As filed with the Securities and Exchange Commission on September 30, 1997.
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------------------------
FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
------------------------------
UNION BANKSHARES, LTD.
(Exact name of registrant as specified in its charter)
------------------------------
DELAWARE 84-0986148
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
1825 LAWRENCE STREET
SUITE 444
DENVER, COLORADO 80202
(303) 298-5352
(Address of principal executive offices)
UNION BANKSHARES, LTD.
PROFIT SHARING 401(K) PLAN
(Full title of the plan)
------------------------------
With copies to:
CHARLES R. HARRISON RONALD R. LEVINE, II, ESQ.
CHIEF EXECUTIVE OFFICER DAVIS, GRAHAM & STUBBS LLP
1825 LAWRENCE STREET, SUITE 444 370 17TH STREET, SUITE 4700
DENVER, COLORADO 80202 DENVER, COLORADO 80202
(303) 298-5352 (303) 892-9400
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
------------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Proposed maximum Proposed
Amount to be offering price maximum aggregate Amount of
Title of securities to be registered registered per unit(1) offering price(1) registration fee
<S> <C> <C> <C> <C>
Common Stock, par value $.001 100,000 shares(4) $26.50 $2,650,000 $804
per share
Interests in the Union Bankshares, Ltd.
Profit Sharing 401(k) Plan (2) (3) (3) (3)
</TABLE>
(1) Estimated solely for the purpose of determining the amount of the
registration fee pursuant to Rule 457(h), based upon the closing price of
the Company's Common Stock on September 25, 1997 as quoted on the NASDAQ
National Market System.
(2) Pursuant to Rule 416(c) under the Securities Act of 1933, as amended, this
Registration Statement also covers an indeterminate amount of plan
interests to be offered or sold pursuant to the Union Bankshares, Ltd.
Profit Sharing 401(k) Plan.
(3) Pursuant to Rule 457(h)(2) under the Securities Act of 1933, as amended, no
separate fee is required to register plan interests.
(4) If, as a result of stock splits, stock dividends or similar transactions,
the number of securities purported to be registered on this Registration
Statement changes, the provisions of Rule 416 shall apply to this
Registration Statement and this Registration Statement shall be deemed to
cover the additional securities resulting from the split of, or the
dividend on, the securities covered by this Registration Statement.
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents filed by the Union Bankshares, Ltd. Profit Sharing
401(k) Plan (the "Plan") with the Commission are hereby incorporated in this
Registration Statement by reference:
(a) The Plan's latest annual report on Form 11-K for the fiscal year ended
December 31, 1996;
The following documents filed by the Company with the Commission are hereby
incorporated in this Registration Statement by reference:
(a) Annual Report on Form 10-KSB for the year ended December 31, 1996;
(b) Quarterly Report on Form 10-QSB for the quarter ended March 31, 1997;
(c) Quarterly Report on Form 10-QSB for the quarter ended June 30, 1997;
and
(d) The description of the Company's Common Stock contained in the
Company's Registration Statement on Form 8-A, filed with the
Commission on January 6, 1993 (File No. 0-21078).
All documents filed by the Company with the Commission pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934 subsequent to
the date of this Registration Statement and prior to the filing of a
post-effective amendment to this Registration Statement indicating that all
securities offered under the Registration Statement have been sold, or
deregistering all securities then remaining unsold, shall be deemed to be
incorporated in this Registration Statement by reference and to be a part hereof
from the date of filing of such documents.
Any statement contained in a document incorporated by, or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Registration Statement to the extent that a statement
contained herein or in any other subsequently filed document which also is or is
deemed to be incorporated by reference herein modified or supersedes such
statement. Any statement so modified or superseded shall not be deemed, except
as so modified or superseded, to constitute a part of this Registration
Statement.
<PAGE>
4. DESCRIPTION OF SECURITIES.
Not applicable.
5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not applicable.
6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Company's Certificate of Incorporation and Bylaws provide that the
Company shall indemnify all directors and officers of the Company to the fullest
extent now or hereafter permitted by the Delaware General Corporation Law. Under
such provisions any director or officer, who in his capacity as such, is made or
threatened to be made a party to any suit or proceeding, shall be indemnified if
such director or officer acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interests of the Company and, with
respect to any criminal proceeding, had no reasonable cause to believe his
conduct was unlawful. The Certificate, Bylaws and the Delaware General
Corporation Law further provide that such indemnification is not exclusive of
any other rights to which such individuals August be entitled under the
Certificate of Incorporation, the Bylaws, any agreement, insurance policies,
vote of stockholders or disinterested directors or otherwise.
In addition, the Company's Certificate of Incorporation provides that to
the fullest extent now or hereafter permitted by Delaware law, the Company's
directors will not be liable for monetary damages for breach of the directors'
fiduciary duty of care to the Company and its stockholders. This provision in
the Certificate of Incorporation does not eliminate the directors' fiduciary
duty of care, and in appropriate circumstances equitable remedies such as an
injunction or other forms of non-monetary relief would remain available under
Delaware law. Each director will continue to be subject to liability for breach
of the director's duty of loyalty to the Company and its stockholders, for acts
or omissions not in good faith or involving intentional misconduct or knowing
violations of law, for liability arising under Section 174 of the Delaware
General Corporation Law (relating to the unlawful payment of dividends, and
purchase or redemption of the Company's stock), or for any transaction from
which the director derived an improper personal benefit. This provision also
does not affect a director's responsibilities under any other laws, such as the
federal securities laws or state or federal environmental laws. The Company has
purchased a directors and officers insurance policy providing not less than a
$3.0 million coverage limit in the aggregate per year.
The foregoing description of certain provisions of the Company's
Certificate of Incorporation and Bylaws is qualified in its entirety by the
actual Certificate of Incorporation and Bylaws of the Company filed as exhibits
to the Registration Statement on Form S-1 (Registration No. 33-56736), as
declared effective on March 9, 1993, and incorporated herein by reference.
II-2
<PAGE>
7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
8. EXHIBITS
4.1 Specimen Stock Certificate/1/
4.2 Union Bankshares, Ltd. Profit Sharing 401(k) Plan
4.3 Model Amendment effective January 1, 1993
4.4 Model Amendment effective January 1, 1994
4.5 Model Amendments effective December 12, 1994 and January 1, 1995
4.6 Plan Adoption Agreement dated September 30, 1993
4.7 First Amendment to Plan Adoption Agreement dated November 10,
1994
4.8 Second Amendment to Plan Adoption Agreement dated December 6,
1996
4.9 Third Amendment to Plan Adoption Agreement dated January 27, 1997
4.10 Trust Agreement for the Plan dated September 30, 1993
5.1 Opinion re Legality. Because the shares will be purchased in the
open market and are not original issuance securities, no opinion
re legality is required
5.2 Determination Letter of Internal Revenue Service as to the
Qualified Status of the Plan under Section 401 of the Internal
Revenue Code of 1986, as amended
5.3 Opinion of Davis, Graham & Stubbs LLP re ERISA compliance of
Amendments to the Plan
23.1 Consent of Baird, Kurtz & Dobson
23.2 Consent of McGladrey & Pullen, LLP
- --------
/1/ Filed as an exhibit to the Company's Registration Statement on Form S-1
(Registration No. 33-56736), as declared effective on March 9, 1993, and
incorporated herein by reference.
II-3
<PAGE>
24.1 Power of Attorney
9. UNDERTAKINGS
A. The Company 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 the Registration Statement or any
material change to such information in the 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; and
(3) to remove from registration by means of a post-effective amendment any of
the securities being registered which remain unsold at the termination of the
offering.
B. The Company hereby undertakes that, for purposes of determining any
liability under the Securities Act of 1933, each filing of the Company's annual
report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act
of 1934 and each filing of the Plan's annual report pursuant to Section 15(d) of
the Securities Exchange Act of 1934, that is incorporated by reference in the
Registration Statement shall be deemed to be a new Registration Statement
relating to the securities offered herein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
C. Insofar as indemnification for liabilities arising under the Securities
Act of 1933 August be permitted to directors, officers and controlling persons
of the Company pursuant to the foregoing provisions, or otherwise, the Company
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Company of expenses incurred or
paid by a director, officer or controlling person of the Company 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 Company will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Company
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Denver, State of Colorado, on September 30, 1997.
