SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Post-Effective Amendment No. 1 to
FORM S-8/A
REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933
MERCHANTS BANCSHARES, INC.
(A DELAWARE CORPORATION)
EMPLOYER IDENTIFICATION NO. 03-0287342
164 College Street, Burlington, VT 05401
Telephone: (802) 658-3400
Merchants Bancshares, Inc.
Executive Employment Agreements
(Full title of the plan)
Jennifer L. Varin
Merchants Bancshares, Inc.
275 Kennedy Drive
South Burlington VT 05403
(Name and address of agent for service)
(802) 658-3400
(Telephone number of agent for service)
MERCHANTS BANCSHARES, INC.
INDEX TO FORM S-8/A
ITEM PAGE
PART I
Item 1 - Plan Information.
Not required to be filed with the Commission
- -
pursuant to Rule 424 (Sec. 230.424).
Item 2 - Registrant Information and Employee Plan
Annual Information.
- -
Not required to be filed with the Commission
pursuant to Rule 424 (Sec. 230.424).
PART II
Item 3 - Incorporation of Documents by Reference 3
Item 4 - Description of Securities 3
Item 5 - Interests of Experts and Named Counsel 3
Item 6 - Indemnification of Directors
and Officers 3-4
Item 7 - Exemption from Registration Claimed 4
Item 8 - Exhibits 4-5
Item 9 - Undertakings 5
Signatures 6-7
ITEM 3: Incorporation of Documents by Reference:
The following documents filed by Merchants Bancshares, Inc.
(the "Registrant") are hereby incorporated by reference in this
Registration Statement: (1) the Registrant's prospectus, dated
April 27, 1987, as filed with the SEC on April 27, 1987, pursuant
to Rule 424(b) of the Securities Act of 1933, as amended; (2) all
reports previously filed by the Registrant pursuant to Section
13(a) or 15(d) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), since December 31, 1995; and (3) the
description of the Common Stock contained in the Registrant's
Registration Statement on Form S-14, filed with the SEC on
September 14, 1983, and under Section 12(g) of the Exchange Act,
including any amendment or report filed for the purpose of
updating such description.
In addition, all documents subsequently filed by the
Registrant pursuant to Sections 13(a), 13(c), 14 and 15(d) of the
Exchange Act prior to the filing of a post-effective amendment
which indicates that all securities offered hereby have been sold
or which deregisters all of such securities then remaining
unsold, shall be deemed to be incorporated by reference into this
Registration Statement and to be a part hereof from the date of
filing of such documents.
ITEM 4: Description of Securities:
A description of the Registrant's Common Stock to be offered
pursuant to this registration statement is not provided herein
because the Registrant's Common Stock is registered under Section
12 of the Exchange Act.
ITEM 5: Interests of Named Experts and Counsel:
Neither the Registrant's independent auditors, Arthur
Andersen LLP nor any individual employed by or associated with
such firm in a professional capacity, was employed by the
Registrant in connection with matters described in this
registration statement on a contingent basis or has, or is to
receive in connection with this offering, a substantial interest,
direct or indirect, in the Registrant or was connected with the
Registrant as a promoter, managing underwriter (or any principal
underwriter, if there are no managing underwriters), voting
trustee, director, officer or employee.
ITEM 6: Indemnification of Directors and Officers.
Section 145 of the Delaware General Corporation Law empowers
a Delaware corporation to indemnify its officers and directors
and certain other persons to the extent and under the
circumstances set forth therein.
The Restated Certificate of Incorporation of the Registrant
and the Amended By-laws of the Registrant provide for
indemnification of officers and directors of the Registrant and
certain other persons against liabilities and expenses incurred
by any of them in certain stated proceedings and under certain
stated conditions.
The Registrant intends to maintain insurance for the benefit
of its directors and officers insuring such persons against
certain liabilities, including liabilities under the securities
law.
ITEM 7: Exemption from Registration: Not Applicable
ITEM 8: Exhibits
The following exhibits are part of this Registration
Statement:
4.1 Restated Certificate of Incorporation of the Registrant
(Incorporated by reference to Exhibit B to Pre-Effective
Amendment No. 1 to the Registrant's Definitive Proxy Statement
for the Annual Meeting of the Stockholders of the Registrant,
filed on April 25, 1987).
4.2 Amended By-Laws of the Registrant, (Incorporated by
reference to Exhibit C to the Registrant's definitive Proxy
Statement for the Annual Meeting of the Stockholders of the
Registrant, filed on April 25, 1987).
*5 Opinion and Consent of Bingham, Dana & Gould LLP as to the
legality of the securities registered.
*23.1 Consent of Bingham, Dana and Gould LLP included in
Exhibit 5.
*23.2 Consent of Arthur Andersen LLP.
10.1 Amended Employment Agreement, dated as of October 31, 1994,
by and between the Registrant, Merchants Bank and Joseph L.
Boutin, pursuant to which the options to purchase common stock of
the Registrant were granted.
10.2 Amended Employment Agreement, dated as of January 23,
1995, by and between Merchants Bank and Michael R.
Tuttle, pursuant to which the options to purchase common stock of
the Registrant were granted.
10.3 Employment Agreement, dated as of December 29, 1995 by
and between Merchants Bank and Thomas R. Havers,
pursuant to which the options to purchase common stock of the
Registrant were granted.
10.4 Employment Agreement, dated as of February 1, 1996, by
and between Merchants Bank and Thomas S. Leavitt, pursuant to
which the options to purchase common stock of the Registrant
were granted.
10.5 Employment Agreement, dated as of December 29. 1995, by and
between Merchants Bank and Merchants Trust Company and William R.
Heaslip, pursuant to which the options to purchase common stock
of the Registrant were granted.
10.6 Amended and Restated Merchants Bank Pension Plan.
* Previously filed.
ITEM 9: Undertakings:
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 to include any material information with respect to the
plan of distribution not previously disclosed in thisRegistration
Statement or any material change to suchinformation in this
Registration Statement;
(2) That, for the purpose of determining any liability under
the Securities Act of 1933, 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 that remain
unsold at the termination of the offering;
(4) 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 15(d) of the Securities
Exchange Act of 1934 that is incorporated by reference in this
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; and
(5) Insofar as indemnification for liabilities arising under
the Securities Act of 1933 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 Securities Act of 1933 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
questions whether such indemnification by it is against public
policy as expressed in the Securities Act of 1933 and will be
governed by the final adjudication of such issue.
MERCHANTS BANCSHARES, INC.
FORM S-8/A
MARCH 18, 1997
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
the registrant certifies that it has reasonable grounds to
believe that it meets all of the requirements for filing this
Post-Effective Amendment No. 1 to Registration Statement on Form
S-8 and has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized, in the City of South
Burlington, State of Vermont, on March18, 1997.
Merchants Bancshares, Inc.
/s/ Joseph L. Boutin
Joseph L. Boutin, President
/s/ Janet P. Spitler
Janet P. Spitler, Treasurer
Pursuant to the requirements of the Securities Act of 1933,
the directors have duly caused this amendment to registration
statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of South Burlington, State
of Vermont, on March 18, 1997.
__________________ /s/ Joseph L. Boutin
Raymond C. Pecor, Jr Joseph L. Boutin
Chairman of the Board President and CEO
/s/ Peter A. Bouyea _________________
Peter A. Bouyea Charles A. Davis
Director Director
/s/ Jeffrey L. Davis _________________
Jeffrey L. Davis Dudley H. Davis
Director Director
/s/ Michael G. Furlong _________________
Michael G. Furlong Thomas F. Murphy
Director Director
_________________ /s/ Patrick S. Robins
Leo O'Brien, Jr. Patrick S. Robins
Director Director
/s/ Benjamin F. Schweyer /s/Robert A. Skiff
Benjamin F. Schweyer Robert A. Skiff
Director Director
/s/ Janet P. Spitler
Janet P. Spitler
Vice President and Treasurer
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION OF DOCUMENTS
4.1 Restated Certificate of Incorporation of the Registrant
(Incorporated by reference to Exhibit B to Pre-Effective
Amendment No. 1 to the Registrant's Definitive Proxy Statement
for the Annual Meeting of the Stockholders of the Registrant,
filed on April 25, 1987).
4.2 Amended By-Laws of the Registrant, (Incorporated by
reference to Exhibit C to the Registrant's Definitive Proxy
Statement for the Annual Meeting of the Stockholders of
the Registrant, filed on April 25, 1987.
*5 Opinion and Consent of Bingham, Dana & Gould LLP as to
the legality of the securities being registered.
10.1 Amended Employment Agreement, dated as of October 31,
1994, by and between the Registrant, Merchants Bank and Joseph
L. Boutin, pursuant to which the options to purchase common stock
of the Registrant were granted.
10.2 Amended Employment Agreement, dated as of January 23,
1995, by and between Merchants Bank and Michael R. Tuttle, pursuant
to which the options to purchase common stock of the Registrant were granted.
10.3 Employment Agreement, dated as of December 29, 1995, by
and between Merchants Bank and Thomas R. Havers, pursuant to which the
options to purchase common stock of the Registrant were granted.
10.4 Employment Agreement, dated as of February 1, 1996, by and
between Merchants Bank and Thomas S. Leavitt, pursuant to which
the options to purchase common stock of the Registrant were
granted.
10.5 Employment Agreement, dated as of December 29, 1995, by
and between Merchants Bank and Merchants Trust Company and William
R. Heaslip, pursuant to which the options to purchase common stock
of the Registrant were granted.
10.6 Amended and Restated Merchants Bank Pension Plan
*23.1 Consent of Bingham, Dana & Gould, LLP included in Exhibit 5.
23.2 Consent of Arthur Andersen LLP.
* Previously filed.
EXHIBIT 10.1
AMENDED EMPLOYMENT AGREEMENT
THIS AGREEMENT is made effective as of the 31st day of
October, 1994, by and between THE MERCHANTS BANK, a state
chartered Bank, and MERCHANTS BANCSHARES, INC., a Delaware
corporation, both with principal offices at 123 Church Street,
Burlington, Vermont, (hereinafter collectively referred to as
"CORPORATIONS") and JOSEPH L. BOUTIN, residing at 63 Morrill
Drive, Burlington, Vermont 05401 (hereinafter referred to as
"EMPLOYEE").
WITNESSETH
In consideration of the mutual covenants herein contained,
the parties agree as follows:
1. Employment: The CORPORATIONS hereby employ the
EMPLOYEE, and the EMPLOYEE hereby accepts employment.
2. Terms and Renewal: This Agreement shall be for a term
beginning on October 31, 1994, and terminating on October 31,
1997.
On the second anniversary of the effective date of this
Agreement, CORPORATIONS shall notify EMPLOYEE if CORPORATIONS do
not intend to renew the Agreement for a one-year term following
its original term. In the event that the CORPORATIONS do not
notify EMPLOYEE, the Agreement shall renew for a one-year term
following its original term. Similarly, on each anniversary date
thereafter the CORPORATIONS shall notify EMPLOYEE if they do not
intend to renew the Agreement, and upon a failure to do so the
Agreement shall automatically renew for an additional one-year
term following the then applicable term.
3. Termination:
3.1 Discharge: The CORPORATIONS have the right to
discharge the EMPLOYEE at any time with or without just
cause, as herein defined. If the EMPLOYEE is discharged
without just cause, the CORPORATIONS agree to pay in one
lump sum the EMPLOYEE's salary, plus pay or provide as or
when due all other normal benefits and Accrued Incentive
Payments as provided herein, for one year from the date of
such discharge or the balance of the time remaining under
the terms of Agreement, whichever is greater. "Accrued
Incentive Payments" shall mean the payment of incentive
amounts, the precondition of which has occurred or will
occur at or upon the expiration of the relevant Fiscal
Period to which such incentive may be applicable. The
EMPLOYEE may elect to receive the payments over a five (5)
year period, such payments to be in an amount equal to the
net present value of the lump sum payment if paid
immediately.
"Just cause" shall mean (a) misconduct connected with
EMPLOYEE's work, if and as defined in any written policy of
the CORPORATIONS covering all of the CORPORATIONS' officers
or directors which is now, or subsequently, in effect; or
(b) the conviction of a felony which precludes EMPLOYEE from
performing all or an essential part of his duties of
employment, provided that, if such conviction is
subsequently reversed, rescinded or expunged, it shall not
constitute just cause for termination.
3.2 Disability: In cases of disability, either party
may elect to terminate the employment, subject to the
following conditions: (i) the EMPLOYEE shall receive the
greater of: (a) the compensation and other normal benefits
plus Accrued Incentive Payments which the EMPLOYEE would
have received had he been terminated without just cause; or
(b) the benefits payable to, and actually paid to, the
EMPLOYEE arising out of any disability insurance policy
covering the EMPLOYEE, and paid for by the CORPORATIONS. If
said policy benefits are paid other than in a lump sum
payment, the value of the benefits, for purposes of this
Agreement, shall be calculated by using a present value of
all payments to be made; and (ii) EMPLOYEE has suffered a
disability as defined below.
"Disability" shall mean mental or physical incapacity
which shall continue for six (6) months or longer after
exhaustion of all sick leave benefits, or a permanent mental
or physical incapacity, either of which makes the
performance of substantially all of the EMPLOYEE's duties
impossible, as certified in writing by the EMPLOYEE's physician.
The CORPORATIONS, in the event of disagreement, may seek the
opinion of a qualified physician to determine if such disability
exists; provided, however, that such physician is Board Certified
in the area of specialty pertinent to the nature and extent of
such disability. In the event of further disagreement, the two
physicians shall choose a third physician, qualified as above,
who shall make the determination, which shall be binding upon the
parties.
4. Resignation by the EMPLOYEE: The EMPLOYEE shall have
the option of terminating his employment with the CORPORATIONS
provided he gives at least 60 days advance written notice to the
CORPORATIONS. The EMPLOYEE shall not be deemed to have resigned
and, instead, shall have been deemed discharged by the
CORPORATIONS, without just cause, if the EMPLOYEE resigns as a
result of: (i) immoral, unethical or illegal acts or omissions
committed by, or which reasonably appear will be committed by,
any director, officer, employee, agent, or independent
contractors of the CORPORATIONS (and the Boards shall not act,
after his recommendation, to terminate the offending party (s) or
to cease and desist such offending activity); (ii) acts or
omissions of any director, officer, employee, agent, or
independent contractors of the CORPORATIONS which could
reasonably subject the EMPLOYEE to personal liability from any
Federal, State or local government or agency, or any banking
authority, including, but not limited to, the Federal Deposit
Insurance Corporation, the Internal Revenue Service, or the
Securities and Exchange Commission; (iii) fundamental
disagreements over basic corporate philosophies and/or corporate
business plans.
5. Offices and Duties: The EMPLOYEE shall be appointed
and/or elected, and shall serve, as the President and Chief
Executive Officer of the CORPORATIONS and as a Director of The
Merchants Bank for the term of his employment hereunder. The
CORPORATIONS intend and shall use their best efforts to ensure
EMPLOYEE's election as a Director of Merchants Bancshares, Inc.
at the next annual meeting of its shareholders. Should the
CORPORATIONS decide to alter the titles and/or positions, they
must provide the EMPLOYEE with an essentially equivalent or
better position, with equivalent or better salary and benefits.
The CORPORATIONS will also use their best efforts to
secure the Agreement of as many shareholders, if such are
required, as are necessary to authorize this Agreement and any
contemporaneous agreements required to perform the same on the
part of the CORPORATIONS and to elect the EMPLOYEE to the Board
of Directors of each of the CORPORATIONS.
6. Efforts: The EMPLOYEE shall devote his full-time
efforts and energies to the business and affairs of the
CORPORATIONS and shall use his best efforts, skill and abilities
to promote the CORPORATIONS' interests.
7. Evaluation: The EMPLOYEE shall be evaluated annually
by the Boards of the CORPORATIONS and shall receive a written
copy of said evaluation. Nothing herein shall allow the
CORPORATIONS to reduce the salary, incentive payments and other
benefits provided for herein; nor shall this provision be deemed
to allow for the alteration of EMPLOYEE's duties and authority
otherwise set forth in this Agreement; provided, however, that
the performance of a condition within any regulatory order,
memorandum of understanding or requirement shall not be affected
by this provision.
8. Salary and Increases: The CORPORATIONS shall pay the
EMPLOYEE for all services rendered an initial salary of
$200,000.00 per annum, commencing October 31, 1994, and payable
on a bi-weekly basis. The annual salary will be reviewed
annually by the Board and may be increased but not decreased at
the discretion of the Board. The CORPORATIONS may also grant the
EMPLOYEE such other compensation, bonuses, benefits, etc., as
they may deem proper from time to time; but, subject to
regulatory restrictions, shall not grant the EMPLOYEE less of
such other compensation, bonuses, benefits, etc. than the
CORPORATIONS grant to any other officer or director.
9. Incentive Payments: Lump sum incentive payments will
be paid to the EMPLOYEE if the following events occur during the
term of this contract:
a.) $50,000.00 to be paid when the FDIC and the Federal
Reserve release the CORPORATIONS from the Memorandum of
Understanding dated October 29, 1993, and the Written
Agreement dated February 18, 1994.
b.) $50,000.00 to be paid when the CORPORATIONS have
restored capital and earnings to allow for the payment of
dividends to their shareholders.
c.) $50,000.00 to be paid when the CORPORATIONS have
earned, on an after tax basis, 1% on assets (ROA) for the
fiscal year.
d.) $50,000.00 to be paid when the CORPORATIONS have
earned, on an after tax basis, 1.2% on assets (ROA) for the
fiscal year.
10. Benefits: The CORPORATIONS shall provide the EMPLOYEE
with all fringe benefits (including but not limited to health,
life, disability, workers compensation insurance; vacation and
sick pay; pension benefits) offered to other employees of the
CORPORATIONS in subordinate positions, but shall provide EMPLOYEE
with five (5) weeks per year of vacation.
11. Supplemental Pension: The EMPLOYEE will reach normal
retirement under the current pension plan at age 65. However,
despite actual years of service, assuming he is employed by the
CORPORATIONS for the entire period, he will have accumulated 18
years of service at age 65. Notwithstanding the foregoing, the
CORPORATIONS will calculate the EMPLOYEE's benefits as if he had
accumulated twenty-five (25) years of service under the plan. If
the EMPLOYEE is not employed by the CORPORATIONS until age 65,
then for each year of service, the EMPLOYEE will be credited with
1.4 years of service for the purpose of calculating his
retirement benefits. This provision shall be applicable only if
and so long as the CORPORATIONS shall maintain a pension plan.
If the CORPORATIONS shall elect to freeze or modify any
existing pension plan and shall enhance or modify any
contributory pension plan qualified under 401(K) of the Internal
Revenue Code, EMPLOYEE shall participate in such replacement or
modified plan.
12. Stock Options: Subject to applicable regulatory
restrictions, the CORPORATIONS agree to grant to the EMPLOYEE the
option, but not the obligation, to purchase up to 20,000 shares
of the common stock of Merchants Bancshares, Inc. at the purchase
price of $11.00 per share. This option is exercisable at any
time after two (2) years from the original commencement date of
this Agreement and until seven (7) years from the original
commencement date of this Agreement (whether or not the EMPLOYEE
is still an employee of or under contract with the CORPORATIONS).
If the EMPLOYEE is terminated without just cause or due
to his disability, or in the event that any transaction occurs
which results in a change of control of either of the
CORPORATIONS from that existing on the date of this Agreement,
the EMPLOYEE may exercise this option immediately upon the
occurrence of any such event or at any other time permitted in
the preceding sub-paragraph. In the event that there is a split
of the stock of Merchants Bancshares, Inc., EMPLOYEE's stock
options and option price shall be adjusted accordingly, so as to
leave EMPLOYEE in the same relative position as at the time of
commencement of this Agreement with regard to the issued and
outstanding shares of Merchants Bancshares, Inc., on the date
such action is taken. In the event there is a public offering of
the stock of Merchants Bancshares, Inc. other than pursuant to a
stock option or an employee stock ownership plan, at any time
before the option granted hereby has been fully exercised, then
the number of shares subject to the option granted herein shall
be increased so that the total number of shares purchased and
purchasable under this option as increased will bear the same
relationship to the fully-diluted capitalization of Merchants
Bancshares, Inc. immediately after giving effect to completion of
the public offering as the original number of shares purchasable
under the option (20,000) does to the fully-diluted
capitalization of Merchants Bancshares, Inc. at the effective
date hereof. The purchase price for additional shares covered by
the option as provided in the preceding sentence shall be the
greater of the purchase price provided for herein or the purchase
price paid by third parties purchasing stock in the public
offering.
If the CORPORATIONS are unable to deliver the shares
upon which the EMPLOYEE seeks to exercise his options, for any
reason, then the CORPORATIONS shall pay to the EMPLOYEE, on the
date of exercise, the difference between $11.00 per share and the
trading price of Merchants Bancshares, Inc.'s shares on that day,
as traded on the exchange on which said shares are listed.
In the event that the EMPLOYEE shall become deceased
during the period in which the EMPLOYEE may exercise his stock
options, as provided above, then his Estate may exercise said
options in the manner provided above; provided, however, that
said options are exercised within six (6) months after EMPLOYEE'S
demise.
13. Expenses: The EMPLOYEE shall be reimbursed for
documented business expense incurred or paid by the EMPLOYEE in
connection with the performance of his duties, in the manner
currently required by corporate policy.
14. Indemnification: The CORPORATIONS agree that, within
the limits set forth in the Vermont Business Corporations Law and
Delaware General Corporation Law, as applicable, they shall hold
the EMPLOYEE harmless for any actions taken by the EMPLOYEE in
what he reasonably believes to be in the CORPORATIONS' interests
or for his omission to so act or for his negligence in connection
with such employment This indemnity shall include the EMPLOYEE's
reasonable attorneys' fees and costs incurred in defending any
such demands, claims, or actions. The EMPLOYEE shall have the
sole right to defend himself against any and all such demands,
claims or actions, using counsel of his choosing. The indemnity
herein provided shall also include, but in no way be limited to,
claims of liability arising for or on account of those acts or
omissions of others described in Section 4 of this Agreement.
