Exhibit 10.5
Sky Financial Group, Inc. Profit Sharing and 401(K) Plan
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(As Amended and Restated Effective January 1, 2001)
Sky Financial Group, Inc. Profit Sharing and 401(k) Plan
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(As Amended and Restated Effective January 1, 2001)
Table of Contents
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Page
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Introduction.......................................................................................................1
Article I. Definitions.............................................................................................3
1.01 Acquired Employer......................................................................................3
1.02 Annual Compensation....................................................................................3
1.03 Annuity Starting Date..................................................................................4
1.04 Applicable Period......................................................................................4
1.05 Break in Service.......................................................................................4
1.06 Change in Control......................................................................................4
1.07 Code...................................................................................................4
1.08 Company................................................................................................4
1.09 Company Stock..........................................................................................4
1.10 Disability.............................................................................................4
1.11 Employee...............................................................................................4
1.12 Employer...............................................................................................5
1.13 Entry Date.............................................................................................5
1.14 ERISA..................................................................................................6
1.15 Hour of Service........................................................................................6
1.16 Named Fiduciary........................................................................................6
1.17 Normal Retirement Age..................................................................................6
1.18 Normal Retirement Date.................................................................................6
1.19 Participant............................................................................................6
1.20 Plan...................................................................................................7
1.21 Plan Administrator.....................................................................................7
1.22 Plan Year..............................................................................................7
1.23 Related Entity.........................................................................................7
1.24 Trust..................................................................................................7
1.25 Trustee................................................................................................7
1.26 Trust Fund.............................................................................................7
1.27 Valuation Date.........................................................................................7
1.28 Year of Service........................................................................................7
Article II.Eligibility.............................................................................................9
2.01 Eligibility............................................................................................9
2.02 Eligibility Upon Re-employment.........................................................................9
2.03 Participation Upon Change of Job Status................................................................9
Article III.Contributions.........................................................................................10
3.01 Employer Contributions................................................................................10
3.02 Compensation Deferral Contributions...................................................................10
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3.03 Matching Contributions................................................................................11
3.04 Profit Sharing Contributions..........................................................................12
3.05 Rollover Contributions................................................................................12
3.06 Special Rules Relating to Veterans Re-employment Rights Under USERRA..................................13
3.07 Automatic Compensation Deferral Contributions.........................................................14
3.08 Spin-off of ESOP Portion Effective June 30, 1999......................................................14
3.09 Spin-off of Certain Frozen Plan Accounts Effective September 30, 1999.................................15
3.10 Merger of Frozen First Western Plan Accounts Effective June 30, 2000..................................15
3.11 Merger of Frozen Picton Cavanaugh Plan Accounts Effective June 30, 2000...............................15
3.12 Merger of Frozen TOB Plan Accounts Effective August 1, 2000...........................................16
3.13 Transfer of Defined Benefit Plan Assets...............................................................17
3.14 Catch-Up Contributions................................................................................17
3.15 Catch-Up Matching Contributions.......................................................................18
Article IV. Allocations...........................................................................................19
4.01 Participant Accounts..................................................................................19
4.02 Allocation of Profit Sharing Contributions............................................................19
4.03 Allocation of Compensation Deferral Contributions.....................................................20
4.04 Allocation of Matching Contributions..................................................................20
4.05 Allocation of Investment Gain or Loss.................................................................20
4.06 Allocation of Cash Dividends..........................................................................20
4.07 Valuations............................................................................................20
4.08 Allocation of Gain or Loss............................................................................21
4.09 Annual Report to Participants.........................................................................21
Article V. Benefits To Participants..............................................................................22
5.01 Upon Retirement or Disability.........................................................................22
5.02 Upon Death............................................................................................22
5.03 Nonforfeitable Interest Upon Termination of Employment................................................22
5.04 October 2, 1998 Change in Control.....................................................................23
5.05 Forfeiture Upon Termination of Employment.............................................................23
5.06 Change in Control.....................................................................................24
Article VI. Distributions.........................................................................................25
6.01 Commencement of Benefits..............................................................................25
6.02 Payment of Benefits: Pre-1999 Participants............................................................25
6.03 Payment of Benefits: Post-1998 Participants...........................................................26
6.04 Optional Forms of Benefit.............................................................................26
6.05 Definitions...........................................................................................27
6.06 Mandatory Commencement of Benefits....................................................................29
6.07 Distributions After Death of a Participant............................................................30
6.08 Right to Have Accounts Transferred....................................................................31
6.09 Restrictions on Distributions of Compensation Deferral Contributions..................................32
Article VII. Limitation On Contributions And Benefits............................................................33
7.01 Definitions...........................................................................................33
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7.02 Limitation on Annual Additions........................................................................33
7.03 Limitation of Benefits Under All Plans................................................................34
Article VIII.Nondiscrimination Requirements.......................................................................35
8.01 Definitions...........................................................................................35
8.02 Nondiscrimination Requirements for Compensation Deferral Contributions................................37
8.03 Nondiscrimination Requirements for Matching Contributions and Employee Contributions..................38
8.04 Multiple Use Limitation...............................................................................39
8.05 Distribution Rules for Excess Contributions and Excess Aggregate Contributions........................40
Article IX. Trust Fund And Investment Funds......................................................................41
9.01 Individual Investment Funds...........................................................................41
9.02 Individual Investment Funds...........................................................................41
9.03 Participants' Right to Vote Company Stock.............................................................42
Article X. Amendment Or Termination..............................................................................43
10.01 Amendment.............................................................................................43
10.02 Plan Termination or Discontinuance of Contributions...................................................43
10.03 Merger, Consolidation or Transfer of Assets...........................................................43
Article XI. Administration.......................................................................................44
11.01 Plan Administrator's Powers and Duties................................................................44
11.02 Records and Reports...................................................................................44
11.03 Payment of Expenses...................................................................................44
11.04 Claims Procedure......................................................................................44
Article XII. Participating Employers.............................................................................46
12.01 Commencement..........................................................................................46
12.02 Termination...........................................................................................46
12.03 Single Plan...........................................................................................46
12.04 Delegation of Authority...............................................................................46
12.05 Disposition of Assets or Subsidiary...................................................................46
Article XIII. Loans And In-Service Withdrawals....................................................................47
13.01 Loans to Participants.................................................................................47
13.02 Hardship Distributions................................................................................48
13.03 In-Service Withdrawals Relating to the Adrian State Bank Plan.........................................49
13.04 Hardship Distribution from Rollover Accounts..........................................................49
Article XIV. Miscellaneous........................................................................................50
14.01 Participant's Rights..................................................................................50
14.02 Assignment or Alienation of Benefits..................................................................50
14.03 Reversion of Funds to Employer........................................................................50
14.04 Action by Company.....................................................................................51
14.05 Allocation of Responsibilities........................................................................51
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14.06 Construction of Plan..................................................................................51
14.07 Gender and Number.....................................................................................52
14.08 Headings..............................................................................................52
14.09 Voting Company Stock..................................................................................52
14.10 Payment of Expenses...................................................................................52
14.11 Incapacity............................................................................................52
14.12 Employee Data.........................................................................................52
14.13 Reduction for Overpayment.............................................................................52
14.14 Invalidity of Certain Provisions......................................................................52
14.15 Plan Supplements......................................................................................53
Article XVI. Top Heavy Provisions.................................................................................54
15.01 Definitions...........................................................................................54
15.02 Determination of Top Heavy Status.....................................................................55
15.03 Combination of Defined Benefit and Defined Contribution Plan..........................................55
15.04 Minimum Contribution..................................................................................56
15.05 Minimum Vesting.......................................................................................56
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Execution Page
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In Witness Whereof, on behalf of Sky Financial Group, Inc., the
undersigned officer has executed this amendment and restatement of the Sky
Financial Group, Inc. Profit Sharing and 401(k) Plan, effective as of January 1,
2001.
Dated this day of 2001.
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Sky Financial Group, Inc.
By:
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Its:
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(Seal)
Sky Financial Group, Inc. Profit Sharing and 401(K) Plan
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(As Amended and Restated Effective January 1, 2001)
Introduction
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The Plan was originally established as the Mid American National Bank &
Trust Company Profit Sharing Retirement Plan, effective January 1, 1966.
Effective July 1, 1989, Mid Am, Inc. ("Mid Am") assumed sponsorship of the Plan.
Mid Am last amended and restated the Plan effective January 1, 1995. Mid Am
merged into Citizens Bancshares, Inc. ("Citizens") effective October 2, 1998
(the "Merger Date"), with the resulting corporation renamed Sky Financial Group,
Inc. (the "Company"). The Company became the sponsor of the Mid Am Inc. Profit
Sharing and 401(k) Plan on the Merger Date.
Effective January 1, 1999, the Company amended and restated the Mid Am,
Inc. Profit Sharing and 401(k) Plan as the Sky Financial Group Inc. Profit
Sharing and 401(k) Plan (the "Plan"). On this January 1, 1999 date, eligible
employees of Citizens and The Ohio Bank, and eligible employees of their
respective subsidiaries, become eligible to participate in the Plan.
Prior to June 30, 1999, a portion of the Plan (the "ESOP Portion") was
invested in Qualifying Employer Securities (as defined in Code Section
4975(e)(8)), and designed to qualify as a stock bonus plan and an employee stock
ownership plan under Code Section 4975(e)(7) and the regulations thereunder.
Effective June 30, 1999, the ESOP Portion of the Plan was spun-off and merged
into the Sky Financial Group, Inc. Employee Stock Ownership Pension Plan (the
"Sky ESOP Pension Plan").
The frozen Mid Am, Inc. Profit Sharing and 401(k) Plan (the "Frozen Plan")
was merged into this Plan. Participants with Frozen Plan accounts were allowed
to direct the investment of their Frozen Plan account balances between Sky
Financial Group, Inc. common stock and a special investment portfolio maintained
by a trustee. Effective September 30, 1999, the portion of the Plan containing
Participant Frozen Plan accounts invested in Sky Financial Group, Inc. common
stock was spun-off and merged into the Sky ESOP Pension Plan. In addition,
effective September 30, 1999, each Participant with a Frozen Plan account
invested in the special investment portfolio is allowed to direct the investment
of that account into the Investment Funds offered in accordance with Article IX
of the Plan.
Effective June 30, 2000, a portion of the First Western Bancorp, Inc.
401(k) Profit-Sharing and Stock Bonus Plan (the "First Western Plan") was merged
into, and amended and restated in the form of, the Plan. The First Western Plan
resulted from a merger of two plans, and was last amended and restated on June
30, 1994, effective as of January 1, 1987. Effective June 30, 2000, the portion
of the First Western Plan that is intended to constitute an employee stock
ownership plan under Code Section 4975(e)(7) was spun-off and merged into the
Sky ESOP Pension Plan. Also effective June 30, 2000, the remaining portion of
the First Western Plan was amended, restated and merged into this Plan.
Effective July 1, 2000, the Picton Cavanaugh, Inc. Profit-Sharing
Retirement Plan (the "Picton Cavanaugh Plan") was merged into, and amended and
restated in the form of, the Plan. Eligible employees of Picton Cavanaugh, Inc.
were eligible to participate in the Plan beginning
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January 1, 2000. The Picton Cavanaugh Plan was a Non-Standardized Prototype Plan
maintained by Picton Cavanaugh, Inc., and was last amended and restated on
December 21, 1998, effective as of January 1, 1999. Picton Cavanaugh, Inc.
became a wholly-owned subsidiary of the Company on May 1, 1999.
Effective August 1, 2000, The Ohio Bank Employees' Profit Sharing Plan (the
"TOB Plan") was merged into, and amended and restated in the form of, the Plan.
The TOB Plan was originally established effective January 1, 1984, and was last
amended and restated effective January 1, 1989. The Company acquired The Ohio
Bank in 1998, and The Ohio Bank became a participating Employer under this Plan
effective January 1, 1999.
This document is an amendment and restatement of the Plan generally
effective as of January 1, 2001, except as and to the extent otherwise provided
herein. The Company intends that the Plan, together with the Trust Agreement,
meet all the pertinent requirements of the Internal Revenue Code of 1986, as
amended, and the Employee Retirement Income Security Act of 1974, as amended,
and shall be interpreted, wherever possible, to comply with the terms of the
Code and ERISA.
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Article I
Definitions
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In addition to other terms defined elsewhere in this Plan document, the
following terms shall have the following meanings:
1.01 Acquired Employer. "Acquired Employer" means any organization,
corporate or otherwise, that is acquired by purchase, merger, consolidation or
any other method, except for asset purchase.
1.02 Annual Compensation. "Annual Compensation" means a Participant's
earned income, wages, salaries, fees for professional services, and other
amounts received for personal services actually rendered in the course of
employment with the Employers (including, but not limited to, commissions paid
to salesmen, compensation for services on the basis of a percentage of profits,
commissions on insurance premiums, tips and bonuses), but excluding the
following:
(a) Employer contributions to a plan of deferred compensation,
including this Plan, that are not included in the Employee's gross income
for the taxable year in which contributed, Employee contributions under a
simplified employee pension plan to the extent such contributions are
deductible by the Employee or any distributions from a plan of deferred
compensation.
(b) amounts realized from the exercise of a non-qualified stock
option, or when restricted stock (or property) held by the Employee either
becomes freely transferable or is no longer subject to a substantial risk
of forfeiture;
(c) amounts realized from the sale, exchange or other disposition of
stock acquired under a qualified stock option;
(d) reimbursements or other expense allowances, fringe benefits (cash
and noncash), moving expenses, deferred compensation and welfare benefits
(even if included in gross income); and
(e) other amounts that received special tax benefits or contributions
made by the Employer (whether or not under a salary reduction agreement)
towards the purchase of an annuity described in Code Section 403(b)
(whether or not the amounts are actually excludible from the gross income
of the Employee).
Annual Compensation includes a Participant's voluntary reductions in cash
consideration made in accordance with arrangements established by the Employer
under Code Section 125 and Code Section 401(k).
In addition to other applicable limitations set forth in the Plan, and
notwithstanding any other provision of the Plan to the contrary, the Annual
Compensation of each Employee taken into account under the Plan shall not exceed
the OBRA '93 annual compensation limit. The OBRA '93 annual compensation limit
is $150,000, as adjusted by the Commissioner of Internal Revenue for the
cost-of-living in accordance with Code Section 401(a)(17)(B). The cost-of-living
adjustment in effect for a calendar year applies to any period, not exceeding 12
months, over which
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Compensation is determined (determination period) beginning in such calendar
year. If a determination period consists of fewer than 12 months, the OBRA '93
annual compensation limit will be multiplied by a fraction, the numerator of
which is the number of months in the determination period, and the denominator
of which is 12. Any reference in this Plan to the limitation under Code Section
401(a)(17) shall mean the OBRA '93 annual compensation limit set forth in this
provision.
The Annual Compensation of each Participant taken into account under the
Plan for any Plan Year beginning after December 31, 2001, shall not exceed
$200,000, as adjusted for cost-of-living increases in accordance with Code
Section 401(a)(17)(B).
1.03 Annuity Starting Date. "Annuity Starting Date" is defined in Section
6.05.
1.04 Applicable Period. The "Applicable Period" is defined in Section 6.05.
1.05 Break in Service. "Break in Service" means a Plan Year in which an
Employee has not completed more than 500 Hours of Service.
1.06 Change in Control. "Change in Control" means the occurrence of any one
or more of the following events: (a) the merger or consolidation of the Company
with or into any other corporation and the Company is not the surviving
corporation; (b) in excess of 24.99% of the outstanding Company Stock is owned,
held or controlled by an entity, person or group acting in concert with the
power to control the Company as that term is defined in Rule 405 of the
Securities Act of 1933, as amended; (c) the sale or exchange in excess of 24.99%
of the assets of the Company to an entity, person or group acting in concert;
(d) the recapitalization, reclassification of securities or reorganization of
the Company that has the effect of either subpart (b) or (c) above; (e) the
issuance by the Company of securities in an amount in excess of 24.99% of the
outstanding Company Stock to any entity, person or group acting in concert and
intending to exercise control of the Company; or (f) the removal, termination or
retirement of more than 50% of the members of the Board of Directors of the
Company during any consecutive 12-month period.
1.07 Code. "Code" means the Internal Revenue Code of 1986, as amended.
1.08 Company. "Company" means Sky Financial Group, Inc.
1.09 Company Stock. "Company Stock" means the common stock of Sky Financial
Group, Inc.
1.10 Disability. "Disability" means a physical or mental condition of a
Participant resulting from a bodily injury or disease or mental disorder that
renders the Participant eligible for benefits under the Company's long-term
disability plan.
1.11 Employee. "Employee" means each and every person employed by an
Employer who is classified by an Employer as a common law employee; provided
that, only individuals who are paid as common law employees from the payroll of
an Employer shall be deemed to be Employees for purposes of the Plan. Any person
who agrees with an Employer that he or she will not be a Participant will not be
eligible to participate in the Plan.
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For purposes of this definition of Employee, and notwithstanding any other
provisions of the Plan to the contrary, individuals who are not classified by an
Employer, in its discretion, as employees under Code Section 3121(d) (including,
but not limited to, individuals classified by the Employer as independent
contractors and non-employee consultants) and individuals who are classified by
an Employer, in its discretion, as employees of any entity other than an
Employer do not meet the definition of Employee and are ineligible for benefits
under the Plan, even if the classification by the Employer is determined to be
erroneous, or is retroactively revised. In the event the classification of an
individual who is excluded from the definition of Employee under the preceding
sentence is determined to be erroneous or is retroactively revised, the
individual shall nonetheless continue to be excluded from the definition of
Employee and shall be ineligible for benefits for all periods prior to the date
the Employer determines its classification of the individual is erroneous or
should be revised. The foregoing sets forth a clarification of the intention of
the Company regarding participation in the Plan for any Plan Year, including
Plan Years prior the amendment of this definition of Employee.
