Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits.
(10) Material Contracts.
(iii) Deferred Compensation Plan Amendment Effective as of
May 1, 1996.
VICORP RESTAURANTS, INC.
DEFERRED COMPENSATION PLAN
TABLE OF CONTENTS
-------------------
Article Title Page No.
- ------- -------------------------------------------- -----------
1 Name 1
2 Purpose 2
3 Definitions 3
4 Operation and Administration 7
5 Eligibility for Participation 10
6 Participant Allocations 12
7 Establishment of Accounts 15
8 Maintenance of Accounts and Valuation of Plan 16
9 Funding Limitations 18
10 Vesting 19
11 Withdrawals of Funds During Employment 20
12 Regulations Governing Distribution of Benefits 22
13 Beneficiary Designation 27
14 Amendment and Termination 28
15 General Provisions 29
VICORP RESTAURANTS, INC.
DEFERRED COMPENSATION PLAN
Article 1
- ---------
History and Name
- ----------------
VICORP Restaurants, Inc. has had in effect since November 1, 1989
the Deferred Compensation Plan of VICORP Restaurants, Inc.
The VICORP Restaurants, Inc. Deferred Compensation Plan, hereinafter
set forth, constitutes an amendment in its entirety to said plan
which is continued effective as of May 1, 1996 with
respect to employees and participants who had not yet retired,
terminated employment or died as of such date. The rights of
anyone covered under the plan prior to May 1, 1996, who retired,
terminated employment or died before that date, shall be
determined in accordance with the terms and provisions of the
plan in effect on the date of such retirement, termination of
employment or death, except as otherwise specifically provided herein.
Article 2
- ---------
Purpose
- -------
The plan is intended to constitute a nonqualified deferred
retirement plan which, in accordance with ERISA Sections 201(2),
301(a)(3) and 401(a)(1), is "unfunded and maintained by an
employer primarily for the purpose of providing deferred
compensation for a select group of management or highly
compensated employees."
The purpose of the Plan is to acknowledge and reward certain key
employees of the Company for their efforts on behalf of the
Company by maximizing their ability to save on a tax-deferred
basis and providing such key employees with benefits that shall
not be restricted by any qualified plan limitations and/or
requirements. Such limitations and requirements shall include,
but not be limited to, the following:
2.1 Elective Deferral Contribution Limitation
-----------------------------------------
The $9,500 (1996 limit) limitation placed on elective
employee contributions in accordance with Sections 402(g)
of the Internal Revenue Code (the "Code"), which
limitation shall be adjusted annually for increases in
the cost-of-living in accordance with Section 415(d) of
the Code.
2.2 Compensation Limitation
-----------------------
The $150,000 (1996 limit) maximum on compensation taken
into account for all purposes under a qualified plan in
accordance with Section 401(a)(17) of the Code, which
limitation shall be adjusted for increases in the cost-of-
living in accordance with Section 401(a)(17)(B) of the Code.
2.3 Limitation on Annual Additions
------------------------------
The limitation on annual additions to qualified
retirement plans in accordance with Section 415(c) of the
Code, which limitation shall be adjusted annually for
increases in the cost-of-living in accordance with
Section 415(d) of the Code.
2.4 Minimum Participation Requirement
---------------------------------
The participation requirements under Section 401(a)(26) of the Code.
2.5 Nondiscrimination Requirements
------------------------------
The nondiscrimination testing requirements under Section 401(k) and
(m) of the Code.
Article 3
- ---------
Definitions
- -----------
For purposes of the Plan, the following words and phrases shall
have the following meanings unless a different meaning is plainly
required by the context. Wherever used, the masculine pronoun
shall include the feminine pronoun and the feminine pronoun shall
include the masculine and the singular shall include the plural
and the plural shall include the singular.
3.1 "Account" shall mean a recordkeeping source from which
Plan benefits are provided. The specific Accounts under
this Plan are listed in Section 7.1 and described more
fully in Article 12.
3.1 "Base Compensation" shall mean the Participant's wages
for the Plan Year paid by the Company of the type
reported in box 1 of Form W-2 (1995). Such wages shall
include amounts within the meaning of Section 3401(a) of
the Code plus any other amounts paid to the Participant
by the Company for which the Company is required to
furnish a written statement under Section 6041(d),
6051(a)(3) and 6052 of the Code, determined without
regard to any rules that limit the amount required to be
reported based on the nature or location of the
employment or services performed,
(a) exclusive of
(i) Bonus Compensation;
(ii) severance pay on a non payroll basis;
(iii) nonqualified plan payments; and
(iv) welfare benefits, fringe benefits (cash and
non-cash), reimbursements of other expense
allowances and moving expenses.
(b) inclusive of
(i) any amounts deferred under any nonqualified plan,
including the Plan; and;
(ii) the amount of any contributions made by the
Company under any salary reduction or similar
arrangement to a qualified deferred compensation,
pension or cafeteria plan, contributions to a
simplified employee pension plan described in
Section 408(k) of the Code.
