PAGE 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-K
(Mark One)
[ X ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED] For the fiscal
year ended December 31, 1993
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED] For the
transition period from __ to __
Commission file number 0-16772
PEOPLES BANCORP INC.
(Exact name of Registrant as specified in its charter)
OHIO
(State or other jurisdiction of incorporation or organization)
31-0987416
(I.R.S. Employer Identification No.)
138 PUTNAM STREET, P. O. BOX 738, MARIETTA, OHIO
(Address of principal executive offices)
45750
(Zip Code)
Registrant's telephone number, including area code: (614) 373-3155
Securities registered pursuant to Section 12(b) of the Act: NONE
Securities registered pursuant to Section 12(g) of the Act:
Common Shares, No Par Value (1,449,470 outstanding at February
28, 1994)
Indicate by check mark whether the Registrant (1) has filed all
reports required to be filed by Section 13 or 15 (d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the Registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No _____
Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 Regulation S-K is not contained herein, and
will not be contained, to the best of Registrant's knowledge, in
definitive proxy or information statements incorporated by
reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]
Based upon the closing price of the Common Shares of the
Registrant on the NASDAQ Stock Market as of February 28, 1994,
the aggregate market value of the Common Shares of the
Registrant held by nonaffiliates on that date was $ 57,463,700.
For this purpose, certain executive officers and directors are
considered affiliates.
Documents Incorporated by Reference:
1) Portions of Registrant's Annual Report to Stockholders for
the fiscal year ended December 31, 1993, are incorporated by
reference into Parts I and II of this Annual Report on Form 10-K.
2) Portions of Registrant's Definitive Proxy Statement
relating to the annual meeting to be held April 5, 1994 are
incorporated by reference into Part III of this Annual Report on
Form 10-K.
Exhibit Index Appears on Page 15
/PAGE 1
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PART I
ITEM 1. BUSINESS.
INTRODUCTION
Peoples Bancorp Inc. (the "Company") was incorporated under the
laws of the State of Delaware on April 1, 1980. The Company was
merged, following Shareholder approval, into the Peoples Bancorp
Inc., an Ohio corporation, effective April 6, 1993, pursuant to
a reincorporation proceeding. Its principal business is to act
as a multi-bank holding company. Its wholly-owned subsidiaries
are The Peoples Banking and Trust Company, Marietta, Ohio
("Peoples Bank"), The First National Bank of Southeastern Ohio
("First National Bank") and The Northwest Territory Life
Insurance Company, an Arizona corporation ("Northwest
Territory").
At December 31, 1993 Peoples Bancorp Inc. (parent company only)
had 23 full-time equivalent employees.
PEOPLES BANK
Peoples Bank was chartered as an Ohio banking corporation under
its present name in Marietta, Ohio, in 1902. On August 1, 1990,
Peoples Bank and The Peoples Bank, Nelsonville and Athens, were
combined to provide efficiency in banking operations. On
December 30, 1991, an office was opened at The Plains, a growing
community in Athens County, Ohio. The Middleport office of
Peoples Bank was acquired on January 2, 1992. This is a
full-service branch located in Meigs County, Ohio. Peoples Bank
acquired some of the assets and some of the liabilities of
Liberty Savings Bank, Marietta, Ohio, from the RTC on February
1, 1992. During 1993 Peoples Bank opened a business production
office in Newark, Ohio. As of December 31, 1993, Peoples Bank
was one of the largest of 13 banks in Washington and Athens
Counties, Ohio, and held 29.2% of total assets of all banks in
those two counties. At December 31, 1993, it had assets of
$400,000,000; deposits of $336,187,000; and net loans of
$277,281,000.
Peoples Bank is a full-service commercial bank. It provides
checking accounts, NOW accounts, Super NOW accounts, money
market deposit accounts, savings accounts, time certificates of
deposit, commercial loans, installment loans, commercial and
residential real estate mortgage loans, credit cards, automatic
teller machines, banking by phone, lease financing, corporate
and personal trust services and safe deposit rental facilities.
Peoples Bank also sells travelers checks, money orders and
cashier's checks. Services are provided through ordinary
walk-in offices, automated teller facilities called
"SuperTeller", and automobile drive-in facilities called "Motor
Bank". At December 31, 1993, the Trust Department of Peoples
Bank held approximately $326 million in trust and custodial
accounts apart from the assets of the Bank.
With all of its offices located in Ohio, Peoples Bank serves
principally Washington, Athens and Meigs Counties, together with
portions of Hocking, Perry and Vinton Counties in Ohio and
adjacent parts of Northern West Virginia. The business
production office in Newark, Ohio, serves that immediate area in
Licking County. Peoples Bank provides services to its customers
at its main office in downtown Marietta and through SuperTeller
and other banking facilities. Full-service branches and
SuperTellers are located at the Frontier Shopping Center and
inside a grocery store at Pike and Acme Streets in Marietta.
A full-service branch, two Motor Banks and a Super-
/PAGE 2
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Teller are operated in Belpre, Ohio. Full-service branches with
Motor Banks are located in Lowell, Reno and Nelsonville, Ohio.
A full-service branch is located at One North Court Street and
at the Athens Mall in Athens, Ohio. The One North Court Street
office also has a SuperTeller machine. In 1993, Peoples Bank
added three SuperTeller machines on the campus of Ohio
University in Athens, Ohio. These locations were operated by
another local bank prior to Peoples Bank assuming operation of
these machines. A full-service bank is located at Middleport,
Ohio.
At December 31, 1993, Peoples Bank had 217 full-time equivalent
employees.
THE FIRST NATIONAL BANK OF SOUTHEASTERN OHIO
First National Bank is a national banking association chartered
in 1900. It provides services and products that are
substantially the same as those of Peoples Bank. It operates a
commercial bank and motor bank at one location at 415 Main
Street, Caldwell, Ohio. It also has a full-service office on
Marion Street in Chesterhill, Ohio. On January 2, 1991, it
acquired a full-service office on Kennebec Street,
McConnelsville, Ohio. Its market area is comprised of Caldwell,
Chesterhill, McConnelsville and the surrounding area in Noble
and Morgan Counties, Ohio. At December 31, 1993, it had assets
of $61,650,000, deposits of $49,723,000 and net loans of
$38,089,000. At December 31, 1993, it had 29 full-time
equivalent employees.
During 1989, The First National Bank of Caldwell and The First
National Bank of Chesterhill were merged to form The First
National Bank of Southeastern Ohio.
THE NORTHWEST TERRITORY LIFE INSURANCE COMPANY
Northwest Territory was organized under Arizona law in 1983 and
was issued a Certificate of Authority to act as a reinsurance
company by the State of Arizona on February 8, 1984. Northwest
Territory reinsures credit life and disability insurance issued
to customers of banking subsidiaries of the Company by another
insurance company. At November 30, 1993, Northwest Territory
had total assets of $1,137,000 and had gross premium income of
$231,000 in 1993, $230,000 in 1992 and $199,000 in 1991.
Northwest Territory reinsures risks (currently not exceeding
$15,000 per insured on a present value basis) within limits
established by governmental regulations and management policy.
Northwest Territory has no employees.
CUSTOMERS AND MARKETS
The Company's service area has a diverse economic structure.
Principal industries in the area include metals, plastics and
petrochemical manufacturing; oil, gas and coal production and
related support industries. In addition, tourism, education and
other service-related industries are important and growing
industries. Excellent transportation facilities, including
highway, river and rail, are available and have helped the area
to develop. Consequently, the Company is not dependent upon any
one industry segment for its business opportunities.
/PAGE 3
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COMPETITION
The banking subsidiaries of the Company experience significant
competition in attracting depositors and borrowers. Competition
in lending activities comes principally from other commercial
banks in the lending areas of the banks and, to a lesser extent,
from savings associations, insurance companies, governmental
agencies, credit union, brokerage firms and pension funds. The
primary factors in competing for loans are interest rate and
overall lending services. Competition for deposits comes from
other commercial banks, savings and loan associations, money
market funds and credit unions as well as from insurance
companies and brokerage firms. The primary factors in competing
for deposits are interest rates paid on deposits, account
liquidity, convenience of office location and overall financial
condition. The Company believes that its size, overall banking
services and financial condition place it in a favorable
competitive position.
NORTHWEST TERRITORY LIFE INSURANCE COMPANY
Northwest Territory Life Insurance Company operates in the
highly competitive industry of credit life and disability
insurance. A large number of stock and mutual insurance
companies also operating in this industry have been in existence
for longer periods of time and have substantially greater
financial resources than does Northwest Territory Life Insurance
Company. The principal methods of competition in the credit
life and disability insurance industry are the availability of
coverages, premium rates and a competitive advantage due to the
fact that the business of Northwest Territory Life Insurance
Company is limited to the accepting of life and disability
reinsurance ceded in part by Northwest Territory Life Insurance
Company from the credit life and disability insurance purchased
by loan customers of Peoples Bank and First National Bank.
SUPERVISION AND REGULATION
The following is a summary of certain statutes and regulations
affecting the Corporation and its subsidiaries. The summary is
qualified in its entirety by reference to such statutes and
regulations.
The Corporation is a bank holding company under the Bank
Holding Company Act of 1956, as amended, which restricts the
activities of the Corporation and the acquisition by the
Corporation of voting stock or assets of any bank, savings
association or other company. The Corporation is also subject
to the reporting requirements of, and examination and regulation
by, the Board of Governors of the Federal Reserve System (the
"Federal Reserve Board"). Subsidiary banks of a bank holding
company are subject to certain restrictions imposed by the
Federal Reserve Act on transactions with affiliates, including
any loans or extensions of credit to the bank holding company or
any of its subsidiaries, investments in the stock or other
securities thereof and the taking of such stock or securities as
collateral for loans to any borrower; the issuance of
guarantees, acceptances or letters of credit on behalf of the
bank holding company and its subsidiaries; purchases or sales of
securities or other assets; and the payment of money or
furnishing of services to the bank holding companies are
prohibited from engaging in certain tie-in arrangements in
connection with extensions of credit or provision of property or
services.
/PAGE 4
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Bank holding companies are also restricted in acquiring shares
or substantially all of the assets of any bank located outside
the state in which the operations of the holding company's
banking subsidiaries are principally conducted. Such an
acquisition must be specifically authorized by statute of the
state of the bank whose shares or assets are to be acquired.
Ohio laws permit interstate banking on a reciprocal basis. Bank
holding companies and banks located in Ohio may acquire or
organize bank holding companies and banks in other states;
conversely, bank holding companies and banks in such states may
acquire or organize bank holding companies or acquire or charter
banks in Ohio if the other state enacts effective reciprocal
legislation granting Ohio bank holding companies and banks the
same or greater authority.
As a national bank, The First National Bank of Southeastern
Ohio is supervised and regulated by the Comptroller of the
Currency. As Ohio state-chartered banks, The Peoples Banking
and Trust Company and The First National Bank of Southeastern
Ohio are insured by the Federal Deposit Insurance Corporation
("FDIC") and those entities are subject to the applicable
provisions of the Federal Deposit Insurance Act. A subsidiary
of a bank holding company can be liable to reimburse the FDIC if
the FDIC incurs or anticipates a loss because of a default of
another FDIC-insured subsidiary of the bank holding company or
FDIC assistance provided to such subsidiary in danger of default.
Various requirements and restrictions under the laws of the
United States and the State of Ohio affect the operations of The
Peoples Banking and Trust Company and The First National Bank of
Southeastern Ohio, including requirements to maintain reserves
against deposits, restrictions on the nature and amount of loans
which may be made and the interest that may be charged thereon,
restrictions relating to investments and other activities,
limitations on credit exposure to correspondent banks,
limitations on activities based on capital and surplus,
limitations on payment of dividends and limitations on branching.
The Federal Reserve Board has adopted risk-based capital
guidelines for bank holding companies and for state member
banks. The risk-based capital guidelines include both a
definition of capital and a framework for calculating
weighted-risk assets by assigning assets and off-balance sheet
items to risk weights (including certain off-balance sheet
items, such as standby letters of credit). The minimum
supervisory risk-based capital ratio is 8%. At least half of
the total capital is to be comprised of common stockholder's
equity (including retained earnings), noncumulative perpetual
preferred stock, a limited amount of cumulative perpetual
preferred stock and minority interest in equity accounts of
consolidated subsidiaries, less goodwill ("Tier 1 capital").
The remainder ("Tier 2 capital") may consist, among other
things, of mandatory convertible debt securities, a limited
amount of subordinated debt, other preferred stock and a limited
amount of allowance for loan and lease losses. The Federal
Reserve Board also imposes a minimum leverage ratio (Tier 1
capital to total assets) of 4% for bank holding companies and
state member banks that meet certain specified condition,
including no operational, financial or supervisory deficiencies
and including having the highest regulatory rating. The minimum
leverage ratio is 1.0-2.0% higher for other bank holding
companies and state member banks based on their particular
circumstances and risk profiles and those experiencing or
anticipating significant growth.
/PAGE 5
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National bank subsidiaries, such as The First National Bank of
Southeastern Ohio, are subject to similar capital requirements
adopted by the Comptroller of the Currency, and state non-member
bank subsidiaries, such as The Peoples Banking and Trust
Company, are subject to similar capital requirements adopted by
the FDIC.
The Corporation and it subsidiaries currently satisfy all
capital requirements. Failure to meet the capital guidelines
could subject a banking institution to a variety of enforcement
remedies available to federal and state regulatory authorities,
including the termination of deposit insurance by the FDIC.
The ability of a bank holding company to obtain funds for the
payment of dividends and for other cash requirements is largely
dependent on the amount of dividends which may be declared by
its subsidiary banks. The Peoples Banking and Trust Company and
The First National Bank of Southeastern Ohio may not pay
dividends to the Corporation if, after paying such dividends,
they would fail to meet the required minimum levels under the
risk-based capital guideline and the minimum leverage ratio
requirements. The Peoples Banking and Trust Company and The
First National Bank of Southeastern Ohio must have the approval
of their respective regulative authorities if a dividend in any
year would cause the total dividends for that year to exceed the
sum of the current year's net profits and the retained net
profits for the preceding two years, less required transfers to
surplus. Payment of dividend by the bank subsidiaries may be
restricted at any time at the discretion of the regulatory
authorities, if they deem such dividends to constitute an unsafe
and/or unsound banking practice. These provisions could have
the effect of limiting the Corporation's ability to pay
dividends on its outstanding common shares.
Northwest Territory Life Insurance Company is chartered by the
State of Arizona and is subject to regulation, supervision and
examination by the Arizona Department of Insurance. The powers
of regulation and supervision of the Arizona Department of
Insurance relate generally to such matters a minimum
capitalization, the grant and revocation of certificates of
authority to transact business, the nature of and limitations on
investments, the maintenance of reserves, the form and content
of required financial statements, reporting requirements and
other matters pertaining to life and disability insurance
companies.
MONETARY POLICY AND ECONOMIC CONDITIONS
The commercial banking business is affected not only by general
economic conditions, but also by the policies of various
governmental regulatory agencies, including the Federal Reserve
Board. The Federal Reserve regulates money and credit
conditions and interest rates in order to influence general
economic conditions primarily through open-market operations in
United States Government securities, changes in the discount
rate on bank borrowings, and changes in the reserve requirements
against bank deposits. These policies and regulations
significantly affect the overall growth and distribution of bank
loans, investments and deposits, and the interest rates charged
on loans, as well as the interest rates paid on deposits and
accounts.
The monetary policies of the Federal Reserve Board have had a
/PAGE 6
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significant effect on the operating results of commercial banks
in the past and are expected to continue to have significant
effects in the future. In view of the changing conditions in
the economy and the money markets and the activities of monetary
and fiscal authorities, no definitive predictions can be made as
to future changes in interest rates, credit availability or
deposit levels.
STATISTICAL FINANCIAL INFORMATION REGARDING THE COMPANY
The following listing of statistical financial information,
which is included in the Company's Annual Report to
Stockholders, provides comparative data for the Company over the
past three and five years, as appropriate. These tables should
be read in conjunction with "Management's Discussion and
Analysis" and the Consolidated Financial Statements of the
Company and its subsidiaries found at pages 26 through 30 and 6
through 19, respectively, of the Company's Annual Report to
Stockholders.
AVERAGE BALANCES AND ANALYSIS OF NET INTEREST INCOME
Please refer to page 22 of the Company's Annual Report to
Stockholders.
RATE VOLUME ANALYSIS
Please refer to page 23 of the Company's Annual Report to
Stockholders.
LOAN MATURITIES
Please refer to page 23 of the Company's Annual Report to
Stockholders.
AVERAGE DEPOSITS
Please refer to "Average Balances and Analysis of Net Interest
Income" on page 22 of the Company's Annual Report to
Stockholders.
MATURITIES SCHEDULE OF LARGE CERTIFICATES OF DEPOSIT
Please refer to page 23 of the Company's Annual Report to
Stockholders.
LOAN PORTFOLIO ANALYSIS
Please refer to pages 24 and 25 of the Company's Annual Report
to Stockholders.
SECURITIES ANALYSIS
Please refer to page 27 of the Company's Annual Report to
Stockholders.
/PAGE 7
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RETURN RATIOS
Please refer to page 5 of the Company's Annual Report to
Stockholders.
ITEM 2. PROPERTIES
The principal office of the Company and Peoples Bank is located
at 138 Putnam Street, Marietta, Ohio. This location consists of
a five-story, stone-block building and one other smaller
building attached by interior corridors. Peoples Bank also owns
several nearby vacant lots for parking and a nearby Motor Bank.
Peoples Bank owns property on which three additional
full-service and two additional Motor Banks are located, leases
the land on which one full-service branch is located and leases
its other full-service branch. Peoples Bank also owns a
two-story, block building on the Public Square in Nelsonville,
Ohio, an additional office in Nelsonville, together with an
office consisting of a two-story concrete structure at One North
Court Street, Athens, Ohio, and a brick full-service office in
the Athens Mall. The building in the Mall is owned by the Bank
on leased real property.
First National Bank owns a three-story office building of brick
and stone at 415 Main Street in Caldwell, Ohio, and a one-story
masonry and brick building constructed in 1969 located on Marion
Street in Chesterhill, Morgan County, Ohio, together with a
two-story brick structure in McConnelsville, Morgan County,
Ohio, located on Kennebec Street.
In 1993, Peoples Bank completed construction of a five-story
addition to its primary facility in downtown Marietta. The
Company and its subsidiaries own other real property which, when
considered in the aggregate, is not material to their
operations. Management believes that these properties are in
satisfactory condition and adequate. Due to growth and
acquisitions, the Company expanded its space for some customer
services and data processing.
Please refer to Note 6 to the Consolidated Financial Statements
on page 14 of the Company's Annual Report to Stockholders for a
discussion of lease commitments.
ITEM 3. LEGAL PROCEEDINGS.
There are no pending legal proceedings to which the Company or
its subsidiaries are a party or to which any of their property
is subject other than ordinary routine litigation incidental to
their business, none of which is material.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
Please refer to this Company's Annual Proxy Statement for a
discussion of items submitted to a vote of security holders.
/PAGE 8
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PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS.
Please refer to page 21 of the Company's Annual Report to
Stockholders, which is incorporated by reference herein.
ITEM 6. SELECTED FINANCIAL DATA.
The table of Selected Financial Data on page 5 of the Company's
Annual Report to Stockholders is incorporated herein by
reference.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATION.
Please refer to Pages 26 through 30 of the Company's Annual
Report to Stockholders, which are incorporated herein by
reference.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
The Consolidated Financial Statements of Peoples Bancorp Inc.
and it subsidiaries, included on pages 6 through 19 of its
Annual Report to Stockholders for the fiscal year ended December
31, 1993, and the Report of Coopers & Lybrand included therein
are incorporated herein by reference. Following is an index to
the financial statements included in the Annual Report to
Stockholders for the fiscal year ended December 31, 1993:
FINANCIAL STATEMENTS:
Peoples Bancorp Inc. and Subsidiaries:
Report of Independent Accountants:
Annual Report Page 20
Consolidated Balance Sheet December 31, 1993 and 1992:
Annual Report Page 6
Consolidated Statement of Income for the Three Years Ended
December 31, 1993:
Annual Report Page 7
Consolidated Statement of Stockholders' Equity for the Three
Years Ended December 31, 1993:
Annual Report Page 8
Consolidated Statement of Cash Flows for the Three Years Ended
December 31, 1993:
Annual Report Page 9
Notes to the Consolidated Financial Statements:
Annual Report Pages 10 - 19
Peoples Bancorp Inc.: (Parent Company Only Financial Statements
are included in Note 18 to the Financial Statements):
Annual Report Pages 18 - 19
Statistical Financial Information of the Company:
Annual Report Pages 21 - 25
/PAGE 9
PAGE 10
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURES.
None
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
Directors and Executive Officers of the Company include those
persons enumerated under "Election of Directors" on pages 5
through 10 of the Company's definitive Proxy Statement relating
to the Company's Annual Meeting of Stockholders to be held April
5, 1994, which section is expressly incorporated by reference.
Other Executive Officers are Carol A. Schneeberger (37), Vice
President/Operations, John T. Underwood (54) Vice
President/Business Development, John (Jack) W. Conlon (48),
Chief Financial Officer and Jeffrey D. Welch (39), Treasurer.
Ms. Schneeberger became Vice President/Operations of the Company
in October, 1988. Prior to her above election she was Auditor
of the Company since August, 1987 and Auditor of Peoples Bank
from January, 1986. She was Assistant Auditor of Peoples Bank
from January, 1979. Mr. Underwood joined Peoples Bancorp Inc.
in October, 1993. Mr. Underwood was Executive Vice
President/Operations for Peoples Bank and has 31 years of
banking experience. Mr. Conlon has been Chief Financial Officer
since April, 1991. He is also Chief Financial Officer and
Treasurer of Peoples Bank. Mr. Welch has been Treasurer since
1985. He was Assistant Treasurer from 1984 to 1985. Certain
other information called for in this Item 10 is incorporated
herein by reference to the Company's definitive Proxy Statement
under the caption "Security Ownership of Certain Beneficial
Owners and Management" on pages 2 through 5.
ITEM 11. EXECUTIVE COMPENSATION.
See "Compensation Committee Interlocks and Insider
Participation" and "Compensation of Executive Officers and
Directors" on pages 13 and 14, and 14 through 18, respectively,
of the Proxy Statement relating to the Company's Annual Meeting
of Stockholders to be held April 5, 1994, which are expressly
incorporated by reference.
Neither the report on executive compensation nor the
performance graph included in the Company's definitive Proxy
Statement relating to the Company's Annual Meeting of
Stockholders to be held on April 5, 1994, shall be deemed to be
incorporated herein by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
See "Security Ownership of Certain Beneficial Owners and
Management" on pages 2 through 5 of the Company's definitive
Proxy Statement relating to the Company's Annual Meeting of
Stockholders to be held April 5, 1994, which section is
expressly incorporated by reference.
/PAGE 10
PAGE 11
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
See "Transactions Involving Management" on page 11 of the
Company's definitive Proxy Statement relating to the Company's
Annual Meeting of Stockholders to be held April 5, 1994, which
section is expressly incorporated by reference.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS
ON FORM 8-K
a) (1) Financial Statements
For a list of all financial statements incorporated by reference
in this Annual Report on Form 10-K, see "Index to Financial
Statements" at Page 13.
b) (2) Financial Statement Schedules
All schedules for which provision is made in the applicable
accounting regulations of the Securities and Exchange Commission
are not required under the related instructions or are
inapplicable and, therefore, have been omitted.
c) (3) Exhibits
Exhibits filed with this Annual Report on Form 10-K are attached
hereto. For a list of such exhibits, see "Exhibit Index" at
page 15. The following table provides certain information
concerning executive compensation plans and arrangements
required to be filed as exhibits to this Annual Report on Form
10-K.
<TABLE>
EXECUTIVE COMPENSATION PLANS AND ARRANGEMENTS
<CAPTION>
EXHIBIT NO DESCRIPTION LOCATION
<S> <C> <C>
10(a) Deferred Compensation Incorporated herein
Agreement dated November by reference to
16, 1976 between Robert Exhibit 6(g) to the
E. Evans and The Company's Registration
Peoples Banking and Statement No. 2-68524
Trust Company as amended on Form S-14.
March 13, 1979.
</TABLE>
/PAGE 11
PAGE 12
<TABLE>
EXECUTIVE COMPENSATION PLANS AND ARRANGEMENTS (continued)
<CAPTION>
EXHIBIT NO DESCRIPTION LOCATION
<S> <C> <C>
10(b) Peoples Bancorp Inc. Exhibit 10(b) Pages i
Retirement Savings Plan through 75.
10(d) Peoples Bancorp Inc. Exhibit 10(c) Pages i
Retirement Plan and through 68.
Trust.
10(e) Summary of the Incorporated herein by
Incentive Bonus Plan reference to Exhibit
of Peoples Bancorp Inc. 10(f) of the Company's
1992 Annual Report on
Form 10-K for fiscal
year ended December
31, 1992 (File No
0-16772).
10(f) Stock Option Plan Incorporated herein by
reference to Exhibit 4
of the Company's Form
S-8 dated August 25, 1993
(Registration Statement No.
33-67878).
</TABLE>
(b) Reports on Form 8-K
During 1993, an Agreement of Merger of Peoples Bancorp
(Delaware) with Peoples Bancorp (Ohio) was filed on Form 8-K,
dated May 3, 1993 (File No. 0-16772). There were no current
reports on Form 8-K filed during the fiscal quarter ended
December 31, 1993.
(c) Exhibits
Exhibits filed with this Annual Report on Form 10-K are
attached hereto. For a list of such exhibits, see "Exhibit
Index" at page 15.
(d) Financial Statement Schedules
None
/PAGE 12
PAGE 13
PEOPLES BANCORP INC.
INDEX TO FINANCIAL STATEMENTS
FINANCIAL STATEMENTS:
Peoples Bancorp Inc. and Subsidiaries:
Report of Independent Accountants:
Annual Report Page 20
Consolidated Balance Sheet as of December 31, 1993 and 1992:
Annual Report Page 6
Consolidated Statement of Income for the Three Years Ended
December 31, 1993:
Annual Report Page 7
Consolidated Statement of Stockholders' Equity for the Three
Years Ended December 31, 1993:
Annual Report Page 8
Consolidated Statement of Cash Flows for the Three Years Ended
December 31, 1993:
Annual Report Page 9
Notes to the Consolidated Financial Statements:
Annual Report Pages 10 - 19
Peoples Bancorp Inc.: (Parent Company Only Financial Statements
are included in Note 18 to the Financial Statements):
Annual Report Pages 18 - 19
Statistical Financial Information of the Company:
Annual Report Pages 21 - 25
/PAGE 13
PAGE 14
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Registrant has duly caused
this Report to be signed on its behalf by the undersigned,
thereunto duly authorized.
PEOPLES BANCORP INC.
Date: March 24, 1994 By ROBERT E. EVANS
Robert E. Evans,
President
Pursuant to the requirements of the Securities Exchange Act of
1934, this Report has been signed below by the following persons
on behalf of the Registrant and in the capacities and on the
dates indicated.
<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
<S> <C> <C>
ROBERT E. EVANS President and Chief March 24, 1994
Robert E. Evans Executive Officer and
Director
JEWELL BAKER Director March 24, 1994
Jewell Baker
DENNIS D. BLAUSER Director March 24, 1994
Dennis D. Blauser
CARL L. BROUGHTON Director March 24, 1994
Carl L. Broughton
WILFORD D. DIMIT Director March 24, 1994
Wilford D. Dimit
BARTON S. HOLL Director March 24, 1994
Barton S. Holl
NORMAN J. MURRAY Director March 24, 1994
Norman J. Murray
NO SIGNATURE Director
Fred R. Price
JAMES B. STOWE Director March 24, 1994
James B. Stowe
PAUL T. THEISEN Director March 24, 1994
Paul T. Theisen
THOMAS C. VADAKIN Director March 24, 1994
Thomas C. Vadakin
JOSEPH H. WESEL Chairman of the Board March 24, 1994
Joseph H. Wesel and Director
JEFFREY D. WELCH Treasurer (Principal March 24, 1994
Jeffrey D. Welch Accounting Officer)
JOHN W. CONLON Chief Financial Officer March 24, 1994
John W. Conlon
</TABLE>
/PAGE 14
PAGE 15
EXHIBIT LIST AND INDEX
PEOPLES BANCORP INC. FORM 10-K FOR YEAR ENDED DECEMBER 31, 1993
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION EXHIBIT LOCATION
<S> <C> <C>
3 (a) Certificate of Incorporation Incorporated herein by
Amendments thereto of Peoples reference to Exhibit 2
Bancorp Inc. to the Company's Form 8-K
filed May 3, 1993 (File
No. 0-16772).
3 (b) Code of Regulations of Peoples Incorporated herein by
Bancorp Inc. reference to Item 4,
Exhibit C to the Company's
Proxy Statement dated
March 8, 1993 in connection
with Annual Meeting of
Stockholders, April 6,
1993, filed on Form 10-K
for the year ended December
31, 1992 (File No. 0-16772).
10 (a) Deferred Compensation Incorporated herein by
Agreement dated November reference to Exhibit 6 (g)
16, 1976, between to the Company's Registration
Robert E. Evans and The Statement No. 2-68524
Peoples Banking and Trust on Form S-14.
Company as amended March
13, 1979.
10 (b) Peoples Bancorp Inc. Exhibit 10 (b) included in
Retirement Savings Plan. this filing of Form 10-K.
10(c) Loan Agreement dated Incorporated herein by
September 16, 1992 by and reference to Exhibit 10 (d)
between Peoples Bancorp of the Company's 1992
Inc. and Fifth Third Bank. Annual Report on Form 10-K
for fiscal year ended
December 31, 1992
(File No. 0-16772).
10 (d) Peoples Bancorp Inc. Exhibit 10 (d) included in
Retirement Plan and Trust. this filing of Form 10-K.
10 (e) Summary of the Incentive Incorporated herein by
Bonus Plan of Peoples Bancorp reference to Exhibit 10 (f)
Inc., Peoples Banking and of the Company's 1992 Annual
Trust Company and First Report on Form 10-K for
National Bank of Southeastern fiscal year ended December
Ohio. 31, 1992 (File No. 0-16772).
10 (f) Stock Option Plan Incorporated herein by
reference to Exhibit 4
of the Company's Form
S-8 dated August 25, 1993
(Registration No. 33-67878).
</TABLE>
/PAGE 15
PAGE 16
EXHIBIT LIST AND INDEX
(Continued)
PEOPLES BANCORP INC. FORM 10-K
FOR YEAR ENDED DECEMBER 31, 1993
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION LOCATION
<S> <C> <C>
11 Computation of Earnings Exhibit 11 included in
Per Share. this filing of Form 10-K.
13 Peoples Bancorp Inc. Exhibit 13 included in
Annual Report to this filing of Form 10-K
Stockholders for the (pages 1 to 25).
fiscal year ended
December 31, 1993.
22 Subsidiaries of Peoples Exhibit 22 included in
Bancorp Inc. this filing of Form 10-K.
28 Form 11-K Annual Report To be filed as an
of Peoples Bancorp amendment to Form 10-K.
Retirement Savings Plan.
</TABLE>
/PAGE 16
[DESCRIPTION] ACTUAL PROXY STATEMENT
[TEXT]
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS PEOPLES BANCORP INC.
Marietta, Ohio
March 7, 1994
To the Shareholders of Peoples Bancorp Inc.:
You are cordially invited to attend the Annual Meeting of
Shareholders (the "Annual Meeting") of Peoples Bancorp Inc. (the
"Company") to be held at 10:00 a.m., local time, on Tuesday,
April 5, 1994, in the Conference Room of The Peoples Banking and
Trust Company, 235 Second Street, Marietta, Ohio, for the
following purposes:
1. To elect the following Directors for terms of three years
each:
<TABLE>
<CAPTION>
Nominee Term Expires In
<S> <C> <C>
George W. Broughton (for election) 1997
Wilford D. Dimit (for re-election) 1997
Barton S. Holl (for re-election) 1997
James B. Stowe (for re-election) 1997
</TABLE>
2. To consider and vote upon a proposal to adopt an amendment to
Article FOURTH of the Company's Amended Articles of
Incorporation which would increase the authorized number of
shares of the Company from 4,000,000 shares to 6,000,000 shares,
all of which will be common shares, without par value.
3. To transact such other business as may properly come before
the Annual Meeting and any adjournment or adjournments thereof.
Shareholders of record at the close of business on February 15,
1994, will be entitled to notice of and to vote at the Annual
Meeting and any adjournment or adjournments thereof.
You are cordially invited to attend the Annual Meeting. The
vote of each shareholder is important, whatever the number of
common shares held. Whether or not you plan to attend the
Annual Meeting, please sign, date and return your Proxy promptly
in the enclosed envelope.
The Company's Annual Report to Shareholders for the fiscal
year ended December 31, 1993 accompanies this Notice and Proxy
Statement.
By Order of the Board of Directors
RUTH I. OTTO
Ruth I. Otto
Corporate Secretary
PEOPLES BANCORP INC.
138 Putnam Street Marietta, Ohio 45750
(614) 373-3155
PROXY STATEMENT
This Proxy Statement and the accompanying proxy are being
mailed to shareholders of Peoples Bancorp Inc., an Ohio
corporation (the "Company"), on or about March 7, 1994, in
connection with the solicitation of proxies by the Board of
Directors of the Company for use at the Annual Meeting of
Shareholders of the Company (the "Annual Meeting") called to be
held on Tuesday, April 5, 1994, or at any adjournment or
adjournments thereof. The Annual Meeting will be held at 10:00
a.m., local time, in the Conference Room of The Peoples Banking
and Trust Company, 235 Second Street, Marietta, Ohio.
The Company has three wholly-owned subsidiaries. They include
The Peoples Banking and Trust Company ("Peoples Bank"), The
First National Bank of Southeastern Ohio ("First National") and
The Northwest Territory Life Insurance Company ("Northwest
Territory").
A proxy for use at the Annual Meeting accompanies this Proxy
Statement and is solicited by the Board of Directors of the
Company. Shareholders of the Company may use their proxies if
they are unable to attend the Annual Meeting in person or wish
to have their common shares of the Company voted by proxy even
if they do attend the Annual Meeting. Without affecting any
vote previously taken, any shareholder executing a proxy may
revoke it at any time before it is voted by filing with the
Secretary of the Company, at the address of the Company set
forth on the cover page of this Proxy Statement, written notice
of such revocation; by executing a later-dated proxy which is
received by the Company prior to the Annual Meeting; or by
attending the Annual Meeting and giving notice of such
revocation in person. Attendance at the Annual Meeting will
not, in and of itself, constitute revocation of a proxy.
Only shareholders of the Company of record at the close of
business on February 15, 1994 (the "Record Date"), are entitled
to receive notice of and to vote at the Annual Meeting and any
adjournment or adjournments thereof. At the close of business
on the Record Date, 1,457,432 common shares were outstanding and
entitled to vote. Each common share entitles the holder thereof
to one vote on each matter to be submitted to shareholders at
the Annual Meeting. A quorum for the Annual Meeting is a
majority of the common shares outstanding. There is no
cumulative voting with respect to the election of directors.
As of the date of this Proxy Statement, the Board of Directors
of the Company does not know of any business to be brought
before the Annual Meeting except as set forth in this Proxy
Statement. However, if any matters other than those referred to
in this Proxy Statement should properly come before such Annual
Meeting, or any adjournment or adjournments thereof, it is
intended that the persons named as proxies in the enclosed proxy
may vote the common shares represented by said proxy on such
matters in accordance with their best judgment in light of the
conditions then prevailing.
The Company will bear the costs of preparing and mailing this
Proxy Statement, the accompanying proxy and any other related
materials and all other costs incurred in connection with the
solicitation of proxies on behalf of the Board of Directors.
Proxies will be solicited by mail and may be further solicited,
for no additional compensation, by officers, directors, or
employees of the Company and its subsidiaries by further
mailing, by telephone, or by personal contact. The Company will
also pay the standard charges and expenses of brokerage houses,
voting trustees, banks, associations and other custodians,
nominees, and fiduciaries, who are record holders of common
shares not beneficially owned by them, for forwarding such
materials to and obtaining proxies from the beneficial owners of
common shares entitled to vote at the Annual Meeting.
The Annual Report to the Shareholders of the Company for the
fiscal year ended December 31, 1993 (the "1993 fiscal year") is
enclosed herewith.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of the Record Date, certain
information concerning the beneficial ownership of common shares
by the only person known to the Company to be the beneficial
owner of more than 5% of the outstanding common shares:
<TABLE>
AMOUNT AND
NAME AND NATURE OF PERCENT
ADDRESS OF BENEFICIAL OF
BENEFICIAL OWNER OWNERSHIP CLASS<F1>
<S> <C> <C>
Peoples Bank- 181,437<F2> 12.4%
Trust Department
Trustee
138 Putnam Street
Marietta, Ohio 45750
<F1> The percent of class is based on 1,457,432 common shares
outstanding on the Record Date.
<F2> Includes 53,138 common shares, 97,465 common shares,
26,455 common shares and 4,379 common shares as to which the
Trust Department of Peoples Bank has shared investment and sole
voting power, shared investment and voting power, sole voting
and investment power, and sole investment and shared voting
power, respectively. The officers and directors of Peoples Bank
and the Company disclaim beneficial ownership of these common
shares by reason of their positions. Does not include 44,420
common shares held by the Trust Department in its capacity as
Trustee under the Peoples Bancorp Inc. Retirement Savings Plan
with respect to which the Trust Department has neither voting
nor investment power.
</TABLE>
The following table sets forth, as of the Record Date, certain
information with respect to the common shares beneficially owned
by each director of the Company, by each nominee for election as
a director of the Company, by the executive officer of the
Company named in the Summary Compensation Table and by all
executive officers and directors of the Company as a group:
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF BENEFICIAL OWNERSHIP<F1>
COMMON
SHARES
WHICH CAN
BE ACQUIRED
UPON EXERCISE
COMMON OF OPTIONS
SHARES EXERCISABLE
PRESENTLY WITHIN PERCENT OF
NAME HELD 60 DAYS TOTAL CLASS<F2>
<S> <C> <C> <C> <C>
Jewell Baker 4,968 110 5,078 <F3>
Dennis D. Blauser 3,586<F4> 110 3,696 <F3>
Carl L. Broughton<F5> 48,244<F6> 110 48,354 3.3%
George W.Broughton<F7> 19,136 50 19,186 1.3%
Wilford D. Dimit<F7> 1,971<F9> 110 2,081 <F3>
Robert E. Evans<F10> 23,006.625<F11> 2,000 25,006.625 1.7%
Barton S. Holl<F7> 1,919<F12> 110 2,029 <F3>
Norman J. Murray 1,863<F13> 110 1,973 <F3>
Fred R. Price 1,903 110 2,013 <F3>
James B. Stowe<F7> 6,208<F14> 110 6,318 <F3>
Paul T. Theisen 4,055 110 4,165 <F3>
Thomas C. Vadakin 767<F15> 110 877 <F3>
Joseph H. Wesel 14,576<F16> 110 14,686 1.0%
All directors and
executive officers
as a group
(numbering 17) 136,216.848<F17> 7,260 143,476.848 9.8%
<FN>
<F1> Unless otherwise noted, the beneficial owner has sole
voting and investment power with respect to all of the common
shares reflected in the table.
<F2> The percent of class is based upon 1,457,432 common shares
outstanding on the Record Date and the number of common shares,
if any, as to which the named person has the right to acquire
beneficial ownership upon the exercise of exercisable options
within 60 days of the Record Date.
<F3> Reflects ownership of less than 1% of the outstanding
common shares.
<F4> Includes 2,662 common shares held jointly by Mr. Blauser
with his wife as to which he exercises shared voting and
investment power and 392 common shares held in an IRA owned by
Mr. Blauser. Does not include 1,429 common shares held of
record and beneficially owned by Mr. Blauser's wife as to which
he has no voting or investment power and disclaims beneficial
ownership.
<F5> Mr. Broughton has chosen not to stand for reelection as a
director of the Company and will cease to serve on April 5, 1994.
<F6> Does not include 6,499 common shares held of record and
owned beneficially by Mr. Broughton's wife and 759 common shares
held in the Elizabeth S. Broughton Trust, a revocable inter
vivos trust with respect to which Mr. Broughton's wife was the
grantor and Peoples Bank is the Trustee, as to which common
shares Mr. Broughton has no voting or investment power and
disclaims beneficial ownership. Peoples Bank and Mrs. Broughton
may be deemed to share voting power with respect to the common
shares held in the Elizabeth S. Broughton Trust and said common
shares are included in the common shares shown as beneficially
owned by People Bank in the preceding table. Also does not
include 4,538 common shares held of record by the Broughton
Foods Company Pension Trust B, as to which Mr. Broughton
disclaims beneficial ownership.
<F7> Nominee for election as a director of the Company.
<F8> Does not include 2,928 common shares held of record and
beneficially owned by Mr. Broughton's wife as to which he has no
voting or investment power and disclaims beneficial ownership.
<F9> Includes 330 common shares held jointly by Mr. Dimit with
his wife as to which he exercises shared voting and investment
power.
<F10> Executive officer of the Company named in the Summary
Compensation Table.
<F11> Includes 3,952.625 common shares allocated to the account
of Mr. Evans in the Peoples Bancorp Inc. Retirement Savings Plan
with respect to which Mr. Evans has the power to direct the
voting and disposition. Does not include 2,940 common shares
held of record and owned beneficially by Mr. Evans' wife and 713
common shares held by Mr. Evans' wife as custodian for their
son, as to which common shares Mr. Evans has no voting or
investment power and disclaims beneficial ownership.
<F12> Includes 371 common shares held jointly by Mr. Holl with
his wife as to which he exercises shared voting and investment
power.
<F13> Does not include 3,726 common shares held of record and
beneficially owned by Mr. Murray's wife and 800 common shares
held of record and beneficially owned by Mr. Murray's daughter.
Mr. Murray has no voting or investment power with respect to
these common shares and disclaims beneficial ownership thereof.
<F14> Includes 2,477 common shares held jointly by Mr. Stowe
with his wife as to which he exercises shared voting and
investment power. Does not include 8,999 common shares held of
record and beneficially owned by Mr. Stowe's wife as to which he
has no voting or investment power and disclaims beneficial
ownership.
<F15> Does not include 7,069 common shares held of record and
beneficially owned by Mr. Vadakin's wife and 1,089 common shares
held by Mr. Vadakin's wife as custodian for her son, as to which
common shares Mr. Vadakin has no voting or investment power and
disclaims beneficial ownership.
<F16> Includes 701 common shares held jointly by Mr. Wesel with
his mother and 1,936 common shares held jointly by Mr. Wesel
with his wife. Mr. Wesel exercises shared voting and investment
power with respect to these common shares. Does not include
3,012 common shares held of record and beneficially owned by Mr.
Wesel's wife as to which he has no voting or investment power
and disclaims beneficial ownership. Does not include 60 common
shares held of record and beneficially owned by Mr. Wesel's
daughter as to which he has no voting or investment power and
disclaims beneficial ownership. Does not include 5,143 common
shares held of record by the Marietta Ignition, Inc. Pension
Plan as to which Mr. Wesel has no voting or investment power and
disclaims beneficial ownership. Mr. Wesel serves as a member of
the Administrative Committee for the Marietta Ignition, Inc.
Pension Plan. Peoples Bank shares voting power with respect to
the common shares held in the Marietta Ignition, Inc. Pension
Plan with the Plan Administrator and said common shares are
included among the common shares shown as beneficially owned by
Peoples Bank in the preceding table.
<F17> Includes common shares held jointly by directors and
executive officers and other persons. Also includes 6,416.85
common shares allocated to the respective accounts of executive
officers of the Company in the Peoples Bancorp Inc. Retirement
Savings Plan. See notes (4), (6), (9) and (11) through (16)
above.
</TABLE>
To the Company's knowledge, based solely on a review of the
copies of the reports furnished to the Company and written
representations that no other reports were required, during the
1993 fiscal year, all filing requirements applicable to
officers, directors and greater than 10% beneficial owners of
the Company under Section 16(a) of the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), were complied with.
ELECTION OF DIRECTORS
(Item 1 on Proxy)
In accordance with Section 2.02 of the Regulations of the
Company, four directors of Class II are to be elected to hold
office for terms of three years each, in each case until their
respective successors are duly elected and qualified. It is the
intention of the persons named in the accompanying proxy to vote
the common shares represented by the proxies received pursuant
to this solicitation for the nominees named below who have been
designated by the Board of Directors, unless otherwise
instructed on the proxy.
The following table gives certain information concerning each
nominee for election as a director of the Company. Unless
otherwise indicated, each person has held his principal
occupation for more than five years.
<TABLE>
POSITION(S) HELD
WITH THE COMPANY AND DIRECTOR NOMINEE
ITS SUBSIDIARIES AND CONTINUOUSLY FOR TERM
TERM NOMINEE AGE PRINCIPAL OCCUPATION(S) SINCE EXPIRING IN
<S> <C> <C> <C> <C>
George W.
Broughton 36 Director and --- 1997
Executive
Vice President/Sales
and Marketing,
Broughton Foods Co.,
a processor
and distributor of dairy
products; Director of SBR,
Inc., maker of
replacement windows and
owner of "Wood Crafters"
catalog and stores.<F1>
Wilford D. Dimit 60 President of First 1993 1997
Settlement, Inc.,
Marietta, Ohio, a
retail clothing store
and restaurant.<F1>
Barton S. Holl 71 Chairman of the Board 1990 1997
of Logan Clay Products,
Inc., Logan, Ohio, a
manufacturer of clay
tile products.
James B. Stowe 73 Chairman of the Board 1980 1997
of Stowe Truck &
Equipment Co., Marietta,
Ohio, a company which
sells heavy equipment,
riding lawn mowers,
tractor/trailers and
trucks.<F1>
<FN>
<F1> Also a director of Peoples Bank.
