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 March 31, 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
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 26.6 million shares outstanding at March 31, 1997.
OLD NATIONAL BANCORP
FORM 10-Q
INDEX
PART I. FINANCIAL INFORMATION
Item 1.Financial Statements Page No.
Consolidated Balance Sheet
March 31, 1997 and 1996, and December 31, 1996 3
Consolidated Statement of Income
Three months ended March 31, 1997 and 1996. . 4
Consolidated Statement of Cash Flows
Three months ended March 31, 1997 and 1996. . 5
Notes to Consolidated Financial Statements . 6
Item 2.Management's Discussion and Analysis of
Financial Condition and Results of Operations 8
PART II OTHER INFORMATION . . . . . . . . . . 11
SIGNATURES. . . . . . . . . . . . . . . . . . . 13
INDEX OF EXHIBITS . . . . . . . . . . . . . . . 14
2
<TABLE>
<CAPTION>
OLD NATIONAL BANCORP
CONSOLIDATED BALANCE SHEET
March 31, March 31, December 31,
($ in thousands) (unaudited) 1997 1996 1996
Assets
<S> <C> <C> <C>
Cash and due from banks. . . . . . . . . . $162,616 $147,130 $180,405
Money market investments . . . . . . . . . 3,878 93,623 6,698
Investment Securities:
U.S. Treasury . . . . . . . . . . . . . . 146,148 183,963 154,524
U.S. Government agencies
and corporations. . . . . . . . . . . . 923,583 751,445 856,263
Obligations of states and political
subdivisions. . . . . . . . . . . . . . 450,786 436,368 462,378
Other . . . . . . . . . . . . . . . . . . 42,348 39,039 41,484
--------- --------- ---------
Total Investment Securities . . . . . . 1,562,865 1,410,815 1,514,649
--------- --------- ---------
Loans
Commercial. . . . . . . . . . . . . . . . 794,281 737,790 796,313
Commercial Real Estate. . . . . . . . . . 679,772 585.741 668,671
Residential Real Estate . . . . . . . . . 1,309,474 1,234,970 1,303,283
Consumer credit, net of unearned income . 752,016 691,078 755,033
Financial . . . . . . . . . . . . . . . . -- 23,167 --
--------- --------- ---------
Total Loans . . . . . . . . . . . . . . 3,535,543 3,272,746 3,523,300
Allowance for loan losses . . . . . . . (45,914) (41,578) (44,053)
--------- --------- ---------
Net Loans . . . . . . . . . . . . . . . 3,489,629 3,231,168 3,479,247
Other assets . . . . . . . . . . . . . . . 190,240 184,735 185,592
--------- --------- ---------
Total Assets. . . . . . . . . . . . . . $5,409,228 $5,067,471 $5,366,591
========= ========= =========
Liabilities
Deposits
Noninterest bearing demand. . . . . . . . $465,019 $452,281 $512,281
Interest bearing:
NOW accounts. . . . . . . . . . . . . . 452,697 446,402 449,486
Savings accounts. . . . . . . . . . . . 478,855 484,809 480,303
Money Market accounts . . . . . . . . . 660,449 656,133 714,261
Certificates of deposit of
$100,000 and over . . . . . . . . . . . 287,823 285,446 257,988
Other time. . . . . . . . . . . . . . . 1,863,186 1,812,185 1,853,705
--------- --------- ---------
Total Deposits. . . . . . . . . . . . . 4,208,029 4,137,256 4,268,024
--------- --------- ---------
Short-term borrowings. . . . . . . . . . . 610,901 332,879 499,666
Subordinated debentures. . . . . . . . . . 30,481 30,585 30,564
Medium term notes. . . . . . . . . . . . . 44,000 45,000 44,000
Other liabilities. . . . . . . . . . . . . 62,462 62,108 65,811
--------- --------- ---------
Total Liabilities . . . . . . . . . . . . 4,955,873 4,607,828 4,908,065
--------- --------- ---------
Shareholders' Equity
Common stock. . . . . . . . . . . . . . . 26,560 26,341 26,778
Capital surplus . . . . . . . . . . . . . 257,501 249,262 265,584
Retained earnings . . . . . . . . . . . . 168,199 179,402 158,284
Net unrealized gain (loss) on investments
securities 1,095 4,638 7,880
--------- --------- ---------
Total Shareholders' Equity. . . . . . . . 453,355 459,643 458,526
--------- --------- ---------
Total Liabilities and Shareholders'
Equity. . . . . . . . . . . . . . . . . $5,409,228 $5,067,471 $5,366,591
========= ========= =========
The accompanying notes are an integral part of this statement.
</TABLE>
3
<TABLE>
<CAPTION>
OLD NATIONAL BANCORP
CONSOLIDATED STATEMENT OF INCOME
Three Months Ended
($ in thousands except share March 31,
and per share data) (Unaudited) 1997 1996
<S> <C> <C>
Interest income
Loans including fees:
Taxable . . . . . . . . . . . . . . . . . $77,677 $72,050
Non-taxable. . . . . . . . . . . . . . . . 970 896
Investment securities:
Taxable. . . . . . . . . . . . . . . . . . 17,902 15,417
Non-taxable. . . . . . . . . . . . . . . . 5,996 5,817
Federal funds sold and securities
purchased under agreement to resell. . . . 103 1,541
Deposits with banks. . . . . . . . . . . . . 105 230
------- -------
Total Interest Income. . . . . . . . . . . 102,753 95,951
------- -------
Interest Expense
Savings, daily interest checking and
money market accounts. . . . . . . . . . . 11,144 12,047
Certificates of deposit of $100,000
and over . . . . . . . . . . . . . . . . . 3,776 3,896
Other time deposits. . . . . . . . . . . . . 25,207 25,648
Federal funds purchased. . . . . . . . . . . 994 221
Securities sold under agreements to
repurchase . . . . . . . . . . . . . . . . 2,369 2,352
Other borrowings . . . . . . . . . . . . . . 5,687 3,151
------- -------
Total Interest Expense . . . . . . . . . . 49,177 47,315
------- -------
Net Interest Income. . . . . . . . . . . . . 53,576 48,636
Provision for loan losses. . . . . . . . . . 3,757 2,002
------- -------
Net Interest Income After Provision
For Loan Losses. . . . . . . . . . . . . 49,819 46,634
------- -------
Noninterest Income
Trust fees . . . . . . . . . . . . . . . . . 2,800 2,503
Service charges on deposit accounts. . . . . 3,922 3,650
Loan servicing fees. . . . . . . . . . . . . 1,405 1,281
Securities gains (losses), net . . . . . . . (6) 55
Other income . . . . . . . . . . . . . . . . 3,312 2,773
------- -------
Total Noninterest Income. . . . . . . . . . 11,433 10,262
------- -------
Noninterest Expense
Salaries and employee benefits . . . . . . . 22,053 19,889
Occupancy expense. . . . . . . . . . . . . . 2,382 2,316
Equipment expense. . . . . . . . . . . . . . 3,039 2,758
FDIC insurance expense . . . . . . . . . . . 150 287
Data processing expense. . . . . . . . . . . 1,288 1,242
Supplies expense . . . . . . . . . . . . . . 1,086 1,109
Communication and transportation expense . . 1,739 1,581
Other expenses . . . . . . . . . . . . . . . 6,417 6,659
------- -------
Total Noninterest Expense . . . . . . . . . 38,154 35,841
------- -------
Income before income taxes . . . . . . . . . 23,098 21,055
Provision for income taxes . . . . . . . . . 7,040 6,383
------- -------
Net Income. . . . . . . . . . . . . . . . . $16,058 $14,672
======= =======
Net Income Per Common Share
Primary . . . . . . . . . . . . . . . . . . $ 0.60 $ 0.53
======= =======
Fully Diluted . . . . . . . . . . . . . . . $ 0.58 $ 0.51
======= =======
Weighted average common shares outstanding:
Primary . . . . . . . . . . . . . . . . . . 26,752,360 27,848,620
========== ==========
Fully Diluted . . . . . . . . . . . . . . . 28,181,567 29,282,581
========== ==========
The accompanying notes are an integral part of this statement
</TABLE>
4
<TABLE>
<CAPTION>
OLD NATIONAL BANCORP
CONSOLIDATED STATEMENT OF CASH FLOWS
Three Months Ended
March 31,
($ in thousands) (unaudited) 1997 1996
Cash flows from operating activities:
<S> <C> <C>
Net income . . . . . . . . . . . . . . . . . . . . $ 16,058 $ 14,672
------- -------
Adjustments to reconcile net income to cash provided
from operating activities:
Depreciation . . . . . . . . . . . . . . . . . . . 2,257 2,066
Amortization of intangible assets. . . . . . . . . 318 384
Net premium amortization on investment securities. 421 666
Provision for loan losses. . . . . . . . . . . . . 3,757 2,002
Loss (Gain) on sale of investment securities . . . 6 (55)
Gain on sale of assets . . . . . . . . . . . . . . (76) (12)
(Increase)Decrease in interest receivable. . . . . (267) 2,253
Increase in other assets . . . . . . . . . . . . . (5,779) (3,828)
Increase in accrued expenses and
other liabilities . . . . . . . . . . . . . . . 1,184 3,331
------- -------
Total adjustments. . . . . . . . . . . . . . . . 1,821 6,807
------- -------
Net cash flows provided by operating activities. . 17,879 21,479
------- -------
Cash flows from investing activities:
Purchase of investment securities available-for-sale (134,216) (86,470)
Proceeds from maturities and paydowns of investment
securities available-for-sale . . . . . . . . . . 68,916 93,466
Proceeds from sales of investment securities available-
for-sale. . . . . . . . . . . . . . . . . . . . . 5,339 2,809
Net principal collected from (loans made to) customers:
Commercial and financial . . . . . . . . . . . . 2,178 (9,903)
Mortgage . . . . . . . . . . . . . . . . . . . . (25,381) (21,385)
Consumer . . . . . . . . . . . . . . . . . . . . 1,007 5,730
Proceeds from sale of mortgage loans . . . . . . . 8,130 13,290
Proceeds from sale of premises and equipment . . . 19 158
Purchase of premises and equipment . . . . . . . . (1,193) (3,548)
------- -------
Net cash flows used in investing activities . . . (75,201) (5,853)
------- -------
Cash flows from financing activities:
Net increase (decrease) in deposits and short-term borrowings:
Noninterest bearing demand. . . . . . . . . . . . (47,262) (23,438)
NOW Accounts. . . . . . . . . . . . . . . . . . . 3,211 104,110
Savings accounts. . . . . . . . . . . . . . . . . (1,448) 21,642
Money Market accounts . . . . . . . . . . . . . . (53,812) (146,928)
Certificates of deposit of $100,000 and over. . . 29,835 (15)
Other time deposits . . . . . . . . . . . . . . . 9,481 (1,197)
Short-term borrowings . . . . . . . . . . . . . . 111,235 17,747
Payment of medium-term notes . . . . . . . . . . . -- (5,000)
Cash dividends paid. . . . . . . . . . . . . . . . (5,844) (5,801)
Common stock repurchased . . . . . . . . . . . . . (10,645) (8,126)
Common stock reissued, net of shares used to convert
subordinated debentures. . . . . . . . . . . . . 1,962 2,156
------- -------
Net cash flows provided by financing activities . 36,713 (44,850)
------- -------
Net decrease in cash and cash equivalents. . . . . (20,609) (29,224)
Cash and cash equivalents at beginning of period . 187,103 269,977
------- -------
Cash and cash equivalents at end of period . . . . $166,494 $240,753
======= =======
Total interest paid. . . . . . . . . . . . . . . . $ 45,273 $ 49,193
======= =======
Total taxes paid . . . . . . . . . . . . . . . . . $ 2,041 $ 1,065
======= =======
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 March 31, 1997 and 1996 and December 31,
1996, and the results of its operations and its cash flows for
the three months ended March 31, 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.
Net income on a fully diluted basis is computed as above and
assumes the conversion of ONB's 8% convertible subordinated
debentures (Note 4). For the fully diluted computation, net
income is adjusted for the assumed reduction in interest expense,
net of income tax effect, and an additional 1.4 million common
shares are assumed to be issued in connection with the conversion
of the remaining outstanding debentures.
3. Investments
The market value and amortized cost of investment securities as
of March 31, 1997 are set forth below ($ in thousands):
Market Value Amortized Cost
Available for Sale, at market value $1,562,865 $1,561,049
========= =========
4. Borrowings
ONB's 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 March 31, 1997,
1.4 million authorized and unissued common shares were reserved
for conversion of the debentures.
At March 31, 1997, ONB has outstanding $44 million of medium term
notes. These notes bear interest at a weighted averate rate of
6.73% and mature between 1998 and 2003.
As of March 31, 1997, ONB has $80 million in unsecured lines of
credit with unaffiliated banks. These lines of credit include
6
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 March 31,
1997, $65.0 million was outstanding under these lines bearing
interest rates that averaged 6.05%.
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 March 31, 1997, as compared to March 31, 1996 and December
31, 1996, and the results of operations for the three months
ended March 31, 1997 and 1996.
Financial Condition
ONB's total assets at March 31, 1997 were $5.409 billion, a 6.7%
increase since March 1996 and a 0.8% increase since December
1996. Earning assets, which consist primarily of money market
investments, investment securities and loans, grew 6.8% over the
prior year. During the past year, the mix of earning assets
remained steady as loans grew 8.0% and money market investmnets
and investment securities increased 4.1%. Since December 1996,
earning assets increased slightly 1.1% with loans growing 0.3%
and investment securities and money market investments increasing
3.0%.
At March 31, 1997, underperforming assets (defined as loans 90
days or more past due, nonaccrual and restructured loans and
forclosed properties) rose to $24.3 million from $20.9 million as
of December 31, 1996. As of these dates, underperforming assets
in total were 0.69% and 0.59%, respectively, of total loans and
forclosed properties.
<TABLE>
<CAPTION>
Past Due Total as %
90 of Total Loans
Days Nonaccrual Restructured Forclosed and Forclosed
Or More Loans Loans Properties Total $ Properties
<S> <C> <C> <C> <C> <C> <C>
March 31, 1997 $2,767 $14,410 $ 801 $6,298 $24,276 0.69%
December 31,1996 2,945 12,501 746 4,703 20,895 0.59
</TABLE>
As of March 31, 1997, the recorded investment in loans for which
impairment has been recognized in accordance with SFAS No. 114
and 118 was $4.2 million with no related allowance and $58.9
million with $15.2 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 three months ended March 31, 1997, the average balance of
impaired loans was $59.2 million and $1.1 million of interest was
recorded.
ONB's consolidated loan portfolio is well diversified and
contains no concentrations of credit in any particular industry
exceeding 10% of its portfolio. ONB has minimal exposure to
construction lending or leveraged buyouts and no exposure in
credits to foreign or lesser-developed countries.
Total deposits at March 31, 1997, increased $70.8 million or 1.7%
compared to March 1996 with growth in all deposit categories
except savings. Other time increased $51.0 million and comprised
the largest dollar increase. Since December 1996, total deposits
decreased $60.0 million or 1.4% with the decline split between
noninterest-bearing demand accounts and money market accounts.
Seasonality and a strong stock market contributed to the first
quarter deposit decrease.
8
Short-term borrowings, comprised of Federal funds purchased,
securities sold under agreements to repurchase and other short-
term borrowings, increased $278.0 million since March 1996 to
supplement deposit growth to help fund additional assets. Since
December 1996, ONB's short-term borrowings increased $111.2
million and helped offset the decline in deposits.
Capital
Total shareholders' equity declined $6.3 million since March 1996
and has decreased $5.2 million since December 1996. During the
first quarter of 1997, net unrealized gain on investment
securities decreased $6.8 million as interest rates increased and
the market value of ONB's investment portfolio declined. In
addition ONB repurchased $10.6 million of common stock and paid a
quarterly cash dividend of $0.23 per share.
ONB's consolidated capital position remains strong as evidenced
by the following comparisons of key industry ratios:
<TABLE>
<CAPTION>
Minimum
Regulatory March 31, March 31, December 31,
Risk Based Capital: Ratios 1997 1996 1996
<S> <C> <C> <C> <C>
Tier 1 Capital to Total Avg Assets (Leverage Ratio) 3.00% 8.24% 8.71% 8.16%
Tier 1 Capital to Risk Adjusted Total Assets 4.00 12.71 13.82 12.94
Total Capital to Risk Adjusted Total Assets 8.00 14.84 16.08 14.97
Shareholders' Equity to Total Assets N/A 8.38 9.07 8.54
</TABLE>
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 March 31, 1997, ONB's rate-sensitive assets were 84% of
rate-sensitive liabilities in the 1-180 day maturity category and
92% in the 181-365 day category. These figures compared to 85%
and 95% on December 31, 1996 and 89% and 105% on March 31, 1996.
During 1996, the rate sensitivity was impacted by the increased
lending in 1996 and changes with the deposit mix and maturities.
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.
Results of Operations
Net Income
Net income for the three months ended March 31, 1997 was $16.1
million, a 9.4% increase over the same period in 1996. Primary
net income per common share for the first quarter of 1997 was
$0.60, compared to $0.53 for the first quarter of 1996, a 13.2%
increase. ONB's return on average assets (ROA) for the first
9
quarter of 1997 was 1.21%. This compared to 1.16% for the same
period in 1996. The improvement in ROA is due to improved net
interest income, and higher noninterest income.
Net Interest Income
Net interest income on a taxable equivalent basis for the first
quarter of 1997 was 9.8% higher than the same period for the
prior year. Higher levels of earning assets and improved yields
resulted in the net interest income growth. The net interest
margin was 4.51% in the first quarter of 1997 versus 4.33% in
1996's first quarter.