UNION BANKSHARES, LTD.
By: /s/ Charles R. Harrison*
-------------------------------------
Charles R. Harrison, Chairman of the
Board and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities and on the date indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
<S> <C> <C>
/s/ Charles R. Harrison* Chairman of the Board and September 30, 1997
- ---------------------------------- Chief Executive Officer
Charles R. Harrison (Principal Executive Officer)
/s/ Bruce E. Hall Vice President, Treasurer and September 30, 1997
- ---------------------------------- Secretary and a Director
Bruce E. Hall (Principal Financial and
Accounting Officer)
/s/ Herman J. Zueck* President and Director September 30, 1997
- ----------------------------------
Herman J. Zueck
Director
- ----------------------------------
Wayne T. Biddle
II-5
<PAGE>
/s/ Ralph D. Johnson* Director September 30, 1997
- ----------------------------------
Ralph D. Johnson
/s/ Richard C. Saunders* Director September 30, 1997
- ----------------------------------
Richard C. Saunders
/s/ C. Gale Sellens* Director September 30, 1997
- ----------------------------------
C. Gale Sellens
/s/ Jerrold B. Evans* Director September 30, 1997
- ----------------------------------
Jerrold B. Evans
*By: /s/ Bruce E. Hall
------------------------------
Attorney In-Fact
</TABLE>
II-6
<PAGE>
EXHIBIT INDEX
Exhibit
No. Description
- --------------------------------------------------------------------------------
4.2 Union Bankshares, Ltd. Profit Sharing 401(k) Plan
4.3 Model Amendment effective January 1, 1993
4.4 Model Amendment effective January 1, 1994
4.5 Model Amendments effective December 12, 1994 and January 1, 1995
4.6 Plan Adoption Agreement dated September 30, 1993
4.7 First Amendment to Plan Adoption Agreement dated November 10, 1994
4.8 Second Amendment to Plan Adoption Agreement dated December 6, 1996
4.9 Third Amendment to Plan Adoption Agreement dated January 27, 1997
4.10 Trust Agreement for the Plan dated September 30, 1993
5.2 Determination Letter of Internal Revenue Service as to the Qualified
Status of the Plan under Section 401 of the Internal Revenue Code of
1986, as amended
5.3 Opinion of Davis, Graham & Stubbs LLP re ERISA compliance of
Amendments to the Plan
23.1 Consent of Baird, Kurtz & Dobson
23.2 Consent of McGladrey & Pullen, LLP
24.1 Power of Attorney
II-7
Exhibit 4.2
UNION BANKSHARES, LTD.
PROFIT-SHARING 401(K) PLAN
PER THE
DAVIS, GRAHAM & STUBBS
PROTOTYPE DEFINED CONTRIBUTION PLAN AGREEMENT
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C> <C>
I. INTRODUCTION...........................................................................................I-1
1.1 Plan Purpose .................................................................................I-1
1.2 Plan Adoption.................................................................................I-1
1.3 Plan Administration...........................................................................I-1
1.4 Trust Fund....................................................................................I-1
1.5 Plan Not Insured..............................................................................I-1
1.6 Defined Terms.................................................................................I-1
II. DEFINITIONS...........................................................................................II-1
2.1 General......................................................................................II-1
2.2 "Account"....................................................................................II-1
2.3 "Act" .......................................................................................II-1
2.4 "Adjusted Net Income"........................................................................II-1
2.5 "Adoption Agreement" ........................................................................II-1
2.6 "Affiliated Employer" .......................................................................II-1
2.7 "After-Tax Contributions" ...................................................................II-1
2.8 "After-Tax Contributions Account" ...........................................................II-1
2.9 "Aggregation Group" .........................................................................II-1
2.10 "Anniversary Date" ..........................................................................II-1
2.11 "Annual Addition" ...........................................................................II-1
2.12 "Beneficiary" ...............................................................................II-2
2.13 "Break in Service" ..........................................................................II-2
2.14 "Code" ......................................................................................II-2
2.15 "Compensation" ..............................................................................II-2
2.16 "Deductible Contributions" ..................................................................II-2
2.17 "Deductible Contributions Account" ..........................................................II-2
2.18 "Defined Benefit Fraction" ..................................................................II-3
2.19 "Defined Contribution Fraction" .............................................................II-3
2.20 "Determination Date" ........................................................................II-3
2.21 "Earned Income" .............................................................................II-3
2.22 "Effective Date" ............................................................................II-3
2.23 "Election Period" ...........................................................................II-4
2.24 "Eligible Participant" ......................................................................II-4
2.25 "Employee" ..................................................................................II-4
2.26 "Employee Contributions" ....................................................................II-4
2.27 "Employer" ..................................................................................II-4
2.28 "Employer Contributions" ....................................................................II-4
2.29 "Employer Contributions Account" ............................................................II-4
2.30 "Entry Date" ................................................................................II-5
2.31 "Five Percent Owner or 5 Percent Owner" .....................................................II-5
2.32 "Forfeiture" ................................................................................II-5
2.33 "Former Participant" ........................................................................II-5
2.34 "401(k) Plan" ...............................................................................II-5
2.35 "Highest Average Compensation" ..............................................................II-5
2.36 "Hour of Service" ...........................................................................II-5
-i-
<PAGE>
PAGE
2.37 "Insurance Company" .........................................................................II-5
2.38 "Insurance Contract" ........................................................................II-5
2.39 "Key Employee" ..............................................................................II-5
2.40 "Limitation Compensation" ...................................................................II-5
2.41 "Limitation Year" ...........................................................................II-6
2.42 "Loan Account" ..............................................................................II-6
2.43 "Loan Payments" .............................................................................II-6
2.44 "Master or Prototype Plan" ..................................................................II-6
2.45 "Maximum Permissible Amount" ................................................................II-6
2.46 "Money Purchase Pension Plan" ...............................................................II-7
2.47 "Non-Key Employee" ..........................................................................II-7
2.48 "Normal Retirement Age" .....................................................................II-7
2.49 "Owner-Employee" ............................................................................II-7
2.50 "Participant" ...............................................................................II-7
2.51 "Permissive Aggregation Group" ..............................................................II-7
2.52 "Plan" ......................................................................................II-7
2.53 "Plan Administrator" ........................................................................II-7
2.54 "Plan Benefits" .............................................................................II-7
2.55 "Plan Year" .................................................................................II-7
2.56 "Prior Plan" ................................................................................II-7
2.57 "Profit-Sharing Plan" .......................................................................II-7
2.58 "Projected Annual Benefit" ..................................................................II-7
2.59 "Qualified Defined Benefit Plan" ............................................................II-7
2.60 "Qualified Defined Contribution Plan" .......................................................II-8
2.61 "Qualified Domestic Relations Order" ........................................................II-8
2.62 "Qualified Election" ........................................................................II-8
2.63 "Qualified Joint and Survivor Annuity" ......................................................II-9
2.64 "Qualified Preretirement Survivor Annuity" ..................................................II-9
2.65 "Qualifying Employer Securities".............................................................II-9
2.66 "Required Aggregation Group" ................................................................II-9
2.67 "Required Beginning Date" ...................................................................II-9
2.68 "Rollover Contributions Account" ...........................................................II-10
2.69 "Safe Harbor Provisions" ...................................................................II-10
2.70 "Self-employed" ............................................................................II-10
2.71 "Service" ..................................................................................II-10
2.72 "Shareholder-Employee" .....................................................................II-10
2.73 "Sponsor" ..................................................................................II-10
2.74 "Spouse" ...................................................................................II-10
2.75 "Super Top-Heavy Plan" .....................................................................II-10
2.76 "Taxable Wage Base" ........................................................................II-11
2.77 "Top-Heavy Plan" ...........................................................................II-11
2.78 "Top-Heavy Ratio" ..........................................................................II-11
2.79 "Trust Agreement" ..........................................................................II-12
2.80 "Trust Fund" or "Fund" .....................................................................II-12
2.81 "Trustee" ..................................................................................II-12
2.82 "Valuation Date(s)" ........................................................................II-12
2.83 "Year of Service" ..........................................................................II-12
III. PARTICIPATION........................................................................................III-1
3.1 Eligibility.................................................................................III-1
-ii-
<PAGE>
PAGE
