SECURITIES & EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1997
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ______ to ______
Commission File Number 0-10888
OLD NATIONAL BANCORP
(Exact name of Registrant as specified in its charter)
INDIANA 35-1539838
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
420 Main Street
Evansville, Indiana 47708
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code, (812)464-1200
NOT APPLICABLE
Former name, former address and former fiscal year,
if changed since last reports.
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, and (2) has been subject to the filing
requirements for at least the past 90 days. Yes x No
Indicate the number of shares outstanding of each of the issuer's classes of
common stock. The Registrant has one class of common stock (no par value)
with approximately 26.4 million shares outstanding at June 30, 1997.
OLD NATIONAL BANCORP
FORM 10-Q
INDEX
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements Page No.
Consolidated Balance Sheet
June 30, 1997 and 1996, and December 31, 1996. . . . 3
Consolidated Statement of Income
Three and six months ended June 30, 1997 and 1996. . 4
Consolidated Statement of Cash Flows
Six months ended June 30, 1997 and 1996. . . . . . . 5
Notes to the Consolidated Financial Statements. . . . .6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations. . . . . 8
PART II. OTHER INFORMATION. . . . . . . . . . . . . . . . . .12
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . .13
INDEX OF EXHIBITS. . . . . . . . . . . . . . . . . . . . . . .14
2
<TABLE>
<CAPTION>
OLD NATIONAL BANCORP
CONSOLIDATED BALANCE SHEET
June 30, June 30, December 31,
($ in thousands) (unaudited) 1997 1996 1996
Assets
<S> <C> <C> <C>
Cash and due from banks. . . . . . . . . . $149,211 $148,896 $180,405
Money market investments . . . . . . . . . 3,918 13,064 6,698
Investment Securities:
U.S. Treasury . . . . . . . . . . . . . . 136,187 175,875 154,524
U.S. Government agencies
and corporations. . . . . . . . . . . . 966,627 783,318 856,263
Obligations of states and political
subdivisions. . . . . . . . . . . . . . 452,773 450,516 462,378
Other . . . . . . . . . . . . . . . . . . 42,447 46,163 41,484
--------- --------- ---------
Total Investment Securities . . . . . . 1,598,034 1,455,872 1,514,649
--------- --------- ---------
Loans:
Commercial. . . . . . . . . . . . . . . . 848,305 773,641 796,313
Commercial Mortgage. . . . . . . . . . . 698,014 632,406 668,671
Residential Mortgage. . . . . . . . . . . 1,340,959 1,243,044 1,303,283
Consumer credit, net of unearned income . 743,289 724,865 755,033
Financial . . . . . . . . . . . . . . . . 1,800 154 ---
--------- --------- ---------
Total Loans . . . . . . . . . . . . . . 3,632,367 3,374,110 3,523,300
Allowance for loan losses . . . . . . . (47,082) (42,939) (44,053)
--------- --------- ---------
Net Loans . . . . . . . . . . . . . . . 3,585,285 3,331,171 3,479,247
Other assets . . . . . . . . . . . . . . . 201,683 187,515 185,592
--------- --------- ---------
Total Assets. . . . . . . . . . . . . . $5,538,131 $5,136,518 $5,366,591
========= ========= =========
Liabilities
Deposits:
Noninterest bearing demand. . . . . . . . $463,723 $460,568 $512,281
Interest bearing:
NOW accounts. . . . . . . . . . . . . . 442,740 485,426 449,486
Savings accounts. . . . . . . . . . . . 470,981 445,424 480,303
Money market accounts . . . . . . . . . 659,194 682,511 714,261
Certificates of deposit of
$100,000 and over . . . . . . . . . . . 318,544 260,417 257,988
Other time. . . . . . . . . . . . . . . 1,877,979 1,795,405 1,853,705
--------- --------- ---------
Total Deposits. . . . . . . . . . . . . 4,233,161 4,129,751 4,268,024
--------- --------- ---------
Short-term borrowings. . . . . . . . . . . 696,350 427,800 499,666
Subordinated debentures. . . . . . . . . . 30,474 30,570 30,564
Medium term notes. . . . . . . . . . . . . 44,000 44,000 44,000
Other liabilities. . . . . . . . . . . . . 68,398 56,440 65,811
--------- --------- ---------
Total Liabilities . . . . . . . . . . . . 5,072,383 4,688,561 4,908,065
--------- --------- ---------
Shareholders' Equity
Common stock. . . . . . . . . . . . . . . 26,401 26,074 26,778
Capital surplus . . . . . . . . . . . . . 252,354 237,930 265,584
Retained earnings . . . . . . . . . . . . 178,377 188,897 158,284
Net unrealized gain (loss) on investment
securities. . . . . . . . . . . . . . . 8,616 (4,944) 7,880
--------- --------- ---------
Total Shareholders' Equity. . . . . . . . 465,748 447,957 458,526
--------- --------- ---------
Total Liabilities and Shareholders'
Equity. . . . . . . . . . . . . . . . . $5,538,131 $5,136,518 $5,366,591
========= ========= =========
The accompanying notes are an integral part of this statement.
</TABLE>
<TABLE>
<CAPTION>
OLD NATIONAL BANCORP
CONSOLIDATED STATEMENT OF INCOME
Three Months Ended Six Months Ended
($ in thousands except share June 30, June 30,
and per share data) (unaudited) 1997 1996 1997 1996
<S> <C> <C> <C> <C>
Interest income
Loans including fees:
Taxable . . . . . . . . . . . . . $80,457 $73,447 $158,134 $145,497
Non-taxable . . . . . . . . . . . 1,073 924 2,043 1,822
Investment securities:
Taxable . . . . . . . . . . . . . 18,900 15,861 36,802 31,277
Non-taxable . . . . . . . . . . . 5,931 5,877 11,927 11,694
Federal funds sold and securities
purchased under agreement to resell 123 588 226 2,130
Deposits with banks. . . . . . . . 119 182 224 411
------- ------- ------- -------
Total Interest Income . . . . . . 106,603 96,879 209,356 192,831
------- ------- ------- -------
Interest Expense
Savings, daily interest checking and
money market accounts . . . . . . 11,279 11,729 22,423 23,776
Certificates of deposit of $100,000
and over. . . . . . . . . . . . . 4,031 3,873 7,807 7,769
Other time deposits. . . . . . . . 26,274 24,930 51,481 50,579
Federal funds purchased. . . . . . 927 301 1,921 522
Securities sold under agreements to
repurchase. . . . . . . . . . . . 2,742 2,246 5,111 4,599
Other borrowings . . . . . . . . . 6,438 3,323 12,125 6,472
------- ------- ------- -------
Total Interest Expense. . . . . . 51,691 46,402 100,868 93,717
------- ------- ------- -------
Net Interest Income . . . . . . . 54,912 50,477 108,488 99,114
Provision for loan losses. . . . . 3,756 2,103 7,513 4,105
------- ------- ------- -------
Net Interest Income After Provision
For Loan Losses . . . . . . . . . 51,156 48,374 100,975 95,009
------- ------- ------- -------
Noninterest Income
Trust fees . . . . . . . . . . . . 2,752 2,462 5,553 4,965
Service charges on deposit accounts 4,056 3,886 7,978 7,535
Loan servicing fees. . . . . . . . 1,391 1,411 2,796 2,692
Securities gains (losses), net . . (4) (8) (10) 47
Other income . . . . . . . . . . . 3,095 3,444 6,406 6,218
------- ------- ------- -------
Total Noninterest Income. . . . . 11,290 11,195 22,723 21,457
------- ------- ------- -------
Noninterest Expense
Salaries and employee benefits . . 22,479 20,937 44,532 40,826
Occupancy expense. . . . . . . . . 2,296 2,286 4,678 4,602
Equipment expense. . . . . . . . . 3,183 2,910 6,222 5,668
Marketing expense. . . . . . . . . 1,416 1,314 2,712 2,556
FDIC insurance expense . . . . . . 178 276 328 563
Data processing expense. . . . . . 1,330 1,188 2,618 2,430
Supplies expense . . . . . . . . . 1,072 1,106 2,158 2,215
Communication and
transportation expense . . . . . 1,659 1,701 3,398 3,282
Other expense. . . . . . . . . . . 5,494 5,742 10,615 11,159
------- ------- ------- -------
Total Noninterest Expense. . . 39,107 37,460 77,261 73,301
------- ------- ------- -------
Income before income taxes . . . . 23,339 22,109 46,437 43,165
Provision for income taxes . . . . 7.067 6,839 14,107 13,223
------- ------- ------- -------
Net Income. . . . . . . . . . . . $16,272 $15,270 $32,330 $29,942
======= ======= ======= =======
Net Income Per Common Share
Primary . . . . . . . . . . . . . $ 0.61 $ 0.56 $ 1.21 $ 1.09
======= ======= ======= =======
Fully Diluted . . . . . . . . . . $ 0.60 $ 0.54 $ 1.18 $ 1.05
======= ======= ======= =======
Weighted average common
shares outstanding:
Primary . . . . . . . . . . . . . 26,549 27,515 26,649 27,682
======= ======= ======= =======
Fully Diluted. . . . . . . . . . . 27,980 28,951 28,081 29,118
======= ======= ======= =======
The accompanying notes are an integral part of this statement
</TABLE>
4
<TABLE>
<CAPTION>
OLD NATIONAL BANCORP
CONSOLIDATED STATEMENT OF CASH FLOWS
Six Months Ended
June 30,
($ in thousands) (unaudited) 1997 1996
<S> <C> <C>
Cash flows from operating activities:
Net income . . . . . . . . . . . . . . . . . . . . $ 32,330 $ 29,942
-------- --------
Adjustments to reconcile net income to
cash provided from operating activities:
Depreciation. . . . . . . . . . . . . . . . . . . 4,697 4,247
Amortization of intangible assets . . . . . . . . 642 639
Net premium amortization (discount accretion) on
investment securities . . . . . . . . . . . . . 780 1,137
Provision for loan losses . . . . . . . . . . . . 7,513 4,105
(Gain) loss on sale of investment securities. . . 10 (47)
Gain on sale of assets. . . . . . . . . . . . . . (126) (29)
(Increase) decrease in interest receivable. . . . (1,311) 1,085
Increase in other assets. . . . . . . . . . . . . (14,842) (5,152)
Increase in accrued expenses and
other liabilities. . . . . . . . . . . . . . . 2,098 4,042
-------- --------
Total adjustments . . . . . . . . . . . . . . . (539) 10,027
-------- --------
Net cash flows provided by operating activities . 31,791 39,969
-------- --------
Cash flows from investing activities:
Purchase of investment securities
available for sale . . . . . . . . . . . . . . . (243,057) (239,670)
Proceeds from maturities and paydowns of
investment securities available for sale . . . . 139,396 149,924
Proceeds from sales of investment securities
available for sale. . . . . . . . . . . . . . . . 20,711 38,054
Net principal collected from (loans
made to) customers:
Commercial . . . . . . . . . . . . . . . . . . . (53,488) (22,209)
Commercial real estate . . . . . . . . . . . . . (29,343) (58,577)
Residential real estate. . . . . . . . . . . . . (48,850) (25,339)
Consumer . . . . . . . . . . . . . . . . . . . . 7,116 (29,257)
Proceeds from sale of mortgage loans . . . . . . . 11,112 21,038
Proceeds from sale of premises and equipment . . . 45 403
Purchase of premises and equipment . . . . . . . . (5,294) (6,530)
-------- --------
Net cash flows used in investing activities . . . (201,652) (172,163)
-------- --------
Cash flows from financing activities:
Net increase (decrease) in deposits and
short-term borrowings:
Noninterest bearing demand. . . . . . . . . . . . (48,558) (15,151)
NOW accounts. . . . . . . . . . . . . . . . . . . (6,746) 143,134
Savings . . . . . . . . . . . . . . . . . . . . . (9,322) (17,743)
Money market accounts . . . . . . . . . . . . . . (55,067) (120,550)
Certificates of deposit of $100,000 and over. . . 60,556 (25,044)
Other time deposits . . . . . . . . . . . . . . . 24,274 (17,977)
Short-term borrowings. . . . . . . . . . . . . . . 196,684 112,668
Payment of medium-term notes . . . . . . . . . . . --- (6,000)
Cash dividends paid. . . . . . . . . . . . . . . . (11,924) (11,230)
Common stock repurchased . . . . . . . . . . . . . (18,223) (21,173)
Common stock reissued, net of shares used to
convert subordinated debentures. . . . . . . . . . 4,213 3,243
-------- --------
Net cash flows provided by financing activities . 135,887 24,177
-------- --------
Net decrease in cash and cash equivalents. . . . . (33,974) (108,017)
Cash and cash equivalents at beginning of period . 187,103 269,977
-------- --------
Cash and cash equivalents at end of period . . . . $153,129 $161,960
======== ========
Total interest paid . . . . . . . . . . . . . . . $ 98,804 $ 95,454
======== ========
Total taxes paid. . . . . . . . . . . . . . . . . $ 14,061 $ 13,159
======== ========
The accompanying notes are an integral part of this statement.
</TABLE>
5
Old National Bancorp
Notes To Consolidated Financial Statements
1. Basis of Presentation
The accompanying consolidated financial statements include the accounts of the
Old National Bancorp and its affiliate entities (ONB). All significant
intercompany transactions and balances have been eliminated. In the opinion
of management, the consolidated financial statements contain all the normal
and recurring adjustments necessary to present fairly the financial position
of ONB as of June 30, 1997 and 1996 and December 31, 1996, and the results of
its operations for the three and six months ended June 30, 1997 and 1996 and
its cash flows for the six months ended June 30, 1997 and 1996. All prior
period information has been restated for the effects of business combinations
accounted for as pooling-of-interests.
2. Net Income Per Common Share
Net income per common share computations are based on the weighted average
number of common shares outstanding during the periods presented. A 5% stock
dividend was paid January 29, 1997 to shareholders of record on January 8,
1997. All share and per share data presented herein have been restated for
the effects of this stock dividend.
3. Investments
The market value and amortized cost of investment securities as of June 30,
1997 are set forth below ($ in thousands):
Market Value Amortized Cost
Held-to-maturity, at amortized cost $ -- $ --
Available-for-sale, at market value 1,598,034 1,583,675
----------- -----------
$ 1,598,034 $ 1,583,675
=========== ===========
4. Borrowings
ONB has outstanding $30.5 million of 8% convertible subordinated debentures
which are due September 15, 2012, unless previously converted or redeemed.
The debentures are convertible at any time prior to maturity into shares of
common stock of ONB at a conversion rate of 46.875 shares for each one
thousand dollars principal amount of debentures. Interest on the debentures
is payable on March 15 and September 15 of each year. The debentures are
redeemable in whole or in part at the option of ONB at a premium to par value.
Beginning September 15, 1998, debenture holders are entitled to an annual
sinking fund of $2.5 million principal amount of debentures annually less
conversions and redemptions. The debentures are subordinated in right of
payment to all senior indebtedness of ONB. As of June 30, 1997, 1.4 million
authorized and unissued common shares were reserved for conversion of the
debentures.
ONB has registered Series A Medium Term Notes in the principal amount of $50
million. The notes may be issued with maturities ranging from nine months to
thirty years and rates may be either fixed or variable. As of June 30, 1997,
a total of $44 million of the notes were outstanding, with maturities ranging
from one to six years and fixed interest rates ranging from 6.1% to 7.0%.
On June 18, 1997, ONB filed a registration statement on Form S-3 (the
"Registration Statement") with the Securities and Exchange Commission (File
6
No.333-29433) with respect to ONB's offering from time to time of up to
$150,000,000 aggregate initial offering price of its Medium-Term Notes Due
Nine Months or More from Date of Issue (the "Notes"). The Registration
Statement was declared effective by the Securities and Exchange Commission on
July 23, 1997. Net proceeds from the Notes will be used for repayment of
indebtedness, investments in and advances to subsidiaries of ONB, common stock
repurchases by ONB and other general corporate purposes, including possible
future acquisitions.
As of June 30, 1997, ONB has $80 million in unsecured lines of credit with
unaffiliated banks. These lines of credit include various informal
arrangements to maintain compensating balances. The compensating balances are
maintained for the benefit of the parent company by affiliate banks which
normally maintain correspondent balances with unaffiliated banks. As of June
30, 1997, $75.0 million was outstanding under these lines bearing interest
rates that averaged 6.12%.
5. Impact of Accounting Changes
Effective January 1, 1997, ONB adopted certain provisions of Statement of
Financial Accounting Standards (SFAS) No. 125, "Accounting for Transfers and
Servicing of Financial Assets and Extinguishments of Liabilities." This
statement provides accounting standards for sales, securitization, and
servicing of receivables, and other financial assets, secured borrowing and
collateral transactions, and the extinguishment of liabilities. Certain other
provisions of this statement are not effective until January 1, 1998.
The adoption of the above statement did not have a material impact on ONB's
financial condition and its results of operations.
In February 1997, the Financial Accounting Standards Board issued SFAS No.
128, "Earnings per Share" (EPS). This statement establishes standards for
computing and presenting EPS. The statement is effective for financial
statements issued for periods ending after December 15, 1997. ONB doesn't
expect the impact to be material to its EPS calculation.
7
PART I. FINANCIAL INFORMATION
ITEM 2
Management's Discussion and Analysis of
Financial Condition and Results of Operations
The following management's discussion and analysis is presented to provide
information concerning the financial condition of ONB as of June 30, 1997, as
compared to June 30, 1996 and December 31, 1996, and the results of operations
for the three and six month periods ended June 30, 1997 and 1996.
Financial Condition
ONB's total assets at June 30, 1997 were $5.54 billion, a 7.8% increase over
the prior year and a 3.2% increase from December 31, 1996. Earning assets,
which consist primarily of money market investments, investment securities and
loans, rose 8.1% over the prior year and a 3.8% increase since year-end.
During the past year, the mix of earning assets has remained steady with loans
growing 7.7% while investment securities and money market investments combined
increased only 9.1%. Since year-end, loans increased 3.1% compared to a 5.3%
increase in investment securities and money market investments. The continued
loan growth reflects the generally healthy economies in our tri-state market
areas.
At June 30, 1997, under-performing assets (defined as loans 90 days or more
past due, nonaccrual and restructured loans and forclosed properities)
increased to $26.2 million from $20.9 million as of December 31, 1996. As of
these dates, under-performing assets in total were 0.72% and 0.59%,
respectively, of total loans and forclosed properities.
<TABLE>
<CAPTION>
Past Due Total as %
90 of Total Loans
Days Nonaccrual Restructured Foreclosed and Forclosed
Or More Loans Loans Properties Total Properties
<S> <C> <C> <C> <C> <C> <C>
June 30, 1997 $4,815 $13,849 $ 389 $7,181 $26,234 0.72%
December 31, 1996 2,945 12,501 746 4,703 20,895 0.59
</TABLE>
As of June 30, 1997, the recorded investment in loans for which impairment has
been recognized in accordance with SFAS No. 114 and 118 was $6.0 million with
no related allowance and $47.1 million with $12.2 million of related
allowance.
ONB's policy for recognizing income on impaired loans is to accrue earnings
unless a loan becomes nonaccrual. When loans are classified as nonaccrual,
interest accrued during the current year is reversed against earnings;
interest accrued in the prior year, if any, is charged to the allowance for
loan losses. Cash received while a loan is classified nonaccrual is recorded
to principal.
For the six months ended June 30, 1997, the average balance of impaired loans
was $57.2 million and $1.7 million of interest was recorded.
ONB's consolidated loan portfolio is well diversified and contains no
concentrations of credit in any particular industry. A concentration
generally exists when more than 10% of total loans outstanding are to
borrowers of the same industry. ONB has minimal exposure to construction
lending or leveraged buyouts and no exposure in credits to foreign or
lesser-developed countries.