Notwithstanding the foregoing and except to the extent
insurance provides such indemnity, the CORPORATIONS shall have no
obligation to hold the EMPLOYEE harmless from (i) any liability
he may have to any governmental entity with respect to personal
taxes, interest or penalties, unless that liability resulted from
a liability of the CORPORATIONS (i.e. corporate 941 taxes,
interest and penalties, assessed against the EMPLOYEE through a
100% assessment by the IRS); (ii) any claims arising out of,
based upon or attributable to the gaining in fact of any personal
profit or advantage to which the EMPLOYEE is not legally
entitled; or (iii) any claim arising out of, based upon or
attributable to the committing of any criminal or deliberately
fraudulent act. Prior to receiving any purported personal profit
or advantage, EMPLOYEE is entitled to receive, at the
CORPORATIONS' expense, an opinion of counsel that he is legally
entitled to receive it.
This Paragraph 13 shall not limit any immunity or
indemnity provided EMPLOYEE by law or by the Articles of
Association or Bylaws of the CORPORATIONS.
15. Binding Effect: This Agreement shall inure to the
benefit of and be binding upon the EMPLOYEE, his legal
representatives, heirs, and distributee(s), and upon the
CORPORATIONS, their successors and assigns, and also any
subsidiary or affiliated corporation.
16. No Waiver: The waiver of any term or condition of this
Agreement shall not be deemed to constitute the waiver of any
other term or condition.
17. Notices: All notices, elections hereunder and similar
communication(s) shall be in writing and shall be sufficient if
addressed to the EMPLOYEE at his address as shown above (or at
any new address as he shall advise the CORPORATIONS of in
writing) and mailed by certified return receipt with postage
fully paid. All notices to the CORPORATIONS shall be given to
the presiding officer of their Boards of Directors.
18. Controlling Law and Attorneys' Fees: Notwithstanding
the actual place of execution, or the States of incorporation of
the CORPORATIONS, this Agreement shall be governed by the laws of
the State of Vermont and the parties hereto consent to the
jurisdiction of the Courts of the State of Vermont.
In the event of a breach of this Agreement, the non-
breaching party shall be entitled to recover its costs and
attorneys' fees from the breaching party.
19. Prior Agreement Superseded: This Amended Employment
Agreement replaces and supersedes in its entirety that certain
Employment Agreement, effective as of the same date, previously
executed by the parties hereto.
NOTWITHSTANDING ANY OTHER TERM OR CONDITION OF THIS
AGREEMENT IT SHALL NOT BECOME EFFECTIVE UNTIL AND UNLESS
REGULATORY AUTHORITIES HAVING JURISDICTION HAVE CONSENTED TO THE
APPOINTMENT AND ELECTION OF EMPLOYEE AS PRESIDENT AND CHIEF
EXECUTIVE OFFICER AND DIRECTOR OF THE CORPORATIONS.
IN WITNESS WHEREOF, the CORPORATIONS have caused this
Agreement to be executed by directors or officers thereunto duly
authorized, and the EMPLOYEE has hereunto set his hand and seal,
all as of the day and year first above written.
IN PRESENCE OF: CORPORATIONS
THE MERCHANTS BANK
BY: /s/ Jack DuBrul II
MERCHANTS BANCSHARES, INC.
BY: /s/ Jack DuBrul II
EMPLOYEE
/s/Joseph L. Boutin
JOSEPH L. BOUTIN
EXHIBIT 10.2
AMENDED EMPLOYMENT AGREEMENT
THIS AGREEMENT is made effective as of the 23rd day of
January, 1995, by and between THE MERCHANTS BANK, a state
chartered Bank with its principal office at 123 Church Street,
Burlington, Vermont, (hereinafter referred to as "CORPORATION")
and MICHAEL R. TUTTLE, residing at 17 Wealthy Avenue, South
Burlington, Vermont 05403 (hereinafter referred to as
"EMPLOYEE").
WITNESSETH
In consideration of the mutual covenants herein contained,
the parties agree as follows:
1. Employment: The CORPORATION hereby employs the
EMPLOYEE, and the EMPLOYEE hereby accepts employment.
2. Terms and Renewal: This Agreement shall be for an
initial term beginning on January 30, 1995, and terminating on
October 31, 1997 (the "Initial Term").
On October 31, 1996, the CORPORATION shall notify the
EMPLOYEE in writing if the CORPORATION does not intend to renew
the Agreement for a one-year term following the Initial Term. In
the event that the CORPORATION does not so notify the EMPLOYEE,
the Agreement shall renew for a one-year term following the
Initial Term. Similarly, on each successive October 31 of a then
applicable Term, the CORPORATION shall notify the EMPLOYEE in
writing if the CORPORATION does not intend to renew the
Agreement. In the event that the CORPORATION does not so notify
the EMPLOYEE, the Agreement shall automatically renew for an
additional one-year Term following the then applicable Term.
3. Termination:
3.1 Discharge: The CORPORATION has the right to
discharge the EMPLOYEE at any time with or without just
cause, as herein defined. If the EMPLOYEE is discharged
without just cause, the CORPORATION agrees to pay in one
lump sum upon discharge the EMPLOYEE's salary, and the
CORPORATION agrees to pay or provide as or when due all
other normal benefits and Accrued Incentive Payments,
including the Accrued Incentive Payments provided for in
Section 9 of this Agreement, for one year from the date of
such discharge or for the balance of the time remaining
under the Term of this Agreement, whichever is greater.
"Accrued Incentive Payments" shall mean the payment of
incentive amounts, the precondition of which has occurred or
will occur at or upon the expiration of the relevant Fiscal
Period to which such incentive may be applicable. The
EMPLOYEE may elect to receive the payments over a five (5)
year period, and if he does so, the net present value of
such payments shall be equal to the lump sum payment if paid
immediately.
"Just cause" shall mean (a) misconduct connected with
EMPLOYEE's work, if and as defined in any written policy of
the CORPORATION covering all of the CORPORATION's officers
which is now, or subsequently, in effect; or (b) the
conviction of a felony which precludes EMPLOYEE from
performing all or an essential part of his duties of
employment, provided that, if such conviction is
subsequently reversed, rescinded or expunged, EMPLOYEE's
termination will be treated as if made without just cause.
3.2 Disability: In cases of disability, either party
may elect to terminate the employment, subject to the
following conditions: (i) the EMPLOYEE shall receive the
greater of: (a) the salary and other normal benefits plus
Accrued Incentive Payments which the EMPLOYEE would have
received had he been terminated without just cause; or (b)
the benefits payable to, and actually paid to, the EMPLOYEE
arising out of any disability insurance policy covering the
EMPLOYEE, and paid for by the CORPORATION. If said policy
benefits are paid other than in a lump sum payment, the
value of the benefits, for purposes of this Agreement, shall
be calculated by using a present value of all payments to be
made; and (ii) EMPLOYEE has suffered a disability as defined
below.
"Disability" shall mean mental or physical incapacity
which shall continue for six (6) months or longer after
exhaustion of all sick leave benefits, or a permanent mental
or physical incapacity, either of which makes the
performance of substantially all of the EMPLOYEE's duties
impossible, as certified in writing by the EMPLOYEE's
physician. The CORPORATION, in the event of disagreement,
may seek the opinion of a qualified physician to determine
if such disability exists; provided, however, that such
physician is Board Certified in the area of specialty
pertinent to the nature and extent of such disability. In
the event of further disagreement, the two physicians shall
choose a third physician, qualified as above, who shall make
the determination, which shall be binding upon the parties.
4. Resignation by the EMPLOYEE: The EMPLOYEE shall have
the option of terminating his employment with the CORPORATION
provided he gives at least 60 days advance written notice to the
CORPORATION. The EMPLOYEE shall not be deemed to have resigned
and, instead, shall be deemed to have been discharged by the
CORPORATION, without just cause, if the EMPLOYEE resigns as a
result of: (i) immoral, unethical or illegal acts or omissions
committed by, or which reasonably appear will be committed by,
any director, officer, employee, agent, or independent
contractors of the CORPORATION (and the Board shall not act,
after his recommendation, to terminate the offending party(s) or
to cease and desist such offending activity); (ii) acts or
omissions of any director, officer, employee, agent, or
independent contractors of the CORPORATION which could reasonably
subject the EMPLOYEE to personal liability from any Federal,
State or local government or agency, or any banking authority,
including, but not limited to, the Federal Deposit Insurance
Corporation, the Internal Revenue Service, or the Securities and
Exchange Commission; (iii) fundamental disagreements over basic
corporate philosophies and/or corporate business plans; (iv) the
CORPORATION having reduced the EMPLOYEE's salary, incentive
payments or other benefits provided for herein or having reduced
his title or position from those specified herein; or (v) Joseph
L. Boutin having been discharged by the Corporation without just
cause from his employment as President and Chief Executive
Officer of the CORPORATION.
5. Offices and Duties: The EMPLOYEE shall be appointed,
and shall serve, as the Executive Vice President of the
CORPORATION. Should the CORPORATION decide to alter his title
and/or position, it must provide the EMPLOYEE with an essentially
equivalent or better position, with equivalent or better salary
and benefits.
6. Efforts: The EMPLOYEE shall devote his full-time
efforts and energies to the business and affairs of the
CORPORATION and shall use his best efforts, skill and abilities
to promote the CORPORATION's interests.
7. Evaluation: The EMPLOYEE shall be evaluated in writing
annually by the President of the CORPORATION and shall receive a
copy of said evaluation. Nothing herein shall allow the
CORPORATION to reduce the salary, incentive payments and other
benefits provided for herein; nor shall this provision be deemed
to allow for the alteration of EMPLOYEE's duties and authority
otherwise set forth in this Agreement; provided, however, that
the performance of a condition within any regulatory order,
memorandum of understanding or requirement shall not be affected
by this provision.
8. Salary and Increases: The CORPORATION shall pay the
EMPLOYEE for all services rendered to the CORPORATION an initial
salary of $120,000.00 per annum, commencing January 30, 1995, and
payable on a weekly basis. The salary will be reviewed annually
by the President and may be increased but not decreased at the
discretion of the President. The CORPORATION may also grant the
EMPLOYEE such other compensation, bonuses, benefits, etc., as it
may deem proper from time to time, but subject to regulatory
restrictions shall not grant the EMPLOYEE less of such other
compensation, bonuses, benefits, etc. than the CORPORATION grants
to any other officer.
9. Incentive Payments: Lump sum incentive payments will
be paid to the EMPLOYEE if the following events occur during the
Initial Term of this Agreement:
a) $25,000.00 to be paid when the FDIC and the Federal
Reserve release the CORPORATION and Merchants
Bancshares, Inc. from the Memorandum of Understanding,
dated October 29, 1993, and the Written Agreement,
dated February 18, 1994.
b) $25,000.00 to be paid when Merchants Bancshares, Inc.
has restored its capital and its earnings to allow for
the payment of dividends to its shareholders.
c) $25,000.00 to be paid when the CORPORATION has earned,
on an after tax basis, 1% on assets (ROA) for the
fiscal year.
10. Benefits: The CORPORATION shall provide the EMPLOYEE
with all fringe benefits (including but not limited to health,
life, disability, workers compensation insurance; vacation and
sick pay; pension benefits) offered to other employees of the
CORPORATION in subordinate positions, but shall provide EMPLOYEE
with five (5) weeks per year of vacation.
11. Stock Options: Subject to applicable regulatory
restrictions, the CORPORATION agrees to cause to be granted to
the EMPLOYEE the option, but not the obligation to, purchase up
to 10,000 shares of the common stock of Merchants Bancshares,
Inc. at the purchase price of $10.00 per share. This option is
exercisable at any time after two (2) years from the original
commencement date of this Agreement and until seven (7) years
from the original commencement date of this Agreement (whether or
not the EMPLOYEE is still an employee of or under contract with
the CORPORATION).
If the EMPLOYEE is terminated without just cause or due
to his disability, or in the event that any transaction occurs
which results in a change of control of either the CORPORATION or
Merchants Bancshares, Inc. from that existing on the date of this
Agreement, the EMPLOYEE may exercise this option immediately upon
the occurrence of any such event or at any other time permitted
in the preceding sub-paragraph. In the event that there is a
split of Merchants Bancshares, Inc. stock, EMPLOYEE's stock
options and option price shall be adjusted accordingly, so as to
leave EMPLOYEE in the same relative position as at the time of
commencement of this Agreement with regard to the issued and
outstanding shares of Merchants Bancshares, Inc. on the date such
action is taken. In the event there is a public offering of the
stock of Merchants Bancshares, Inc. other than pursuant to a
stock option or an employee stock ownership plan, at any time
before the option granted hereby has been fully exercised, then
the number of shares subject to the option granted herein shall
be increased so that the total number of shares purchased and
purchasable under this option as increased will bear the same
relationship to the fully-diluted capitalization of the
Corporation immediately after giving effect to completion of the
public offering as the original number of shares purchasable
under the option (10,000) does to the fully-diluted
capitalization of the Corporation at the effective date hereof.
The purchase price for additional shares covered by the option as
provided in the preceding sentence shall be the greater of the
purchase price provided for herein or the purchase price paid by
third parties purchasing stock in the public offering.
If the CORPORATION is unable to cause to be delivered
the shares upon which the EMPLOYEE seeks to exercise his options,
for any reason, then the CORPORATION shall pay to the EMPLOYEE,
on the date of exercise, the difference between $10.00 per share
and the trading price of Merchants Bancshares, Inc.'s shares on
that day, as traded on the exchange on which said shares are
listed.
In the event that the EMPLOYEE shall become deceased
during the period in which the EMPLOYEE may exercise his stock
options, as provided above, then his Estate may exercise said
options in the manner provided above; provided, however, that
said options are exercised within six (6) months after EMPLOYEE'S
demise.
12. Expenses: The EMPLOYEE shall be reimbursed for
documented business expense incurred or paid by the EMPLOYEE in
connection with the performance of his duties, in the manner
currently required by corporate policy.
13. Indemnification: The CORPORATION agrees that, within
the limits set forth in the Vermont Business Corporations Law, it
shall hold the EMPLOYEE harmless for any actions taken by the
EMPLOYEE or omissions to act, which, in either case, he
reasonably believes to be in the CORPORATION's interests, or for
his negligence in connection with such employment. This
indemnity shall include the EMPLOYEE's reasonable attorneys' fees
and costs incurred in defending any such demands, claims, or
actions. The EMPLOYEE shall have the sole right to defend
himself against any and all such demands, claims or actions,
using counsel of his choosing. The indemnity herein provided
shall also include, but in no way be limited to, claims of
liability arising for or on account of those acts or omissions of
others described in Section 4 of this Agreement.
Notwithstanding the foregoing and except to the extent
insurance provides such indemnity, the CORPORATION shall have no
obligation to hold the EMPLOYEE harmless from (i) any liability
he may have to any governmental entity with respect to personal
taxes, interest or penalties, unless that liability resulted from
a liability of the CORPORATION (i.e. 941 Withholding taxes,
interest and penalties, assessed against the EMPLOYEE through a
100% assessment by the IRS); (ii) any claims arising out of,
based upon or attributable to the gaining in fact of any personal
profit or advantage to which the EMPLOYEE is not legally
entitled; or (iii) any claim arising out of, based upon or
attributable to the committing of any criminal or deliberately
fraudulent act. Prior to receiving any purported personal profit
or advantage, EMPLOYEE is entitled to receive, at the
CORPORATION's expense, an opinion of counsel that he is legally
entitled to receive it.
This Paragraph 13 shall not limit any immunity or
indemnity provided EMPLOYEE by law or by the Articles of
Association or Bylaws of the CORPORATION.
14. Binding Effect: This Agreement shall inure to the
benefit of and be binding upon the EMPLOYEE, his legal
representatives, heirs, and distributee(s), and upon the
CORPORATION, its successors and assigns, and also any subsidiary
or affiliate corporation.
15. No Waiver: The waiver of any term or condition of this
Agreement shall not be deemed to constitute the waiver of any
other term or condition.
16. Notices: All notices, elections hereunder and similar
communication(s) shall be in writing and shall be sufficient if
addressed to the EMPLOYEE at his address shown above (or at any
new address of which he shall advise the CORPORATION in writing)
and mailed by certified return receipt with postage fully paid.
All notices to the CORPORATION shall be given to the presiding
officer of the Board of Directors.
17. Controlling Law and Attorneys' Fees: Notwithstanding
the actual place of execution, or the state of incorporation of
the CORPORATION, this Agreement shall be governed by the laws of
the State of Vermont and the parties hereto consent to the
jurisdiction of the Courts of the State of Vermont.
In the event of a breach of this Agreement, the non-
breaching party shall be entitled to recover its costs and
attorneys' fees from the breaching party.
18. Corporate Authority. The Board of Directors of the
CORPORATION has authorized the President of the CORPORATION to
negotiate and execute this Agreement on behalf of the
CORPORATION, and upon request of the EMPLOYEE the CORPORATION
shall furnish its certificate of the Resolution granting such
authority.
19. Compliance with Law. Any and all provisions of this
Agreement shall be consistent and comply with applicable laws or
regulations enacted or promulgated both before and after the
execution date of this Agreement, and to the extent that any
provision is inconsistent or does not comply with applicable laws
or regulations, that part which is inconsistent or does not
comply shall be modified to comply with the applicable law or
regulation.
20. Prior Agreement Superseded. This Amended Employment
Agreement replaces and supersedes in its entirety that certain
Employment Agreement, effective as of the same date, previously
executed by the parties hereto.
IN WITNESS WHEREOF, the CORPORATION has caused this
Agreement to be executed by its officer thereunto duly
authorized, and the EMPLOYEE has hereunto set his hand and seal,
all as of the day and year first above written.
IN PRESENCE OF: CORPORATION:
THE MERCHANTS BANK
/s/ Jennifer L. Varin BY:/s/ Joseph L. Boutin
EMPLOYEE:
/s/ Jennifer L. Varin /s/ Michael R. Tuttle
MICHAEL R. TUTTLE
EXHIBIT 10.3
EMPLOYMENT AGREEMENT
THIS AGREEMENT is made effective as of the 29 day of
December, 1995, by and between THE MERCHANTS BANK, a state
chartered Bank with its principal office at 123 Church Street,
Burlington, Vermont, (hereinafter referred to as "CORPORATION")
and THOMAS R. HAVERS, residing at 144 Laurel Hill Drive, South
Burlington, Vermont 05403 (hereinafter referred to as
"EMPLOYEE").
WITNESSETH
In consideration of the mutual covenants herein contained,
the parties agree as follows:
1. Employment: The CORPORATION hereby employs the
EMPLOYEE, and the EMPLOYEE hereby accepts employment.
2. Terms and Renewal: This Agreement shall be for an
initial term beginning on December 29, 1995, and terminating on
October 31, 1997.
On October 31, 1996, the CORPORATION shall notify the
EMPLOYEE in writing if the CORPORATION does not intend to renew
the Agreement for a one-year term following the Initial Term. In
the event that the CORPORATION does not so notify the EMPLOYEE,
the Agreement shall renew for a one-year term following the
Initial Term. Similarly, on each successive October 31 of a then
applicable Term, the CORPORATION shall notify the EMPLOYEE in
writing if the CORPORATION does not intend to renew the
Agreement. In the event that the CORPORATION does not so notify
the EMPLOYEE, the Agreement shall automatically renew for an
additional one-year Term following the then applicable Term.
3. Termination:
3.1 Discharge: The CORPORATION has the right to
discharge the EMPLOYEE at any time with or without just
cause, as herein defined. If the EMPLOYEE is discharged
without just cause, the CORPORATION agrees to pay in one
lump sum upon discharge the EMPLOYEE's salary for one year.
"Just cause" shall mean (a) misconduct connected with
EMPLOYEE's work, if and as defined in any written policy of
the CORPORATION covering all of the CORPORATION's officers
which is now, or subsequently, in effect; or (b) the
conviction of a felony which precludes EMPLOYEE from
performing all or an essential part of his duties of
employment, provided that, if such conviction is
subsequently reversed, rescinded or expunged, EMPLOYEE's
termination will be treated as if made without just cause.
3.2 Disability: In cases of disability, either party
may elect to terminate the employment, subject to the
following conditions: (i) the EMPLOYEE shall receive the
greater of: (a) the salary and other normal benefits plus
Accrued Incentive Payments which the EMPLOYEE would have
received had he been terminated without just cause; or (b)
the benefits payable to, and actually paid to, the EMPLOYEE
arising out of any disability insurance policy covering the
EMPLOYEE, and paid for by the CORPORATION. If said policy
benefits are paid other than in a lump sum payment, the
value of the benefits, for purposes of this Agreement, shall
be calculated by using a present value of all payments to be
made; and (ii) EMPLOYEE has suffered a disability as defined
below.
"Disability" shall mean mental or physical incapacity
which shall continue for six (6) months or longer after
exhaustion of all sick leave benefits, or a permanent mental
or physical incapacity, either of which makes the
performance of substantially all of the EMPLOYEE's duties
impossible, as certified in writing by the EMPLOYEE's
physician. The CORPORATION, in the event of disagreement,
may seek the opinion of a qualified physician to determine
if such disability exists; provided, however, that such
physician is Board Certified in the area of specialty
pertinent to the nature and extent of such disability. In
the event of further disagreement, the two physicians shall
choose a third physician, qualified as above, who shall make
the determination, which shall be binding upon the parties.