3.2 Eligibility to Share in Employer Contributions..............................................III-2
3.3 Years of Service - Hours of Service Method..................................................III-3
3.4 Years of Service - Continuous Service Method................................................III-3
3.5 Hours of Service ...........................................................................III-4
3.6 Affiliated Employer.........................................................................III-5
3.7 Omission of Eligible Employee...............................................................III-5
3.8 Inclusion of Ineligible Employee............................................................III-5
IV. CONTRIBUTIONS.........................................................................................IV-1
4.1 Employer Contributions.......................................................................IV-1
4.2 Employer's Representations...................................................................IV-1
4.3 Return of Contributions......................................................................IV-1
4.4 Employee After-Tax Contributions.............................................................IV-2
V. PARTICIPANTS' ACCOUNTS.................................................................................V-1
5.1 Participants' Accounts........................................................................V-1
5.2 Determination of Net Worth of Fund............................................................V-1
5.3 Restoration of Forfeitures....................................................................V-1
5.4 Allocation of Increase or Decrease in Net Worth and of Employee
Contributions.................................................................................V-1
5.5 Allocation of Balance of Employer Contributions...............................................V-2
5.6 Annual Limitations if Only One Plan...........................................................V-2
5.7 Annual Limitations if Other Master or Prototype Plans.........................................V-2
5.8 Annual Limitations if Qualified Defined Contribution Plans Other
Than Master or Prototype Plans..............................................................V-3
5.9 Annual Limitations if Other Qualified Defined Benefit Plan....................................V-4
5.10 Suspense Account..............................................................................V-4
5.11 Transfer of Prior Plan Accounts...............................................................V-4
5.12 Annual Report.................................................................................V-4
VI. FORFEITABLE AND NON-FORFEITABLE INTERESTS.............................................................VI-1
6.1 Nature of a Participant's Interest...........................................................VI-1
6.2 Non-Forfeitable Amounts Credited to a Participant's Accounts.................................VI-1
6.3 Forfeitable Amounts Credited to a Participant's Accounts.....................................VI-1
6.4 Computation of Years of Vesting Service......................................................VI-1
6.5 Forfeitures..................................................................................VI-1
6.6 Reemployment Without Break in Service........................................................VI-2
6.7 Vesting After a Break in Service.............................................................VI-2
VII. PAYMENT OF A PARTICIPANT'S PLAN BENEFIT..............................................................VII-1
7.1 Plan Benefits...............................................................................VII-1
7.2 Retirement or Death.........................................................................VII-1
7.3 Other Termination of Service................................................................VII-2
7.4 Payment of a Participant's Plan Benefit.....................................................VII-2
7.5 Deferred Distributions......................................................................VII-5
7.6 Early Distributions.........................................................................VII-6
7.6A Direct Rollovers............................................................................VII-6
7.7 Withdrawals of After-Tax and Employer Contributions.........................................VII-6
-iii-
<PAGE>
PAGE
7.8 Hardship Withdrawals........................................................................VII-7
7.9 Withdrawal of Deductible Contributions......................................................VII-8
7.10 Loans.......................................................................................VII-8
7.11 Designation of Beneficiary..................................................................VII-9
7.12 Payments to Minors or Persons of Unsound Mind..............................................VII-10
7.13 Non-Alienation of Benefits.................................................................VII-10
7.14 Qualified Domestic Relations Orders........................................................VII-11
7.15 Claims Procedure...........................................................................VII-12
7.16 Claims Review Procedure....................................................................VII-13
7.17 Plan Administrator Consent or Discretion...................................................VII-13
7.18 Unclaimed Account..........................................................................VII-13
VIII. TOP-HEAVY PROVISIONS................................................................................VIII-1
8.1 General....................................................................................VIII-1
8.2 Vesting....................................................................................VIII-1
8.3 Employer Contributions and Forfeitures.....................................................VIII-1
8.4 Adjustments in Annual Limitations..........................................................VIII-2
IX. ADMINISTRATION........................................................................................IX-1
9.1 The Plan Administrator to Be Administrator...................................................IX-1
9.2 Powers and Duties of Plan Administrator......................................................IX-1
9.3 Delegation of Fiduciary Duties...............................................................IX-1
9.4 Records and Reports..........................................................................IX-1
9.5 Indemnification for Liability................................................................IX-1
X. ESTABLISHMENT OF FUND..................................................................................X-1
10.1 The Funding Agreement.........................................................................X-1
10.2 Expenses of Fund..............................................................................X-1
10.3 Source of Plan Benefit........................................................................X-1
XI. CONTINUANCE AND AMENDMENT OF THE PLAN.................................................................XI-1
11.1 Continuation of the Plan.....................................................................XI-1
11.2 Distribution of Trust Fund on Termination of Plan and Trust Fund.............................XI-1
11.3 Vesting Upon Permanent Discontinuance of Contributions.......................................XI-1
11.4 Amendment by Employer........................................................................XI-1
11.5 Amendment by Sponsor.........................................................................XI-2
11.6 Amendments Changing Vesting Schedule.........................................................XI-2
11.7 Merger or Consolidation of Plan..............................................................XI-2
XII. MISCELLANEOUS........................................................................................XII-1
12.1 Effect of Plan..............................................................................XII-1
12.2 Limitation of Liability.....................................................................XII-1
12.3 Plan to Conform to Code and Act.............................................................XII-1
12.4 Separate Administration.....................................................................XII-1
12.5 Failure of Other Employer to Qualify........................................................XII-1
12.6 Notice of Tax Court Proceeding..............................................................XII-1
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<PAGE>
PAGE
12.7 Rollovers and Transfers from Other Plans....................................................XII-1
12.8 Text to Control.............................................................................XII-2
-v-
<PAGE>
XIII. 401 (k) PLAN........................................................................................XIII-1
13.1 Application................................................................................XIII-1
13.2 Definitions................................................................................XIII-1
13.3 Employer Contributions.....................................................................XIII-4
13.4 Employee Salary Reduction Deferrals or After-Tax Contributions ............................XIII-4
13.5 Required and Additional Salary Reduction Deferrals ........................................XIII-5
13.6 Collection of Required or Optional After-Tax Contributions.................................XIII-5
13.7 Distribution of Excess Salary Reduction Deferrals..........................................XIII-5
13.8 Percentage Limitation on Salary Reduction Deferrals, Qualified
Nonelective Contributions and Qualified Matching Contributions...........................XIII-6
13.9 Distribution of Excess Contributions.......................................................XIII-7
13.10 Percentage Limitation on After-Tax Contributions and Matching
Contributions under Code section 401(m)..................................................XIII-8
13.11 Distribution of Excess Aggregate Contributions.............................................XIII-9
13.12 Qualified Nonelective Contributions.......................................................XIII-10
13.13 Participants' Accounts....................................................................XIII-10
13.14 Allocation of Increase or Decrease in Net Worth and of Employee
Contributions...........................................................................XIII-10
13.15 Withdrawal of Salary Reduction Deferrals, Qualified Nonelective
Contributions and Qualified Matching Contributions.......................................XIII-10
13.16 Hardship Withdrawals......................................................................XIII-11
</TABLE>
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<PAGE>
DAVIS, GRAHAM & STUBBS
PROTOTYPE DEFINED CONTRIBUTION PLAN
I.
INTRODUCTION
1.1 PLAN PURPOSE -- The Employer has established this Defined Contribution
Plan to help its Employees provide financial security for themselves and their
dependents upon death, disability or retirement. All Plan Benefits are in
addition to Social Security.
1.2 PLAN ADOPTION -- The Employer has executed an Adoption Agreement and
has adopted this Plan as a Profit-Sharing Plan, a 401(k) Plan or as a Money
Purchase Pension Plan. Article XIII will apply only if the Employer adopts this
Plan as a 401(k) Plan. Any adoption of this Plan as a 401(k) Plan is deemed to
be also an adoption of this Plan as a Profit-Sharing Plan. The Adoption
Agreement and the Trust Agreement are a part of this Plan and describe certain
provisions and alternatives the Employer has adopted. The Employer has also
established a Trust to hold and invest the Trust Fund.
1.3 PLAN ADMINISTRATION -- The Employer will appoint one or more persons to
serve as Plan Administrator. The Plan Administrator will administer the Plan as
described in Article IX.