No person classified by an Employer as a temporary, seasonal or summer
employee shall be deemed to be an Employee. No person who is classified by an
Employer as an independent contractor shall be deemed to be an Employee. No
person who is classified by an Employer as a "leased employee" shall be deemed
to be an Employee. "Leased employee" shall mean any person who is not an
Employee but who provides services to an Employer if:
(a) such services are provided pursuant to an agreement between the
Employer and any leasing organization;
(b) such person has performed services for the Employer (or for the
Employer and any related person within the meaning of Section 414(n)(6) of
the Code) on a substantially full-time basis for a period of at least one
(1) year; and
(c) such services are performed under the primary direction or control
of the Employer.
Except as provided below, a "leased employee" shall be treated as an
employee of an Employer for nondiscrimination testing and other purposes
specified in Code Section 414(n). However, contributions or benefits provided by
the leasing organization that are attributable to services performed for an
Employer shall be treated as provided by the Employer. A "leased employee" shall
not be treated as an employee if such "leased employee" is covered by a money
purchase pension plan of the leasing organization, and the number of leased
employees does not constitute more than 20% of the Employers' "non-highly
compensated work force" as defined by Code Section 414(n)(5)(C). The money
purchase pension plan of the leasing organization must provide benefits equal to
or greater than: (i) a non-integrated employer contribution rate of at least 10%
of compensation, (ii) immediate participation, and (iii) full and immediate
vesting.
1.12 Employer. "Employer" means any Related Entity with respect to the
Company that adopts this Plan pursuant to Article XII. The term also includes
the Company, unless the context otherwise requires.
1.13 Entry Date. "Entry Date" means the first day of each calendar month in
the Plan Year.
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1.14 ERISA. "ERISA" means the Employee Retirement Income Security Act of
1974, as amended.
1.15 Hour of Service. "Hour of Service" means:
(a) Each hour for which an Employee is directly or indirectly paid or
entitled to payment by either the Company or the Employer for the performance of
duties;
(b) Each hour for which an Employee is directly or indirectly paid, or
entitled to payment, by either the Company or the Employer for reasons (such as
vacation, sickness, disability, or similar leave of absence) other than for the
performance of duties, and for military leaves, maternity/paternity leaves or
leaves for jury duty; and
(c) Each hour for which back pay, irrespective of mitigation of damages,
has been either awarded or agreed to by either the Company or the Employer
provided that the same Hours of Service shall not be credited under this Section
(c) and Sections (a) or (b) above, as the case may be.
(d) An Employee shall also be credited with one Hour of Service for each
hour that otherwise would normally have been credited to the Employee but during
which such Employee is absent from work for any period (i) by reason of the
Employee's pregnancy, (ii) by reason of the birth of the Employee's child, (iii)
by reason of the placement of a child with such Employee in connection with an
adoption of such child by the Employee or (iv) for purposes of caring for a
child for a period beginning immediately following birth or placement, provided
that an Employee shall be credited with no more than 501 Hours of Service on
account of any single continuous period of absence by reason of any such
pregnancy, birth or placement and provided further that Hours of Service
credited to an individual on account of such a period of absence shall be
credited only for the Break in Service computation period in which such absence
begins if an Employee would otherwise fail to be credited with 501 or more Hours
of Service in such period or, in any other case, in the immediately following
computation period.
Hours of Service computed hereunder shall be computed in accordance with
Section 2530.200 b-2 (b) and (c) of the Department of Labor Regulations, which
is incorporated herein by reference. In no event shall more than 501 Hours of
Service be credited for any one continuous period of absence during or for which
the employee receives payment for nonperformance of duties whether or not such
period occurs in a single computation period.
1.16 Named Fiduciary. "Named Fiduciary" means a fiduciary named in this
document, or who, pursuant to a procedure specified in the Plan, is identified
as a Named Fiduciary.
1.17 Normal Retirement Age. "Normal Retirement Age" means age 65 years.
1.18 Normal Retirement Date. "Normal Retirement Date" means the first day
of the month coinciding with or next following the date on which a Participant
attains Normal Retirement Age.
1.19 Participant. "Participant" means an Employee who has satisfied the
eligibility requirements for the participation in the Plan.
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1.20 Plan. "Plan" means the Sky Financial Group, Inc. Profit Sharing and
401(k) Plan.
1.21 Plan Administrator. "Plan Administrator" means the Sky Financial
Group, Inc. Benefit Plans Committee (the "Committee"). The Plan Administrator
shall be the Plan's Named Fiduciary. The Plan Administrator shall have no
responsibility for the custody or management of the Trust Fund.
1.22 Plan Year. "Plan Year" means the 12-month period beginning on January
1 and ending on the following December 31 of each year.
1.23 Related Entity. "Related Entity" means: (a) all corporations that are
members with the Company in a controlled group of corporations within the
meaning of Code Section 1563(a), determined without regard to Code Sections
1563(a)(4) and (e)(3)(c); (b) all trades or businesses (whether or not
incorporated) that are under common control with the Company as determined by
regulations promulgated under Code Section 414(c); (c) all trades or businesses
that are members of an affiliated service group with the Company within the
meaning of Code Section 414(m); and (d) any other entity required to be
aggregated with the Company in accordance with regulations under Code Section
414(o); provided, however, for purposes of Article VII, the definition shall be
modified to substitute the phrase "more than 50%" for the phrase "at least 80%"
each place it appears in Code Section 1563(a)(1). The term "Related Entity"
shall include the predecessor of the Company and any Related Entity.
1.24 Trust. "Trust" means one or more Trusts established to fund the Plan.
The Trustee shall receive any contributions paid to it. All contributions so
received together with the income therefrom shall be held, managed and
administered in the Trust pursuant to the terms of the Plan.
1.25 Trustee. "Trustee" means Sky Trust, N.A. The Trustee shall have the
authority and discretion to manage and control the assets of the Plan. The
Trustee is a Named Fiduciary.
1.26 Trust Fund. "Trust Fund" means all assets of whatever kind or nature
held by the Trustee pursuant to the terms of the Plan, unless indicated
otherwise. The Trust Fund may consist of more than one trust agreement with more
than one Trustee.
1.27 Valuation Date. "Valuation Date" shall mean each business day on which
the Nasdaq Stock Market is open.
1.28 Year of Service. For purposes of determining eligibility to
participate in the Plan in accordance with Section 2.01(b) hereof, "Year of
Service" means a 12-consecutive month period, commencing on the date of an
Employee's first Hour of Service with an Employer, during which the Employee is
continuously employed by an Employer.
(a) For purposes of determining a Participant's nonforfeitable interest
pursuant to Section 5.03, "Year of Service" means a Plan Year during which such
participant is credited with at least 1,000 Hours of Service. For purposes of
Section 5.03, a Participant will be credited with a Year of Service if the
Participant completes 1,000 Hours of Service during said period, even though the
Participant is not employed for the full 12-month period.
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(b) An Employee who does not initially meet the eligibility requirements of
Section 2.01 and later becomes a Participant, will have all Years of Service
counted for Plan purposes, both prior to and subsequent to becoming a
Participant.
(c) In the event a terminated Participant is re-hired, all Years of Service
with an Employer shall be counted for purposes of Sections 2.01 and 5.03 hereof.
(d) Solely for purposes of determining a Participant's nonforfeitable
interest pursuant to Section 5.03 hereof, "Year of Service" means any Plan Year
during which an individual was a leased employee (as defined in Code Section
414(n)) of the Company or any entity that must be aggregated with the Company
under Code Sections 414(b), (c) or (m) and during which the individual earned at
least 1,000 Hours of Service.
(e) If a Participant who has no nonforfeitable rights under Article V has
five consecutive Breaks in Service, then the Plan shall not take into account
Years of Service after such consecutive Breaks in Service for purposes of
determining the nonforfeitable percentage of the Participant's Account that
accrued before the Break in Service.
(f) If a Participant who has no nonforfeitable rights incurs a Break in
Service for the greater of (i) five or more consecutive Plan Years or (ii) the
Participant's accumulated Years of Service prior to the Break in Service, then
the Plan shall not take into account Years of Service prior to such consecutive
Breaks in Service for the purpose of determining the nonforfeitable percentage
of the Participant's Accounts that accrues after the Break in Service.
(g) Effective for Plan Years beginning on and after January 1, 2001, all
hours, years and/or other periods of service that an Employee had with an
Acquired Employer shall be credited toward Years of Service under the terms and
conditions of this Section 1.27 solely for purposes of determining the
Employee's (i) eligibility to participate in the Plan under Section 2.1, and
(ii) nonforfeitable interest in his or her Accounts under Section 5.03.
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Article II
Eligibility
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2.01 Eligibility. Subject to the terms of the Plan, each Employee who was a
Participant in the Plan as of December 31, 2000, shall participate in the Plan
on and after January 1, 2001. Each other Employee will become a Participant
according to the following:
(a) Solely with respect to Compensation Deferral Contributions provided for
under Section 3.02 hereof, each Employee shall be eligible to make Compensation
Deferral Contributions beginning with the first day the Employee completes an
Hour of Service, or on the first Entry Date thereafter, if the Employee meets
both of the following requirements:
(i) the Employee has attained age 18 years; and
(ii) the Employee is not a member of a collective bargaining unit
unless the collective bargaining agreement between the Employer and the
union provides for participation in this Plan.
(b) With respect to Employer Matching and Profit Sharing Contributions
provided for under Sections 3.03 and 3.04 of the Plan, each Employee shall
participate in the Plan on the first Entry Date coincident with or next
following the date the Employee meets all of the following requirements:
(i) the Employee is credited with one Year of Service;
(ii) the Employee has attained age 18 years; and
(iii) the Employee is not a member of a collective bargaining unit
unless the collective bargaining agreement between the Employer and the
union provides for participation in this Plan.
Notwithstanding the foregoing, with respect to Profit Sharing Contributions
only, an Employee who completes the requirements of this Section 2.01(b) during
the month of December in a Plan Year shall be eligible to participate in the
Plan as of the December 1 in that Plan Year.
2.02 Eligibility Upon Re-employment. A former Participant, or former
Employee who met the eligibility requirements of Section 2.01(b) for
participation in the Plan at the time he or she terminated employment, and who
is subsequently rehired, shall participate in the Plan on the Entry Date
coinciding with or next following his or her re-employment by the Employer, if
the Employee then meets the requirements for participation described in Section
2.01.
2.03 Participation Upon Change of Job Status. An individual who has
satisfied the requirements of Section 2.01(a) or (b) but who is not a
Participant because he or she is not an Employee or because he or she does not
satisfy Sections 2.01(a)(2) or (b)(3), shall become a Participant immediately
(but not sooner than the Entry Date on which the individual would have become a
Participant had he been an Employee and had satisfied Section 2.01(a)(2) or
---
(b)(3) at all times) upon becoming an Employee and upon satisfying Section
2.01(a)(2) and (b)(3).
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Article III
Contributions
-------------
3.01 Employer Contributions. The Plan is designed to qualify as a profit
sharing plan for purposes of Code Sections 401(a), 402, 412 and 417. The
Employer may make contributions to the Plan without regard to current or
accumulated earnings and profits for any taxable year or years ending with or
within such Plan Year.
Prior to January 1, 1999, Employers' Profit Sharing Contributions were made
and invested solely in Qualifying Employer Securities. On and after January 1,
1999, Employers' Profit Sharing Contributions may be made in cash. Each
Participant's Profit Sharing Contributions Account as of December 31, 1998
(including any Profit Sharing Contribution for the 1998 Plan Year), was renamed
the Participant's "ESOP Account" effective January 1, 1999, and a new Profit
Sharing Contributions Account was established for each Participant on January 1,
1999, pursuant to Section 4.01. Effective June 30, 1999, the portion of the Plan
consisting of all ESOP Accounts was spun off from this Plan and merged into the
Sky ESOP Pension Plan.
3.02 Compensation Deferral Contributions. Each Employee who becomes
eligible to participate may elect to defer a percentage of his or her Annual
Compensation for each pay period that he or she remains a Participant in
accordance with procedures established by the Plan Administrator. The
Participant's election shall be made at such time and in such manner as the Plan
Administrator shall determine. The Participant's election shall remain in effect
until revoked or superseded by a subsequent election pursuant to procedures
established by the Plan Administrator.
(a) Amount. A Participant may specify a Compensation Deferral Contribution
amount equal to any whole percentage of his or her Annual Compensation, not less
than 1% thereof; except that the Plan Administrator may specify a lower
percentage amount of contribution from time to time in order to prevent excess
contributions.
(b) Change. A Participant may change the specified percentage of
Compensation Deferral Contributions at any time, but not retroactively, by
making a revised election, unless the Plan Administrator shall specify that
changes are permitted less frequently.
(c) Suspension. A Participant may suspend his or her election to make
Compensation Deferral Contributions at any time, but not retroactively.
(d) Compensation Reduction. A Participant's Annual Compensation for a Plan
Year shall be reduced by the amount of the Compensation Deferral Contribution
that the Participant elects for such Plan Year.
(e) Election. All elections shall be made at the time, in the manner, and
subject to the conditions specified by the Plan Administrator, who shall
prescribe uniform and nondiscriminatory rules for such elections.
(f) Timing of Contributions. The Employers shall pay over to the Trust Fund
all Participants' Compensation Deferral Contributions made under this Section
3.01 with respect to a Plan Year as of the earliest day on which such amounts
can reasonably be segregated from the
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Employer's general assets; provided, however that such contributions shall be
made no later than the fifteenth business day of the month following the date on
which such amounts would otherwise have been payable to the Participant in cash,
or as of such earlier or later date (in the case of any available extensions of
time) as may be required or permitted by regulations issued pursuant to ERISA.
Contributions made by Employers under this Section shall be allocated to the
Compensation Deferral Accounts of the Participants from whose Annual
Compensation the contributions were withheld in an amount equal to the amount
withheld. Such contributions shall be deemed to be employer contributions made
on behalf of Participants to a qualified cash or deferred arrangement (within
the meaning of Code Section 401(k)(2)).
(g) Nondiscrimination Limitations. Contributions to a Participant's
Compensation Deferral Contributions Account must meet the nondiscrimination
requirements of Code Section 401(k) pursuant to Section 8.02 hereof.
(h) Exclusion Limitations. Except as provided herein, the Employer shall
contribute to the Plan on behalf of the Participant the full amount of the
Compensation Deferral Contribution authorized by each Participant. In no event,
however, shall a Participant's Compensation Deferral Contributions to the Plan
for any calendar year exceed $10,500. The Employer shall automatically
discontinue Compensation Deferral Contributions for the remainder of the year on
behalf of a Participant who reaches this limitation. If due to a mistake in
fact, a Compensation Deferral Contribution in excess of $10,500 is allocated in
a calendar year to the Compensation Deferral Contribution Account of any
Participant, the Trustee shall return to such Participant the portion of his
Compensation Deferral Contribution in excess of $10,500 plus any earnings and
less any losses attributable to such excess not later than the April 15
immediately following the calendar year during which such excess contribution
was made. If in a calendar year a Participant's Compensation Deferral
Contributions under the Plan, when aggregated with any other elective deferrals
made by such Participant in such calendar year to any other qualified retirement
plan under Code Sections 401(k), 403(b) and 408(k), whether or not maintained by
an Employer, would otherwise exceed $10,500, such Participant may before the
March 1 immediately following such calendar year notify the Plan Administrator
in writing as to the portion of the amount in excess of $10,500 to be allocated
to the Plan, and the Plan Administrator may, but is not required to, direct the
Trustee to pay to such Participant the amount of the excess that was allocated
to the Plan by such Participant plus any earnings allocated to such excess
amount before the April 15 immediately following the calendar year during which
the excess contribution was made. The $10,500 limitation contained in this
Section shall be automatically adjusted in accordance with Code Sections
402(g)(5) and 415(d).
3.03 Matching Contributions. For each pay period beginning on or after the
first Entry Date on which the Participant has satisfied the eligibility
requirements of Section 2.01(b), the Employer shall contribute to the Trust Fund
on behalf of each Participant an amount equal to 100% of the first 3% of the
Participant's Compensation Deferral Contributions for the pay period, to a
maximum of 3% of such Participant's Annual Compensation for such pay period. The
Matching Contribution shall be contributed to the Trust Fund on behalf of each
Participant who is eligible to receive such Contribution in accordance with
Section 2.01(b), and allocated among the Investment Funds according to the
Participant's election.
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Notwithstanding the foregoing, any eligible Participant who does not make
Compensation Deferral Contributions of at least 3% during a pay period because
such Participant has already made Compensation Deferral Contributions for the
Plan Year up to the limit prescribed under Code Section 402(g) shall receive a
Matching Contribution for that pay period as if such Participant had made the
Compensation Deferral Contributions already contributed to the Plan for that
Plan Year ratably over the pay periods occurring during the Plan Year.
(a) Nondiscrimination Limitations. Contributions to a Participant's
Matching Contributions Account must meet the nondiscrimination requirements of
Code Section 401(m) pursuant to Section 8.03 hereof.