3.3 "Beneficiary" shall mean the person or persons designated
in accordance with Article 13 to receive any benefits
under the Plan in the event of a Participant's death.
3.4 "Board of Directors" shall mean the full Board of Directors
of the Company.
3.5 "Bonus Compensation" shall mean any cash remuneration paid
to a Participant, excluding Base Compensation, as a
specific incentive bonus or award, including Voluntary
Deferral Allocations made in accordance with Section 6.1,
the source of which is Bonus Compensation.
3.6 "Committee" shall mean the person or persons appointed by
the Board of Directors to administer the Plan.
3.7 "Company" shall mean VICORP Restaurants, Inc. or any
affiliate, subsidiary or associate company which shall
adopt the Plan for its employees with the approval of
VICORP Restaurants, Inc. including any successor to the
VICORP Restaurants, Inc. as a result of a statutory
merger, purchase of assets or any other form of
reorganization of the business of VICORP Restaurants, Inc.
3.8 "Deferred Retirement Date" shall mean the first day of any
month subsequent to the Participant's Normal Retirement Date.
3.9 "Determination Date" shall mean the date on which the
Participant's termination of employment occurs.
3.10 "Disability" or "Disabled" shall mean any physical or
mental condition which meets the definition and provisions
described in the Company's group long-term disability
contract covering any Participants of this Plan.
3.11 "Disability Retirement Date" shall mean the first day of
any month in which a Participant is Disabled.
3.12 "Effective Date" shall mean November 1, 1989.
"Supplemental Effective Date" shall mean May 1, 1996.
3.13 "Employee" shall mean a person who is employed by the
Company and falls under the usual common law rules
applicable in determining the employer-employee relationship.
3.14 "Exercise Period" shall mean the period beginning on, and
including, the date on which a holder of a Stock Option
first becomes entitled to exercise the Stock Option and
ending on, and including, the date on which the Stock
Option expires.
3.15 "Exercise Price" shall mean the price at which a holder of
a Stock Option is entitled to purchase a share of Company
stock during the Exercise Period pursuant to the
applicable Stock Option Agreement between the Employee and
VICORP Restaurants, Inc.
3.16 "Participant" shall mean any Employee who is participating
in the Plan in accordance with the provisions herein set forth.
3.17 "Plan" shall mean the VICORP Restaurants, Inc. Deferred
Compensation Retirement Plan as it may be amended from
time to time.
3.18 "Plan Year" shall mean a period of 12 consecutive months
commencing on January 1, 1990 and each January 1 thereafter.
3.19 "Qualified Plan" shall mean the VICORP Restaurants, Inc.
Profit Sharing Plan or any successor 401(k) plan
maintained by VICORP Restaurants, Inc. which is qualified
under Sections 401(a) and 401(k) of the Code.
3.20 "Normal Retirement Date," for purposes of this Plan, shall
mean either the date on which a Participant attains at
least age 62, or the Participant attains at least age 55
and has completed ten or more Years of Service with the Company.
3.21 "Retirement" shall mean the termination of employment of a
Participant on his Normal, Deferred or Disability Retirement Date.
3.22 "Stock Option" shall mean an option received by an Employee
pursuant to a Stock Option Agreement between the Employee and
VICORP Restaurants, Inc. giving that Employee the right to purchase
shares of Company stock during the Exercise Period for the Exercise
Price.
3.23 "Surrender Date" shall mean the date, selected by a holder
of a Stock Option pursuant to a Surrender and Deferral
Election, on which the holder will surrender such Stock
Option; provided, however, that such date must be (i)
within the Exercise Period and (ii) for 1996 at least 90
days after the date on which the holder files a Surrender
and Deferral Election, and for all subsequent years at
least 180 days after the date on which the holder files a
Surrender and Deferral Election.
3.24 "Surrender and Deferral Election" shall mean a notification
by the Employee to the Committee of his election to surrender
Stock Options under Section 6.5 and of the Surrender Date
selected by the Employee.
3.25 "Trust Agreement" shall mean the instrument executed by
the Company and the Trustee fixing the rights and
liabilities of each with respect to holding and administering
the Trust Fund in the event such a fund is established in
accordance with the provisions of Section 3.27.
3.26 "Trustee" shall mean the Trustee or any successor Trustee,
appointed by the Board of Directors, acting in accordance
with the terms of the Trust Agreement.
3.27 "Trust Fund" shall mean all assets held by the Trustee for
the purposes of the Plan in accordance with the terms of
the Trust Agreement.
3.28 "Valuation Date" shall mean each business day of the Plan
Year as determined by the New York Stock Exchange.
Article 4
- ---------
Operation and Administration of the Plan
- ----------------------------------------
4.1 Organization of the Committee
-----------------------------
(a) The Board of Directors shall appoint a Committee to
administer the Plan, who, upon acceptance of such
appointment, shall serve at the pleasure of the Board
of Directors. Any member may resign by delivering his
written resignation to the Board of Directors and to
the Committee. Vacancies in the Committee arising from
resignation, death, or removal shall be filled by the
Board of Directors.