Total deposits at June 30, 1997, grew $103.4 million or 2.5% from June 30,
8
1996 and decreased $34.9 million or 0.8% since year-end. Seasonality and a
strong stock market contributed to the decrease since year-end.
Short-term borrowings, comprised of Federal funds purchased, securities sold
under agreements to repurchase and other short-term borrowings, increased
$268.6 million since June 1996 and $196.7 million since December 1996. This
increase helped fund additional assets and offset the decline in deposits
since year-end.
Capital
Total shareholders' equity increased by $17.8 million since June 1996 and $7.2
million since December 1996.
ONB's consolidated capital position remains strong as evidenced by the
following comparisons of key industry ratios:
Minimum
Regulatory June 30, June 30, December 31,
Ratios 1997 1996 1996
Risk Based Capital:
Tier 1 Capital to Total Assets 3.00% 8.18% 8.64% 8.16%
(Leverage Ratio)
Tier 1 Capital to Risk Adjusted 4.00% 12.46% 13.38% 12.94%
Total Assets
Total Capital to Risk Adjusted 8.00% 14.56% 15.45% 14.97%
Total Assets
Shareholders' Equity to N/A 8.41% 8.72% 8.54%
Total Assets
Each of ONB's affiliate banks have capital ratios which exceed regulatory
minimums.
Liquidity and Asset/Liability Management
ONB continually monitors its liquidity and actively manages its
asset/liability position. The purpose of liquidity management is to match the
sources of funds with anticipated customer borrowings and withdrawals and
other obligations. The primary purpose of asset/liability management is to
minimize the effect on net income of changes in interest rates and to maintain
a prudent match within specified time periods of rate-sensitive assets and
rate-sensitive liabilities.
ONB also uses net interest income simulation modeling to better quantify the
impact of potential interest rate fluctuations on net interest income. With
this understanding management can best determine possible balance sheet
changes, pricing strategies, and appropriate levels of capital and liquidity
which allows ONB to generate strong net interest income while controlling and
monitoring interest rate risk.
As of June 30, 1997, ONB's rate-sensitive assets were 79% of rate-sensitive
liabilities in the 1-180 day maturity category and 89% in the 181-365 day
category. These figures compared to 85% and 89% on December 31, 1996 and 81%
and 94% on June 30, 1996. These positions are within acceptable ranges as
determined from time-to-time by management. ONB's funds management committee
meets bi-monthly to closely monitor and effect changes as needed in the
consolidated rate-sensitivity position.
9
Results of Operations
Net Income
Net income for the six months ended June 30, 1997 was $32.3 million, an 8.0%
increase from the same period 1996. Net income for the second quarter of 1997
was up 6.6% over 1996. Primary net income per common share for the second
quarter of 1997 and for the six months ended June 30, 1997 were $0.61 and
$1.21, respectively.
The company's return on average assets (ROA) for the second quarter of 1997
was 1.20%. This was equal to the same period in 1996. Year-to-date ROA
percentages were 1.20% in 1997 compared to 1.18% for 1996. Return on average
equity (ROE) for the quarter and the first six months of 1997 were 14.37% and
14.32%, respectively, excluding unrealized security gains(losses). These
compare favorably to 1996 ROE results of 13.57% and 13.25% for similar
periods. Growth in net interest income generated the net income improvements.
Net Interest Income/Net Interest Margin (taxable equivalent basis)
Year-to-date net interest income for 1997 was $115,346 a 9.0% increase over
1996. Net interest income for the second quarter of 1997 was $58,342 compared
to $53,925 in 1996, an 8.2% increase over the prior year. The net interest
margin for the second quarter was 4.52% and 4.48% for 1997 and 1996,
respectively. The year-to-date net interest margin percentage in 1997 was
4.51% compared to 4.41% in 1996. Increases in earning assets contributed to
the improved net interest income.
Provision and Allowance for Loan Losses
The provision for loan losses was $3.8 million in the second quarter of 1997
compared to $2.1 million in the second quarter of 1996. Year-to-date, the
provision for loan losses of $7.5 million compares to $4.1 million in 1996.
ONB's net charge-offs were 0.36% of average loans for the current quarter,
compared to 0.14% in the second quarter of 1996. For the first six months,
net charge-offs were 0.33% in 1997 compared to 0.15% in 1996. The provision
and net charge-off levels in the first half of 1996 were low. Levels in 1997
are comparable with the second half of 1996.
The allowance for loan losses is continually monitored and evaluated both
within each affiliate bank and at the holding company level to provide
adequate coverage for potential losses. ONB maintains a comprehensive loan
review program to provide independent evaluations of loan administration,
credit quality, loan documentation, and adequacy of the allowance for loan
losses. The allowance for loan losses to end-of-period loans of 1.30% at June
30, 1997 compares to 1.27% in 1996. The allowance for loan losses covers all
under-performing loans by 2.5 times at June 30, 1997 compared to 2.7 times at
December 31, 1996.
Noninterest Income
Excluding securities gains (losses), noninterest income increased slightly in
the three months ended June 30, 1997 as compared to the same period in 1996.
For the first six months, this increase was 6.2%. Both increases were fueled
by an increase in trust fees which were up 11.8% for both second quarter and
the first six months and service charges which increased 4.4% and 5.9% for the
quarter and six months ended. Most other categories of noninterest income
were comparable to last year's results.
10
Noninterest Expense
Noninterest expense increased 4.4% in the second quarter of 1997 compared to
1996. For the first six months noninterest expense increased 5.4% from 1996.
Salaries and benefits, together the largest individual component of
noninterest expense, increased 7.4% in the second quarter of 1997 compared to
1996. For the first six months, this percentage increased 9.1%. This
increase arose primarily from the combination of a new subsidiary, Consumer
Acceptance Corporation, which was formed in the second quarter of 1996 and
accelerated incentive accruals in 1997 due to the stronger results during the
first six months. Communications expense exceeded prior year due to the
installation of a wide-area network (WAN). Equipment expense was up 9.4%
quarter-to-quarter and 9.8% year-to-year. Additional depreciation has
resulted from updating computer systems during installation of the WAN. Other
expense decreased 4.3% over the second quarter of 1996 and 4.9% over 1996
year-to-date. Most other categories of noninterest expense experienced
relatively small changes between the years.
Provision for Income Taxes
The provision for income taxes, as a percentage of pre-tax income, decreased
in the second quarter to 30.3% compared to 30.9% in 1996. For the first six
months, this percentage was 30.4% for 1997 and 30.6% in 1996.
11
PART II
OTHER INFORMATION
ITEM 1. Legal Proceedings
NONE
ITEM 2. Changes in Securities
NONE
ITEM 3. Defaults Upon Senior Securities
NONE
ITEM 4. Submission of Matters to a Vote of Security Holders
None
ITEM 5. Other Information
None
ITEM 6. Exhibits and Reports on Form 8-K
(a) Exhibits as required by Item 601 of Regulation S-K.
(10) Employees' Savings and Profit Sharing Plan of Old National Bancorp,
as amended.
(11) Statement re computation of per share earnings.
(27) Financial Data Schedule
(b) ONB did not file a current report on Form 8-K during the quarter ended
June 30, 1997.
12
SIGNATURES
Pursuant to the requirements 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.
OLD NATIONAL BANCORP
(Registrant)
By: s/s Steve H. Parker
Steve H. Parker
Senior Vice President
Chief Financial Officer
Date: August 14, 1997
13
INDEX OF EXHIBITS
Regulation S-K
Reference
(Item 601)
10 Employees' Savings and Profit Sharing Plan of Old National Bancorp,
as amended.
11 Statement re Computation of Per Share Earnings
27 Financial Data Schedule
14
<TABLE>
<CAPTION>
EXHIBIT 11
PAGE 1 OF 2
OLD NATIONAL BANCORP
STATEMENT RE COMPUTATION OF PER SHARE EARNINGS
($ IN THOUSANDS EXCEPT PER SHARE)
Three Months Ended Six Months Ended
June 30, 1997 June 30, 1997
Primary Fully Diluted Primary Fully Diluted
<S> <C> <C> <C> <C>
Net Income. . . . . . . . . . . . . . $16,272 $16,272 $32,330 $32,330
Interest expense foregone on assumed
conversion of 8% convertible subordinated
debentures, net of tax. . . . . . . . -- 368 -- 736
------- ------- ------- -------
Adjusted net income . . . . . . . . . $16,272 $16,640 $32,330 $33,066
Weighted average common shares
outstanding . . . . . . . . . . . . . 26,461,093 26,461,093 26,561,975 26,561,975
Additional shares outstanding upon assumed
conversion of 8% convertible subordinated
debentures. . . . . . . . . . . . . . -- 1,428,469 -- 1,428,469
Additional shares outstanding upon assumed
exercise of stock options . . . . . . 88,110 90,637 87,120 90,637
------- ------- ------- -------
Adjusted weighted average shares
outstanding . . . . . . . . . . . . . 26,549,203 27,980,199 26,649,095 28,081,081
---------- ---------- ---------- ----------
Earnings per share. . . . . . . . . . $ .61 $ .60 $ 1.21 $ 1.18
========== ========== ========== ==========
</TABLE>
<TABLE>
<CAPTION>
EXHIBIT 11
PAGE 2 OF 2
OLD NATIONAL BANCORP
STATEMENT RE COMPUTATION OF PER SHARE EARNINGS
($ IN THOUSANDS EXCEPT PER SHARE)
Three Months Ended Six Months Ended
June 30, 1996 June 30, 1996
Primary Fully Diluted Primary Fully Diluted
<S> <C> <C> <C> <C>
Net Income. . . . . . . . . . . . . . $15,270 $15,270 $29,942 $29,942
Interest expense foregone on assumed
conversion of 8% convertible subordinated
debentures, net of tax. . . . . . . . -- 369 -- 739
------- ------- ------- -------
Adjusted net income . . . . . . . . . $15,270 $15,639 $29,942 $30,681
Weighted average common shares
outstanding . . . . . . . . . . . . . 27,430,225 27,430,225 27,597,505 27,597,505
Additional shares outstanding upon assumed
conversion of 8% convertible subordinated
debentures. . . . . . . . . . . . . . -- 1,432,969 -- 1,432,969
Additional shares outstanding upon assumed
exercise of stock options . . . . . . 84,706 87,871 84,285 87,871
------- ------- ------- -------
Adjusted weighted average shares
outstanding . . . . . . . . . . . . . 27,514,931 28,951,065 27,681,790 29,118,345
---------- ---------- ---------- ----------
Earnings per share. . . . . . . . . . $ .56 $ .54 $ 1.09 $ 1.05
========== ========== ========== ==========
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM OLD NATIONAL
BANCORP'S JUNE 30, 1997 FORM 10-Q AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE
TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-30-1997
<CASH> 149,211
<INT-BEARING-DEPOSITS> 3,918
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 1,598,034
<INVESTMENTS-CARRYING> 0
<INVESTMENTS-MARKET> 0
<LOANS> 3,632,367
<ALLOWANCE> 47,082
<TOTAL-ASSETS> 5,538,131
<DEPOSITS> 4,233,161
<SHORT-TERM> 696,350
<LIABILITIES-OTHER> 68,398
<LONG-TERM> 74,474
0
0
<COMMON> 26,401
<OTHER-SE> 439,347
<TOTAL-LIABILITIES-AND-EQUITY> 5,538,131
<INTEREST-LOAN> 160,177
<INTEREST-INVEST> 48,729
<INTEREST-OTHER> 450
<INTEREST-TOTAL> 209,356
<INTEREST-DEPOSIT> 81,711
<INTEREST-EXPENSE> 100,868
<INTEREST-INCOME-NET> 108,488
<LOAN-LOSSES> 7,513
<SECURITIES-GAINS> (10)
<EXPENSE-OTHER> 10,615
<INCOME-PRETAX> 46,437
<INCOME-PRE-EXTRAORDINARY> 32,330
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 32,330
<EPS-PRIMARY> 1.21
<EPS-DILUTED> 1.18
<YIELD-ACTUAL> 4.51
<LOANS-NON> 13,849
<LOANS-PAST> 4,815
<LOANS-TROUBLED> 389
<LOANS-PROBLEM> 116,175
<ALLOWANCE-OPEN> 44,053
<CHARGE-OFFS> 7,793
<RECOVERIES> 1,959
<ALLOWANCE-CLOSE> 47,082
<ALLOWANCE-DOMESTIC> 47,082
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
Employees' Savings and Profit Sharing Plan
of
Old National Bancorp
Amended and Restated
As of
January 1, 1997
TABLE OF CONTENTS
Page #
INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . .1
DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . .2
Section 1.1 Adjustment . . . . . . . . . . . . . . . . .2
Section 1.2 Annual Additions . . . . . . . . . . . . . .2
Section 1.3 Beneficiary. . . . . . . . . . . . . . . . .2
Section 1.4 Board. . . . . . . . . . . . . . . . . . . .2
Section 1.5 Break(s) in Service. . . . . . . . . . . . .2
Section 1.6 Code . . . . . . . . . . . . . . . . . . . .3
Section 1.7 Committee. . . . . . . . . . . . . . . . . .3
Section 1.8 Company. . . . . . . . . . . . . . . . . . .3
Section 1.9 Compensation . . . . . . . . . . . . . . . .3
Section 1.10 Defined Benefit Plan . . . . . . . . . . . .3
Section 1.11 Defined Contribution Plan. . . . . . . . . .4
Section 1.12 Effective Date . . . . . . . . . . . . . . .4
Section 1.13 Employee . . . . . . . . . . . . . . . . . .4
Section 1.14 Employer . . . . . . . . . . . . . . . . . .4
Section 1.15 Employer Contributions . . . . . . . . . . .4
Section 1.16 Entry Date . . . . . . . . . . . . . . . . .4
Section 1.17 Fiduciary. . . . . . . . . . . . . . . . . .4
Section 1.18 Former Participant . . . . . . . . . . . . .5
Section 1.19 Highly Compensated Employees . . . . . . . .5
Section 1.20 Hour of Service. . . . . . . . . . . . . . .7
Section 1.21 Individual Account . . . . . . . . . . . . 10
Section 1.22 Investment Account . . . . . . . . . . . . 10
Section 1.23 Key Employee . . . . . . . . . . . . . . . 10
Section 1.24 Leased Employee. . . . . . . . . . . . . . 11
Section 1.25 Leave of Absence . . . . . . . . . . . . . 11
Section 1.26 Limitation Year. . . . . . . . . . . . . . 11
Section 1.27 Matching Contribution Account. . . . . . . 11
Section 1.28 Matching Contributions . . . . . . . . . . 11
Section 1.29 Normal Retirement Date . . . . . . . . . . 12
Section 1.30 Normal Retirement Age. . . . . . . . . . . 12
Section 1.31 Original Plan. . . . . . . . . . . . . . . 12
Section 1.32 Participant. . . . . . . . . . . . . . . . 12
Section 1.33 Permissive Aggregation Group . . . . . . . 12
Section 1.34 Plan . . . . . . . . . . . . . . . . . . . 12
Section 1.35 Plan Year. . . . . . . . . . . . . . . . . 12
Section 1.36 Prior Plan . . . . . . . . . . . . . . . . 12
Section 1.37 Prior Plan Account . . . . . . . . . . . . 12
Section 1.38 Profit Sharing Contribution. . . . . . . . 12
Section 1.39 Profit Sharing Contribution Account. . . . 12
Section 1.40 Required Aggregation Group . . . . . . . . 13
Section 1.41 Rollover Contribution. . . . . . . . . . . 13
Section 1.42 Rollover Contribution Account. . . . . . . 13
Section 1.43 Salary Reduction . . . . . . . . . . . . . 13
Section 1.44 Salary Reduction Account . . . . . . . . . 13
Section 1.45 Service. . . . . . . . . . . . . . . . . . 13
Section 1.46 Sponsoring Employer . . . . . . . . . . . 14
Section 1.47 Top Heavy Plan . . . . . . . . . . . . . . 14
Section 1.48 Total and Permanent Disability . . . . . . 15
Section 1.49 Trust Agreement. . . . . . . . . . . . . . 15
Section 1.50 Trust Fund . . . . . . . . . . . . . . . . 15
Section 1.51 Trustee. . . . . . . . . . . . . . . . . . 15
Section 1.52 Valuation Date . . . . . . . . . . . . . . 15
Section 1.53 Construction . . . . . . . . . . . . . . . 16
PARTICIPATION. . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 2.1 Eligibility Requirements . . . . . . . . . 17
Section 2.2 Plan Binding . . . . . . . . . . . . . . . 17
Section 2.3 Reemployment and Change in Status. . . . . 17
Section 2.4 Beneficiary Designation. . . . . . . . . . 18
Section 2.5 Notification of Individual Account Balance 18
CONTRIBUTIONS. . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 3.1 Salary Reduction . . . . . . . . . . . . . 20
Section 3.2 Matching Contributions . . . . . . . . . . 22
Section 3.3 Profit Sharing Contributions . . . . . . . 23
Section 3.4 Rollover Amount From Other Plans . . . . . 23
Section 3.5 Nondiscrimination Test for Salary
Reduction. . . . . . . . . . . . . . . . . 24
Section 3.6 Nondiscrimination Test for Other
Contributions. . . . . . . . . . . . . . . 27
Section 3.7 Maximum Individual Deferral. . . . . . . . 29
Section 3.8 Mistake of Fact. . . . . . . . . . . . . . 30
Section 3.9 Military Service . . . . . . . . . . . . . 30
ALLOCATIONS TO INDIVIDUAL ACCOUNTS . . . . . . . . . . . . . . 31
Section 4.1 Individual Accounts. . . . . . . . . . . . 31
Section 4.2 Investment of Accounts . . . . . . . . . . 31
Section 4.3 Valuation of Accounts. . . . . . . . . . . 32
Section 4.4 Trustee and Committee Judgment Controls. . 33
Section 4.5 Maximum Additions. . . . . . . . . . . . . 33
Section 4.6 Corrective Adjustments . . . . . . . . . . 34
Section 4.7 Defined Contribution and Defined Benefit
Plan Action. . . . . . . . . . . . . . . . 34
Section 4.8 Segregation of Individual Accounts . . . . 36
DISTRIBUTIONS. . . . . . . . . . . . . . . . . . . . . . . . . 39
Section 5.1 Normal Retirement. . . . . . . . . . . . . 39
Section 5.2 Late Retirement. . . . . . . . . . . . . . 39
Section 5.3 Death. . . . . . . . . . . . . . . . . . . 39
Section 5.4 Disability . . . . . . . . . . . . . . . . 39
Section 5.5 Termination of Employment. . . . . . . . . 40
Section 5.6 Commencement of Benefits . . . . . . . . . 41
Section 5.7 Minimum Distributions. . . . . . . . . . . 42
Section 5.8 Methods of Payment . . . . . . . . . . . . 43
Section 5.9 Joint and Survivor Options . . . . . . . . 45
Section 5.10 Benefits to Minors and Incompetents. . . . 48
Section 5.11 Unclaimed Benefits . . . . . . . . . . . . 49
Section 5.12 Participant Directed Rollovers . . . . . . 49
WITHDRAWALS AND LOANS. . . . . . . . . . . . . . . . . . . . . 51
Section 6.1 Hardship Withdrawal. . . . . . . . . . . . 51
Section 6.2 Other Withdrawals. . . . . . . . . . . . . 53
Section 6.3 Participant Loans. . . . . . . . . . . . . 53
FUNDING. . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
Section 7.1 Contributions. . . . . . . . . . . . . . . 57
Section 7.2 Trustee. . . . . . . . . . . . . . . . . . 57
FIDUCIARIES. . . . . . . . . . . . . . . . . . . . . . . . . . 58
Section 8.1 General. . . . . . . . . . . . . . . . . . 58
Section 8.2 Employer . . . . . . . . . . . . . . . . . 58
Section 8.3 Trustee. . . . . . . . . . . . . . . . . . 59
Section 8.4 Administrative Committee . . . . . . . . . 59
Section 8.5 Claims Procedures. . . . . . . . . . . . . 61
Section 8.6 Records. . . . . . . . . . . . . . . . . . 62
Section 8.7 Indemnification. . . . . . . . . . . . . . 62
AMENDMENT AND TERMINATION OF THE PLAN. . . . . . . . . . . . . 64
Section 9.1 Amendment of the Plan. . . . . . . . . . . 64
Section 9.2 Termination of the Plan. . . . . . . . . . 64
Section 9.3 Return of Contributions. . . . . . . . . . 64
TOP HEAVY PLAN PROVISIONS. . . . . . . . . . . . . . . . . . . 66
Section 10.1 General. . . . . . . . . . . . . . . . . . 66
Section 10.2 Minimum Contribution . . . . . . . . . . . 66
Section 10.3 Super Top Heavy Plans. . . . . . . . . . . 66
Section 10.4 Compensation . . . . . . . . . . . . . . . 67
MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . . . 68
Section 11.1 Governing Law. . . . . . . . . . . . . . . 68
Section 11.2 Construction . . . . . . . . . . . . . . . 68
Section 11.3 Administration Expenses. . . . . . . . . . 68
Section 11.4 Participant's Rights . . . . . . . . . . . 68
Section 11.5 Spendthrift Clause . . . . . . . . . . . . 68
Section 11.6 Merger, Consolidation or Transfer. . . . . 69
Section 11.7 Counterparts . . . . . . . . . . . . . . . 69
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . 69
PARTICIPATING EMPLOYERS. . . . . . . . . . . . . . . . . . . . 70
INTRODUCTION
Effective January 1, 1953, Old National Bank in
Evansville adopted the Employees' Savings and Profit Sharing Plan
of Old National Bank in Evansville ("Original Plan") and a trust
agreement.
