FIRST NATIONAL BANCORP, INC.
EMPLOYEE PROFIT SHARING AND RETIREMENT PLAN
JANUARY 1, 1998
TABLE OF CONTENTS
ARTICLE I DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2
1-1. ACCOUNTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2
1-2. CODE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2
1-3. COMMITTEE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2
1-4. COMPANY STOCK . . . . . . . . . . . . . . . . . . . . . . . . . . . .2
1-5. COMPANY STOCK ACCOUNT . . . . . . . . . . . . . . . . . . . . . . . .2
1-6. COMPENSATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . .2
1-7. CONTROLLED GROUP. . . . . . . . . . . . . . . . . . . . . . . . . . .2
1-8. EMPLOYEE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3
1-9. ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3
1-10. FISCAL YEAR. . . . . . . . . . . . . . . . . . . . . . . . . . . . .3
1-11. LIMITATION YEAR. . . . . . . . . . . . . . . . . . . . . . . . . . .3
1-12. OTHER INVESTMENTS ACCOUNT. . . . . . . . . . . . . . . . . . . . . .3
1-13. PARTICIPANT. . . . . . . . . . . . . . . . . . . . . . . . . . . . .3
1-14. RELATED PLAN . . . . . . . . . . . . . . . . . . . . . . . . . . . .3
1-15. TRUST FUND . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3
1-16. VALUATION DATE . . . . . . . . . . . . . . . . . . . . . . . . . . .3
ARTICLE II SERVICE COMPUTATIONS. . . . . . . . . . . . . . . . . . . . . . . .4
2-1. SERVICE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4
2-2. HOUR OF SERVICE . . . . . . . . . . . . . . . . . . . . . . . . . . .4
2-3. ONE-YEAR BREAK-IN-SERVICE . . . . . . . . . . . . . . . . . . . . . .4
(a) GENERAL. . . . . . . . . . . . . . . . . . . . . . . . . . . . .4
(b) PREGNANCY OR BIRTH OR ADOPTION OF A CHILD. . . . . . . . . . . .5
2-4. YEAR OF SERVICE . . . . . . . . . . . . . . . . . . . . . . . . . . .5
2-5. SERVICE WITH AFFILIATED COMPANIES . . . . . . . . . . . . . . . . . .5
ARTICLE III PLAN PARTICIPATION . . . . . . . . . . . . . . . . . . . . . . . .6
3-1. ELIGIBILITY FOR PARTICIPATION . . . . . . . . . . . . . . . . . . . .6
ARTICLE IV ANNUAL COMPANY CONTRIBUTIONS. . . . . . . . . . . . . . . . . . . .7
4-1. ANNUAL COMPANY CONTRIBUTION . . . . . . . . . . . . . . . . . . . . .7
4-2. LIMITATION ON AMOUNT OF ANNUAL COMPANY CONTRIBUTION . . . . . . . . .7
4-3. WHEN CONTRIBUTIONS MADE . . . . . . . . . . . . . . . . . . . . . . .7
4-4. MANNER OF PAYMENT . . . . . . . . . . . . . . . . . . . . . . . . . .7
ARTICLE V INVESTMENT OF TRUST ASSETS . . . . . . . . . . . . . . . . . . . . .8
5-1. INVESTMENT POLICY . . . . . . . . . . . . . . . . . . . . . . . . . .8
5-2. SALES OF COMPANY STOCK. . . . . . . . . . . . . . . . . . . . . . . .8
ARTICLE VI PARTICIPANTS' ACCOUNTS AND ANNUAL ADJUSTMENTS . . . . . . . . . . .9
6-1. ACCOUNTS FOR PARTICIPANTS . . . . . . . . . . . . . . . . . . . . . .9
6-2. CHARGES TO ACCOUNTS . . . . . . . . . . . . . . . . . . . . . . . . .9
6-3. COMPANY STOCK ACCOUNT . . . . . . . . . . . . . . . . . . . . . . . .9
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6-4. OTHER INVESTMENTS ACCOUNT . . . . . . . . . . . . . . . . . . . . . .9
6-5. ALLOCATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9
6-6. LIMITATION ON ALLOCATIONS TO PARTICIPANTS . . . . . . . . . . . . . .9
(a) GENERAL. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9
(b) ALLOCATIONS OF EXCESS AMOUNTS. . . . . . . . . . . . . . . . . . 10
(c) DIVIDEND RECHARACTERIZATION. . . . . . . . . . . . . . . . . . . 10
6-7. ADJUSTING TO VALUE OF TRUST FUND. . . . . . . . . . . . . . . . . . 11
6-8. PARTICIPANT STATEMENTS. . . . . . . . . . . . . . . . . . . . . . . 11
ARTICLE VII RETIREMENT DATES, TERMINATION DATE . . . . . . . . . . . . . . . 12
7-1. NORMAL RETIREMENT DATE. . . . . . . . . . . . . . . . . . . . . . . 12
7-2. DISABILITY RETIREMENT DATE. . . . . . . . . . . . . . . . . . . . . 12
7-3. EARLY RETIREMENT DATE . . . . . . . . . . . . . . . . . . . . . . . 12
7-4. RETIREMENT DATE . . . . . . . . . . . . . . . . . . . . . . . . . . 12
7-5. TERMINATION DATE. . . . . . . . . . . . . . . . . . . . . . . . . . 12
ARTICLE VIII VESTING OF ACCOUNT BALANCES . . . . . . . . . . . . . . . . . . 13
8-1. VESTING ON RETIREMENT . . . . . . . . . . . . . . . . . . . . . . . 13
8-2. VESTING ON DEATH. . . . . . . . . . . . . . . . . . . . . . . . . . 13
8-3. VESTING ON OTHER TERMINATION. . . . . . . . . . . . . . . . . . . . 13
8-4. DETERMINATION OF ACCOUNT BALANCES . . . . . . . . . . . . . . . . . 13
ARTICLE IX DISTRIBUTION OF PLAN BENEFITS . . . . . . . . . . . . . . . . . . 14
9-1. METHOD OF DISTRIBUTION. . . . . . . . . . . . . . . . . . . . . . . 14
9-2. FORM OF DISTRIBUTION. . . . . . . . . . . . . . . . . . . . . . . . 14
9-3. DISTRIBUTIONS AFTER DEATH . . . . . . . . . . . . . . . . . . . . . 14
9-4. TIME OF DISTRIBUTION. . . . . . . . . . . . . . . . . . . . . . . . 14
(a) GENERAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
(b) DEFERRAL OF DISTRIBUTION. . . . . . . . . . . . . . . . . . . . 15
(c) SPECIAL RULES . . . . . . . . . . . . . . . . . . . . . . . . . 15
9-5. IN-SERVICE DISTRIBUTIONS. . . . . . . . . . . . . . . . . . . . . . 15
(a) DIVIDENDS . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
(b) WITHDRAWALS . . . . . . . . . . . . . . . . . . . . . . . . . . 15
9-6. DISTRIBUTIONS TO PERSONS UNDER DISABILITY . . . . . . . . . . . . . 16
9-7. BENEFITS MAY NOT BE ASSIGNED OR ALIENATED . . . . . . . . . . . . . 16
9-8. NO GUARANTEE OF BENEFITS. . . . . . . . . . . . . . . . . . . . . . 16
9-9. BENEFICIARIES . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
9-10. BENEFITS OF PERSONS WHO CANNOT BE LOCATED. . . . . . . . . . . . . 17
9-11. DISTRIBUTION WITHHOLDING . . . . . . . . . . . . . . . . . . . . . 17
ARTICLE X SHAREHOLDER RIGHTS AND RESTRICTIONS. . . . . . . . . . . . . . . . 18
10-1. VOTING OF COMPANY STOCK. . . . . . . . . . . . . . . . . . . . . . 18
10-2. PUT OPTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
10-3. RIGHT OF FIRST REFUSAL . . . . . . . . . . . . . . . . . . . . . . 18
(a) COMPANY AND TRUSTEE RIGHT OF FIRST REFUSAL. . . . . . . . . . . 18
(b) ENDORSEMENT ON STOCK CERTIFICATES . . . . . . . . . . . . . . . 19
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ARTICLE XI PLAN ADMINISTRATION . . . . . . . . . . . . . . . . . . . . . . . 20
11-1. PLAN ADMINISTRATION. . . . . . . . . . . . . . . . . . . . . . . . 20
11-2. THE TRUST. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
11-3. CLAIMS PROCEDURE . . . . . . . . . . . . . . . . . . . . . . . . . 20
(a) PROCEDURE . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
(b) PROCEDURE FOR REVIEW OF A DENIED CLAIM. . . . . . . . . . . . . 20
11-4. PROCEDURES WITH RESPECT TO DOMESTIC RELATIONS ORDERS . . . . . . . 21
(a) DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . 21
(b) PROCEDURES. . . . . . . . . . . . . . . . . . . . . . . . . . . 21
(c) NOTICE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
(d) SEGREGATION OF ACCOUNT. . . . . . . . . . . . . . . . . . . . . 22