4. Resignation by the EMPLOYEE: The EMPLOYEE shall have
the option of terminating his employment with the CORPORATION
provided he gives at least 60 days advance written notice to the
CORPORATION. The EMPLOYEE shall not be deemed to have resigned
and, instead, shall be deemed to have been discharged by the
CORPORATION, without just cause, if the EMPLOYEE resigns as a
result of: (i) immoral, unethical or illegal acts or omissions
committed by, or which reasonably appear will be committed by,
any director, officer, employee, agent, or independent
contractors of the CORPORATION (and the Board shall not act,
after his recommendation, to terminate the offending party(s) or
to cease and desist such offending activity); (ii) acts or
omissions of any director, officer, employee, agent, or
independent contractors of the CORPORATION which could reasonably
subject the EMPLOYEE to personal liability from any Federal,
State or local government or agency, or any banking authority,
including, but not limited to, the Federal Deposit Insurance
Corporation, the Internal Revenue Service, or the Securities and
Exchange Commission.
5. Offices and Duties: The EMPLOYEE shall be appointed,
and shall serve, as the Senior Vice President of the CORPORATION.
Should the CORPORATION decide to alter his title and/or position,
it must provide the EMPLOYEE with an essentially equivalent or
better position, with equivalent or better salary and benefits.
6. Efforts: The EMPLOYEE shall devote his full-time
efforts and energies to the business and affairs of the
CORPORATION and shall use his best efforts, skill and abilities
to promote the CORPORATION's interests.
7. Evaluation: The EMPLOYEE shall be evaluated in writing
annually by the President of the CORPORATION and shall receive a
copy of said evaluation. Nothing herein shall allow the
CORPORATION to reduce the salary, incentive payments and other
benefits provided for herein; nor shall this provision be deemed
to allow for the alteration of EMPLOYEE's duties and authority
otherwise set forth in this Agreement; provided, however, that
the performance of a condition within any regulatory order,
memorandum of understanding or requirement shall not be affected
by this provision.
8. Salary and Increases: The CORPORATION shall pay the
EMPLOYEE for all services rendered to the CORPORATION an initial
salary of $100,000.00 per annum, commencing January 1, 1996, and
payable on the first and fifteenth of the month. The salary will
be reviewed annually by the President and may be increased but
not decreased at the discretion of the President. The
CORPORATION may also grant the EMPLOYEE such other compensation,
bonuses, benefits, etc., as it may deem proper from time to time,
but subject to regulatory restrictions shall not grant the
EMPLOYEE less of such other compensation, bonuses, benefits, etc.
than the CORPORATION grants to any other officer.
9. Incentive Payments: The EMPLOYEE shall be entitled to
participate in the EXECUTIVE INCENTIVE PLAN to be presented to
the Board of Directors in the first quarter of 1996. The plan
will provide both short and long-term (stock options) incentives
to senior executives based on the improved performance of the
CORPORATION.
In the event the Board does not approve the incentive
program, the EMPLOYEE will receive incentive payments if the
following events occur during the first year of this contract:
a) $10,000.00 to be paid if the number of full-time
equivalent employees in the Bank does not exceed two
hundred and fifty-three.
b) $10,000.00 to be paid if the number of full-time
equivalent employees in the Bank does not exceed two
hundred and thirty-nine.
c) $10,000.00 to be paid if the number of full-time
equivalent employees in the Bank does not exceed two
hundred and thirty-two.
10. Benefits: The CORPORATION shall provide the EMPLOYEE
with all fringe benefits (including but not limited to health,
life, disability, workers compensation insurance; vacation and
sick pay; pension benefits) offered to other employees of the
CORPORATION in subordinate positions.
11. Stock Options: Subject to applicable regulatory
restrictions and approval by the Corporation's Board of
Directors, the CORPORATION agrees to cause to be granted to the
EMPLOYEE the option, but not the obligation to, purchase up to
5,000 shares of the common stock of Merchants Bancshares, Inc. at
the purchase price of $14 7/8 per share. This option is
exercisable at any time after two (2) years from the original
commencement date of this Agreement and until seven (7) years
from the original commencement date of this Agreement (whether or
not the EMPLOYEE is still an employee of or under contract with
the CORPORATION).
If the EMPLOYEE is terminated without just cause or due
to his disability, or in the event that any transaction occurs
which results in a change of control of either the CORPORATION or
Merchants Bancshares, Inc. from that existing on the date of this
Agreement, the EMPLOYEE may exercise this option immediately upon
the occurrence of any such event or at any other time permitted
in the preceding sub-paragraph. In the event that there is a
split of Merchants Bancshares, Inc. stock, EMPLOYEE's stock
options and option price shall be adjusted accordingly, so as to
leave EMPLOYEE in the same relative position as at the time of
commencement of this Agreement with regard to the issued and
outstanding shares of Merchants Bancshares, Inc. on the date such
action is taken. In the event there is a public offering of the
stock of Merchants Bancshares, Inc. other than pursuant to a
stock option or an employee stock ownership plan, at any time
before the option granted hereby has been fully exercised, then
the number of shares subject to the option granted herein shall
be increased so that the total number of shares purchased and
purchasable under this option as increased will bear the same
relationship to the fully-diluted capitalization of the
Corporation immediately after giving effect to completion of the
public offering as the original number of shares purchasable
under the option (5,000) does to the fully-diluted capitalization
of the Corporation at the effective date hereof. The purchase
price for additional shares covered by the option as provided in
the preceding sentence shall be the greater of the purchase price
provided for herein or the purchase price paid by third parties
purchasing stock in the public offering.
If the CORPORATION is unable to cause to be delivered
the shares upon which the EMPLOYEE seeks to exercise his options,
for any reason, then the CORPORATION shall pay to the EMPLOYEE,
on the date of exercise, the difference between $14 7/8 per share
and the trading price of Merchants Bancshares, Inc.'s shares on
that day, as traded on the exchange on which said shares are
listed.
In the event that the EMPLOYEE shall become deceased
during the period in which the EMPLOYEE may exercise his stock
options, as provided above, then his Estate may exercise said
options in the manner provided above; provided, however, that
said options are exercised within six (6) months after EMPLOYEE'S
demise.
12. Expenses: The EMPLOYEE shall be reimbursed for
documented business expense incurred or paid by the EMPLOYEE in
connection with the performance of his duties, in the manner
currently required by corporate policy.
13. Indemnification: The CORPORATION agrees that, within
the limits set forth in the Vermont Business Corporations Law, it
shall hold the EMPLOYEE harmless for any actions taken by the
EMPLOYEE or omissions to act, which, in either case, he
reasonably believes to be in the CORPORATION's interests, or for
his negligence in connection with such employment. This
indemnity shall include the EMPLOYEE's reasonable attorneys' fees
and costs incurred in defending any such demands, claims, or
actions. The EMPLOYEE shall have the sole right to defend
himself against any and all such demands, claims or actions,
using counsel of his choosing. The indemnity herein provided
shall also include, but in no way be limited to, claims of
liability arising for or on account of those acts or omissions of
others described in Section 4 of this Agreement.
Notwithstanding the foregoing and except to the extent
insurance provides such indemnity, the CORPORATION shall have no
obligation to hold the EMPLOYEE harmless from (i) any liability
he may have to any governmental entity with respect to personal
taxes, interest or penalties, unless that liability resulted from
a liability of the CORPORATION (i.e. 941 Withholding taxes,
interest and penalties, assessed against the EMPLOYEE through a
100% assessment by the IRS); (ii) any claims arising out of,
based upon or attributable to the gaining in fact of any personal
profit or advantage to which the EMPLOYEE is not legally
entitled; or (iii) any claim arising out of, based upon or
attributable to the committing of any criminal or deliberately
fraudulent act. Prior to receiving any purported personal profit
or advantage, EMPLOYEE is entitled to receive, at the
CORPORATION's expense, an opinion of counsel that he is legally
entitled to receive it.
This Paragraph 13 shall not limit any immunity or
indemnity provided EMPLOYEE by law or by the Articles of
Association or Bylaws of the CORPORATION.
14. Binding Effect: This Agreement shall inure to the
benefit of and be binding upon the EMPLOYEE, his legal
representatives, heirs, and distributee(s), and upon the
CORPORATION, its successors and assigns, and also any subsidiary
or affiliate corporation.
15. No Waiver: The waiver of any term or condition of this
Agreement shall not be deemed to constitute the waiver of any
other term or condition.
16. Notices: All notices, elections hereunder and similar
communication(s) shall be in writing and shall be sufficient if
addressed to the EMPLOYEE at his address shown above (or at any
new address of which he shall advise the CORPORATION in writing)
and mailed by certified return receipt with postage fully paid.
All notices to the CORPORATION shall be given to the presiding
officer of the Board of Directors.
17. Controlling Law and Attorneys' Fees: Notwithstanding
the actual place of execution, or the state of incorporation of
the CORPORATION, this Agreement shall be governed by the laws of
the State of Vermont and the parties hereto consent to the
jurisdiction of the Courts of the State of Vermont.
In the event of a breach of this Agreement, the non-
breaching party shall be entitled to recover its costs and
attorneys' fees from the breaching party.
18. Corporate Authority. The Board of Directors of the
CORPORATION has authorized the President of the CORPORATION to
negotiate and execute this Agreement on behalf of the
CORPORATION, and upon request of the EMPLOYEE the CORPORATION
shall furnish its certificate of the Resolution granting such
authority.
19. Compliance with Law. Any and all provisions of this
Agreement shall be consistent and comply with applicable laws or
regulations enacted or promulgated both before and after the
execution date of this Agreement, and to the extent that any
provision is inconsistent or does not comply with applicable laws
or regulations, that part which is inconsistent or does not
comply shall be modified to comply with the applicable law or
regulation.
IN WITNESS WHEREOF, the CORPORATION has caused this
Agreement to be executed by its officer thereunto duly
authorized, and the EMPLOYEE has hereunto set his hand and seal,
all as of the day and year first above written.
IN PRESENCE OF: CORPORATION:
THE MERCHANTS BANK
/s/ Jennifer L. Varin BY: /s/ Joseph L. Boutin
NAME: Joseph L. Boutin
TITLE: President
EMPLOYEE:
/s/ Elizabeth L. Havers /s/ Thomas R. Havers
THOMAS R. HAVERS
EXHIBIT 10.4
EMPLOYMENT AGREEMENT
THIS AGREEMENT is made effective as of the 1ST day of
February, 1996, by and between THE MERCHANTS BANK, a state
chartered Bank with its principal office at 123 Church Street,
Burlington, Vermont, (hereinafter referred to as the "
CORPORATION") and THOMAS S. LEAVITT, residing at 1921 Eastridge
Drive, Billings, Montana 59102 (hereinafter referred to as
"EMPLOYEE").
WITNESSETH
In consideration of the mutual covenants herein contained,
the parties agree as follows:
1. Employment: The CORPORATION hereby employs the
EMPLOYEE, and the EMPLOYEE hereby accepts employment.
2. Terms and Renewal: This Agreement shall be for an
initial term beginning on February 1, 1996, and terminating on
October 31, 1997.
On October 31, 1996, the CORPORATION shall notify the
EMPLOYEE in writing if the CORPORATION does not intend to renew
the Agreement for a one-year term following the Initial Term. In
the event that the CORPORATION does not so notify the EMPLOYEE,
the Agreement shall renew for a one-year term following the
Initial Term. Similarly, on each successive October 31 of a then
applicable Term, the CORPORATION shall notify the EMPLOYEE in
writing if the CORPORATION does not intend to renew the
Agreement. In the event that the CORPORATION does not so notify
the EMPLOYEE, the Agreement shall automatically renew for an
additional one-year Term following the then applicable Term.
3. Termination:
3.1 Discharge: The CORPORATION has the right to
discharge the EMPLOYEE at any time with or without just
cause, as herein defined. If the EMPLOYEE is discharged
without just cause, the CORPORATION agrees to pay in one
lump sum upon discharge the EMPLOYEE's salary for one year.
"Just cause" shall mean (a) misconduct connected with
EMPLOYEE's work, if and as defined in any written policy of
the CORPORATION covering all of the CORPORATION's officers
which is now, or subsequently, in effect; or (b) the
conviction of a felony which precludes EMPLOYEE from
performing all or an essential part of his duties of
employment, provided that, if such conviction is
subsequently reversed, rescinded or expunged, EMPLOYEE's
termination will be treated as if made without just cause.
3.2 Disability: In cases of disability, either party
may elect to terminate the employment, subject to the
following conditions: (i) the EMPLOYEE shall receive the
greater of: (a) the salary and other normal benefits plus
Accrued Incentive Payments which the EMPLOYEE would have
received had he been terminated without just cause; or (b)
the benefits payable to, and actually paid to, the EMPLOYEE
arising out of any disability insurance policy covering the
EMPLOYEE, and paid for by the CORPORATION. If said policy
benefits are paid other than in a lump sum payment, the
value of the benefits, for purposes of this Agreement, shall
be calculated by using a present value of all payments to be
made; and (ii) EMPLOYEE has suffered a disability as defined
below.
"Disability" shall mean mental or physical incapacity
which shall continue for six (6) months or longer after
exhaustion of all sick leave benefits, or a permanent mental
or physical incapacity, either of which makes the
performance of substantially all of the EMPLOYEE's duties
impossible, as certified in writing by the EMPLOYEE's
physician. The CORPORATION, in the event of disagreement,
may seek the opinion of a qualified physician to determine
if such disability exists; provided, however, that such
physician is Board Certified in the area of specialty
pertinent to the nature and extent of such disability. In
the event of further disagreement, the two physicians shall
choose a third physician, qualified as above, who shall make
the determination, which shall be binding upon the parties.
4. Resignation by the EMPLOYEE: The EMPLOYEE shall have
the option of terminating his employment with the CORPORATION
provided he gives at least 60 days advance written notice to the
CORPORATION. The EMPLOYEE shall not be deemed to have resigned
and, instead, shall be deemed to have been discharged by the
CORPORATION, without just cause, if the EMPLOYEE resigns as a
result of: (i) immoral, unethical or illegal acts or omissions
committed by, or which reasonably appear will be committed by,
any director, officer, employee, agent, or independent
contractors of the CORPORATION (and the Board shall not act,
after his recommendation, to terminate the offending party(s) or
to cease and desist such offending activity); (ii) acts or
omissions of any director, officer, employee, agent, or
independent contractors of the CORPORATION which could reasonably
subject the EMPLOYEE to personal liability from any Federal,
State or local government or agency, or any banking authority,
including, but not limited to, the Federal Deposit Insurance
Corporation, the Internal Revenue Service, or the Securities and
Exchange Commission.
5. Offices and Duties: The EMPLOYEE shall be appointed,
and shall serve, as the Senior Vice President and Director of
Sales of the MERCHANTS BANK. Should the CORPORATION decide to
alter his title and/or position, it must provide the EMPLOYEE
with an essentially equivalent or better position, with
equivalent or better salary and benefits.
6. Efforts: The EMPLOYEE shall devote his full-time
efforts and energies to the business and affairs of the
CORPORATION and shall use his best efforts, skill and abilities
to promote the CORPORATION's interests.
7. Evaluation: The EMPLOYEE shall be evaluated in writing
annually by the President of the CORPORATION and shall receive a
copy of said evaluation. Nothing herein shall allow the
CORPORATION to reduce the salary, incentive payments and other
benefits provided for herein; nor shall this provision be deemed
to allow for the alteration of EMPLOYEE's duties and authority
otherwise set forth in this Agreement; provided, however, that
the performance of a condition within any regulatory order,
memorandum of understanding or requirement shall not be affected
by this provision.
8. Salary and Increases: The CORPORATION shall pay the
EMPLOYEE for all services rendered to the CORPORATION an initial
salary of $100,000.00 per annum, commencing February 1, 1996, and
payable on the first and fifteenth of the month. The salary will
be reviewed annually by the President and may be increased but
not decreased at the discretion of the President. The
CORPORATION may also grant the EMPLOYEE such other compensation,
bonuses, benefits, etc., as it may deem proper from time to time,
but subject to regulatory restrictions shall not grant the
EMPLOYEE less of such other compensation, bonuses, benefits, etc.
than the CORPORATION grants to any other officer.
9. Incentive Payments: Incentive Payments based on the
Bank's total "weighted" portfolio will be paid to the EMPLOYEE on
a quarterly basis. The final structure of these payments will be
provided to the EMPLOYEE prior to March 1, 1996. In no event
will the potential amount of the incentive payments be less than
$20,000. The incentives will be based on reasonable goals and
objectives for deposit and loan growth as outlined in the Bank's
business plans.
10. Benefits: The CORPORATION shall provide the EMPLOYEE
with all fringe benefits (including but not limited to health,
life, disability, workers compensation insurance; vacation and
sick pay; pension benefits) offered to other employees of the
CORPORATION in subordinate positions.
The Bank agrees to reimburse the EMPLOYEE for reasonable
relocation expenses as follows:
a) Broker commission as a result of the sale of his
primary residence in Billings, Montana.
b) Cost of renting a home in the Burlington area through
July of 1996.
c) Moving costs (transportation of household goods).
d) Incidental relocation and closing costs associated with
purchasing a primary residence in Vermont. Said cost
shall not exceed $5,000.
11. Stock Options: Subject to applicable regulatory
restrictions and approval by the Corporation's Board of
Directors, the CORPORATION agrees to cause to be granted to the
EMPLOYEE the option, but not the obligation to, purchase up to
10,000 shares of the common stock of Merchants Bancshares, Inc.
at the purchase price of $15 3/8 per share. This option is
exercisable at any time after two (2) years from the original
commencement date of this Agreement and until seven (7) years
from the original commencement date of this Agreement (whether or
not the EMPLOYEE is still an employee of or under contract with
the CORPORATION).
If the EMPLOYEE is terminated without just cause or due
to his disability, or in the event that any transaction occurs
which results in a change of control of either the CORPORATION or
Merchants Bancshares, Inc. from that existing on the date of this
Agreement, the EMPLOYEE may exercise this option immediately upon
the occurrence of any such event or at any other time permitted
in the preceding sub-paragraph. In the event that there is a
split of Merchants Bancshares, Inc. stock, EMPLOYEE's stock
options and option price shall be adjusted accordingly, so as to
leave EMPLOYEE in the same relative position as at the time of
commencement of this Agreement with regard to the issued and
outstanding shares of Merchants Bancshares, Inc. on the date such
action is taken. In the event there is a public offering of the
stock of Merchants Bancshares, Inc. other than pursuant to a
stock option or an employee stock ownership plan, at any time
before the option granted hereby has been fully exercised, then
the number of shares subject to the option granted herein shall
be increased so that the total number of shares purchased and
purchasable under this option as increased will bear the same
relationship to the fully-diluted capitalization of the
Corporation immediately after giving effect to completion of the
public offering as the original number of shares purchasable
under the option (10,000) does to the fully-diluted
capitalization of the Corporation at the effective date hereof.
The purchase price for additional shares covered by the option as
provided in the preceding sentence shall be the greater of the
purchase price provided for herein or the purchase price paid by
third parties purchasing stock in the public offering.
If the CORPORATION is unable to cause to be delivered
the shares upon which the EMPLOYEE seeks to exercise his options,
for any reason, then the CORPORATION shall pay to the EMPLOYEE,
on the date of exercise, the difference between $15 3/8 per share
and the trading price of Merchants Bancshares, Inc.'s shares on
that day, as traded on the exchange on which said shares are
listed.
In the event that the EMPLOYEE shall become deceased
during the period in which the EMPLOYEE may exercise his stock
options, as provided above, then his Estate may exercise said
options in the manner provided above; provided, however, that
said options are exercised within six (6) months after EMPLOYEE'S
demise.
12. Expenses: The EMPLOYEE shall be reimbursed for
documented business expense incurred or paid by the EMPLOYEE in
connection with the performance of his duties, in the manner
currently required by corporate policy.
13. Indemnification: The CORPORATION agrees that, within
the limits set forth in the Vermont Business Corporations Law, it
shall hold the EMPLOYEE harmless for any actions taken by the
EMPLOYEE or omissions to act, which, in either case, he
reasonably believes to be in the CORPORATION's interests, or for
his negligence in connection with such employment. This
indemnity shall include the EMPLOYEE's reasonable attorneys' fees
and costs incurred in defending any such demands, claims, or
actions. The EMPLOYEE shall have the sole right to defend
himself against any and all such demands, claims or actions,
using counsel of his choosing. The indemnity herein provided
shall also include, but in no way be limited to, claims of
liability arising for or on account of those acts or omissions of
others described in Section 4 of this Agreement.
Notwithstanding the foregoing and except to the extent
insurance provides such indemnity, the CORPORATION shall have no
obligation to hold the EMPLOYEE harmless from (i) any liability
he may have to any governmental entity with respect to personal
taxes, interest or penalties, unless that liability resulted from
a liability of the CORPORATION (i.e. 941 Withholding taxes,
interest and penalties, assessed against the EMPLOYEE through a
100% assessment by the IRS); (ii) any claims arising out of,
based upon or attributable to the gaining in fact of any personal
profit or advantage to which the EMPLOYEE is not legally
entitled; or (iii) any claim arising out of, based upon or
attributable to the committing of any criminal or deliberately
fraudulent act. Prior to receiving any purported personal profit
or advantage, EMPLOYEE is entitled to receive, at the
CORPORATION's expense, an opinion of counsel that he is legally
entitled to receive it. This Paragraph 13 shall not limit any
immunity or indemnity provided EMPLOYEE by law or by the Articles
of Association or Bylaws of the CORPORATION.
14. Binding Effect: This Agreement shall inure to the
benefit of and be binding upon the EMPLOYEE, his legal
representatives, heirs, and distributee(s), and upon the
CORPORATION, its successors and assigns, and also any subsidiary
or affiliate corporation.
15. No Waiver: The waiver of any term or condition of this
Agreement shall not be deemed to constitute the waiver of any
other term or condition.
16. Notices: All notices, elections hereunder and similar
communication(s) shall be in writing and shall be sufficient if
addressed to the EMPLOYEE at his address shown above (or at any
new address of which he shall advise the CORPORATION in writing)
and mailed by certified return receipt with postage fully paid.
