Old Second Bancorp Inc 8-K, filed Sep 29, 2020
Old Second Bancorp Inc (OSBC)
About this 8-K
Old Second Bancorp Inc filed this 8-K on September 29, 2020, reporting on events of September 23, 2020.
Items reported
- Item 5.02: Director or officer change, or executive pay
- Item 9.01: Financial statements and exhibits
I
United States
Securities And Exchange Commission
Washington, D.C. 20549
FORM
Current Report
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers
On September 23, 2020, the Board of Directors of Old Second Bancorp, Inc. (the “Board”) adopted the Old Second Bancorp, Inc. Voluntary Deferred Compensation Plan (the “Deferred Compensation Plan”), which amends and restates the Amended and Restated Deferred Compensation Plan for Executives and the Amended and Restated Deferred Compensation Plan for Directors, each dated September 1, 2008, and combines them into a single plan. The Deferred Compensation Plan, which is effective November 1, 2020, will be applicable to compensation earned and deferred, and Company contributions credited under the plan, after December 31, 2020.
The Deferred Compensation Plan provides deferred compensation benefits to certain eligible participants, including non-employee members of the Board of Directors of the Company or Old Second National Bank and a select group of key management or highly compensated employees. The Deferred Compensation Plan will be administered by a committee appointed by the Board (the “Committee”), which will have discretionary authority to make, amend, interpret and enforce appropriate rules and regulations for the administration of the plan and to resolve any questions relating to the plan, including the determination of those eligible to participate. The Deferred Compensation Plan is an “unfunded” plan of deferred compensation payable out of the general assets of the Company. The Deferred Compensation Plan is intended to comply with the requirements of Section 409A of the Internal Revenue Code of 1986, as amended, and the regulations thereunder. Participants in the Deferred Compensation Plan will have the status of unsecured general creditors of the Company with respect to amounts credited to their accounts under the plan.
The Deferred Compensation Plan allows participants to irrevocably elect to defer a percentage of their compensation otherwise payable to them until the date specified under the distribution option elected by the participant in their deferral agreement (consisting of flexible distribution options or a retirement distribution option). The initial maximum compensation deferral under the Deferred Compensation Plan is 75% of base salary and 100% of bonuses, commissions, director fees/retainers or other compensation. The Deferred Compensation Plan’s maximum deferral amounts may be changed by the Committee in its discretion. The Committee may also, in its discretion, make supplemental contributions (“Company Contributions”) to a participant’s retirement distribution account in the form of (i) matching contributions on behalf of participants who elect to make the maximum permissible deferral amount under the applicable 401(k) Plan, including catch-up contributions, and (ii) profit sharing contributions. Directors are not eligible for Company Contributions. Company Contributions vest according to the schedule specified by the Committee on or before the time such contributions are made.
The Committee will establish and maintain separate distribution accounts with respect to each participant in the Plan, including a retirement distribution account and/or up to five flexible distribution accounts. The participant’s distribution accounts will be credited with returns in accordance with the investment options elected by the participant. Investment options under the Plan will correspond to certain investment portfolios designated by the Committee.
A participant will be entitled to receive a distribution of benefits under the distribution option of the Deferred Compensation Plan selected by the participant in his or her compensation deferral agreement upon a specified date or the participant’s separation from service (including on account of retirement) in either a lump sum or in annual installments over a period not to exceed 15 years. If the participant has a separation from service prior to retirement, other than on account of his or her death, the participant’s separation account and specified date account will be distributed in a lump sum in the calendar year next following the calendar year in which separation occurred. In accordance with the terms of the Deferred Compensation Plan, distributions will also be made to a participant’s beneficiaries upon the participant’s death or to the participant if he or she suffers an unforeseen financial emergency, as determined by the Committee.
The description of the Deferred Compensation Plan is not complete and is qualified in its entirety by reference to the plan filed as Exhibit 10.1 to this Current Report on Form 8-K, which is incorporated into this Item 5.02 by reference.
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Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
Signature
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 hereunto duly authorized.
| OLD SECOND BANCORP, INC. | |
| | |
| | |
Dated: September 28, 2020 | By: | /s/ Bradley S. Adams |
| | Bradley S. Adams |
| | Executive Vice President and |
| | Chief Financial Officer |
3
Exhibit 10.1
OLD SECOND BANCORP, INC.
VOLUNTARY DEFERRED COMPENSATION PLAN
Effective Date
November 1, 2020
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Old Second Bancorp, Inc. Voluntary Deferred Compensation Plan
ARTICLE I
ARTICLE II
ARTICLE III
ARTICLE IV
ARTICLE V
ARTICLE VI
ARTICLE VII
ARTICLE VIII
ARTICLE IX
ARTICLE X
ARTICLE XI
ARTICLE XII
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ARTICLE I
Establishment and Purpose
Old Second Bancorp, Inc. (the “Company”) has adopted the Amended and Restated Voluntary Deferred Compensation Plan for Executives (the “Executive Plan”) and the Old Second Bancorp, Inc. Amended and Restated Voluntary Deferred Compensation Plan for Directors (the “Director Plan”), has reserved the authority to amend the Executive Plan and Director Plan, and desires to exercise such authority.
Effective as of the Effective Date (except as otherwise provided below in this paragraph), the Company does hereby amend and restate the Director Plan and Executive Plan, and does hereby combine the previously separate documents evidencing the Executive Plan and Director Plan, into a single plan document, as set forth below. The Executive Plan and Director Plan as amended and restated and combined under this document shall be known as the Old Second Bancorp, Inc. Voluntary Deferred Compensation Plan (the or this “Plan”). The Plan shall be applicable to (i) Compensation earned after December 31, 2020, and deferred under Compensation Deferral Agreements timely and appropriately submitted on or after the Effective Date, (ii) and Company Contributions credited under this Plan on or after December 31, 2020.
Provided, however, and notwithstanding anything in the Plan to the contrary, Compensation deferred under Compensation Deferral Agreements or other similar agreements which were effective prior to the Effective Date, and other deferred amounts, which were credited under the Executive Plan or Director Plan immediately prior to the Effective Date shall continue to be accounted for and credited under the Plan, but shall be administered and distributed in accordance with the terms, conditions and valid elections under the documents evidencing the Executive Plan and Director Plan immediately prior to the Effective Date if and only to the extent one or more of such applicable terms, conditions and valid elections (i) are inconsistent with the terms of this Plan on or after the Effective Date or (ii) would have to be operative to avoid a violation of, or tax to be incurred under, Code Section 409A. Such applicable terms and conditions of the Executive Plan and Director Plan which were effective immediately prior to the Effective Date are set forth on Exhibits “A” and “B,” respectively, which are attached hereto and incorporated herein by this reference.
The purpose of the Plan is to attract and retain key employees by providing them with an opportunity to defer receipt of a portion of their salary, bonus, and other specified compensation. The Plan is not intended to meet the qualification requirements of Code Section 401(a), but is intended to meet the requirements of Code Section 409A, and shall be operated and interpreted consistent with that intent.
The Plan constitutes an unsecured promise by a Participating Employer to pay benefits in the
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future. Participants in the Plan shall have the status of general unsecured creditors of the Company or the Participating Employer, as applicable. Each Participating Employer shall be solely responsible for payment of the benefits attributable to services performed for it. The Plan is unfunded for Federal tax purposes and is intended to be an unfunded arrangement for eligible employees who are part of a select group of management or highly compensated employees of the Employer within the meaning of Sections 201(2), 301(a)(3) and 401(a)(1) of ERISA and non-employee members of the Board of Directors. Any amounts set aside to defray the liabilities assumed by the Company or a Participating Employer will remain the general assets of the Company or the Participating Employer and shall remain subject to the claims of the Company’s or the Participating Employer's creditors until such amounts are distributed to the Participants.
ARTICLE II
Definitions
| 2.7 | Change in Control. Change in Control means, with respect to a Participating Employer that is organized as a corporation, any of the following events: (i) a change in the |
| ownership of the Participating Employer, (ii) a change in the effective control of the Participating Employer, or (iii) a change in the ownership of a substantial portion of the assets of the Participating Employer. |
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Change in Ownership. For purposes of this Section, a change in the ownership of the Participating Employer occurs on the date on which any one person, or more than one person acting as a group, acquires ownership of stock of the Participating Employer that, together with stock held by such person or group constitutes more than 50% of the total fair market value or total voting power of the stock of the Participating Employer. The acquisition by a person or group owning more than 50% of the total fair market value or total voting power of the stock of such Participating Employer of additional shares of such Participating Employer shall not constitute a “change of the ownership” of such Participating Employer.
Change in Effective Control. A change in the effective control of the Participating Employer occurs on the date on which either: (i) a person, or more than one person acting as a group, acquires ownership of stock of the Participating Employer possessing 30% or more of the total voting power of the stock of the Participating Employer, taking into account all such stock acquired during the 12-month period ending on the date of the most recent acquisition, provided that the acquisition by a person or group owning more than 30% of the total fair market value or total voting power of the stock of such Participating Employer of additional shares of such Participating Employer shall not constitute a “change of effective control” of such Participating Employer, or (ii) a majority of the members of the Participating Employer’s Board of Directors is replaced during any 12-month period by directors whose appointment or election is not endorsed by a majority of the members of such Board of Directors prior to the date of the appointment or election, but only if no other corporation is a majority shareholder of the Participating Employer.
Change in Ownership of Substantial Portion of Assets. A change in the ownership of a substantial portion of assets occurs on the date on which any one person, or more than one person acting as a group, other than a person or group of persons that is related to the Participating Employer, acquires assets from the Participating Employer that have a total gross fair market value equal to or more than 40% of the total gross fair market value of all of the assets of the Participating Employer immediately prior to such acquisition or acquisitions, taking into account all such assets acquired during the 12-month period ending on the date of the most recent acquisition. A transfer of assets shall not be treated as a “change in the ownership of a substantial portion of the assets” when such transfer is made to an entity that is controlled by the shareholders of the transferor corporation as determined under Treas. Reg. section 1.409A-3(i)(5)(vii)(B).
An event constitutes a Change in Control with respect to a Participant only if the Participant performs services for the Participating Employer that has experienced the Change in Control, or the Participant’s relationship to the affected Participating Employer otherwise satisfies the requirements of Treasury Regulation Section 1.409A-3(i)(5)(ii).