Provision for Loan Losses
The provision for loan losses was $3.8 million in the first
quarter of 1997 compared to $2.0 million in the first quarter of
1996. ONB's net charge offs were 0.30% of average loans for the
quarter versus 0.17% in the first quarter of 1996. The 1997
provision and net charge-offs are comparable to our results for
the full year of 1996 and do not reflect a significant
deterioration of the loan portfolio or the economies in the
communities in which ONB serves. The rise in charge-offs was
concentrated in the consumer area which has been seen throughout
the banking industry. The allowance for loan losses is
continually monitored and evaluated both within each affiliate
bank and at the holding company level so as to provide adequate
coverage for potential losses. The allowance for loan losses to
end-of-period loans of 1.30% at March 31, 1997 compared to 1.25%
at year-end in 1996 and 1.27% at March 31, 1996. The allowance
for loan losses covers all underperforming assets by 1.89 times
at March 31, 1997 compared to 2.10 times at December 31, 1996.
Noninterest Income
Total noninterest income increased 11.4% in the three months
ended March 31, 1997 as compared to the same period in 1996. In
both years security gains comprised an insignificant portion of
noninterest income. All categories experienced increases over
1996. Trust fees increased 11.9%, service charges on deposit
accounts grew 7.5%, loan servicing fees increased 9.7% and other
income rose 19.4%. The growth in other income was mainly from
increases in insurance commissions and investment product fees.
Noninterest Expense
Noninterest expense increased 6.5% in the first quarter of 1997
over the same period in 1996. Salaries and benefits, together
the largest individual component of noninterest expense,
increased 10.9% in the first quarter of 1997 compared to 1996.
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 first quarter results. 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, increased slightly in the first quarter to 30.5% compared
to 30.3% in 1996. The growth in earning assets has been
primarily in taxable loans with tax exempt securities remaining
level which has raised ONB's effective tax rate.
10
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
At the April 17, 1997 Annual Meeting of Shareholders, the
following matters were submitted to a vote of the shareholders.
Election of Directors - The following directors were elected for
a term of one year.
Vote Count
For Against Abstained Unvoted
David L. Barning 19,750,904 95,272 -- --
Richard J. Bond 19,762,376 83,773 -- --
Alan W. Braun 19,741,191 109,368 -- --
John J. Daus, Jr. 19,755,586 94,457 -- --
Wayne A. Davidson 19,763,176 83,245 -- --
Larry E. Dunigan 19,743,123 103,718 -- --
David E. Eckerle 19,762,638 83,426 -- --
Thomas B. Florida 19,755,222 94,821 -- --
Phelps L. Lambert 19,762,403 84,608 -- --
Ronald B. Lankford 19,763,161 85,614 -- --
Lucien H. Meis 19,757,735 89,381 -- --
Louis L. Mervis 19,759,671 86,393 -- --
Dan W. Mitchell 19,761,129 91,635 -- --
John N. Royse 19,755,136 94,426 -- --
Marjorie Z. Soyugenc 19,757,522 89,416 -- --
Charles D. Storms 19,763,270 83,572 -- --
Selection of Independent Public Accountants - Arthur Andersen
LLP, Indianapolis, Indiana Votes For - 19,709,028, Votes Against
- - 44,914, Votes Abstained - 134,687, Unvoted - 0.
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) Old National Bancorp Employees' Retirement Plan, as amended.
11
(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
March 31, 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: May 14, 1997
13
INDEX OF EXHIBITS
Regulation S-K
Reference
(Item 601)
10 Old National Bancorp Employees' Retirement Plan, as amended.
11 Statement re Computation of Per Share Earnings
27 Financial Data Schedule
14
EXHIBIT 11
PAGE 1 OF 2
OLD NATIONAL BANCORP
STATEMENT RE COMPUTATION OF PER SHARE EARNINGS
($ IN THOUSANDS EXCEPT PER SHARE)
Three Months Ended
March 31, 1997
Primary Fully Diluted
Net Income. . . . . . . . . . . . . . $16,058 $16,058
Interest expense foregone on assumed
conversion of 8% convertible subordinated
debentures, net of tax . . . . . . . -- 368
------ ------
Adjusted net income . . . . . . . . . $16,058 $16,426
Weighted average common shares
outstanding . . . . . . . . . . . . . 26,662,845 26,662,845
Additional shares outstanding upon assumed
conversion of 8% convertible subordinated
debentures. . . . . . . . . . . . . . -- 1,428,797
Additional shares outstanding upon assumed
exercise of stock options . . . . . . 89,515 89,925
---------- ----------
Adjusted weighted average shares
outstanding. . . . . . . . . . . . . 26,752,360 28,181,567
========== ==========
Earnings per share . . . . . . . . . $ .60 $ .58
========== ==========
EXHIBIT 11
PAGE 2 OF 2
OLD NATIONAL BANCORP
STATEMENT RE COMPUTATION OF PER SHARE EARNINGS
($ IN THOUSANDS EXCEPT PER SHARE)
Three Months Ended
March 31, 1996
Primary Fully Diluted
Net Income. . . . . . . . . . . . . . . . $14,672 $14,672
Interest expense foregone on assumed
conversion of 8% convertible subordinated
debentures, net of tax. . . . . . . . . . -- 369
------ ------
Adjusted net income . . . . . . . . . . . $14,672 $15,041
Weighted average common shares
outstanding. . . . . . . . . . . . . . . 27,764,767 27,764,767
Additional shares outstanding upon assumed
conversion of 8% convertible subordinated
debentures . . . . . . . . . . . . . . . -- 1,433,672
Additional shares outstanding upon assumed
exercise of stock options. . . . . . . . . 83,853 84,142
---------- ----------
Adjusted weighted average shares
outstanding . . . . . . . . . . . . . . . 27,848,620 29,282,581
========== ==========
Earnings per share. . . . . . . . . . . . $ .53 $ .51
========== ==========
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM OLD NATIONAL
BANCORP'S MARCH 31, 1997 FORM 10-Q AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE
TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> MAR-31-1997
<CASH> 162,616
<INT-BEARING-DEPOSITS> 3,878
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 1,562,865
<INVESTMENTS-CARRYING> 0
<INVESTMENTS-MARKET> 0
<LOANS> 3,535,543
<ALLOWANCE> 45,914
<TOTAL-ASSETS> 5,409,228
<DEPOSITS> 4,208,029
<SHORT-TERM> 610,901
<LIABILITIES-OTHER> 62,462
<LONG-TERM> 74,481
0
0
<COMMON> 26,560
<OTHER-SE> 426,795
<TOTAL-LIABILITIES-AND-EQUITY> 5,409,228
<INTEREST-LOAN> 78,647
<INTEREST-INVEST> 23,898
<INTEREST-OTHER> 208
<INTEREST-TOTAL> 102,753
<INTEREST-DEPOSIT> 40,127
<INTEREST-EXPENSE> 49,177
<INTEREST-INCOME-NET> 53,576
<LOAN-LOSSES> 3,757
<SECURITIES-GAINS> (6)
<EXPENSE-OTHER> 6,417
<INCOME-PRETAX> 23,098
<INCOME-PRE-EXTRAORDINARY> 16,058
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 16,058
<EPS-PRIMARY> .60
<EPS-DILUTED> .58
<YIELD-ACTUAL> 4.51
<LOANS-NON> 14,410
<LOANS-PAST> 2,767
<LOANS-TROUBLED> 801
<LOANS-PROBLEM> 107,366
<ALLOWANCE-OPEN> 44,053
<CHARGE-OFFS> 3,567
<RECOVERIES> 957
<ALLOWANCE-CLOSE> 45,914
<ALLOWANCE-DOMESTIC> 45,914
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
EXHIBIT 10
Old National Bancorp
Employees' Retirement Plan
Amended and Restated
as of
May 1, 1996
Old National Bancorp Employees' Retirement Plan
TABLE OF CONTENTS
Page #
INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . .1
TITLE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2
Section 1.1 Title . . . . . . . . . . . . . . . . .2
DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . .3
Section 2.1 Accrued Benefit . . . . . . . . . . . .3
Section 2.2 Actuarial Equivalent. . . . . . . . . .4
Section 2.3 Actuary . . . . . . . . . . . . . . . .4
Section 2.4 Anniversary Date. . . . . . . . . . . .4
Section 2.5 Annual Earnings . . . . . . . . . . . .5
Section 2.6 Attained Age. . . . . . . . . . . . . .5
Section 2.7 Average Monthly Compensation. . . . . .5
Section 2.8 Average Monthly Earnings. . . . . . . .5
Section 2.9 Beneficiary . . . . . . . . . . . . . .5
Section 2.10 Board of Directors. . . . . . . . . . .6
Section 2.11 Break in Service. . . . . . . . . . . .6
Section 2.12 Code. . . . . . . . . . . . . . . . . .6
Section 2.13 Company . . . . . . . . . . . . . . . .6
Section 2.14 Contingent Beneficiary. . . . . . . . .6
Section 2.15 Covered Compensation. . . . . . . . . .6
Section 2.16 Credited Service. . . . . . . . . . . .7
Section 2.17 Death Benefit . . . . . . . . . . . . .8
Section 2.18 Defined Benefit Plan. . . . . . . . . .8
Section 2.19 Defined Contribution Plan . . . . . . .8
Section 2.20 Disability Payment. . . . . . . . . . .8
Section 2.21 Disability Retirement Date. . . . . . .8
Section 2.22 Disabled Member . . . . . . . . . . . .8
Section 2.23 Early Retirement Age. . . . . . . . . .8
Section 2.24 Early Retirement Date . . . . . . . . .8
Section 2.25 Effective Date. . . . . . . . . . . . .8
Section 2.26 Employee. . . . . . . . . . . . . . . .9
Section 2.27 Employer. . . . . . . . . . . . . . . .9
Section 2.28 Entrance Date . . . . . . . . . . . . .9
Section 2.29 Highly Compensated Employees. . . . . .9
Section 2.30 Hour of Service . . . . . . . . . . . 12
Section 2.31 Key Employee. . . . . . . . . . . . . 14
Section 2.32 Late Retirement Date. . . . . . . . . 15
Section 2.33 Leased Employee . . . . . . . . . . . 15
Section 2.34 Limitation Year . . . . . . . . . . . 15
Section 2.35 Member. . . . . . . . . . . . . . . . 15
Section 2.36 Merged Plan . . . . . . . . . . . . . 16
Section 2.37 Monthly Retirement Income . . . . . . 16
Section 2.38 Normal Retirement Age . . . . . . . . 16
Section 2.39 Normal Retirement Date. . . . . . . . 16
Section 2.40 Original Plan . . . . . . . . . . . . 16
Section 2.41 Participating Employer. . . . . . . . 16
Section 2.42 Participation Date. . . . . . . . . . 16
Section 2.43 Permissive Aggregation Group. . . . . 16
Section 2.44 Plan Year . . . . . . . . . . . . . . 16
Section 2.45 Prior Plan. . . . . . . . . . . . . . 16
Section 2.46 Required Aggregation Group. . . . . . 17
Section 2.47 Retired Member. . . . . . . . . . . . 17
Section 2.48 Retirement Committee. . . . . . . . . 17
Section 2.49 Service . . . . . . . . . . . . . . . 17
Section 2.50 Sponsoring Employer . . . . . . . . . 18
Section 2.51 Spouse. . . . . . . . . . . . . . . . 18
Section 2.52 Statutory Interest Rate . . . . . . . 18
Section 2.53 Top Heavy Plan. . . . . . . . . . . . 18
Section 2.54 Total and Permanent Disability. . . . 19
Section 2.55 Trust Agreement . . . . . . . . . . . 19
Section 2.56 Trustee . . . . . . . . . . . . . . . 20
Section 2.57 Trust Fund. . . . . . . . . . . . . . 20
Section 2.58 Construction. . . . . . . . . . . . . 20
MEMBERSHIP IN THE RETIREMENT PLAN. . . . . . . . . . . . . . . 21
Section 3.1 Eligibility Requirements. . . . . . . 21
Section 3.2 Plan Binding. . . . . . . . . . . . . 21
MONTHLY RETIREMENT INCOME. . . . . . . . . . . . . . . . . . . 22
Section 4.1 General . . . . . . . . . . . . . . . 22
Section 4.2 Benefit Forms . . . . . . . . . . . . 22
Section 4.3 Normal Retirement . . . . . . . . . . 24
Section 4.4 Late Retirement . . . . . . . . . . . 25
Section 4.5 Early Retirement. . . . . . . . . . . 25
Section 4.6 Disability Retirement . . . . . . . . 26
Section 4.7 Proof of Entitlement. . . . . . . . . 28
Section 4.8 Reemployment. . . . . . . . . . . . . 28
Section 4.9 Non-forfeitable Right at Normal
Retirement . . . . . . . . . . . . . . . . . . . . . 28
OTHER BENEFITS . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 5.1 Other Terminations of Employment. . . 29
Section 5.2 Death Benefits. . . . . . . . . . . . 30
Section 5.3 Death of Retired or Disabled Member . 31
Section 5.4 Payment to Contingent Beneficiaries . 31
Section 5.5 Lump Sum Distributions. . . . . . . . 31
Section 5.6 Benefit Commencement Limitations. . . 32
Section 5.7 Minimum Distribution Rules. . . . . . 33
Section 5.8 Required Distribution Periods . . . . 33
Section 5.9 Member Directed Rollovers . . . . . . 34
THE RETIREMENT COMMITTEE . . . . . . . . . . . . . . . . . . . 36
Section 6.1 Appointment . . . . . . . . . . . . . 36
Section 6.2 Term of Appointment . . . . . . . . . 36
Section 6.3 Officers and Actions. . . . . . . . . 36
Section 6.4 Duties. . . . . . . . . . . . . . . . 36
Section 6.5 Claims Procedures . . . . . . . . . . 37
Section 6.6 Direction to Trustee. . . . . . . . . 38
Section 6.7 Non-discrimination Provision. . . . . 38
Section 6.8 Employment of Agents. . . . . . . . . 39
Section 6.9 Indemnification . . . . . . . . . . . 39
CONTRIBUTIONS BY THE EMPLOYER. . . . . . . . . . . . . . . . . 40
Section 7.1 Contributions . . . . . . . . . . . . 40
Section 7.2 Expenses. . . . . . . . . . . . . . . 40
Section 7.3 Actuary . . . . . . . . . . . . . . . 40
Section 7.4 Funding Standard Account. . . . . . . 40
THE TRUST FUND AND TRUSTEE . . . . . . . . . . . . . . . . . . 41
Section 8.1 Trust Agreement . . . . . . . . . . . 41
Section 8.2 Trust Fund. . . . . . . . . . . . . . 41
Section 8.3 Appointment of Trustee. . . . . . . . 41
Section 8.4 Powers of Trustee . . . . . . . . . . 41
RESERVATION OF AND LIMITATIONS ON RIGHTS . . . . . . . . . . . 42
Section 9.1 Benefits. . . . . . . . . . . . . . . 42
Section 9.2 Contributions . . . . . . . . . . . . 42
Section 9.3 Members' Rights . . . . . . . . . . . 42
Section 9.4 Benefit Offset. . . . . . . . . . . . 42
Section 9.5 Spendthrift Clause. . . . . . . . . . 43
Section 9.6 Return of Contributions . . . . . . . 43
AMENDMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Section 10.1 Amendment of Plan . . . . . . . . . . 44
Section 10.2 Limitations on Right to Amend . . . . 44
PERMANENT OR TEMPORARY DISCONTINUANCE OF PLAN. . . . . . . . . 45
Section 11.1 Termination . . . . . . . . . . . . . 45
Section 11.2 Apportionment of Trust Fund . . . . . 45
Section 11.3 Allocation of Trust Fund. . . . . . . 45
Section 11.4 Expenses. . . . . . . . . . . . . . . 46
Section 11.5 Distribution of Trust Fund. . . . . . 46
Section 11.6 Restrictions on Distributions . . . . 46
Section 11.7 Termination of Signatory Employer . . 47
Section 11.8 Non-forfeitability. . . . . . . . . . 47
ACTUARY. . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
Section 12.1 Duties. . . . . . . . . . . . . . . . 48
Section 12.2 Information . . . . . . . . . . . . . 48
Section 12.3 Reliance. . . . . . . . . . . . . . . 48
ENTRY AND WITHDRAWAL OF AN EMPLOYER. . . . . . . . . . . . . . 49
Section 13.1 Entry of Employer . . . . . . . . . . 49
Section 13.2 Withdrawal of Employer. . . . . . . . 49
CHANGE IN EMPLOYMENT . . . . . . . . . . . . . . . . . . . . . 51
Section 14.1 Transfer to Signatory Employer. . . . 51
Section 14.2 Transfer to Non-signatory Employer. . 51
Section 14.3 Transfer from Non-signatory Employer. 51
Section 14.4 Resumption of Full Membership . . . . 51
Section 14.5 Change in Employment Status . . . . . 52
MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . . . 53
Section 15.1 Retirement Committee Interpretation . 53
Section 15.2 Headings. . . . . . . . . . . . . . . 53
Section 15.3 Governing Law . . . . . . . . . . . . 53
Section 15.4 Benefits to Minors and Incompetents . 53
Section 15.5 Actuarial Determinations. . . . . . . 53
Section 15.6 Copies of Documents . . . . . . . . . 54
Section 15.7 Severability. . . . . . . . . . . . . 54
Section 15.8 Named Fiduciaries . . . . . . . . . . 54
Section 15.9 Allocation of Duties of Fiduciaries . 54
Section 15.10 Misstatement of Facts . . . . . . . . 55
Section 15.11 Limitation on Benefits. . . . . . . . 55
Section 15.12 Combined Limitation on Benefits . . . 58
Section 15.13 Corrective Adjustments. . . . . . . . 60
Section 15.14 Successor on Merger or Consolidation. 60
Section 15.15 Benefits on Merger or Consolidation . 60
Section 15.16 Exclusive Benefit . . . . . . . . . . 60
Section 15.17 Unclaimed Benefits. . . . . . . . . . 60
TOP HEAVY PROVISIONS . . . . . . . . . . . . . . . . . . . . . 61
Section 16.1 Generally . . . . . . . . . . . . . . 61
Section 16.2 Vesting . . . . . . . . . . . . . . . 61
Section 16.3 Minimum Benefit . . . . . . . . . . . 61
Section 16.4 Top Heavy Compensation. . . . . . . . 62
Section 16.5 Testing Year. . . . . . . . . . . . . 62
Section 16.6 Full Compensation . . . . . . . . . . 62
Section 16.7 Top Heavy Service . . . . . . . . . . 62
Section 16.8 Combined Limitation on Benefits . . . 62
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . 63
APPENDIX APARTICIPATING EMPLOYERS. . . . . . . . . . . . . . . 64
APPENDIX BPARTICIPATING EMPLOYERS - EARLY RETIREMENT ELIGIBILITY 65
APPENDIX CPARTICIPATING EMPLOYERS - OPTIONAL FORMS PROVISIONS. 66
APPENDIX DPARTICIPATING EMPLOYERS - NORMAL RETIREMENT PROVISIONS 67
APPENDIX EPARTICIPATING EMPLOYERS - EARLY RETIREMENT REDUCTIONS 68
APPENDIX FPARTICIPATING EMPLOYERS - VESTING PROVISIONS . . . . 69
INTRODUCTION
Effective January 1, 1945, Old National Bank adopted the Old
National Bank Retirement Plan ("Original Plan") for the benefit
of its eligible employees.