Effective January 1, 1968, the Original Plan was
amended and restated as the Employees' Savings and Profit Sharing
Plan of Old National Bank of Evansville (As Amended 1968) ("1968
Plan"), and the trust agreement was amended and restated as a
separate document.
Effective January 1, 1976, the 1968 Plan was amended
and restated as the Restated Employees' Savings and Profit
Sharing Plan of Old National Bank of Evansville ("1976 Plan").
Effective January 1, 1980, the 1976 Plan was amended
and restated as the Revised Employees' Savings and Profit Sharing
Plan of Old National Bank of Evansville ("1980 Plan").
Effective January 1, 1984, the 1980 Plan was amended
and restated as the Revised Employees' Savings and Profit Sharing
Plan of Old National Bank of Evansville ("1984 Plan").
Effective January 1, 1986, the 1984 Plan was amended
and restated as the Employees' Savings and Profit Sharing Plan of
Old National Bancorp ("1986 Plan").
Effective January 1, 1989, the 1986 Plan was amended
and restated as the Employees' Savings and Profit Sharing Plan of
Old National Bancorp ("Prior Plan").
Effective January 1, 1997, the Sponsoring Employer
desires to amend and restate the Prior Plan in its entirety as
the Employees' Savings and Profit Sharing Plan of Old National
Bancorp ("Plan"), as hereinafter set forth, in order to provide
benefits for certain of its eligible employees.
It is intended that this Plan, together with the
Trust Agreement, meet all the requirements of the Internal
Revenue Code of 1986, as amended (the "Code") and the Employee
Retirement Income Security Act of 1974 as amended ("ERISA") and
shall be interpreted, wherever possible, to comply with the terms
of the said laws, as amended, and all formal regulations and
rulings issued thereunder. It is also intended that this Plan
shall be a profit sharing plan under Code Section 401(a).
<PAGE>
ARTICLE 1
DEFINITIONS
Section 1.1 Adjustment means the net increases and
decreases in the market value of the Trust Fund
during a Plan Year or other period exclusive of
any contribution or distribution during such
year or other period. Such increases and
decreases shall include such items as realized
or unrealized investment gains and losses and
investment income, and may include expenses of
administering the Trust Fund and the Plan.
Section 1.2 Annual Additions means for any Employee in any
Limitation Year, the sum of Employer
Contributions, Salary Reduction, and
forfeitures allocated to the Employee's
Individual Account. Amounts allocated to an
individual medical account, as defined in
Section 415(l)(2) of the Code, which is part of
an annuity or pension plan maintained by the
Employer are treated as Annual Additions to a
Defined Contribution Plan. Also, amounts
derived from contributions paid or accrued
which are attributable to post-retirement
medical benefits allocated to the separate
account of a Key Employee, as required by
Section 419A(d)(3) of the Code, maintained by
the Employer, are treated as Annual Additions
to a Defined Contribution Plan.
Section 1.3 Beneficiary means any person designated by a
Participant to receive such benefits as may
become payable hereunder after the death of
such Participant; provided, however, that a
married Participant may not name as his
Beneficiary someone other than his spouse
unless the spouse consents in writing to such
designation, which consent shall be
acknowledged by a Plan representative or by a
notary public.
Section 1.4 Board means the Board of Directors of the
Employer.
Section 1.5 Break(s) in Service means a Plan Year during
which an employee has been credited with fewer
than five hundred and one (501) Hours of
Service. However, where there is a short Plan
Year as a result of a merger, an employee will
incur a Break in Service for such Plan Year on
the basis that the number of months during such
short Plan Year multiplied by forty-one and
two-thirds (41-2/3) hours shall be the
equivalent of five hundred (500) Hours of
Service.
Solely to determine whether a Break in Service has
occurred, an employee who is absent from work for
maternity or paternity reasons shall receive credit
for the Hours of Service which would otherwise have
been credited to such employee but for such absence,
or in any case in which Hours of Service cannot be
determined, eight (8) Hours of Service per day of
such absence. In no event will the number of Hours
of Service credited to an employee pursuant to the
immediately preceding sentence exceed five hundred
one (501). For purposes of this Section, an absence
from work for maternity or paternity reasons means an
absence (1) by reason of the pregnancy of the
employee, (2) by reason of the birth of a child of
the employee, (3) by reason of the placement of a
child with the employee in connection with the
adoption of such child by the employee, or (4) for
purposes of caring for such child for a period
beginning immediately following such birth or
placement. The Hours of Service credited under this
paragraph shall be credited (1) in the Plan Year or
other applicable computation period in which the
absence begins if the crediting is necessary to
prevent a Break in Service in that period, or (2) in
all other cases, in the next following Plan Year or
other applicable computation period.
Section 1.6 Code means the Internal Revenue Code of 1986,
as amended and revised.
Section 1.7 Committee means the Administrative Committee
provided for in Article 8 hereof.
Section 1.8 Company means Old National Bancorp and all of
the legal entities which are part of a
controlled group or affiliated service group
with Old National Bancorp, pursuant to the
provisions of Code Sections 414(b), (c), (m),
or (o).
Section 1.9 Compensation means, with respect to each
Participant for the most recent calendar year,
his basic compensation (including regular pay,
overtime, paid hours not worked, holiday pay,
vacation pay, sick pay, jury duty, bereavement,
short term disability, commissions, overtime,
any other amounts so determined by the
Sponsoring Employer, and any amount which would
have otherwise been basic compensation except
that a Participant is contributing such amount
to a qualified plan under a salary reduction
agreement as provided under Code Section 401(k)
and amounts contributed pursuant to a salary
reduction agreement to a plan provided under
Code Section 125) for each calendar year. For
purposes of this Section, only amounts paid for
pay periods ending during the period in which a
Participant is actively participating in the
Plan shall be considered Plan Compensation.
Compensation shall be limited to one hundred
fifty thousand dollars ($150,000) or such other
amount as determined pursuant to Code Section
401(a)(17).
Section 1.10 Defined Benefit Plan means a plan established
and qualified under Section 401 of the Code,
except to the extent it is, or is treated as, a
Defined Contribution Plan.
Section 1.11 Defined Contribution Plan means a plan which is
established and qualified under Section 401 of
the Code, which provides for an individual
account for each participant therein and for
benefits based solely on the amount contributed
to each participant's account and any income,
expenses, gains or losses (both realized and
unrealized) which may be allocated to such
account.
Section 1.12 Effective Date means January 1, 1953, the
effective date of the Original Plan. The
effective date of this amended and restated
Plan is January 1, 1997.
Section 1.13 Employee means any person employed by the
Employer, including any person who is employed
by the Employer and who is on an approved Leave
of Absence, subject to the following:
(1) The term "Employee" shall exclude any person
who is a Leased Employee; and
(2) The term "Employee" shall exclude any employee
who is a part of a collective bargaining unit
for which benefits have been the subject of
good faith negotiation unless and until the
Employer and the collective bargaining unit
representative for that unit through the
process of good faith bargaining agree in
writing for coverage hereunder.
When used with an initial lower case letter, the term
"employee" shall mean a person employed by the
Employer or the Company, as the context requires,
without regard to the limitations contained in this
Section.
Section 1.14 Employer means Old National Bancorp and each of
the legal entities, or any successor thereto
which is a part of the Company and which has
adopted the Plan for its eligible Employees
with consent of the Sponsoring Employer. The
Adopting Employers shall be shown on Appendix
"A" attached to and made a part of this
document. Appendix "A" may be changed by the
appropriate officer of the Sponsoring Employer
without action by the Board.
Section 1.15 Employer Contributions means Matching
Contributions, Profit Sharing Contributions
made to the Trust Fund by the Employer. Salary
Reduction shall not be included in the term
Employer Contributions when used in this Plan.
Section 1.16 Entry Date means the first day of each calendar
month during each Plan Year.
Section 1.17 Fiduciary means the Employer, the Trustee, the
Committee and any individual, corporation, firm
or other entity which assumes, in accordance
with Article 8, responsibilities of the
Employer, the Trustee or the Committee with
respect to management of the Plan or the
disposition of its assets.
Section 1.18 Former Participant means a Participant whose
participation in the Plan has terminated but
who has not received payment in full of the
balance in his Individual Account to which he
is entitled.
Section 1.19 Highly Compensated Employees will be determined
in accordance with the following:
1.19(a) Highly Compensated Employee means an
employee who during the determination year,
subject to Subsection (b) of this Section,
or the look back year:
(1) was at any time a five percent (5%)
owner of the Employer; or
(2) received compensation from the Company
in excess of seventy-five thousand
dollars ($75,000) (or such higher amount
as may be provided under Code Section
414(q)); or
(3) received compensation from the Company
in excess of fifty thousand dollars
($50,000) (or such higher amount as may
be provided under Code Section 414(q))
and was in a group consisting of the top
twenty percent (20%) of the employees of
the Company when ranked on the basis of
compensation; or
(4) was at any time an officer and received
compensation greater than fifty percent
(50%) of the maximum amount under Code
Section 415(b)(1)(A). Not more than
fifty (50) officers (or, if lesser, the
greater of three (3) employees or ten
percent (10%) of the employees) shall be
considered under this Subsection as
Highly Compensated Employees. If no
officer is described above, then the
highest paid officer shall be treated as
described in this item (4).
1.19(b) If the employee was not a Highly
Compensated Employee for the look back
year, then he shall not be considered a
Highly Compensated Employee for the
determination year unless he is a five
percent (5%) owner of the Employer or one
of the highest paid one hundred (100)
employees and meets the criteria of clauses
(2), (3) or (4) of Subsection (a) of this
Section.
1.19(c) For purposes of determining Highly
Compensated Employees, compensation shall
mean compensation paid by the Company for
purposes of Code Section 415(c)(3) and
shall include amounts deferred pursuant to
Code Sections 125 (flexible benefit plans);
402(g)(3) (elective deferrals); and
402(h)(1)(B) (simplified employee plans).
1.19(d) For purposes of determining the top twenty
percent (20%) of employees and the number
of officers counted as Highly Compensated
Employees, the following employees shall be
excluded:
(1) employees who have not completed six (6)
months of service,
(2) employees who normally work less than
seventeen and one-half (17-1/2) hours
per week,
(3) employees who normally work during not
more than six (6) months during the Plan
Year,
(4) employees who have not attained age
twenty-one (21),
(5) employees included in a collective
bargaining unit covered by an agreement
with the Company (to the extent
permitted by regulations), and
(6) employees who are non-resident aliens.
1.19(e) A former employee shall be treated as a
Highly Compensated Employee if (1) such
employee was a Highly Compensated Employee
when such employee separated from service,
or (2), such employee was a Highly
Compensated Employee at any time after
attainment of age fifty-five (55).
1.19(f) Except as otherwise provided in this
Section, the term "look back year" shall
mean the twelve (12) month period
immediately preceding the determination
year.
1.19(g) Except as otherwise provided in this
Section, the term "determination year"
shall mean the current Plan Year.
1.19(h) To the extent permitted by regulations
under Code Section 414(q), the Employer may
elect to make the look back year
calculation on the basis of the calendar
year ending with or within the applicable
determination year (or, in the case of a
determination year that is shorter than
twelve (12) months, the calendar year
ending with or within the twelve (12) month
period ending with the end of the
determination year). In such case, the
Employer must make the determination year
calculation on the basis of the period (if
any) by which the applicable determination
year extends beyond such calendar year. If
the Employer makes the election provided
for in this Subsection, such election must
be made with respect to all plans, entities
and arrangements of the Employer.
1.19(i) The determination of Highly Compensated
Employees shall be determined on a Company
wide basis and shall not be determined on
an Employer by Employer or plan by plan
basis.
1.19(j) If the Employer so elects for a year,
clause (2) of Subsection (a) of this
Section shall be applied by substituting
fifty thousand dollars ($50,000) in place
of seventy-five thousand dollars ($75,000),
and clause (3) of Subsection (a) of this
Section shall not apply, provided that:
(1) at all times during such year, the
Employer maintained substantial business
activities and employed employees in at
least two (2) significantly separate
geographic areas, and
(2) The Employer satisfies such other
conditions as may be prescribed by the
Secretary of the Treasury.
1.19(k) The determination of Highly Compensated
Employees shall be governed by Code Section
414(q) and the regulations issued
thereunder.
Section 1.20 Hour of Service means any hour for which an
employee is paid or entitled to payment by the
Company during the Plan Year or other
applicable computation period (1) for the
performance of duties for the Company; (2) on
account of a period of time during which no
duties are performed (irrespective of whether
the employment relationship has terminated);
and (3) as a result of a back pay award which
has been agreed to or made by the Company,
irrespective of mitigation of damages, to the
extent that such hour has not been previously
credited under item (1) or item (2) preceding.
1.20(a) The number of Hours of Service to be
credited on account of a period of time
during which no duties are performed
(including hours resulting from a back pay
award) shall be determined as follows. If
the payment which is made or due is
calculated on the basis of units of time,
the number of Hours of Service to be
credited shall be the number of regularly
scheduled working hours included in the
units of time on the basis of which the
payment is calculated; if an employee does
not have a regular work schedule, the
number of Hours of Service to be credited
shall be calculated on the basis of an
eight (8) hour work day. If the payment
which is made or due is not calculated on
the basis of units of time, the number of
Hours of Service to be credited shall be
calculated by dividing the amount of the
payment by the employee's most recent
hourly rate of compensation before the
period during which no duties were
performed, determined as follows:
(1) If the employee's compensation is
determined on the basis of an hourly
rate, such hourly rate shall be the
employee's most recent hourly rate of
compensation.
(2) If the employee's compensation is
determined on the basis of a fixed rate
for a specified period of time other
than hours, his hourly rate of
compensation shall be his most recent
rate of compensation for the specified
period of time, divided by the number of
hours regularly scheduled for the
performance of duties during such period
of time; if an employee does not have a
regular work schedule, his hourly rate
of compensation shall be calculated on
the basis of an eight (8) hour work day.
(3) If the employee's compensation is not
determined on the basis of a fixed rate
for a specified period of time, his
hourly rate of compensation shall be the
lowest hourly rate of compensation paid
to employees in his job classification,
or, if no employees in his job
classification have an hourly rate of
compensation, the minimum wage in effect
under Section 6(a)(1) of the Fair Labor
Standards Act of 1938, as amended.
1.20(b) In no event shall the application of the
terms of Subsection (a) of this Section
result in crediting an employee with a
number of Hours of Service during the
period which is greater than the number of
hours regularly scheduled for the
performance of duties. If an employee has
no regular work schedule, the number of
Hours of Service to be credited to him
shall not exceed the number which would be
credited calculated on the basis of an
eight (8) hour work day.
1.20(c) Except for an employee on a Leave of
Absence, no employee shall be credited with
more than five hundred one (501) Hours of
Service as a result of the application of
Subsection (a) of this Section for any
single continuous period during which he
performs no duties, regardless of whether
such period extends beyond one (1) Plan
Year or other applicable computation
period.
1.20(d) The Plan Year or other applicable
computation period to which Hours of
Service shall be credited shall be
determined as follows:
(1) Except as hereinafter provided, Hours of
Service credited in accordance with item
(1) of the first paragraph of this
Section shall be credited in the Plan
Year or other applicable computation
period in which the duties were
performed.
(2) Except as hereinafter provided, Hours of
Service credited in accordance with item
(2) of the first paragraph of this
Section shall be credited: if calculated
on the basis of units of time, to the
Plan Year or Plan Years or other
applicable computation periods in which
the period during which no duties are
performed occurs, beginning with the
first unit of time to which the payment
relates; otherwise to the Plan Year or
other applicable computation period in
which the period during which no duties
are performed occurs, provided that if
the period during which no duties are
performed extends beyond one (1) Plan
Year or other applicable computation
period, such Hours of Service shall be
allocated between not more than the
first two (2) Plan Years or other
applicable computation periods on any
reasonable basis consistently applied.
(3) Except as hereinafter provided, Hours of
Service credited in accordance with item
(3) of the first paragraph of this
Section shall be credited to the Plan
Year or other applicable computation
period to which the award or agreement
for back pay pertains rather than to the
Plan Year or other applicable
computation period in which the award,
agreement, or payment is made.
(4) Hours of Service to be credited to an
employee in connection with a period of
no more than thirty-one (31) days which
extends beyond one (1) Plan Year or
other applicable computation period may
be credited to the first or the second
Plan Year or other applicable
computation period, provided that such
crediting is done on a reasonable and
nondiscriminatory basis.
1.20(e) Nothing in this Section shall be construed
to alter, amend, modify, invalidate, impair
or supersede any law of the United States
or any rule or regulation issued under any
such law. The nature and extent of any
credit for Hours of Service under this
Section shall be determined under such law,
including Department of Labor Regulation
Section 2530.200b-2.
Section 1.21 Individual Account means the detailed record
kept of the amounts credited or charged to each
Participant in accordance with the terms
hereof. Such Individual Account is comprised
of the following accounts: a Salary Reduction
Account, a Matching Contribution Account, a
Profit Sharing Contribution Account, a Prior
Plan Account, a Rollover Contribution Account
and an Investment Account.
Section 1.22 Investment Account means that portion of a
Participant's Individual Account attributable
to (i) investment (after-tax) contributions
under the Prior Plan and deductible employee
contributions under the Prior Plan and (ii) the
Participant's proportionate share attributable
to said contributions under the Prior Plan
attributable to the said contributions, of the
Adjustments, reduced by any distributions from
such Investment Account pursuant to Article 5
and any withdrawals from said Investment
Account pursuant to Article 6, if withdrawals
are allowed pursuant thereto. The amount in
the Investment Account attributable to after-tax
contributions and the amount attributable
to deductible employee contributions shall be
accounted for separately.