All notices to the CORPORATION shall be given to the presiding
officer of the Board of Directors.
17. Controlling Law and Attorneys' Fees: Notwithstanding
the actual place of execution, or the state of incorporation of
the CORPORATION, this Agreement shall be governed by the laws of
the State of Vermont and the parties hereto consent to the
jurisdiction of the Courts of the State of Vermont.
In the event of a breach of this Agreement, the non-
breaching party shall be entitled to recover its costs and
attorneys' fees from the breaching party.
18. Corporate Authority. The Board of Directors of the
CORPORATION has authorized the President of the CORPORATION to
negotiate and execute this Agreement on behalf of the
CORPORATION, and upon request of the EMPLOYEE the CORPORATION
shall furnish its certificate of the Resolution granting such
authority.
19. Compliance with Law. Any and all provisions of this
Agreement shall be consistent and comply with applicable laws or
regulations enacted or promulgated both before and after the
execution date of this Agreement, and to the extent that any
provision is inconsistent or does not comply with applicable laws
or regulations, that part which is inconsistent or does not
comply shall be modified to comply with the applicable law or
regulation.
IN WITNESS WHEREOF, the CORPORATION has caused this
Agreement to be executed by its officer thereunto duly
authorized, and the EMPLOYEE has hereunto set his hand and seal,
all as of the day and year first above written.
IN PRESENCE OF: CORPORATION:
THE MERCHANTS BANK
/s/ Jennifer L. Varin BY: /s/ Joseph L. Boutin
NAME: Joseph L. Boutin
TITLE: President
EMPLOYEE:
/s/ Peggy J. Charland /s/ Thomas S. Leavitt
THOMAS S. LEAVITT
EXHIBIT 10.5
EMPLOYMENT AGREEMENT
THIS AGREEMENT is made effective as of the 29 day of
December, 1995, by and between THE MERCHANTS BANK, a state
chartered Bank with its principal office at 123 Church Street,
Burlington, Vermont, THE MERCHANTS TRUST COMPANY, a corporation
organized and existing under the laws of the State of Vermont
with its principal office at 164 College Street (hereinafter
collectively referred to as "CORPORATION"), and WILLIAM R.
HEASLIP, residing at 80 Dunder Road, Burlington, Vermont 05401
(hereinafter referred to as "EMPLOYEE").
WITNESSETH
In consideration of the mutual covenants herein contained,
the parties agree as follows:
1. Employment: The CORPORATION hereby employs the
EMPLOYEE, and the EMPLOYEE hereby accepts employment.
2. Terms and Renewal: This Agreement shall be for an
initial term beginning on December 29, 1995, and terminating on
October 31, 1997.
On October 31, 1996, the CORPORATION shall notify the
EMPLOYEE in writing if the CORPORATION does not intend to renew
the Agreement for a one-year term following the Initial Term. In
the event that the CORPORATION does not so notify the EMPLOYEE,
the Agreement shall renew for a one-year term following the
Initial Term. Similarly, on each successive October 31 of a then
applicable Term, the CORPORATION shall notify the EMPLOYEE in
writing if the CORPORATION does not intend to renew the
Agreement. In the event that the CORPORATION does not so notify
the EMPLOYEE, the Agreement shall automatically renew for an
additional one-year Term following the then applicable Term.
3. Termination:
3.1 Discharge: The CORPORATION has the right to
discharge the EMPLOYEE at any time with or without just
cause, as herein defined. If the EMPLOYEE is discharged
without just cause, the CORPORATION agrees to pay in one
lump sum upon discharge the EMPLOYEE's salary for one year.
"Just cause" shall mean (a) misconduct connected with
EMPLOYEE's work, if and as defined in any written policy of
the CORPORATION covering all of the CORPORATION's officers
which is now, or subsequently, in effect; or (b) the
conviction of a felony which precludes EMPLOYEE from
performing all or an essential part of his duties of
employment, provided that, if such conviction is
subsequently reversed, rescinded or expunged, EMPLOYEE's
termination will be treated as if made without just cause.
3.2 Disability: In cases of disability, either party
may elect to terminate the employment, subject to the
following conditions: (i) the EMPLOYEE shall receive the
greater of: (a) the salary and other normal benefits plus
Accrued Incentive Payments which the EMPLOYEE would have
received had he been terminated without just cause; or (b)
the benefits payable to, and actually paid to, the EMPLOYEE
arising out of any disability insurance policy covering the
EMPLOYEE, and paid for by the CORPORATION. If said policy
benefits are paid other than in a lump sum payment, the
value of the benefits, for purposes of this Agreement, shall
be calculated by using a present value of all payments to be
made; and (ii) EMPLOYEE has suffered a disability as defined
below.
"Disability" shall mean mental or physical incapacity
which shall continue for six (6) months or longer after
exhaustion of all sick leave benefits, or a permanent mental
or physical incapacity, either of which makes the
performance of substantially all of the EMPLOYEE's duties
impossible, as certified in writing by the EMPLOYEE's
physician. The CORPORATION, in the event of disagreement,
may seek the opinion of a qualified physician to determine
if such disability exists; provided, however, that such
physician is Board Certified in the area of specialty
pertinent to the nature and extent of such disability. In
the event of further disagreement, the two physicians shall
choose a third physician, qualified as above, who shall make
the determination, which shall be binding upon the parties.
4. Resignation by the EMPLOYEE: The EMPLOYEE shall have
the option of terminating his employment with the CORPORATION
provided he gives at least 60 days advance written notice to the
CORPORATION. The EMPLOYEE shall not be deemed to have resigned
and, instead, shall be deemed to have been discharged by the
CORPORATION, without just cause, if the EMPLOYEE resigns as a
result of: (i) immoral, unethical or illegal acts or omissions
committed by, or which reasonably appear will be committed by,
any director, officer, employee, agent, or independent
contractors of the CORPORATION (and the Board shall not act,
after his recommendation, to terminate the offending party(s) or
to cease and desist such offending activity); (ii) acts or
omissions of any director, officer, employee, agent, or
independent contractors of the CORPORATION which could reasonably
subject the EMPLOYEE to personal liability from any Federal,
State or local government or agency, or any banking authority,
including, but not limited to, the Federal Deposit Insurance
Corporation, the Internal Revenue Service, or the Securities and
Exchange Commission.
5. Offices and Duties: The EMPLOYEE shall be appointed,
and shall serve, as the President and Chief Executive Officer of
THE MERCHANTS TRUST COMPANY. Should the CORPORATION decide to
alter his title and/or position, it must provide the EMPLOYEE
with an essentially equivalent or better position, with
equivalent or better salary and benefits.
6. Efforts: The EMPLOYEE shall devote his full-time
efforts and energies to the business and affairs of the
CORPORATION and shall use his best efforts, skill and abilities
to promote the CORPORATION's interests.
7. Evaluation: The EMPLOYEE shall be evaluated in writing
annually by the President of the CORPORATION and shall receive a
copy of said evaluation. Nothing herein shall allow the
CORPORATION to reduce the salary, incentive payments and other
benefits provided for herein; nor shall this provision be deemed
to allow for the alteration of EMPLOYEE's duties and authority
otherwise set forth in this Agreement; provided, however, that
the performance of a condition within any regulatory order,
memorandum of understanding or requirement shall not be affected
by this provision.
8. Salary and Increases: The CORPORATION shall pay the
EMPLOYEE for all services rendered to the CORPORATION an initial
salary of $90,000.00 per annum, commencing December 29, 1995, and
payable on first and fifteenth of the month. The salary will be
reviewed annually by the President and CEO of the Bank and may be
increased but not decreased at the discretion of the President
and CEO of the Bank. The CORPORATION may also grant the EMPLOYEE
such other compensation, bonuses, benefits, etc., as it may deem
proper from time to time, but subject to regulatory restrictions
shall not grant the EMPLOYEE less of such other compensation,
bonuses, benefits, etc. than the CORPORATION grants to any other
officer.
9. Incentive Payments: Lump sum incentive payments will
be paid to the EMPLOYEE if the following events occur during the
Initial Term of this Agreement:
a) $10,000.00 to be paid when the FDIC releases The
Merchants Trust Company from the Memorandum of
Understanding, dated February 17, 1995.
b) $10,000.00 to be paid
.
c) $10,000.00 to be paid
.
10. Benefits: The CORPORATION shall provide the EMPLOYEE
with all fringe benefits (including but not limited to health,
life, disability, workers compensation insurance; vacation and
sick pay; pension benefits) offered to other employees of the
CORPORATION in subordinate positions.
11. Stock Options: Subject to applicable regulatory
restrictions and approval by the Corporation's Board of
Directors, the CORPORATION agrees to cause to be granted to the
EMPLOYEE the option, but not the obligation to, purchase up to
5,000 shares of the common stock of Merchants Bancshares, Inc. at
the purchase price of $14 7/8 per share. This option is
exercisable at any time after two (2) years from the original
commencement date of this Agreement and until seven (7) years
from the original commencement date of this Agreement (whether or
not the EMPLOYEE is still an employee of or under contract with
the CORPORATION).
If the EMPLOYEE is terminated without just cause or due
to his disability, or in the event that any transaction occurs
which results in a change of control of either the CORPORATION or
Merchants Bancshares, Inc. from that existing on the date of this
Agreement, the EMPLOYEE may exercise this option immediately upon
the occurrence of any such event or at any other time permitted
in the preceding sub-paragraph. In the event that there is a
split of Merchants Bancshares, Inc. stock, EMPLOYEE's stock
options and option price shall be adjusted accordingly, so as to
leave EMPLOYEE in the same relative position as at the time of
commencement of this Agreement with regard to the issued and
outstanding shares of Merchants Bancshares, Inc. on the date such
action is taken. In the event there is a public offering of the
stock of Merchants Bancshares, Inc. other than pursuant to a
stock option or an employee stock ownership plan, at any time
before the option granted hereby has been fully exercised, then
the number of shares subject to the option granted herein shall
be increased so that the total number of shares purchased and
purchasable under this option as increased will bear the same
relationship to the fully-diluted capitalization of the
Corporation immediately after giving effect to completion of the
public offering as the original number of shares purchasable
under the option (5,000) does to the fully-diluted capitalization
of the Corporation at the effective date hereof. The purchase
price for additional shares covered by the option as provided in
the preceding sentence shall be the greater of the purchase price
provided for herein or the purchase price paid by third parties
purchasing stock in the public offering.
If the CORPORATION is unable to cause to be delivered
the shares upon which the EMPLOYEE seeks to exercise his options,
for any reason, then the CORPORATION shall pay to the EMPLOYEE,
on the date of exercise, the difference between $14 7/8 per share
and the trading price of Merchants Bancshares, Inc.'s shares on
that day, as traded on the exchange on which said shares are
listed.
In the event that the EMPLOYEE shall become deceased
during the period in which the EMPLOYEE may exercise his stock
options, as provided above, then his Estate may exercise said
options in the manner provided above; provided, however, that
said options are exercised within six (6) months after EMPLOYEE'S
demise.
12. Expenses: The EMPLOYEE shall be reimbursed for
documented business expense incurred or paid by the EMPLOYEE in
connection with the performance of his duties, in the manner
currently required by corporate policy.
13. Indemnification: The CORPORATION agrees that, within
the limits set forth in the Vermont Business Corporations Law, it
shall hold the EMPLOYEE harmless for any actions taken by the
EMPLOYEE or omissions to act, which, in either case, he
reasonably believes to be in the CORPORATION's interests, or for
his negligence in connection with such employment. This
indemnity shall include the EMPLOYEE's reasonable attorneys' fees
and costs incurred in defending any such demands, claims, or
actions. The EMPLOYEE shall have the sole right to defend
himself against any and all such demands, claims or actions,
using counsel of his choosing. The indemnity herein provided
shall also include, but in no way be limited to, claims of
liability arising for or on account of those acts or omissions of
others described in Section 4 of this Agreement.
Notwithstanding the foregoing and except to the extent
insurance provides such indemnity, the CORPORATION shall have no
obligation to hold the EMPLOYEE harmless from (i) any liability
he may have to any governmental entity with respect to personal
taxes, interest or penalties, unless that liability resulted from
a liability of the CORPORATION (i.e. 941 Withholding taxes,
interest and penalties, assessed against the EMPLOYEE through a
100% assessment by the IRS); (ii) any claims arising out of,
based upon or attributable to the gaining in fact of any personal
profit or advantage to which the EMPLOYEE is not legally
entitled; or (iii) any claim arising out of, based upon or
attributable to the committing of any criminal or deliberately
fraudulent act. Prior to receiving any purported personal profit
or advantage, EMPLOYEE is entitled to receive, at the
CORPORATION's expense, an opinion of counsel that he is legally
entitled to receive it.
This Paragraph 13 shall not limit any immunity or
indemnity provided EMPLOYEE by law or by the Articles of
Association or Bylaws of the CORPORATION.
14. Binding Effect: This Agreement shall inure to the
benefit of and be binding upon the EMPLOYEE, his legal
representatives, heirs, and distributee(s), and upon the
CORPORATION, its successors and assigns, and also any subsidiary
or affiliate corporation.
15. No Waiver: The waiver of any term or condition of this
Agreement shall not be deemed to constitute the waiver of any
other term or condition.
16. Notices: All notices, elections hereunder and similar
communication(s) shall be in writing and shall be sufficient if
addressed to the EMPLOYEE at his address shown above (or at any
new address of which he shall advise the CORPORATION in writing)
and mailed by certified return receipt with postage fully paid.
All notices to the CORPORATION shall be given to the presiding
officer of the Board of Directors.
17. Controlling Law and Attorneys' Fees: Notwithstanding
the actual place of execution, or the state of incorporation of
the CORPORATION, this Agreement shall be governed by the laws of
the State of Vermont and the parties hereto consent to the
jurisdiction of the Courts of the State of Vermont.
In the event of a breach of this Agreement, the non-
breaching party shall be entitled to recover its costs and
attorneys' fees from the breaching party.
18. Corporate Authority. The Board of Directors of the
CORPORATION has authorized the President of the CORPORATION to
negotiate and execute this Agreement on behalf of the
CORPORATION, and upon request of the EMPLOYEE the CORPORATION
shall furnish its certificate of the Resolution granting such
authority.
19. Compliance with Law. Any and all provisions of this
Agreement shall be consistent and comply with applicable laws or
regulations enacted or promulgated both before and after the
execution date of this Agreement, and to the extent that any
provision is inconsistent or does not comply with applicable laws
or regulations, that part which is inconsistent or does not
comply shall be modified to comply with the applicable law or
regulation.
NOTWITHSTANDING ANY OTHER TERM OR CONDITION OF THIS
AGREEMENT IT SHALL NOT BECOME EFFECTIVE UNTIL AND UNLESS
REGULATORY AUTHORITIES HAVING JURISDICTION HAVE CONSENTED TO THE
APPOINTMENT AND ELECTION OF EMPLOYEE AS PRESIDENT AND CHIEF
EXECUTIVE OFFICER OF THE MERCHANTS TRUST COMPANY.
IN WITNESS WHEREOF, the CORPORATION has caused this
Agreement to be executed by its officer thereunto duly
authorized, and the EMPLOYEE has hereunto set his hand and seal,
all as of the day and year first above written.
IN PRESENCE OF: CORPORATION:
THE MERCHANTS BANK
/s/ Jennifer L. Varin BY: /s/ Joseph L. Boutin
NAME: Joseph L. Boutin
TITLE: President
THE MERCHANTS TRUST COMPANY
/s/ Jennifer L. Varin BY: /s/ Joseph L. Boutin
NAME: Joseph L. Boutin
TITLE: Chairman
EMPLOYEE:
/s/ David Bates /s/ William R. Heaslip
WILLIAM R. HEASLIP
ADDENDUM TO THE EMPLOYMENT CONTRACT OF WILLIAM R. HEASLIP
DATED DECEMBER 29, 1995
Article 9. Incentive Payments: Lump sum payments will be paid
to the EMPLOYEE if the following events occur during the Initial
Term of this Agreement:
b) $10,000 to be paid if the following revenue
objectives are achieved by Merchants Trust
Co. for the year ending 12-31-96:
Gross Revenue $1,482,000*
Net Revenue $173,000*
*Legal and professional expenses will be
capped at $80,000. Any benefit from the
Piper Jaffray lawsuit will not be included in
the calculation.
c) $10,000 to be paid if the ratio of new revenue to lost
revenue from October 1, 1996 to March 31, 1997 is three to one
(3/1) with an annualized minimum new revenue target of $62,000.
IN PRESENCE OF: CORPORATION
MERCHANTS BANK
/s/ Thomas R. Havers BY:/s/ Joseph L. Boutin
NAME: Joseph L.Boutin
TITLE: President
MERCHANTS TRUST COMPANY
/s/ Thomas R. Havers BY: /s/ Joseph L. Boutin
NAME: Joseph L. Boutin
TITLE: Chairman
EMPLOYEE
/s/ Thomas R. Havers /s/ William R. Heaslip
_________________
EXHIBIT 10.6.1
SIXTH AMENDMENT
Background
As of January 1, 1981, the Plan was amended and restated in
its entirety to provide for a change in the retirement benefit
formula and in certain other Plan provisions. Also, as of
December 29, 1980 the Catamount Bank of North Bennington, Vermont
was acquired by The Merchants Bank and the Catamount Bank Pension
Plan was merged into The Merchants Bank Pension Plan as of
January 1, 1981. Participants in the Catamount Bank Pension Plan
on December 31, 1980 automatically became participants in The
Merchants Bank Pension Plan on January 1, 1981. The Merchants
Bank Pension Plan also assumed all liabilities for active,
terminated, vested and retired participants in the Catamount Bank
Pension Plan as in effect on December 31, 1980 and assets of the
Catamount Bank Pension Plan were transferred to The Merchants
Bank Pension Plan trust fund.
The Plan was subsequently amended by a First Amendment
thereto, effective as of January 1, 1981, by a Second Amendment
thereto, effective variously, by a Third Amendment thereto,
effective as of July 6, 1985, by a Fourth Amendment thereto,
effective variously and by a Fifth Amendment thereto, effective
variously. As of January 1, 1994, or such other date as is
specifically provided, the Plan was again amended and restated in
its entirety to comply with the Tax Reform Act of 1986 and later
legislation up to and including the Revenue Reconciliation Act of
1993.
It is the intent of the Employer that the Plan shall be
established and maintained (1) as a retirement program which is
in full compliance with the Employee Retirement Income Security
Act of 1974, and (2) as a qualified plan under Section 401(a) of
the Internal Revenue Code of 1986 ("Code"), each as amended from
time to time.
Unless otherwise specifically provided, the terms of this
amended and restated Plan shall apply only to a Member who
retires or terminates employment on or after January 1, 1994, the
Effective Date of this amended and restated Plan. The benefits
due any former Member shall be governed by the Plan as in effect
upon his retirement or termination of employment.
ARTICLE I
Definitions
Section 1.1. Definitions. The terms set forth below shall
have the following meanings in this Plan:
"Actuarial Equivalent" means the equality in present value
of two different financial events or series of financial events
based on the following assumptions:
(a) Interest: 7.5%; and
(b) Mortality: Unisex Pension 1984 table with mortality
rates set back 3 years;
provided that in the case of a lump sum payment made pursuant to
Section 6.6 the interest rate shall be the interest rate used by
the Pension Benefit Guaranty Corporation to value immediate or
deferred annuities, whichever is applicable, for plans
terminating as of the first day of the Plan Year which contains
the commencement date.
"Actuary" means a member of the Society of Actuaries or of
the American Academy of Actuaries who is enrolled by the Joint
Board for the Enrollment of Actuaries.
"Annual Compensation" means the total compensation received
by an Employee from the Employer during a Plan Year as reported
on Form W-2 for Federal income tax purposes, including
specifically base salary, wages and overtime pay, but excluding
any committee fees, bonuses and awards and also excluding any
Employer contribution under The Merchants Bank Employee Stock
Ownership Plan or under any group life insurance or other
employee pension benefit plan or employee welfare benefit plan.
For purposes of this Section, Annual Compensation shall also
include salary reduction contributions made on behalf of an
Employee to a plan maintained under Code Section 125 or
401(k)(2). Annual Compensation shall be limited to a maximum of
$200,000, as adjusted by the Secretary of Treasury at the same
time and in the same manner as under Code Section 415(d).
Effective January 1, 1994, Annual Compensation shall be limited
to an amount necessary to comply with Code Section 401(a)(17).
"Beneficiary" means any individual or entity entitled to
receive benefits upon the death of any person covered by the
Plan.
"Break in Service" means any Plan Year in which an Employee
completes less than 501 Hours of Service.
"Date of Employment" means the first day in which an Employ
ee completes an Hour of Service. "Date of Reemployment" means
the first day following the last Break in Service in which an
Employee completes an Hour of Service.
"Date of Termination" means the last day on which an Employ
ee completes an Hour of Service due to voluntary or involuntary
termination of employment.
"Direct Rollover" means payment by the plan to the eligible
retirement plan specified by the distributee.
"Distributee" means an Employee or former Employee. In
addition, the Employee's or former Employee's surviving spouse
and the Employee's or former Employee's spouse or former spouse
who is the alternate payee under a qualified domestic relations
order, as defined in Section 414(p) of the Code, are distributees
with regard to the interest of the spouse or former spouse.
"Effective Date" means January 1, 1994, which is the date
that this amended and restated Plan generally became effective,
except as otherwise herein specifically provided.
"Eligible Retirement Plan" means 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.
"Eligible Rollover Distribution" means 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
includible in gross income (determined without regard to the
exclusion for net unrealized appreciation with respect to
Employer securities).
"Employee" means any person employed by the Employer.