Effective January 1, 1951, Old National Bank amended and
restated the Original Plan as the Old National Bank Retirement
Plan ("1951 Plan").
Effective January 1, 1970, Old National Bank amended and
restated the 1951 Plan as the Old National Bank Retirement Plan
("1970 Plan").
Effective January 1, 1976, Old National Bank amended and
restated the 1970 Plan as the Old National Bank Retirement Plan
("1976 Plan").
Effective January 1, 1982, Old National Bank amended and
restated the 1976 Plan as the Old National Bank Retirement Plan
("1982 Plan").
Effective January 1, 1984, Old National Bank amended and
restated the 1982 Plan as the Old National Bank Retirement Plan
("1984 Plan").
Effective January 1, 1986, Old National Bancorp ("Sponsoring
Employer", formerly Old National Bank) amended and restated the
1984 Plan as the Old National Bancorp Employees' Retirement Plan
("1986 Plan").
Effective January 1, 1989, the Sponsoring Employer amended
and restated the 1986 Plan as the Old National Bancorp Employees'
Retirement Plan ("Prior Plan").
Effective May 1, 1996, except as otherwise provided herein,
in order to comply with recent changes in the law and
regulations, the Employer, by action of its Board of Directors,
desires to amend and restate the Prior Plan as the Old National
Bancorp Employees' Retirement Plan ("Plan").
The purpose of this Plan continues to be to provide for the
retirement of Employees of the Employer who become Members of the
Plan, benefits for Totally and Permanently Disabled Members, and
Death Benefits for beneficiaries of deceased Members, but limited
to those who qualify herein in accordance with the terms and
conditions hereinafter set forth.
It is intended that this Plan, together with the Trust
Agreement, meet all the requirements of the Employee Retirement
Income Security Act of 1974, as amended, and the Internal Revenue
Code of 1986, as amended, and the Plan shall be interpreted,
wherever possible, to comply with the terms of the Act and all
formal regulations and rulings issued under such Act.
ARTICLE 1
TITLE
Section 1.1 Title This Plan shall be known as the Old
National Bancorp Employees' Retirement Plan ("Plan").
ARTICLE 2
DEFINITIONS
Section 2.1 Accrued Benefit as of any date shall mean the
benefit determined pursuant to Subsection (a) of this Section,
plus Subsection (b) of this Section, but not less than Subsection
(c) of this Section.
2.1(a) The Member's projected Monthly Retirement
Income at his Normal Retirement Date,
calculated pursuant to Subsection 4.3(a),
subject to Appendix D, shall be based on the
following assumptions, except as otherwise
provided in Section 4.3:
(1) that the Member's Average Monthly Earnings,
Average Monthly Compensation and Covered
Compensation at date of calculation would
have been his Average Monthly Earnings,
Average Monthly Compensation and Covered
Compensation at his Normal Retirement Date;
and
(2) that his Credited Service would have
continued to accrue at the same rate as in
the Plan Year preceding the Plan Year in
which the calculation is being done until his
Normal Retirement Date.
(3) The amount so determined shall be multiplied
by a fraction, the numerator of which shall
be the Member's Credited Service as of the
date of calculation and the denominator of
which shall be the Credited Service the
Member would have had at his Normal
Retirement Date assuming he had continued to
earn Credited Service at the same rate at
which he earned Credited Service in the Plan
Year preceding the Plan Year in which the
Accrued Benefit is being determined.
2.1(b) The Member's Monthly Retirement Income at his
Normal Retirement Date calculated pursuant to
Subsection 4.3(b), subject to Appendix D,
shall be fully accrued at all times.
2.1(c) Notwithstanding the above, if the Member's
Credited Service includes periods of
employment prior to January 1, 1994, in no
event will the Member's Accrued Benefit as of
any date on or after January 1, 1994 be less
than the sum of (i) and (ii) where (i) is the
Member's Accrued Benefit as of December 31,
1993, and (ii) is the Member's Accrued
Benefit as of the date of calculation,
calculated in accordance with the preceding
Subsection of this Section, but with Credited
Service excluding periods of employment prior
to January 1, 1994. In calculating the
benefit in (ii) above, the maximums on
recognized Credited Service in Section 4.3
shall be reduced by Credited Service earned
for periods prior to January 1, 1994.
Section 2.2 Actuarial Equivalent means a benefit of
equivalent value computed on the basis of the following factors:
Interest - The annual interest rate on 30-year Treasury
securities as specified by the Internal
Revenue Service for the fifth (5th) month
before the first day of the Plan Year in
which the annuity starting date occurs. The
rate shall be effective for the entire Plan
Year in which the annuity starting date
occurs.
Mortality - The mortality table prescribed by the
Secretary of the Treasury based on the
standard table described in Code Section
807(d)(5)(A) used to determine reserves
for group annuity contracts issued on
the date as of with the present value is
being determined, without regard to any
other subparagraph of Code Section
807(d)(5), that is prescribed by the
Internal Revenue Service. For 1995 and
thereafter, until a new table is
prescribed by the Secretary of the
Treasury, the applicable mortality table
is the table prescribed in Revenue
Ruling 95-6.
Notwithstanding the preceding terms of this Section, for the
period beginning on May 1, 1996, and ending on April 30, 1997,
the Actuarial Equivalent of a Participant's retirement income
benefit, payable in a lump sum form of payment, shall be the
larger of the amount determined using the interest rate specified
in this Section for the month preceding the first day of the Plan
Year in which occurs the date of determination, or for the month
specified in the first paragraph of this Section.
Further, in no event will the Actuarial Equivalent of a
benefit, other than a single sum value, calculated on or after
May 1, 1996 be less than the Actuarial Equivalent of the Accrued
Benefit as of April 30, 1996, based on the interest and mortality
assumptions effective prior to May 1, 1996.
Section 2.3 Actuary shall mean a Fellow of the Society of
Actuaries who has been enrolled by the Joint Board for the
Enrollment of Actuaries under Section 3042 of the Employee
Retirement Income Security Act of 1974, or a firm of actuaries at
least one of whose members is a Fellow of the Society of
Actuaries who has been so enrolled. The Actuary shall be
designated by the Sponsoring Employer.
Section 2.4 Anniversary Date shall mean January 1st in
each year.
Section 2.5 Annual Earnings shall mean, in the case of
each Member, as of the date of determination, his basic
compensation (including regular pay, 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 Employer, and any amount which would have
otherwise been basic compensation except that a Member 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 Plan Year. Annual
Earnings for any Plan Year in which a Member has completed fewer
than two thousand (2,000) Hours of Service shall be the amounts
which he would have received for personal services if such
Participant had completed two thousand (2,000) Hours of Service
in such Plan Year. Notwithstanding the preceding, Annual
Earnings paid to a Member by an Participating Employer prior to
the Participating Employer's Entrance Date will not be included
in Annual Earnings.
In determining Annual Earnings for a Member, compensation in
excess of one hundred fifty thousand dollars ($150,000) or such
other amount as is authorized pursuant to Code Section 401(a)(17)
shall not be recognized.
Section 2.6 Attained Age shall mean, unless clearly
indicated to the contrary, the age of an Employee or Member as of
his last birthday.
Section 2.7 Average Monthly Compensation shall mean one-
thirty sixth (1/36) of the sum of the final three (3) Annual
Earnings amounts preceding the Member's Disability Retirement
Date, Early Retirement Date, Normal Retirement Date, Late
Retirement Date or termination date under Section 5.1 hereof. If
a Member has fewer than three (3) Annual Earnings amounts,
Average Monthly Compensation shall be the monthly average of his
actual Annual Earnings amounts.
Section 2.8 Average Monthly Earnings shall mean one-
sixtieth (1/60th) of the sum of the highest five (5) consecutive
Annual Earnings amounts preceding the Member's Disability
Retirement Date, Early Retirement Date, Normal Retirement Date,
Late Retirement Date, or termination date under Section 5.1
hereof. If the Member has fewer than five (5) Annual Earnings
amounts, Average Monthly Earnings shall be the monthly average of
his actual Annual Earnings amounts.
Section 2.9 Beneficiary shall mean any person or persons
(or a trust) designated by a Member in such form and manner as
the Retirement Committee may prescribe to receive a Death
Benefit, other than a Death Benefit in the form specified in
Section 4.2(c), payable hereunder if such person or persons
survive the Member. This designation may be revoked at any time
in similar manner and form. In the event of the death of the
designated Beneficiary prior to the death of the Member, the
Contingent Beneficiary shall be entitled to receive the Death
Benefit unless the Beneficiary was named pursuant to Section
4.2(b), in which case the provisions of Section 4.2(b) shall
govern. Notwithstanding the above, a married Member may not
designate a non-spouse Beneficiary without the consent of his
Spouse in the manner stated in Subsection 4.2(c).
Section 2.10 Board of Directors shall mean the Board of
Directors of the Sponsoring Employer unless otherwise indicated.
Section 2.11 Break in Service shall mean a Plan Year in
which an employee who has been credited with fewer than five
hundred and one (501) Hours of Service.
Notwithstanding the preceding paragraph and solely to
determine whether a Break in Service has occurred, a Member 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 Member but for such absence, or in any
case in which such Hours of Service cannot be determined, eight
(8) Hours of Service per day of such absence. In no event,
however, shall the Hours of Service credited pursuant to the
immediately preceding sentence exceed five hundred and one (501).
For purposes of this paragraph, an absence from work for
maternity or paternity reasons means an absence (i) by reason of
the pregnancy of the Member, (ii) by reason of a birth of a child
of the Member, (iii) by reason of the placement of a child with
the Member in connection with the adoption of such child by such
Member, or (iv) 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 (i) 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 (ii) in all
other cases, in the following Plan Year or other applicable
computation period.
Section 2.12 Code shall mean the Internal Revenue Code of
1986, as amended.
Section 2.13 Company shall mean Old National Bancorp and
all of the legal entities which are a part of a controlled group
or affiliated service group with Old National Bancorp pursuant to
the provisions of Code Sections 414(b), (c), (m) and (o).
Section 2.14 Contingent Beneficiary shall mean the person
or persons (or a trust) duly designated by the Member to receive
a Death Benefit from the Plan in the event the designated
Beneficiary does not survive the Member.
Section 2.15 Covered Compensation shall mean one-twelfth
(1/12) of the average (without indexing) of the taxable wage
bases in effect for each calendar year during the thirty-five
(35) year period ending with the last day of the calendar year in
which the Employee attains (or will attain) social security
retirement age. A thirty-five (35) year period is used for all
individuals regardless of the year of birth of the individual.
In determining an employee's Covered Compensation for a Plan
Year, the taxable wage base for all calendar years beginning
after the first day of the Plan Year is assumed to be the same as
the taxable wage base in effect as of the beginning of the Plan
Year. An Employee's Covered Compensation for a plan year
beginning after the thirty-five (35) year period applicable under
this paragraph is the Employee's Covered Compensation for the
Plan Year during which the thirty-five (35) year period ends. An
Employee's Covered Compensation for a Plan Year beginning before
the thirty-five (35) year period applicable under this paragraph
is one-twelfth (1/12) of the taxable wage base in effect as of
the beginning of the plan year. Each Member's Covered
Compensation will automatically be adjusted for each Plan Year,
provided that no adjustment shall result in a reduction of the
Member's Accrued Benefit in violation of Code Section 411(d)(6).
Section 2.16 Credited Service shall mean the number of
years for which a Member is given credit in calculating his
Monthly Retirement Income or Death Benefit, as determined
pursuant to the following:
2.16(a) Credited Service prior to January 1, 1976 shall be
a Member's period of employment with an Employer
prior to January 1, 1976 through December 31,
1975.
2.16(b) Beginning on and after January 1, 1976, Credited
Service shall accrue at the rate of one (1) year
for each Plan Year in which the Member is credited
with at least two thousand (2,000) Hours of
Service. If the Member is credited with fewer
than two thousand (2,000) Hours of Service in a
Plan Year, but at least one thousand (1,000) Hours
of Service, he shall be granted Credited Service
for such Plan Year based on a ration of the actual
number of Hours of Service to two thousand (2,000)
Hours of Service.
2.16(c) No Credited Service shall accrue prior to the
Entrance Date of the Member's Participating
Employer.
2.16(d) Notwithstanding the above, if an employee incurs
one (1) or more consecutive Breaks in Service
(five (5) or more consecutive Breaks in Service on
and after January 1, 1985), his Credited Service
shall not include any periods of employment prior
to his consecutive Breaks in Service if (i) said
employee's Employer-provided benefit pursuant to
Section 5.1 was zero immediately prior to the
commencement of his consecutive Breaks in Service,
and (ii) the employee's consecutive Breaks in
Service equal or exceed the Member's Service prior
to the commencement of his consecutive Breaks in
Service. The change to five (5) consecutive Breaks
in Service effective January 1, 1985, shall not
apply to a series of consecutive Breaks in Service
in progress on January 1, 1985, if the rule
effective prior to January 1, 1985, has already
caused Service prior to the Breaks in Service to
be disregarded immediately prior to January 1,
1985.
2.16(e) Notwithstanding the above, Credited Service
shall not include any periods of employment
for which a lump sum settlement was made (and
not repaid) pursuant to Section 5.5.
Section 2.17 Death Benefit shall mean any benefit paid to
a Beneficiary or Contingent Beneficiary or other person at the
death of a Member, Disabled Member, or Retired Member, as
provided under the terms of the Plan.
Section 2.18 Defined Benefit Plan shall mean a plan
established and qualified under Code Section 401 or 403, except
to the extent it is or is treated as a Defined Contribution Plan.
Section 2.19 Defined Contribution Plan shall mean a plan
which is established and qualified under Code Section 401 or 403,
which provides for an individual account for each member therein
and for benefits based solely on the amount contributed to each
member's account and any income and expenses or gains and losses
(both realized and unrealized) which may be allocated to such
account.
Section 2.20 Disability Payment shall mean the Monthly
Retirement Income due a Disabled Member.
Section 2.21 Disability Retirement Date shall mean, in the
case of a Member who had been credited with five (5) or more
years of Service, the first day of the month coincident with or
immediately following the date on which a Member becomes eligible
for (and elects) immediate Disability Payments hereunder.
Section 2.22 Disabled Member shall mean any Member who is
Totally and Permanently Disabled.
Section 2.23 Early Retirement Age shall mean, except as
provided in Appendix B, the date on which a Member reaches
Attained Age fifty-five (55).
Section 2.24 Early Retirement Date shall mean, except as
provided in Appendix B, in the case of each Member who has
reached his Early Retirement Age and who has been credited with
at least five (5) years of Service, the first day of the month
coincident with or immediately following the later of (a) the
date such Member shall leave the employ of the Employer in
accordance with Section 4.5 hereof, or (b) the date the Member
directs in writing shall be his Early Retirement Date.
Section 2.25 Effective Date shall mean January 1, 1945,
the effective date of the Original Plan. The effective date of
this amended and restated Plan is May 1, 1996, except as
otherwise provided.
Section 2.26 Employee means any person employed by the
Employer, subject to the following:
(1) The term "Employee" shall exclude any person who
is a Leased Employee.
(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 2.27 Employer shall mean Old National Bancorp its
successors and assigns, and any subsidiary or affiliated
companies authorized by the Board of Directors of Old National
Bancorp to participate in this Plan with respect to their
employees, and subject to the provisions of Article 15, any
corporation into which an Employer may be merged or consolidated
or to which all or substantially all of its assets may be
transferred.
Section 2.28 Entrance Date mean the effective date of an
Employers adoption of the Plan as a Participating Employer.
Section 2.29 Highly Compensated Employees will be
determined in accordance with the following:
2.29(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;
(2) received compensation from the Company in
excess of $75,000 (or such higher amount as
may be provided under Code Section 414(q));
(3) received compensation from the Company in
excess of $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. If no
officer is described above, then the highest
paid officer shall be treated as described in
this item (4).
2.29(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 employees and meets the criteria
of clauses (2), (3) or (4) of Subsection (a) of
this Section.
2.29(c) If the Highly Compensated Employee is a five
percent (5%) owner or one of the ten (10) most
highly compensated employees, then the
compensation and contributions of employees who
are spouses, lineal descendants, ascendants or
spouses of lineal descendants or ascendants of
such Highly Compensated Employees shall be
attributed to the Highly Compensated Employee and
the employees who are such relatives shall not be
considered as separate employees. In the event
that family aggregation is required, the
limitation on compensation pursuant to Code
Section 401(a)(17) will be allocated among family
members by multiplying the limitation by a
fraction, the numerator of which is the individual
family member's compensation and the denominator
of which is the total compensation of all members
of the family group or in such other manner as
provided by regulation and pronouncements of the
Internal Revenue Service. In the case of family
aggregation for purposes of Code Section
401(a)(17), the term "family member" shall include
only the spouse of the Highly Compensated Employee
and any lineal descendants of the Highly
Compensated Employee who have not attained age
nineteen (19) before the close of the Plan Year.