ARTICLE XII THE COMMITTEE. . . . . . . . . . . . . . . . . . . . . . . . . . 23
12-1. MEMBERSHIP . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
12-2. RIGHTS, POWERS, AND DUTIES OF THE COMMITTEE. . . . . . . . . . . . 23
12-3. APPLICATION OF RULES . . . . . . . . . . . . . . . . . . . . . . . 24
12-4. REMUNERATION AND EXPENSES. . . . . . . . . . . . . . . . . . . . . 24
12-5. EXERCISE OF COMMITTEE'S DUTIES . . . . . . . . . . . . . . . . . . 24
12-6. RESIGNATION OR REMOVAL OF COMMITTEE MEMBERS. . . . . . . . . . . . 24
12-7. APPOINTMENT OF SUCCESSOR COMMITTEE MEMBERS . . . . . . . . . . . . 24
ARTICLE XIII AMENDMENT AND TERMINATION . . . . . . . . . . . . . . . . . . . 25
13-1. AMENDMENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
13-2. TERMINATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
13-3. MERGER OR CONSOLIDATION OF PLAN, TRANSFER OF PLAN ASSETS . . . . . 25
13-4. VESTING AND DISTRIBUTION ON TERMINATION AND PARTIAL TERMINATION. . 25
ARTICLE XIV TOP-HEAVY PROVISIONS . . . . . . . . . . . . . . . . . . . . . . 26
14-1. TOP-HEAVY DETERMINATION. . . . . . . . . . . . . . . . . . . . . . 26
14-2. MINIMUM CONTRIBUTION . . . . . . . . . . . . . . . . . . . . . . . 26
14-3. AGGREGATION OF PLANS . . . . . . . . . . . . . . . . . . . . . . . 26
ARTICLE XV MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . 27
15-1. NO REVERSION TO COMPANY. . . . . . . . . . . . . . . . . . . . . . 27
15-2. NOTICES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
15-3. INDEPENDENT APPRAISER. . . . . . . . . . . . . . . . . . . . . . . 27
15-4. INDEMNIFICATION. . . . . . . . . . . . . . . . . . . . . . . . . . 27
15-5. SUBSIDIARY AND AFFILIATED COMPANIES. . . . . . . . . . . . . . . . 27
15-6. PARTICIPATION NOT GUARANTEE OF EMPLOYMENT. . . . . . . . . . . . . 27
15-7. GENDER AND NUMBER. . . . . . . . . . . . . . . . . . . . . . . . . 28
15-8. GOVERNING LAWS . . . . . . . . . . . . . . . . . . . . . . . . . . 28
15-9. TEXT TO CONTROL. . . . . . . . . . . . . . . . . . . . . . . . . . 28
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FIRST NATIONAL BANCORP, INC.
EMPLOYEE PROFIT SHARING AND RETIREMENT PLAN
RECITALS
WHEREAS, First National Bancorp, Inc., an Illinois corporation (the
"Company"), desires to recognize and reward the contribution by its employees,
to its successful operation, and to provide incentive for such employees, to
increase their productivity, by enabling them to acquire stock ownership
interests in the Company and to share in the profits of the Company; and
WHEREAS, the Company has entered into a trust agreement, known as the
"First National Bancorp, Inc. Employee Profit Sharing and Retirement Plan Trust"
(the "Trust Agreement"), with First National Bank of Joliet, as "Trustee", dated
as of the date hereof, pursuant to which all contributions made by the Company
under this plan will be held, managed, and controlled by the Trustee;
NOW, THEREFORE, the Company hereby adopts the First National Bancorp, Inc.
Employee Profit Sharing and Retirement Plan (the "Plan"), effective as of
January 1, 1998 (the "Effective Date").
ARTICLE I
DEFINITIONS
Whenever used herein, the following words and phrases shall have the
meanings stated below, unless a different meaning is plainly required by the
context:
1-1. ACCOUNTS. The term "Accounts" means, collectively, a Participant's
Company Stock Account and Other Investments Account.
1-2. CODE. The term "Code" means the Internal Revenue Code of 1986, as
amended from time to time. Reference to a section of the Code shall include
that section and any comparable section or sections of any future legislation
that amend, supplement, or supersede such section.
1-3. COMMITTEE. The term "Committee" means the committee appointed by
the Board of Directors of the Company to administer the Plan.
1-4. COMPANY STOCK. The term "Company Stock" means the shares of common
stock issued by the Company, provided that such shares constitute "employer
securities" as that term is defined in Section 409(l) of the Code.
1-5. COMPANY STOCK ACCOUNT. The term "Company Stock Account" means the
account established for a Participant by the Administrator pursuant to Section
6-1 and to which the Participant's share of the Company's contribution made or
invested in Company Stock shall be allocated pursuant to Sections 6-3 and 6-5.
1-6. COMPENSATION. Except as otherwise provided in Section 6-6, the term
"Compensation" means a Participant's total earnings from the Company or member
of the Controlled Group paid during a Fiscal Year for services rendered within
the meanings of Section 3401(a) of the Code, including bonuses, overtime, and
commissions and any amounts deferred pursuant to Code Sections 401(k) and 125.
However, the term "Compensation" shall not include any earnings in excess of
such amount as is determined under Section 401(a)(17) of the Code. In any case
where a Participant commences his participation in the Plan, or resumes his
active participation in the Plan after incurring a One-Year Break-in-Service, on
any day other than the first day of a Fiscal Year, his Compensation for that
Fiscal Year shall be that portion of his compensation as determined under this
Section 1-6 paid during the period of his participation in the Plan for that
Fiscal Year.
1-7. CONTROLLED GROUP. The term "Controlled Group" means: (a) the
Company and one (1) or more other corporations which are members of a
"controlled group" of corporations within the meaning of Section 414(b) of the
Code and the regulations thereunder; (b) the Company and one (1) or more
unincorporated trades or businesses that are under "common control" within the
meaning of Section 414(c) of the Code and the regulations thereunder; (c) the
Company and one (1) or more other organizations that are members of an
"affiliated service group", as determined under Section 414(m) of the Code and
the regulations
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thereunder; and (d) the Company and such other entities as must be treated as
a "controlled group" under Section 414(o) of the Code and the regulations
thereunder.
1-8. EMPLOYEE. The term "Employee" means any person employed by the
Company or a member of the Controlled Group, including any officer, who receives
regular Compensation other than retirement benefits under this Plan.
1-9. ERISA. The term "ERISA" means Public Law No. 93-406, the Employee
Retirement Income Security Act of 1974, as amended from time to time.
1-10. FISCAL YEAR. The term "Fiscal Year" means the year that begins on
January 1 and that ends on December 31.
1-11. LIMITATION YEAR. The term "Limitation Year" means the period of
twelve (12) consecutive months to be used in determining whether the Plan is in
compliance with the provisions of Section 415 of the Code and of the regulations
thereunder. The Company shall take all actions necessary to ensure that the
Limitation Year is the same twelve (12)-month period as the Fiscal Year.