(b) The Committee shall act by a majority of its members
unless unanimous consent is required by the Plan or by
unanimous approval of its members if there are two or
less members in office at the time. In the event of a
Committee deadlock, the Committee shall determine the
method for resolving such deadlock. No Committee member
shall act upon any question pertaining solely to himself,
and the other member or members shall make any determination
required by the Plan in respect to such member.
(c) The Committee may, by unanimous consent, delegate specific
authority and responsibilities to one or more of its members.
The member or members so designated shall be solely liable,
jointly and severally, for their acts or omissions with respect
to such delegated authority and responsibilities. Committee
members not so designated shall be relieved from liability for
any act or omission resulting from such delegation.
4.2 Determination of Participant Eligibility
----------------------------------------
The Committee shall, by written action prior to the first day of
each Plan Year, designate those Employees, if any, who are to be
Key Employees for purposes of Article 5.
4.3 Authority and Responsibility
----------------------------
The Committee shall have full authority and responsibility to
interpret and construe the Plan and determine all questions of the status
and rights of the Participants and the amounts of their allocations. Its
interpretation, construction or determination, as the case may be, shall
be final and conclusive on both the Company and the Participants and
their respective successors, assigns, personal representatives and
Beneficiaries. Such authority and responsibility shall include, but
shall not be limited to, the following:
(a) appointment of qualified accountants, consultants, administrators,
counsel, appraisers, or other persons it deems necessary or
advisable, who shall serve the Committee as advisors only and shall
not exercise any discretionary authority, responsibility or control
with respect to the management or administration of the Plan;
(b) determination of all benefits, and resolution of all questions
arising from the administration, interpretation and application of
the Plan;
(c) adoption of forms and regulations for the administration of the
Plan;
(d) remedy of all inequity resulting from incorrect information
received or communicated, or of administrative error;
(e) settlement or compromise of any claims or debts arising from the
operation of the Plan and the commencement of any legal actions or
administrative proceeding.
4.4 Records and Reports
-------------------
The Committee shall keep a record of its proceedings and acts and shall
keep books of account, records and other data necessary for the proper
administration of the Plan.
Following the end of each calendar quarter, the Committee shall provide
each Participant with a detailed statement of his Account, including all
transactions affecting his Account during the preceding calendar quarter,
and reflecting the most recent valuation of his Account.
4.5 Required Information
--------------------
The Company, Participants or Beneficiaries entitled to benefits shall
furnish forms and any information or evidence as requested by the
Committee for the proper administration of the Plan. Failure on the
part of any Participant or Beneficiary to comply with such request
within a reasonable period of time shall be sufficient grounds for delay
in the payment of benefits until the information or evidence requested
is received.
4.6 Payment of Expenses of Plan
---------------------------
The expenses of the Committee in connection with the administration of
the Plan shall be the responsibility of the Company.
4.7 Indemnification
---------------
The Company shall indemnify and hold the members of the Committee
harmless against liability incurred in the administration of the Plan,
except for the gross negligence or willful misconduct of any member.
Article 5
- ---------
Eligibility for Participation
- -----------------------------
5.1 Eligibility
-----------
Each Key Employee will be eligible to participate in the Plan as of the
first day of the first month following his date of hire or initial
attainment of status as a Key Employee in accordance with Section 4.2.
5.2 Voluntary Participation
-----------------------
Participation in the Plan by Key Employees is entirely voluntary. As
further specified in Section 6.3, a Key Employee must sign an election
form and submit the signed form to the Committee before the date he
elects to become a Participant of the Plan.
5.3 Committee Rules and Regulations
-------------------------------
The Committee shall, through the adoption of a set of rules and
regulations, provide for methods used in advising a Key Employee of his
eligibility in the Plan, and all forms necessary for the Key Employee to
elect to participate.
5.4 Cessation of Participation
--------------------------
(a) For purposes of Articles 6, 7 and 11, an individual shall cease to
be a Participant on the earliest of:
(i) the date on which he ceases to be a Key Employee;
(ii) the date on which he terminates employment with the
Company; and
(iii) the date on which the Plan terminates.
(b) For all other plan purposes, an individual shall cease to be a
Participant on the date the total vested value of his Account has
been paid.
(c) Notwithstanding the foregoing Subsections (a) and (b), in the event
that the Department of Labor (DOL) issues regulations or other
official notice specifically defining the group of employees that
may participate in a plan of this type and any current Participants
do not meet the criteria set forth in the DOL regulations or
notice, the accounts of such participants shall be distributed in a
lump sum as soon as administratively possible following the later
of the effective date or publication date of the DOL regulations or
notice.
