As filed with the Securities and Exchange Commission on May 5, 1999
REGISTRATION NO. 333-_______
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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GUARANTY BANCSHARES, INC.
(Exact name of registrant as specified in its charter)
TEXAS 75-1656431
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification Number)
100 WEST ARKANSAS
MOUNT PLEASANT, TEXAS 75455
(903) 572-9881
(Address of registrant's Principal Executive Offices)
GUARANTY BANK EMPLOYEE STOCK OWNERSHIP PLAN
(WITH 401(K) PROVISIONS)
(Full Title of Plan)
DEVRY GARRETT
GENERAL COUNSEL
GUARANTY BANCSHARES, INC.
100 WEST ARKANSAS
MOUNT PLEASANT, TEXAS 75455
(Name, and address of agent for service)
903-572-9881
(Telephone number, including area code, of agent for service)
COPY TO:
WILLIAM T. LUEDKE IV
BRACEWELL & PATTERSON, L.L.P.
SOUTH TOWER, PENNZOIL PLACE
711 LOUISIANA STREET, SUITE 2900
HOUSTON, TEXAS 77002-2781
(713) 223-2900
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CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
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PROPOSED
MAXIMUM PROPOSED AMOUNT OF
TITLE OF AMOUNT TO OFFERING MAXIMUM AGGREGATE REGISTRATION
SECURITIES TO BE REGISTERED BE REGISTERED(1) PRICE PER SHARE (2) OFFERING PRICE (2) FEE
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<S> <C> <C> <C> <C>
Common Stock, par value $1.00 per share 600,000 $9.875 $5,925,000 $1,647.15
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(1) Pursuant to Rule 457(h)(1), the registration fee is calculated with
respect to shares to be purchased pursuant to the Guaranty Bank Employee
Stock Ownership Plan (with 401(k) provisions) (the "Plan"). In addition,
pursuant to Rule 416(a) of the Securities Act of 1933, as amended (the
"Act"), this Registration Statement also covers an indeterminate amount of
interests to be offered or sold pursuant to the Plan which is described
herein.
(2) The proposed maximum offering price per share and the proposed maximum
aggregate offering price are (a) calculated, pursuant to Rule 457(h)(1),
by multiplying the number of shares to be registered by the average of the
high and low prices of a share of Common Stock, as reported on The Nasdaq
Stock Market, Inc., on May 3, 1999, which was $9.875, and (b) provided
herein for the sole purpose of determining the registration fee.
<PAGE>
PART I
INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS
Item 1. PLAN INFORMATION.*
Item 2. REGISTRANT INFORMATION AND EMPLOYEE PLAN ANNUAL INFORMATION.*
* The information required by Items 1 and 2 of Part I of Form S-8 is omitted
from this Registration Statement in accordance with the Note to Part 1 of
Form S-8 and Rule 428 promulgated under the Securities Act of 1933,
as amended (the "Securities Act").
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<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
Guaranty Bancshares, Inc., a Texas corporation, (the "Company") and the
Guaranty Bank Employee Stock Ownership Plan (with 401(k) provisions) (the
"Plan"), hereby incorporate by reference into this registration statement
(the "Registration Statement"):
(i) the Company's Annual Report on Form 10-K for the year ended
December 31, 1998, as filed with the Securities and Exchange
Commission (the "Commission") on March 12, 1999;
(ii) the Company's Quarterly Report on Form 10-Q for the quarter
ended March 31, 1998, as filed with the Commission on June 29,
1998;
(iii) the Company's Quarterly Report on Form 10-Q for the quarter
ended June 30, 1998, as filed with the Commission on August
10, 1998;
(iv) the Company's Quarterly Report on Form 10-Q for the quarter
ended September 30, 1998, as filed with the Commission on
November 13, 1998; and
(v) the description of the Company's Common Stock, par value $1.00
per share, contained in the Company's Form 8-A, dated May 11,
1998 including any amendment or report filed for the purpose
of updating such description.
All documents filed by the Company or the Plan with the Commission
pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), subsequent to the filing date of this
Registration Statement and prior to the filing of a post-effective amendment to
this Registration Statement which indicates that all securities offered have
been sold or which deregisters all securities then remaining unsold, shall be
deemed to be incorporated by reference in this Registration Statement and to be
a part hereof from the date of filing of such documents.
The Company will provide, without charge, to each participant in the Plan,
on written or oral request of such person, a copy of any or all of the documents
(without exhibits, unless such exhibits are specifically incorporated by
reference), incorporated by reference pursuant to this Item 3. All such requests
should be directed to Guaranty Bancshares, Inc., 100 West Arkansas, Mount
Pleasant, Texas 75455, Attention: Devry Garrett, General Counsel, phone number
(903) 572-9881.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Company's Amended Articles of Incorporation (the "Articles of
Incorporation") and Amended and Restated Bylaws ("Bylaws") require the Company
to indemnify officers and directors of the Registrant to the fullest
II-1
<PAGE>
extent permitted by Article 2.02-1 of the Texas Business Corporation Act
("TBCA") of the State of Texas. Generally, Article 2.02-1 of the TBCA permits a
corporation to indemnify a person who was, is, or is threatened to be a named
defendant or respondent in a proceeding because the person was or is a director
or officer if it is determined that such person (i) conducted himself in good
faith, (ii) reasonably believed (a) in the case of conduct in his official
capacity as a director or officer of the corporation, that his conduct was in
the corporation's best interests, or (b) in the case of other situations, that
his conduct was at least not opposed to the corporation's best interests, and
(iii) in the case of any criminal proceeding, had no reasonable cause to believe
that his conduct was unlawful. In addition, the TBCA requires a corporation to
indemnify a director or officer for any action that such director or officer is
wholly successful in defending on the merits.
The Company's Articles of Incorporation provide that a director of the
Company will not be liable to the corporation for monetary damages for an act or
omission in the director's capacity as a director, except to the extent not
permitted by law. Texas law does not permit exculpation of liability in the case
of (i) a breach of the director's duty of loyalty to the corporation or its
shareholders, (ii) an act or omission not in good faith that involves
intentional misconduct or a knowing violation of the law, (iii) a transaction
from which a director received an improper benefit, whether or not the benefit
resulted from an action taken within the scope of the director's office, (iv) an
act or omission for which the liability of the director is expressly provided by
statute, or (v) an act related to an unlawful stock repurchase or dividend.
The Company may provide liability insurance for each director and officer
for certain losses arising from claims or changes made against them while acting
in their capabilities as directors or officers of the Company, whether or not
the Company would have the power to indemnify such person against such
liability, as permitted by law.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
4.1 Amended Articles of Incorporation of the Company (incorporated by
reference from Exhibit 3.1 to the Company's Registration Statement
on Form S-1 Registration No. 333-48959).
4.2 Amended and Restated Bylaws of the Company (incorporated by
reference from Exhibit 3.2 to the Company's Registration Statement
on Form S-1, Registration No. 333-48959).
4.3* Guaranty Bancshares, Inc. Employee Stock Ownership Plan (with 401(k)
provisions).
4.4* Amendment Number 1A to the Guaranty Bancshares, Inc. Employee Stock
Ownership Plan (with 401(k) provisions).
4.5* Amendment Number 1B to the Guaranty Bancshares, Inc. Employee Stock
Ownership Plan (with 401(k) provisions).
4.6* Amendment Number 2 to the Guaranty Bancshares, Inc. Employee Stock
Ownership Plan (with 401(k) provisions).
4.7* Amendment Number 3 to the Guaranty Bancshares, Inc. Employee Stock
Ownership Plan (with 401(k) provisions).
4.8* Amendment Number 4 to the Guaranty Bancshares, Inc. Employee Stock
Ownership Plan (with 401(k) provisions).
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<PAGE>
23* Consent of Arnold, Walker, Arnold & Co., P.C.
24* Power of Attorney (included on page II-5).
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*Filed Herewith.
ITEM 9. UNDERTAKINGS.
A. The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration
statement:
(i) To include any prospectus required by section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration statement
(or the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental
change in the information set forth in this Registration
Statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar
value of securities offered would not exceed that which was
registered) and any deviation from the low or high and of the
estimated maximum offering range may be reflected in the form
of a prospectus filed with the Commission pursuant to Rule
424(b) if, in the aggregate, the changes in volume and price
represent no more than a 20 percent change in the maximum
aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration
statement.
(iii) To include any material information with respect
to the plan of distribution not previously disclosed in the
registration statement or any material change to such
information in this Registration Statement;
PROVIDED, HOWEVER, that paragraphs (A)(1)(i) and (A)(1)(ii) of this
section do not apply if the information required to be included in a
post-effective amendment by those paragraphs is contained in
periodic reports filed by the registrant pursuant to Section 13 or
Section 15(d) of the Exchange Act, that are incorporated by
reference in this Registration Statement.
(2) That, for the purpose of determining any liability under
the Securities Act, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold
at the termination of the offering.
B. The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
II-3
<PAGE>
C. Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
[SIGNATURE PAGE FOLLOWS]
II-4
<PAGE>
SIGNATURES
THE REGISTRANT. PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF
1933, AS AMENDED, THE REGISTRANT CERTIFIES THAT IT HAS REASONABLE GROUNDS TO
BELIEVE THAT IT MEETS ALL OF THE REQUIREMENTS FOR FILING ON FORM S-8 AND HAS
DULY CAUSED THIS REGISTRATION STATEMENT OR AMENDMENT TO BE SIGNED ON ITS BEHALF
BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE CITY OF MOUNT PLEASANT,
STATE OF TEXAS ON THE 4TH DAY OF MAY, 1999.
GUARANTY BANCSHARES, INC.
(Registrant)
By: /s/ ARTHUR B. SCHARLACH, JR.
President
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and appoints
Arthur B. Scharlach, Jr. and Clifton A. Payne with full power to each of them to
act without the other, the undersigned's true and lawful attorney-in-fact and
agent, with full power of substitution and resubstitution, for the undersigned
and in the undersigned's name, place and stead, in any and all capacities (until
revoked in writing), to sign this Registration Statement and any and all
amendments (including post-effective amendments) thereto, to file the same,
together with all exhibits thereto and documents in connection therewith, with
the Securities and Exchange Commission, to sign any and all applications,
registration statements, notices and other documents necessary or advisable to
comply with the applicable state securities authorities, granting unto said
attorney-in-fact and agent, or his or their substitute or substitutes, full
power and authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises in order to effectuate the same
as fully to all intents and purposes as the undersigned might or could do if
personally present, thereby ratifying and confirming all that said
attorneys-in-fact and agents, or his or their substitute or substitutes, may
lawfully do or cause to be done by virtue hereof.
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
REGISTRATION STATEMENT OR AMENDMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN
THE CAPACITIES INDICATED AND ON THE 4TH DAY OF MAY, 1999.
SIGNATURE TITLE
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/s/ BILL G. JONES Chairman of the Board
Bill G. Jones
/s/ ARTHUR B. SCHARLACH, JR. President and Director
Arthur B. Scharlach, Jr. (Principal Executive Officer)
/s/ CLIFTON A. PAYNE Treasurer and Director
Clifton A. Payne (Principal Financial Officer/ Principal
Accounting Officer)
/s/ JOHN A. CONROY Director
John A. Conroy
/s/ JONICE CRANE Director
Jonice Crane
/s/ C. A. HINTON, SR. Director
C. A. Hinton, Sr.
/s/ RUSSELL L. JONES Director
Russell L. Jones
II-5
<PAGE>
/s/ WELDON MILLER Director
Weldon Miller
/s/ D. R. ZACHRY, JR. Director
D. R. Zachry, Jr.
II-6
<PAGE>
SIGNATURES
THE PLAN. PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE
PLAN TRUSTEES HAVE DULY CAUSED THIS REGISTRATION STATEMENT OR AMENDMENT TO BE
SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED IN THE CITY
OF MOUNT PLEASANT, STATE OF TEXAS ON THE 4TH DAY OF MAY, 1999.
GUARANTY BANCSHARES, INC. EMPLOYEE STOCK
OWNERSHIP (WITH 401(K) PROVISIONS) (PLAN)
By: /s/ DEVRY W. GARRETT
Name: Devry W. Garrett
Title: Trustee
By: /s/ RUSSELL L. JONES
Name: Russell L. Jones
Title: Trustee
By: /s/ WELDON MILLER
Name: Weldon Miller
Title: Trustee
By: /s/ CLIFTON A. PAYNE
Name: Clifton A. Payne
Title: Trustee
By: /s/ RICHARD PERRYMAN
Name: Richard Perryman
Title: Trustee
By: /s/ D. R. ZACHRY
Name: D. R. Zachry
Title: Trustee
II-7
<PAGE>
EXHIBIT INDEX
EXHIBIT NUMBER DESCRIPTION
4.1 Amended and Restated Articles of Incorporation of the
Company (incorporated by reference from Exhibit 3.1 to
the Company's Registration Statement on Form S-1
Registration No. 333-48959).
4.2 Amended and Restated Bylaws of the Company (incorporated
by reference from Exhibit 3.2 to the Company's
Registration Statement on Form S-1, Registration No.
333- 48959).
4.3* Guaranty Bancshares, Inc. Employee Stock Ownership Plan
(with 401(K) provisions).
4.4* Amendment Number 1A to the Guaranty Bancshares, Inc.
Employee Stock Ownership Plan (with 401(k) provisions).
4.5* Amendment Number 1B to the Guaranty Bancshares, Inc.
Employee Stock Ownership Plan (with 401(k) provisions).
4.6* Amendment Number 2 to the Guaranty Bancshares, Inc.
Employee Stock Ownership Plan (with 401(k) provisions).
4.7* Amendment Number 3 to the Guaranty Bancshares, Inc.
Employee Stock Ownership Plan (with 401(k) provisions).
4.8* Amendment Number 4 to the Guaranty Bancshares, Inc.
Employee Stock Ownership Plan (with 401(k) provisions).
23* Consent of Arnold, Walker, Arnold & Co., P.C.
24* Power of Attorney (included on page II-5).
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*Filed Herewith
II-8
GUARANTY BANCSHARES, INC.
EMPLOYEE STOCK OWNERSHIP PLAN
(With 401(k) Provisions)
Effective as of January 1, 1992
<PAGE>
SECTION PAGE
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1. Nature of Plan ..................................................... 1.1
2. Definitions ........................................................ 2.1
3. Eligibility and Participation ...................................... 3.1
4. Employer and Employee Contributions ................................ 4.1
5. Investment of Trust Assets ......................................... 5.1
6. Allocations to Participants' Accounts .............................. 6.1
7. Expenses of the Plan and Trust ..................................... 7.1
8. Voting Company Stock ............................................... 8.1
9. Disclosure to Participants ......................................... 9.1
10. Capital Accumulation ............................................... 10.1
11. Retirement, Disability or Death .................................... 11.1
12. Termination of Service, Break in Service, Vesting and Forfeitures .. 12.1
13. Credited Service ................................................... 13.1
14. When Capital Accumulation Will Be Distributed ...................... 14.1
15. How Capital Accumulation Will Be Distributed ....................... 15.1
16. Rights, Options and Restrictions on Company Stock .................. 16.1
17. No Assignments of Benefits, Dividends, Loans ....................... 17.1
18. Administration ..................................................... 18.1
19. Claims Procedure ................................................... 19.1
20. Guaranties ......................................................... 20.1
21. Future of the Plan ................................................. 21.1
22. "Top-Heavy" Contingency Provisions ................................. 22.1
23. Diversification .................................................... 23.1
24. Governing Law ...................................................... 24.1
25. Execution .......................................................... 25.1
<PAGE>
GUARANTY BANCSHARES, INC.
EMPLOYEE STOCK OWNERSHIP PLAN
(With 401(k) Provisions)
Section 1. NATURE OF PLAN.
The purpose of this Plan is to enable participating Employees to share in
the growth and prosperity of the Company through Employer contributions to the
Plan and to provide Participants with an opportunity to accumulate capital for
their future economic security. The Plan is designed to permit both Employer and
Employee contributions to the Plan. The primary purpose of the Plan is to enable
Participants to acquire stock ownership interests in the Company. Therefore, the
Trust Assets held under the Plan will. be invested primarily in Company Stock.
The Plan is also designed to be available as a technique of corporate
finance to the Company. Accordingly, it may be used to accomplish the following
objectives:
(a) To meet general financing requirements of the Company, including
capital growth and transfers in the ownership of Company Stock;
(b) To provide Participants with beneficial ownership of Company Stock and
other assets through Employer and Employee contributions to the Plan;
and
(c) To receive loans (or other extensions of credit) to finance the
acquisition of Company Stock ("Acquisition Loans"), with such loans to
be repaid by Employer Contributions to the Trust and dividends
received on such Company Stock.
The Plan, hereby adopted effective as of January 1, 1992, is a stock bonus
plan containing Section 401(k) features that is intended to qualify under
Section 401(a) of the Internal Revenue Code. The Plan is also designed to be an
employee stock ownership plan under Section 4975(e)(7)
1.1
<PAGE>
of the Code. The Plan is a complete amendment and restatement of the Guaranty
Bancshares, Inc. Employee Savings Plan, which was originally effective January
1, 1985.
All Trust Assets under the Plan will be administered, distributed,
forfeited and otherwise governed by the provisions of this Plan and the related
Trust Agreement. The Plan is administered by a Board of Trustees and an
Administrative Committee for the exclusive benefit of Participants (and their
Beneficiaries).
1.2
<PAGE>
Section 2. DEFINITIONS.
In this Plan, whenever the context so indicates, the singular or plural
number and the masculine, feminine or neuter gender shall be deemed to include
the other, the terms "he," "his," and "him" shall refer to a Participant, and
the capitalized terms shall have the following meanings:
ACCOUNT
One of the several accounts maintained to record the interest of a
Participant under the Plan. See Section 6.
ACQUISITION LOAN
A loan (or other extension of credit) used by the Trust to finance the
Acquisition of Company Stock, which loan may constitute an extension of
credit to the Trust from a party in interest (as defined in ERISA). See
Section 5(b).
ADJUSTED COMPENSATION
The total remuneration paid to an Employee as a Participant in each Plan
Year, as reported on IRS Form W-2, plus the amount (if any) of his Salary
Reduction Contributions and Code Section 125 Cafeteria Plan deferrals for
the Plan Year. For any Plan Year, however, Adjusted Compensation exceeding
$200,000 for any Employee (adjusted in accordance with the Section
415(d)(2) of the Code for cost of living increases) shall not be taken into
account.