1.4 TRUST FUND -- The Trust Fund will be held and invested, as described in
Article X, by the Trustee named in the Trust Agreement, which is a separate
document but part of the Plan. Plan Benefits will be paid from the Trust Fund to
eligible Participants on or after termination of their Service.
1.5 PLAN NOT INSURED -- The benefits under this Plan are not insured by the
Pension Benefit Guaranty Corporation.
1.6 DEFINED TERMS -- Capitalized words used in this Plan are defined in
Article II.
<PAGE>
II.
DEFINITIONS
2.1 GENERAL. Certain capitalized words used in the Plan and Trust Agreement
have the meanings set forth below, unless the context clearly indicates
otherwise. Masculine pronouns include the feminine and neuter, and the singular
includes the plural.
2.2 "ACCOUNT" means the amount of each Participant's interest in the Fund
as described in Article V.
2.3 "ACT" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the rules and regulations issued thereunder.
2.4 "ADJUSTED NET INCOME" means the consolidated net income of the Employer
computed in accordance with accounting principles regularly applied by the
Employer on a basis consistent with prior Fiscal Years, but without taking into
account: (a) gains or losses from the sale or other disposition of real or
depreciable personal property used in the Employer's business; (b) items of
income or loss classified as extraordinary, nonrecurring or nonoperating; (c)
deductions for contributions under this Plan; and (d) federal, state and local
taxes imposed on the Employer and measured by its income.
2.5 "ADOPTION AGREEMENT" means the document by which the Employer elects to
establish a Qualified Defined Contribution Plan under the terms of this
Prototype Retirement Plan.
2.6 "AFFILIATED EMPLOYER" means any corporation which is a member of a
controlled group of corporations (as defined in Code section 414(b)) which
includes the Employer; any trade or business (whether or not incorporated) which
is under common control (as defined in Code section 414(c)) with the Employer;
any organization (whether or not incorporated) which is a member of an
affiliated service group (as defined in Code section 414(m)) which includes the
Employer; and any other entity required to be aggregated with the Employer
pursuant to regulations under Code section 414(o).
2.7 "AFTER-TAX CONTRIBUTIONS" means any contribution made to the Plan by or
for a Participant which is included in the Participant's gross income in the
year in which made and which is maintained under a separate account to which
earnings and losses are allocated. Such contributions are not permitted for Plan
Years beginning on or after January 1, 1989 unless the Employer adopted this
Plan as a 401(k) Plan.
2.8 "AFTER-TAX CONTRIBUTIONS ACCOUNT" means the Participant's Account to
which After-Tax Contributions are allocated.
2.9 "AGGREGATION GROUP" means this Plan and any other plans which are
required or permitted to be aggregated pursuant to Code section 416(g). 2.10
"ANNIVERSARY DATE" means the last day of each Plan Year of the Employer
subsequent to the Effective Date of this Plan.
2.11 "ANNUAL ADDITION" means the amount allocated to a Participant's
Account during the Limitation Year which constitutes:
(a) Employer Contributions and Employee Contributions, including
Excess Contributions, Excess Aggregate Contributions and Excess Deferrals,
regardless of whether such amounts are distributed or forfeited;
(b) Forfeitures; and
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(c) Amounts described in Code sections 415(l)(2) and 419A(d)(2).
2.12 "BENEFICIARY" means the person or persons, including an individual or
corporate trustee, designated pursuant to Article VII to receive benefits which
may be payable upon a Participant's death.
2.13 "BREAK IN SERVICE" is defined in subsection 3.3(c) or subsection
3.4(d), whichever is applicable.
2.14 "CODE" means the Internal Revenue Code of 1986, as amended from time
to time, and the rules and regulations issued thereunder.
2.15 "COMPENSATION" means
(a) For purposes of contributions under the Plan:
(i) As to an Employee who is not Self-employed, compensation as
defined by the Employer in Section 18 of the Adoption Agreement; and
(ii) As to an Employee who is Self-employed, such person's Earned
Income for the Plan Year plus, if the Employer has elected the second
alternative under Subsection 18(a) of the Adoption Agreement, elective
or salary reduction contributions to a cash or deferred arrangement.
(b) Compensation for purposes of applying the nondiscrimination rules
of Code sections 401 through 419(A) means compensation described in Code
section 414(s) which includes wages as reported on the Employee's Form W-2
for income tax purposes or which, in the case of a Self-employed
individual, constitutes payment for services rendered includable in the
Self-employed individual's gross income and, if the Employer so elects, the
contributions the Employer makes under Code sections 125, 402(a)(8), 402(h)
or 403(b), provided such election does not discriminate in favor of the
Highly Compensated Employee.
For all purposes, Compensation taken into account under the Plan shall not
exceed $200,000 as adjusted for cost of living pursuant to Code section 415(d).
In determining the Compensation of a Participant for purposes of the limitation
in the preceding sentence, the rules of Code section 414(q)(6) shall apply,
except in applying such rules, the term "family" shall include only a Spouse and
any lineal descendants of the Participant who have not attained age 19 before
the close of the Plan Year. If, as a result of the application of such rules the
adjusted $200,000 limitation is exceeded, then (except for purposes of
determining the portion of Compensation up to the integration level if the Plan
provides for integration with Social Security), the limitation shall be prorated
among the affected individuals in proportion to each such individual's
Compensation as determined under this section prior to the application of this
limitation.
2.16 "DEDUCTIBLE CONTRIBUTIONS" means the contributions, if any, which may
have been permitted under this Plan or under a Prior Plan prior to January 1,
1987.
2.17 "DEDUCTIBLE CONTRIBUTIONS ACCOUNT" means the Account in the name of
the Participant to record such Participant's Deductible Contributions allowed
pursuant to Code section 72(o)(5)(A) prior to January 1, 1987.
2.18 "DEFINED BENEFIT FRACTION" means a fraction, the numerator of which is
the sum of the Participant's Projected Annual Benefits under all the Qualified
Defined Benefit Plans (whether or not terminated) maintained by the Employer,
and the denominator of which is the lesser of 125% of the dollar limitation
determined for the Limitation Year under Code sections 415(b) and (d) or 140% of
the Highest Average Compensation including any adjustments under Code section
415(b). Notwithstanding the above, if the Participant was a participant as of
the first day of the first Limitation Year beginning after December 31, 1986 in
one or more Qualified Defined Benefit Plans maintained by the Employer on May 5,
1986, the denominator of this fraction will not be less than 125% of the sum of
the annual benefits which the Participant had accrued under such plans as of the
close of the last
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Limitation Year beginning before January 1, 1987, without reference to any
changes in the terms and conditions after May 6, 1986. The preceding sentence
applies only if the Qualified Defined Benefit Plans individually and in the
aggregate satisfied the requirements of Code section 415 for all Limitation
Years beginning before January 1, 1987.
2.19 "DEFINED CONTRIBUTION FRACTION" means a fraction, the numerator of
which is the sum of the Annual Additions to the Participant's Accounts under all
the Qualified Defined Contribution Plans (whether or not terminated) maintained
by the Employer for the current and all prior Limitation Years (including the
Annual Additions attributable to the Participant's After-Tax Contributions to
all Qualified Defined Benefit Plans (whether or not terminated) maintained by
the Employer, and the Annual Additions attributable to all welfare benefit funds
as defined in Code section 419(e) and individual medical accounts as defined in
Code section 415(l)(2) maintained by the Employer), and the denominator of which
is the sum of the maximum aggregate amounts for the current and all prior
Limitation Years of Service with the Employer (regardless of whether a Qualified
Defined Contribution Plan was maintained by the Employer). The maximum
aggregation amount in any Limitation Year is the lesser of (a) 125% of the
dollar limitation in effect under Code section 415(c)(1)(A), or (b) 35% of the
Participant's Limitation Compensation for such year. If the Employee was a
participant as of the first day of the first Limitation Year beginning after
December 31, 1986 in one or more Qualified Defined Contribution Plans maintained
by the Employer on May 6, 1986, the numerator of this fraction will be adjusted
if the sum of this fraction and the Defined Benefit Fraction would otherwise
exceed 1.0 under the terms of this Plan. Under the adjustment, an amount equal
to the product of (1) the excess of the sum of the fractions over 1.0 times (2)
the denominator of this fraction will be permanently subtracted from the
numerator of this fraction. The adjustment is calculated using the fractions as
they would be computed as of the close of the last Limitation Year beginning
before January 1, 1987, without regard to any changes in the terms and
conditions after May 5, 1986, but using the section 415 limitation applicable to
the first Limitation Year beginning on or after January 1, 1987. The Annual
Addition for any Limitation Year beginning before January 1, 1987 may not be
recomputed to treat all Employee contributions as Annual Additions.