(b) Timing of Contributions. Matching Contributions shall be periodically
contributed by the Employer to the Trust Fund in accordance with the Employer's
established payroll procedures in a manner uniformly applied to all Participants
similarly situated.
3.04 Profit Sharing Contributions. Each year the Employers may make a
Profit Sharing Contribution to the Trust Fund in such amounts as the Company, in
its sole discretion, shall determine. Employer Profit Sharing Contributions
shall be held and administered in trust by the Trustee according to the terms
and conditions of the Plan and Trust. Employer contributions may be paid in
cash. To the extent that the Trust has obligations arising from an extension of
credit of the Trust that is payable in cash within one year of the date of the
Employer's contribution is made, such contribution will be paid to the Trust in
cash. Any such contribution shall be allocated in accordance with Section 4.02
hereof, to those Participants eligible to receive such contribution in
accordance with Section 2.01(b).
The Employer's Profit Sharing Contribution, if any, shall be made to the
Trustee in full within such time as may be permitted for Federal Income Tax
purposes to obtain a deduction for the contribution by the Employer for such
taxable year.
3.05 Rollover Contributions. The Trustee may accept transfers on behalf of
a Participant from:
(a) a qualified pension or profit sharing plan maintained by a former
employer of the Participant;
(b) a previously qualified pension or profit sharing plan maintained by the
Employer;
(c) a "rollover" Individual Retirement Account as that term is defined in
Code Section 408(d)(3)(A)(ii); or
(d) a plan in which assets are held on behalf of an Owner-Employee as
defined in Code Section 401(c)(3), which satisfies the applicable requirements
of Code Sections 401(a) and 401(d) and with respect thereto: (i) the transferred
funds shall be maintained in separate accounts in the name of the respective
Participants; and (ii) a Participant's interest in the separate account shall be
nonforfeitable.
In addition to the rollover contributions set forth in paragraphs (a)
through (d) above, the Trustee also may accept transfers made after December 31,
2001 from an annuity contract
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described in Code Section 403(b) or an eligible plan under Code Section 457(b)
that is maintained by a state, political subdivision of a state, or any agency
or instrumentality of a state or political subdivision of a state.
Notwithstanding the above, no direct transfer may be made from a plan
maintained by the Company that is subject to the requirements of Code Section
401(a)(11)(A).
3.06 Special Rules Relating to Veterans Re-employment Rights Under USERRA.
Effective December 12, 1994, the following special provisions shall apply to an
Employee or Participant who is re-employed in accordance with the re-employment
provisions of the Uniformed Services Employment and Re-employment Rights Act
(USERRA) following a period of qualifying military service (as determined under
USERRA):
(a) Each period of qualifying military service served by an Employee or
Participant shall, upon such re-employment with an Employer, be deemed to
constitute service with the Employer for all purposes of the Plan.
(b) The Participant shall be permitted to make up Compensation Deferral
Contributions missed during the period of qualifying military service. The
Participant shall have a period of time beginning on the date of the
Participant's re-employment with an Employer following his period of qualifying
military service and extending over the lesser of (i) the Participant's period
of qualifying military service multiplied by three, and (ii) 5 years, to make up
such missed Compensation Deferral Contributions.
(c) If the re-employed Participant elects to make up Compensation Deferral
Contributions in accordance with paragraph (b) above, the Employer shall make
any Matching Contributions that would have been made on behalf of such
Participant had the Participant made such Compensation Deferral Contributions
during the period of qualifying military service.
(d) If the Employer made any Profit Sharing Contributions to the Plan
during the period of qualifying military service, the Employer shall make a
Profit Sharing Discretionary Contribution on behalf of the Participant upon the
Participant's re-employment following his period of qualifying military service,
in the amount that would have been made on behalf of such Participant had the
Participant been employed during the period of qualifying military service.
(e) The Plan shall not (i) credit earnings to a Participant's Accounts with
respect to any Compensation Deferral or Matching Contribution before such
contribution is actually made, or (ii) make up any allocation of forfeitures,
with respect to the period of qualifying military service. A re-employed
Participant shall be entitled to accrued benefits attributable to Compensation
Deferral Contributions only if such contributions are actually made.
(f) For all purposes under the Plan, including an Employer's liability for
making contributions on behalf of a re-employed Participant as described above,
the Participant shall be treated as having received Annual Compensation from the
Employer based on the rate of Annual Compensation the Participant would have
received during the period of qualifying military service, or if that rate is
not reasonably certain, on the basis of the Participant's average rate of Annual
Compensation during the 12-month period immediately preceding such period.
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(g) If a Participant makes a Compensation Deferral Contribution or the
Employer makes a Matching Contribution in accordance with the foregoing
provisions of this Section 3.06:
(i) such contributions shall not be subject to any otherwise
applicable limitation under Code Section 402(g), 404(a) or 415, and shall
not be taken into account in applying such limitations to other Participant
or Employer contributions under the Plan or any other plan with respect to
the year in which such contributions are made, and such contributions shall
be subject to these limitations only with respect to the year to which such
contributions relate and only in accordance with regulations prescribed by
the Internal Revenue Service; and
(ii) the Plan shall not be treated as failing to meet the requirements
of Code Section 401(a)(4), 401(a)(26), 401(k)(3), 401(k)(11), 401(k)(12),
401(m), 410(b) or 416 by reason of such contributions.
3.07 Automatic Compensation Deferral Contributions. The Company may, in its
sole discretion, implement an automatic Compensation Deferral Contribution
feature as to all Employees who first become eligible under Section 2.01(a) of
the Plan, effective as of any date the Company specifies in the future. Pursuant
to this automatic Compensation Deferral Contribution feature, the Plan
Administrator will withhold a Compensation Deferral Contribution amount equal to
3% of the Annual Compensation of each Employee who first becomes eligible under
Section 2.01(a) of the Plan after the effective date the Company specifies for
the automatic Compensation Deferral Contribution feature, as if the Participant
had elected to defer that percentage of his or her Annual Compensation for each
pay period. The Participant's deemed election shall remain in effect until the
Participant files a subsequent election revoking or superseding the deemed
election, pursuant to procedures established by the Plan Administrator.
(a) A Participant may suspend his or her deemed election to make
Compensation Deferral Contributions at any time, but not retroactively. A
Participant may change the deemed election percentage at any time, but not
retroactively, by making a revised election, unless the Plan Administrator
specifies that changes are permitted less frequently.
(b) Compensation Deferral Contributions deemed authorized by each
Participant and contributed by the Employer pursuant to Section 3.02 hereof,
shall be credited to the Participant's Compensation Deferral Contributions
Account. If the Participant does not direct the manner in which such
Contributions are to be invested among the Investment Funds, the Plan
Administrator shall specify an Investment Fund or Funds into which such
Contributions will be invested.
(c) The Company intends that this Section 3.07 comply, and be administered
in accordance with, the provisions of Revenue Ruling 98-30.
3.08 Spin-off of ESOP Portion Effective June 30, 1999. Prior to June 30,
1999, a portion of the Plan (the "ESOP Portion") was invested in Qualifying
Employer Securities (as defined in Code Section 4975(e)(8), and designed to
qualify as a stock bonus plan and an employee stock ownership plan under Code
Section 4975(e)(7) and the regulations thereunder. Effective June 30, 1999, the
ESOP Portion was spun-off from this Plan and merged into the Sky ESOP Pension
Plan.
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3.09 Spin-off of Certain Frozen Plan Accounts Effective September 30, 1999.
The frozen Mid Am, Inc. Profit Sharing and 401(k) Plan (the "Frozen Plan") was
merged into the Plan. Participants with Frozen Plan accounts were allowed to
direct the investment of their Frozen Plan account balances between Sky
Financial Group, Inc. common stock and a special investment portfolio maintained
by a trustee. Effective September 30, 1999, the portion of the Plan containing
Frozen Plan accounts invested in Sky Financial Group, Inc. common stock was
spun-off and merged into the Sky Financial Group, Inc. Employee Stock Ownership
Pension Plan. In addition, effective September 30, 1999, Participants with
Frozen Plan accounts invested in the special investment portfolio are allowed to
direct the investment of those accounts into the Investment Funds offered in
accordance with Article IX.
3.10 Merger of Frozen First Western Plan Accounts Effective June 30, 2000.
Prior to June 30, 2000, the Company maintained the First Western Bancorp, Inc.
401(k) Profit-Sharing and Stock Bonus Plan (the "First Western Plan"). Except
for the portion of the First Western Plan intended to be an employee stock
ownership plan (the "First Western ESOP"), the First Western Plan has been
frozen since December 31, 1999. Effective June 30, 2000, the First Western ESOP
was spun-off from the First Western Plan and merged into the Sky Financial
Group, Inc. Employee Stock Ownership Plan. On that date, the remainder of the
First Western Plan was merged into, and amended and restated in the form of,
this Plan.
Amounts transferred from the First Western Plan pursuant to this Section
from a Participant's Account that were attributable to "Tax Reduction
Contributions" under the First Western Plan shall be held and invested in the
Participant's Compensation Deferral Contribution Account under this Plan,
according to the Participant's investment elections. Amounts transferred from
the First Western Plan that were attributable to "Stock Bonus Contributions"
other than "Matching Contributions" under the First Western Plan shall be held
and invested in the Participant's Profit Sharing Contributions Account under
this Plan. The remaining amounts transferred from the First Western Plan shall
be contributed to the Participant's Prior Plan Account.
Notwithstanding the provisions of Section 5.03, certain amounts transferred
from the First Western Plan are fully vested and nonforfeitable. A Participant
for whom amounts are transferred under this Section will always have a
nonforfeitable interest in the amounts transferred and credited to his or her
Compensation Deferral Contributions Account and Prior Plan Account. Any amount
transferred to a Participant's Profit Sharing Contributions Account will be
subject to the nonforfeitable interest schedule contained in Section 5.03.
"Years of Service" credited under the First Western Plan will count as
Years of Service for all purposes under this Plan.
3.11 Merger of Frozen Picton Cavanaugh Plan Accounts Effective June 30,
2000. Prior to July 1, 2000, the Company maintained the Picton Cavanaugh, Inc.
Profit-Sharing Retirement Plan (the "Picton Cavanaugh Plan"). The Picton
Cavanaugh Plan has been frozen since January 1, 2000. Eligible employees of
Picton Cavanaugh, Inc. were eligible to participate in the Plan beginning
January 1, 2000. Effective July 1, 2000, the Picton Cavanaugh Plan was merged
into, and amended and restated in the form of, this Plan.
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Amounts transferred from the Picton Cavanaugh Plan pursuant to this Section
from a Participant's Account that were attributable to "Elective Contributions"
under the Picton Cavanaugh Plan shall be held and invested in the Participant's
Compensation Deferral Contribution Account under this Plan, according to the
Participant's investment elections. Amounts transferred from the Picton
Cavanaugh Plan that were attributable to "Discretionary Contributions" other
than "Matching Contributions" under the Picton Cavanaugh Plan shall be held and
invested in the Participant's Profit Sharing Contributions Account under this
Plan. Amounts transferred from the Picton Cavanaugh Plan that were attributable
to "Matching Contributions" under the Picton Cavanaugh Plan shall be held and
invested in the Participant's Matching Contributions Account under this Plan.
A Participant for whom amounts are transferred under this Section will
always have a nonforfeitable interest in the amounts transferred and credited to
his or her Compensation Deferral Contributions Account. Any amount transferred
to a Participant's Profit Sharing Contributions Account and Matching
Contributions Account will be subject to the nonforfeitable interest schedule
contained in Section 5.03.
"Years of Service" credited under the Picton Cavanaugh Plan will count as
Years of Service for all purposes under this Plan.
3.12 Merger of Frozen TOB Plan Accounts Effective August 1, 2000. Prior to
August 1, 2000, the Company maintained The Ohio Bank Employees' Profit Sharing
Plan (the "TOB Plan"). The TOB Plan was frozen effective December 31, 1999.
Effective August 1, 2000, the TOB Plan was merged into, and amended and restated
in the form of, this Plan.
Amounts transferred from the TOB Plan pursuant to this Section from a
Participant's Account that were attributable to "Salary Deferral Contributions"
under the TOB Plan shall be held and invested in the Participant's Compensation
Deferral Contribution Account under this Plan, according to the Participant's
investment elections. Any other amounts transferred from the TOB Plan shall be
held and invested in the Participant's Prior Plan Account under this Plan.
"Years of Service" credited under the TOB Plan will count as Years of
Service for all purposes under this Plan.
Notwithstanding the provisions of Section 5.03 of this Plan, amounts
transferred from the TOB Plan are fully vested and nonforfeitable, and the
following special provisions shall apply to those amounts:
(a) In addition to the optional forms of benefit described in Section 6.04
of this Plan, a participant for whom an amount was transferred from the TOB Plan
(a "TOB Participant") may elect to have his or her Accounts distributed in the
form of a single premium nontransferable annuity contract that is not
conditioned upon mortality, and that is purchased by the Trustee at the TOB
Participant's direction.
(b) Notwithstanding any contrary provision in Article VI of this Plan or
this Section 3.12, a TOB Participant may, within the 60-day period preceding or
the 60-day period commencing on the date of his or her employment termination,
elect to receive part of the portion of his or her Accounts that were
transferred from the TOB Plan in a partial distribution. To be
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effective, such partial distribution must represent at least 50%, but not more
than 90%, of the amount transferred to the TOB Participant's Accounts from the
TOB Plan. If a TOB Participant requests a partial distribution under this
Section 3.13(b), the distribution will be made within the 30-day period
commencing on the later of (1) the date of the TOB Participant's employment
termination; or (2) the date the Participant applies for the distribution.
(c) In the event of a TOB Participant's death, the base value of any life
insurance contract transferred from the TOB Plan to the Plan under this Section
3.12 that is in excess of the life insurance contract's cash value will be
distributed to the Participant's Beneficiary in the method elected by the
Beneficiary under Section 6.07 of this Plan.
3.13 Transfer of Defined Benefit Plan Assets. The Company may, in its sole
discretion, contribute to the Trust Fund amounts transferred from a terminated
defined benefit plan previously maintained by the Company (the "Defined Benefit
Plans"), in accordance with the provisions of Code Section 4980(d). Amounts
transferred from the Defined Benefit Plans pursuant to this Section 3.13 shall
either (a) be allocated to Participants' Profit Sharing and/or Matching
Contributions Accounts in the Plan Year in which the transfer occurs, or (b)
held and invested in a suspense account established under this Plan. Amounts
held in a suspense account (including interest thereon) shall be allocated to
Participants' Profit Sharing and Matching Contributions Accounts no less rapidly
than ratably over the seven-Plan-Year-period beginning with Plan Year in which
the transfer occurs.
3.14 Catch-Up Contributions. Effective for Plan Years beginning after
December 31, 2001, the Plan will permit each "Catch-Up Eligible Participant" to
make Compensation Deferral Contributions in excess of the applicable limits set
forth in paragraph (c) below ("Catch-Up Contributions") in any Plan Year.
(a) The Plan shall not permit a Participant to make Catch-Up Contributions
in any Plan Year that exceed the lesser of:
(i) the applicable dollar limit prescribed by Code Section 414(v)
(e.g., $1,000 for Plan Year 2002); and
(ii) the excess (if any) of (A) the Participant's compensation (as
defined in Code Section 415(c)(3)) for the year, over (B) any other Compensation
Deferral Contributions the Catch-Up Eligible Participant makes for the Plan
Year, other than Catch-Up Contributions under this Section 3.14.
(b) Catch-Up Contributions to the Plan under this Section 3.14 shall not,
with respect to the Plan Year in which the contribution is made:
(i) be taken into account in applying the limits of Code Sections
401(a)(30), 401(k)(11), 402(h), 402A(c)(2), 403(b)(1)(E), 404(h), 408(k),
408(p), 415 or 457 to other contributions or benefits under the Plan or under
any other plan of the Employers;
(ii) cause the Plan to be treated as failing to meet the requirements
of Code Sections 401(a)(4), 401(k)(3), 401(k)(8), 402(g), 403(b)(12), 408(k),
410(b) or 416 by reason of the making of (or the right to make) Catch-Up
Contributions.
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For all other purposes of the Plan, Catch-Up Contributions shall be treated as
Compensation Deferral Contributions.
(c) For purposes of this Section 3.14, the term "Catch-Up Eligible
Participant" means, with respect to any Plan Year, each Participant in the Plan
who: (i) has attained, or will attain, age 50 before the close of the Plan Year,
and (ii) who is otherwise eligible to make Compensation Deferral Elections
during the Plan Year, except by reason of the application of any limitation or
other restriction described in Code Section 401(a)(30), 402(h), 403(b)(1)(E),
404(h), 408(k), 408(p), 415, 457, 401(k)(8)(C) or 408(k)(6) or any comparable
limitation or restriction contained in the terms of the Plan.
3.15 Catch-Up Matching Contributions. Effective for Plan Years beginning
after December 31, 2001, each Employer may contribute for each Catch-Up Eligible
Participant in its employ at the end of the Plan Year an amount ("Catch-Up
Matching Contributions") based on the Catch-Up Contributions, if any, made by
the Catch-Up Eligible Participant during such Plan Year. Each Employer will
determine the amount of any Catch-Up Matching Contribution in its discretion,
subject to the limitations described in Section 7.02. Any Catch-Up Matching
Contributions shall be paid to the Trustee no later than the time required for
the filing of the Employer's federal income tax returns for its fiscal year in
which such Plan Year ends, including extensions of time thereof. For all other
purposes of the Plan, Catch-Up Matching Contributions shall be treated as
Matching Contributions.