AFFILIATED COMPANY
Guaranty Bank, Talco Bank, and any other corporation or business which is a
member of a controlled group of corporations or businesses with the Company
pursuant to Section 414(b), (c), or (m) of the Code.
ANNIVERSARY DATE
The 31st day of December of each year (the last day of each Plan Year).
ANNUITY STARTING DATE
The first day of the first period for which an amount is payable as an
annuity; or in the case of a benefit not payable in the form of an annuity,
the first day on which all events have occurred which entitle the
participant to such benefit.
2.1
<PAGE>
APPROVED ABSENCE
A leave of absence (without pay) granted to an Employee by an Employer
under its established leave policy.
BENEFICIARY
The person (or persons) entitled to receive any benefit under the Plan in
the event of a Participant's death. See Section 15(b).
BOARD OF DIRECTORS
The Board of Directors of the Company.
BREAK IN SERVICE
A Plan Year in which a Participant is not credited with more than 500 Hours
of Service by reason of his termination of Service. See Section 12(b).
BUYOUT
A transaction or series of related transactions by which the Company is
sold, either through the sale of a Controlling Interest in the Company's
voting stock or through the sale of substantially all of the Company's
assets, to a party not having a Controlling Interest in the Company's
voting stock on the date of execution of this Agreement.
CAPITAL ACCUMULATION
A Participant's vested, nonforfeitable interest in his Accounts under the
Plan. See Section 10.
CHANGE IN CONTROL
A Buyout, Merger or Substantial Change in Ownership.
CODE
The Internal Revenue Code of 1986.
COMMITTEE
The Administrative Committee appointed by the Board of Directors to
administer the Plan. See Section 18.
COMPANY
Guaranty Bancshares, Inc., a corporation organized under the laws of Texas
and registered as a bank holding company under the Bank Holding Company Act
of 1956, as amended.
2.2
<PAGE>
COMPANY STOCK
Shares of capital stock issued by the Company, which are either voting
common stock or preferred stock (convertible into voting common stock) and
which shares constitute "employer securities" under Section 409(l) of the
Code.
COMPANY STOCK ACCOUNT
The Account of a Participant which reflects his interest in Company Stock
held under the Plan. See Section 6(e).
COMPENSATION
The total remuneration paid to an Employee by the Employer in each Plan
Year for personal services, excluding (a) contributions to a plan of
deferred compensation (to the extent contributions are not included in
gross income of the employee for the taxable year contributed) and
distributions from such a deferred compensation plan (whether or not
includable in gross income), (b) amounts realized in connection with the
exercise of non-qualified stock options (or the sale exchange or other
disposition of qualified stock options) and amounts which receive special
tax benefits.
CONTROLLING INTEREST
Controlling Interest shall mean ownership, either directly or indirectly,
of more than (20%) of the Company's voting stock.
CREDITED SERVICE
The number of calendar years during which an Employee is credited with at
least 1000 Hours of Service. See Section 13.
DEFINED CONTRIBUTION DOLLAR LIMITATION
The dollar amount of $30,000, or, if greater, one-fourth of the defined
benefit dollar limitation set forth in Section 415(b)(1) of the Code as in
effect for the Plan Year.
EMPLOYEE
Any common-law employee of an Employer.
EMPLOYER
The Company, Guaranty Bank, Talco Bank, and any other Affiliated Company
which is designated by the Board of Directors as an Employer and which
adopts the Plan for the benefit of its Employees.
2.3
<PAGE>
EMPLOYER CONTRIBUTIONS
Payments made to the Trust by an Employer which include Basic
Contributions, Matching Contributions, and Optional Contributions. See
Section 4.
EMPLOYER DISCRETIONARY BASIC CONTRIBUTIONS
Plan contributions made pursuant to Plan Section 4(l)(a)(3).
EMPLOYER DISCRETIONARY MATCHING CONTRIBUTIONS
Plan contributions made pursuant to Plan Section 4(l)(a)(2).
EMPLOYER DISCRETIONARY OPTIONAL CONTRIBUTIONS
Plan contributions made pursuant to Plan Section 4(l)(a)(4).
ERISA
The Employee Retirement Income Security Act of 1974, as amended.
FINANCED SHARES
Shares of Company Stock acquired by the Trust with the proceeds of an
Acquisition Loan.
FORFEITURE
Any portion of a Participant's Accounts which does not become a part of his
Capital Accumulation upon the occurrence of a Break in Service. See Section
12(b) and (c).
HIGHLY COMPENSATED PARTICIPANT
Any Employee who, in accordance with Code Section 414(q), during the year
or the preceding year: (A) was at any time a five percent (5%) owner of the
Employer, (B) received compensation from the Employer in excess of $75,000,
(C) received compensation from the Employer in excess of $50,000 and was in
the top-paid group of Employees for such year (defined as the top twenty
percent (20%) of Employees when ranked on the basis of compensation paid
during such year) , or (D) was at any time an officer and received
compensation greater than fifty percent (50%) of the amount in effect under
Section 415(b)(1)(A for such year. See Section 4(2)(c).
2.4
<PAGE>
HOUR OF SERVICE
Each hour of Service for which an Employee is credited under the Plan, as
described in Section 3(d).
KEY EMPLOYEE
Any Employee or former Employee (and the beneficiaries of such Employee)
who at any time during the Plan Year (or any of the four preceding plan
years) was an officer of the Employer if such individual's annual
Compensation exceeds fifty percent (50%) of the dollar limitation under
Section 415(b)(1)(A) of the Code, an owner (or considered an owner under
Section 318 of the Code) of both more than .5% interest, as well as one of
the ten (10) largest interests in the Employer if such individual's
Compensation exceeds 100 percent (100%) of the dollar limitation under
Section 415(c)(1)(A) of the Code, a five percent (5%) owner of the
Employer, or a one percent (1%) owner of the Employer who has an annual
Compensation of more than $150,000.
LOAN SUSPENSE ACCOUNT
The account to which financed shares are credited and maintained while an
Acquisition Loan is outstanding. See Sections 5(b) and 6(e).
MERGER
A transaction or series of transactions wherein the Company is combined
with another business entity, and after which the persons or entities who
had owned, either directly or indirectly, a Controlling Interest in the
Company's voting stock on the date of execution of this Agreement own less
than a Controlling Interest in the voting stock of the combined entity.
NON-KEY EMPLOYEE
Any Employee or former Employee not defined as a Key Employee.
OTHER INVESTMENTS ACCOUNT
The portion of the Optional Contribution Account of a Participant which
reflects his interest under the Plan attributable to Trust Assets other
than Company Stock. See Section 6(e).
PARTICIPANT
Any Employee who is participating in this Plan. See Section 3.
PLAN
Guaranty Bancshares, Inc. Employee Stock Ownership Plan (with Section
401(k) provisions), which includes the Trust Agreement.
2.5
<PAGE>
PLAN YEAR
The twelve-month period ending on each Anniversary Date.
PROFIT SHARING ACCOUNT
The Account of each Participant representing his interest in the Profit
Sharing Plan prior to its restatement.
PROFIT SHARING PLAN
The Guaranty Bancshares, Inc. Employee Savings Plan, a profit sharing plan
containing 401(k) provisions, originally effective January 1, 1985, and of
which this Plan is a restatement.
SUBSTANTIAL CHANGE IN OWNERSHIP
A transaction or series of transactions in which a Controlling Interest in
the Company is acquired by or for a person or business entity, either of
which did not own, either directly or indirectly, a Controlling Interest in
the Company on the date that this Agreement was executed. The above shall
not apply to stock purchased by the Plan.
SALARY REDUCTION ACCOUNT
The account balance of a Participant attributable to Salary Reduction
Contributions.
SALARY REDUCTION CONTRIBUTIONS
Plan contributions made as a result of the salary reduction elections of
Participants pursuant to Plan Section 4(2).
SERVICE
Employment with the Company (or an Affiliated Company).
TREASURY REGULATION
A regulation promulgated under Title 26 of the Code of Federal Regulation
and formally adopted pursuant to a Treasury Directive.
TRUST
Guaranty Bancshares, Inc. Employee Stock Ownership Trust, created by the
Trust Agreement entered into between the Company and the Trustee.
2.6
<PAGE>
TRUST AGREEMENT
The agreement between the Company and the Trustee establishing the Trust
and specifying the duties of the Trustee.
TRUST ASSETS
The Company Stock and other assets held in the Trust for the benefit of
Participants. See Section 5.
TRUSTEE
The Board of Trustees (and any successor Trustee) appointed by the Board of
Directors to hold and invest the Trust Assets. See Section 18.
VESTED ACCOUNT
The fair market value of a Participant's nonforfeitable benefit under the
Plan.
2.7
<PAGE>
Section 3. ELIGIBILITY AND PARTICIPATION.
(a) All Employees participating in the Profit Sharing Plan as of the
adoption date will remain Participants. Thereafter, each Employee will become a
Participant on the January 1 or July 1 coinciding with or next following date of
hire, assuming employment in a position requiring at least 1,000 Hours of Serve
in a Plan Year.
(b) A Participant is generally entitled to share in the allocations of
Forfeitures for a Plan Year in which he is credited with at least 1000 Hours of
Service. A Participant is entitled to share in Employer Basic and Optional
Contributions only for a Plan Year in which he is credited with at least 1000
Hours of Service and in which he was an Employee (or on Approved Absence) on the
Anniversary Date. A Participant shall also share in the allocations of Employer
Contributions for the Plan Year of his retirement, disability or death (as
provided in Section 12).
(c) A former Employee who is reemployed by an Employer and has previously
satisfied the eligibility requirements of Section 3(a) shall become a
Participant as of his date of reemployment. An Employee who is on an Approved
Absence shall not become a Participant until the end of his Approved Absence but
a Participant who is on an Approved Absence shall continue as a Participant
during the period of his Approved Absence. Failure to return to work by the end
of the Approved Absence wil.1 terminate Service as of the beginning of the
Approved Absence.
(d) HOURS OF SERVICE. For purposes of determining the Hours of Service to
be credited to an Employee under the Plan, the following rules shall be applied:
(1) Hours of Service shall include:
3.1
<PAGE>
(a) each hour of Service for which an Employee is paid, or entitled to
payment, for the performance of duties, with such hours of Service
being credited in the Plan Year in which the duties are performed;
and
(b) each hour of Service for which an Employee is paid, or entitled to
payment, for a period during which no duties are performed
(irrespective of whether the employment relationship has terminated)
due to vacation, holiday, illness, incapacity (including
disability), layoff, jury duty, military duty or leave of absence;
provided that no more than 501 Hours of Service need be credited for
one continuous period during which an Employee does not perform
duties; and
(c) each hour of Service for which back pay, irrespective of mitigation
of damages, is either awarded or agreed to; provided, however, that
Hours of Service credited under either subparagraph (a) or (b) above
shall not be credited under this subparagraph (c). These Hours of
Service will be credited to Employee for the Plan Year to which the
award or agreement pertains rather than the Plan Year in which the
award, agreement or payment is made.
(2) The crediting of Hours of Service shall be determined by the Committee in
accordance with the rules set forth in Section 2530.200b-2(b) and (c) of
the regulations prescribed by the Department of Labor, which rules shall be
consistently applied with respect to all Employees within the same job
classification.
(3) Hours of Service shall not be credited to an Employee for a period during
which no duties are performed if payment is made or due under a plan
maintained solely for the purpose of complying with applicable worker's
compensation, unemployment compensation or disability insurance laws, and
Hours of Service shall not be credited on account of any payment made or
due an Employee solely in reimbursement of medical or medically-related
expenses.
(4) Hours of Service will be credited for employment with other members of an
affiliated service group (under Section 414(m) of the Code), a controlled
group of corporations (under Section 414(b) of the Code), or a group of
trades or businesses under common control (under Section 414 (c) of the
Code), of which an Employer is, or may become, a member.
(5) For purposes of determining whether an Employee has incurred a Break in
Service and for vesting and participation purposes, if an Employee begins a
maternity/paternity leave of absence described in Section 411(a)(6)(E)(i)
of the Code, his Hours of Service shall include the Hours of Service that
would have been credited to him if he had not been so absent (or eight (8)
Hours of Service for each day of such absence if the actual Hours of
Service cannot be determined). An Employee shall be credited for such Hours
of Service (up to a maximum of 501 Hours of Service) in the Plan Year in
which his absence begins (if such crediting
3.2
<PAGE>
will prevent him from incurring a Break in Service in such Plan Year) or,
in all other cases, in the following Plan Year. For purposes of this
provision, a maternity/paternity leave of absence described in Section
411(a)(6)(E)(i) of the Code pertains to a Participant who is absent from
work for any period by reason of the pregnancy of the Participant, by
reason of the birth of a child of the Participant, by reason of the
placement of a child with the Participant in connection with the adoption
of such child by such Participant, or for purposes of caring for such child
for a period beginning immediately following such birth or placement.
3.3
<PAGE>
Section 4. EMPLOYER AND EMPLOYEE CONTRIBUTIONS.
1. EMPLOYER CONTRIBUTIONS
(a) The Employer shall contribute the following amounts to the Plan each
Plan Year:
1. The amount of each Participant Is Salary Contribution made pursuant
to Section 4(2). As provided in Section 12 (a), the interests of a
Participant in the Salary Reduction Contributions allocated to his
account will always be 100% vested.
2. An Employer Discretionary Matching Contribution on behalf of each
Participant up to a maximum of one hundred percent (100%) of the
Participant's Salary Reduction Contributions, provided, however,
that the Board of Directors shall have the discretion, on an annual
basis, Contributions are matched, which shall in no event exceed
four percent (4%) of a Participant's compensation.
The interests of a Participant in Employer Matching
Contributions made prior to August 20, 1992 and in seventy-five
percent (75%) of Employer matching Contributions made on or after
August 20, 1992 will become nonforfeitable pursuant to the vesting
schedule contained in Section 12(a).
The interests of a Participant in twenty-five percent (25%)
of Employer Matching Contributions made on or after August 20,
1992 will always be 100% vested.
3. An Employer Discretionary Basic Contributions, which shall be
determined at the sole discretion of the Board of Directors. As
provided in Section 12(a), the interests of a Participant in the
Employer Basic Contributions allocated to his account will always be
100% vested.
4. An Employer Discretionary Optional Contribution, which shall be
determined in the sole discretion of the Board of Directors. The
interests of a Participant in the Employer Optional Contributions
allocated to his account will become nonforfeitable pursuant to the
vesting schedule contained in Section 12(a).
(b) Salary Reduction Contributions shall be paid to the Trustee promptly
(and in no event later than 30 days after the end of the Plan Year following
each pay period).
4.1
<PAGE>
(c) Employer Discretionary Matching, Basic, and Optional Contributions for
each Plan Year shall be paid to the Trustee not later than the due date
(including extensions) for filing the Employer's Federal income tax return for
that Plan Year.
(d) In the event Employer Contributions are paid to the Trust by reason of
a mistake of fact, such Employer Contributions may be returned to the Employer
(upon the request of the Employer) by the Trustee within one (1) year after the
payment to the Trust.
2. EMPLOYEE SALARY REDUCTION CONTRIBUTIONS
(a) A Participant may authorize his Employer to contribute to the Trust on
his behalf Salary Reduction Contributions. Such Salary Reduction Contributions
shall be stated as a whole percentage, and shall not be less than 1%, or more
than 15%, of the Participant's Compensation. The total amount of Salary
Reduction Contributions for any Plan Year shall not exceed $8,728, multiplied by
any cost of living adjustment factor prescribed by the Secretary of the Treasury
under Section 415(d) of the Code.
(b) Each Participant electing to have his Employer contribute Salary
Reduction Contributions on his behalf during the Plan Year shall file a written
notice with the Plan Administrator at least thirty (30) days prior to the
January lst or July lst that he intends such election to take effect. This
requirement shall be waived on adoption of the Plan and each Participant shall
be given a reasonable time to elect Salary Reduction Contributions. Such written
notice shall contain an election of the percentage of his Compensation to be
contributed and authorization for his Employer to reduce his Compensation by
such amount. Salary Reduction Contributions may be suspended at any time by
giving prior written notice. After suspension, the Participant shall not be
eligible for further Salary Reduction Contributions until the beginning of the
next Plan Year. A
4.2
<PAGE>
Participant may change the percentage of his Salary Reduction Contributions only
as of the January lst or July lst of any Plan Year, but upon not less than
thirty (30) days prior written notice. A Participant shall be fully vested at
all times in the portion of his Account from Salary Reduction Contributions.
(c) For any Plan Year, the Committee shall have the right to limit or
reduce the Salary Reduction Contributions of the Highly Compensated Participants
in order to insure that the Maximum Deferral Percentage Limit under Code Section
401(k) is not exceeded. Furthermore, in accordance with Treasury Regulation
1.401(k)-l(f), the Employer may make additional Basic Contributions, Optional
Contributions and/or Matching Contributions or may distribute or recharacterize
such contributions made during the Plan Year in order to provide that the
Maximum Deferral Percentage Limit under Code Section 401(k) is not exceeded. The
Maximum Deferral Percentage Limit under Code Section 401(k) is equal to the
greater of Limit 1 or Limit 2:
Limit 1. The Actual Deferral Percentage of the Highly Compensated
Participants may not exceed one hundred twenty-five percent
(125%) of the Actual Deferral Percentage of all other
Participants; or
Limit 2. The Actual Deferral Percentage of the Highly Compensated
Participants may not exceed the lesser of:
(a) The Actual Deferral Percentage of all other Participants,
plus two percent (2%) or
(b) The Actual Deferral Percentage of all other Participants,
multiplied by two hundred percent (200%).
Actual Deferral Percentage with respect to any specific group of
Participants for a Plan Year shall mean the average of the ratios (calculated
separately for each Participant in such group) of (A) the amount of Salary
Reduction Contributions paid into the Trust Fund on behalf of each Participant
for such Plan Year to (B) the Participant's Compensation for such Plan Year. In
the case of a
4.3
<PAGE>
Highly Compensated Participant who is eligible to have Salary Reduction
Contributions paid into a trust fund to his account under two or more plans
maintained by the Employer, the Actual Deferral Percentage shall be determined
as if all such Salary Reduction Contributions were made under a single
arrangement. Furthermore, for purposes of determining the Actual Deferral
Percentage of a Highly Compensated Participant, the amount of Salary Reduction
Contributions paid into the Trust Fund on his behalf shall include Salary
Reduction Contributions made on behalf of certain family members described in
Section 414(q)(6).