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Notwithstanding anything to the contrary herein, with respect to a Participating Employer that is a partnership or limited liability company, Change in Control means only a change in the ownership of such entity or a change in the ownership of a substantial portion of the assets of such entity, and the provisions set forth above respecting such changes relative to a corporation shall be applied by analogy. Any reference to a “majority shareholder” shall be treated as referring to a partner or member that (a) owns more than 50% of the capital and profits interest of such entity, and (b) alone or together with others is vested with the continuing exclusive authority to make management decisions necessary to conduct the business for which the partnership or limited liability company was formed.
However, in no event shall a Change in Control occur or be deemed to have occurred with respect to a Participant if the Participant is part of a purchasing group which consummates the Change in Control transaction. The Participant shall be deemed “part of a purchasing group” for purposes of the preceding sentence if the Participant is an equity participant in the purchasing company or group (except for (i) passive ownership of less than two percent (2%) of the stock of the purchasing company; or (ii) ownership of equity participation in the purchasing company or group which is otherwise not significant, as determined prior to the Change in Control by a majority of the non- employee continuing Directors).
Notwithstanding anything in this Plan to the contrary, with respect to any amount payable under this Plan (to a Participant or Beneficiary) which is not exempt from Code Section 409A and which is payable upon a Change in Control, such Change in Control must, in addition to the applicable preceding provisions regarding the definition of Change in Control, constitute a “change in the ownership or effective control of the applicable Participating Employer” or a “change in the ownership of a substantial portion of the assets of the applicable Participating Employer” under Code Section 409A and the regulations thereunder.
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| 2.32 | Separation Account. Separation Account means an Account established by the Committee in accordance with a Participant’s Compensation Deferral Agreement to record Deferrals allocated to such Account by the Participant and which are payable upon the Participant’s Separation from Service as set forth in Section 6.3. The Committee may limit the number of Separation Accounts that may be maintained at any one time by a Participant, as set forth in the Plan’s enrollment materials. |
Except in the case of an Employee on a bona fide leave of absence as provided below, an Employee is deemed to have incurred a Separation from Service if the Employer and the Employee reasonably anticipated that the level of services to be performed by the Employee after a date certain would be reduced to 20% or less of the average services rendered by the Employee during the immediately preceding 36-month period (or the total period of employment, if less than 36 months), disregarding periods during which the Employee was on a bona fide leave of absence.
An Employee who is absent from work due to military leave, sick leave, or other bona fide leave of absence shall incur a Separation from Service on the first date immediately following the later of: (i) the six month anniversary of the commencement of the leave, or
(ii) the expiration of the Employee’s right, if any, to reemployment under statute or contract.
If a Participant ceases to provide services as an Employee and begins providing services as an independent contractor for the Employer, a Separation from Service shall occur only if the parties anticipate that the level of services to be provided as an independent contractor are such that a Separation from Service would have occurred if the Employee had continued to provide services at that level as an Employee. If, in accordance with the preceding sentence, no Separation from Service occurs as of the date the individual’s employment status changes, a Separation from Service shall occur thereafter only upon the 12-month anniversary of the date all contracts with the Employer have expired, provided the Participant does not perform services for the Employer during that time.
For purposes of determining whether a Separation from Service has occurred, the Employer means the Employer as defined in Section 2.22 of the Plan, except that in applying Code sections 1563(a)(1), (2) and (3) for purposes of determining whether another organization is an Affiliate of the Company under Code Section 414(b), and in applying Treasury Regulation Section 1.414(c)-2 for purposes of determining whether another organization is an Affiliate of the Company under Code Section 414(c), “at least 50 percent” shall be used instead of “at least 80 percent” each place it appears in those sections.
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The Committee specifically reserves the right to determine whether a sale or other disposition of substantial assets to an unrelated party constitutes a Separation from Service with respect to a Participant providing services to the seller immediately prior to the transaction and providing services to the buyer after the transaction.
In the case of a Director, Separation from Service means the date the Director is no longer a member of the Board of Directors.
| 2.34 | Specified Date Account. Specified Date Account means an Account established by the Committee to record the amounts payable in a future year as specified in the Participant’s Compensation Deferral Agreement. The Committee may limit the number of Specified Date Accounts that may be maintained at any one time by a Participant, as set forth in the Plan’s enrollment materials. |
| 2.36 | Unforeseeable Emergency. Unforeseeable Emergency means a severe financial hardship to the Participant resulting from an illness or accident of the Participant, the Participant’s spouse, the Participant’s dependent (as defined in Code section 152, without regard to section 152(b)(1), (b)(2), and (d)(1)(B)), or a Beneficiary; loss of the Participant’s property due to casualty (including the need to rebuild a home following damage to a home not otherwise covered by insurance, for example, as a result of a natural disaster); or other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Participant. The types of events which may qualify as an Unforeseeable Emergency may be limited by the Committee. |
ARTICLE III
Eligibility and Participation
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Agreements but may otherwise exercise all of the rights of a Participant under the Plan with respect to his or her Account(s). On and after a Separation from Service, a Participant shall remain a Participant as long as his or her Account Balance is greater than zero (0). All Participants, regardless of employment status, will continue to be credited with Earnings and during such time may continue to make allocation elections as provided in Section 7.4. An individual shall cease being a Participant in the Plan when his Account has been reduced to zero (0).
ARTICLE IV
Deferrals
| (a) | An Eligible Employee or Director may make an initial election to defer Compensation by submitting a Compensation Deferral Agreement during the enrollment periods established by the Committee and in the manner specified by the Committee, but in any event, in accordance with Section 4.2. Unless an earlier date is specified in the Compensation Deferral Agreement, deferral elections with respect to a Compensation source (such as salary, bonus, Director fees or other Compensation) become irrevocable on the latest date applicable to such Compensation source under Section 4.2. |
| (b) | A Compensation Deferral Agreement that is not timely filed with respect to a service period or component of Compensation, or that is submitted by a Participant who Separates from Service prior to the latest date such agreement would become irrevocable under Section 409A, shall be considered null and void and shall not take effect with respect to such item of Compensation. The Committee may modify or revoke any Compensation Deferral Agreement prior to the date the election becomes irrevocable under the rules of Section 4.2. |
| (c) | The Committee may permit different deferral amounts for each component of Compensation and may establish a minimum or maximum deferral amount for each such component. Unless otherwise specified by the Committee in the Compensation Deferral Agreement, Participants may defer a minimum of 1% and a maximum of (75%) of their base compensation and a minimum of 1% and |
| maximum of (100%) of bonus, commissions, Director fees/retainer or other Compensation earned during a Plan Year. |
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| (d) | Deferrals of cash Compensation shall be calculated with respect to the gross cash Compensation payable to the Participant prior to any deductions or withholdings, but shall be reduced by the Committee as necessary so as not to exceed 100% of the cash Compensation of the Participant remaining after deduction of all required income and employment taxes, required employee benefit deductions, deferrals to 401(k) plans and other deductions required by law. Changes to payroll withholdings that affect the amount of Compensation being deferred to the Plan shall be allowed only to the extent permissible under Code Section 409A. |
A Compensation Deferral Agreement filed under this paragraph applies to Compensation earned after the date that the Compensation Deferral Agreement becomes irrevocable.
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are established through the date the Compensation Deferral Agreement is submitted; and
Any election to defer Performance-Based Compensation that is made in accordance with this paragraph and that becomes payable as a result of the Participant’s death or disability (as defined in Treas. Reg. Section 1.409A-1(e)) or upon a change in control (as defined in Treas. Reg. Section 1.409A-3(i)(5)) prior to the satisfaction of the performance criteria, will be void unless it would be considered timely under another rule described in this Section.
| (d) | Short-Term Deferrals. The Committee may permit Compensation that meets the definition of a “short-term deferral” described in Treas. Reg. Section 1.409A- 1(b)(4) to be deferred in accordance with the rules of Section 6.9, applied as if the date the Substantial Risk of Forfeiture lapses is the date payments were originally scheduled to commence, provided, however, that the provisions of Section 6.9(b) shall not apply to payments attributable to a change in control (as defined in Treas. Reg. Section 1.409A-3(i)(5)). A Compensation Deferral Agreement submitted in accordance with this paragraph becomes irrevocable on the latest date it could be submitted under Section 6.9. |
| (e) | Certain Forfeitable Rights. With respect to a legally binding right to a payment in a subsequent year that is subject to a forfeiture condition requiring the Participant’s continued services for a period of at least 12 months from the date the Participant obtains the legally binding right, the Committee may permit an Eligible Employee or Director to defer such Compensation by filing a Compensation Deferral Agreement on or before the 30th day after the legally binding right to the Compensation accrues, provided that the Compensation Deferral Agreement is submitted at least 12 months in advance of the earliest date on which the forfeiture condition could lapse. The Compensation Deferral Agreement described in this paragraph becomes irrevocable not later than such 30th day. If the forfeiture condition applicable to the payment lapses before the end of such 12-month period as a result of the Participant’s death or disability (as defined in Treas. Reg. Section 1.409A-3(i)(4)) or upon a change in control (as defined in Treas. Reg. Section 1.409A-3(i)(5)), the Compensation Deferral Agreement will be void unless it would be considered timely under another rule described in this Section. |
| (f) | “Evergreen” Deferral Elections. The Committee, in its discretion, may provide that Compensation Deferral Agreements will continue in effect for subsequent |
| years or performance periods by communicating that intention to Participants in |
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writing prior to the date Compensation Deferral Agreements become irrevocable under this Section 4.2. An evergreen Compensation Deferral Agreement may be revoked or modified in writing prospectively by the Participant or the Committee with respect to Compensation for which such election remains revocable under this Section 4.2.
A Compensation Deferral Agreement is deemed to be revoked for subsequent years if the Participant is not an Eligible Employee or Director as of the last permissible date for making elections under this Section 4.2 or if the Compensation Deferral Agreement is cancelled in accordance with Section 4.6.
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ARTICLE V
Company Contributions
Matching Contribution. To the extent permissible under Treasury Regulation §1.401(k)- 1(e) and other applicable provisions of the Code and regulations thereunder, the Company or other applicable Participating Employer, in its discretion, may make an annual matching contribution on behalf of each Participant who elects to make the maximum permissible deferral amount under the applicable Participating Employer’s 401(k) Plan (the “401(k) Plan”), including catch-up contributions (as defined in the 401(k) Plan), if applicable, and does not make any change to such 401(k) Plan deferral election throughout the applicable Plan Year (as defined under the 401(k) Plan). The amount of such matching contribution for such Plan Year shall be six percent (6%) of the Participant’s Compensation (as defined under the 401(k) Plan) without regard to the limit imposed by Section 415 of the Code, less any matching contribution credited under the 401(k) Plan on behalf of the Participant for such Plan Year.