2.29(d) 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).
2.29(e) 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.
2.29(f) A former employee upon reemployment 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).
2.29(g) Except as otherwise provided in this Section, the
term "look back year" shall mean the twelve (12)
month period immediately preceding the
determination year.
2.29(h) Except as otherwise provided in this Section the
term "determination year" shall mean the current
plan year.
2.29(i) 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.
2.29(j) 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.
2.29(k) 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.
2.29(l) The determination of Highly Compensated
Employees shall be governed by Code Section
414(q) and the regulations issued thereunder.
Section 2.30 Hour of Service shall mean any hour for which
an employee is paid or entitled to payment by the Company during
the Plan Year or other applicable computation period (i) for the
performance of duties for the Company; (ii) on account of a
period of time during which no duties are performed, regardless
of whether the employment relationship has terminated; and (iii)
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
(i) or item (ii) preceding.
2.30(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
paid to employees in his job classification,
or, if no employees in his job classification
have an hourly rate of compensation, the
minimum non-training wage in effect under
Section 6(a)(1) of the Fair Labor Standards
Act of 1938, as amended.
2.30(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.
2.30(c) No employee shall be credited with more than five
hundred and 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.
2.30(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 (i)
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 (ii)
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 period 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
(iii) 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 (l) Plan Year or other applicable
computation period may be credited to the
first or the second computation period,
provided such crediting is done on a
reasonable and nondiscriminatory basis.
2.30(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 2.31 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
applicable Plan Year or any of the four (4) preceding Plan Years
is defined in Subsection (a) through (d) of this Section.
2.31(a) An officer of the Company having annual
compensation 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;
2.31(b) One (1) of the ten (10) employees having annual
compensation from the Company 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;
2.31(c) A five percent (5%) owner of the Employer; or
2.31(d) A one percent (1%) owner of the Employer having
annual compensation from the Company for a Plan
Year of more than one hundred and fifty thousand
dollars ($150,000).
2.31(e) For purposes of this Section, compensation has the
same meaning as under Code Section 415(c)(3), and
in the case of employer contributions made
pursuant to a salary reduction agreement, without
regard to Code Section 403(b).
2.31(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 2.32 Late Retirement Date shall mean the first day
of any month subsequent to the Member's Normal Retirement Date
coincident with or immediately following the day the Member
terminates employment with his Employer for any reason other than
death.
Section 2.33 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. A Leased
Employee shall be treated as employed by the Employer for
purposes of calculating Service even if not eligible for
participation in the Plan.
Section 2.34 Limitation Year shall mean the twelve (12)
month period beginning on January 1st and ending on December
31st.
Section 2.35 Member shall mean any Employee of the
Employer who has become a Member as provided in Article 3 hereof.
Section 2.36 Merged Plan shall mean a plan maintained by a
Participating Employer that is merged into this Plan.
Section 2.37 Monthly Retirement Income shall mean a
monthly income due a Retired Member which shall commence as of
his Disability, Early, Normal or Late Retirement Date, or the
commencement date of benefit payments under Section 5.1 hereof,
and continue for the period indicated in Article 4 hereof.
Section 2.38 Normal Retirement Age shall mean the later of
the date on which a Member reaches Attained Age sixty-five (65)
or the fifth (5th) anniversary of the date the Member commenced
participation in the Plan.
Section 2.39 Normal Retirement Date shall mean, except as
hereinafter provided, the first day of the month coincident with
or immediately following a Member's Normal Retirement Age.
Section 2.40 Original Plan shall mean the Old National
Bank Retirement Plan as amended immediately prior to its
restatement.
Section 2.41 Participating Employer means an Employer,
which is acquired by the Sponsoring Employer or subsidiary of
the Sponsoring Employer which adopts the Plan with the Sponsoring
Employer's consent. An acquired entity shall become a
Participating Employer as of January 1 coincident with or next
following the acquisition date. For purposes of this Section,
the term "acquired entity" means an entity in which the Company
acquires at least eighty percent (80%), directly or indirectly,
of the outstanding stock or assets, and the term "acquisition
date" shall mean the date on which the entity becomes an acquired
entity as provided in the definitive agreement between the
Company and the acquired entity. The Participating Employers are
listed on Appendix A which can be updated from time to time by
the President or Vice President of the Sponsoring Employer
without action of the Board.
Section 2.42 Participation Date means the first day of
each calendar month.
Section 2.43 Permissive Aggregation Group shall mean the
Required Aggregation Group and any other plan or plans of the
Company that are not required to be included in the Required
Aggregation Group, but which, if treated as being part of such
group, would not cause such group to fail to meet the
requirements of Code Sections 401(a)(4) and 410.
Section 2.44 Plan Year shall mean the twelve (12) month
period beginning on January 1st and ending on December 31st.
Section 2.45 Prior Plan shall mean the Old National
Bancorp Employees' Retirement Plan as amended immediately prior
to this restatement.
Section 2.46 Required Aggregation Group shall mean (1)
each plan of the Company in which a Key Employee is a member; (2)
each other 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 plan maintained by the Company within the five
(5) year period ending on the determination date for the Plan
Year in question which, but for the fact that it terminated,
would meet the criteria of (1) or (2) preceding.
Section 2.47 Retired Member shall mean any Member of the
Plan who has qualified for retirement and who is receiving a
Monthly Retirement Income by direction of the Retirement
Committee.
Section 2.48 Retirement Committee shall mean the
Retirement Committee as provided in Article 6 hereof.
Section 2.49 Service shall mean, as of any date, the sum
of Service under Subsection (a) and (b) of this Section, subject
to the terms of Subsection (c) and (d) of this Section.
2.49(a) Service prior to January 1, 1976, shall be a
Member's period of employment with the Company
from his last hiring date prior to January 1, 1976
through December 31, 1975.
2.49(b) On and after January 1, 1976, shall be the total
number of Plan Years, during which the employee
has at least one thousand (1,000) Hours of Service
for the Company.
2.49(c) Effective January 1, 1993, in the case of an
employee who was a participant under a prior
Defined Benefit Plan of a Participating Employer,
Service prior to the first day of the Plan Year in
which the Employer's Entrance Date occurs shall be
determined pursuant to the terms of the prior plan
and Service on and after the first day of the Plan
Year in which the Employer's Entrance Date occurs
shall be determined pursuant to the terms of this
Plan.
2.49(d) Notwithstanding the above, if an employee incurs
one (1) or more consecutive Breaks in Service
(five (5) or more consecutive Breaks in Service on
and after January 1, 1985), his Credited Service
shall not include any periods of employment prior
to his consecutive Breaks in Service if (i) said
employee's Employer-provided benefit pursuant to
Section 5.1 was zero immediately prior to the
commencement of his consecutive Breaks in Service,
and (ii) the employee's consecutive Breaks in
Service equal or exceed the Member's Service prior
to the commencement of his consecutive Breaks in
Service. The change to five (5) consecutive Breaks
in Service effective January 1, 1985, shall not
apply to a series of consecutive Breaks in Service
in progress on January 1, 1985, if the rule
effective prior to January 1, 1985, has already
caused Service prior to the Breaks in Service to
be disregarded immediately prior to January 1,
1985.
Section 2.50 Sponsoring Employer shall mean Old National
Bancorp.
Section 2.51 Spouse shall mean the legally married spouse
of the Member at the earlier of the Member's date of death or the
date benefits commence to the Member under the Plan.
Section 2.52 Statutory Interest Rate shall mean an
interest rate equal to (i) one hundred and twenty percent (120%)
of the Federal mid-term rate as in effect under Section 1274 of
the Code for the first month of the Plan Year for each Plan Year
through the date on which the determination is being made,
compounded annually and (ii) the rate specified for determining
Actuarial Equivalent for the period beginning with the
determination date and ending on the date in which the Member
attains Normal Retirement Age or his date of severance of
employment, if later, compounded annually.
Section 2.53 Top Heavy Plan shall mean, for Plan Years
beginning after December 31, 1983, any plan under which, as of
any determination date, the present value of the cumulative
accrued benefits under the plan for Key Employees exceeds sixty
percent (60%) of the present value of the cumulative accrued
benefits under the Plan for all employees. For purposes of this
definition, the Subsections of this Section shall apply. The
accrued benefit of any employee other than a Key Employee shall
be determined under the method which is used for accrual purposes
for all plans of the Company, or, if there is no such method, as
if such benefit accrued not more rapidly than the slowest accrual
rate permitted under the fractional accrual rule of Code Section
411(b)(1)(C).
2.53(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 actuarial
assumptions adopted by the Employer for purposes
of determining if this Plan is a Top Heavy 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 is a part of a
Required Aggregation Group.
2.53(b) A plan shall be considered a Top Heavy Plan for
any Plan Year if, on the last day of the preceding
Plan Year (the determination date), the above
criteria were met. For the first Plan Year that
the Plan shall be in effect, the determination of
whether said Plan is a Top Heavy Plan shall be
made as of the last day of such Plan Year.
2.53(c) Each 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.
2.53(d) With respect to a Member or former Member who has
not performed any service for the Employer at any
time during the five (5) year period ending on the
determination date, and with respect to a Member
or former Member who 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 Member or former Member shall not
be taken into account for the purposes of
determining whether this Plan is a Top Heavy Plan.
2.53(e) 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 2.54 Total and Permanent Disability or Totally and
Permanently Disabled shall mean a physical or mental condition
which, in the judgement of the Committee based on a medical
examination by a doctor or clinic appointed by the Committee,
totally and permanently prevents the Member with five (5) or more
years of Service from engaging in any occupation or employment
for remuneration or profits. Total and Permanent Disability
shall exclude disabilities arising from:
2.54(a) Chronic or excessive use of intoxicants, drugs or
narcotics; or
2.54(b) Intentionally self-inflicted injury or
intentionally self-induced sickness; or
2.54(c) A proven unlawful act or enterprise on the part of
the Member; or
2.54(d) Service in any police or other armed branch or
department of any nation, state or political
subdivision thereof; or
2.54(e) Service in the armed forces of any country.
Section 2.55 Trust Agreement shall mean the agreement
entered into between the Sponsoring Employer and the Trustee
providing for the funding of benefits under this Plan.
Section 2.56 Trustee shall mean the Trustee under the
Trust Agreement.
Section 2.57 Trust Fund shall mean all cash, securities,
life insurance and/or annuity contracts, real estate, or any
other property held by the Trustee pursuant to the terms of the
Trust Agreement, together with income thereon.
Section 2.58 Construction
The words and phrases defined in this Article when used in
this Plan with an initial capital letter 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 3
MEMBERSHIP IN THE RETIREMENT PLAN
Section 3.1 Eligibility Requirements
Each Employee who was covered under the Prior Plan as
of April 30, 1996, shall remain eligible to be covered hereunder
as of May 1, 1996, without further action on his part.
Thereafter, an Employee who is not yet a Member shall become a
Member hereunder on the Participation Date coincident with or
next following the completion of a twelve (12) consecutive month
period during with he is 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. A terminated
Member who later resumes his employment with the Employer shall
become a Member on his return to the status of an Employee. Each
employee shall be furnished a summary of the Plan when he becomes
a Member.
In the case of an Employee who was employed by a
Participating Employer, Hours of Service with the Participating
Employer prior to the Participating Employer's Entrance Date
shall be counted as Hours of Service for purposes of the
eligibility requirements under this Section. Notwithstanding the
foregoing, no Employee of a Participating Employer that is
acquired by the Sponsoring Employer shall become a Member prior
to the January 1st coincident with or next following the
Participating Employer's Entrance Date.
Section 3.2 Plan Binding
Upon becoming a Member, a Member 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.
ARTICLE 4
MONTHLY RETIREMENT INCOME
Section 4.1 General
Monthly Retirement Income payable under the terms of this
Article shall be subject to the restrictions and limitations of
Article 9, Article 11, Article 15, Article 16 and elsewhere in
this Plan and shall be paid by the Trustee only by or at the
direction of the Retirement Committee. Neither the Employer, the
Retirement Committee nor the Trustee shall be under any
obligation to pay any Monthly Retirement Income other than from
the Trust Fund.
Section 4.2 Benefit Forms
The basic form of Monthly Retirement Income (to which the
formula indicated in Section 4.3 applies) shall be a monthly
income commencing on the Member's Disability, Early, Normal or
Late Retirement Date or on the date specified in Section 5.1 and
payable in the form specified in Subsection (a) of this Section.
At any time during the election period (which shall mean the
period beginning ninety (90) days immediately prior to the date
upon which Monthly Retirement Income is to commence under this
Section or under Section 5.1 and ending on that date), the Member
may elect in a written application provided by the Retirement
Committee, and with Spouse consent, if applicable, to receive his
Monthly Retirement Income in one of the alternative forms listed
below, which shall each be the Actuarial Equivalent of the
Monthly Retirement Income payable under the basic form, except as
otherwise provided. Any election under this Section may be
revoked and a new election made at any time prior to the
commencement of benefits. Once benefits have commenced, no
further revocation or change shall be permitted.
4.2(a) Basic Form A monthly income payable for the
Member's lifetime equal to his benefit under
Section 4.3.
4.2(b) Survivor Annuity Form A monthly income
payable for the lifetime of the Member and
continuing thereafter, in an amount one-half
(1/2), two-thirds (2/3), three-fourths (3/4),
or equally as great, as elected by the
Member, to a Beneficiary designated in
writing by the Member. Should the
Beneficiary named by the Member die prior to
the Member's Disability, Early, Normal or
Late Retirement Date or prior to the date
specified in Section 5.1, the election shall
be void and Monthly Retirement Income shall
be paid under the basic form unless the
Member makes a valid election of another
alternate form of payment before his benefit
begins. Should the Beneficiary die after
Monthly Retirement Income has commenced to
the Member, no alternate Beneficiary can be
named.
4.2(c) Qualified Joint and Survivor Annuity Form An
immediate annuity in the form of a monthly
income payable for the lifetime of the
Member, with one-half (1/2) of such amount
continuing to the Member's Spouse, after the
Member's death, for the lifetime of the
Spouse.
(1) No less than thirty (30) days and no more
than ninety (90) days prior to the annuity
starting date (or such other time as provided
by regulations or other pronouncements), each
Member shall be furnished an explanation of
the terms and conditions of the qualified
joint and survivor annuity (which shall be a
benefit payable under the basic form if the
Member is not married), as specifically
applicable to said Member (and his Spouse, if
any); an explanation of his right to make an
election not to have his benefit distributed
in the form of a qualified joint and survivor
annuity; an explanation of the rights of his
Spouse, if any, to consent to such election;
and an explanation of the financial effect
upon the Member's benefit of making such
election. Such explanation shall be written
in a manner intended to be understood by the
Member and his Spouse, if any. In the event
a Member requests additional information, as
permitted under the terms of the notice,
commencement of benefits for any purpose
hereunder shall not begin until at least
ninety (90) days following the Member's
receipt of such additional information unless
the Member specifically elects earlier
commencement and he is otherwise entitled to
such commencement under the terms of the
Plan. Any election to waive the form of
payment in this Subsection and to have
benefits paid in an alternate form permitted
by this Section must be in writing. The
Member's election, and the Beneficiary named
in the election, must be consented to by the
Member's Spouse unless the Member elects, as
an alternative, the form of payment described
in Section 4.2(b) with his Spouse as
Beneficiary. The Spouse's consent must be
witnessed by a Plan representative or by a
notary public and, once given, Spouse consent
may not be revoked. If it is established to
the satisfaction of a Plan representative
that Spouse consent cannot be obtained
because there is no Spouse or the Spouse
cannot be located, Spouse consent will not be
required.
(2) In the event that (i) no election is
effectively made and (ii) it is determined
that the Member is married on the date at
which his Monthly Retirement Income is to
commence, the manner of distribution shall be
as provided in this Subsection. In all other
instances where no election is effectively
made, benefits shall be paid as provided in
Subsection 4.2(a).
4.2(d) Lump Sum Form A lump sum payment to the
Member, but only at his actual date of
retirement equal to the Actuarial Equivalent
of the Monthly Retirement Income payable
under the basic form.
4.2(e) Merged Plans. Unless otherwise provided in
Appendix C, a Member who participated in a
Merged Plan of a Participating Employer may
elect the optional forms provided under said
Merged Plan in addition to the optional forms
otherwise provided for pursuant to this
Section, but only as to the Member's accrued
benefit under the Merged Plan as of the date
of the merger.
4.2(f) Incidental Death Benefit If the Member's
designated Beneficiary is other than his
Spouse, the form of payment must comply with
the incidental death benefit requirements of
Code Section 401(a)(9) and the regulations
thereunder.
Section 4.3 Normal Retirement
When a Member lives to his Normal Retirement Date and
remains in the employ of the Employer until such date, he shall
be entitled to retire and to receive a Monthly Retirement Income
in an amount calculated by the Actuary and certified to the
Trustee by the Retirement Committee. The amount of the Member's
Monthly Retirement Income under the basic form and payable on his
Normal Retirement Date shall be the amounts provided in
Subsection (a) this Section, plus the amounts provided in
Subsection (b) of this Section, if applicable, but in no event
less than the amount determined under Appendix D, if applicable.