(d) In the event the Maximum Deferral Percentage Limit under Code Section
401(k) is exceeded, the amount of excess contributions for a Highly Compensated
Participant shall be either recharacterized or distributed pursuant to Treasury
Regulation 1.401(k)-1(f)(2) and will be determined in the following manner.
First, the Actual Deferral Percentage (ADP) of the Highly Compensated
Participant with the highest ADP will be reduced to the extent necessary to
satisfy the Maximum Deferral Percentage Limit under Code Section 401(k) or to
cause such Participant's ADP to equal the ADP of the Highly Compensated
Participant with the next highest ADP. Second, this process is repeated until
the Maximum Deferral Percentage Limit under Code Section 401(k) is satisfied.
For each such Highly Compensated Participant whose ADP is reduced, the amount of
such Participant's excess contributions is equal to the Participant's total
Basic and Salary Reduction Contributions (determined prior to the application of
this paragraph) minus the amount determined by multiplying the Participant's ADP
(determined after application of this paragraph) by such Participant's
Compensation. In the case of a Highly Compensated Participant whose ADP is
determined pursuant to the Code Section 414(q)(6) family aggregation rules, the
determination of
4.4
<PAGE>
the amount of excess assets shall be made pursuant to Treasury Regulation
1.401(k)-l(f)(5)(ii).
The amount of a Participant's excess contributions distributed or
recharacterized pursuant to Treasury Regulation 1.401(k)-I(f) shall be reduced
by any excess deferrals previously distributed or recharacterized during such
Plan Year. The distribution or recharacterization of excess contributions will
include any income attributable thereto from the date such excess contributions
were made until such date of recharacterization or distribution. The
distribution or recharacterization of any excess contribution is to be made
prior to the two and one-half month period following the end of the Plan Year in
which such excess contributions were made. Any recharacterized excess
contributions will remain subject to Plan provisions applicable to Salary
Reduction Contributions.
(e) In the event a Participant's Salary Reduction Contribution or Employer
Contribution:
(1) is made under a mistake of fact;
(2) is conditioned upon initial qualification of the Plan under Code
Section 401(a) and the Plan does not so qualify,
the contribution may be returned to the Employer within one (1) year after the
payment of the contribution, the disallowance of the deduction to the extent
disallowed, or the date of denial of the qualification of the Plan, whichever is
applicable. Except as provided under this paragraph, the assets of the Plan will
be used for the exclusive purpose of providing benefits to Participants under
the Plan and their Beneficiaries and for defraying reasonable administrative
expenses of the Plan.
3. LIMITATIONS ON MATCHING CONTRIBUTIONS
(a) For any Plan Year, the Committee shall have the right to limit or
reduce the Matching Contributions attributable to the Highly Compensated
Participants in order
4.5
<PAGE>
to insure that the Maximum Contribution Percentage Limit under Code Section
401(m) is not exceeded. The Maximum Contribution Percentage Limit under Code
Section 401(m) is equal to the greater of Limit 1 or Limit 2:
Limit 1. The Actual Contribution Percentage of the Highly Compensated
Participants may not exceed one hundred twenty-five percent
(125%) of the Actual Contribution Percentage of all other
Participants; or
Limit 2. The Actual Contribution Percentage of the Highly Compensated
Participants may not exceed the lesser of:
(a) The Actual Contribution Percentage of all other
Participants, plus two percent (2%) or
(b) The Actual Contribution Percentage of all other
Participants, multiplied by two hundred percent (200%).
Actual Contribution Percentage with respect to any specific group of
Participants for a Plan Year shall mean the average of the ratios (calculated
separately for each Participant in such group) of (A) the amount of Matching
Contributions paid into the Trust Fund on behalf of each Participant for such
Plan Year to (B) the Participant's Compensation for such Plan Year. A
Participant's Matching Contributions are to be taken into account if they are
paid to the Trust during the Plan Year or are paid to an agent of the Plan and
are transmitted to the Trust within a reasonable period after the end of the
Plan Year. In the case of a Participant who has Matching Contributions, the
Actual Contribution Percentage is considered to be zero. In the case of a Highly
Compensated Participant who is eligible to have Matching Contributions paid into
a trust fund to his account under two or more plans maintained by the Employer,
the Actual Contribution Percentage shall be determined as if all such Matching
Contributions were made under a single arrangement. Furthermore, for purposes of
determining the Actual Contribution Percentage
4.6
<PAGE>
of a Highly Compensated Participant, the amount of Matching Contributions paid
into the Trust Fund on his behalf shall include Matching Contributions made on
behalf of certain family members described in Code Section 414(q)(6) and the
Treasury Regulations thereunder.
(b) In the event the Maximum Contribution Percentage Limit under Code
Section 401(m) is exceeded, the amount of excess contributions for a Highly
Compensated Participant will be distributed or forfeited pursuant to Treasury
Regulation 1.401(m)-l(e) and determined in the following manner. First, the
Actual Contribution Percentage (ACP) of the Highly Compensated Participant with
the highest ACP will be reduced to the extent necessary to satisfy the Maximum
Contribution Percentage Limit under Code Section 401(m) or to cause such
Participant's ACP to equal the ACP of the Highly Compensated Participant with
the next highest ACP. Second, this process is repeated until the Maximum
Contribution Percentage Limit under Code Section 401(m) is satisfied. For each
such Highly Compensated Participant whose ACP is reduced, the amount of such
Participant's excess contributions is equal to the Participant's total Matching
Contributions (determined prior to the application of this paragraph) minus the
amount determined by multiplying the Participant's ACP (determined after
application of this paragraph) by such Participant's Compensation. In the case
of a Highly Compensated Participant whose ACP is determined pursuant to the Code
Section 414(q)(6) family aggregation rules, the determination of the amount of
excess assets shall be made pursuant to Treasury Regulation
1.401(m)-l(e)(4)(ii).
The amount of a Participant's excess contributions distributed shall be
reduced by any excess contributions previously distributed during such Plan
Year. The distribution of excess contributions will include any income
attributable thereto from the date such excess contributions were
4.7
<PAGE>
made until such date of recharacterization or distribution. The distribution of
any excess contribution is to be made prior to the two and one-half month period
following the end of the Plan Year in which such excess contributions were made.
Any recharacterized excess contributions will remain subject to Plan provisions
applicable to Matching Contributions. (c) For any Plan Year, the application of
the Maximum Deferral Percentage and Contribution Percentage Limitations pursuant
to Sections 4(2)(c) and 4(3)(d) of the Plan shall be made in accordance with the
multiple use limitations under Treasury Regulation 1.401(m)-2.
(d) To the extent Matching Contributions are used, pursuant to Plan Section
4(2)(c), to compute the Maximum Deferral Percentage Limit under Code Section
401(k), they will not be used to compute the Maximum Contribution Percentage
Limit under Code Section 401(m). Furthermore, at the election of the Employer,
Basic Contributions (to the extent not utilized to compute the Maximum Deferral
Percentage Limit under Code Section 401(k) may be used in the computation of the
Maximum Contribution Percentage Limit under Code Section 401(m).
4. EMPLOYEE ROLLOVER CONTRIBUTION
(a) With the Employer's consent, a Rollover Contribution may be made by or
for an Employee if either of the following conditions are met:
(1) The Contribution is a rollover contribution which the Code permits to
be transferred to a plan that meets the requirements of Section 401(a)
of the Code; and
(2) The Contribution is made within 60 days after the Employee receives or
would be entitled to receive the distribution; and
(3) The Employee furnishes evidence satisfactory to the Committee that
proposed transfer is in fact a rollover contribution which meets
conditions (1) and (2) above.
-OR-
4.8
<PAGE>
(4) The contribution is made pursuant to Plan Section 23 diversification
requirements.
The Rollover Contribution may be made by the Employee or may be made with
his consent by the named fiduciary of another plan. The Contribution will be
made according to procedures set up by the Committee.
(b) If the Employee is not a Participant at the time the Rollover
Contribution is made, he will be deemed to be a Participant only for the
purposes of investment and distribution of the Rollover Contribution. No
Employer Contribution will be made for him and he may not make Participant
Contributions, until the time he meets all of the requirements to become a
Participant.
(c) Any Rollover Contribution made by or for an Employee is credited to his
Account when made and is at all times fully vested and nonforfeitable.
4.9
<PAGE>
Section 5. INVESTMENT OF TRUST ASSETS.
(a) Trust Assets under the Plan will be invested by the Trustee, with the
exception provided in (c), primarily in Company Stock in accordance with the
Trust Agreement. Employer Contributions (and other Trust Assets) may be used to
acquire shares of Company Stock from Company shareholders or from the Company.
The Trustee may also invest Trust Assets in such other prudent investments as
the Trustee deems to be desirable for the Trust, or Trust Assets may be held
temporarily in cash. All purchases of Company Stock by the Trustee shall be made
at prices which do not exceed the fair market value of Company Stock, as
determined in good faith by the Trustee in accordance with the provisions of
Section 18. The Trustee may invest and hold up to one hundred percent (100%) of
the Trust Assets in Company Stock.
(b) The Trustee may incur Acquisition Loans from time to time to finance
the acquisition of Company Stock (Financed Shares) for the Plan or to repay a
prior Acquisition Loan. An installment obligation incurred in connection with
the purchase of Company Stock shall constitute an Acquisition Loan. An
Acquisition Loan shall be for a specific term, shall bear a reasonable rate of
interest and shall not be payable on demand except in the event of default. An
Acquisition Loan may be secured by a pledge of the Financed Shares so acquired
(or acquired with the proceeds of a prior Acquisition Loan which is being
refinanced). No other Trust Assets may be pledged as collateral for an
Acquisition Loan, and no lender shall have recourse against Trust Assets other
than any Financed Shares remaining subject to pledge. If the lender is a party
in interest (as defined in ERISA), Financed Shares may be transferred to the
lender only upon and to the extent of the failure of the Plan to meet the
payment schedule of the loan. Any pledge of Financed Shares must provide for the
release of
5.1
<PAGE>
the shares so pledged as payments on the Acquisition Loan are made by the
Trustee and such Financed Shares are allocated to Participants' Company Stock
Accounts under Section 6(e). Payments of principal and interest on any
Acquisition Loan shall be made by the Trustee only from Employer Contributions
to enable the Trust to repay such Acquisition Loan, from earnings attributable
to such Employer Contributions, from Salary Reduction Contributions, and from
any dividends received by the Trust on such Financed Shares.
(c) Salary Reduction Contributions and the Profit Sharing Account will not
normally be invested in Company Stock. However, a Participant may, with the
consent of the Trustee, direct the investment of his Salary Reduction Account
and/or Profit Sharing Account in a Company Stock Fund, the principal investment
goal of which shall be capital appreciation primarily through investment in
Company Stock. In addition to the Company Stock Fund, the Trustee may establish
other Investment Funds (such as an Equity Fund or Fixed Income Fund) with
differing investment goals.
(d) The Committee may also authorize the purchase of life insurance on the
life of a shareholder made payable to the trust. The purpose of any such
purchase of life insurance shall be primarily to provide liquidity to acquire
Company Stock for the benefit of participants.
(e) As of each Anniversary Date, the Trustee shall determine the fair
market value of each Investment Fund being administered by the Trustee. With
respect to each such Investment Fund, the Trustee shall determine the net gain
or loss resulting from expenses paid, and realized and unrealized gains and
losses. After each Anniversary Date, the net gain or loss of
5.2
<PAGE>
each Investment Fund shall be allocated by the Trustee to the Accounts of
Participants participating in such Investment Fund.
The reasonable and equitable decision of the Trustee as to the value of
each Investment Fund and of any Account as of each Anniversary Date shall be
conclusive and binding upon all Participants having any interest, direct or
indirect, in the Investment Funds or in any Account.
5.3
<PAGE>
Section 6. ALLOCATIONS TO PARTICIPANT'S ACCOUNT.
Separate Accounts shall be established to reflect each Participant's
interest under the Plan.
(a) EMPLOYER MATCHING CONTRIBUTION ACCOUNT. The Employer Matching
Contribution Account maintained for each Participant will be credited annually
with the amount of the Employer Matching Contribution allocable to such
Participant, as determined pursuant to Section (4)(1)(a)(2), and with his share
of the net income (or loss) of the Trust.
(b) EMPLOYER BASIC CONTRIBUTION ACCOUNT. The Employer Basic Contribution
Account maintained for each Participant will be credited annually with his
allocable share of Employer Basic Contributions and with his share of the net
income (or loss) of the Trust. Employer Basic Contributions under Section 4
shall be allocated as of the Anniversary Date among the Accounts of Participants
so entitled under Section 3(b) in a manner necessary to satisfy the
nondiscrimination requirements of the Code.
(c) EMPLOYEE SALARY REDUCTION ACCOUNT. The Employee Salary Reduction
Contribution Account maintained for each Participant will be credited (or
debited) annually with his share of the net income (or loss) of the Trust, his
Salary Reduction Contributions, if any, made during the Plan Year, and with any
financed shares released from the Loan Suspense Account on account of his Salary
Reduction Contributions.
(d) EMPLOYEE ROLLOVER CONTRIBUTION ACCOUNT. The Rollover Contribution
Account maintained for each Participant will be credited (or debited) annually
with his share of net income (or loss) of the Trust and with his Rollover
Contributions, if any, made during the Plan Year.
(e) EMPLOYER OPTIONAL CONTRIBUTION ACCOUNTS. A separate Company Stock
Account and Other Investments Account shall be established to reflect each
Participant's interest under the
6.1
<PAGE>
Employer Optional Contribution portion of the Plan. The Company Stock Account
maintained for each Participant will be credited annually with his allocable
share of Company Stock (including fractional shares) purchased and paid for by
the Trust or contributed in kind to the Trust, with any Forfeitures of Company
Stock and with any stock dividends on Company Stock allocated to his Company
Stock Account. Financed Shares shall initially be credited to a Loan Suspense
Account and shall be allocated to the Company Stock Accounts of Participants
only as payments on the Acquisition Loan are made by the Trustee. The number of
Financed Shares to be released from the Loan Suspense Account for allocation to
Participants' Company Stock Accounts for each Plan Year shall be determined by
the Committee as described under (e)(1) and (e)(2) below.
(1) GENERAL Rule. The number of Financed Shares held in the Loan Suspense
Account immediately before the release for the current Plan Year shall be
multiplied by a fraction. The numerator of the fraction shall be the amount of
principal or principal and interest paid on the Acquisition Loan for that Plan
Year. The denominator of the fraction shall be the sum of the numerator plus the
total payments of principal or principal and interest on the Acquisition Loan
projected to be paid for all future Plan Years. For this purpose, the interest
to be paid in future years is to be computed by using the interest rate in
effect as of the Anniversary Date of the Plan Year.
(2 ) SPECIAL Rule. The Committee may elect (at the time an Acquisition Loan
is incurred) or the provisions of the Acquisition Loan may provide for the
release of shares from the Loan Suspense Account based solely upon the ratio
that the payments of principal for each Plan Year bear to the total principal
amount of the Acquisition Loan. This method
6.2
<PAGE>
may be used only if: (A) the Acquisition Loan provides for annual payments of
principal and interest at a cumulative rate that is not less rapid at any time
than level annual payments of such amounts for ten (10) years; (B) interest
included in any payment on the Acquisition Loan is disregarded only to the
extent that it would be determined to be interest under standard loan
amortization tables; and (C) the entire duration of the Acquisition Loan
repayment period does not exceed ten (10) years, even in the event of a renewal,
extension or refinancing of the Acquisition Loan.
(3) OTHER INVESTMENTS ACCOUNTS. The Other Investments Account maintained
for each Participant will be credited (or debited) annually with his share of
the net income (or loss) of the Trust, with any cash dividends on Company Stock
allocated to his Company Stock Account (other than currently distributed
dividends) and with his allocable share of Employer Contributions in cash and
any Forfeitures from Other Investments Accounts. Such Account will be debited
for the Participant's share of any cash payments made for the acquisition of
Company Stock or for the repayment of any principal and interest on an
Acquisition Loan.
The allocations to Participants' Accounts for each Plan Year will be made
as follows under the remaining subsections of this Section.
(f) EMPLOYER CONTRIBUTIONS AND FORFEITURES. Employer Contributions under
Section 4 and Forfeitures under Section 12(b) and (c) for each Plan Year will be
allocated as of the Anniversary Date among the Accounts of Participants so
entitled under Section 3(b) in the ratio which the Adjusted Compensation of each
such Participant bears to the total Adjusted Compensation of all such
Participants for that Plan Year.
(g) ALLOCATION LIMITATIONS. For each Plan Year, the Annual Additions with
respect to any Participant may not exceed the lesser of:
6.3
<PAGE>
(1) Twenty-five percent (25%) of his compensation (within the
meaning of Code Section 415(c)(3)); or
(2) The Defined Contribution Dollar Limitation.
For this purpose, "Annual Additions" shall be the total amount of any Employer
Contributions, Salary Reduction Contributions, Voluntary Participant
Contributions and Forfeitures (including any income attributable to Forfeitures
and amounts described in Code Sections 415(L)(1) and 419A(d)(2)) allocated to
the Participant in this Plan and any other Employer defined contribution plan.
For purposes of applying these limitations only, the Plan uses the safe harbor
definition of Compensation pursuant to Section 1.415-2(d)(8) of the Treasury
Regulations'. as defined in Section 2 of the Plan. In computing Annual
Additions, Forfeitures of Company Stock and Employer Contributions of Company
Stock shall be based on the fair market value of Company Stock as of the
Anniversary Date.
Prior to the allocation of the Employer Contributions for any Plan Year,
the Committee shall determine whether the amount to be allocated would cause the
limitation described herein to be exceeded as to any Participant. In the event
that the limitation is exceeded for any Participant due to the allocation of a
forfeiture or a reasonable error in the estimation of a Participant's
Compensation, the excess shall be maintained in a separate suspense account and
shall be allocated in the next subsequent Plan Year as if such amounts were an
additional contribution to the appropriate Account. No contributions which would
be included in the next limitation year's Annual Addition may be made before the
total suspense account has been reallocated.