Section 1.23 Key Employee shall mean any employee, former
employee or beneficiary thereof in an Internal
Revenue Service qualified plan adopted by the
Company who at any time during the Plan Year or
any of the four (4) preceding Plan Years is
1.23(a) an officer of the Employer having an annual
compensation from the Employer during the
Plan Year greater than fifty percent (50%)
of the amount in effect under Code Section
415(b)(1)(A) for the calendar year in which
such Plan Year ends; or
1.23(b) one (1) of the ten (10) employees having an
annual compensation from the Employer for a
Plan Year of more than the limitation in
effect under Code Section 415(c)(1)(A) for
the calendar year in which such Plan Year
ends and owning (or considered as owning
within the meaning of Code Section 318)
both more than a one-half percent (1/2%)
interest, and the largest interest in the
Employer; or
1.23(c) a five percent (5%) owner of the Employer;
or
1.23(d) a one percent (1%) owner of the Employer
having an annual compensation from the
Employer for a Plan Year of more than one
hundred fifty thousand dollars ($150,000).
1.23(e) For purposes of this Section, compensation
means compensation as defined in Code
Section 415, but without regard to Code
Sections 125, 402(e)(3) and 402(h)(1)(B),
and in the case of employer contributions
made pursuant to a salary reduction
agreement, without regard to Code Section
403(b).
1.23(f) This definition shall be interpreted
consistent with Code Section 416 and rules
and regulations issued thereunder.
Further, such law and regulations shall be
controlling in all determinations under
this definition, inclusive of any
provisions and requirements stated
thereunder but hereinabove absent.
Section 1.24 Leased Employee shall mean any person (other
than an employee of the recipient) who provides
services to the recipient if such services are
provided pursuant to an agreement between the
recipient and any other person ("leasing
organization"), such person has performed such
services for the recipient (or for the
recipient and any related persons determined in
accordance with Code Section 414(n)(6)) on a
substantially full-time basis for a period of
one (1) year, and such services are of a type
historically performed by employees in the
business field of the recipient employer.
Section 1.25 Leave of Absence means an employee's unpaid
leave of absence (i) in the armed forces of the
United States of America to the extent required
by law, or (ii) on any leave duly granted by
the Employer for sickness, disability or other
purposes if the employee returns to employment
with the Employer at the expiration of any such
authorized leave, or (iii) due to layoff not in
excess of one (1) year if the employee returns
to employment with the Employer when notified
of his or her recall to work.
Section 1.26 Limitation Year means the twelve (12) month
period beginning on January 1 and ending on
December 31.
Section 1.27 Matching Contribution Account means that
portion of a Participant's Individual Account
attributable to (i) Matching Contributions
allocated to such Participant pursuant to
Section 3.2 and (ii) the Participant's
proportionate share, attributable to his
Matching Contribution Account, of the
Adjustments, reduced by any distributions from
such Matching Contribution Account pursuant to
Article 5 and any withdrawals from such
Matching Contribution Account pursuant to
Article 6, if withdrawals are allowed pursuant
thereto.
Section 1.28 Matching Contributions means contributions made
to the Trust Fund by the Employer pursuant to
Section 3.2.
Section 1.29 Normal Retirement Date means the first day of
the month coincident with or next following the
Participant's sixty-fifth (65th) birthday.
Section 1.30 Normal Retirement Age means age sixty-five
(65).
Section 1.31 Original Plan means the Employees' Savings and
Profit Sharing Plan of Old National Bank in
Evansville adopted effective January 1, 1953.
Section 1.32 Participant means any Employee who commences
participation in the Plan pursuant to Article 2
hereof.
Section 1.33 Permissive Aggregation Group means the Required
Aggregation Group and each other plan or plans
of the Company that are not required to be
included in the Required Aggregation Group, and
which, if treated as being part of such group,
would not cause such group to fail to meet the
requirements of Code Section 401(a) and 410.
Section 1.34 Plan means the Employees' Savings and Profit
Sharing Plan of Old National Bancorp.
Section 1.35 Plan Year means the twelve (12) month period
beginning on January 1 and ending on December
31.
Section 1.36 Prior Plan means the Employees' Savings and
Profit Sharing Plan of Old National Bancorp in
effect on December 31, 1996.
Section 1.37 Prior Plan Account means that portion of a
Participant's Individual Account attributable
to (i) assets, including elective deferrals,
after-tax contributions, matching contributions
and other employer contributions, with each
type of contribution being separately accounted
for, transferred to this Plan as a result of a
merger with another plan in which the
Participant participated into this Plan and
(ii) the Participant's proportionate share
attributable to the said prior plan assets, of
the Adjustments, reduced by an distributions
from such Prior Plan Account pursuant to
Article 5 and any withdrawals from such Prior
Plan Account pursuant to Article 6, if
withdrawals are allowed pursuant thereto.
Section 1.38 Profit Sharing Contribution means contributions
made to the Trust Fund by the Employer pursuant
to Section 3.3.
Section 1.39 Profit Sharing Contribution Account means that
portion of a Participant's Individual Account
attributable to (i) Profit Sharing
Contributions allocated to such Participant
pursuant to Section 3.3 and (ii) the
Participant's proportionate share attributable
to his Profit Sharing Contribution Account, of
the Adjustments, reduced by any distributions
from such Profit Sharing Contribution Account
pursuant to Article 5 and any withdrawals from
such Profit Sharing Contribution Account
pursuant to Article 6, if withdrawals are
allowed pursuant thereto.
Section 1.40 Required Aggregation Group means
(1) each qualified plan of the Company in which a
Key Employee is a participant; and
(2) each other qualified plan of the Company which
enables any plan in (1) to meet the
requirements of Code Section 401(a)(4) or 410;
and
(3) each terminated qualified plan maintained by
the Company within the last five (5) years
ending on the determination date for the Plan
Year in question and which, but for the fact
that it terminated, would be part of a Required
Aggregation Group for such Plan Year.
Section 1.41 Rollover Contribution means contributions made
to the Trust Fund by an Employee pursuant to
Section 3.4.
Section 1.42 Rollover Contribution Account means that
portion of an Employee's Individual Account
attributable to (i) Rollover Contributions
pursuant to Section 3.4 and (ii) the
Participant's proportionate share, attributable
to his Rollover Contribution Account, of the
Adjustments, reduced by any distributions from
such Rollover Contribution Account pursuant to
Article 5 and any withdrawals from such
Rollover Contribution Account pursuant to
Article 6, if withdrawals are allowed pursuant
thereto.
Section 1.43 Salary Reduction means contributions made to
the Trust Fund by the Employer pursuant to
Section 3.1.
Section 1.44 Salary Reduction Account means that portion of
a Participant's Individual Account attributable
to (i) Salary Reduction amounts made on his
behalf pursuant to Section 3.1 and (ii) the
Participant's proportionate share, attributable
to his Salary Reduction Account, of the
Adjustments, reduced by any distributions from
such Salary Reduction Account pursuant to
Article 5 and any withdrawals from such Salary
Reduction Account pursuant to Article 6, if
withdrawals are allowed pursuant thereto.
Section 1.45 Service means the aggregate of an employee's
periods of Service under Subsection (a) of this
Section, subject to the other Subsections of
this Section.
1.45(a) A year of Service is each Plan Year during
which an employee has been credited with
one thousand (1,000) or more Hours of
Service for the Company. The period of
time an employee is on Leave of Absence
shall be included herein.
1.45(b) If an employee incurs five (5) or more
consecutive Breaks in Service, the
employee's Service prior to the consecutive
Breaks in Service will be disregarded if
the employee does not have a non-forfeitable
interest in his Individual Account attributable to Employer
Contributions and the number of consecutive
Breaks in Service equals or exceeds the
employee's Service.
1.45(c) Service with a predecessor employer will be
credited to an employee as Service for the
Employer as required pursuant to Code
Section 414(a).
Section 1.46 Sponsoring Employer means Old National Bancorp.
Section 1.47 Top Heavy Plan means any qualified plan under
which, as of any determination date (the last
day of the preceding Plan Year), the present
value of the cumulative accrued benefits under
the plan for Key Employees exceeds sixty
percent (60%) of the present value of
cumulative accrued benefits under the plan for
all Employees. For purposes of this definition
the following provisions shall apply:
1.47(a) If such plan is a Defined Contribution
Plan, the present value of cumulative
accrued benefits shall be deemed to be the
market value of all Employee accounts under
the plan, other than voluntary deductible
Employee contributions. If such plan is a
Defined Benefit Plan, the present value of
cumulative accrued benefits shall be the
lump sum present value determined pursuant
to the plan. Moreover, the present value
of the cumulative accrued benefits shall be
increased by the amount of all Plan
distributions made with respect to an
Employee during the five (5) year period
ending on the determination date, including
distributions under a terminated plan
which, if it had not been terminated, would
have been required to be included in a
Required Aggregation Group.
1.47(b) The Plan shall be considered to be a Top
Heavy Plan for any Plan Year if, on the
last day of the preceding Plan Year, the
above rules were met. For the first Plan
Year that the Plan shall be in effect, the
determination of whether the Plan is a Top
Heavy Plan shall be made as of the last day
of such Plan Year.
1.47(c) Each qualified plan of the Company required
to be included in a Required Aggregation
Group shall be treated as a Top Heavy Plan
if such group is a top heavy group.
1.47(d) With regard to a Participant or Former
Participant who (i) has not performed any
service for the Employer at any time during
the five (5) year period ending on the
determination date, or (ii) was formerly a
Key Employee, but who is not a Key Employee
on the determination date, the present
value of the cumulative accrued benefit for
such Participant or Former Participant
shall not be taken into account for the
purposes of determining whether this Plan
is a Top Heavy Plan.
1.47(e) This definition shall be interpreted
consistent with Code Section 416 and rules
and regulations issued thereunder.
Further, such law and regulation shall be
controlling in all determinations under
this definition inclusive of any provisions
and requirements stated thereunder but
hereinabove absent.
Section 1.48 Total and Permanent Disability or Totally and
Permanently Disabled means the physical or
mental condition arising after the original
date of employment of the Participant which
totally and permanently prevents the
Participant from engaging in any occupation or
employment for remuneration or profit, except
for the purpose of rehabilitation not
incompatible with a finding of total and
permanent disability. The Committee shall be
the sole and final judge of Total and Permanent
Disability within the meaning of the Plan,
after consideration of such evidence as it may
require, including the reports of such
physician or physicians as it may designate.
Section 1.49 Trust Agreement means the agreement entered
into between the Sponsoring Employer and the
Trustee pursuant to Article 7 hereof.
Section 1.50 Trust Fund means the trust fund created in
accordance with Article 7 hereof.
Section 1.51 Trustee means such individual or corporation as
shall be designated in the Trust Agreement to
hold in trust any assets of the plan for the
purpose of providing benefits under the Plan,
and shall include any successor trustee
designated thereunder.
Section 1.52 Valuation Date means the last day of each
calendar month of each Plan Year. As of each
Valuation Date, the Trust Fund shall be valued
at fair market value. The Committee may from
time to time value the Trust Fund as of any
other date as it deems desirable.
Section 1.53 Construction. Capitalized words and phrases
used in this Plan shall have the meanings
specified in this Article, unless a different
meaning is clearly required by the context.
Any words herein used in the masculine shall be
read and construed in the feminine where they
would so apply. Words in the singular shall be
read and construed as though used in the plural
in all cases where they would so apply.
ARTICLE 2
PARTICIPATION
Section 2.1 Eligibility Requirements
Each Employee shall be eligible to participate
as of the later of (i) the Effective Date, or
(ii) the Entry Date next following the
completion of a twelve (12) consecutive month
period during which he has been credited with
at least one thousand (1,000) Hours of Service.
The first period shall be the twelve (12)
consecutive month period beginning on the date
he completes his first Hour of Service.
Thereafter, the period shall be the Plan Year
in which occurs the anniversary of the date the
Employee completes his first Hour of Service.
The period of time an Employee is on Leave of
Absence shall be included in determining Hours
of Service for purposes of this Section.
Section 2.2 Plan Binding
Upon becoming a Participant, a Participant
shall be bound then and thereafter by the terms
of this Plan and the Trust Agreement, including
all amendments to the Plan and the Trust
Agreement made in the manner herein authorized.
Section 2.3 Reemployment and Change in Status
2.3(a) Termination of employment shall be deemed
to occur when an Employee has an
interruption in continuity of his
employment by the Company. Such
termination may have resulted from
retirement, death, voluntary or involuntary
termination of employment, unauthorized
absence, or by failure to return to active
employment with the Company or to retire by
the date on which an authorized leave of
absence expired.
2.3(b) If an Employee who was not eligible to
become a Participant in the Plan during his
prior period of employment is reemployed,
he shall be eligible to participate in the
Plan after he has met the requirements of
Section 2.1.
2.3(c) If an Employee who was eligible to become a
Participant in the Plan during his prior
period of employment is reemployed, he
shall be eligible to again become a
Participant as of the date he again becomes
an Employee.
2.3(d) If a person employed by the Employer
becomes an Employee as defined under this
Plan, he shall be eligible to participate
in the Plan as of the date of his change in
status, provided he has met the
requirements of Section 2.1. If a person
employed by the Employer ceases to be an
Employee as defined under the Plan he will
cease to be an active Participant effective
as of the first payroll coincident with or
next following his change in status.
Section 2.4 Beneficiary Designation
Upon commencing participation, each Participant
shall designate a Beneficiary on forms
furnished by the Committee. Such Participant
may then from time to time change his
Beneficiary designation by written notice to
the Committee and, upon such change, the rights
of all previously designated Beneficiaries to
receive any benefits under this Plan shall
cease. A married Participant may not name as
his Beneficiary someone other than his spouse
unless the spouse consents in writing to such
designation, which consent shall be
acknowledged by a Plan representative or by a
notary public. If the Beneficiary designation
consented to by the spouse is not limited to a
specific Beneficiary ("general consent"), the
consent must acknowledge that the spouse has a
right to limit consent to a specific
Beneficiary. The consent of the spouse must be
obtained each time the Beneficiary is changed,
unless a general consent is given. If, at the
time of a Participant's death while benefits
are still outstanding, his named Beneficiary
does not survive him, the benefits shall be
paid to his named contingent Beneficiary. If a
deceased Participant is not survived by either
a named Beneficiary or contingent Beneficiary
(or if no Beneficiary was effectively named),
the benefits shall be paid in a single sum to
the estate of the deceased Participant. If the
Beneficiary or contingent Beneficiary is living
at the death of the Participant, but such
person dies prior to receiving the entire death
benefit, the remaining portion of such death
benefits shall be paid in a single sum to the
estate of such deceased Beneficiary or
contingent Beneficiary.
Section 2.5 Notification of Individual Account Balance
At least once each Plan Year or more frequently
as determined by the Committee, the Committee
shall notify each Participant of the amount of
his share in the Adjustments and contributions
for the period just completed, and the new
balance of his Individual Account.
ARTICLE 3
CONTRIBUTIONS
Section 3.1 Salary Reduction
3.1(a) Each Employee who satisfies the
requirements of Section 2.1 may elect to
have Salary Reduction made on his behalf,
commencing on the date specified in Section
2.1. Such election shall be made by
entering into a Salary Reduction agreement
with the Employer in which it is agreed
that the Employer will redirect a portion
of the Participant's Compensation and
contribute that designated amount to the
Trust Fund on behalf of the Participant in
accordance with the following.
3.1(b) Salary Reduction Agreement. Each eligible
Employee may enter into a Salary Reduction
agreement under which the Employee's
Employer will redirect a portion of the
Participant's Compensation during each Plan
Year in an amount equal to an integral
percentage ranging from one percent (1%) to
(i) fifteen percent (15%) or (ii) the
percentage that would result in the maximum
Salary Reduction pursuant to Section 3.7 of
such Compensation and contribute such
percentage to the Trust Fund on behalf of
the Participant. The Committee may limit
Salary Reduction at any time, if such
limits are advisable in order for the Plan
to comply with the requirements of Sections
3.5 and 3.7.
3.1(c) Submission of Form. In order for Salary
Reduction to commence on the appropriate
date (the beginning of a payroll period),
the Salary Reduction agreement must be
received by the Committee prior to the date
Salary Reduction is to start as determined
by the Committee. Notwithstanding the
above, a terminated Participant who is
reemployed and is eligible to participate
upon reemployment may enter into a Salary
Reduction agreement on his reemployment
date to be applicable to Compensation
earned beginning with the first payroll
period on and after such date. In
addition, a person employed by the Company
who becomes an Employee and is eligible to
participate upon a change in status may
enter into a Salary Reduction Agreement on
the effective date of his change in status
to be applicable to Compensation earned
beginning with the first payroll period on
and after such date. In the event a
Participant does not so elect when
initially eligible, he may subsequently
elect to have Salary Reduction made on his
behalf commencing with the first payroll
period on or after the first day of the
next Plan Year quarter following the
election on such form and in such manner as
the Committee shall determine. The Salary
Reduction agreement shall be on a form
provided by the Committee. Such agreement
shall authorize the Employer to reduce
Compensation otherwise payable to the
Participant during each pay period by the
amount of Salary Reduction elected.
3.1(d) Change in Redirected Amounts. A
Participant electing to have Salary
Reduction made on his behalf to the Plan
pursuant to this Section, may, on a Salary
Reduction agreement provided by and
submitted to the Committee, increase or
decrease his Salary Reduction amount
(within the appropriate minimum and
maximum) as of the first payroll period on
or after the first day of any subsequent
calendar quarter on such form and in such
manner as the Committee shall determine,
but not retroactively. The Salary
Reduction agreement shall state the amount
of Salary Reduction he desires to have
made.
3.1(e) Cessation of Redirection. Any Participant
may elect to cease future Salary Reduction
to the Plan effective with the first
payroll period on or after the first day of
any subsequent calendar quarter. In the
event any such Participant desires
thereafter to recommence having Salary
Reduction made on his behalf, he shall be
allowed to do so effective with the first
payroll period on or after the first day of
any subsequent calendar quarter after
receipt of written notice by the Committee
on the appropriate form and in the manner
specified by the Committee stating the
amount of Salary Reduction he desires to
have made.
3.1(f) Change or Cessation of Redirection - Change
in Family Status. A Participant may also
change or terminate his or her Salary
Reduction agreement on account of a change
in family status by making a written
election such form and in such manner as
the Committee shall provide. The change or
termination of the Participant's election
shall be effective as soon as reasonably
possible after the election form is
received by the Committee. A change in
family status includes marriage, divorce,
death of the Participant's spouse or child,
birth or adoption of a child, changing from
full-time to part-time or part-time to
full-time status by the Participant or
spouse, a significant change in the health
coverage of the Participant or spouse
attributable to the spouse's employment,
and the commencement or termination of
employment of the Participant's spouse. A
Participant who desires to resume making
Salary Reduction may do so as of the first
payroll period on or after the first day of
any subsequent calendar quarter by a
written election on a form and in such
manner as the Committee shall provide.
3.1(g) Notice Requirements. Any of the notice
requirements in this Section may be
lengthened or shortened by the Committee if
it finds it administratively necessary or
feasible to do so, with such discretion
being exercised in a nondiscriminatory
manner.
3.1(h) Payment to Trustee. The Employer shall pay
to the Trustee any Salary Reduction made on
behalf of any Participant within a
reasonable time following the end of each
regular pay period, but no later than
fifteen (15) consecutive business days
after the end of the month in which the
Salary Reduction was made.