Article 6
- ---------
Participant Allocations
- -----------------------
6.1 Voluntary Deferral Allocations
------------------------------
(a) Until the date of his cessation of participation in accordance with
Subsection 5.4(a), a Participant may, within 30 days after first
eligible or during the 30-day period preceding any January 1
thereafter
(i) elect to voluntarily defer, through pay reduction each
payroll period of the Plan Year of reference, no less
than 1% nor more than 50%, in whole percentages, of that
portion of his Base Compensation attributable to such
payroll period; and/or
(ii) authorize the Company to reduce his Bonus Compensation,
no less than 1% nor more than 100%, in whole percentages,
and to have a corresponding amount credited to his Accounts, in
accordance with Section 7.2, by filing a Deferral Agreement with
the Committee prior to the effective date of such election. The
deferral shall be made from Base Compensation or Bonus Compensation
as the Participant shall specify; however, to the extent the
deferral is to be made from Bonus Compensation and no or
insufficient Bonus is paid, the deferral shall be reduced.
(b) A Participant's Voluntary Deferral Allocations made in accordance
with Subsection (a) shall take the form of before tax deferrals to
the Participant's Voluntary Deferral Allocation Account. In the
event that a Participant's Base and/or Bonus Compensation should
increase or decrease during the Plan Year, his allocations shall
automatically be adjusted to reflect such change.
(c) Notwithstanding the foregoing, a Participant may not make
contributions to this Plan during any period for which
contributions must be suspended in accordance with regulation
Section 1.401(k)-1(d)(2)(iv)(B)(4) of the Code, as a condition
of the Participant's receipt of a hardship withdrawal from any
plan of the Company which includes a qualified cash or deferred
arrangement under section 401(k) of the Code.
(d) The amount of Base and/or Bonus Compensation that a Participant
elects to defer shall be credited to the Participant's Accounts as
soon as practicable, but no longer than 30 days following the date
on which the Participant is paid the nondeferred portion of the
compensation which is the source of the deferral.
6.2 Transfer of Voluntary Deferral Allocations to the Qualified Plan
----------------------------------------------------------------
(a) As soon as administratively practicable following the end of each
Plan Year but no later than March 15 of the following Plan Year,
the Company will ensure that preliminary actual deferral percentage
and actual contribution percentage testing under the Qualified Plan
has been completed in order to determine the maximum amount of
additional elective deferral contributions that could be made for
each Participant for such Plan Year, consistent with Section 402(g)
and the limitations of Section 401(k)(3), on behalf of each
Participant who also is a participant in the Qualified Plan.
(b) Upon determination of the maximum amount described in the preceding
Subsection, the Company shall transfer directly to the Qualified
Plan for the benefit of each such Participant an amount equal to
the lesser of
(i) such maximum amount for such Participant; or
(ii) the sum of the voluntary deferral allocations made in
accordance with Section 6.1 and allocated to the
Participant's Retirement Account in accordance with Section
7.2 for such Plan Year.
(c) The amounts so transferred to the Qualified Plan for the benefit
of the Participant will be treated as a contribution to the
Qualified Plan and will be allocated under the Qualified Plan
as of the last day of the Plan Year in which those amounts would
have been received by the Participant as wages, but for the
deferral elections under the Plan and the Qualified Plan, and the
application of this Section.
(d) The amount to be transferred in accordance with Subsection (b)
shall continue to be credited with deemed investment experience in
accordance with Article 8 until the date of transfer. Any amounts
attributable to such investment experience shall remain in the
Plan.
(e) Effective Date of Section
-------------------------
The provisions of this Section shall be effective as of the Plan
Year beginning on January 1, 1997 and ending on December 31, 1997
and each Plan Year thereafter.
6.3 Forms Required
--------------
A Participant shall elect to contribute on forms and in the manner
prescribed by the Committee. A new election must be made prior to each
Plan Year for which the Participant is eligible to participate in the
Plan, even if the Participant does not elect to contribute for such
Plan Year.
6.4 Irrevocable Election
--------------------
A Participant may not modify or discontinue his allocations for a Plan
Year after the first day thereof.
6.5 Election to Surrender Stock Options and to Defer
------------------------------------------------
(a) Subject to the requirements of Subsections (b) and (c), every
Employee who is eligible to participate in the Plan and who holds
Stock Options shall have the right to irrevocably elect to
surrender all or any portion of the Stock Options held by such
Employee and, in exchange therefor, have credited to that
Employee's account in this Plan on the Surrender Date from the
Company shares of VICORP Restaurants, Inc. common stock ("Stock"),
as determined under Subsection (c).
(b) The election under Subsection (a) must be made by the Employee
filing a Surrender and Deferral Election with the Committee for
1996 at least 90 days prior to the Surrender Date and for all
subsequent years at least 180 days prior to the Surrender Date.
(c) If the Employee makes the election under Subsection (a) and
surrenders the Stock Options on the Surrender Date, the Employee
will have credited to his account on the Surrender Date a number
of shares the Fair Market Value of which will equal the product
of (i) the number of shares represented by the Stock Options
surrendered times (ii) the excess of (x) the mean between the "bid"
and "ask" closing prices for the Company's stock on the Surrender
Date ("Fair Market Value"), as reported by NASDAQ, over (y) the
Exercise Price of the Stock Options.