Any excess amount shall be reallocated among the Accounts of the other
Participants according to the ratio which the Adjusted Compensation of each such
Participant bears to the total Adjusted Compensation of all such Participants
for the Plan Year, to the extent possible without exceeding the limitations with
respect to any other Participant for that Plan Year.
6.4
<PAGE>
In addition, for any Participant who was covered under a defined benefit
plan, Annual Additions may not be allocated to his Accounts (under this Plan) in
amounts which cause the sum of the defined benefit plan fraction and the defined
contribution plan fraction to exceed 1.0 for any Plan Year. For this purpose,
the "defined benefit plan fraction" shall have as its numerator the projected
annual benefit of the Participant under the defined benefit plan as of the
Anniversary Date and shall have as its denominator the lesser of (i) the product
of 1.25 multiplied by the dollar limitation in effect under Section 415(b)(1)(A)
of the Code for such Plan Year; or (ii) the product of 1.4 multiplied by the
amount which may be taken into account under Section 415(b)(1)(B) of the Code
with respect to the Participant for such Plan Year. The "defined contribution
plan fraction" shall have as its numerator the total of the Annual Additions of
the Participant (under this Plan and any other Employer defined contribution
plan) for all Plan Years and shall have as its denominator the sum of. the
lesser of the following amounts determined for such Plan Years and for each
prior year of Service with an Employer: (i) the product of 1.25 multiplied by
the dollar limitation taken into account under Section 415(c)(1)(A) of the Code
for the year; or (ii) the product of 1.4 multiplied by the amount which may be
taken into account under Section 415(c)(1)(B) of the Code with respect to such
Participant for such year.
(h) SPECIAL LIMITATION PROVISION. Any Employer Contributions which are
applied by the Trust (not later than the due date, including extensions, for
filing the Company's Federal income tax return for that Plan Year) to pay
interest on an Acquisition Loan, and any Financed Shares which are allocated as
Forfeitures, shall not be included as Annual
6.5
<PAGE>
Additions under Section 6(g); provided, however, that the provisions of this
Section 6(h) shall be applicable only for Plan Years for which not more than
one-third (1/3) of the Employer Contributions applied to pay principal or
interest, or both, on an Acquisition Loan are allocated to Participants who are
highly compensated employees within the meaning of Code Section 414(q).
(i) NET INCOME (OR LOSS) OF THE TRUST. The net income (or loss) of the
Trust for each Plan Year will be determined as of the Anniversary Date. Each
Participant's share of the net income (or loss) will be allocated to his
Accounts in the ratio which the balance of such Accounts on the preceding
Anniversary Date (reduced by the amount of any distribution of Capital
Accumulation from such Account during the Plan Year) bears to the sum of the
Account balances for all Participants as of that date. The net income (or loss)
of the Trust includes the increase (or decrease) in the fair market value of
Trust Assets (other than Company Stock), interest income, dividends and other
income and gains (or loss) attributable to Trust Assets (other than any
dividends on Company Stock allocated to Company Stock Accounts) since the
preceding Anniversary Date, reduced by any expenses charged to the Trust Assets
for that Plan Year. The computation of the net income (or loss) of the Trust
shall not take into account any interest paid by the Trust under an Acquisition
Loan.
(j) DIVIDENDS ON COMPANY STOCK. Cash dividends received on shares of
Company Stock allocated to Participants' Accounts will be allocated to the
respective Other Investments Account portion of the Employer Optional
Contribution Accounts of those Participants. Cash dividends received on
unallocated shares of Company Stock shall be included in the computation of net
income (or loss) of the Trust. Stock dividends received on Company Stock shall
be credited to the Accounts to which such Company Stock was
6.6
<PAGE>
allocated. Any cash dividends which are currently distributed to Participants or
used to repay a loan to the ESOP under Sections 17(b) or (c) shall not be
credited to their Other Investments Account portion of the Employer Optional
Contribution Account. Furthermore, any cash dividends used to pay administrative
expenses of the Plan shall not be credited to Participants' Other Investments
Account portion of the Employer Optional Contribution Account.
(k) ACCOUNTING FOR ALLOCATIONS. The Committee shall establish accounting
procedures for the purpose of making the allocations to Participants' Accounts
provided for in this Section. The Committee shall maintain adequate records of
the aggregate cost basis of Company Stock allocated to each Participant's
Company Stock Account. The Committee shall also keep separate records of
Financed Shares and of Employer Contributions (and any earnings thereon) made
for the purpose of enabling the Trust to repay any Acquisition Loans. From time
to time, the Committee may modify the accounting procedures for the purposes of
achieving equitable and nondiscriminatory allocations among the Accounts of
Participants in accordance with the general concepts of the Plan, the provisions
of this Section and the requirements of the Code and ERISA.
(1) LIMITATION ON ALLOCATION TO CERTAIN SHAREHOLDERS. To the extent that a
Company shareholder sells qualifying Company securities to the Plan Trust and
elects (with the consent of the Company) nonrecognition of gain under Section
1042 of the Code, no portion of the Company securities purchased in the
nonrecognition transaction (or any dividends or other income attributable
thereto) may accrue or be allocated:
(1) during the nonallocation period (the ten year period beginning on
the later of (i) the date of the sale of the is qualified Company
securities, or (ii) the date of the Plan allocation attributable
to the final payment of acquisition indebtedness incurred in
connection with such sale) for the benefit of:
6.7
<PAGE>
(A) the selling shareholder;
(B) the spouse, brothers or sisters (whether by the whole or
half blood), ancestors or lineal descendants of the selling
shareholder referred to above;
OR
(2) for the benefit of any other person who owns after application of
Code Section 318(a) more than 25% of:
(A) any class of outstanding stock of the Company or of any
corporation which is a member of the same controlled group
of corporations within the meaning of subsection(1)(4) as
the Company, or
(B) the total value of any class of outstanding stock of the
Company or any such corporation described in (2)(A) above.
For the purposes of this subparagraph (1)(2), Code Section 318(a) shall be
applied without regard to the employee trust exception in Section
318(a)(2)(B)(i).
6.8
<PAGE>
Section 7. EXPENSES OF THE PLAN AND TRUST.
All expenses of administering the Plan and Trust shall be charged to and
paid out of the Trust Assets. The Company may pay all or any portion of such
expenses, and payment of expenses by the Company shall not be deemed to be
Employer Contributions.
7.1
<PAGE>
Section 8. VOTING COMPANY STOCK.
All Company Stock in the Trust shall normally be voted by the Trustee in
such manner as it shall determine in its sole discretion. However, with respect
to any corporate matter which involves the voting of Company Stock as to the
approval or disapproval of any corporate merger or consolidation,
recapitalization, reclassification, liquidation, dissolution, sale of
substantially all assets of a trade or business, or such similar transactions as
may be prescribed in Code regulations, each Participant will be entitled to
direct the Trustee as to the exercise of any voting rights attributable to
shares of Company Stock then allocated to his Company Stock Account but only to
the extent required by Sections 401(a)(22) and 409(e)(3) of the Code and the
regulations thereunder. In that event, any allocated Company Stock with respect
to which voting instructions are not received from Participants shall not be
voted, and all Company Stock which is not then allocated to Participants'
Company Stock Accounts shall be voted in the manner determined by the Trustee.
8.1
<PAGE>
Section 9. DISCLOSURE TO PARTICIPANTS.
(a) SUMMARY PLAN DESCRIPTION. Each Participant shall be furnished with the
summary plan description required by Sections 102(a)(1) and 104(b)(1) of ERISA.
Such summary plan description shall be updated from time to time as required
under ERISA and Department of Labor regulations thereunder.
(b) SUMMARY _ANNUAL REPORT. Within nine (9) months after each Anniversary
Date, each Participant shall be furnished with the summary annual report of the
Plan required by Section 104(b)(3) of ERISA, in the form required by regulations
of the Department of Labor.
(c) ANNUAL STATEMENT. Following each Anniversary Date, each Participant
shall be furnished with a statement reflecting the following information:
(1) The balance (if any) in his Accounts as of the beginning of the Plan
Year.
(2) The amounts of Employer Contributions, Salary Reduction Contributions,
and Forfeitures allocated to his Accounts for that Plan Year.
(3) The adjustments to his Accounts to reflect his share of dividends (if
any) on Company Stock and the net income (or loss) of the Trust for
that Plan Year.
(4) The new balance in his Accounts, including the number of shares of
Company Stock allocated to his Company Stock Account and the fair
market value of Company Stock as of that Anniversary Date.
(5) His number of years of Credited Service and his vested percentage in
his Account balances (under Sections 12 and 13) as of that Anniversary
Date.
(d) ADDITIONAL DISCLOSURE. The Committee shall make available for
examination by any Participant copies of the Plan, the Trust Agreement and the
latest annual report of the Plan filed (on Form 5500) with the Internal Revenue
Service. Upon written request of any Participant, the
9.1
<PAGE>
Committee shall furnish copies of such documents and may make a reasonable
charge to cover the cost of furnishing such copies, as provided in regulations
of the Department of Labor.
9.2
<PAGE>
Section 10. CAPITAL ACCUMULATION.
A Participant's vested (nonforfeitable) interest under the Plan is called
his Capital Accumulation. His Capital Accumulation shall be determined in
accordance with the provisions of Sections 11 and 12. Each Participant's Capital
Accumulation will be distributed as provided in Sections 14 and 15.
10.1
<PAGE>
Section 11. RETIREMENT, DISABILITY, OR DEATH.
Upon a Participant's retirement, disability or death, his Capital
Accumulation will be the total of his Account balances (100% vested). The
Participant will share in the allocation of Employer Contributions and
Forfeitures for the Plan Year in which his Service terminates by retirement,
disability, or death.
A Participant will be treated as having retired under the Plan if his
Service ends by any of the following:
(a) NORMAL RETIREMENT
A Participant's Normal Retirement Age is his sixty-fifth (65th) birthday. Upon
attaining his Normal Retirement Age while employed by the Company (or an
Affiliated Company), a Participant's Account balances will become
nonforfeitable.
(b) EARLY RETIREMENT
A Participant may elect early retirement under the Plan at any time after he has
attained age fifty-five (55) and completed at least ten (10) years of Service.
(c) DEFERRED RETIREMENT
In the event a Participant's Service continues beyond his Normal Retirement
Age, he shall continue to participate in the Plan.
(d) DISABILITY RETIREMENT
If the Committee determines that a Participant has suffered a disability
(while employed by the Company or an, Affiliated Company) of a type that
entitles him to receive total disability benefits under Social Security, he
will be granted disability retirement under the Plan without regard to his
age or period of Service.
11.1
<PAGE>
Section 12. OTHER TERMINATION OF SERVICE, BREAK IN SERVICE, VESTING AND
FORFEITURES.
(a) If a Participant's Service terminates for any reason other than his
retirement, disability or death, his Capital Accumulation attributable to
Employer Optional Contributions, Employer Matching Contributions made before
August 20, 1992, and seventy-five percent (75%) of Employer Matching
Contributions made on or after August 20, 1992 will be determined on the basis
of his nonforfeitable interest, in accordance with the following vesting
schedule:
CREDITED SERVICE NONFORFEITABLE
UNDER SECTION 13 PERCENTAGE
---------------- ----------
Less than Three Years 0%
Three Years 20%
Four Years 40%
Five Years 60%
Six Years 80%
Seven Years or More 100%
A Participant is 100% vested at all times in his Account due to Employer Basic
Contributions, twenty-five percent (25%) of Employer Matching Contributions made
on or after August 20, 1992, and in Employee Salary Reduction and Rollover
Contributions. A Participant will not share in the allocation of Employer
Contributions and Forfeitures for the Plan year if his Service terminates prior
to the Anniversary Date (except for reasons of retirement, disability or death).
(b) Any portion of the final balances in a Participant's Accounts which is
not vested (and does not become part of his Capital Accumulation) will become a
Forfeiture upon the occurrence of a Break in Service, provided the Participant
has first received a distribution of his nonforfeitable interest in his Account
balances. If the Participant has not received a distribution of his Account
12.1
<PAGE>
balances, then the portion of his Account balance which is not vested shall be
forfeited only upon the occurrence of a five-consecutive-year Break in Service.
Forfeitures shall first be charged against a Participant's Other Investments
Account, with any balance charged against his Company Stock Account at the then
fair market value of Company Stock. Financed Shares shall be forfeited only
after other shares of Company Stock have been forfeited. Forfeitures will be
reallocated among the Participants, as provided in Section 6(f), as of the
Anniversary Date of the Plan Year in which a Break in Service occurs. A Break in
Service will occur only in a Plan Year for which a Participant is not credited
with more than 500 hours of Service and is not an Employee on the Anniversary
Date by reason of his termination of Service.
(c) RESTORATION OF FORFEITED ACCOUNTS. If a Participant is reemployed after
a one-year Break in Service but prior to the occurrence of a
five-consecutive-year Break in Service, the portion of his Accounts
(attributable to the prior period of Service) that was forfeited upon the
occurrence of a one-year Break in Service shall be restored as if there-had been
no Forfeiture, provided the Participant repays any amounts previously
distributed. Such restoration shall be made out of Forfeitures in the Plan Year
of reemployment (prior to allocations under Section 6(f)). To the extent such
Forfeitures are not sufficient, the Company shall make a special contribution to
the Participant's restored Accounts. Any amount so restored to a Participant
shall not constitute an Annual Addition under Section 6(g).
(d) SUBSEQUENT VESTING. If the Participant received a distribution of his
Capital Accumulation prior to the occurrence of a five-consecutive-year Break in
Service and he is reemployed prior to the occurrence of such a Break in Service,
the portion of his Accounts restored under Section 12(c) shall be maintained
separately until he becomes one-hundred percent (100%) vested. His Capital
Accumulation ("X") attributable to such separate Accounts
12.2
<PAGE>
shall be determined (prior to one-hundred percent (100%) vesting) at the time
his participation in the Plan subsequently terminates, in accordance with the
following formula:
X = P(AB + D) - D
For purposes of applying this formula, P is the vested percentage at the time of
the subsequent termination; AB is the total of such Account balances at that
time; and D is the amount of his Capital Accumulation previously distributed.
(e) Upon a Change in Control, a Participant will be 100% vested in his
Company Stock Account and Other Investments Account.
12.3
<PAGE>
Section 13. CREDITED SERVICE.
(a) GENERAL Rule. For purposes of vesting, an Employee's Credited Service
includes the total number of years of employment in which he is credited with at
least 1,000 Hours of Service with the Employer. Credited Service shall include
such Service with the Company, any other Employer and any Affiliated Company.
(b) REEMPLOYMENT. If a former Participant is reemployed after the
occurrence of a Break in Service, the following special rules shall apply in
determining his Credited Service:
(1) New Accounts will be established to reflect his interest in the Plan
attributable to his Service after the Break in Service.
(2) If he is reemployed after the occurrence of a five-consecutive-year
Break in Service, Credited Service after the Break in Service will not
increase his vested interest in his Accounts attributable to Service
prior to the Break in Service.
(3) After he completes one (1) Plan Year of Credited Service following his
reemployment, his Credited Service with respect to his new Accounts
will include his Credited Service accumulated prior to the Break in
Service.
(4) In the case of a Participant who is reemployed who has not attained a
vested interest under this Plan, Service prior to the Break in Service
shall not be included in determining his Credited Service provided the
number of consecutive one-year Breaks in Service equals or exceeds the
greater of five (5), or the aggregate number of years of Credited
Service before such consecutive Breaks in Service.
13.1
<PAGE>
Section 14. WHEN CAPITAL ACCUMULATION WILL BE DISTRIBUTED.
(a) A Participant's Capital Accumulation will be computed following the
termination of his Service. The Committee will, upon implementation of the Plan,
determine whether distribution of a Participant's Capital Accumulation for any
reason other than retirement, disability or death be made: (i) as soon as
reasonably possible after termination of Service, (ii) at some set date or dates
during the Plan Year, or (iii) as soon as reasonably possible after a Break in
Service has occurred. Once such determination has been made by the Committee, it
must be applied equally and in a nondiscriminatory manner to all terminating
Participants. In the event of a Participant's retirement, disability or death,
his Capital Accumulation will be distributed in a single distribution as soon as
reasonably possible after the close of the Plan Year in which the Participant
retires, is disabled or dies. In no event, however, shall distribution in such
case be delayed later than one year after the close of the Plan Year in which
the Participant retires, is disabled or dies. Under certain circumstances
described in Section 14(d), the Committee may delay the timing of a distribution
to the Participant because the Plan lacks sufficient cash liquidity to convert a
Participant's Stock Account to cash.
In no event, however (with the exception of Financed Shares described in
the succeeding sentence), shall distribution be deferred more than one year
after the close of the fifth Plan Year following the Participant's termination
of Service (unless the Participant has been reemployed by the Company at the end
of the fifth Plan Year following the termination of Service or the Participant
has chosen to delay the distribution of his Capital Accumulation beyond this
date). In the event any portion of the Participant's Account consists of Company
Stock attributable to a loan made to the Plan (pursuant to Section 5 of the
Plan) which has not been fully repaid,
14.1
<PAGE>
if the Plan lacks sufficient cash liquidity as described in Section 14(d), the
above timing as to distributions may be delayed until the earlier of the Plan
Year in which sufficient cash liquidity is available or the Plan Year following
the year in which the loan is fully repaid. Once entitled to distribution, the
Participant may choose the following alternative modes of distribution:
(1) Distribution of a Participant's Capital Accumulation in a single
distribution at some later date; or
(2) Distribution of a Participant's Capital Accumulation in substantially
equal, annual installments over a period not exceeding five (5) years
(provided that such period does not exceed the life expectancy of the
Participant); or
(3) Any combination of the foregoing.
Notwithstanding Section 14(a)(2) above, if the fair market value of a
Participants' Account attributable to Company Stock is in excess of $500,000 as
of the date distribution is to begin, the five-year maximum distribution period
shall be extended by one additional year (up to an additional five years) for
each $100,000 increment, or fraction of such increment, by which the value of
the Participants' Account exceeds $500,000. The $500,000 and $100,000 dollar
amounts shall be subject to adjustment in accordance with Section 409(o)(2) of
the Code.