</TABLE>
While it is contemplated that all nominees will stand for
election, if one or more nominees at the time of the Annual
Meeting should be unavailable or unable to serve as a candidate
for election as a director, the proxies reserve full discretion
to vote the common shares represented by the proxies for the
election of the remaining nominees and for the election of any
substitute nominee or nominees designated by the Board of
Directors. The Board of Directors knows of no reason why any of
the above-mentioned persons will be unavailable or unable to
serve if elected to the Board.
Under Ohio law and the Company's Regulations, the four
nominees for election as Class II directors receiving the
greatest number of votes will be elected as directors. Common
shares as to which the authority to vote is withheld and broker
non-votes will be counted for quorum purposes but will not be
counted toward the election of directors, or toward the election
of the individual nominees specified on the form of proxy.
The following table gives certain information concerning the
current directors who will continue to serve after the Annual
Meeting. Unless otherwise indicated, each person has held his
or her principal occupation for more than five years.
<TABLE>
POSITION(S) HELD
WITH THE COMPANY AND DIRECTOR
ITS SUBSIDIARIES AND CONTINUOUSLY TERM
NAME AGE PRINCIPAL OCCUPATION(S) SINCE EXPIRES IN
<S> <C> <C> <C> <C>
Robert E. Evans 53 President and Chief 1980 1995
Executive Officer of
the Company and of
Peoples Bank; Chairman
of the Board of
Northwest Territory.<F1>
Paul T. Theisen 63 President and a 1980 1995
Shareholder of Theisen,
Brock, Frye, Erb &
Leeper Co., L.P.A.,
Attorneys at Law,
Marietta, Ohio.<F2>
Thomas C. Vadakin 62 President of Vadakin, 1989 1995
Inc., Marietta, Ohio,
a heavy industrial
cleaning service;
Director (2/94),
The Airolite Company,
Marietta, Ohio, a
manufacturer of
ventilating louvers.<F3>
Jewell Baker 70 Co-Owner of B & N Coal 1990 1996
Company, Dexter City,
Ohio, a mining and
energy producer;
Director of First
National Bank of
Caldwell from 1984 to
1989; Director of
First National from
1989 to 1990.
Dennis D. Blauser 68 President of Blauser 1987 1996
Energy Corp., Marietta,
Ohio, an oil and gas
producer; President of
Blauser Well Service,
Inc., Marietta, Ohio,
a servicer of oil and
gas wells; Chairman of
the Board of Marietta
Structures Corp.,
Marietta, Ohio, a builder
of bridge beams, pre-
stressed concrete beams
and pre-engineered siding
for buildings.<F2>
Norman J. Murray 76 Former Chairman of the 1980 1996
Board (1985-1994) of The
Airolite Co., Marietta,
Ohio, a manufacturer of
ventilating louvers;
Chairman of the Board of
Peoples Bank since 1990.<F3>
Fred R. Price 58 President and Chief 1987 1996
Executive Officer of
Chesterhill Stone Co.,
a gravel company located
in Southeastern Ohio;
President and Chief
Executive Officer of
Price Inland Terminal Co.,
a barge company located
in Southeastern Ohio;
President and Chief
Executive Officer of
Beverly Slag Co., a slag
company located in
Southeastern Ohio.
Joseph H. Wesel 64 President and Chief 1980 1996
Executive Officer of
Marietta Automotive
Warehouse, Inc.,
Marietta, Ohio,
automotive parts
wholesaler; President
of Auto Paints Works
Inc., Marietta, Ohio,
a wholesaler/retailer
of auto paint and body
shop supplies; President
of W.D.A., Inc.,
Marietta, Ohio, a real
estate holding company;
Director, Marietta
Ignition, Inc., a
wholesaler/retailer of
automotive parts and
industrial supplies;
Chairman of the Board
of the Company.<F3>
<FN>
<F1> Mr. Evans is also a director of Peoples Bank, First
National and Northwest Territory.
<F2> Mr. Theisen is also a director of Peoples Bank and First
National.
<F3> Also a director of Peoples Bank.
</TABLE>
George W. Broughton, a nominee for election as a director of
the Company, is the son of Carl L. Broughton who currently
serves as a director of the Company. Mr. Broughton has chosen
not to stand for reelection and will cease to serve on April 5,
1994.
The Board of Directors of the Company held a total of
thirteen (13) meetings during the Company's 1993 fiscal year.
Each incumbent director attended 75% or more of the aggregate of
the total number of meetings held by the Board of Directors
during the period he or she served as a director and the total
number of meetings held by all committees of the Board of
Directors on which he or she served during the period he or she
served except Jewell Baker (50%) and Fred R. Price (35%).
The Board of Directors of the Company has an Audit Committee
comprised of Jewell Baker, Dennis D. Blauser, Wilford D. Dimit,
Barton S. Holl, Norman J. Murray, Fred R. Price, James B. Stowe
and Joseph H. Wesel (Mr. Wesel serves as an ex-officio member).
The function of the Audit Committee is to assist the Audit
Department of the Company in the annual review of the loan
portfolio of each subsidiary bank, to review the work schedule
of the Audit Department as to when audits of the subsidiaries
are to be conducted and the adequacy of such audits, to review
the adequacy of the Company's system of internal controls, to
investigate the scope and adequacy of the work of the Company's
independent public accountants, and to recommend to the Board of
Directors a firm of accountants to serve as the Company's
independent public accountants. The Audit Committee met seven
(7) times during the Company's 1993 fiscal year.
The Board of Directors of the Company has a Compensation
Committee comprised of Carl L. Broughton, Norman J. Murray, Paul
T. Theisen and Joseph H. Wesel. The function of the
Compensation Committee is to review and recommend for approval
by the Board of Directors salaries, bonuses, employment
agreements and employee benefit plans for officers and
employees, to supervise the operation of the Company's
compensation plans, to select those eligible employees who may
participate in each plan (where selection is required) and to
prescribe (where permitted under the terms of the plan) the
terms of any stock options granted under any stock option plan
of the Company. The Compensation Committee met one (1) time
during the Company's 1993 fiscal year.
The Board of Directors does not have a standing nominating
committee or committee performing similar functions.
TRANSACTIONS INVOLVING MANAGEMENT
Paul T. Theisen is President and a shareholder in the law firm
of Theisen, Brock, Frye, Erb & Leeper Co., L.P.A. which rendered
legal services to the Company and its subsidiaries during the
Company's 1993 fiscal year and is expected to render legal
services to the Company and its subsidiaries during the
Company's 1994 fiscal year.
During the Company's 1993 fiscal year, its subsidiaries,
Peoples Bank and First National, entered into banking
transactions, in the ordinary course of their respective
businesses, with certain executive officers and directors of the
Company, with members of their immediate families and with
corporations for which directors of the Company serve as
executive officers. It is expected that similar banking
transactions will be entered into in the future. Loans to such
persons have been made on substantially the same terms,
including the interest rate charged and the collateral required,
as those prevailing at the time for comparable transactions with
persons not affiliated with the Company or its subsidiaries.
These loans have been subject to, and are presently subject to,
no more than a normal risk of uncollectibility and present no
other unfavorable features. The aggregate amount of loans to
directors and executive officers of the Company and their
associates as a group at December 31, 1993, was $9,085,162.68.
As of the date hereof, all of such loans are performing loans.
REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS
ON EXECUTIVE COMPENSATION
Notwithstanding anything to the contrary set forth in any of
the Company's previous filings under the Securities Act of 1933,
as amended, or the Exchange Act that might incorporate future
filings, including this Proxy Statement, in whole or in part,
this Report and the graph set forth on page 19 shall not be
incorporated by reference into any such filings.
In November of 1992, a sub-committee of the Executive
Committee of the Company's Board of Directors was given
additional duties by the Board to act as the Board's
Compensation Committee (the "Committee"). The members of the
Committee are Carl L. Broughton, Norman J. Murray, Paul T.
Theisen and Joseph H. Wesel, none of whom are compensated
executive officers or employees of the Company or its
subsidiaries. Mr. Murray is Chairman of the Board of Peoples
Bank. The Committee is to meet periodically to review and
recommend for approval by the Board of Directors salaries,
bonuses, employment agreements and employee benefits plans for
officers and employees, including executive officers of the
Company. Prior to the establishment of the Committee, the Board
of Directors functioned in the same capacity. The Committee
also supervises the operation of the Company's compensation
plans, selects those eligible employees who may participate in
each plan (where selection is permitted) and prescribes (where
permitted under the terms of the plan) the terms of any stock
options granted under any stock option plan of the Company.
Section 162(m) of the Internal Revenue Code of 1986, as
amended, prohibits a publicly held corporation, such as the
Company, from claiming a deduction on its federal income tax
return for compensation in excess of $1 million paid for a given
fiscal year to the chief executive officer (or person acting in
that capacity) at the close of the corporation's fiscal year and
the four most highly compensated officers of the corporation,
other than the chief executive officer, at the end of the
corporation's fiscal year. The $1 million compensation deduction
limitation does not apply to "performance-based compensation".
The proposed regulations issued by the Internal Revenue Service
under Section 162(m) on December 15, 1993 (the "Proposed IRS
Regulations") set forth a number of provisions which
compensatory plans, such as the Incentive Bonus Plan and the
Company's Stock Option Plan, must contain if the compensation
paid under such plans is to qualify as performance-based for the
purposes of Section 162(m). In order to qualify as
"performance-based" under IRS Regulations, the compensation must
be paid solely on account of the attainment of one or more
performance goals set by a compensation committee comprised
solely of two (2) or more outside directors. The performance
goals must be approved by a majority of shareholders prior to
payment of the remuneration and the compensation committee must
certify to the satisfaction of the goals. Due to the fact that
all executive officers of the Company receive compensation at
levels substantially below the deductibility limit, the
Committee does not propose at this time to present for
shareholder approval performance goals such as those provided in
the Incentive Compensation Plan discussed below. The Committee
will rely from time to time upon advice of the Company's General
Counsel regarding the appropriateness of presenting the
Incentive Bonus Plan, or any similar plan, to Shareholders.
The Committee operates under the principle that the
compensation of executive officers should be directly and
significantly related to the financial performance of the
Company. The compensation philosophy of the Company reflects a
commitment to reward executive officers for performance through
cash compensation and through plans designed to enhance the
long-term commitment of officers and employees to the Company
and its subsidiaries. The cash compensation program for
executive officers consists of two elements, a base salary
component and an incentive component payable under the Incentive
Bonus Plan. The combination of base salary and incentive
compensation is designed to relate total cash compensation
levels to the performance of the Company, its subsidiaries and
the individual executive officer. The salaries of executive
officers of the Company, including Mr. Evans' salary, have
remained without substantial adjustment for a number of years,
except for limited increases reflecting cost of living rises and
special meritorious increases or adjustments reflecting
increased responsibilities and promotions. This philosophy was
reflected in Mr. Evans' 1993 salary, which increased only 4.3%
from the prior year. This adjustment was designed to reflect
cost of living increases. Primary reliance has been placed on
the Incentive Bonus Plan for compensation adjustments.
The Incentive Bonus Plan was established in 1988 for certain
senior officers of the Company and its subsidiaries, including
Mr. Evans and the other executive officers of the Company. The
purpose of the Plan is to base, in part, compensation on the
profit performance of the Company. Each year, in January, the
Committee establishes minimum levels of return on equity and net
income which must be met before any incentive bonus is paid. In
1993 the Incentive Bonus Plan required the attainment of a
minimum return on equity of 10.00% and income growth based on
the highest dollar net income from either the preceding year or
any of the four years prior to 1993 increasing such year by a 5%
compounding factor. If such minimum levels are met, each
officer receives an incentive bonus equal to a predetermined
percentage of salary, based on the amount by which net income
exceeds the minimum level, up to an approximate maximum of 23%
of salary. Consequently, higher net income creates higher
incentive bonuses. The goals set for 1993 were exceeded and Mr.
Evans' incentive bonus was approximately 20.8% of his salary.
The Company's long-term compensation program consists
primarily of stock options granted under the Company's 1993
Stock Option Plan (the "1993 Plan"). The Committee believes
that stock ownership by members of the Company's management and
stock-based performance compensation arrangements are important
in aligning the interests of management with those of
shareholders generally in the enhancement of shareholder value.
Options are granted under the 1993 Plan with an exercise price
equal to the market value of the Company's common shares on the
date of grant. If there is no appreciation in the market value
of the Company's common shares, the options are valueless. The
Committee granted options based upon its subjective
determination of the relative current and future contribution
each officer has or may contribute to the long-term welfare of
the Company.
In order to further enhance Mr. Evans' long-term commitment to
the Company, Peoples Bank entered in a Deferred Compensation
Agreement with him in 1976. Under this Agreement, Mr. Evans
agreed to serve the Bank as an employee until he reaches age 65
or until his earlier retirement, disability or death and agreed
not to engage in activities in competition with Peoples Bank.
The amount of $5,000 is automatically accrued to Mr. Evans'
account upon the completion of each year of service to Peoples
Bank until he reaches normal retirement age.
At various times in the past, the Company has adopted certain
broad-based employee benefit plans in which the Company's
executive officers are permitted to participate on the same
terms as non-executive officer employees who meet applicable
eligibility criteria, subject to legal limitations on the
amounts that may be contributed or the benefits that may be
payable under the plans.
To enhance the long-term commitment of the officers and
employees of the Company and its subsidiaries, the Company
established the Peoples Bancorp Inc. Retirement Savings Plan
(the "Peoples 401(k) Plan") on December 31, 1985. Mr. Evans, as
well as all officers and employees of the Company and its
subsidiaries, may participate in the Peoples 401(k) Plan.
Company matching contributions and participant contributions may
be invested in common shares providing each participant with
motivation toward safe and sound long-term growth of the
Company. Company matching contributions may vary at the
discretion of the Board of Directors.
Submitted by the Compensation Committee of the Company's Board
of Directors:
Carl L. Broughton, Norman J. Murray, Paul T. Theisen and
Joseph H. Wesel.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Carl L. Broughton, who served as Chairman of the Board of the
Company from 1988 to 1990, serves as a member of the
Compensation Committee. Norman J. Murray, Chairman of the Board
of Peoples Bank, also serves as a member of the Compensation
Committee. Paul T. Theisen, who is President and a shareholder
in the law firm of Theisen, Brock, Frye, Erb & Leeper Co.,
L.P.A. which rendered legal services to the Company and its
subsidiaries during the Company's 1993 fiscal year and is
expected to render legal services to the Company and its
subsidiaries during the Company's 1994 fiscal year, also serves
as a member of the Compensation Committee.
COMPENSATION OF EXECUTIVE OFFICERS AND DIRECTORS
Summary of Cash and Certain Other Compensation
The following table shows for the last three fiscal years, the
cash compensation paid by the Company and its subsidiaries, as
well as certain other compensation paid or accrued for those
years, to Robert E. Evans, the Chief Executive Officer of the
Company and the only executive officer of the Company whose
total annual salary and bonus for the 1993 fiscal year exceeded
$100,000.
<TABLE>
SUMMARY COMPENSATION TABLE
LONG-TERM
COMPENSATION
AWARDS
NAME AND ANNUAL COMPENSATION UNDERLYING ALL OTHER
PRINCIPAL SALARY BONUS OPTIONS/SAR's COMPENSATION
POSITION YEAR ($)(<F1> ($)<F2> (#)<F3> ($)<F4>
<S> <C> <C> <C> <C> <C>
Robert E. Evans, 1993 $170,000 $32,605 2,000 $7,752
President and 1992 $162,975 $27,000 0 $6,324
Executive Officer 1991 $150,690 $19,546 0 $6,152
of the Company and
of Peoples Bank
<FN>
<F1> "Salary" includes fees received by Mr. Evans for
services rendered during 1993, 1992 and 1991 as a director of
the Company and its subsidiaries in the amounts of $13,500,
$12,975 and $8,850, respectively.
<F2> All bonuses reported were earned by Mr. Evans pursuant to
the Incentive Bonus Plan of Peoples Bank (the "Incentive Bonus
Plan").
<F3> Represents options granted under the Peoples Bancorp Inc.
1993 Stock Option Plan. See the table under "OPTION GRANTS IN
LAST FISCAL YEAR" for more detailed information on such options.
<F4> "All Other Compensation" includes contributions of
$2,752, $1,324 and $1,152 to the Peoples Bancorp Inc. Retirement
Savings Plan (the "Peoples 401(k) Plan") on behalf of Mr. Evans
to match pre-tax elective deferral contributions (included under
"Salary") made by him to the Peoples 401(k) Plan in 1993, 1992
and 1991, respectively. "All Other Compensation" also includes
the amount of $5,000 for each of 1993, 1992 and 1991 which was
accrued for the account of Mr. Evans pursuant to the terms of a
Deferred Compensation Agreement between Mr. Evans and the
Company. See the discussion in "Deferred Compensation
Agreement."
</TABLE>
GRANT OF OPTIONS
The following table sets forth information concerning
individual grants of options made under the Peoples Bancorp Inc.
1993 Stock Option Plan (the "1993 Plan") during the 1993 fiscal
year to the named executive officer. The Company has never
granted stock appreciation rights.
<TABLE>
OPTION GRANTS IN LAST FISCAL YEAR
% OF POTENTIAL
TOTAL OPTIONS REALIZABLE VALUE
NUMBER OF GRANTED TO AT ASSUMED ANNUAL
SECURITIES EMPLOYEES RATES OF STOCK
UNDERLYING IN EXERCISE EXPIR- PRICE APPRECIATION
OPTIONS FISCAL PRICE ATION FOR OPTION TERM<F2>
NAME GRANTED(#)<F1> YEAR ($/SHARE) DATE 5%($) 10%($)
<S> <C> <C> <C> <C> <C> <C>
Robert E. Evans 2,000 10.5% $35.00 10/01/03 $44,024 $111,566
<FN>
<F1> The unexercisable portion of the options is forfeited
upon leaving the employ of the Company and its subsidiaries. If
Mr. Evans' employment with the Company and its subsidiaries is
terminated by reason of his retirement under the provisions of
any retirement plan of the Company or any subsidiary or by
reason of permanent disability, the exercisable portion of his
options may be exercised for a period of three months, subject
to the stated term of the options. If Mr. Evans' employment is
terminated by reason of his death while an employee of the
Company and/or a subsidiary, the exercisable portion of his
options may be exercised for a period of one year, subject to
the stated term of the options. If Mr. Evans' employment is
terminated for any other reason, his options will be forfeited.
<F2> The amounts reflected in this table represent certain
assumed rates of appreciation only. Actual realized values, if
any, on option exercises will be dependent on the actual
appreciation of the common shares of the Company over the term
of the options. There can be no assurances that the Potential
Realizable Values reflected in this table will be
achieved.
</TABLE>
OPTION EXERCISES AND HOLDINGS
The following table sets forth information with respect to
unexercised options held as of the end of the 1993 fiscal year
by the named executive officer. No options were exercised
during the 1993 fiscal year.
<TABLE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL
YEAR-END OPTION VALUES
<CAPTION>
NUMBER OF NUMBER OF VALUE
SECURITIES SECURITIES UNDERLYING OF UNEXERCISED
UNDERLYING ($) UNEXERCISED OPTIONS AT IN-THE-MONEY OPTIONS
OPTIONS VALUE FY- END(#) AT FY-END<F1><F2>
NAME EXERCISED REALIZED EXERCISABLE UNEXERCISABLE EXERCIS. UNEXERCIS.
<S> <C> <C> <C> <C> <C> <C>
Robert E.
Evans 0 n/a 2,000 0 $13,500 $0
<FN>
<F1> All values as shown are pre-tax.
<F2> "Value of Unexercised In-the-Money Options at FY-End" is
based upon the fair market value of the Company's common shares
on December 31, 1993 ($41.75) less the exercise price of
in-the-money options at the end of the 1993 fiscal year.
</TABLE>
PENSION PLAN
The following table shows the estimated annual pension benefits
payable upon retirement at age 65 on a lifetime annuity basis
under the Peoples Bancorp Inc. Retirement Plan, a funded,
noncontributory pension plan (the "Pension Plan"), to a covered
participant in specified compensation and years of service
classifications.
<TABLE>
PENSION PLAN TABLE
<CAPTION>
YEARS OF SERVICE
<S> <C> <C> <C> <C> <C>
Compensation 15 20 25 30 35
$125,000 $33,687 $44,916 $56,145 $67,374 $67,374
150,000 40,812 54,416 68,020 81,624 81,624
175,000 47,937 63,916 79,895 95,874 95,874
200,000 55,062 73,416 91,770 110,124 110,124
225,000 62,187 82,916 103,645 124,374 124,374
250,000 65,276 87,035 108,794 130,553 130,553
</TABLE>
Benefits listed in the Pension Plan Table are not subject to
deduction for Social Security benefits or other amounts and are
computed on a lifetime annuity basis.
Monthly benefits upon normal retirement (age 65) are based upon
40% of "average monthly compensation" plus 17% of the excess, if
any, of "average monthly compensation" over "covered
compensation." For purposes of the Pension Plan, "average
monthly compensation" is based upon the monthly compensation
(including regular salary and wages, overtime pay, bonuses and
commissions) of an employee averaged over the five consecutive
credited years of service which produce the highest monthly
average within the last ten years preceding retirement and
"covered compensation" is the average of the 35 years of social
security wage bases prior to social security retirement age
("covered compensation" for Robert E. Evans as of the end of the
1993 fiscal year was $42,000.)
1993 annual compensation, to the extent determinable, for
purposes of the Pension Plan for Mr. Evans was $183,500. As of
the end of 1993 fiscal year, Mr. Evans had 23 credited years of
service.
DEFERRED COMPENSATION AGREEMENTS
On November 18, 1976, Peoples Bank entered into a Deferred
Compensation Agreement with Mr. Evans and an executive officer
since retired. Under this Deferred Compensation Agreement, Mr.
Evans agreed to serve Peoples Bank as an employee until he
reaches age 65 or until his earlier retirement, disability or
death and agreed not to engage in activities in competition with
Peoples Bank. Under this Agreement, Mr. Evans or his
beneficiaries are entitled to receive specified amounts upon Mr.
Evans' retirement, disability or death, which amounts are
payable monthly for ten years (with interest) or in one lump sum
at the election of Peoples Bank. The principal amount payable
to Mr. Evans is based upon the sum of the amount accrued for his
account during his years of employment with Peoples Bank.
During the Company's 1993 fiscal year, the amount of $5,000 was
accrued for Mr. Evans' account pursuant to his Deferred
Compensation Agreement and as of December 31, 1993, a total of
$100,000 had been accrued to his account. The amount of $5,000
will be accrued to Mr. Evans' account upon the completion of
each year of service to Peoples Bank until he reaches normal
retirement age.
DIRECTORS COMPENSATION
Each director of the Company receives $250 per calendar
quarter and $250 for each meeting attended.
Effective January 1, 1991, the Company established the Peoples
Bancorp Inc. Deferred Compensation Plan for Directors (the
"Directors Deferred Compensation Plan"). Voluntary
participation in the Directors Deferred Compensation Plan
enables a director of the Company, or of one of its
subsidiaries, to defer all or a part of his or her director's
fees, including federal income tax thereon. Such deferred fees
earn interest as provided in the Directors Deferred Compensation
Plan. Distribution of the deferred funds is paid in a lump sum
or annual installments beginning in the first year in which the
person is no longer a director.
Directors, other than those employed by the Company (the
"Non-Employee Directors"), are automatically granted options on
the date they are first elected or appointed as a director of
the Company to purchase 550 common shares at an option price
equal to 100% of the fair market value of the common shares on
the date of grant. In addition, every other year at the Board
meeting immediately following the annual shareholders meeting,
commencing in 1993, all Non-Employee Directors then serving on
the Board of Directors, other than a Non-Employee Director who
was first elected as a director at such annual shareholders
meeting or first appointed as a director at the Board meeting
immediately following such annual shareholders meeting will
receive an automatic grant of options to purchase 550 common
shares; provided that the number of common shares subject to
options granted to Non-Employee Directors who have not served a
full two years on the Board will be prorated such that those
Non-Employee Directors will receive options to purchase only a
percentage of 550 common shares commensurate with the actual
portion of the two years that such Non-Employee Directors served
on the Board. Options granted to Non-Employee Directors have
terms of ten years and become exercisable with respect to 20% of
the common shares subject thereto on the date of grant and 20%
on each of the first, second, third and fourth anniversaries of
the date of grant. If a Non-Employee Director ceases to be a
director for reasons other than his or her death, the options
may be exercised for a period of three months, subject to the
term of the options. If a Non-Employee Director ceases to be a
director by reason of his or her death, the options may be
exercised for a period of one year, subject to the term of the
options.
PERFORMANCE GRAPH
The following line graph compares the yearly percentage change
in the Company's cumulative total shareholder return (as
measured by dividing (i) the sum of (A) the cumulative amount of
dividends for the measurement period, assuming dividend
reinvestment, and (B) the difference between the price of the
Company's common shares at the end and the beginning of the
measurement period; by (ii) the price of the Company's common
shares at the beginning of the measurement period) against the
cumulative return for an index for NASDAQ Stock Market (U.S.
Companies) comprised of all domestic common shares traded on the
NASDAQ National Market System and the NASDAQ Small-Cap Market
and an index for NASDAQ Bank Stocks comprised of all depository
institutions (SIC Code #602) and depository institutions holding
companies (SIC Code #671) that are traded on the NASDAQ National
Market System and the NASDAQ Small-Cap Market ("NASDAQ Bank
Stocks"), for the five-year period ended December 31, 1993.
PLEASE SEE FORM SE FOR PERFORMANCE GRAPH IN PAPER FORM
DELIVERED TO THE SEC ON MARCH 7, 1994
PROPOSED AMENDMENT OF AMENDED ARTICLES OF
INCORPORATION TO INCREASE AUTHORIZED NUMBER OF COMMON SHARES
(Item 2 on Proxy)
The Amended Articles of Incorporation (the "Amended Articles")
of the Company presently authorize 4,000,000 shares, all of
which are common shares, without par value. The Company's Board
of Directors unanimously adopted a resolution proposing and
declaring it advisable that Article FOURTH of the Company's
Amended Articles be amended in order to increase the authorized
number of shares of the Company to 6,000,000 shares, all of
which will be common shares, without par value, and recommending
to the shareholders of the Company the approval of the proposed
amendment. Of the Company's presently authorized 4,000,000
common shares, 1,457,432 were outstanding as of February 15,
1994, 110,000 common shares were reserved for issuance upon the
exercise of options granted and to be granted under the
Company's 1993 Plan and 2,432,568 were available for issuance.
In addition, common shares may be acquired by participants in
the Peoples 401(k) Plan if they direct that their contributions
and Company matching contributions under the Peoples 401(k) Plan
be invested in the investment fund consisting of common shares.
The proposed increase in the authorized number of common
shares of the Company would be accomplished by amending Article
FOURTH of the Company's Amended Articles to read as follows:
FOURTH: The authorized number of shares of the Corporation
shall be 6,000,000, all of which shall be common shares, each
without par value.
The Board of Directors believes that it is desirable and in the
best interests of the Company and its shareholders to increase
the number of common shares that the Company is authorized to
issue in order to ensure that the Company will have a sufficient
number of authorized common shares available in the future to
provide it with the desired flexibility to meet its business
needs. If this proposal is approved by the shareholders, the
additional common shares could be available for a variety of
corporate purposes, including, for example, the declaration and
payment of share dividends to the Company's shareholders; share
splits; use in the financing of expansion or future
acquisitions; issuance pursuant to a dividend reinvestment plan;
issuance pursuant to the terms of employee stock option plans
and other employee benefit plans, including the Peoples 401(k)
Plan and the 1993 Plan; and use in other possible future
transactions of a currently undetermined nature.
If the proposed amendment is adopted, the Company would be
permitted to issue the additional authorized common shares
without further shareholder approval, except to the extent
otherwise required by the Company's Amended Articles, by law or
by NASDAQ or any securities exchange on which the common shares
may be listed at the time (the common shares are currently
reported on the NASDAQ National Market System). The
authorization of additional common shares will enable the
Company, as the need may arise, to take timely advantage of
market conditions and the availability of favorable
opportunities without the delay and expense associated with the
holding of a special meeting of its shareholders. It is the
belief of the Board of Directors that the delay necessary for
shareholder approval of a specific issuance could be to the
detriment of the Company and its shareholders. The Board of
Directors does not intend to issue any common shares except on
terms which the Board deems to be in the best interests of the
Company and its shareholders. Existing shareholders of the
Company will have no pre-emptive rights to purchase any common
shares issued in the future. Depending on the terms thereof,
the issuance of the common shares may or may not have a dilutive
effect on the Company's then-existing shareholders.
From time to time the Company's Board of Directors has
declared a share split with respect to the Company's outstanding
common shares. As of the date hereof, the Board has not yet
determined to declare such a share split. If the Board of
Directors should authorize at a future date such a share split,
the issuance of the common shares pursuant to the share split
will not have a dilutive effect on the equity interest of the
Company's existing shareholders. Shareholders of the Company
should understand that they are not being asked to approve or
disapprove a proposed share split. A vote in favor of the
proposal to adopt the amendment to Article FOURTH of the Amended
Articles should not be deemed to be a vote to approve a share
split. If the proposed amendment is not approved by the
shareholders, the Company anticipates that share splits will
still take place from time to time notwithstanding the
disapproval.
The Board of Directors of the Company is considering the
adoption of a dividend reinvestment plan (a "DRIP") pursuant to
which common shares of the Company may be issued; however, the
terms under which such a DRIP would be operated have not been
determined. The issuance of common shares pursuant to the DRIP
may or may not have a dilutive effect on the equity interest of
the Company's then-existing shareholders, depending on the terms
thereof. Shareholders of the Company should understand that
they are not being asked to approve or disapprove the adoption
of a DRIP. A vote in favor of the proposal to adopt the
amendment to Article FOURTH of the Amended Articles should not
be deemed to be a vote to approve the DRIP. If the proposed
amendment is not approved by the shareholders, the Company
anticipates that the DRIP will still be adopted.
Other than the common shares which would be acquired as a
result of a share split, the common shares which may be acquired
pursuant to the Peoples 401(k) Plan, the 110,000 common shares
which may be issued under the 1993 Plan and the common shares
which may be issued if a DRIP is adopted by the Board of
Directors, the Company presently has no plans, agreements or
understandings to issue any of the newly authorized common
shares.
Although the Company has no such intentions, the proposed
increase in the authorized and unissued common shares might be
considered as having the effect of discouraging an attempt by
another person or entity, through the acquisition of a
substantial number of common shares, to acquire control of the
Company with a view to imposing a merger, sale of all or any
part of its assets, or a similar transaction, since the issuance
of new common shares, in a public or private sale, merger or
similar transaction, could be used to dilute the share ownership
of a person or entity seeking to obtain control of the Company.
Furthermore, since Article SEVENTH of the Amended Articles
requires, if three members of the Board of Directors of the
Company votes against the approval of such amendments or
transactions, the affirmative vote of holders of shares
entitling them to exercise not less than 75% of the voting power
of the Company to: (i) adopt amendments to the Amended Articles
or the Regulations of the Company (including the provisions of
the Amended Articles and the Regulations pertaining to the right
of a shareholder to nominate an individual for election as a
director of the Company, the number of directors, the right of
shareholders to remove directors from office and fill vacancies
in the Board of Directors, or the classified Board); (ii) adopt
any proposal to fix or change the number of directors of the
Company by action of the shareholders; or (iii) adopt mergers,
consolidations, a proposal to sell, lease, exchange, transfer or
otherwise dispose of all or substantially all of the Company's
property or assets, combinations or majority share acquisitions
involving the issuance of common shares and requiring
shareholder approval, and a proposal to dissolve the Company;
the Board could (within the limits imposed by Ohio law) issue
new common shares to purchasers who, together with other
shareholders of the Company, might block such a 75% vote.
The Board has no present knowledge of any present or past
efforts to gain control of the Company and has not received any
indication from any party that such party is interested in
acquiring the Company. As of February 15, 1994, the Company's
executive officers and directors, their respective associates
and the Trust Department of Peoples Bank held approximately
22.2% of the Company's common shares and corresponding voting
power.
The Company's Amended Articles and Regulations contain other
provisions which could potentially make a change of control of
the Company more difficult. These include (a) the
classification of the Board of Directors of the Company into
three classes of directors so that each director serves for
three years, with one class being elected each year; (b) the
requirement that shareholder nominations for election to the
Board of Directors be made in writing and delivered or mailed to
the Secretary of the Company within the time frames specified in
the Company's Regulations; and (c) the requirement that holders
of shares entitling them to exercise not less than 75% of the
voting power of the Company vote in favor of the removal of a
director from office and that such removal only be for cause.
UNDER ARTICLE SEVENTH OF THE AMENDED ARTICLES, THE AFFIRMATIVE
VOTE OF THE HOLDERS OF SHARES ENTITLING THEM TO EXERCISE NOT
LESS THAN A MAJORITY OF THE VOTING POWER OF THE COMPANY IS
REQUIRED TO ADOPT THE PROPOSED AMENDMENT TO ARTICLE FOURTH OF
THE COMPANY'S AMENDED ARTICLES. Under Ohio law and the
Company's Regulations, abstentions and broker non-votes are
counted as present; the effect of an abstention or a broker
non-vote on the proposal is the same as a "no" vote. If the
amendment is approved, it will become effective upon the filing
of a Certificate of Amendment to the Company's Amended Articles
with the Ohio Secretary of State, which is expected to be
accomplished as promptly as practicable after such approval is
obtained.
The Board of Directors recommends that the shareholders vote
FOR the proposed amendment to Article FOURTH of the Company's
Amended Articles.
Unless otherwise directed, the persons named in the enclosed
proxy will vote the common shares represented by all proxies
received prior to the Annual Meeting, and not properly revoked,
in favor of the proposed amendment to Article FOURTH.
SHAREHOLDER PROPOSALS FOR 1995 ANNUAL MEETING
Any qualified shareholder who desires to present a proposal
for consideration at the 1995 Annual Meeting of Shareholders
must submit the proposal in writing to the Company. If the
proposal is received by the Company on or before November 15,
1994 and otherwise meets the requirements of applicable state
and federal law, it will be included in the proxy statement and
form of proxy of the Company relating to its 1995 Annual Meeting
of Shareholders.
NOTIFICATION OF APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors of the Company appointed the accounting
firm of Coopers & Lybrand to serve as independent public
accountants of the Company for the 1993 fiscal year. The firm
has served as independent public accountants for the Company
since 1980. Accountants for the 1994 fiscal year have not been
selected. The Board of Directors has historically appointed
accountants at the meeting held immediately following the Annual
Meeting and intends to do so this year.
The Board of Directors expects that representatives of Coopers
& Lybrand will be present at the Annual Meeting, will have the
opportunity to make a statement if they desire to do so, and
will be available to respond to appropriate questions.
OTHER MATTERS
As of the date of this Proxy Statement, the Board of Directors
knows of no other business to be presented for action by the
shareholders at the 1994 Annual Meeting of Shareholders other
than as set forth in this Proxy Statement. However, if any
other matter is properly presented at the Annual Meeting, or at
any adjournment or adjournments thereof, it is intended that the
persons named in the enclosed proxy may vote the common shares
represented by such proxy on such matters in accordance with
their best judgment in light of the conditions then prevailing.
It is important that proxies be voted and returned promptly;
therefore, shareholders who do not expect to attend the Annual
Meeting in person are urged to fill in, sign and return the
enclosed proxy in the self-addressed envelope furnished herewith.
By Order of the Board of Directors
ROBERT E. EVANS
Robert E. Evans
President and Chief Executive Officer
March 7, 1994
EXHIBIT 10 (b)
PEOPLES BANCORP INC.
RETIREMENT SAVINGS PLAN
Amended and Restated Effective January 1, 1989
PEOPLES BANCORP INC.
RETIREMENT SAVINGS PLAN
TABLE OF CONTENTS
ARTICLE I.
DEFINITIONS
1.01 Accounts
1.02 Affiliate
1.03 Beneficiary
1.04 Break in Service
1.05 Code
1.06 Committee
1.07 Compensation
1.08 Effective Date
1.09 Employee
1.10 Employer
1.11 Employment Commencement Date
1.12 Entry Date
1.13 ERISA
1.14 Exchange Act
1.15 Family Member
1.16 Highly-Compensated Employee
1.17 Hour of Service
1.18 Inactive Participant
1.19 Investment Funds
1.20 Leased Employee
1.21 Lower-Compensated Employee
1.22 Normal Retirement Age
1.23 Participant
1.24 Period of Severance
1.25 Plan
1.26 Plan Year
1.27 Projected Annual Benefit
1.28 Severance from Service
1.29 Spouse or Surviving Spouse
1.30 Trust Agreement
1.31 Trust Fund
1.32 Trustee
1.33 Valuation Date
1.34 Year of Service
ARTICLE II. PARTICIPATION
2.01 Eligibility and Election to Participate
2.02 Reemployment
2.03 Employment After Normal Retirement Age
2.04 Designation of Beneficiary
ARTICLE III. CONTRIBUTIONS
3.01 Contribution of Participant Deferrals
3.02 Participant Nondeductible Contributions
3.03 Rollover Contributions
3.04 Employer Matching Contributions
3.05 Limitation of Participant Deferrals
3.06 Maximum Participant and Matching Contributions for Highly-Compensated
Employees
3.07 Combined Alternative Limitation on Participant Deferrals and
Employer Matching Contributions
ARTICLE IV. PARTICIPANT'S ACCOUNTS; ALLOCATIONS
4.01 Participant's Accounts
4.02 Allocation of Employer Matching Contributions
4.03 Allocation of Net Gains or Losses; Crediting of Accounts
4.04 Limitation of Annual Additions
4.05 Limitation of Reversion of Contributions
ARTICLE V. INVESTMENT OF CONTRIBUTIONS AND VALUATION OF FUNDS
5.01 Investment Funds
5.02 Investment Fund Options
5.03 Qualifying Employer Securities
5.04 Valuation of Trust Fund
ARTICLE VI. WITHDRAWALS OF PARTICIPANT DEFERRALS WHILE EMPLOYED
6.01 Withdrawal of Employee Deferral Accounts
6.02 Hardship Withdrawals
6.03 Withdrawal of Nondeductible Contribution
6.04 Amount and Payment of Withdrawals
ARTICLE VII. AMOUNT AND DISTRIBUTION OF BENEFITS
7.01 Retirement Benefits
7.02 Death Benefits
7.03 Disability Benefits
7.04 Benefits Upon Termination of Employment
7.05 Distribution of Benefit
7.06 Timing of Distributions
ARTICLE VIII. DEFERRAL PLAN COMMITTEE
8.01 Appointment of Committee
8.02 Powers and Duties
8.03 Actions by the Committee
8.04 Interested Committee Members
8.05 Indemnification
8.06 Conclusiveness of Action
8.07 Payment of Expenses
8.08 Claims Procedure
ARTICLE IX. AMENDMENT TO THE PLAN
9.01 Right to Amend
ARTICLE X. TERMINATION OF THE PLAN
10.01 Right to Terminate
10.02 Plan Merger and Consolidation
10.03 Successor Employer
ARTICLE XI. TRUST AND THE TRUSTEE
11.01 Employer to Select Trustee
ARTICLE XII. TOP HEAVY PLAN PROVISIONS
12.01 Definitions
12.02 Top Heavy Status
12.03 Minimum Contributions
ARTICLE XIII. MISCELLANEOUS
13.01 Voluntary Plan
13.02 Designation of Dates
13.03 Non-alienation of Benefits
13.04 Participant Loans
13.05 Inability to Receive Benefits
13.06 Lost Participants
13.07 Limitation of Rights
13.08 Gender
13.09 Invalid Provision
13.10 One Plan
13.11 Governing Law
PEOPLES BANCORP INC.
RETIREMENT SAVINGS PLAN
Peoples Bancorp Inc. hereby adopts the following retirement
savings plan pursuant to Sections 401(a) and 401(k) of the Code,
effective January 1, 1989. The Plan is an amendment and
restatement of the Peoples Bancorp Inc. Retirement Savings Plan,
effective December 31, 1985. The Plan shall be for the
exclusive benefit of the Participants and, where applicable, the
Beneficiaries of such Participants. It is intended that this
Plan, together with the Trust Agreement, shall comply with the
applicable provisions of the Internal Revenue Code of 1986, as
amended, and the Employee Retirement Income Security Act of
1974, as amended.
ARTICLE I
DEFINITIONS
Whenever used herein, the following words and phrases shall
have the meaning specified below. Additional words and phrases
may be defined in the text of the Plan.
1.01. Accounts
"Accounts" means a Participant's Employee Deferral Account,
his Voluntary Contributions Account, his Rollover Account and
his Employer Matching Contributions Account.
1.02. Affiliate
"Affiliate" means any other employer which, together with the
Employer, is a member of a controlled group of corporations or
of a commonly controlled trade or business [as defined in Code
Sections 414(b) and (c) and as modified by Code Section 415(h)]
or of an affiliated service group [as defined in Code Section
414(m)] or other organization described in Code Section 414(o).
1.03. Beneficiary
"Beneficiary" means the person, persons or entity designated
by a Participant pursuant to the terms of Section 2.04 to
receive the death benefit payable under the Plan.
1.04. Break in Service
"Break in Service" means a Period of Severance of one year.
1.05. Code
"Code" means the Internal Revenue Code of 1986, as may be
amended from time to time.
1.06. Committee
"Committee" means the Deferral Plan Committee as described in
Article VIII.
1.07. Compensation
"Compensation" means the total amount reflected on a
Participant's Form W-2 for the Plan Year, excluding any benefits
paid under this Plan, except Compensation shall include any
salary deferrals made by a Participant pursuant to Section 3.01.
Notwithstanding the preceding sentence, for purposes of
allocating the Employer's contribution under the Plan, for the
year in which a Participant begins or resumes participation in
the Plan, Compensation before his participation began or resumed
shall be disregarded. In any Plan Year, Compensation in excess
of the maximum amount permitted under Code Section 401(a)(17)
(or such larger number as may be determined by the Secretary of
the Treasury) shall not be considered.
1.08. Effective Date
"Effective Date" means, for this amended and restated Plan,
January 1, 1989, unless some other effective date is provided
for in any specific provision herein.
1.09. Employee
"Employee" means any person who, on or after the Effective
Date, is receiving remuneration for personal services rendered
to the Employer (or who would be receiving such remuneration
except for an authorized leave of absence). In addition, any
Leased Employee shall be treated as an Employee of the Employer.
However, contributions or benefits provided by the leasing
organization for any Leased Employee which are attributable to
services performed for the Employer shall be treated as provided
by the Employer. The preceding sentences shall not apply to any
Leased Employee of the Employer if (a) Leased Employees do not
constitute more than 20% of the Employer's
non-highly-compensated work force [as defined by reference to
Section 414(q) of the Code]; and (b) the Leased Employee is
covered by a money purchase pension plan maintained by the
leasing organization which provides (i) a nonintegrated employer
contribution rate for each participant of at least 10% of
compensation; (ii) full and immediate vesting; and (iii)
immediate participation for all employees of the leasing
organization (except for those individuals whose compensation is
less than $1,000 in each plan year during the four-year period
ending with the plan year).
1.10. Employer
"Employer" means Peoples Bancorp Inc., its Affiliates and any
successor business or organization which shall assume the
obligations of the Plan.
1.11. Employment Commencement Date
"Employment Commencement Date" means the date on which the
Employee first performs an Hour of Service for the Employer or
an Affiliate.
1.12. Entry Date
"Entry Date" means the first day of January, April, July and
October of each Plan Year.
1.13. ERISA
"ERISA" means the Employee Retirement Income Security Act of
1974, as periodically amended.
1.14. Exchange Act
"Exchange Act" means the Securities Exchange Act of 1934, as
periodically amended.
1.15. Family Member
"Family Member" means, with respect to any individual, such
individual's Spouse and lineal ascendants or descendants and the
spouses of such lineal ascendants or descendants.
1.16. Highly-Compensated Employee
"Highly-Compensated Employee" means a highly-compensated
active employee and a highly-compensated former employee. A
highly-compensated active employee includes any Employee who
performs service for the Employer or an Affiliate during the
determination year and who, during the look-back year (a)
received compensation in excess of $75,000 (as adjusted by the
Secretary of the Treasury); (b) received compensation in excess
of $50,000 (as adjusted by the Secretary of the Treasury) and
was a member of the top-paid group for such year; or (c) was an
officer of the Employer or an Affiliate and received
compensation during such year that is greater than 50% of the
dollar limitation in effect under Code Section 415(b)(1)(A).
The term Highly-Compensated Employee also includes (a)
Employees who are both described in the preceding paragraph if
the term "determination year" is substituted for the term
"look-back year" and one of the 100 Employees who received the
most compensation from the Employer or an Affiliate during the
determination year; and (b) Employees who are 5% owners at any
time during the look-back year or determination year. If no
officer has satisfied the compensation requirement of (c) in the
preceding paragraph during either a determination year or
look-back year, the highest paid officer for such year shall be
treated as a Highly-Compensated Employee. For this purpose, the
determination year shall be the Plan Year. The look-back year
shall be the 12-month period immediately preceding the
determination year.
A highly-compensated former Employee includes any Employee who
separated from service (or was deemed to have separated) prior
to the determination year, performs no service for the Employer
or an Affiliate during the determination year and was a
highly-compensated active employee for either the separation
year or any determination year ending on or after the Employee's
55th birthday. A separation year is the determination year the
Employee separates from service. If an Employee is, during a
determination year or look-back year, a Family Member of either
a 5% owner who is an active or former Employee or a
Highly-Compensated Employee who is one of the 10 most
highly-compensated employees ranked on the basis of compensation
paid by the Employer or its Affiliates during such year, then
the Family Member and the 5% owner or top-10 highly-compensated
employee shall be aggregated. In such case, the Family Member
and 5% owner or top-10 highly-compensated employee shall be
treated as a single Employee receiving compensation and Plan
contributions or benefits equal to the sum of such compensation
and contributions or benefits of the Family Member and 5% owner
or top-10 highly-compensated employee.