1-12. OTHER INVESTMENTS ACCOUNT. The term "Other Investments Account"
means the account established for a Participant by the Administrator pursuant to
Section 6-1 and to which the Participant's share of the Company's contributions
made in cash or property other than Company Stock shall be allocated pursuant to
Sections 6-4 and 6-5.
1-13. PARTICIPANT. The term "Participant" means an Employee who becomes a
participant in the Plan under the provisions of Section 3-1.
1-14. RELATED PLAN. The term "Related Plan" means any other defined
contribution plan (as defined in Section 415 of the Code) maintained by the
Company or by any other employer that is: (a) a member of a "controlled group"
of corporations (as defined in Section 414(b) of the Code, as modified by
Section 415(h) thereof) that includes the Company; (b) under "common control"
(as defined in Section 414(c) of the Code, as modified by Section 415(h)
thereof) with the Company; (c) part of an "affiliated service group" (as defined
in Section 414(m) of the Code) that includes the Company; or (d) required to be
treated as a member of a "controlled group" under Section 414(o) of the Code and
the regulations thereunder that includes the Company.
1-15. TRUST FUND. The term "Trust Fund" means all property held by the
Trustee under the Trust Agreement.
1-16. VALUATION DATE. The term "Valuation Date" means the date of
termination or partial termination of the Plan, the last day of each Fiscal
Year, and such other dates as may be determined by the Company.
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ARTICLE II
SERVICE COMPUTATIONS
2-1. SERVICE. The term "Service" means the period of employment of an
Employee or Participant for which he receives credit pursuant to the provisions
of this Article II.
2-2. HOUR OF SERVICE. The term "Hour of Service" means, with respect to
any Employee or Participant:
(a) Each hour for which he is directly or indirectly paid, or
entitled to payment, by the Company for the performance of
duties during the applicable computation period;
(b) Each hour for which he has been awarded back pay or for which
the Company has agreed to award him back pay, irrespective of
mitigation of damages; and
(c) Each hour for which he is directly or indirectly paid, or
entitled to payment, by the Company for reasons other than the
performance of duties during the applicable computation period
(such as for vacation, sickness, injury, or disability).
Hours of Service shall not be credited under more than one (1) of the preceding
subsections. Hours described in clause (a) above shall be credited to the
Employee or Participant for the computation periods in which the duties were
performed. Employees for whom the Company does not maintain records of their
hours worked shall be credited with Hours of Service on the basis of a forty
(40)-hour workweek or, in the case of a partial workweek, on the basis of an
eight (8)-hour workday. Hours described in clause (b) above shall be credited
to the Employee or Participant for the computation periods to which the award or
agreement pertains, rather than for the computation periods in which either
payment is actually made or amounts payable to the Employee or Participant
become due. Hours described in clause (c) above shall be credited to the
Employee or Participant for the computation periods during which the events
giving rise to the payments occurred. Hours of service shall be computed in
accordance with paragraphs (b) and (c) of Section 2530.200b-2 of the Department
of Labor Regulations under ERISA and any successor regulations. The provisions
of this Section 2-2 shall be construed so as to resolve any ambiguities in favor
of crediting an Employee or Participant with Hours of Service.
2-3. ONE-YEAR BREAK-IN-SERVICE.
(a) GENERAL. The term "One-Year Break-in-Service" means any
Fiscal Year during which a Participant completes five hundred
(500) or fewer Hours of Service with the Company.
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(b) PREGNANCY OR BIRTH OR ADOPTION OF A CHILD. For purposes of
determining whether a One-Year Break-in-Service has occurred,
an Employee or Participant shall be given credit for the Hours
of Service which normally would have been credited to such
Employee or Participant but for an absence from work for any
period for any of the following reasons: (i) by reason of the
pregnancy of such Employee or Participant; (ii) by reason of
the birth of a child of such Employee or Participant; (iii) by
reason of the placement of a child with such Employee or
Participant in connection with the adoption of such child by
such Employee or Participant; or (iv) for purposes of caring
for such child for a period beginning immediately following
such birth or placement. If the Administrator is unable to
determine the hours which normally would have been credited to
an Employee or Participant but for an absence of the kind
described above, there shall be credited to such Employee or
Participant eight (8) Hours of Service per day of such
absence; provided, however, that the total number of hours
treated as Hours of Service by reason of an absence of the
kind described above shall not exceed five hundred and one
(501) hours. The hours described in the preceding sentence
shall be treated as Hours of Service either: (i) only in the
year in which the absence from work begins, if a Participant
would be prevented from incurring a One-Year Break-in-Service
in such year solely because the period of absence is treated
as Hours of Service; or (ii) in any other case, in the
immediately following year.
2-4. YEAR OF SERVICE. The term "Year of Service" means any Fiscal Year
during which an Employee or Participant has completed at least one thousand
(1,000) Hours of Service with the Company; provided, however, that for purposes
of eligibility to participate in the Plan as provided in Article III, the term
"Year of Service" shall mean the twelve (12)-consecutive month period beginning
on the date on which the Employee first completes an Hour of Service and each
anniversary thereof, in which the Employee has completed at least one thousand
(1,000) Hours of Service with the Company. Each Employee and each Participant
shall receive credit for each Year of Service for all purposes of the Plan,
including Years of Service with the Company prior to the Effective Date, except
that Years of Service completed by an Employee or Participant prior to the
attainment of age eighteen (18) shall be disregarded.
2-5. SERVICE WITH AFFILIATED COMPANIES. For purposes of determining
Hours of Service and Years of Service under this Article II and the vested
portion of a Participant's Accounts under Article VIII, credit shall be granted
for service with another entity which, together with the Company, is a member of
a Controlled Group.
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ARTICLE III
PLAN PARTICIPATION
3-1. ELIGIBILITY FOR PARTICIPATION. Each Employee shall become a
Participant in this Plan on the January 1st or July 1st after which he first
meets the following requirements:
(a) He has completed one (1) Year of Service;
(b) He has attained age twenty one (21); and
(c) He is not included in a unit of Employees covered by a
collective bargaining agreement between Employee
representatives and the Company, if retirement benefits were
the subject of good faith bargaining between such Employee
representatives and the Company and if, as a result of such
negotiations, either he is covered by another retirement plan
to which the Company makes contributions or there has been no
agreement between such parties for his coverage under this
Plan.
Each Participant who incurs a One-Year Break-in-Service and who returns to
the employ of the Company shall again become a Participant immediately upon
his reemployment by the Company if he was at least twenty percent (20%)
vested in his Company Stock and Other Investment Accounts pursuant to Section
8-3. If an employee or a Participant is not at least twenty percent (20%)
vested in his Company Stock and Other Investment Accounts and incurs five (5)
consecutive One-Year Breaks-in-Service, then for purposes of this Section
3-1, his Years of Service prior to such One-Year Breaks-in-Service shall be
disregarded.
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ARTICLE IV
ANNUAL COMPANY CONTRIBUTIONS
4-1. ANNUAL COMPANY CONTRIBUTION. Subject to the following provisions of
this Article IV, for any Fiscal Year the Company may pay over to the Trustee, as
an annual contribution to the Plan for that year, such sum, if any, as is
determined by resolution of the Board of Directors of the Company. Payment of
such contributions shall be conditioned on qualification of the Plan under
Section 401(a) of the Code and on deductibility of the contributions under
Section 404 of the Code.
4-2. LIMITATION ON AMOUNT OF ANNUAL COMPANY CONTRIBUTION. In no event
shall the amount of the Company's contribution under the Plan for any Fiscal
Year exceed the maximum amount allowable as a deduction in computing its taxable
income for that year for federal income tax purposes.
4-3. WHEN CONTRIBUTIONS MADE. The Company's contribution under the Plan
for any Fiscal Year shall be due on the last day of that Fiscal Year and shall
be paid over to the Trustee not later than the time prescribed by law for filing
the Company's federal income tax return for that Fiscal Year (including any
extensions thereof).
4-4. MANNER OF PAYMENT. The Company's contributions shall be made in
cash or shares of Company Stock. Any shares of Company Stock contributed to the
Plan shall be valued at their fair market value as of the date of the
contribution, as determined by the Trustee based upon a valuation by an
independent appraiser.