Effective January 1, 1987, the term Employee shall include any
leased employee as described in Section 414(n) of the Code,
provided, however, that no such leased employee shall be thereby
eligible to participate in the Plan. The term "leased" employee
means any person (other than an Employee of the recipient) who
pursuant to an agreement between the recipient and any other
person ("leasing organization") has performed services for the
recipient (or for the recipient and related persons determined in
accordance with Section 414(n)(6) of the Code) on a substantially
full-time basis for a period of at least one year, and such
services are of a type historically performed by employees in the
business field of the recipient employer. Contributions or
benefits provided a leased employee by the leasing organization
which are attributable to services performed for the recipient
employer shall be treated as provided by the recipient employer.
A leased employee shall not be considered an employee of the
recipient if: (i) such employee is covered by a money purchase
pension plan providing: (1) a nonintegrated employer
contribution rate of at least 10 percent of compensation, but
including amounts contributed pursuant to a salary reduction
agreement which are excludable from the employee's gross income
under Sections 125, 402(a)(8), 402(h), or 403(b) of the Code, (2)
immediate participation, and (3) full and immediate vesting, and
(ii) leased employees do not constitute more than 20 percent of
the recipient's non-highly compensated workforce.
"Employer" or "Company" means The Merchants Bank, The
Merchants Trust Company and any subsidiary, affiliated or related
company which adopts the Plan with the consent of The Merchants
Bank.
"ERISA" means the Employee Retirement Income Security Act of
1974 (P.L. 93-406) and any amendments or revisions which may be
enacted thereto and regulations which may be promulgated
thereunder.
"Final Average Compensation" means the average of a Member's
Annual Compensation over the five (5) consecutive Plan Years out
of any ten (10) consecutive Plan Years prior to the date of
determination of Final Average Compensation which will produce
the highest average. If a Member has less than five (5) Plan
Years of Annual Compensation, Final Average Compensation shall be
his average Annual Compensation over his actual period of service
during which Annual Compensation is received.
"Hour of Service" means:
(a) each hour for which an Employee is paid, or entitled to
payment, for the performance of duties for the
Employer;
(b) each hour for which an Employee is paid, or entitled to
payment, by the Employer on account of a period of time
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 (a) no more than 500 Hours of
Service will be credited under this sub-paragraph (ii)
or under sub-paragraph (iii) below to an Employee on
account of any single continuous period during which an
Employee performs no duties (whether or not such period
occurs in a single Plan Year), and (b) payment shall
not be deemed to be made by the Employer if such
payment is made or due under a plan maintained solely
for the purpose of complying with applicable workmen's
compensation, unemployment compensation, disability
insurance laws or if such payment is solely in the
nature of reimbursement to the Employee for medical or
medically related expenses; and
(c) each hour for which back pay, irrespective of
mitigation of damages, is either awarded or agreed to
by the Company, provided that the same Hours of Service
shall not be credited under sub-paragraph (a) or (b)
and under this subparagraph (c).
Solely for purposes of determining whether a Break in
Service has occurred, an individual who is absent from work for
maternity or paternity reasons shall receive credit for the Hours
of Service which would otherwise have been credited to such
individual but for such absence, or in any case in which such
Hours cannot be determined, eight Hours of Service per day of
such absence. For purposes of this paragraph, an absence from
work for maternity or paternity reasons means an absence (i) by
reason of the pregnancy of the individual, (ii) by reason of a
birth of a child of the individual, (iii) by reason of the
placement of a child with the individual, or (iv) for purposes of
caring for such child for a period beginning immediately
following such birth or placement. The Hours of Service credited
under this paragraph shall be credited (i) in the computation
period in which the absence begins if the crediting is necessary
to prevent a Break in Service in that period, or (ii) in all
other cases, in the following computation period.
Subject to the foregoing, the determination of Hours of
Service shall be governed by applicable regulations of the United
States Department of Labor. For purposes of Article II and VII
hereof, Hours of Service shall be computed as though the term
"Employer" includes any corporations which are members of a
controlled group of corporations (as defined in Section 414(b) of
the Code); all trades or businesses (whether or not incorporated)
which are under common control (as defined in Section 414(c) of
the Code); all members of affiliated service groups (as defined
in Section 414(m) of the Code); and any other entity required to
be aggregated with the Employer pursuant to regulations under
Section 414(o) of the Code.
Hours of Service shall be credited according to Title 29,
Code of Federal Regulations, Section 2530.200b-2(c), which
regulation is hereby incorporated into the Plan by reference.
In the case of Employees for whom hourly records are
maintained, Hours of Service shall be ascertained from the
records of hours worked or hours for which payment is made or
owing in accordance with (a), (b), and (c) above.
In the case of Employees whose compensation is not
determined on the basis of certain amounts of compensation for
each hour worked during a given period, Hours of Service shall be
determined on the basis of 45 Hours of Service per week if under
(a), (b) or (c) above such Employee would be credited with at
least one Hour of Service during the week.
"Member" means an Employee who is eligible to participate
under Article III of the Plan. "Member" shall not include
Retired Member, Terminated Member, or any former Member who has
become ineligible for any reason.
"Plan" means The Merchants Bank Pension Plan as stated
herein and as it may be amended from time to time.
"Plan Administrator" or "Administrator" means The Merchants
Bank.
"Plan Year" means the period beginning each January 1 and
ending December 31.
"Primary Social Security Benefit" means the yearly Primary
Insurance Amount for which the Member is eligible at age 65 under
the Social Security Act as in effect on his Normal Retirement
Date or his Date of Termination, if earlier. If a Member's Date
of Termination occurs prior to his Normal Retirement Date, the
Social Security Benefit to which such Member will be entitled at
age 65 will be based on the assumption that such Member will
continue to receive, until age 65, Annual Compensation in the
same amount as received in the calendar year immediately
preceding the date of determination of his Accrued Benefit.
Where past earnings records are not available the Plan
Administrator may estimate the Primary Social Security Benefit of
a Member using reasonable assumptions applied in a
nondiscriminatory manner. This estimated Primary Social Security
Benefit shall take into account the Member's Annual Compensation,
with any actual earnings history that is not available to be
estimated using national average wages as used by the Social
Security Administration for indexing wages. However, to the
extent that the Member furnishes or causes to be furnished a
complete record of past earnings for purposes of calculating his
Primary Social Security Benefit, the Plan Administrator shall
recalculate his Accrued Benefit and make whatever adjustments are
necessary to his Retirement Benefit payments.
"Retired Member" means a former Member who retired and
commenced receiving benefits or who retired and is eligible for
immediate benefits in accordance with Sections 4.1, 4.2 or 4.3 of
Article IV or a former Terminated Member who has retired and
commenced to receive benefits in accordance with Article VII.
"Section 401(a)(17) Member" means a Member whose current
Accrued Benefit as of a date on or after the first day of the
first plan year beginning on or after January 1, 1994, is based
on compensation per year beginning prior to the first day of the
first plan year beginning on or after January 1, 1994, that
exceeded $150,000.
"Sponsor" means the Employer.
"Spouse" means the person to whom a Member, Retired Member,
or Terminated Member is legally married, provided that if because
of either death or divorce they shall not be legally married for
at least one year, such person shall not be deemed a spouse.
"Terminated Member" means a former Member who has terminated
employment with the Employer prior to being eligible for
immediate Retirement Benefit payments and has a nonforfeitable
right to a benefit in accordance with Article VII.
"Trust Agreement" means a written Declaration of Trust
between the Employer and the Trustee.
"Trust Fund" means the assets held by the Trustee for the
Plan in accordance with a Trust Agreement.
"Trustee" means the individuals or entity so designated by
the Trust Agreement.
Section 1.2. Miscellaneous.
(a) Wherever used herein a pronoun in the masculine gender
shall be considered as including the feminine gender
unless the context clearly indicates otherwise, and
wherever used herein a pronoun in the singular form
shall be considered as being in the plural form unless
the context clearly indicates otherwise.
(b) If any term or provision of the Plan as presently in
effect or as amended from time to time, or the
application thereof to any payments or circumstances,
shall to any extent be invalid or unenforceable, the
remainder of the Plan, and the application of such term
or provision to payments or circumstances other than
those as to which it is invalid or unenforceable, shall
not be affected thereby, and each term or provision of
the Plan shall be valid and enforced to the fullest
extend permitted by law.
(c) The headings in the Plan are inserted for convenience
of reference only and shall have no effect upon the
meaning of the provisions hereof.
(d) The Plan shall be governed and construed, enforced and
administered in accordance with the laws of the State
of Vermont, except as preempted by Federal law.
ARTICLE II
Service
For purposes of the Plan, an Employee's Service with the
Employer shall be determined in accordance with the following
provisions:
Section 2.1. Participation Service. An Employee's
Participation Service shall determine his eligibility for
membership in the Plan in accordance with Article III.
An Employee shall earn a year of Participation Service if he
completes one thousand (1,000) Hours of Service in the 12-month
period commencing on his Date of Employment. If the Employee
fails to earn a year of Participation Service in this initial
period, the Employee shall earn a year of Participation Service
in the first Plan Year beginning after such Date of Employment in
which he completes one thousand (1,000) Hours of Service.
Section 2.2. Credited Service. An Employee's Credited
Service shall be equal to the sum of his Credited Service earned
for employment before January 1, 1976, and earned for employment
on and after January 1, 1976, and shall determine his right to a
nonforfeitable benefit in accordance with Article VII and the
amount of his Accrued Benefit in accordance with Article V.
An Employee's Credited Service before January 1, 1976, shall
be determined in accordance with the terms of the Plan as in
effect on December 31, 1975, except that (i) Credited Service
shall not exclude periods of service prior to the Employee's 25th
birthday and (ii) if an Employee was employed by the Catamount
Bank on December 31, 1980 his Credited Service prior to January
1, 1976, shall be determined in accordance with the Catamount
Bank Pension Plan as in effect on December 31, 1975.
An Employee's Credited Service after December 31, 1975 shall
be equal to the number of Plan Years in which an Employee
completes one thousand (1,000) Hours of Service, including
employment with the Catamount Bank from January 1, 1976 through
December 31, 1980. Prorated Credited Service will be given for
any Plan Year after December 31, 1975 in which an Employee's Date
of Employment, Date of Termination or Retirement Date occurs, in
the ratio not to exceed one (1), in which his Hours of Service in
such year bears to one thousand (1,000).
Section 2.3. Interrupted Credited Service. If an Employee
whose Credited Service is interrupted after December 31, 1975 is
subsequently reemployed, and he thereafter meets the definition
of Employee and earns a year of Credited Service, his prior
Credited Service shall be reinstated as of his reemployment date
if:
(a) he had met the requirements for a benefit under Article
VII at the time his prior Credited Service was
interrupted; or
(b) the number of his consecutive One-Year Breaks in
Service from the time his prior Credited Service is
deemed interrupted to his date of reemployment does not
equal or exceed five (5).
Otherwise, such prior Credited Service shall be forfeited.
Section 2.4. Previous Plans and Employers.
(a) For purposes of the calculation of Participation
Service and Credited Service, Hours of Service as an
employee of the Sterling Trust Company prior to April
1, 1985 shall not be counted.
(b) Employees of the Catamount Bank who became Employees of
The Merchants Bank on January 1, 1981 due to the
acquisition of the former Bank by the latter Bank shall
have their service as employees of the Catamount Bank
prior to January 1, 1981 be counted as Credited Service
for purposes of the Plan, in accordance with this
Article II.
(c) For purposes of the calculation of benefit amounts in
Article V, service as an employee of Hardwick Trust
Company prior to March 1, 1977 shall not be counted.
(d) An employee of the St. Johnsbury Branch Office of the
First National Bank of Vermont who became an Employee
of The Merchants Bank on July 6, 1985 as a direct
result of the acquisition of the St. Johnsbury Branch
Office by The Merchants Bank shall become a Member of
The Merchants Bank Pension Plan as of July 6, 1985, if
such Employee was a member of the Retirement Plan for
Employees of the First National Bank of Vermont on July
5, 1985, or if such Employee would otherwise satisfy
the requirements for participation in The Merchants
Bank Pension Plan. For such Employees, periods of
employment after June 30, 1976 and prior to July 6,
1985 with the First National Bank of Vermont shall be
recognized as Participation Service or Credited
Service, as the case may be, for all purposes under The
Merchants Bank Pension Plan. Furthermore, each such
Employee shall be 100% vested in the monthly Accrued
Benefit shown for such Employee in Appendix A herein,
so that the monthly Accrued Benefit and vested Accrued
Benefit of each such employee shall, at any date of
determination following July 5, 1985, be not less than
the monthly Accrued Benefit shown for such Employee in
Appendix A.
ARTICLE III
Participation
Section 3.1. Membership. Each Employee who was a Member of
the Plan on December 31, 1993 shall be a Member of the Plan
January 1, 1994, the Effective Date of this amendment and
restatement of the Plan.
Section 3.2. Age and Service Requirements. Each other
Employee will be included in the Plan as a Member on the first
day of the month coincident with or next following the date on
which he has both:
(a) attained the age of 21, and
(b) completed one year of Participation Service.
Section 3.3. Subsequent Rehires. If an Employee who has
satisfied the requirements of Sections 3.1 or 3.2 has a Date of
Termination and is subsequently rehired by the Employer, he will
become a Member of the Plan on the first day of the month
coincident with or next following his Date of Reemployment.
Section 3.4. Catamount Bank Pension Plan. A Member of the
Catamount Bank Pension Plan on December 31, 1980 who was
receiving retirement benefit payments under such Plan became a
Retired Member of the Plan on January 1, 1981. A Member of the
Catamount Bank eligible for deferred vested benefits became a
Terminated Member of the Plan as of January 1, 1981. In both
cases Retirement Benefit payments shall be determined in
accordance with the Catamount Bank Pension Plan as in effect on
December 31, 1980.
ARTICLE IV
Benefit Eligibility
Section 4.1. Normal Retirement Date. A Member's Normal
Retirement Date shall be the first day of the month coincident
with or next following the Member's 65th birthday.
Section 4.2. Early Retirement Date. A Member may elect to
retire on an Early Retirement Date which shall be the first day
of any month, as specified by the Member, following both
(a) the completion of 10 years of Credited Service, and
(b) the Member's 55th birthday;
provided that a Member of The Merchants Bank Pension Plan on
December 31, 1980 who became a Member of the Plan on January 1,
1981 may elect to retire on an Early Retirement Date which shall
be the first day of any month following his 55th birthday
regardless of his Credited Service.
Section 4.3. Deferred Retirement Date. The Deferred
Retirement Date of any Member who is in employment with the
Employer beyond his Normal Retirement Date shall be the first day
of the month coincident with or next following the Member's Date
of Termination.
Section 4.4. Eligibility for Pre-Retirement Death Benefit.
A Pre-Retirement Death Benefit as provided in Section 5.8 of
Article V shall be payable to the Spouse of a deceased Member who
was either:
(a) a Member who was eligible to receive an Early
Retirement Benefit in accordance with Section 4.2,
including a Retired Member who had retired on an Early
Retirement Date and elected to defer receiving benefit
payments in accordance with Section 5.5 of Article V,
or
(b) any other Member or Terminated Member who had a
nonforfeitable right to his Accrued Benefit in
accordance with Article VII.
Subject to Section 4.5, if a Member or Terminated Member who
is not eligible for coverage by the Pre-Retirement Death Benefit
dies, then no benefit shall be payable upon his death to his
surviving Spouse except for any required employee contribution
with interest as determined in accordance with Section 7.6 of the
Plan.
Section 4.5. Eligibility for and Amount of Alternative
Death Benefit. An "Alternative Death Benefit" shall be payable
to the Beneficiary (determined in a manner similar to that
provided under Section 6.4 of Article VI) of:
(a) a Retired Member who dies (i) after retiring on his
Early Retirement Date and electing to defer receiving
payments in accordance with Section 5.5 of Article V
and (ii) before commencement of such benefit payments,
or
(b) a Member who dies after having attained his Normal
Retirement Date and while employed by the Company;
provided, however, that if he is married to a Spouse upon his
date of death such Alternative Death Benefit shall be payable
only if the Member has waived the Pre-Retirement Death Benefit
with appropriate spousal consent (in a manner similar to that
provided under Section 6.2(f)(iii) of Article VI and subject to
the notification requirements of Section 6.2(f)(vi) of Article
VI).
The Alternative Death Benefit shall be payable in such
amount and form as if the Member or Retired Member had commenced
the payment of his benefits immediately prior to his death in the
form of a Life Annuity with 180 Monthly Payments Guaranteed (or,
prior to January 1, 1992, a Life Annuity with 120 Monthly
Payments Guaranteed) pursuant to Section 6.4 of Article VI.
ARTICLE V
Benefit Amounts
Section 5.1. Normal Retirement Benefit. The annual Normal
Retirement Benefit of a Member who retires on his Normal
Retirement Date and who has 30 or more years of Credited Service
on his Normal Retirement Date shall be equal to the sum of:
(a) 60% of the Member's Final Average Compensation less 50%
of his Primary Social Security Benefit, plus
(b) 1/2 of 1% of the Member's Final Average Compensation
multiplied by his Credited Service in excess of 30
years.
The annual Normal Retirement Benefit of a Member who has
less than 30 years of Credited Service on his Normal Retirement
Date shall be equal to the product of:
(c) 60% of the Member's Final Average Compensation less 50%
of his Primary Social Security Benefit, times
(d) a fraction whose numerator is the Member's Credited
Service on his Normal Retirement Date and whose
denominator is thirty.
The monthly Normal Retirement Benefit of a Member shall be
equal to the annual benefit as determined above divided by
twelve.
In no event shall the monthly amount of Normal Retirement
Benefit for an Employee who was a Member of the Plan on December
31, 1980 and who has at least three (3) years of Credited Service
on his Normal Retirement Date be less than $50.00.
Section 5.2. Accrued Benefit.
(a) A Member's Accrued Benefit at any time prior to his
Normal Retirement Date shall be equal to the amount of
Normal Retirement Benefit, figured in accordance with
Section 5.1, that the Member would receive if he
remained in the employ of the Employer until his Normal
Retirement Date but based upon his Final Average
Compensation as of the date such Accrued Benefit is
being determined, multiplied by a fraction. The
fraction shall be that in which the numerator is the
Member's Credited Service completed on the date his
Accrued Benefit is to be determined and the denominator
is the Credited Service the Member would complete if he
remained in the employ of the Employer until his Normal
Retirement Date.
(b) Unless otherwise provided under the Plan, each Section
401(a)(17) Member's Accrued Benefit under this Plan
will be the greater of the Accrued Benefit determined
for the Member under (i) or (ii) below:
(i) The Member's Accrued Benefit determined with
respect to the benefit formula applicable for the
Plan Year beginning on or after January 1, 1994,
as applied to the Member's total Credited Service
taken into account under the Plan for the purposes
of benefit accruals; or
(ii) The sum of:
a. The Member's Accrued Benefit as of the last
day of the last Plan Year beginning before
January 1, 1994, frozen in accordance with
Section 1.401(a)(4)-(13) of the Treasury
Regulations, and
b. The Member's Accrued Benefit determined under
the benefit formula applicable for the Plan
Year beginning on or after January 1, 1994,
as applied to the Member's years of Credited
Service for Plan Years beginning on or after
January 1, 1994, for purposes of benefit
accruals.
(c) In no event will the Accrued Benefit of a Member at any
time be less than the benefit he had accrued under the
Plan on December 31, 1988.
(d) A Member's monthly Accrued Benefit shall be equal to
his annual Accrued Benefit divided by twelve.
Section 5.3. Deferred Retirement Benefit. Effective as of
January 1, 1988, the monthly amount of Deferred Retirement
Benefit payable to a Member who retires on a Deferred Retirement
Date shall be the greater of (i) the Actuarial Equivalent of his
Normal Retirement Benefit or (ii) his Normal Retirement Benefit
determined as of his Deferred Retirement Date as if such Deferred
Retirement Date were his Normal Retirement Date.
Section 5.4. Minimum Normal Retirement Benefit. The annual
Retirement Benefit of a Member shall not be less than 1% of his
Final Average Compensation multiplied by his Credited Service not
in excess of ten (10) years.
Section 5.5. Early Retirement Benefit. A Member who
retires on an Early Retirement Date may elect to have his
Retirement Benefit payments commence immediately upon retirement
or may defer commencement of benefit payments until the first day
of any month up to and including his Normal Retirement Date. The
monthly amount of Early Retirement Benefit payable to a Member
who retires on an Early Retirement Date shall be equal to his
monthly Accrued Benefit if payable on his Normal Retirement Date
and otherwise shall be equal to his monthly Accrued Benefit
reduced by 5/9ths of 1% for each of the first 60 months and by
5/18ths of 1% for each of the next 60 months by which
commencement of benefit payments precedes his Normal Retirement
Date.
Section 5.6. Certain Other Minimum Benefits. In no event
will the Retirement Benefit determined for a Member on a Normal,
Deferred or Early Retirement Date be less than the highest
Retirement Benefit the Member would have received in the same
form of payment had his Credited Service ceased at any time prior
to his Retirement Date when he was eligible to receive an
immediate benefit.
Section 5.7. Life Annuity Payment Assumption. In
determining a Member's Normal, Deferred or Early Retirement
Benefit in accordance with this Article V it is assumed that such
benefit is payable as a Life Annuity as set forth in Article VI.
Benefits payable in accordance with any other form shall be the
Actuarial Equivalent of the Life Annuity form.
Section 5.8. Pre-Retirement Death Benefit Amount. The
amount of Pre-Retirement Death Benefit that shall be payable to
the Spouse of a Member (including a Terminated Member, and a
Retired Member who has deferred commencement of benefit payments)
who is eligible for such coverage in accordance with Section 4.4
shall be as follows: if a Member is survived by a Spouse on the
date of his death such spouse shall be entitled to receive a
monthly benefit commencing on the first day of the month
coinciding with or next following the death of the Member equal
to the monthly benefit which such Spouse would have received had
the Member retired on the date of his death and elected to
receive immediate payments under the Joint and Survivor Annuity
Form of Payment with 50% Continuation to his Spouse as provided
in Article VI.