(b) Distribution of a Participant's Capital Accumulation shall commence not
later than sixty (60) days after the Anniversary Date coinciding with or next
following his Normal Retirement Age (or his termination of Service, if later).
The distribution of the Capital Accumulation of any Participant with respect to
the Plan Year in which he attains age 70 1/2 must commence not later than April
lst of the next Plan Year (even if he has not terminated Service and regardless
of any consent requirements pursuant to Section 15(c) of the Plan).
14.2
<PAGE>
If the amount of a Participant's Capital Accumulation cannot be ascertained by
the Committee by the date on which a distribution is to commence, or if the
Participant cannot be located, distribution of his Capital Accumulation shall
commence within sixty (60) days after the date on which his Capital Accumulation
is able to be determined or after the date on which the Committee locates the
Participant.
(c) If any part of a Participant's Capital Accumulation is retained in the
Trust after his Service or participation ends, his Accounts will continue to be
treated as provided in Section 6. However, such Accounts will not be credited
with any additional Employer Contributions or Forfeitures.
(d) In accordance with Section 15 of the Plan, if Company Stock is not
readily tradable on an established market, the Participant must be given the
right to demand distribution of his Capital Accumulation entirely in cash,
Company Stock or some combination of the two. In such case, the Trustees will
strive to create sufficient cash reserves in the Plan to permit a terminating
Participant to convert the portion of his Capital Accumulation consisting of
Company Stock to cash-. However, should Plan cash reserves not permit conversion
of Company Stock to cash, the Committee may delay distribution of a
Participant's Capital Accumulation, within the limits described in Section
14(a), until the date such Plan cash reserves can be reasonably generated
through either additional Employer contributions to the Plan or a restructuring
of existing Plan assets.
14.3
<PAGE>
Section 15. HOW CAPITAL ACCUMULATION WILL BE DISTRIBUTED.
(a) Distribution of a Participant's Capital Accumulation will be made in
whole shares of Company Stock, cash or a combination of both, as determined by
the Committee; provided, however, that the Committee shall notify the
Participant of his right to demand distribution of his Capital Accumulation
entirely in cash or entirely in whole shares of Company Stock (with the value of
any fractional share paid in cash). If Company Stock is readily tradable on an
established market, a Participant need not be given the right to demand
distribution in cash. In the event a distribution is to be made in shares of
Company Stock, any balance in a Participant's Other Investments Account may be
applied to provide whole shares of Company Stock for distribution, at the then
fair market value. If securities acquired with the proceeds of an exempt loan
are available for distribution and consist of more than one class of Company
Stock, a Participant must receive substantially the same proportion of each such
class of Company Stock.
(b) The Trustee will make distributions from the Trust only upon the
direction of the Committee. Distribution will be made to the Participant if
living, and if not, to his Beneficiary. Upon the death of a Participant, the
Participant's Beneficiary shall be his surviving spouse, or if none, his estate.
A Participant (with the consent of his spouse, if any) may designate a different
Beneficiary (and contingent Beneficiaries) and alternate form of distribution of
his Capital Accumulation from time to time (and may change such designation of
Beneficiary or form of distribution at any time) with the consent of his spouse
(unless the original consent permits subsequent choice of Beneficiary or form of
distribution
15.1
<PAGE>
without further spousal consent) by filing a written designation with the
Committee. The consent for a designation of a Beneficiary (or change in
designation of Beneficiary and form of distribution) must be in writing, must
acknowledge the effect of such election, and must be witnessed by a Plan
representative or a notary public. A deceased Participant's entire Capital
Accumulation shall be distributed to his Beneficiary within five (5) years after
his death, except to the extent that distribution has previously commenced in
accordance with Section 14(a).
(c) The Company shall furnish the recipient of a distribution with the tax
consequences explanation required by Section 402(f) of the Code and shall comply
with the applicable withholding requirements of Section 3405 of the Code with
respect to distributions from the Trust (other than any dividend distributions
under Section 17(b)). If a Participant's Capital Accumulation has at any time
exceeded $3,500, no portion of his Capital Accumulation shall be distributed to
him in a lump sum without his consent, or where the Participant has died, the
consent of the surviving Participant's Beneficiary. Regardless of the value of a
Participant's Capital Accumulation, no distribution may be made under the
preceding sentence after the Annuity Starting Date unless the Participant and
the spouse of the Participant (or where the Participant has died, the surviving
spouse) consents in writing to such distribution in accordance with Section 417
of the Code and the Regulations thereunder.
15.2
<PAGE>
Section 16. RIGHTS, OPTIONS AND RESTRICTIONS ON COMPANY STOCK.
(a) Shares of Company Stock distributed by the Trust shall be subject to a
"right of first refusal" if the Company Stock is not publicly traded at the time
the right may be exercised. The right of first refusal shall not be applicable
if Company Stock is publicly traded at the time the right may otherwise be
exercised. For this purpose, "publicly traded" refers to shares of Company Stock
which are listed on a national securities exchange or which are quoted on a
system sponsored by a national securities association. If the Company Stock is
subject to a right of first refusal, the right shall provide that, prior to any
subsequent transfer of suc.h shares, the shares must first be offered for
purchase in writing to the Company, and then to the Trust, at their then fair
market value. A bona fide written offer from an independent prospective buyer
shall be deemed to be the fair market value of such Company Stock for this
purpose. The Company and the Trustee shall have a total of fourteen (14) days to
exercise the right of first refusal on the same terms offered by a prospective
buyer. The Company or the Trustee may require that a Participant entitled to a
distribution of Company Stock execute an appropriate stock transfer agreement
(evidencing the right of first refusal) prior to receiving a distribution of
Company Stock.
(b) In accordance with Section 409(h) of the Code and the regulations
thereunder, the Company shall not be required to issue a "put option" to any
Participant who receives a distribution of Company Stock if the Company Stock is
readily tradable on any established market or if the Company is not allowed by
law to purchase its own stock. If the Company is permitted by law to purchase
its own stock and the Company's
16.1
<PAGE>
stock is not readily tradable on an established market, the Company shal1 issue
a "put option" to any Participant who receives a distribution of Company Stock.
The put option shall permit the Participant to sell such Company Stock to the
Company at any time during two option periods, at the fair market value of such
shares. The first put option period shall be for at least sixty (60) days
beginning on the date of distribution. The second put option period shall be for
at least sixty (60) days beginning after the new determination of the fair
market value of Company Stock by the Trustee (and notice to the Participant) in
the following Plan Year. The Company may allow the Trustee to purchase shares of
Company Stock tendered to the Company under a put option. In the event neither
the Trustee nor the Company wishes to purchase such shares, then the Participant
has the right to demand distribution in cash. If the distribution to the
Participant constituted a total distribution within the meaning of Code Section
409(h)(5), payment of the fair market value of a Participants' Account
consisting of Company Stock may be made in five substantially equal annual
payments. The first installment shall be paid not later than 30 days after the
Participant exercises the put option. The Plan will pay a reasonable rate of
interest (as determined by the Company or the Trustees) and will provide
adequate security on amounts not paid after 30 days. If the distribution to the
Participant did not constitute a total distribution within the meaning of Code
Section 409(h)(5), the Participant shall be paid an amount equal to the fair
market value of the Company Stock repurchased no later than 30 days after the
Participant exercises the put option.
16.2
<PAGE>
(c) The Company or the Trustee may at any time offer to purchase any shares
of Company Stock (including, if a put option is issued, those shares not sold
under the put option described in Section 16(b)) which are held by former
Participants (or Beneficiaries), at the then fair market value. The terms of
payment for any such purchase of Company Stock may be either in a lump sum or in
installments over a period not exceeding ten (10) years, with interest payable
at a reasonable rate on any unpaid installment balance (as determined by the
Trustee).
(d) Shares of Company Stock held or distributed by the Trustee may include
such legend restrictions on transferability as the Company may reasonably
require in order to assure compliance with applicable federal and state
securities and banking laws. Except as otherwise provided in this Section 16, no
shares of Company Stock held or distributed by the Trustee may be subject to a
put, call or other option, or buy-sell or similar arrangement. Furthermore,
except as otherwise provided in this Section 16, the Trustee may not obligate
the Plan or Trust to acquire securities from a particular security holder at an
indefinite time determined upon the happening of an event. The provisions of
this Section 16 shall continue to be applicable to Company Stock even if the
Plan ceases to be an employee stock ownership plan under Section 4975(e)(7) of
the Code.
16.3
<PAGE>
Section 17. No ASSIGNMENT OF BENEFITS, DIVIDEND , LOANS.
(a) Prior to a Participant receiving distribution of his Capital
Accumulation, such Participant's Capital Accumulation MAY not be anticipated,
assigned (either at law or in equity), alienated or subject to attachment,
garnishment, levy, execution or other legal or equitable process, except in
accordance with a "qualified domestic relations order" (as defined in Section
414(p) of the Code).
(b) DIVIDENDS ON ALLOCATED STOCK. Any cash dividends on Company Stock
allocated to the Accounts of Participants may be paid currently (or within
ninety (90) days after the end of the Plan Year in which the dividends are paid
to the Trust) in cash to such Participants on a nondiscriminatory basis, as
determined by the Committee. Such distribution (if any) of cash dividends to
Participants may be limited to dividends on shares of Company Stock which are
then vested or may be applicable to dividends on all shares allocated to Company
Stock Accounts.
(c) DIVIDENDS USED TO REPAY LOAN TO PLAN. Any cash dividends on allocated
and unallocated Company Stock may also be used to repay a loan to the Plan which
meets the requirements of Code Section 4975 and the Regulations thereunder.
(d) TRUSTEE DISCRETION AS TO DIVIDENDS. The decision as to whether cash
dividends on Company Stock will be distributed to Participants, used to repay a
loan to the Plan, or held in the Trust shall be made in the sole discretion of
the Committee, and the Committee may request the Company to pay such dividends
directly to Participants.
17.1
<PAGE>
(e) LOANS TO PARTICIPANTS The Committee is hereby designated with sole
authority and responsibility to approve or deny loans and, except as provided in
this Section, collect unpaid loans. Loans may be made on any Quarterly Date upon
the written application of a Participant submitted to the Committee during the
period 30 days prior to and ending 15 days before the date the loan is to be
made.
Loans shall be approved only on account of an immediate and heavy financial
need and shall be approved only up to the amount that is necessary to satisfy
such financial need. For this purpose, an "immediate and heavy financial need"
shall mean the financial inabability to provide the necessary funds (i) to meet
the extraordinary medical expenses of the Participant, the spouse of the
Participant, or any dependents of the Participant, (ii) to prevent the eviction
of the Participant from his principal residence or foreclosure on the mortgage
of the Particiant's principal residence, or (iii) to provide payment of tuition
for the next semester or quarter of post-secondary education for the
Participant, his or her spouse, children, or dependents.
Written application shall be in a form acceptable to the Trustee and shall
set forth the reason the loan is being requested. Loans shall be made available
to all Participants in a uniform and nondiscriminatory manner. All loans will be
adequately secured and will bear a reasonable rate of interest as determined by
the Committee. The term of the loans shall be determined by the Committee, but
shall not exceed five (5) years.
The Committee shall bear sole responsibility for ensuring compliance with
all applicable federal or state laws and regulations. Each loan shall be secured
by a written assignment of that portion of the Participant's vested Account
which the Committee determines to the necessary to adequately secure repayment
of the loan. However, no portion of the Participant's Capital
17.2
<PAGE>
Accumulation may be used as security for such loan unless the spouse (if any)
consents in writing to such use during the 90-day period ending on the date on
which the loan is secured. No loan shall be approved by the Committee to any
Participant in any amount which exceeds (1) minus (2) where:
(1) is the lesser of:
(i) $50,000; or
(ii) fifty percent (50%) of the Participant's Vested Other
Investments Account.
(2) is the aggregate unpaid amount of all loans made to the Participant
under this or any other qualified plan maintained by the Employer.
Each loan shall be made from the borrowing Participant's Other Investments
Account. Repayments of the loan and interest shall be credited to his Other
Investments Account. No loan shall be considered a general investment of the
Trust Fund In the event a Participant does not repay the principal of such loan
within the time prescribed by the Committee or interest thereon at such times as
are required by the terms of the loan or if the Participant ceases to be an
Employee while such Participant has a loan which is outstanding, the Committee
may direct the Trustee to take such action as the Committee may reasonably
determine, including:
(1) demand repayment of the loan and institute legal action to enforce
collection, or
(2) demand repayment of the loan and charge the total amount against the
balance credited to the Participant's vested Account which was
assigned as security, and
17.3
<PAGE>
reduce any payment or distribution from the Trust Fund to which the
Participant or his Beneficiary may become entitled to the extent
necessary to discharge the obligation on the loan.
17.4
<PAGE>
Section 18. ADMINISTRATION.
The Plan will be administered by a Board of Trustees (the "Trustee") and an
Administrative Committee (the "Committee") , each composed of individuals
appointed by the Board of Directors to serve at its pleasure and without
compensation. The Trustee shall be the named fiduciary with authority and
responsibility for the management and investment of the Trust Assets. The
Committee members shall be the named fiduciaries with authority to control and
manage all other aspects of the administration of the Plan. Any Committee member
may also serve as a Trustee of the Plan, if so designated by the Board of
Directors.
Committee action will be by vote of a majority of the members at a meeting
or in writing without a meeting. Minutes of each meeting of the Committee shall
be kept. The Committee shall make such rules, regulations, computations,
interpretations, and decisions, and shall maintain such records and accounts as
may be necessary to administer the Plan in a nondiscriminatory manner for the
exclusive benefit of the Participants and their Beneficiaries, as required under
the Code and ERISA. The Committee shall establish procedures to determine the
qualified status of domestic relations orders and to administer distributions
under such qualified orders (in accordance with Section 414(p) of the Code).
The Committee will give instructions to the Trustee with respect to matters
which require instructions, as provided in this Plan and the Trust Agreement.
The Committee members may allocate their fiduciary responsibilities among
themselves and may designate other persons (including the Trustee) to carry out
its fiduciary responsibilities under the Plan. In the event that
18.1
<PAGE>
the Committee specifically designates the Trustee to perform any of the
Committee's fiduciary responsibilities, or if the Trustee is composed of the
same individuals as the Committee, then any specific instructions otherwise
required by the Plan or Trust Agreement from the Committee to the Trustee with
respect to such designated fiduciary responsibilities shall not be required.
The Trustee shall be responsible for investing the Trust Assets under the
Plan. The Trustee shall establish a funding policy and method for acquiring
Company Stock for the Trust in a manner that is consistent with the objectives
of the Plan and the requirements of ERISA. If Company Stock is readily tradable
on an established securities market, the fair market value of Company Stock
shall be based upon the offering price established by current bid and asked
prices quoted by persons independent of the Company, pursuant to Section
3(18)(A)(ii) of ERISA. In the absence of Company Stock trading on an established
securities market, all valuations of Company Stock pursuant to activities
carried on by the Plan shall be made by an independent appraiser meeting
requirements similar to those contained in Treasury Regulations under Section
170(a)(1) of the Code.
The Trustee and the Committee are empowered, on behalf of the Plan, to
employ investment advisers, accountants, legal counsel and other agents to
assist them in the performance of their duties under the Plan. The Company shall
secure fidelity bonding for the fiduciaries of the Plan, as required by Section
412 of ERISA. All reasonable expenses of the Trustee and the Committee shall be
paid as provided in Section 7. The Company shall indemnify each member of the
Board of Trustees and the Committee against any personal liability or expense,
except such liability or expense as may result from his own willful misconduct.
The Company shall be the Plan Administrator under Section 414(g) of the Code
and under Section 3(16)(A) of ERISA. The Committee shall be the designated agent
of the Plan for the service of legal process.
18.2
<PAGE>
Section 19. CLAIMS PROCEDURE.
Unless otherwise specified in the Plan, distributions of Capital
Accumulations under the Plan will normally be paid without a Participant (or
Beneficiary) having to file a claim for benefits. However, a Participant (or
Beneficiary) who does not receive a distribution to which he believes he is
entitled may present a claim to the Committee for any unpaid benefits. All
questions and claims regarding benefits under the Plan shall be acted upon by
the Committee.
Each Participant (or Beneficiary) who wishes to file a claim for benefits
with the Committee shall do so in writing, addressed to the Committee or to the
Company. If the claim for benefits is wholly or partially denied, the Committee
shall notify the Participant (or Beneficiary) in writing of such denial of
benefits within ninety (90) days after the Committee initially received the
benefit claim.
Any notice of a denial of benefits shall advise the Participant (or
Beneficiary) of:
(a) the specific reason or reasons for the denial;
(b) the specific provisions of the Plan on which the denial is
based;
(c) any additional material or information necessary for the
Participant (or Beneficiary) to perfect his claim and an
explanation of why such material or information is necessary;
and
(d) the steps which the Participant (or Beneficiary) must take to
have his claim for benefits reviewed.
Each Participant (or Beneficiary) whose claim for benefits is denied shall
have the opportunity to file a written request for a full and fair review of his
claim by the Committee, to review all documents pertinent to his claim and to
submit a written statement regarding issues
19.1
<PAGE>
relative to his claim. Such written request for review of his claim must be
filed by the Participant (or Beneficiary) within sixty (60) days after receipt
of written notification of the denial of his claim.
The decision of the Committee will be made within sixty (60) days after
receipt of a request for review and shall be communicated in writing to the
claimant. Such written notice shall set forth the specific reasons and specific
Plan provisions on which the Committee based its decision. If there are special
circumstances (such as the need to hold a hearing) which require an extension of
time for completing the review, the Committee's decision shall be rendered not
more than one hundred twenty (120) days after receipt of a request for review.
All notices by the Committee denying a claim for benefits, and all
decisions on request for a review of the denial of a claim for benefits, shall
be written in a manner calculated to be understood by the Participant (or
Beneficiary) filing the claim or requesting the review.
19.2
<PAGE>
Section 20. GUARANTIES.
All Capital Accumulations will be paid only from the Trust Assets. An
Employer, the Trustee or the Committee shall not have any duty or liability to
furnish the Trust with any funds, securities or other assets, except as
expressly provided in the Plan.
The adoption and maintenance of the Plan shall not be deemed to constitute
a contract of employment or otherwise between an Employer and any Employee, or
to be a consideration for, or an inducement or condition of, any employment.