Section 3.2 Matching Contributions
As of each last day of each Plan Year, the
Employer shall make a Matching Contribution to
the Trust Fund on behalf of eligible
Participants. The Matching Contribution will
be an amount necessary to match an amount of
the eligible Participants' net eligible Salary
Reduction made to the Trust Fund since the
preceding Valuation Date determined pursuant to
the following schedule based on the
Participant's years of Service:
Years of Matched % of
Service Salary Reduction
0 to 4 50%
5 to 9 75%
10 or more 100%
Net eligible Salary Reduction means Salary
Reduction not to exceed four percent (4%) of
Compensation during the period since the
preceding Valuation Date. Any Matching
Contribution shall be allocated to the Matching
Contribution Account of each eligible
Participant who has been credited with one
thousand (1,000) Hours of Service during the
Plan Year. For purposes of this Section, an
eligible Participant shall mean a Participant
who is employed by the Employer on the date as
of which the contribution is made. In the case
of a merger of a plan into this Plan on a day
other than the first day of a Plan Year, the
one thousand (1,000) Hours of Service
requirement shall be reduced by multiplying it
by a fraction, the numerator of which shall be
the number of days beginning with the effective
date of the merger and ending on the last day
of the Plan Year and the denominator of which
shall be the number of days in the Plan Year.
Section 3.3 Profit Sharing Contributions
As of the last day of each Plan Year, the
Employer may, by action of the Board, make a
Profit Sharing Contribution to the Trust Fund.
Any such Profit Sharing Contribution shall be
allocated to the Profit Sharing Contribution
Account of each Participant who has satisfied
the eligibility requirements of Section 2.1
(without regard to whether the Participant has
made an election pursuant to Section 3.1), is
employed by the Employer on the date as of
which the contribution is made and has been
credited with at least one thousand (1,000)
Hours of Service during the Plan Year. Any
such Profit Sharing Contributions shall be
allocated to the Profit Sharing Contribution
Accounts of the Participants described in the
immediately preceding sentence in the
proportion that each such Participant's
Compensation during the Plan Year bears to the
total Compensation of all such Participants
during such Plan Year. In the case of a merger
of a plan into this Plan on a day other than
the first day of a Plan Year, the one thousand
(1,000) Hours of Service requirement shall be
reduced by multiplying it by a fraction, the
numerator of which shall be the number of days
beginning with the effective date of the merger
and ending on the last day of the Plan Year and
the denominator of which shall be the number of
days in the Plan Year.
Section 3.4 Rollover Amount From Other Plans
3.4(a) An Employee eligible to participate in the
Plan, regardless of whether he has
satisfied the participation requirements of
Section 2.1, may transfer to the Trust Fund
an "eligible rollover distribution,"
defined in Section 402(c)(4) of the Code,
provided that such distribution is from a
plan which meets the requirements of
Section 401(a) of the Code (the "other
plan").
3.4(b) The procedures approved by the Committee
shall provide that such a transfer may be
made only if the following conditions are
met:
(1) the transfer occurs on or before the
sixtieth (60th) day following the
Employee's receipt of the distribution
from the other plan; and
(2) the amount transferred is equal to any
portion of the distribution the Employee
received from the other plan, subject to
the maximum rollover provision of
Section 402 of the Code; and
3.4(c) Notwithstanding the foregoing, if an
Employee had deposited a distribution
previously received from an other plan into
an individual retirement account ("IRA"),
as defined in Section 408 of the Code, he
may transfer the amount of such
distribution, plus earnings thereon from
the IRA, to this Plan; provided such
rollover amount is deposited with the
Trustee on or before the sixtieth (60th)
day following receipt thereof from the IRA,
and provided such rollover meets all the
requirements of Code Section 408(d)(3).
3.4(d) The Committee shall develop such
procedures, and may require such
information from an Employee desiring to
make such a transfer, as it deems necessary
or desirable to determine that the proposed
transfer will meet the requirements of this
Section. Upon approval by the Committee,
the amount transferred shall be deposited
in the Trust Fund and shall be credited to
a Rollover Contribution Account. Such
account shall be one hundred percent (100%)
vested in the Employee and shall share in
income allocations in accordance with
Section 4.3. Upon termination of
employment, the total amount of the
Rollover Contribution Account shall be
distributed in accordance with Article 5.
3.4(e) Upon such a transfer by an Employee who is
otherwise eligible to participate in the
Plan but who has not yet completed the
participation requirements of Section 2.1,
his Rollover Contribution Account shall
represent his sole interest in the Plan
until he becomes a Participant.
Section 3.5 Nondiscrimination Test for Salary Reduction
3.5(a) Periodically as determined by the Employer,
the Employer shall check the actual
deferral percentages against the tests
identified below. In the event that
neither test is met, the Employer shall
reduce the Salary Reduction percentages of
Highly Compensated Employees that are above
the maximum deferral percentage allowed
under the tests; provided that the initial
reductions shall be in unmatched Salary
Reduction, and only if such redirections
are not sufficient shall matched Salary
Reduction be reduced. Beginning with the
highest such percentage, each contribution
percentage shall be reduced to the next
highest percentage, and so forth, until the
excess is eliminated. If it is necessary
to reduce the matched Salary Reduction, the
Participant's Employer Matching
Contribution on the said Salary Reduction
shall be forfeited in accordance with the
provisions of Section 5.5.
3.5(b) The term "eligible Employees," for purposes
of this Section, shall mean all employees
of the Employer who are eligible to make
Salary Reduction contributions during the
Plan Year for which the tests are being
made.
3.5(c) The term "actual deferral percentage,"
means the average of the following
percentages (calculated separately for each
eligible Employee): Salary Reduction
contributions on behalf of each eligible
Employee divided by the compensation of the
eligible Employee. In calculating the
actual deferral percentage of a Highly
Compensated Employee who participates in
more than one cash or deferred arrangement
of the Company, all cash or deferred
arrangements ending with or within the same
calendar year shall be treated as a single
arrangement.
3.5(d) The term "compensation" for purposes of
this Section, shall include amounts paid by
the Employer to the Employee during the
period he is eligible to make Salary
Reduction contributions and which amounts
are currently includible in the Employee's
gross income. For all Plan Years, the
Employer shall have the right to increase
the Employee's compensation, for purposes
of this Section by the amount of any
Employee Salary Reduction elections under
Section 125 (flexible benefit plans),
402(g)(3) (elective deferrals) and
402(h)(1)(B) (simplified employee plans) of
the Code, or to use such alternate
definition of compensation as may be
provided under Section 414(s) of the Code.
Alternate definitions of compensation under
Code Section 414(s) include (i)
compensation within the meaning of Code
Section 415(c)(3) including or excluding
reimbursements or other expense allowances,
fringe benefits (cash or non-cash), moving
expenses, deferred compensation and welfare
benefits, and (ii) any other definition of
compensation that is reasonable, does not
by design favor Highly Compensated
Employees and satisfies the
nondiscrimination requirements of Code
Section 414(s) and the regulations
thereunder. Effective for Plan Years
beginning on or after January 1, 1989,
compensation for purposes of this Section
shall be limited to one hundred fifty
thousand dollars ($150,000) or such other
amount as determined pursuant to Code
Section 401(a)(17).
3.5(e) Only one (1) of the following two (2) tests
need be satisfied not to have a reduction
in Salary Reduction.
Test I - The actual deferral percentage for the
group of Highly Compensated Employees is
not more than the actual deferral
percentage of all other eligible
Employees multiplied by one and
twenty-five hundredths (1.25).
Test II - The excess of the actual deferral
percentage for the group of Highly
Compensated Employees over the actual
deferral percentage for all other
eligible Employees is not more than two
(2) percentage points, and the actual
deferral percentage for the group of
Highly Compensated Employees is not more
than the actual deferral percentage for
all other eligible Employees multiplied
by two (2.0). Effective for Plan Years
beginning after December 31, 1988, if
Test II in Subsection 3.6(e) is used in
testing other contributions pursuant to
that Section, Test II under this Section
shall be limited as provided for in Code
Section 401(m)(9) and the regulations
issued by the Secretary of the Treasury
or notices issued by the Internal
Revenue Service. If a multiple use of
Test II occurs, such multiple use shall
be corrected by reducing either the
actual deferral percentage or actual
contribution percentage of the Highly
Compensated Employees in an amount
calculated in the manner provided in
Subsection (a) of this Section or
Subsection 3.6(a).
3.5(f) If neither Test I nor Test II is satisfied
for any Plan Year, the Plan shall
nevertheless be deemed to comply with the
requirements of Section 401(k)(3)(A)(ii) of
the Code for such Plan Year if, before the
last day of the following Plan Year, the
amount of any excess contribution (adjusted
for income or loss for the Plan Year
computed using any reasonable method that
satisfies Code Section 401(a)(4), provided
it is used consistently for all
Participants and for all corrective
distributions under the Plan for the Plan
Year and provided it is used by the Plan
for allocating income or loss to
Participants' Individual Accounts) is
distributed to the Participant. For
purposes of this Section, the term "excess
contributions" means, with respect to any
Plan Year, the excess of:
(1) the aggregate amount of Salary Reduction
contributions, if applicable, actually
paid to the Trust Fund on behalf of
Highly Compensated Employees for the
Plan Year, over
(2) the maximum amount of such contributions
permitted under Subsection (e) of this
Section.
3.5(g) This Section shall be governed by the rules
of Code Section 401(k), 401(a)(4) and any
rules or regulations issued pursuant
thereto, including the aggregation rules of
Code Section 401(k)(3) and the regulations
thereunder.
Section 3.6 Nondiscrimination Test for Other Contributions
3.6(a) Periodically as determined by the Employer,
the Employer shall check the actual
contribution percentages against the tests
identified below. In the event that
neither test is met, the Employer shall
reduce the Matching Contribution
percentages of Highly Compensated Employees
that are above the maximum contribution
percentage allowed under the tests.
Beginning with the highest such percentage,
each contribution percentage shall be
reduced to the next highest percentage, and
so forth, until the excess is eliminated.
If it is necessary to reduce the Employer
Matching Contribution the Participant shall
nevertheless receive from the Plan a
distribution equal to the vested portion of
the Employer Matching Contribution plus any
income thereon that would have been
allocated to him had such reduction in
contribution not been necessary. Any
remaining portion of the Matching
Contribution shall be forfeited in
accordance with the provisions of Section
5.5.
3.6(b) The term "eligible Employees," for purposes
of this Section, shall mean all employees
of the Employer who are eligible to: make
Salary Reduction contributions, if the
Employer elects to take Salary Reduction
into account, and receive Matching
Contributions during the Plan Year for
which the tests are being made.
3.6(c) The term "actual contribution percentage,"
means the average of the following
percentages (calculated separately for each
eligible Employee): Matching Contributions
(and Salary Reduction to the extent elected
by the Employer and permitted by
Regulations under Code Section 401(m)) on
behalf of each eligible Employee divided by
compensation of the eligible Employee. In
calculating the actual contribution
percentage of a Highly Compensated Employee
who participates in more than one
arrangement of the Company subject to Code
Section 401(m), all arrangements subject to
Code Section 401(m) ending with or within
the same calendar year shall be treated as
a single arrangement.
3.6(d) The term "compensation" for purposes of
this Section, shall include amounts paid by
the Employer to the Employee during the
period he is eligible to receive Matching
Contributions and which amounts are
currently includible in the Employee's
gross income. For all Plan Years, the
Employer shall have the right to increase
the Employee's compensation, for purposes
of this Section by the amount of any
Employee Salary Reduction elections under
Section 125 (flexible benefit plans),
402(g)(3) (elective deferrals) and
402(h)(1)(B) (simplified employee plans) of
the Code, or to use such alternate
definition of compensation as may be
provided under Section 414(s) of the Code.
Alternate definitions of compensation under
Code Section 414(s) include (i)
compensation within the meaning of Code
Section 415(c)(3) including or excluding
reimbursements or other expense allowances,
fringe benefits (cash or non-cash), moving
expenses, deferred compensation and welfare
benefits, and (ii) any other definition of
compensation that is reasonable, does not
by design favor Highly Compensated
Employees and satisfies the
nondiscrimination requirements of Code
Section 414(s) and the regulations
thereunder. Effective for Plan Years
beginning on or after January 1, 1989,
compensation for purposes of this Section
shall be limited to one hundred fifty
thousand dollars ($150,000) or such other
amount as determined pursuant to Code
Section 401(a)(17).
3.6(e) Only one (1) of the following two (2) tests
need be satisfied not to have a reduction
in contributions tested pursuant to this
Section.
Test I - The actual contribution percentage for the
group of Highly Compensated Employees is
not more than the actual contribution
percentage of all other eligible Employees
multiplied by one and twenty-five
hundredths (1.25).
Test II The excess of the actual contribution
percentage for the group of Highly
Compensated Employees over the actual
contribution percentage for all other
eligible Employees is not more than two (2)
percentage points, and the actual
contribution percentage for the group of
Highly Compensated Employees is not more
than the actual contribution percentage for
all other eligible Employees multiplied by
two (2.0). Effective for Plan Years
beginning after December 31, 1988, if Test
II in Subsection 3.5(e) is used in testing
Salary Reduction pursuant to that Section,
Test II under this Section shall be limited
as provided in Code Section 401(m)(9) and
the regulations issued by the Secretary of
the Treasury or notices issued by the
Internal Revenue Service. If a multiple
use of Test II occurs, such multiple use
shall be corrected by reducing either the
actual deferral percentage or actual
contribution percentage of the Highly
Compensated Employees in an amount
calculated in the manner provided in
Subsection (a) of this Section or
Subsection 3.5(a).
3.6(f) If neither Test I nor Test II is satisfied
for any Plan Year, the Plan shall
nevertheless be deemed to comply with the
requirements of Section 401(m) of the Code
for such Plan Year if, before the last day
of the following Plan Year, the amount of
any excess contribution (adjusted for
income or loss for the Plan Year computed
using any reasonable method that satisfies
Code Section 401(a)(4), provided it is used
consistently for all Participants and for
all corrective distributions under the Plan
for the Plan Year and provided it is used
by the Plan for allocating income or loss
to Participants' Individual Accounts) is
distributed to the Participant, or if
forfeitable, is forfeited. For purposes of
this Section, the term "excess
contributions" means, with respect to any
Plan Year, the excess of:
(1) the aggregate amount of Matching
Contributions actually paid to the Trust
Fund on behalf of Highly Compensated
Employees for the Plan Year, over
(2) the maximum amount of such contributions
permitted under Subsection (e) of this
Section.
3.6(g) This Section shall be governed by Code
Section 401(m), 401(a)(4) and any rules or
regulations issued pursuant thereto,
including the aggregation rules of Code
Section 401(m)(2)(B) and the regulations
Section 3.7 Maximum Individual Deferral
A Participant shall not be permitted to have
his Employer redirect an amount in excess of
seven thousand dollars ($7,000) in any calendar
year pursuant to the provisions of Section 3.1,
including contributions to any other plan of
the Company which are made pursuant to Code
Section 402(a)(8). The seven thousand dollars
($7,000) limitation shall be adjusted in
accordance with cost-of-living adjustments made
by the Secretary of the Treasury pursuant to
Code Section 402(g)(5). If any amount is
redirected pursuant to Section 3.1 in excess of
seven thousand dollars ($7,000), or if a
Participant notifies the Committee, in writing,
by March 1 following the close of the taxable
year of its portion of the amount contributed
in excess of seven thousand dollars ($7,000) to
all plans pursuant to Code Section 402(a)(8),
such amount shall be deemed an "excess
deferral" and the Plan Administrator shall
direct the Trustee to distribute to the
Participant (not later than the April 15
following the calendar year in which the excess
deferral was made) the amount of the excess
deferral (adjusted for income or loss for the
Plan Year computed using any reasonable method
that satisfies Code Section 401(a)(4) provided
it is used consistently for all Participants
and for all corrective distributions under the
Plan for the Plan Year and provided it is used
by the Plan for allocating income or loss to
Participants' Individual Accounts and reduced
by any deferrals distributed or reclassified
pursuant to Section 3.5). In the case of
family aggregation pursuant to Subsection
1.18(c), excess contributions under this
Section shall be allocated to Participants who
are subject to the family aggregation rules of
Code Section 414(q)(6) in the manner prescribed
by regulations.
Section 3.8 Mistake of Fact
If due to a mistake of fact, Employer
Contributions to the Trust Fund for any Plan
Year exceed the amount intended to be
contributed, notwithstanding any provision to
the contrary, the Employer, as soon as such
mistake of fact is discovered, shall notify the
Trustee. The Employer shall direct that the
Trustee return such excess to the Employer,
provided such return is made within one (1)
year of the date on which the Employer made the
contribution.
Section 3.9 Military Service
This Plan shall comply with the Uniformed
Services Employment and Reemployment Rights Act
of 1994, as amended and revised, and this Plan
shall be construed, where necessary, in such
manner as to comply with said law.
<PAGE>
ARTICLE 4
ALLOCATIONS TO INDIVIDUAL ACCOUNTS
Section 4.1 Individual Accounts
The Committee shall establish and maintain an
Individual Account in the name of each
Participant to which the Committee shall credit
all amounts allocated to each such Participant
pursuant to Article 3 and the following
Sections of this Article.
Section 4.2 Investment of Accounts
4.2(a) Investment Funds. There shall be
established such Investment Funds within
the Trust Fund as the Committee shall
determine.
4.2(b) Investment Direction. The Participant may
direct the investments of the cumulative
balance of his Individual Account
attributable to (i) Salary Reduction and
Rollover Contributions and his Prior Plan
Account and Investment Account and (ii)
current Salary Reduction and Rollover
Contributions in such increments and in
such manner as the Committee shall
establish, provided that the portion of a
Participant's segregated account, pursuant
to Section 4.8 as of December 31, 1996, is
not subject to investment direction
pursuant to this Section.
4.2(c) Default Fund. A Participant who does not
make any election under this Section shall
have the Individual Account and current
contributions made on his behalf invested
in such Investment Fund as the Committee
shall determine.
4.2(d) Employer Contributions. The investment of
the cumulative balance of a Participant's
Individual Account attributable to Employer
Contributions and current Employer
Contributions are not subject to the
Participant's investment directions
pursuant to this Section. Said
contributions shall be invested in such
manner as the Trustee shall determine and
may be invested, either partially or
entirely, in Employer securities.
<PAGE>
Section 4.3 Valuation of Accounts
4.3(a) Individual Account. As of each Valuation
Date, the Committee shall determine the
fair market value of the Individual Account
of each Participant as follows:
(1) The value of the Individual Account of
each Participant as of the last
Valuation Date;
(2) Minus the amount of any withdrawals,
distributions and forfeitures made from
the Participant's Individual Account
since the last Valuation Date;
(3) Plus any contributions to the separate
account in the Participant's Individual
Account established for contributions
pursuant to the following Sections since
the last Valuation Date: 3.1, 3.2, 3.4;
(4) Plus any investment earnings allocated
to such Individual Account since the
last Valuation Date;
(5) Minus any investment losses allocated to
such Individual Account since the last
Valuation Date.
4.3(b) Investment Earnings or Losses. The
investment earnings (or losses, if such
computation is negative) from each
Investment Fund shall mean the net gain or
loss of each Investment Fund from
investments, as reflected by interest
payments, dividends, realized and
unrealized gains and losses on securities,
other investment transactions and expenses
paid from the fund. In determining the
investment earnings or losses of the
Investment Fund as of any date, assets
shall be valued on the basis of their fair
market value as of said date.
4.3(c) Allocation of Investment Earnings or
Losses. The investment earnings or losses
from each Investment Fund shall be
allocated to the Individual Account of each
Participant invested in the respective
Investment Fund in the ratio of (a) divided
by (b) where (a) is an amount determined
pursuant to Subsection (d) of this Section
for the portion of the Individual Account
of each Participant invested in the
Investment Fund and (b) is an amount
determined pursuant to Subsection (d) of
this Section for the portion of the
Individual Account of all Participants
invested in the respective Investment Fund.