Profit Sharing Contribution. The Company or other applicable Participating Employer, in its discretion, may make an annual profit sharing contribution to Plan Participants.
The profit sharing contribution shall be limited to the employer contribution amount that would have been credited under the 401(k) Plan had the limits of Code Section 415 and 401(a)(17) not been in effect less the actual employer contribution amount credited under the 401(k) Plan.
Deferrals of equity-based Compensation (if permitted by the Committee, in its discretion) will vest as provided under the terms of the applicable award.
All Company Contributions become 100% vested, if while employed by an Employer, a Participant dies, becomes disabled, his or her Participating Employer experiences a Change in Control as determined by the Company or the Participant attains age 65.
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ARTICLE VI
Payments from Accounts
Payment events and Payment Schedules elected by the Participant shall be set forth in a valid Compensation Deferral Agreement that establishes the Account to which such elections apply in accordance with Article IV or in a valid modification election applicable to such Account as described in Section 6.9.
Payment amounts are based on Account Balances as of the last Valuation Date of the month next preceding the month actual payment is made.
Commencement. Payment is made or begins in the year designated by the Participant.
Form of Payment. Payment will be made in a lump sum, unless the Participant elected to receive annual installments up to fifteen (15) years, except as otherwise provided in Section 6.3.
Commencement. In the event of Separation from Service prior to age 65, all Specified Date Accounts will be paid in full in the calendar year next following the calendar year in which Separation from Service occurs. (Any specified date payment scheduled for the same year Separation from Service occurs will be paid according to the Specified Date election described in Section 6.2, and the balance will be paid as provided in the preceding sentence.)
Subject to a Participant’s retirement elections described below, the Retirement Account and all Separation Accounts commence payment in the calendar year next following the calendar year in which Separation from Service occurs.
Notwithstanding any other provision of this Plan, and only to the extent required by Code Section 409A, an applicable payment to a Participant who is a “specified employee” as defined in Code Section 409A(a)(2)(B) will commence no earlier than six months
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following his or her Separation from Service.
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Form of Payment. Subject to a Participant’s retirement elections described below, all payments will be made in a lump sum.
Retirement Election. A Participant may elect to receive his or her Retirement Account and each Separation Account commencing in a year later than the calendar year next following Separation from Service and may further elect to receive each such Account in annual installments up to fifteen (15) years. The elected time and form of payment will apply only if the Participant experiences a Separation from Service on or after the date he or she has attained age 65.
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Participant reasonably anticipates will result from the payment. The amount of the emergency payment shall be subtracted from the Retirement Account and Separation Accounts and then from the Specified Date Accounts, starting with the Account having the latest commencement date until fully distributed, then continuing in this manner with the next latest Account until the full amount of the distribution is made. Emergency payments shall be paid in a single lump sum within the 90-day period following the date the payment is approved by the Committee. The Committee may specify that Deferrals will be distributed before any Company Contributions.
| 6.9 | Modifications to Payment Schedules. A Participant may modify the Payment Schedule elected by him or her with respect to an Account, consistent with the permissible Payment Schedules available under the Plan for the applicable payment event, provided such modification complies with the requirements of this Section 6.9. |
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the Payment Schedule in effect prior to modification (the “Prior Election”).
ARTICLE VII
Valuation of Account Balances; Investments
| 7.2 | Earnings Credit. Each Account will be credited with Earnings on each Business Day, based upon the Participant’s investment allocation among a menu of investment options selected in advance by the Committee, in accordance with the provisions of this Article VII (“investment allocation”). |
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investment options shall not be effective with respect to any period prior to the effective date of such change.
A Participant shall specify an investment allocation for each of his Accounts in accordance with procedures established by the Committee. Allocation among the investment options must be designated in increments of 1%. The Participant’s investment allocation will become effective on the same Business Day or, in the case of investment allocations received after a time specified by the Committee, the next Business Day.
A Participant may change an investment allocation on any Business Day, both with respect to future credits to the Plan and with respect to existing Account Balances, in accordance with procedures adopted by the Committee. Changes shall become effective on the same Business Day or, in the case of investment allocations received after a time specified by the Committee, the next Business Day, and shall be applied prospectively.
ARTICLE VIII
Administration
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Upon such Change in Control, the Company may not remove the Committee or its members, unless a majority of Participants and Beneficiaries with Account Balances consent to the removal and replacement of the Committee. Notwithstanding the foregoing, the Committee shall not have authority to direct investment of trust assets under any rabbi trust described in Section 10.2.
The Participating Employers shall, with respect to the Committee identified under this Section: (i) pay all reasonable expenses and fees of the Committee, (ii) indemnify the Committee (including individuals serving as Committee members) against any costs, expenses and liabilities including, without limitation, attorneys’ fees and expenses arising in connection with the performance of the Committee’s duties hereunder, except with respect to matters resulting from the Committee’s gross negligence or willful misconduct, and (iii) supply full and timely information to the Committee on all matters related to the Plan, any rabbi trust, Participants, Beneficiaries and Accounts as the Committee may reasonably require.
| 8.4 | Indemnification. The Participating Employers shall indemnify and hold harmless each employee, officer, director, agent or organization, to whom or to which are delegated duties, responsibilities, and authority under the Plan or otherwise with respect to administration of the Plan, including, without limitation, the Committee, its delegees and its agents, against all claims, liabilities, fines and penalties, and all expenses reasonably incurred by or imposed upon him or it (including but not limited to reasonable attorney fees) which arise as a result of his or its actions or failure to act in connection with the operation and administration of the Plan to the extent lawfully allowable and to the extent that such claim, liability, fine, penalty, or expense is not paid for by liability insurance purchased or paid for by the Participating Employer. Notwithstanding the foregoing, the Participating Employer shall not indemnify any person or organization if his or its actions or failure to act are due to gross negligence or willful misconduct or for any such amount incurred through any settlement or compromise of any action unless the Participating Employer consents in writing to such settlement or compromise. |
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ARTICLE IX
Amendment and Termination
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of a right that otherwise would result in a violation of or imposition of tax under Code Section 409A.
ARTICLE X
Informal Funding
| 10.1 | General Assets. Obligations established under the terms of the Plan for an applicable Participant may be satisfied only from the general funds of the applicable Participating Employers that granted the right to such applicable Participant which created such applicable obligation, or a trust described in this Article X. No Participant, spouse or Beneficiary shall have any right, title or interest whatsoever in assets of the Participating Employers. Nothing contained in this Plan, and no action taken pursuant to its provisions, shall create or be construed to create a trust of any kind, or a fiduciary relationship, between the Participating Employers, on the one hand, and any Employee, spouse, or Beneficiary, on the other hand. To the extent that any person acquires a right to receive payments hereunder, such right is no greater than the right of an unsecured general creditor of the applicable Participating Employer that granted such right to such applicable person. |
If a rabbi trust is in existence upon the occurrence of a “change in control”, as defined in such trust, the Participating Employer shall, upon such change in control, and on each anniversary of the change in control, contribute in cash or liquid securities such amounts as are necessary so that the value of assets after making the contributions exceed 125% of the total value of all Account Balances.
ARTICLE XI
Claims
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claim, the Participant forfeits any amounts to which he or she may have been entitled to receive under the claim.
| (a) | In General. Notice of a denial of benefits (other than claims based on disability) will be provided within 90 days of the Committee’s receipt of the Claimant's claim for benefits. If the Committee determines that it needs additional time to review the claim, the Committee will provide the Claimant with a notice of the extension before the end of the initial 90-day period. The extension will not be more than 90 days from the end of the initial 90-day period and the notice of extension will explain the special circumstances that require the extension and the date by which the Committee expects to make a decision. |
| (b) | Disability Benefits. Notice of denial of claims based on disability will be provided within forty-five (45) days of the Committee’s receipt of the Claimant’s claim for disability benefits. If the Committee determines that it needs additional time to review the disability claim, the Committee will provide the Claimant with a notice of the extension before the end of the initial 45-day period. If the Committee determines that a decision cannot be made within the first extension period due to matters beyond the control of the Committee, the time period for making a determination may be further extended for an additional 30 days. If such an additional extension is necessary, the Committee shall notify the Claimant prior to the expiration of the initial 30-day extension. Any notice of extension shall indicate the circumstances necessitating the extension of time, the date by which the Committee expects to furnish a notice of decision, the specific standards on which such entitlement to a benefit is based, the unresolved issues that prevent a decision on the claim and any additional information needed to resolve those issues. A Claimant will be provided a minimum of 45 days to submit any necessary additional information to the Committee. In the event that a 30-day extension is necessary due to a Claimant’s failure to submit information necessary to decide a claim, the period for furnishing a notice of decision shall be tolled from the date on which the notice of the extension is sent to the Claimant until the earlier of the date the Claimant responds to the request for additional information or the response deadline. |
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procedures and the time limits applicable to such procedures, including the right to appeal the decision, the deadline by which such appeal must be filed and a statement of the Claimant’s right to bring a civil action under Section 502(a) of ERISA following an adverse decision on appeal and the specific date by which such a civil action must commence under Section 11.4.
In the case of a complete or partial denial of a disability benefit claim, the notice shall provide such information and shall be communicated in the manner required under applicable Department of Labor regulations.
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| (b) | Disability Benefits. Appeal of a denied disability benefits claim must be filed in writing with the Appeals Committee no later than 180 days after receipt of the written notification of such claim denial. The review shall be conducted in accordance with applicable Department of Labor regulations. |
The Appeals Committee shall make its decision regarding the merits of the denied claim within 45 days following receipt of the appeal (or within 90 days after such receipt, in a case where there are special circumstances requiring extension of time for reviewing the appealed claim). If an extension of time for reviewing the appeal is required because of special circumstances, written notice of the extension shall be furnished to the Claimant prior to the commencement of the extension. The notice will indicate the special circumstances requiring the extension of time and the date by which the Appeals Committee expects to render the determination on review. Following its review of any additional information submitted by the Claimant, the Appeals Committee shall render a decision on its review of the denied claim.
| (c) | Contents of Notice. If a benefits claim is completely or partially denied on review, notice of such denial shall be in writing. Any electronic notification shall comply with the standards imposed by Department of Labor Regulation 29 CFR 2520.104b-1(c)(1)(i), (iii), and (iv). Such notice shall set forth the reasons for denial in plain language. |
The decision on review shall set forth: (i) the specific reason or reasons for the denial, (ii) specific references to the pertinent Plan provisions on which the denial is based, (iii) a statement that the Claimant is entitled to receive, upon request and free of charge, reasonable access to and copies of all documents, records, or other information relevant (as defined above) to the Claimant’s claim, and (iv) a statement of the Claimant’s right to bring an action under Section 502(a) of ERISA, following an adverse decision on review and the specific date by which such a civil action must commence under Section 11.4.