4.3(a) (i) One and forty-five hundredths of one
percent (1.45%) of Average Monthly Earnings
multiplied by Credited Service not in excess
of ten (10) years of Credited Service, plus
(ii) One and sixty-five hundredths of one
percent (1.65%) of Average Monthly Earnings
multiplied by Credited Service in excess of
ten (10) years of Credited Service, but not
in excess of twenty (20) years of Credited
Service, plus (iii) One and ninety-five
hundredths of one percent (1.95%) of Average
Monthly Earnings multiplied by Credited
Service in excess of twenty (20) years of
Credited Service, but not in excess of
thirty-five (35) years of Credited Service,
minus (iv) Fifty-nine hundredths of one
percent (.59%) of Average Monthly
Compensation, to a maximum of one hundred
twenty-five percent (125%) of Covered
Compensation, multiplied by all years of
Credited Service, not to exceed thirty-five
(35) years of Credited Service.
4.3(b) In the case of a Merged Plan, the Member's
accrued benefit under the Merged Plan as of
the Employer's Entrance Date.
Section 4.4 Late Retirement
4.4(a) A Member may remain in the employ of the
Employer after his Normal Retirement Date, in
which event no Monthly Retirement Income
shall be paid until the Member's Late
Retirement Date. Upon the Member's actual
retirement on his Late Retirement Date, the
amount of his Monthly Retirement Income under
the basic form shall be the greater of (i) an
amount computed under Section 4.3 as of his
Late Retirement Date, or (ii) the Monthly
Retirement Income he would have received had
he retired on his Normal Retirement Date,
such amount increased at the rate of three-
fourths of one percent (3/4 of 1%) for each
month between Normal Retirement Date and his
Late Retirement Date.
4.4(b) Notwithstanding anything in this Section to
the contrary, a Member who is employed by the
Employer after his Normal Retirement Date may
elect to commence his Monthly Retirement
Income as of his Normal Retirement Date. The
Monthly Retirement Income under this
Subsection, payable pursuant to the basic
form, shall be an amount computed pursuant to
Section 4.3 as of his Normal Retirement Date.
The Member who makes an election pursuant to
this Subsection shall continue to accrue
benefits for periods of employment after his
Normal Retirement Date. Each year after his
Normal Retirement Date, the Monthly
Retirement Income of a Member who makes an
election under this Subsection shall be
adjusted for additional accruals since the
preceding Plan Year. If a Member who is
employed after his Normal Retirement Date
does not make an election under this
Subsection to commence his Monthly Retirement
Income at his Normal Retirement Date, his
Monthly Retirement Income will not commence
until his Late Retirement Date.
4.4(c) In the case of a Member who (i) participated
in a Merged Plan of a Participating Employer
and (ii) continued his employment past his
normal retirement date under the Merged Plan,
the Monthly Retirement Income at his Late
Retirement Date shall not be less than that
determined under such Merged Plan as of the
Entrance Date of such Participating Employer.
Section 4.5 Early Retirement
4.5(a) Upon written application, a Member may retire
as of an Early Retirement Date. Commencing
at his Early Retirement Date, such Member
shall be entitled to a Monthly Retirement
Income which shall be equal to his Accrued
Benefit as of his Early Retirement Date
multiplied by a factor determined pursuant to
the following table based on his years and
months of age as of his Early Retirement
Date, interpolated for months.
Age at Early
Retirement Date Factor
65 1.0000
64 .9230
63 .8461
62 .7692
61 .7307
60 .6923
59 .6538
58 .6153
57 .5769
56 .5292
55 .4861
4.5(b) In the case of a Member (i) who participated
in a Merged Plan, (ii) who has reached his
early retirement date under the Merged Plan
as of the day preceding the Participating
Employer's Entrance Date (iii) and who was an
active participant in the Merged Plan as of
the day preceding the Participating
Employer's Entrance Date, the benefit to
which he is entitled to pursuant to this
Section shall not be less than his accrued
benefit under the Merged plan as of the day
preceding the Participating Employer's
Entrance Date, reduced actuarially as
provided by the terms of the Merged Plan in
effect on the day preceding the Participating
Employers' Entrance Date unless otherwise
provided in Appendix E.
4.5(c) A Member who terminates employment for any
reason other than Total and Permanent
Disability after meeting the requirements of
this Section and before reaching his Normal
Retirement Date will be considered to have
retired under this Section.
Section 4.6 Disability Retirement
4.6(a) When a Member shall be determined to be
Totally and Permanently Disabled, the
Retirement Committee shall certify such fact
to the Trustee and the Disabled Member shall
be retired as of his Disability Retirement
Date. In such event, the Disabled Member's
benefits hereunder shall be deferred until
the later of (i) his Normal Retirement Date,
or (ii) the date he is no longer entitled to
benefits under a long-term disability program
sponsored by the Employer, in which case such
period of deferral shall be included in both
his Service and his Credited Service for
purposes of calculating his benefits
hereunder. His earnings for such period
shall be conclusively deemed to be equal to
his Monthly Earnings in effect when the
Member last received compensation from the
Employer. The Member's Covered Compensation
immediately prior to his Disability
Retirement Date shall be deemed to continue
during the period the Member's benefits are
deferred hereunder. If, during the period of
deferral of Disability Payments hereunder,
such Disabled Member was not also receiving
Social Security disability benefits (except
during the period such Member's application
for Social Security disability benefits was
pending and during the waiting period
required under the Social Security Act for
disability benefits thereunder), such
additional period shall not be included in
his Service and Credited Service.
4.6(b) Notwithstanding the above, upon becoming
Totally and Permanently Disabled, a Disabled
Member may elect to receive immediate
commencement of Disability Payments hereunder
as of his Disability Retirement Date,
provided he is not receiving benefits under a
long-term disability program sponsored by the
Employer. If such election is made, the
Disabled Member shall be entitled to a
reduced Monthly Retirement Income, commencing
with his Disability Retirement Date and
payable under the basic method, in an amount
equal to his Accrued Benefit as of such date
(including credit for any Service and
Credited Service provided above), reduced in
accordance with the factors in Section 4.5
for each month by which the commencement date
of his Disability Payments precedes the
Member's Normal Retirement Date for periods
between the Member's Early Retirement Age and
his Normal Retirement Date and based on the
Actuarial Equivalent factors for periods
prior to the Member's Early Retirement Age.
4.6(c) If such Disabled Member recovers prior to his
Normal Retirement Date, his Disability
Payments, if any, shall be immediately
discontinued. If he returns to the employ of
the Employer within a reasonable period (as
determined conclusively by the Retirement
Committee under uniform standards
consistently applied), he shall be given
credit for prior Service and Credited
Service, including his period of disablement.
If he does not return to the Employer's
employ within a reasonable period of time, he
shall be deemed terminated as of his date of
recovery, and the benefits, if any, to which
he is entitled shall be calculated pursuant
to Section 5.1 based on his Attained Age and
Credited Service as of his date of
disablement. In either event the benefits,
if any, which are eventually payable shall be
reduced by the Actuarial Equivalent of the
Disability Payments actually received
hereunder.
Section 4.7 Proof of Entitlement
Each Member entitled to receive benefits under this Article
shall complete such forms and furnish such proofs as shall be
required by the Retirement Committee.
Section 4.8 Reemployment
Notwithstanding anything in this Plan to the contrary, if a
Member who has retired in accordance with Section 4.3, Section
4.4 or Section 4.5 is reemployed by the Employer, his Monthly
Retirement Income shall continue in pay status during the period
of his reemployment and he shall continue to accrue benefits
under the Plan. Upon his subsequent retirement his Monthly
Retirement Income shall be reduced by the Actuarial Equivalent of
the Monthly Retirement Income he received prior to subsequent
retirement. However, the Monthly Retirement Income of a Member
upon his subsequent retirement shall not be less than the Monthly
Retirement Income the Member was receiving prior to his
subsequent retirement. Death Benefit protection, if any, during
reemployment and thereafter shall be in accordance with the form
of payment of Monthly Retirement Income in effect for him prior
to his reemployment.
Section 4.9 Non-forfeitable Right at Normal Retirement
A Member who reaches Normal Retirement Age while in the
employ of the Employer shall have a non-forfeitable right, upon
his actual retirement, to receive a Monthly Retirement Income
determined in accordance with Section 4.3 or Section 4.4.
ARTICLE 5
OTHER BENEFITS
Section 5.1 Other Terminations of Employment
5.1(a) When the employment of a Member by the
Employer shall be terminated for any reason
other than death or retirement (including
Early, Normal, Late and Disability
Retirement), either voluntarily or
involuntarily, such Member shall cease to be
an active Member of the Plan. Subject to the
limitations and restrictions of Article 9,
Article 11 Article 15, Article 16 and
elsewhere in this Plan, a Member shall be
entitled at Normal Retirement Date to receive
a Monthly Retirement Income equal to a
percentage of his Accrued Benefit determined
in accordance with the schedule set forth in
Subsection (b) of this Section.
5.1(b) Except as otherwise provided in Subsection
(d) of this Section, the schedule referred to
in Subsection (a) of this Section shall be as
follows:
Percentage of
Years of Service Accrued
Benefits
Less than 5 years 0%
5 years of more 100%
5.1(c) Except as otherwise provided in Appendix F,
in the case of a Member (i) who participated
in a Merged Plan, (ii) who participated in
the Merged Plan as of the day preceding the
Participating Employer's Entrance Date, and
(iii) who had three years of vesting service
under the prior plan, the Member's
nonforfeitable percentage will be determined
under the vesting schedule in Subsection (b)
of this Section or under the vesting schedule
under the prior plan, whichever is greater.
5.1(d) In lieu of the Monthly Retirement Income
payable at Normal Retirement Date provided
above, a terminated Member who has become
eligible for reduced federal Social Security
old age benefits shall be entitled at any
time after he has become eligible for reduced
federal Social Security old age benefits to
elect the immediate commencement of benefits
hereunder. Alternatively, in lieu of
receiving the Monthly Retirement Income
payable at the Normal Retirement Date
provided above, a terminated Member who has
been credited with five (5) years or more of
Service at the time of termination of
employment shall be entitled at any time
after reaching Attained Age fifty-five (55)
to elect the immediate commencement of
benefits hereunder. Commencing on the first
day of the month coincident with or
immediately following either election, the
terminated Member shall be entitled to a
reduced Monthly Retirement Income which shall
be equal to his Accrued Benefit under this
Section as of his date of termination, such
amount reduced as provided in Section 4.5 for
the months by which the commencement date of
his benefits under this Section precedes his
Normal Retirement Date. Subject to the
provisions of Section 4.2, at any time prior
to the commencement of his Monthly Retirement
Income, a terminated Member may elect to
receive his benefits in an Actuarially
Equivalent alternate form described in
Section 4.2.
Section 5.2 Death Benefits
5.2(a) If an active Member or a former Member
(including a Disabled, terminated or Retired
Member) with a vested Accrued Benefit should
die prior to commencement of benefits, his
Beneficiary shall be entitled to a Death
Benefit. Such Death Benefit shall be a
monthly income, payable for the life of the
Beneficiary, equal to the Actuarial
Equivalent of the Member's Accrued Benefit
determined as of the first day of the month
coincident with or immediately following his
date of death. The Death Benefit payable
pursuant to this Subsection shall commence as
of the first day of the month coincident with
or otherwise immediately following the
Member's date of death. In lieu of this
monthly benefit and upon the election of the
Beneficiary, a single sum settlement, which
shall be the Actuarial Equivalent of the
annuity benefit, shall be paid.
5.2(b) The Death Benefit payable to a Spouse
pursuant to Subsection (a) of this Section
shall not be less than the benefit that would
have been payable to the Spouse if the Member
had retired or terminated pursuant to the
appropriate Section of the Plan on the first
day of the month coincident with or
immediately following his date of death and
election to receive his Monthly Retirement
Income pursuant to Subsection 4.2(c).
5.2(c) In the event of the death of a former Member
after termination of employment due to
retirement, a death benefit shall be payable
to his Beneficiary in an amount equal to One
Thousand Five Hundred Dollars ($1,500).
However, in the case of an individual who was
a participant in the Peoples National Bank of
Lawrenceville Retirement Plan and who
subsequently terminated employment due to
retirement, upon the death of such Member, a
death benefit shall be payable to his
Beneficiary in an amount equal to Two
Thousand Dollars ($2,000). Either benefit
shall be payable in the form of a single sum
settlement.
Section 5.3 Death of Retired or Disabled Member
When a Retired or Disabled Member who is receiving benefits
hereunder shall die, his Beneficiary (or Spouse, if Subsection
4.2(c) applies) shall be entitled to any benefits due under the
basic or elected alternate form of payment of his Monthly
Retirement Income. Should the period of guaranteed payments be
exhausted at the death of the Retired or Disabled Member, no
Death Benefit shall be payable.
Section 5.4 Payment to Contingent Beneficiaries
If a Death Benefit (other than one arising under Subsection
4.2(c), Subsection 4.2(b) or Section 5.2(a) to a Spouse) is
payable under this Article 5, and the designated Beneficiary has
pre-deceased the deceased Member, the Death Benefit shall be paid
to the Contingent Beneficiary. If neither the Beneficiary nor
the Contingent Beneficiary is living at the time of the death of
the Member, the Retirement Committee shall direct the Trustee to
pay the Death Benefit in a single sum to the estate of the
deceased Member. If the Beneficiary or Contingent Beneficiary is
living at the death of the Member, but such person dies prior to
receiving the entire Death Benefit, the remaining portion of such
Death Benefit shall be paid in a single sum to the estate of such
deceased Beneficiary or Contingent Beneficiary.
Section 5.5 Lump Sum Distributions
5.5(a) If (i) the Actuarial Equivalent of a
terminated or retired Member's vested Accrued
Benefit or the Actuarial Equivalent of a
Death Benefit payable to a Beneficiary is
less than three thousand five hundred dollars
($3,500), or (ii) after reviewing the
explanation stated in Subsection 4.2(c) the
Member agrees in writing within ninety (90)
days following termination of employment
(with Spouse consent, if applicable, obtained
in the same form and manner as in Subsection
4.2(c)), the Retirement Committee shall
direct that the Actuarial Equivalent of his
vested Accrued Benefit or Death Benefit be
paid within a reasonable time after
termination of employment in a lump sum to
such terminated Member or Beneficiary. If a
Member terminates with a zero percent (0%)
vested percentage, he shall be deemed to
receive a distribution pursuant to this
Section as of the date of his termination.
If a Member receives or is deemed to receive
a distribution pursuant to this Section, the
non-vested portion of his Accrued Benefit
shall be forfeited as of the date he receives
or is deemed to receive the distribution. If
the vested Accrued Benefit or Death Benefit
has been more than three thousand five
hundred dollars ($3,500) at the time of any
distribution, the value of the vested Accrued
Benefit or Death Benefit 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.
5.5(b) If such terminated Member is subsequently
reemployed and again becomes a Member of this
Plan, the calculation of his Accrued Benefit
shall include any periods of employment prior
to his reemployment date only if the amount
of such payment, plus interest, is repaid to
the Trust Fund no later than the earlier of:
(1) five (5) years after the first date on which
the Member is subsequently reemployed by the
Employer, or
(2) the date the Member incurs five (5)
consecutive Breaks in Service commencing
after the date of the distribution.
5.5(c) The interest rate applicable to amounts being
repaid shall be five percent (5%) per annum
between the date of payment and the earlier
of date of repayment or January 1st, 1988,
and the Statutory Interest Rate on and after
January 1st, 1988. The interest rate
applicable to amounts being repaid shall
automatically be adjusted to reflect any
regulations issued by the Secretary of the
Treasury changing the interest rate for
mandatory contributions under the Employee
Retirement Income Security Act of 1974.
5.5(d) If the amount distributed (plus interest) is
repaid, the Member's Accrued Benefit shall be
based on the periods of employment as
specified hereinabove. If such terminated
Member is subsequently reemployed and again
becomes a Member of this Plan after incurring
five (5) consecutive Breaks in Service
commencing after the date of the
distribution, he shall not be entitled to
repay, and the calculation of his Accrued
Benefit shall not include any periods of
employment prior to his reemployment date.
5.5(e) A Member who is entitled to receive a lump
sum distribution in excess of three thousand
five hundred dollars ($3,500) but is not
entitled to the immediate commencement of
Monthly Retirement Income under any other
section of this Plan shall be entitled to a
Monthly Retirement Income payable in the form
of a qualified joint and survivor annuity as
defined in Section 4.2(c) with monthly
payments beginning on the first day of the
month in which the lump sum distribution
would otherwise have been made. The
Actuarial Equivalent of such qualified joint
and survivor annuity shall be equal to the
lump sum distribution otherwise payable.
Section 5.6 Benefit Commencement Limitations
Unless the Member otherwise elects, any payment of benefits
to the Member shall begin not later than sixty (60) days after
the close of the Plan Year in which occurs the latest of:
(1) the Member's reaching Attained Age sixty-five
(65);
(2) the tenth (10th) anniversary of the date the
Employee became a Member; and
(3) termination of service of the Member.
Section 5.7 Minimum Distribution Rules
Effective January 1, 1989, the Accrued Benefit of all
Members must commence no later than April 1 following the
calendar year in which such individual attains age seventy and
one-half (70-1/2) (or such other date as regulations or notices
shall provide) 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 a Member
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 must commence no later than 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 Member becomes a
five percent (5%) owner.
Notwithstanding anything in this Plan to the contrary, if a
Member is required to commence benefits pursuant to this Section
while remaining employed by the Employer, he shall continue to
accrue benefits under the Plan. Upon his subsequent retirement,
his Monthly Retirement Income shall be reduced by the Actuarial
Equivalent of the Monthly Retirement Income he received prior to
his subsequent retirement; provided, however, that the reduction
shall not result in a Monthly Retirement Income of less than that
which he received prior to his subsequent retirement.
Section 5.8 Required Distribution Periods
5.8(a) Notwithstanding the forms of payment in Section
4.2, distributions of benefits may only be made
over one of the following periods (or a
combination thereof):
(1) the life of the Member;
(2) the life of the Member and a designated
Beneficiary;
(3) a period certain not extending beyond the
life expectancy of the Member; or
(4) a period certain not extending beyond the
joint and last survivor life expectancy of
the Member and a designated Beneficiary.