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ARTICLE V
INVESTMENT OF TRUST ASSETS
5-1. INVESTMENT POLICY. Assets held in the Trust Fund may be invested by
the Trustee primarily in Company Stock. Contributions made by the Company to
the Plan and other assets of the Trust Fund may be used to acquire shares of
Company Stock from any shareholder of the Company or from the Company. The
Trustee also may invest assets of the Trust Fund in such other properties as the
Trustee deems appropriate for the Trust Fund, as provided in Section III of the
Trust Agreement. All purchases of Company Stock by the Trustee shall be made
only at prices which do not exceed the fair market value of the shares
purchased, as determined by the Trustee based upon a valuation by an independent
appraiser.
5-2. SALES OF COMPANY STOCK. The Trustee may sell shares of Company
Stock to any person, including the Company. Any such sale must be made at a
price not less than the fair market value of the shares, as determined by the
Trustee. If such sale is between the Trustee and a "disqualified person," as
defined in Section 4975(e)(2) of the Code, the fair market value of the shares
shall be determined as of the date of the sale. If such sale is between the
Trustee and a person who is not a "disqualified person," the fair market value
of the shares shall be determined as of the most recent Valuation Date. The
Trustee may not sell shares of Company Stock in a sale that would be a
"prohibited transaction" within the meaning of the Code and ERISA.
8
ARTICLE VI
PARTICIPANTS' ACCOUNTS AND ANNUAL ADJUSTMENTS
6-1. ACCOUNTS FOR PARTICIPANTS. The Administrator shall establish and
maintain a Company Stock Account and an Other Investments Account for each
Participant.
6-2. CHARGES TO ACCOUNTS. When a Valuation Date occurs, any
distributions made to or on behalf of any Participant or beneficiary since the
last preceding Valuation Date shall be charged to the proper Accounts maintained
for such Participant or beneficiary.
6-3. COMPANY STOCK ACCOUNT. Subject to the provisions of Section 6-6, as
of the last day of each Fiscal Year, the Trustee shall credit to each
Participant's Company Stock Account: (a) the Participant's allocable share of
Company Stock purchased by the Trustee or contributed by the Company to the
Trust Fund for that year; (b) the Participant's allocable share of any
forfeitures of Company Stock arising under the Plan during that year; and (c)
any stock dividends declared and paid during that year on Company Stock
allocated to the Participant's Company Stock Account.
6-4. OTHER INVESTMENTS ACCOUNT. As of the last day of each Fiscal Year,
the Trustee shall credit to each Participant's Other Investments Account: (a)
the Participant's allocable share of any contribution for that year made by the
Company in cash or in property other than Company Stock; (b) the Participant's
allocable share of any forfeitures from the Other Investments Accounts of other
Participants; (c) any cash dividends paid during that year on Company Stock
allocated to the Participant's Company Stock Account; and (d) the share of the
net income or loss of the Trust Fund properly allocable to that Participant's
Other Investments Account, as provided in Section 6-7.
6-5. ALLOCATIONS. Subject to the provisions of this Section 6-5 and
Section 6-6, the Company's contribution for any Fiscal Year and the forfeitures
arising under the Plan during that year shall be allocated among Participants
who are credited with a Year of Service for such Fiscal Year; and who are
employed by the Company on the last day of such Fiscal Year or who died or
retired on a Retirement Date (as defined in Section 7-4) during such Fiscal
Year, in the proportion that each Participant's Compensation for the year bears
to all Participants' Compensation for that year.
6-6. LIMITATION ON ALLOCATIONS TO PARTICIPANTS.
(a) GENERAL. Notwithstanding any other provisions of the Plan to
the contrary, the amounts credited to a Participant's Accounts
in accordance with this Article VI for any Limitation Year,
other than allocations of earnings and losses of the Trust
Fund and amounts excepted by Section 415 of the Code and the
Treasury Regulations thereunder, shall not exceed an amount
equal to the lesser of:
9
(i) thirty thousand dollars ($30,000), adjusted each
Limitation Year to take into account any cost-of-living
increase adjustment provided for that year under Section
415(d) of the Code; or
(ii) twenty-five percent (25%) of the Compensation paid to
the Participant by the Company in that Limitation Year.
If the limitations of this Section 6-6 shall apply to the
Accounts of any Participant for any Limitation Year, the
amount credited to his accounts under this Plan shall be
reduced to the extent required under this Section 6-6 before
any reduction is made in the amount credited to his Accounts
under any Related Plan. For purposes of this Section 6-6 the
term "Compensation" shall include only those items specified
in Section 1.415-2(d)(1)(i) of the Treasury Regulations and
shall exclude all items listed in Section 1.415-2(d)(2)
thereof.
(b) ALLOCATIONS OF EXCESS AMOUNTS. Subject to the limitations of
this Section 6-6, the portions of any Company contributions
and of any forfeitures which have been allocated to a
Participant under this Plan for a Limitation Year but which
cannot be credited to his Accounts because of the limitations
imposed by this Section 6-6 (the "excess amounts"), shall be
held in a suspense account. The amounts held in the suspense
account with respect to a Participant shall be allocated to
his Accounts in the following year before any Company
contributions are allocated to his Accounts for such following
year. If such Participant is not covered by the Plan as of
the last day of such following Limitation Year, then such
excess amounts shall again be held in a suspense account and
shall be allocated in the following year as if they were
forfeitures occurring on the first day of the following year.
All amounts held in a suspense account pursuant to this
Section 6-6(b) shall not share in the increase or decrease in
the net worth of the Trust Fund.
(c) DIVIDEND RECHARACTERIZATION. If any dividend paid on Company
Stock shall be recharacterized to be a Company contribution to
the Plan for any Limitation Year, and if such
recharacterization would cause an allocation to a
Participant's Accounts to exceed the limits allowed under
Section 415 of the Code for any Limitation Year, the
Participant's Accounts then shall be retroactively reduced by
an amount equal to the sum of (i) the excess of the amount
credited to the Participant's Accounts over the maximum amount
that was properly allocable to his Accounts (the "excess
amount"), plus (ii) all earnings of the Trust Fund credited to
the Participant's Accounts that are attributable to the excess
amount. This provision shall be administered in such a way as
to assure that no Participant receives any benefit from an
allocation of any excess amount to his Accounts. Any excess
amount and any earnings
10
attributable thereto shall be placed in the suspense
account referred to in subsection (b) of this Section 6-6.
It shall be conclusively presumed that any error with
respect to the characterization of any dividend payment by
the Company was a mistake of fact with respect to the which
the Trustee or the Administrator shall be entitled to make
corrective adjustments to Participant Accounts.
6-7. ADJUSTING TO VALUE OF TRUST FUND. As of each Valuation Date, the
Trustee shall determine: (i) the net worth of that portion of the Trust Fund
which consists of properties other than Company Stock (which portion of the
Trust Fund hereinafter is referred to as the "Investment Fund"); and (ii) the
increase or decrease in the net worth of the Investment Fund since the last
Valuation Date. The net worth of the Investment Fund shall be the fair market
value of all properties held by the Trustee under the Trust Agreement other than
Company Stock, net of liabilities other than liabilities to Participants and
their beneficiaries. The Trustee shall allocate to the Other Investments
Account of each Participant that percentage of the increase or decrease in the
net worth of the Investment Fund equal to the ratio which the balances credited
to such Participant's Other Investments Account bear to the total amount
credited to all Other Investments Account.
6-8. PARTICIPANT STATEMENTS. Each Fiscal Year, the Trustee will provide
each Participant with a statement of his Account balances as of the most recent
Valuation Date. Such statement shall show the value of the Company Stock
credited to a Participant's Company Stock Account, which value shall be
determined by the Trustee based upon a valuation by an independent appraiser.
11
ARTICLE VII
RETIREMENT DATES, TERMINATION DATE
7-1. NORMAL RETIREMENT DATE. The term "Normal Retirement Date" means the
date on which a Participant's employment with the Company is terminated for any
reason on or after the date on which he attains age fifty-nine and one-half
(59-1/2) and completes five (5) Years of Service.