The determination of who is a Highly-Compensated Employee,
including the determinations of the number and identity of
Employees in the top-paid group, the top 100 Employees, the
number of Employees treated as officers and the compensation
that is considered will be made in accordance with Code Section
414(q) and the regulations thereunder.
1.17. Hour of Service
"Hour of Service" means
(a) each hour for which an Employee is paid, or entitled to
payment, for the performance of duties for the Employer or an
Affiliate. These hours shall be credited to the Employee for
the computation period or periods in which the duties are
performed;
(b) each hour for which an Employee is paid, or entitled to
payment, by the Employer or an Affiliate on account of a period
of time during which no duties are performed (irrespective of
whether the employment relationship has terminated) due to
vacation, holiday, illness, incapacity (including disability),
layoff, jury duty, military duty or leave of absence; and
(c) each hour for which back pay, irrespective of mitigation
of damages, is either awarded or agreed to by the Employer or an
Affiliate. An Hour of Service credited under paragraph (a) or
(b) above will not be credited under this paragraph (c). These
hours shall be credited to the Employee for the computation
period or periods to which the award or agreement pertains
rather than the computation period in which the award, agreement
or payment is made.
1.18. Inactive Participant
"Inactive Participant" means a Participant whose employment
with the Employer or an Affiliate has continued but (a) whose
participation has been suspended as a result of making a
withdrawal pursuant to Section 6.02 hereof; or (b) who has
suspended his deferrals pursuant to Section 3.01(c) hereof.
1.19. Investment Funds
"Investment Funds" means the investment funds as determined by
the Committee and described in Section 5.02 for the investment
of Participant Accounts pursuant to Participant directions.
1.20. Leased Employee
"Leased Employee" means any person (other than an employee of
the recipient) who, pursuant to an agreement between the
recipient and any other person (leasing organization), has
performed services for the recipient [or for the recipient and
related persons determined in accordance with Code Sections
414(n) and 414(o)] on a substantially full-time basis for a
period of at least one year, and such services are of a type
historically performed by employees in the business field of the
recipient employer.
1.21. Lower-Compensated Employee
"Lower-Compensated Employee" means any Employee who is not a
Highly-Compensated Employee.
1.22. Normal Retirement Age
"Normal Retirement Age" means the Participant's 65th birthday;
provided, however, that this Plan shall not be interpreted to
require that a Participant retire prior to attaining any
specific age.
1.23. Participant
"Participant" means either (a) an Employee who is
participating in the Plan in accordance with Article II and for
whom Accounts are being maintained; or (b) a former Employee of
the Employer or an Affiliate for whom Accounts are being
maintained.
1.24. Period of Severance
"Period of Severance" means the time period between an
Employee's Severance from Service and the date on which he is
next credited with an Hour of Service.
1.25. Plan
"Plan" means the plan designated as the Peoples Bancorp Inc.
Retirement Savings Plan, as described in this document and as it
may be periodically amended.
1.26. Plan Year
"Plan Year" means the 12 months beginning on each January 1
and ending each December 31. The Plan Year shall be the
"Limitation Year" for purposes of Code Section 415 and Section
4.04 of the Plan.
1.27. Projected Annual Benefit
"Projected Annual Benefit" means the annual benefit to which a
Participant would be entitled under all Employer sponsored
defined benefit plans, assuming that the Participant continues
employment until his normal retirement date, that the
Participant's Compensation continues until his normal retirement
date at the rate in effect during the current calendar year and
that all other factors relevant for determining benefits under
the Plan remain constant at the level in effect during the
current calendar year.
1.28. Severance from Service
"Severance from Service" means the earliest of the date on
which an Employee either
(a) quits;
(b) retires;
(c) is discharged;
(d) dies; or
(e) is continuously absent (with or without pay) beyond (i)
the first anniversary of the first day of his approved absence;
or (ii) the expiration of his approved absence, whichever is
longer.
An Employee will not be deemed to have incurred a Severance
from Service while in active service with the United States
armed forces and while his reemployment rights are protected by
law. If a Participant retires because of disability and
recovers before his normal retirement date but is not rehired by
the Employer or an Affiliate, he will be treated as having quit
(rather than retired) on the date his disability began.
1.29. Spouse or Surviving Spouse
"Spouse" or "Surviving Spouse" means an individual who is
legally married to the Participant, provided that an individual
who was formerly married to the Participant will be treated as
the Spouse or Surviving Spouse to the extent provided under a
qualified domestic relations order, as described in Code Section
414(p).
1.30. Trust Agreement
"Trust Agreement" means the agreement, and any amendments made
thereto, by and between the Employer and the Trustee for the
management, investment and disbursement of funds held in the
Trust Fund.
1.31. Trust Fund
"Trust Fund" means the Employer's portion of the fund
established pursuant to the terms of the Trust Agreement, which
fund may be comprised of one or more Investment Funds.
1.32. Trustee
"Trustee" means the bank, trust company and/or individual
designated by the Employer to hold and invest the Trust Fund and
to pay benefits and expenses as authorized by the Committee in
accordance with the terms and provisions of the agreement by and
between the Employer and such bank, trust company and/or
individual.
1.33. Valuation Date
"Valuation Date" means each March 31, June 30, September 30
and December 31, or more frequently if determined to be
necessary by the Committee.
1.34. Year of Service
"Year of Service" means each 12-month period between an
Employee's Employment Commencement Date and his Severance from
Service.
(a) Years of Service include an Employee's Period of Severance
if he is reemployed by the Employer or an Affiliate before a
Break in Service;
(b) except for determining eligibility to participate, periods
of service less than a full year will be aggregated; and
(c) any portion of a Year of Service which is less than a full
year will be stated as a fractional year with each full or
partial month equal to 1/12th of a year.
If a Participant is absent for maternity/paternity purposes
and that absence begins during Plan Years beginning after
December 31, 1984, the 12-consecutive-month period beginning on
the first anniversary of the date the absence began will not be
counted as a Break in Service. For purposes of this section, an
absence from work for maternity/paternity purposes means an
absence due to
(a) the pregnancy of the Employee;
(b) the birth of a child of the Employee;
(c) the placement of a child with the Employee in connection
with the adoption of such child by the Employee; or
(d) the caring for a child for a period beginning immediately
after birth or placement.
ARTICLE II
PARTICIPATION
2.01. Eligibility and Election to Participate
Each individual who was a Participant in the Plan on the day
before the Effective Date shall remain a Participant in this
Plan on the Effective Date. Each Employee who is classified by
the Employer as a full-time employee who is not a Participant on
the Effective Date shall become a Participant in the Plan on the
Entry Date coincident with or next following his Employment
Commencement Date. Each Employee who is classified by the
Employer as a part-time employee who is not a Participant on the
Effective Date shall become a Participant in the Plan on the
Entry Date coincident with or next following the date as of
which he has been credited with 1,000 Hours of Service.
To be eligible to make Participant deferrals, a Participant
must complete an enrollment form and agree to make contributions
to the Plan, authorize the Employer to withhold such
contributions from his Compensation and pay the same to the
Trustee and designate a Beneficiary. An Employee who declines
to make Participant deferrals at the time when he is initially
eligible shall be a Participant for all other purposes of the
Plan and may elect to make Participant deferrals on the next
Entry Date thereafter, provided the Employee completes the
required form at least five days prior to such date.
2.02. Reemployment
If a Participant whose employment has terminated is
subsequently reemployed, he shall be eligible to participate in
the Plan on the Entry Date following his reemployment.
Notwithstanding the previous sentence, effective September 1,
1993, a Participant whose employment has terminated, who is
subsequently reemployed and who was subject to the provisions of
Section 16 of the Exchange Act at the time of his termination of
employment shall not be eligible to participate in the Plan
until the later of (a) the Entry Date following his
reemployment; and (b) the Entry Date following the date which is
six months after his termination of employment.
2.03. Employment After Normal Retirement Age
A Participant who continues in the employ of the Employer
after his Normal Retirement Age shall continue to be a
Participant for all purposes of the Plan.
2.04. Designation of Beneficiary
(a) Each Participant shall designate a Beneficiary to receive
any death benefit payable under the Plan. In the event the
Participant dies before a distribution has occurred pursuant to
Section 7.01, 7.03 or 7.04, such distribution shall be paid to
the Participant's Surviving Spouse.
If there is no Surviving Spouse, or if the Surviving Spouse
consents to forego receipt of the distribution in accordance
with paragraph (b) below, distribution shall be made to any
person, persons or entity designated by the Participant as a
Beneficiary hereunder. If more than one Beneficiary is named,
the Participant may specify the sequence and/or proportion in
which payments must be made to each Beneficiary. In the absence
of such specification, payments shall be made in equal shares to
all named Beneficiaries. To the extent otherwise consistent
with this Plan, a Participant may change his Beneficiary from
time to time by written notice delivered to the Committee in the
manner prescribed by the Committee. If no Beneficiary has been
designated or if no designated Beneficiary is living at the time
of the Participant's death, payment of such death benefit, if
any, to the extent permitted by law, shall be made to the
surviving person or persons in the first of the following
classes of successive preference of Beneficiaries: (i)
Surviving Spouse; (ii) issue, then living, per stirpes; (iii)
executors or administrators. Any minor's share shall be paid to
such adult or adults as have been appointed legal guardian and
have assumed custody and support of such minor. Proof of death
satisfactory to the Committee must be furnished prior to the
payment of any death benefit under the Plan.
(b) If the Participant's Beneficiary under the Plan is someone
other than the Participant's Spouse, then such designation is
subject to the Spouse's consent. Spousal consent shall be valid
only if (i) it is made in writing on a form prescribed by the
Committee; (ii) the Spouse acknowledges the effect of the
consent; and (iii) the consent and acknowledgment are witnessed
by a Plan representative or a notary public. If the Participant
establishes to the satisfaction of the Committee that such
written consent may not be obtained because his Spouse cannot be
located, a designation of a Beneficiary other than his Spouse
will be deemed to have been made with spousal consent.
ARTICLE III
CONTRIBUTIONS
3.01. Contribution of Participant Deferrals
(a) Effective January 1, 1987, each Participant may elect, by
entering into a salary reduction agreement with the Employer,
for each Plan Year to defer a portion of his Compensation, not
to exceed the lesser of (i) 15% of his Compensation; or (ii) the
maximum amount permitted under Section 402(g) of the Code,
taking into account elective deferrals made under other
qualified cash or deferred arrangements in which the Participant
participates. Such deferred amounts shall be contributed by the
Employer to the Participant's Employee Deferral Account.
(b) A Participant's election to make Participant deferrals
shall be effective for each payroll period during which an
effective salary reduction agreement is on file with the
Employer.
(c) A Participant's deferral percentage will remain in effect,
notwithstanding any change in his Compensation, until he elects
to change such percentage. A Participant may elect to increase,
decrease or cease his deferral percentage once during each
calendar quarter of the Plan Year. Salary reduction agreements
and amendments to salary reduction agreements shall be effective
as of, and shall not apply to any payroll period preceding, the
payroll period next following the 30th day after the salary
reduction agreement or amendment to the salary reduction
agreement is executed by the Participant and the Employer.
Notwithstanding any provision in the preceding paragraph,
effective September 1, 1993, if a Participant who is subject to
the provisions of Section 16 of the Exchange Act elects to cease
making Participant deferrals, he may not again elect to make
such Participant deferral contributions to the Plan until the
later of (i) the first day of the Plan Year following such
cessation of Participant deferral contributions; or (ii) the
date which is six months after the effective date of the
cessation of his Participant deferrals. In addition, such a
Participant shall be ineligible to transfer any portion of his
Employee Deferral Account, Voluntary Contributions Account,
Rollover Account or Employer Matching Contributions Account from
any Investment Fund or Funds in which investments are not made
in equity securities of the Employer to any Investment Fund in
which investments are made in equity securities of the Employer
(an "Intra-Fund Acquisition Transfer") for a period of six
months following the effective date of the Participant's
suspension of Participant deferrals.
A Participant who has elected a deferral percentage for a
prior portion of a Plan Year who fails to change such percentage
on an allowable date for a subsequent portion of a Plan Year
shall be deemed to have kept his prior deferral percentage in
effect for such subsequent portion of the Plan Year.
(d) Participant deferrals under this section shall be made by
payroll deductions authorized by the Participant and shall be
contributed to the Plan by the Employer. Participant deferrals
constitute Employer contributions under the Plan and are
intended to qualify as elective contributions under Code Section
401(k). Amounts allocated to a Participant's Employee Deferral
Account shall be fully vested in such Participant and
nonforfeitable at all times. The salary-deferral arrangement of
this Plan and any other plans of the Employer [which include a
cash or deferred arrangement under Section 401(k) of the Code
and which are considered one plan for purposes of Section
401(a)(4) or Section 401(b) of the Code] shall be treated as one
salary-deferral arrangement for purposes of applying the
provisions of this Article III.
(e) Effective January 1, 1987, in the event a Participant
notifies the Committee in writing by any March 1 that, with
respect to the previous calendar year, such Participant has made
elective Participant deferrals in excess of the maximum amount
permitted under Section 402(g)(5) of the Code for such calendar
year (taking into account for this purpose the aggregate salary
deferrals made by the Participant to all qualified cash or
deferred arrangements in which he participates), then the
Committee shall return to such Participant by the next following
April 15 the amount specified in such written notification of
his Participant deferral contributions to the Plan during the
previous calendar year, together with allocable earnings
thereon. To the extent that a Participant has made elective
Participant deferrals in excess of the maximum amount permitted
under Code Section 402(g)(5) to this Plan or any other plan
maintained by the Employer or an Affiliate, such Participant
shall be deemed to have notified the Committee of such excess
deferrals.
3.02. Participant Nondeductible Contributions
Each Participant may, if he so elects, contribute to the
Trustee of this Plan in any Plan Year amounts not in excess of
10% of the Compensation paid or accrued to the Participant by
the Employer during such Plan Year. All amounts contributed by
a Participant under this section shall be credited to his
Voluntary Contributions Account and shall be fully vested in the
Participant and nonforfeitable at all times. Contributions may
be in cash, by means of salary reductions or otherwise, in
accordance with such rules as the Committee may determine.
Notwithstanding any provision in this paragraph, effective
September 1, 1993, a Participant who is subject to the
provisions of Section 16 of the Exchange Act may not make
nondeductible contributions under the Plan unless he is also
making Participant deferral contributions to the Plan.
3.03. Rollover Contributions
Subject to such restrictions as the Committee may apply or
affirmative refusal by the Committee to accept such rollovers,
an Employee may roll over a distribution from another qualified
pension or profit sharing plan; provided, however, that
notwithstanding any provision contained herein, no Employee
shall roll over more than a maximum amount of $500,000 in any
one particular Plan Year into any Investment Fund or Funds in
which investments are made in equity securities of the Employer.
Amounts so rolled over shall be credited to the Employee's
Rollover Account and shall be fully vested in such Employee and
nonforfeitable at all times. Amounts transferred directly from
another qualified pension or profit sharing plan shall be
treated hereunder as a rollover.
3.04. Employer Matching Contributions
For each Plan Year, the Employer shall contribute an amount
equal to a percentage of the total amount of contributions
agreed to be made by it pursuant to salary reduction agreements
under Section 3.01 entered into between the Employer and
Participants for such Plan Year. The amount of this matching
contribution, if any, shall be determined in the discretion of
the Board of Directors.
Contributions made pursuant to this Section 3.04 shall be
allocated to the Employer Matching Contributions Account of
Participants who both (a) made Participant deferrals during the
Plan Year for which such matching contribution is made by the
Employer; and (b) are employed by the Employer or an Affiliate
on the last day of such Plan Year. Matching contributions shall
be allocated to each eligible Participant in the proportion
which the total Participant deferral contributions of such
Participant for the Plan Year bears to the total Participant
deferral contributions of all Participants who are eligible for
matching contributions for the Plan Year. Any amounts
contributed by the Employer pursuant to this paragraph shall be
paid on an annual basis to the Trustee.
3.05. Limitation of Participant Deferrals
(a) Notwithstanding Section 3.01, effective January 1, 1987,
the deferral percentages under Section 3.01 shall be modified as
provided in paragraph (c) if the requirements of paragraph (b)
are not satisfied.
(b) An actual deferral percentage shall be determined for each
Employee who is eligible to become a Participant. Such
percentage shall be his total Participant deferrals, divided by
his Compensation during the portion of the Plan Year during
which he was eligible to participate in the Plan. With respect
to Employees who are eligible to but make no deferrals under
this Plan for the year, such actual deferral percentage shall be
zero.
The average of the actual deferral percentages for all
eligible Employees who are Highly-Compensated Employees (High
Average), when compared to the average of the actual deferral
percentages for all eligible Employees who are Lower-Compensated
Employees (Low Average), must meet one of the following
requirements:
(i) the High Average is no greater than the Low Average
times 1.25; or
(ii) the excess of the High Average over the Low Average is
not greater than 2% and the High Average is no greater than the
Low Average times 2.0.
(c) The Committee shall make a determination as of the last
day of the Plan Year regarding the maximum Participant deferral
contribution which each Participant who is a Highly-Compensated
Employee may elect to defer, and any Participant who elected to
defer more than his maximum permissible Participant deferral
contribution shall be deemed to have elected to defer the
maximum permissible Participant deferral contribution as
determined by the Committee. For this purpose, all cash or
deferred arrangements under which a Highly-Compensated Employee
is eligible to participate shall be treated as a single
arrangement. If it is determined as of the end of the Plan Year
that any amounts withheld by the Employer for such Participant
exceed the amounts determined permissible by the Committee or,
if the amount of the Participant's Participant deferral
contribution would limit the contribution the Employer has
determined to make for its corresponding fiscal year, then the
excess amount or the portion of the Participant's Participant
deferral contribution which would so limit the Employer's
contribution, together with interest thereon (if any), shall be
returned by the Employer or the Trustee to the Participant
within 2 1/2 months after the end of the Plan Year, but in no
event later than the last day of the following Plan Year.
For purposes of this paragraph (c), the amount of excess
contributions for a Highly-Compensated Employee will be
determined in the following manner. First, the actual deferral
ratio (ADR) of the Highly-Compensated Employee with the highest
ADR is reduced to the extent necessary to satisfy the actual
deferral percentage (ADP) test or cause such ratio to equal the
ADR of the Highly-Compensated Employee with the next highest
ratio. Second, this process is repeated until the ADP test is
satisfied. The amount of excess contributions for a
Highly-Compensated Employee is then equal to the total of
elective and other contributions taken into account for the ADP
test minus the product of the Employee's contribution ratio as
determined above and the Employee's Compensation. The Committee
shall have the right to limit or reduce the Participant deferral
contributions of Participants, as it determines necessary and in
any manner it determines, to ensure that the aggregate
allocation to the Employee Deferral Accounts of all Participants
will not exceed the amount permitted as a deduction by the
Employer pursuant to the Code and to ensure that, with respect
to any particular Participant, the amount credited to such
Participant's Employee Deferral Account for the Plan Year does
not exceed the amount permissible under Section 415 of the Code.
3.06. Maximum Participant and Matching Contributions for
Highly-Compensated Employees
(a) Effective January 1, 1987, the contribution percentage for
eligible Highly-Compensated Employees under this Plan shall not
exceed the greater of (i) 125% of such percentage for all other
eligible Employees; or (ii) the lesser of 200% of such
percentage for all other eligible Employees or the percentage
for all other eligible Employees plus two percentage points.
(b) For purposes of this section, the contribution percentage
for a specified group of Employees for a Plan Year shall be the
average of the ratios (calculated separately for each Employee
in such group) of (i) the sum of the Participant's nondeductible
contributions and the Employer matching contributions made under
the Plan on behalf of each such Employee for such Plan Year to
(ii) the Employee's compensation [within the meaning of Section
414(s) of the Code] for the portion of such Plan Year during
which he was eligible to participate in the Plan.
(c) Any Employee who is eligible to make a Participant
deferral contribution under the Plan shall be considered an
"eligible employee" for purposes of this section.
(d) The Plan shall not be treated as failing to meet the
requirements of this section for any Plan Year if, before the
close of the following Plan Year, the amount of the excess
aggregate contributions for such Plan Year and any income
allocable to such contributions is distributed. For this
purpose, income allocable to excess contributions shall include
only income for the Plan Year for which the excess aggregate
contributions were made. Any distribution of the excess
aggregate contributions for any Plan Year shall be made to
Highly-Compensated Employees on the basis of the respective
portions of such amounts attributable to each of such Employees.
For purposes of this section, the term "excess aggregate
contributions" shall mean, with respect to any Plan Year, the
excess of (i) the amount of the Participant nondeductible
contributions and Employer matching contributions actually made
by or on behalf of Highly-Compensated Employees for such Plan
Year over (ii) the maximum amount of such contributions
permitted under the contribution percentage requirement
described above (determined by reducing contributions made on
behalf of Highly-Compensated Employees in order of their
contribution percentages beginning with the highest of such
percentages).
3.07. Combined Alternative Limitation on Participant Deferrals
and Employer Matching Contributions
Notwithstanding any provision of this Article III, effective
January 1, 1987, if, as of any Plan Year, both the High Average
specified in Section 3.05 (relating to actual deferral
percentages) and the contribution percentage for
Highly-Compensated Employees specified in Section 3.06 (relating
to actual contribution percentages) exceed the Low Average
specified in Section 3.05 and the contribution percentage for
Lower-Compensated Employees specified in Section 3.06 by more
than 25%, the Committee shall apply the aggregate alternative
limitation in accordance with Section 1.401(m)-2 of the Income
Tax Regulations. In the event the combined alternative
limitation is not satisfied for any given Plan Year, the
Employer shall direct the Committee to reduce the High Average
of Section 3.05 and/or the contribution percentage for
Highly-Compensated Employees of Section 3.06 as permitted by
Sections 3.05 and 3.06 hereof to the extent necessary to satisfy
the combined alternative limitation.
ARTICLE IV
PARTICIPANT'S ACCOUNTS; ALLOCATIONS
4.01. Participant's Accounts
The Committee shall maintain Accounts as follows for each
Participant in the Plan:
(a) an Employer Matching Contributions Account to record
(i) his share of the Employer matching contributions,
allocated under Section 3.03; and
(ii) his share of the net income, or net losses, resulting
from the investment thereof.
(b) an Employee Deferral Account to record
(i) the Participant's Participant deferrals made pursuant
to Section 3.01, minus any withdrawals; and
(ii) his share of the net income, or net losses, resulting
from the investment thereof.
(c) a Voluntary Contributions Account to record:
(i) his nondeductible contributions, minus any withdrawals;
and
(ii) his share of the net income, or net losses, resulting
from the investment thereof.
(d) a Rollover Account to record
(i) the Participant's rollovers made pursuant to Section
3.03; and
(ii) his share of the net income, or net losses, resulting
from the investment thereof.
4.02. Allocation of Employer Matching Contributions
Employer matching contributions made under Section 3.04 shall
be allocated to each Participant in accordance with the
provisions of Section 3.04.
4.03. Allocation of Net Gains or Losses; Crediting of Accounts
As of each Valuation Date, the fair market value of the Trust
Fund shall be determined in accordance with Section 5.04. The
net increase or decrease in such values resulting from the
investment of the assets therein and from administrative
expenses charged to the Trust Fund, if any, pursuant to Section
8.07 shall be apportioned to each Participant's Employer
Matching Contributions Account and Rollover Account in
proportion to the value thereof as of the last preceding
Valuation Date. The net increase or decrease in the value of
the Trust Fund resulting from investment of the assets therein
and from administrative expenses charged to the Trust Fund, if
any, pursuant to Section 8.07 shall be apportioned to each
Participant's Employee Deferral Account in the ratio that the
sum of the value of such Participant's Employee Deferral Account
as of the preceding Valuation Date plus a weighted average of
any Participant deferrals made to such Employee Deferral Account
since the preceding Valuation Date less any withdrawals made
from such Employee Deferral Account since the preceding
Valuation Date bears to the total value of all Participants'
Employee Deferral Accounts as of the preceding Valuation Date
plus a weighted average of all Participant deferrals made to the
Plan since the preceding Valuation Date less any withdrawals
made from all Employee Deferral Accounts since the preceding
Valuation Date. The net increase or decrease in the value of
the Trust Fund resulting from investment of the assets therein
and from administrative expenses charged to the Trust Fund, if
any, pursuant to Section 8.07 shall be apportioned to each
Participant's Voluntary Contributions Account in the ratio that
the sum of the value of such Participant's Voluntary
Contributions Account as of the preceding Valuation Date plus a
weighted average of any Participant nondeductible contributions
made to such Voluntary Contributions Account since the preceding
Valuation Date less any withdrawals made from such Voluntary
Contributions Account since the preceding Valuation Date bears
to the total value of all Participants' Voluntary Contributions
Accounts as of the preceding Valuation Date plus a weighted
average of all Participant nondeductible contributions made to
the Plan since the preceding Valuation Date less any withdrawals
made from all Voluntary Contributions Accounts since the
preceding Valuation Date.
4.04. Limitation of Annual Additions
(a) Basic Limitation. Notwithstanding Sections 3.01 and 3.05
and subject to the provisions of paragraphs (b) and (c) below,
Annual Additions to each Participant's Account shall not exceed
the lesser of (i) $30,000 or such larger amount as may be
determined by the Secretary of the Treasury for Limitation Years
ending on or after January 1, 1988; or (ii) 25% of the
Participant's compensation for the Limitation Year.
For purposes of this Section 4.04, "compensation" shall mean
compensation as defined in Treasury Regulation Section
1.415-2(d) and shall include wages, salaries, fees for
professional services, percentage of profits, earned income in
the case of a self-employed Participant, disability payments,
paid or reimbursed moving expenses to the extent not deductible
by the Participant, medical reimbursement items and the value of
a non-qualified stock option to the extent includable in an
Employee's gross income upon making the election under Code
Section 83(b). Specifically excluded are salary deferral
contributions, contributions to the distributions from most
deferred compensation plans, amounts realized from the sale of a
non-qualified stock option or from the sale, exchange or other
disposition of stock acquired under a qualified stock option
plan and most amounts which receive special tax benefits. Also
for purposes of this section, "Annual Additions" means the sum
of the following amounts credited to a Participant's Account for
the Limitation Year under all defined contribution plans
maintained by the Employer:
(i) Employer contributions;
(ii) Forfeitures;
(iii) Employee contributions;
(iv) amounts allocated after March 31, 1984 to an individual
medical account, as defined in Code Section 415(l)(2), which is
part of a defined benefit plan maintained by the Employer; and
(v) amounts derived from contributions paid or accrued
after December 31, 1985 in taxable years ending after such date
which are attributable to postretirement medical benefits
allocated to the separate account of a Key Employee [as defined
in Code Section 416(i)] under a welfare benefit fund [as defined
in Code Section 419(e)] maintained by the Employer. The amounts
described under this subparagraph (v) shall not be subject to
the 25% of compensation limit provided in Section 4.04(a).
(b) Participation in Other Defined Contribution Plan. The
limitation of this Section 4.04 with respect to any Participant
who at any time has participated in any other qualified defined
contribution plan [as defined in Section 3(34) of
ERISA and Code Section 414(i)] maintained by the Employer will
apply as if the total contributions allocated under all such
defined contribution plans in which the Participant has
participated were allocated under one plan.
(c) Participation in this Plan and Defined Benefit Plan. If a
Participant has been a Participant in a qualified defined
benefit plan [as defined in Section 3(35) of ERISA and Code
Section 414(j)] maintained by the Employer, the sum of the
Participant's defined benefit plan fraction and defined
contribution plan fraction for any year shall not exceed one.
The defined benefit plan fraction is a fraction, the numerator
of which is the sum of the Participant's Projected Annual
Benefit under all defined benefit plans (whether or not
terminated) maintained by the Employer, and the denominator of
which is the lesser of (i) 1.25 times the dollar limitation of
Code Section 415(b)(1)(A) in effect for the limitation year; or
(ii) 1.4 times the Participant's average annual earnings for the
three consecutive years that produce the highest average.
The defined contribution plan fraction is a fraction, the
numerator of which is the sum of the Annual Additions to the
Participant's Accounts under all defined contribution plans
maintained by the Employer (whether or not terminated) for the
current and all prior years, and the denominator of which is the
sum of the lesser of the following amounts determined for such
years and for each prior Year of Service with the Employer: (i)
1.25 times the dollar limitation in effect under Code Section
415(c)(1)(A) for such year; or (ii) 1.4 times the amount which
may be taken into account under Code Section 415(c)(1)(B).
For any years in which the Plan is "top heavy" as defined in
Section 12.02, "1.0" shall be substituted for "1.25" in the
preceding two paragraphs.
As to each Participant, if, in any Limitation Year, the sum of
the defined benefit plan fraction and the defined contribution
plan fraction exceeds 1.0, the rate of benefit accruals under
this Plan will be reduced so that the sum of the fractions
equals 1.0.
(d) Adjustments. If the limitation described in this Section
4.04 is effective in limiting the amount to be allocated to the
Accounts of a Participant for a Plan Year, the annual
contributions hereunder will be reduced as necessary to bring
them within the limitation, as follows:
(i) first, amounts attributable to Participant
nondeductible contributions will be reduced. Such amounts will
be returned to the Participant;
(ii) second, amounts attributable to the Participant's
deferrals will be reduced. Such amounts will be returned to the
Participant as cash Compensation and will be subject to all
federal, state, municipal and/or county taxes and other
deductions which would apply to cash Compensation; and
(iii) third, the Employer matching contribution allocated to
the Participant's Employer Matching Contributions Account will
be reduced. The amount of the reduction will be credited to an
unallocated Employer Matching Contributions Account and will
reduce current or future Employer matching contributions.
(e) Members of Controlled Group. The determination of the
limitation on Annual Additions described in this Section 4.04
will be made considering the Employees of all members of a
controlled group of corporations or commonly controlled trades
or businesses [as defined in Code Sections 414(b) and (c) as
modified by Code Section 415(h)] or affiliated service groups
[as defined in Code Section 414(m)] of which the Employer is a
part as employed by a single employer. Such determination will
be made assuming the phrase "more than 50%" is substituted for
the phrase "at least 80%" each place it appears in Code Section
1563(a)(1).
4.05. Limitation of Reversion of Contributions
Except as provided in paragraphs (a) through (c) below,
contributions made under the Plan shall be held for the
exclusive benefit of Participants and their Beneficiaries and
may not revert to the Employer.
(a) In the case of a contribution which is made by the
Employer by a mistake of fact, such contribution shall be
returned to the Employer within one year after it is contributed
to the Plan.
(b) In the case of a contribution conditioned on the Plan's
qualification under Code Section 401(a), if the Plan fails to
qualify initially or fails to qualify as a result of an
amendment, such contribution shall be returned to the Employer
within one year after the date that the Plan's qualification is
denied.
(c) In the case of a contribution conditioned upon its
deductibility under Code Section 404, to the extent the
deduction is disallowed, the amount disallowed shall be returned
to the Employer within one year after the disallowance.
ARTICLE V
INVESTMENT OF CONTRIBUTIONS AND VALUATION OF FUNDS
5.01. Investment Funds
Each Participant will have his Employer Matching Contributions
Account, his Employee Deferral Account, his Voluntary
Contributions Account and his Rollover Account invested in the
Trust Fund.
5.02. Investment Fund Options
The Committee shall establish and maintain one or more
Investment Funds for the investment of Participant Accounts
under the Plan. Each sum credited to a Participant's Accounts
shall be invested in such Investment Funds by the Trustee
pursuant to directions received from the Participant. There
shall be three four such Investment Funds, as hereinafter
indicated:
(a) Fund A The Peoples Stock Fund shall be a common stock fund
of the Trustee which consists of a diversified portfolio of
high-quality common stocks. While awaiting investment in common
stocks, any cash held by the Trustee may be invested in common
or collective short-term investment funds of the Trustee.
(b) Fund B The Certificate of Deposit Fund shall be a fixed
income fund of the Plan which consists of investments in various
deposit instruments of The Peoples Banking and Trust Company,
which bear a reasonable interest rate. While awaiting
investment into the fixed income fund, any cash held by the
Trustee may be invested in common or collective short-term
investment funds of the Trustee.
(c) Fund C The Peoples Bancorp Stock Fund shall consist of the
common shares stock of Peoples Bancorp Inc. While awaiting
investment into the Peoples Bancorp Inc. common shares, stock,
any cash held by the Trustee may be invested in common or
collective short-term investment funds of the Trustee.
(d) The Peoples Special Stock Fund shall be a common stock
fund which consists of a diversified portfolio of small company
common stocks and common stock mutual funds. While awaiting
investment in common stocks and/or common stock mutual funds,
any cash held by the Trustee may be invested in common or
collective short-term investment funds of the Trustee.
Each Participant will direct, at the time he elects to make
Participant deferrals, voluntary contributions and/or rollover
contributions, that contributions be invested in one or more of
the Investment Funds. If the Participant elects to have his
contributions invested in more than one such Investment Fund, he
shall designate the portion of contributions that will be
invested in each Investment Fund, provided that each portion
shall be in an increment of 5% of such contributions.
Any investment election given by a Participant for investment
of contributions will continue in effect until changed by the
Participant. A Participant, by filing a written election with
the Committee prior to December 15 of any Plan Year, may change
his current investment election with respect to any of the
Investment Funds as to his future Participant deferrals and/or
voluntary contributions within the limits of the previous
paragraph, effective on January 1 of the following Plan Year.
In addition, a Participant who is not subject to the provisions
of Section 16 of the Exchange Act may also, by filing a written
election with the Committee prior to June 15 of any Plan Year,
change his current investment election with respect to future
contributions, effective on July 1 of such Plan Year.
A Participant, by filing a written election with the Committee
prior to December 15 of any Plan Year, may convert his
investment election with respect to any of the Investment Funds
as to his prior contributions to the Plan within the limits of
this section, at their then current value, effective on January
1 of the following Plan Year. In addition, a Participant who is
not subject to the provisions of Section 16 of the Exchange Act
may also, by filing a written election with the Committee prior
to June 15 of any Plan Year, convert his investment election
with respect to his prior contributions, effective on July 1 of
such Plan Year.
Notwithstanding any provision contained in this section,
effective September 1, 1993, a Participant who is subject to the
provisions of Section 16 of the Exchange Act may only change his
investment election (applicable to both future Participant
deferrals, rollover contributions, nondeductible contributions
and Employer matching contributions and prior Participant
deferrals, rollover contributions, nondeductible contributions
and Employer matching contributions) with respect to investments
in any Investment Fund in which investments are made in equity
securities of the Employer (both increases or decreases in
investments to such Investment Fund) either (i) pursuant to an
irrevocable written request made during the period beginning on
the third business day following the date of release of
quarterly financial data including sales and earnings of the
Employer for the third quarter of the calendar year and ending
on the twelfth business day following such date; or (ii)
pursuant to an irrevocable request in writing given to the
Committee at least six months immediately prior to the effective
date of such change.
In addition, for six months following any transfer by a
Participant who is subject to the provisions of Section 16 of
the Exchange Act of any portion of such Participant's Employee
Deferral Account, Voluntary Contributions Account, Rollover
Account or Employer Matching Contributions Account from any
Investment Fund or Funds in which investments are made in equity
securities of the Employer to any Investment Fund or Funds in
which investments are not made in equity securities of the
Employer (an "Intra-Fund Withdrawal Transfer"), (i) no
Intra-Fund Acquisition Transfer may be made; and (ii) no
Participant deferrals, voluntary contributions, rollover
contributions or Employer matching contributions may be made by,
or on behalf of, the Participant into any Investment Fund or
Funds except as permitted by Rule 16b-3(d)(2)(i) pertaining to
Section 16 of the Exchange Act. At the time a written request
for an Intra-Fund Withdrawal Transfer is made by a Participant
who is subject to the provisions of Section 16 of the Exchange
Act, the Participant must direct in writing into which
Investment Fund or Funds his Participant deferrals, voluntary
contributions, rollover contributions, if any, and Employer
matching contributions shall be made during the six months
following the Intra-Fund Withdrawal Transfer in order to cause
on-going Plan transactions to be in compliance with Rule
16b-3(d)(2)(i) pertaining to Section 16 of the Exchange Act.
5.03. Qualifying Employer Securities
Notwithstanding any other provision of this Plan, the Plan is
authorized to invest and hold up to 100% of the Trust assets in
"qualifying employer securities" [as that term is defined in
Section 407(d)(5) of ERISA] and "bank deposits" [as that term is
defined in Section 4975(d)(4) of the Code]. The Plan may
purchase such common shares of common stock or other securities
of the Employer from the Employer or from any other source, and
such common shares of common stock or securities may be
outstanding, newly issued or treasury securities. All such
purchases shall be made at fair market values. If no common
shares of common stock or other securities of the Employer are
available for purchase, the Plan may retain cash uninvested or
may invest all or any part thereof in any other investment if
such retention is prudent under all the facts and circumstances
then prevailing.
Each Participant may vote Employer securities, which are
entitled to vote and are allocated to the Accounts of such
Participant. The Trustee shall provide to each Participant
materials pertaining to the exercise of such rights containing
all of the information distributed to other shareholders
stockholders of the Employer. A Participant shall have the
opportunity to exercise any such rights within the same time
period as other shareholders stockholders of the Employer. In
the exercise of voting rights, votes representing fractional
common shares of stock and common shares of stock held in
unallocated inventory shall be voted in the same ratio for the
election of Directors and for and against each issue as the
applicable vote directed by Participants with respect to whole
common shares of stock.
Notwithstanding any other provision of this Plan, a
Participant who is entitled to a distribution from the Plan
(other than a hardship withdrawal or a withdrawal of his
nondeductible contributions) has a right to demand that his
benefits be distributed in the form of Employer securities to
the extent his Accounts reflect ownership of whole common shares
or consist of Employer securities.
5.04. Valuation of Trust Fund
As of each Valuation Date, the Trustee shall determine the
current market value of the net assets of the Trust Fund,
including the current market value of each Investment Fund
established by the Committee pursuant to Section 5.02.
ARTICLE VI
WITHDRAWALS OF PARTICIPANT DEFERRALS WHILE EMPLOYED
6.01. Withdrawal of Employee Deferral Accounts
Except as provided in Section 3.01(e) and Section 3.05, the
balance to the credit of a Participant in his Employee Deferral
Account shall not be distributable until the Participant's
retirement, death, disability, separation from service with the
Employer, termination of the Plan (provided a total distribution
is made and the Employer does not establish a successor plan),
the date of the sale by the Employer of all of its assets
(provided the affected Participant continues in the employ of
the corporation acquiring such assets) or the date of the sale
by the Employer of its interest in a subsidiary (provided the
affected Participant continues in the employ of the subsidiary),
except for any withdrawal distributions for hardship, if
permitted under Section 6.02 of the Plan. No portion of a
Participant's Employee Deferral Account shall be distributable
merely by reason of the completion of a stated period of
participation or the lapse of a fixed number of years.
6.02. Hardship Withdrawals
Upon 15 days' written notice to the Committee and subject to
Committee approval, a Participant may withdraw all or a portion
of his Employee Deferral Account (excluding any earnings
credited thereto) as of the Valuation Date immediately preceding
his withdrawal request to the extent necessary to meet a
financial hardship. Notwithstanding the provisions of the
previous sentence, effective September 1, 1993, a Participant
who is subject to the provisions of Section 16 of the Exchange
Act and who participates in any Investment Fund or Funds in
which investments are made in equity securities of the Employer
may make a withdrawal pursuant to this Section 6.02 only if he
makes his request for withdrawal (pursuant to an irrevocable
election) to the Committee at least six months prior to the date
any distribution for hardship is made from the Plan to such
Participant. Requests for withdrawal pursuant to this Section
6.02 may only be made once in a 12-month period. The amount of
any withdrawal under this section due to financial hardship
shall not be less than $500 nor in excess of the amount
necessary to meet such financial hardship plus any amounts
necessary to pay any federal, state or local income taxes
reasonably anticipated to result from the withdrawal. For
purposes of the Plan, a financial hardship shall include any of
the following events:
(a) expenses for medical care described in Code Section 213(d)
previously incurred by the Participant or his Spouse or
dependents (as defined in Code Section 152) or necessary for
these persons to obtain medical care described in Code Section
213(d);
(b) costs directly related to the purchase of a principal
residence for the Participant (excluding mortgage payments);
(c) the payment of tuition and related educational fees for
the next 12 months of post-secondary education for the
Participant, his Spouse, children or dependents; or
(d) payments necessary to prevent the eviction of the
Participant from the Participant's principal residence or
foreclosure on the mortgage on that residence.
An application for withdrawal pursuant to this section may
only be approved by the Committee if a Participant either (a)
certifies that his financial need cannot be met by insurance,
reasonable liquidation of assets (not itself creating a
hardship), cessation of Participant deferrals, by other
distributions or nontaxable loans from plans maintained by the
Employer or by borrowing from commercial sources on reasonable
commercial terms; or (b) elects to (i) suspend his Participant
deferrals to this Plan and all other plans maintained by the
Employer for a period of 12 months following his receipt of a
hardship distribution pursuant to this section; and (ii) have
his Participant deferrals to this Plan for his taxable year
immediately following the taxable year of the hardship
distribution limited to the applicable limit on Participant
deferrals under Section 402(g) of the Code minus his Participant
deferrals for the taxable year of the hardship distribution.
Notwithstanding the previous provisions of this paragraph,
effective September 1, 1993, an application for withdrawal by a
Participant who is subject to the provisions of Section 16 of
the Exchange Act may only be approved by the Committee if the
Participant satisfies the requirements of (b) of this paragraph,
suspends his voluntary contributions and rollover contributions
to this Plan and all other plans maintained by the Employer for
a period of six months following his receipt of a hardship
distribution and agrees that for six months following the date
any distribution for hardship is made, no Intra-Fund Acquisition
Transfer shall be made.
6.03. Withdrawal of Nondeductible Contributions
A Participant shall, upon 30 days' prior written notice to the
Committee, be entitled to withdraw at any time his entire
Voluntary Contributions Account, or any portion of such
Voluntary Contributions Account. Notwithstanding the provisions
of the previous sentence, effective September 1, 1993, a
Participant who is subject to the provisions of Section 16 of
the Exchange Act and who participates in any Investment Fund or
Funds in which investments are made in equity securities of the
Employer may make a withdrawal pursuant to this Section 6.03
only if he makes his request for withdrawal (pursuant to an
irrevocable election) to the Committee at least six months prior
to the date any distribution is made from the Plan to such
Participant. Requests for withdrawal pursuant to this Section
6.03 may only be made once in a 12-month period. To the extent
that a Participant who is subject to the provisions of Section
16 of the Exchange Act makes a withdrawal of all or a part of
his nondeductible contributions pursuant to this Section 6.03,
rules similar to the rules contained in Section 6.02 (applicable
to the withdrawal of Participant deferrals) shall be applied
with respect to the Participant's ability to again make
nondeductible contributions to the Plan, to make Participant
deferrals and rollover contributions to the Plan and to make any
Intra-Fund Acquisition Transfer.
6.04. Amount and Payment of Withdrawals
All withdrawals under Article VI shall be effective as of the
Valuation Date immediately preceding the date the Committee
receives a timely withdrawal request from the Participant. The
amount of such withdrawal shall be taken from the Participant's
Account as of such Valuation Date and paid to the Participant in
a single lump sum as soon as administratively possible.
Notwithstanding the previous provisions of this Section 6.04,
effective September 1, 1993, any withdrawal on behalf of a
Participant who is subject to the provisions of Section 16 of
the Exchange Act shall not be effective until the date which is
at least six months from the date on which such Participant made
an application to the Committee for the withdrawal.
ARTICLE VII
AMOUNT AND DISTRIBUTION OF BENEFITS
7.01. Retirement Benefits
(a) Normal Retirement. The retirement benefit payable under
the Plan in the case of a Participant whose employment with the
Employer is terminated on or after his Normal Retirement Age
shall be 100% of his Accounts on the Valuation Date immediately
following his termination of employment if the termination of
employment occurs after the mid-point of any calendar quarter.
If the Participant's termination of employment occurs on or
before the mid-point of a calendar quarter, the benefit payable
shall be 100% of the Participant's Accounts on the Valuation
Date immediately preceding his termination of employment, plus
any contributions and earnings subsequently allocated to such
Accounts and less any subsequent distributions from and losses
subsequently allocated to such Accounts.
(b) Early Retirement. Any Participant who attains age 55 is
eligible for early retirement under the Plan. The retirement
benefit payable under the Plan in the case of a Participant who
is eligible for early retirement shall be 100% of his Accounts
on the Valuation Date immediately following his early retirement
if the termination of employment occurs after the mid-point of
any calendar quarter. If the Participant's termination of
employment occurs on or before the mid-point of a calendar
quarter, the benefit payable shall be 100% of the Participant's
Accounts on the Valuation Date immediately preceding his
termination of employment, plus any contributions and earnings
subsequently allocated to such Accounts and less any subsequent
distributions from and losses subsequently allocated to such
Accounts.
7.02. Death Benefits
The death benefit payable to a Beneficiary under the Plan in
the case of a Participant whose employment with the Employer is
terminated due to his death shall be 100% of his Accounts on the
Valuation Date immediately following the Participant's death if
the termination of employment occurs after the mid-point of any
calendar quarter. If the Participant's termination of
employment occurs on or before the mid-point of a calendar
quarter, the benefit payable shall be 100% of the Participant's
Accounts on the Valuation Date immediately preceding his
termination of employment, plus any contributions and earnings
subsequently allocated to such Accounts and less any subsequent
distributions from and losses subsequently allocated to such
Accounts.
7.03. Disability Benefits
The disability benefit payable under the Plan in the case of a
Participant who becomes totally and permanently disabled shall
be 100% of his Accounts on the Valuation Date immediately
following the date of his total and permanent disability if the
termination of employment occurs after the mid-point of any
calendar quarter. If the Participant's termination of
employment occurs on or before the mid-point of a calendar
quarter, the benefit payable shall be 100% of the Participant's
Accounts on the Valuation Date immediately preceding his
termination of employment, plus any contributions and earnings
subsequently allocated to such Accounts and less any subsequent
distributions from and losses subsequently allocated to such
Accounts. A Participant shall be deemed totally and permanently
disabled on the date that he suffers a physical or mental
condition which, in the judgment of the Committee, based upon
medical reports and other evidence satisfactory to the
Committee, presumably permanently prevents the Employee from
satisfactorily performing his usual duties for the Employer or
the duties of such other position or job which the Employer
makes available to him and for which the Employee is qualified
by reason of his training, education or experience.