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Article IV
Allocations
-----------
4.01 Participant Accounts. The Plan Administrator shall direct the Trustee
to maintain such separate Accounts for each Participant as the Plan
Administrator shall from time to time determine, including the following:
(a) Profit Sharing Contributions Account. The amount of the Employer's
contribution to the Trust Fund pursuant to Section 3.04 hereof and allocated
pursuant to Section 4.02(a) hereof, and any amount allocated to a Participant's
Profit Sharing Account pursuant to Section 3.10, 3.11, 3.12 or 3.13, together
with such Participant's share of all income, gains and accumulations therefrom,
shall be credited and losses debited to each Participant's Profit Sharing
Contributions Account.
(b) Compensation Deferral Contributions Account. Compensation Deferral
Contributions authorized by each Participant and contributed by the Employer
pursuant to Section 3.02 hereof, and any amount allocated to a Participant's
Compensation Deferral Contributions Account pursuant to Section 3.10 or 3.11,
together with such Participant's share of all income, gains and accumulations
therefrom, shall be credited and losses debited to each Participant's
Compensation Deferral Contributions Account.
(c) Matching Contributions Account. Matching Contributions made by the
Employer pursuant to Section 3.03 or 3.15 hereof, and any amount allocated to a
Participant's Matching Contribution Account pursuant to Section 3.11 or 3.13,
together with such Participant's share of all income, gains and accumulations
therefrom, shall be credited and losses debited to such Participant's Matching
Contributions Account.
(d) Prior Plan Account. Amounts transferred from a previous qualified plan
of an Employer, together with such Participant's share of income, gains and
accumulations therefrom, shall be credited and losses debited to each
Participant's Prior Plan Account.
(e) Rollover Contributions Account. Rollover Contributions made by a
Participant pursuant to Section 3.05 hereof, together with such Participant's
shares of all income, gains and accumulations therefrom, shall be credited and
losses debited to such Participant's Rollover Contributions Account.
(f) Frozen Plan Account. Amounts transferred to this Plan as a result of
the merger of the frozen Mid Am, Inc. Profit Sharing and 401(k) Plan (the
"Frozen Plan") into this Plan, and remaining in this Plan under the terms of
Section 3.09, together with such Participant's share of income, gains and
accumulations therefrom, shall be credited and losses debited to each
Participant's Frozen Plan Account.
Said Profit Sharing Contributions Account, Compensation Deferral
Contributions Account, Matching Contributions Account, Prior Plan Account,
Rollover Contributions Account and Frozen Plan Account will sometimes
hereinafter be collectively referred to as "Accounts."
4.02 Allocation of Profit Sharing Contributions. Effective as of the last
day of each Plan Year, any amount contributed by the Employers pursuant to
Section 3.04 or 3.13 hereof shall
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be allocated and credited to the Profit Sharing Contributions Account of each
eligible Participant. An allocation will be made only if the Participant was
employed by the Employer on the last day of such Plan Year and was credited with
at least 1,000 Hours of Service during such Plan Year, except that any
Participant who became totally and permanently disabled, died or retired during
such Plan Year shall receive an allocation. Such allocations shall be determined
in the same proportion that such Participant's Annual Compensation bears to the
total Annual Compensation of all Participants eligible to share in the
Employers' Profit Sharing Contribution for such Plan Year. For this purpose,
Annual Compensation shall (i) only include compensation earned while the
Participant was an Employee of an Employer, and (ii) include compensation for
the entire Plan Year, even if the Participant first became a Participant during
the Plan Year.
4.03 Allocation of Compensation Deferral Contributions. All Compensation
Deferral Contributions made by the Employers pursuant to Section 3.02 for any
pay period shall be allocated and credited to the Compensation Deferral
Contributions Account of each eligible Participant who made Compensation
Deferral Contributions for that pay period, according to such Participant's
Compensation Deferral Contributions for the pay period. All Catch-Up
Contributions made by the Employer pursuant to Section 3.14 for any pay period
shall be allocated and credited to the Compensation Deferral Contributions
Account of each Catch-Up Eligible Participant who made Catch-Up Contributions
for that pay period, according to such Catch-Up Eligible Participant's Catch-Up
Contributions for the pay period.
4.04 Allocation of Matching Contributions. Any Matching Contributions made
by the Employers pursuant to Section 3.03 or 3.13 for any pay period shall be
allocated and credited to the Matching Contributions Account of each eligible
Participant who made Compensation Deferral Contributions for that pay period,
according to such Participant's Compensation Deferral Contributions for the pay
period. The allocable share of each Participant shall be 100% of the first 3% of
the Participant's Compensation Deferral Contributions for the pay period, up to
a maximum of 3% of the Participant's Annual Compensation, subject to the terms
of the Plan. Any Catch-Up Matching Contributions made by the Employers pursuant
to Section 3.15 for any pay period shall be allocated and credited to the
Matching Contributions Account of each eligible Participant who made Catch-Up
Contributions for that period. Such allocations shall be determined in the same
proportion that such Participant's Annual Compensation bears to the total Annual
Compensation of all Participant's eligible to share in the Employer's Catch-Up
Matching Contribution for such pay period. For this purpose, Annual Compensation
shall (i) only include compensation earned while the Participant was an Employee
of an Employer, and (ii) include compensation for the entire Plan Year, even if
the Participant first became a Participant during the Plan Year.
4.05 Allocation of Investment Gain or Loss. Any net gain or net loss
resulting from the operation of the Investment Funds of the Trust for such year,
determined in accordance with Article IX hereof, shall be allocated by the
Trustee to the respective Participant's Accounts in proportion to the value of
the respective interests in the Investment Fund immediately preceding such
revaluation.
4.06 Allocation of Cash Dividends. Cash dividends on Company Stock
allocated to a Participant's Account shall be credited to the Participant's
Account.
4.07 Valuations. The Trust Fund and each Investment Fund shall be valued by
the Trustee at fair market value as of each Valuation Date. The "adjusted net
worth" of an Investment
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Fund as of any Valuation Date means the net worth of that Investment Fund as
determined by the Trustee in accordance with the provisions of the Trust
Agreement.
4.08 Allocation of Gain or Loss. Any increase or decrease in the market
value of each Investment Fund of the Trust Fund since the preceding Valuation
Date and all income earned, expenses incurred and realized profits and losses,
shall be determined in accordance with accounting methods uniformly and
consistently applied and shall be added to or deducted from the Account of each
Participant based on the amount of a Participant's Account in such Investment
Fund at the prior Valuation Date in accordance with non-discriminatory
procedures and rules adopted by the Plan Administrator. Before reallocation, the
Accounts of the Participants shall be reduced by any payments made therefrom in
the period. At the Plan Administrator's discretion uniformly applied,
administrative expenses directly connected or associated with a particular
Participant's Account may be charged to the Account. Notwithstanding the
foregoing, allocation shall not be required to the extent the Trust Fund, or any
Investment Fund thereof, is administered in a manner that permits separate
valuation of each Participant's interest therein without separate incremental
cost to the Plan or the Plan Administrator otherwise provides for separate
valuation.
4.09 Annual Report to Participants. The Plan Administrator shall notify
each Participant in writing of the financial status of his or her Accounts as of
the last day of each Plan Year.
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Article V
Benefits to Participants
------------------------
5.01 Upon Retirement or Disability. When a Participant retires on or after
the Participant's Normal Retirement Date, or becomes totally and permanently
disabled, the entire interest in the Participant's Accounts, including the
amount of any contributions for the Plan Year in which the Participant's
retirement or Disability occurs, shall become nonforfeitable. The Plan
Administrator, in accordance with the provisions of Section 6.01 of the Plan,
shall then direct the Trustee to distribute to such Participant the entire
interest in his or her Accounts. A Participant's Accounts shall be
nonforfeitable upon the attainment of Normal Retirement Age.
A Participant who remains in the employment of the Employer after the
Participant's Normal Retirement Date shall continue to participate in the Plan.
No distribution shall be made to the Participant until his or her actual
retirement, subject to the mandatory commencement of benefit provisions of
Section 6.06 hereof.
5.02 Upon Death. Upon the death of a Participant, the entire interest in
the Participant's Accounts, including the amount of any contributions for the
Plan Year in which the Participant's death occurs, shall become nonforfeitable.
The Plan Administrator, in accordance with the provisions of Article VI of the
Plan, shall then direct the Trustee to distribute the entire interest in the
Participant's Accounts to such Participant's designated beneficiary or
beneficiaries. The Plan Administrator may require proper proof of death and
evidence of the right of any person to receive payment of the entire interest in
the Accounts of the deceased Participant as the Plan Administrator deems
desirable and the Plan Administrator's determination shall be conclusive. The
Trustee shall make such distribution as soon as administratively feasible
following the Participant's death and in accordance with the rules and
procedures established by the Plan Administrator.
Unless the Participant has made a Qualified Election, the Trustee shall
make all payments to the Participant's spouse in a lump sum, or, if applicable,
in a Qualified Pre-Retirement Survivor Annuity pursuant to Section 6.02. Each
Participant, by written instrument delivered to the Plan Administrator, shall
have the unqualified right to designate, and from time to time change, the
beneficiary or beneficiaries to receive the entire interest in his Accounts in
the event of his death, subject to the Qualified Election requirements in
Section 6.05(e).
In the event the Participant fails to designate a beneficiary or
beneficiaries, the entire interest in the Participant's Accounts shall be
distributed first to the Participant's spouse if then living, or second to the
Participant's estate.
5.03 Nonforfeitable Interest Upon Termination of Employment. Upon
termination of a Participant's employment for any reason other than retirement,
Disability or death, the Trustee shall, in accordance with the provisions of
Section 6.01 of the Plan and at the instruction of the Plan Administrator,
distribute to the Participant the entire interest then constituting his
Compensation Deferral Contributions Account and Rollover Contributions Account,
which are always nonforfeitable, and the nonforfeitable interest in the
Participant's Matching Contributions Account, Profit Sharing Contributions
Account, Frozen Plan Account and Prior Plan Account based on the Participant's
Years of Service determined in accordance with the applicable schedule below:
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Years of Service Nonforfeitable Interest
Less than 2 0%
2 but less than 3 40%
3 but less than 4 60%
4 but less than 5 80%
5 or more 100%
(a) Any Participant who, prior to January 1, 1999, was a Participant in the
Mid Am, Inc. Profit Sharing and 401(k) Plan, and who has completed at least
three Years of Service as of January 1, 1999, may elect in writing to have his
or her nonforfeitable interest computed under the Plan's five year cliff vesting
schedule in effect prior to January 1, 1999, by the later of: (i) the
Participant's termination of employment, or (ii) the date that is 60 days after
the day the Plan Administrator gives written notice of the Plan amendment to the
Participant.
(b) In the event the nonforfeitable interest schedule is amended, or the
nonforfeitable interest schedule of an existing plan is amended by the Plan,
then any Participant who has completed at least three Years of Service on the
later of the date the amendment is adopted, or the date the amendment is
effective may elect in writing to have his or her nonforfeitable interest
computed under the prior applicable nonforfeitable interest schedule, beginning
on the date the Plan amendment is adopted and ending on the later of: (i) the
Participant's termination of employment, (ii) the date that is 60 days after the
day the Plan amendment is adopted, (iii) the date that is 60 days after the day
the Plan amendment becomes effective, or (iv) the date that is 60 days after the
day the Plan Administrator gives written notice of the Plan amendment to the
Participant.
(c) Notwithstanding any contrary provision of this Plan, each Participant
who was an employee of Sky Investments, Inc. on March 7, 2001, the effective
date of the sale of Sky Investments, Inc., acquired a 100% nonforfeitable
interest in his or her Accounts under the Plan as of that date.
5.04 October 2, 1998 Change in Control. Each Participant in the Mid Am,
Inc. Profit Sharing and 401(k) Plan on October 2, 1998, the effective date of
the merger of Mid Am into Citizens, acquired a 100% nonforfeitable interest in
his or her Accounts under the Mid Am, Inc. Profit Sharing and 401(k) Plan as of
that date. The Employer Profit Sharing and Matching Contributions made under the
Mid Am, Inc. Profit Sharing and 401(k) Plan, and under this Plan, on and after
October 2, 1998, shall be subject to the vesting schedule contained in this
Article, based on all of the Participant's Years of Service before and after
that date.
5.05 Forfeiture Upon Termination of Employment. If a Participant terminates
employment, and the value of the Participant's vested Accounts is not (or at the
time of any prior, periodic distribution was not) greater than $5,000, the
Participant will receive a distribution of the value of the entire vested
portion of his or her Accounts and the nonvested portion will be treated as a
forfeiture.
(a) If a Participant terminates service and elects to receive a
distribution of the vested portion of his or her Accounts pursuant to Article VI
of the Plan, the nonvested portion will be treated as a forfeiture.
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(b) If distribution is made to a Participant on account of termination of
employment, which is less than the value of the Participant's Account, prior to
the date on which the Participant has a Break in Service for five consecutive
Plan Years, and the Participant returns to employment covered by the Plan, the
Participant's Account shall subsequently be determined without regard to the
portion thereof derived from predistribution employment, provided the
Participant (i) received distribution of the entire present value of the
nonforfeitable portion of his or her Account at the time of distribution, (ii)
the amount of the distribution did not exceed the dollar limit under Code
Section 411(a)(11)(A) or the Participant (with spousal consent, if applicable)
voluntarily elected to receive the distribution, and (iii) the Participant upon
return to employment covered by the Plan does not repay the full amount of the
distribution before the earlier of suffering five consecutive one year Breaks in
Service, or at the close of the first period of five consecutive one year Breaks
in Service commencing after the distribution. If the Participant makes a timely
repayment, the Participant's Account shall equal the sum of the repayment and
the forfeitable portion of the Participant's Account on the date of
distribution, unadjusted by gains or losses subsequent to the distribution.
Restoration of forfeitures under this paragraph shall be made, to the extent
necessary, first from forfeitures in the Plan Year of repayment and second from
Employer contributions.
(c) If a Participant does not receive a distribution pursuant to Article
VI, the nonvested portion of the Participant's Accounts will be treated as a
forfeiture on the last day of the Plan Year in which the Participant terminated
employment.
(d) Except as provided in paragraph (b) above, forfeitures will be used to
reduce the contribution due from the Employer for the Plan Year in which the
forfeiture occurs, or for the immediately following Plan Year.
(e) For purposes of this Section 5.05, if a Participant does not have any
nonforfeitable interest in his Accounts, he will be deemed to have received a
distribution of the entire vested portion of his Accounts in accordance with the
provisions of subparagraph (a) above without having submitted any application
for benefits to the Plan Administrator. If such Participant returns to active
service with an Employer prior to incurring five consecutive Breaks in Service,
the Participant will be deemed to have paid back the distribution and his
Accounts will be restored as provided in subparagraph (b) above.
5.06 Change in Control. In the event of a Change in Control, each
Participant who is employed by an Employer on the effective date of a Change in
Control shall acquire a 100% nonforfeitable interest in his or her Accounts as
of that date.
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Article VI
Distributions
-------------
6.01 Commencement of Benefits. The Plan shall distribute a Participant's
Account as soon as administratively feasible after the Participant's termination
of employment, except as provided below. If the nonforfeitable portion of the
Participant's Account exceeds (or at the time of any prior, periodic
distribution ever exceeded) $5,000, the Plan shall not distribute the
Participant's Account before the Participant attains Normal Retirement Date,
unless the Participant consents to such distribution in writing. The Plan
Administrator shall notify the Participant of the right to defer the
distribution of his or her Account, subject to the limitations of Section 6.06
below. Effective January 1, 2002, the value of a Participant's nonforfeitable
Account shall be determined without regard to that portion of his or her Account
that is attributable to rollover contributions (and earnings allocable thereto)
within the meaning of Code Sections 402(c), 403(a)(4), 403(b)(8),
408(d)(3)(A)(ii) and 457(e)(16).
If the Participant does not consent to distribution, the Participant's
Account shall be retained in the Trust Fund until such later date as the
Participant requests distribution. If the Participant does not request
distribution prior to the Participant's Normal Retirement Date or death, the
Plan shall distribute the Participant's Account as soon as administratively
feasible after the Valuation Date next following the first to occur of the
Participant's Normal Retirement Date or death (provided the Plan Administrator
receives notice of the Participant's death).
6.02 Payment of Benefits: Pre-1999 Participants. For each Participant who
was a Participant in the Mid Am, Inc. Profit Sharing and 401(k) Plan prior to
January 1, 1999:
(a) the normal form of benefit under the Plan is the "Qualified Joint and
Survivor Annuity," unless the Participant and his or her spouse execute a
Qualified Election, pursuant to Section 6.05(e), selecting an optional form of
benefit within the 90-day period ending on the date the Plan is to commence
benefit payments; and
(b) if the Participant is married and dies prior to the commencement of his
or her benefits, the Participant's Account shall be used to provide a "Qualified
Pre-Retirement Survivor Annuity" for the Participant's spouse, unless the
Participant and his or her spouse execute a Qualified Election, pursuant to
Section 6.05(e), selecting another form of distribution, within the "Election
Period."
(c) Notwithstanding paragraphs (a) and (b) of this Section 6.02, the
provisions of paragraph (d) of Section 6.04 shall apply exclusively to all
distributions scheduled to commence on or after the earlier of (i) the 90th day
after the Participant has been furnished a summary of paragraph (d) of Section
6.04 that satisfies the requirements of 29 C.F.R. 2520.104(b)-3, or (ii) January
1, 2003.