7-2. DISABILITY RETIREMENT DATE. The term "Disability Retirement Date"
means the date that the Participant's employment with the Company is terminated
because of disability. For purposes of this Section 7-2, a Participant shall be
deemed to be disabled if, because of a physical or mental disability, is not
expected to live or the Participant is, or is expected to be, unable to perform
the duties of his customary position of employment (or is unable to engage in
any substantial gainful activity) for an indefinite period of at least twelve
(12) months. A Participant also is disabled if he incurs the permanent loss or
loss of use of a member or function of the body, or is permanently disfigured,
and his employment with the Company is terminated because of such loss, loss of
use or disfigurement. The Administrator may require a Participant to submit to
a physical examination in order to confirm disability.
7-3. EARLY RETIREMENT DATE. The term "Early Retirement Date" means the
date on which a Participant's employment with the Company is terminated for any
reason on or after the date on which he attains age fifty-five (55) and
completes twenty-five (25) Years of Service.
7-4. RETIREMENT DATE. The term "Retirement Date" means a Participant's
Normal Retirement Date, Early Retirement Date or Disability Retirement Date as
the case may be.
7-5. TERMINATION DATE. The term "Termination Date" means the date on
which a Participant's employment with the Company is terminated for any reason
prior to a Retirement Date.
12
ARTICLE VIII
VESTING OF ACCOUNT BALANCES
8-1. VESTING ON RETIREMENT. If a Participant retires or is retired on a
Retirement Date, the balances credited to his Accounts will be fully vested and
will be distributed to the Participant or for his benefit, as provided in
Article IX.
8-2. VESTING ON DEATH. If a Participant dies while in the employ of the
Company, the balances credited to his Accounts will be fully vested and will be
distributed to his beneficiary or for his beneficiary's benefit, as provided in
Article IX.
8-3. VESTING ON OTHER TERMINATION. A Participant shall have a vested and
nonforfeitable right to a percentage of the balances credited to his Company
Stock and Other Investments Accounts according to the following schedule:
YEARS OF SERVICE VESTED PERCENTAGE
fewer than 2 0%
2 20%
3 40%
4 60%
5 80%
6 100%
If a Participant's employment with the Company is terminated on a Termination
Date and before he is completely vested, the forfeitable balances credited to
his Company Stock and Other Investments Accounts will be forfeited and will be
allocated and credited in accordance with Section 6-5.
8-4. DETERMINATION OF ACCOUNT BALANCES. All determinations of the
balances credited to the Accounts of Participants required pursuant to this
Article VIII shall be made as of the Valuation Date coincident with or
immediately preceding the event giving rise to the determination. All Other
Investments Accounts shall continue to share in the changes in the value of the
Investment Fund, pursuant to Section 6-8, until such Accounts are distributed.
13
ARTICLE IX
DISTRIBUTION OF PLAN BENEFITS
9-1. METHOD OF DISTRIBUTION. Subject to the provisions of this Article
IX, distribution of the balances credited to a Participant's Accounts will be
made by the Trustee by payment in a lump sum.
9-2. FORM OF DISTRIBUTION. Distribution of the balance credited to a
Participant's Company Stock Account shall be made in whole shares of Company
Stock, except that the value of any fractional shares shall be paid in cash, and
the balance credited to his Other Investments Account shall be made in cash.
9-3. DISTRIBUTIONS AFTER DEATH. If a Participant dies before the entire
balance credited to his Accounts has been distributed, such balance shall be
payable in full upon the death of the Participant to the Participant's surviving
spouse. However, such balance may be paid to a beneficiary designated by the
Participant in accordance with Section 9-9 if one of the following conditions is
satisfied: either (a) the surviving spouse of such Participant has consented in
writing to the payment of the balance credited to the Participant's Accounts to
such beneficiary and the spouse's consent acknowledges the effect of such
consent and has been witnessed by the Administrator or by a notary public; or
(b) it is established to the satisfaction of the Administrator that such consent
could not be obtained because the Participant was not married, because the
Participant's spouse cannot be located, or because of such other circumstances
as the Secretary of the Treasury may prescribe by regulation. Any consent by a
spouse under this Section 9-3, or any establishment that the consent of a spouse
cannot be obtained, shall be effective only with respect to that spouse. Any
consent by a spouse under this Section 9-3 must acknowledge the beneficiary
designated by the Participant, including any class of beneficiaries or any
contingent beneficiaries; and the Participant may not subsequently change
beneficiaries without the consent of his or her spouse. Any consent by a spouse
pursuant to this Section 9-3 shall be irrevocable. If there is no surviving
spouse upon the death of a Participant, the balance in such Participant's
Accounts shall be paid to the beneficiary designated by such Participant in
accordance with Section 9-9.
9-4. TIME OF DISTRIBUTION.
(a) GENERAL. If a Participant dies, becomes disabled, or retires,
distribution of the balance credited to his Accounts shall be
made within one (1) year after the close of the Fiscal Year in
which he terminates his employment with the Company. If a
Participant's service with the Company is terminated for any
reason other than death, disability, or retirement,
distribution of the balances credited to his Accounts shall
be made not later than one (1) year after the close of the
Fiscal Year which is the fifth (5th) Fiscal Year following the
Fiscal Year in which the Participant's employment with the
Company is terminated (unless the Participant is
14
reemployed by the Company before distributions are required
to be made or commence).
(b) DEFERRAL OF DISTRIBUTION. A Participant whose Account
balances exceed five thousand dollars ($5,000) may elect to
defer distribution of his benefits hereunder until a date not
later than April 1st of the year immediately following the
year in which he attains age seventy and one-half (70-1/2).
Distributions made or commenced due to the Participant's
attainment of age seventy and one-half (70-1/2) shall be made
in accordance with Section 401(a)(9) of the Code and the
regulations thereunder.
(c) SPECIAL RULES. Notwithstanding anything to the contrary set
forth in paragraphs (a) or (b) of this Section 9-4, unless a
Participant elects a later date, distribution of his benefits
shall be made not later than the sixtieth (60th) day after the
close of the Fiscal Year in which the later of the following
events occurs: (1) the attainment of age sixty-five (65) or
normal retirement age, if earlier, by the Participant; or (2)
the termination of the Participant's service with the Company.
However, if the Participant is a "five percent owner," as such
term is defined in Section 416 of the Code, in no event shall
the balance credited to such a Participant's Accounts begin to
be distributed later than April 1st of the calendar year
immediately following the calendar year in which he attains
the age seventy and one-half (70-1/2).
9-5. IN-SERVICE DISTRIBUTIONS.
(a) DIVIDENDS. If so determined by the Board of Directors of the
Company, any cash dividend received by the Trustee on Company
Stock allocated to the Company Stock Accounts of Participants
may be paid currently (or within ninety (90) days after the
end of the Limitation Year in which the dividends are paid to
the Trustee) in cash by the Trustee to the Participants (or to
their beneficiaries), in proportion to the amounts of Company
Stock allocated to their Company Stock Accounts as of the
record date of the dividend. Alternatively, the Company may
pay such dividends directly to Participants or beneficiaries.
Any distribution of cash dividends may be limited to dividends
on shares of Company Stock which are then vested or may be
applicable to cash dividends on all shares allocated to
Participants' Company Stock Accounts.
(b) WITHDRAWALS. A Participant who has attained age fifty-five
(55) and who has completed at least ten (10) years of
participation in the Plan after the Effective Date shall be
notified of his right to withdraw a portion of the balance
credited to his Company Stock Account. An election to
withdraw must be made on the prescribed form and be filed
with the
15
Administrator within the ninety (90)-day period immediately
following the close of any Limitation Year within the
"Election Period". The "Election Period" is the period of
six (6) consecutive Fiscal Years beginning with the
Limitation Year in which the Participant first becomes
eligible to make a withdrawal. For each of the first five
(5) Limitation Years in the Election Period, the
Participant may elect to withdraw an amount which does not
exceed twenty-five percent (25%) of the balance credited to
his Company Stock Account, less all amounts previously
withdrawn under this Section 10-5. In the case of the last
Limitation Year in the Election Period, the Participant may
elect to withdraw an amount which does not exceed fifty
percent (50%) of the balance credited to his Company Stock
Account, less all amounts previously withdrawn. Any amount
which a Participant elects to withdraw under this Section
9-5 shall be distributed within ninety (90) days after the
ninety (90)-day period in which the election may be made. A
withdrawal shall be treated as a distribution which is
subject to the provisions of this Article X.