7.04. Benefits Upon Termination of Employment
The benefit payable under the Plan in the case of a
Participant whose employment with the Employer is terminated for
any reason other than retirement, death or disability shall be
100% of his Accounts, as of the Valuation Date immediately
following his termination of employment if the termination of
employment occurs after the mid-point of any calendar quarter.
If the Participant's termination of employment occurs on or
before the mid-point of a calendar quarter, the benefit payable
shall be 100% of the Participant's Accounts on the Valuation
Date immediately preceding his termination of employment, plus
any contributions and earnings subsequently allocated to such
Accounts and less any subsequent distributions from and losses
subsequently allocated to such Accounts.
7.05. Distribution of Benefits
(a) At the time a Participant becomes entitled to receive any
amount because of his retirement, death, disability or
termination of employment, the Trustee, acting in accordance
with the written instructions of the Committee, shall either
make payment from the Trust Fund to such Participant or his
Beneficiary (i) in a lump sum; or (ii) in such periodic
installments as may be elected by the Participant or Beneficiary
over a time period not to exceed 10 years.
Effective January 1, 1993, if a Participant is entitled to a
distribution under this Section 7.05 which qualifies as an
Eligible Rollover Distribution and he (a) elects to have such
distribution paid directly to an Eligible Retirement Plan; and
(b) specifies the Eligible Retirement Plan to which such
distribution is to be paid (in a manner required by the Plan
Administrator), such distribution shall be made from the Plan in
the form of a direct trustee-to-trustee transfer to the Eligible
Retirement Plan so specified. The preceding sentence shall only
be applicable to the extent that a Participant's Eligible
Rollover Distribution would be includible in the Participant's
gross income if it were not transferred to an Eligible
Retirement Plan. For purposes of this paragraph, the term
"Eligible Rollover Distribution" shall have the meaning given to
such term under Section 401(a)(31)(C) of the Code and the term
"Eligible Retirement Plan" shall have the meaning given to such
term under Section 401(a)(31)(D) of the Code.
If a Participant's Accounts are to be distributed in other
than an immediate lump sum, minimum annual payments under the
Plan must be paid over one of the following periods (or a
combination thereof):
(i) a period certain not extending beyond the life
expectancy of the Participant; or
(ii) a period certain not extending beyond the joint and
last survivor expectancy of the Participant and a designated
Beneficiary.
(b) If the Participant's Accounts are 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 total amount of the Participant's Accounts by
the life expectancy of the Participant or joint and last
survivor expectancy of the Participant and designated
Beneficiary. If the Participant's Spouse is not the designated
Beneficiary, the method of distribution selected must assure
that at least 50% of the present value of the amount available
for distribution is paid within the life expectancy of the
Participant.
If the distribution of the Participant's Accounts has begun
and he dies before such Accounts have been distributed to him,
the remaining portion of such Accounts will be distributed at
least as rapidly as under the method of distribution being used
prior to the Participant's death.
Subject to the succeeding paragraph, if the Participant dies
before his distribution has begun, his Accounts shall be
distributed within five years of his death unless (i) a portion
of such Accounts is payable to or on behalf of a designated
Beneficiary; (ii) such portion will be distributed over the life
of such designated Beneficiary; and (iii) such distribution
begins not later than one year after the date of the
Participant's death (or such date as prescribed by the Secretary
of Treasury).
Notwithstanding the preceding paragraph, if the designated
Beneficiary is the Participant's Surviving Spouse, the date by
which the distribution must commence under (iii) in the
preceding paragraph shall be the date the Participant would have
attained age 70 1/2. If the Surviving Spouse dies before
distribution to said Spouse begins, this section shall apply as
if the Surviving Spouse were the Participant. Life expectancy
of a Surviving Spouse may be recalculated annually; however, in
the case of any other designated Beneficiary, such life
expectancy will be calculated at the time that payment first
commences without further calculations. In addition, any amount
paid to a child of the Participant will be treated as if it had
been paid to the Surviving Spouse if the amount becomes payable
to the Surviving Spouse when the child reaches the age of
majority.
7.06. Timing of Distributions
(a) Distributions under the Plan pursuant to this Article VII
will begin as soon as practicable, but, unless otherwise elected
by the Participant, not later than 60 days following the end of
the Plan Year in which the Participant attains age 65,
celebrates his tenth anniversary of participation in the Plan or
terminates employment, whichever is latest. In no event will
the entire interest of a Participant be distributed, or commence
to be distributed, later than April 1 following the year in
which the Participant attains age 70 1/2.
(b) Notwithstanding the previous paragraph, if a Participant
terminates service and the value of his Accounts does not exceed
$3,500 (and did not exceed $3,500 at the time of any prior
distribution), the Participant shall receive a distribution of
the value of his Accounts as soon as administratively feasible
following his termination of service. If a Participant
terminates service and the value of his Accounts exceeds $3,500
(or exceeded $3,500 at the time of any prior distribution), the
Participant may elect, with the written consent of his Spouse,
if any, to receive a distribution of the value of his Accounts
as soon as administratively feasible following his termination
of service. For purposes of this paragraph, if the value of a
Participant's Accounts is zero, the Participant shall be deemed
to have received a distribution of such Accounts.
ARTICLE VIII
DEFERRAL PLAN COMMITTEE
8.01. Appointment of Committee
A Deferral Plan Committee consisting of not less than three
members nor more than five members shall be appointed by the
Board of Directors of the Employer to administer the Plan.
Vacancies in the Committee, which result from death, resignation
or otherwise, shall be filled from time to time by appointment
of a new Committee member by the Employer; and any member of the
Committee may be removed at any time at the discretion of the
Employer.
8.02. Powers and Duties
(a) The Committee shall, in its discretion, have full power to
administer the Plan and to construe and apply all of its
provisions on behalf of the Employer. The Employer shall be the
Named Fiduciary within the meaning of Section 402(a) of ERISA
for purposes of Plan administration. The Committee may delegate
to any other person or organization any of its powers and duties
with respect to the operation of this Plan. The Committee's
powers and duties, unless properly delegated, shall include, but
shall not be limited to
(i) deciding questions relating to eligibility, continuity
of service and amount of benefits;
(ii) deciding disputes which may arise with regard to the
rights of Employees, Participants and their legal
representatives or Beneficiaries under the terms of the Plan.
Such decisions by the Committee shall be deemed final in each
case;
(iii) obtaining such information from the Employer with
respect to its Employees as shall be necessary to determine the
rights and benefits of such Employees under the Plan. The
Committee may rely conclusively upon such information furnished
by the Employer;
(iv) compiling and maintaining all records necessary for the
Plan;
(v) furnishing the Employer, upon request, such reports
with respect to the administration of the Plan as are reasonable
and appropriate;
(vi) authorizing the Trustee to make payment of all benefits
as they become payable under the Plan;
(vii) engaging such legal, administrative, actuarial,
investment, accounting, consulting and other professional
services as the Committee deems proper;
(viii) adopting rules and regulations for the
administration of the Plan not inconsistent with the Plan;
(ix) doing and performing such other actions as may be
provided for in other parts of this Plan.
(b) The Committee shall determine whether domestic relations
orders represent "qualified domestic relations orders" as that
term is defined in Code Section 414(p) or a successor provision.
If the Committee determines the order is a qualified domestic
relations order, it shall direct the manner and time of
distribution pursuant to the order. Prior to such
determination, the Committee shall promptly notify the
Participant affected with respect to the order and any payee
under the order of the receipt of the order. The Committee
shall send such notices to the address set forth in the order,
or if the address is not set forth therein, to the last known
address. Such notice shall state that the Committee is in the
process of determining whether the order is a qualified domestic
relations order and such notice shall also permit a reasonable
period under the circumstances for comment with respect to such
determination. During such period, the Committee shall cause
the amounts otherwise payable under the order to be segregated
in a separate account. After the determination is made, the
Committee shall notify the Participant and any payee under the
order of such determination. Any payee may designate a
representative for receipt of copies of notices sent to the
payee with respect to the order.
8.03. Actions by the Committee
The Committee may act at a meeting, or in writing without a
meeting, by the vote or assent of a majority of its members.
The Committee shall appoint one of its members to act as a
secretary to record all action taken by it. The Committee shall
have authority to designate in writing one or more of its
members as the person(s) authorized to execute papers and
perform other ministerial duties on behalf of the Committee.
8.04. Interested Committee Members
No member of the Committee shall participate in any action of
the Committee on a matter in which such member has a specialized
individual interest as a Participant in the Plan. Such matters
shall be determined by a majority of the remainder of the
Committee.
8.05. Indemnification
The Employer shall indemnify and hold harmless any person who
is or was a member of the Committee or any person who is or was
an employee who performs or performed services with respect to
the Plan against all liabilities and all reasonable expenses
(including, without limitation, counsel fees and amounts paid in
settlement other than to the Employer) incurred or paid in
connection with any threatened or pending action, suit or
proceeding to which such person (or his executor, administrator
or other legal representative) may be made a party or in which
such person may otherwise be involved by reason of the fact that
he serves or has served as a member of the Committee or
otherwise performs or has performed services with respect to the
Plan; provided that (a) if such action, suit or proceeding shall
be prosecuted against such person (or his executor,
administrator or other legal representative) to final
determination on the merits or otherwise, it shall not be
finally adjudged in such action, suit or proceeding that such
person is liable for gross negligence or willful misconduct in
the performance of his duty to the Employer or the Plan in
relation to the matter or matters in respect of which
indemnification is claimed; or (b) if such action, suit or
proceeding shall be settled or otherwise terminated as against
such person (or his executor, administrator or other legal
representative) without a final determination, it shall be
determined that such person was not guilty of gross negligence
or willful misconduct in the performance of his duty to the
Employer or the Plan in relation to the matter or matters in
respect of which indemnification is claimed, such determination
to be made by a majority of the members of the Board of
Directors of the Employer or by independent counsel to whom the
question may be referred by the Board of Directors.
The Employer's obligations under this section may be satisfied
through the purchase of a policy or policies of insurance
providing equivalent protection.
8.06. Conclusiveness of Action
Any action on matters within the discretion of the Committee
shall be conclusive, final and binding upon all Participants of
the Plan and upon all persons claiming any rights hereunder
including Beneficiaries.
8.07. Payment of Expenses
The members of the Committee shall serve without compensation
for services as such. Notwithstanding the preceding sentence,
the Trust Fund shall reimburse the Committee and its members for
all necessary and proper expenses incurred in carrying out their
duties under the Plan. The compensation or fees of accountants,
counsel and other specialists may be paid directly by the
Employer or by the Trust Fund; and any other costs of
administering the Plan or Trust may be charged to the Trust;
and, at the discretion of the Employer, such costs may be
reimbursed by the Employer.
8.08. Claims Procedure
(a) A Participant or Beneficiary or the Employer acting on
behalf of such Participant or Beneficiary shall notify the
Committee of a claim for benefits under the Plan. Such request
shall be in writing to the Committee and shall set forth the
basis of such claim and shall authorize the Committee to conduct
such examinations as may be necessary for the Committee to
determine, in its discretion, the validity of the claim and to
take such steps as may be necessary to facilitate the payment of
benefits to which the Participant or Beneficiary may be entitled
under the terms of the Plan.
A decision by the Committee shall be made promptly and not
later than 90 days after the Committee's receipt of the claim of
benefits under the Plan, unless special circumstances require an
extension of the time for processing; in which case, a decision
shall be rendered as soon as possible, but not later than 180
days after the initial receipt of the claim for benefits.
(b) Whenever a claim for benefits by any Participant or
Beneficiary has been denied by the Committee, a written notice
prepared in a manner calculated to be understood by the
Participant or Beneficiary must be provided setting forth
(i) the specific reasons for the denial;
(ii) the specific reference to the pertinent Plan provisions
on which the denial is based;
(iii) a description of any additional material or information
necessary for the claimant to perfect the claim and an
explanation of why such material or information is necessary; and
(iv) an explanation of the Plan's claim review procedure.
(c) Upon denial of his claim by the Committee, a Participant
or Beneficiary
(i) may request a review by a named fiduciary, other than
the Committee, upon written application to the Employer;
(ii) may review pertinent Plan documents; and
(iii) may submit issues and comments in writing to a named
fiduciary.
A Participant or Beneficiary shall have 60 days after receipt
by the claimant of written notification of a denial of a claim
to request a review of a denied claim.
A decision by a named fiduciary shall be made promptly and not
later than 60 days after the named fiduciary's receipt of a
request for review, unless special circumstances require an
extension of the time for processing; in which case, a decision
shall be rendered as soon as possible, but not later than 120
days after receipt of a request for review. The decision on
review by a named fiduciary shall be in writing and shall
include specific reasons for the decision, written in a manner
calculated to be understood by the claimant, and specific
references to the pertinent Plan provisions on which the
decision is based.
ARTICLE IX
AMENDMENT TO THE PLAN
9.01. Right to Amend
The Employer shall have the right at any time, by an
instrument in writing, to modify, alter or amend this Plan in
whole or in part; provided, however, that no such amendment
shall in any way affect the vested rights of the Participants
under this Plan. If an amendment changes the vested rights
provided in this Plan, each Participant having not less than
three Years of Service may elect, during the period beginning
when the amendment is adopted and ending no earlier than the
latest of (a) 60 days after the amendment's adoption; (b) 60
days after the amendment's effective date; or (c) 60 days after
the Participant is issued a written notice of the amendment, to
have his vested rights computed without regard to such
amendment. No amendment shall be made to this Plan which shall
attempt to transfer any part of the corpus or income of the
Trust to purposes other than the exclusive benefit of
Participants and their Beneficiaries. No amendment to the Plan
shall eliminate or reduce an early retirement benefit or
eliminate an optional form of distribution.
ARTICLE X
TERMINATION OF THE PLAN
10.01. Right to Terminate
The Employer shall have the right to terminate the Plan in
whole or in part at any time. In the event of a termination,
partial termination or complete discontinuation of
contributions, each affected Participant shall be 100% vested in
the value of all his Accounts.
10.02. Plan Merger and Consolidation
If the Plan is merged or consolidated with any other plan, or
if the assets or liabilities of the Plan are transferred to any
other plan, each Participant shall be entitled to a distribution
immediately after such merger, consolidation or transfer
(determined as if such plan then terminated) at least equal to
the distribution to which he would have been entitled had the
Plan terminated immediately prior to such merger, consolidation
or transfer.
10.03. Successor Employer
In the event of the dissolution, merger, consolidation or
reorganization of the Employer, provision may be made by which
the Plan and Trust will be continued by the successor; and, in
that event, such successor shall be substituted for the Employer
under the terms and provisions of this Trust Agreement upon the
filing in writing of its election to do so with the Trustee and
acceptance by the Trustee, and providing such successor meets
the requirements of the Code. The substitution of the successor
shall constitute an assumption of Plan liabilities by the
successor; and the successor shall have all of the powers,
duties and responsibilities of the Employer under the Plan.
ARTICLE XI
TRUST AND THE TRUSTEE
11.01. Employer to Select Trustee
The Employer shall select a Trustee to hold and invest the
Trust Fund in accordance with the terms of a Trust Agreement.
The Trustee shall be a bank or trust company incorporated under
the laws of the United States or of any state and qualified to
operate as a trustee or a combination of such entities or an
individual. The Employer may, from time to time, change the
Trustee then serving under the Trust Agreement to another
Trustee or elect to terminate the Trust and hold the Plan assets
in any other method acceptable under ERISA.
The Trustee shall invest, manage, acquire and dispose of the
Plan's assets. However, the Employer may, in its sole
discretion, retain an investment manager [as defined in Section
3(38) of ERISA] to direct the manner in which some or all of the
Plan's assets are invested, managed, acquired or disposed of by
the Trustee. The Trustee shall be the Named Fiduciary within
the meaning of ERISA with respect to the investment, management
and control of the Trust Fund, unless such duties are delegated
to an investment manager or otherwise delegated under the terms
of the Trust Agreement. The Trust Agreement may include
provision for participation in a joint or associated Trust Fund
or pooled separate account for the purpose of pooling investment
experience.
ARTICLE XII
TOP HEAVY PLAN PROVISIONS
12.01. Definitions
If the Plan is or becomes top heavy in any Plan Year, the
provisions of this Article XII will supersede any conflicting
provisions in the Plan. The following definitions and rules are
necessary to comply with related federal tax requirements:
(a) Key Employee: Any Employee or former Employee (and the
Beneficiaries of such Employee) who at any time during the
determination period was (i) an officer of the Employer if such
individual's annual compensation exceeds 50% of the dollar
limitation under Code Section 415(b)(1)(A); (ii) an owner (or an
individual who is considered an owner under Code Section 318) of
one of the ten largest interests in the Employer if such
individual's annual compensation exceeds the dollar limitation
under Code Section 415(c)(1)(A); (iii) a 5% owner of the
Employer; or (iv) a 1% owner of the Employer who has annual
compensation of more than $150,000. For purposes of this
section, annual compensation means compensation as defined in
Code Section 415(c)(3), but including amounts contributed by the
Employer pursuant to a salary reduction agreement which are
excludable from the Employee's gross income under Code Section
125, 402(a)(8), 402(h) or 403(b). The determination period is
the Plan Year containing the Determination Date and the four
preceding Plan Years. The determination of who is a Key
Employee will be made in accordance with Code Section 416(i)(1)
and the regulations thereunder.
(b) Non-Key Employee: Any Employee or former Employee of the
Employer who is not a Key Employee. The Beneficiary of a
Non-Key Employee will be treated as a Non-Key Employee, and the
Beneficiary of a former Non-Key Employee will be treated as a
former Non-Key Employee.
(c) Determination Date: For any Plan Year subsequent to the
first Plan Year, the last day of the preceding Plan Year. For
the first Plan Year, the last day of such Plan Year.
(d) Permissive Aggregation Group: The Required Aggregation
Group of plans plus any other plan or plans of the Employer
which, when considered as a group with the Required Aggregation
Group, would continue to satisfy the requirements of Code
Sections 401(a)(4) and 410.
(e) Required Aggregation Group: (i) Each qualified plan of
the Employer in which at least one Key Employee participates or
participated at any time during the determination period
(regardless of whether the Plan has terminated); and (ii) any
other qualified plan of the Employer which enables a plan
described in (i) to meet the requirements of Code Section
401(a)(4) or 410.
(f) Top Heavy Plan: The Plan, if it meets the requirements of
Section 12.02.
12.02. Top Heavy Status
This Plan, and any other plans aggregated with it, will become
top heavy pursuant to this Section 12.02, as of the
Determination Date, if the present value of accrued benefits for
Key Employees is more than 60% (90% in the case of "super top
heavy") of the sum of the present value of accrued benefits of
all Employees, excluding former Key Employees. In the case of
more than one plan which is to be aggregated, the present value
of the accrued benefits (including distributions for Key
Employees and all Employees) is first determined separately for
each plan as of each plan's determination date. The plans then
will be aggregated by adding the results of each plan as of the
determination dates for such plans that fall within the same
calendar year. The combined results will indicate whether the
plans are top heavy. For purposes of any plan that is
aggregated with this Plan, such computations shall be made, for
such plan, by using the interest rate and mortality assumptions
contained in such plan.
The Account balances and accrued benefits of a Participant who
has not performed services for the Employer maintaining the Plan
during the five-year period ending on the Determination Date
will be disregarded.
The present value of accrued benefits as of the Determination
Date for any individual is the sum of (a) the Account balance as
of the most recent Valuation Date occurring within a 12-month
period ending on the Determination Date; (b) an adjustment for
contributions due as of the Determination Date; and (c) the
aggregate distributions made with respect to such individual
under the Plan during the five-year period ending on the
Determination Date. For a profit sharing plan, the adjustment
in (b) is generally the amount of contributions actually made
after the Valuation Date but on or before the Determination Date.
In determining whether the Plan is top heavy, it must be
aggregated with each plan included in the Required Aggregation
Group. In addition, the Employer may aggregate plans included
in the Permissive Aggregation Group.
12.03. Minimum Contributions
For each Plan Year in which the Plan is top heavy, each
Participant who is a Non-Key Employee (including those
Participants who did not complete 1,000 Hours of Service in the
Plan Year) must receive an annual allocation of contributions
(disregarding Social Security benefits) equal to at least 3% of
his Compensation; provided that, if the largest percentage of
Compensation allocated to a Key Employee for a Plan Year is less
than 3%, that largest percentage will be substituted for 3%.
For any year in which the Employer maintains a defined benefit
plan in addition to this Plan, the requirements of this
paragraph will be satisfied by providing each Non-Key Employee
with the 2% minimum annual benefit provided under the top heavy
provisions of the defined benefit plan. For any year in which
the Employer maintains another defined contribution plan in
addition to this Plan, the minimum benefit described in this
paragraph shall be provided by such other defined contribution
plan.
ARTICLE XIII
MISCELLANEOUS
13.01. Voluntary Plan
The Plan is purely voluntary on the part of the Employer; and
neither the establishment of the Plan nor any amendment thereof
nor the creation of any fund or account nor the payment of any
benefits shall be construed as giving any person a legal or
equitable right against the Employer, the Trustee or the
Committee unless the same shall be specifically provided for in
this Plan or conferred by affirmative action of the Committee or
the Employer in accordance with the terms and provisions of this
Plan. Nor shall such actions be construed as giving any
Employee or Participant the right to be retained in the service
of the Employer. All Employees and/or Participants shall remain
subject to discharge to the same extent as though this Plan had
not been established.
13.02. Designation of Dates
Whenever any date designated herein shall fall on a Saturday,
Sunday or holiday, the next succeeding day which is not a
Saturday, Sunday or holiday will be substituted therefor, except
that where a date is designated as the last day of a period and
such date falls on a Saturday, Sunday or holiday, the next
preceding day which is not a Saturday, Sunday or holiday shall
be substituted therefor.
13.03. Non-alienation of Benefits
Participants and their Beneficiaries shall be entitled to all
the benefits specifically set out under the terms of the Plan,
but said benefits or any of the property rights therein shall
not be assignable or distributable to any creditor or other
claimant of such Participant. A Participant shall not have the
right to anticipate, assign, pledge, accelerate or in any way
dispose of or encumber any of the monies or benefits or other
property which may be payable or become payable to such
Participant or his Beneficiary. The preceding sentence shall
also apply to the creation, assignment or recognition of a right
to any benefit payable with respect to a Participant pursuant to
a domestic relations order, unless such order is determined to
be a qualified domestic relations order, as defined in Code
Section 414(p) and determined pursuant to Section 8.02(b) of the
Plan.
13.04. Participant Loans
The Committee shall direct the Trustee to loan a Participant
or Beneficiary an amount from his Accounts, on a reasonably
equivalent basis and in accordance with the following rules:
A Participant's loan, when added to the balance of any other
outstanding loans the Participant may have under this Plan or
any other qualified retirement plan maintained by the Employer
or an Affiliate, shall not exceed the lesser of
(a) $50,000 reduced to the extent of (i) the highest
outstanding loan balance of the Participant's loans outstanding
during the immediately prior 12-month period (ending the day
before the new loan is granted) over (ii) the total of all
outstanding loans the day the new loan is granted; or
(b) the greater of (i) $10,000; or (ii) 50% of the
Participant's Total Vested Account Balance.
For purposes of this section, "Total Vested Account Balance"
means the total dollar value as of the Valuation Date coinciding
with or immediately preceding the date of the loan, of the
vested portion of the Participant's Employer Matching
Contributions Account, Voluntary Contributions Account and
Employee Deferral Account.
In addition to such rules and regulations as the Committee may
adopt, all loans shall comply with the following terms and
conditions:
(a) all loans shall be subject to the approval of the
Committee or its agent;
(b) an application for a loan by a Participant shall be made
in writing to the Committee or its agent, whose action thereon
shall be final;
(c) in reviewing applications for loans, the Committee shall
apply normal commercial standards to determine whether to
approve or deny an applicant's request;
(d) the period of repayment for any loan shall be arrived at
by mutual agreement between the Committee or its agent and the
borrower, but all loans shall become due and payable upon
termination of employment and the period in no event shall
exceed five years, except that a ten-year repayment rule shall
apply to any loan used for the purpose of establishing or
preserving a home which is the Participant's principal residence;
(e) each loan shall be made at a rate of interest equal to the
average of the rates of interest charged for similarly secured
loans by banks and trust companies within the market served by
the Trustee reasonably contemporaneously with the execution of
the note;
(f) each loan shall be treated as a separate investment of the
funds credited to such Participant's Accounts and the Committee
shall reduce such Participant's Accounts in any Investment Funds
as the Participant has so directed;
(g) payments by a Participant on any such loan shall be
credited to such Participant's Accounts in the various
Investment Funds in the same proportions as the Participant's
deferral contributions are made to such Investment Funds at the
time such loan payments are made;
(h) an amount equal to all unpaid loans to such Participant,
including accrued interest thereon, shall be deducted from the
amount otherwise distributable to any Participant or to a
Beneficiary of any such Participant pursuant to Article VII for
purposes of repayment of such loans;
(i) no more than one loan to any Participant can be made in
any calendar year and any Participant cannot have more than one
loan outstanding at any time;
(j) repayment of loans shall be by payroll deduction or other
approved method on a level amortization basis except that a
Participant may prepay the outstanding principal balance of his
loan at any time;
(k) the Committee will also notify the Participant that, to
the extent his loan is secured by the balance in his Employee
Deferral Account, no interest deduction is allowable;
(l) loans shall be made available to all Participants and
Beneficiaries on a reasonably equivalent basis;
(m) loans shall not be made available to Highly-Compensated
Employees in an amount greater than the amount made available to
other Employees;
(n) each loan shall be secured by the balance remaining in the
Participant's Accounts and/or by such other security usually and
customarily utilized in the banking industry as the Committee
may deem adequate;
(o) the Committee shall approve and deny loans on a
nondiscriminatory basis using criteria customary and usual in
the banking industry;
(p) no participant loan shall exceed the present value of the
Participant's Accounts;
(q) a Participant must obtain the consent of his or her
Spouse, if any, to use of his Accounts as security for the loan.
Spousal consent shall be obtained no earlier than the beginning
of the 90-day period that ends on the date on which the loan is
to be secured. The consent must be in writing, must acknowledge
the effect of the loan and must be witnessed by a Plan
representative or notary public. Such consent shall thereafter
be binding with respect to that loan. A new consent shall be
required if the Accounts are used for renegotiation, extension,
renewal or other revisions of the loan;
(r) in the event of default, foreclosure on the note and
attachment of security will not occur until a distributable
event occurs in the Plan;
(s) no loans will be made to any shareholder-employee or
owner-employee. For purposes of this requirement, a
shareholder-employee means an employee or officer of an electing
small business (Subchapter S) corporation who owns [or is
considered as owning within the meaning of Section 318(a)(1) of
the Code], on any day during the taxable year of such
corporation, more than 5% of the outstanding stock of the
corporation.
If a valid spousal consent has been obtained in accordance
with (q), then, notwithstanding any other provision of this
Plan, the portion of the Participant's Accounts used as a
security interest held by the Plan by reason of a loan
outstanding to the Participant shall be taken into account for
purposes of determining the amount of the Accounts payable at
the time of death or distribution, but only if the reduction is
used as repayment of the loan. If less than 100% of the
Participant's Accounts (determined without regard to the
preceding sentence) are payable to the Surviving Spouse, then
the Accounts shall be adjusted by first reducing the Accounts by
the amount of the security used as repayment of the loan and
then determining the benefit payable to the Surviving Spouse.
Notwithstanding the previous provisions of this Section 13.04,
effective September 1, 1993, a Participant who is subject to the
provisions of Section 16 of the Exchange Act and who
participates in any Investment Fund or Funds in which
investments are made in equity securities of the Employer may be
granted a loan pursuant to this Section 13.04 only if he makes
his request for a loan (pursuant to an irrevocable election) to
the Committee at least six months prior to the date the loan is
to be made from the Plan to such Participant. An application
for a loan by a Participant who is subject to the provisions of
Section 16 of the Exchange Act may only be approved by the
Committee if the Participant agrees that no Participant
deferrals, voluntary contributions, or rollover contributions or
Employer matching contributions shall be made by, or on behalf
of, the Participant into any Investment Fund or Funds in which
investments are made in equity securities of the Employer for a
period of six months following his receipt of a loan and that
for six months following the date the loan is made, no
Intra-Fund Acquisition Transfer shall be made. In addition, no
payments by such a Participant on any such loan shall be
credited to an Account in an Investment Fund in which
investments are made in equity securities of the Employer for a
period of six months following his receipt of the loan.
13.05. Inability to Receive Benefits
If the Committee receives evidence that (a) a person entitled
to receive any payment under the Plan is physically or mentally
incompetent to receive payment and to give a valid release
therefor; and (b) another person or an institution is then
maintaining or has custody of such person and no guardian,
committee or other representative of the estate of such person
has been duly appointed by a court of competent jurisdiction,
such payment may be made to such other person or institution
referred to in (b) above. The release to such other person or
institution shall be a valid and complete discharge for the
payment.
13.06. Lost Participants
If the Committee is unable, after reasonable and diligent
effort, to locate a Participant or Beneficiary who is entitled
to payment under the Plan, the payment due such person shall
become a Forfeiture; provided, however, that if the Participant
or Beneficiary later files a claim for his benefit, it shall be
reinstated. Notification by certified or registered mail to the
last known address of the Participant or Beneficiary shall be
deemed a reasonable and diligent effort to locate such person.
13.07. Limitation of Rights
Nothing in the Plan, expressed or implied, is intended or
shall be construed to confer upon or give to any person, firm or
association other than the Employer, the Participants and their
successors in interest any right, remedy or claim under or by
reason of this Plan.
13.08. Gender
Whenever used in this Plan, the masculine pronoun refers to
both men and women.
13.09. Invalid Provision
In case any provision of this Plan shall be held illegal or
invalid for any reason, said illegality or invalidity shall not
affect the remaining parts of this Plan; but this Plan shall be
construed and enforced as if said illegal and invalid
provision(s) had never been inserted herein.
13.10. One Plan
This Plan may be executed in any number of counterparts, each
of which shall be deemed an original; and said counterparts
shall constitute but one and the same instrument and may be
sufficiently evidenced by any one counterpart.
13.11. Governing Law
The Plan shall be governed by and construed in accordance with
the federal laws governing employee benefit plans qualified
under the Code and in accordance with the local laws of the
State of Ohio where such laws are not in conflict with the
aforementioned federal laws.
Executed effective January 1, 1989, unless otherwise stated
herein.
PEOPLES BANCORP INC.
By: ROBERT E. EVANS
Print Name: Robert E. Evans
Title: President and Chief Executive Officer
Date: August 19, 1993
EXHIBIT 10 (d)
PEOPLES BANCORP INC. RETIREMENT PLAN
As Amended and Restated
Effective January 1, 1989
PEOPLES BANCORP INC. RETIREMENT PLAN
Peoples Bancorp, Inc., a corporation organized under the laws of
the State of Ohio, herein referred to as Employer, does hereby
amend and restate and, as amended and restated, continue a
Pension Plan for the benefit of its Eligible Employees on the
terms and conditions described hereinafter.
ARTICLE 1
PREFACE
Section 1.1.
Effective Date.
Except as otherwise provided herein, the effective date of the
Plan as amended and restated herein is January 1, 1989.
Section 1.2.
Purpose of the Plan.
The purpose of the Plan is to provide a systematic program for
the retirement of the Eligible Employees of the Employer by
continuing the program under which the Employer makes regular
contributions to a Trust Fund, which contributions are accepted,
invested and disbursed by a Trustee or Trustees to provide
definitely determinable benefits for such Employees or their
Beneficiaries.
Section 1.3.
Legal Effect.
The terms and conditions of the Plan as restated herein shall
amend and supersede prospectively and in their entirety the
terms and conditions of the Prior Plan originally effective
January 1, 1982, and as amended and restated effective January
1, 1984, and all subsequent amendments thereto except as
otherwise expressly stated herein; notwithstanding, however, the
provisions of such Prior Plan shall continue to govern the
rights of all Employees who retired or otherwise ceased to work
for the Employer prior to the date of execution hereof, except
as is otherwise expressly stated herein.
Section 1.4.
Form of Plan.
The Plan shall be a single plan of a controlled group, as
defined in Code Sections 414(b), 414(c) and 414(m). Only
service and Compensation with the Employer by an Eligible
Employee shall be used to determine the amount of any benefit
under the Plan.
Section 1.5.
Governing Law.
This Plan shall be regulated, construed and administered under
the laws of the State of Ohio, except when preempted by federal
law.
Section 1.6.
Headings.
The headings and subheadings in this Plan have been inserted for
convenience and reference only and are to be ignored in any
construction of the provisions hereof.
Section 1.7.
Gender and Number.
The masculine gender shall be deemed to include the feminine,
the feminine gender shall be deemed to include the masculine,
and the singular shall include the plural unless otherwise
clearly required by the context.
ARTICLE 2
DEFINITIONS
The words and phrases defined and used hereinafter shall have
the following meaning, unless a different meaning is clearly
required by the context of the Plan.
Section 2.1.
Accrual Date shall mean the first day of the month coincident
with or next following the date a Participant is no longer
employed by the Employer.
Section 2.2.
Accrued Benefit of a Participant as of the Accrual Date, before
his Normal Retirement Age shall equal the product of (a) and (b)
where:
(a) is a fraction, not exceeding 1, the numerator
of which is the total number of his Years of Service as of such
Accrual Date and the denominator of which is the total number
of Years of Service he would have if he separated from service
at his Normal Retirement Age; and
(b) is the projected annual normal retirement
benefit, defined in Section 5.1, calculated to reflect the number
of Years of Service he would have if he separated from service
at his Normal Retirement Age and his Average Compensation as if he had
attained his Normal Retirement Age on the Accrual Date.
The minimum Accrued Benefit shall not be less than the Accrued
Benefit as of the date this Plan is executed under the
provisions of the Peoples Bancorp Inc. Retirement Plan and Trust
or the Peoples Banking and Trust Company Employees' Pension
Plan, as appropriate, except as otherwise provided by actions
taken in accordance with Internal Revenue Service Notice 88-131,
Notice 89-92, IRS Revenue Procedure 89-65, IRS Notice 91-38,
IRS Announcement 92-29, IRS Notice 92-36, or any other such IRS
guidance regarding the timing of the implementation of changes
made by the Tax Reform Act of 1986 affecting the Plan.
The Accrued Benefit of a Participant who has attained his Normal
Retirement Age shall be based on the benefits provided under
Section 5.4.
Section 2.3.
Act shall mean the Employee Retirement Income Security Act of
1974 as amended or as it may be amended from time to time.
Section 2.4.
Actuarial Equivalent shall mean equality in value of the
aggregate amounts expected to be received under different forms
of payment. Such equality in value shall be based on
assumptions as to the occurrence of future events. The future
events to be taken into account are mortality for Participants,
mortality for Beneficiaries, and an interest discount for the
time value of money. For this Plan, the actuarial assumptions
are as follows:
(a) Mortality assumption for payments to
Participants: UP Mortality Table projected to 1984, adjusted
for twenty percent (20%) female content.
(b) Mortality assumption for payments to
Beneficiaries and survivors: UP Mortality Table projected to
1984, adjusted for eighty percent (80%) female content.
(c) Interest assumption: Interest rate used as
of the first day of the current Plan Year by the Pension Benefit
Guaranty Corporation for purposes of valuing immediate or
deferred (as appropriate) annuities for terminating plans under
Act Section 4062. The interest rate in effect during the Plan Year
in which benefits are to commence shall be applied exclusively in
all determinations of actuarial equivalence.
The Actuarial Equivalent of the Accrued Benefit as of the date
this amendment and restatement is executed shall be the greater
of:
(a) the Actuarial Equivalent of the Accrued
Benefit as of such date under the terms of the Plan as in effect
on the day preceding the date this amendment and restatement
is executed, or
(b) the Actuarial Equivalent as determined under
the definition of Actuarial Equivalent as amended herein.
Section 2.5.
Actuary shall mean an enrolled actuary or firm of actuaries
which has on its staff an enrolled actuary selected by the
Committee to provide actuarial services for the Plan.
Section 2.6.
Age shall mean attained age at latest anniversary of birth.
Section 2.7.
Annuity Starting Date shall mean:
(a) the first day of the first period for which an
amount is payable as an annuity, or
(b) in the case of a benefit not payable in the
form of an annuity, the first day on which all events have occurred
which entitle the Participant to such benefit.
Section 2.8.
Average Compensation shall mean the average of the Participant's
annual Compensation paid during five consecutive Years of
Service out of the last ten Years of Service preceding the Plan
Year which contains the Participant's accrual date, such five
consecutive years chosen so as to produce the highest average.
If a Participant has less than five consecutive years of actual
Compensation, the average will be taken over his total Years of
Service during such period.
Section 2.9.
Beneficiary shall mean the person or persons or legal entity
designated as such by a Participant or Inactive Participant to
receive the benefits, if any, payable in the event of the
Participant's or Inactive Participant's death. A Beneficiary
may only be designated as appropriate, pursuant to Article 5 or
Article 7. When Article 5 or Article 7 allows the designation
of a Beneficiary, each Participant or Inactive Participant may
name a Beneficiary on a form provided by the Plan Administrator
and delivered to the Plan Administrator. Such designation may
include more than one person with one or more secondary or
contingent Beneficiaries and shall be subject to change upon
written request of such Participant or Inactive Participant in
the same manner as the original designation.
Section 2.10.
Board shall mean the Board of Directors of the Employer.
Section 2.11.
Break in Service shall mean the failure of an Employee to
complete more than 500 Hours of Service during a Plan Year.
Such Break in Service shall be effective as of the first day of
the Plan Year in which such event occurs. A Break in Service
shall not result solely from Disability or illness, an
authorized leave of absence, or military service.
Section 2.12.
Code shall mean the Internal Revenue Code of 1986, as amended or
as it may be amended from time to time.
Section 2.13.
Committee shall mean the Committee, as described in Article 9
hereof.
Section 2.14.
Compensation, except for purposes of Articles 8 and 14 herein,
shall mean remuneration paid by the Employer to an Employee for
services rendered as reported or reportable on Form W-2 for
federal income tax withholding purposes (or similar form
required for such purposes) including incentive pay, overtime
and bonuses, but excluding directors fees. Compensation shall
also include any employee deferrals under a Code Section 401(k)
plan maintained by the Employer and salary reduced under a Code
Section 125 arrangement maintained by the Employer.
Compensation in excess of $200,000 shall not be considered for
any Plan Year. The $200,000 limitation shall be adjusted for
cost-of-living increases as allowed by the Secretary of the
Treasury pursuant to Code Section 401(a)(17). In determining
the Compensation of a Participant for purposes of this
limitation, the family aggregation rules of Code Section
414(q)(6) shall apply, except that in applying such rules, the
term "family" shall include only the Spouse of the Participant
and any descendants of the Participant who have not attained Age
19 before the close of the Plan Year. The $200,000 limitation
shall be applied to a family aggregation unit on a pro rata
basis according to each such Participant's Compensation without
regard to such limitation.
Section 2.15.
Covered Compensation shall mean, with respect to a Participant,
the average of the taxable wage bases (rounded to the nearest
multiple of $600) in effect under Section 230 of the Social
Security Act for each year during the 35 year period ending with
the year in which the Participant attains his Social Security
Retirement Age. In determining a Participant's Covered
Compensation for a Plan Year, the taxable wage base for the
current Plan Year and any subsequent Plan Year shall be assumed
to be the same as the taxable wage base in effect as of the
first day of the Plan Year for which the determination is being
made.
Section 2.16.
Date of Employment shall mean the first date on which an
Employee completes an Hour of Service.
Section 2.17.
Date of Reemployment shall mean the first date on which an
Employee completes an Hour of Service following a Break in
Service. If an Employee incurs a Break in Service without
terminating employment, such date will be deemed to occur on the
first day of the first Plan Year following the year in which
such Break in Service occurs.
Section 2.18.
Disability shall mean the permanent and total inability of a
Participant, by reason of physical or mental infirmity or both,
to perform the work customarily assigned to him by the Employer.
The determination of the existence or nonexistence of Disability
shall be made by the Committee pursuant to a medical examination
by a medical doctor selected or approved by the Committee.
Section 2.19.
Early Retirement Age shall mean the first day of the month
coincident with or next following Age 50 and the completion of
10 Years of Service.
Section 2.20.
Early Retirement Date shall mean the date on or after his Early
Retirement Age on which the Participant elects, pursuant to
Section 5.2, to retire from employment and begin receipt of
early retirement benefits.
Section 2.21.
Eligible Employee shall mean any Employee who is not included in
a unit of Employees covered by an agreement which the Secretary
of Labor finds to be a collective bargaining agreement between
Employee representatives and the Employer. In no event shall a
"leased employee," as defined in Code Section 414(n)(2), be an
Eligible Employee.
Section 2.22.
Employee shall mean any person who is employed by the Employer.
Section 2.23.
Employer shall mean Peoples Bancorp, Inc. or any Related
Employer who, with the written consent of the Board of Directors
of Peoples Bancorp, Inc., agrees in writing to be a party hereto.
Section 2.24.
Entry Date shall mean the first day of each Plan Year.
Section 2.25.
Fund, Trust or Trust Fund shall mean the sum of the
contributions made by the Employer and held by the Trustee in a
trust created herein, increased by the profits and income
thereto and decreased by any losses and reasonable expenses
incurred in the administration of the trust and any payments
made therefrom under the Plan.
Section 2.26.
Hour of Service shall mean:
(a) Each hour for which an Employee is paid or
entitled to payment for the performance of duties for the Employer.
These hours shall be credited to the Employee for the computation
period in which the duties are performed, and
(b) Each hour for which an Employee is paid, or
entitled to payment, by the Employer on account of a period of time
during which no duties are performed (irrespective of whether the
employment relationship has terminated) due to vacation, holiday,
illness, incapacity (including disability), layoff, jury duty,
military duty or leave of absence.
Notwithstanding the preceding sentence:
(1) No more than 501 hours will be credited under
this paragraph to an Employee on account of any single continuous
period during which the Employee performs no duties (whether or not
such period occurs in a single computation period);
(2) An hour for which an Employee is directly or
indirectly paid, or entitled to payment, on account of a period during
which no duties are performed will not be credited to the Employee if
such payment is made or due under a plan maintained solely for the
purpose of complying with applicable workmen's compensation, or
unemployment compensation or disability insurance laws; and
(3) Hours will not be credited for a payment which
solely reimburses an Employee for medical or medically related expenses
incurred by the Employee.
(c) Each hour for which back pay, irrespective
of mitigation or damages, is either awarded or agreed to by the Employer.
The same hours shall not be credited both under paragraph (a) or
paragraph (b), as the case may be, and under this paragraph (c). These
hours shall be credited to the Employee for the computation period or
periods to which the award or agreement pertains rather than the
computation period in which the award, agreement or payment is made.
(d) Each hour for which an Employee is required to be
credited for military service under applicable law and regulations and
which is not otherwise credited under this Section.
(e) Hours under this Section shall be calculated and
credited pursuant to Section 2530.200b-2 of the Department of Labor
Regulations which is incorporated herein by reference.
(f) Solely for purposes of determining whether
a Break in Service for vesting and participation has occurred, an
Employee or former Employee who is absent from work for maternity or
paternity leave shall receive credit either for the Hours of Service, as
described in subsections (a) - (e) above, which would otherwise have been
credited to such Employee or former Employee but for such absence, or
in any case in which such Hours of Service cannot be determined, eight
Hours of Service per day of absence. The total number of Hours of
Service credited under this subsection (f) shall not exceed 501.
Hours of Service pursuant to this paragraph shall be credited in the
computation period during which the absence begins if doing so
would prevent a Participant from incurring a one-year Break in Service
in that computation period. In any other case, these hours shall be
credited in the following computation period. For purposes of this
paragraph, an absence from work for maternity or paternity leave means
an absence (1) by reason of pregnancy of the Employee or former Employee,
(2) by reason of the birth of a child of the Employee or former Employee,
(3) by reason of placement of a child with the Employee or former
Employee in connection with the adoption of such child by such Employee
or former Employee, or (4) for purposes of caring for such child for a
period beginning immediately following such birth or placement.
Notwithstanding the above, no credit shall be given for Hours of
Service pursuant to this subsection (f) unless the Employee or former
Employee furnishes sufficient information to the Plan Administrator or
the Committee to establish that the absence is due to maternity or
paternity leave and the number of days of such absence.
Section 2.27.
Inactive Participant shall mean a person who terminates employment
or otherwise ceases to be a Participant but who is entitled to receive an
immediate or a deferred vested benefit from the Plan.
Section 2.28.
Limitation Year shall mean the calendar year.
Section 2.29.
Normal Form of Benefit shall mean an annuity paid in equal monthly
installments on the first day of each calendar month in which the
Participant shall have lived the entire preceding calendar month.
Section 2.30.
Normal Retirement Age shall mean for Participants who entered the
Plan before the first day of the first Plan Year beginning after
December 31, 1987, the sixty-fifth birthday of the Participant.
For Participants who entered the Plan on or after the first day of
the first Plan Year beginning after December 31, 1987, it shall mean
the later of the sixty-fifth birthday of the Participant or the first
day of the Plan Year which includes the fifth anniversary of the
date the Participant commences participation in the Plan.
Section 2.31.
Normal Retirement Date shall mean the first day of the month coincident
with or next following the Normal Retirement Age.
Section 2.32.
Participant shall mean every Eligible Employee who has met the
requirements of Article 3 and who is not an Inactive Participant.
Section 2.33.
Plan shall mean the Peoples Bancorp Inc. Retirement Plan, as amended
and restated herein and as it may be subsequently amended.
Section 2.34.
Plan Administrator shall mean the Chairman of the Committee.