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6.03 Payment of Benefits: Post-1998 Participants. For each Participant who
was not a Participant in the Mid Am, Inc. Profit Sharing and 401(k) Plan prior
to January 1, 1999, the Plan will distribute the Participant's Account in one of
the optional forms of benefit specified in Section 6.04, as the Participant
elects. If a Participant who was not a Participant in the Mid Am, Inc. Profit
Sharing and 401(k) Plan prior to January 1, 1999, dies before the complete
distribution of his or her Account, leaving a surviving spouse, the surviving
spouse will automatically be the Participant's sole, primary beneficiary, unless
the Participant has designated someone other than his surviving spouse as
beneficiary, by a Qualified Election, pursuant to Section 6.05(e).
Notwithstanding the previous paragraph of this Section 6.03, the provisions
of paragraph (d) of Section 6.04 shall apply exclusively to all distributions
scheduled to commence on or after the earlier of (i) the 90th day after the
Participant has been furnished a summary of paragraph (d) of Section 6.04 that
satisfies the requirements of 29 C.F.R. 2520.104(b)-3, or (ii) January 1, 2003.
6.04 Optional Forms of Benefit. A Participant may elect to waive the
Qualified Joint and Survivor Annuity and have his or her Accounts distributed in
one of the following optional forms of distribution:
(a) a lump sum payment;
(b) a straight life annuity for the Participant's life; or
(c) substantially equal monthly, quarterly, semi-annual or annual
installments over any period of time not exceeding the Participant's then life
expectancy or the joint and last survivor expectancy of the Participant and a
designated beneficiary. If there is any remaining balance in the Participant's
Account upon his or her death, such balance shall be payable as a death benefit
in accordance with Section 6.07 below.
(d) Notwithstanding paragraphs (a) through (c) of this Section 6.04, the
provisions of this paragraph (d) shall apply exclusively to all distributions
scheduled to commence on or after the earlier of (i) the 90th day after the
Participant has been furnished a summary of this paragraph (d) that satisfies
the requirements of 29 C.F.R. 2520.104(b)-3, or (ii) January 1, 2003.
A Participant, or his or her designated beneficiary, may elect to have the
vested balance of the Participant's Account distributed in either (i) a lump sum
payment, or (ii) substantially equal monthly, quarterly, semi-annual or annual
installments over any period of time not exceeding the Participant's then life
expectancy or the joint and last survivor expectancy of the Participant and a
designated beneficiary. If there is any remaining balance in the Participant's
Account upon his or her death, such balance shall be payable as a death benefit
in accordance with Section 6.07 below.
If the Participant's entire Account is to be distributed in other than a
lump sum, then the amount to be distributed each year must be at least an amount
equal to the quotient obtained by dividing the Participant's entire interest by
the life expectancy of the Participant or joint and last survivor expectancy of
the Participant and designated beneficiary. Life expectancy and joint and last
survivor life expectancy are computed by the use of the return multiples
contained in Section 1.72-9 of the Income Tax Regulations. For purposes of this
computation, a Participant's life expectancy may be recalculated no more
frequently than annually, however, the life expectancy of a non-spouse
beneficiary may not be recalculated. If the Participant's spouse is not the
designated
-26-
beneficiary, the method of distribution selected must assure that more than 50%
of the present value of the amount available for distribution is paid within the
life expectancy of the Participant. All distributions must be the minimum
distribution incidental benefit requirements in Section 1.401(a)(9)-2 of the
proposed regulations.
With respect to distributions under the Plan made for calendar years
beginning on or after January 1, 2002, the Plan will apply the minimum
distribution requirements of Code Section 401(a)(9) in accordance with the
Treasury Regulations under Code Section 401(a)(9) that were proposed on January
17, 2001, notwithstanding any provision of the Plan to the contrary. The
provisions of this amendment will continue in effect until the end of the last
calendar year beginning before the effective date of final regulations under
Code Section 401(a)(9) or such other date as may be specified in guidance
published by the Internal Revenue Service.
6.05 Definitions. The following definitions shall apply to this Article VI:
(a) Annuity Starting Date. "Annuity Starting Date" mean the first day of
the first period for which an amount is paid as an annuity, regardless of when
or whether payment is actually made. In the case of benefits not payable as an
annuity, the Annuity Starting Date is the date on which all events have occurred
that entitle the Participant to a benefit.
(b) Qualified Joint and Survivor Annuity. "Qualified Joint and Survivor
Annuity" means an annuity for the life of the Participant with a survivor
annuity for the life of the spouse that is not less than 50% and not more than
100% of the amount of the annuity that is payable during the joint lives of the
Participant and the spouse, which is the actuarial equivalent of the normal form
of benefit, or if greater, any optional form of benefit. A Qualified Joint and
Survivor Annuity for a Participant who is not married shall be an annuity for
the life of such Participant.
(c) Qualified Pre-Retirement Survivor Annuity. "Qualified Pre-Retirement
Survivor Annuity" means an annuity for the life of the Participant's surviving
spouse, if any, applying the Participant's vested Account to purchase such life
annuity. The spouse of the deceased Participant may elect to receive the full
value of such Participant's Account in a lump sum in lieu of the Qualified
Pre-Retirement Survivor Annuity.
Subject to the rules in Section 6.03, the surviving spouse shall begin to
receive payments immediately, unless such surviving spouse elects a later date,
except that the surviving spouse shall receive an immediate distribution if the
value of the Participant's vested Accounts is not (or at the time of any prior,
periodic distribution was not) greater than $5,000.
(d) Applicable Period. The "Applicable Period" for the explanation of the
Qualified Joint and Survivor Annuity shall be no less than 30 days (or no less
than 7 days if the Participant waives the 30-day period pursuant to Code Section
417(a)(7)(B)) and no more than 90 days prior to the Participant's Annuity
Starting Date, or soon after the Participant's Annuity Starting Date if the
requirements of Code Section 417(a)(7)(A) are met. The "Applicable Period" for
the Qualified Pre-Retirement Survivor Annuity" means, with respect to a
particular Participant, the latest of the following:
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(i) The period that begins with the first day of the Plan Year in
which the Participant attains age 32 and ending with the close of the Plan
Year preceding the Plan year in which the Plan Year in which the
Participant attains age 35;
(ii) a reasonable period after the Employee becomes a Participant;
(iii) a reasonable period after this Section no longer applies to the
Participant; or
(iv) a reasonable period after the Participant's separation from
service in the case of a Participant who separates from service before
attaining age 35.
Within the Applicable Period, the Plan Administrator shall give the
Participant written notification of the availability of the Qualified Election
with respect to the Qualified Joint and Survivor Annuity. The notification shall
explain the terms and conditions of the Qualified Joint and Survivor Annuity,
the rights of the spouse, the effect of electing not to take such annuity, and
the right to revoke a previous election to waive such annuity. The Participant
(and the Participant's spouse) must complete the election on or before the
Annuity Starting Date, or after the Annuity Starting Date if the requirements of
Code Section 417(a)(7)(A) are met. The Participant may revoke an election not to
take the Joint and Survivor Annuity or choose again to take such annuity at any
time and any number of times within the applicable election period. If a
Participant requests additional information within 60 days after receipt of the
notification of election, the minimum election period shall be extended an
additional 60 days following the Participant's receipt of such additional
information.
Within the Applicable Period, the Plan Administrator shall give each
Participant a written explanation of the Qualified Pre-Retirement Survivor
Annuity which shall contain the following: (i) the terms and conditions of a
Qualified Pre-Retirement Survivor Annuity; (ii) the Participant's right to make
and the effect of an election to waive this form of benefit; (iii) the rights of
the Participant's spouse; and (iv) the right to make, and the effect of, a
revocation of a previous election to waive the Qualified Pre-Retirement Survivor
Annuity. In the case of a Participant who enters the Plan after the first day of
the Plan Year in which the Participant attained age 32, the Plan Administrator
shall provide the required notice no later than the close of the second Plan
Year succeeding the entry of the Participant in the Plan.
(e) Qualified Election. "Qualified Election" means an election by a
Participant to (i) waive the Qualified Joint and Survivor Annuity or Qualified
Pre-Retirement Survivor Annuity, pursuant to Section 6.02, and elect an optional
form of distribution, (ii) designate a beneficiary other than the Participant's
spouse, pursuant to Section 6.03, or (iii) begin distributions prior to the
Participant's Normal Retirement Date, pursuant to Section 6.01, which satisfies
the following consent requirements:
(i) The spouse's consent shall be witnessed by a Plan representative
or notary public.
(ii) The spouse's consent must acknowledge the effect of the election,
including that the spouse had the right to limit consent only to a specific
beneficiary or a specific form of benefit, if applicable, and that the
relinquishment of one or both such rights was voluntary. Unless the consent
of the spouse expressly permits designations by the
-28-
Participant without a requirement of further consent by the spouse, the
spouse's consent must be limited to the form of benefit, if applicable, and
the beneficiary, class of beneficiaries, or contingent beneficiary named in
the election.
(iii) Spousal consent is not required if the Participant establishes
to the satisfaction of the plan representative that the consent of the
spouse cannot be obtained because there is no spouse or the spouse cannot
be located.
(iv) A spouse's consent under this Section shall not be valid with
respect to any other spouse.
(v) A Participant may revoke a prior election without the consent of
the spouse. Any new election will require a new spousal consent, unless the
consent of the spouse expressly permits such election by the Participant
without further consent by the spouse.
(vi) A spouse's consent may be revoked at any time within the
Participant's election period.
6.06 Mandatory Commencement of Benefits. In no event other than the written
direction of the Participant will distribution of the Participant's benefits
under the Plan commence later than the 60th day after the end of the Plan Year
in which the later of the following events occurs:
(a) The Participant attains Normal Retirement Age;
(b) The tenth anniversary of the year in which the Participant commences
participation in the Plan; or
(c) The Participant terminates employment with the Employer.
A Participant may elect to defer the commencement of distributions under
the Plan to a date later than set forth above, provided, however, that the
Participant must make any such election by submitting to the Plan Administrator
a signed written statement describing the method and medium of distribution and
the date on which such distribution shall commence.
Anything above to the contrary notwithstanding, distributions of a
Participant's benefits must commence by April 1 of the calendar year following
the later of (i) the calendar year in which the Participant attains age 70-1/2,
or (ii) the calendar year in which the Participant retires, in accordance with
the minimum distribution requirements of Code Section 401(a)(9). Notwithstanding
the foregoing sentence, for any Participant who is a 5-percent owner of an
Employer, the distributions of benefits must commence by April 1 of the calendar
year following the calendar year in which the Participant attains age 70-1/2. A
Participant who attained age 70-1/2 during the 1998 calendar year and who is not
a 5-percent owner may elect to postpone receiving such distributions until April
1 of the calendar year following the year in which the Participant retires, as
long as he or she so elects in the manner prescribed by the Plan Administrator
before April 1, 1999. For purposes of this minimum distribution, the Participant
may elect prior to the date of the first required distribution to have his life
expectancy and his spouse's life expectancy recalculated annually. Such election
shall be irrevocable once made, and shall apply for all
-29-
subsequent Plan Years. The Participant and his spouse shall have the right to
separately elect as to whether each wants his life expectancy recalculated, and
the election of one shall not affect the election of the other. In the event
that either the Participant or his spouse fails to make an election, his life
expectancy shall be recalculated annually.
A Participant (i) for whom an amount was transferred pursuant to Section
3.10, 3.11 or 3.12 and (ii) who attains age 70-1/2 in the 2000 Plan Year or
earlier, may elect to commence receiving his or her Plan benefits on April 1 of
the calendar year following the calendar year in which the Participant attained
age 70-1/2, even if the Participant has not retired.
The mandatory commencement of distribution to a Participant or beneficiary
pursuant to this Section 6.06 shall not apply provided (i) that prior to January
1, 1984, or such other date permitted by law, a Participant (including Key
Employees) who had an Account balance under this Plan as of December 31, 1983,
made a written designation for a method of distribution of the benefit that
satisfy the provisions of Code Section 401(a)(9) as in effect prior to the
enactment of the Tax Equity and Fiscal Responsibility Act of 1982 (including
rules relating to incidental death benefits). Any written designation, if made,
shall be binding upon the Plan Administrator. In addition, the mandatory
commencement of distribution shall not apply to any Participant who attained age
70-1/2 prior to January 1, 1988 and who was not a five percent owner at any time
after he or she attained age 66-1/2.
6.07 Distributions After Death of a Participant. Subject to the provisions
of Section 6.02 above, if a Participant dies before the Plan has distributed any
portion of his or her Account, the Plan shall distribute the Participant's
Account in one of the following methods:
(a) The Plan shall distribute the Participant's Account no later than
December 31 of the calendar year that contains the fifth anniversary of the date
of the Participant's death, regardless of who is to receive the distribution.
(b) If the distribution is to be made to a designated beneficiary, the
distribution of a Participant's interest shall commence not later than December
31 of the calendar year immediately following the calendar year in which the
Participant died, and payments shall occur over a period not extending beyond
the life expectancy of such designated beneficiary. If distribution is to be
made to the Participant's surviving spouse, distribution must commence on or
before the later of: (i) December 31 of the calendar year immediately following
the calendar year in which the Participant died, or (ii) December 31 of the
calendar year in which the Participant would have attained age 70-1/2. Such
distribution shall occur over a period not extending beyond the life expectancy
of such designated beneficiary.
A Participant or the Participant's spouse or designated beneficiary,
subject to a Qualified Election, may elect the method of distribution described
in subparagraph (b) above. Such election must be made no later than the earlier
of: (i) the date that distribution would have to occur according to the
provisions of subparagraph (a) above, or (ii) the date that distribution would
have to occur according to the provisions of subparagraph (b) above. As of such
date, the election is irrevocable and shall apply for all subsequent years and
any subsequent beneficiaries. If no such election is made, distribution shall be
made in accordance with subparagraph (a) above.
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If the Participant's surviving spouse dies before the Plan begins
distributions to such spouse, the payment of the Participant's interest shall be
made as if the surviving spouse were the Participant. If the Plan has begun
distribution of the Participant's interest at the time of such Participant's
death, distribution may be made for a term certain at least as rapidly as under
the method of distribution used prior to the death of the Participant.
6.08 Right to Have Accounts Transferred. Notwithstanding any provision of
the Plan to the contrary that would otherwise limit an "eligible distributee"
election under this Article VI, an eligible distributee may elect, at the time
and in the manner prescribed by the Plan Administrator, to have any portion of
an "eligible rollover distribution" paid directly to an "eligible retirement
plan" specified by the eligible distributee in a "direct rollover."
(a) "Eligible rollover distribution" means any distribution of all or any
portion of the balance to the credit of the eligible distributee, except that an
eligible rollover distribution shall not include: (i) any distribution that is
one of a 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 eligible distributee and the
eligible distributee's designated beneficiary, or for a specified period of ten
years or more; (ii) any distribution to the extent such distribution is required
under Code Section 401(a)(9); (iii) effective, January 1, 2000, any hardship
distribution described in Code Section 401(k)(2)(B)(i)(IV); and (iv) the portion
of any distribution that is not includible in gross income (determined without
regard to the exclusion for net unrealized appreciation with respect to employer
securities).
(b) "Eligible retirement plan" means an individual retirement account
described in Code Section 408(a), an individual retirement annuity described in
Code Section 408(b), an annuity plan described in Code Section 403(a), or a
qualified trust described in Code Section 401 (a), that accepts the eligible
distributee's rollover distribution. However, in the case of an eligible
rollover distribution to the surviving spouse, an eligible retirement plan shall
only be an individual retirement account or individual retirement annuity.
Effective for distributions made after December 31, 2001, an "eligible
retirement plan" shall also mean an annuity contract described in Code Section
403(b) and an eligible plan under Code Section 457(b) that is maintained by a
state, political subdivision of a state, or any agency or instrumentality of a
state or political subdivision of a state.
(c) An "eligible distributee" means Employee or former Employee. In
addition, the Employee's or former Employee's surviving spouse and the
Employee's or former Employee's spouse who is the alternate payee under a
qualified domestic relations order, as defined in Section 414(p), are eligible
distributees with regard to the interest of the spouse or former spouse.
(d) A "direct rollover" means a payment by the plan to the eligible
retirement plan specified by the eligible distributee.
If a distribution is one to which Code Sections 401(a)(11) and 417 do not
apply, such distribution may commence less than 30 days after the notice
required under Section 1.411(a)-11(c) of the Income Tax Regulations is given,
provided that: (i) the Plan Administrator clearly informs the Participant that
the Participant has a right to a period of at least 30 days after receiving the
notice to consider the decision of whether or not to elect a distribution (and,
if applicable, a
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particular distribution option); and (ii) the Participant, after receiving the
notice, affirmatively elects a distribution.
6.09 Restrictions on Distributions of Compensation Deferral Contributions.
Compensation Deferral Contributions may not be distributed from this Plan prior
to the earlier of:
(a) retirement, separation from service, death or Disability of the
Participant;
(b) attainment of age 59-1/2by the Participant, if procedures have been
established by the Plan Administrator;
(c) occurrence of a hardship (as described in Section 13.02 of the Plan);
(d) termination of the Plan without establishment of a successor plan;
(d) sale of substantially all of the assets of the Employer to an entity
that is not an affiliated employer; or
(e) upon the sale of a subsidiary of the Employer to an entity that is not
an affiliated employer, only Participants who are employed by such subsidiary
may receive a distribution of their Compensation Deferral Contributions Account.