2.20 "DETERMINATION DATE" means, with respect to any Plan Year, the last
day of the preceding Plan Year or, in the case of the first Plan Year, the last
day of such Plan Year. The Valuation Date applicable to any Determination Date
is the Valuation Date indicated in Section 19 of the Adoption Agreement which
coincides with or immediately precedes the Determination Date.
2.21 "EARNED INCOME" means the total net earnings from self-employment in
the trade or business to which the Plan applies, provided that personal services
are a material income-producing factor in such trade or business. Net earnings
will be determined without regard to items not included in gross income and the
deductions allocable to such items. In computing such net earnings, deductions
for contributions by the Employer on behalf of all Employees will be taken into
account. Net earnings will be determined with regard to the deduction allowed to
the Employer by Code section 164(f) for taxable years beginning after December
31, 1989.
2.22 "EFFECTIVE DATE" means the date specified in Section 6 or 7 of the
Adoption Agreement.
2.23 "ELECTION PERIOD" means the period which begins on the first day of
the Plan Year in which a Participant attains age 35 and ends on the date of his
or her death. If a Participant terminates service prior to the first day of the
Plan Year in which age 35 is attained, the election period will begin on the
date of separation with respect to the account balance as of the date of
separation.
2.24 "ELIGIBLE PARTICIPANT" means any Employee who is eligible to make an
After-Tax Contribution or a Salary Reduction Deferral or who is eligible to
receive an Employer Contribution (including Forfeitures). If an Employee
Contribution is required as a condition of participation in the Plan, any
Employee who would be a Participant in the Plan but who makes no such
contribution will be treated as an eligible Employee for whom no Employee
Contributions are made.
2.25 "EMPLOYEE" means any person who is employed by the Employer including
an individual who is Self-employed or any person who is employed by any employer
aggregated with the Employer under Code
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section 414(b), (c), (m) or (o) and any person required to be considered
employed by the Employer under Code section 414(n). Any leased employee will be
treated as an Employee of the recipient Employer; however, contributions or
benefits provided a leased employee by the leasing organization which are
attributable to services performed for the recipient Employer will be treated as
provided by the recipient Employer. The preceding sentence will not apply to any
leased employee if all leased employees constitute less than 20% of the
Employer's Non-Highly Compensated workforce pursuant to Code section
414(n)(5)(c)(ii) and if such employee is covered by a money purchase pension
plan providing: (a) a nonintegrated employer contribution rate of at least 10%
of compensation as defined in Code section 415(c)(3) but including amounts
contributed pursuant to a salary reduction agreement which are excludable from
an employee's gross income under Code sections 125, 402(a)(8), 402(h) or 403(b),
(b) immediate participation, and (c) full and immediate vesting. For purposes of
this paragraph, 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 Employer and related persons determined in accordance with
Code section 414(n)(6)) 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.
2.26 "EMPLOYEE CONTRIBUTIONS" means the After-Tax Contributions, if any,
authorized by Section 12 of the Adoption Agreement.
2.27 "EMPLOYER" means the corporation, partnership, sole proprietor,
affiliated Employer or other entity which executed the Adoption Agreement
establishing this Plan, and any predecessor (including a sole proprietorship or
partnership) or successor through merger, consolidation or purchase of
substantially all of the Employer's assets or business which, within 90 days
after such succession, agrees to continue this Plan. If the Employer is a sole
proprietorship, upon the Employer's death or incapacity, his personal
representative will become the Employer, but only for purposes of terminating
the Plan and directing disposition of the Fund pursuant to Article X. For
purposes of applying the limitations of Section 5.7, 5.8, 5.9 or 5.10, Employer
will also include an affiliated service group (as defined in Code section 414(m)
of which the Employer is a part), a group of corporations or other entities
which constitute a controlled group of corporations (as defined in Code section
414(b) as modified by Code section 415(h)), a group of trades or businesses
(whether or not incorporated) under common control (as defined in Code section
414(c) as modified by Code section 415(h)), and any other entity required to be
aggregated with the Employer pursuant to Code section 414(o).
2.28 "EMPLOYER CONTRIBUTIONS" means the amount contributed by the Employer.
2.29 "EMPLOYER CONTRIBUTIONS ACCOUNT" means the account maintained by the
Plan Administrator in the name of a Participant to record his interest in the
Fund represented by his share of Employer Contributions (other than Salary
Reduction Contributions) and Forfeitures, and the increase or decrease in the
net worth of the Fund allocable thereto.
2.30 "ENTRY DATE" means the first day of the first and seventh months of
the Plan Year, unless otherwise specified in Section 9 of the Adoption
Agreement.
2.31 "FIVE PERCENT OWNER OR 5 PERCENT OWNER" means any person who owns (or
is considered as owning under Code section 318) more than five percent of the
outstanding stock of the Employer that employs such person or stock possessing
more than five percent of the total combined voting power of all stock of such
Employer or, if the Employer is not a corporation, any person who owns more than
five percent of the capital or profits interest in the Employer.
2.32 "FORFEITURE" means that portion of a Participant's Employer
Contributions Account which is forfeited as described in Section 6.5.
2.33 "FORMER PARTICIPANT" means an individual who has ceased to be a
Participant because of termination of his Service for any reason and who has an
undistributed Account.
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2.34 "401(K) PLAN" means this Plan if it is adopted by an Employer pursuant
to a 401(k) Adoption Agreement.
2.35 "HIGHEST AVERAGE COMPENSATION" means the average Limitation
Compensation for the three consecutive Years of Service with the Employer that
produces the highest average. A Year of Service with the Employer is the
twelve-consecutive-month period defined in the Adoption Agreement.
2.36 "HOUR OF SERVICE" has the meaning set forth in Section 3.5. 2.37
"INSURANCE COMPANY" means a life insurance company authorized to issue policies
in the State of Colorado.
2.38 "INSURANCE CONTRACT" means a retirement income, endowment or ordinary
life policy issued to the Funding Agent on the life of a Participant.
2.39 "KEY EMPLOYEE" means any Employee or former Employee (and the
beneficiaries of such Employee) who at any time during the Plan Year or any of
the four preceding Plan Years was an officer of the Employer having an annual
compensation greater than 50% of the amount in effect under Code section
415(b)(1)(A) for any such Plan Year, an owner (or considered an owner under Code
section 318) of one of the ten largest interests in the Employer if such
individual's compensation exceeds 100% of the dollar limitation under Code
section 415(c)(1)(A), a Five Percent Owner of the Employer, or a One Percent
Owner of the Employer who has an annual compensation of more than $150,000.
Annual compensation means compensation as defined in Code section 415(c)(3), but
including amounts contributed by the Employer pursuant to a salary reduction
agreement which are excludable from the Employee's gross income under Code
sections 125, 402(a)(8), 402(h) or 403(b). The determination period is the Plan
Year containing the determination date and the four preceding Plan Years. The
determination of who is a Key Employee will be made in accordance with Code
section 416(i), as amended, and the regulations thereunder. No Participant will
be deemed to be a Key Employee for any Plan Year prior to the Plan Year
beginning after December 31, 1983.
2.40 "LIMITATION COMPENSATION" means a Participant's Earned Income, wages,
salaries, fees for professional services and other amounts received for personal
services actually rendered in the course of employment with the Employer
maintaining the Plan (including, but not limited to, commissions paid salesmen,
compensation for services on the basis of a percentage of profits, commissions
on insurance premiums, tips, and bonuses) and excluding the following:
(a) Employer contributions to a plan of deferred compensation to the
extent contributions are not included in gross income of the Employee for
the taxable year in which contributed, or on behalf of an Employee to a
simplified employee pension plan to the extent such contributions are
deductible under Code section 219(b)(7), and any distributions from a plan
of deferred compensation whether or not includable in the gross income of
the Employee when distributed;
(b) Amounts realized from the exercise of a non-qualified stock
option, or when restricted stock (or property) held by an Employee becomes
freely transferable or is no longer subject to a substantial risk of
forfeiture;
(c) Amounts realized from the sale, exchange or other disposition of
stock acquired under a qualified stock option; and
(d) Other amounts which receive special tax benefits, or contributions
made by an Employer (whether or not under a salary reduction agreement)
towards the purchase of a Code section 403(b) annuity contract (whether or
not the contributions are excludable from the gross income of the
Employee).