Section 2.35.
Plan Year shall mean the 12-month period ending on December 31.
Section 2.36.
Prior Plan shall mean the Peoples Bancorp Inc. Retirement Plan
and Trust and the Peoples Banking and Trust Company Employees'
Pension Plan.
Section 2.37.
Related Employer shall mean a corporation which is a member of a
controlled group of corporations, within the meaning of Sections
1563(a)(1), (a)(2) and (a)(3) of the Code, of which the Employer
is also a member. Related Employer shall also mean any other trade
or business, whether or not incorporated, which is under common
control with the Employer, within the meaning of Section 414(c) of
the Code, and/or all members of an affiliated service group within the
meaning of Section 414(m) of the Code. For purposes of Article
14, however, the phrase "more than 50 percent" shall be
substituted for the phrase "at least 80 percent" each place it
appears in Section 1563(a)(1) of the Code.
Section 2.38.
Social Security Retirement Age shall mean generally the Age at
which unreduced old-age insurance benefits will commence under
the Social Security Act as shown below.
DATE OF BIRTH SOCIAL SECURITY RETIREMENT AGE
Before January 1, 1938 65
After December 31, 1937 but
Before January 1, 1955 66
After December 31, 1954 67
Section 2.39. Spouse shall mean the Participant's
or Inactive Participant's spouse as determined under the laws of
the state or commonwealth in which the Participant or Inactive
Participant resides.
Section 2.40. Trustee shall mean the bank, trust
company, other financial institution or individual or
individuals holding and managing the Fund according to the terms
of Peoples Bancorp Inc. Retirement Plan Trust Agreement.
Section 2.41. Year of Service shall mean a Plan
Year during which an Employee has completed at least 1,000 Hours
of Service, subject to the following qualifications and
exceptions:
(a) Service performed prior to a Break in
Service shall be disregarded if such Break in
Service commenced prior to July 1, 1976.
(b) In the case of a nonvested Participant,
Years of Service before any period of consecutive one-year Breaks
in Service shall be disregarded if the number of consecutive one-year
Breaks in Service equals or exceeds the greater of five or the
aggregate number of Years of Service before such period.
Any Years of Service disregarded pursuant to the previous sentence
shall also be disregarded when applying the provisions of that sentence to
a subsequent period of Breaks in Service.
If an individual would have lost credit
for Years of Service under the rule of parity as stated in the
Prior Plan as of the end of the Plan Year beginning in 1984,
the rules of this paragraph shall not apply to that individual
with respect to Years of Service before the Plan Year
beginning in 1985. Credit for those prior years in such a case
is forever lost. If an individual would not have lost credit for
Years of Service under the rule of parity as stated in the Prior Plan
as of the end of the Plan Year beginning in 1984, the
rules of this paragraph shall apply to that individual with
respect to all Years of Service.
(c) Service after Normal Retirement Date shall
be credited, including such service before
January 1, 1988, for any Employee who has at least one Hour of
Service in any Plan Year beginning after
December 31, 1987, subject to the other provisions of this
Section.
(d) For purposes of vesting, Years of Service,
as determined above, with a Related
Employer for the period of time during which employers are
related shall be counted as service with
the Employer.
(e) Where the Employer maintains the plan of a
predecessor employer, as defined in Section
1.411(a)-5(b) of the Income Tax Regulations, Years of Service,
as determined above, with such predecessor
employer shall be treated as Years of Service with the
Employer for purposes of vesting.
(f) For purposes of vesting, an Employee who
was covered by the Peoples Banking & Trust
Company Employees' Pension Plan as of January 1, 1989 and who is
credited with at least 1,000 Hours of
Service in both the period beginning January 1, 1989 and
ending on December 31, 1989, and the period
beginning on July 1, 1988 and ending on
June 30, 1989 shall be credited with two Years of Service.
(g) For purposes of determining a
Participant's Accrued Benefit, with respect to those
Participants covered by the Peoples Banking & Trust
Company Employees' Pension Plan as of January 1, 1989, the
accrual computation period beginning July 1 shall be changed to the
12-consecutive-month period beginning on January 1. The period
from July 1, 1988 to January 1, 1989, shall be treated as a
partial accrual computation period. In order to receive pro rata credit
for purposes of benefit accrual for service in the partial accrual
computation period, such a Participant must be credited with 1,000 Hours
of Service.
(h) Any Employee who has at least one Hour of
Service in any Plan Year beginning after
December 31, 1987 and who was previously excluded from
participation because he was hired after
Age 60 shall receive retroactive service from their Date of
Employment, subject to the other provisions of
this Section.
ARTICLE 3
ELIGIBILITY AND PARTICIPATION
Section 3.1. Eligibility. An Eligible Employee
who has attained Age 20 1/2 and who has been an Employee for six
months shall become a Participant at the time specified in
Section 3.2. The Age 60 exclusion contained in the Prior Plan
is eliminated effective January 1, 1988.
Section 3.2. Participation. Any Eligible
Employee who has satisfied the requirements of Section 3.1 shall
become a Participant on the first Entry Date coincident with or
next following the date on which such requirements are met
unless such Employee separated from service and did not return
to employment before his Entry Date.
Once an Eligible Employee becomes a Participant he
shall remain a Participant until he terminates employment with
an Employer regardless of the number of Hours of Service he
completes in a Plan Year.
An Eligible Employee who terminates employment
before his Entry Date, after meeting the requirements of Section
3.1, and is rehired before his Entry Date shall become a
Participant on his Entry Date.
An Eligible Employee who terminates employment or
who incurs a Break in Service without terminating employment,
after meeting the requirements of Section 3.1, and is rehired or
avoids a Break in Service in a Plan Year shall become a
Participant on his Date of Reemployment.
Section 3.3. Transfer to or from Eligible Class
of Employees. In the event a Participant is no longer an
Eligible Employee and becomes ineligible to participate but has
not terminated employment or incurred a Break in Service, such
Employee will participate immediately upon again becoming an
Eligible Employee. If such a Participant terminates employment
or incurs a Break in Service, eligibility to participate will be
determined under the Break in Service rules of Section 3.2 above.
In the event an Employee who is not an Eligible
Employee becomes an Eligible Employee, such Eligible Employee
will participate immediately if such Eligible Employee has
satisfied the minimum age and service requirements and would
otherwise have previously become a Participant.
Notwithstanding, such Eligible Employee shall be subject to the
Break in Service rules of Section 3.2 above.
Section 3.4. Service with a Related Employer.
Service with a Related Employer not adopting this Plan shall be
considered service with the Employer when determining if an
Employee has completed the service requirement for eligibility.
A Participant who transfers employment to a
company which is a Related Employer not adopting this Plan shall
remain covered by the Plan, but such Inactive Participant shall
receive credit, for purposes of determining his Accrued Benefit,
for service only to the extent of his service while an Eligible
Employee of the Employer. For vesting purposes, such Inactive
Participant shall continue to accrue Years of Service hereunder.
If such Inactive Participant is transferred again to the
Employer as an Eligible Employee, he shall participate in the
Plan on his date of transfer. If such individual remains in the
employ of a Related Employer not adopting this Plan until his
termination of employment, his benefits shall be calculated
based on the provisions of Articles 5, 6 and 7.
Section 3.5. Service as a Leased Employee. Each
"leased employee" who performs services for the Employer or
Related Employer on a substantially full-time basis for a period
of at least one year shall be considered an Employee or an
employee of a Related Employer as appropriate for purposes of
determining if this Plan satisfies the minimum coverage
requirements of Code Section 410(b). An individual will be
considered to have performed services on a substantially
full-time basis if that individual is credited with the lesser
of 1,500 Hours of Service or 75% of the Hours of Service that
are customarily performed in the particular position by an
Employee or an employee of a Related Employer.
If a "leased employee" becomes an Eligible
Employee by being hired in a capacity other than as a "leased
employee," service in any Plan Year beginning in or after 1984,
while a "leased employee" shall be considered when determining
such Employee's Years of Service for vesting purposes.
ARTICLE 4
CONTRIBUTIONS
Section 4.1. Contributions by the Employer. The
Employer contemplates that the contributions to the Trust under
this Plan shall be made by the Employer, based upon the
recommendation of the Actuary, as recommended by the Committee.
All Employer contributions under this Plan are expressly
conditioned on their current deductibility under the Code.
Section 4.2. Gains from Terminations. Any gains
arising from the death of Participants or from forfeitures shall
not be utilized to increase the benefits to the remaining
Participants.
Section 4.3. Funding Requirements. The Employer
shall fund the Plan in a manner consistent with the provisions
of the Code, the Act, and such other laws and regulations as
shall be applicable, to the end that the Plan shall be funded on
a lawful and sound actuarial basis; but to the extent permitted
by governing law, the Employer shall be free to determine the
manner and means of making provision for funding the Plan.
Section 4.4. Contributions by Participants.
Contributions by Participants are neither required nor
permitted.
ARTICLE 5
RETIREMENT
Section 5.1. Normal Retirement. As of his Normal
Retirement Date, a Participant shall be eligible to retire and
to receive his normal retirement benefit. The annual normal
retirement benefit, subject to the provisions of Articles 8 and
14, shall be calculated as the Normal Form of Benefit as
follows:
(a) Forty percent (40%) of the
Participant's Average Compensation, plus
(b) Seventeen percent (17%) of the excess of
the Participant's Average Compensation over
his Covered Compensation;
(c) Such sum multiplied by the ratio of his
total Years of Service to 30, such ratio not to
exceed 1.
In no event shall the normal retirement benefit
for any Participant other than a highly compensated Employee (as
defined in Code Section 414(q)) be less than his minimum
projected benefit under the Prior Plan at Age 65 using his
Compensation as of January 1, 1993.
In no event shall the normal retirement benefit be
less than the highest early retirement benefit that would have
been payable to the Participant as of the beginning of any Plan
Year.
In no event shall the normal retirement benefit
under this Plan be less than the Accrued Benefit to the credit
of the Participant as of the date before this amendment and
restatement is executed.
Section 5.2. Early Retirement. A Participant who
has not attained his Normal Retirement Age, but has attained his
Early Retirement Age, may elect to retire as of the first day of
any calendar month following written notice to the Employer and
to the Committee. At the option of the Participant, subject to
Section 5.10, benefits may begin as of any calendar month
following his early retirement and preceding the date which
would have been his Normal Retirement Date had he remained an
Employee. Such early retirement benefit of a Participant shall
be calculated as the Normal Form of Benefit payable pursuant to
Section 5.1 hereof and shall equal his Accrued Benefit as of his
Early Retirement Date, reduced by one-fifteenth for each of the
first five years and one-thirtieth for each of the next ten
years by which his Early Retirement Date precedes his Normal
Retirement Date.
Section 5.3.
Disability Retirement. A Participant who has not attained his
Normal Retirement Age, and suffers Disability may retire as of
the first day of any calendar month next following the date the
Committee determines that he is disabled. Payment of his
Disability benefit may begin on the first day of any calendar
month prior to his Normal Retirement Age at the request of the
disabled Participant, subject to Section 5.8.
If the Participant is covered under a long-term
disability insurance plan maintained by the Employer and
receives disability payments thereunder, his benefits shall
begin on the first day of the month chosen by the Participant,
but in no event before the termination of the long-term
disability plan payments, subject to the provisions of Section
15.8.
The Disability retirement benefit shall equal his
Accrued Benefit as of the first day of the month following last
receipt of Compensation from the Employer reduced for each year
by which the starting date of the Disability retirement benefit
precedes his Normal Retirement Date in the same manner as
described in Section 5.2 and actuarially reduced for each
additional year before Age 50. The Disability retirement
benefit shall be payable under one of the methods of payment
specified in Section 5.6, subject to Section 5.7.
Section 5.4. Delayed Retirement. If a
Participant is in service following his Normal Retirement Date,
payment of his normal retirement benefit shall be deferred until
the first day of the calendar month coincident with or next
following his actual retirement, hereinafter called his Delayed
Retirement Date. In no event shall benefit payments be delayed
beyond the date specified in Article 15. Notwithstanding the
above, a Participant may elect to begin receiving payment on the
first day of any month following his Normal Retirement Date.
If a Participant is in service following his
Normal Retirement Date, his benefit shall continue to accrue
until his actual retirement date. In no event, however, shall a
Participant's benefit at actual retirement be less than the
Accrued Benefit at the Normal Retirement Date increased
actuarially to his actual date of retirement. For purposes of
this adjustment the assumptions shall be those specified in the
definition of Actuarial Equivalent except that when determining
the increase in value for the period between Normal Retirement
Date and Delayed Retirement Date, only the interest assumption
shall be used.
Section 5.5. Reemployment Following
Retirement. If a Participant begins to receive a periodic
benefit following early retirement and is subsequently
reemployed prior to attaining Normal Retirement Age, benefit
payments shall cease during the period of reemployment. If a
Participant begins to receive a benefit following Disability
retirement, recovers and resumes employment prior to attaining
his Normal Retirement Age, benefit payments shall cease. Upon
his subsequent retirement, his benefit accrued to that date
shall be based on the total of both periods of Years of Service
and shall reflect Compensation as if the period of employment
were contiguous to the prior period of employment. However, the
benefit paid to such Participant shall be adjusted by the
Actuarial Equivalent of any benefits previously paid. If a
Participant begins to receive a benefit following Normal
Retirement Age, early retirement or Disability and is
subsequently reemployed after attaining Normal Retirement Age he
shall be treated as a Participant eligible for delayed
retirement. The continuation or cessation of benefit payments
as well as the continuation of benefit accrual shall be
consistent with the provisions of Section 5.4.
If an individual receives a distribution from the
Plan which then represents the Actuarial Equivalent of the
present value of his full Accrued Benefit and is subsequently
reemployed or otherwise earns additional service under the Plan,
his Years of Service for purposes of determining his Accrued
Benefit shall include service prior to his termination on which
the earlier distribution was based. However, the benefit
subsequently paid to such Participant shall be adjusted by the
Actuarial Equivalent of the benefit previously paid.
Section 5.6. Methods of Payment. Each retiring
Participant shall be offered the optional methods of payment
listed below. Any benefits payable under such optional methods
of payment shall be the Actuarial Equivalent of the Normal Form
of Benefit and shall be subject to the distribution restrictions
of Article 15.
(a) Life Annuity: An annuity payable in equal
monthly installments during the
Participant's lifetime only, on the first day of each calendar
month in which the Participant has lived
the entire preceding month.
(b) Five Years Certain and Life Annuity: An
annuity payable in monthly installments on
the first day of each calendar month for 60 months certain and
thereafter on the first day of each
calendar month in which the Participant has lived the entire
preceding month.
(c) Ten Years Certain and Life
Annuity: An annuity payable in monthly installments on
the first day of each calendar month for 120 months
certain and thereafter on the first day of
each calendar month in which the Participant has lived the
entire preceding month.
(d) Joint and Full Survivor Annuity: An
annuity whereby a monthly installment shall be
paid to the Participant during his lifetime and thereafter in
the same monthly amount to the Beneficiary
during the Beneficiary's lifetime, on the first day of each
calendar month in which the Participant or
his Beneficiary has lived the entire preceding
month.
(e) Joint and One-Half Survivor Annuity: An
annuity, whereby a monthly installment
shall be paid to the Participant during his lifetime and
thereafter in one-half of such monthly
amount to the Beneficiary during the Beneficiary's lifetime, on
the first day of each calendar month in
which the Participant or his Beneficiary has lived the entire
preceding month.
(f) Joint and Three-Fourths Survivor Annuity:
An annuity, whereby a monthly installment
shall be paid to the Participant during his lifetime and
thereafter in threefourths of such monthly amount to the
Beneficiary during the Beneficiary's lifetime,
on the first day of each calendar month in which the
Participant or his Beneficiary has lived
the entire preceding month.
(g) Lump Sum: A single lump sum payment shall
be distributed. Such lump sum payment
shall be the Actuarial Equivalent of the vested Accrued Benefit
payable at the time of distribution as the
Normal Form of Benefit. The commencement of a lump
sum benefit shall be effective as of the later of the
effective date of the Participant's
retirement unless the Participant or Inactive Participant
specifically elects to waive the 30 day
advance notice requirement. Any such lump sum which is $200 or
more shall include the right of the
Participant to make a direct rollover under Code Section
401(a)(31), as provided in Article 16.
Section 5.7. Election of Option. The provisions
of Sections 5.7, 5.8 and 5.9 shall apply to any Participant or
Inactive Participant who is credited with at least one Hour of
Service on or after August 23, 1984. A payment option as set
forth in Section 5.6 shall be elected, changed or revoked by the
Participant, his guardian, or attorney-in-fact, by written
notice filed with the Committee during the election period
specified below; provided, however: (a) A
married Participant shall be deemed to have elected a joint and
one-half survivor annuity with his Spouse
as his Beneficiary unless he makes an affirmative election not
to take such an annuity.
(b) If the Beneficiary under a joint and
survivor option dies before the commencement of
payments, the election shall be inoperative.
(c) If a timely election shall not have been
made, payment shall be made under the
Normal Form of Benefit to an unmarried Participant, unless
otherwise provided herein.
Notwithstanding the above, any election by a
Participant not to provide a joint and one-half (or greater)
survivor annuity with his Spouse as the named Beneficiary shall
not take effect unless the Participant's Spouse consents in
writing to such election and the consent acknowledges the effect
of such election. The Spouse's consent must be witnessed by a
Plan representative or a notary public or it must be established
to the satisfaction of a Plan representative that the consent
cannot be obtained because there is no Spouse, because the
Spouse cannot be located or because of such other circumstances
as the Secretary of the Treasury may prescribe by regulations.
A Spouses's consent under this Section must generally recognize
the specific non-spouse Beneficiary, if applicable, and the
specific method of payment. A Spouse may elect to irrevocably
release all rights to a qualified joint and survivor annuity and
may expressly permit that subsequent elections within the
election period be made by the Participant without any
requirement of further consent by the Spouse. A Spouse has the
right to restrict consent to a specific Beneficiary and/or
method of payment.
For purposes of this Section a former Spouse will
be treated as the Spouse to the extent provided under a
qualified domestic relations order as described in Code Section
414(p).
Section 5.8. Election Period. A Participant may
elect the method of benefit payment during the 90-day period
ending on his Annuity Starting Date. Any election made during
the election period shall be revocable, and another such
election may be made at any time prior to the close of the
election period, at which time the last such election which
shall have been made shall be irrevocable. Any such election,
and any revocation thereof, shall be made by notice in writing
to the Committee in a form which is satisfactory to the
Committee.
In the case of a Participant who elects to begin
receiving retirement benefit payments on a date such that there
is not sufficient time to provide notice under this Section at
least 30 days before his Annuity Starting Date, interim payments
under the method of payment elected shall be made unless a lump
sum payment is elected, but the initial election shall be
revocable by the Participant or his Spouse within 30 days of the
date the notice is given.
Section 5.9. Information to be Given
Participants. Consistent with regulations prescribed by the
Secretary of the Treasury and no less than 30 days and no more
than 90 days before his Annuity Starting Date, a written
statement shall be mailed or personally delivered to him setting
forth a general description of the joint and one-half survivor
annuity, as well as the circumstances under which it shall be
provided unless the Participant shall elect another form of
payment, the availability of such election, and a general
explanation of the financial effect of such election. Such
written statement shall also include a statement of the rights
of the Participant's Spouse as provided in Section 5.7. It
shall further notify the Participant that he may make a written
request at any time during the election period specified above,
for an additional written statement of the terms and conditions
of the joint and one-half survivor annuity and the financial
effect of payment in some method other than the joint and
one-half survivor annuity.
Section 5.10. Consent Requirement.
Notwithstanding anything in this Plan to the contrary, no
distribution shall commence to a Participant before his Normal
Retirement Age without the written consent of the Participant or
Inactive Participant and his Spouse, if any (except in the case
of a qualified joint and survivor annuity), unless the Actuarial
Equivalent present value of the Participant's vested Accrued
Benefit does not exceed $3,500.
Section 5.11. Payment of Small Benefits. If the
Actuarial Equivalent present value of the Participant's vested
Accrued Benefit does not exceed $3,500, such amount shall be
distributed to the Participant at the time at which such
retirement benefits are to commence, as a lump sum without his
consent, provided such distribution represents the Participant's
entire vested interest in the Plan. Such distribution shall be
made within the time period specified in Article 15. Any such
lump sum which is $200 or more shall include the right of the
Participant to make a direct rollover under Code Section
401(a)(31), as provided in Article 16.
Section 5.12. Transition Rule. (a)
Any living Participant not receiving benefits on August 23,
1984, who was credited with at least one
Hour of Service under this Plan or a predecessor plan on or
after September 2, 1974, and who is not
otherwise credited with any service in a Plan Year
beginning on or after January 1, 1976, must be given the
opportunity to have his or her benefits
paid in accordance with subsection (c) of this Section 5.12.
(b) The opportunity to elect (as described in
subsection (a) above) must be afforded to the
appropriate Participants during the period commencing on August
23, 1984, and ending on the date benefits
would otherwise commence to said Participants.
(c) Any Participant who has elected, pursuant
to subsection (a) of this Section, shall have
his or her benefits distributed in accordance with all of the
following requirements if benefits would
have been payable in the form of a life annuity:
(1) Automatic joint and
survivor annuity. If benefits in the form of a life annuity
become payable to a married Inactive
Participant who:
(A) begins to
receive payments under the Plan on or after Normal
Retirement Age; or
(B) begins to receive payments on or after the Qualified Early
Retirement Age; or
(C) separates from service on or after attaining Normal
Retirement Age (or the
Qualified Early Retirement Age) and after satisfying the
eligibility requirements for the
payment of benefits under the plan and
thereafter dies before beginning to receive such
benefits;
then such benefits will be
received under this Plan in the form of a qualified
joint and survivor annuity, unless the
Participant has elected otherwise during
the election period. The election period must be at least
a 90-day period and must not end
more than 90 days before the commencement of benefits. Any
election hereunder will be in writing
and may be changed by the Participant at
any time.
(2) For purposes of this
Section 5.12 only.
(A) Qualified Early Retirement Age is the latest of:
1)the earliest date,
under the Plan, on which the Participant may
elect to receive retirement benefits,
2)the first day of the
120th month beginning before the
Participant reaches Normal Retirement Age, or
3)the date the
Participant begins participation.
(B)Qualified joint and survivor annuity is an annuity for the
life of the Participant
with a one-half (or greater, if applicable) survivor annuity
for the life of his Spouse as
described in Section 5.6.
ARTICLE 6
VESTING
Section 6.1. General. The Accrued Benefit of
each Participant, subject to the provisions of Article 8, shall be
fully vested in him (that is, not subject to forfeiture) upon
the first to occur of the following dates:
(a) Attainment of his Normal Retirement Age
(whether or not the Participant actually retires),
(b) Date on which he first becomes
eligible to elect early retirement (whether or not he actually elects
such early retirement),
(c) Date on which he first qualifies for Disability
retirement, or
(d) Date of completion of five or more Years
of Service.
Section 6.2. Payments Following Termination of
Service.
(a) If a Participant shall terminate
employment for any reason other than normal
retirement, Disability retirement, early retirement or death and
is not later reemployed, payment of his
vested Accrued Benefit, as determined pursuant to this
Article, shall be deferred until he is eligible for
and elects to receive an early retirement
benefit under the Plan or his Normal Retirement Date, whichever
is earlier. On that date, if he is then
living, he shall receive his vested Accrued Benefit
payable to or with respect to him in the same manner as
if he were then a Participant entitled to
an early or Normal Retirement Benefit under the Plan.
(b) If the Actuarial Equivalent present value
of the Participant's vested Accrued Benefit
does not exceed $3,500, such amount shall be distributed as a
lump sum without the Participant's consent,
provided such distribution represents the Participant's entire
vested interest in the Plan.
If the Actuarial Equivalent present value
of the Participant's vested Accrued Benefit is
greater than $3,500, the Participant may request to receive
such amount as a lump sum. In lieu of such
lump sum, a married Participant shall have the right to elect an
immediate joint and one-half survivor
annuity as described in Section 5.6, subject to
the provisions of Section 5.7. An unmarried Participant
shall have the right to elect an immediate
life annuity, in lieu of such lump sum. Such benefit shall be
reduced in the same manner as early
retirement benefits in Section 5.2 and actuarially reduced
for each additional year before he would have
attained his Early Retirement Age.
Any lump sum distribution under this
subsection (b) shall be made as soon as
administratively feasible following the Plan Year in which such
termination occurs. Any such lump sum
which is $200 or more shall include the right of the Participant
to make a direct rollover under Code
Section 401(a)(31), as provided in Article 16.
(c) If an individual receives a
distribution from the Plan which then represents the
Actuarial Equivalent of the present value of his full
Accrued Benefit and is subsequently
reemployed or otherwise earns additional service under the Plan,
his Years of Service for purposes of
determining his Accrued Benefit shall include service
prior to his termination on which the earlier
distribution was based. However, the
benefit subsequently paid to such Participant shall be adjusted
by the Actuarial Equivalent of the benefit
previously paid.
Section 6.3. Rights of Employees. The adoption
of the Plan shall not be construed as conferring any legal or
other rights upon any Employee or any persons for continuation
of employment, nor shall it interfere with the right of the
Employer to discharge any Employee or to deal with him without
regard to the effect thereof under the Plan.
Section 6.4. Deemed Distribution. Any individual
whose employment with the Employer, or a Related Employer, has
terminated prior to that individual obtaining any nonforfeitable
Accrued Benefit under the Plan shall be treated as having been
cashed-out of the Plan on his termination date, and his status
as a Participant in the Plan shall cease as of that date,
subject to his right to again commence participation, as
otherwise provided by the Plan.
ARTICLE 7
DEATH
Section 7.1. General. Except as otherwise
provided in Article 5 and in this Article 7, no death benefit
shall be payable under the Plan.
Section 7.2. Death Prior to the Annuity Starting
Date. If a vested married Participant or vested married
Inactive Participant dies prior to his Annuity Starting Date,
his surviving Spouse, if any, shall be entitled to an annuity
equal to the following amount.
In the case of a married Participant who dies on
or before his earliest retirement date, the survivor annuity
shall be computed as if the Participant had separated from
service on the date of his death, survived to the earliest
retirement date under the Plan, had commenced receiving payment
of a joint and one-half survivor annuity as provided in Section
5.6, then died on the day after his earliest retirement date.
In the case of a married Inactive Participant who
dies on or before his earliest retirement date, the survivor
annuity shall be computed in the same manner as for an active
Participant, except that the date he separated from service
instead of the date of his death shall be used.
In the case of a married Participant or a married
Inactive Participant who dies after his earliest retirement
date, such survivor annuity shall be computed as if such
Participant had begun receiving a joint and one-half survivor
annuity on the day before his death.
Section 7.3. Payment of Small Benefits.
Notwithstanding the above, if the lump sum Actuarial Equivalent
of the benefit described in Section 7.2 is $3,500 or less, then
payment shall be made to the Spouse in a lump sum.
Section 7.4. Commencement of and Period for
Payment of Death Benefits. The Spouse shall elect a benefit
commencement date which falls within the period beginning on the
date the Participant or Inactive Participant would have attained
his earliest retirement date and ending on the date on which the
deceased Participant or Inactive Participant would have attained
Age 70 1/2.
If the Participant's or Inactive
Participant's Spouse, if any, does not survive, no death benefit
will be paid.
Section 7.5. Death Following the Annuity Starting
Date. If a Participant or Inactive Participant dies after the
Annuity Starting date, payments (if any are appropriate) shall
be made in accordance with the method of payment elected by the
Participant or Inactive Participant pursuant to Article 5, and
shall in all events be payable at least as rapidly as under the
method of payment in effect prior to the Participant's or
Inactive Participant's death.
Section 7.6. Qualified Domestic Relations Order.
For purposes of this Article 7, a former Spouse shall be treated
as the Spouse to the extent provided under a qualified domestic
relations order as described in Code Section 414(p).
Section 7.7. Transition Rule. Any living married
Inactive Participant not receiving benefits on August 23, 1984,
who would otherwise not receive the benefits prescribed by
Section 7.2 shall have Section 7.2 apply to him if he is
credited with at least one Hour of Service under this Plan or a
predecessor plan in any Plan Year beginning on or after January
1, 1976, and if he had at least ten Years of Service for vesting
and had at least a partially vested interest in the Plan at the
time he separated from service.
Section 7.8. Death After Election of Joint and
Survivor Annuity. If a Participant or Inactive Participant who
had made a valid election under Section 5.7 of a qualified joint
and survivor annuity with a survivorship portion payable to his
Spouse greater than 50% dies before his Annuity Starting Date,
the survivor annuity otherwise payable under this Article shall
not be less than the monthly amount the Spouse would have
received under the method of payment elected had the Participant
or Inactive Participant died on the day after his Annuity
Starting Date.
ARTICLE 8
TOP-HEAVY PLAN PROVISIONS
Section 8.1. Determination Date. If, as of the
Determination Date, the Plan is a Top-Heavy Plan, as defined in
Section 8.3, the provisions of this Article 8 shall apply.
The Determination Date with respect to any Plan
Year shall be the last day of the preceding Plan Year.
Section 8.2. Valuation Date. The Valuation Date
is the date on which a Participant's Accrued Benefit is
determined for purposes of determining if this Plan is a
Top-Heavy Plan.
Except as provided below, the Valuation Date shall
be the most recent date falling within the 12-month period
ending on the Determination Date, on which a computation was
made for purposes of computing plan costs for minimum funding
purposes.
In the first Plan Year the Accrued Benefit for a
Participant shall be determined either (a) as if that
Participant terminated service as of the Determination Date or
(b) as if that Participant terminated service as of the
Valuation Date, taking into account the estimated Accrued
Benefit as of the Determination Date.
For the second Plan Year, the Accrued Benefit for
a Participant must not be less than his Accrued Benefit taken
into account for the first Plan Year unless the difference is
attributable to using an estimate of the Accrued Benefit as of
the Determination Date for the first Plan Year and using the
actual Accrued Benefit as of the Determination Date for the
second Plan Year.
For any Plan Year after the second Plan Year the
Accrued Benefit for a Participant must be determined as if the
Employee terminated service as of the Valuation Date.
Section 8.3. Top-Heavy Plan. (a)
The Plan shall be considered a Top-Heavy Plan, if, as of the
Determination Date, either:
(1)the
aggregate of the present value of the Accrued Benefits for Key
Employees under the Plan exceeds
60% of the sum of the present value of the Accrued
Benefits of all Employees under the Plan, or
(2)the Plan is part of a
Top-Heavy Group, as defined in Section 8.5.
Notwithstanding anything in this
subsection (a), if this Plan is part of an aggregation
group, as defined in Section 8.5, that is found not to
be Top-Heavy, then this Plan shall not be a
Top-Heavy Plan.
(b) The present value of Accrued Benefits for
purposes of this Section shall be determined
according to the following actuarial assumptions:
Annual effective interest
rate of 5%
Mortality:PBGC I for males
PBGC II for females
For purposes of this Section the actuarial
assumptions used for all plans within the Top-Heavy Group must
be the same.
(c) For purposes of determining whether the
Top-Heavy rules apply for any Plan Year:
(1)Rollover contributions
initiated by an Employee and accepted by this Plan
after December 31, 1983, shall not be recognized
with respect to this Plan if the
rollover contribution came from a plan not maintained by the
Employer or Related Employer.
(2)Any Accrued Benefit for
an Employee who is not currently a Key Employee,
but at one time was a Key Employee, shall not be
recognized for the Plan Year
ending on the Determination Date.
(3)Except as provided in (4)
below, the Accrued Benefit for an Employee shall
include aggregate distributions made with respect
to such Employee under the Plan
during the five-year period ending on the Determination Date,
except for the distributions made
to former Key Employees excluded above, and
distributions rolled over to a plan maintained by the
Employer or Related Employer.
(4)Effective for Plan Years
beginning after December 31, 1984, if an individual
has not performed any service for the Employer
at any time during the fiveyear period ending on the
Determination Date, any Accrued Benefit for such
individual shall not be taken into account.
(5)The Accrued Benefit shall
include any non-proportional subsidies but shall
exclude proportional subsidies.
(d) Notwithstanding, when two or
more plans constitute an aggregation group, the present
value of the accrued benefits shall be determined
separately for each plan as of each plan's
Determination Date and then aggregated for each plan as of the
Determination Date for such plans that fall
within the same calendar year.
Section 8.4. Key Employee shall mean any Employee
or former Employee who, at any time during the Plan Year or any
of the four preceding Plan Years, is: (a) an
officer of the Employer having an annual Compensation greater
than 50% of the defined benefit dollar
limitation under Section 415(b)(1)(A) of the Code (as it may be
increased by the Secretary of the Treasury
for any applicable cost of living increases);
however, the maximum number of officers considered Key
Employees may not exceed (i) three if there
are less than 30 Employees, (ii) ten percent of all Employees
if there are between 30 and 500 Employees, or
(iii) 50 if there are more than 500
Employees. Officers shall include only those administrative
executives who regularly and continuously
serve as such. Title alone shall not be determinative of
officer status;
(b) one of the ten Employees earning an annual
Compensation which exceeds the maximum
defined contribution annual additions dollar limit under Code
Section 415 and owning (or considered as
owning within the meaning of Code Section 318) more
than both 1/2 percent interest and the largest interests
in the Employer;
(c) a five-percent owner of the Employer,
meaning if the employer is a Corporation, any
person who owns (or is considered as owning within the meaning
of Section 318) more than five percent of
the outstanding stock of the Employer or stock possessing
more than five percent of the total combined voting
power of all stock of the corporation, or
if the employer is not a corporation, any person who owns more
than five percent of the capital or profits
interest in the Employer; or
(d) a one-percent owner of the Employer having
an annual Compensation from the Employer of
more than $150,000, meaning if the employer is a corporation,
any person who owns (or is considered as
owning within the meaning of Section 318)
more than one percent of the outstanding stock of the Employer
or stock possessing more than one percent
of the total combined voting power of all stock of the
corporation, or if the Employer is not a corporation,
any person who owns more than one percent
of the capital or profits interest in the Employer.
For purposes of this Section 8.4, Employee shall
mean any Employee, as defined in Article 2, of the Employer, or
any employee of a Related Employer if the Plan is part of a
Top-Heavy Group with the plan of a Related Employer. Employee
and Key Employee shall include any beneficiary of an Employee or
a Key Employee, and former Key Employee shall include any
beneficiary of a former Key Employee.
For purposes of subsections (b), (c),
and (d) above, constructive ownership rules of Code Section 318
shall be applied by substituting "5 percent" for "50 percent" in
Code Section 318(a)(2).
For purposes of determining one percent and five
percent ownership, the aggregation rules of Code Section 414(b),
(c), and (m) shall not apply.
Notwithstanding anything above, the criteria used
in the determination of Key Employees shall be consistent with
Code Section 416, which is incorporated herein by reference.
Non-Key Employee shall mean any Employee who is
neither a Key Employee nor a former Key Employee.
Section 8.5. Top-Heavy Group. (a)
Top-Heavy Group shall mean an aggregation group where the sum,
as of the Determination Date, of (1) and
(2) exceeds 60% of the same amount determined for
all Employees, under all plans included in the group, and
(1)is the present value of
the cumulative accrued benefits for Key Employees
under any defined benefit plan included in the
group, and
(2)is the sum of the account
balances of Key Employees under any defined
contribution plan included in the group.
(b) The aggregation group must include:
(1)any plan of the Employer
or Related Employer in which a Key Employee is a
participant, and
(2)any plan on which a plan
covering a Key Employee depends for qualification
under the requirements of Code Section 401(a)(4)
or 410.
(c) The aggregation group may also include, at
the election of the Employer, any plan not
required to be included in an aggregation group if such group
would continue to meet the qualification
requirements of Code Sections 401(a)(4) and 410. If such an
aggregation group is found not to be Top-Heavy,
then no plan shall be considered Top-Heavy.
If the aggregation group is found to be Top-Heavy, then all
plans in the group, except the plan which
was not required to be included, would be considered
Top-Heavy Plans.
(d) All plans maintained by the Employer
(including plans that have terminated) during
the 5-year period ending on a Determination Date must be
considered in determining the Top-Heavy
Group as of that Determination Date.
Section 8.6. Minimum Benefits for
Top-Heavy Plans. If the Plan is or becomes a Top-Heavy Plan,
then, notwithstanding the provisions of Section 2.2, the minimum
accrued benefit expressed as a single life annuity beginning at
Normal Retirement Age for each Non-Key Employee who is a
Participant shall be the lesser of: (a) two
percent of his Top-Heavy Average Compensation times Top-Heavy
Years of Service, or
(b) 20% of his Top-Heavy Average Compensation.
If the form of benefit is other than a single life
annuity, the minimum benefit must be an amount that is the
Actuarial Equivalent of the above minimum benefit. If the
benefit commences at a date other than at Normal Retirement Age,
the Participant will receive an amount that is at least the
Actuarial Equivalent of the single life annuity benefit
commencing at Normal Retirement Age.
Each Non-Key Employee who is a Participant shall
receive this minimum benefit regardless of the Non-Key
Employee's level of Compensation and regardless of whether the
Non-Key Employee is employed on a specified date.
Section 8.7. Top-Heavy Group Minimum Benefits.
In the case of a Top-Heavy Group consisting of both defined
benefit and defined contribution plans, the required minimum
accrued benefit or Employer contribution for each Top-Heavy Year
of Service for Employees participating in each type of Plan
shall be satisfied by the minimum accrued benefit under this
Plan.
The required minimum accrued benefit or Employer
contribution for each Top-Heavy Year of Service for Employees
who do not participate in this Plan but who do participate in
another plan of the Top-Heavy Group shall be satisfied by
providing the minimum accrued benefit or contribution under that
plan.
Section 8.8. Compensation and Top-Heavy Average
Compensation. For purposes of this Article 8, Compensation
shall mean compensation as defined in Section 414(q)(7) of the
Code. Top-Heavy Average Compensation shall mean the average
Compensation paid during the consecutive Top-Heavy Years of
Service, not to exceed five years, which produces the highest
average Compensation. In determining the Top-Heavy Average
Compensation, years during which the Employee did not earn a
Year of Service shall be disregarded.
Section 8.9. Years of Service.
Top-Heavy Years of Service shall mean all Years of Service,
excluding any Year of Service after which the Plan was not a
Top-Heavy Plan for the Plan Year ending during such Year of
Service and further excluding any Year of Service completed in a
Plan Year beginning before January 1, 1984.
Section 8.10. No Duplication of Minimum Benefit.
If the Employer maintains another qualified plan which provides
a minimum benefit or contribution, then the minimum benefit or
contribution provided under this Plan shall not, when combined
with the benefit or contribution provided by the other plan,
exceed the amount required by Section 416(c) of the Code.
Section 8.11. Minimum Vesting Requirements. If
the Plan is or becomes a Top-Heavy Plan, as defined in Section
8.3, then, notwithstanding the provisions of Section 6.1, a
Participant shall be 100% vested in his Accrued Benefit after
three Years of Service.
Years of Service for the purposes of vesting in a
Top-Heavy Plan shall include all Years of Service, including
years prior to January 1, 1984, and years during which the Plan
is not considered to be a Top-Heavy Plan. Vesting pursuant to
this Section 8.11 shall apply to each Participant's entire
Accrued Benefit. However, when the Plan becomes a Top-Heavy
Plan, the Accrued Benefit of any Employee who does not complete
at least one Hour of Service after the Plan becomes Top-Heavy is
not required to be subject to the minimum vesting schedule for
Top-Heavy Plans.
When the Plan ceases to be a Top-Heavy Plan, the
vesting schedule shall not revert to the schedule defined in
Section 6.1. Section
8.12. Adjustments in Section 415 Limits for Top-Heavy Plans.
If this Plan is a TopHeavy Plan or if the Plan and one or more
other plans maintained by the Employer or Related Employer in
the aggregate are or become a Top-Heavy Group, then the defined
benefit plan fraction, as defined in Section 14.8, shall be
applied by substituting 1.0 for 1.25, and the defined
contribution plan fraction as defined in Section 14.8 shall be
applied by substituting 1.0 for 1.25.
The above paragraph shall not apply if (a) and (b)
below are satisfied:
(a) In the case of a Top-Heavy Group
consisting of both defined contribution and defined
benefit plans, a minimum benefit shall be provided for
each Non-Key Employee who participates in
defined benefit plans equal to the lesser of three percent (3%)
of TopHeavy Average Compensation as defined in Section 8.8, per
Top-Heavy Year of Service after January 1,
1984, or thirty percent (30%) of Top-Heavy Average
Compensation, as defined in Section 8.8.
Notwithstanding, a minimum contribution of
four percent (4%) of Top-Heavy Average
Compensation shall be provided for each Non-Key Employee covered
only by a defined contribution plan in the
Top-Heavy Group.
(b) The present value of the cumulative
accrued benefits of all Key Employees does not
exceed ninety percent (90%) of the present value of the
cumulative accrued benefits of all
Employees participating in this Plan or participating in this
Plan and any other plans included in the
Top-Heavy Group, excluding former Key Employees.
Section 8.13. Transition Fraction. If this Plan
is a Top-Heavy Plan to which the above Section 8.12 applies,
then $41,500 shall be substituted for $51,875 in the Transition
Fraction defined in Article 14.
ARTICLE 9
ADMINISTRATION BY COMMITTEE Section
9.1. The Committee shall consist of not less than three nor
more than five individuals who shall be appointed by the Board
to serve at the pleasure of the Board. Any member of the
Committee may resign, and his successor, if any, shall be
appointed by the Board. The Committee shall be responsible for
the general administration and interpretation of the Plan and
for carrying out its provisions, except to the extent all or any
of such obligations are specifically imposed on the Trustee or
the Board. The Committee shall constitute a named fiduciary
under the Plan. Section 9.2. The members of the
Committee shall elect a Chairman and may elect an acting
Chairman. They shall also elect a Secretary and may elect an
acting Secretary, either one of whom may be, but need not be,
members of the Committee. The Committee may appoint from its
membership such subcommittees with such powers as the Committee
shall determine and may authorize one or more of its members, or
any agent, to execute or deliver any instruments or to make any
payment on behalf of the Committee.
Section 9.3. The Committee shall hold such
meetings upon such notice at such places and at such intervals
as it may from time to time determine. Notice of meetings shall
not be required if notice is waived in writing by all of the
members of the Committee or if all such members are present at
the meeting.
Section 9.4. A majority of the members of the
Committee shall constitute a quorum for the transaction of
business. All resolutions or other actions taken by the
Committee at any meeting shall be by vote of a majority of those
present and entitled to vote at any such meeting. Resolutions
may be adopted or other action taken without a meeting only upon
written consent thereto signed by all of the members of the
Committee.
Section 9.5. The Committee shall maintain full
and complete records of its deliberations and decisions. Its
records shall contain all relevant data pertaining to individual
Participants and their rights under the Plan and in the Fund.
Section 9.6. Subject to the
limitations of the Plan and of the Act, the Committee may from
time to time establish rules or by-laws for the administration
of the Plan and the transaction of its business.
Section 9.7. No individual member of the
Committee shall have any right to vote or decide upon any matter
relating solely to himself or to any of his rights or benefits
under the Plan. Such member, however, may sign any unanimous
written consent to resolutions adopted or other action taken
without a meeting.
Section 9.8. The Committee may correct errors
and, insofar as practicable, may adjust any benefit or credit or
payment accordingly.
Section 9.9. Subject to the claims procedure set
forth in Article 11, the Committee shall have the duty and
authority to interpret and construe the provisions of the Plan
and to decide any dispute which may arise regarding the rights
of Participants thereunder. Such determinations shall apply
uniformly to all persons similarly situated and shall be binding
and conclusive upon all interested persons.
Section 9.10. The Committee may, at its option,
instruct the Trustee to purchase annuity contracts from a legal
reserve life insurance company to provide any benefits due from
the Plan. Any such annuity contracts shall be nontransferable
and nonforfeitable.
Section 9.11. The Committee may engage an
actuary, attorney, accountant or any other technical advisor to
perform such other duties as shall be required regarding the
operation of the Plan and may employ such clerical and related
personnel as the Committee shall deem necessary or desirable in
carrying out the provisions of the Plan. Subject to the
provisions of the Act, the Committee may determine and recommend
annually to the Board the amount of contribution to be made to
the Fund for the year.
Section 9.12. No fee or compensation shall be
paid to any member of the Committee for his services as such.
Section 9.13. The Committee shall be
entitled to reimbursement out of the Trust Fund for reasonable
expenses properly and actually incurred in the performance of
its duties in the administration of the Plan.
ARTICLE 10
ALLOCATION OF RESPONSIBILITIES AMONG NAMED
FIDUCIARIES, MANAGEMENT OF FUNDS
AND AMENDMENT OR TERMINATION OF PLAN
Section 10.1. The responsibilities allocated to
the named fiduciaries are as follows: (a)
Board: (1) to amend the Plan,
(2)to appoint and remove members of the
Committee, (3)to appoint and
remove Trustees under the Plan,
(4)to determine the amount to be contributed to the Plan each
year by the Employer, and
(5)to terminate the Plan.
(b) Committee:
(1)to interpret the
provisions of the Plan and to determine the rights of the
Participants under the Plan including eligibility for participation
or benefits, except to the extent otherwise provided in Article 11
relating to the claims procedure,
(2)to administer the Plan in
accordance with its terms, except to the extent powers to administer
the Plan are specifically delegated to another named
fiduciary or other person or persons as provided in the Plan,
(3)to calculate the service
and to account for the Accrued Benefits of Participants
and to maintain service and employment records, and
(4)to direct the Trustees in
the distribution of Trust assets and benefit payments.
(c) Plan Administrator:
(1)to file such reports as
may be required to the United States Department of Labor, the
Internal Revenue Service, the Pension Benefit Guaranty
Corporation and any other government agencies for which reports may be
required to be submitted from time to time,
(2)to comply with
requirements of law for disclosure of Plan provisions and
other information relating to the Plan, to Participants and other
interested parties,
(3)to administer the claims
procedure, as provided in Article 11,
(4)to direct the Trustee to
withhold from distributions made pursuant to this Plan those amounts
required by law and further to direct the Trustee to make any
reports to Participants and to any others as may be required by
the Internal Revenue Code or other controlling law, rules or
regulations, and
(5)to establish and execute
the funding policy of the Plan.