9-6. DISTRIBUTIONS TO PERSONS UNDER DISABILITY. Notwithstanding any
provisions of this Article IX to the contrary, if a Participant, surviving
spouse, or beneficiary is declared incompetent and a conservator or other person
legally charged with the care of his or her person or of his or her estate is
appointed, any benefits to which such Participant, surviving spouse, or
beneficiary is entitled shall be paid to such conservator or other person.
Except as provided above in this Section 9-6, when the Administrator, in its
sole discretion, determines that a Participant, surviving spouse, or beneficiary
is unable to manage his or her financial affairs, the Administrator may direct
the Trustee to make distributions to any person for the benefit of the
Participant, surviving spouse, or beneficiary.
9-7. BENEFITS MAY NOT BE ASSIGNED OR ALIENATED. The benefits payable to
any person under this Plan may not be voluntarily or involuntarily assigned or
alienated. However, the provisions of this Section 9-7 shall not apply to the
creation, assignment, or recognition of a right to any benefit payable with
respect to a Participant pursuant to a "qualified domestic relations order," as
that term is defined in Section 414(p) of the Code.
9-8. NO GUARANTEE OF BENEFITS. The benefits provided under the Plan for
any Participant shall be paid solely from that Participant's Accounts.
9-9. BENEFICIARIES. Subject to the provisions of Section 9-3, each
Participant may designate any legal or natural person to receive any benefits
payable under the Plan on account of his death. Each designation by a
Participant shall be in writing and shall be filed with the Administrator in
such form as it may require. Subject to the provisions of Section 9-3, a
beneficiary may change or revoke a direction as to the manner in which his
benefits are to be paid, or may make such a direction if none has been made, at
any time prior to the payment of his benefits by the Trustee. Subject to the
provisions of Section 9-3, by a writing filed with the Administrator, a
Participant may change his beneficiary designation at any time and from
16
time to time without the consent of or notice to any person or persons
previously designated by him. If no person or persons have been designated
by a Participant, or if all persons so designated predecease the Participant
or die prior to complete distribution of his benefits, then the
Administrator, in its sole discretion, shall direct the Trustee to distribute
the Participant's benefits to:
(a) one (1) or more of the Participant's relatives by blood,
adoption, or marriage, as the Trustee decides; or
(b) the Participant's executor or administrator.
In no event may the beneficiary of a deceased Participant designate a
beneficiary.
9-10. BENEFITS OF PERSONS WHO CANNOT BE LOCATED. If the Administrator
notifies a Participant or a beneficiary designated in accordance with Sections
9-3 and 9-9 in writing at his last known address that he is entitled to benefits
under the Plan and the Participant or beneficiary fails to claim his benefits
within seven (7) calendar years after notification, his benefits will be
distributed to one (1) or more of the Participant's or beneficiary's relatives
by blood, adoption, or marriage, as the Administrator shall in its sole
discretion decide.
9-11. DISTRIBUTION WITHHOLDING. Unless a Participant or beneficiary
elects under Section 401(a)(31)(A) of the Code to have his benefits paid
directly to an "eligible retirement plan," the Trustee shall withhold federal
tax in an amount equal to twenty percent (20%) of such benefits; provided
however, that the maximum amount that the Trustee may withhold shall be the
value of any non-Company Stock amounts held under the Plan. An "eligible
retirement plan" is a plan described in Section 401(a)(31)(D) of the Code.
Within a reasonable period of time before distributing a Participant's benefits,
the Trustee shall provide the Participant or beneficiary with a written
explanation of the following matters: (a) the provisions of this Plan under
which the Participant or beneficiary may have his benefits transferred directly
to another eligible retirement plan; (b) the Code provision which requires the
withholding of tax on the distribution if it is not directly transferred to
another eligible retirement plan; (c) the provisions of the Code under which the
distribution will not be subject to tax if transferred to an eligible retirement
plan within sixty (60) days after the date on which the recipient receives the
distribution; and (d) such other matters as to which an explanation is required
by law.
17
ARTICLE X
SHAREHOLDER RIGHTS AND RESTRICTIONS
10-1. VOTING OF COMPANY STOCK. If the Company has a registration-type
class of securities, then each Participant will be entitled to direct the
Trustee as to how to vote the shares of Company Stock allocated to his Company
Stock Account with respect to all matters. If the Company does not have a
registration-type class of securities, each Participant will be entitled to
direct the Trustee as to how to vote the shares of Company Stock allocated to
his Company Stock Account with respect to any proposed merger or consolidation,
recapitalization, reclassification, liquidation, dissolution, sale of
substantially all the assets of a trade or business, or such similar
transactions as are specified in Treasury Regulations under Section 409(c)(3) of
the Code. The Trustee shall vote all shares of Company Stock which are not
allocated to any Participant's Company Stock Account, including shares placed in
the suspense account referred to in Section 6-6(b), and the shares of allocated
Company Stock with respect to which no direction is received from the
Participants to whose Accounts the shares are allocated in the manner it deems
appropriate.
10-2. PUT OPTION. Subject to any required regulatory approval of any
state or federal bank regulatory agency, and except as provided in Section
409(h)(3) of the Code, in the case where the Company Stock is not readily
tradable on an established securities market, the Company shall provide a put
option to any Participant or beneficiary who receives a distribution of Company
Stock. Pursuant to this option, the Participant or beneficiary shall have the
right to sell his Company Stock to the Company at any time during two (2) option
periods, at a price equal to the fair market value of the stock determined as of
the most recent Valuation Date. The first put option period shall be for at
least sixty (60) days, beginning on the date of the distribution of the stock.
The second put option period shall be for at least sixty (60) days beginning
after the new determination of fair market value of the stock in the following
Fiscal Year (and after the delivery of notice thereof to the Participant or
beneficiary). The Company may allow the Trustee to purchase shares of Company
Stock tendered to the Company under a put option. The Company shall have the
option to pay the purchase price for any Company stock sold under a put option
in one (1) lump sum within thirty days of the exercise of the option or in
substantially equal, annual installments over a period not exceeding five (5)
years, with adequate security provided and interest payable at a reasonable rate
on any unpaid installment balance (as determined by the Company).
10-3. RIGHT OF FIRST REFUSAL.
(a) COMPANY AND TRUSTEE RIGHT OF FIRST REFUSAL. Any shares of
Company Stock that are distributed by the Trustee shall be
subject to rights of first refusal held by the Company and by
the Trustee. Pursuant to these rights, any person who
receives shares of Company Stock from the Trust shall be
required to offer in writing to sell such shares first to the
Company, and then to the Trustee, at fair market value before
transferring such shares to any other person. A bona fide
written offer
18
from an independent prospective buyer shall be deemed to be
the fair market value of the shares for purposes of this
Section 10-3. The Company and the Trustee shall have
fourteen (14) days from the date that they receive notice
of the shareholder's desire to transfer his shares to
exercise their rights of first refusal. The Company may
require that a Participant or Beneficiary entitled to a
distribution of Company Stock execute an appropriate stock
transfer agreement evidencing the right of first refusal
prior to receiving a certificate for shares of Company
Stock.
(b) ENDORSEMENT ON STOCK CERTIFICATES. Shares of Company Stock
held or distributed by the Trustee shall include such legend
restrictions on transferability as the Company may reasonably
require in order to assure compliance with the rights of first
refusal provided for in Section 10-3 and with applicable
federal and state securities laws. Except as otherwise
provided in this Article X, no shares of Company Stock held or
distributed by the Trustee may be subject to a put, call, or
other option or to a buy-sell or similar arrangement.