5.8(b) Upon the death of the Member, the following
distribution provisions shall take effect:
(1) If the Member dies after distribution of his
interest has commenced, the remaining portion
of such interest will continue to be
distributed at least as rapidly as under the
method of distribution in effect prior to the
Member's death.
(2) If the Member dies before distribution of his
interest commences, the Member's entire
interest will be distributed no later than
five (5) years after the Member's death
except to the extent that an election is made
to receive distributions in accordance with
(A) or (B) below:
(A) If any portion of the Member'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
Member's death.
(B) If the designated Beneficiary is the
Member's surviving Spouse, the date
distributions are required to begin in
accordance with (A) above shall not be
earlier than the date on which the
Member would have attained age seventy
and one-half (70-1/2), and, if the
Spouse dies before payments begin,
subsequent distributions shall be made
as if the Spouse had been the Member.
Section 5.9 Member Directed Rollovers
5.9(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 Article, a distributee may elect, at the time
and in the manner prescribed by the Retirement
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.
5.9(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).
5.9(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.
5.9(d) A direct rollover is a payment by the plan to the
eligible retirement plan specified by the
distributee.<PAGE>
ARTICLE 6
THE RETIREMENT COMMITTEE
Section 6.1 Appointment
The Board of Directors of the Sponsoring Employer shall
appoint three (3) or more persons, who may be an employee or
officer of the Company, to be known as the "Retirement Committee"
to administer the Plan and to keep records of individual Member
benefits. The Sponsoring Employer will notify the Trustee and
the Actuary of the names of the members of the Retirement
Committee and of any changes in membership that may take place
from time to time.
Section 6.2 Term of Appointment
All members of the Retirement Committee shall serve until
their resignation or dismissal by the Board of Directors of the
Sponsoring Employer and vacancies shall be filled in the same
manner as the original appointments. The Board of Directors of
the Sponsoring Employer may dismiss any member of the Retirement
Committee at any time with or without cause. No compensation
shall be paid members of the Retirement Committee from the Trust
Fund for services on such Committee.
Section 6.3 Officers and Actions
Except as otherwise specifically provided in the Plan, every
decision and action of the Retirement Committee shall be valid if
concurred in by a majority of the members then in office, which
concurrence may be had without a formal meeting. The Retirement
Committee shall select a secretary, who may or may not be a
Member of the Plan or a member of the Committee, and any other
officers deemed necessary, and shall adopt rules governing its
procedures not inconsistent herewith. The Retirement Committee
shall keep a permanent record of its meetings and actions.
Section 6.4 Duties
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 Member, Spouse or
Beneficiary; (iii) establishing and reducing to writing and
distributing to any Member 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.
Section 6.5 Claims Procedures
6.5(a) Subject to the limitations of the Plan and of
the Trust Agreement, the Retirement Committee
shall from time to time establish rules for
the transaction of its business and for the
administration of the Plan. Without limiting
the generality of the preceding sentence, it
is specifically provided that the Retirement
Committee shall set forth in writing,
available for inspection by any interested
party, the procedures to be followed in
presenting claims for benefits under the
Plan. The Retirement Committee shall rely on
the records of the Employer, as certified to
it, with respect to any and all factual
matters dealing with the employment of an
Employee or Member. In case of any factual
dispute hereunder, the Retirement Committee
shall resolve such dispute giving due weight
to all evidence available to it. The
Retirement Committee shall interpret the Plan
and shall determine all questions arising in
the administration, interpretation and
application of the Plan. All such
determinations shall be final, conclusive and
binding except to the extent that they are
appealed under the following claims
procedure. In the event that the claim of
any person to all or any part of any payment
or benefit under this Plan shall be denied,
the Retirement Committee shall provide to the
claimant, within ninety (90) days after
receipt of such claim, a written notice
setting forth, in a manner calculated to be
understood by the claimant:
(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 claimant to
perfect the claim and an explanation as to
why such material or information is
necessary; and
(4) an explanation of the Plan's claim procedure.
6.5(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.
6.5(c) Within sixty (60) days after receipt of the
above material, the claimant shall have a
reasonable opportunity to appeal the claim
denial to the Retirement Committee for a full
and fair review. The claimant or his duly
authorized representative may
(1) request a review upon written notice to the
Retirement Committee;
(2) review pertinent documents; and
(3) submit issues and comments in writing.
6.5(d) A decision by the Retirement Committee will
be made not later than sixty (60) days after
receipt of a request for review, unless
special circumstances require an extension of
time for processing, in which event a
decision should be rendered as soon as
possible, but in no event later than one
hundred and twenty (120) days after such
receipt. The Retirement Committee's decision
on review shall be written and shall include
specific reasons for the decision, written in
a manner calculated to be understood by the
claimant, with specific references to the
pertinent Plan provisions on which the
decision is based.
Section 6.6 Direction to Trustee
The secretary of the Retirement Committee shall direct the
Trustee in writing to make payments from the Trust Fund to
Members who qualify for such payments hereunder, as certified to
it by the Actuary. Such written order to the Trustee shall
specify the name of the Member, his address, his Social Security
number, and the amount and frequency of such payments.
Section 6.7 Non-discrimination Provision
The Retirement Committee shall not take action or direct the
Trustee to take any action with respect to any of the benefits
provided hereunder or otherwise in pursuance of the powers
conferred herein upon the Retirement Committee which would be
discriminatory in favor of Members or Employees who are Highly
Compensated Employees or which would result in benefiting one
Member, or group of Members, at the expense of another, or in the
application of different rules to substantially similar sets of
facts.
<PAGE>
Section 6.8 Employment of Agents
The Retirement Committee may employ such counsel,
accountants, and other agents and otherwise delegate its duties
hereunder 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 Retirement Committee in the
administration of the Plan and Trust.
Section 6.9 Indemnification
The Employer shall indemnify and hold the Retirement
Committee, and each of its members, 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,
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.
<PAGE>
ARTICLE 7
CONTRIBUTIONS BY THE EMPLOYER
Section 7.1 Contributions
It is the intention of the Employer, but it does not
guarantee to do so, to deposit with the Trustee from time to time
the funds actuarially necessary to provide the benefits under the
Plan, in a manner consistent with the funding standards mandated
by the Employee Retirement Income Security Act of 1974 and the
applicable regulations issued thereunder.
Section 7.2 Expenses
The Sponsoring Employer will pay, or cause to be paid from
the Trust Fund, all expenses of administering this Plan and the
Trust as may be mutually agreed upon from time to time.
Section 7.3 Actuary
The Actuary shall perform periodically an actuarial
valuation of the Plan and Trust Fund and shall certify to the
Sponsoring Employer in writing the results of the valuation. The
Actuary in his actuarial valuation shall apply all gains arising
in the operation of the Plan, including but not necessarily
limited to gains resulting from terminations of employment of
Members prior to qualifying for benefits hereunder, to reduce the
contributions of the Sponsoring Employer pursuant to the funding
method and actuarial tables then in use.
Section 7.4 Funding Standard Account
The Retirement Committee shall cause the Plan to establish
and maintain a funding standard account so that it may be
determined whether or not the Plan has complied with minimum
funding standards.
ARTICLE 8
THE TRUST FUND AND TRUSTEE
Section 8.1 Trust Agreement
The Sponsoring Employer has entered into a Trust Agreement
with the Trustee to hold the funds necessary to provide the
benefits set forth in this Plan. The Trust Agreement shall be
deemed to form a part of the Plan and all rights of Members or
others under this Plan shall be subject to the provisions of the
Trust Agreement to the extent such provisions are not
contradicted by specific provisions of this Plan. The Trust
Agreement may contain provisions granting authority to the
Sponsoring Employer to settle the accounts of the Trustee on
behalf of all persons having or claiming an interest in the Trust
Fund.
Section 8.2 Trust Fund
The Trust Fund shall be received, held in Trust, and
disbursed by the Trustee in accordance with the provisions of the
Trust Agreement and the provisions as set forth in this Plan. No
part of the Trust Fund shall be used for or diverted to purposes
other than for the exclusive benefit of Members, Retired Members,
Disabled Members, Spouses, and their Beneficiaries or Contingent
Beneficiaries under this Plan, prior to the satisfaction of all
liabilities hereunder with respect to them, except as provided in
Section 7.2, Section 9.6, and except as provided in Section 11.5
herein at the time of termination of the Plan and Trust. No
person shall have any interest in or right to the Trust Fund or
any part thereof, except as specifically provided for in this
Plan and/or the Trust Agreement.
Section 8.3 Appointment of Trustee
The Trustee shall at all times be a banking corporation
organized and doing business under the laws of the United States
of America or any state therein, authorized under such laws to
exercise corporate trust powers and subject to supervision or
examination by Federal or State authority. The Board of
Directors of the Sponsoring Employer may remove the Trustee at
any time upon the notice required by the terms of the Trust
Agreement and, upon such removal or upon the resignation of the
Trustee, the Board of Directors of the Sponsoring Employer shall
designate and appoint a successor Trustee.
Section 8.4 Powers of Trustee
The Trustee shall have such powers to purchase insurance on
the lives of Members, and hold, invest, reinvest, control, and
disburse funds as at that time shall be set forth in the Trust
Agreement.
ARTICLE 9
RESERVATION OF AND LIMITATIONS ON RIGHTS
Section 9.1 Benefits
Although it is the intention of the Employer that this Plan
shall be continued and its contributions made regularly each
year, this Plan is entirely voluntary on the part of the Employer
and the continuance of the Plan and the payments thereunder are
not assumed as a contractual obligation of the Employer. The
Employer does not guarantee or promise to pay or cause to be paid
any of the benefits provided by this Plan.
Section 9.2 Contributions
The Employer specifically reserves the right, in its sole
and uncontrolled discretion and by official and authorized act,
to modify, suspend, in whole or in part, at any time or from time
to time, and for any period or periods, or to discontinue at any
time, the contributions specified in Article 7 of this Plan.
Section 9.3 Members' Rights
This Plan shall not be deemed to constitute a contract
between the Employer and any Member or to be a consideration or
an inducement for the employment of any Member or employee.
Nothing contained in this Plan shall be deemed to give any Member
or employee the right to be retained in the service of the
Employer or to interfere with the right of the Employer to
discharge any Member or employee at any time regardless of the
effect which such discharge shall have upon him as a Member of
the Plan.
Section 9.4 Benefit Offset
If any Member is, or becomes, or upon proper application
would become, entitled to a pension or other benefits under any
other "qualified" defined benefit pension plan of which his
Employer has borne, or is required to bear, any part of the cost,
the Monthly Retirement Income payable to such Member under the
provisions of this Plan shall be reduced to reflect the value of
such other pension plan to the extent that credit is granted
under both Plans for the same period of Service. The term "other
`qualified' defined benefit pension plan" shall not include any
plan or program under which benefits are provided wholly or in
part by public funds, state or federal, nor shall it include any
"qualified" thrift or profit sharing plan sponsored by the
Employer.
Section 9.5 Spendthrift Clause
None of the benefits under the Plan are subject to the
claims of creditors of Members, Retired Members, Disabled Members
or their beneficiaries and will not be subject to attachment,
garnishment or any other legal process. Neither a Member, a
Retired Member, a Disabled Member nor his beneficiaries may
assign, sell, borrow on or otherwise encumber any of his
beneficial interest in this Trust nor shall any such benefits be
in any manner liable for or subject to the deeds, contracts,
liabilities, engagements, or torts of any Member, Retired Member,
Disabled Member or beneficiary. The preceding two (2) sentences
shall also apply to the creation, assignment, or recognition of a
right to any benefit payable with respect to a Member pursuant to
a domestic relations order, unless such order is determined by
the Retirement Committee to be a qualified domestic relations
order, as defined in Code Section 414(p), or any domestic
relations order entered before January 1, 1985, if payment of
benefits pursuant to the order has commenced prior to such date.
Section 9.6 Return of Contributions
It is intended that this Plan shall be approved and
qualified by the Internal Revenue Service as meeting the
requirements of the Code and regulations issued thereunder with
respect to employees' plans and trusts:
(1) so that contributions so made and the income of the
Trust Fund will not be taxable to Members as income
until received; and
(2) so that the income of the Trust Fund shall be exempt
from federal income tax.
The Employer's contribution under this Plan is conditioned
on it being deductible under Code Section 404. In the event the
Commissioner of Internal Revenue or his delegate rules that a
deduction for all or a part of the Employer's contribution is not
allowed, the Employer will recover, within one (1) year after the
disallowance of such deduction, that portion or all of its
contribution for which no deduction is allowed. The Employer
also reserves the right to recover that portion or all of any
contribution made by a mistake of fact, provided such recovery is
made within one (1) year of the payment of the contribution to
the Trustee.
ARTICLE 10
AMENDMENTS
Section 10.1 Amendment of Plan
The Sponsoring Employer reserves the right, at any time and
from time to time, without consent of Members, active or retired,
Spouses, Beneficiaries, Contingent Beneficiaries or any person or
persons claiming through them, by action of its Board of
Directors, to modify or amend, in whole or in part, any or all of
the provisions of the Plan, including specifically the right to
make any such amendments effective retroactively if necessary to
bring the Plan into conformity with governmental regulations
which must be complied with in order to make the Plan eligible
for tax benefits; provided that no such modification or amendment
shall make it possible for any part of the assets of the Plan to
be used for or diverted to purposes other than for the exclusive
benefit of Members, Disabled Members and Retired Members and
their Beneficiaries, Spouses and Contingent Beneficiaries under
the Plan, prior to the satisfaction of all liabilities with
respect to such Members, Disabled Members and Retired Members and
their Beneficiaries, Spouses, and Contingent Beneficiaries under
the Plan, except as stated in this Plan.
Section 10.2 Limitations on Right to Amend
No amendment to the Plan (including a change in the
actuarial bases for determining optional or early retirement
benefits) shall be effective to the extent that it has the effect
of decreasing a Member's Accrued Benefit. Notwithstanding the
preceding sentence, a Member's Accrued Benefit may be reduced to
the extent permitted under Code Section 412(c)(8). For purposes
of this paragraph, a Plan amendment that has the effect of (1)
eliminating or reducing an early retirement benefit or a
retirement-type subsidy, or (2) eliminating an optional form of
benefit, with respect to benefits attributable to Credited
Service before the amendment, shall be treated as reducing
Accrued Benefits. In the case of a retirement-type subsidy, the
preceding sentence shall apply only with respect to a Member who
satisfies the pre-amendment conditions for the subsidy. In
general, a retirement-type subsidy is a subsidy that continues
after retirement, but does not include a qualified disability
benefit, a medical benefit, a Social Security supplement, a death
benefit (including life insurance), or a plant shutdown benefit
(that does not continue after retirement age). Furthermore, no
amendment to the Plan shall have the effect of decreasing a
Member's vested interest determined without regard to such
amendment as of the later of the date such amendment is adopted,
or the date it becomes effective.
ARTICLE 11
PERMANENT OR TEMPORARY DISCONTINUANCE OF PLAN
Section 11.1 Termination
Each Employer, by action of its Board of Directors, may
suspend its payments to the Trust for any year and may terminate
its participation in this Plan at any time.
Section 11.2 Apportionment of Trust Fund
If an Employer terminates its participation in this Plan,
the Retirement Committee shall direct the Trustee to compute the
value of that portion of the Trust Fund held for the benefit of
Members, Retired Members, qualified terminated Members, Disabled
Members, Spouses, Beneficiaries and Contingent Beneficiaries
otherwise eligible to receive benefits hereunder attributable to
employment with that Employer. The Retirement Committee, based
upon the certification of the Actuary, shall apportion the amount
so valued to all such Members, Retired Members, qualified
terminated Members, Disabled Members and/or their Beneficiaries,
Contingent Beneficiaries and Spouses in shares as determined in
Section 11.3, but subject to the provisions of Section 11.6.
Section 11.3 Allocation of Trust Fund
The value of that portion of the Trust Fund computed above
remaining after providing for that Employer's share of the
expenses of administration of the Plan and Trust shall be
allocated for purposes of paying Monthly Retirement Income,
Disability Payments and Death Benefits in the order of precedence
indicated and in the amounts indicated in Section 4044 of the
Employee Retirement Income Security Act of 1974 as said Section
may be amended, according to the principles set forth in said
Section and such other portions of the said Act as it
incorporates by reference. For the purpose of making such
allocation, any regulations issued pursuant to that Section shall
be deemed part of such Section.
The allocation of that portion of the Trust Fund computed
above in accordance with this Section shall be based on the
method of payment of Monthly Retirement Income, Disability
Payments or Death Benefits specified in the Plan. In the event
that the Trust Fund assets on or after the date of termination
are insufficient to fund all benefits within any class, the
benefits of all higher order of precedence shall be funded, the
benefits of all lower order of precedence shall be unfunded, and
the assets remaining shall be allocated among members of that
class on the basis of their respective actuarial reserves,
subject to the provisions of Section 4044 of the Employee
Retirement Income Security Act of 1974.
<PAGE>
Section 11.4 Expenses
In the event of failure of an Employer upon termination of
its participation in this Plan to pay or reimburse the Trustee or
the Actuary for the then outstanding charges or expenses incurred
hereunder, the Trustee is empowered to satisfy such claims by
lien upon that portion of the Trust Fund attributable to that
Employer, prior to making any allocation to Members, Retired
Members, Disabled Members, Beneficiaries, Spouses, and Contingent
Beneficiaries of the Plan in accordance with Section 11.2 and
Section 11.3 hereof.