(d) Trustees:
(1)to invest and reinvest
Trust assets,
(2)to make benefit payments
to Plan Participants as directed by the Committee,
(3)to render annual or other
periodic or terminal accountings to the Employer as
provided in the Trust Agreement, and
(4)otherwise to hold,
administer and control the assets of the Trust as provided in
the Plan and Trust Agreement.
(e) Investment Manager:
If appointed in accordance with the terms
of the Trust Agreement, the Investment
Manager shall have the power to manage, acquire and dispose of
any assets under the Plan, or to direct the
Trustee in the management, acquisition or disposition of any
such assets.
Section 10.2. Except as otherwise provided in the
Act, a named fiduciary shall not be responsible or liable for
acts or omissions of another named fiduciary with respect to its
fiduciary responsibilities. A named fiduciary of the Plan shall
be responsible and liable only for its own acts or omissions
with respect to fiduciary duties specifically allocated to it
and designated as its responsibility.
Section 10.3. All assets of the Plan shall be
held in a Trust forming part of the Plan. The Trust shall be
administered as a Fund to provide for the payment of benefits
out of the income and principal of the Trust to the Participants
or their successors in interest as provided in the Plan. All
fiduciaries (as defined in the Act) with respect to the Plan
shall discharge their duties as such solely in the interest of
the Participants and their successors in interest (a) for the
exclusive purposes of providing benefits to Participants and
their successors in interest and of defraying reasonable
expenses of administering the Plan and Trust, (b) with the care,
skill, prudence and diligence under the circumstances then
prevailing that a prudent man acting in a like capacity and
familiar with such matters would use in the conduct of an
enterprise of like character and with like aims, and (c) in
accordance with the Plan and Trust Agreement, except to the
extent such documents may be inconsistent with the Act. Except
when specifically provided in this Plan or in the Trust, the
assets of the Plan shall never inure to the benefit of the
Employer.
At no time shall it be possible for the Plan
assets to be used for, or diverted to, any purpose other than
for the exclusive benefit of the Participants and their
Beneficiaries. Notwithstanding the foregoing, contributions
made by the Employer may be returned to the Employer if:
(a) the contributions were conditioned on the
initial qualification of the Plan under the
Code, the Commissioner of Internal Revenue determines the Plan
is not initially qualified under the
Internal Revenue Code and all assets attributable to such
employer contributions are returned within
one year after the plan is found to not so qualify; or
(b) the contribution was made due to a mistake
of fact; the contribution is returned within
one year of the mistaken payment of the contribution and the
return satisfies the requirements of
paragraph (d) below; or
(c) the contribution was conditioned on its
current deductibility, under Code Section 404,
the deduction is disallowed, the contribution is returned
within one year of the disallowance of the
deduction, the return satisfies the requirements of paragraph
(d) below.
(d) The return of a Plan contribution to the
Employer satisfies the requirements of this
paragraph if the amount so returned does not exceed the amount
contributed over
(1) the amount that would have been contributed had there been
no mistake of fact or
(2) the amount that would have been contributed
had the contribution been limited to the amount that is deductible
after any disallowance by the Internal Revenue Service.
Earnings attributable to such contributions may not be returned.
However, a return will not satisfy the requirements of this
paragraph unless the amount of the contribution so returned
is reduced by any losses attributable to the contribution.
Section 10.4. The Employer and the Trustee shall
enter into an appropriate Trust Agreement, which shall be a part
of the Plan, for the administration of the Trust under the Plan.
Such Trust Agreement shall contain such powers and reservations
as to investment, reinvestment, control and disbursement of the
funds of the Trust and such other provisions as shall be agreed
upon and set forth therein which are not inconsistent with the
provisions of this Plan, its nature and purposes, and the Act.
Said Trust Agreement shall provide that the Board may remove the
Trustee at any time upon reasonable notice, that the Trustee may
resign at any time upon reasonable notice, and that upon such
removal or resignation of any Trustee, the Board shall designate
a successor Trustee.
Section 10.5. All requests,
directions, requisitions and instructions of the Committee to
the Trustee shall be in writing and signed by the Secretary of
the Committee or by any one member of the Committee authorized
by the majority to sign.
Section 10.6. The Employer hereby reserves the
right, by action of the Board, to amend or terminate the Plan
and Trust or Trust Agreement at any time. Except, however, as
provided in Sections 10.3 and 12.3, no such amendment or
termination shall have the effect of diverting the Trust Funds
to purposes other than for the exclusive benefit of the
Participants.
ARTICLE 11
CLAIMS PROCEDURE
Section 11.1. Filing of a Claim for Benefits. If
either a Participant or a Beneficiary believes he is entitled to
a benefit from the Plan which he is not receiving, he (the
"claimant") shall file a written claim with the Plan
Administrator or any member of the Committee upon a form
approved by the Committee. In the event the Plan Administrator
is the claimant, all actions which are required to be taken by
the Plan Administrator pursuant to this Article shall be taken
instead by a member of the Committee as designated by the
Employer.
Section 11.2. Notification to Claimant of
Decision. Notice of a decision with respect to a claim shall be
furnished to the claimant within 90 days following the receipt
of the claim by the Plan Administrator or any member of the
Committee unless special circumstances require an extension of
time for processing the claim. If there is a need for such an
extension, written notice of the extension shall be furnished by
the Committee to the claimant prior to the expiration of the
initial 90 day period. In no event shall such extension exceed
a period of 90 days from the end of the initial 90 day period.
The notice of extension shall indicate the special circumstances
requiring the extension and the date by which the notice of
decision with respect to the claim shall be furnished.
Commencement of benefit payments shall constitute notice of
approval of a claim to the extent of the amount of the approved
benefit. If such claim shall be wholly or partially denied,
such notice shall be in writing and worded in a manner
calculated to be understood by the claimant and shall set forth:
(a) the specific reason or reasons for the denial, (b) specific
reference to pertinent provisions of the Plan on which the
denial is based, (c) a description of any additional material or
information necessary for the claimant to perfect the claim and
an explanation of why such material or information is necessary
and (d) an explanation of the Plan's claims review procedure.
If the claimant is not notified of the decision regarding his
claim in accordance with this Article, the claim shall be deemed
denied and the claimant shall then be permitted to proceed with
the claims review procedure provided in Section 11.3.
Section 11.3. Claims Review Procedure. Within 60
days following receipt by the claimant of notice of the claim
denial or within 60 days following the close of the 90 day
period referred to in Section 11.2, if the claimant is not
notified of the decision within such 90 day period, the claimant
may appeal denial of the claim. The claimant shall be given an
opportunity to review pertinent documents and to submit issues
and comments in writing. A request for review by the Committee
shall be in writing and shall contain all additional information
which the claimant wishes considered. Following such request
for review, the Committee shall fully and fairly review the
decision denying the claim.
Section 11.4. Decision on Review. The decision
on review of a denied claim shall be made in the following
manner.
(a) The Committee shall make its decision regarding the merits
of the denied claim within 60 days following receipt by the
Committee of the request for review (or within 120 days
after such receipt in a case where there are special
circumstances requiring extension of time
for reviewing the appealed claim). It shall deliver the
decision to the claimant in writing. If an
extension of time for reviewing the appealed claim is
required because of special circumstances, written
notice of the extension shall be furnished to the claimant prior
to the commencement of the extension. If the decision
on review is not furnished within the prescribed time, the
claim shall be deemed denied on review.
(b) The decision on review shall set forth specific reasons for
the decision, shall be written in a manner calculated to be
understood by the claimant and shall cite specific references to the
pertinent Plan provisions on which the decision is based.
Section 11.5. Action by Authorized Representative
of Claimant. All actions set forth in this Article to be taken
by the claimant may likewise be taken by a representative of the
claimant duly authorized by him to act in his behalf on such
matters. The Plan Administrator or the Committee may require
such evidence of the authority to act of any such representative
as either may deem reasonably necessary or advisable.
ARTICLE 12
TERMINATION OF PLAN AND TRUST
Section 12.1. In the event of termination of the
Plan, all Employer contributions shall cease, and no additional
Participants shall enter the Plan. The net assets of the Trust,
after reduction for expenses of administration and liquidation,
shall be allocated to the Participants in the following order:
(a) First, to the benefits attributable to
voluntary Employee contributions, if any, which is
the portion of an Accrued Benefit of a Participant, Spouse
or other Beneficiary due to voluntary
contributions, if any, rather than contributions, if any,
required for participation in the Plan or
in any merged plan. (b) Second, to the
benefits attributable to mandatory Employee contributions, if
any, which is the portion of an Accrued
Benefit, other than those specified in subsection (a)
of a Participant, Spouse, or other Beneficiary due to
the Participant's contributions, if any,
which were required for participation in the Plan or in any
merged plan.
(c) Third, to the Actuarial Equivalent of the
Accrued Benefit, other than those specified
in subsections (a) and (b), of each Participant with respect to
whom payments under the Plan commenced at
least three years preceding the date of termination or with
respect to whom payments under the Plan would
have commenced at least three years
preceding the date of termination if such Participant had
retired as of the beginning of such three
year period, provided that there shall be excluded from this
subsection (c) any increase in benefits
resulting from amendments to the Plan at any time during the
five years preceding the date of termination.
(d) Fourth, the Actuarial Equivalent of all
Accrued Benefits, other than those specified in
subsections (a) through (c), payment of which are guaranteed
by the Pension Benefit Guaranty Corporation
referred to in the Act, determined irrespective of the
limitation to a single $750 monthly benefit
(as may be further adjusted for cost of living
expenses) where an Employee is a Participant in more than one
Plan of the Employer.
(e) Fifth, the Actuarial Equivalent of all
Accrued Benefits, other than those specified in
subsections (a) through (d), which are vested under the Plan.
(Vested interests shall be determined
without taking the termination of the Plan into account.) If,
however, the assets under the Plan are not
sufficient to pay the Actuarial Equivalent of such
vested Accrued Benefits in full, first priority shall be
given to such benefits which would have been
vested under the Plan as in effect at the beginning of the five
year period ending on the date of Plan
termination. (Any assets of the Plan in excess of
such amount shall be used to satisfy increases in
benefits due to any Plan amendments within
the five year period). Second priority shall be given to such
amendment providing for the smallest
increase in benefits and third priority to such amendment
providing for the second smallest increase in
benefits and continuing until the first to
occur of exhaustion of Plan assets or payment of the Actuarial
Equivalent of all increases in Accrued
Benefits due to amendments during such five year period.
(f) Sixth, the Actuarial Equivalent
of Accrued Benefits under the Plan in addition to the
Accrued Benefits described in subsections (a) through
(e).
If the net assets of the Trust available for
allocation as provided in the foregoing subsections (a) through
(f) are insufficient to satisfy in full all Accrued Benefits
designated in such subsections, such net assets shall be applied
to satisfaction in full of the Accrued Benefits designated in
each such subsection in the order set forth, and no part of such
assets shall be applied to satisfy Accrued Benefits designated
in any such subsection until all Accrued Benefits designated in
all preceding subsections have been satisfied in full. If such
net assets applied to satisfy the Accrued Benefits under one
subsection are insufficient to fully satisfy the Accrued
Benefits designated in that subsection, such net assets so
allocated pursuant to such subsection shall be apportioned in
satisfaction of such benefits on the basis of the present value,
as of the Plan termination date, of such Accrued Benefits.
Section 12.2. The amount allocated pursuant to
Section 12.1 hereof shall be payable to such Employees, in the
form of an annuity or any other optional methods of payment
under Section 5.6. Such distributions will insure that the
provisions of Sections 5.6 and 5.7 shall be complied with. If
the value of a married or single Participant's or Inactive
Participant's benefit is $3,500 or less, then the Committee
shall distribute the benefit in a single lump sum in any event.
Any such lump sum which is $200 or more shall include the right
of the Participant or Inactive Participant to make a direct
rollover under Code Section 401(a)(31), as provided in Article
16.
Each Participant eligible for retirement will be
given at least a reasonable period during which he can elect or
revoke his form of benefit payment.
Section 12.3. Upon complete termination of the
Plan, each Participant shall have a fully vested and
nonforfeitable interest in his Accrued Benefit to the extent
funded. In determining the funded Accrued Benefit of each such
Participant, the provisions of Sections 12.1 and 12.4 shall
apply. If, following a complete termination of the Plan, there
are assets in the Trust Fund resulting from variations in actual
experience and expected actuarial experience after all
liabilities of the Plan to the Participants have been satisfied,
such remaining assets shall be distributed to the Employer.
Section 12.4. For purposes of complying with the
requirements of Section 1.401-4(c) of the regulations of the
United States Treasury Department, the following provisions are
hereby incorporated in and made a part of this Plan.
(a) The following terms are defined for the
purposes of this Section 12.4:
(1)The term "Benefits"
includes any periodic income, any withdrawal values
payable to a living Participant and the cost of
any death benefits which may be
payable after retirement on behalf of a Participant, but does
not include the cost of any death
benefits with respect to a Participant before retirement nor
the amount of any death benefits
actually payable after the death of a
Participant whether such death occurs before or after
retirement.
(2)The term "Full Current
Costs" means the normal cost of the Plan for all years
since the effective date of the Plan, plus
interest on any unfunded liability
during such period.
(3)The term "Annual
Compensation" of a Participant means either such
Participant's average regular annual Compensation,
or such average Compensation for
the last five years, or such Participant's last annual
Compensation if such Compensation is
reasonably similar to his average
regular annual Compensation for the preceding five years.
(4)The term "Substantial
Owner" means an Employee or former Employee who
is presently or who at any time during the last 60
months was:
(A)in the case of a sole proprietorship, the sole owner of an
unincorporated trade or
business,
(B)in the case of a partnership, a partner who directly or
indirectly owns more than
ten percent of either the capital interest or the profits
interest in such partnership, or
(C)in the case of a corporation, a person who directly or
indirectly owns more than
ten percent in value of the voting stock of that corporation.
For purposes of this subsection
(a)(4), the constructive ownership rules of
Section 1563(e) of the Code (without regard to Section
1563(e)(3)(C)) shall apply.
(b) Upon the occurrence of any event described
in subsection (c) of this Section, the
Employer contribution applied for the benefit of a Participant
who is among the twenty-five highest paid
Employees of the Employer at the effective date of the Plan
and whose anticipated annual normal retirement
benefit under the Plan exceeds $1,500 shall
be restricted in accordance with subsection (d) of this Section.
(c) The restrictions described in subsection
(d) of this Section shall become applicable if:
(1)the Plan is terminated
within ten years after the original effective date of the
Plan;
(2)the Benefits of a
Participant described in subsection (b) above become payable
within ten years after the effective
date of the Plan; or
(3)the Plan is not subject to the
minimum funding requirements of Code Section
412 and the Benefits of a Participant described in (b)
above become payable after the
Plan has been in effect for ten years and the Full Current Costs
of the Plan for the first ten
years have not been funded.
(d) The restrictions required under subsection
(b) of this Section are that the Employer
contributions which may be used for the benefit of a Participant
described in such subsection (b) shall not
exceed the greater of (1) or (2) where:
(1)is the greater of
$20,000, or 20 percent of the first $50,000 of the Annual
Compensation of such Participant
multiplied by the number of years between
the effective date of the Plan and
(A)the date of termination of the Plan;
(B)in the case of a Participant described in subsection (c)(2)
of this Section, the date
the Benefit of the Participant becomes payable, if this
date is before the termination date
of the Plan; or
(C)in the case of a Participant described in subsection (c)(3)
of this Section, the date
of the failure to meet the Full Current Costs of the
Plan. However, if the Full Current
Costs of the Plan have not been
met on the date described in (A) or (B) of this subsection,
whichever is applicable,
then the date of the failure to meet such Full Current
Costs shall be substituted for the
date referred to in (A) or (B) of this
subsection. For purposes of determining the
contributions which may be
used for the Benefits of a Participant when (B) of this
subsection applies, the
number of years taken into account may be recomputed
for each year if the Full Current Costs
of the Plan are met for such
year.
(2)is a dollar amount equal
to:
(A) in the case of a
Participant described in (b) above who is also a
Substantial Owner, the present value of the
benefit guaranteed for such
Participant under Section 4022 of the Act if the Plan was
terminated or the present
value of the benefit that would be guaranteed under
Section 4022 of the Act and applicable
regulations thereunder had the
Plan terminated on the date Benefits commence; or
(B)in the case of a Participant described in (b) above who is
not a Substantial Owner,
the present value of the maximum benefit
described in Section 4022(b)(3)(B) of the Act,
determined on the earlier
of the date the Plan terminates or the date Benefits commence,
without regard to any other
limitations of Section 4022 of the Act.
(e) For the purposes of this Section, the
Employer contributions which, at a given time,
may be used for the Benefits of a Participant include any
unallocated funds which would be used for
his Benefits if the Plan were then terminated or the Participant
were then to withdraw from the Plan, as well
as all contributions allocated up to that
time exclusively for his Benefits.
(f) The provisions of this Section apply to a
former or retired Participant of the
Employer, as well as to a Participant still in the service of
the Employer.
(g) Notwithstanding the foregoing provisions
of this Section, if Benefits under the Plan
(or the predecessor or any prior Plan) shall be materially
increased, the foregoing restrictions of
this Section shall apply with respect to such increase as of the
effective date thereof. The effective date
of such increase for the purpose of applying such
restrictions will be treated as if it were the effective
date of the predecessor or prior Plan.
However, with respect to any Participant who is among the
twenty-five highest paid Employees of the
Employer on such effective date, there shall be substituted for
the limit upon the Benefit set forth in
subdivision (d)(1) above a limit which does not
exceed the greatest of the following three amounts:
(1)The Employer
contributions (or funds attributable thereto) which would have
been applied to provide the Benefits
for the Participant if the Plan (or the
predecessor or prior plan, if applicable) had been continued
without change;
(2)The sum of $20,000; or
(3)The sum of (A) and (B)
where (A) is the Employer contributions (or funds
attributable thereto) which would have been
applied to provide Benefits for the
Participant under the Plan (or the predecessor or prior Plan, if
applicable) if it had been
terminated the day before the effective date of such increase in
Benefits, and (B) is an amount
computed by multiplying the number of years
for which the current costs of the Plan after that date
are met by (i) 20% of his Annual
Compensation or (ii) $10,000, whichever is smaller.
(h) Notwithstanding anything above to the
contrary, this Section shall be applied in
accordance with the rules of Section 1.401-4(c) of the
regulations of the United States Treasury
Department which is incorporated herein by reference.
(i) In the event of Plan termination, the
benefit of any highly compensated active or
former Employee is limited to a benefit that is
nondiscriminatory under Code Section
401(a)(4).
For Plan Years beginning on or after
January 1, 1991, benefits distributed to any of
the 25 most highly compensated active and former highly
compensated Employees are restricted such
that the annual payments are no greater than an amount equal to
the payment that would be made on behalf of
the Employee under a single life annuity
that is the Actuarial Equivalent of the sum of the Employee's
Accrued Benefit and the Employee's other
benefits under the Plan.
The preceding paragraph shall not apply
if: (a) after payment of the benefit to an
Employee described in the preceding paragraph, the value of Plan
assets equals or exceeds 110% of the value
of current liabilities, as defined in Code Section 412(l)(7),
or (b) the value of the benefits for an
Employee described above is less than 1% of
the value of current liabilities.
For purposes of this Section, benefit includes loans in excess
of the amount set forth in Code Section
72(p)(2)(A), any periodic income, any withdrawal values payable
to a living Employee, and any death
benefits not provided for by insurance on the
Employee's life.
Section 12.5. The conditions of the preceding
Section 12.4 shall not restrict the payment in one lump sum of
the entire amount to which a Participant may be entitled under
the lump sum option set forth in the Article 5 of this Plan
while this Plan is in full effect and its full current cost has
been paid provided the following conditions are met:
(a) The Participant must enter into a written agreement with
the Trustee, binding upon his estate, in
which the Participant agrees to repay to the Trustee a sum equal
to the actuarially equivalent value of the
amount by which the Participant's monthly
retirement benefit would have been decreased during the
Participant's then remaining lifetime
pursuant to the provisions set forth in the preceding Section
12.4 of this Article 12 in the event the
Plan is terminated or the full current cost is not met during
the period specified in Section 12.4.
(b) The Participant must also guarantee
payment of any amount required by the agreement
by depositing with the Trustee, or with a depository
acceptable to the Trustee, simultaneously
with the aforesaid lump sum payment, property having a fair
market value equal to one hundred
twenty-five percent (125%) of the amount repayable if the
plan had been terminated on the date the lump sum
payment was made to the Participant. The
property is to be held by the depository until the receipt of a
certification by the Trustee that the
Participant (or his estate) is no longer obligated to
repay any amount under the agreement.
(c) The Participant must further agree that if
the market value of the property held by the
depository falls below one hundred twenty-five percent (125%) of
the amount which would then be repayable if
the Plan were terminated, he will deposit additional
property in the amount necessary to bring the total
value of the property held by the
depository up to the one hundred twenty-five percent (125%)
level.
Section 12.6. In the event of a partial
termination of the Plan, each affected Participant shall have a
fully vested and nonforfeitable interest in his Accrued Benefit
to the extent funded as of the date of partial termination after
reduction for expenses of administration and liquidation of the
terminated portion of the Trust. In determining the funded
Accrued Benefit of each such Participant and the method of
distribution thereof, the provisions in Sections 12.1 and 12.4
shall apply. For this purpose the portion of the Trust
constituting the funded Accrued Benefits of such Participants
will be treated as if it were the entire Trust and the affected
Participants will be treated as if they were all of the
Participants in the Plan.
ARTICLE 13
MISCELLANEOUS
Section 13.1. Merger or Consolidation of Plan.
In the event of any merger or consolidation of the Plan with any
other plan or a transfer of assets or liabilities of the Plan to
any other plan (which merged, consolidated or transferee plan
shall be referred to in this Section as the "successor plan"),
the benefit which each Participant would receive if the
successor plan (and the instant Plan, if this Plan continues in
existence and he has any interest remaining therein) were
terminated immediately after the merger, consolidation or
transfer, shall be equal to or greater than the benefit he would
have received if the instant Plan (and the successor plan, if
the successor plan existed immediately prior to the merger,
consolidation or transfer and he had any interest therein) had
been terminated immediately preceding the merger, consolidation
or transfer.
Section 13.2. Communication to Employees. In
accordance with the requirements of the Act, the Employer shall
communicate to the Participants the principal terms of the Plan
and the benefits available thereunder.
Section 13.3. Non-Assignability of Benefits. No
portion of the Accrued Benefit with respect to any Participant
shall be subject in any manner to anticipation, alienation,
sale, transfer, assignment, pledge, encumbrance or charge except
in the case of a qualified domestic relations order as described
in Code Section 414(p). Any attempt to so anticipate, alienate,
sell, transfer, assign, pledge, encumber or charge the same
shall be void except in the case of a qualified domestic
relations order as described in Code Section 414(p). No portion
of such Accrued Benefit shall in any manner be payable to any
assignee, receiver or Trustee, or be liable for the
Participant's debts, contracts, liabilities, engagements or
torts, or be subject to any legal process of attachment except
in the case of a qualified domestic relations order as described
in Code Section 414(p).
Section 13.4. Facility of Payments. If a
Participant shall be physically, mentally or legally incapable
of receiving or acknowledging receipt of any payment under the
Plan to which he is entitled, the Committee, upon the receipt of
satisfactory evidence of his incapacity and satisfactory
evidence that another person or institution is maintaining him
and that no guardian or committee has been appointed for him,
may cause any payment otherwise payable to him to be made to
such person or institution so maintaining him.
Section 13.5. Amendment. No amendment
to the Plan (including a change in the actuarial basis for
determining optional or early retirement benefits) shall be
effective to the extent that it has the effect of decreasing a
Participant's Accrued Benefit. Notwithstanding the preceding
sentence, a Participant's Accrued Benefit may be reduced to the
extent permitted under Section 412(c)(8) of the Code. For
purposes of this paragraph, a plan amendment which has the
effect of (1) eliminating or reducing an early retirement
benefit or a retirement type subsidy, or (2) eliminating an
optional form of benefit, with respect to benefits attributable
to service before the amendment shall be treated as reducing
Accrued Benefits. In the case of a retirement-type subsidy, the
preceding sentence shall apply only with respect to a
Participant who satisfies (either before or after the amendment)
the preamendment conditions for the subsidy. In general, a
retirement-type subsidy is a subsidy that continues after
retirement, but does not include a qualified disability benefit,
a medical benefit, a social security supplement, a death benefit
(including life insurance), or a plant shutdown benefit (that
does not continue after retirement age). Furthermore, if the
vesting schedule of the Plan is amended, in the case of an
Employee who is a Participant as of the later of the date such
amendment is adopted or the date it becomes effective, the
nonforfeitable percentage (determined as of such date) of such
Employee's Employer-derived Accrued Benefit will not be less
than the percentage computed under the Plan without regard to
such amendment.
If the vesting schedule under the Plan is amended
and the vesting under the new schedule is at any point not as
rapid as under the prior schedule, each Participant with at
least three Years of Service may elect to have his
nonforfeitable percentage computed under the Plan according to
the prior schedule.
For purposes of the above paragraph, a Participant
shall be considered to have completed three Years of Service if
he has completed 1,000 Hours of Service in each of three Plan
Years, whether or not consecutive, ending with or prior to the
last day of the election period described below.
The election period shall begin no later than the
date the amendment is adopted and shall end no earlier than the
later of the following dates: (a) the date
which is 60 days after the date the amendment is adopted;
(b) the date which is 60 days after the
amendment becomes effective; or
(c) the date which is 60 days after
the day the Participant is issued written notice of the
change by the Employer or the Plan Administrator.
If the vesting schedule of this Plan is changed,
the nonforfeitable percentage of any Participant's Accrued
Benefit derived from Employer contributions determined as of the
later of the date the change is effective or the date the change
is adopted shall not be less than the nonforfeitable percentage
computed under the Plan without regard to such change.
Section 13.6. Designation of Beneficiary. In any
event where a Participant or Inactive Participant may name a
Beneficiary to receive any death benefits provided, pursuant to
Article 5 or, pursuant to Article 7, such Beneficiary shall be
named on a form provided by the Plan Administrator and delivered
to the Plan Administrator. Such designation may include more
than one person with one or more secondary or contingent
Beneficiaries and shall be subject to change upon written
request of such Participant or Inactive Participant in the same
manner as the original designation. If a Beneficiary is
receiving or is entitled to receive payments from the Plan and
dies before receiving all of the payments due him, any remaining
payments shall be made to the contingent Beneficiary, if any.
The provisions of this Section are subject to the
spousal consent provisions of Article 5 and, if applicable,
Article 7. In no event shall language in this Section be
construed to allow a Participant or Inactive Participant to name
a Beneficiary other than his Spouse when Article 7 only provides
for payment to the Spouse upon the death of a married
Participant or married Inactive Participant.
Section 13.7. Fiduciary Discretion. In
discharging the duties assigned to it under the Plan, the
Trustee, Plan Administrator, the Committee, and any other
fiduciary shall have the discretion to interpret the Plan; to
adopt, amend, and rescind rules and regulations pertaining to
their duties under the Plan; and to make all other
determinations necessary or advisable for the discharge of their
duties under the Plan. Such discretionary authority shall be
absolute and exclusive if exercised in a uniform and
nondiscriminatory manner with respect to all similarly situated
individuals. The express grant in the Plan of any specific
power to a fiduciary with respect to any duty assigned to it
under the Plan shall not be construed as limiting any power or
authority of the fiduciary to discharge its duties.
ARTICLE 14
LIMITATIONS ON BENEFITS AND CONTRIBUTIONS UNDER
THE PLAN
Section 14.1. Definitions and Rules Applicable to
this Article. (a) "Annual Benefit" shall mean
the total benefit payable from this Plan calculated as a
straight life annuity.
Except as provided below, an Annual
Benefit payable in a form other than a straight
life annuity must be adjusted to an actuarially equivalent
straight life annuity before applying the
limitations of this Article. The interest rate assumption used
to determine actuarial equivalence will be
the greater of the interest rate specified in the
definition of Actuarial Equivalent in Article 2 of this
Plan or five percent. The Annual Benefit
does not include any benefits attributable to Employee
contributions or rollover contributions, or
the assets transferred from a qualified plan that was not
maintained by the Employer. No actuarial
adjustment to the benefit is required for (a)
the value of a qualified joint and survivor annuity, (b) the
value of benefits that are not directly
related to retirement benefits (such as the qualified disability
benefit, pre-retirement death benefits, and
post-retirement medical benefits), and (c) the value
of post-retirement cost-of-living increases made in
accordance with the Federal Income Tax
Regulations.
(b) "Average Compensation" shall mean a
Participant's highest average Compensation
from the Employer over a period of three consecutive calendar
years. If a Participant is employed for
less than three calendar years, his Average Compensation shall
be his average earnings over his calendar
years of employment. Average Compensation
shall include bonus payments and other taxable remuneration.
(c) "Compensation." A Participant's earned
income, wages, salaries, and fees for
professional services, and other amounts received for personal
services actually rendered in the course of
employment with the Employer (including, but not limited
to, commissions paid salesmen, compensation for
services on the basis of a percentage of
profits, commissions on insurance premiums, tips and bonuses),
and excluding the following:
(1)Employer contributions to
a plan of deferred compensation which are not
included in the Employee's gross income for the
taxable year in which contributed
or Employer 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;
(2)Amounts realized from the
exercise of a nonqualified 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;
(3)Amounts realized from the
sale, exchange or other disposition of stock
acquired under a qualified stock option; and
(4)Other amounts which 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
Section 403(b) of the Code (whether or
not the amounts are actually excludable from the gross income
of the Employee).
Compensation for any Limitation Year is
the compensation actually paid or includable
in gross income during such year.
(d) "Current Accrued Benefit" shall mean a
Participant's accrued benefit under the Plan,
determined as if the Participant had separated from service as
of the close of the last Limitation Year
beginning before January 1, 1987, when expressed as an Annual
Benefit. In determining the amount of a
Participant's Current Accrued Benefit, the
following shall be disregarded:
(1)any change in the terms
and conditions of the Plan after May 5, 1986; and
(2)any cost of living
adjustment occurring after May 5, 1986.
(e) This Article 14 shall be effective on the
first day of the Limitation Year beginning
after December 31, 1986.
Section 14.2. Limitation on Annual Benefits.
Subject to the provisions of Section 14.4 below, this Plan when
aggregated with the benefits from any other defined benefit plan
(whether or not terminated) ever maintained by the Employer or
Related Employer shall not provide Annual Benefits which exceed
the lesser of $90,000 or 100% of a Participant's Average
Compensation. This limitation shall be hereinafter referred to
as the "Maximum Annual Benefit." The Maximum Annual Benefit
shall be increased by cost of living increases published in
regulations by the Secretary of the Treasury. Any adjustments
made as a result of this Section 14.2 shall not be effective
prior to the first day of the Limitation Year for which the
increase is effective as prescribed by the regulations. Such
adjustments shall also be made to the Annual Benefits of any
Inactive Participant provided that no adjustments shall be made
following the Annuity Starting Date of any Participant or
Inactive Participant.
Section 14.3. No Adjustments to Annual Benefit of
Less than $10,000. Subject to the provisions of Section 14.4
below, if the Annual Benefit payable from this Plan or from this
Plan and any other defined benefit plan maintained by the
Employer to a Participant does not exceed $10,000, the
adjustment to the Annual Benefit in Section 14.2 above shall not
be required, provided that the Participant has never been
covered by a defined contribution plan maintained by the
Employer.
Section 14.4. Adjustment of Limitation
for Years of Service or Participation.
(a) Defined Benefit Dollar Limitation. If a
Participant has completed less than ten years
of participation, the Participant's Accrued Benefit shall not
exceed the defined benefit dollar
limitation under Section 14.2 above as adjusted by multiplying
such amount by a fraction, the numerator of
which is the Participant's number of years (or part
thereof) of participation in the Plan, and the
denominator of which is ten.
(b) Other Defined Benefit Limitations. If a
Participant has completed less than ten years
of service with the Employer or Related Employers, the
percentage of Compensation limitation
described in Section 14.2 and the limitations described in
Section 14.3 shall be adjusted by
multiplying such amounts by a fraction, the numerator of which
is the Participant's number of years of
service (or part thereof), and the denominator of
which is ten.
(c) Limitations on Reductions. In no event
shall Sections 14.4(a) or 14.4(b) reduce the
limitations provided under Sections 415(b)(1) and (4) of the
Code to an amount less than one-tenth of
the applicable limitation (as determined without regard to this
Section 14.4).
(d) Application to Changes in Benefit
Structure. To the extent provided by the Secretary
of the Treasury, this Section 14.4 shall be applied
separately with respect to each change in
the benefit structure of the Plan.
Section 14.5. Benefit Payable Prior to Social
Security Retirement Age. If the $90,000 Maximum Annual Benefit
is payable to a Participant prior to his attaining his Social
Security Retirement Age, such Annual Benefit shall be adjusted
on an actuarial basis as if such Annual Benefit is payable
beginning at his Social Security Retirement Age. The above
adjustment shall be made in such manner as the Secretary of the
Treasury may prescribe which is consistent with the reduction
for old-age insurance benefits commencing before the Social
Security Retirement Age under the Social Security Act. For the
purpose of adjusting the maximum for the commencement of
benefits prior to Age 62, the interest rate assumption shall not
be less than the greater of five percent (5%) or the rate
specified in the Plan for determining actuarial equivalence for
early retirement.
Section 14.6. Benefit Payable After Social
Security Retirement Age. If retirement benefits begin after a
Participant reaches his Social Security Retirement Age, the
$90,000 Maximum Annual Benefit shall be adjusted in accordance
with regulations prescribed by the Secretary so that the Maximum
Annual Benefit shall be equivalent to the benefit which would be
payable at his Social Security Retirement Age. For the purpose
of adjusting any such maximum, the interest rate assumption
shall not be greater than the lesser of five percent (5%) or the
rate specified in the Plan for determining actuarial equivalence
for delayed retirement.
Section 14.7. Application of Maximum Limitation
to Separate Plans. If the Employer maintains one or more
defined benefit plans in addition to this Plan, the Maximum
Annual Benefit shall be applied in the aggregate to this Plan
and to all such other defined benefit plans.
Section 14.8. Limitation for Participants in
Defined Benefit Plan and Defined Contribution Plan.
(a) If an Employee is or was a Participant in one or more
defined benefit plans and one or more
defined contribution plans ever maintained by the Employer or
Related Employer (whether or not
terminated), the sum of the defined benefit plan fraction
and the defined contribution plan fraction for that
Participant shall not exceed 1.0 for any
Limitation Year. If the sum of the defined benefit plan
fraction and the defined contribution plan
fraction shall exceed 1.0 in any year for any Participant in
this Plan, the Employer shall adjust the
numerator of the defined benefit plan fraction so that the
sum of the defined benefit plan fraction and the
defined contribution plan fraction shall
not be in excess of 1.0 in any Limitation Year for such
Participant.
(b) For the purpose of this Article, the term
defined benefit plan fraction for any
Limitation Year shall mean a fraction the numerator of which is
the projected Annual Benefit payable to a
Participant as of the close of the then current Limitation Year
under all defined benefit plans maintained by
the Employer or Related Employer and the
denominator of which is the lesser of:
(1)the product of 1.25
multiplied by the maximum dollar limitation for the
Limitation Year concerned as provided under Code
Section 415, or
(2)the product of 1.4
multiplied by the applicable amount to be taken into
account according to the percentage of
compensation limit as defined for this
purpose under Code Section 415.
(c) The term defined contribution plan
fraction for any Limitation Year shall mean a
fraction the numerator of which is the aggregate amount of
annual additions made to a Participant's
accounts under all defined contribution plans, whether or not
terminated, maintained by this Employer or
Related Employer (including the annual additions
attributable to the Participant's nondeductible
contributions to this and all other defined
benefit plans maintained by this Employer or Related Employer)
as of the close of the then current
Limitation Year and the denominator of which as of the end
of any Limitation Year, is the sum of the defined
contribution denominator increments for
that Limitation Year and all prior Limitation Years of the
Participant's service with the Employer or
Related Employer (regardless of whether the Plan was in
existence during those years.)
For each Limitation Year, the defined
contribution denominator increment is the lesser
of the following amounts:
(1)the product of 1.25
multiplied by the maximum dollar limitation for the
Limitation Year concerned, as provided under
Code Section 415, or
(2)the product of 1.4 multiplied by the applicable
amount to be taken into account
according to the percentage of compensation limit as defined for
this purpose under Code Section
415.
For purposes of this Section 14.8(c),
amounts allocated, after March 31, 1984, to an
individual medical account, as defined in Code Section 415(l),
which is part of a defined benefit plan
maintained by the Employer are treated as annual additions to a
defined contribution plan. Also, amounts
derived from contributions paid or accrued
after December 31, 1985, which are attributable to
post-retirement medical benefits allocated
to the separate account of a Key Employee, as defined in Section
8.4, 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. In no event shall this
be construed as applying the limitations of Code Section
415(c)(1)(B) to individual medical accounts
or post-retirement medical benefits.
(d) With respect to any year ending after
December 31, 1982, and at the election of the
Plan Administrator, the amount taken into account in
determining the denominator of the defined
contribution plan fraction with respect to each Participant for
all years ending before January 1, 1983,
shall be an amount equal to the product of (1) and (2),
where
(1)is the denominator of the
defined contribution plan fraction as calculated for
the Limitation Year ending in 1982, and
(2)is the Transition
Fraction.
Transition Fraction means a fraction the
numerator of which is the lesser of $51,875
or 1.4 multiplied by 25% of the Compensation of the Participant
for the Limitation Year ending in 1981 and
the denominator of which is the lesser of $41,500 or 25% of
the Participant's Compensation for the Limitation
Year ending in 1981.
(e) For purposes of computing the defined
contribution plan fraction, "Annual Addition"
shall mean the amount allocated to a Participant's account
during the Limitation Year as a result of:
(1)Employer contributions,
(2)Employee contributions,
(3)Forfeitures, and
(4)Amounts described in
Sections 415(l)(1) and 419A(d)(2) of the
Code.
The Annual Addition for any Limitation
Year beginning before January 1, 1987, shall
not be recomputed to treat all employee contributions as an
Annual Addition.
If the Plan satisfied the applicable
requirements of Section 415 of the Code as in
effect for all Limitation Years beginning before January 1,
1987, an amount shall be subtracted from
the numerator of the defined contribution plan fraction (not
exceeding such numerator) as prescribed by
the Secretary of the Treasury so that the sum of the
defined benefit plan fraction and defined contribution
plan fraction computed under Section
415(e)(1) of the Code does not exceed 1.0 for such Limitation
Year.
Section 14.9. Preservation of Accrued Benefit
Under the Tax Equity and Fiscal Responsibility Act of 1982.
Notwithstanding the above provisions of this Article 14, if a
Participant was a Participant in this Plan before January 1,
1983, the Maximum Annual Benefit shall not be less than the
Participant's Accrued Benefit at the close of the 1982
Limitation Year.
Section 14.10. Preservation of Accrued Benefit
Under the Tax Reform Act of 1986.
(a) This Section 14.10 shall apply to defined
benefit plans that were in existence on May
6, 1986, and that met the applicable requirements of Section 415
of the Code as in effect for all Limitation
Years.
(b) If the Current Accrued Benefit of an
individual who is a Participant as of the first day
of the Limitation Year beginning on or after January 1,
1987, exceeds the benefit limitations under
Section 415(b) of the Code (as modified by changes made by the
Tax Reform Act of 1986) referred to above in
Sections 14.4, 14.5 and 14.6, then, for
purposes of Code Sections 415(b) and (e), the defined benefit
dollar limitation with respect to such
individual shall be equal to such Current Accrued Benefit.
ARTICLE 15
DISTRIBUTION REQUIREMENTS
Section 15.1. General Rules.
(a) Except as otherwise provided in Article 5,
regarding the joint and survivor annuity
requirements, the requirements of this Article shall apply to
any distribution of a Participant's
interest and will take precedence over any inconsistent
provisions of this Plan. Unless otherwise
specified, the provisions of this Article apply to calendar
years beginning after December 31, 1984.
(b) All distributions required under this
Article shall be determined and made in
accordance with the Income Tax Regulations under Section
401(a)(9) of the Code, including the
minimum distribution incidental benefit requirement of Section
1.401(a)(9)-2 of the Income Tax Regulations.
Section 15.2. Required Beginning Date. The
entire interest of a Participant must be distributed or begin to
be distributed no later than the Participant's required
beginning date.
Section 15.3. Limits on Distribution Periods. As
of the first distribution calendar year, distributions, if not
made in a single-sum, may only be made over one of the following
periods (or a combination thereof):
(a) the life of the Participant,
(b) the life of the Participant and a
designated Beneficiary,
(c) a period certain not extending beyond the
life expectancy of the Participant, or
(d) a period certain not extending beyond the
joint and last survivor expectancy of the
Participant and a designated Beneficiary.
Section 15.4. Determination of Amount to be
Distributed Each Year.
(a) If the Participant's interest is to be
paid in the form of annuity distributions under the
Plan, payments under the annuity shall satisfy the
following requirements:
(1)the annuity distributions
must be paid in periodic payments made at intervals
not longer than one year;
(2)the distribution period
must be over a life (or lives) or over a period certain
not longer than a life expectancy (or joint
life and last survivor expectancy)
described in Section 401(a)(9)(A)(ii) or Section
401(a)(9)(B)(iii) of the Code,
whichever is applicable;
(3)the life expectancy (or
joint life and last survivor expectancy) for purposes of
determining the period certain shall be
determined without recalculation of life
expectancy;
(4)once payments have begun
over a period certain, the period certain may not
be lengthened even if the period certain is
shorter than the maximum permitted;
(5)payments must either be
nonincreasing or increase only as follows:
(i)with any percentage increase in a specified and generally
recognized cost-of-living
index;
(ii)to the extent of the reduction to the amount of the
Participant's payments to
provide for a survivor benefit upon death, but only if the
Beneficiary whose life was being
used to determine the distribution
period described in Section 15.3 above dies and the
payments continue
otherwise in accordance with that Section over the life of the
Participant;
(iii)to provide cash refunds of Employee contributions upon the
Participant's death; or
(iv)because of an increase in benefits under the Plan.
(6)If the annuity is a life
annuity (or a life annuity with a period certain not
exceeding 20 years), the amount which must be
distributed on or before the
Participant's required beginning date (or, in the case of
distributions after the death of
the Participant, the date distributions are required to begin
pursuant to Section 15.5 below)
shall be the payment which is required for one
payment interval. The second payment need not be
made until the end of the next
payment interval even if that payment interval ends in the next
calendar year. Payment intervals
are the periods for which payments are received,
e.g., bimonthly, monthly, semi-annually, or
annually.
If the annuity is a period
certain annuity without a life contingency (or is a life
annuity with a period certain exceeding 20
years) periodic payments for each
distribution calendar year shall be combined and treated as an
annual amount. The amount which
must be distributed by the Participant's required beginning
date (or, in the case of distributions
after the death of the Participant, the date
distributions are required to begin pursuant to Section
15.4(a)(5) above) is the annual
amount for the first distribution calendar year. The annual
amount for other distribution
calendar years, including the annual amount for the calendar
year in which the Participant's
required beginning date (or the date
distributions are required to begin pursuant to Section 15.5
below) occurs, must be distributed
on or before December 31 of the calendar year for which
the distribution is required.
(b) Annuities purchased after December 31, 1988,
are subject to the following additional
conditions:
(1)Unless the Participant's
Spouse is the designated Beneficiary, if the
Participant's interest is being distributed in the form
of a period certain annuity
without a life contingency, the period certain as of the
beginning of the first
distribution calendar year may not exceed the applicable period
determined using the table set forth
in Q and A A-5 of Section 1.401(a)(9)-2
of the Income Tax Regulations.
(2)If the Participant's
interest is being distributed in the form of a joint and
survivor annuity for the joint lives of the
Participant and a nonspouse
Beneficiary, annuity payments to be made on or after the
Participant's required beginning
date to the designated Beneficiary after the Participant's
death must not at any time exceed the
applicable percentage of the annuity
payment for such period that would have been payable to the
Participant using the table set
forth in Q and A A-6 of Section 1.401(a)(9)-2 of the Income Tax
Regulations.
(c) Transitional rule. If payments under an
annuity which complies with Section (a)
above begin prior to January 1, 1989, the minimum distribution
requirements in effect as of July 27, 1987,
shall apply to distributions from this plan, regardless of
whether the annuity form of payment is
irrevocable. This transitional rule also applies to
deferred annuity contracts distributed to or owned by
the Employee prior to January 1, 1989,
unless additional contributions are made under the Plan by the
Employer with respect to such contract.
(d) If the form of distribution is an annuity
made in accordance with this Section 15.4,
any additional benefits accruing to the Participant after his or
her required beginning date shall be
distributed as a separate and identifiable component of the
annuity beginning with the first payment
interval ending in the calendar year immediately
following the calendar year in which such amount accrues.
(e) Any part of the Participant's interest
which is in the form of an individual account
shall be distributed in a manner satisfying the requirements of
Section 401(a)(9) of the Code and the
regulations thereunder.
Section 15.5. Death Distribution Provisions.
(a) Distribution beginning before death. If
the Participant dies after distribution of his or
her interest has begun, the remaining portion of such
interest will continue to be distributed at
least as rapidly as under the method of distribution being used
prior to the Participant's death.
