Old Second Bancorp, Inc. Employees’
401(k) Savings Plan and Trust
Notes to Financial Statements
As of December 31, 2022 and 2021
1.Description of the Plan
The following is a brief description of the Old Second Bancorp, Inc. Employees’ 401(k) Savings Plan and Trust (the “Plan”). Participants should refer to the Plan document or the summary plan description for a more complete description of the Plan’s provisions.
General
The Plan is a defined-contribution plan established to provide deferred compensation benefits to eligible employees. Under the Plan, all nonunion employees of Old Second Bancorp, Inc. and certain of its affiliates (collectively, the “Company”) who have met certain eligibility requirements may elect to participate in the Plan. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974, as amended (ERISA).
On December 1, 2021, Old Second Bancorp, Inc. acquired West Suburban Bancorp, Inc., and its wholly owned subsidiary, West Suburban Bank. As of that date, the prior existing West Suburban 401(k) Savings Plan was terminated; the Company has received a favorable IRS Plan determination letter and as a result all current participants in the West Suburban plan are now eligible to rollover funds into the Company’s plan, move the funds to another administrator, or take a withdrawal. West Suburban plan participants no longer employed by the Company are able to withdraw or rollover their funds to another tax deferred plan at any time after termination.
Contributions
Under provisions of the Plan, participants enter into agreements wherein each participant may elect to contribute an unlimited reduction in compensation to the Plan (subject to statutory wage deferral limitations). Maximum contribution limits of compensation may apply for certain highly compensated employees.
The Plan allows for a discretionary employer match contribution. The Plan has a “Safe Harbor” Plan provision, which allows a Company match equal to 100% of the first 3% of the participant’s eligible compensation contributed, and an additional Company match of 50% on the next 2% of the participant’s eligible compensation contributed, allowing a total Company match of 4% if the participant elects a 5% or more contribution rate. Participants are eligible for matching contributions after one month of service, with the entry date being the first day of the month coincident with or next following the employee's one-month anniversary. Participants are 100% vested in the safe harbor matching contributions as of the contribution date. Total employer matching contributions to the plan in 2022 were $1,988,752.
Profit-sharing contributions are based on amounts determined by the Company’s Board of Directors before the end of each year and shall not exceed the maximum amount deductible for federal income tax purposes. Participants must complete one year of service to be eligible for profit-sharing contributions with the earliest entry date being the first of the quarter coincident with or next following their one year anniversary date. For year ended December 31, 2022, no profit-sharing contribution was made by the Company.
Forfeitures may be used to pay Plan expenses, or are used to reduce Company contributions. There were no forfeitures used in the Plan during the year ending December 31, 2022 to reduce the employer matching contributions.
Participants who have attained age 50 before the end of the Plan year are eligible to make additional catch-up contributions. Participants may also contribute amounts representing distributions from other qualified defined benefit or defined contribution plans.