For the denial of a disability benefit, the notice will also include such additional information and be communicated in the manner required under applicable Department of Labor regulations.
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The Appeals Committee shall have the exclusive authority at the appeals stage to interpret the terms of the Plan and resolve appeals under the Claims Procedure.
Each Participating Employer shall, with respect to the Committee identified under this Section: (i) pay its proportionate share of all reasonable expenses and fees of the Appeals Committee, (ii) indemnify the Appeals Committee (including individual committee members) against any costs, expenses and liabilities including, without limitation, attorneys’ fees and expenses arising in connection with the performance of the Appeals Committee hereunder, except with respect to matters resulting from the Appeals Committee’s gross negligence or willful misconduct, and (iii) supply full and timely information to the Appeals Committee on all matters related to the Plan, any rabbi trust, Participants, Beneficiaries and Accounts as the Appeals Committee may reasonably require.
If a Participant or Beneficiary prevails in a legal proceeding brought under the Plan to enforce the rights of such Participant or any other similarly situated Participant or Beneficiary, in whole or in part, the Participating Employer shall reimburse such Participant or Beneficiary for all legal costs, expenses, attorneys’ fees and such other liabilities incurred as a result of such proceedings. If the legal proceeding is brought in connection with a change in control (including a “change in control” as defined in a rabbi trust described in Section 10.2) the Participant or Beneficiary may file a claim directly with the trustee for reimbursement of such costs, expenses and fees. For purposes of the preceding sentence, the amount of the claim shall be treated as if it were an addition to the Participant’s or Beneficiary’s Account Balance and will be included in determining the Participating Employer’s trust funding obligation under Section 10.2.
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not resolved through the claims procedure set forth in Article XI, such claim shall be submitted to and resolved exclusively by expedited binding arbitration by a single arbitrator. Arbitration shall be conducted in accordance with the following procedures:
The complaining party shall promptly send written notice to the other party identifying the matter in dispute and the proposed remedy. Following the giving of such notice, the parties shall meet and attempt in good faith to resolve the matter. In the event the parties are unable to resolve the matter within 21 days, the parties shall meet and attempt in good faith to select a single arbitrator acceptable to both parties. If a single arbitrator is not selected by mutual consent within ten Business Days following the giving of the written notice of dispute, an arbitrator shall be selected from a list of nine persons each of whom shall be an attorney who is either engaged in the active practice of law or recognized arbitrator and who, in either event, is experienced in serving as an arbitrator in disputes between employers and employees, which list shall be provided by the main office of either JAMS, the American Arbitration Association (“AAA”) or the Federal Mediation and Conciliation Service. If, within three Business Days of the parties’ receipt of such list, the parties are unable to agree on an arbitrator from the list, then the parties shall each strike names alternatively from the list, with the first to strike being determined by the flip of a coin. After each party has had four strikes, the remaining name on the list shall be the arbitrator. If such person is unable to serve for any reason, the parties shall repeat this process until an arbitrator is selected.
Unless the parties agree otherwise, within 60 days of the selection of the arbitrator, a hearing shall be conducted before such arbitrator at a time and a place agreed upon by the parties. In the event the parties are unable to agree upon the time or place of the arbitration, the time and place shall be designated by the arbitrator after consultation with the parties. Within 30 days of the conclusion of the arbitration hearing, the arbitrator shall issue an award, accompanied by a written decision explaining the basis for the arbitrator’s award.
In any arbitration hereunder, the Participating Employer shall pay all administrative fees of the arbitration and all fees of the arbitrator, except that the Participant or Beneficiary may, if he/she/it wishes, pay up to one-half of those amounts. Each party shall pay its own attorneys’ fees, costs, and expenses, unless the arbitrator orders otherwise. The prevailing party in such arbitration, as determined by the arbitrator, and in any enforcement or other court proceedings, shall be entitled, to the extent permitted by law, to reimbursement from the other party for all of the prevailing party’s costs (including but not limited to the arbitrator’s compensation), expenses, and attorneys’ fees. The arbitrator shall
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have no authority to add to or to modify this Plan, shall apply all applicable law,
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and shall have no lesser and no greater remedial authority than would a court of law resolving the same claim or controversy. The arbitrator shall have no authority to add to or to modify this Plan, shall apply all applicable law, and shall have no lesser and no greater remedial authority than would a court of law resolving the same claim or controversy. The arbitrator shall, upon an appropriate motion, dismiss any claim without an evidentiary hearing if the party bringing the motion establishes that it would be entitled to summary judgment if the matter had been pursued in court litigation.
The parties shall be entitled to discovery as follows: Each party may take no more than three depositions. The Participating Employer may depose the Participant or Beneficiary plus two other witnesses, and the Participant or Beneficiary may depose the Participating Employer, pursuant to Rule 30(b)(6) of the Federal Rules of Civil Procedure, plus two other witnesses. Each party may make such reasonable document discovery requests as are allowed in the discretion of the arbitrator.
The decision of the arbitrator shall be final, binding, and non-appealable, and may be enforced as a final judgment in any court of competent jurisdiction.
This arbitration provision of the Plan shall extend to claims against any parent, subsidiary, or affiliate of each party, and, when acting within such capacity, any officer, director, shareholder, Participant, Beneficiary, or agent of any party, or of any of the above, and shall apply as well to claims arising out of state and federal statutes and local ordinances as well as to claims arising under the common law or under this Plan.
Notwithstanding the foregoing, and unless otherwise agreed between the parties, either party may apply to a court for provisional relief, including a temporary restraining order or preliminary injunction, on the ground that the arbitration award to which the applicant may be entitled may be rendered ineffectual without provisional relief.
Any arbitration hereunder shall be conducted in accordance with the Federal Arbitration Act: provided, however, that, in the event of any inconsistency between the rules and procedures of the Act and the terms of this Plan, the terms of this Plan shall prevail.
If any of the provisions of this Section 11.6(a) are determined to be unlawful or otherwise unenforceable, in the whole part, such determination shall not affect the validity of the remainder of this section and this section shall be reformed to the extent necessary to carry out its provisions to the greatest extent possible and to
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insure that the resolution of all conflicts between the parties, including those
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arising out of statutory claims, shall be resolved by neutral, binding arbitration. If a court should find that the provisions of this Section 11.6(a) are not absolutely binding, then the parties intend any arbitration decision and award to be fully admissible in evidence in any subsequent action, given great weight by any finder of fact and treated as determinative to the maximum extent permitted by law.
The parties do not agree to arbitrate any putative class action or any other representative action. The parties agree to arbitrate only the claims(s) of a single Participant or Beneficiary.
| (b) | Upon Change in Control. Upon a change in control, Section 11.6(a) shall not apply and any legal action initiated by a Participant or Beneficiary to enforce his or her rights under the Plan may be brought in any court of competent jurisdiction. Notwithstanding the Appeals Committee’s discretion under Sections |
11.3 and 11.5, the court shall apply a de novo standard of review to any prior claims decision under Sections 11.1 through 11.3 or any other determination made by the Company, its Board of Directors, a Participating Employer, the Committee, or the Appeals Committee.
ARTICLE XII
General Provisions
The Company may unilaterally assign any or all of its liabilities and obligations under this Plan in connection with any restructuring, recapitalization, sale of assets or other similar transactions affecting a Participating Employer without the consent of any Participant. Any such assignment shall be binding upon all Participants and their respective beneficiaries.
| 12.2 | No Legal or Equitable Rights or Interest. No Participant or other person shall have any legal or equitable rights or interest in this Plan that are not expressly granted in this Plan. Participation in this Plan does not give any person any right to be retained in the service of the Participating Employer or any other Employer. The right and power of a Participating Employer to dismiss or discharge an Employee is expressly reserved. The |
| Participating Employers make no guaranty, representation or warranty as to the tax |
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consequences or results applicable to any Participant or any Beneficiaries resulting from a deferral of income pursuant to the Plan, or otherwise in connection with the Plan. All such consequences and results shall be the sole responsibility and liability of the Participants and Beneficiaries.
OLD SECOND BANCORP, INC.
37 SOUTH RIVER STREET AURORA, IL 60506
ATTN: HUMAN RESOURCES DIRECTOR
Any notice or filing required or permitted to be given to a Participant under this Plan shall be sufficient if in writing or hand-delivered, or sent by mail to the last known address of the Participant.
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restored. If the Committee is unable to locate the Participant or Beneficiary after five years of the date payment is scheduled to be made, provided that a Participant’s Account shall not be credited with Earnings following the first anniversary of such date on which payment is to be made and further provided, however, that such benefit shall be reinstated, without further adjustment for interest, if a valid claim is made by or on behalf of the Participant or Beneficiary for all or part of the forfeited benefit.
| 12.10 | Compliance With Code Section 409A; No Guarantee. This Plan is intended to be administered in compliance with Code Section 409A and each provision of the Plan shall be interpreted consistent with Code Section 409A. Although intended to comply with Code Section 409A, this Plan shall not constitute a guarantee to any Participant or Beneficiary that the Plan in form or in operation will result in the deferral of federal or state income tax liabilities or that the Participant or Beneficiary will not be subject to the additional taxes imposed under Section 409A. No Employer shall have any legal or other liability or obligation to a Participant or Beneficiary with respect to taxes imposed under Code Section 409A or otherwise, or for failure of the Plan to achieve any desired or intended tax, investment or other result. |
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IN WITNESS WHEREOF, the undersigned executed this Plan as of the 31st day of August , 2020, to be effective as of the Effective Date as provided herein.
OLD SECOND BANCORP, INC.
By: /s/ Bradley S. Adams
Bradley S. Adams
Its: Executive Vice President / CFO (Title)
OLD SECOND BANK
By: /s/ Chris Lasse
Chris Lasse
Its: Human Resources Director (Title)
THE FOLLOWING SIGNATORIES ARE MEMBERS OF THE BOARD OF DIRECTORS OF OLD SECOND BANCORP, INC.:
/s/ William B. Skoglund | | /s/ John Ladowicz | ||||
William B. Skoglund, solely as a member Of | | John Ladowicz, solely as a member of the | ||||
the Board of Directors of | | Board of Directors of | ||||
Old Second Bancorp, Inc. | | Old Second Bancorp, Inc. | ||||
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Schedule A Participating Employers
Old Second Bancorp, Inc.