(b) Distribution beginning after death. If
the Participant dies before distribution of his or
her interest begins, distribution of the Participant's
entire interest shall be completed by
December 31 of the calendar year containing the fifth
anniversary of the Participant's death
except to the extent that an election is made to receive
distributions in accordance with (1) or (2)
below:
(1)if any portion of the Participant's interest is payable to a
designated Beneficiary,
distributions may be made over the life or over a period certain
not greater than the life
expectancy of the designated Beneficiary commencing
on or before December 31 of the calendar year
immediately following the calendar
year in which the Participant died;
(2)if the designated
Beneficiary is the Participant's surviving Spouse, the date
distributions are required to begin in
accordance with (1) above shall not be
earlier than the later of (1) December 31 of the calendar
year immediately following the
calendar year in which the Participant died and (2) December 31
of the calendar year in which the
Participant would have attained Age 70 1/2.
The Participant's designated
Beneficiary must elect the method of distribution
no later than the earlier of (1) December 31 of
the calendar year in which
distributions would be required to begin under this Section, or
(2) December 31 of the calendar
year which contains the fifth anniversary of the date of
death of the Participant. If the
Participant has no designated Beneficiary, or if
the designated Beneficiary does not elect a method
of distribution, distribution of
the Participant's entire interest must be completed by December
31 of the calendar year containing
the fifth anniversary of the Participant's death.
(c) For purposes of Section 15.5(b) above, if
the surviving Spouse dies after the
Participant, but before payments to such Spouse begin, the
provisions of Section 15.5(b), with the
exception of paragraph (2) therein, shall be applied as if the
surviving Spouse were the Participant.
(d) For purposes of this Section 15.5, any
amount paid to a child of the Participant will
be treated as if it had been paid to the surviving Spouse if
the amount becomes payable to the surviving
Spouse when the child reaches the age of majority.
(e) For the purpose of this Section 15.5,
distribution of a Participant's interest is
considered to begin on the Participant's required beginning date
(or, if Section 15.5(c) above is
applicable, the date distribution is required to begin to the
surviving Spouse pursuant to Section
15.5(b) above). If distribution in the form of an annuity
described in Section 15.4 above irrevocably
commences to the Participant before the required
beginning date, the date distribution is considered to begin
is the date distribution actually commences.
Section 15.6. Definitions
(a) Applicable life expectancy. The life
expectancy (or joint and last survivor
expectancy) calculated using the attained Age of the Participant
(or designated Beneficiary) as of the
Participant's (or designated Beneficiary's) birthday in the
applicable calendar year reduced by one for each
calendar year which has elapsed since the
date life expectancy was first calculated. If life expectancy
is being recalculated, the applicable life
expectancy shall be the life expectancy as so
recalculated. The applicable calendar year shall be the first
distribution calendar year, and if life
expectancy is being recalculated such succeeding calendar year.
If annuity payments commence before the
required beginning date, the applicable calendar year
is the year such payments commence. If distribution is
in the form of an immediate annuity
purchased after the Participant's death with the Participant's
remaining interest, the applicable calendar
year is the year of purchase.
(b) Designated Beneficiary. The individual
who is designated as the Beneficiary under
the plan in accordance with Section 401(a)(9) of the Code and
the regulations thereunder.
(c) Distribution calendar year. A calendar
year for which a minimum distribution is
required. For distributions beginning before the Participant's
death, the first distribution calendar year
is the calendar year immediately preceding the calendar year
which contains the Participant's required
beginning date. For distributions beginning
after the Participant's death, the first distribution calendar
year is the calendar year in which
distributions are required to begin pursuant to Section 15.5
above.
(d) Life expectancy. Life expectancy and
joint and last survivor expectancy are computed
by use of the expected return multiples in Tables V and VI of
Section 1.72-9 of the Income Tax
Regulations.
Unless otherwise elected by the
Participant (or Spouse in the case of distributions
described in Section 15.5(b)(2) above) by the time
distributions are required to begin, life
expectancies shall be recalculated annually. Such election
shall be irrevocable as to the Participant
(or Spouse) and shall apply to all subsequent years. The life
expectancy of a nonspouse Beneficiary may not
be recalculated.
(e) Required beginning date.
(1)General rule. The
required beginning date of a Participant is the first day of
April of the calendar year following
the calendar year in which the Participant
attains Age 70 1/2.
(2)Transitional rule. The
required beginning date of a Participant who attains
Age 70 1/2 before January 1, 1988, shall be
determined in accordance with (A)
or (B) below:
(A)Non-5-percent owners. The required beginning date of a
Participant who is not a
"5-percent owner" (as defined in (3) below) is the first
day of April of the calendar year
following the calendar year in which
the later of retirement or attainment of Age 70 1/2
occurs.
(B)5-percent owners. The required beginning date of a
Participant who is a
5-percent owner during any year beginning after December 31,
1979, is the first day of April
following the later of:
(i)the calendar year in
which the Participant attains Age 70 1/2,
or
(ii)the earlier of the
calendar year with or within which ends the
Plan Year in which the Participant
becomes a 5-percent
owner, or the calendar year in which the Participant retires.
The required
beginning date of a Participant who is not a 5-percent
owner who attains Age 70 1/2 during
1988 and who has not retired as
of January 1, 1989, is April 1, 1990.
(3)5-percent owner. A
Participant is treated as a 5-percent owner for purposes
of this Section if such Participant is a
5-percent owner as defined in Section
416(i) of the Code (determined in accordance with Section 416
but without regard to whether the
plan is top-heavy) at any time during the plan year
ending with or within the calendar year in which
such owner attains Age 66 1/2 or
any subsequent Plan Year.
(4)Once distributions have
begun to a 5-percent owner under this Section, they
must continue to be distributed, even if the
Participant ceases to be a 5-percent
owner in a subsequent year.
(5)Plans maintained by
governments and churches. In the case of a
governmental plan (as defined in Section 414(d) of the
Code) or plans maintained by a
church (as defined in Sections 3121(w)(3)(A) or
3121(w)(3)(B) of the Code), the required beginning
date shall be the later of the
date determined under the preceding provisions of Section
15.6(e) or April 1 of the calendar
year following the calendar year in which the Employee
retires.
(f) Participant. Participant shall be as
defined in Article 2 and shall for the purposes of
this Article 15 also include the term Inactive
Participant, where appropriate.
Section 15.7. Transitional Rule.
(a) Notwithstanding the other requirements of
this Article and subject to the requirements
of Article 5 regarding joint and survivor annuity requirements,
distribution on behalf of any Employee,
including a 5-percent owner, may be made in accordance with all
of the following requirements (regardless of
when such distribution commences):
(1)The distribution by the
Trust is one which would not have disqualified such
Trust under Section 401(a)(9) of the Internal
Revenue Code as in effect prior to
amendment by the Deficit Reduction Act of 1984.
(2)The distribution is in
accordance with a method of distribution designated by
the Employee whose interest in the Trust is
being distributed or, if the
Employee is deceased, by a Beneficiary of such Employee.
(3)Such designation was in
writing, was signed by the Employee or the
Beneficiary, and was made before January 1, 1984.
(4)The Employee had accrued
a benefit under the Plan as of December 31, 1983.
(5)The method of
distribution designated by the Employee or the Beneficiary
specifies the time at which distribution
will commence, the period over which
distributions will be made, and in the case of any distribution
upon the Employee's death, the
Beneficiaries of the Employee listed in order of
priority.
(b) A distribution upon death will not be
covered by this transitional rule unless the
information in the designation contains the required information
described above with respect to the
distributions to be made upon the death of the Employee.
(c) For any distribution which commences
before January 1, 1984, but continues after
December 31, 1983, the Employee, or the Beneficiary, to whom
such distribution is being made, will be
presumed to have designated the method of distribution under
which the distribution is being made if the
method of distribution was specified in
writing and the distribution satisfies the requirements in
subsections 15.7(a)(1) and (5).
(d) If a designation is revoked any subsequent
distribution must satisfy the requirements
of Section 401(a)(9) of the Code and the regulations thereunder.
If a designation is revoked subsequent to
the date distributions are required to begin, the Trust must
distribute by the end of the calendar year
following the calendar year in which the
revocation occurs the total amount not yet distributed which
would have been required to have been
distributed to satisfy Section 401(a)(9) of the Code and the
regulations thereunder, but for the Section
242(b)(2) election. For calendar years beginning after
December 31, 1988, such distributions must meet the
minimum distribution incidental benefit
requirements in Section 1.401(a)(9)-2 of the Income Tax
Regulations. Any changes in the
designation will be considered to be a revocation of the
designation. However, the mere
substitution or addition of another Beneficiary (one not named
in the designation) under the designation
will not be considered to be a revocation of the
designation, so long as such substitution or addition does
not alter the period over which
distributions are to be made under the designation, directly or
indirectly (for example, by altering the
relevant measuring life). In the case in which an amount is
transferred or rolled over from one plan to
another plan, the rules in Q and A J-2 and
Q and A J-3 of Section 1.401(a)(9)-1 of the Income Tax
Regulations shall apply.
Section 15.8. Compliance with Section 401(a)(14)
of the Code. Benefits under this Plan must begin, unless the
Participant elects otherwise, no later than the 60th day after
the close of the Plan Year in which the latest of the following
events occurs:
(1) the Participant attains Normal Retirement
Age,
(2) the Participant terminates his Service
with the Employer, or
(3) the tenth anniversary of the year in which
the Participant commences participation in
the Plan.
ARTICLE 16 DIRECT
ROLLOVER ELECTIONS
Section 16.1. This Article applies to
distributions made on or after January 1, 1993. Notwithstanding
any provision of the Plan to the contrary that would otherwise
limit a distributee's election under this Article, a 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 distributee in a direct rollover.
Section 16.2. Definitions. (a)
Eligible rollover distribution: An eligible rollover
distribution is any distribution of all or
any portion of the balance to the credit of the distributee,
except that an eligible rollover
distribution does not include: any distribution that is one of
a 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 expectancy) of
the distributee and the distributee's designated beneficiary, or
for a specified period of ten years or
more; any distribution to the extent such distribution is
required under Section 401(a)(9) of the
Code; and the portion of any distribution that is not
includable in gross income (determined without regard
to the exclusion for net unrealized
appreciation with respect to employer securities).
(b) Eligible retirement plan: An eligible
retirement plan is an individual retirement
account described in Section 408(a) of the Code, an individual
retirement annuity described in Section
408(b) of the Code, an annuity plan described in Section 403(a)
of the Code, or a qualified trust described
in Section 401(a) of the Code, that accepts
the distributee's eligible rollover distribution. However, in
the case of an eligible rollover
distribution to the surviving spouse, an eligible retirement
plan is an individual retirement account or
individual retirement annuity.
(c) Distributee: A distributee includes an
employee or former employee. In addition, the
employee's or former employee's surviving spouse and the
employee's or former employee's spouse or
former spouse who is the alternate payee under a qualified
domestic relations order, as defined in Section
414(p) of the Code; are distributees with
regard to the interest of the spouse or former spouse.
(d) Direct rollover: A direct rollover is a
payment by the Plan to the eligible retirement
plan specified by the distributee.
Section 16.3. Additional Direct Rollover Rules.
The following additional rules apply to the Plan in addition to
the model language provided above.
(a) A distributee may elect a complete direct
rollover with respect to all of the
distribution or a partial direct rollover with respect to a
portion of the distribution and the
remainder will be paid directly to the distributee. The amount
of a partial direct rollover must be at
least $500. (b) A distributee who is
entitled to elect a direct rollover with respect to any or any
portion of a distribution but who does not
make any election shall be deemed to have
rejected the direct rollover option.
(c) A distribution of less than $200 that
would otherwise be an eligible rollover
distribution shall not be an eligible rollover distribution if
it is reasonable to expect that all such
distributions to the distributee from the Plan during the same
calendar year will total $200 or less.
(d) This rules of this Article shall be
administered in compliance with regulations issued
by the Internal Revenue Service under Sections 401(a)(31),
402(c)402(f) and 3405(c) of the Code, and
such regulations are hereby specifically incorporated by
reference. IN WITNESS WHEREOF, the Peoples Bancorp
Inc. Retirement Plan is, by the authority of the Board of
Directors of the Employer, executed on behalf of the Employer,
the 19th day of August, 1993.
PEOPLES BANCORP, INC.
ROBERT E. EVANS
Robert E. Evans
Authorized Officer
Robert E. Evans
President and Chief Executive Officer
ATTEST:
Charles R. Hunsaker
EXHIBIT 11
PEOPLES BANCORP INC.
Computation of Earnings Per Share
<TABLE>
Year Ended December 31
1993 1993 1992<F1> 1991<F1>
Before After
Cumulative Cumulative
Effect of Effect of
Accounting Accounting
Changes Changes
<S> <C> <C> <C> <C>
PRIMARY EARNINGS PER SHARE
EARNINGS
Net income $5,385,000 $5,071,000 $4,550,000 $3,615,000
COMMON SHARES OUTSTANDING
Weighted average
Common Shares
Outstanding 1,396,981 1,396,981 1,331,378 1,208,655
Add: Effect of outstanding
stock options 1,695 1,695
Total weighted average
Common Shares
Outstanding 1,398,676 1,398,676 1,331,378 1,208,655
PRIMARY EARNINGS PER SHARE $3.85 $3.63 $3.42 $2.99
FULLY DILUTED EARNINGS PER SHARE
EARNINGS
Net income $5,385,000 $5,071,000 $4,550,000 $3,615,000
Add: Effect of not
having Convertible
Subordinated
Debenture outstanding,
net of tax effect 21,000 21,000 117,000 229,000
TOTAL $5,406,000 $5,092,000 $4,667,000 $3,844,000
COMMON SHARES OUTSTANDING
Weighted average
Common Shares
Outstanding 1,396,981 1,396,981 1,331,378 1,208,655
Add: Effect of outstanding
stock options 1,695 1,695
SUBTOTAL 1,398,676 1,398,676
Add: Shares issued
assuming conversion of
Convertible Subordinated
Debentures at beginning
of period 22,319 22,319 138,060 268,925
Total weighted average
Common Shares
Outstanding 1,420,995 1,420,995 1,469,438 1,477,579
FULLY DILUTED EARNINGS
PER SHARE $3.81 $3.59 $3.17 $2.60
<FN>
<F1> Prior years weighted average shares outstanding adjusted due
to 10% stock dividend issued April 15, 1993.
</TABLE>
PAGE 1
INFORMATION NOT PERTINENT TO FORM 10-K.
/PAGE 1
PAGE 2
INFORMATION NOT PERTINENT TO FORM 10-K.
/PAGE 2
PAGE 3
INFORMATION NOT PERTINENT TO FORM 10-K.
/PAGE 3
PAGE 4
INFORMATION NOT PERTINENT TO FORM 10-K.
/PAGE 4
PAGE 5
SELECTED FINANCIAL DATA
The information below under the captions "Operating Data",
"Balance Sheet Data" and "Per Share Data" for each of the five
years in the period ended December 31, 1993 has been derived
from the Consolidated Financial Statements of the Corporation.
<TABLE>
<CAPTION>
1993 1992 1991 1990 1989
(dollars in thousands, except ratios and per share data)
<S> <C> <C> <C> <C> <C>
Operating Data<F1>
for the year ended:
Total interest income $35,311 $37,707 $39,151 $39,600 $37,806
Total interest expense 15,263 17,887 22,172 24,042 22,732
Net interest income 20,048 19,820 16,979 15,558 15,074
Provision for
loan losses 1,592 2,387 1,748 1,475 1,446
Other income 3,952 3,514 2,924 2,824 2,503
Other expenses 15,124 14,945 13,547 12,586 12,158
Net income 5,071 4,550 3,615 3,458 3,173
Balance Sheet Data
at year end:
Total assets $465,373 $468,562 $424,449 $412,789 $396,098
Investments 103,349 112,556 99,963 102,244 96,716
Net loans 315,305 285,448 273,980 257,634 247,135
Total deposits 385,639 401,623 375,027 360,601 347,148
Term debt and
capital leases 20,331 15,506 6,836 7,275 8,043
Stockholders' equity 42,778 38,497 32,414 29,567 27,598
Significant Ratios<F1><F2>
Net income to:
Average total assets 1.09% 1.01% 0.85% 0.85% 0.82%
Average stockholders'
equity 11.9 11.8 11.7 12.0 11.9
Average stockholders'
equity to average
total assets 8.8 7.5 7.3 7.1 6.9
Average loans to
average deposits 78.4 70.2 71.4 70.6 73.6
Primary capital to
period end total
assets 10.1 8.9 8.6 8.2 7.9
Dividend payment ratio 29.8 28.0 29.2 28.8 29.6
Per Share Data<F1><F2><F3>
Net income:
Primary $3.63 $3.42 $2.99 $2.84 $2.57
Fully diluted<F4> 3.59 3.17 2.60 2.46 2.25
Cash dividends paid 1.04 0.95 0.87 0.82 0.76
Book value at end of
period 29.41 27.63 26.57 24.60 22.55
<FN>
<F1> 1993 net income and per share information based upon net
income after adjustment for cumulative effect of accounting
changes.
<F2> Adjusted to reflect a 10% stock dividend issued on April 15,
1993.
<F3> Primary shares outstanding
1993 = 1,398,676
1992 = 1,331,851
1991 = 1,208,655
1990 = 1,220,878
1989 = 1,231,243
Fully diluted shares outstanding
1993 = 1,420,995
1992 = 1,469,911
1991 = 1,477,579
1990 = 1,501,071
1989 = 1,521,271
<F4> Fully diluted net income per share is calculated as if the
Subordinated Convertible Debentures were converted as of the
issue date, with a corresponding increase in net income from the
after-tax reduction in interest expense.
</TABLE>
/PAGE 5
PAGE 6
<TABLE>
<CAPTION>
CONSOLIDATED BALANCE SHEET
As of December 31, 1993 and 1992
1993 1992
<S> <C> <C>
ASSETS
Cash and due from banks (Note 1) $15,275,000 $17,427,000
Interest bearing deposits with banks 5,998,000 9,085,000
Federal funds sold 7,050,000 29,400,000
Investment securities (fair value
approximates $108,105,000 and
$117,571,000 at December 31, 1993
and 1992, respectively)
(Notes 1 and 2) 103,349,000 112,556,000
Loans (Notes 1, 3 and 11) 321,675,000 291,135,000
Reserve for possible loan losses
(Notes 1 and 3) (6,370,000) (5,687,000)
Net loans 315,305,000 285,448,000
Bank premises and equipment (Notes 1
and 4) 10,767,000 8,095,000
Accrued interest 3,254,000 3,720,000
Prepaid expenses and other assets 4,375,000 2,831,000
Total assets $465,373,000 $468,562,000
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Noninterest bearing $45,105,000 $45,713,000
Interest bearing 340,534,000 355,910,000
Total deposits 385,639,000 401,623,000
Short-term borrowings:
Federal funds purchased, Federal Home
Loan Bank advances, and securities
sold under repurchase agreements 12,260,000 9,700,000
Term debt (Note 5) 20,331,000 15,506,000
Accrued expenses and other liabilities 4,365,000 3,236,000
Total liabilities 422,595,000 430,065,000
Commitments (Notes 6 and 7)
Stockholders' equity (Notes 12, 17 and 18):
Common stock, $1.00 par value,
2,000,000 shares authorized,
1,309,491 issued 1,309,000
Capital in excess of par value 16,575,000
Common stock, no par value,
4,000,000 shares authorized,
1,509,540 issued 24,290,000
Retained earnings 20,012,000 21,639,000
SUBTOTAL 44,302,000 39,523,000
Treasury stock, 55,241 shares in 1993
and 42,925 shares in 1992, at
cost (1,524,000) (1,026,000)
Total stockholders' equity 42,778,000 38,497,000
Total liabilities and
stockholders' equity $465,373,000 $468,562,000
</TABLE>
The accompanying notes are an integral part of the financial statements.
/PAGE 6
PAGE 7
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENT OF INCOME
For the three years ended December 31, 1993
1993 1992 1991
<S> <C> <C> <C>
INTEREST INCOME:
Interest and fees on loans $26,645,000 $27,788,000 $28,853,000
Interest and dividends on:
Obligations of U.S. Government
and its agencies 5,050,000 5,598,000 5,345,000
Obligations of states and
political subdivisions 2,022,000 2,126,000 2,151,000
Other interest income 1,594,000 2,195,000 2,802,000
Total interest income 35,311,000 37,707,000 39,151,000
INTEREST EXPENSE:
Interest on deposits 13,855,000 17,186,000 21,109,000
Interest on short-term borrowings 203,000 262,000 495,000
Interest on term debt 1,205,000 439,000 568,000
Total interest expense 15,263,000 17,887,000 22,172,000
Net interest income 20,048,000 19,820,000 16,979,000
Provision for loan losses 1,592,000 2,387,000 1,748,000
Net interest income after
provision for loan losses 18,456,000 17,433,000 15,231,000
OTHER INCOME:
Income from fiduciary activities 1,475,000 1,342,000 1,304,000
Service charges on deposit accounts 1,295,000 964,000 853,000
Gain on sale of securities 45,000 44,000 1,000
Other 1,137,000 1,164,000 766,000
Total other income 3,952,000 3,514,000 2,924,000
OTHER EXPENSES:
Salaries and benefits 7,429,000 6,991,000 6,478,000
Net occupancy expense of premises 924,000 834,000 752,000
Equipment expense 1,091,000 1,152,000 1,079,000
Insurance 1,057,000 1,054,000 923,000
Stationary and other supplies 543,000 534,000 482,000
Taxes other than income taxes 565,000 520,000 468,000
Amortization of excess of cost over
net assets acquired 159,000 159,000 186,000
Other 3,356,000 3,701,000 3,179,000
Total other expenses 15,124,000 14,945,000 13,547,000
Income before federal income taxes
and cumulative effect of
accounting changes 7,284,000 6,002,000 4,608,000
FEDERAL INCOME TAXES (Note 9):
Current 2,168,000 1,968,000 1,062,000
Deferred (269,000) (516,000) (69,000)
SUBTOTAL 1,899,000 1,452,000 993,000
Income before cumulative effect
of accounting changes 5,385,000 4,550,000 3,615,000
Cumulative effect of accounting
changes, net of applicable
taxes (Notes 8 and 9) (314,000)
NET INCOME $5,071,000 $4,550,000 $3,615,000
EARNINGS PER SHARE (Note 10):
Income before cumulative
effect of accounting changes:
Primary $3.85 $3.42 $2.99
Assuming full dilution $3.81 $3.17 $2.60
Cumulative effect of accounting changes:
Primary $0.22
Assuming full dilution $0.22
Net income per share:
Primary $3.63 $3.42 $2.99
Assuming full dilution $3.59 $3.17 $2.60
Weighted average number of
shares outstanding:
Primary 1,398,676 1,331,851 1,208,655
Assuming full dilution 1,420,995 1,469,911 1,477,579
</TABLE>
The accompanying notes are an integral part of the financial statements.
/PAGE 7
PAGE 8
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
For the three years ended December 31, 1993
Capital in
Common Stock Excess Retained Treasury
Shares Amount of Par Earnings Stock Total
<S> <C> <C> <C> <C> <C> <C>
Balance, January 1, 1991 1,127,606 $1,128,000 $13,449,000 $15,807,000 $(817,000) $29,567,000
Net income 3,615,000 3,615,000
Purchase of treasury
stock, 2,000 shares (50,000) (50,000)
Conversion of
subordinated debentures
to common stock 18,647 19,000 320,000 339,000
Cash dividends,
at a rate of $0.87
per share (1,057,000) (1,057,000)
Balance, December
31, 1991 1,146,253 1,147,000 13,769,000 18,365,000 (867,000) 32,414,000
Net income 4,550,000 4,550,000
Purchase of treasury
stock, 5,793 shares (159,000) (159,000)
Conversion of
subordinated debentures
to common stock 163,238 162,000 2,806,000 2,968,000
Cash dividends,
at a rate of $0.95
per share (1,276,000) (1,276,000)
Balance, December
31, 1992 1,309,491 1,309,000 16,575,000 21,639,000 (1,026,000) 38,497,000
Net income 5,071,000 5,071,000
Purchase of treasury
stock, 12,316 shares (498,000) (498,000)
Conversion of
subordinated debentures
to common stock 73,532 74,000 1,144,000 1,218,000
10% stock dividend 126,517 126,000 5,062,000 (5,188,000)
Conversion from $1.00
par value to no
par value 22,781,000 (22,781,000)
Cash dividends,
at a rate of $1.04
per share (1,510,000) (1,510,000)
Balance, December
31, 1993 1,509,540 $24,290,000 $0 $20,012,000 $(1,524,000) $42,778,000
</TABLE>
The accompanying notes are an integral part of the financial statements.
/PAGE 8
PAGE 9
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENT OF CASH FLOWS
For the three years ended December 31, 1993
1993 1992 1991
<S> <C> <C> <C>
Cash flows from operating activities:
Net income $5,071,000 $4,550,000 $3,615,000
Adjustments to reconcile net income
to net cash provided by
operating activities:
Provision for loan losses 1,592,000 2,387,000 1,748,000
Gain on sale of investments (45,000) (44,000) (1,000)
Depreciation and amortization 1,584,000 1,746,000 1,495,000
(Increase) decrease in
interest receivable 466,000 (821,000) 198,000
(Increase) decrease in
interest payable (275,000) 391,000 342,000
Deferred income taxes (565,000) (516,000) (69,000)
Deferral of loan origination
fees and costs (221,000) (172,000) (41,000)
Accrual for postretirement
benefits 867,000
Other, net (698,000) 2,045,000 (1,594,000)
Net cash provided by
operating activities 7,776,000 9,566,000 5,693,000
Cash flows from investing activities:
Net increase in term interest
bearing deposits with banks
and federal funds sold 7,468,000 5,409,000 (3,565,000)
Purchases of investment securities (29,260,000) (34,685,000) (19,134,000)
Proceeds from sales of
investment securities 4,558,000 72,000 1,466,000
Proceeds from maturities of
investment securities 33,402,000 21,323,000 19,342,000
Net increase in loans (31,166,000) (13,617,000) (17,929,000)
Expenditures for premises and
equipment (3,566,000) (2,771,000) (1,169,000)
Proceeds from sales of other
real estate owned 56,000 826,000 30,000
Net cash applied to
investing activities (18,508,000) (23,443,000) (20,959,000)
Cash flows from financing activities:
Net increase (decrease) in
noninterest-bearing deposits (608,000) 9,314,000 (2,028,000)
Net increase (decrease) in
interest-bearing deposits (15,376,000) 17,282,000 6,454,000
Net increase (decrease) in
short-term borrowings 2,559,000 1,785,000 (4,535,000)
Proceeds from long-term debt 8,000,000 12,000,000 2,600,000
Payments on long-term debt and
capital leases (1,956,000) (360,000) (2,700,000)
Cash dividends paid (1,510,000) (1,276,000) (1,057,000)
Purchase of treasury stock (498,000) (159,000) (50,000)
Net cash provided by
(applied to) financing
activities (9,389,000) 38,586,000 8,684,000
Net increase (decrease)
in cash and cash
equivalents (20,121,000) 24,709,000 (6,582,000)
Cash and cash equivalents at
beginning of year 48,444,000 23,735,000 30,317,000
Cash and cash equivalents at
end of year $28,323,000 $48,444,000 $23,735,000
Supplemental disclosures of cash flow information and non-cash transactions:
Interest paid $15,538,000 $18,276,000 $22,514,000
Income taxes paid $2,754,000 $1,461,000 $1,055,000
Conversion of subordinated
debentures to common stock $1,218,000 $2,968,000 $339,000
</TABLE>
The accompanying notes are an integral part of the financial statements.
/PAGE 9
PAGE 10
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1. SUMMARY OF SELECTED ACCOUNTING POLICIES:
The following is a summary of significant accounting policies
followed in the preparation of the financial statements. Certain
amounts in the 1992 and 1991 financial statements have been
reclassified to conform to the 1993 presentation.
PRINCIPLES OF CONSOLIDATION:
The consolidated financial statements include the accounts of
Peoples Bancorp Inc. (the Corporation) and its wholly-owned
subsidiaries. Significant intercompany accounts and transactions
have been eliminated.
INCOME RECOGNITION:
The principal areas of operation of the Corporation are reported
on the accrual basis of accounting. Subsidiary banks suspend the
accrual of interest when, in management's opinion, collection of
all or a portion of future interest has become doubtful. When
deemed uncollectible, previously accrued and unpaid interest on
loans placed on nonaccrual status is charged against the
allowance for loan losses or reversed from current year's
interest income depending on the year the accrued interest was
recorded. Interest is included in income to the extent received
only if complete principal recovery is reasonably assured.
INVESTMENT SECURITIES:
Investment securities are stated at cost adjusted for
amortization of premium or accretion of discount on the
level-yield method. Gain or loss on securities are recorded at
the settlement date, which does not differ materially from the
trade date, using the specific identification method.
At the time of purchase of a security the subsidiary banks
determine if the security will be held in the trading or
investment account. The determination is based upon the intended
use and the bank's intent and ability to hold to maturity.
At December 31, 1993 and 1992, the subsidiary banks did not
maintain trading accounts.
RESERVE FOR POSSIBLE LOAN LOSSES:
The provision for possible loan losses for financial reporting
purposes is based upon past experience and an evaluation of
potential losses in the current loan portfolio. In management's
opinion, the provision is considered sufficient to maintain the
loan loss reserve at a level adequate to absorb all anticipated
losses existing in the loan portfolios at the balance sheet
dates.
BANK PREMISES AND EQUIPMENT:
The cost of Bank premises and equipment is depreciated over the
estimated useful lives of the related assets on the
straight-line method. Maintenance and repairs are charged to
operations as incurred. Additions and betterments are
capitalized.
The cost of assets sold or retired and the related amounts of
accumulated depreciation are eliminated from the accounts in the
year of sale or retirement. Any resulting gain or loss is
reflected in the consolidated statement of income.
OTHER REAL ESTATE:
Other real estate owned, included in other assets on the
consolidated balance sheet, represents properties acquired by
the Corporation's subsidiary banks through customers' loan
defaults. Real estate is stated at an amount equal to the loan
balance prior to foreclosure plus cost incurred for improvements
to the property, but not more than the fair value less estimated
costs to sell the property.
EXCESS OF COST OVER NET ASSETS ACQUIRED:
The excess of cost over net assets of subsidiary banks acquired
is being amortized over a ten to twenty-year period using the
straight-line and sum-of-the-months digits methods.
CONSOLIDATED STATEMENT OF CASH FLOWS:
Cash and cash equivalents include cash and amounts due from
banks, interest bearing deposits with banks and federal funds
sold, all with original maturities of ninety days or less. These
balances at December 31, 1993, 1992 and 1991 are as follows:
<TABLE>
1993 1992 1991
<S> <C> <C> <C>
Cash and due from banks $15,275,000 $17,427,000 $14,632,000
Interest bearing deposits
with banks 5,998,000 5,117,000 1,103,000
Federal funds sold 7,050,000 25,900,000 8,000,000
TOTAL $28,323,000 $48,444,000 $23,735,000
</TABLE>
/PAGE 10
PAGE 11
FAIR VALUES OF FINANCIAL INSTRUMENTS:
The following methods and assumptions were used by the
Corporation in estimating its fair value disclosures for
financial instruments in accordance with Statement of Financial
Accounting Standards No. 107:
CASH AND DUE FROM BANKS, INTEREST BEARING DEPOSITS WITH BANKS,
AND FEDERAL FUNDS SOLD: The carrying amounts reported in
the balance sheet for these captions approximate those assets'
fair values.
INVESTMENT SECURITIES: Fair values for investment securities are
based on quoted market prices, where available. If quoted market
price is not available, fair value is estimated using quoted
market prices of comparable securities.
LOANS: For performing variable rate loans that reprice
frequently and performing demand loans, with no significant
change in credit risk, fair values are based on carrying values.
The fair values for certain mortgage loans are based on quoted
market prices of similar loans sold in conjunction with
securitization transactions, adjusted for differences in loan
characteristics. The fair value of other performing loans (e.g.,
commercial real estate, commercial and consumer loans) are
estimated using discounted cash flow analyses, using interest
rates currently being offered for loans with similar terms to
borrowers of similar credit quality.
Fair value for significant nonperforming loans is based on
either the estimated fair value of underlying collateral or
estimated cash flows discounted at a rate commensurate with the
risk. Assumptions regarding credit risk, cash flows, and
discount rates are determined using available market information
and specific borrower information.
DEPOSITS: The carrying amounts of demand deposits, savings
accounts and certain money market deposits approximate fair
value. The fair value of fixed maturity certificates of deposit
is estimated using the rates currently offered for deposits of
similar remaining maturities. The carrying value and fair value
of interest-bearing deposits were $340,534,000 and $343,977,000,
and $355,910,000 and $361,317,000 at December 31, 1993 and 1992,
respectively.
SHORT-TERM BORROWINGS: The carrying amounts of federal funds
purchased, securities sold under repurchase agreements
approximate their fair values.
TERM DEBT: Rates currently available to the Corporation for debt
with similar terms and remaining maturities are used to estimate
fair value of existing debt. The carrying amounts of term debt
approximate their fair value.
LOAN COMMITMENTS AND STANDBY LETTERS OF CREDIT: The fair value
of commitments is estimated using the fees currently charged to
enter into similar agreements taking into account the remaining
terms of the agreements and the present creditworthiness of the
counterparties.
2. INVESTMENTS SECURITIES:
The carrying values and estimated fair values of investments are
as follows:
<TABLE>
<CAPTION>
Gross Gross
Carrying Unrealized Unrealized Fair
Value Gains Losses Value
DECEMBER 31, 1993
<S> <C> <C> <C> <C>
Obligations of
U.S. Government $48,790,000 $2,244,000 $(12,000) $51,022,000
Obligations of U.S.
Government agencies 4,809,000 56,000 (3,000) 4,862,000
Government
mortgage-backed
securities 13,589,000 149,000 (17,000) 13,721,000
Obligations of states
and political
subdivisions 26,183,000 1,648,000 27,831,000
Other bonds and
securities 9,978,000 701,000 (10,000) 10,669,000
TOTALS $103,349,000 $4,798,000 $(42,000) $108,105,000
DECEMBER 31, 1992
Obligations of U.S.
Government $60,317,000 $3,034,000 $(6,000) $63,345,000
Obligations of U.S.
Government agencies 915,000 43,000 958,000
Government
mortgage-backed
securities 10,163,000 222,000 (73,000) 10,312,000
Obligations of states
and political
subdivisions 31,284,000 1,534,000 (33,000) 32,785,000
Other bonds and
securities 9,877,000 339,000 (45,000) 10,171,000
TOTALS $112,556,000 $5,172,000 $(157,000) $117,571,000
</TABLE>
/PAGE 11
PAGE 12
The carrying value and estimated fair value of debt securities
at December 31, 1993, by contractual maturity, is shown below.
Expected maturities will differ from contractual maturities
because borrowers may have the right to call or prepay
obligations with or without call or prepayment penalties.
<TABLE>
<CAPTION>
Carrying Fair
Value Value
<S> <C> <C>
Due in one year or less $20,004,000 $20,406,000
Due after one year through five years 53,621,000 56,538,000
Due after five years through ten years 13,367,000 14,189,000
Due after ten years 6,533,000 7,120,000
Government mortgage-backed securities 9,824,000 9,852,000
TOTALS $103,349,000 $108,105,000
</TABLE>
Proceeds from sales of investments in debt securities during
1993, 1992 and 1991 were $4,558,000, $0 and $501,000,
respectively. Gross gains of $45,000, $0 and $1,000 were
realized during 1993, 1992 and 1991, respectively.
As of December 31, 1993 and 1992, investment securities having a
par value of $42,985,000 and $55,840,000, respectively were
pledged to collateralize government and trust department
deposits in accordance with federal and state requirements.
The Financial Accounting Standards Board has issued Statement on
Financial Accounting Standards No. 115, "Accounting for Certain
Investments in Debt and Equity Securities" (SFAS No. 115). The
requirements of SFAS No. 115 are effective for fiscal years
beginning after December 15, 1993. SFAS No. 115 requires that
debt and equity securities be classified in three categories and
accounted for as follows:
1. Debt securities that the Corporation has the
positive intent to hold to maturity are classified as
held-to-maturity securities and reported at amortized cost.
2. Debt and equity securities that are bought and
held principally for the purpose of selling them in the near
term are classified as trading securities and reported at fair
value, with unrealized gains and losses included in earnings.
3. Debt and equity securities not classified as
either held-to-maturity securities or trading securities are
classified as available-for-sale securities and reported at fair
value, with unrealized gains and losses excluded from earnings
and reported in a separate component of stockholders' equity.
The Corporation will adopt this accounting standard effective
January 1, 1994. The effect of this change in accounting
principle will result in an unrealized holding gain, net of tax
effect, of approximately $485,000, for securities classified as
available-for-sale and will be reflected as a separate component
of stockholders' equity. It is anticipated the adoption of this
accounting standard will have no impact on 1994 earnings.
3. LOANS AND RESERVE FOR POSSIBLE LOAN LOSSES:
Loans are comprised of the following at December 31:
<TABLE>
<CAPTION>
1993 1992
Carrying Carrying
Value Value
<S> <C> <C>
Commercial $47,299,000 $40,253,000
Real estate, construction 3,391,000 1,965,000
Real estate, mortgage 189,866,000 176,119,000
Consumer 81,119,000 72,798,000
TOTALS $321,675,000 $291,135,000
</TABLE>
/PAGE 12
PAGE 13
Activity in the reserve for loan losses is summarized as follows:
<TABLE>
<CAPTION>
1993 1992 1991
<S> <C> <C> <C>
Balance, beginning of year $5,687,000 $4,273,000 $4,068,000
Provision for loan losses 1,592,000 2,387,000 1,748,000
Reserve of acquired branch 721,000
Losses charged to the reserve,
net of recoveries of
$294,000, $623,000 and
$476,000, respectively (909,000) (1,694,000) (1,561,000)
Balance, end of year $6,370,000 $5,687,000 $4,273,000
</TABLE>
The fair value of net loans at December 31, 1993 and 1992 was
$322,670,000 and 294,732,000, respectively.
In May 1993, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 114 "Accounting
by Creditors for Impairment of a Loan" (SFAS No. 114). The
statement applies to financial statements for fiscal years
beginning after December 15, 1994, and requires that certain
impaired loans be recorded at either the present value of
expected future cash flows discounted at the loan's effective
interest rate, the loan's market price, or the fair value of the
collateral for collateral dependent loans. The effect of
adopting this statement is unknown at the present time.
4. BANK PREMISES AND EQUIPMENT:
The cost of Bank premises and equipment and the related
accumulated depreciation as of December 31, 1993 and 1992 are
summarized as follows:
<TABLE>
1993 1992
<S> <C> <C>
Land $1,069,000 $1,069,000
Building and premises 10,329,000 8,264,000
Furniture, fixtures and equipment 6,037,000 5,774,000
SUBTOTAL 17,435,000 15,107,000
Accumulated depreciation 6,668,000 7,012,000
Net book value $10,767,000 $8,095,000
</TABLE>
Depreciation expense was $906,000, $798,000 and $759,000 for the
years ended December 31, 1993, 1992 and 1991, respectively.
5. TERM DEBT:
Term debt consisted of the following at December 31:
<TABLE>
<CAPTION>
1993 1992
Carrying Carrying
Value Value
<S> <C> <C>
Term note payable, at prime
(6% at December 31, 1993) $2,080,000 $2,340,000
Convertible Subordinated Debenture,
7-3/4% due May 1, 2006 1,234,000
Federal Home Loan Bank advances,
bearing interest at rates ranging
from 4.15% to 6.75% 18,251,000 11,932,000
TOTALS $20,331,000 $15,506,000
</TABLE>
The Term Note payable is due on June 30, 1994, with interest
payable quarterly. The Note Agreement is collateralized by all
of the common stock of a consolidated subsidiary and places
certain restrictive covenants on the Corporation, including the
maintenance of tangible net worth equal to the greater of 6% of
total assets or $27,922,000, and the incurrence of additional
indebtedness.
The Subordinated Debentures were convertible at any time prior
to maturity at $16.53 per share. The Debentures were redeemable
at the option of the Corporation at any time on or after May 1,
1989, at various redemption prices declining to par at May 1,
1996. During 1992 the Corporation redeemed 50% of the
outstanding Debentures for 103.1% of the principal amount.
During 1993 the Corporation redeemed the remaining debentures at
a price of 102.325%.
/PAGE 13
PAGE 14
Federal Home Loan Bank (FHLB) advances consist of various
borrowings with maturities ranging from 10 to 15 years. The
advances are collateralized by the Corporation's real estate
mortgage portfolio and all of the FHLB common stock owned by the
banking subsidiaries. The most restrictive requirement of the
debt agreement requires the Corporation to provide real estate
mortgage loans as collateral at an amount not less than 150% of
advances outstanding.
The aggregate minimum annual retirements of term debt in the
next five years are as follows:
1994 $3,754,000
1995 1,772,000
1996 1,875,000
1997 1,744,000
1998 1,675,000
Thereafter 9,511,000
TOTAL $20,331,000
6. COMMITMENTS:
The Corporation leases a banking facility and equipment under
various agreements with original terms providing for fixed
monthly payments over periods ranging from two to ten years.
The future minimum rental payments required under operating
leases are as follows:
Year Ending Operating
December 31, Leases
1994 $58,000
1995 5,000
1996 6,000
1997 6,000
1998 6,000
Thereafter 14,000
Total minimum lease payments $105,000
Rent expense amounted to $149,000, $224,000 and $225,000 in
1993, 1992 and 1991, respectively.
7. FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK:
In the normal course of business, the Corporation is party to
financial instruments with off-balance-sheet risk necessary to
meet the financing needs of customers. These financial
instruments include loan commitments, standby letters of credit,
and unused credit card limits. The instruments involve, to
varying degrees, elements of credit and interest rate risk in
excess of the amount recognized in the consolidated financial
statements.
The Corporation's exposure to credit loss in the event of
nonperformance by the other party to the financial instrument
for loan commitments, standby letters of credit and unused
credit card limits is represented by the contractual amount of
those instruments. The Corporation uses the same credit policies
in making commitments and conditional obligations as it does for
on-balance-sheet instruments. The total amounts of financial
instruments with off-balance-sheet risk are as follows:
<TABLE>
<CAPTION>
1993 1992
Contract Fair Contract Fair
Amount Value Amount Value
<S> <C> <C> <C> <C>
Financial instruments whose
contract amounts represent
credit risk:
Loan commitments $24,895,000 $62,000 $25,896,000 $32,000
Standby letters of credit 2,132,000 27,000 5,146,000 26,000
Unused credit card limits 11,872,000 N/A 9,755,000 N/A
</TABLE>
Since many of the loan commitments may expire without being
drawn upon, the total commitment amount does not necessarily
represent future cash requirements. The Corporation evaluates
each customer's credit worthiness on a case-by-case basis. The
amount of collateral obtained, if deemed necessary by the
Corporation upon extension of credit, is based on management's
credit evaluation of the counter-party. Collateral held varies
but may include accounts receivable, inventory, property, plant,
and equipment, and income-producing commercial properties. The
credit
/PAGE 14
PAGE 15
risk involved in issuing letters of credit is essentially the
same as that involved in extending loan commitments to
customers. The Corporation's average commitment for credit card
loans is $2,075. As a result, collateral is not required on
credit card loans.
The Corporation's lending is primarily focused in the local
southeastern Ohio market and consists principally of
single-family residential mortgages. The Corporation's largest
group of business loans consist of Automobile Dealer Floor
Plans, which totaled $13,782,000 and $10,526,000 at December 31,
1993 and 1992, respectively. It is the Corporation's policy to
obtain the underlying inventory as collateral on these loans.
The Corporation does not extend credit to any single borrower or
group of related borrowers in excess of $6,889,000, the legal
lending limit.
8. EMPLOYEE BENEFIT PLANS:
The Corporation has a noncontributory pension plan which covers
substantially all employees. The plan provides benefits based on
an employee's years of service and compensation. The
Corporation's funding policy is to contribute annually an amount
that can be deducted for federal income tax purposes using a
different actuarial cost method and different assumptions from
those used for financial reporting.
Net pension cost for 1993, 1992 and 1991 included the following
components:
<TABLE>
<CPATION>
1993 1992 1991
<S> <C> <C> <C>
Service cost-benefits earned during
the year $243,000 $201,000 $197,000
Interest cost on projected benefit
obligations 388,000 370,000 367,000
Actual return on plan assets (411,000) (405,000) (421,000)
Net amortization and deferral of
initial transition credit and
subsequent gains and losses (11,000) (29,000) 24,000
Net pension cost $209,000 $137,000 $167,000
The funded status of the plan and accrued pension cost
recognized at December 31, 1993 and 1992 were as follows:
</TABLE>
<TABLE>
1993 1992
<S> <C> <C>
Actuarial present value of benefit obligations:
Vested benefits $4,479,000 $3,857,000
Nonvested benefits 155,000 109,000
Accumulated benefit obligation 4,634,000 3,966,000
Impact of future salary increases 873,000 967,000
Projected benefit obligation 5,507,000 4,933,000
Plan assets at fair value, primarily
U.S. Government obligations, and
collective investment stock and
bond funds 5,026,000 4,856,000
Projected benefit obligations in
excess of plan assets (481,000) (77,000)
Items not recognized in income:
Unrecognized prior service cost (78,000) (86,000)
Unrecognized net gain from past
experience different from that
assumed and effects of changes
in assumptions (211,000) (396,000)
Initial transition credit which is
being amortized over 21 years (66,000) (68,000)
Accrued pension cost included in other
liabilities $(836,000) $(627,000)
Assumptions used for the plan at
December 31, 1993 and 1992 are
as follows:
Discount rate 7.25% 8.00%
Rate of increase in compensation levels 4.50% 5.50%
Long-term rate of return on assets 8.50% 8.50%
</TABLE>
Prior to 1992, the Corporation maintained an informal
contributory health care and life insurance benefits program for
substantially all employees and retirees. During 1992, this Plan
was amended to provide these benefits only to existing retirees
and their dependents at increased contributory levels. Prior to
1993, the Corporation accounted for the costs of providing these
benefits as the health care costs were incurred and premiums
were paid. The Corporation's cost of providing these benefits to
retirees was approximately $90,000 in 1992.