19
ARTICLE XI
PLAN ADMINISTRATION
11-1. PLAN ADMINISTRATION. The authority to control and manage the
operation and administration of the Plan is vested in a Committee, as described
in Article XI. The Committee shall designate a responsible person as the
Administrator of the Plan, having the rights, duties and obligations of an
"administrator" under the provisions of ERISA. If the Committee fails to
designate an Administrator, the Company shall be the Administrator of the Plan.
The Company shall be the "Named Fiduciary" (as described in Section 402 of
ERISA) under the Plan.
11-2. THE TRUST. All contributions made under the Plan will be held,
managed, and controlled by a trustee acting under a trust which forms a part of
the Plan. The terms of the trust are set forth in a Trust Agreement known as
the First National Bancorp, Inc. Employee Profit Sharing and Retirement Plan
Trust Agreement. All rights which may accrue to any person under the Plan shall
be subject to all of the terms and provisions of the Trust Agreement as in
effect from time to time.
11-3. CLAIMS PROCEDURE.
(a) PROCEDURE. Claims for benefits under the Plan shall be made
in writing to the Committee. The Committee shall have full
discretion to render a decision with respect to any claim. If
a claim for benefits is wholly or partially denied by the
Committee, the Committee shall notify the claimant in writing
of the denial of the claim within a reasonable period of time,
not to exceed ninety (90) days after receipt of the claim. A
notice of denial shall be written in a manner calculated to be
understood by the claimant, and it shall set forth: (i) the
specific reason or reasons for denial of the claim; (ii) a
specific reference to the pertinent Plan provisions upon which
the denial is based; (iii) a description of any additional
material or information necessary for the claimant to perfect
the claim, together with an explanation of why such material
or information is necessary; and (iv) appropriate information
regarding the steps to be taken if the claimant wishes to
submit his claim for review. If the Committee shall fail to
notify the claimant either that his claim has been granted or
that it has been denied within ninety (90) days after the
claim is received by the Committee, the claim shall be deemed
to have been denied.
(b) PROCEDURE FOR REVIEW OF A DENIED CLAIM. Within sixty (60)
days of the receipt by the claimant of a written notice of
denial of his claim, or within sixty (60) days after the claim
is deemed denied as set forth in subsection (a) above, if
applicable, the claimant may file a written request with the
Committee that it conduct a full and fair review of the
20
denial of his claim for benefits. In connection with the
claimant's appeal of the denial of his benefits, the
claimant may review pertinent documents and may submit
issues and comments in writing. The Committee shall have
full discretion to fully and fairly review the claim, and
the Committee shall render a decision on the claim appeal
promptly. Such decision shall be rendered not later than
sixty (60) days after the receipt of the claimant's request
for review, unless special circumstances (such as the need
to hold a hearing) require an extension of time for
processing, in which case the sixty (60)-day period may be
extended to one hundred and twenty (120) days. The
Committee shall notify the claimant in writing of any such
extension. The decision upon review shall: (i) include
specific reasons for the decision; (ii) be written in a
manner calculated to be understood by the claimant; and
(iii) contain specific references to the pertinent Plan
provisions upon which the decision is based.
11-4. PROCEDURES WITH RESPECT TO DOMESTIC RELATIONS ORDERS.
(a) DEFINITIONS. For purposes of this Section 11-4, the following
terms shall have the following meanings: (i) the term
"domestic relations order" shall mean any judgment, decree, or
order (including approval of a property settlement agreement)
which relates to the provision of child support, alimony
payments, or marital property rights to a spouse, former
spouse, child, or other dependent of a Participant and which
is made pursuant to a state domestic relations law, including
a community property law; (ii) the term "qualified domestic
relations order" shall have the meaning set forth in Section
414(p) of the Code; and (iii) the term "alternate payee" shall
mean any spouse, former spouse, child, or other dependent of a
Participant who is recognized by a domestic relations order as
having a right to receive all or a portion of the benefits
payable under the Plan with respect to such Participant.
(b) PROCEDURES. The Committee shall establish reasonable
procedures with respect to the following matters: (i) the
manner for determining whether a domestic relations order
constitutes a qualified domestic relations order; and (ii) the
administration of distributions under such qualified orders.
(c) NOTICE. Promptly following the receipt of any domestic
relations order, the Committee shall notify the Participant
affected by such order, and any other alternate payee, of the
receipt of such order and of the procedures established under
the Plan for determining the qualified status of domestic
relations orders. Within a reasonable period of time after
receipt of any domestic relations order, the Committee shall
determine whether such order is a qualified domestic relations
order and
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shall notify the Participant affected by such order and each
alternate payee of such determination.
(d) SEGREGATION OF ACCOUNT. During any period in which the issue
whether a domestic relations order is a qualified domestic
relations order is being determined by the Committee, by a
court of competent jurisdiction, or otherwise, the Committee
shall instruct the Trustee to segregate in a separate account
under the Trust Fund or to deposit in an escrow account the
amounts which would have been payable to the alternate payee
during such period if the order had been determined to be a
qualified domestic relations order. If the order or any
modification thereof is determined to be a qualified domestic
relations order within eighteen months, the Committee shall
pay the segregated amounts, plus any interest thereon, to the
persons entitled thereto. If within eighteen (18) months
either it is determined that the order is not a qualified
domestic relations order or the issue whether such order is a
qualified domestic relations order is not resolved, then the
Committee shall pay the segregated amounts, plus any interest
thereon, to the persons who would have been entitled to such
amounts if there had been no order. Any determination that an
order is a qualified domestic relations order which is made
after the close of the eighteen (18)-month period described
above shall be applied prospectively only.
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ARTICLE XII
THE COMMITTEE
12-1. MEMBERSHIP. The Committee referred to in Section 11-1 shall consist
of three (3) or more members, who shall be appointed by the Board of Directors
of the Company. In controlling and managing the operation and administration of
the Plan, the Committee shall act by the concurrence of a majority of its
members at a meeting or by writing without a meeting. By unanimous written
consent, the Committee may authorize any one (1) of its members to execute any
document, instrument or direction on its behalf. A written statement by a
majority of the Committee members or by an authorized Committee member shall be
conclusive in favor of any person (including the Trustee) acting in reliance
thereon.
12-2. RIGHTS, POWERS, AND DUTIES OF THE COMMITTEE. The Committee shall
have such discretionary authority as may be necessary to efficiently administer
the Plan. The rights, powers, and duties of the Committee shall include the
following:
(a) to interpret and construe the provisions of the Plan;
(b) to determine all questions relating to the eligibility,
benefits, and other rights of Employees, Participants, and
beneficiaries under the Plan;
(c) to adopt such rules of procedure and regulations as are
consistent with the provisions of the Plan and as the
Committee deems necessary and proper;
(d) to maintain and keep adequate records concerning the Plan, and
concerning the proceedings and acts of the Committee, in such
form and detail as the Committee may decide;
(e) to appoint investment managers to manage any assets of the
Trust Fund, and to authorize such managers to acquire and
dispose of assets of the Trust Fund;
(f) to employ one or more persons to render advice with respect to
any responsibility which the Committee has under the Plan;
(g) to delegate such authority and duties, including the authority
to execute any documents, as the Committee may deem
appropriate to the Trustee or to other agents, provided that
the Committee shall exercise reasonable care in the selection
of any agents; and
(h) to act as the agent for the service of legal process.
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12-3. APPLICATION OF RULES. In operating and administering the Plan, the
Committee shall apply all rules of procedure and regulations adopted by it in a
uniform and non-discriminatory manner.
12-4. REMUNERATION AND EXPENSES. No remuneration shall be paid to any
Committee member as such. However, the reasonable expenses of a Committee
member incurred in the performance of a Committee function shall be reimbursed
by the Company.