Old Second Bank
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Exhibit A
OLD SECOND BANCORP, INC. AMENDED AND RESTATED
VOLUNTARY DEFERRED COMPENSATION PLAN
FOR EXECUTIVES PLAN DOCUMENT
September 1, 2008
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TABLE OF CONTENTS
ARTICLE 1 | NAME AND PURPOSE | 1 |
1.1 | Name | 1 |
1.2 | Purpose | 1 |
1.3 | Plan for a Select Group | 1 |
1.4 | Not a Funded Plan | 1 |
ARTICLE 2 | DEFINITIONS | 1 |
2.1 | 401(k) Plan | 1 |
2.2 | Account | 1 |
2.3 | Administrator | 1 |
2.4 | Affiliated Company | 1 |
2.5 | Appeals Committee | 1 |
2.6 | Base Salary | 1 |
2.7 | Beneficiary | 2 |
2.8 | Benefit Commencement Date | 2 |
2.9 | Benefit Payment | 2 |
2.10 | Board | 2 |
2.11 | Bonus | 2 |
2.12 | Change of Control | 2 |
2.13 | Code | 3 |
2.14 | Company | 4 |
2.15 | Compensation Committee | 4 |
2.16 | Deferral Account | 4 |
2.17 | Deferral Amount | 4 |
2.18 | Deferral Election | 4 |
2.19 | Director | 4 |
2.20 | Effective Date | 4 |
2.21 | Employee | 5 |
2.22 | ERISA | 5 |
2.23 | Key Employee | 5 |
2.24 | Matching Contribution | 5 |
2.25 | Measurement Funds | 5 |
2.26 | Normal Retirement Date | 5 |
2.27 | Participant | 6 |
2.28 | Participant Access System | 6 |
2.29 | Plan | 6 |
2.30 | Plan Year | 6 |
2.31 | Pre-2005 Deferral Account | 6 |
2.32 | Preexisting Balance | 6 |
2.33 | Preretirement Distribution Election | 6 |
2.34 | Profit Sharing Contribution | 7 |
2.35 | Retire or Retirement | 7 |
2.36 | Section 409A | 7 |
2.37 | Termination Date | 7 |
2.38 | Termination of Employment | 7 |
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Old Second Bancorp, Inc. Voluntary Deferred Compensation Plan
2.39 | Unforeseeable Emergency | 7 |
2.40 | Vesting Forfeiture Amount | 8 |
ARTICLE 3 | ELIGIBILITY AND PARTICIPATION | 1 |
3.1 | Eligibility | 1 |
3.2 | Participation | 1 |
3.3 | Cessation of Participation Initiated by the Compensation Committee | 1 |
ARTICLE 4 | CONTRIBUTIONS | 1 |
4.1 | Deferral Elections | 1 |
4.2 | Company Contributions | 3 |
4.3 | Establishment of Deferral Accounts | 3 |
4.4 | Crediting of Deferral Amounts, Profit Sharing Contributions and Matching Contributions | 3 |
4.5 | Withholding | 4 |
4.6 | Adjustment of Accounts | 4 |
4.7 | Measurement Funds | 4 |
ARTICLE 5 | GRANDFATHERED PROVISIONS APPLICABLE TO PRE-2005 DEFERRAL ACCOUNTS | 1 |
5.1 | Application | 1 |
5.2 | Definitions | 1 |
5.3 | Preretirement Distribution Election | 2 |
5.4 | Forms of Benefit Distribution. | 3 |
5.5 | Benefit Commencement Events. | 4 |
ARTICLE 6 | PRERETIREMENT DISTRIBUTION; UNFORESEEABLE EMERGENCIES | 1 |
6.1 | Preretirement Distribution Election | 1 |
6.2 | Hardship Withdrawals | 1 |
ARTICLE 7 | BENEFITS DISTRIBUTIONS | 1 |
7.1 | Benefit Commencement Date | 1 |
7.2 | Time of Distribution | 1 |
7.3 | Change to Elections for Time and Form of Payment | 1 |
7.4 | Consent Not Required | 2 |
7.5 | Correction of Amounts Payable | 2 |
7.6 | Timing of Payments | 2 |
7.7 | Transition Rule | 3 |
ARTICLE 8 | BENEFIT DISTRIBUTION EVENTS | 1 |
8.1 | Retirement Benefits. | 1 |
8.2 | Termination of Employment. | 1 |
8.3 | Death. | 1 |
8.4 | Change of Control. | 2 |
8.5 | Benefit Payment Delay in the Event of Allegations | 2 |
ARTICLE 9 | BENEFICIARIES | 1 |
9.1 | Automatic Beneficiary | 1 |
9.2 | Designated Beneficiary or Beneficiaries | 1 |
9.3 | Death of Beneficiary | 1 |
ARTICLE 10 | RIGHTS OF PARTICIPANTS AND BENEFICIARIES | 1 |
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10.1 | Creditor Status of Participant and Beneficiary | 1 |
10.2 | Rights with Respect to a Trust | 1 |
10.3 | Investments | 1 |
ARTICLE 11 | TRUST | 1 |
11.1 | Establishment of Trust | 1 |
11.2 | Obligations of the Company | 1 |
11.3 | Trust Terms | 1 |
ARTICLE 12 | CLAIMS PROCEDURE | 1 |
12.1 | Claim for Benefits | 1 |
12.2 | Request for Review of a Denial of a Claim for Benefits | 2 |
12.3 | Appeals Procedure | 2 |
12.4 | Decision upon Review of Denial of Claim for Benefits | 3 |
12.5 | Establishment of Appeals Committee | 4 |
12.6 | Operations of Appeals Committee | 5 |
12.7 | Special Provisions Relating to Change of Control | 6 |
ARTICLE 13 | ADMINISTRATION | 1 |
13.1 | Appointment of Administrator | 1 |
13.2 | Powers and Duties of the Administrator | 1 |
13.3 | Engagement of Advisors | 2 |
13.4 | Payment of Costs and Expenses | 2 |
ARTICLE 14 | AMENDMENT AND TERMINATION | 1 |
14.1 | Power to Amend or Terminate | 1 |
14.2 | Effects of Plan Termination | 1 |
14.3 | No Liability for Plan Amendment or Termination | 2 |
ARTICLE 15 | MISCELLANEOUS | 1 |
15.1 | Non-Alienation | 1 |
15.2 | Tax Withholding | 1 |
15.3 | Incapacity | 1 |
15.4 | Administrative Forms | 2 |
15.5 | Independence of Plan | 2 |
15.6 | No Employment Rights Created | 2 |
15.7 | Responsibility for Legal Effect | 2 |
15.8 | Limitation of Duties | 2 |
15.9 | Limitation of Sponsor Liability | 3 |
15.10 | Successors | 3 |
15.11 | Controlling Law | 3 |
15.12 | Notice | 3 |
15.13 | Headings and Titles | 3 |
15.14 | General Rules of Construction | 3 |
15.15 | Severability | 4 |
15.16 | Indemnification | 4 |
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OLD SECOND BANCORP, INC.
AMENDED AND RESTATED
VOLUNTARY DEFERRED COMPENSATION PLAN FOR EXECUTIVES
The Old Second Bancorp, Inc., Amended and Restated Voluntary Deferred Compensation Plan for Executives (hereinafter referred to as “the Plan”) is hereby further amended and restated by Old Second Bancorp, Inc., a corporation organized and existing under and by virtue of the laws of the State of Delaware and its subsidiaries (hereinafter referred to as “Company”);
W I T N E S S E T H:
WHEREAS, the Company now desires to amend and restate the Plan to make the following desired changes to the Plan:
| (i) | to memorialize the grandfathering of the amounts deferred and credited to the Plan on and before December 31, 2004 such that these amounts (plus any earnings thereon) will not be subject to the provisions of Section 409A; |
| (ii) | to provide a supplemental matching contribution benefit to Participants who participate in the Company’s 401(k) Plan; and |
| (iii) | to bring the Plan into compliance with the final regulations issued under Section 409A for all amounts credited to Participants under the Plan on or after January 1, 2005. |
WHEREAS, the Company previously adopted the Plan in order to permit certain employees of the Company who are deemed to be management and/or highly compensated employees (hereinafter referred to as “Participant(s)”) to make deferrals of their compensation;
WHEREAS, the Company previously amended and restated the Plan on February 1, 2006, to comply with the preliminary regulations issued under Section 409A; and
NOW, THEREFORE, the Company hereby adopts the amended and restated Plan, effective September 1, 2008, as follows:
Old Second Bancorp, Inc. Voluntary Deferred Compensation Plan
NAME AND PURPOSE
1-1
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Unless the context otherwise indicates, the following words used herein shall have the following
meanings wherever used in this instrument:
However, Base Salary shall not include any bonus amounts, incentive payments, commission payments, fringe benefits, special benefits, perquisites, or matching or employer contributions under any benefit plan of the Company or an Affiliated Company.
2-1
Old Second Bancorp, Inc. Voluntary Deferred Compensation Plan
However, a Bonus shall not include fringe benefits, special benefits, perquisites, or matching or employer contributions under any benefit plan of the Company.
2-2
Old Second Bancorp, Inc. Voluntary Deferred Compensation Plan
However, in no event shall a Change of Control be deemed to have occurred, with respect to a Participant if the Participant is part of a purchasing group which consummates the Change of Control transaction. The Participant shall be deemed “part of a purchasing group” for purposes of the preceding sentence if the Participant is an equity participant in the purchase company or group (except for (i) passive ownership of less than two percent (2%) of the stock of the purchasing company; or (ii) ownership of equity participation in the purchasing company or group which is otherwise not significant, as determined prior to the Change of Control by a majority of the non- employee continuing Directors).
2-3
Old Second Bancorp, Inc. Voluntary Deferred Compensation Plan
| 2.19 | Director. The word “Director” shall mean a member of the Board. |
2-4
Old Second Bancorp, Inc. Voluntary Deferred Compensation Plan
| 2.36 | Section 409A. The words “Section 409A” shall mean Code Section 409A, related |
U.S. Treasury regulations and guidance thereunder, including such regulations and guidance promulgated after the Effective Date of the Plan, as deemed appropriate by the Administrator.
| (b) | Employee voluntarily terminates employment with the Company; or |
| (c) | Employee Retires from employment with the Company; |
2-5
Old Second Bancorp, Inc. Voluntary Deferred Compensation Plan
Provided that such termination of employment qualifies as a separation from service under Section 409A.