Section 11.5 Distribution of Trust Fund
The application of the Trust Fund on the foregoing basis
shall be calculated by the Actuary and certified to the Trustee
by the Retirement Committee as of the date on which the Plan
terminated. Subject to the restrictions of the Employee
Retirement Income Security Act of 1974, as it may be amended,
when the calculations shall be completed, the interest of each
Member, qualified terminated Member, Retired Member, Disabled
Member, Beneficiary, Spouse, and Contingent Beneficiary shall
continue to be held in the Trust Fund pursuant to the terms of
Section 11.3 hereof, or, at the direction of the Retirement
Committee, the appropriate portion of the Trust Fund shall be
liquidated and each of their interests distributed to them in
conformity with Section 4.2; provided, however, that subject to
the limitations of Section 4044(d)(2) of the Employee Retirement
Income Security Act of 1974, any funds remaining after the
satisfaction of all liabilities to such Members, qualified
terminated Members, Retired Members, Disabled Members,
Beneficiaries, Spouses, and Contingent Beneficiaries under this
Plan due to erroneous actuarial computation shall be returned to
the Employer.
Section 11.6 Restrictions on Distributions
11.6(a) In the event of termination of the Plan, the
benefit of any Highly Compensated Employee
(including a former employee who is a Highly
Compensated Employee) is limited to a benefit that
is nondiscriminatory under Code Section 401(a)(4).
11.6(b) The annual payments of Monthly Retirement Income
on behalf of any restricted Member shall not
exceed the amount that would be payable as a
single life annuity that is the Actuarial
Equivalent of the Member's Accrued Benefit (other
than any social security supplement), his other
benefits (loans in excess of the amounts set forth
in Code Section 72(p)(2)(A), any periodic income,
any withdrawal values payable to a living
employee, and any death benefit not provided
through insurance on the Member's life) under the
Plan, and any social security supplement which he
is entitled to receive. The term restricted
Member shall mean any Member who is a Highly
Compensated Employee (including a former employee
who is a Highly Compensated Employee) and who is
among the Company's twenty-five (25) most highly-
compensated employees.
11.6(c) The restrictions of Subsection (b) of this Section
shall not apply if (i) after payment to or on
behalf of such Member of all such benefits, the
value of Plan assets equals or exceeds one hundred
and ten percent (110%) of the value of the Plan's
current liabilities as defined in Code Section
412(l)(7), or (ii) the value of the Member's
benefits is less than one percent (1%) of the
value of the Plan's current liabilities as defined
in Code Section 412(l)(7), or the value of the
Member's benefit does not exceed the amount
described in Code Section 411(a)(11)(A).
Section 11.7 Termination of Signatory Employer
Termination of this Plan by one (1) Employer shall not
affect the Plan as it applies to other signatory Employers and
their Employees.
Section 11.8 Non-forfeitability
Notwithstanding any other provision herein contained (except
the provisions of Section 11.6 hereof), should the Plan terminate
or partially terminate, the rights of all affected past or
present Members to benefits accrued to the date of such
termination or partial termination, to the extent then funded, or
the amounts credited to the Members' accounts, shall be non-
forfeitable. A partial termination shall be deemed to have
occurred in accordance with a determination to that effect by the
Federal regulatory agency (the Department of Treasury, the
Department of Labor, or the Pension Benefit Guaranty Corporation)
having jurisdiction so to determine under the Employee Retirement
Income Security Act of 1974.
ARTICLE 12
ACTUARY
Section 12.1 Duties
The Actuary shall make all actuarial calculations and
perform all duties required of him hereunder. In making an
actuarial valuation of the Plan and Trust from time to time, the
Actuary may rely upon the written statement of the Trustee
concerning the assets in the Trust and shall not be required to
make any independent calculations with respect thereto. The
Actuary shall certify to the Sponsoring Employer in writing the
results of the calculations required of him and the Employer may
rely thereon. In making all calculations hereunder, the Actuary
shall use such actuarial tables as he deems appropriate but he
shall use the same tables in making all his calculations during a
specified period. The Actuary shall employ actuarial assumptions
and methods each of which are reasonable (taking into account the
experience of the Plan and reasonable expectations) or which, in
the aggregate, result in a total contribution equivalent to that
which would be determined if each such method and assumption were
reasonable, and which, in combination, offer the Actuary's best
estimate of anticipated experience under the Plan. The Actuary
may from time to time change the actuarial tables and other
assumptions used by him hereunder.
Section 12.2 Information
The Sponsoring Employer shall furnish the Actuary such
information on employees, payrolls, and other related data as the
Actuary may require from time to time.
Section 12.3 Reliance
The Actuary may rely upon any information furnished him by
the Employer or by the Retirement Committee.
ARTICLE 13
ENTRY AND WITHDRAWAL OF AN EMPLOYER
Section 13.1 Entry of Employer
An employer classified by the Board of Directors of the
Sponsoring Employer as a subsidiary or affiliate of any
organization signatory to this Plan may become a party to this
Plan and the Trust Agreement and an Employer hereunder by
delivering to the Retirement Committee a written election on such
form as the Retirement Committee may require. With the consent
of the Retirement Committee, such employer shall become an
Employer hereunder as of an Effective Date approved by said
Retirement Committee and shall be subject to the terms and
provisions of this Plan and the Trust Agreement as then in effect
or thereafter amended.
Section 13.2 Withdrawal of Employer
An Employer hereunder who wishes to withdraw from this Plan
and the Trust Agreement shall deliver to the Retirement Committee
a resolution of its Board of Directors which indicates the reason
or reasons for such withdrawal. Withdrawal may take place on an
Anniversary Date only and notice thereof to the Retirement
Committee must be submitted at least six (6) months prior to the
date the withdrawal is to be effective unless such time
requirement is waived in writing by the Retirement Committee.
13.2(a) If the withdrawal of an Employer is a part of the
complete termination and dissolution of the
Employer's business or the discontinuance of the
Employer's pension plan without termination of its
business and without the immediate establishment
of a new pension plan, the provisions of Article
11 hereof shall apply to such Employer's
withdrawal as if the withdrawal were a part of the
complete termination of this Plan, but the
participation of other Employers hereunder shall
not be affected nor shall the continuation of the
Plan with respect to the participation therein by
other Employers be affected by such withdrawal of
an Employer.
13.2(b) If the withdrawal of an Employer hereunder is the
result of the establishment of a new and different
retirement plan for its employee which will,
immediately upon withdrawal of the Employer from
this Plan, cover employees of the Employer who are
covered by this Plan, the Retirement Committee,
upon being furnished evidence of the terms of such
new retirement plan and that such new plan has
been approved by the Internal Revenue Service as
qualified under Section 401(a) of the Code as now
in effect or hereafter amended, shall direct the
Actuary and Trustee to establish such Employer's
interest in the value of the Trust Fund. The
Employer's interest in the value of the Trust Fund
so determined, after reduction for charges and
other expenses incurred to process the withdrawal
of the Employer, shall be transferred to the
trustee or trustees of the new retirement plan or
to the insurance company which is to hold the
funds of the new retirement plan, whichever is
applicable. The Retirement Committee in its sole
discretion shall have the right to direct the
Trustee to transfer the withdrawal value of the
Employer's interest in the Trust Fund to the
trustee or trustees of the new retirement plan or
to the designated insurance company in the form of
installments, in cash or in cash and securities
over a period of time not to exceed six (6) months
following the effective date of the Employer's
withdrawal.
13.2(c) The application of the withdrawing Employer's
interest in the Trust Fund pursuant to the terms
of this Section shall constitute a complete
discharge of the responsibility of remaining
Employers, the Retirement Committee and the
Trustee, without any responsibility on their part
collectively or individually to see to the
application thereof.
ARTICLE 14
CHANGE IN EMPLOYMENT
Section 14.1 Transfer to Signatory Employer
A Member who is an employee of an Employer and who transfers
his employment to or otherwise becomes an employee of another
Employer hereunder without breaking his Service shall continue to
be covered by this Plan without interruption. For actuarial
contributions and other purposes of the Plan, he shall be
considered an employee of his former Employer until the
Anniversary Date coincident with or otherwise immediately
following the date as of which his transfer of employment
occurred, after which he shall be considered an employee of his
new Employer for all purposes of the Plan.
Section 14.2 Transfer to Non-signatory Employer
A Member who becomes employed by another employer which is a
subsidiary or affiliate of the Company although not an Employer
as defined herein shall remain covered by this Plan until the
last day of the Plan Year immediately following or coincident
with such transfer of employment. Effective as of the
Anniversary Date following such transfer of employment, such
Member shall become a limited Member of the Plan and Section 5.1
shall not be applicable. As a limited Member and so long as he
remains in the employ of the Company, he shall continue to earn
Hours of Service for purposes of determining eligibility for
benefits hereunder as if his employer were an Employer. However,
no Credited Service shall be granted for the period of his
limited membership and if such limited Member terminates
employment without again becoming a full Member of this Plan, his
benefits, if any, will be determined on the basis of his Credited
Service at the time of his transfer of employment. His Average
Monthly Earnings and Covered Compensation will be determined at
the time of his transfer of employment.
Section 14.3 Transfer from Non-signatory Employer
An Employee who transfers employment from an employer which
is a subsidiary or affiliate of an Employer, but which is not
itself signatory hereto, to an Employer hereunder shall, for
purposes of determining eligibility to participate hereunder, and
for purposes of vesting, but not for purposes of benefit accrual,
receive Hours of Service for his prior periods of employment with
such affiliated or subsidiary employer. The Employee shall be
eligible for membership immediately provided he satisfies the age
and length of employment requirements of Section 3.1.
Section 14.4 Resumption of Full Membership
A limited Member of this Plan under Section 14.2 who returns
to the employ of an Employer and the status of Employee hereunder
shall again become a full Member of the Plan on the date of such
transfer. A Member of this Plan who is subject to the terms of
this Section shall be entitled to benefits equal to those
retained as a limited Member plus such additional benefits as he
might earn as a full Member again.
Section 14.5 Change in Employment Status
If a Member hereunder ceases to be an Employee due to a
change in employment status, while remaining an employee of an
Employer, he shall cease to accrue Credited Service as of the
date of such change in status and shall become a limited Member
hereunder until such time as he again becomes an Employee as
defined herein. If such limited Member does not again become an
Employee as defined herein prior to his severance of employment,
the amount, if any, of the benefit to which he is entitled
hereunder shall be determined based on his Credited Service as of
the date of change in status, his Attained Age at date of
severance, his Service including his period as a limited Member,
his mode of severance, and his Average Monthly Earnings and
Covered Compensation as of the date of his change in employment
status. If an employee not a Member becomes an Employee as
defined herein due to a change in employment status, he shall be
eligible for membership (i) immediately if he has already
satisfied all of the eligibility requirements of Section 3.1
except the requirement that he be an Employee, or (ii) as of the
Participation Date following the date he satisfies the
eligibility requirements of Section 3.1.
ARTICLE 15
MISCELLANEOUS
Section 15.1 Retirement Committee Interpretation
Any rules, regulations, or procedures that may be necessary
for the proper administration or functioning of this Plan that
are not covered in this Plan or the Trust Agreement shall be
promulgated and adopted by the Retirement Committee.
Section 15.2 Headings
Any headings or subheadings in this Plan are inserted for
convenience of reference only and are to be ignored in the
construction of any provisions hereof.
Section 15.3 Governing Law
This Plan shall be construed in accordance with the laws of
the State Of Indiana, except where such laws are superseded by
the Employee Retirement Income Security Act of 1974, in which
case such Act shall control.
Section 15.4 Benefits to Minors and Incompetents
In making any distribution to or for the benefit of any
minor or incompetent Beneficiary, the Retirement Committee, in
its sole, absolute and uncontrolled discretion, may, but need
not, order the Trustee to make such distribution to a legal or
natural guardian or other relative of such minor or court-
appointed committee of such incompetent, or to any adult with
whom such minor or incompetent temporarily or permanently
resides, and any such guardian, committee, relative or other
person shall have full authority and discretion to expend such
distribution for the use and benefit of such minor or
incompetent. The receipt of such guardian, committee, relative
or other person shall be a complete discharge to the Trustee,
without any responsibility on its part or on the part of the
Retirement Committee to see to the application thereof.
Section 15.5 Actuarial Determinations
All actuarial determinations necessary in the administration
of this Plan shall be made by the Actuary employed by the
Sponsoring Employer. The Retirement Committee shall be free to
consult the Actuary at any time and neither the Retirement
Committee nor the Sponsoring Employer shall be liable for the
actuarial correctness of any determination made by the Actuary.
Section 15.6 Copies of Documents
An executed copy of this Plan shall be furnished the
Trustee. An executed copy of this Plan and of the Trust
Agreement shall be furnished the Actuary.
Section 15.7 Severability
In case any provision of this Plan shall be held illegal or
invalid for any reason, such illegality or invalidity shall not
affect the remaining parts of this Plan and this Plan shall be
construed and enforced as if such illegal and invalid provisions
had never been inserted herein.
Section 15.8 Named Fiduciaries
For purposes of Part 4 of Title I of the Employee Retirement
Income Security Act of 1974, the Employers, the Trustee, the
Retirement Committee and those parties to whom any duties are
allocated pursuant to Article 6 of the Plan or the Trust
Agreement, as such provisions may hereafter be amended, shall
each be named fiduciaries. All actions by named fiduciaries
shall be in accordance with the terms of this Plan and of the
Trust insofar as such documents are consistent with the
provisions of Title I of the Employee Retirement Income Security
Act of 1974. Each named fiduciary while discharging his duties
under this Plan shall act solely in the interest of Members and
beneficiaries and for the exclusive purpose of providing benefits
and defraying reasonable administrative expenses. Each named
fiduciary shall discharge his duties hereunder with the care,
skill, prudence and diligence under the circumstances then
prevailing that a prudent man acting in a like capacity and
familiar with such matters would use in the conduct of an
enterprise of a like character and with like aims. Without
limiting the generality of the above, it is specifically provided
that the appointment and retention of the members of the
Retirement Committee or of any parties as investment managers
pursuant to the Trust Agreement are duties of the Sponsoring
Employer and the Trustee (whichever is appropriate) for purposes
of this Section.
Section 15.9 Allocation of Duties of Fiduciaries
The Sponsoring Employer shall be responsible for the
administration and management of the Plan except for those duties
hereinafter specifically allocated to the Trustee or the
Retirement Committee. The Trustee shall have exclusive
responsibility for the management and control of the assets of
the Plan (but may, pursuant to the Trust Agreement, delegate all
or a portion of such responsibility). The Retirement Committee
shall have exclusive responsibility for all matters specifically
delegated to it by the Sponsoring Employer in this Plan. The
Sponsoring Employer shall be deemed the administrator for
purposes of the Employee Retirement Income Security Act of 1974.
Section 15.10 Misstatement of Facts
A misstatement in the age, sex, length of Service, date of
employment or birth, or compensation of a Member, or any other
such matter, shall be corrected when it becomes known that any
such misstatement of fact has occurred.
Section 15.11 Limitation on Benefits
The total annual benefit (as defined hereinafter) of any
Member shall not exceed the limitations set forth in this Section
and its subsections.
15.11(a) For purposes of this Section, the term "annual
benefit" means a benefit payable in the form of a
straight life annuity with no ancillary benefits,
under a plan to which employees do not contribute
and under which no rollover contributions (as
defined in Sections 402(a)(5), 403(a)(4) and
408(d)(3) of the Code) are made.
15.11(b) The total annual benefit shall not exceed the
lesser of
(1) ninety thousand dollars ($90,000) or the
specific amount, determined by the
Commissioner of Internal Revenue as of
January 1 of each calendar year, beginning
with calendar year 1988, to apply to the Plan
Year ending with or within that calendar
year, or
(2) one hundred percent (100%) of the Member's
average compensation for his high three (3)
years (as defined in Subsection (e) of this
Section).
15.11(c) When retirement benefits under this Plan are
payable in any form other than the form described
in Subsection (a) of this Section or if the
Members contribute to the Plan or make rollover
contributions, the determination as to whether the
limitation described in this Section has been
satisfied shall be made, in accordance with
regulations prescribed by the Secretary of the
Treasury or his delegate, by adjusting such
benefit so that it is equivalent to the benefit
described in Subsection (a) of this Section,
provided that, if the benefit is payable in a form
not subject to the provisions of Code Section
417(e), it shall be the greater of the benefit
determined using the factors set forth in Section
2.2, or the benefit determined using an interest
rate of five percent (5%) per annum and the
mortality table referenced in Section 2.2, and if
the benefit is payable in a form subject to the
provisions of Code Section 417(e), it shall be the
benefit determined using the factors set forth in
Section 2.2. For purposes of this Subsection, any
ancillary benefit which is not directly related to
retirement income benefits shall not be taken into
account; and that portion of any joint and
survivor annuity which constitutes a qualified
joint and survivor annuity (as defined in Section
417(b) of the Internal Revenue Code) shall not be
taken into account.
15.11(d) If the retirement income benefit under this Plan
begins before the Social Security retirement age,
the determination as to whether the dollar
limitation set forth in clause (1) of Subsection
(b) of this Section has been satisfied shall be
made, in accordance with regulations and
pronouncements issued by the Secretary of the
Treasury or his delegate, by reducing the dollar
limitation so that such limitation (as so reduced)
equals an annual benefit (beginning when such
retirement income benefit begins) which is
equivalent to a ninety thousand dollar ($90,000)
annual benefit beginning at Social Security
retirement age. The reductions required by this
paragraph for determining equivalent maximum
benefits which commence between age sixty-two (62)
and the Social Security retirement age under the
Social Security Act shall be consistent with the
reductions provided by the Social Security Act for
benefits commencing during that period. The
factors used to determine the equivalent maximum
benefit for benefits which commence prior to age
sixty-two (62) shall be the reductions provided by
the Social Security Act for the period between
Social Security Retirement Age and age sixty-two
(62), and (i) the reduction factors in Section 4.5
to the extent such factors are applicable for the
period prior to age sixty-two (62), or (ii) an
interest rate of five percent (5%) and the
mortality table specified in Section 2.2,
whichever produces the lesser dollar limitation.
15.11(e) For purposes of this Section, a Member's high
three (3) years shall be the period of consecutive
calendar years (not more than three (3) during
which the Member both was an active Member in the
Plan and had the greatest aggregate compensation
from the Employer. In the case of a Member who is
an "employee" within the meaning of Section
401(c)(1) of the Code, the preceding sentence
shall be applied by substituting "the Member's
earned income (within the meaning of Section
401(c)(2) of the Code but determined without
regard to any exclusion under Section 911 of the
Code)," for "compensation from the Employer."