6.6 Section 16 Rejection
--------------------
Notwithstanding the Employee's election to surrender and defer
as provided in Section 6.5 hereof, the Committee shall have the
right to reject such election in the event such election at the
time it is made would result in a violation of the short-swing
profit provisions of Section 16 of the Securities and Exchange
Act of 1934 and the rules and regulations promulgated thereunder
as now or hereinafter in effect.
Article 7
- ---------
Establishment of Accounts
- -------------------------
7.1 Establishment of Accounts
-------------------------
The following Accounts shall be established with respect to each
Participant:
(a) Retirement Account,
(b) Education Account,
(c) Fixed Period Account.
7.2 Account and Subaccount Allocation
---------------------------------
(a) Each Participant shall submit to the Committee before the beginning
of the Plan Year of reference a written statement specifying the
respective percentages of the Participant's Voluntary Deferral
Allocations which are to be allocated to the Accounts listed in
Subsection 7.1 and described more fully in Article 12.
Notwithstanding the foregoing, the total amount attributable to
the Participant's benefit account under the terms and provisions of
the Plan as of April 30, 1996 shall be automatically allocated on
the Supplemental Effective Date to the Retirement Account
established on behalf of such Participant in accordance with
Subsection 7.1(a).
(b) The minimum amount which may be allocated for the Plan Year of
reference in accordance with Subsection (a) to each Account and,
if applicable, to each subaccount, is $1,000.
7.3 Irrevocable Allocation
----------------------
An Eligible Employee may not amend or revoke an allocation made for or
during a Plan Year.
Article 8
- ---------
Maintenance, Investment and Valuation of Accounts
- -------------------------------------------------
8.1 Maintenance of Accounts
-----------------------
The Committee shall establish and maintain a separate accounting in the
name of each Participant, to which it shall credit all amounts allocated
in accordance with Articles 6 and 7 and all earnings as determined in
accordance with Section 8.3 and 8.4.
8.2 Deemed Investment Election
--------------------------
(a) Initial Election - Each Participant shall designate, in multiples
of 5%, one or more of the funds described in Section 8.3 for the
purpose of attributing earnings to his Account.
In the event the Participant fails to make an initial investment
election, his Account shall be deemed to be 100% invested in the
most conservative fund (e.g. a money market fund or a fixed income
fund) available under the Plan until such time as he makes a
subsequent or transfer election in accordance with Subsection (b)
or (c).
(b) Subsequent Election - A Participant may, by written election,
change his fund election with respect to subsequent allocations.
Such subsequent elections are limited to four times each Plan Year.
(c) Transfer Election - A Participant may, by written election, change
his fund election with respect to his then existing Account. Such
changes are limited to four times each Plan Year and shall become
effective as soon as administratively possible following receipt of
the Transfer Election.
(d) Such elections shall be the basis for the valuation of a
Participant's Account in accordance with Section 8.4 but shall
not require the Company to actually place assets in such funds
or purchase any specific assets for purposes of the Plan.
8.3 Funds
-----
The Committee shall choose investment vehicles on which to base the
imputed earnings of Participant Accounts. Until changed by the
Committee, such vehicles shall consist of the following:
(a) Vanguard Bond Index
(b) Vanguard Index 500
(c) Fidelity Puritan Fund
(d) Fidelity Equity Income Fund
(e) Fidelity Magellan Fund
The Committee, in its sole discretion, may at any time change the above-
referenced vehicles by written resolution, provided that the Participants
are notified prior to the effective date of any such change.
The fair market value of each Fund shall be determined by the Committee
and shall represent the fair market value of all securities and other
property held for the respective Fund, plus cash and accrued earnings,
less accrued expenses and proper charges against the Fund to the extent
that they are not otherwise paid by the Company in accordance with
Subsection 8.4.
8.4 Allocation of Earnings and Expenses
-----------------------------------
(a) On the basis of the valuation as of a Valuation Date, the
Accounts of all Participant's shall be (i) proportionately
adjusted to reflect the deemed investment earnings such as
interest, dividends, realized and unrealized investment profits
and losses and (ii) directly adjusted to reflect all other
applicable transactions during the Plan Year attributable to such
Accounts including, but not limited to, any allocations or
distributions.
(b) In addition to its allocations, the Company may, in its
discretion, pay all the administrative expenses of the Plan and
all fees and retainers of the Plan's accountants, counsel,
consultant, administrator or other specialist so
long as the Plan remains in effect.
Article 9
- ---------
Funding Limitations
- -------------------
9.1 Benefit Status
--------------
(a) All benefits under the Plan are unfunded obligations of the
Company.
(b) At no time shall a Participant or the Participant's Beneficiary
have any right, title or interest in or to any specific fund or
assets of the Company.