2-6
Old Second Bancorp, Inc. Voluntary Deferred Compensation Plan
ELIGIBILITY AND PARTICIPATION
3-1
Old Second Bancorp, Inc. Voluntary Deferred Compensation Plan
| 4.1 | Deferral Elections. If a Participant makes a Deferral Election under the Plan for a Plan |
Year, then a portion of the Base Salary and/or Bonus which would normally be paid to the Participant by or through the Company or an Affiliated Company shall be retained by the Company or an Affiliated Company, as applicable, and, in lieu thereof, an amount equal thereto, shall constitute a Deferral Amount hereunder and shall be credited to the Participant’s Deferral Account pursuant to Article 4.4 herein. Such elections shall be subject to the following rules:
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Old Second Bancorp, Inc. Voluntary Deferred Compensation Plan
within such other earlier deadline as may be established by the Administrator, in its sole discretion, in order to participate for the Plan Year. In such event, such person’s participation in the Plan shall not commence earlier than the date determined by the Administrator pursuant to subsection (iii) below and such person shall not be permitted to defer under this Plan any portion of his or her Base Salary or Bonus that are paid with respect to services performed prior to his or her participation commencement date, except to the extent permissible under Section 409A.
| (a) | Matching Contribution. To the extent permissible under Treasury Regulations |
§1.401(k)-1(e), the Company shall make an annual Matching Contribution on behalf of each Participant who elects to make the maximum permissible deferral amount under the 401(k) Plan, including Catch-Up Contributions (as defined in the 401(k) Plan), if applicable, and does not make any change to such 401(k) Plan deferral election throughout that Plan Year. The amount of such Matching Contribution shall be equivalent to six percent (6%) of the Participant’s Compensation as defined under the 401(k0 Plan without regard to limited imposed by Section 415 of the Code, less any matching contribution credited under the 401(k) Plan on behalf of the Participant.
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Old Second Bancorp, Inc. Voluntary Deferred Compensation Plan
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Old Second Bancorp, Inc. Voluntary Deferred Compensation Plan
| (d) | Ending Balance. The Sub-Ending Balance plus Investment Earnings. |
| (a) | money market funds; |
| (b) | mutual funds; |
| (c) | equity funds; |
| (d) | fixed income funds; |
| (e) | balanced funds; |
| (f) | any insurance company’s general account; or |
| (g) | any special account established and maintained by any insurance company. |
The Company shall have the sole discretion to determine the number of Measurement Funds to be designated hereunder and the nature of the funds and may change or eliminate the Measurement Funds designated hereunder from time to time.
Participants shall direct the allocation of their Accounts among the Measurement Funds designated by the Company as though such Accounts held actual assets. Any such directions of investment shall be subject to such rules as the Company and Administrator may prescribe, including, but not limited to, rules concerning the manner of providing investment directions and the frequency of changing such investment directions. In the event a Participant does not direct the investment of any portion of Participant’s Accounts, such undirected portion shall be deemed to be invested in the money market fund.
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Old Second Bancorp, Inc. Voluntary Deferred Compensation Plan
GRANDFATHERED PROVISIONS APPLICABLE TO PRE-2005 DEFERRAL ACCOUNTS
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Old Second Bancorp, Inc. Voluntary Deferred Compensation Plan
However, in no event shall a Change of Control be deemed to have occurred, with respect to a Participant if the Participant is part of a purchasing group which consummates the Change of Control transaction. The Participant shall be deemed “part of a purchasing group” for purposes of the preceding sentence if the Participant is an equity participant in the purchase company or group (except for (i) passive ownership of less than two percent (2%) of the stock of the purchasing company; or (ii) ownership of equity participation in the purchasing company or group which is otherwise not significant, as determined prior to the Change of Control by a majority of the nonemployee continuing Directors).
| (ii) | Employee voluntarily terminates employment with the Company or |
| (iii) | Employee Retires from employment with the Company. |
| 5.4 | Forms of Benefit Distribution. |
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Old Second Bancorp, Inc. Voluntary Deferred Compensation Plan
| (c) | Forms. The forms of retirement benefits payable under the Plan are as follows: |
Form 1. Installment Form. A Participant who receives Benefit Payments under the installment form shall receive a retirement benefit commencing on the Benefit Commencement Date and in the form of up to 20 equal annual installments. If the Participant dies prior to the completion of said installments, the remaining amount shall be paid in a lump sum payment form to the Beneficiary within sixty (60) days following the date of the Participant’s death.
Form 2. Lump Sum Payment Form. A Participant who receives payment of retirement benefits under the lump sum payment form shall receive a single sum payment on the Benefit Commencement Date in lieu of payments under Form 1. Notwithstanding the foregoing, the lump sum payment form is only available:
| (i) | to a Participant in payment of a withdrawal pursuant to Article 5.5(d) herein; |
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Old Second Bancorp, Inc. Voluntary Deferred Compensation Plan
| 5.5 | Benefit Commencement Events. |
| (d) | Withdrawal Rights. |
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Old Second Bancorp, Inc. Voluntary Deferred Compensation Plan
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Old Second Bancorp, Inc. Voluntary Deferred Compensation Plan
to provide restitution. Any forfeiture of the Participant’s Deferral Account shall be offset by any amounts outside the Plan the Participant uses to provide restitution.
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Old Second Bancorp, Inc. Voluntary Deferred Compensation Plan
PRERETIREMENT DISTRIBUTION; UNFORESEEABLE EMERGENCIES
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Old Second Bancorp, Inc. Voluntary Deferred Compensation Plan
1(d)(3) for the Participant to obtain a hardship distribution from the 401(k) Plan. If the Administrator determines, in its sole discretion, that a termination of the Participant’s deferral is required in accordance with the preceding sentence, the Participant’s deferrals shall be terminated as soon as administratively practicable following the date on which such determination is made. Notwithstanding the foregoing, for hardship withdrawals from a Participant’s Deferral Account, the Administrator shall interpret all provisions relating to termination and/or payout hereunder in a manner that is consistent with Section 409A.
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Old Second Bancorp, Inc. Voluntary Deferred Compensation Plan
BENEFITS DISTRIBUTIONS
| 7.1 | Benefit Commencement Date. A Participant’s Benefit Commencement Date shall be the |
earliest of the following dates:
| (d) | The date of a Change of Control as provided in Article 8.4; or |
| (e) | The date the Participant dies. |
In the event that a Participant has not made an election as to his Benefit Commencement Date, the default Benefit Commencement Date shall be his or her Termination of Employment.
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Old Second Bancorp, Inc. Voluntary Deferred Compensation Plan
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Old Second Bancorp, Inc. Voluntary Deferred Compensation Plan
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Old Second Bancorp, Inc. Voluntary Deferred Compensation Plan
| 8.1 | Retirement Benefits. |
| 8.2 | Termination of Employment. |
| 8.3 | Death. |
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Old Second Bancorp, Inc. Voluntary Deferred Compensation Plan
| 8.4 | Change of Control. |
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Old Second Bancorp, Inc. Voluntary Deferred Compensation Plan
| 9.1 | Automatic Beneficiary. Unless a Participant or former Participant has designated a |
Beneficiary in accordance with the provisions of Article 9.2 herein, the Participant’s Beneficiary shall be deemed to be the person or persons in the first of the following classes in which there are any survivors of such Participant or former Participant:
| (b) | issue, per stirpes; |
| (d) | executor or administrator of Participant’s estate. |
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Old Second Bancorp, Inc. Voluntary Deferred Compensation Plan
RIGHTS OF PARTICIPANTS AND BENEFICIARIES
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Old Second Bancorp, Inc. Voluntary Deferred Compensation Plan
| 11.1 | Establishment of Trust. Notwithstanding any other provision or interpretation of the Plan, |
the Company or an Affiliated Company, as applicable, may establish a trust in which to hold cash, insurance policies or other assets to be used to make, or reimburse the Company or an Affiliated Company, as applicable, for payments to the Participants or Beneficiaries of all or part of the benefits under the Plan. Any trust assets shall at all times remain subject to the claims of general creditors of the Company or an Affiliated Company, as applicable, in the event of their insolvency as more fully described in the trust.
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Old Second Bancorp, Inc. Voluntary Deferred Compensation Plan
| 12.1 | Claim for Benefits. Any claim for benefits under the Plan shall be made in writing to the |
Administrator in such a manner as the Administrator shall reasonably prescribe. The Administrator shall process each such claim and determine entitlement to benefits within thirty (30) days following the receipt of a completed application for benefits unless special circumstances require an extension of time for processing the claim. If such an extension of time for processing is required, written notice of the extension shall be furnished to the claimant prior to the termination of the initial thirty (30) day period. In no event shall such extension exceed a period of thirty (30) days from the end of such initial period. The extension notice shall indicate the special circumstances requiring an extension of time and the date as of which the Administrator expects to render the final decision.
If such a claim is wholly or partially denied by the Administrator, the Administrator shall notify the claimant of the denial of the claim in writing, delivered in person or mailed by first class mail to the claimant’s last known address. Such notice of denial shall contain:
| (b) | a reference to the relevant Plan provisions upon which the denial is based; |
| (d) | an explanation of the Plan’s claim review procedure. |
If no such notice is provided, and if the claim has not been granted within the time specified above for approval of the claim, the claim shall be deemed denied and subject to review as described below. The interpretations, determinations and decisions of the Administrator shall be final and binding upon all persons with respect to any right, benefit and privilege hereunder, subject to the review procedures set forth in this Article 12.
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Old Second Bancorp, Inc. Voluntary Deferred Compensation Plan
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Old Second Bancorp, Inc. Voluntary Deferred Compensation Plan
and exclusive remedy and shall be in lieu of all actions at law, in equity, pursuant to arbitration or otherwise.
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Old Second Bancorp, Inc. Voluntary Deferred Compensation Plan
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Old Second Bancorp, Inc. Voluntary Deferred Compensation Plan
be any person(s), corporation or partnership (including the Company itself) as the Board shall deem desirable in its sole discretion. The Administrator may be removed or resign upon thirty
(30) days written notice or such lesser period of notice as is mutually agreeable. Unless the Board appoints another Administrator, the Compensation Committee shall be the Administrator.
| (a) | the expenses may be paid directly by the Company; or |
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Old Second Bancorp, Inc. Voluntary Deferred Compensation Plan
Such costs and expenses include those incident to the performance of the responsibilities of the Administrator, Appeals Committee or Compensation Committee, including but not limited to, claims, administration fees and costs, fees of accountants, legal counsel and other specialists, bonding expenses, and other costs of administering the Plan. Notwithstanding the foregoing, in no event will any person serving in the capacity of Administrator, Appeals Committee member or Compensation Committee member who is a full-time employee of the Company be entitled to any compensation for such services.