For purposes of applying these limitations, amounts included as compensation are
those actually paid or made available to a Participant within the Limitation
Year.
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2.41 "LIMITATION YEAR" means the Plan Year (or any other
twelve-consecutive-month period adopted for all Qualified Defined Contribution
Plans or Qualified Defined Benefit Plans of the Employer pursuant to a written
resolution adopted by the Employer). If this Plan is the only such Plan
maintained by the Employer, the Limitation Year means each Plan Year beginning
after December 31, 1975. If the Limitation Year is amended to a different
twelve-consecutive-month period, the new Limitation Year must begin on a date
within the Limitation Year in which the amendment is made.
2.42 "LOAN ACCOUNT" means the Participant's Account established pursuant to
Section 7.11.
2.43 "LOAN PAYMENTS" means the payments made by a Participant to such
Participant's Loan Account pursuant to Section 7.11.
2.44 "MASTER OR PROTOTYPE PLAN" means a plan sponsored by a trade or
professional association, bank, insurance company or regulated investment
company, the form of which is intended to qualify under Code section 401(a).
2.45 "MAXIMUM PERMISSIBLE AMOUNT" means, with respect to any Participant
for any Limitation Year, the lesser of (a) $30,000 (or such other amount as may
be permitted by the Secretary of the Treasury pursuant to Code section 415), or
(b) 25% of his Limitation Compensation for such Limitation Year. The Limitation
Compensation in (b) does not apply to any contribution for medical benefits
within Code sections 401(h) or 419A(f)(2) which is otherwise treated as an
Annual Addition. If a short Limitation Year is created because of an amendment
changing the Limitation Year to a different twelve-consecutive-month period, the
Maximum Permissible Amount for the short Limitation Year will be the lesser of
(1) $30,000 multiplied by the following fraction:
Number of Months
IN THE SHORT LIMITATION YEAR
12
or (2) 25% of the Participant's Limitation Compensation for the short Limitation
Year.
2.46 "MONEY PURCHASE PENSION PLAN" means this Plan if it is adopted by the
Employer pursuant to the Adoption Agreement for Standard Money Purchase Pension
Plan or the Adoption Agreement for Custom Money Purchase Pension Plan.
2.47 "NON-KEY EMPLOYEE" means any Employee who is not a Key Employee.
2.48 "NORMAL RETIREMENT AGE" is the later of (a) the earlier of the age
elected by the Employer in Section 17 of the Adoption Agreement or age 65 or (b)
the fifth anniversary of the Entry Date on which the Employee became a
Participant.
2.49 "OWNER-EMPLOYEE" means the Employer if the Employer is a sole
proprietor or, if the Employer is a partnership, a partner owning more than 10%
of either the capital or profits interest in the partnership, or a person who
owned the business with respect to which a Prior Plan was maintained under the
Self-Employed Individuals Tax Retirement Act of 1962.
2.50 "PARTICIPANT" means any individual who has an Account in the Fund and
whose Service has not terminated, unless otherwise indicated.
2.51 "PERMISSIVE AGGREGATION GROUP" consists of the Required Aggregation
Group, plus any other plans of the Employer which, when considered as a group
with the Required Aggregation Group, would continue to satisfy the requirements
of Code sections 401(a)(4) and 410. If the Permissive Aggregation Group is not
Top- Heavy, the Top-Heavy requirements do not apply to any plan in the
Permissive Aggregation Group.
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2.52 "PLAN" means the plan set forth in this document, as amended from time
to time.
2.53 "PLAN ADMINISTRATOR" means the person or persons appointed pursuant to
Article IX.
2.54 "PLAN BENEFITS" means the amount described in Section 7.1 to which a
Participant becomes entitled as a result of the termination of his Service for
any reason.
2.55 "PLAN YEAR" means the plan year otherwise designated in the Plan.
2.56 "PRIOR PLAN" means any employee pension or profit-sharing plan
established and maintained by the Employer or a predecessor of the Employer
which, pursuant to Section 7 of the Adoption Agreement, is amended in its
entirety by the substitution of this Plan for such plan.
2.57 "PROFIT-SHARING PLAN" means this Plan if it is adopted by the Employer
pursuant to the Adoption Agreement for Standard Profit-Sharing Plan.
2.58 "PROJECTED ANNUAL BENEFIT" means a Participant's annual benefit
(adjusted to an actuarially equivalent straight life annuity if such benefit is
expressed in a form other than a straight life annuity or qualified joint and
survivor annuity) under the terms of the Plan, assuming that the Participant
will continue employment until normal retirement age under the Plan (or current
age, if later) and that the Participant's Limitation Compensation for the
current Limitation Year and all other relevant factors used to determine
benefits under the Plan will remain constant for all future Limitation Years.
2.59 "QUALIFIED DEFINED BENEFIT PLAN" means a pension plan, other than a
Qualified Defined Contribution Plan, intended to qualify under Code section
401(a).
2.60 "QUALIFIED DEFINED CONTRIBUTION PLAN" means a pension, profit-sharing,
savings, stock bonus or similar plan intended to qualify under Code section
401(a), which provides for an individual account for each Participant and for
benefits based solely on the amounts contributed to the Participant's account
and any income, expense, loss, gain or forfeiture allocated thereto.
2.61 "QUALIFIED DOMESTIC RELATIONS ORDER" means a court order which meets
the requirements of Section 7.15.
2.62 "QUALIFIED ELECTION" means:
(a) A consent by the Participant's Spouse to the Participant's naming
a person other than such Spouse as a Beneficiary of a Participant's Plan
Benefit or as a Beneficiary of an Insurance Contract purchased pursuant to
Section 5.13;
(b) A consent by a Participant's Spouse to the Participant's pledging
the Participant's Account as security for a loan under this Plan if the
Adoption Agreement so provides; or
(c) A waiver by a Participant, which has been consented to by the
Participant's Spouse, of the right to have the Plan Benefit paid as a
Qualified Joint and Survivor Annuity or a Qualified Preretirement Annuity
in the case of a Money Purchase Pension Plan or in the case of a
Profit-Sharing Plan or 401(k) Plan which does not comply with the Safe
Harbor Provisions. Any waiver of a Qualified Joint and Survivor Annuity or
a Qualified Preretirement Survivor Annuity shall not be effective unless:
(i) the Participant's Spouse consents in writing to the election; (ii) the
election designates a specific Beneficiary, including any class of
Beneficiaries or any contingent Beneficiaries, which may not be changed
without the Spouse's
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consent (or the Spouse expressly permits designations by the Participant
without any further spousal consent); (iii) the Spouse's consent
acknowledges the effect of the election; and (iv) the Spouse's consent is
witnessed by a plan representative or notary public. Additionally, a
Participant's waiver of the Qualified Joint and Survivor Annuity shall not
be effective unless the election designates a form of benefit payment which
may not be changed without the Spouse's consent (or the Spouse expressly
permits designations by the Participant without any further spousal
consent). If it is established to the satisfaction of a plan representative
that there is no Spouse or that the Spouse cannot be located, a waiver will
be deemed a qualified election. Any consent by a Spouse obtained under this
provision (or establishment that the consent of a Spouse may not be
obtained) shall be effective only with respect to such Spouse. A consent
that permits designations by the Participant without any requirement of
further consent by such Spouse must acknowledge that the Spouse has the
right to limit consent to a specific Beneficiary, and a specific form of
benefit where applicable, and that the Spouse voluntarily elects to
relinquish either or both of such rights. A revocation of a prior waiver
may be made by a Participant without the consent of the Spouse at any time
before the commencement of benefits. The number of revocations is not
limited. No consent obtained under this provision is valid unless the
Participant has received notice as provided in Section 7.4 below.