/PAGE 15
PAGE 16
On January 1, 1993, the Corporation adopted Statement of
Financial Accounting Standards No. 106 "Employers' Accounting
for Postretirement Benefits Other Than Pensions" (SFAS No. 106)
which requires the accrual of the expected costs of providing
postretirement benefits during the period of employee service.
The Corporation has recognized the cumulative effect of its
transition obligation of $884,000 ($583,000, net of tax) as of
January 1, 1993. The net periodic postretirement benefit cost
for 1993 was $74,000. The net postretirement benefit liability
was $867,000 at December 31, 1993. The weighted average discount
rate used in determining the accumulated postretirement benefit
obligation at December 31, 1993 was 7.25%. The assumed health
care costs trend rate used in measuring the accumulated benefit
obligation at December 31, 1993 was 11%, grading down 1% per
year to an ultimate rate of 5%.
The Financial Accounting Standards Board issued Statement of
Financial Accounting Standard No. 112, "Employer's Accounting
for Postemployment Benefits" (SFAS No. 112), which requires
accrual accounting for benefits provided to former or inactive
employees after employment, but before retirement. The
requirements of SFAS No. 112 are effective for fiscal years
beginning after December 15, 1993. The Corporation anticipates
that the adoption of this accounting standard will not have a
material impact on the Corporation's financial position or
results of operations.
9. FEDERAL INCOME TAX EXPENSE:
The Corporation and its banking affiliates file a consolidated
federal income tax return and income tax expense is allocated
among all companies based upon their federal taxable income or
loss and tax credits.
On January 1, 1993 the Corporation adopted Financial Accounting
Standards No. 109, "Accounting for Income Taxes" (SFAS No. 109),
which requires the recognition of deferred tax assets and
liabilities for the expected future tax consequences of events
that have been included in the financial statements or tax
returns. Deferred income taxes are recognized at prevailing tax
rates for temporary differences between financial statement and
income tax bases of assets and liabilities. The Corporation has
recognized the cumulative effect of this change in accounting of
$269,000 as an increase in income in 1993.
The effective federal income tax rate in the consolidated
statement of income is less than the statutory corporate tax
rate due to the following:
<TABLE>
<CAPTION>
December 31
1993 1992 1991
<S> <C> <C> <C>
Statutory corporate tax rate 34.0% 34.0% 34.0%
Differences in rate resulting from:
Interest on obligations of state
and political subdivisions (7.9) (10.2) (13.5)
Other 0.4 1.0
TOTALS 26.1% 24.2% 21.5%
Deferred federal income tax expense arises from timing
differences in the recognition of revenue and expense for
financial reporting and tax purposes. The source of those
differences and the tax effects of each are as follows:
Difference in tax and book provision for
loan losses $(303,000) $(64,000)
Deferral of nonrefundable loan fees for book (59,000) 14,000
Other (154,000) (19,000)
TOTALS $(516,000) $(69,000)
</TABLE>
The related federal income tax expense (benefit) on securities
transactions approximated $15,000 in 1993, $13,000 in 1992 and
$0 in 1991.
/PAGE 16
PAGE 17
The components of the net deferred tax asset were as follows:
<TABLE>
December 31 January 1
1993 1993
<S> <C> <C>
Deferred tax assets arising from:
Loan loss reserve $1,427,000 $1,175,000
Pension expense 317,000 246,000
Postretirement benefits other
than pensions 297,000
Deferred loan fees and costs 289,000 268,000
Other 242,000 211,000
Total deferred tax asset 2,572,000 1,900,000
Deferred tax liabilities arising from:
Depreciation 367,000 305,000
Other 153,000 107,000
Total deferred tax liabilities 520,000 412,000
Net deferred tax assets $2,052,000 $1,488,000
</TABLE>
The Corporation has not recorded a valuation allowance, as the
deferred tax assets are presently considered to be realizable
upon the level of anticipated future taxable income. Net
deferred tax assets and federal income tax expense in future
years can be significantly affected by changes in the enacted
tax rates or by unexpected adverse events that would impact
management's conclusions as to the ultimate realizability of
deferred tax assets.
10. EARNINGS PER SHARE:
Fully-diluted earnings per share are calculated as if the
Subordinated Debentures were converted as of the issue date,
with a corresponding increase in net income from the after-tax
reduction in interest expense. For purposes of the primary and
fully-diluted earnings per share calculation, options granted
under the 1993 stock option plan are considered common stock
equivalents.
11. RELATED PARTY TRANSACTIONS:
In the normal course of its business, the subsidiary banks have
granted loans to certain executive officers and directors and
their interests. The following is an analysis of activity of
related party loans for the year ended December 31, 1993:
Balance, January 1, 1993 $7,905,000
New loans 11,191,000
Repayments (9,481,000)
------------
Balance, December 31, 1993 $9,615,000
Such amounts do not include loans to members of immediate
families other than spouses of persons who are executive
officers or directors.
12. REGULATORY MATTERS:
The payment of dividends by banking subsidiaries is subject to
various Regulatory restrictions. Laws provide that dividends in
any calendar year generally shall not exceed the total net
profits of that year plus the retained net profits of the
preceding two years. As of December 31, 1993 approximately
$7,700,000 of retained earnings of the banking subsidiaries were
available for the payment of dividends to the parent
corporation.
The Corporation's banking subsidiaries are required to maintain
minimum amounts of capital to total "risk weighted" assets, as
defined by the banking regulators. At December 31, 1993 the
banking subsidiaries are required to have minimum Tier 1 and
total capital ratios of 4% and 8%, respectively. The banking
subsidiaries' actual ratios at that date were in excess of these
stated minimums.
13. FEDERAL RESERVE REQUIREMENTS:
The Federal Reserve requires that certain average reserve
balances be maintained in the subsidiary banks' cash and due
from banks account. The Reserve requirement is calculated on a
percentage of total deposit liabilities and amounted to
$5,010,000 and $4,834,000 at December 31, 1993 and 1992,
respectively.
/PAGE 17
PAGE 18
14. BRANCH ACQUISITIONS:
During 1992, the Corporation acquired approximately $32 million
of assets and assumed $32 million of deposit and other
liabilities from two unaffiliated institutions.
15. STOCK DIVIDEND:
On January 25, 1993, the Corporation declared a ten percent
stock dividend issued on April 15, 1993 to shareholders of
record as of April 1, 1993. All per share information in the
accompanying consolidated financial statements has been
adjusted to give retroactive effect to the stock dividend.
16. STOCK OPTIONS:
The Corporation is authorized under provisions of the 1993 Stock
Option Plan to grant options to purchase 110,000 shares of the
Corporation's Common Stock to key employees and directors at a
price not less than the fair market value of the shares on the
dates the options are granted. Options granted may be either
"Incentive Options" or "Non-qualified Options" as defined by the
Internal Revenue Code.
During 1993 the Corporation granted 8,050 non-qualified options
at $41.00 per share and 19,000 incentive options at $35.00 per
share. All of these options were outstanding as of December 31,
1993.
17. STOCKHOLDERS' EQUITY:
During 1993 the stockholders of the Corporation approved a plan
which provided for, among other things, the change in the
Corporation's state of incorporation from Delaware to Ohio, and
an increase in the authorized number of shares from 2,000,000
common shares, $1.00 par value, to 4,000,000 common shares,
without par value. Common stock and capital in excess of par
value have been combined and presented as a single caption on
the accompanying consolidated balance sheet at December 31, 1993.
18. PARENT COMPANY ONLY FINANCIAL INFORMATION:
<TABLE>
<CAPTION>
BALANCE SHEET, DECEMBER 31
1993 1992
<S> <C> <C>
Assets:
Cash $128,000 $320,000
Receivable due from subsidiary 1,606,000 1,765,000
Short-term and other investments 569,000 569,000
Capital note receivable due from subsidiary 3,000,000
Investments in subsidiaries, at equity 38,269,000 37,771,000
Excess cost over net assets acquired 1,241,000 1,378,000
Subordinated debenture costs, net
of amortization 84,000
Other 599,000 634,000
Total assets $45,412,000 $42,521,000
Liabilities:
Accrued interest payable and accrued expenses $147,000 $121,000
Dividends payable 407,000 329,000
Term debt (Note 5) 2,080,000 3,574,000
Total liabilities 2,634,000 4,024,000
Stockholders' equity 42,778,000 38,497,000
Total liabilities and stockholders'equity $45,412,000 $42,521,000
</TABLE>
/PAGE 18
PAGE 19
<TABLE>
<CAPTION>
Statement of Income
Year Ended December 31,
1993 1992 1991
<S> <C> <C> <C>
INCOME:
Dividends from subsidiaries $5,130,000 $1,810,000 $1,615,000
Interest ($40,000, $55,000
and $85,000 from
subsidiaries, respectively) 58,000 60,000 100,000
Management fees from
subsidiaries 770,000 698,000 455,000
Other 110,000 39,000
Total income 6,068,000 2,607,000 2,170,000
EXPENSES:
Interest 169,000 333,000 568,000
Salaries and benefits 848,000 660,000 391,000
Other 709,000 630,000 480,000
Total expenses 1,726,000 1,623,000 1,439,000
Income before federal
income taxes and equity
in undistributed
earnings of
subsidiaries 4,342,000 984,000 731,000
Applicable income tax benefit 231,000 237,000 251,000
Equity in undistributed earnings
of subsidiaries 498,000 3,329,000 2,633,000
NET INCOME $5,071,000 $4,550,000 $3,615,000
STATEMENT OF CASH FLOWS
YEAR ENDED DECEMBER 31,
Cash flows from operating activities:
Net income $5,071,000 $4,550,000 $3,615,000
Adjustments to reconcile net
income to cash provided
by operations:
Amortization and depreciation 265,000 281,000 221,000
Equity in undistributed
earnings of subsidiaries (498,000) (3,329,000) (2,633,000)
Other, net 115,000 (159,000) 187,000
Net cash provided by
operating activities 4,953,000 1,343,000 1,390,000
Cash flows from investing activities:
Net decrease in short-term
investments 40,000 1,834,000
Purchase of investment securities (50,000) (112,000)
Expenditures for premises and
equipment (20,000) (4,000) (67,000)
Proceeds from sale of
premises to subsidiary 362,000
Purchase of capital
note receivable
due from subsidiary (3,000,000)
Net cash provided by
investing activities (3,020,000) 348,000 1,655,000
Cash flows from financing activities:
Cash dividends paid (1,510,000) (1,276,000) (1,057,000)
Proceeds from long-term debt 2,600,000
Payments on long-term debt and
capital leases (276,000) (292,000) (2,700,000)
Purchase of treasury stock (498,000) (159,000) (50,000)
Change in receivable
from subsidiary 159,000 (184,000) (1,581,000)
Net cash used in
financing activities (2,125,000) (1,911,000) (2,788,000)
Net (decrease) increase
in cash (192,000) (220,000) 257,000
Cash at the beginning of the year 320,000 540,000 283,000
Cash at the end of
the year $128,000 $320,000 $540,000
</TABLE>
The parent company paid interest totaling $185,000, $371,000 and
$572,000 during the years ended December 31, 1993, 1992 and
1991, respectively.
The Corporation's investment in subsidiaries is reflected at an
amount equivalent to the underlying fair value of the
subsidiaries at the date of acquisition adjusted to reflect the
changes in equity of such subsidiaries since acquisition.
Stockholders' equity reflected in the Parent Company Only
balance sheet includes undistributed earnings of subsidiaries
which are restricted from transfer to the Corporation in the
form of dividends. Such amounts approximated $16,300,000 and
$16,000,000 at December 31, 1993 and 1992, respectively.
/PAGE 19
PAGE 20
REPORT OF INDEPENDENT ACCOUNTANTS
TO THE STOCKHOLDERS AND BOARD OF DIRECTORS OF PEOPLES BANCORP INC.
We have audited the accompanying consolidated balance sheets of
Peoples Bancorp Inc. and Subsidiaries as of December 31, 1993
and 1992 and the consolidated statements of income,
stockholders' equity, and cash flows for each of the years in
the three-year period ended December 31, 1993. These financial
statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the consolidated
financial position of Peoples Bancorp Inc. and Subsidiaries as
of December 31, 1993 and 1992 and the consolidated results of
their operations and their cash flows for each of the years in
the three-year period ended December 31, 1993 in conformity with
generally accepted accounting principles.
As discussed in Notes 8 and 9 to the consolidated financial
statements, the Corporation changed its methods of accounting
for postretirement benefits other than pensions and income taxes
in 1993.
COOPERS & LYBRAND
Coopers & Lybrand
Columbus, Ohio
January 28, 1994
/PAGE 20
PAGE 21
COMMON STOCK
MARKET FOR COMMON STOCK AND DIVIDENDS
Prior to 1993, the Corporation's Common Stock was traded on a
limited basis in the over-the-counter market. On February 9,
1993, the Corporation commenced trading on the Nasdaq National
Stock Market (National Association of Securities Dealers
Automated Quotation). Nasdaq provides brokers and others with
immediate access to the best stock price for the Corporation and
thousands of other companies across the world. The Corporation
can be found under the symbol PEBO.
To the best knowledge of the Corporation, during 1993,
approximately 130,000 shares were traded. The following table
sets forth for the indicated periods the high and low bid
quotations for, and the cash dividends declared, with respect to
the Corporation's Common Stock.
Prior to 1993, the bid quotations were obtained from the three
securities dealers which made a market in the Corporation's
Common Stock. These quotations are inter-dealer prices, without
retail markup, markdown, or commission, and may not represent
actual transactions. Currently seven companies serve as market
makers on the Nasdaq National Stock Market. Market prices since
February, 1993, have been obtained directly from the Nasdaq
quotation system. The bid quotations and per share dividends
have been adjusted for a 10% stock dividend issued on April 15,
1993. Peoples Bancorp had 1,107 shareholders at December 31,
1993.
<TABLE>
<CAPTION>
QUARTERLY MARKET AND DIVIDEND INFORMATION
PER SHARE
High Bid Low Bid Dividend
<S> <C> <C> <C>
1993
Fourth Quarter $44.00 $39.00 $.28
Third Quarter 46.50 38.00 .26
Second Quarter 47.00 35.00 .26
First Quarter 49.09 34.55 .24
1992
Fourth Quarter $40.00 $33.64 $.24
Third Quarter 37.27 30.00 .24
Second Quarter 32.73 25.91 .24
First Quarter 27.27 24.55 .24
1991
Fourth Quarter $28.18 $24.55 $.22
Third Quarter 26.36 21.82 .22
Second Quarter 22.73 20.91 .22
First Quarter 22.50 20.45 .22
</TABLE>
The Corporation and its predecessor have paid cash dividends on
its Common Stock for over 37 consecutive years and have
increased the annual dividend in each of the last 28 years. The
Corporation plans to continue to pay quarterly cash dividends.
Cash dividends are subject to certain restrictions as described
in Note 12 to the audited financial statements.
THE ANNUAL MEETING OF STOCKHOLDERS OF PEOPLES BANCORP INC. WILL
BE HELD TUESDAY, APRIL 5, 1994 AT 10:00 A.M. IN THE PEOPLES BANK
CONFERENCE ROOM, 235 SECOND STREET, MARIETTA, OHIO. STOCKHOLDERS
ARE CORDIALLY INVITED TO ATTEND.
ON WRITTEN REQUEST, A COPY OF OUR ANNUAL REPORT TO THE
SECURITIES AND EXCHANGE COMMISSION ON FORM 10-K IS AVAILABLE TO
INTERESTED STOCKHOLDERS. REQUESTS SHOULD BE ADDRESSED TO RUTH
OTTO, SECRETARY, PEOPLES BANCORP INC., P.O. BOX 738, MARIETTA,
OHIO 45750.
/PAGE 21
PAGE 22
<TABLE>
<CAPTION>
AVERAGE BALANCES AND ANALYSIS OF NET INTEREST INCOME
(dollars in thousands)
1993 1992 1991
Average Average Average
Average Income/ Yield/ Average Income/ Yield/ Average Income/ Yield/
Balance Expense Rate Balance Expense Rate Balance Expense Rate
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Securities:
Taxable $79,086 $5,959 7.5% $81,607 $6,378 7.8% $73,506 $6,154 8.4%
Nontaxable<F1> 26,895 2,608 9.7% 29,363 2,874 9.8% 29,323 2,959 10.1%
Total 105,981 8,567 8.1% 110,970 9,252 8.3% 102,829 9,113 8.9%
Loans:
Commercial 45,024 3,590 8.0% 40,250 3,543 8.8% 39,941 4,087 10.2%
Real estate 184,014 15,319 8.3% 178,025 16,415 9.2% 158,757 16,928 10.7%
Consumer (net) 77,244 7,736 10.0% 72,758 7,830 10.8% 71,515 7,838 11.0%
Valuation
reserve (6,095) (5,298) (945)
Total 300,187 26,645 8.9% 285,735 27,788 9.7% 266,268 28,853 10.8%
Money Market:
Interest-bearing
deposits 8,562 209 2.4% 6,894 452 6.6% 8,349 573 6.9%
Federal funds
sold 17,706 623 3.5% 21,462 1,035 4.8% 18,687 1,420 7.6%
Total 26,268 832 3.2% 28,356 1,487 5.2% 27,036 1,993 7.4%
Total earning
assets 432,436 36,044 8.3% 425,061 38,527 9.1% 396,133 39,959 10.1%
Other assets 32,580 27,263 27,290
Total
assets $465,016 $452,324 $423,423
Deposits:
Savings $72,999 2,107 2.9% $61,660 2,195 3.6% $48,085 2,339 4.9%
Interest-bearing
demand
deposits 80,100 1,998 2.5% 73,830 2,310 3.1% 64,534 3,094 4.8%
Time 196,374 9,750 5.0% 224,898 12,681 5.6% 225,648 15,676 6.9%
Total 349,473 13,855 4.0% 360,388 17,186 4.8% 338,267 21,109 6.2%
Borrowed Funds:
Short term 9,186 203 2.2% 9,398 262 2.8% 9,436 495 5.2%
Long term 19,611 1,205 6.1% 6,549 439 6.7% 7,101 568 8.0%
Total 28,797 1,408 4.9% 15,947 701 4.4% 16,537 1,063 6.4%
Total interest
bearing
liabilities 378,270 15,263 4.0% 376,335 17,887 4.8% 354,804 22,172 6.2%
Noninterest
bearing
deposits 41,621 38,403 34,443
Other
liabilities 4,320 3,485 3,302
Total
liabilities 424,211 418,223 392,549
Stockholders'
equity 40,805 34,101 30,874
Total
liabilities and
stockholders'
equity $465,016 $452,324 $423,423
Interest rate
spread $20,781 4.4% $20,640 4.4% $17,787 3.9%
Interest revenue/
earning assets 8.3% 9.1% 10.1%
Interest expense/
earning assets 3.5% 4.2% 5.6%
Net yield on
earnings assets 4.8% 4.9% 4.5%
<FN>
<F1> Computed on a fully tax equivalent basis by dividing
nontaxable income by 66% and reducing the result by the
municipal interest limitation. The interest income was increased
by $733,000, $820,000 and $808,000 for 1993, 1992 and 1991,
respectively.
<F2> Nonaccrual loans are included in the average balances
listed. Related income on nonaccrual loans through the date the
loan was put on accrual status is included in loan income. As of
December 31, 1993, 1992 and 1991, nonaccrual loans outstanding
were $1,416,000, $1,279,000 and $1,301,000, respectively.
<F3> Loan fees included in income for 1993, 1992 and 1991 were
$558,000, $512,000, and $244,000, respectively.
/PAGE 22
PAGE 23
</TABLE>
<TABLE>
<CAPTION>
RATE VOLUME ANALYSIS/MATURITIES TABLES
Rate Volume Analysis
(dollars in thousands)
Change in
Income/Expense<F1> Rate Effect Volume Effect
1993 1992 1991 1993 1992 1991 1993 1992 1991
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Investment
income:
Taxable $(419) $224 $(50) $(225) $(447) $(145) $(194) $671 $95
Nontaxable (266) (85) (7) (26) (89) (87) (240) 4 80
Total (685) 139 (57) (251) (536) (232) (434) 675 175
Loan income:
Commercial 47 (544) (325) (351) (575) (365) 398 31 40
Real estate (1,096) (513) 1,138 (1,634) (2,485) 136 538 1,972 1,002
Consumer (94) (8) (992) (561) (144) (1,283) 467 136 291
Total (1,143) (1,065)(179) (2,546) (3,204) (1,512) 1,403 2,139 1,333
Money market
funds (655) (506) (239) (583) (599) (139) (72) 93 (100
Total interest
income (2,483) (1,432)(475) (3,380) (4,339) (1,883) 897 2,907 1,408
Interest expense:
Savings (88) (144) 39 (454) (714) (138) 366 570 177
Interest-
bearing
demand
deposits (312) (784) (501) (496) (1,192) (683) 184 408 182
Time (2,931) (2,995)(1,058) (1,422) (2,943) (1,865) (1,509) (52) 807
Short-term
borrowings(59) (233) (250) (53) (231) (209) (6) (2) (41)
Long-term
borrowings 766 (129) (100) (40) (87) (74) 806 (42) (26)
Total interest
expense (2,624)(4,285)(1,870) (2,465) (5,167) (2,969) (159) 882 1,099
$141 $2,853 $1,395 $(915) $828 $1,086 $1,056 $2,025 $309
<FN>
<F1> The change in interest due to both rate and volume has been
allocated to volume and rate changes in proportion to the
relationship of the dollar amounts of the change in each.
</TABLE>
<TABLE>
<CAPTION>
LOAN MATURITIES
Due In
Due in One Year Due
One Year Through After
or Less Five Years Five Years Total
LOAN TYPE:
<S> <C> <C> <C> <C>
Commercial loans:
Fixed $2,611 $1,500 $3,009 $7,120
Variable 27,047 3,244 9,888 40,179
SUBTOTAL 29,658 4,744 12,897 47,299
Real estate loans:
Fixed 56 5,174 46,129 51,359
Variable 527 7,703 133,668 141,898
SUBTOTAL 583 12,877 179,797 193,257
Consumer loans:
Fixed 6,734 59,000 2,628 68,362
Variable 378 10,458 1,921 12,757
SUBTOTAL 7,112 69,458 4,549 81,119
TOTAL $37,353 $87,079 $197,243 $321,675
</TABLE>
<TABLE>
<CAPTION>
Maturities Schedule of Large Certificates of Deposit over $100,000
as of December 31
(dollars in thousands)
1993 1992 1991 1990
<S> <C> <C> <C> <C>
Under 3 months $5,761 $7,810 $15,099 $14,104
3 to 6 months 2,241 5,957 <F1> <F1>
6 to 12 months 2,859 2,109
3 to 12 months 5,100 8,066 7,674 14,214
Over 12 months 6,939 7,291 4,198 3,276
Total $17,800 $23,167 $26,971 $31,594
<FN>
<F1> The maturity schedule of large certificates of deposit prior
to 1992 is in accordance with regulatory guidelines for
preparation of quarterly Call Reports. The accounting system did
not provide a split of the 3 to 12 months category into
categories of 3 to 6 months and 6 to 12 months.
</TABLE>
/PAGE 23
PAGE 24
<TABLE>
<CAPTION>
LOAN PORTFOLIO ANALYSIS
(dollars in thousands)
1993 1992 1991 1990 1989
<S> <C> <C> <C> <C> <C>
Year-end balances:
Commercial $47,299 $40,253 $42,557 $39,818 $39,380
Real estate 189,866 176,119 163,670 151,242 141,847
Real estate
construction 3,391 1,965 3,073 1,400 1,407
Consumer (net) 76,977 69,030 65,168 65,680 64,801
Credit card 4,142 3,768 3,785 3,580 3,465
Total $321,675 $291,135 $278,253 $261,720 $250,900
Average loans $300,187 $285,735 $266,268 $257,214 $249,384
Reserve for
possible loan
losses, January 1 $5,687 $4,273 $4,086 $3,765 $3,044
Reserve for
losses of acquired
branch 721
Loans charged off:
Commercial 193 1,163 572 576 188
Real estate 143 295 401 91 209
Consumer 816 826 1,002 753 672
Credit card 51 33 62 43 46
Total 1,203 2,317 2,037 1,463 1,115
Recoveries:
Commercial 60 241 91 12 209
Real estate 65 110 25 48 18
Consumer 157 267 354 243 153
Credit card 12 5 6 6 10
Total 294 623 476 309 390
Net chargeoffs:
Commercial 133 922 481 564 (21)
Real estate 78 185 376 43 191
Consumer 659 559 648 510 519
Credit card 39 28 56 37 36
Total 909 1,694 1,561 1,154 725
Charged to operations 1,592 2,387 1,748 1,475 1,446
Reserve for loan
losses December 31 $6,370 $5,687 $4,273 $4,086 $3,765
Reserve for possible
loan losses as of
December 31:
Commercial $3,185 $2,651 $1,797 $2,145 $1,589
Real estate 2,000 1,189 1,108 510 442
Consumer 987 602 454 425 666
Credit card 166 45 45 41 45
Unallocated 32 1,200 869 965 1,023
Total $6,370 $5,687 $4,273 $4,086 $3,765
% of loans to total
loans at December 31:
Commercial 14.7% 13.8% 15.3% 15.2% 15.7%
Real estate 60.1 61.2 59.9 58.3 57.1
Consumer 23.9 23.7 23.4 25.1 25.8
Credit card 1.3 1.3 1.4 1.4 1.4
Total 100.0% 100.0% 100.0% 100.0% 100.0%
</TABLE>
/PAGE 24
PAGE 25
<TABLE>
(dollars in thousands)
1993 1992 1991 1990 1989
<S> <C> <C> <C> <C> <C>
Ratio: Net
chargeoffs/average loans:
Commercial 0.05% 0.32% 0.18% 0.22% (0.01)%
Real estate 0.02 0.06 0.14 0.02 0.08
Consumer 0.22 0.20 0.24 0.20 0.21
Credit card 0.01 0.01 0.02 0.01 0.01
Total 0.30% 0.59% 0.58% 0.45% 0.29%
Nonperforming loans:
Nonaccrual loans $1,416 $1,279 $1,301 $1,769 $1,701
Loans 90+ days past due 896 1,284 1,706 1,844 1,982
Other real estate owned 38 49 779 144 682
Troubled debt restructuring 3
Total $2,350 $2,612 $3,786 $3,760 $4,365
Nonperforming loans as a
percent of total loans 0.7% 0.9% 1.4% 1.4% 1.7%
</TABLE>
The provision for possible loan losses for financial reporting
purposes is based upon past experience and an evaluation of
potential losses in the current loan portfolio. In management's
opinion, the provision is considered sufficient to maintain the
loan loss reserve at a level adequate to absorb all anticipated
losses existing in the loan portfolios at the balance sheet
dates. Loans are classified as nonaccrual when, in the opinion
of management, the collection of principal or interest is
unlikely. No interest is taken into income on nonaccrual loans
until such time as the borrower demonstrates the ability to pay
principal and interest. Interest income on nonaccrual loans
which would have been recorded under the original terms of the
loans for 1993, 1992 and 1991 was $149,000 (of which $41,000 was
actually recorded), $205,000 (of which $111,000 was actually
recorded) and $158,000 (of which $61,000 was actually recorded),
respectively.
/PAGE 25
PAGE 26
MANAGEMENT'S DISCUSSION AND ANALYSIS
INTRODUCTION
The following discussion and analysis of the financial
statements of Peoples Bancorp Inc. is presented to lend the
reader insight-insight into Management's review of the financial
results, as well as Management's views of Peoples Bancorp's
place in the economy of Southeastern Ohio and Northern West
Virginia and future opportunities for the organization. Our
subsidiaries, The Peoples Banking and Trust Company (Peoples
Bank), The First National Bank of Southeastern Ohio (First
National) and the Northwest Territory Life Insurance Company,
provide financial services to individuals and businesses within
our market area. Peoples Bank is chartered in the State of Ohio
and subject to regulation, supervision and examination by the
Federal Deposit Insurance Corporation and the Ohio Division of
Banks. First National is a member of the Federal Reserve System
and subject to regulation, supervision and examination by the
Comptroller of the Currency. This discussion and analysis should
be read in conjunction with the audited financial statements and
footnotes and with the ratios, statistics and discussions
contained elsewhere in the Annual Report.
OVERVIEW OF INCOME STATEMENT
Peoples Bancorp achieved an increase in net income of $521,000
or 11.5%. Total 1993 net income was $5,071,000. For the year
ended December 31, 1993, primary and fully-diluted earnings per
share were $3.63 and $3.59 compared to $3.42 and $3.17 for 1992.
Net income to average assets improved from 1.01% last year to
1.09% this year. Net income to average stockholders' equity for
1993 was 11.9% compared to 11.8% last year.
During 1993, the Corporation adopted Statement of Financial
Accounting Standards No. 106, "Employers' Accounting for
Postretirement Benefits other than Pensions" (SFAS No. 106)
which requires the accrual of the expected costs of providing
postretirement benefits during the period of employee service.
The Corporation provides certain health care benefits to current
retirees and their dependents. Peoples Bancorp Inc. has
recognized the cumulative effect of its transition obligation of
$884,000 ($583,000, net of tax) as a decrease in income in 1993.
The Corporation has also adopted Statement of Financial
Accounting Standards No. 109, "Accounting for Income Taxes"
(SFAS No. 109), which requires recognition of deferred tax
assets and liabilities for the expected future tax consequences
of events that have been included in the financial statements or
tax returns. Deferred income taxes are recognized at prevailing
tax rates for temporary differences between financial statement
and income tax bases of assets and liabilities. The Corporation
has recognized the cumulative effect of this change in
accounting of $269,000 as an increase in income in 1993.
Previously issued financial statements have not been restated.
INTEREST INCOME AND EXPENSES
Net interest income after provision for loan loss increased from
$18,456,000 last year to $18,898,000 this year. Interest income
decreased by $2.4 Million while interest expense decreased by
$2.6 Million. The volume of business has not declined. In fact,
certain interest sensitive categories have shown growth. The
continued impact of lower interest rates has resulted in these
changes. The mix of interest-earning assets shifted away from
short-term Federal funds sold to loans. Loans have typically
returned the highest rate of interest earning assets while
short-term funds have been the lowest. On the liability side of
the balance sheet, Peoples Bancorp has also experienced a
change in mix. Interest-bearing deposits, primarily Certificates
of Deposit, have declined by $15.4 Million or 4.3%. This funding
source has been replaced by an increase in borrowings from the
Federal Home Loan Bank (FHLB). The FHLB borrowings can be
matched directly against specific assets. Total interest-earning
assets have decreased by $4,104,000 to $438,072,000 while
interest-bearing liabilities have decreased by $7,991,000 to
$373,125,000. The composite of these items results in an
increase in net interest income over 1992.
OTHER INCOME
Total non-interest income increased $438,000 or 12.5% over 1992.
Service charges on deposit accounts increased by $331,000 to
$1,295,000. Management continues to review the level of services
performed in order to determine appropriate fees that should be
charged for our deposit products. Income from fiduciary
activities increased by 10% to $1,475,000. Income from fiduciary
activities is a function of assets under management of the
Investment & Trust Division (ITD). The market value of assets
under ITD management has increased from $288,086,000 at December
31, 1992 to $326,182,000 at December 31, 1993.
OTHER EXPENSES
Other expenses increased by $179,000 or 1.2% to $15,124,000.
This modest increase is the result of Management's efforts to
control overhead. Salaries and benefits increased by $438,000 or
6.3%. Net occupancy expense increased by $90,000 primarily due
to taking a half year's depreciation on the expansion and
renovation of the Corporation's downtown Marietta facility which
was completed in October, 1993. The total project cost was $5.2
Million and was incurred over 1992 and 1993.
FEDERAL INCOME TAX EXPENSE
Federal income taxes increased from $1,452,000 last year to
$1,899,000 this year, primarily due to increased pre-tax income.
The effective tax rate increased from 24.2% in 1992 to 26.1%
this year. The corporation earned less interest on obligations
of state and political subdivisions in relation to total income
this year than last. Management expects this trend to continue.
/PAGE 26
PAGE 27
OVERVIEW OF BALANCE SHEET
Total assets remained nearly the same as last year, decreasing
$3,189,000 or 0.7% to $465,373,000. Interest-earning assets
decreased from $442,176,000 to $438,027,000 while
interest-bearing liabilities decreased from $381,116,000 to
$373,125,000. The result is an increase in net earning assets.
The mix of assets and liabilities has also changed.
Interest-earning deposits with banks and federal funds sold
decreased by $25,437,000 while loans increased by $30,540,000.
This shift from lower yielding to higher yielding assets helped
the Corporation maintain its net interest margin.
<TABLE>
<CAPTION>
SECURITY ANALYSIS
Maturity Distribution (dollars in thousands)
U.S. Federal State and
Treasury Agency Municipal Other Total
<S> <C> <C> <C> <C> <C>
December 31, 1993
Maturity:
Within 1 year $15,975 $ $4,049 $823 $20,847
1 - 5 years 30,025 8,426 14,525 4,710 57,686
5 - 10 years 2,685 7,143 5,630 750 16,208
Over 10 years 2,495 1,375 3,699 7,569
Total $48,685 $18,064 $25,579 $9,982 $102,310
Book Value $48,790 $18,398 $26,183 $9,978 $103,349
Market Value $51,022 $18,583 $27,831 $10,669 $108,105
Maturity:
Within 1 year 7.399% 10.550% 8.064% 8.037%
1 - 5 years 7.201 6.228% 9.402 7.717 7.655
5 - 10 years 7.439 5.514 8.880 5.857 7.018
Over 10 years 5.429 10.265 4.877 6.038
Total 7.279% 5.835% 9.515% 6.554% 7.512%
December 31, 1992
Book Value $60,317 $11,078 $31,284 $9,877 $112,556
Market Value $63,345 $11,270 $32,785 $10,171 $117,571
December 31, 1991
Book Value $56,398 $5,514 $30,130 $7,921 $99,963
Market Value $60,003 $5,613 $30,930 $8,010 $104,556
</TABLE>
The yield on state and municipal securities is computed on a
fully tax equivalent basis assuming a tax rate of 34%.
The portfolio contains no single issue (excluding U.S.
Government and Federal Agency securities) which exceeds 10% of
shareholders' equity.
LOANS
Overall loan demand was strong during 1993. Real estate loans
increased by $13,747,000 or 7.8% to $189,866,000 as individuals
and businesses found that lower interest rates allowed them to
afford more debt. Consumer loans increased by $8,321,000 or
11.4% to $81,119,000. Our consumer loan processes, particularly
in indirect lending, deliver the service and support our
customers need in a timely and efficient manner which makes it
easy to do business with us. Commercial loans increased by
$7,046,000 or 17.5% to $47,299,000. Businesses within our market
have expanded and the Corporation expanded its market area
during 1993 by opening a business production office in Newark,
Ohio.
LOAN CONCENTRATION
Peoples Bancorp does not have a concentration of its loan
portfolio in any one industry. Real estate lending has been and
remains, a significant component of our loan portfolio
representing 60.1% of total loans. Approximately 71.2% of these
real estate loans are one to four family residential loans to
individuals that work within a wide range of businesses within
our immediate market area. The Corporation's largest group of
business loans consist of Automobile Dealer Floor Plans which
totaled $13,782,000 and $10,526,000 at December 31, 1993 and
1992, respectively. It is the Corporation's policy to obtain the
underlying inventory as collateral on these loans. As a matter
of policy, the Corporation does not extend credit to
/PAGE 27
PAGE 28
any single borrower or group of borrowers in excess of
$6,889,000, the legal lending limit. Southeastern Ohio has a
diversified industry base without dependence on any one
industry. Management believes that the loan portfolio is
adequately diversified.
RESERVE FOR POSSIBLE LOAN LOSSES
The reserve for possible loan losses increased to $6,370,000 or
1.98% of loans from $5,687,000 or 1.95% of loans last year.
During 1993 the Corporation established a new loan review
process. This independent review has improved the depth of the
information on loans and allows quantitative challenging of the
loan loss reserve. This was achieved while the provision for
loan losses, the income statement expense, decreased from
$2,387,000 to $1,592,000. Net chargeoffs of uncollectible loans
decreased from $1,694,000 in 1992 to $909,000 in 1993. Total
non-performing loans decreased from $2,612,000 to $2,350,000.
Overall loan quality, as indicated by the reduction in
non-performing loans to total loans from .90% to .73% and the
reduction in net chargeoffs, has improved.
DEPOSITS
Total deposits decreased by $15,984,000 to $385,639,000 at
December 31, 1993. Noninterest-bearing deposits remained about
the same as last year while interest-bearing deposits declined.
Large Certificates of Deposits over $100,000 decreased by
$5,367,000, which reduces the Corporation's dependence on
larger, more volatile funds. Lower market interest rates have
caused our depositors to consider other investment options.
OTHER SOURCES OF FUNDS
The Corporation has increased its long term advances from the
Federal Home Loan Bank (FHLB) from $11,932,000 at December 31,
1992 to $18,251,000 at December 31, 1993. The Corporation also
had $3,000,000 of short term borrowings from FHLB as of December
31, 1993. FHLB provides a reliable source of fixed-rate,
long-term funding that can be matched against fixed-rate real
estate loans.
CAPITAL/STOCKHOLDER'S EQUITY
Total Stockholders' Equity increased $4,281,000 or 11.1% to
$42,778,000 during 1993. Net income of $5,071,000 was used to
fund $1,510,000 of dividends to Stockholders, a 29.8% dividend
payout ratio. The Corporation also called $1,218,000 of
Convertible Subordinated Debentures in May. Holders elected to
convert the Debentures into stock due to the favorable
conversion ratio. The Corporation purchased 12,316 shares of its
own stock for the treasury for $498,000. The Board of Directors
has, from time to time, authorized management to purchase shares
for the treasury. Treasury shares may be used for future
acquisitions. It is anticipated that additional shares will be
purchased for the treasury.
Banking regulators have established risk-based capital
guidelines for measuring capital adequacy. The guidelines assign
various levels of risk to each category of assets. Peoples
Bancorp's core risk-based capital was 13.5% at December 31, 1993
compared to 12.8% last year and total risk based capital was
14.7% at December 31, 1993 compared to 14.5% last year. The
regulatory guidelines require minimum core and total risk-based
capital of 4% and 8%. Management expects to maintain capital in
excess of regulatory guidelines.
LIQUIDITY
Liquidity measures an organization's ability to meet cash
obligations as they come due. The Consolidated Statement of Cash
Flows presented on page 9 of the accompanying financial
statements provides analysis of the Corporation's cash and cash
equivalents. Additionally, Management considers that portion of
the loan portfolio that matures within one year and maturities
within one year in the investment portfolio as part of our
liquid assets. The current liquidity position is adequate to
fund off-balance-sheet commitments. See additional discussion of
off-balance-sheet commitments in Note 7 of the accompanying
financial statements.
Management believes that the Corporation's liquidity position is
adequate. An Asset and Liability Management Committee meets
periodically to monitor liquidity needs, funding sources and
other issues.
FAIR VALUE ACCOUNTING
The audited financial statements contain required disclosures to
comply with Financial Accounting Standards Board Statement
Number 107. The disclosures may be found in the footnotes to the
audited financial statements. The fair values of loans and
investments exceed carrying values and the fair value of deposit
liabilities exceeds carrying value. Generally, the carrying
value of all other financial instruments approximate fair value.
/PAGE 28
PAGE 29
EFFECTS OF INFLATION ON FINANCIAL STATEMENTS
Substantially all of the Company's assets relate to banking and
are monetary in nature. Therefore, they are not impacted by
inflation to the same degree as companies in capital intensive
industries. During a period of rising prices, a net monetary
asset position results in a loss in purchasing power and
conversely a net monetary liability position results in an
increase in purchasing power. In banks, monetary assets exceed
monetary liabilities, consequently, when prices are increasing,
banks experience a decline in the purchasing power of their net
assets.
RECENTLY ISSUED ACCOUNTING STANDARDS
The Financial Accounting Standards Board (FASB) has issued
statements during the past year that may have a future impact on
Peoples Bancorp's financial statements. FASB Statement 114,
Accounting By Creditors for Impairment of a Loan requires the
impaired loans be measured based on the present value of
expected future cash flows, the loans observable market price,
or the fair value of the collateral. The Statement applies to
financial statements for fiscal years beginning after December
15, 1994. Management has not determined the financial statement
impact of adoption and does not expect to adopt early. FASB
Statement 115, Accounting for Certain Investments in Debt and
Equity Securities, addresses the accounting and reporting for
investments in equity and debt securities. Investments are to be
classified into three categories: held-to-maturity, trading
securities and available-for-sale securities, which have
separate rules regarding reporting of unrealized gains and
losses. The Statement is effective for fiscal years beginning
after December 15, 1993. The Corporation will adopt FASB 115
January 1, 1994. See footnote 2 to the audited financial
statements for further discussion. FASB Statement 112,
Employers' Accounting for Postemployment Benefits, establishes
accounting standards for benefits provided after termination of
employment, but prior to retirement. Management will adopt FASB
112 January 1, 1994 and expects no significant financial
statement impact.
<TABLE>
<CAPTION>
INTEREST RATE SENSITIVITY - MATURING OR REPRICING
The following Interest Rate Sensitivity Table presents Peoples
Bancorp's Interest Rate Sensitivity Position at December 31,
1993:
At December 31, 1993 (thousands)
0 - 3 4 - 12 Over
Months Months 1-5 Years 5 Years Total
<S> <C> <C> <C> <C> <C>
Interest earning assets:
Securities:
Taxable $6,631 $10,287 $44,627 $17,657 $79,202
Tax-exempt 955 3,130 14,311 5,751 24,147
Total 7,586 13,417 58,938 23,408 103,349
Federal funds sold 7,050 7,050
Loans net of unearned
income 85,212 103,599 79,435 53,429 321,675
Interest-bearing
deposits with banks 5,898 100 5,998
TOTAL 105,746 117,116 138,373 76,837 438,072
Interest-bearing
liabilities:
Deposits 186,073 58,733 95,728 340,534
Federal funds
purchased,
Federal Home
Loan Bank advances,
and securities
sold under
agreements to
repurchase 12,260 12,260
Other borrowings 2,080 18,251 20,331
Total 200,413 58,733 95,728 18,251 373,125
Interest sensitivity $(94,667) $58,383 $42,645 $58,586 $64,947
</TABLE>
/PAGE 29
PAGE 30
OUTLOOK FOR 1994
Management has developed a business plan for 1994 that, if
achieved, will result in an increase in net income. Net interest
margin is expected to narrow as interest rates drift up slightly
during the year. Volume of lending activity is expected to
increase and will be funded through growth in deposits.
Alternatives to traditional banking activities will continue to
be pursued. Thirty of our bankers became licensed during the
year to sell fixed-rate annuities and life insurance products.
An alternative to a high-cost, full-service office was started
during 1993 when the Corporation opened a business production
office in rented facilities in Newark, Ohio.
Developing a cadre of bankers and the systems support needed to
provide our customers with the financial products and services
they want requires a total organizational commitment. Our
bankers are learning through seminars, in-house training,
college courses and specialized training. Five of our associates
have entered a two-year management training program which will
expose them to key operating units within the organization.
During 1993, PC-based Platform Automation Software was
installed. This "smart system" generates the paper work and
allows our bankers to focus on the customer.
Peoples Bancorp looks anxiously into the future. Our bankers
realize that our future depends on our ability to provide
products and services that the customer wants. Through training,
teamwork and a customer-oriented mindset, our bankers are
re-thinking the way we do business.
COMPARISON OF 1992 TO 1991
Net income for the year ended December 31, 1992 was $4,550,000,
an increase of nearly 26% over 1991. Net interest income
increased $2,841,000 to $19,821,000 for 1992. The average yield
on interest-earning assets decreased by one percent from 10.1%
to 9.1% while the rates paid on interest-bearing liabilities
decreased 1.4% from 5.6% to 4.2%. Investment securities declined
less than other asset categories because of Peoples Bancorp's
philosophy of buying investments that mature gradually over
time. Other income increased by nearly $600,000 over 1991.
Income from fiduciary activities, the largest source of other
income, increased to $1,342,000, while service charge income
increased by over $100,000. Other expenses were up by nearly
$1.4 Million to $14,945,000 for 1992. Salaries and benefits
increased by $513,000 to $6,991,000 as the Corporation added a
location in Middleport, Ohio and The Plains, Ohio office
completed its first full year of operation.
Total assets increased by over $44 Million during 1992. This
10.4% increase to $468,562,000 was the result of two
acquisitions and growth within our market. Real Estate Mortgage
lending was very active during 1992. Commercial loan balances
declined by 5.4% during 1992 as economic growth was weak. The
reserve for possible loan losses increased from 1.54% to 1.95%
of loans at December 31, 1992. The increase was necessary due to
the uncertainty of loans purchased from the Resolution Trust
Company. Non-performing loans fell from 1.4% of total loans at
December 31, 1991 to 0.9% at December 31, 1992. Numerous
improvements were made to facilities, particularly Nelsonville,
Ohio; Middleport, Ohio and building a replacement for a drive-up
facility in downtown Marietta, Ohio. Deposits increased by
$26,596,000 or 7.1% during 1992. The majority of this growth was
through acquisitions. Term debt increased to $15,506,000 as the
Corporation elected to borrow $11,932,000 of long-term,
fixed-rate funds from the Federal Home Loan Bank to offset the
increase in fixed-rate mortgage lending. Peoples Bancorp's core
risk-based capital increased from 11.5% at December 31, 1991 to
12.8% at December 31, 1992. Total risk-based capital decreased
slightly from 14.6% to 14.5% over the period.
/PAGE 30
EXHIBIT 22
PEOPLES BANCORP INC.
FORM 10-K FOR YEAR ENDED DECEMBER 31, 1993
SUBSIDIARIES OF PEOPLES BANCORP INC.
The following are the only subsidiaries of Peoples Bancorp Inc.:
NAME OF SUBSIDIARY JURISDICTION OF INCORPORATION
The Peoples Banking and Trust Company Ohio
The First National Bank of Southeastern Ohio United States
The Northwest Territory Life Insurance Company Arizona