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Old Second Bancorp, Inc. Voluntary Deferred Compensation Plan
ARTICLE 14 AMENDMENT AND TERMINATION
| 14.1 | Power to Amend or Terminate. Except as otherwise provided herein following a Change |
of Control, the Plan may be amended by the Company at any time, and may be terminated by the Company at any time, but no such amendment, modification or termination shall reduce the amounts credited to the Deferral Account of any Participant, determined as of the date of such amendment, modification or termination. Such amendment or termination shall be in writing, executed by two or more Directors of the Company whose actions are authorized or ratified by the Board. The Plan may not be amended (but may be terminated) during the two (2) year period following a Change of Control except that amendments may be made as required by law. Notwithstanding the foregoing, no amendment or modification shall be made unless such amendment or modification complies with Section 409A, and, in the event that the Company determines that any provision of the Plan may violate or otherwise not comply with Section 409A, the Company may, without the consent of the Participant, (a) adopt such amendments to the plan and appropriate policies and procedures, including amendments and policies with retroactive effect, that the Company determines necessary or appropriate to preserve the intended treatment of the Plan or the benefits provided by the Plan, and/or (b) take such other actions as the Company determines necessary or appropriate to comply with the requirements of Section 409A.
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Old Second Bancorp, Inc. Voluntary Deferred Compensation Plan
Company under Treasury Regulations Section 1.409A-1(c) for three years after the Termination Date. Notwithstanding anything to the contrary in this subsection, no distribution of any amounts may be made in connection with the termination of the Plan if the termination and liquidation of the Plan occurs proximate to a downturn in the financial health of the Company.
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Old Second Bancorp, Inc. Voluntary Deferred Compensation Plan
| 15.1 | Non-Alienation. No benefits or amounts credited to any Account under the Plan shall be |
subject in any manner to be anticipated, alienated, sold, transferred, assigned, pledged, encumbered, attached, garnished or charged in any manner (either at law or in equity), and any attempt to so anticipate, alienate, sell, transfer, assign, pledge, encumber, attach, garnish or charge the same shall be void; nor shall any such benefits or amounts in any manner be liable for or subject to the debts, contracts, liabilities, engagements or torts of the person entitled to such benefits or amounts as are herein provided to Participant.
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Old Second Bancorp, Inc. Voluntary Deferred Compensation Plan
of them, makes any representations or warranties, express or implied, or assumes any responsibility concerning the legal, tax, or other implications or effects of the Plan. Without limiting the generality of the foregoing, the Company shall not have any liability for the tax liability which a Participant may incur resulting from participation in the Plan or the payment of benefits hereunder.
Old Second Bancorp, Inc. 37 South River Street Aurora, Illinois 60506
Attn:Administrator, Old Second Bancorp, Inc. Voluntary Deferred Compensation Plan for Executives
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Old Second Bancorp, Inc. Voluntary Deferred Compensation Plan
and vice versa, as the context shall require. The present tense of a verb shall include the past and future tenses, and vice versa, as the context may require.
IN WITNESS WHEREOF, Old Second Bancorp, Inc., by its appropriate officers duly authorized, has caused the Plan to be executed and adopted as of the 1st day of September, 2008.
Old Second Bancorp, Inc. | ||
By: | /s/ William B. Skoglund | Date: _September 1, 2008 |
| William B. Skoglund | |
| Chairman of the Board, Director | |
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Exhibit B
OLD SECOND BANCORP, INC. AMENDED AND RESTATED
VOLUNTARY DEFERRED COMPENSATION PLAN FOR DIRECTORS
PLAN DOCUMENT
September 1, 2008
TABLE OF CONTENTS
ARTICLE 1 | NAME AND PURPOSE | 1 |
1.1 | Name | 1 |
1.2 | Purpose | 1 |
1.3 | Plan for a Select Group | 1 |
1.4 | Not a Funded Plan | 1 |
ARTICLE 2 | DEFINITIONS | 1 |
2.1 | Account | 1 |
2.2 | Administrator | 1 |
2.3 | Affiliated Company | 1 |
2.4 | Appeals Committee | 1 |
2.5 | Beneficiary | 1 |
2.6 | Benefit Commencement Date | 1 |
2.7 | Benefit Payment | 1 |
2.8 | Board | 1 |
2.9 | Change of Control | 2 |
2.10 | Code | 3 |
2.11 | Company | 3 |
2.12 | Compensation | 3 |
2.13 | Compensation Committee | 4 |
2.14 | Deferral Account | 4 |
2.15 | Deferral Amount | 4 |
2.16 | Deferral Election | 4 |
2.17 | Director | 4 |
2.18 | Effective Date | 4 |
2.19 | ERISA | 4 |
2.20 | Measurement Funds | 5 |
2.21 | Normal Retirement Date | 5 |
2.22 | Participant | 5 |
2.23 | Participant Access System | 5 |
2.24 | Plan | 5 |
2.25 | Plan Year | 5 |
2.26 | Pre-2005 Deferral Account | 5 |
2.27 | Preexisting Balance | 5 |
2.28 | Preretirement Distribution Election | 6 |
2.29 | Retire or Retirement | 6 |
2.30 | Section 409A | 6 |
2.31 | Termination Date | 6 |
2.32 | Termination of Tenure | 6 |
2.33 | Unforeseeable Emergency | 6 |
ARTICLE 3 | ELIGIBILITY AND PARTICIPATION | 1 |
3.1 | Eligibility | 1 |
3.2 | Participation | 1 |
ARTICLE 4 | CONTRIBUTIONS | 1 |
i
4.1 | Deferral Elections | 1 |
4.2 | Establishment of Deferral Accounts | 2 |
4.3 | Crediting of Deferral Amounts | 3 |
4.4 | Adjustment of Accounts | 3 |
4.5 | Measurement Funds | 3 |
ARTICLE 5 | GRANDFATHERED PROVISIONS APPLICABLE TO PRE-2005 DEFERRAL ACCOUNTS | 1 |
5.1 | Application | 1 |
5.2 | Definitions | 1 |
5.3 | Preretirement Distribution Election | 2 |
5.4 | Forms of Benefit Distribution. | 3 |
5.5 | Benefit Commencement Events. | 5 |
ARTICLE 6 | PRERETIREMENT DISTRIBUTION; UNFORESEEABLE EMERGENCIES | 1 |
6.1 | Preretirement Distribution Election | 1 |
6.2 | Hardship Withdrawals | 1 |
ARTICLE 7 | BENEFITS DISTRIBUTIONS | 1 |
7.1 | Benefit Commencement Date | 1 |
7.2 | Time of Distribution | 1 |
7.3 | Change to Elections for Time and Form of Payment | 2 |
7.4 | Consent Not Required | 2 |
7.5 | Correction of Amounts Payable | 3 |
7.6 | Timing of Payments | 3 |
7.7 | Transition Rule | 3 |
ARTICLE 8 | BENEFIT DISTRIBUTION EVENTS | 1 |
8.1 | Retirement Benefits. | 1 |
8.2 | Termination of Tenure. | 1 |
8.3 | Death. | 1 |
8.4 | Change of Control. | 2 |
8.5 | Benefit Payment Delay in the Event of Allegations | 2 |
ARTICLE 9 | BENEFICIARIES | 1 |
9.1 | Automatic Beneficiary | 1 |
9.2 | Designated Beneficiary or Beneficiaries | 1 |
9.3 | Death of Beneficiary | 1 |
ARTICLE 10 | RIGHTS OF PARTICIPANTS AND BENEFICIARIES | 1 |
10.1 | Creditor Status of Participant and Beneficiary | 1 |
10.2 | Rights with Respect to a Trust | 1 |
10.3 | Investments | 1 |
ARTICLE 11 | TRUST | 1 |
11.1 | Establishment of Trust | 1 |
11.2 | Obligations of the Company | 1 |
11.3 | Trust Terms | 1 |
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ARTICLE 12 | CLAIMS PROCEDURE | 1 |
12.1 | Claim for Benefits | 1 |
12.3 | Appeals Procedure | 2 |
12.4 | Decision upon Review of Denial of Claim for Benefits | 3 |
12.5 | Establishment of Appeals Committee | 4 |
12.6 | Operations of Appeals Committee | 5 |
12.7 | Special Provisions Relating to Change of Control | 6 |
ARTICLE 13 | ADMINISTRATION | 1 |
13.1 | Appointment of Administrator | 1 |
13.2 | Powers and Duties of the Administrator | 1 |
13.3 | Engagement of Advisors | 2 |
13.4 | Payment of Costs and Expenses | 2 |
ARTICLE 14 | AMENDMENT AND TERMINATION | 1 |
14.1 | Power to Amend or Terminate | 1 |
14.2 | Effects of Plan Termination | 1 |
14.3 | No Liability for Plan Amendment or Termination | 2 |
ARTICLE 15 | MISCELLANEOUS | 1 |
15.1 | Non-Alienation | 1 |
15.2 | Tax Withholding | 1 |
15.3 | Incapacity | 1 |
15.4 | Administrative Forms | 2 |
15.5 | Independence of Plan | 2 |
15.6 | Responsibility for Legal Effect | 2 |
15.7 | Limitation of Duties | 2 |
15.8 | Limitation of Sponsor Liability | 2 |
15.9 | Successors | 3 |
15.10 | Controlling Law | 3 |
15.11 | Notice | 3 |
15.12 | Headings and Titles | 3 |
15.13 | General Rules of Construction | 3 |
15.14 | Severability | 3 |
15.15 | Indemnification | 4 |
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OLD SECOND BANCORP, INC. AMENDED AND RESTATED
VOLUNTARY DEFERRED COMPENSATION PLAN FOR DIRECTORS
The Old Second Bancorp, Inc., Amended and Restated Voluntary Deferred Compensation Plan for Directors (hereinafter referred to as “the Plan”) is hereby further amended and restated by Old Second Bancorp, Inc., a corporation organized and existing under and by virtue of the laws of the State of Delaware and its subsidiaries (hereinafter referred to as “Company”);
W I T N E S S E T H:
WHEREAS, the Company now desires to amend and restate the Plan to make the following desired changes to the Plan:
WHEREAS, the Company previously adopted the Plan in order to permit members of the Company’s and Affiliated Company’s Boards of Directors (hereinafter referred to as “Participant(s)”) to make deferrals of their directors’ fees;
WHEREAS, the Company previously amended and restated the Plan on February 1, 2006, to comply with the preliminary regulations issued under Section 409A; and
NOW, THEREFORE, the Company hereby adopts the amended and restated Plan, effective September 1, 2008, as follows:
ARTICLE 1
NAME AND PURPOSE
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DEFINITIONS
Unless the context otherwise indicates, the following words used herein shall have the following meanings wherever used in this instrument:
| (i) | Any one person, or more than one person acting as a group (as determined under Treasury Regulation |
§1.409A-3(g)(5)(v)(B)), acquires or has acquired during the 12-month period ending on the date of the most recent acquisition by such person or persons ownership of stock of the Company possessing thirty percent (30%) or more of the total voting power of the stock of such corporation; or
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otherwise not significant, as determined prior to the Change of Control by a majority of the non-employee continuing Directors).
| (a) | Increased by any deferred compensation amounts; and |
| (b) | Reduced by all of the following amounts even if they are taxable to the Director: |
| (i) | Expense reimbursements, expense allowances or moving expenses; and |
| (ii) | Cash and non-cash fringe benefits and welfare benefits. |
Finally, the Director’s Compensation with respect to a Plan Year (as defined hereinafter) shall be that Compensation which is earned for such Plan Year, without regard to when such Compensation is actually paid to the Director.