(c) As to any claim for benefits under the Plan, the Participant or
the Participant's Beneficiary shall be a creditor of the Company
in the same manner as any other creditor having a general claim for
unpaid compensation.
9.2 Investment and Benefit Payment Obligation of the Company
--------------------------------------------------------
(a) Nothing contained herein shall require the Company to set aside or
earmark any monies or other assets specifically for payments under
the Plan.
(b) Neither the Company nor any Trustee shall be obligated to purchase
or maintain any asset, and any reference to investments is solely
for the purpose of computing the value of benefits.
(c) Neither this Plan nor any action taken pursuant to the terms of
this Plan shall be considered to create a fiduciary relationship
between the Company and the Plan Participants or any other persons,
or to establish a trust in which the assets are beyond the claims
of any unsecured creditor of the Company.
(d) Benefits are payable as they become due irrespective of any actual
investments the Company may make to meet its obligations.
Article 10
- ----------
Vesting
- -------
10.1 Upon Retirement
---------------
Upon eligibility for Retirement, a Participant shall have a 100% vested
interest in his Account.
10.2 Upon Death
----------
Upon the death of a Participant, such Participant's Beneficiary shall be
entitled to a 100% vested interest in the Participant's Account.
10.3 Upon Other Termination of Employment
------------------------------------
Upon termination of a Participant's employment prior to his Retirement
or death, he shall be entitled to a 100% vested interest in his Account.
Article 11
- ----------
Withdrawal of Funds During Employment
- -------------------------------------
11.1 Financial Hardship Rules
------------------------
(a) The Committee, solely in its discretion and in accordance with the
provisions of this Article, may permit Participants to withdraw
funds from the Plan.
(b) A withdrawal may be made only if it is on account of an
unanticipated emergency caused by an event beyond the Participant's
control that results in a severe and immediate financial need,
known hereafter as a "Financial Hardship".
The following unanticipated emergencies shall be recognized as
causing a Financial Hardship:
(i) a sudden and unexpected illness or accident of the
participant or of one of the participant's dependents, as
defined in Article 152(a) of the Internal Revenue Code of
1986;
(ii) loss of the participant's property due to casualty; or
(iii) other similar extraordinary and unforeseeable circumstances
arising as a result of events beyond the control of the
participant.
Circumstances that shall not be deemed to meet the above "Financial
Hardship" definition shall include, but not be limited to, the need
to send any children of the Participant to college and the desire
to purchase a home.
(c) The circumstances that shall constitute an unforeseeable emergency
shall depend upon the facts of each request, but, in any case, the
Participant must provide the Committee with a signed written
statement certifying that the Financial Hardship cannot be relieved
(i) through reimbursement or compensation by insurance or
otherwise,
(ii) by reasonable liquidation of such Participant's assets,
including those of his spouse and minor children if they
are reasonably available to him,
(iii) by discontinuance of allocations to this Plan or
contributions to the Qualified Plan, through reimbursement
or compensation by insurance or otherwise,
(iv) by other distributions or loans from the Qualified Plan or
loans from commercial sources on reasonable commercial
terms.
(d) The amount of such Financial Hardship withdrawal may not exceed the
amount required to meet the specified need.
11.2 General Rules
-------------
(a) Only one withdrawal will be permitted during any Plan Year.
(b) A written request for a withdrawal must be submitted to the
Committee at least 30 days prior to the withdrawal date, or at such
other time as the Committee shall determine.
(c) If a withdrawal is requested as of any date other than the day
after a Valuation Date, no investment earnings will be credited on
the amount withdrawn for the period from the last Valuation Date to
the date specified for the withdrawal.
Article 12
- ----------
Regulations Governing Distribution of Benefits
- ----------------------------------------------
12.1 Retirement Account.
-------------------
(a) Commencement of Benefit.
-----------------------
If a Participant terminates employment for any reason, including
death, the Company shall pay such Participant or his Beneficiary,
if applicable, a benefit in the form determined under
Subsection (b), based on the value of his Retirement Account as of
the Participant's Determination Date as soon as administratively
practicable following such Determination Date.
(b) Form of Distribution
--------------------
(i) Upon Normal or Deferred Retirement
----------------------------------
Distribution of the Participant's Retirement Account as a
result of the Participant's Normal or Deferred Retirement
shall be in one of the following forms at the Participant's
election, subject to the rules set forth in Subsection (d).
(A) a single lump sum.
(B) substantially equal annual installments over a period
of not less than two nor more than 15 full years.
Notwithstanding the foregoing, if the Participant's
Retirement Account has a balance of less than $10,000,
such Account shall automatically be paid to the Participant
in one lump sum.
(ii) Upon Death, Disability or Other Termination of Employment
---------------------------------------------------------
(excluding Normal or Deferred Retirement)
-----------------------------------------
Distribution of the Participant's Retirement Account as a
result of the Participant's death, Disability or other
termination of employment (excluding Normal or Deferred
Retirement) shall be in a single lump sum.