For purposes of determining the Death Benefit payable to the
Spouse of a Member or Terminated Member, who was not eligible for
immediate Early Retirement Benefits upon his death it shall be
assumed that the Member or Terminated Member:
(a) if employed, separated from service on his date of
death,
(b) survived to the date that he would first become
eligible for Retirement Benefits under the Plan,
(c) retired on the date in (b) above with an immediate
Joint and Survivor Annuity with 50% Continuation to the
spouse, and
(d) died on the day after the date of (c) above.
The benefit payable to the Spouse will be paid as of the
first day of the month coincident with or next following the date
of death of the Member or Terminated Member and will be the
Actuarial Equivalent of the amount the Spouse would have received
under the conditions of (a) through (d) above.
Notwithstanding the foregoing, if the surviving Spouse of
such a Member dies before any benefit payments have been made
under this Section 5.8, such Member shall be deemed to have been
unmarried on the date of his death.
Section 5.9. No Reduction for Increase in Social Security
Benefits. The Normal, Deferred, Early or Death Benefit payable
to a Retired Member, Spouse or Beneficiary who is receiving
benefits under the Plan, or the Accrued Benefit of a Terminated
Member or of a Member who has retired on an Early Retirement Date
and deferred commencement of benefit payments, shall not be
reduced because of any increase in Federal Social Security
Benefits.
Section 5.10. Suspension of Retirement Benefits.
(a) If a Retired Member who is receiving Retirement
Benefits under the Plan is reemployed by the Employer
and completes forty (40) or more Hours of Service in a
calendar month, his Retirement Benefit payments will be
suspended commencing with the payment due in the first
month after the month in which he completes forty (40)
or more Hours of Service. Any such suspensions will be
applied in a consistent and nondiscriminatory manner.
In addition, during the period in which the Member's
benefits are suspended he will be covered under the
death benefit in accordance with Sections 4.4, 4.5 or
5.8, as applicable; however, if the Member's Retirement
Benefits were being paid in a Joint and Survivor
Annuity Form, and the Member dies before he again
retires, his or her spouse shall receive a benefit in
accordance with such Joint and Survivor Annuity Form,
if it is greater than the benefit provided in
accordance with Sections 4.4, 4.5 or 5.8, as
applicable.
(b) If a Retired Member has had his Retirement Benefits
suspended in accordance with this Section, his annual
Accrued Benefit and Credited Service as of his Date of
Retirement or Date of Termination shall be reinstated.
The Retirement Benefit payable upon his subsequent
retirement shall be payable in the same Form of Payment
as his original Retirement Benefit and computed in
accordance with the applicable provisions of the Plan
based upon his age and service as of his subsequent
retirement, or actuarially adjusted to reflect the
Retirement Benefit previously paid.
(c) Effective January 1, 1985, if Retirement Benefits have
been paid in a lump sum in accordance with the terms of
the Plan and if the Member is subsequently reemployed
by the Employer, he shall not accrue any benefits for
service prior to his Date of Reemployment unless such
lump sum is repaid to the Trust Fund before the earlier
of (a) five years from the date on which the Member is
subsequently reemployed or (b) the close of the first
period of five consecutive one-year Breaks in Service
after the distribution of the lump sum, with interest
at the rate determined for purposes of Code Section
411(c)(2)(C), upon which repayment of such benefits
shall be fully restored.
Section 5.11. Forfeitures. Any forfeitures arising from
the termination of employment or death of a Member or for any
other reason shall be applied against the Employer contributions
otherwise required under the Plan and shall not be applied to
increase the benefit any Member would otherwise receive under the
Plan at any time.
Section 5.12. Maximum Retirement Benefit. Effective for
any "Limitation Year" beginning after December 31, 1986, the
limitations of Section 415 of the Code and the regulations
thereunder are hereby incorporated herein by reference, provided,
however, that if the maximum benefit limitations of Section
415(e) of the Code would otherwise be exceeded, the Plan
Administrator shall limit the appropriate Member's benefit
hereunder to the extent required, and each affected Member shall
be notified by the Plan Administrator of such limitation. The
Limitation Year shall be the calendar year.
Section 5.13. Plan Provisions for Benefit Payments
Exclusive. No benefits shall be paid under the Plan except in
the event of retirement, death, termination of employment, or
termination of the Plan, and such benefits will be paid as
expressly provided herein.
ARTICLE VI
Form of Payment of Normal
Early or Deferred Retirement Benefits
Section 6.1. Default Annuity Election. If a Member has a
Spouse at the date that benefit payments begin because of his
Normal, Early or Deferred Retirement and he has not made any
other annuity election provided for in this Article, the
Retirement Benefits payable to him shall be in the form of a
Joint and Survivor Annuity with 50% Continuation to the Spouse.
If a Member has no such Spouse at the date that benefits begin
because of his Normal, Early or Deferred Retirement and he has
not made any other annuity election provided for in this Article,
the Retirement Benefits payable to him shall be in the form of a
Life Annuity. All forms of payment other than a Life Annuity
shall be the Actuarial Equivalent of the Life Annuity Form.
Section 6.2. Joint and Survivor Annuity Form.
(a) The Joint and Survivor Annuity Form shall provide for
the payment of Retirement Benefits to the Retired
Member commencing as of his actual retirement date and
continuing during his lifetime and shall further
provide for the continuation of Retirement Benefits to
his Spouse, if living, after the death of the Retired
Member. The amount of such Retirement Benefits payable
to his surviving Spouse shall be a specified percentage
of the Retirement Benefits then being paid to the
Retired Member determined as of the first day of the
month in which the Retired Member dies.
(b) The Member must designate in writing to the Plan
Administrator the specified percentage of his
Retirement Benefit to be payable to his surviving
Spouse upon his death. He may elect either a 100%, 66-
2/3% or 50% continuation. If no election in writing is
received by the Plan Administrator before a Member's
Retirement Date such Member shall be deemed to have
elected the Joint and Survivor Annuity Form with 50%
Continuation, and benefits will be paid accordingly.
(c) The payment of Retirement Benefits to the surviving
Spouse shall commence on the first day of the month
following the month in which the Retired Member dies,
and shall continue monthly with the last payment due
for the month in which the surviving Spouse's death
occurs.
(d) If the Spouse predeceases the Retired Member, the
Retirement Benefit payments will continue in the same
amount and will cease upon the Retired Member's death.
(e) If the Member dies before his first Retirement Benefit
payment becomes due, benefits to a surviving Spouse, if
any, shall be payable in accordance with Sections 4.4
and 5.8 (Pre-Retirement Death Benefit), subject to
Section 4.5. If, however, a Joint and Survivor Annuity
Form of payment is in effect because it has been
specifically elected in accordance with (b), or because
no election has been received from the Member, and if
the Member dies on or after his Normal Retirement Date
and prior to the commencement of Retirement Benefit
payments, then his Spouse, if living, shall be entitled
to Retirement Benefit payments in an amount equal to
the greater of the amount which would have been payable
to the Spouse in accordance with Sections 4.4 and 5.8
(subject to Section 4.5) and the amount payable under
this Form.
(f) General Provisions.
(i) It shall be the Member's sole responsibility to
keep the Employer informed of his marital status.
(ii) The Member may revoke this form in favor of any
other form offered hereunder, if he does so in
writing to the Employer prior to the commencement
of Retirement Benefit payments.
(iii) If a Member has a Spouse and elects to
receive a form of payment other than a 100%, 66-
2/3% or 50% Joint and Survivor Annuity as
described in (a) and (b) of this Section 6.2, then
both the Member and his Spouse must consent in
writing, on a form provided by the Plan
Administrator in the presence of a Plan
representative or a Notary Public. If such
written consent is not received by the Plan
Administrator, retirement benefit payments will be
paid in the form of a 50% Joint and Survivor
Annuity.
(iv) The election period to waive the Joint and
Survivor Annuity shall be the 90-day period ending
on the Annuity Starting Date.
(v) For purposes of this Section, the "Annuity
Starting Date" means the first day of the first
month for which an amount is received as an
annuity.
(vi) The Plan Administrator shall provide the Member
within a reasonable period of time before the
Annuity Starting Date (and consistent with
Treasury regulations) a written explanation of:
(A) the terms and conditions of the Joint and
Survivor Annuity;
(B) the Member's right to make an election to
waive the Joint and Survivor Annuity;
(C) the right of the Member's Spouse to consent
to any election to waive the Joint and
Survivor Annuity; and
(D) the right of the Member to revoke such
election and the effect of such revocation.
Section 6.3. Life Annuity Form.
(a) A Member may elect a Life Annuity which provides for a
Retirement Benefit payable to the Member, commencing as
of his actual Retirement date and ceasing with the last
payment due for the month in which the Retired Member's
death occurs.
(b) This Form may be elected by the Member by written
notice to the Employer and this form will automatically
take effect if a Member has no surviving Spouse on the
date of his retirement and if no other form of payment
has been elected by the Member.
(c) If this form has been elected by a Member who has a
Spouse and if the Member dies on or after his 65th
birthday but before the commencement of Retirement
Benefit payments, his Spouse shall receive monthly
benefits in accordance with Sections 4.4 and 5.8.
Section 6.4. Life Annuity Form with 120 or 180 Monthly
Payments Guaranteed.
(a) A Member may elect a Life Annuity with either 120 or
180 Monthly Payments Guaranteed. This Form would
provide for a Retirement Benefit payable to the Retired
Member commencing as of his actual retirement date and
continuing during his lifetime with the guarantee that
not less than a total of 120 or 180, as elected,
monthly Retirement Benefit payments will be made to the
Retired Member and his named Beneficiary.
(b) If this Form is elected and the Retired Member dies
prior to the receipt of 120 or 180, as applicable,
monthly payments, the balance of the 120 or 180, as
applicable, monthly payments will be paid to the
Retired Member's named Beneficiary until the total 120
or 180, as applicable, monthly payments have been made
to the Retired Member and his named Beneficiary. The
first such payment to the Beneficiary shall be due and
payable as of the first day of the month following the
Retired Member's death.
(c) In the event there is no named Beneficiary living at
the death of the Retired Member, the balance of the 120
or 180, as applicable, guaranteed monthly payments will
become payable to the Retired Member's estate or, at
the option of the Employer, shall be commuted to a
single sum and shall be paid to the Retired Member's
estate.
(d) If the Beneficiary of a deceased Retired Member should
die prior to receiving the balance of the 120 or 180,
as applicable, guaranteed monthly payments, such
balance shall continue to be paid to the Beneficiary's
executors or administrators or, at the option of the
Employer, shall be commuted to a single sum and shall
be paid to the Beneficiary's executors or
administrators.
(e) No monthly benefit will be payable to a Beneficiary
under this form of payment if the Member dies before
his first Retirement Benefit payment becomes due.
(f) A Member may not elect a Life Annuity Form with 120 or
180 Monthly Payments Guaranteed if the 120 or 180, as
applicable, month guaranteed period exceeds the life
expectancy of the Member or the joint and last survivor
life expectancy of the Member and his designated
Beneficiary. The determination of life expectancy is
based upon the ages of the Member and his Beneficiary
as of the date that Retirement Benefit payments
commence and the life expectancy tables as provided in
Section 1.72-9 of the Code.
Section 6.5. Excess Employee Contributions. If upon the
death of the last designated payee under Sections 6.2, 6.3 or 6.4
above the required employee contributions with interest, if any,
of a Retired Member on his Retirement Date exceed the sum of
monthly payments made, then such excess shall be payable to the
Retired Member's Beneficiary or to his estate.
Section 6.6. Certain Minimal Lump Sum Payments.
(a) Retirement Benefit payments shall be made to a Retired
or Terminated Member, or the person designated by him
to receive payments upon his death, if applicable, in a
lump sum where the lump sum value of the Member's
Accrued Benefit does not exceed $3,500 and has never
exceeded $3,500 at the time of a prior distribution.
Such lump sum payment is to be the Actuarial Equivalent
of such monthly Retirement Benefit.
(b) A Member who has remained in service after his Normal
Retirement Date and has attained age 70-1/2 on or after
January 1, 1988 shall receive a lump sum payment of the
Actuarial Equivalent value of his entire Accrued
Benefit and a lump sum payment of such value of any
additional Accrued Benefit in each subsequent Plan Year
so long as no such lump sum value exceeds or ever
exceeded at the time of any prior distribution $3,500.
(c) No distribution may be made under this Section 6.6
after the Annuity Starting Date unless the Member and
the Member's Spouse (or where the Member has died, the
Surviving Spouse) consent in writing to such
distribution.
Section 6.7. No Right to Pay Interest to Beneficiary Only.
Anything in the Plan to the contrary notwithstanding, the Member
shall not have the right prior to his retirement irrevocably to
elect to have all or part of his interest in the Plan, which
would otherwise become available to him during his lifetime, paid
only to his Beneficiary after his death.
Section 6.8. No Death Beneficiary Consent. In no event
shall the consent of any person entitled to receive payment upon
the death of a Member be required as a condition to the right of
a Member to revoke or change any option previously elected.
Section 6.9. Effect of Reemployment. If a Member who is
receiving benefits under the Plan is reemployed by the Employer
and completes 40 or more Hours of Service per month, his
Retirement Benefit payments shall cease with the payment due in
the first month in which he completes 40 or more Hours of
Service. If and when a Member subsequently retires, he shall
retire in accordance with Section 5.10.
Section 6.10. Timing of Benefits Payments. It is the
intent of the Plan that all benefits be paid promptly when due.
In the absence of any inability to determine the amount of
benefit payable or the eligibility for a benefit due to the lack
of adequate information on date of birth of a Member or Spouse or
the date of marriage, the first benefit shall be paid no later
than the 60th day after the close of the latest Plan Year in
which:
(a) the Member attains age 65;
(b) the Member reaches the 10th anniversary of his date of
commencement of participation in the Plan, or of the
Catamount Bank Pension Plan, for those Employees who
were participants in such plan on December 31, 1980;
(c) the Member's Date of Termination occurs;
(d) Notwithstanding any provision in the Plan to the
contrary, effective for Plan Years beginning after
December 31, 1984, the distribution of a Member's
benefits, whether made under the Plan or through the
purchase of an annuity contract, shall be made in
accordance with the following requirements and shall
otherwise comply with Section 401(a)(9) of the Code and
the regulations thereunder (including Section
1.401(a)(9)-2 of the Federal Income Tax Regulations),
the provisions of which are incorporated herein by
reference.
(i) A Member's benefits shall be distributed to him no
later than April 1st of the calendar year
following the later of (x) the calendar year in
which the Member attains age 70-1/2 or (y) the
calendar year in which the Member retires,
provided, however, that this clause (y) shall not
apply in the case of a Member who is a "five
percent (5%) owner" at any time during the five
Plan Year period ending in the calendar year in
which he attains age 70-1/2 or, in the case of a
Member who becomes a five percent (5%) owner
during any subsequent Plan Year, clause (y) shall
no longer apply and the required beginning date
shall be the April 1st of the calendar year
following the calendar year in which such
subsequent Plan Year ends. Alternatively,
distributions to a Member must begin no later than
the applicable April 1st as determined under the
preceding sentence and must be made over the life
of the Member (or the lives of the Member and the
Member's designated Beneficiary) or a period
certain measured by the life expectancy of the
Member (or the life expectancies of the Member and
his designated Beneficiary) in accordance with
applicable regulations.
Notwithstanding the foregoing, clause (y) above
shall not apply to any Member unless the Member
had attained age 70-1/2 before January 1, 1988 and
was not a five percent owner at any time during
the Plan Year ending with or within the calendar
year in which the Member attained age 66-1/2 or
any subsequent Plan Year.
(ii) Additionally, for calendar years beginning before
1989, distributions may also be made under an
alternative method which provides that the then
present value of the payments to be made over the
period of the Member's life expectancy exceeds
fifty percent (50%) of the then present value of
the total payments to be made to the Member and
his Beneficiaries.
(iii) For purposes of this Section, the life
expectancy (or joint and last survivor expectancy)
shall be calculated using the attained age of the
Member (or designated beneficiary) as of the
Member's (or designated beneficiary's) birthday in
the applicable calendar year. The applicable
calendar year shall be the first distribution
calendar year. If annuity payments commence
before the required beginning date, the applicable
calendar year is the year such payments commence.
Life expectancy and joint and last survivor
expectancy shall be computed using the return
multiplies in Tables V and VI of Section 1.72-9 of
the Federal Income Tax Regulations.
Section 6.11. Distribution Upon Death. Notwithstanding any
provision to the contrary:
(a) If the distribution of a Member's interest had begun in
accordance with a method selected in this Article VI
and the Member dies before his entire interest has been
distributed to him, the remaining portion of such
interest shall be distributed at least as rapidly as
under the method of distribution selected pursuant to
this Article VI as of his date of death.
(b) If a Member dies before he has begun to receive any
distributions of his interest under the Plan, his
entire interest shall be distributed to his
Beneficiaries within five (5) years after his death.
(c) The five (5) year distribution requirement of Section
6.11(b) shall not apply to any portion of the deceased
Member's interest which is payable to or for the
benefit of a designated Beneficiary. In such event,
such portion may be distributed over the life of such
designated Beneficiary (or over a period not extending
beyond the life expectancy of such designated
Beneficiary) provided such distribution begins not
later than one (1) year after the date of the Member's
death (or such late date as may be prescribed by
Federal Income Tax Regulations).
In the event the Member's Spouse is his designated
Beneficiary, the requirement that distributions commence within
one (1) year of a Member's death shall not apply. In lieu
thereof, such distribution must commence no later than the date
on which the deceased Member would have attained age seventy and
one-half (70-1/2). If the surviving Spouse dies before the
distribution to such Spouse begins, then the five (5) year
distribution requirement of Section 6.11(b) shall apply as if the
Spouse were the Member.
ARTICLE VII
Termination of Employment
Section 7.1. Member Terminating After His 65th Birthday. A
Member who terminated his employment with the Employer on or
after his 65th birthday shall have a nonforfeitable, or vested,
right to 100% of his monthly Accrued Benefit determined as of his
65th birthday regardless of his Credited Service.
Section 7.2. Member With Less Than Five Years of Credited
Service. A Member who has less than five (5) years of Credited
Service who has a Date of Termination for any reason shall
forfeit all rights to benefits under the Plan.
Section 7.3. Member With More Than Five Years of Credited
Service. A Member who has completed five (5) or more years of
Credited Service and who has a Date of Termination for any reason
other than death prior to his Normal Retirement Date or his Early
Retirement Date shall have a nonforfeitable, or vested, right to
his Accrued Benefit, determined as of his Date of Termination.
Section 7.4. Members Meeting Early Retirement Date
Requirements. A Member who has a Date of Termination after
meeting the requirement of Section 4.2, Early Retirement Date,
shall be 100% vested in his monthly Accrued Benefit regardless of
his Credited Service.
Section 7.5. Forms of Benefit. A Member's vested monthly
Accrued Benefit shall be payable at the Member's Normal
Retirement Date in a form as determined in accordance with
Article VI. If a Member meets the years of Credited Service
requirements as set forth in Article IV, Section 4.2(a) at his
Date of Termination of employment and provided that such Member
subsequently meets the age requirement as specified in Article
IV, Section 4.2(b), such Terminated Member may elect, in lieu of
a benefit payable at Normal Retirement Date, to receive a benefit
payable on an Early Retirement Date. Such Early Retirement
Benefit will be equal to the vested monthly Accrued Benefit to
which the Terminated Member would be entitled at his Normal
Retirement Date reduced in accordance with Section 5.5.
Section 7.6. Certain Pre-February 1, 1971 Employee
Contributions. Notwithstanding the preceding Sections of this
Article VII, a Member who made required employee contributions to
the Plan prior to February 1, 1971, when such contributions were
discontinued, shall always have a vested right to 100% of such
contributions, with interest, regardless of his Credited Service.
Interest on required employee contributions shall be compounded
annually after December 31, 1975 at no less than the rate in
effect under Code Section 411(c)(2)(C) and (D).
A Member who retires or who terminates employment with a
vested right to all or a part of his Accrued Benefit in
accordance with Section 7.3 and who elects a refund of his own
contributions, with interest, prior to the date that Retirement
Benefits commence shall retain a vested right to that part of his
Accrued Benefit derived from Employer contributions which shall
be equal to his Accrued Benefit at his Retirement Date or Date of
Termination reduced by
(a) the amount of his contributions with interest as of his
Retirement Date or Date of Termination carried forward
at the rate of interest prescribed for accumulating
employee contributions to the date which would have
been his Normal Retirement Date, multiplied by
(b) the appropriate conversion factor then in effect under
Code Section 411(c)(2)(B) and (D).
Section 7.7. No Nonforfeitable Rights in Certain Instances.
Subject to Section 4.5, a Member shall not retain a nonforfeit
able right to a benefit if he:
(a) dies before his Normal Retirement Date without being
eligible for the Pre-Retirement Death Benefit in
accordance with Section 4.4, or
(b) dies as a Terminated Member after his Date of
Termination of employment but before his Normal
Retirement Date, except as provided in Section 4.4,
other than the refund to his beneficiary or estate of any
required employee contributions, with interest.
Section 7.8. Effect of Amendments to Vesting Schedule. No
amendment to the vesting schedule shall deprive a Member of his
nonforfeitable rights to benefits accrued to the date of the
amendment. Further, if the vesting schedule of the plan is
amended, each Member with at least three (3) years of Credited
Service with the Employer may elect, within a reasonable period,
after the adoption of the amendment to have his nonforfeitable
percentage computed under the Plan without regard to such
amendment. The period during which the election may be made
shall commence with the date the amendment is adopted and shall
end on the later of:
(a) 60 days after the amendment is adopted,
(b) 60 days after the amendment becomes effective,
(c) 60 days after the Member is issued notice of the
amendment by the Employer or Plan Administrator.