4.3(d) Determination of Ratio. For purposes of
determining the ratio in Subsection (c) of
this Section, the amounts shall be
determined as follows:
(1) the value of the portion of such
Individual Account(s) in the respective
Investment Fund as of the last Valuation
Date;
(2) Plus one hundred percent (100%) of
Salary Reduction made to the portion of
such Individual Account(s) in the
respective Investment Fund since the
last Valuation Date;
(3) Plus one hundred percent (100%) of
Rollover Contributions made to the
portion of such Individual Account(s) in
the respective Investment Fund since the
last Valuation Date;
(4) Minus withdrawals and benefit payments
to or on behalf of Participants from the
portion of such Individual Account(s) in
the respective Investment Fund since the
last Valuation Date;
(5) Minus loans made pursuant to Section
6.3, if any, since the last Valuation
Date;
Section 4.4 Trustee and Committee Judgment Controls
In determining the fair market value of the
Trust Fund and of Individual Accounts, the
Trustee and the Committee shall exercise their
best judgment, and all such determinations of
value (in the absence of bad faith) shall be
binding upon all Participants and their
Beneficiaries. All allocations shall be deemed
to have been made as of the Valuation Date,
regardless of when actual allocations were
undertaken.
Section 4.5 Maximum Additions
Anything herein to the contrary
notwithstanding, the total Annual Additions of
a Participant for any Limitation Year when
combined with any similar annual additions
credited to the Participant for the same period
from another qualified Defined Contribution
Plan maintained by the Company, shall not
exceed the lesser of the amounts determined
pursuant to Subsection (a) or (b) of this
Section.
4.5(a) Thirty thousand dollars ($30,000) or such
other amount as determined pursuant to Code
Section 415; or
4.5(b) Twenty-five percent (25%) of the
Participant's compensation received from the
Company for such Limitation Year, as
determined pursuant to Section 415 of the
Code.
4.5(c) In the event a Participant is covered by one
or more Defined Contribution Plans
maintained by the Company, the maximum
annual additions as noted above shall be
decreased in any other Defined Contribution
Plan as determined necessary by the Company,
prior to a reduction of this Plan, to ensure
that all such plans will remain qualified
under the Code.
Section 4.6 Corrective Adjustments
In the event that corrective adjustments in the
Annual Addition to any Participant's Individual
Account are required as the result of
allocating forfeitures, a reasonable error in
estimating a Participant's compensation, a
reasonable error in determining the amount of
elective deferrals (within the meaning of Code
Section 402(g)(3)) that may be made with
respect to an individual under the limits of
Code Section 415, or such other facts and
circumstances as may be provided for by rules
and regulations issued pursuant to Code Section
415, the corrective adjustments shall be made
pursuant to and in the order of the Subsections
in this Section.
4.6(a) The portion of the Participant's unmatched
Salary Reduction shall be reduced to insure
compliance with Section 4.5. Any affected
Salary Reduction will be distributed to the
Participant.
4.6(b) The portion of the Participant's matched
Salary Reduction and his Matching
Contributions shall be proportionally
reduced to insure compliance with Section
4.5. Any affected Salary Reduction will be
distributed to the Participant. Any
affected Matching Contributions shall be
used to reduce future Matching
Contributions.
4.6(c) The Participant's Profit Sharing
Contributions shall be reduced to insure
compliance with Section 4.5. Any affected
Profit Sharing Contributions shall be used
to reduce future Profit Sharing
Contributions.
Section 4.7 Defined Contribution and Defined Benefit Plan
Fraction
If a Participant is a participant in a Defined
Benefit Plan maintained by the Company, the sum
of his defined benefit plan fraction and his
defined contribution plan fraction for any
Limitation Year may not exceed 1.0.
4.7(a) For purposes of this Section, the term
"defined contribution plan fraction" shall
mean a fraction the numerator of which is
the sum of all of the Annual Additions of
the Participant under this Plan and any
other Defined Contribution Plan maintained
by the Company as of the close of the
Limitation Year and the denominator of which
is the sum of the lesser of the following
amounts determined for such Limitation Year
and for each prior Limitation Year of
employment with the Company:
(1) the product of 1.25 multiplied by the
dollar limitation in effect under
Section 415(c)(1)(A) of the Code; or
(2) the product of 1.4 multiplied by the
amount which may be taken into account
under Code Section 415(c)(1)(B) with
respect to each individual under the
Plan for such Limitation Year.
4.7(b) For purposes of this Section, the term,
"defined benefit plan fraction" shall mean a
fraction the numerator of which is the
Participant's projected annual benefit (as
defined in the Defined Benefit Plan)
determined as of the close of the Limitation
Year and the denominator of which is the
lesser of:
(1) the product of 1.25 multiplied by the
dollar limitation in effect pursuant to
Section 415(b)(1)(A) of the Code for
such Limitation Year; or
(2) the product of 1.4 multiplied by the
amount which may be taken into account
pursuant to Section 415(b)(1)(B) of the
Code with respect to each individual
under the Plan for such Limitation Year.
4.7(c) The limitation on aggregate benefits from a
Defined Benefit Plan and a Defined
Contribution Plan which is contained in
Section 2004 of ERISA, as amended, shall be
complied with by a reduction (if necessary)
in the Participant's benefits under the
Defined Benefit Plan.
<PAGE>
Section 4.8 Segregation of Individual Accounts
4.8(a) Effective January 1, 1997, no portion of a
Participant's Individual Account can be
transferred into or out of the investment
funds pursuant to this Section.
4.8(b) Any Participant, after age sixty (60), may
elect to have all of his Individual Accounts
transferred to a segregated fixed investment
fund for the purpose of minimizing market
value fluctuations for years nearing normal
retirement. The Participant must designate
in writing this option ten (10) days in
advance of the beginning of any Plan Year
after his sixtieth (60th) birthday.
4.8(c) In accordance with this section, the
following provisions shall apply:
(1) The Trustee shall, for investment
purposes, segregate the Trust Fund into
such investment funds as the Committee
shall determine, which shall be known as
the general investment fund and the
fixed income investment fund. The
Trustee may invest the assets of the
general investment fund in any manner
consistent with applicable provisions of
this Plan and Trust Agreement. But the
assets of the fixed income investment
fund shall be invested by the Trustee in
corporate, municipal or United States
government bonds, debentures, notes,
certificates or other similar evidence
of indebtedness if such does not have a
maturity or more than sixty (60) months
from date of investment; in savings
accounts, savings certificates, group
annuity contracts issued by life
insurance companies or other similar
investment media. The Individual
Account of each Participant shall be
held entirely in one of such investment
funds and the Individual Account of all
Participants shall be held by the
Trustee in the general investment fund
unless such Individual Account has been
transferred to the fixed income
investment fund in accordance with
paragraph (2) of this Subsection.
(2) Any Participant who has reached age
sixty (60) but has not reached Normal
Retirement Date may direct the Committee
that his Individual Account be
transferred from the general investment
fund to the fixed income investment
fund. Such written direction of such a
Participant, in order to be effective,
must be given in a manner reasonably
designated by the Committee and must be
received by the Committee not less than
thirty (30) days prior to the beginning
of the next succeeding Plan Year. If
any such direction by a Participant
shall have been made at the time and in
the manner as provided in this
paragraph, then such direction shall be
deemed to be an irrevocable election and
will be effective as of the first day of
the succeeding Plan Year following such
thirty (30) day period. The Trustee
shall, as of such first day of the
succeeding Plan Year, transfer such
Participant's Individual Account to the
fixed income investment fund, and all
further allocations to such
Participant's Individual Account shall
be added thereafter to his Individual
Account in the fixed income investment
fund. Such election by any Participant
shall be irrevocable without regard as
to whether such Participant remains a
Participant after reaching Normal
Retirement Age.
(3) As to each of the investment funds, all
income, appreciation, depreciation and
other losses and gains in investments or
assets held in each such respective
investment fund shall be allocated among
the accounts held in each such
respective investment fund in the manner
set forth in Section 4.3, but only
taking into account the Individual
Accounts of those Participants who have
been segregated pursuant to this
Section.
4.8(d) Provided further, that in the case of
benefits payable to a retired or terminated
Participant (or his Beneficiary) in the form
of installments, the following provisions
shall apply:
(1) Where, in accordance with the provisions
of this Article, all or any part of any
distribution is to be made in
installments, the Committee shall direct
the Trustee to segregate and deposit
cash of the Trust Fund to provide for
such installments in one or more savings
accounts in banking or savings
institutions (one of which accounts may
be in the Trustee's savings department).
(2) Such segregated savings accounts shall
be credited with interest at the savings
account interest rates of each
depository, and such interest shall be
added to the amount distributable. Such
accounts shall be a segregated part of
the Trust Fund and shall be subject to
all provisions of the Plan and Trust
Agreement, except that such accounts
shall not be included in the valuation
of the Trust nor in the determination of
the balances of Participant Individual
Accounts for the purpose of allocation
of Trust income or loss.
(3) Notwithstanding the provisions of clause
(1) of Subsection (b) of this Section,
in any case in which a Participant (or
his Beneficiary) requests that, instead
of being deposited in such segregated
savings accounts, the amount to provide
for such installments or deferred
distributions shall continue to be held
and invested as an unsegregated part of
the Trust Fund and included in the
valuation of the Trust Fund and in the
determination of the balances of
Participant Individual Accounts for the
purpose of allocations of Trust income
or loss under the provisions of Section
4.3, the Committee may consent to such
request and direct the Trustee
accordingly.
<PAGE>
ARTICLE 5
DISTRIBUTIONS
Section 5.1 Normal Retirement
When a Participant lives to his Normal
Retirement Date and retires, he shall become
entitled to the full value of his Individual
Account as of the Valuation Date coincident
with or, otherwise, immediately following the
later of his date of retirement or the end of
the last payroll period following the date for
which the Participant is paid as a result of
his retirement.
Section 5.2 Late Retirement
A Participant may continue his employment past
his Normal Retirement Date on a year to year
basis. He shall continue to be an active
Participant under the Plan. Upon his actual
retirement, he shall become entitled to the
full value of his Individual Account as of the
Valuation Date coincident with or, otherwise,
immediately following the later of his date of
retirement or the end of the last payroll
period following the date for which the
Participant is paid as a result of his
retirement.
Section 5.3 Death
If a Participant dies, his Beneficiary shall be
entitled to the full value of his Individual
Account as of the Valuation Date coincident
with or, otherwise, immediately following the
later of the Participant's date of death or the
end of the last payroll period following the
date for which the Participant is paid as a
result of his death.
Section 5.4 Disability
When it is determined that a Participant is
Totally and Permanently Disabled, the Committee
shall certify such fact to the Trustee and such
Disabled Participant shall be entitled to
receive the full value of his Individual
Account as of the Valuation Date coincident
with or, otherwise, immediately following the
later of the Participant's retirement as a
result of Totally and Permanent Disability or
the end of the last payroll period following
the date for which the Participant is paid as a
result of his retirement as a result of Totally
and Permanent Disability.
Section 5.5 Termination of Employment
5.5(a) Upon termination of employment for any
reason (other than Normal Retirement, Late
Retirement, Disability Retirement or death),
a Participant shall be entitled to a benefit
equal to the vested portion (as determined
in this Section) of the balance of his
Individual Account, as of the Valuation Date
coincident with or immediately following the
later of such termination of employment or
the end of the last payroll period following
the date for which the Participant is paid
as a result of said termination.
5.5(b) A Participant shall always be one hundred
percent (100%) vested in the balance of his
Salary Reduction Account, Rollover
Contribution Account, Investment Account and
Prior Plan Account.
5.5(c) A Participant shall be vested in the balance
attributable to his Matching Contribution
Account and Profit Sharing Contribution
Account based on years of Service as of his
date of termination, in accordance with the
following schedule:
Years of Service Vested Percentage
Less than 1 year 0%
1 but less than 2 20%
2 but less than 3 40%
3 but less than 4 60%
4 but less than 5 80%
5 years or more 100%
5.5(d) Notwithstanding the above, a Participant who
attains Normal Retirement Age or dies or
becomes Totally and Permanently Disabled
while employed by the Company shall be fully
vested in his Individual Account under the
Plan.
5.5(e) A Participant who terminates employment
pursuant to this Section with a zero percent
(0%) vested percentage shall be deemed to
have received a distribution on the date he
terminates employment. If a terminated
Participant receives a distribution of the
vested portion of his Individual Account
prior to incurring five (5) consecutive
Breaks in Service or if said terminated
Participant is zero percent (0%) vested in
his Individual Account, the non-vested
balance of such terminated Participant's
Individual Account shall be forfeited as of the
date he receives or is deemed to receive said
distribution.
5.5(f) If a terminated Participant is reemployed
and again becomes a Participant prior to
incurring five (5) consecutive Breaks in
Service, any amount forfeited pursuant to
this Section will be restored to his
Individual Account if he repays, prior to
the earlier of the last day of the Plan Year
in which he incurs his fifth consecutive
Break in Service commencing on the date of
distribution or the date which is five (5)
years after the first date on which the
Participant is subsequently reemployed, the
amount previously distributed to him from
such Account. Restoration of a forfeiture
will come from forfeitures in the year in
which he is reemployed and, to the extent
such forfeitures are not sufficient, from a
special Employer Contribution. For purposes
of this Section a Participant who receives a
deemed distribution pursuant to this Section
will be deemed to have repaid the
distribution upon reemployment.
5.5(g) The non-vested balance of the Individual
Account of a terminated Participant shall be
forfeited as of the Valuation Date at the
end of the Plan Year in which such
terminated Participant incurs five (5)
consecutive Breaks in Service if the
Participant is vested in any portion of his
Individual Account and does not receive a
distribution prior to incurring five (5)
consecutive Breaks in Service.
5.5(h) A terminated Participant who is reemployed
and again becomes a Participant after
incurring five (5) or more consecutive
Breaks in Service shall not be allowed to
repay any amount distributed to him and
shall not have any amount forfeited pursuant
to this Section restored to his Individual
Account.
5.5(i) Any Matching Contributions and Profit
Sharing Contributions forfeited will be used
to reduce future Employer Contributions.
Section 5.6 Commencement of Benefits
5.6(a) Any benefits payable under this Article
shall be paid as soon as reasonably possible
following the Valuation Date following the
actual date of severance. Notwithstanding
the preceding, the Participant must consent
to the distribution unless his benefit may
be cashed out pursuant to Subsection 5.8(a)
or unless the Participant is subject to
Section 5.7 as a result of attaining age
seventy and one-half (70-1/2).
Notwithstanding the preceding, in the case
of a distribution pursuant to either Section
5.1, 5.2, 5.3 or 5.4, eighty percent (80%)
of the Participant's Individual Account as
of the Valuation Date immediately preceding
his actual date of severance shall be paid
as soon as reasonably possible following the
actual date of severance and the balance of
his Individual Account shall be paid as soon
as administratively possible following the
Valuation Date following his actual date of
severance.
5.6(b) In no event, unless the Participant
otherwise elects, shall payment begin later
than sixty (60) days after the last day of
the Plan Year in which occurs the latest of
(i) the Participant's reaching Normal
Retirement Age; (ii) the tenth (10th)
anniversary of the date the Employee became
a Participant; or (iii) termination of the
Participant's employment.
5.6(c) Except as required in Section 5.7 for a
Participant who has attained age seventy and
one-half (70-1/2), a Participant may defer
distribution to a subsequent date. If the
Participant's benefit does not commence as
soon as administratively possible following
the Participant's actual date of severance
pursuant to Subsection (a) of this Section,
such subsequent distribution shall be made
based on the value of the Individual Account
as of the Valuation Date coincident with or
immediately preceding the receipt of notice
by the Committee of the Participant's
election to receive a distribution. Such
distribution shall be made as soon as
reasonably possible following such Valuation
Date.
Section 5.7 Minimum Distributions
The Individual Account of all Participants must
be distributed or commence to be distributed no
later than April 1 following the calendar year
in which such individual attains age seventy
and one-half (70-1/2) unless such individual
has effectively executed a waiver prior to
January 1, 1984, in accordance with the Code
and notices and regulations issued thereunder.
However, if the Participant was not a five
percent (5%) owner in any Plan Year after
attaining age sixty-five and one-half (65-1/2)
and had attained age seventy and one-half
(70-1/2) prior to January 1, 1988,
distributions to said Participant must commence
no later than the April 1 following the
calendar year in which the later of termination
of employment or age seventy and one-half (70-1/2)
occurs, or the Participant becomes a five
percent (5%) owner.
Section 5.8 Methods of Payment
5.8(a) A Participant or Beneficiary shall elect a
distribution of the Individual Account as
provided hereinafter. Subject to the
provisions of Section 5.9, no other manner
of distribution shall be provided. The
request by the Participant or the
Beneficiary shall be in writing and shall be
filed with the Committee at least thirty
(30) days before distribution is to be made.
The Committee may not require a distribution
without the consent of the Participant prior
to his reaching Normal Retirement Age,
unless the vested value of the Individual
Account is not more than three thousand five
hundred dollars ($3,500). If the vested
value of the Participant's Individual
Account is three thousand five hundred
dollars ($3,500) or less, the benefits
payable will be paid as soon as reasonably
possible following the actual date of
severance, notwithstanding lack of consent.
If the vested value of the Participant's
Individual Account has been more than three
thousand five hundred dollars ($3,500) at
the time of any distribution, the value the
Participant's Individual Account will be
deemed to be more than three thousand five
hundred dollars ($3,500) at the time of any
subsequent distribution for purposes of the
consent requirements of this paragraph.
Notwithstanding the above, no lump sum
distribution may be made after periodic
payments have commenced unless the
Participant or the Participant's surviving
spouse consents in writing to the
distribution. The alternative forms of
distribution are as follows:
(1) A lump sum distribution in cash, with
the exception of the Participant's
Individual Account invested pursuant to
Subsection 4.2(d), which may, at the
Participant's election, be distributed
in shares of Employer securities; or
(2) Periodic installment payments (either
monthly or annually) for a period not to
exceed ten (10) years as selected by the
Participant or Beneficiary; or
(3) Any combination of the above.
5.8(b) In the event that a Participant elects to
take a distribution in shares of Employer
securities, the fair market value of the
shares to be distributed shall be determined
as follows:
fair market value of
the individual Employer securities
Participant's held in the Trust
Matching X -------------------
Contribution fair market value of
Account and Profit all Plan assets held in
Sharing Account the Matching
balance Contribution Accounts
and Profit Sharing
Contribution Accounts
of all Participants
5.8(c) If the Participant dies after the periodic
installment payments commence but before the
Individual Account is fully distributed, the
balance remaining in the Individual Account
shall be paid out over the periods remaining
pursuant to the Participant's election under
clause (2) of Subsection (a) of this
Section, or, if the Beneficiary elects, such
other period as is allowed under this Section.
5.8(d) Any payment provided for in this Section may
not extend beyond the life expectancy of the
Participant or the joint and last survivor
expectancy of the Participant and designated
Beneficiary.
5.8(e) If the Participant dies before distribution
occurs or commences, the Participant's
entire interest will be distributed no later
than five (5) years after 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
in substantially equal installments over
the life or life expectancy of the
designated Beneficiary commencing no
later than one (1) year after the
Participant's death.
(2) If the designated Beneficiary is the
Participant's surviving spouse, the date
distributions are required to be made or
commence shall not be earlier than the
date on which the Participant would have
attained age sixty-five (65). If the
spouse dies before payments begin, any
subsequent distribution shall be made as
if the spouse had been the Participant.
5.8(f) Notwithstanding any settlement option
contained in this Plan, the benefits payable
to the Beneficiary of any Participant must
be incidental to the primary purpose of
distributing accumulated funds to the
Participant, and if the Participant's
designated Beneficiary or survivor is other
than his spouse, the settlement option shall
not violate Code Section 401(a)(9).
Section 5.9 Joint and Survivor Options
5.9(a) Qualified Joint and Survivor Annuity.