(c) Determination of Benefits
-------------------------
(i) In the event that the Participant elects to have his
benefits distributed in accordance with Subsection
(b)(i)(A) or (ii), he shall receive a single lump sum equal
to the total value of his Account determined as of the date
his benefit payment is processed.
(i) In the event that the Participant elects to have his
benefits distributed in accordance with Subsection
(b)(i)(B), the
(A) amount of the first payment shall be determined by
multiplying the vested value of the Participant's
Account as of his Determination Date by a fraction,
(1) the denominator of which equals the number
of years over which the benefits are to
be paid; and
(2) the numerator of which is one.
(B) amounts of the payments for each succeeding year
shall be determined by multiplying the vested value
of the Participant's Account as of the applicable
anniversary of his Determination Date by a fraction,
(1) the denominator of which equals the number
of remaining years over which the benefits are
to be paid; and
(2) the numerator of which is one.
(d) Election of Form of Benefit Payment.
-----------------------------------
(i) A Participant shall elect the form in which his benefits
are payable in accordance with Subsection (b)(i). Such
election must be made when the Participant makes his
initial election to participate in the Plan in accordance
with Article 5.
(ii) Notwithstanding the foregoing, the Participant may elect to
change the form elected in accordance with Subsection (a),
provided such new election is made at least one full
calendar year prior to the Participant's termination of
employment.
(iii) Any election made pursuant to this Article shall be made on
forms and in the manner prescribed by the Committee and
shall be irrevocable, except as provided in
Subsection (ii).
12.2 Education Account.
-----------------
(a) If a Participant remains continuously employed by the Company until
January 1 of the calendar year in which an Eligible Dependent
attains age 18, the Company shall pay to the Participant a benefit,
as soon after such January 1st and each of the next three
anniversaries thereof as administratively practicable, determined
as of the Valuation Date immediately preceding or coinciding with
each such January 1st as follows:
January 1st Percentage of Eligible
Year Dependent's Subaccount
----------- ----------------------
1 25%
2 33-1/3%
3 50%
4 100%
(b) Subject to the requirements of Section 7.2, a Participant may
establish subaccounts under his Education Account by
designating Eligible Dependents. A Participant may have a maximum
of five such subaccounts at any time. A Participant's election
pursuant to Section 8.2 shall apply uniformly to each subaccount.
(c) If a Participant terminates his employment for any reason with a
balance in his Education Account, the balance shall be transferred
to his Retirement Account and distributed in accordance with
Subsections 12.1(a) and (b); but no later than he would have
received his benefit as provided in Subsection 12.2(a) above.
(d) Notwithstanding any provision to the contrary, if on the January 1
of the calendar year in which an Eligible Dependent of a
Participant attains age 18, the Eligible Dependent's subaccount has
a balance of less than $10,000, such balance shall automatically be
paid to the Participant in one lump sum.
(e) If an Eligible Dependent dies prior to the payment of the full
amount credited to his subaccount, the balance shall be paid to
the Participant as soon as administratively practicable following
the Valuation Date coinciding with or immediately following the
Eligible Dependent's death.
(f) For purposes of this Section, "Eligible Dependent" means a living
individual who is a child, stepchild, grandchild, niece or nephew,
or who is otherwise identified as a dependent of a Participant for
purposes of the Code and who is either younger than age 14 or
younger than age 18 but for whom a subaccount was initially
established pursuant to Subsection (b) prior to his attaining
age 14.
12.3 Fixed Period Account.
--------------------
(a) A benefit equal to the lump sum value of the Participant's Fixed
Period Account determined as of the Valuation Date coinciding with
or immediately preceding the January 1 of the payment year
specified by the Participant shall be paid to him as soon as
administratively practicable thereafter.
(b) A Participant shall designate the payment year in the written
statement by which the Fixed Period Account is established. Such
payment year must not be less than two full calendar years
subsequent to the date the Fixed Period Account of reference is
established.
Subject to the requirements of Section 7.2, a Participant may
establish subaccounts under his Fixed Period Account, with separate
payment years for each. A Participant may have a maximum of five
such subaccounts at any time. A Participant's election pursuant to
Section 8.2 shall apply uniformly to each subaccount.
(c) If a Participant's employment terminates for any reason and the
Participant has a balance in his Fixed Period Account, the balance
shall be transferred to his Retirement Account and be distributed
in accordance with Subsections 12.1(a) and (b); but no later than
he would have received his benefit as provided in Subsection
12.3(a) above.
12.4 Claim Procedure For Benefits
----------------------------
(a) Any request for specific information with respect to benefits under
the Plan must be made to the Committee in writing by a Participant
or his Beneficiary. Oral communications will not be recognized as
a formal request or claim for benefits.