ARTICLE VIII
Funding
Section 8.1. Funding Policy. The Employer shall adopt a
funding policy for the Plan which is consistent with the
requirements of ERISA and for the purpose of carrying out such
funding policy the Employer will maintain a Trust Agreement and
will make periodic payments to the Trust Fund.
Section 8.2. Exclusive Benefit. Except as provided in this
Article, no part of the Trust Fund shall be used for or diverted
to purposes other than for the exclusive benefit of Members,
their Spouses or their Beneficiaries covered under the Plan,
prior to the satisfaction of all liabilities hereunder with
respect to them, provided that any funds under the Plan may be
used to pay reasonable Plan administration expenses.
Section 8.3. Mistakes of Fact. If the Employer determines
that a contribution to the Trust Fund for any Plan Year has been
made by mistake of fact, the Employer shall direct the Trust to
return that contribution to the Employer within one year of the
date of the contribution was made.
Section 8.4. No Interest Except as Provided. No person
shall have any interest in or right to the Trust Fund except as
expressly provided in the Plan and Trust Agreement and then only
to the extent that such funds have been contributed by the
Employer to the Trust Fund.
Section 8.5. Costs. The Employer shall pay for the full
cost of the Plan including administrative expenses provided that
reasonable administrative expenses may, with the approval of the
Trustee, be paid from the Trust Fund.
Section 8.6. Indemnification. To the extent permitted by
law, the Employer may indemnify and hold harmless any person from
and against any claim, liability or expenses arising out of such
person's serving in a fiduciary capacity hereunder, and the
Employer may purchase insurance for this purpose.
ARTICLE IX
Administration
Section 9.1. General. The Plan shall be administered by
Plan Administrator in accordance with the Plan and Trust
Agreement and for purposes of such Plan administration The
Merchants Bank is hereby deemed to be "Plan Administrator" and a
"Named Fiduciary" within the meaning of ERISA.
Section 9.2. Discretion. The Administrator shall
administer the Plan in accordance with its terms, and shall have
powers necessary to carry out the provisions of the Plan. The
Administrator shall have total and complete discretion to
interpret the Plan and to determine all questions arising in the
administration, interpretation and application of the Plan. The
Administrator shall have such discretion to resolve all questions
of eligibility, both as to participation and as to benefits and
shall have the power of full and final determination as to all
questions concerning eligibility for participation and benefits.
The Administrator may correct any defect, supply any omission or
reconcile any inconsistency in such manner and to such extent as
shall be necessary to carry out the purposes of this Plan;
provided, however, that all such interpretations shall be done in
a uniform and non-discriminatory manner and shall be done in a
manner consistent with the intent that this Plan shall be and
shall remain qualified pursuant to the provisions of Sections
401(a) and 501(a) of the Code. The Administrator's decision in
such matter shall be binding and conclusive as to all parties,
provided that such decision shall not be made in an arbitrary or
capricious manner. The Administrator may adopt such rules and
regulations as it deems desirable for the conduct of the
administration of the Plan.
Section 9.3. Claims for Benefits. Claims for benefits
under the Plan shall be filed on forms supplied by the
Administrator. Written notice of the disposition of the claim
shall be furnished to the claimant within 90 days after the
application therefor is filed, unless special circumstances
require an extension for processing of the claim, in which case a
decision shall be rendered as soon as possible, but not later
than 180 days after receipt of the claim by the Administrator.
Written notice of such extension shall be furnished to the
claimant prior to the commencement of the extension indicating
the special circumstances requiring an extension of time and the
date by which the Administrator expects to render the decision on
the claim. In the event the claim is denied, the reasons for the
denial shall be specifically set forth in writing, pertinent
provisions of the Plan shall be cited, a description of any
additional material or information necessary for the claimant to
perfect the claim and an explanation of why such information is
necessary shall be furnished, and appropriate information as to
the steps to be taken if the Member or Beneficiary wishes to
submit his claim for review shall be provided.
Section 9.4. Appeals. Any Employee, former Employee or
Beneficiary of either who has been denied a benefit or feels
aggrieved by any other action of the Employer, Administrator or
the Trustee shall be entitled upon request to the Administrator
and within sixty (60) days after receipt of written notification
of denial of a claim:
(a) to request a review upon written application to the
Administrator;
(b) review pertinent documents; and
(c) submit issues and comments in writing.
The Administrator shall schedule an opportunity for a full
and fair hearing of the issue, and a decision following such a
hearing shall be made within sixty (60) days after he receives a
request for review, unless special circumstances require an
extension of time for processing the claim, in which case a
decision shall be rendered as soon as possible, but not later
than 120 days after receipt of a request for review. Written
notice of such an extension shall be furnished to the claimant
prior to the commencement of the extension. The decision on
review shall be in writing and shall include specific reasons for
the decisions written in a manner calculated to be understood by
the claimant, as well as specific references to the pertinent
Plan provisions on which the decision is based.
Section 9.5. Powers of Committees. The Employer may name
an individual or a committee to oversee the day to day operations
of the Plan with discretionary authority over the operation of
the Plan and such individual or the committee shall be
fiduciaries for purposes of plan administration.
Section 9.6. Rollover Distributions. This Section applies
to distributions made on or after January 1, 1993. Notwith
standing any provision of the Plan to the contrary that would
otherwise limit a Distributee's election under this section, 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.
ARTICLE X
Discontinuance of Company
Contributions, Plan Amendments and Mergers
Section 10.1. General. The Employer intends to continue
its sponsorship of the Plan and payment of contributions to the
Trust Fund indefinitely; but continuance of such sponsorship and
such contributions is not assumed as a contractual obligation, or
other obligation, of the Employer and the right is reserved by
the Employer to cease its sponsorship of the Plan or to reduce,
suspend, or discontinue its contributions hereunder at any time.
Section 10.2. Amendments. The Employer shall have the
right to amend the Plan at any time and to any extent that it may
deem advisable. No such amendment, however, shall:
(a) vest in the Employer any interest in or control over
the Trust Fund accumulated in accordance with the Plan
or the retirement benefits provided hereunder, or
(b) deprive any Retired Member, who has retired under the
Plan, prior to the date of amendment, of any retirement
benefit under the Plan or change the provisions
thereof, provided, however, that any change or
modification for the purpose of conforming the Plan to
the requirements of the Code or of any other pertinent
provisions of Federal or State Law, or of any
regulation or ruling of any duly constituted authority
in connection therewith, may be made effective at any
time with retroactive effect.
(c) Except as permitted by applicable Treasury regulations,
no Plan amendment or transaction having the effect of a
Plan amendment (such as a merger, plan transfer or
similar transaction) shall be effective if it
eliminates or reduces any "Section 411(d)(6) protected
benefits" or adds or modifies conditions relating to
"Section 411(d)(6) protected benefits" the result of
which is a further restriction on such benefits unless
such protected benefits are preserved with respect to
benefits accrued as of the later of the adoption date
or effective date of the amendment. "Section 411(d)(6)
protected benefits" are benefits described in Code
Section 411(d)(6)(A), early retirement benefits and
retirement-type subsidies, and optional forms of
benefit.
Section 10.3. Mergers, Consolidations, Etc. The Plan may
not be merged or consolidated with any other plan, nor may any
assets or liabilities of the Plan or the Trust Fund be
transferred to any other plan, unless each Member in the Plan
would (if such other plan then terminated) receive a benefit
immediately after such merger, consolidation or transfer which is
equal to or greater than the benefit he would have been entitled
to receive immediately before such merger, consolidation or
transfer (if the plan had then terminated).
Section 10.4. Majority Vote. Any of the actions the
Employer may take in accordance with this Article X shall be
taken by majority vote of the Board of Directors of The Merchants
Bank.
ARTICLE XI
Plan Termination Procedures
Section 11.1. Terminology. The terms termination, partial
termination and date thereof, as used in the Plan, shall have the
same meaning imparted thereto under ERISA. If the termination or
partial termination of the Plan occurs, such of the following
procedures as may be required by ERISA shall be carried out with
respect to those Members affected by such termination or partial
termination.
Section 11.2. Effect of Termination or Partial Termination.
If the termination or partial termination of the Plan occurs, the
rights of all affected Members to Accrued Benefits as of the date
of such termination or partial termination, to the extent funded
as of such date or otherwise guaranteed by the Pension Benefit
Guaranty Corporation, an agency of the United States government,
shall then become nonforfeitable, except to the extent that
certain forfeitures may be required in accordance with the
provisions of Section 11.5 below and those of Article XII hereof.
As to those Members whose employment with the Employer was
terminated prior to the date of termination or partial
termination of the Plan, the provisions of this paragraph shall
not increase the nonforfeitable rights, if any, applicable to
such former Members under Article VII hereof as of their
respective Dates of Termination of employment with the Employer,
except as otherwise required by law.
Section 11.3. Suspension of Benefits. If the termination
or partial termination of the Plan occurs, the benefit payments
otherwise payable under the Plan shall be subject to suspension
until such time as all applicable filings with and approvals by
the Pension Benefit Guaranty Corporation have been completed for
the carrying out of the allocation procedures set forth in this
Article and the resumption of benefit payments hereunder.
Section 11.4. Restriction of Benefits. If the termination
or partial termination of the Plan occurs, the provisions of
Article XII hereof, if not previously carried out, shall then be
carried out.
Section 11.5. Benefits in Pay Status. If the termination
or partial termination of the Plan occurs, all benefits then in
pay status with respect to Retired Members, their Spouses or
Beneficiaries under the Plan shall be subject to reduction only
as required under ERISA to the extent that such benefit amounts
exceed the benefit amounts allocable to such Retired Members,
Spouses and Beneficiaries under Section 11.6 below. Further,
with respect to benefits under the Plan which commenced within
the three year period ending on the date of termination or
partial termination of the Plan, such previously paid benefits
shall be subject to recovery from the Retired Members for the
benefit of the Plan, as required under ERISA, to the extent that
such previously paid benefit amounts exceed limitations
applicable thereto under ERISA.
Section 11.6. Allocation of Trust Fund Assets. If the
termination of the Plan occurs, the assets of the Trust Fund
available to provide benefits shall be allocated among those
Members, Retired Members, Terminated Members, Spouses and
Beneficiaries affected by such termination or partial termination
in the following order:
(a) First, there shall be allocated the amount necessary to
provide the Accrued Benefit attributable to the
required employee contributions made by a Member, if
any, with interest in accordance with Section 7.6;
(b) Second, equally among individuals in the following two
categories:
(i) in the case of a benefit of a Member, Terminated
Member, Retired Member, Spouse or Beneficiary
which was in pay status as of the beginning of the
three year period ending on the date of
termination or partial termination of the Plan, to
each such benefit, based upon the provisions of
the Plan (as in effect during the five year period
ending on such date) under which such benefit
would be the least;
(ii) in the case of a benefit of a Member, Terminated
Member, Retired Member, Spouse or Beneficiary
(other than a benefit described in (i) above)
which would have been in pay status as of the
beginning of such three year period if the
Employee (or former Employee as the case may be)
had retired prior to the beginning of the three
year period and if his benefits had commenced (in
a form which conforms to the provisions of Article
VI hereof) as of the beginning of such period, to
each such benefit based on the provisions of the
Plan (as in effect during the five year period
ending on such date) under which such benefit
would be the least.
(c) Third, in the case of all other benefits guaranteed
under Title IV of ERISA which are not otherwise
provided for under (a) or (b) above, to each such
benefit based upon the provisions of the Plan (in a
form which confirms to the provisions of Article VI
hereof) but subject to such limitations on amounts of
such benefits as shall then be applicable under ERISA.
(d) Fourth, in the case of all other benefits which were
nonforfeitable immediately prior to the date of
termination or partial termination which are not
otherwise provided for under (a), (b) or (c) above, to
each such benefit based upon the provisions of the Plan
(in a form which conforms to the provisions of Article
VI hereof).
(e) Fifth, in the case of all other benefits under the Plan
which are not otherwise provided for under (a), (b),
(c) or (d) above, to each such benefit based upon the
provisions of the Plan (in a form which conforms to the
provisions of Article VI hereof).
Section 11.7. Assets Insufficient Under Section 11.6(a),
(b), (c) or (e). If the assets of the Trust Fund available for
allocation under any subparagraph of Section 11.6 above, other
than paragraph (d) thereof, are insufficient to satisfy in full
the benefits of all individuals which are described in that
subparagraph, the assets shall be allocated pro-rata among
individuals on the basis of the present value (as of the date of
termination or partial termination of the Plan) of their
respective benefits described in that paragraph.
Section 11.8. Assets Insufficient Under Section 11.6(d).
If the assets of the Trust Fund available for allocation under
paragraph (d) of Section 11.6 above are insufficient to satisfy
in full the benefits of individuals described in said paragraph
(d), the following shall apply:
(a) Except as provided in (b) below, the assets shall be
allocated to the benefits of individuals described in
said paragraph (d) on the basis of the benefits of
individuals which would have been described in said
paragraph (d) under the Plan as in effect at the
beginning of the five year period ending on the date of
termination or partial termination of the Plan.
(b) If the assets available for allocation under paragraph
(a) immediately above are sufficient to satisfy in full
the benefits described therein (without regard to this
paragraph (b)) then for purposes of paragraph (a)
immediately above, benefits of individuals described
therein shall be determined on the basis of the Plan as
amended by the most recent amendment to the Plan
effective during such five year period under which the
assets available for allocation are sufficient to
satisfy in full the benefits of individuals described
in paragraph (a) immediately above hereunder and shall
be allocated thereunder on the basis of the Plan
effective during such period.
(c) If the assets of the Plan available for allocation
under any category set forth in this Section 11.8, are
insufficient to satisfy in full the benefits which are
described in that category, the assets shall be
allocated pro rata among such benefits on the basis of
the present value (as of the date of termination or
partial termination of the Plan) of the respective
benefits described in that category.
Section 11.9. Reallocation to Avoid Discrimination. If the
Secretary of the Treasury determines that the allocation made
pursuant to this Article (without regard to this Section) results
in discrimination prohibited by Section 401(a)(4) of the Code,
then, if required to prevent the disqualification of the Plan
under Section 401(a) of the Code, the assets allocated under
paragraphs (c), (d) or (e) of Section 11.6 above shall be
reallocated to the extent necessary to avoid such discrimination.
Section 11.10. Remaining Assets. Any assets of the Plan
which remain after provision has been made to satisfy all
liabilities of the Plan to Members, their Spouses and their
Beneficiaries shall, unless in contravention of any provision of
law, be distributed to the Employer in cash.
ARTICLE XII
Restricted Benefits to Certain Members
Section 12.1. Post-January 1, 1993. This Section 12.1
shall apply for Plan Years beginning on or after January 1, 1993.
(a) In the event of Plan termination, the benefit of any
highly compensated active or former employee (which
terms for the purposes of this Section 12.1 are as
defined in Code Section 414(q) and the regulations
thereunder) is limited to a benefit that is
nondiscriminatory under Section 401(a)(4) of the Code.
(b) Benefits distributed to any of the 25 most highly
compensated active and former highly compensated
employees are restricted such that the annual payments
are no greater than an amount equal to the payment that
would be made on behalf of the employee under a single
life annuity that is the actuarial equivalent of the
sum of the employee's accrued benefit and the
employee's other benefits under the Plan.
(c) The preceding paragraph shall not apply if: (a) after
payment of the benefit to an employee described in the
preceding paragraph, the value of Plan assets equals or
exceeds 110% of the value of current liabilities as
defined in Section 412(1)(7) of the Code, or (b) the
value of the benefits for an employee as described
above is less than 1% of the value of current
liabilities.
(d) For purposes of this Section 12.1, benefit includes
loans in excess of the amount set forth in Section
72(p)(2)(A) of the Code, any periodic income, any
withdrawal values payable to a living employee, and any
death benefits not provided for by insurance on the
employee's life.
Section 12.2. Pre-January 1, 1993. For Plan Years
beginning before January 1, 1993, the provisions of this Article
XII as in effect immediately before the amendment and restatement
thereof generally effective as of January 1, 1989, shall remain
in effect.
ARTICLE XIII
Miscellaneous
Section 13.1. Not a Contract of Employment, Etc. Inclusion
in the Plan shall not be construed as a contract of employment,
or as giving the Member any right to be retained in the service
of the Employer without the Employer's consent, nor shall it
interfere with the right of the Employer to discharge or
discipline a Member, nor shall it give the Member any right,
claim or interest in any Retirement Benefits herein described
except upon fulfillment of the provisions and requirements of the
Plan.
Section 13.2. No Right to Assign, Etc. No person entitled
to benefits under the Plan shall have the right, either
voluntarily or involuntarily, to assign, commute or encumber the
benefits herein provided. The preceding sentence shall also
apply to the creation, assignment or recognition of a right to
any benefit payable with respect to a Member pursuant to a
domestic relations order, unless such order is a qualified
domestic relations order as defined in Section 414(p) of the
Code, or any domestic relations order entered before January 1,
1985. To the maximum extent permitted by law, the benefits or
payments herein provided shall not in any way be liable to
attachment, garnishment, or to be seized, taken, appropriated or
applied by legal or equitable process, to pay any debt or
liability of such person.
Section 13.3. Incapacitated Retired Member. In the event
that the Plan Administrator shall find that any Retired Member to
whom a benefit is payable under the terms of the Plan is unable
to care for his affairs because of illness or accident, is
otherwise mentally or physically incompetent, or unable to give a
valid receipt, the Plan Administrator may cause the payments
becoming due to such Retired Member to be paid to another person
for his benefit without responsibility on the part of the Plan
Administrator to follow the application of such payment. Any
such payment shall be a payment for the account of the Retired
Member and shall operate as a complete discharge of all liability
therefor under the Plan of the Plan Administrator.
Section 13.4. Addresses. Each Retired Member or Terminated
Member who retains rights to a vested deferred retirement benefit
shall be responsible for furnishing the Plan Administrator with
his address. Any notice required or permitted to be given
hereunder shall be deemed given if directed to him at such
address and mailed by regular United States mail.
Section 13.5. Actuarial Computations. All actuarial
computations required under the Plan shall be made by or under
the supervision of the Actuary and upon such rates of interest,
mortality and other actuarial components and in accordance with
such method of computation as the Actuary shall deem proper.
Section 13.6. Alternative Acts. In the event it shall
become impossible for the Plan Administrator to perform any act
required by the Plan, the Plan Administrator may perform such
alternative act which most nearly carries out the intent and
purpose of the Plan.
ARTICLE XIV
Special Rules for Top-Heavy Plans
Section 14.1. General. Notwithstanding anything in the
Plan to the contrary, the provisions of this Article XIV shall be
applied in any Plan Year beginning on or after January 1, 1984,
if the Plan is determined to be a "Top-Heavy Plan".
Section 14.2. Key Employee Defined. A Key Employee is any
Employee or former Employee (and his Spouse or Children) who, at
one time during the Plan Year or any of the preceding four Plan
Years is one or more of the following:
(a) An officer of the Employer (as that term is defined
within the meaning of the regulations under Section 416
of the Code). The number of officers that will be
considered Key Employees will be limited to the lesser
of (i) fifty (50) employees, or (ii) the greater of
three (3) employees or 10% of all employees. However,
effective January 1, 1987, an Employee will not be
considered a Key Employee for a Plan Year if the
Employee earns less than 50% of the dollar limit on
annual additions to a defined benefit plan (or such
other amount adjusted in accordance with Section
415(b)(1)(A) of the Code) as in effect for the calendar
year in which the determination date falls. Only those
Employers which are incorporated shall be considered as
having officers.
(b) One of the ten (10) Employees owning (or considered as
owning within the meaning of Section 318 of the Code)
the largest interests in the Employer. In determining
ownership hereunder, employers that had otherwise been
aggregated under Sections 414(b), (c) and (m) of the
Code shall be treated as separate employers. However,
an Employee will not be considered a "top ten" owner
for a Plan Year if the Employee earns less than the
dollar limit on annual additions to a qualified defined
contribution plan in accordance with Section
415(c)(1)(A) of the Code as in effect for such Plan
Year or owns less than one-half (1/2) percent ownership
interest in value in all of the employers required to
be aggregated under Code Sections 414(b), (c) and (m).
(c) A "five percent (5%) owner" of the Employer. "Five
percent (5%) owner" means any person who owns (or is
considered as owning within the meaning of Section 318
of the Code) more than five percent (5%) of the
outstanding stock of the Employer or stock possessing
more than five percent (5%) of the total combined
voting power of all stock of the Employer or, in the
case of an unincorporated business, any person who owns
more than five percent (5%) of the capital or profits
interest in the Employer. In determining percentage
ownership hereunder, employers that had otherwise been
aggregated under Section 414(b), (c) and (m) of the
Code shall be treated as separate employers; or
(d) A "one percent (1%) owner" of the Employer having an
annual compensation from the Employer of more than
$150,000. "One percent (1%) owner" means any person
who owns (or is considered as owning within the meaning
of Section 318 of the Code) more than one percent (1%)
of the outstanding stock of the Employer or stock
possessing more than one percent (1%) of the capital or
profits interest in the Employer. In determining
percentage ownership hereunder, employers that had
otherwise been aggregated under Section 414(b), (c) and
(m) of the Code shall be treated as separate employers.
However, in determining whether an individual has
Compensation of more then $150,000, Compensation from
each employer required to be aggregated under Section
414(b), (c) and (m) of the Code shall be taken into
account.
Section 14.3. Permissive Aggregation Group. The Employer
may include any other plan not required to be included in the
Required Aggregation Group, provided the resulting group, taken
as a whole, would continue to satisfy the provisions of the Code
Sections 401(a)(4) or 410. Such group shall be known as a
Permissive Aggregation Group.