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Article VII
Limitation On Contributions and Benefits
----------------------------------------
7.01 Definitions. The following definitions shall apply for purposes of
this Section 7.01:
(a) Annual Addition. "Annual Addition" means for each Plan Year the sum of
ithe following amounts credited to a Participant's Accounts for the Limitation
Year under all Defined Contribution Plans maintained by the Employer:
(i) Employer contributions,
(ii) Employee contributions,
(iii) Forfeitures, and
(iv) Any amounts allocated to an individual medical account (as
defined in Code Section 415(l)(2)) that is part of any pension or annuity
plan maintained by the Employer are treated as Annual Additions to a
Defined Contribution Plan. Amounts derived from contributions paid or
accrued after December 31, 1985 in taxable years ending after such date
that are attributable to post retirement medical benefits allocated to the
separate account of a key employee (as defined in Code Section 419(d)(3))
under a welfare benefit fund (as defined in Code Section 419(e)) maintained
by the Employer are treated as Annual Additions to a Defined Contribution
Plan. These amounts are treated as Annual Additions but are not subject to
the Compensation limit set forth in Section 7.02 below.
Rollover Contributions made by a Participant pursuant to Section 3.05
hereof, shall not be taken into account in computing Annual Additions. Catch-Up
Contributions made by a Participant pursuant to Section 3.14 hereof, shall not
be taken into account in computing Annual Additions.
(b) Defined Contribution Plan. "Defined Contribution Plan" means a pension
plan or profit sharing plan that provides for an individual account for each
Participant and for benefits based solely upon the amount contributed to the
Participant's account and any income, expenses, gains, losses and any
forfeitures of accounts of other Participants that may be allocated to such
Participant's account.
(c) Compensation. "Compensation" means compensation received from the
Employer during the Plan Year that is includible in gross income for income tax
purposes, including any elective deferrals (as defined in Code Section
402(g)(3)) and amounts contributed or deferred by the Employer at the election
of the Employee and that is not includible in the gross income of the Employee
by reason of Code Section 125, 132(f)(4) or 457.
(d) Limitation Year. "Limitation Year" means the Plan Year.
7.02 Limitation on Annual Additions. Any other provision of this Plan to
the contrary notwithstanding, the maximum Annual Addition to the Accounts of any
Participant under the Plan and any other Defined Contribution Plan maintained by
an Employer may not exceed the lesser of:
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(a) $30,000 (as adjusted for cost of living increases pursuant to Code
Section 415(d)), or
(b) 25% of the Participant's Compensation for the Limitation Year.
The Annual Addition limits specified in paragraphs (a) and (b) above for any
Limitation Year beginning after December 31, 2001, will be the lesser of (i)
$40,000 (as adjusted under Code Section 415(d)) or (ii) 100% of a Participant's
Compensation for the Limitation Year.
If, as the result of a reasonable error in estimating a Participant's
Compensation, the allocation of forfeitures, or under other limited facts and
circumstances as may be provided under the Regulations to Code Section 415, the
Annual Addition exceeds the maximum under this and any other Defined
Contribution Plan maintained by the Employer, the Plan Administrator shall
distribute an amount of the Participant's Compensation Deferral Contributions
necessary to eliminate the excess Annual Addition, or as much of the excess as
possible, as permitted by Code Section 415 or the regulations thereunder. If the
Plan Administrator distributes an amount of a Participant's Compensation
Deferral Contributions pursuant to the preceding sentence, the Plan
Administrator shall reduce from the Participant's Account any Matching
Contributions attributable to such returned Compensation Deferral Contributions,
and utilize the reduced Matching Contributions to reduce the Employer
contribution required for the next succeeding Plan Year. Any such sums shall not
share in the gains or losses of the Trust Fund.
7.03 Limitation of Benefits Under All Plans . For Plan Years beginning
before January 1, 2000, if an Employee was (or had been) a Participant under the
Plan and a defined benefit plan maintained by the Employer, the sum of the
defined contribution fraction and the defined benefit fraction for any
Limitation Year could not exceed 1.0 as computed under the terms and conditions
as set forth under Code Section 415(e). If the sum exceeded 1.0, the
Participant's defined contribution fraction was reduced until the sum equaled
1.0. The defined benefit plan fraction and the defined contribution fraction
were defined in Code Section 415(e).
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Article VIII
Nondiscrimination Requrements
------------------------------
8.01 Definitions. The following definitions shall apply for purposes of
this Article VIII:
(a) Actual Contribution Percentage. "Actual Contribution Percentage" means
the average (expressed as a percentage) of the Actual Contribution Ratios of the
Participants in a group.
(b) Actual Contribution Ratio. "Actual Contribution Ratio" means the ratio
(expressed as a percentage) of the Participant's Employee Contributions and
Matching Contributions to the Plan for the Plan Year (and any other plan that is
aggregated with the Plan for purposes of meeting the nondiscrimination
requirements of Code Section 401(m)) to the Participant's Compensation for the
Plan Year. The Actual Contribution Ratio of a Participant who is eligible, but
neither makes Employee Contributions nor receives Matching Contributions is
zero. An Actual Contribution Ratio for a Participant who has met the
requirements of Section 2.01(a), but not the requirements of 2.01(b), is not
calculated or included in the calculation of the Actual Contribution Percentage.
(c) Actual Deferral Percentage. "Actual Deferral Percentage" means the
average (expressed as a percentage) of the Actual Deferral Ratios of the
Participants in a group.
(d) Actual Deferral Ratio. "Actual Deferral Ratio" means the ratio
(expressed as a percentage) of the Participant's Elective Contributions for the
Plan Year (under the Plan and any other plan that is aggregated with the Plan
for purposes of meeting the nondiscrimination requirements of Code Section
401(k)) to the Participant's Compensation for the Plan Year. At the option of
the Plan Administrator, Qualified Matching Contributions and/or Qualified
Nonelective Contributions may be included for purposes of determining each
Participant's Actual Deferral Ratio. The Actual Deferral Ratio of a Participant
who is eligible but has no Elective Contributions, Qualified Matching
Contributions or Qualified Nonelective Contributions is zero. The Actual
Deferral Ratio for a Participant who has met the requirements of Section 2.01(a)
but has no Elective Contributions is zero.
(e) Compensation. "Compensation" means compensation received from the
Employer during the Plan Year that is includible in gross income for income tax
purposes, including any amounts contributed by the Employer pursuant to the
election of the Employee and that is not includible in the gross income of the
Employee by reason of Code Section 125, 132(f)(4), 402(e)(3), 402(h) or 403(b).
(f) Elective Contributions. "Elective Contributions" means Compensation
Deferral Contributions and any other Employer contributions made to the Plan,
and any other plan that is aggregated with the Plan for purposes of meeting the
nondiscrimination requirements of Code Section 401(k), that were subject to a
cash or deferred arrangement.
(g) Employee Contributions. "Employee Contributions" means any
contributions to the Plan (and any other plan that is aggregated with the Plan
for purposes of meeting the nondiscrimination requirements of Code Section
401(m)) that are designed or treated as after-tax
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Employee contributions and are allocated to a separate account to which
attributable earnings and losses are allocated.
(h) Excess Contributions. "Excess Contributions" means the excess of: (i)
the Elective Contributions, Qualified Matching Contributions and/or Qualified
Nonelective Contributions of a Highly Compensated Employee for such Plan Year,
over (ii) the maximum amount of such contributions permitted under the limits
determined in accordance with Section 8.03 hereof.
(i) Excess Aggregate Contributions. "Excess Aggregate Contributions" means
the excess of: (i) the Employee Contributions and Matching Contributions
actually made by or on behalf of a Highly Compensated Employee for such Plan
Year, over (ii) the maximum amount of such contributions permitted under the
limits determined in accordance with Section 8.03 hereof.
(j) Highly Compensated Employee. The term "Highly Compensated Employee" or
"HCE" means any Employee who performs service for an Employer during the Plan
Year and who: (i) was a 5-percent owner during the year or the preceding year;
or (ii) for the preceding year received Compensation from the Employers in
excess of $80,000 (as adjusted pursuant to Code Section 415(d)) and was in the
top-paid group of employees for such preceding year.
An Employee is in the top-paid group of Employees for any year if such
Employee is in the group consisting of the top 20% of the Employees when ranked
on the basis of Compensation paid during such year. For purposes of determining
the number of Employees in the top-paid group (but not for identifying the
particular Employees in the top-paid group), certain Employees may be excluded
in accordance with Code Section 414(q)(5).
A former employee will be treated as an HCE if he or she was an HCE for (i)
the separation year, or (ii) any Plan Year ending on or after the Employee's
55th birthday.
Before determining who are Highly Compensated Employees, Code Sections
414(b), (c), (m), (n) and (o) shall first be applied.
(k) Matching Contributions. "Matching Contributions" means:
(i) an Employer contribution made to the Plan (or any plan required to
be aggregated with the Plan for purposes of the nondiscrimination
requirements of Code Section 401(m)) on account of Employee Contributions
to the Plan;
(ii) an Employer contribution made to the Plan (or any plan required
to be aggregated with the Plan for purposes of the nondiscrimination
requirements of Section 401(m)) on account of an Elective Contribution to
the Plan; or
(iii) a forfeiture allocable on the basis of Excess Aggregate
Contributions.
A contribution made by the Employer in order to meet the Top Heavy minimum
contribution requirements of Article XVI may not be treated as a Matching
Contribution.
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(l) Non-Highly Compensated Employee. "Non-Highly Compensated Employee" or
"Non-HCE" means any Employee who is not a Highly Compensated Employee.
(m) Qualified Matching Contributions. "Qualified Matching Contributions"
means Matching Contributions that are fully vested at the time of contribution
and are subject to the withdrawal restrictions of Section 13.02.
(n) Qualified Nonelective Contributions. "Qualified Nonelective
Contributions" means Employer contributions, other than Elective Contributions
and Matching Contributions, that are fully vested at the time of contribution
and are not subject to the withdrawal restrictions of Section 13.02.
8.02 Nondiscrimination Requirements for Compensation Deferral
Contributions.
(a) Actual Deferral Percentage Test. In no event shall the Actual Deferral
Percentage of Participants who are HCEs exceed the Actual Deferral Percentage of
the Participants who are Non-HCEs by more than the greater of:
(i) 125% of the Actual Deferral Percentage for Participants who are
Non-HCEs, or
(ii) The lesser of 200% of the Actual Deferral Percentage for
Participants who are Non-HCEs or two percentage points higher than the
Actual Deferral Percentage for Participants who are Non-HCEs.
(b) Excess Contributions. If the Plan does not satisfy the Actual Deferral
Percentage Test for nondiscrimination in Code Section 401(k) for any Plan Year,
then the Excess Contributions for such Plan Year (plus any income and minus any
loss allocable thereto as calculated in accordance with Section 8.02(c)) shall
be distributed to the HCEs by the last day of the following Plan Year, as
determined under this Section. If such Excess Contributions are distributed more
than 2-1/2 months after the last day of the Plan Year in which such Excess
Contributions arose, a 10% excise tax will be imposed on the Company or Employer
maintaining the Plan with respect to such amounts. The portion of the Excess
Contributions attributable to an HCE is determined as follows:
First, the Plan Administrator shall determine the dollar amount of Excess
Contributions for each affected HCE, by reducing the Actual Deferral Ratio for
each HCE whose Actual Deferral Ratio(s) is the highest at any one time in the
following manner until the ADP Test is satisfied:
(i) The Actual Deferral Ratio of each HCE whose Actual Deferral Ratio
is the greatest shall be reduced by one-hundredth (1/100) of one percentage
point.
(ii) If more reduction is needed, the Actual Deferral Ratio of each
HCE whose Actual Deferral Ratio is the greatest (including the Actual
Deferral Ratio of any HCE whose Actual Deferral Ratio was adjusted under
step (i)) shall be reduced by one-hundredth (1/100) of one percentage
point.
(iii) If more reduction is needed, the procedures in step (ii) shall
be repeated.
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However, in applying steps (i) through (iii) above, rather than actually
distributing the amount of Compensation Deferral Contributions necessary to
reduce the Actual Deferral Ratio of each affected HCE to an amount sufficient to
satisfy the ADP Test in order of such HCE's Actual Deferral Ratios, the total of
the dollar amounts calculated in steps (i) through (iii) above (the "Excess
Contributions") will be determined and distributed as follows:
(iv) The Compensation Deferral Contributions of the HCE with the
highest dollar amount of Compensation Deferral Contributions will be
reduced by the amount required to cause that HCE's Compensation Deferral
Contributions to equal the dollar amount of the Compensation Deferral
Contributions of the HCE with the next highest dollar amount of
Compensation Deferral Contributions. Then this amount would be distributed
to the HCE with the highest dollar amount of Compensation Deferral
Contributions. However, if a lesser reduction, when added to the total
dollar amount already distributed under this step, would equal the total
Excess Contributions, then the lesser dollar amount will be distributed.
(v) If the total amount distributed under step (iv) is less than the
total Excess Contributions, then the step (iv) will be repeated.
Any refund made in accordance with this Section to a Participant shall be
drawn from the Participant's Compensation Deferral Contributions Account.
Matching Contributions with respect to such distributed Compensation
Deferral Contributions shall be forfeited (unless paid to the Participant due to
a correction under the Actual Contribution Percentage correction).
The amount of Excess Contributions to be distributed shall be reduced by
excess Compensation Deferral Contributions previously distributed pursuant to
Section 3.02(h) for the taxable year ending in the same Plan Year. Furthermore,
excess Compensation Deferral Contributions to be distributed for a taxable year
pursuant to Section 3.02(h) will be reduced by Excess Contributions previously
distributed pursuant to this Section 8.02(b) hereof for the Plan Year beginning
in such taxable year.
(c) Allocation of Income. Excess Compensation Deferral Contributions under
Section 3.02(h) and Excess Contributions under this Section will be adjusted for
any income or loss up to the date of distribution. Such income or loss will be
computed according to a reasonable method permitted under Treas. Reg.Section
1.401(k)-1(f)(4).
8.03 Nondiscrimination Requirements for Matching Contributions and Employee
Contributions.
(a) Actual Contribution Percentage Test. In no event shall the Actual
Contribution Percentage of Participants who are HCEs exceed the Actual
Contribution Percentage of the Participants who are Non-HCEs by more than the
greater of:
(i) 125% of the Actual Contribution Percentage for Participants who
are Non-HCEs, or
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(ii) The lesser of 200% of the Actual Contribution Percentage for
Participants who Non-HCEs or two percentage points higher than the Actual
Contribution Percentage for Participants who are Non-HCEs.
(b) Excess Aggregate Contributions. If the plan fails the Actual
Contribution Percentage Test for nondiscrimination under Code Section 401(m),
the Excess Aggregate Contributions for such Plan Year (plus any income and minus
any loss allocable thereto including the period between the end of the Plan Year
and the date of distribution or forfeiture) shall be distributed to the HCEs by
the last day of the following Plan Year, as determined under this Section. If
such Excess Aggregate Contributions are distributed more than 2-1/2 months after
the last day of the Plan Year in which such excess amounts arose, a 10% excise
tax will be imposed on the Employer maintaining the Plan with respect to those
amounts.
The portion of the Excess Aggregate Contributions attributable to an HCE is
determined under the procedures specified in Section 8.02(b). Any refund made to
a Participant in accordance with this Section shall be drawn from his or her
Matching Contributions Account. Notwithstanding the foregoing, if a Participant
does not have a 100% nonforfeitable right to his or her Matching Contributions
Account under Section 5.03, the forfeitable portion of any amount withdrawn from
the Participant's Contributions Account shall be forfeited and the vested
portion shall be distributed to the Participant.
(c) Allocation of Income. Excess Aggregate Contributions will be adjusted
for any income or loss up to the date of distribution. Such income or loss will
be computed according to a reasonable method permitted under Treas.
Reg.Section.1.401(k)-1(f)(4).
8.04 Multiple Use Limitation. In the event that an HCE participates in a
plan (or a group of plans maintained by the Company) that is subject to both the
nondiscrimination requirements of Code Section 401(k) (as described in Section
8.02) and the nondiscrimination requirements of Code Section 401(m) (as
described in Section 8.03), the sum of the Actual Deferral Percentage and the
Actual Contribution Percentage for the group of HCEs may not exceed the sum of:
(a) 125% of:
(i) the Actual Deferral Percentage of the Group of Non-HCEs; or
(ii) the Actual Contribution Percentage of Non-HCEs; plus
(iii) the lesser of: (i) 2% plus the lesser of (a)(i) or (a)(ii)
above; or (ii) 200% of the lesser of (a)(i) or (a)(ii) above.
(b) Alternatively, the sum of the Actual Deferral Percentage and the Actual
Contribution Percentage for the group of the HCEs may not exceed the sum of 125%
of the lesser of:
(1) the Actual Deferral Percentage of the group of Non-HCEs; or
(2) 200% of the greater of (a)(i) or (a)(ii) above.
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To the extent that it is necessary, the Actual Deferral Percentage or the
Actual Contribution Percentage of the HCE group shall be reduced to comply with
this limitation. (Any alternative calculation provided by regulations shall be
incorporated in this Plan by reference and shall apply when and as provided in
those regulations.)
The multiple use test described in Treas. Reg.Section. 1.401(m)-2 and this
Section 8.04 shall not apply for Plan Years beginning after December 31, 2001.