(b) The Committee shall provide adequate notice in writing to any
Participant or Beneficiary whose claim for benefits under the Plan
has been denied, (i) setting forth the specific reasons for such
denial; specific references to pertinent plan provisions; a
description of any material and information which had been
requested but not received by the Committee; and, (ii) advising
such Participant or Beneficiary that any appeal of such adverse
determination must be in writing to the Committee, within such
period of time designated by the Committee but, until changed, not
more than 60 days after receipt of such notification, and must
include a full description of the pertinent issues and basis of
such claim.
(c) If the Participant or Beneficiary fails to appeal such action to
the Committee in writing within the prescribed period of time, the
Committee's adverse determination shall be final.
(d) If an appeal is filed with the Committee, the Participant or
Beneficiary shall submit such issues he feels are pertinent and the
Committee shall reexamine all facts, make a final determination as
to whether the denial of benefits is justified under the
circumstances, and advise the Participant or Beneficiary in writing
of its decision and the specific reasons on which such decision was
based, within 60 days of receipt of such written request, unless
special circumstances require a reasonable extension of such 60-day
period.
12.5 Substitute Payee
----------------
If a Participant or Beneficiary entitled to receive any benefits
hereunder is in his minority, or is, in the judgment of the Committee,
legally, physically, or mentally incapable of personally receiving and
receipting any distribution, the Committee may make distributions to
a legally appointed guardian or to such other person or institution as,
in the judgment of the Committee, is then maintaining or has custody of
the payee.
12.6 Satisfaction of Liability
-------------------------
After all benefits have been distributed in full to a Participant or to
his Beneficiary, all liability to such Participant or to his Beneficiary
shall cease.
12.7 Nonassignability
----------------
No benefit under the Plan shall (a) be subject in any manner to
anticipation, alienation, sale, transfer, assignment, pledge, encumbrance
or charge, and any such action shall be void for all purposes of the
Plan; or (b) in any manner be subject to the debts, contracts,
liabilities, engagements or torts of any person, nor shall it be subject
to attachments or other legal process for or against any person, except
to such extent as may be required by law.
Article 13
- ----------
Beneficiary Designation
- -----------------------
13.1 Each Participant, upon becoming eligible for participation in the Plan,
may designate a Beneficiary to receive the benefits payable in the event
of his death, and designate a successor Beneficiary to receive any
benefits payable in the event of the death of any other Beneficiary.
13.2 A Participant may change his Beneficiary at any time. All Beneficiary
designations and changes shall be made on an appropriate form as
designated by the Committee and filed with the Committee.
13.3 If no person shall be designated by the Participant, or if the designated
Beneficiary shall not survive the Participant, payment of his interest
shall be made to the Participant's estate.
Article 14
- ----------
Amendment and Termination
- -------------------------
14.1 Amendment
---------
The Company may amend or otherwise modify the Plan by resolution of its
Board of Directors, in whole or in part, either retroactively or
prospectively, provided that no amendment or modification shall, with
respect to allocations already credited,
(a) change the amount of allocations under Article 6 or Article 7 or
(b) create vesting requirements under Article 10.
14.2 Termination
-----------
The Plan may be terminated at any time at the discretion of the Company
by resolution of its Board of Directors. Written notification of such
action shall be given to each Participant and the Committee. Thereafter,
no further allocations or credits shall be made to the Plan. As soon as
administratively feasible following termination of the Plan, the
Committee shall distribute the amount in each Account to or on behalf of
the Participant or Beneficiary entitled thereto.
Article 15
- ----------
General Provisions
- ------------------
15.1 Limitation of Rights
--------------------
Neither the establishment of the Plan nor any modification thereof, nor
the creation of an account, nor the payment of any benefits shall be
construed as giving any Participant, Beneficiary, or any other person
whomsoever, any legal or equitable right against the Company or the
Committee unless such right shall be specifically provided for in the
Plan or conferred by affirmative action of the Committee in accordance
with the terms and provisions of the Plan; or as giving any Participant
the right to be retained in the service of the Company, and all
Participants and other employees shall remain subject to discharge to the
same extent as if the Plan had never been adopted.
15.2 Construction of Agreement
-------------------------
The Plan shall be construed according to the laws of the State of
Colorado, and all provisions hereof shall be administered according to,
and its validity shall be determined under, the laws of Colorado where
preempted by Federal law.
15.3 Severability
------------
Should any provision of the Plan or any regulations adopted thereunder be
deemed or held to be unlawful or invalid for any reason, such fact shall
not adversely affect the other provisions or regulations unless such
invalidity shall render impossible or impractical the functioning of the
Plan and, in such case, the appropriate parties shall immediately adopt a
new provision or regulation to take the place of the one held illegal or
invalid.
15.4 Titles and Headings
-------------------
The titles and headings of the Articles in this instrument are for
convenience of reference only and, in the event of any conflict, the text
rather than such titles or headings shall control.
15.5 Binding Upon Successors
-----------------------
The liabilities under the Plan shall be binding upon any successor or
assign of the Company and any purchaser of the Company or substantially
all of the assets of the Company.