Nothing contained in this Plan shall be deemed to give an Employee the right to
be retained in the Service of an Employer or to interfere with the right of an
Employer to discharge, with or without cause, any Employee at any time.
20.1
<PAGE>
Section 21. FUTURE OF THE PLAN.
As future conditions cannot be foreseen, the Company reserves the right to
amend or terminate the Plan (in whole or in part) and the Trust Agreement at any
time, by action of its Board of Directors. Neither amendment nor termination
shall retroactively reduce the vested rights of Participants or permit any part
of the Trust Assets to be diverted to or used for any purpose other than for the
exclusive benefit of the Participants (and their Beneficiaries).
The Company specifically reserves the right to amend the Plan and the Trust
Agreement retroactively in order to satisfy any applicable requirements of the
Code and ERISA.
The Company further reserves the right to terminate the Plan in the event
of a determination by the Internal Revenue Service (after a timely Application
for Determination is filed by the Company) that the Plan initially fails to
satisfy the requirements of Section 401(a) and 4975(e)(7) of the Code. In that
event, all Trust Assets shall (upon written direction of the Company) be
returned to the Company, and the Plan and the Trust shall terminate.
If the Plan is terminated (or partially terminated) by the Company,
participation of all Participants affected by the termination will end. The
Accounts of all Participants affected by the termination will become
nonforfeitable as of the date of termination. A complete discontinuance of
Employer Contributions shall be deemed to be a termination of the Plan for this
purpose. The Plan will not be considered "terminated," however, if Employer
Contributions are replaced by contributions to a comparable plan that meets the
requirements of Section 401(a) of the Code. After termination of the Plan, the
Trust will be maintained until the Capital Accumulations of all Participants
have been distributed. Capital Accumulations will be distributed following
termination of the Plan in accordance with Section 14 of the Plan.
21.1
<PAGE>
In the event of the merger or consolidation of this Plan with another Plan,
or the transfer of Trust Assets (or liabilities) to another Plan, the Account
balances of each Participant immediately after such merger, consolidation or
transfer must be at least as great as immediately before such merger,
consolidation or transfer (as if the Plan had then terminated).
21.2
<PAGE>
Section 22. "TOP HEAVY" CONTINGENCY PROVISIONS.
(a) The provisions of this Section 22 are included in the Plan pursuant to
Section 401(a)(10)(B)(ii) of the Code and shall become applicable only if the
Plan becomes a "top-heavy plan" under Section 416(g) of the Code for any Plan
Year.
(b) The determination as to whether the Plan becomes "top-heavy" for any
Plan Year shall be made as of the Anniversary Date of the immediately preceding
Plan Year (or as of December 31, 1991, for the Plan Year ending on that date),
by considering the Account balances of Participants in (1) the Plan, (2) any
other plan (such as a defined contribution or defined benefit plan) of the
Employer in which a Key Employee participates (in the Plan Year containing the
determination date or any of the preceding four Plan Years, even if the plan was
terminated), and (3) each other plan which enables any plan in which a Key
Employee participates during the period tested to meet the requirements of Code
Section 401(a)(4) or 410(b). All employers aggregated under Code Section 414(b),
(c) or (m) are considered a single employer. The Plan (and any other defined
contribution plan or any defined benefit plan) shall be "top-heavy" only if the
total of the Account balances under the Plan and any other defined contribution
plan and the value of accrued benefits under any defined benefit plan for Key
Employees as of the determination date for that Plan Year exceeds sixty percent
(60%) of the total of the Account balances for all Participants. For such
purpose, Account balances (including Participants' Account balances under any
other defined contribution plan) and accrued benefit values shall be computed
and adjusted pursuant to Section 416(g) of the Code. In determining Key
Employees under this Section 22(b), the term "annual compensation" in
22.1
<PAGE>
Section 416(i)(1)(A) of the Code shall mean Compensation (as defined in
Section 2).
(c) For any Plan Year in which the Plan is "top-heavy," each Participant
who is an Employee on the Anniversary Date and is not a participant in a defined
benefit plan and who is a Non-Key Employee shall receive, regardless of his
Hours of Service for that Plan Year, a minimum allocation of Employer
Contributions and Forfeitures which is equal to the lesser of:
(1) Three percent (3%) of his Compensation; or
(2) The same percentage of his Compensation as the allocation to the
Key Employee for whom the Percentage is the highest for that Plan
Year. For purposes of this calculation, any salary reductionor
other similar arrangement of a Key Employee shall be included in
determining the percentage allocation to a Key Employee.
If such Employee is also a Participant in any other defined contribution plan,
he shall receive only the minimum allocation in this Plan and shall not receive
the minimum allocation provided in the defined contribution plan.
(d) For any Plan Year in which the Plan is "top-heavy," each Participant
who is an Employee on the Anniversary Date and is also a participant in a
defined benefit plan and who is a Non-Key Employee shall receive only the
defined benefit minimum provided in the defined benefit plan and shall not
receive the minimum allocation provided in Section 22(c) of this Plan (or the
minimum allocation in any other defined contribution plan).
(e) For any Plan Year, including years in which the Plan is "top-heavy",
Compensation of each Employee for purposes of the Plan shall
22.2
<PAGE>
not take into account any amount in excess of $200,000, as adjusted for
increases in the cost of living pursuant to Section 416(d)(2) of the Code.
(f) As of the first day of any Plan Year in which the Plan has become
"top-heavy," the vesting schedule in Section 12(a) shall be amended to read as
follows:
NONFORFEITABLE
CREDITED SERVICE PERCENTAGE
Less Than Two Years 0%
Two Years 20%
Three Years 40%
Four Years 60%
Five Years 80%
Six Years or More 100%
(g) For any Plan Year in which the Plan is "top-heavy," with respect to any
Participant who is covered under a defined benefit plan, the "defined benefit
plan fraction" and the "defined contribution plan fraction" referred to in
Section 6(g) shall be computed by substituting "1.0" in lieu of "1.25" in both
denominators.
(h) The Capital Accumulation of an Employee who has not performed any
Service for the Employer at any time during the five-year period ending on the
determination date is excluded from the calculation to determine top-heaviness.
22.3
<PAGE>
Section 23. DIVERSIFICATION.
(a) Within 90 days after the last day of each Plan Year during the
Participants' Qualified Election Period, any Plan Participant who has attained
age fifty-five (55) and has completed ten (10) years of Credited Service (i.e.,
a "Qualified Participant") shall have the right to make an election to direct
the Plan as to the investment of twenty-five percent (25%) of the value of the
Participants' Account attributable to Company Stock which was acquired by the
Plan. Within 90 days after the close of the last Plan Year in the Participants'
Qualified Election Period, a Qualified Participant may direct the Plan as to the
investment of fifty percent (50%) of the value of such Account. The term
Qualified Election Period shall mean the six (6) Plan Year period beginning with
the Plan Year in which a Plan Participant first becomes a Qualified Participant.
(b) METHOD OF DIRECTING INVESTMENT. The Participant's election to diversify
his Account shall be provided to the Plan Administrator in writing and shall be
effective no later than 180 days after the close of the Plan Year to which the
election applies.
(c) DISTRIBUTION OF ACCOUNT. Upon a Qualified Participant's election to
direct the investment of a portion of the Participant's Account, the Plan may
distribute the portion of the Account that is covered by the election within 90
days after the last day of the period during which the election can be made.
Such distribution shall be subject to such requirements of the Plan concerning
put options (Section 16) and such provisions under Section 15 as require the
consent of the Participant and the Participant's spouse (if any) to a
distribution with a value in excess of $3,500.
23.1
<PAGE>
Section 24. GOVERNING LAW.
The provisions of the Plan and the Trust Agreement shall be construed,
administered and enforced in accordance with the laws of the State of Texas, to
the extent such laws are not superseded by ERISA.
24.1
<PAGE>
Section 25. EXECUTION.
To record the adoption of this Plan, the Company has caused this document
to be executed this 1ST day of SEPTEMBER, 1992.
GUARANTY BANCSHARES, INC.
By:________________________________
President
By:________________________________
Secretary
25.1
EXHIBIT 4.4
AMENDMENT NUMBER 1A TO THE
GUARANTY BANCSHARES, INC.
EMPLOYEE STOCK OWNERSHIP PLAN
Guaranty Bancshares, Inc., a bank holding company organized and operated
under the laws of the state of Texas, hereby adopts the following amendment to
the Guaranty Bancshares, Inc. Employee Stock Ownership Plan ("Plan"):
1. Section 2 of the Plan is hereby amended to replace the definition of
"Adjusted Compensation" with the following definition:
"With respect to remuneration paid prior to October 1, 1992, the total
compensation paid to an Employee as a Participant in each Plan Year, as
reported on IRS Form W-2, less overtime and bonuses, plus the amount (if
any) of his remuneration deferred under a qualified defined contribution
plan containing 401(k) provisions for the Plan Year.
With respect to remuneration paid on or after October 1, 1992, the total
compensation paid to an Employee as a Participant in each Plan Year, as
reported on IRS Form W-2, plus the amount (if any) of his remuneration
deferred under a qualified defined contribution plan containing 401(k)
provisions for the Plan Year.
For any Plan Year, however, Adjusted Compensation exceeding $200,000 for
any Employee (adjusted in accordance with Section 415 (d) (2) of the Code
for cost of living increases) shall not be taken into account."
IN WITNESS WHEREOF, the undersigned, a-duly authorized officer of Guaranty
Bancshares, Inc., hereby adopts this Amendment Number 1 to the Guaranty
Bancshares, Inc. Employee Stock Ownership Plan on this 18th day of May, 1993.
GUARANTY BANCSHARES, INC.
By: Bill G. Jones
As Its: Chairman of the Board
EXHIBIT 4.5
AMENDMENT NUMBER 1B TO THE
GUARANTY BANCSHARES, INC.
EMPLOYEE STOCK OWNERSHIP PLAN (WITH 401(K) PROVISIONS)
Guaranty Bancshares, Inc., Guaranty Bank, and Talco Bank, a corporation
registered as a bank holding company organized and operated under the laws of
the state of Texas and a banking association, hereby adopt the following
amendments to the Guaranty Bancshares, Inc. Employee Stock Ownership Plan (with
401(k) Provisions) ("Plan") as a condition to the issuance of an IRS Favorable
Determination Letter dated AUGUST 24 , 1993:
1. The first sentence in the third paragraph in Section 1 of the Plan is
hereby deleted and substituted therefor is the following language:
"The Plan, hereby adopted effective as of January 1, 1989, is a stock bonus
plan containing Section 401(k) features that is intended to qualify under
Section 401(a) of the Internal Revenue Code."
2. The definition of "Acquisition Loan" in Section 2 of the Plan is hereby
deleted and substituted therefor is a new definition to read as follows:
"A loan (or other extension of credit) used by the Trust to finance the
acquisition of Company Stock, which is made to the Plan by a disqualified
person or a loan to the Plan which is guaranteed by a disqualified person.
It includes a direct loan of cash, a purchase money transaction, and an
assumption of the obligation of the Plan."
3. The definition of "Adjusted Compensation" in Section 2 of the Plan is
hereby deleted and substituted therefor is the following definition:
"The total remuneration paid to an Employee by the Employer in each Plan
Year, as reported on IRS Form W-2, plus the amount (if any) of his
remuneration deferred under a qualified defined contribution plan
containing 401(k) provisions that are made by the Employer on behalf of its
Employees that are not includable in gross income under Sections 125,
402(a)(8), 402(h), and 403(b) for the Plan Year. For any Plan Year,
however, Adjusted Compensation exceeding $200,000 for any Employee
(adjusted in accordance with the Code for cost of living increases) shall
not be taken into account. For purposes of applying the $200,000 limit on
compensation, the family unit of an employee who either is a five percent
(5%) owner or is both a highly compensated employee and one of the ten most
highly compensated employees will be treated as a single
1
<PAGE>
employee with one compensation, and, except for the purpose of determining
compensation below the Plan's integration level, if applicable, the
$200,000 limit will be allocated among the members of the family unit in
proportion to their respective compensation. For this purpose, a family
unit consists of the employee who is five percent (5%) owner or one of the
ten most highly compensated employees, the employee's spouse and the lineal
descendants who have not attained age 19 before the close of the year."
4. Section 2 of the Plan is hereby amended to add the following language to
the definition of "Credited Service":
"Years of service with the Employer before a Participant entered the Plan,
including Years of Service in noncovered employment, will be counted for
vesting purposes, except that the following may be disregarded: (1) Years
of Service before age 18; (2) Years of Service during a period for which
the Employee declined to contribute to the Plan; (3) Years of Service with
the Employer during any period for which the Employer did not maintain the
Plan or a predecessor Plan; (4) Service not required to be taken into
account under the Breaks in Service rules; (5) Years of Service before
January 1, 1971, unless the Employee has had at least three (3) Years of
Service after December 31, 1970; (6) Years of Service before the first Plan
Year, if such service would have been disregarded under the rules of the
Plan with regard to Breaks in Service as in affect on the applicable date;
and (7) in the case of a multi-employer plan, Years of Service (a) with the
Employer after (1) a complete withdrawal of that Employer from the Plan, or
(2) to the extent permitted in the regulations prescribed by the Secretary,
a partial withdrawal described in Section 4205(b)(2)(A)(i) of such Act in
conjunction with the certification of the collective bargaining
representative, and (b) with any Employer under the Plan after the
termination date of the Plan under Section 404(a) of such Act."
5. Section 2 of the Plan is hereby amended to delete the definition of
"Compensation," and substitute therefor is a new definition to read as follows:
"The compensation that may be taken into account in determining
contributions on behalf of any employee is limited to no more than $200,000
(as adjusted) in a plan year. For purposes of applying the $200,000 limit
on compensation, the family unit of an employee who is either a five
percent (5%) owner or is both a highly compensated employee and one of the
ten most highly compensated employees will be treated as a single employee
with one compensation, and the $200,000 limit will be allocated among the
members of
2
<PAGE>
the family unit in proportion to their respective compensation. For this
purpose, a family unit consists of the employee who is a five percent (5%)
owner or one of the ten most highly compensated employees, the employee's
spouse and the lineal descendants who have not attained age 19 before the
close of the year."
"Compensation is wages, salaries, and fees from professional services and
other amounts received (without regard to whether or not an amount is paid
in cash) for personal service actually rendered in the course of employment
with the employer maintaining the Plan to the extent that the amounts are
includable in gross income (including, but not limited to, commissions paid
to salesmen, compensation for services on the basis of a percentage of
profits, commission on insurance premiums, tips, bonuses, fringe benefits,
and reimbursements or other expense allowances under a nonaccountable plan)
as described in Regulation 1.62-2(c), and excluding the following:
(a) Employer contributions to a plan of deferred compensation which are not
includable in the employee's gross income for the taxable year in which
contributed, or employer contributions under a simplified employee pension
plan to the extent such contributions are deductible by the employee, or
any distributions from a plan of deferred compensation;
(b) Amounts realized from the exercise of a nonqualified stock option, or
unrestricted stock (or property) held by the employee either becomes freely
transferable or is no longer subject to a substantial risk of forfeiture;
(c) Amounts realized from the sale, exchange or other disposition of stock
acquired under a qualified stock option plan; and
(d) Other amounts which receive special tax benefits, or contributions made
by the employer (whether or not under a salary reduction agreement) towards
the purchase of an annuity contract described in Section 403(b) of the Code
(whether or not the contributions are actually excludable from the gross
income of the employee).
"For any self-employed individual, compensation will mean earned income."
3
<PAGE>
"For limitation years beginning after December 31, 1991, compensation for a
limitation year is the compensation actually paid or made available during
such limitation year."
"Notwithstanding the preceding sentence, compensation for a participant in
a defined contribution plan who is permanently and totally disabled (as
defined in Section 22(e)(3) of the Internal Revenue Code) is the
compensation such participant would have received for the limitation year
that the participant would have been paid at the rate of compensation paid
immediately before becoming permanently and totally disabled; such imputed
compensation for the disabled participant may be taken into account only if
the participant is not a highly compensated employee (as defined in Section
414(q) of the Code) and contributions made on behalf of such participant
are nonforfeitable when made."
6. Section 2 of the Plan is hereby amended to add the following definition
of "Direct Rollover":
"A payment by the Plan to the eligible retirement plan specified by the
distributees."
7. Section 2 of the Plan is hereby amended to add the following definition
of "Distributee":
"A Distributee includes an employee or former employee. In addition, the
employees or former employee's surviving spouse and the employee's or
former employee's spouse or former spouse who is the alternate payee under
a qualified domestic relations order, as defined in Section 414(p) of the
Code, or Distributees with regard to the interests of the spouse or former
spouse."
8. Section 2 of the Plan is hereby amended to add the following definition
of "Eligible Retirement Plan":
"An individual retirement account described in Section 408(a) of the Code,
an individual retirement annuity described in Section 408(b) of the Code,
an annuity plan described in Section 403(a) of the Code, or a qualified
trust described in Section 401(a) of the Code, that accepts the
Distributee's eligible rollover distribution. However, in the case of an
eligible rollover distribution to the surviving spouse, an Eligible
Retirement Plan is an individual retirement account or individual
retirement annuity."
4
<PAGE>
9. Section 2 of the Plan is hereby amended to add the following definition
of "Eligible Rollover Distribution":
"Any distribution of all or any portion of the balance to the credit of the
Distributee, except that an Eligible Rollover Distribution does not
include: any distribution that is one of a series of substantially equal
periodic payments (not less frequently than annually) made for the life (or
life expectancy) of the Distributee or the joint lives (or joint life
expectancies) of the Distributee and the Distributee's designated
beneficiary, or for a specified period of ten years or more; any
distribution to the extent such distribution is required under Section
401(a)(9) of the Code; and the portion of any distribution that is not
includable in gross income (determined without regard to the exclusion for
net unrealized appreciation with respect to employer securities)."
10. Sections 2 (under the definition of affiliated company), 3(d)(5), and
22(a) of the Plan are hereby amended to add the following language:
"All determinations related to a controlled group of corporations or
businesses which are under common control shall consider any and all
regulations promulgated by the secretary of Treasury pursuant to Internal
Revenue Code Section 414(o)."
11. The definition of "Highly Compensated Participant" in Section 2 of the
Plan is hereby deleted and substituted therefor is a new definition to read as
follows:
"An employee who performs service during the determination year and is
described in one or more of the following groups:
(1) An employee who is a five percent (5%) owner, as defined in Section
416(i)(1)(A)(iii), at any time during the determination year or the
look-back year.