Compensation, for purposes of this Section, shall
be determined pursuant to Code section 415.
15.11(f) Notwithstanding the preceding provisions of this
Section, the benefits payable with respect to a
Member under this Plan shall be deemed not to
exceed the limitation of this Section if:
(1) the retirement benefits payable with respect
to such Member under this Plan and under all
other Defined Benefit Plans to which the
Employer contributes do not exceed ten
thousand dollars ($10,000) for the applicable
Plan Year and for any prior Plan Year; and
(2) the Employer has not at any time maintained a
Defined Contribution Plan in which the Member
participated.
15.11(g) In the case of an Employee who has fewer than ten
(10) years of participation in the Plan, the
limitation referred to in clause (1) of Subsection
(b) of this Section shall be multiplied by a
fraction, the numerator of which is the number of
years (or part thereof) of participation in the
Plan and the denominator of which is ten (10).
In the case of an Employee who has fewer than ten
(10) years of employment with the Employer, the
limitation referred to in clause (2) of Subsection
(b) of this Section (or in Subsection (f) of this
Section, if applicable) shall be multiplied by a
fraction, the numerator of which is the number of
years (or parts thereof) of employment with the
Employer and the denominator of which is ten (10).
In no event shall this Subsection reduce the
limitation referred to in Subsection (b) of this
Section (or in Subsection (f) of this Section, if
applicable) to an amount less than one-tenth
(1/10) of such limitation (determined without
regard to this Subsection).
15.11(h) In the case of a Member who is separated from
service with his Employer, the one hundred percent
(100%) limitation in clause (2) of Subsection (b)
of this Section shall be automatically adjusted to
reflect any regulations issued by the Secretary of
the Treasury pursuant to Section 415(d) of the
Code, concerning cost-of-living adjustments.
15.11(i) If the retirement income benefit under this Plan
begins after the Social Security retirement age
and is the Actuarial Equivalent of the Member's
normal retirement benefit, the determination as to
whether the dollar limitation set forth in clause
(1) of Subsection (b) of this Section has been
satisfied shall be made, in accordance with
regulations and pronouncements issued by the
Secretary of the Treasury, by increasing the
dollar limitation so that such limitation (as so
increased) equals an annual benefit (beginning
when such retirement income benefit begins) which
is equivalent to a ninety thousand dollar
($90,000) annual benefit beginning at the Social
Security retirement age, using (i) the interest
and mortality rates specified in Section 2.2, or
(ii) the mortality factors specified in Section
2.2 and an interest rate of five percent (5%) per
annum, compounded annually, whichever produces the
lower dollar limit.
15.11(j) If the Current Accrued Benefit of a Member on
December 31, 1986, exceeds the limitation referred
to in Subsection (b) of this Section as modified
by the applicable provisions of the other
subsections of this Section, then, with respect to
such Member, the limitation described in clause
(1) of Subsection (b) of this Section shall be
equal to such Current Accrued benefit.
For purposes of this Subsection, "Current Accrued
Benefit" means a Member's Accrued Benefit
determined as if the Member had separated from
service with the Employer as of December 31, 1986,
and expressed as an annual benefit within the
meaning of Code Section 415(b)(2). In determining
the amount of a Member's Current Accrued Benefit,
(1) any change in the terms and conditions of the
Plan after May 5, 1986, and (2) any cost of living
adjustment occurring after May 5, 1986 shall be
disregarded.
15.11(k) This Section is effective as of January 1st, 1987.
Section 15.12 Combined Limitation on Benefits
If a Member is a participant in one or more Defined Benefit
Plans and one or more Defined Contribution Plans maintained by
the Company, the sum of his defined benefit plan fraction and his
defined contribution plan fraction shall not exceed unity (1.0)
during any Limitation Year.
If the sum of the defined benefit plan fraction and the
defined contribution plan fraction would exceed unity (1.0) for
any Limitation Year, the Company shall adjust the rate of benefit
accrual for purposes of a Defined Benefit Plan on behalf of the
Member so that the sum of such fractions shall not exceed unity
(1.0).
For purposes of determining maximum annual additions to
Defined Contribution Plans and maximum annual benefits payable
from Defined Benefit Plans, all Defined Contribution Plans and
all Defined Benefit Plans, whether or not terminated, shall be
combined and treated as one plan.
15.12(a) The term "defined benefit plan fraction" shall
mean a fraction the numerator of which is the
Member's projected annual benefit (as defined in
the said 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 one and twenty-five hundredths
(1.25) multiplied by the dollar limitation
described in clause (1) of Subsection
15.11(b) for such Limitation Year; or
(2) the product of one and four-tenths (1.4)
multiplied by the amount, described in clause
(2) of Subsection 15.11(b), which may be
taken into account with respect to each
individual under the Plan for such Limitation
Year.
15.12(b) The term "defined contribution plan fraction"
shall mean a fraction the numerator of which is
the sum of all of the annual additions to the
Member's individual account under the Defined
Contribution Plan 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 one and twenty-five hundredths
(1.25) multiplied by the dollar limitation in
effect in Code Section 415(c)(1)(A) for such
Limitation Year;
(2) the product of one and four-tenths (1.4)
multiplied by the amount which may be taken
into account pursuant to Code Section
415(c)(1)(B) with respect to each individual
under the Defined Contribution Plan for such
Limitation Year. If the Plan satisfied the
applicable requirements of Section 415 of the
Code as in effect for all Plan Years prior to
January 1st, 1987, the numerator of the
defined contribution plan fraction shall be
adjusted by permanently subtracting therefrom
an amount equal to the product of the amount
by which the sum of the defined benefit plan
fraction and the defined contribution plan
fraction exceeds one (1), times the
denominator of the defined contribution plan
fraction as of December 31, 1986.
15.12(c) The limitation on aggregate benefits from a
Defined Benefit Plan and a Defined Contribution
Plan which is contained in Section 2004 of the
Employee Retirement Income Security Act of 1974 as
amended shall be complied with by a reduction (if
necessary) in the Member's benefits under this
Defined Benefit Plan before a reduction in annual
additions to any Defined Contribution Plan.
15.12(d) This Section is effective as of January 1st, 1987.
Section 15.13 Corrective Adjustments
In the event that as of any Anniversary Date corrective
adjustments are required pursuant to Section 15.11 or Section
15.12, the Member's annual benefit shall be reduced by an amount,
determined by the Actuary, adequate to ensure compliance with
Section 15.11 and Section 15.12.
Section 15.14 Successor on Merger or Consolidation
In the event of a merger or consolidation of the Employer or
transfer of all or substantially all of its assets to any other
corporation, partnership or association, provision may be made by
such successor corporation, partnership or association at its
election for the continuance of this agreement and the retirement
plan created hereunder by such successor entity. Such successor
shall, upon its election to continue this Plan, be substituted in
place of the Employer by an instrument duly authorizing such
substitution and duly executed by the Employer and its successor.
Upon notice of such substitution accompanied by a certified copy
of the resolutions of the Board of Directors of the Employer and
its successor, authorizing such substitution and delivered to the
Trustee, the Trustee and all Members hereunder shall be
authorized to recognize such successor in the place of the
Employer.
Section 15.15 Benefits on Merger or Consolidation
In the case of any merger or consolidation with or transfer
of assets or liabilities of the Plan to any other plan, such
merger, transfer or consolidation shall, by its terms, provide
that each Member of the Plan would, if the Plan then terminated,
receive a benefit immediately after the merger, consolidation, or
transfer which is equal to or greater than the benefit he would
have been entitled to receive immediately before the merger,
consolidation, or transfer if this Plan had then terminated.
Section 15.16 Exclusive Benefit
No Employer shall be entitled to any part of the corpus or
income of the Trust Fund and no part thereof shall be used for or
diverted to purposes other than the exclusive benefit of the
Members and beneficiaries hereunder, except as provided in
Section 7.2, Section 9.6 and Section 11.5 herein at the time of
termination of the Plan and Trust.
Section 15.17 Unclaimed Benefits
If, after diligent effort, a Member 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 benefit shall be forfeited. If the Member or
Beneficiary subsequently presents a valid claim for the benefit
to the Retirement Committee, the Retirement Committee shall cause
the benefit, equal to the amount which was forfeited under this
Section, to be restored.
ARTICLE 16
TOP HEAVY PROVISIONS
Section 16.1 Generally
Notwithstanding anything contained in the Plan to the
contrary, in the event that this Plan when combined with all
other plans required to be aggregated pursuant to Code Section
416(g) is a Top Heavy Plan for any Plan Year, this Section shall
become operative with respect to such Plan Year.
Section 16.2 Vesting
In the event the vesting schedule set forth in Section 5.1
is less liberal than the vesting schedule hereinafter provided,
then such vesting schedule shall be substituted with the
following to the extent that the following is more favorable:
Years of Service Vested Percentage
Less than 2 years 0%
2 but less than 3 years 20%
3 years but less than 4 years 40%
4 years but less than 5 years 60%
5 years but less than 6 years 80%
6 years or more 100%
Should the Plan cease to be a Top Heavy Plan, the vesting
schedule in Section 5.1 shall be put back into effect. However,
the vested percentage of any Member cannot be decreased as a
result of the return to the prior vesting schedule and any Member
with three (3) or more years of Service may elect, within the
later of (i) sixty (60) days after the Plan ceases to be a Top
Heavy Plan, or (ii) sixty (60) days after the date the Member is
issued written notification of the change in the vesting
schedules, to remain under the special vesting rules described in
this Section.
Section 16.3 Minimum Benefit
For the first Plan Year that the Plan shall be a Top Heavy
Plan, and all future Plan Years during which the Plan is a Top
Heavy Plan, there shall be a minimum accrued benefit applicable
to each Member who earns a year of Credited Service during the
Plan Year equal to two percent (2%) of Top Heavy Compensation
multiplied by the Member's years of Top Heavy Service up to a
maximum of ten (10) years.
<PAGE>
Section 16.4 Top Heavy Compensation
"Top Heavy Compensation" means one-twelfth (1/12) of a
Member's average annual Full Compensation during that period of
five (5) consecutive Testing Years for which his aggregate Full
Compensation was the greatest. If he shall have fewer than five
(5) consecutive Testing Years, his Top Heavy Compensation shall
mean his average annual Full Compensation during that period
containing the largest number of consecutive Testing Years;
provided that, if there shall be more than one such period, Top
Heavy Compensation shall be calculated on the basis of such
period for which such average is the greatest.
Section 16.5 Testing Year
"Testing Year" means a Plan Year which begins prior to the
end of the last Plan Year for which the Plan was a Top Heavy
Plan, but excluding Plan Years beginning before 1984.
Section 16.6 Full Compensation
"Full Compensation" means, for any Employee for any Plan
Year, his compensation (as such term is defined for purposes of
Code Section 415(b)) from the Employer or affiliate for the
calendar year which ends with or within such Plan Year, limited
to one hundred fifty thousand dollars ($150,000) or such other
amount as is authorized pursuant to Code Section 401(a)(17).
Section 16.7 Top Heavy Service
"Top Heavy Service" means a year of Credited Service for a
Plan Year in which the Plan is a Top Heavy Plan, with the
exception that Credited Service for Plan Years beginning prior to
January 1, 1984, shall be excluded.
Section 16.8 Combined Limitation on Benefits
In the event the Plan is a Top Heavy Plan for the Plan Year,
the multiplier of one and twenty-five hundredths (1.25) in
Sections 15.12(a) and 15.12(b) shall be reduced to one (1.0)
unless:
(1) All plans required to be aggregated and any other plans
which may be permissively aggregated pursuant to Code
Section 416(g) are ninety percent (90%) or less top
heavy; and
(2) The minimum accrued benefit referenced in Section 16.3
is modified by substituting for such minimum accrued
benefit a minimum accrued benefit applicable to all
Members equal to the lesser of three percent (3%) of
Top Heavy Compensation multiplied by the Member's
number of years of Top Heavy Service, or a percentage
of the Member's Top Heavy Compensation equal to at
least twenty percent (20%) and increased by one percent
(1%) for each Plan Year (up to ten percent (10%)) taken
into account under this clause (ii).
* * * * * * * * * * * * *
SIGNATURES
IN WITNESS WHEREOF, the Sponsoring Employer has caused the
Plan to be executed this 7th day of August
, 1996, but to be effective May 1, 1996, except as
otherwise indicated.
Attest: Old National Bancorp
By s/s Allen Mounts
Title VP Director of Human Resources
APPENDIX A
PARTICIPATING EMPLOYERS
Participating Employer Entrance Date
Old National Bank in Evansville January 1,1945
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 January 1, 1989
Morganfield National Bank January 1, 1990
First National Bank January 1, 1990
First State Bank January 1, 1990
Security Bank & Trust of Mt. Carmel January 1, 1991
Farmer's Bank & Trust Company of Henderson January 1, 1991
Old National Service Corporation January 1, 1991
Palmer American National Bank January 1, 1993
United Southwest Bank January 1, 1993
Citizens State Bank January 1, 1993
Dubois County Bank January 1, 1994
Richardt Insurance Agency, Inc. January 1, 1994
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 January 1, 1996
City National Bancorp, Inc. January 1, 1996
First National Bank of Oblong January 1, 1996
This Appendix reflects Participating Employers with an Entrance
Date on or before January 1, 1996.
APPENDIX B
PARTICIPATING EMPLOYERS - EARLY RETIREMENT ELIGIBILITY
1. In the case of a Member who was an active participant in the
First Citizens Bank and Trust Company Employees' Pension
Plan as of November 13, 1986, Early Retirement Date shall be
determined without regard to requirement that the Member be
credited with at least five (5) years of Service.
2. In the case of a Member who was an active participant in The
Merchants National Bank in Terre Haute Employees' Pension
Plan as of October 21, 1986, Early Retirement Date shall be
determined without regard to requirement that the Member be
credited with at least five (5) years of Service.
3. In the case of a Member who was an active participant in the
Indiana State Bank Employees' Pension Plan as of December
31, 1994, Early Retirement Date shall be determined without
regard to requirement that the Member be credited with at
least five (5) years of Service.
APPENDIX C
PARTICIPATING EMPLOYERS - OPTIONAL FORMS PROVISIONS
1. A Member who was a participant under a Participating
Employer's prior plan that was merged into this Plan prior
to January 1, 1995 may elect such other optional forms
available under the Participating Employer's prior plan.
The additional optional forms under this item are available
as to the Member's entire Accrued Benefit.
APPENDIX D
PARTICIPATING EMPLOYERS - NORMAL RETIREMENT PROVISIONS
1. The amount of the Member's Monthly Retirement Income under
the basic form and payable on his Normal Retirement, in the
case of a Member (i) who was age fifty (50) or over and had
completed ten (10) years of Service as of March 31, 1986,
and (ii) who was a participant in The Merchants National
Bank of Terre Haute Employees' Pension Plan, shall not be
less than the normal retirement benefit (or the accrued
benefit in the case of a Member who terminates his
employment by retirement or otherwise prior to his Normal
Retirement Date) of such Member which would have been
provided under such prior plan had it continued unchanged
based on the provisions of such plan as it existed
immediately prior to March 31, 1986, less the Actuarial
Equivalent of the benefit which would be provided by the
Member's account balance (to the extent such account balance
represents employer contributions and earnings attributable
thereon) under the Employees' Savings and Profit-Sharing
Plan of Old National Bancorp.
2. The amount of the Member's Monthly Retirement Income under
the basic form and payable on his Normal Retirement, in the
case of a Member who was a participant in the Gibson County
Bank Employees' Pension Plan as of March 31, 1987, shall not
be less than the normal retirement benefit (or the accrued
benefit in the case of a Member who terminates his
employment by retirement or otherwise prior to his Normal
Retirement Date) of such Member which would have been
provided under such prior plan had it continued unchanged
based on the provisions of such plan as it existed on March
31, 1987, less the Actuarial Equivalent of the benefit which
would be provided by the Member's account balance (to the
extent such account balance represents employer
contributions and earnings attributable thereon) under the
Employees' Savings and Profit-Sharing Plan of Old National
Bancorp.
APPENDIX E
PARTICIPATING EMPLOYERS - EARLY RETIREMENT REDUCTIONS
1. In the case of a Member who has reached his early retirement
date under the Indiana State Bank Employees' Pension Plan on
or before December 31, 1994, and who was an active
participant in the Indiana State Bank Employees' Pension
Plan as of December 31, 1994, the benefit to which he is
entitled pursuant to Section 4.5 shall not be less than his
accrued benefit under the Indiana State Bank Employees'
Pension Plan as of December 31, 1994, reduced by one-one
hundred eightieth (1/180) for each completed month of the
first five (5) years and one-three hundred sixtieth (1/360)
for each completed month of the next five (5) years by which
the date he begins receiving such benefit precedes his
Normal Retirement Date.
2. In the case of a Member who has reached his early retirement
date under the City National Bancorp. Inc. Employee
Retirement Plan on or before December 31, 1995, and who was
an active participant in the City National Bancorp. Inc.
Employee Retirement Plan as of December 31, 1995, the
benefit to which he is entitled pursuant to Section 4.5
shall not be less than his accrued benefit under the City
National Bancorp. Inc. Employee Retirement Plan as of
December 31, 1995, reduced actuarially as provided in
Section 6 of the City National Bancorp. Inc. Employee
Retirement Plan.
APPENDIX F
PARTICIPATING EMPLOYERS - VESTING PROVISIONS
1. For those Members who were active participants in the prior
plan of Farmers Bank & Trust Co. of Madisonville, Kentucky
as of January 1, 1988, such Member's Accrued Benefit as of
January 1, 1988 shall be nonforfeitable. Subsequent
accruals shall become vested in accordance with Subsection
5.1(b).