(d) A Participant who will not yet attain age 35 as of the end of any
current Plan Year may make a special Qualified Election to waive the
Qualified Preretirement Survivor Annuity for the period beginning on the
date of such election and ending on the first day of the Plan Year in which
the Participant will attain age 35. Such election shall not be valid unless
the Participant receives a written explanation of the Qualified
Preretirement Survivor Annuity in such terms as are comparable to the
explanation required under subparagraph 7.4(b)(iii)(B) without regard to
the time period during which such explanation must be provided. Qualified
Preretirement Survivor Annuity coverage will be automatically reinstated as
of the first day of the Plan Year in which the Participant attains age 35.
Any new waiver on or after such date shall be subject to the full
requirements of this section.
2.63 "QUALIFIED JOINT AND SURVIVOR ANNUITY" means an immediate annuity for
the life of the Participant with a survivor annuity for the life of the Spouse
which will be 50% (unless a different percentage up to 100% is elected by the
Participant) of the amount of the annuity which is payable during the joint
lives of the Participant and the Spouse. Such annuity will be the amount of
benefit which can be purchased with the Participant's Plan Benefit.
2.64 "QUALIFIED PRERETIREMENT SURVIVOR ANNUITY" means an annuity for the
life of the Spouse of the Participant the actuarial equivalent of which is not
less than 50% of the Participant's Plan Benefit as of the Participant's date of
death.
2.65 "QUALIFYING EMPLOYER SECURITIES" means common stock issued by the
Employer or an Affiliated Employer which is readily tradeable on an established
securities market. If there is no common stock which meets the requirements of
the preceding sentence, the term "Qualifying Employer Securities" means common
stock issued by the Employer or an Affiliated Employer having a combination of
voting power and dividend rights equal to or in excess of that class of common
stock of the Employer or any Affiliated Employer having the greatest voting
power and that class of common stock of the Employer or any Affiliated Employer
having the greatest dividends rights.
2.66 "REQUIRED AGGREGATION GROUP" means (a) each qualified plan of the
Employer in which at least one Key Employee participates or participated at any
time during the determination period (regardless of whether or not the plan has
terminated), and (b) any other qualified plan of the Employer which enables a
plan described in (a) to meet the requirements of Code sections 401(a)(4) or
410. Each plan in the Required Aggregation Group will be a Top-Heavy Plan if the
Required Aggregation Group is not an aggregated Top-Heavy Plan.
2.67 "REQUIRED BEGINNING DATE" means:
(a) GENERAL RULE. The Required Beginning Date of a Participant is the
first day of April of the calendar year following the calendar year in
which the Participant attains age 70-1/2.
(b) TRANSITIONAL RULES. The Required Beginning Date of a Participant
who attained age 70-1/2 before January 1, 1988 is determined in accordance
with (i) or (ii) below:
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(i) Non-5 Percent Owners. The Required Beginning Date of a
Participant who is not a 5 Percent Owner is the first day of April of
the calendar year following the calendar year in which the later of
retirement or attainment of age 70-1/2 occurs.
(ii) 5 Percent Owners. The Required Beginning Date of a
Participant who is a 5 Percent Owner during any year beginning after
December 31, 1979 is the first day of April following the later of:
(A) the calendar year in which the Participant attains age
70-1/2, or
(B) the earlier of the calendar year with or within which
ends the Plan Year in which the Participant becomes a 5 Percent
Owner or the calendar year in which the Participant retires.
The Required Beginning Date of a Participant who is not a 5 Percent Owner who
attained age 70-1/2 during 1988 and who had not retired as of January 1, 1989 is
April 1, 1990.
(c) 5 PERCENT OWNER. A Participant is treated as a 5 Percent Owner for
purposes of this Section if such Participant is a 5 Percent Owner as
defined in Code section 416(i) (determined in accordance with section 416
but without regard to whether the Plan is Top-Heavy) at any time during the
Plan Year ending with or within the calendar year in which such owner
attains age 66-1/2 or any subsequent Plan Year. After distributions to a 5
Percent Owner have begun, they must continue to be distributed, even if the
Participant ceases to be a 5 Percent Owner in a subsequent year. 2.68
"ROLLOVER CONTRIBUTIONS ACCOUNT" means the Account in the name of the
Participant to record such Participant's Rollover Contributions pursuant to
Section 12.7.
2.69 "SAFE HARBOR PROVISIONS" means the following conditions when applied
to a Profit-Sharing Plan or 401(k) Plan:
(a) the Participant cannot or does not elect payments in the form of a
life annuity, and
(b) on the death of the Participant, the Participant's Plan Benefit
will be paid to the Participant's surviving Spouse, but if there is no
surviving Spouse or if the surviving Spouse has already consented in a
manner conforming to a Qualified Election (without the notice required
under Section 7.4), then to the Participant's designated Beneficiary.
However, the Safe Harbor Provisions are not operative with respect to the
Participant if it is determined that the profit-sharing plan is a direct or
indirect transferee of a defined benefit plan, money purchase pension plan
(including a target benefit plan), stock bonus or profit-sharing plan which
would otherwise provide for a life annuity form of payment to the
Participant. In addition, this Section will not apply unless the
Participant's Spouse is the Beneficiary of any insurance on the
Participant's life purchased by Employer Contributions or Forfeitures
allocated to the Participant's Account.
2.70 "SELF-EMPLOYED" means (a) an individual who has earned income for the
taxable year from the trade or business for which the Plan is established; (b)
an individual who would have had earned income but for the fact that the trade
or business had no net profits for the taxable year; and (c) an individual who
has been a self-employed individual for any prior taxable year within the
meaning of (b).
2.71 "SERVICE" means employment as an Employee, or association as an
Owner-Employee or Self-employed, with the Employer or an Affiliated Employer
named in Section 22 of the Adoption Agreement. If the Employer maintains the
plan of a predecessor employer, service with such predecessor will be treated as
Service with the Employer.
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2.72 "SHAREHOLDER-EMPLOYEE" means an Employee who, on any day in a Plan
Year in which the Employer is an electing small business corporation under
Subchapter S of the Code, owns more than five percent of the outstanding stock
of the Employer, including stock owned, directly or indirectly, by or for his
spouse, children, grandchildren and parents, or is a Shareholder-Employee under
Code section 1379.
2.73 "SPONSOR" means Davis, Graham & Stubbs.
2.74 "SPOUSE" means the Spouse or surviving Spouse of the Participant,
provided that a former Spouse will be treated as the Spouse or surviving Spouse
to the extent provided under a qualified domestic relations order as described
in Code section 414(p).
2.75 "SUPER TOP-HEAVY PLAN" means a plan which would be a Top-Heavy Plan if
"90%" were substituted for "60%" each place it appears in the definition of
Top-Heavy Plan.
2.76 "TAXABLE WAGE BASE" means the maximum amount of earnings which may be
considered wages, under Code section 3121(a)(1), for Federal Insurance
Contributions Act purposes.
2.77 "TOP-HEAVY PLAN" means any plan if, for any Plan Year beginning after
December 31, 1983, any of the following conditions exist:
(a) If the Top-Heavy Ratio for this Plan exceeds 60% and this Plan is
not part of any Required Aggregation Group or Permissive Aggregation Group
of plans.
(b) If this Plan is a part of a Required Aggregation Group of plans
but not part of a Permissive Aggregation Group and the Top-Heavy Ratio for
the group of plans exceeds 60%.
(c) If this Plan is a part of a Required Aggregation Group and part of
a Permissive Aggregation Group of plans and the Top-Heavy Ratio for the
Permissive Aggregation Group exceeds 60%.
2.78 "TOP-HEAVY RATIO" means:
(a) If the Employer maintains one or more Qualified Defined
Contribution Plans (including any Simplified Employee Pension Plan) and the
Employer has not maintained any Qualified Defined Benefit Plan which during
the five-year period ending on the Determination Date(s) has or has had
accrued benefits, the Top-Heavy Ratio for this Plan alone or for the
Required or Permissive Aggregation Group, as appropriate, is a fraction,
the numerator of which is the sum of the account balances of all Key
Employees as of the Determination Date(s) (including any part of any
account balance distributed in the five-year period ending on the
Determination Date(s)), and the denominator of which is the sum of all
account balances (including any part of any account balance distributed in
the five-year period ending on the Determination Date(s)), both computed in
accordance with Code section 416 and the regulations thereunder. Both the
numerator and denominator of the Top-Heavy Ratio are increased to reflect
any contribution not actually made as of the Determination Date but which
is required to be taken into account on that date under Code section 416
and the regulations thereunder.