8.05 Distribution Rules for Excess Contributions and Excess Aggregate
Contributions.
(a) Income or loss attributable to Excess Contributions and/or Excess
Aggregate Contributions shall be determined in the same proportion that the
amount of the Participant's Employee Contributions or Matching Contributions
distributed bears to the balance of his appropriate Account.
(b) The distribution of Excess Contributions, Excess Aggregate
Contributions, and any income thereon may be made without the consent of the
Participant or his spouse, and shall be considered as income to the Participant,
except to the extent of Employee Contributions distributed, for purposes of Code
Section 61.
(c) The Plan Administrator may re-characterize Elective Deferrals as
Employee Contributions as an alternative to distributing Excess Contributions,
provided the following requirements are met:
(i) The amount of recharacterized Elective Contributions, when
combined with the HCE's other Employee Contributions, does not exceed any
limit on Employee Contributions to the Plan, including the
nondiscrimination restrictions provided in Section 8.03.
(ii) The recharacterized Elective Contributions must be considered as
Employee Contributions for the Plan year in which the Elective
Contributions were made.
-40-
Article IX
Trust Fund and Investment Funds
-------------------------------
9.01 Individual Investment Funds. The Company shall direct the Trustee to
establish certain Investment Funds within the Trust Fund, including a Company
Stock Fund. A Participant may direct the investment of his or her Accounts,
subject to the terms of Section 9.02 below. The Company may establish additional
Investment Funds or remove an Investment Fund from the Plan from time to time in
its sole discretion.
9.02 Individual Investment Funds. A Participant may, in any manner made
available by the Plan Administrator, direct the manner in which all
contributions and allocations to the Participant's Compensation Deferral
Contributions Account, Profit Sharing Contributions Account, Matching
Contributions Account, Rollover Contributions Account and Prior Plan Account
shall be invested (an "Investment Election"). The Participant may direct the
investment of such Accounts in one or more of the Investment Funds, in
increments of at least 1%.
(a) A Participant may change the investments of his Compensation Deferral
Contributions Account, Profit Sharing Contributions Account, Matching
Contributions Account, Rollover Contributions Account and Prior Plan Account
daily. A Participant may make changes in the Investment Election at any time by
written election filed with the Plan Administrator, or by such other method,
such as a voice response system, that the Plan Administrator makes available.
Each change shall be effective as soon as practicable following receipt, but in
no event later than 5 business days following the receipt of the election. The
Participant may elect to invest future contributions differently than present
Account balances.
(b) The Trustee shall revalue the assets of each Investment Fund at their
fair market value as of each Valuation Date. The Accounts of each Participant
shall then be adjusted by apportioning the Investment Fund, including income, as
thus revalue, among Participants' Accounts in proportion to the value of their
respective interests in the Investment Fund immediately preceding such
revaluation.
(c) The Plan is intended to constitute a plan described in Section 404(c)
of ERISA and Title 29 of the Code of Federal Regulations Section 2550.404c-1.
The Trustee, Plan Administrator and any other fiduciary of the Plan are relieved
of liability for losses which are the direct and necessary result of investment
instructions given by a Participant or beneficiary.
(d) If the Participant fails to direct 100% of his Compensation Deferral
Contributions Account, Profit Sharing Contributions Account, Matching
Contributions Account, Rollover Contributions Account and Prior Plan Account to
an Investment Fund, the balance not directed shall be invested in such
Investment Fund as the Plan Administrator deems to be the most conservative.
-41-
9.03 Participants' Right to Vote Company Stock. Each Participant shall be
entitled to direct the exercise of voting rights with respect to the Company
Stock deemed owned by the Participant's Accounts pursuant to the Participant's
investments in the Company Stock Fund. The Company shall provide to each
Participant materials pertaining to the exercise of such rights containing all
the information distributed to shareholders as part of its distribution of such
information to shareholders. A Participant shall have the opportunity to
exercise any such rights within the same time period as shareholders of the
Company. In the exercise of voting rights, shares of Company Stock for which no
voting instructions are received and shares of Company Stock that are not
allocated to any Participant's Account shall be voted in the same ratio for the
election of directors and for and against each other issue as the applicable
vote directed by Participants with respect to shares of Company Stock.
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ArticleX
Amendment or Termination
------------------------
10.01 Amendment. The Company reserves the right, at any time and from time
to time, to amend in whole or in part either retroactively or prospectively any
or all of the provisions of the Plan without the consent of any Employer or
Participant. Such amendment shall be stated in a written instrument adopted or
executed by the Company. Upon the Company's adoption or execution of any
amendment, the Plan shall be deemed to have been amended and the Company, the
Employers and all Plan Participants and their beneficiaries shall be bound
thereby; provided, however, that no amendment shall:
(a) authorize, cause or permit any part of the Trust Fund (other than such
part as is required to pay taxes and administrative expenses) to be used or
diverted to purposes other than the benefit of the Participants, former
Participants or their beneficiaries or estates (except as described in Section
14.03);
(b) affect the rights, duties or responsibilities of the Trustee without
its consent; or
(c) have any retroactive effect so as to deprive any Participant of his or
her nonforfeitable interest already accrued, or eliminate an optional form of
benefit, except only that any amendment may be made retroactive which is
necessary to conform the Plan to mandatory provisions of Federal or State law,
regulations or rulings.
10.02 Plan Termination or Discontinuance of Contributions. The Company
shall have the right, at any time, to terminate the Plan. Upon such termination,
or any partial termination, the entire interest of each affected Participant's
Accounts shall become nonforfeitable. Upon the discontinuance of Employer
contributions or suspension thereof on other than a temporary basis, the entire
interest of each affected Participant's Accounts shall become nonforfeitable.
Any unallocated funds existing at the time of such termination or discontinuance
shall be allocated to the then affected Participants in the same manner as
Employer contributions under Section 4.02. Distribution upon Plan termination
shall be made in accordance with the provisions of Article VI of the Plan.
10.03 Merger, Consolidation or Transfer of Assets. The Company may merge or
consolidate the Plan with, or transfer the Plan's assets or liabilities to, any
other plan, provided each Participant would receive a benefit immediately after
such merger, consolidation or transfer, if the successor plan then terminated,
that is equal to or greater than the benefit the Participant would have received
immediately prior to such merger, consolidation or transfer if the Plan were to
have terminated on such date.
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Article XI
Administration
--------------
11.01 Plan Administrator's Powers and Duties. The Plan Administrator shall
administer the Plan in accordance with its terms, and shall have all powers
necessary to administer the Plan in accordance with the provisions set forth in
the Plan. The Plan Administrator shall interpret the Plan and shall determine
all questions arising in the administration, interpretation and application of
the Plan. Any such determination by the Plan Administrator shall be conclusive
and binding on all persons, subject to the claims procedure as set forth in
Section 11.05 of the Plan.
The Plan Administrator may adopt such by-laws and regulations as it deems
desirable for the conduct of its affairs, and may appoint such accountant,
counsel, specialists, and other persons as it deems necessary or desirable in
connection with the administration of the Plan. The Plan Administrator shall be
entitled to rely conclusively upon, and shall be fully protected in any action
taken by it in good faith in relying upon, any opinions or reports that shall be
furnished to it by any such accountant, counsel or other specialists.
11.02 Records and Reports. The Plan Administrator shall keep a record of
all its proceedings and acts, and shall keep all such books of accounts, records
and other data as may be necessary for the proper administration of the Plan.
The Plan Administrator shall notify the Company and the Trustee of any action
taken by it and, when required, shall notify any other interested person or
persons.
11.03 Payment of Expenses. Reasonable and necessary expenses of
administering the Plan may be paid from the Trust Fund and shall include, but
not be limited to, expenses incurred to properly communicate the Plan to
Employees. The members of the Committee shall serve without compensation for
services as such, but the Employers shall pay all expenses of the Committee.
Such expenses shall include any expenses incident to the functioning of the
Committee, including but not limited to, fees of accountants, legal counsel,
investment counsel and other specialists, and other costs of administering the
Plan.
11.04 Claims Procedure. A claim for a Plan benefit shall be deemed filed
when the Plan Administrator receives a written communication made by a
Participant or beneficiary, or the authorized representative of either.
If the Plan Administrator wholly or partially denies a claim, the Plan
Administrator shall give written notice of such denial to the claimant within 90
days after the Plan Administrator receives the claim. Such notice shall set
forth, in a manner calculated to be understood by the claimant: (i) the specific
reason or reasons for the denial; (ii) specific reference to pertinent Plan
provisions on which the denial is based; (iii) a description of any additional
material or information necessary to perfect the claim and an explanation of why
such material or information is necessary; and (iv) an explanation of the Plan's
claim review procedure.
Within 90 days from the receipt of the notice of denial, a claimant may
appeal such denial to the Plan Administrator for a full and fair review. The
review shall be instituted by the filing of a written request for review by the
claimant or his or her authorized representative within the 90 day period stated
above. A request for review shall be deemed filed as of the date the Plan
Administrator receives such written request. The claimant or his or her
authorized representative
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shall have the right to review all pertinent documents, may submit issues and
comments in writing and may do such other appropriate things as the Plan
Administrator may allow. The Plan Administrator shall make its decision not
later than 60 days after it receives the request for review; unless special
circumstances, such as the need to hold a hearing, require an extension of time,
in which case, the Plan Administrator shall render a decision not later than 120
days after it receives a request for review, which decision shall be final and
binding on such claimant.
11.05 Indemnification. The Employers shall indemnify and save harmless the
Plan Administrator, the members of the Committee, the Employers' officers and
employees with administrative or fiduciary responsibility for the Plan, and each
of them, from and against any and all loss resulting from liability to which the
Plan Administrator, the employees, or the members of the Committee, may be
subjected by reason of any act or conduct (except willful misconduct or
negligence) in their official capacities in the administration of the Plan or
Trust, including all expenses reasonably incurred in their defense, in case the
Employers fail to provide such defense. The indemnification provisions of this
Section shall not relieve the Plan Administrator, any employee or any Committee
member from any liability he or she may have under ERISA for breach of a
fiduciary duty.
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Article XII
Participating Employers
-----------------------
12.01 Commencement. Subject to the terms of the Plan, each Employer that
was an Employer under the Mid Am, Inc. Profit Sharing and 401(k) Plan, the
Citizens Bancshares, Inc. Amended and Restated Profit Sharing Plan, the Century
National Bank and Trust Company Amended and Restated Profit Sharing/401(k) Plan,
or The Ohio Bank Employees' Profit Sharing Plan as of December 31, 1998, shall
be an Employer under the Plan on January 1, 1999. Subject to the terms of the
Plan, each Employer that was an Employer under the First Western Bancorp, Inc.
401(k) Profit-Sharing and Stock Bonus Plan, the Wood Bancorp, Inc. Employee
Stock Ownership Plan, the Picton Cavanaugh Profit Sharing Plan, or the Mahoning
National Bank of Youngstown 401(k) Plan, as of December 31, 1999, shall be an
Employer under the Plan on January 1, 2000. On and after that date, any entity
that is a Related Entity with respect to the Company may, with the Company's
permission, elect to adopt this Plan and the accompanying Trust Agreement.
12.02 Termination. The Company may determine at any time that any Employer
shall withdraw and establish a separate plan and fund. The Company shall effect
the withdrawal by delivering a duly executed instrument to the Trustee
instructing it to segregate the assets of the Trust Fund allocable to the
Employees of such Employer and pay them over to the separate fund.
Any Employer under the Plan that ceases to be a Related Entity, shall
automatically be withdrawn from the Plan, effective on the date the Employer
ceases to be a Related Entity.
12.03 Single Plan. The Plan shall at all times be administered and
interpreted as a single plan for the benefit of the Employees of the Company and
all Employers.
12.04 Delegation of Authority. Each Employer, by adopting the Plan,
acknowledges that the Company has all the rights and duties thereof under the
Plan and the Trust Agreement, including the right to amend the same.
12.05 Disposition of Assets or Subsidiary. Distributions may be made in
connection with the Company's disposition of assets or a subsidiary to those
Employees who continue in employment with the purchaser of the assets or with
the subsidiary, provided that the purchaser or the subsidiary does not maintain
the Plan after the disposition, subject to Section 6.09.
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Article XIII
Loans and In-Service Withdrawals
--------------------------------
13.01 Loans to Participants. The Plan Administrator may direct the Trustee
to make a loan to a Participant, from the Participant's Account, upon the
Participant's request. The Plan Administrator will direct the Trustee to make
loans from Participants' Accounts on a uniform, non-discriminatory basis, in
accordance with procedures the Plan Administrator establishes, and upon the
terms and conditions set forth below.
(a) The total amount that any Participant can borrow under this provision
cannot exceed the lesser of: (i) 50% of the Participant's vested Accounts; or
(ii) $50,000, reduced by the highest outstanding balance of loans from the Plan
to the Participant during the one year period ending on the day before which
such loan is to be made.
(b) Each loan shall bear interest at an annual rate that the Plan
Administrator shall determine in accordance with regulations it has established.
(c) Each Participant who receives a loan hereunder shall also receive a
clear statement of the charges involved in each loan transaction. The statement
shall include the dollar amount and the annual interest rate of the finance
charge.
(d) The Participant must repay a loan in such manner as the Plan
Administrator specifies, provided that any loan must be repaid in full within
the earlier of 5 years or the date of the Participant's retirement.
Notwithstanding the foregoing, if the loan is to be used to acquire a dwelling
that is to be used within a reasonable time as the principal residence of the
Participant, the maximum length of the loan shall be 15 years. The loan shall be
amortized in level payments over the term of the loan, with payments occurring
not less frequently than quarterly.
(e) All loans shall be evidenced by Promissory Notes and such other
documents that the Plan Administrator or the Trustee may reasonably require
under the circumstances.
(f) The Plan Administrator or the Trustee shall be entitled to exercise all
legal and equitable rights available to it in order to enforce the collection of
any unpaid loan balance.
(g) If any loan to a Participant is unpaid on the date that the
Participant, or his beneficiary or estate, becomes entitled to receive benefits
from the Trust, such unpaid portion shall, as of that date, become due and the
amount thereof, together with any unpaid interest thereon, shall be deducted
from any benefits that the Participant, his beneficiary or his estate otherwise
would have been entitled to receive. The provisions of this Section shall apply
the same for loans renewed, renegotiated, modified or extended as for new loans.
(h) For each Participant who was a Participant in the Mid Am, Inc. Profit
Sharing and 401(k) Plan prior to January 1, 1999, if the value of the
Participant's vested Accounts subject to security for a loan is in excess of
$5,000, then in the 90-day period ending on the date on which the loan is
secured, the Participant's spouse, if any, must consent to the loan. If the
spouse does not give consent, then such Participant shall not be eligible for a
loan.
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(i) All loans shall be subject to such administrative procedures as the
Plan Administrator deems necessary.
(j) Loans may be made either from a Participant's (i) Compensation Deferral
Contributions Account or (ii) Profit Sharing Account, Matching Contributions
Account, Prior Plan Account, Rollover Contributions Account and Frozen Plan
Account. A loan shall be repaid into the Account from which it was made. A
Participant may have only one loan outstanding at a time from either set of
Accounts, subject to the overall limits of Section 13.01(a). Effective as of
December 1, 2000, a Participant can receive only two loans from the Plan in any
Plan Year.
13.02 Hardship Distributions. Distribution of Compensation Deferral
Contributions (exclusive of earnings, gains and other accretions attributable to
Plan Years commencing after December 31, 1988) may be made to a Participant in
the event of hardship. For purposes of this Section, hardship is defined as an
immediate and heavy financial need of the employee where such employee lacks
other available resources. For each Participant who was a Participant in the Mid
Am, Inc. Profit Sharing and 401(k) Plan prior to January 1, 1999, hardship
distributions are subject to the spousal consent requirements contained in Code
Sections 401(a)(11) and 417.
(a) The following are the only financial needs considered immediate and
heavy: (i) Expenses incurred or necessary for medical care, described in Code
Section 213(d), of the Participant, the Participant's spouse or dependents; (ii)
the purchase (excluding mortgage payments) of a principal residence for the
Participant; (iii) payment of tuition and related educational fees for the next
12 months of post-secondary education for the Participant, the Participant's
spouse, children or dependents; or (iv) the need to prevent eviction of the
Participant from, or a foreclosure on the mortgage of, the Participant's
principal residence.
(b) A distribution will be considered as necessary to satisfy an immediate
and heavy financial need of the Participant only if:
(i) Compensation Deferral Contributions for the Participant's taxable
year immediately following the taxable year of the hardship distribution
shall be limited to the applicable limit under Code Section 402(g) for such
taxable year less the amount of Compensation Deferral Contributions for the
taxable year of the hardship distribution;
(ii) the Participant has obtained all available distributions, other
than hardship distributions, and all non-taxable loans under this Plan and
all other plans maintained by the Employer;
(iii) the Participant shall not be permitted to make Compensation
Deferral Contributions under this Plan or compensation deferral
contributions under any other plan of the Employer for a period of 12
months after the receipt of the hardship distribution; and
(iv) the distribution is not in excess of the amount of an immediate
and heavy financial need.
Notwithstanding the foregoing, a Participant who receives a hardship
distribution after December 31, 2001 shall not be permitted to make Compensation
Deferral Contributions under this Plan or compensation deferral contributions
under any other plan of the Employer for a period of 6
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months after receipt of the hardship distribution. A Participant who receives a
hardship distribution in calendar year 2001 shall not be permitted to make
Compensation Deferral Contributions under this Plan or compensation deferral
contributions under any other plan of the Employer for a period of 6 months
after receipt of the hardship distribution or, if later, until January 1, 2002.