In the case of a Permissive Aggregation Group, only a plan
that is part of the Required Aggregation Group will be considered
a Top-Heavy Plan if the Permissive Aggregation Group is a Top-
Heavy Group. No plan in the Permissive Aggregation Group will be
considered a Top-Heavy Plan if the Permissive Aggregation Group
is not a Top-Heavy Group.
Section 14.4. Required Aggregation Group. In determining a
Required Aggregation Group hereunder, each plan of the Employer
qualified under Section 410(a) of the Code, in which a Key
Employee is a member, and each such other plan of the Employer
which enables any plan in which a Key Employee participates to
meet the requirements of Code Sections 401(a)(4) or 410, will be
required to be aggregated. Such group shall be known as a
Required Aggregation Group.
In the case of a Required Aggregation Group, each plan in
the group will be considered a Top-Heavy Plan if the Required
Aggregation Group is a Top-Heavy Group. No plan in the Required
Aggregation Group will be considered a Top-Heavy Plan if the
Required Aggregation Group is not a Top-Heavy Group.
Section 14.5. Top-Heavy Group means a Required or
Permissive Aggregation Group in which, as of the "determination
date", the sum of (i) and (ii) exceeds sixty percent (60%) of
(iii) below.
(a the actuarial present value of accrued benefits of Key
Employees under all defined benefit plans included in
the group;
(b the aggregate accounts of Key Employees under all
defined contribution plans of the Employer included in
the group;
(c the actuarial present value of accrued benefits under
all defined benefit plans of all members plus the
aggregate accounts under all defined contribution plans
of all members.
For purposes of Article XIV actuarial present value of
accrued benefits of defined benefit plans and aggregate accounts
of defined contribution plans shall include distributions made to
Members, Retired Members and Terminated Members included in the
"60% Test" during the five consecutive Plan Year period ending on
the determination date.
Section 14.6. Determination That Plan is "Top-Heavy." For
purposes of this Article, the Plan will be considered a Top-Heavy
Plan for a Plan Year if, as of the "determination date", which is
the last day of the preceding Plan Year: (A) the actuarial
present value of the Accrued Benefits of the members who are Key
Employees or have been Key Employees (as defined in Section
416(i) of the Code) exceeds 60% of the actuarial present value of
the Accrued Benefits of all Members (the "60% Test") or (B) the
Plan is part of a Required Aggregation Group (within the meaning
of Section 416(g) of the Code) and the Required Aggregation Group
is Top-Heavy. However, and notwithstanding the results of the
"60% Test", the Plan shall not be considered a Top-Heavy Plan for
any Plan Year in which the Plan is a part of a Required or
Permissive Aggregation Group (within the meaning of Section
416(g) of the Code) which is not Top-Heavy.
For purposes of making the "60% Test" for any Plan Year,
Accrued Benefits shall be those amounts calculated as of the
first day of the preceding Plan Year or any later date within
such Plan Year as of which an actuarial valuation is made, and
the actuarial present value of those amounts shall be based on
the actuarial assumptions used by the Actuary in the actuarial
valuation made within such preceding Plan Year. Accrued benefits
shall also include any distributions not included in the
actuarial present value of Accrued Benefits made to Members
during the five consecutive Plan Years ending on the
determination date. Effective January 1, 1987, in the case of a
Participant other than a Key Employee such Accrued Benefits shall
be calculated using the single accrual method used for all plans
of the Employer and any entity related to the Employer under
Sections 414(b), (c) and (m) of the Code, or if no such single
method exists, using a method which results in benefits accruing
not more rapidly than the slowest accrual rate permitted under
section 411(b)(1)(C) of the Code. For purposes of Article XIV,
Members shall include Retired Members and Terminated Members who
retired or terminated employment during the five consecutive Plan
Year period ending on the determination date.
Section 14.7. Minimum Benefit. The minimum Accrued Benefit
for a Member terminating employment at or after age 65, and the
minimum Accrued Benefit payable at Normal Retirement Date for a
Member who terminates employment prior thereto with entitlement
to a Retirement Benefit, shall be equal to the product of:
(a 2% of his average monthly compensation during his five
year highest-paid consecutive calendar years of
Credited Service
multiplied by
(b each of the first 10 years of his Credited Service
after December 31, 1983 in which the Plan is a Top-
Heavy Plan.
Notwithstanding the foregoing, if a Member participates in
the Plan and another qualified defined contribution or defined
benefit plan maintained by the Employer, the Member shall receive
the top heavy minimum benefit under this Section 14.7 and shall
not receive any top heavy minimum contributions or benefits under
any such other qualified plans.
Section 14.8. Minimum Vesting. Notwithstanding the
provisions of Article VII, a Member shall be eligible for a
deferred vested benefit if, while the Plan is a Top-Heavy Plan,
his employment is terminated before death or retirement and after
he has completed at least 2 years of Credited Service. The
amount of his deferred vested benefit payable as a Life Annuity,
commencing as of his Normal Retirement Date, shall be at least
equal to his vested percentage of his Accrued Benefit, determined
in accordance with the following table:
Years of Credited Service Vested Percentage
Less than 2 0%
2 years 20%
3 years 40%
4 years 60%
5 years or more 100%
Section 14.9. Change in Top-Heavy Status. If the Plan
becomes a Top-Heavy Plan and subsequently ceases to be such, the
vesting schedule in Section 14.8 shall continue to apply in
determining the nonforfeitable percentage of the Accrued Benefit
of any Member who had at least three years of Credited Service as
of the last day of the Plan Year during which the Plan was Top-
Heavy. For other Members said schedule shall apply only to their
Accrued Benefits as of such last day.
Section 14.10. Distributions to Key Employees. Except as
provided below, all distributions to Key Employees shall be made
in accordance with Article VI.
Section 14.11. Impact on Maximum Benefits. For any Plan
Year in which the Plan is a Top-Heavy Plan, the defined benefit
plan fraction of Section 415(e)(2) of the Code shall be reread by
substituting the number "1.00" for the number "1.25" wherever it
appears therein except that such substitution shall not have the
effect of reducing any accrued benefit under a defined benefit
plan prior to the first day of the Plan Year in which this
provision becomes applicable.
ARTICLE XV
Effective Date
Section 15.1. Effective Date. This amended and restated
Plan shall take effect as of January 1, 1994, except as otherwise
herein specifically provided.
IN WITNESS WHEREOF, the Employer has caused this instrument
to be executed by its duly authorized representative this 29th day
of June, 1994.
(Corporate Seal) THE MERCHANTS BANK
Attest: /s/ Susan Struble By: /s/ Dudley H. Davis
Duly Authorized Agent Duly Authorized Agent
(Corporate Seal) THE MERCHANTS TRUST COMPANY
Attest: /s/ Charles Claudio By: /s/ Susan J. Moses
Duly Authorized Agent Duly Authorized Agent
APPENDIX A
SCHEDULE OF MONTHLY ACCRUED BENEFITS
AS OF JULY 6, 1985 FOR FORMER EMPLOYEES OF
THE ST. JOHNSBURY, VERMONT BRANCH OFFICE
OF THE FIRST NATIONAL BANK OF VERMONT
Employee Monthly Accrued Benefit
Barrett, Richard P. $ 183.57
Davis, Martha J. 42.51
Gonyaw, Eleanor M. 141.11
Parrish, Beverly 8.93
Porter, Gail 7.47
Prue, Barbara L. 136.27
Robbie, Gayle 10.39
Senecal, Edward F. 510.90
TABLE OF CONTENTS
Page
ARTICLE I
Definitions
Section 1.1. Definitions 1
Section 1.2. Miscellaneous 5
ARTICLE II
Service
Section 2.1. Participation Service 6
Section 2.2 Credited Service 6
Section 2.3 Interrupted Credited Service 7
Section 2.4 Previous Plans and Employees 7
ARTICLE III
Participation
Section 3.1 Membership 8
Section 3.2 Age and Service Requirements 8
Section 3.3 Subsequent Rehires 8
Section 3.4 Catamount Bank Pension Plan 8
ARTICLE IV
Benefit Eligibility
Section 4.1 Normal Retirement Date 8
Section 4.2 Early Retirement Date 8
Section 4.3 Deferred Retirement Date 8
Section 4.4 Eligibility for Pre-Retirement Death Benefit 9
Section 4.5 Eligibility for and Amount of Alternative
Death Benefit 9
ARTICLE V
Benefit Amounts
Section 5.1 Normal Retirement Benefit 9
Section 5.2 Accrued Benefit 10
Section 5.3 Deferred Retirement Benefit 11
Section 5.4 Minimum Normal Retirement Benefit 11
Section 5.5 Early Retirement Benefit 11
Section 5.6 Certain Minimum Benefits 11
Section 5.7 Life Annuity Payment Assumption 11
Section 5.8 Pre-Retirement Death Benefit Amount 11
Section 5.9No Reduction for Increase in Social Security Benefits 12
Section 5.10 Suspension of Retirement Benefits 12
Section 5.11 Forfeitures 13
Section 5.12 Maximum Retirement Benefit 13
Section 5.13 Plan Provisions for Benefit Payments Exclusive 13
ARTICLE VI
Form of Payment of Normal
Early or Deferred Retirement Benefits
Section 6.1 Default Annuity Election 13
Section 6.2 Joint and Survivor Annuity Form 13
Section 6.3 Life Annuity Form 15
Section 6.4 Life Annuity Form with 120 or 180 Monthly
Payments Guaranteed 15
Section 6.5 Excess Employee Contributions 16
Section 6.6 Certain Minimal Lump Sum Payments 16
Section 6.7 No Right to Pay Interest to Beneficiary Only 16
Section 6.8 No Death Beneficiary Consent 17
Section 6.9 Effect of Reemployment 17
Section 6.10 Timing of Benefits Payments 17
Section 6.11 Distribution Upon Death 18
ARTICLE VII
Termination of Employment
Section 7.1 Member Terminating After His 65th Birthday 19
Section 7.2Member With Less Than Five Years of Credited Service 19
Section 7.3Member With More Than Five Years of Credited Service 19
Section 7.4. Members Meeting Early Retirement Date Reqirements 19
Section 7.5 Forms of Benefit 19
Section 7.6Certain Pre-February 1, 1971 Employee Contributions 19
Section 7.7 No Non-forfeitable Rights in Certain Instances 20
Section 7.8 Effect of Amendments to Vesting Schedule 20
ARTICLE VIII
Funding
Section 8.1 Funding Policy 20
Section 8.2 Exclusive Benefit 20
Section 8.3 Mistakes of Fact 20
Section 8.4 No Interest Except as Provided 20
Section 8.5 Costs 21
Section 8.6 Indemnification 21
ARTICLE IX
Administration
Section 9.1 General 21
Section 9.2 Discretion 21
Section 9.3 Claims for Benefits 21
Section 9.4 Appeals 21
Section 9.5 Powers of Committees 22
Section 9.6 Rollover Distributions 22
ARTICLE X
Discontinuance of Company
Contributions, Plan Amendments and Mergers
Section 10.1 General 22
Section 10.2 Amendments 22
Section 10.3 Mergers, Consolidations, Etc. 23
Section 10.4 Majority Vote 23
ARTICLE XI
Plan Termination Procedures
Section 11.1 Terminology 23
Section 11.2 Effect of Termination or Partial Termination 23
Section 11.3 Suspension of Benefits 23
Section 11.4 Restriction of Benefits 23
Section 11.5 Benefits in Pay Status 24
Section 11.6 Allocation of Trust Fund Assets 24
Section 11.7 Assets Insufficient Under
Section 11.6(a), (b), (c) or (e) 25
Section 11.8 Assets Insufficient Under Section 11.6(d) 25
Section 11.9 Reallocation to Avoid Discrimination 25
Section 11.10 Remaining Assets 25
ARTICLE XII
Restricted Benefits to Certain Members
Section 12.1 Post-January 1, 1993 26
Section 12.2 Pre-January 1, 1993 26
ARTICLE XIII
Miscellaneous
Section 13.1 Not a Contract of Employment, Etc. 26
Section 13.2 No Right to Assign, Etc. 26
Section 13.3 Incapacitated Retired Member 27
Section 13.4 Addresses 27
Section 13.5 Actuarial Computations 27
Section 13.6 Alternative Acts 27
ARTICLE XIV
Special Rules for Top-Heavy Plans
Section 14.1 General 27
Section 14.2 Key Employee Defined 27
Section 14.3 Permissive Aggregation Group 28
Section 14.4 Required Aggregation Group 28
Section 14.5 Top-Heavy Group 29
Section 14.6 Determination That Plan is "Top-Heavy." 29
Section 14.7 Minimum Benefit 29
Section 14.8 Minimum Vesting 30
Section 14.9 Change in Top-Heavy Status 30
Section 14.10 Distributions to Key Employees 30
Section 14.11 Impact on Maximum Benefits 30
ARTICLE XV
Effective Date
Section 15.1 Effective Date 31
_________________________________________________________________
______________________
SIXTH
AMENDMENT
TO
THE MERCHANTS BANK PENSION PLAN
This AMENDMENT is executed the 28TH day of NOVEMBER,1994, by
THE MERCHANTS BANK, (the "Employer"), a corporation duly
organized and existing under the laws of the State of Vermont and
the sponsor of the Merchants Bank Pension Plan (the "Plan").
Background
1. Section 10.02 of the Plan authorizes Employer to make
amendments to the Plan to the extent it deems advisable.
2. The Board of Directors of the Employer desires to amend
the Plan to freeze benefit accruals effective as of January 1,
1995 and to clarify certain administrative procedures under the
Plan.
N O W , T H E R E F O R E ,
The Plan is hereby amended, effective as of the dates set
forth herein as follows:
1. Article V is hereby amended by renumbering Section 5.13 to
become Section 5.15 and by the additions of the following
sections:
Section 5.13. Cessation of Benefit Accruals. Notwith
standing any other provision of the Plan, effective January
1, 1995, no additional benefits shall accrue for any
Participant. The Accrued Benefit of any Member shall be
determined on the basis of the Member's Credited Service as
of December 31, 1994 and the Final Average Compensation of
any Participant shall be determined as if the Participant
had ceased working no later than December 31, 1994.
Section 5.14. Unclaimed Benefits. If at, after, or
during the time when a benefit hereunder is payable to any
Member, Beneficiary or other distributee, the Plan
Administrator or its designee shall mail by registered or
certified mail to such Member, Beneficiary or other
distributee a written demand for his current address, and if
such Member, Beneficiary or other distributee shall fail to
respond within seven (7) years from the initial mailing of
such demand, then the Plan Administrator may determine that
such Member, Beneficiary or other distributee has forfeited
his right to such benefit and such forfeited amount shall be
applied in accordance with Section 5.11. Such forfeited
benefit may be reinstated if a claim for same is made by the
Member, Beneficiary or other distributee at any time
thereafter and if the Plan Administrator determines that
such reinstatement can occur without prejudice to the Plan.
In the event the Plan is terminated and benefits remain
unclaimed, the Plan Administrator shall take such steps as
it deems feasible in order to protect the Member's benefits.
2. Effective January 1, 1995, Section 8.3 of the Plan is
amended to read as follows:
Section 8.3. Reversion of Employer Contributions.
Notwithstanding any other provisions of this Plan, all
contributions by the Employer to the Trust Fund are condi
tioned on the deductibility of such contributions under
Section 404 of the Code and the initial qualification of the
Plan under Section 401 of the Code. If it is determined
that the contribution for any Plan year has been made
because of a good faith mistake of fact or a good faith
mistake as to the deductibility of such contribution, the
contribution may be returned to the Employer within one year
of the mistaken payment. In such case, the amount that may
be returned is limited to the excess of (a) the amount
contributed over (b) the amount that would have been
contributed had there not occurred a mistake of fact or a
mistake in determining the deduction. Earnings attributable
to such contributions while in the Trust shall not be
returnable, and losses attributable to such contributions
shall reduce the amount available for reversion to the
Employer.
3. Section 10.2 of the Plan is hereby amended by the
addition of the following after the first full sentence of that
section:
Any amendment to the Plan shall be adopted by formal action
of the Employer's board of directors and executed by an
officer authorized to act on behalf of the Employer.
4. In all other respects, the Plan remains in full force
and effect.
IN WITNESS WHEREOF, the Employer has hereto caused this
Amendment to be executed on the date first written above.
WITNESS: THE MERCHANTS BANK
___________________________________
By:___________________________________
Title:
___________________________________
EXHIBIT 10.6.2 SEVENTH AMENDMENT
TO
THE MERCHANTS BANK PENSION PLAN
This AMENDMENT is executed the 24TH day of February, 1995, by
THE MERCHANTS BANK, (the "Employer"), a corporation duly
organized and existing under the laws of the State of Vermont and
the sponsor of The Merchants Bank Pension Plan (the "Plan").
Background
1. Section 10.02 of the Plan authorizes the Employer to
make amendments to the Plan to the extent it deems advisable.
2. The Board of Directors of the Employer desires to amend
the Plan to comply with a request from the Internal Revenue
Service so that the Plan may be issued a Determination Letter.
N O W , T H E R E F O R E ,
The Plan is hereby amended, effective as of the dates set
forth herein as follows:
1. Section 1.1 is amended by the addition of the following
definition:
"Average Monthly Compensation" for purposes of Article
XIV shall equal a Participant's "Annual Compensation" for
the applicable year under Article XIV divided by twelve
(12).
2. Section 2.3(a) is amended by the addition of the words
"or Article XIV" immediately after the phrase "Article VII".
3. Section 2.3(b) is amended by deleting the phrase "five
(5)" at the end thereof and inserting the phrase "the greater of
(i) five (5) or (ii) the aggregate number of years of service
before such period."
4. Section 6.2(f)(iii) is amended by the addition of the
following after the first sentence thereof:
The Member's and the Spouse's consent shall either (A) state
the specific non-spouse beneficiary and/or the optional form
of benefit elected or (B) state that the Spouse generally
consents to the waiver of the Joint and Survivor Annuity
described in (a) and (b) of this Section 6.2 and/or to the
designation of a different beneficiary. In the event the
consent described in (A) above is used, then the Member may
not subsequently change either the beneficiaries or the form
of distribution (except to a Joint and Survivor Annuity
described in (a) or (b) of this Section 6.2) without the
Spouse's subsequent consent. In the event of a Spouse's
general consent pursuant to (B) of this Section 6.2(f)(iii),
no subsequent Spouse's consent is required to any such
changes in beneficiaries or form.
5. In all other respects, the Plan remains the same.
IN WITNESS WHEREOF, the Employer has caused this Amendment
to be executed by its duly authorized representative this 24th day
of February, 1995.
(Corporate Seal) THE MERCHANTS BANK
Attest:Susan M. Verro By: Joseph L.Boutin
Duly Authorized Agent Duly Authorized Agent
EXHIBIT 10.6.3
EIGHTH AMENDMENT
TO
THE MERCHANTS BANK PENSION PLAN
This AMENDMENT is executed by THE MERCHANTS BANK, (the
"Employer"), a corporation duly organized and existing under the
laws of the State of Vermont and the sponsor of The Merchants
Bank Pension Plan (the "Plan").
Background
1. Section 10.02 of the Plan authorizes the Employer to
make amendments to the Plan to the extent it deems advisable.
2. The Board of Directors of the Employer desires to amend
the Plan to make available an early retirement benefit for
eligible employees who elect to participate during the period
September 8, 1995 through October 23, 1995.
N O W , T H E R E F O R E ,
The Plan is hereby amended, effective as of September 8,
1995 as follows:
1. Section 1.1 is amended by the addition of the following
definition:
"Early Retirement Program" means the 1995 Early
Retirement Program sponsored by the Employer from September
8, 1995 through October 23, 1995. To participate in the
Early Retirement Plan, an employee must, on September 8,
1995, (i) be an active employee of the Employer and not have
previously resigned or been terminated, (ii) be a Member of
the Plan and (iii) meet the Rule of 70. To meet the Rule of
70, a Member's age, determined as of December 31, 1995, plus
years of Credited Service, after adding five (5) years to
each, must total at least seventy (70). To participate in
the Early Retirement Program an eligible Member must sign an
election form provided to the Member by the Employer.
2. Section 2.2 of the Plan is amended by the addition of
the following at the end thereto:
In addition to the foregoing, any Member who is
eligible for and who elects to participate in the Early
Retirement Program shall have five (5) years of Credited
Service added to whatever numbers of years of Credited
Service he already has under this Section 2.2.
3. Section 4.2 of the Plan is amended by the addition of
the following at the end thereto:
Notwithstanding the foregoing, the Early Retirement
Date for Members who are eligible for, and elect to
participate in, the Early Retirement Program shall be the
first day of any month after December 31, 1995, as specified
by the Member, following both:
(a) the completion of 10 years of Credited Service,
and
(b) the Member's 50th birthday.
4. Article IV is amended by the addition of the following
new section:
Section 4.6 Member's Age under the Early Retirement
Program. The age of any employee who is eligible for, and elects
to participate in, the Early Retirement Program, shall be deemed
to be his actual age as of December 31, 1995 plus five (5) years,
except for purposes of calculating the Member's benefit payment
options.
5. In all other respects, the Plan remains the same.
IN WITNESS WHEREOF, the Employer has caused this Amendment
to be executed by its duly authorized representative this 14th day
of September, 1995.
(Corporate Seal)
THE MERCHANTS BANK
Attest: Susan M. Verro By: Joseph L. Boutin
Duly Authorized Agent Duly Authorized Agent
Exhibit 23.2
March 21, 1997
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the
incorporation by reference in this Post-Effective Amendment No. 1
to Form S-8/A Registration Statement of our report dated January
25, 1996 incorporated by reference in the Form 10-K of Merchants
Bancshares, Inc. for the year ended December 31, 1995 and to all
references to our Firm included in this Registration Statement.
/s/ ARTHUR ANDERSEN LLP
Boston, Massachusetts
March 21, 1997