Except as otherwise provided below, unless
an optional form of benefit is selected
pursuant to a qualified election within the
90 day period ending on the date benefit
payments would commence, a Participant's
vested Individual Account balance will be
paid in the form of a qualified joint and
survivor annuity, and an unmarried
Participant's benefit shall be paid in the
form of a life annuity unless otherwise
elected by the Participant. A qualified
joint survivor annuity will not be
applicable and this Section shall not apply
if the following conditions are met:
(1) The Participant's vested Individual
Account is payable in full, on the death
of the Participant, to the Participant's
surviving spouse, or if there is no
surviving spouse, or if the surviving
spouse has previously consented to the
designation of a non-spouse Beneficiary
in the manner prescribed under this
Section, and
(2) Such Participant does not elect a
payment of benefits in the form of a
life annuity, and
(3) With respect to such Participant, the
Plan is not a direct or indirect
transfer which is described in clause
(i) or (ii) or Section 401(a)(11)(B) of
the Code, or
(4) If the distribution is subject to the
terms and conditions contained in
Section 5.8 concerning the distribution
of vested Individual Accounts of three
thousand five hundred dollars ($3,500)
or less.
5.9(b) Qualified Pre-Retirement Survivor Annuity.
Except as otherwise provided in this
Subsection, unless an optional form of
benefit has been selected within the
election period pursuant to a qualified
election, if a Participant dies before
benefits have commenced, fifty percent (50%)
of the Participant's vested Individual
Account shall be applied toward the purchase
of an annuity for the life of the surviving
spouse. Benefits will not be required to be
paid in the form of a pre-retirement
survivor annuity if the following conditions
are met:
(1) The Participant's vested Individual
Account is payable in full, on the death
of the Participant, to the Participant's
surviving spouse, or if there is no
surviving spouse, or if the surviving
spouse has previously consented to the
designation of a non-spouse Beneficiary
in the manner prescribed under this
Section, and
(2) Such Participant does not elect a
payment of benefits in the form of a
life annuity, and
(3) With respect to such Participant, the
Plan is not a direct or indirect
transfer which is described in clause
(i) or (ii) or Section 401(a)(11)(b) of
the Code, or
(4) If the distribution is subject to the
terms and conditions contained in
Section 5.8 concerning the distribution
of vested Individual Accounts of three
thousand five hundred dollars ($3,500)
or less.
5.9(c) Election Period shall mean, for purposes of
this Section, the period which begins on the
first day of the Plan Year in which the
Participant attains age thirty-five (35) and
ends on the date of the Participant's death.
If a Participant separates from service
prior to the first day of the Plan Year in
which age thirty-five (35) is attained, with
respect to the Individual Account Balance as
of the date of separation, the election
period shall begin on the date of
separation.
5.9(d) Early Retirement Age shall mean, for
purposes of this Section, the earliest date
on which, under the Plan, the Participant
could elect to receive retirement benefits.
5.9(e) Qualified Election shall mean, for purposes
of this Section, an election pursuant to
this Subsection. A waiver of a qualified
joint and survivor annuity or a qualified
pre-retirement survivor annuity is
permitted. The waiver must be in writing,
must be executed by the Participant, must
specify the Beneficiary and the optional
form of benefit and must be consented to by
the Participant's spouse. The spouse's
consent to a waiver must be witnessed by a
Plan representative or a notary public.
Notwithstanding this consent requirement, if
the Participant establishes to the
satisfaction of a Plan representative that
such written consent may not be obtained
because there is no spouse or the spouse
cannot be located, a waiver will be deemed a
qualified election. Any consent necessary
under this provision will be valid only with
respect to the spouse who signs the consent,
or in the event of a deemed qualified
election, the designated spouse.
Additionally a revocation of a prior waiver
may be made by a Participant without the
consent of the spouse at any time before the
commencement of benefits. The number of
revocations shall not be limited.
5.9(f) Qualified Joint and Survivor Annuity shall
mean, for purposes of this Section, an
annuity for the life of the Participant with
a survivor annuity for the life of the
spouse which is not less than fifty percent
(50%) and not more than one hundred percent
(100%) of the amount of the annuity which is
payable during the joint lives of the
Participant and the spouse and which is the
amount of benefit which can be purchased
with the Participant's vested Individual
Account balance.
5.9(g) Qualified Pre-Retirement Survivor Annuity
shall mean, for purposes of this Section, a
survivor annuity for the life of the
surviving spouse, the actuarial equivalent
of which is not less than fifty percent
(50%) of the vested Individual Account of
the Participant as of the date of death,
which may become payable as a result of the
Participant's death prior to his Normal
Retirement Date.
5.9(h) Notice Requirements.
(1) In the case of a qualified joint and
survivor annuity the Committee shall
provide each Participant no less than
thirty (30) days and no more than ninety
(90) day prior to the annuity starting
date (or such other time as provided by
regulations or other pronouncements), a
written explanation of: (i) the terms
and conditions of a qualified joint and
survivor annuity; (ii) the Participant's
right to make and the effect of an
election to waive the qualified joint
and survivor annuity form of benefit;
(iii) the rights of a Participant's
spouse; and (iv) the right to make and
the effect of a revocation of a previous
election to waive the qualified joint
and survivor annuity.
(2) In the case of a qualified pre-retirement
survivor annuity the Committee shall provide
each Participant within the period beginning
on the first day of the Plan Year in which the
Participant attains age thirty-two (32)
and ending with the close of the Plan
Year preceding the Plan Year in which
the Participant attains age thirty-five
(35), a written explanation of the
qualified pre-retirement survivor
annuity in such terms and in such manner
as would be comparable to the
explanation provided for meeting the
requirement of a qualified joint and
survivor annuity. If a Participant
enters the Plan after the first day of
the Plan Year in which the Participant
attained age thirty-two (32), the
Committee shall provide notice no later
than the close of the third Plan Year
succeeding the entry of the Participant
in the Plan.
(3) Notwithstanding the other requirements
of this Section, the respective notices
prescribed by this Section need not be
given to a Participant if the Plan
"fully subsidizes" the costs of a
qualified joint and survivor annuity or
qualified pre-retirement survivor
annuity, and the Participant cannot
elect another form of benefit. For
purposes of this Section, the Plan fully
subsidizes the costs of a benefit if
under the Plan the failure to waive such
benefit by a Participant would not
result in a decrease in any plan
benefits with respect to such
Participant and would not result in
increased contributions from the
Participant.
Section 5.10 Benefits to Minors and Incompetents
5.10(a) In case any person entitled to receive
payment under the Plan shall be a minor, the
Committee, in its discretion, may dispose of
such amount in any one or more of the ways
specified in items (1) through (3) of this
Subsection.
(1) By payment thereof directly to such
minor;
(2) By application thereof for benefit of
such minor;
(3) By payment thereof to either parent of
such minor or to any adult person with
whom such minor may at the time be
living or to any person who shall be
legally qualified and shall be acting as
guardian of the person or the property
of such minor; provided only that the
parent or adult person to whom any
amount shall be paid shall have advised
the Committee in writing that he will
hold or use such amount for the benefit
of such minor.
5.10(b) In the event that it shall be found that a
person entitled to receive payment under the
Plan is physically or mentally incapable of
personally receiving and giving a valid
receipt for any payment due (unless prior
claim therefor shall have been made by a
duly qualified Committee or other legal
representative), such payment may be made to
the spouse, son, daughter, parent, brother,
sister or other person deemed by the
Committee to have incurred expense for such
person otherwise entitled to payment.
Section 5.11 Unclaimed Benefits
If, after diligent effort, a Participant,
spouse or Beneficiary who is entitled to a
distribution cannot be located within a
reasonable period of time after the date such
distribution was to commence, the distributable
Individual Account balance shall be deposited
in such separate account as the Trustee shall
determine. The separate account shall be
registered in the name of the person entitled
to the distribution. The balance in such
separate account shall be forfeited on the
fifth (5th) anniversary of the Participant's
termination of employment, or such later date
as the Committee may determine, and shall be
used to reduce future Employer Contributions.
If the Participant, spouse or Beneficiary
subsequently presents a valid claim for the
benefit to the Committee, the Committee shall
cause the benefit, equal to the amount which
was forfeited under this Section, to be
restored, first from forfeitures and then from
Employer Contributions.
Section 5.12 Participant Directed Rollovers
5.12(a) This Section 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 Section, a
distributee may elect, at the time and in
the manner prescribed by the Committee, to
have any portion of an eligible rollover
distribution paid directly to an eligible
retirement plan specified by the distributee
in a direct rollover.
5.12(b) For purposes of this Section, 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 expectancies) of the distributee and
the distributee's designated beneficiary, or
for a specified period of ten (10) 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 includible in
gross income (determined without regard to
the exclusion for net unrealized
appreciation with respect to employer
securities).
5.12(c) For purposes of this Section, 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.
For purposes of this Section, 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.
5.12(d) A direct rollover is a payment by the plan
to the eligible retirement plan specified by
the distributee.
ARTICLE 6
WITHDRAWALS AND LOANS
Section 6.1 Hardship Withdrawal
6.1(a) Except as otherwise provided in this
Section, and upon proper written application
of a Participant made at least thirty (30)
days in advance of the withdrawal date, in
such form as the Committee may specify, the
Committee in its sole discretion may permit
the Participant to withdraw a portion or all
of the balance of his Salary Reduction
Account, his Rollover Contribution Account,
his Prior Plan Account and his Investment
Account attributable to employee after-tax
contributions, provided that earnings
allocated to said accounts may not be
withdrawn. Such withdrawal shall be based
on the Valuation Date coincident with or
immediately preceding the date of
application plus contributions made to such
Account since such Valuation Date.
6.1(b) The reason for a withdrawal pursuant to this
Section must be to enable the Participant to
meet unusual or special situations in his
financial affairs resulting in immediate and
heavy financial needs of the Participant.
Such situations shall be limited to:
(1) medical expenses (described in Code
Section 213(d)) previously incurred by
the Participant, the Participant's
spouse or any dependents of the
Participant (as defined in Code Section
152) or necessary for these persons to
obtain medical care described in Code
Section 213(d);
(2) purchase (excluding mortgage payments)
of a principal residence for the
Participant;
(3) payment of tuition and related
educational fees for the next twelve
(12) months of post-secondary education
for the Participant, his or her spouse,
children, or dependents (as defined in
Code Section 152);
(4) the need to prevent the eviction of the
Participant from his principal residence
or foreclosure on the mortgage of the
Participant's principal residence; or
(5) any additional items which may be added
to the list of deemed immediate and
heavy financial needs by the
Commissioner of Internal Revenue through
the publication of revenue rulings,
notices, and other documents of general
applicability.
Any withdrawal hereunder may not exceed the
amount required to meet the immediate financial
need created, and provided further that such
amount must not be reasonably available from
other resources of the Participant. The amount
of an immediate and heavy financial need shall
include any federal, state, or local taxes or
penalties reasonably anticipated to result from
the distribution.
6.1(c) The Committee may shorten the notice period
if it finds it is administratively feasible.
In granting or refusing any request for
withdrawal or in shortening the notice
period, the Committee shall apply uniform
standards consistently and such
discretionary power shall not be applied so
as to discriminate in favor of Highly
Compensated Employees.
6.1(d) The withdrawals under this Section shall in
no way affect said Participant's continued
participation in this Plan except by the
reduction in account balances caused by such
withdrawals and except as provided in
Subsection (e) of this Section.
6.1(e) If a Participant withdraws Salary Reduction
pursuant to the provisions of this Section,
the following provisions of this Subsection
shall apply and the Committee shall deem
that such amount requested for withdrawal is
not reasonably available from other
resources of the Participant.
(1) A withdrawal may be made pursuant to
this Section only after the Participant
has obtained all distributions other
than hardship distributions, and all
nontaxable loans available under this
Plan and all other Plans maintained by
the Employers.
(2) Elective contributions and employee
contributions under this Plan and all
other plans maintained by the Employer
will be suspended for twelve (12) months
after receipt of the withdrawal of
Salary Reduction pursuant to this
Section.
(3) The limitation provided for in Section
3.7 for the taxable year of the
Participant following the taxable year
of the withdrawal pursuant to this
Section shall be reduced by the
Participant's Salary Reduction and other
elective contributions for the taxable
year of the Participant during which the
withdrawal pursuant to this Section is
taken.
6.1(f) This Section shall be governed by the
provisions of Code Section 401 and the
regulations and other pronouncements
thereunder.
Section 6.2 Other Withdrawals
6.2(a) Upon proper written application made in such
manner and in such form as the Committee may
specify, a Participant who has attained age
fifty-nine and one-half (59-1/2) shall be
permitted to withdraw all of the balance of
his Individual Account, determined as of the
date of application, provided that less than
his entire Individual Account may not be
withdrawn.
6.2(b) Upon proper written application, in such
manner and in such form as the Committee may
specify, a Participant shall be permitted to
withdraw a portion or all of the balance of
his Investment Account consisting of his own
after-tax contributions (but not earnings
thereon) determined as of the Valuation Date
coincident with or immediately preceding the
date of application.
Section 6.3 Participant Loans
6.3(a) Upon proper written application of a
Participant (which, for purposes of this
Section, shall mean any person who is a
party in interest as defined in Section
3(14) of the Employee Retirement Income
Security Act of 1974 and who has a vested
interest in his Individual Account), made in
such manner and in such form as the
Committee may specify, the Committee may
direct the Trustee to make a loan to the
Participant from his Individual Account.
Appropriate administrative expenses, as
determined by the Committee, may be charged
to the Participant's Individual Account.
Notwithstanding the preceding, a loan shall
not be made to a former Participant that may
result in discrimination under Code Section
401(a)(4). The application, and the
resulting loan, must meet the terms and
conditions specified in the following
provisions of this Section and the approval
or denial of a loan request will be made on
the basis of whether the loan would meet
these requirements. The Committee may
shorten any notice period required by this
Section or any written procedures adopted by
the Committee to implement the provisions of
this Section if it finds it is
administratively feasible.
6.3(b) The amount of the loan shall not exceed the
lesser of:
(1) fifty thousand dollars ($50,000),
reduced by the highest outstanding
balance of loans from the Plan during
the one (1) year period ending on the
day before the day the loan is made, or
(2) one-half (1/2) the present value of the
nonforfeitable accrued benefit of the
Participant under the Plan as of the
preceding valuation date (i) minus
withdrawals since said Valuation Date,
and (ii) minus the outstanding balance
of all other loans from the Plan as of
the date of the loan, and (iii) plus the
vested contributions since said
valuation date.
6.3(c) The Committee shall account for the value of
the loan as a part of the Participant's
Individual Account in the following order:
the Participant's Profit Sharing
Contribution Account, the Participant's
Matching Contribution Account, the
Participant's Prior Plan Account, the
Participant's Rollover Contribution Account,
the Participant's Salary Reduction Account
and Investment Account. The Committee shall
account for repayments of principal in the
following order: the Participant's
Investment Account, the Participant's Salary
Reduction Account, the Participant's
Rollover Contribution Account, the
Participant's Prior Plan Account, the
Participant's Matching Contribution Account
and the Participant's Profit Sharing
Contribution Account.
6.3(d) The Trustee shall credit interest and
principal payments made by a Participant,
including any additional prepayments made
pursuant to this Section, against his loan
evidenced by the promissory note held as an
earmarked asset of the Trust Fund, to the
Trust Fund. The Committee, on each
Valuation Date, shall adjust the
Participant's Individual Account to reflect
payments made since the last Valuation Date.
6.3(e) Except in the case of a loan for the
purchase of a principal residence of the
Participant, the maximum term of repayment
shall be five (5) years. The term of
repayment of a loan for the purchase of a
principal residence of the Participant shall
be as determined by the Committee in a
uniform and nondiscriminatory manner.
6.3(f) The Participant shall authorize the Employer
to deduct approximately equal interest and
principal payments from his compensation
payable at the end of the last regular pay
period of each calendar month. The Employer
shall transfer such payroll deductions to
the Trustee within a reasonable time
following the end of each month. In the
event that a Participant receives a loan
hereunder and becomes an inactive
Participant while remaining employed by the
Employer, repayments shall be made pursuant
to the Committee's direction pursuant to the
terms of the promissory note (no less
frequently than quarterly) and the Committee
shall transfer said payments to the Trustee
within a reasonable period of time after
receipt. In the event that a Participant
who receives a loan hereunder ceases to be
employed by an Employer, the outstanding
principal balance and any interest due to
date on the outstanding principal balance
shall be immediately due and payable upon
demand.
6.3(g) A Participant may repay, at any time, any
portion or all of the then outstanding
principal balance of his loan, together with
interest due to date on the prepaid portion.
Any such prepayments shall be made to the
Committee and the Committee shall transfer
such prepaid amounts to the Trustee within a
reasonable time after receipt. Except as
otherwise provided in this Section, such
right of prepayment shall be entirely in the
discretion of the Participant and shall be
without premium or penalty.
6.3(h) The collateral shall be the assignment of up
to fifty percent (50%) of the Participant's
vested Individual Account as of the date of
the loan is made, supported by the
Participant's promissory note for the amount
of such loan, including interest, payable to
the order of the Trustee.
6.3(i) Each loan shall bear interest at a
reasonable rate to be fixed by the Committee
and shall be based on interest rates
currently being charged for similar loans by
commercial lending institutions in the same
geographical area as the situs of the Trust
Fund. The Committee shall not discriminate
among Participants in the matter of interest
rates; but loans granted at different times
may bear different interest rates if, in the
opinion of the Committee, different rates
are required based on the rates being
charged by said commercial lending
institutions for similar loans.
6.3(j) The terms of the promissory note for the
loan shall provide that if a Participant
with an outstanding loan balance defaults on
the loan prior to the earlier of termination
of employment or attainment of age fifty
nine and one-half (59 1/2), interest shall
continue to accrue on the outstanding
principal balance at the stated rate, and
shall be added to the principal balance as
it accrues. Unless otherwise provided in
the promissory note, a Participant shall be
considered to have defaulted on the
promissory note if a payment is not made.
If the Participant resumes loan repayments,
such repayment of both principal and
interest shall be based on the outstanding
loan balance on the date repayments resume.
The term of the loan, as originally stated,
shall be adjusted so that the period during
which payments were in default will be
disregarded. If, on the earlier of
termination of employment or attainment of
age fifty nine and one-half (59 -1/2), loan
repayments have not resumed, the end of the
term of the loan will be deemed to have been
reached. In such event, either Section
6.3(k) shall apply or, if applicable, the
Participant shall be deemed to have made a
withdrawal equal to the then outstanding
principal balance of the loan. Such deemed
withdrawal shall be treated as a
distribution to which Section 6.3(k)
applies.
6.3(k) No distribution under Article 5 shall be
made to any Participant, Former Participant,
or Beneficiary unless and until all unpaid
loans, including accrued interest, have been
repaid. Such Participant, Former
Participant or Beneficiary shall have the
option of paying the unpaid loan balance and
accrued interest directly or of having such
amount deducted from the distribution.
The terms of the promissory note shall provide
that in the event of default, the Participant
shall be deemed to consent to a lump sum
distribution at the earliest date a
distribution can be made under the Plan equal
to the unpaid loan balance and accrued
interest.
6.3(l) In granting or refusing any request for a
loan, the Committee shall apply uniform
standards consistently and such
discretionary power shall not be applied so
as to discriminate in favor of Highly
Compensated Employees.
<PAGE>
ARTICLE 7
FUNDING
Section 7.1 Contributions
Contributions by the Employer and by the
Participants as provided for in Article 3 shall
be paid over to the Trustee. All contributions
by the Employer shall be irrevocable, except as
herein provided, and may be used only for the
exclusive benefit of the Participants, Former
Participants and their Beneficiaries.
Section 7.2 Trustee
The Sponsoring Employer has entered into an
agreement with the Trustee whereunder the
Trustee will receive, invest and administer as
a trust fund contributions made under this Plan
in accordance with the Trust Agreement.