13.03 In-Service Withdrawals Relating to the Adrian State Bank Plan.
(a) Compensation Deferral Contributions. Any active Participant who has
attained age 59-1/2 may make written application to the Plan Administrator (on a
form and in a manner to be prescribed by the Plan Administrator) to withdraw
from the Trust Fund an amount not in excess of the value of his or her Prior
Plan Account attributable to compensation deferral contributions made to the
Adrian State Bank Profit Sharing and Savings Plan (exclusive of any earnings
thereon) determined as of the valuation date following the date of the request.
An active Participant who has attained age 59-1/2 may make such a request
without terminating employment. Only one such withdrawal by an active
Participant may be made in any one Plan Year.
(b) Voluntary After-Tax Contributions. Prior to termination of employment,
a Participant may elect to make a withdrawal from that portion of his Prior Plan
Account attributable to his voluntary after-tax contributions made to the Adrian
State Bank Profit Sharing and Savings Plan. The following rules shall apply
respecting such withdrawal:
(i) withdrawals shall be permitted upon application acceptable to the
Plan Administrator and 30 days' notice if so requested by the Trustee.
(ii) any withdrawal shall be limited to an amount not in excess of the
lesser of the Participant's total voluntary after-tax contributions, or the
value of that portion of his Prior Plan Account attributable to voluntary
after-tax contributions, provided that such withdrawals shall not be
permitted more than one in each calendar year quarter.
13.04 Hardship Distribution from Rollover Accounts. A Participant may
request a distribution of his or her Rollover Contribution Account, under the
following circumstances:
(a) the Rollover Contributions have been held and invested under the
Participant's Rollover Contributions Account under the Plan for at least 12
months; and
(b) the Participant certifies to the Committee that the distribution is on
account of a hardship. For purposes of this Section, hardship is defined as an
immediate and heavy financial need of the Participant where such Participant
lacks other available resources.
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Article XIV
Miscellaneous
-------------
14.01 Participant's Rights. Neither the establishment of the Plan, nor any
modification thereof, nor the creation of any fund or account, nor any
distributions hereunder, shall be construed as giving to any Participant or
other person any legal or equitable right against the Employer, or any officer
or Employee thereof, or the Trustee, or the Plan Administrator except as herein
provided. Under no circumstances shall the terms of employment of any
Participant be modified or in any way affected thereby.
14.02 Assignment or Alienation of Benefits. (a) No benefit or interest
available hereunder will be subject to assignment or alienation, either
voluntarily or involuntarily.
(b) The preceding subsection (a) shall also apply to the creation,
assignment, or recognition of a right to any benefit with respect to a
participant pursuant to a domestic relations order entered before January 1,
1985, or a domestic relations order that is not a Qualified Domestic Relations
Order. For purposes of this Section 14.02, "Qualified Domestic Relations Order"
means any domestic relations order that creates or recognizes the existence of
an alternate payee's right to, or assigns to an alternate payee the right to,
receive all or a portion of the benefits payable with respect to a Participant,
and that otherwise meets the requirements of Code Section 414(p).
As soon as practical after receipt of a domestic relations order, the Plan
Administrator shall determine whether it is a Qualified Domestic Relations
Order. If the domestic relations order is determined to be a Qualified Domestic
Relations Order, the Plan Administrator shall be permitted, in accordance with
rules and regulations promulgated by the Internal Revenue Service and the rules
and regulations established by the Plan Administrator, to direct the Trustee to
make an immediate distribution to the alternate payee (i) if the amount is less
than $5,000, (ii) as provided in any such Order, or (iii) as elected by the
alternate payee. Such distribution shall be permitted regardless of the age or
employment of the Participant and regardless of whether not the Participant is
otherwise entitled to a distribution, but only from the Participant's vested
Accounts.
(c) In addition, the prohibition of this Section 14.02 will not apply to
any offset of a Participant's benefit under the Plan against an amount the
Participant is ordered or required to pay to the Plan under a judgment, order,
decree or settlement agreement that meets the requirements as set forth in this
Section 14.02. The Participant must be ordered or required to pay the Plan under
a judgment of conviction for a crime involving the Plan, under a civil judgment
(including a consent order or decree) entered by a court in an action brought in
connection with a violation (or alleged violation) of part 4 of subtitle B of
title I of ERISA, or pursuant to a settlement agreement between the Secretary of
Labor and the Participant in connection with a violation (or alleged violation)
of that part 4. This judgment, order, decree or settlement agreement must
expressly provide for the offset of all or part of the amount that must be paid
to the Plan against the Participant's benefit under the Plan.
14.03 Reversion of Funds to Employer. All Employer contributions are
conditioned upon their deductibility pursuant to Code Section 404. An Employer
shall not directly or indirectly receive any refund on contributions made to the
Trust Fund except in the following circumstances:
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(a) Mistake of Fact. In the case of a contribution made by a good faith
mistake of fact, the Trustee shall return the erroneous portion of the
contribution, without increase for investment earnings, but with decrease for
investment losses, if any, within one year after payment of the contribution to
the Trust Fund.
(b) Deductibility. To the extent deduction of any contribution determined
by an Employer in good faith to be deductible is disallowed, the Trustee, at the
option of the Employer, shall return that portion of the contribution, without
increase for investment earnings but with decrease for investment losses, if
any, for which deduction has been disallowed within one year after the
disallowance of the deduction.
(c) Initial Qualification. In the event there is a determination that the
Plan does not initially satisfy all applicable requirements of Code Section 401,
all contributions made by an Employer incident to that initial qualification
shall be returned to the Employer by the Trustee within one year after the date
on which the initial qualification is denied, but only if the Company submitted
an application for such initial determination by the due date of the Company's
income tax return for the taxable year in which the Plan was adopted, or such
later date as the Treasury Secretary may prescribe.
(d) Limitation. No return of contribution shall be made under this Section
which adversely affects the Plan's qualified status under regulations, rulings
or other published positions of the Internal Revenue Service or reduces a
Participant's Account below the amount it would have been had such contribution
not been made.
Earnings attributable to any contribution subject to refund shall not be
refunded. The amount subject to refund shall be reduced by any loss attributable
thereto, and by any amount that would cause the individual account of any
Participant to be reduced to less than the balance which would have been in the
account had the contribution subject to refund not been made. The return of the
contribution shall be made within one year of the mistaken payment, the
disallowance of deduction (to the extent disallowed) or the denial of
qualification, as the case may be. This Section shall not preclude refunds made
in accordance with Article VIII.
14.04 Action by Company. Any action by the Company or an Employer under
this Plan may be by resolution of the Board of Directors, or by any person or
persons duly authorized by resolution of the Board of Directors or by the
By-Laws of the Company (or Employer) to take such action. Whenever the Company
or an Employer, under the terms of the Plan, is permitted or required to do or
perform any act or matter or thing, it shall be done and performed by any
officer thereunto duly authorized.
14.05 Allocation of Responsibilities. None of the allocated
responsibilities or any other responsibilities shall be shared by any two or
more Named Fiduciaries unless such sharing is provided by a specific provision
of the Plan. Whenever one Named Fiduciary is required to follow the directions
of another Named Fiduciary, the responsibility shall be that of the Named
Fiduciary giving the directions.
14.06 Construction of Plan. To the extent not in conflict with the
provisions of ERISA, all questions of interpretation of the Plan shall be
governed by the laws of the State of Ohio.
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14.07 Gender and Number. Wherever any words are used herein in the
masculine gender, they shall be construed as though they were also used in the
feminine gender in all cases where they would so apply, and wherever any words
are used herein in the singular form, they shall be construed as though they
were also used in the plural form in all cases where they would so apply.
14.08 Headings. Headings of sections are for general information only, and
the Plan is not to be construed by reference thereto.
14.09 Voting Company Stock. The Trustee shall vote all allocated shares of
Company Stock in accordance with Participants' directions. The Trustee shall
vote shares of Company Stock for which no voting instructions are received and
shares of Company Stock that are not allocated to any Participant's Account in
the same ratio as it votes the Company Stock for which voting instructions from
Participants are received.
14.10 Payment of Expenses. Pursuant to instructions of the Company, the
Trustee shall pay from the Trust Fund all reasonable and necessary expenses,
taxes and charges incurred on behalf of the Fund or the income thereof in
connection with the administration or operation of the Trust Fund to the extent
that such items are not otherwise paid. No provision of this Plan shall be
construed to provide for payment to or the reimbursement of the Trustee (or any
employee or agent of the Trustee) with respect to any liability or expense
(including counsel fees) that may be incurred by the Trustee (or any employee or
agent) having been found to have breached any responsibility it may have under
the other provisions of this Plan or any responsibility or prohibition imposed
upon it by ERISA.
14.11 Incapacity. If the Plan Administrator determines that a person
entitled to receive any benefit payment is under a legal disability or is
incapacitated in any way so as to be unable to manage his financial affairs, the
Plan Administrator may make payments to such person for his benefit, or apply
the payments for the benefit of such person in such manner as the Plan
Administrator considers advisable. Any payment of a benefit in accordance with
the provisions of this Section shall be a complete discharge of any liability to
make such payment.
14.12 Employee Data. The Plan Administrator or the Trustee may require that
each Employee provide such data as it deems necessary upon becoming a
Participant in the Plan. Each Employee, upon becoming a Participant, shall be
deemed to have approved of and to have acquiesced in each and every provision of
the Plan for himself, his personal representatives, distributees, legatees,
assigns, and beneficiaries.
14.13 Reduction for Overpayment. The Plan Administrator shall, whenever it
determines that a person has received benefit payments under this Plan in excess
of the amount to which the person is entitled under the terms of the Plan, make
reasonable attempts to collect such overpayment from the person.
14.14 Invalidity of Certain Provisions. If any provision of this Plan shall
be held invalid or unenforceable, such invalidity or unenforceability shall not
affect any other provisions hereof and the Plan shall be construed and enforced
as if such provisions, to the extent invalid or unenforceable, had not been
included.
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14.15 Plan Supplements. The provisions of this Plan may be modified by
Supplements or Appendices to the Plan. The terms and provisions of each
Supplement or Appendix are part of the Plan and supersede the provisions of the
Plan to the extent necessary to eliminate any inconsistencies between the Plan
and the Supplements or Appendices.
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Article XV
Top Heavy Provisions
--------------------
15.01 Definitions. The following definitions shall apply for purposes of
this Article XVI:
(a) Aggregation Group. "Aggregation Group" shall mean the following:
(i) Each plan of the Employer in which a Key Employee is a
Participant;
(ii) Each other plan of the Employer (including a terminated plan of
the Employer if it was maintained within the last 5 years ending on the
Determination Date for the Plan Year being tested for Top Heavy status)
that allows a plan covering a Key Employee to meet qualification
requirements under the coverage rules of Section 410 or the
anti-discrimination rules of Code Section 401(a)(4); except that for Plan
Years beginning after December 31, 2001, a terminated plan will be included
in the Aggregation Group only if the Employer maintained it during the
one-year period ending on the Determination Date;
(iii) At the option of the Employer, any other Plan maintained by the
Employer as long as the expanded Aggregation Group including such plan or
plans continues to satisfy the coverage rules of Section 410 and the
anti-discrimination rules of Code Section 401(a)(4).
(b) Compensation. "Compensation" means compensation received from the
Employer during the Plan Year that is includible in gross income for income tax
purposes, including any elective deferrals (as defined in Code Section
402(g)(3)) and amounts contributed or deferred by the Employer at the election
of the Employee and that is not includible in the gross income of the Employee
by reason of Code Section 125, 132(f)(4) or 457.
(c) Determination Date. "Determination Date" shall mean the last day of the
Plan Year preceding the Plan year that is being tested for Top Heavy status. In
the first Plan year, the Determination Date shall mean the last day of the Plan
Year that is being tested for Top Heavy status.
(d) Key Employee. "Key Employee" means any Employee, former Employee, or
beneficiary of such Employees, who at any time during the Plan Year or the four
preceding Plan Years is:
(i) an officer having Compensation from the Employer greater than 50%
of the Section 415(b)(1)(A) dollar limit (as adjusted and in effect for
that Plan Year);
(ii) one of ten employees having Compensation from the Employer of
more than the limitation in effect under Code Section 415(c)(1)(A), and
owning (or considered as owning within the meaning of Code Section 318 both
more than a 0.5% interest as well as one of the ten largest interests in
the Employer. However, if two employees have the same ownership interest in
the Employer, the Employee having the greater Compensation shall be treated
as having the larger interest.
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(iii) a 5% owner of the Employer, or
(iv) a 1% owner of the Employer having Compensation from the Employer
of more than $150,000.
For Plan Years beginning after December 31, 2001, "Key Employee" will mean any
Employee or former Employee (including any deceased Employee) who at any time
during the Plan Year that includes the Determination Date was: (1) an officer of
the Employer having Compensation greater than $130,000 (as adjusted under Code
Section 416(i)(l)); (2) a 5% owner of the Employer; or (3) a 1% owner of the
Employer having Compensation of more than $150,000.
For purposes of determining the top ten owners, 5% owners, or 1% owners,
ownership is determined without regard to the aggregation rules of Sections
414(b), (c) and (m) of the Code.
(e) Non-Key Employee. "Non-Key Employee" means any Employee who is not a
Key employee. Non-Key employees include Employees who are former key Employees.
15.02 Determination of Top Heavy Status. The Plan will be considered Top
Heavy if, as of the Determination Date, the present value of cumulative accrued
benefits under the Plan for Key Employees exceeds 60% of the present value of
the cumulative accrued benefits under the Plan for all Employees. In determining
the ratio of accrued benefits for Key Employees to all other Employees, the Plan
Administrator shall use the procedure as outlined in Code Section 416(g) which
is incorporated herein by reference. In determining whether the Plan is
considered Top Heavy, all plans within the Aggregation Group will be utilized
for the calculation. For this purpose, all Employer Contributions, including
Compensation Deferral Contributions, and forfeitures shall be taken into account
in determining the contribution percentage made on behalf of any Key Employee.
Solely for the purpose of determining if the Plan, or any other plan
included in the Aggregation Group is Top Heavy, the accrued benefit of an
Employee other than a Key Employee shall be determined under.
(a) the method; if any, that uniformly applies for accrual purposes under
all plans maintained by the Employer or the Company, or
(b) if there is no such method, as if such benefit accrued not more rapidly
than the slowest accrual rate permitted under the fractional accrual rate of
Code Section 411(b)(1)(C).
The present value of cumulative accrued benefits of a Participant who has
not been credited with an Hour of Service for the Employer maintaining the Plan
during the five-year period ending on the Determination Date will be disregarded
for purposes of this Article XVI; except that for Plan Years beginning after
December 31, 2001, the present value of cumulative accrued benefits will be
disregarded for a Participant who has not been credited with an Hour of Service
for the Employer maintaining the Plan during the one-year period ending on the
Determnation Date.
15.03 Combination of Defined Benefit and Defined Contribution Plan. In the
event the Plan is deemed to be Top Heavy, the defined benefit and defined
contribution fraction set forth
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in Section 7.01 will be calculated by substituting 1.0 for 1.25. If a Non-Key
Employee participates in this Plan and a defined benefit plan that are both Top
Heavy, the minimum contribution requirement for this Plan and the minimum
benefit requirement for the defined benefit plan, pursuant to Code Section 416,
will be satisfied if such Participant is provided with a contribution to the
Plan equal to 5% of Compensation. Effective January 1, 2000, the provisions of
this Section 15.03 shall no longer apply.
15.04 Minimum Contribution. In the event that the Plan in aggregation with
any other Defined Contribution Plans of the Employer is determined to be Top
Heavy, the Participants who are Non-Key Employees will be eligible for a minimum
contribution for such Plan Year. This minimum contribution that shall be
allocated to the Profit Sharing Contributions Account of each Participant who is
a Non-Key Employee, will be contributed to this Plan in an amount equal to 3% of
Compensation or if less, the largest contribution percentage of Compensation
(taking into account all Employer Contributions, including Compensation Deferral
Contributions, and forfeitures) provided on behalf of any Key Employee. The
minimum contribution required by this Section shall be made on behalf of such
Participants who are employed as of the last day of the Plan year regardless of
the numbers of Hours of Service credited to each Participant for such Plan Year,
regardless of such Participant's level of Compensation and regardless of whether
such Participant is authorizing Compensation Deferral Contributions to the Plan.
If this minimum contribution is provided by another Defined Contribution Plan of
the Employer, then this Section will not apply to this Plan. If part of this
minimum contribution is provided by another Defined Contribution Plan of the
Employer, then the balance of the minimum contribution shall be provided by this
Plan. Compensation Deferral Contributions of Non-Key Employees shall not be
considered as part of the minimum contribution required by this Section 15.04.
For Plan Years beginning after December 31, 2001, Matching Contributions will be
taken into account for purposes of providing the minimum contribution required
by this Section 15.04 on behalf of Non-Key Employees.
15.05 Minimum Vesting. In the event the Plan is determined to be Top Heavy,
each Participant shall have a nonforfeitable interest in his Accounts at least
equal to the following schedule:
Years of Service Nonforfeitable Percentage
Less than 3 0%
3 or More 100%
The above schedule shall not apply where the nonforfeitable interest in the
Participant's Accunts would be greater under Article V of the Plan.
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