12-5. EXERCISE OF COMMITTEE'S DUTIES. Notwithstanding any other
provisions of the Plan, the Committee shall discharge its duties hereunder
solely in the interests of the Plan Participants and their beneficiaries, and:
(a) for the exclusive purpose of providing benefits to Plan
Participants and their beneficiaries; and
(b) with the care, skill, prudence, and diligence under the
circumstances then prevailing that a prudent person acting in
a like capacity and familiar with such matters would use in
the conduct of an enterprise of a like character and with like
aims.
12-6. RESIGNATION OR REMOVAL OF COMMITTEE MEMBERS. A Committee member may
resign at any time by giving ten (10) days' advance written notice to the
Company, the Trustee and the other members of the Committee. The Company may
remove a Committee member by giving advance written notice to him, the Trustee
and the other members of the Committee. A Committee member who is a Participant
shall be automatically removed on his Retirement or Termination Date.
12-7. APPOINTMENT OF SUCCESSOR COMMITTEE MEMBERS. The Board of Directors
of the Company may fill any vacancy in the membership of the Committee and shall
give prompt written notice thereof to the other Committee members and to the
Trustee. While there is a vacancy in the membership of the Committee, the
remaining Committee members shall have the same powers as the full Committee
until the vacancy is filled.
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ARTICLE XIII
AMENDMENT AND TERMINATION
13-1 AMENDMENT. Subject to the provisions of Section 15-1, the Company
reserves the right to amend the Plan at any time by action of its Board of
Directors or of a person designated by resolution of its Board of Directors.
However, no amendment shall divest a Participant of any amount that he would
have received had he resigned from the Company's employ immediately prior to the
effective date of the amendment.
13-2. TERMINATION. The Company reserves the right to terminate the Plan
at any time by action of its Board of Directors. The Plan will terminate on the
earliest of the following dates:
(a) the date the Company is judicially declared bankrupt or
insolvent;
(b) the date the Company completely discontinues its contributions
under the Plan; or
(c) the date the Company is dissolved, merged, consolidated, or
reorganized, or sells all or substantially all of its assets,
except that, subject to the provisions of Section 13-3,
provision may be made by the successor or purchaser for
continuing the Plan (and in that event, the successor or
purchaser shall be substituted for the Company under the
Plan).
13-3. MERGER OR CONSOLIDATION OF PLAN, TRANSFER OF PLAN ASSETS. In the
case of any merger or consolidation with, or transfer of assets and liabilities
to, any other pension or profit sharing plan, provision shall be made so that
each Participant in the Plan on the date of the merger, consolidation, or
transfer would receive a benefit immediately after the merger, consolidation, or
transfer if the Plan then terminated which is equal to or greater than the
benefit he would have been entitled to receive immediately prior to the merger,
consolidation, or transfer if the Plan had terminated then.
13-4. VESTING AND DISTRIBUTION ON TERMINATION AND PARTIAL TERMINATION.
Notwithstanding any other provision of the Plan to the contrary, on termination
of the Plan in accordance with Section 13-2 or on partial termination of the
Plan by operation of law, the date of termination or partial termination will be
a Valuation Date and, after all adjustments required on a Valuation Date have
been made, each affected Participant's benefits will be nonforfeitable. On
termination of the Plan the Company may instruct the Trustee to (a) liquidate
the Trust Fund and distribute all benefits as soon as administratively possible;
or (b) retain the Trust Fund and distribute all benefits in accordance with the
provisions of Article VI. The provisions of Article VI will continue to apply
until the benefits of all affected Participants have been distributed to them.
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ARTICLE XIV
TOP-HEAVY PROVISIONS
14-1. TOP-HEAVY DETERMINATION. The Plan will be top-heavy if, as of the
first day of the first Fiscal Year or, as of the day next preceding the first
day of any later Fiscal Year (the "Determination Date"), the aggregate present
value of the Account balances of all "Key Employees," as defined in Section
416(i) of the Code, and their beneficiaries exceeds sixty percent (60%) of the
aggregate present value of the Account balances of all Participants and
beneficiaries. The aggregate present value of the Account balances of a
Participant who has not performed any services for the Company or a member of
the Controlled Group during the five (5)-year period ending on the Determination
Date shall not be taken into account.
14-2. MINIMUM CONTRIBUTION. For each Fiscal Year that the Plan is
top-heavy, the aggregate amount of Company contributions allocated to the
accounts of each Participant who is not a Key Employee and who is employed by
the Company or a member of the Controlled Group as of the last day of the
Fiscal Year shall not be less than the lesser of:
(a) three percent (3%) of his Compensation for the Fiscal Year; or
(b) that percent of his Compensation equal to the percentage of
Company contributions allocated to the Accounts of the Key
Employee with the highest allocation percentage.
14-3. AGGREGATION OF PLANS. As required by Section 416(g)(2) of the Code,
other plans maintained by the Company or a member of the Controlled Group shall
be aggregated with this Plan for purposes of determining whether the Plan is
top-heavy.
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ARTICLE XV
MISCELLANEOUS
15-1. NO REVERSION TO COMPANY. No part of the corpus or income of the
Trust Fund shall revert to the Company or be used for or diverted to purposes
other than for the exclusive benefit of Participants and their beneficiaries,
except as specifically provided in Article V of the Trust Agreement.
15-2. NOTICES. Any notice required to be filed with any person under the
Plan will be properly filed if delivered or mailed to such person, in care of
the Company, at 78 North Chicago Street, Joliet, Illinois 60432, or at such
other address as the Company may designate from time to time.
15-3. INDEPENDENT APPRAISER. If the Company Stock is not readily tradable
on an established securities market, then all determinations of fair market
value required under the Plan shall be based upon a valuation by an independent
appraiser.
15-4. INDEMNIFICATION. The Company shall indemnify the Trustee, the
Administrator, and any other person acting as a fiduciary with respect to the
Plan for, and hold them harmless against, any and all liabilities, losses,
costs, or expenses of any kind or nature which may be imposed on, incurred by,
or asserted against them at any time by reason of their service under this Plan
(including legal fees and expenses), to the extent such liability, loss, cost,
or expense is not insured against or exceeds any insurance recovery. However,
no person shall be entitled to indemnity under this Section if he acted
dishonestly or in willful or grossly negligent violation of the law or
regulation under which such liability, loss, cost, or expense arises.
15-5. SUBSIDIARY AND AFFILIATED COMPANIES. With the approval of the Board
of Directors of the Company, any subsidiary or affiliate of the Company may
become a party to this Plan, and become entitled to all of the benefits and
subjected to all of the obligations hereof, by executing an acceptance of this
Plan in such form as the Company and the Trustee shall approve. Upon acceptance
of this Plan by any subsidiary or affiliate, employees of such subsidiary or
affiliate may become Participants upon meeting the eligibility requirements
herein provided; and when so qualified such employees shall be subject to the
same obligations and entitled to the same rights and benefits as if they were
employees of the Company. The contributions to be made in respect of employees
of any subsidiary or affiliate of the Company which becomes a party to this Plan
shall be made by the subsidiary or affiliate and not by the Company. The
subsidiary or affiliate shall have no right to defer payment of its contribution
or to terminate the Plan in respect of itself or its participating employees
without the written consent of the Board of Directors of the Company.
15-6. PARTICIPATION NOT GUARANTEE OF EMPLOYMENT. Participation in the
Plan does not constitute a guarantee or contract of employment with the Company.
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15-7. GENDER AND NUMBER. In this Plan, where the context admits, words in
the masculine gender include the feminine and neuter genders, words in the
singular include the plural, and the plural includes the singular.
15-8. GOVERNING LAWS. The Plan shall be construed and administered
according to the laws of the State of Illinois, to the extent that such laws are
not preempted by the laws of the United States of America.
15-9. TEXT TO CONTROL. The Article and Section headings and numbers in
this Plan are included solely for convenience of reference, and if there be any
conflict between such headings and numbers and the text of this Plan, the text
shall control.
The foregoing is a true and correct copy of the First National Bancorp,
Inc. Employee Profit Sharing and Retirement Plan.
Dated at Joliet, Illinois, this 10th day of December, 1998.
FIRST NATIONAL BANCORP, INC.
By: Albert G. D'Ottavio
-------------------------
Its President
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