Section having the same or a similar purpose.
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ELIGIBILITY AND PARTICIPATION
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ARTICLE 4
CONTRIBUTIONS
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| (d) | Ending Balance. The Sub-Ending Balance plus Investment Earnings. |
| (b) | mutual funds; |
| (d) | fixed income funds; |
| (f) | any insurance company’s general account; or |
| (g) | any special account established and maintained by any insurance company. |
The Company shall have the sole discretion to determine the number of Measurement Funds to be designated hereunder and the nature of the funds and may change or eliminate the Measurement Funds designated hereunder from time to time. Participants shall direct the allocation of their Accounts among the Measurement Funds designated by the Company as though such Accounts held actual assets. Any such directions of investment shall be subject to such rules as the Company and Administrator may prescribe, including, but not limited to, rules concerning the manner of providing investment directions and the frequency of changing such investment directions. In the event a Participant does not direct the investment of any portion of Participant’s Accounts, such undirected portion shall be deemed to be invested in the money market fund.
To the extent a portion of the Participant’s Existing Balance includes units of phantom stock ownership, the Participant’s Deferral Account may continue to be allocated to the Company’s stock Measurement Fund or may be allocated to any of the Plan’s Measurement Funds. No additional deferral amounts may be allocated to the Company’s stock Measurement Fund. If a portion of the Participant’s Deferral Account that is credited with a phantom stock ownership measurement is subsequently reallocated to a Measurement Fund, such amount may not be allocated back to the Company’s phantom stock ownership measurement.
Example: A Participant is credited with a phantom stock ownership balance of 20 units. The Participant may continue to allocate an amount in the Plan to Company stock up to 20 units. If the Participant allocates the value of 6 units to a Measurement Fund, the total amount that may be allocated to Company stock from that point forward is 14 units.
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ARTICLE 5
GRANDFATHERED PROVISIONS APPLICABLE TO PRE-2005 DEFERRAL ACCOUNTS
However, in no event shall a Change of Control be deemed to have occurred, with respect to a Participant if the Participant is part of a purchasing group which consummates the Change of Control transaction. The Participant shall be deemed “part of a purchasing group” for purposes of the preceding sentence if the Participant is an equity participant in the purchase company or group (except for (i) passive ownership of less than two percent (2%) of the stock of the purchasing company; or (ii) ownership of equity participation in the purchasing company or group which is otherwise not significant, as determined prior to the Change of Control by a majority of the non-employee continuing Directors).
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definite period and shall be payable in the form elected and on the date specified by the Participant, provided that the following shall be applicable:
| (c) | Forms. The forms of retirement benefits payable under the Plan are as follows: |
Form 1. Installment Form. A Participant who receives Benefit Payments under the installment form shall receive a retirement benefit commencing on the Benefit Commencement Date and in the form of up to 20 equal annual installments. If the Participant dies prior to the completion of said installments, the remaining amount shall be paid in a lump sum payment form to the Beneficiary within sixty (60) days following the date of the Participant’s death.
Form 2. Lump Sum Payment Form. A Participant who receives payment of retirement benefits under the lump sum form shall receive a single sum payment on the Benefit Commencement Date in lieu of payments under Form 1. Notwithstanding the foregoing, the lump sum payment form is only available:
| (i) | to a Participant in payment of a withdrawal pursuant to Article 6.4 herein; |
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Article 5.4(b) herein.
| (d) | Withdrawal Rights and Preretirement Distributions. |
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5-4
ARTICLE 6
PRERETIREMENT DISTRIBUTION; UNFORESEEABLE EMERGENCIES
(A) through reimbursement or compensation by insurance or otherwise, (B) by liquidation of the Participant’s assets (other than tax-qualified retirement assets), to the extent the liquidation of such assets would not itself cause severe financial hardship, or (C) by cessation of deferrals under this Plan. Such distribution shall be made in a lump sum payment. To the extent of such withdrawal, the Participant’s Deferral Account balances shall be canceled. Notwithstanding the foregoing, for hardship withdrawals from a Participant’s Deferral Account, the Administrator shall interpret all provisions relating to termination and/or payout hereunder in a manner that is consistent with Section 409A.
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ARTICLE 7
BENEFITS DISTRIBUTIONS
| (b) | The Participant’s Termination of Tenure prior to Retirement as provided in Article 8.2; |
| (d) | The date of a Change of Control as provided in Article 8.4; or |
In the event that a Participant has not made an election as to his Benefit Commencement Date, the default Benefit Commencement Date shall be his or her Termination of Tenure.
| (b) | Any distribution to be made pursuant to the Installment Method shall commence no later than |
sixty (60) days after the Participant’s Benefit Commencement Date and thereafter shall be made no later than sixty (60) days after the last business day of the preceding year.
(12) months prior to the first scheduled payment under the Participant’s originally scheduled Benefit Commencement Date.
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and such other provisions to the contrary, the requirement that a distribution commence on or before a particular date shall not apply if the amount of payment required to be made on such date cannot be ascertained by such date, or the Administrator is unable to locate the Participant or the Beneficiary after making reasonable efforts to do so, provided that, within sixty (60) days after such amount can be ascertained or the Participant or the Beneficiary is located, a payment is made retroactive to such date. This Article 7 is not intended to permit a Participant or Beneficiary to elect to defer payment beyond the dates otherwise provided herein.
Notwithstanding the foregoing, payments delayed pursuant to this Article 7 shall be made no later than the end of the calendar year in which the payment became due in order to comply with Section 409A.
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ARTICLE 8
BENEFIT DISTRIBUTION EVENTS
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ARTICLE 9
BENEFICIARIES
| (b) | issue, per stirpes; |
| (d) | executor or administrator of Participant’s estate. |
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ARTICLE 10
RIGHTS OF PARTICIPANTS AND BENEFICIARIES
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ARTICLE 11
TRUST
Article 11.1 herein, the Company or an Affiliated Company, as applicable, shall remain liable for paying the benefits under the Plan. However, any payment of benefits to a Participant or a Beneficiary made by such a trust shall satisfy the Company’s or the Affiliated Company’s, as applicable, obligation to make such payment to such person.
Article 11.1 herein at any time, and in any manner it deems necessary or desirable, subject to the preceding sentence and the terms of any agreement under which any such trust is established or maintained.
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ARTICLE 12
CLAIMS PROCEDURE
If such a claim is wholly or partially denied by the Administrator, the Administrator shall notify the claimant of the denial of the claim in writing, delivered in person or mailed by first class mail to the claimant’s last known address. Such notice of denial shall contain:
| (b) | a reference to the relevant Plan provisions upon which the denial is based; |
| (d) | an explanation of the Plan’s claim review procedure. |
If no such notice is provided, and if the claim has not been granted within the time specified above for approval of the claim, the claim shall be deemed denied and subject to review as described below. The interpretations, determinations and decisions of the Administrator shall be final and binding upon all persons with respect to any right, benefit and privilege hereunder, subject to the review procedures set forth in this Article 12.
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Although the Appeals Committee shall act by decision of a majority of its members as above provided, nevertheless in the absence of written notice to the contrary, every person may deal with the Secretary and consider the Secretary’s acts as having been authorized by the Appeals Committee. Any notice served or demand made on the Secretary shall be deemed to have been served or made upon the Appeals Committee.
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ARTICLE 13
Such costs and expenses include those incident to the performance of the responsibilities of the Administrator, Appeals Committee or Compensation Committee, including but not limited to, claims, administration fees and costs, fees of accountants, legal counsel and other specialists, bonding expenses, and other costs of administering the Plan. Notwithstanding the foregoing, in no event will any person serving in the capacity of Administrator, Appeals Committee member or Compensation Committee member who is a full-time employee of the Company be entitled to any compensation for such services.
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ARTICLE 14
two (2) year period following a Change of Control except that amendments may be made as required by law. Notwithstanding the foregoing, no amendment or modification shall be made unless such amendment or modification complies with Section 409A, and, in the event that the Company determines that any provision of the Plan may violate or otherwise not comply with Section 409A, the Company may, without the consent of the Participant, (a) adopt such amendments to the plan and appropriate policies and procedures, including amendments and policies with retroactive effect, that the Company determines necessary or appropriate to preserve the intended treatment of the Plan or the benefits provided by the Plan, and/or (b) take such other actions as the Company determines necessary or appropriate to comply with the requirements of Section 409A.
shall have no liability for terminating the Plan notwithstanding the fact that a Participant may have expected to make future deferrals and have future allocations made on Participant’s behalf hereunder had the Plan remained in effect.
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ARTICLE 15
MISCELLANEOUS
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be exercised without the approval or consent of any person in a fiduciary capacity. Neither the Company, nor any of its respective officers, members, employees, agents and delegates, shall have any liability to any party for its exercise of any such right or authority.
Old Second Bancorp, Inc. 37 South River Street Aurora, Illinois 60506
Attn:Administrator, Old Second Bancorp, Inc. Voluntary Deferred Compensation Plan for Directors
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IN WITNESS WHEREOF, Old Second Bancorp, Inc., by its appropriate officers duly authorized, has caused the Plan to be executed and adopted as of the 1st day of September, 2008.
Old Second Bancorp, Inc. | ||
By: | /s/ William B. Skoglund | Date: _September 1, 2008 |
| William B. Skoglund | |
| Chairman of the Board, Director | |
~#4828-3521-2228 v.2~
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