(2) An employee who receives compensation in excess of $75,000 (indexed in
accordance with Section 415(d)) during the look-back year.
(3) An employee who receives compensation in excess of $50,000 (indexed in
accordance with Section 415(d)) during the look-back year and is a
member of the top paid group for the look-back year.
5
<PAGE>
(4) An employee who is an officer, within the meaning of Section 416(i)
during the look-back year and who receives compensation in the
look-back year greater than fifty percent (50%) of the dollar
limitation in effect under Section 415(b)(1)(A) for the calendar year
in which the look-back year begins.
(5) An employee who is both described in paragraphs 2, 3, or 4 above when
these paragraphs are modified to substitute the determination year for
the look-back year and 1 of the 100 employees who receive the most
compensation from the employer during the determination year."
"The determination year is the Plan Year for which the determination of who
is highly compensated is being made."
"The look-back year is the 12-month period immediately preceding the
determination year, or, if the employer elects, the calendar year ending
with or within the determination year."
"The top-paid group consists of the top twenty percent (20%) of employees
ranked on the basis of compensation received during the year. For purposes
of determining the number of employees in the top-paid group, employees
described in Section 414(q)(8) and Q&A 9(b) of Section 1.414(q-lT) of the
regulations are excluded."
"The number of officers is limited to 50 (or, if lesser, the greater of
three employees or ten percent (10%) employees) excluding those employees
who may be excluded in determining the top-paid group."
"When no officer has compensation in excess of fifty percent (50%) of the
Section 415 (b) (1) (A) limit, the highest paid officer is treated as
highly compensated."
"Compensation is compensation within the meaning of Section 415 (c) (3)
including elective or salary reduction contributions to a cafeteria plan,
cash or deferred arrangement or tax-sheltered annuity."
"Employers aggregated under Section 414(b), (c), (m), or (o) are treated as
a single employer."
"The term "Five Percent (5%) Owner" means (1) if the Employer is a
corporation, then any person who owns (or is considered as owning within
the meaning of Section 318) more than five percent (5%) of the outstanding
stock of the corporation or stock possessing more than five
6
<PAGE>
percent (5%) of the total combined voting power of all stock of the
corporation, or (2) if the Employer is not a corporation, any person who
owns more than five percent (5%) of the capital or profits interest in the
Employer."
"For purposes of determining the number of Employees in the top-paid group,
the following Employees shall be excluded: (1) Employees who have not have
completed six (6) months of service, (2) Employees who normally work less
than 17 1/2 hours per week, (3) Employees who normally work during not more
than six (6) months during any year, (4) Employees who have not attained
age twenty-one (21), and (5) except to the extent provided in the
regulations, Employees who are included in a unit of Employees covered by
an agreement with the Secretary of Labor finds to be a collective
bargaining agreement between Employee representatives and the Employer.
Except as provided by the Secretary, the Employer may elect to apply
exclusions (1), (2), (3), or (4) by substituting a shorter period of
service, the smaller number of hours or months, or lower age for a period
of service, number of hours or months, or age (as the case may be) than
that specified in such exclusion."
12. Section 3(a) of the Plan is hereby amended to add the following
language:
"The initial eligibility computation period used to determine whether an
Employee is employed in a position requiring at least 1,000 Hours of
Service will be a 12 consecutive month period beginning with the employment
commencement date."
"Service of an Employee who is a leased employee to any Employer aggregated
under Section 414(b), (c) or (m) must be credited for vesting purposes
whether or not such individual is eligible to participate in the Plan."
13. The last sentence of Section 4(2)(a) of the Plan is hereby deleted and
substituted therefor is the following language:
"The total amount of Salary Reduction Contributions for any Plan Year shall
not exceed $7,627, multiplied by an cost-of-living adjustment factor
prescribed by the Secretary of the Treasury under Section 415(d) of the
Code."
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<PAGE>
"Any Salary Reduction Contribution in excess of the aforementioned
limitation, plus any income allocable thereto, shall be returned to the
participant no later than the first April 15 following the close of the tax
year in which such contributions were made."
14. The fourth sentence in Section 4(2)(b) of the Plan is hereby deleted
and substituted therefor is the following language:
"Salary Reduction Contributions may be suspended at any time by a
Participant by giving prior written notice."
15. The second paragraph of Section 4(2)(c) is hereby deleted and
substituted therefor is the following language:
"Actual Deferral Percentage with respect to any specific group of
Participants for a Plan Year shall mean the average of the ratios
(calculated separately for each Participant in such group) of (A) the
amount of each eligible employee's Salary Reduction Contributions
(including Employer Discretionary Basic contributions and Employer
Discretionary Matching Contributions that are treated as elective
contributions) paid into the Trust fund on behalf of each Participant for
such Plan Year to (B) the Participant's Compensation for such Plan Year."
"In the case of a highly compensated employee who is either a five percent
(5%) or one of the ten most highly compensated employees and is thereby
subject to the family aggregation rules of Section 414(q)(6), the Actual
Deferral Ratio (ADR) for the family group (which is treated as one highly
compensated employee) is the ADR determined by combining the Salary
Reduction Contributions, compensation, and amounts treated as elective
contributions of all eligible family members. Except to the extent taken
into account in the preceding sentence, the Salary Reduction Contributions,
compensation, and amounts treated as Salary Reduction Contributions of all
family members are disregarded in determining the actual deferral
percentages for the groups of highly compensated employees and nonhighly
compensated employees."
"Excess contributions are allocated among the family members in proportion
to the contributions of each family member that have been combined."
8
<PAGE>
"Excess contributions will not be recharacterized with respect to a Highly
Compensated Participant to the extent that the recharacterized amounts, in
combination with employee contributions actually made by the employee,
exceed the maximum amount of employee contributions (determined prior to
applying Section 401(m)(2)(A) of the Code) that the employee is permitted
to make under the plan in the absence of recharacterization."
"A Salary Reduction Contribution will be taken into account under the
actual deferral percentage test of Section 401(k)(3)(A) of the Code for a
plan year only if it relates to compensation that either would have been
received by the employee in the plan year (but for the deferral election)
or is attributable to services performed by the employee in the plan year
and would have been received by the employee within 2 1/2 months after the
close of the plan year (but for the deferral election)."
"A Salary Reduction Contribution will be taken into account under the
actual deferral percentage test of Section 401(k)(3)(A) of the Code for a
plan year only if it is allocated to the employee as of a date within that
plan year. For this purpose, a Salary Reduction Contribution is considered
allocated as of a date within a plan year if the allocation is not
contingent on participation or performance of services after such date and
the elective contribution is actually paid to the trust no later than 12
months after the plan year to which the contribution relates."
"In calculating the actual deferral percentage for purposes of Section
401(k), the actual deferral ratio of a Highly Compensated Participant will
be determined by treating all cash or deferred arrangements under which the
Highly Compensated Participant is eligible (other than those that may not
be permissively aggregated) as a single arrangement."
16. Section 4(2)(d) of the Plan is hereby amended to add the following
language:
"The accrued benefit derived from contributions made by an Employee as of
any applicable date is the balance of the Employee's separate account as
stated in Section 6(c) consisting only of his contributions in the income,
expenses, gains, and losses attributable thereto. Contributions which have
been recharacterized as Salary Reduction Contributions will be placed in
the Employee Salary Reduction Account listed in Section 6(c)."
9
<PAGE>
17. Section 4(3)(a) of the Plan is hereby amended to add the following language:
"In calculating the actual contribution percentage (ACP) test of Section
401(m) for a Plan Year, contributions will be taken into account as
follows: an employee contribution is to be taken into account if it is paid
to the Trust during the Plan Year or paid to an agent of the Plan and
transferred into the Trust within a reasonable period after the end of the
Plan Year. An excess contribution to a cash or deferred arrangement that is
recharacterized is to be taken into account in the plan year in which a
contribution would have been received in cash by the employee had the
employee not elected to defer the amounts. An Employer Discretionary
Matching Contribution is taken into account for a plan year only if it is
(1) made on account of the employee's Salary Reduction Contributions for
the plan year, (2) allocated to the employee's account as of a date within
that year, and (3) paid to the Trust by the end of the twelfth month
following the close of that year. Qualified Employer Discretionary Matching
Contributions which are used to meet the requirements of Section
401(k)(3)(A) are not to be taken into account for purposes of the ACP test
of Section 401(m). For purposes of determining whether a plan satisfies the
actual contribution percentage test of Section 401(m), all employee and
Employer Discretionary Matching Contributions that are made under two or
more plans that are aggregated for purposes of Sections 401(a)(4) and
410(b) (other than Section 410(b)(2)(A)(ii)) are to be treated as made
under a single plan and that if two or more plans are permissively
aggregated for purposes of Section 401(m), the aggregated plans must also
satisfy Sections 401(a)(4) and 410(b) as though they were a single plan.
The actual contribution ratio of a Highly Compensated Participant will be
determined by treating all plans subject to Section 401(m) under which the
Highly Compensated Participant is eligible (other than those that may not
be permissively aggregated) as a single plan. In the case of a highly
compensated employee who is either a five percent (5%) owner or one of the
ten most highly compensated employees and is thereby subject to the family
aggregation rules of Section 414(q)(6), the Actual Contribution Ratio (ACR)
for the family group (which is treated as one highly compensated employee)
is the ACR determined by combining the contributions and compensation of
all eligible family members. Except to the extent taken into account in the
preceding sentence, the contributions and compensation of all family
members are disregarded in determining the actual contribution percentages
for the groups of highly compensated employees and nonhighly compensated
employees."
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<PAGE>
"A family member is the spouse and the lineal ascendants and descendants
(and spouses of such ascendants and descendants) of any Employee or former
Employee."
"Employer Discretionary Basic Contributions may be treated as Employer
Discretionary Matching Contributions for purposes of the actual
contribution percentage test of Section 401(m) only if such contributions
are nonforfeitable when made and distributable only under the following
circumstances:
(1) The employer's retirement, death, disability, or separation from
service;
(2) The termination of the Plan with the establishment or maintenance of
another defined contribution plan (other than an ESOP or SEP);
(3) In the case of a profit sharing or stock bonus plan, the employee's
attainment of age 59 1/2 or the employee's hardship;
(4) The sale or other disposition by a corporation to an unrelated
corporation of substantially all of the assets used in a trade or
business, but only with respect to employees who continue employment
with the acquiring corporation and the acquiring corporation does not
maintain the plan after the disposition; and
(5) The sale or other disposition by a corporation of its interest in a
subsidiary to an unrelated entity, but only with respect to employees
who continue employment with the subsidiary and the acquiring entity
does not maintain the plan after the disposition.
Paragraphs 2, 4, and 5 above, apply only if the transferor corporation
continues to maintain the plan. Employer Discretionary Basic Contributions
which may be treated as Employer Discretionary Matching Contributions must
satisfy these requirements without regard to whether they are actually
taken into account as Employer Discretionary Matching Contributions."
"For purposes of aggregating plans, allocations under a plan or portion of
a plan described in Code Sections 4975(e)(7) or 409 may not be combined
with contributions or allocations under any plan or portion of a plan not
described in Code Sections 4975(e)(7) or 409 for purposes of determining
whether either the ESOP or the non-ESOP satisfies the requirements of
Section 401(m)."
11
<PAGE>
18. The last sentence in the second paragraph of Section 4(3) (b) is hereby
deleted, and substituted therefor by the following language:
"The amount of excess aggregate contributions for a plan year shall be
determined only after first determining the excess contributions that are
treated as Employee Voluntary Contributions due to recharacterization."
"Excess aggregate contributions are allocated among the family members in
proportion to the contributions of each family member that have been
combined."
"The distribution (or forfeiture, if applicable) of excess aggregate
contributions will include any income attributable thereto (computed
pursuant to Reg. 1.401(m)-l(e)(3)) from the date such excess aggregate
contributions were made until such date of distribution."
19. Section 4(3) (c) of the Plan is hereby amended to include the following
language:
"If multiple use of the alternative limitation occurs, it must be corrected
by reducing the actual deferral percentage of all highly compensated
employees regardless of whether they are eligible under both an arrangement
subject to section 401(k) and a plan subject to Section 401(m)."
20. Section 4(4)(c) is hereby amended to include the following language:
"The requirements described in Section 401(a)(11)(A) and 417 of the Code,
and the regulations thereunder, will apply to a Participant's benefits if,
with respect to the Participant, the Plan is a direct or indirect
transferee of benefits held on or after January 1, 1985, by a defined
benefit plan or a defined contribution plan subject to the requirements of
Section 401(a)(11) and Code Section 417. If the Plan provides for a
separate accounting of the Participant's benefits, these requirements need
only apply to the separate account."
21. The last sentence of Section 5(b) of the Plan is hereby deleted and
substituted therefor is the following language:
"When a Participant is entitled to a distribution from the Plan of
securities that are not readily tradable on an established securities
market, the Employer will repurchase these securities within the time
periods and in accordance with the methods described in Code
12
<PAGE>
Sections 409(h)(5) and (6). This requirement shall be treated as met if (1)
the amount to be paid for the employer securities is paid in substantially
equal periodic payments (not less frequently than annually) over a period
beginning not later than 30 days after the exercise of the put option (a
put option for a period of at least 60 days following the date of
distribution of stock of the Employer and, if the put option is not
exercised within such 60-day period, for an additional period of at least
60 days in the following Plan Year) and not exceeding 5 years, and (2)
there is adequate security provided and reasonable interest paid on the
unpaid amounts of the Employee's benefits to be distributed in the form of
employer securities. For purposes of the above, the term "Total
Distribution" means the distribution within 1 taxable year to the recipient
of the balance to the credit of the recipient's account. If an Employer is
required to repurchase employer securities as part of an installment
distribution, the amount to be paid for the employer securities shall be
paid not later than 30 days after the exercise of the put option described
above."
"Except for the put option described in Section 54.4975-7(b)(10), the
security acquired with the proceeds of an exempt loan may be subject to a
put, call or other option, or buy-sell or other arrangement while held by
and when distributed from a plan, whether or not the Plan has continued to
operate as an Employee Stock Ownership Plan. A put option described in
Section 54.4975-7(b)(10) of the regulations is a put option on a qualifying
employer security acquired with the proceeds of an exempt loan by an ESOP
after September 30, 1976, that is not publicly traded when distributed or
is subject to a trading limitation when distributed. A "trading limitation"
on a security is a restriction under any Federal or state securities law,
any regulation thereunder, or an agreement, affecting the security which
would make the security not as freely tradable as one not subject to such
restriction. Such put option must be exercisable only by a Participant, by
the Participant's donees, or by a person (including an estate or its
distributes) to whom the security passes by reason of a Participant's
death. "Participant" means a participant and beneficiaries of the
Participant under the ESOP. The put option must permit a Participant to put
the security to the Employer. If it is known at the time a loan is made
that Federal or state law will be violated by the Employer's honoring such
put option, the put option must permit the security to be put in a manner
consistent with such law, to a third party that has substantial net worth
at the time the loan is made and whose net worth is reasonably expected to
remain substantial."
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<PAGE>
"Payments made with respect to an exempt loan by the Employee Stock
ownership Plan during the year must not exceed an amount equal to the sum
of contributions and earnings received during or prior to such year less
such payments in prior years."
"Assets transferred in satisfaction of a loan must not exceed the amount
of default. For a disqualified person, the assets transferred to
satisfy default cannot exceed the payment schedule of the loan."
"The rights and protections required under Regulation Section
54.4975-7(b)(4), relating to put, call or other options and to buy-sell or
other similar arrangements in Sections 54.4975-7(b)(10), (11), and (12),
relating to put options are nonterminable, even if the loan is repaid or
the Plan ceases to be an Employee Stock Ownership Plan."
"Payments of principal and interest on any Acquisition Loan shall be paid
by the Trustee only from Employer Contributions to enable the Trust to
repay such Acquisition Loan, from earnings attributable to such Employer
Contributions and from any dividends received by the Trust on such financed
shares. Salary Reduction Contributions shall not be used to pay any
interest on an exempt loan."
22. The introductory paragraph to Section 6 is hereby deleted, and
substituted therefor is a new introductory paragraph to read as follows:
"Separate Accounts shall be established to reflect each Participant's
interest in the Plan. Within each of the Accounts described in sections
(a), (b) , (c) , and (e) herein, a separate Company Stock Account and Other
Investments Account will be determined and maintained in accordance with
the procedures contained in Subsection (e)."
23. Section 6(e) of the Plan is hereby amended to add the following
language:
"As of the end of each Plan Year, the Plan must consistently allocate, to
the Participants' accounts, nonmonetary units representing Participants'
interest in assets withdrawn from the suspense account."
24. Section 6(f) of the Plan is hereby deleted and substituted therefor is
the following language:
"Employer Discretionary Optional Contributions and Forfeitures under
Section 12(b) and (c) for each Plan Year will be allocated as of the
anniversary date among the accounts
14
<PAGE>
of participants so entitled under Section 3(b) in the ratio which the
adjusted compensation of each such participant bears to the total adjusted
compensation of all such participants for that Plan Year."
25. Section 6(g) of the Plan is hereby amended to add the following
language:
"All defined contribution plans (including voluntary employee contribution
accounts in a defined benefit plan and key employee accounts under a
welfare benefit plan described in Section 419, as well as employer
contributions allocated to an IRA) of the Employer, whether or not
terminated, will be treated as one defined contribution plan for purposes
of the limitations under Section 415(c) of the Code. Where the Employer is
a member of a controlled group of corporations or commonly controlled
trades or businesses, or a member of an affiliated service group, within
the meaning of Sections 414(b), (c), or (m) and 415(g) and (h) of the Code,
all such employers are treated as a single employer for purposes of the
Plan's application of the Section 415 limitations."
26. The first sentence in the third paragraph of Section 6(g) of the Plan
is hereby deleted and substituted therefor is the following language:
"Any excess amount shall be reallocated among the Accounts of the other
Participants in such subsequent Plan Year according to the ratio which the
Adjusted Compensation of each such Participant bears to the total Adjusted
Compensation of all such Participants for the Plan Year, to the extent
possible without exceeding the limitations with respect to any other
Participant for that Plan Year."