Such Trust Agreement is incorporated by
reference as a part of the Plan, and the rights
of all persons hereunder are subject to the
terms of the Trust Agreement. The Trust
Agreement specifically provides, among other
things, for the investment and reinvestment of
the Trust Fund and the income thereof, the
management of the Trust Fund, the
responsibilities and immunities of the Trustee,
removal of the Trustee and appointment of a
successor, accounting by the Trustee and the
disbursement of the Trust Fund.
The Trustee shall, in accordance with the terms
of such Trust Agreement, accept and receive all
sums of money paid to it from time to time by
the Employer, and shall hold, invest, reinvest,
manage and administer such moneys and the
increment, increase, earnings and income
thereof as a trust fund for the exclusive
benefit of the Participants, Former
Participants and their Beneficiaries or the
payment of reasonable expenses of administering
the Plan.
In the event that affiliated or subsidiary
Employers become signatory hereto, completely
independent records, allocations, and
contributions shall be maintained for each
Employer. The Trustee may invest all funds
without segregating assets between or among
signatory Employers.
ARTICLE 8
FIDUCIARIES
Section 8.1 General
Each Fiduciary who is allocated specific duties
or responsibilities under the Plan or any
Fiduciary who assumes such a position with the
Plan shall discharge his duties solely in the
interest of the Participants, Former
Participants and Beneficiaries and for the
exclusive purpose of providing such benefits as
stipulated herein to such Participants, Former
Participants and Beneficiaries, or defraying
reasonable expenses of administering the Plan.
Each Fiduciary, in carrying out such duties and
responsibilities, shall act 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 exercising such
authority or duties.
A Fiduciary may serve in more than one
Fiduciary capacity and may employ one or more
persons to render advice with regard to his
Fiduciary responsibilities. If the Fiduciary
is serving as such without compensation, all
expenses reasonably incurred by such Fiduciary
shall be paid from the Trust Fund or by the
Employer.
A Fiduciary may delegate any of his
responsibilities for the operation and
administration of the Plan. In limitation of
this right, a Fiduciary may not delegate any
responsibilities as contained herein relating
to the management or control of the Trust Fund
except through the employment of an investment
manager as provided in Section 8.3 and in the
Trust Agreement relating to the Trust Fund.
Section 8.2 Employer
The Sponsoring Employer established and
maintains the Plan for the benefit of its
Employees and for Employees of Adopting
Employers and of necessity retains control of
the operation and administration of the Plan.
The Sponsoring Employer, in accordance with
specific provisions of the Plan, has as herein
indicated, delegated certain of these rights
and obligations to the Trustee, and the
Committee and these parties shall be solely
responsible for these, and only these,
delegated rights and obligations.
The Employer shall supply such full and timely
information for all matters relating to the
Plan as (a) the Committee, (b) the Trustee, and
(c) the accountant engaged on behalf of the
Plan by the Sponsoring Employer may require for
the effective discharge of their respective
duties.
Section 8.3 Trustee
The Trustee, in accordance with the Trust
Agreement, shall have exclusive authority and
discretion to manage and control the Trust
Fund, except that the Sponsoring Employer may
in its discretion employ at any time and from
time to time an investment manager (as defined
in Section 3(38) of ERISA) to direct the
Trustee with respect to all or a designated
portion of the assets comprising the Trust
Fund.
Section 8.4 Administrative Committee
8.4(a) The Board of the Sponsoring Employer shall
appoint a Committee of not less than three
(3) persons to hold office at the pleasure
of the Board, such Committee to be known as
the Administrative Committee or Committee.
No compensation shall be paid members of the
Committee from the Trust Fund for service on
such Committee. The Committee shall choose
from among its members a chairman and a
secretary. Any action of the Committee
shall be determined by the vote of a
majority of its members. Either the
chairman or the secretary may execute any
certificate or written direction on behalf
of the Committee.
8.4(b) Every decision and action of the Committee
shall be valid if concurrence is by a
majority of the members then in office,
which concurrence may be had without a
formal meeting.
8.4(c) In accordance with the provisions hereof,
the Committee has been delegated certain
administrative functions relating to the
Plan with all powers necessary to enable it
properly to carry out such duties. The
Committee shall have no power in any way to
modify, alter, add to or subtract from, any
provisions of the Plan. The Committee shall
have the power and authority in its sole,
absolute and uncontrolled discretion to
control and manage the operation and
administration of the Plan and shall have
all powers necessary to accomplish these
purposes. The responsibility and authority
of the Committee shall include, but shall
not be limited to, (i) determining all
questions relating to the eligibility of
employees to participate; (ii) determining
the amount and kind of benefits payable to
any Participant, spouse or Beneficiary;
(iii) establishing and reducing to writing
and distributing to any Participant or
Beneficiary a claims procedure and
administering that procedure, including the
processing and determination of all appeals
thereunder; and (iv) interpreting the
provisions of the Plan including the
publication of rules for the regulation of
the Plan as in its sole, absolute and
uncontrolled discretion are deemed necessary
or advisable and which are not inconsistent
with the express terms hereof, the Code or
the Employee Retirement Income Security Act
of 1974, as amended. All disbursements by
the Trustee, except for the ordinary
expenses of administration of the Trust Fund
or the reimbursement of reasonable expenses
at the direction of the Sponsoring Employer,
as provided herein, shall be made upon, and
in accordance with, the written directions
of the Committee. When the Committee is
required in the performance of its duties
hereunder to administer or construe, or to
reach a determination, under any of the
provisions of the Plan, it shall do so on a
uniform, equitable and nondiscriminatory
basis.
8.4(d) The Committee shall establish rules and
procedures to be followed by the
Participants, Former Participants and
Beneficiaries in filing applications for
benefits and for furnishing and verifying
proofs necessary to establish age, Service,
and any other matters required in order to
establish their rights to benefits in
accordance with the Plan. Additionally, the
Committee shall establish accounting
procedures for the purpose of making the
allocations, valuations and adjustments to
Participants' accounts. Should the
Committee determine that the strict
application of its accounting procedures
will not result in an equitable and
nondiscriminatory allocation among the
accounts of Participants, it may modify its
procedures for the purpose of achieving an
equitable and non-discriminatory allocation
in accordance with the general concepts of
the Plan, provided however that such
adjustments to achieve equity shall not
reduce the vested portion of a Participant's
interest.
8.4(e) The Committee may employ such counsel,
accountants, and other agents as it shall
deem advisable. The Sponsoring Employer
shall pay, or cause to be paid from the
Trust Fund, the compensation of such
counsel, accountants, and other agents and
any other expenses incurred by the Committee
in the administration of the Plan and Trust
Fund. The Committee may also delegate any
of its duties hereunder to any other person
or persons as it deems appropriate.
Section 8.5 Claims Procedures
8.5(a) The Committee shall receive all applications
for benefits. Upon receipt by the Committee
of such an application, it shall determine
all facts which are necessary to establish
the right of an applicant to benefits under
the provisions of the Plan and the amount
thereof as herein provided. Upon request,
the Committee will afford the applicant the
right of a hearing with respect to any
finding of fact or determination. The
applicant shall be notified in writing of
any adverse decision with respect to his
claim within ninety (90) days after its
submission. The notice shall be written in
a manner calculated to be understood by the
applicant and shall include the items
specified in items (1) through (4) of this
Subsection.
(1) The specific reason or reasons for the
denial;
(2) Specific references to the pertinent
Plan provisions on which the denial is
based;
(3) A description of any additional material
or information necessary for the
applicant to perfect the claim and an
explanation why such material or
information is necessary; and
(4) An explanation of the Plan's claim
review procedures.
8.5(b) If special circumstances require an
extension of time for processing the initial
claim, a written notice of the extension and
the reason therefor shall be furnished to
the claimant before the end of the initial
ninety (90) day period. In no event shall
such extension exceed ninety (90) days.
8.5(c) In the event a claim for benefits is denied
or if the applicant has had no response to
such claim within ninety (90) days of its
submission (in which case the claim for
benefits shall be deemed to have been
denied), the applicant or his duly
authorized representative, at the
applicant's sole expense, may appeal the
denial to the Committee within sixty (60)
days of the receipt of written notice of
denial or sixty (60) days from the date such
claim is deemed to be denied. In pursuing
such appeal the applicant or his duly
authorized representative:
(1) May request in writing that the
Committee review the denial;
(2) May review pertinent documents; and
(3) May submit issues and comments in
writing.
8.5(d) The decision on review shall be made within
sixty (60) days of receipt of the request
for review, unless special circumstances
require an extension of time for processing,
in which case a decision shall be rendered
as soon as possible, but not later than one
hundred twenty (120) days after receipt of a
request for review. If such an extension of
time is required, written notice of the
extension shall be furnished to the claimant
before the end of the original sixty (60)
day period. The decision on review shall be
made in writing, shall be written in a
manner calculated to be understood by the
claimant, and shall include specific
references to the provisions of the Plan on
which such denial is based. If the decision
on review is not furnished within the time
specified above, the claim shall be deemed
denied on review.
Section 8.6 Records
All acts and determinations of the Committee
shall be duly recorded by the secretary thereof
and all such records together with such other
documents as may be necessary in exercising his
duties under the Plan shall be preserved in the
custody of such secretary. Such records and
documents shall at all times be open for
inspection and for the purpose of making copies
by any person designated by the Sponsoring
Employer. The Committee shall provide such
timely information, resulting from the
application of its responsibilities under the
Plan, as needed by the Trustee and the
accountant engaged on behalf of the Plan by the
Sponsoring Employer, for the effective
discharge of their respective duties.
Section 8.7 Indemnification
The Employer shall indemnify and hold the
Board, officers of the Employer, the Committee
and each of its members, and any person who is
an employee of the Employer acting on behalf of
the Board, officers or Committee, harmless from
and against any and all expense, claim, cause
of action, or liability it or any of them may
incur in the administration of the Plan and
Trust Fund, unless such expense, claim, cause
of action, or liability is the result of fraud
or willful breach of his or their fiduciary
responsibilities under the Employee Retirement
Income Security Act of 1974. This shall
include the advancement of any legal or other
expenses incurred in connection with the claim,
cause of action or liability.
ARTICLE 9
AMENDMENT AND TERMINATION OF THE PLAN
Section 9.1 Amendment of the Plan
The Sponsoring Employer shall have the right at
any time by action of the Board to modify,
alter or amend the Plan in whole or in part;
provided, however, that the duties, powers and
liability of the Trustee hereunder shall not be
increased without its written consent; and
provided, further, that the amount of benefits
which, at the time of any such modification,
alteration or amendment, shall have accrued for
any Participant, Former Participant or
Beneficiary hereunder shall not be adversely
affected thereby; and provided, further, that
no such amendment shall have the effect of
reverting to the Employer any part of the
principal or income of the Trust Fund. No
amendment to the Plan shall decrease the
balance of a Participant's Individual Account
or eliminate an optional form of distribution.
Section 9.2 Termination of the Plan
The Sponsoring Employer expects to continue the
Plan indefinitely, but continuance is not
assumed as a contractual obligation and the
Sponsoring Employer reserves the right at any
time by action of the Board to terminate its
participation in the Plan. If the Sponsoring
Employer terminates or partially terminates its
participation in the Plan or permanently
discontinues its Contributions at any time,
each Participant affected thereby shall be then
vested with the amount to the credit in his
Individual Account.
In the event of termination or partial
termination of the Plan by the Sponsoring
Employer, the Committee shall value the Trust
Fund as of the date of termination. That
portion of the Trust Fund for which the Plan
has not been terminated shall be unaffected.
Section 9.3 Return of Contributions
It is intended that this Plan shall be approved
and qualified under the Code and Regulations
issued thereunder with respect to employees'
plans and trusts (1) so as to permit the
Employers to deduct for federal income tax
purposes the amounts of contributions to the
Trust Fund; (2) so that contributions so made
and the income of the Trust Fund will not be
taxable to Participants as income until
received; (3) so that the income of the Trust
Fund shall be exempt from federal income tax.
Any Employer Contributions and Salary Reduction
are made to the Plan conditioned on their
deductibility under Code Section 404. In the
event the Commissioner of Internal Revenue or
his delegate rules that the deduction for all
or a part of any Employer Contribution or
Salary Reduction is not allowed, the Employers
reserve the right to recover that portion or
all of their contributions for which no
deduction is allowed (reduced by any losses),
provided such recovery is made within one (1)
year of the disallowance.
<PAGE>
ARTICLE 10
TOP HEAVY PLAN PROVISIONS
Section 10.1 General
Notwithstanding anything in the Plan to the
contrary, if this Plan when combined with all
other plans required to be aggregated pursuant
to Code Section 416(g) is deemed to be a
top-heavy plan for any Plan Year, the
Subsections in this Article shall apply to such
Plan Year.
Section 10.2 Minimum Contribution
Regardless of hours worked or level of
compensation, each active Participant who is
not a Key Employee shall be entitled to a
minimum allocation of contributions and
forfeitures equal to the lesser of (i) three
percent (3%) of the Participant's Compensation
for the Plan Year; and (ii) provided that the
Plan is not part of a Required Aggregation
Group with a Defined Benefit Plan because the
Plan enables the Defined Benefit Plan to meet
the requirements of Code Section 401(a)(4) or
410, the highest percentage of Compensation
contributed on behalf of, plus forfeitures
allocated to, a Key Employee (including Salary
Reduction). In the case of a Participant who
is also a participant in a Defined Benefit Plan
maintained by the Employer, the minimum accrued
benefit provided in the Defined Benefit Plan
pursuant to Code Section 416(c)(1) equal to two
percent (2%) of the Participant's average
monthly compensation for the five (5)
consecutive years when his aggregate
compensation was highest multiplied by his
years of credited service up to ten (10) years
for each plan year in which the Plan is top
heavy, shall be the only minimum benefit for
both that plan and this Plan, and the minimum
allocation described above shall not apply.
Section 10.3 Super Top Heavy Plans
The multiplier of 1.25 in Section 4.7 shall be
reduced to 1.0 unless (i) all plans of the
Required Aggregation Group or the Permissive
Aggregation Group, when aggregated, are ninety
percent (90%) or less top heavy, and (ii) the
minimum accrued benefit referenced in clause
(i) of Section 10.2 is modified by substituting
three percent (3%) with four percent (4%). In
the case of each Participant who is also a
participant in a Defined Benefit Plan
maintained by the Employer, the minimum accrued
benefit provided in the Defined Benefit Plan
pursuant to Code Sections 416(c)(1) and 416(h)
equal to three percent (3%) of the
Participant's average monthly compensation for
the five (5) highest consecutive years when his
aggregate compensation was highest multiplied
by his years of credited service up to ten (10)
years for each plan year in which the Plan is
top heavy shall be the only minimum benefit for
both that plan and this Plan, and the minimum
allocation described above shall not apply.
Section 10.4 Compensation
For purposes of this Article, compensation
shall have the same meaning as assigned to it
by Code Section 415(c)(3) without regard to
Code Sections 125, 402(e)(3), 402(h)(1)(B) and
contributions pursuant to a salary reduction
agreement under Code Section 403(b) and shall
be limited to one hundred fifty thousand
dollars ($150,000) or such other amount as
determined pursuant to Code Section 401(a)(17).
<PAGE>
ARTICLE 11
MISCELLANEOUS
Section 11.1 Governing Law
The Plan shall be construed, regulated and
administered according to the laws of the State
of Indiana, except in those areas preempted by
the laws of the United States of America.
Section 11.2 Construction
The headings and subheadings in the Plan have
been inserted for convenience of reference only
and shall not affect the construction of the
provisions hereof. In any necessary
construction the masculine shall include the
feminine and the singular the plural, and vice
versa.
Section 11.3 Administration Expenses
The expenses of administering the Trust Fund
and the Plan shall be paid from the Trust Fund,
unless they are paid by the Employer.
Section 11.4 Participant's Rights
No Participant in the Plan shall acquire any
right to be retained in the Employer's employ
by virtue of the Plan, nor, upon his dismissal,
or upon his voluntary termination of
employment, shall he have any right or interest
in and to the Trust Fund other than as
specifically provided herein. The Employer
shall not be liable for the payment of any
benefit provided for herein; all benefits
hereunder shall be payable only from the Trust
Fund.
Section 11.5 Spendthrift Clause
To the extent permitted by law, none of the
benefits, payments, proceeds, or distributions
under this Plan shall be subject to the claim
of any creditor of the Participant, Former
Participant or any Beneficiary hereunder or to
any legal process by any creditor of such
Participant, Former Participant or any such
Beneficiary; and neither shall such
Participant, Former Participant or any such
Beneficiary have any right to alienate,
commute, anticipate, or assign any of the
benefits, payments, proceeds or distributions
under this Plan. 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 Section 414(p) of the
Code, or any domestic relations order entered
before January 1, 1985, under which payments
have commenced prior to such date.
Distributions may be made to an alternate payee
under a qualified domestic relations order
prior to the Participant's earliest retirement
age as defined by Code Section 414(p).
Section 11.6 Merger, Consolidation or Transfer
In the event of the merger or consolidation of
the Plan with another plan or transfer of
assets or liabilities from the Plan to another
plan, each then Participant, Former Participant
or Beneficiary shall not, as a result of such
event, be entitled on the day following such
merger, consolidation or transfer under the
termination of the Plan provisions to a lesser
benefit than the benefit he was entitled to on
the date prior to the merger, consolidation or
transfer if the Plan had then terminated.
Section 11.7 Counterparts
The Plan and the Trust Agreement may be
executed in any number of counterparts, each of
which shall constitute but one and the same
instrument and may be sufficiently evidenced by
any one counterpart.
* * * * * * * * * * * * *
SIGNATURES
IN WITNESS WHEREOF, the Sponsoring Employer has caused this
Plan to be executed this 29th day of May
, 1997, but effective January 1, 1997.
Witness: Old National Bancorp
By Allen Mounts
Title VP Director of Human Resources
APPENDIX "A"
PARTICIPATING EMPLOYERS
Participating Employer Entrance Date
Old National Bank in Evansville January 1, 1953
Old National Bancorp April 1, 1986
The Merchants National Bank April 1, 1986
First-Citizens Bank and Trust Company April 1, 1986
Peoples Bank and Trust Company July 1, 1986
The Rockville National Bank September 1, 1986
Clinton State Bank January 1, 1987
Gibson County Bank April 1, 1987
Security Bank & Trust of Vincennes May 1, 1987
Farmers Bank & Trust Co. of Madisonville,
Kentucky January 1, 1988
Peoples National Bank June 1, 1988
Morganfield National Bank April 1, 1989
First National Bank July 1, 1989
First State Bank March 1, 1989
Security Bank & Trust of Mt. Carmel November 1, 1990
Farmers Bank & Trust Company of Henderson November 1, 1990
Old National Service Corporation January 1, 1991
United Southwest Bank April 1, 1992
Palmer American National Bank January 1, 1993
Citizens State Bank January 1, 1993
Richardt Insurance Agency, Inc. March 1, 1993
Dubois County Bank April 1, 1993
Bank of Western Indiana January 1, 1995
Indiana State Bank January 1, 1995
Orange County Bank January 1, 1995
Old National Trust Company January 1, 1995
Old National Trust Company - Illinois January 1, 1995
Old National Trust Company - Kentucky January 1, 1995
Citizens National Bank July 1, 1995
First National Bank of Oblong January 1, 1996
City National Bancorp, Inc. January 1, 1996
National Bank of Carmi July 1, 1996
Workingmens/ONB Bank (resulting from the
merger of Workingmens Federal Savings Bank
into ONB Bank of Bloomington) ______________
Consumer Acceptance Corporation January 1, 1997
The above listing of Participating Employers and their respective
Entrance Dates is current as of
May 29 , 1997 .
Old National Bancorp
By Allen Mounts
VP Director of Human Resources