27. The second sentence in Section 12(a) of the Plan is hereby deleted and
substituted therefor is the following language:
"A Participant is one hundred percent (100%) vested at all times in his
Account due to Employer Discretionary Basic Contributions, the first
twenty-five percent (25%) of Employer Discretionary Matching Contributions
made on or after August 20, 1992, and in Employee Salary Reduction and
Rollover Contributions."
15
<PAGE>
28. Section 12(b) of the Plan is hereby amended to add the following
language:
"An Employee who separates from service and is reemployed prior to
incurring a Break in Service will continue to vest, starting at the point
in the vesting schedule where he or she left employment, and both his or
her pre-separation and post-separation accrued benefit. If more than one
class of qualifying employer securities subject to exempt loan provisions
have been allocated to a Participant's account, the Plan must forfeit the
same proportion of each such class."
29. Section 14(a) of the Plan is hereby amended to add the following
language:
"A Participant who elects to defer receipt of benefits may not do so to the
extent that he or she is creating a death benefit, and it is more than
incidental."
"Notwithstanding any provision of the Plan to the contrary that would
otherwise limit a Distributee's election under Code Section 401 (a) (3 1) ,
a Distributee may elect, at the time and in the manner prescribed by the
Plan administrator, to have any portion of an Eligible Rollover
Distribution paid directly to an Eligible Retirement Plan specified by the
Distributee in a Direct Rollover."
30. Section 15(b) of the Plan is hereby amended to add the following
language:
"The payment of benefits under the Plan to the Participant will begin not
later than the 60th day after the close of the Plan Year in which the
latest of the following events occurs:
(1) the attainment by the Participant of age 65, or, if earlier, the
normal retirement age specified under the Plan,
(2) the tenth anniversary of the date on which the Participant commences
participation in the Plan,
(3) the termination of the Participant's service with the Employer, or
(4) the date the Participant elects that the payment to him of any benefit
under a Plan will commence at a date later than the date specified
above.
16
<PAGE>
"If the Participant dies before the time when distribution is considered to
have commenced, the method of distribution shall meet the following
requirements: (a) Any remaining portion of the Participant's interest that
is not payable to a beneficiary designated by the Participant will be
distributed within five years after the Participant's death; and (b) any
portion of the Participant's interest that is payable to a beneficiary
designated by the Participant will be distributed either (i) within five
years after the Participant's death, or (ii) over the life of the
beneficiary over a period certain not extending beyond the life expectancy
of the beneficiary, commencing not later than the end of the calendar year
following the calendar year in which the Participant died (or, if the
designated beneficiary is the Participant's surviving spouse, commencing
not later than the end of the calendar year following the calendar year in
which the Participant would have attained age 70 1/2) ."
"If more than one class of employer securities has been acquired with the
proceeds of an exempt loan, distribution of each class will be
substantially proportional."
31. The fourth sentence in Section 15(b) of the Plan is hereby deleted and
substituted therefor is the following language:
"A Participant (with the consent of his spouse, if any) may designate a
different Beneficiary (and contingent Beneficiaries) and alternate form of
distribution of his Capital Accumulation (either in one lump sum or in
substantially equal annual payments) from time to time (and may change such
designation of Beneficiary or form of distribution at any time) with the
consent of his spouse (unless the original consent permits subsequent
choice of Beneficiary or form of distribution without further spousal
consent) by filing a written designation with the Committee."
32. Section 16(b) of the Plan is hereby amended to add the following
language:
"If Employer is required to repurchase Employer securities as part of an
installment distribution, the amount to be paid for the Employer securities
shall be paid not later than 30 days after the exercise of the put option."
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<PAGE>
33. Section 22(b) of the Plan is hereby amended to add the following
language:
"Each plan of an employer in which a key employee participates (in the plan
year containing the determination date or any of the four preceding plan
years) and each other plan which enables any plan in which a key employee
participates during the period tested to meet the requirements of Section
401(a)(4) or (b), are required to be aggregated for top-heavy testing
purposes and are considered the required aggregation group."
"A permissive aggregation group is one or more plans that are not required
to be aggregated but which may be aggregated with a required aggregation
group. A plan may permissively be aggregated only if the resulting
aggregation group satisfies the requirements of Sections 401(a)(4) and
410."
"The accrued benefits and account balances that are to be taken into
account in determining top heaviness relate to the proper determination
date."
"For a year in which the plan is top heavy, each nonkey employee will
receive a minimum contribution if the participant is not separated from
service at the end of the plan year, regardless of whether the nonkey
employee has less than 1,000 hours of service (or the equivalent)."
"Accrued benefits used to determine the top-heavy ratio include
distributions made during the five-year period being considered."
"The determination date for any Plan Year subsequent to the first Plan
Year, is the last day of the preceding Plan Year. The determination date
for the first Plan Year of the Plan is the last day of that year."
34. Section 22(c) of the Plan is hereby amended to add the following
language:
"Salary Reduction Contributions made by nonkey employees will not be
counted in determining if they have received their minimum three percent
(3%) contribution."
35. Section 22(e) of the Plan is hereby amended to add the following
language:
"Compensation to be used for determining a minimum benefit or a minimum
contribution is the compensation described in Section 1.415-2(d) of the
Regulations. The same
18
<PAGE>
definition of compensation must be used for all top-heavy purchases, except
that for the purpose of determining whether an Employee is a Key Employee,
with respect to Plan years beginning on or after January 1, 1989, the
compensation to be used is compensation as defined in Section 415(c)(3) of
the Code but including employee contributions made pursuant to salary
reduction arrangements."
IN WITNESS WHEREOF, the undersigned, a duly authorized officer of Guaranty
Bancshares, Inc., Guaranty Bank, and Talco Bank hereby adopts this Amendment
Number 1 to the Guaranty Bancshares, Inc. Employee Stock Ownership Plan (with
401(k) Provisions) on this 1st day of September, 1993.
GUARANTY BANCSHARES, INC.
By: Bill G. Jones
As Its: Chairman of the Board
GUARANTY BANK
By: Bill G. Jones
As Its: Chairman of the Board
TALCO BANK
By: Rusty Jones
As Its: President
19
EXHIBIT 4.6
AMENDMENT NUMBER 2
TO THE
GUARANTY BANCSHARES, INC.
EMPLOYEE STOCK OWNERSHIP PLAN (WITH 401(k) PROVISIONS)
Guaranty Bancshares, Inc., Guaranty Bank and Talco Bank, a corporation
registered as a bank holding company organized and operated under the laws of
the state of Texas and a banking association, hereby adopt the following
amendment to the Guaranty Bancshares, Inc. Employee Stock Ownership Plan (with
401(k) Provisions) ("Plan"):
1. Section 2 of the Plan is hereby amended to add the following definition:
"IN ADDITION TO OTHER APPLICABLE LIMITATIONS SET FORTH IN THE PLAN, AND
NOTWITHSTANDING ANY OTHER PROVISION OF THE PLAN TO THE CONTRARY, FOR PLAN
YEARS BEGINNING ON OR AFTER JANUARY 1, 1994, THE annual COMPENSATION AND
ANNUAL ADJUSTED COMPENSATION OF EACH EMPLOYEE TAKEN INTO ACCOUNT UNDER THE
PLAN SHALL NOT EXCEED THE OBRA '93 ANNUAL COMPENSATION LIMIT. THE OBRA '93
ANNUAL COMPENSATION LIMIT IS $150,000, AS ADJUSTED BY THE COMMISSIONER FOR
INCREASES IN THE COST OF LIVING IN ACCORDANCE WITH SECTION 401(A)(17)(B) OF
THE INTERNAL REVENUE CODE. THE COST-OF-LIVING ADJUSTMENT IN EFFECT FOR A
CALENDAR YEAR APPLIES TO ANY PERIOD, NOT EXCEEDING 12 MONTHS, OVER WHICH
COMPENSATION AND ADJUSTED COMPENSATION ARE DETERMINED (DETERMINATION
PERIOD) BEGINNING IN SUCH CALENDAR YEAR. IF A DETERMINATION PERIOD CONSISTS
OF FEWER THAN 12 MONTHS, THE OBRA '93 ANNUAL COMPENSATION LIMIT WILL BE
MULTIPLIED BY A FRACTION, THE NUMERATOR OF WHICH IS THE NUMBER OF MONTHS IN
THE DETERMINATION PERIOD, AND THE DENOMINATOR OF WHICH IS 12.
FOR PLAN YEARS BEGINNING ON OR AFTER JANUARY 1, 1994, ANY REFERENCE IN
THIS PLAN TO THE LIMITATION UNDER SECTION 401(A)(17) OF THE CODE SHALL MEAN
THE OBRA '93 ANNUAL COMPENSATION LIMIT SET FORTH IN THIS PROVISION.
IF COMPENSATION OR ADJUSTED COMPENSATION FOR ANY PRIOR DETERMINATION
PERIOD IS TAKEN INTO ACCOUNT IN DETERMINING AN EMPLOYEE'S BENEFITS ACCRUING
IN THE CURRENT PLAN YEAR, THE COMPENSATION OR ADJUSTED COMPENSATION FOR
THAT PRIOR DETERMINATION PERIOD IS SUBJECT TO THE OBRA '93 ANNUAL
COMPENSATION LIMIT IN EFFECT FOR THAT PRIOR DETERMINATION PERIOD. FOR THIS
PURPOSE, FOR DETERMINATION PERIODS BEGINNING BEFORE THE FIRST DAY OF THE
FIRST PLAN YEAR BEGINNING ON OR AFTER JANUARY 1, 1994, THE OBRA `93 ANNUAL
COMPENSATION LIMIT IS $150,000 .
IN WITNESS WHEREOF, the undersigned, a duly authorized officer Guaranty
Bancshares, Inc., Guaranty Bank and Talco Bank, hereby adopt this Amendment
Number 2 to the Guaranty
1
<PAGE>
Bancshares, Inc. Employee Stock Ownership Plan (with 401(k) Provisions) on
this 20TH day of DECEMBER, 1994.
GUARANTY BANCSHARES, INC.
By: Bill G. Jones
As Its: CHAIRMAN OF THE BOARD
GUARANTY BANK
By: Art Scharlach
As Its: PRESIDENT
TALCO BANK
By: Rusty Jones
As Its: PRESIDENT
2
EXHIBIT 4.7
AMENDMENT NUMBER 3
TO THE
GUARANTY BANCSHARES, INC.
EMPLOYEE STOCK OWNERSHIP PLAN (WITH 401(k) PROVISIONS)
Guaranty Bancshares, Inc., Guaranty Bank and Talco Bank, collectively, a
corporation registered as a bank holding company organized and operated under
the laws of the state of Texas and a banking association, hereby adopt the
following amendment to the Guaranty Bancshares, Inc. Employee Stock Ownership
Plan (with 401(k) Provisions) ("Plan"):
1. Section 12(a) of the Plan is hereby amended to add the following
language:
"HOWEVER, A PARTICIPANT SHALL BE ENTITLED TO THE VESTED PORTION OF HIS
EMPLOYER DISCRETIONARY MATCHING CONTRIBUTION IN THE YEAR OF HIS
TERMINATION, REGARDLESS OF WHETHER EMPLOYMENT TERMINATES PRIOR TO THE
ANNIVERSARY DATE.
2. The second paragraph in Section 17(e) of the Plan is hereby deleted and
replaced with the following definition:
"LOANS SHALL BE APPROVED ONLY ON ACCOUNT OF AN IMMEDIATE AND HEAVY
FINANCIAL NEED AND SHALL BE APPROVED ONLY UP TO THE AMOUNT THAT IS
NECESSARY TO SATISFY SUCH FINANCIAL NEED. FOR THIS PURPOSE, AN "IMMEDIATE
AND HEAVY FINANCIAL NEED" SHALL MEAN THE FINANCIAL INABILITY TO PROVIDE
THE NECESSARY FUNDS (I) TO MEET THE EXTRAORDINARY MEDICAL EXPENSES OF THE
PARTICIPANT, THE SPOUSE OF THE PARTICIPANT, OR ANY DEPENDENTS OF THE
PARTICIPANT, (II) TO PREVENT THE EVICTION OF THE PARTICIPANT FROM HIS
PRINCIPAL RESIDENCE OR FORECLOSURE ON THE MORTGAGE OF THE PARTICIPANT'S
PRINCIPAL RESIDENCE, OR (III) PAYMENT OF TUITION, RELATED EDUCATIONAL
FEES, AND ROOM AND BOARD EXPENSES FOR THE NEXT 12 MONTHS OF POST SECONDARY
EDUCATION FOR THE PARTICIPANT OR THE PARTICIPANT'S SPOUSE, CHILDREN, OR
DEPENDENTS."
IN WITNESS WHEREOF, the undersigned, a duly authorized officer Guaranty
Bancshares, Inc., Guaranty Bank and Talco Bank, hereby adopt this Amendment
1
<PAGE>
Number 3 to the Guaranty Bancshares, Inc. Employee Stock Ownership Plan (with
401(k) Provisions) on this 11th day of JULY, 1995.
GUARANTY BANCSHARES, INC.
By: Bill G. Jones
As Its: PRESIDENT & CEO
GUARANTY BANK
By: Art Scharlach
As Its: PRESIDENT & CEO
TALCO BANK
By: Rusty Jones
As Its: PRESIDENT & CEO
2
EXHIBIT 4.8
AMENDMENT NUMBER 4
TO THE
GUARANTY BANCSHARES, INC.
EMPLOYEE STOCK OWNERSHIP PLAN
(WITH 401(k) PROVISIONS)
Guaranty Bancshares, Inc. and Guaranty Bank, collectively, a corporation
registered as a bank holding company organized and operated under the laws of
the state of Texas and a banking association, hereby adopt the following
amendment to the Guaranty Bancshares, Inc. Employee Stock Ownership Plan (with
401(k) Provisions) ("Plan").
1. Section 3(a) of the Plan is hereby amended to add the following new
paragraph:
"NOTWITHSTANDING THE FOREGOING, EACH EMPLOYEE WHO IS EMPLOYED AFTER
DECEMBER 31, 1997, WILL BECOME ELIGIBLE TO PARTICIPATE ON THE NEXT JANUARY
IST OR JULY IST, WHICHEVER THE CASE MAY BE, FOLLOWING THE DATE THAT HE
COMPLETED ONE (1) FULL YEAR OF SERVICE IN WHICH HE IS CREDITED WITH AT
LEAST 1,000 HOURS OF SERVICE. THE ELIGIBILITY COMPUTATION PERIOD USED TO
DETERMINE WHETHER AN EMPLOYEE HAS COMPLETED ONE (1) FULL YEAR OF SERVICE
WILL FIRST BE THE TWELVE (12) CONSECUTIVE MONTH PERIOD BEGINNING WITH THE
EMPLOYMENT COMMENCEMENT DATE, AND THEREAFTER WILL BE THE TWELVE (12)
CONSECUTIVE MONTH PERIOD COMMENCING ON THE JANUARY IST OF EACH PLAN YEAR
BEGINNING AFTER THE EMPLOYMENT COMMENCEMENT DATE."
2. Section 12(a) of the Plan is hereby amended to add the following new
paragraph:
"NOTWITHSTANDING THE FOREGOING, IF A PARTICIPANT WHO BECOMES EMPLOYED AFTER
DECEMBER 31, 1997, TERMINATES SERVICE FOR ANY REASON OTHER THAN HIS
RETIREMENT, DISABILITY OR DEATH, HIS CAPITAL ACCUMULATION ATTRIBUTABLE TO
EMPLOYER OPTIONAL CONTRIBUTIONS AND ONE HUNDRED PERCENT (100%) OF EMPLOYER
MATCHING CONTRIBUTIONS WILL BE DETERMINED ON THE BASIS OF HIS
NONFORFEITABLE INTEREST, IN ACCORDANCE WITH THE VESTING SCHEDULE DISCUSSED
IN PARAGRAPH ONE (1) OF THIS SECTION 12(A)."
3. The second sentence of Section 14(b) is hereby deleted and replaced with
the following two (2) sentences:
"THE DISTRIBUTION OF THE CAPITAL ACCUMULATION OF ANY PARTICIPANT WHO IS NOT
A 5-PERCENT OWNER OF THE COMPANY MUST COMMENCE NOT LATER THAN APRIL LST OF
THE NEXT PLAN YEAR FOLLOWING THE LATER OF THE PLAN YEAR IN WHICH HE ATTAINS
AGE 70 1/2 OR RETIRES (REGARDLESS OF ANY CONSENT REQUIREMENTS PURSUANT TO
SECTION 15(C) OF THE PLAN). IF THE PARTICIPANT OWNS, DIRECTLY OR
INDIRECTLY, MORE THAN 5-PERCENT OF THE OUTSTANDING STOCK OF THE COMPANY OR
STOCK POSSESSING MORE THAN 5-PERCENT OF THE TOTAL COMBINED VOTING POWER OF
ALL STOCK OF THE COMPANY, THE DISTRIBUTION OF THE CAPITAL ACCUMULATION OF
SUCH PARTICIPANT WITH RESPECT TO THE PLAN YEAR IN WHICH HE ATTAINS AGE 70
1/2 MUST COMMENCE NOT LATER THAN APRIL IST OF THE NEXT PLAN YEAR (EVEN IF
HE HAS NOT TERMINATED SERVICE AND REGARDLESS OF ANY CONSENT REQUIREMENTS
PURSUANT TO SECTION 15(C) OF THE PLAN). "
IN WITNESS WHEREOF, the undersigned, a duly authorized officer of Guaranty
Bancshares, Inc. and Guaranty Bank, hereby adopt this Amendment Number 4 to the
Guaranty Bancshares, Inc. Employee Stock Ownership Plan (with 401(k) Provisions)
on this 21st day of OCTOBER 1997.
GUARANTY BANCSHARES, INC.
By: Bill G. Jones
As Its: CHAIRMAN OF THE BOARD
GUARANTY BANK
By: Art Scharlach
As Its: PRESIDENT
2
EXHIBIT 23
CONSENT OF INDEPENDENT AUDITORS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 of Guaranty Bancshares, Inc. of our report dated January
26, 1999 relating to the consolidated financial statements of Guaranty
Bancshares, Inc. and Subsidiaries included in the Annual Report on Form 10-K .
ARNOLD, WALKER, ARNOLD & CO., P.C.
/s/ Arnold, Walker, Arnold & Co., P.C.
Mount Pleasant, Texas
May 4, 1999