(b) If the Employer maintains one or more Qualified Defined
Contribution Plans (including any Simplified Employee Pension Plan) and the
Employer maintains or has maintained one or more Qualified Defined Benefit
Plans which during the five-year period ending on the Determination Date(s)
has or has had any accrued benefits, the Top-Heavy Ratio for any Required
or Permissive Aggregation Group, as appropriate, is a fraction, the
numerator of which is the sum of account balances under the Aggregated
Qualified Defined Contribution Plans for all Key Employees, determined in
accordance with (a) above, and the present value of accrued benefits under
the Aggregated Qualified Defined Benefit Plans for all Key Employees as of
the Determination Date(s), and the denominator of which is the sum of the
account balances under the Aggregated Qualified Defined Contribution Plans
for all Participants, determined in accordance with (a) above, and the
present value of accrued benefits under the Qualified Defined Benefit Plans
for all Participants as of the Determination Date(s), all determined in
accordance with Code section 416 and the regulations thereunder. The
accrued benefits under
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a Qualified Defined Benefit Plan in both the numerator and denominator of
the Top-Heavy Ratio are increased for any distribution of an accrued
benefit made in the five-year period ending on the Determination Date.
(c) For purposes of (a) and (b) above, the value of account balances
and the present value of accrued benefits will be determined as of the most
recent Valuation Date that falls within or ends with the twelve-month
period ending on the Determination Date, except as provided in Code section
416 and the regulations thereunder for the first and second plan years of a
defined benefit plan. The account balances and accrued benefits of a
Participant who (i) is not a Key Employee but who was a Key Employee in a
prior year or (ii) has not been credited with at least one Hour of Service
with any Employer maintaining the Plan at any time during the five-year
period ending on the Determination Date will be disregarded. The
calculation of the Top-Heavy Ratio and the extent to which distributions,
rollovers and transfers are taken into account will be made in accordance
with Code section 416 and the regulations thereunder. Deductible
Contributions will not be taken into account for purposes of computing the
Top-Heavy Ratio. When aggregating plans, the value of account balances and
accrued benefits will be calculated with reference to the Determination
Dates that fall within the same calendar year.
(d) The accrued benefit of a Participant other than a Key Employee
shall be determined under the method, if any, that uniformly applies for
accrual purposes under all defined benefit plans maintained by the Employer
or, if there is no such method, as if such benefit accrued not more rapidly
than the slowest accrual rate permitted under the fractional rule of Code
section 411(b)(1)(C).
2.79 "TRUST AGREEMENT" means the document which is part of the Plan and
under which the Trustee invests or administers the Fund.
2.80 "TRUST FUND" OR "FUND" means the assets, including Insurance
Contracts, if any, held under the Trust Agreement which forms a part of this
Plan, and from which benefits under this Plan will be paid.
2.81 "TRUSTEE" means the bank designated as Trustee in the Adoption
Agreement, or any successor Trustee appointed pursuant to the terms of the
applicable Trust Agreement.
2.82 "VALUATION DATE(S)" means the date(s) described in Section 19 of the
Adoption Agreement.
2.83 "YEAR OF SERVICE" has the meaning set forth in Section 3.3 or 3.4,
whichever is applicable.
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III.
PARTICIPATION
3.1 ELIGIBILITY --
(a) INITIAL ENTRY -- An Employee will automatically become a
Participant on the Effective Date if, on the Effective Date, he or she
satisfies the following requirements:
(i) EMPLOYEE -- He or she is an Employee;
(ii) NO COLLECTIVE BARGAINING AGREEMENT -- He or she is not
included in a unit of Employees covered by a collective bargaining
agreement which does not provide for participation in the Plan,
provided that retirement benefits were the subject of good faith
bargaining between the Employer and employee representatives. For this
purpose, the term "employee representatives" does not include any
organization more than half of whose members are Employees who are
owners, officers or executives of the Employer;
(iii) NONRESIDENT ALIEN -- He or she is not a nonresident alien
who receives no earned income which constitutes U.S. income under the
Code from the Employer; and
(iv) OTHER -- He or she satisfies the other eligibility
requirements specified in Section 8 of the Adoption Agreement.
If an Employee does not satisfy such requirements on the Effective Date, the
Employee will automatically become a Participant on the Entry Date coinciding
with or next following the date on which the Employee satisfies such
requirements, provided the Employee is an eligible Employee on such Entry Date.
If an Employee was a participant in the Prior Plan on the day before the
Effective Date but does not satisfy such requirements on the Effective Date,
such Employee will not be eligible to share in Employer Contributions until the
Entry Date coinciding with or next following the date on which such Employee
satisfies such requirements. The preceding rules will be applicable regardless
of whether Years of Service are computed under the Hours of Service Method
described in Section 3.3 or the Continuous Service Method described in Section
3.4. However, if the Continuous Service Method is applicable, the Special Entry
Date provisions of subsection 3.4(e) may be applicable. If an Employee becomes a
Participant, as described in subsection 3.1(a), (b) or (c), such Employee will
be eligible to share in Employer Contributions and to make Employee
Contributions if such Contributions are authorized by Section 12 of the Adoption
Agreement, for each Plan Year in which such Employee satisfies the requirements
of Section 3.2.
(b) ENTRY AFTER TERMINATION OF SERVICE -- If an Employee's Service
terminates for any reason and such Employee is subsequently reemployed by
the Employer, such Employee will retain credit for any Years of Eligibility
Service, computed as described in Section 3.3 or 3.4, whichever is
applicable, completed prior to the date of reemployment. If an Employee had
become a Participant prior to the termination of Service, such Employee
will become a Participant immediately upon reemployment as an Employee. If
an Employee had not become a Participant prior to the termination of
Service, such Employee will become a Participant on the Entry Date
coinciding with or next following the date on which he or she became an
eligible Employee under (a) above. For the purpose of this Section, the
date of reemployment will be the first date on which an Employee completes
an Hour of Service subsequent to termination of Service.
(c) INELIGIBLE CLASS OF EMPLOYMENT -- An Employee will not be eligible
to share in Employer Contributions or make Employee Contributions for the
portion of any Plan Year in which he or she is not an eligible Employee
under (a) above. If an Employee has been a Participant but becomes
ineligible to participate in the Plan even though his or her Service has
not terminated, such Employee will become eligible to share in Employer
Contributions and to make Employee Contributions immediately upon returning
to the status of
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an eligible Employee. If an Employee has not been a Participant because he
or she has been in an ineligible class of employment, such Employee will
become a Participant immediately upon becoming an eligible Employee.
(d) ACCOUNTS OF CERTAIN INDIVIDUALS -- If an Employee was a
participant in the Prior Plan and is ineligible to participate in this
Plan, his or her accounts under the Prior Plan will be transferred to the
Fund as described in Section 5.11. If an Employee was a Participant in this
Plan but becomes ineligible to participate, his or her Accounts will be
retained in the Fund. In either of such events, such Accounts will share in
any increase or decrease in the net worth of the Fund as described in
Section 5.4. However, an Employee will not be eligible to share in any
Employer Contributions, nor will he or she be eligible to make Employee
Contributions, until he or she is an eligible Employee. Except for
ineligibility to share in Employer Contributions and to make Employee
Contributions as described above, such Employee will be subject to all of
the provisions of the Plan.
(e) OWNER-EMPLOYEES -- Owner-Employees may become Participants in the
Plan pursuant to this subsection. However, no contributions may be made by
or on behalf of an Owner-Employee for any Plan Year in which the
requirements of (i), (ii) and (iii) below, to the extent applicable, are
not satisfied.
(i) If this Plan provides contributions or benefits for one or
more Owner-Employees who control both the business with respect to
which this Plan is established and one or more other trades or
businesses, this Plan and the plan established with respect to such
other trades or businesses must, when considered as a single plan,
satisfy Code sections 401(a) and (d) with respect to the employees of
this and all such other trades or businesses.
(ii) If this Plan provides contributions or benefits for one or
more Owner-Employees who control one or more trades or businesses,
the employees of each such other trade or business must be included in
a plan which satisfies Code sections 401(a) and (d) and which provides
contributions and benefits not less favorable than those provided for
such Owner-Employees under the Plan.
(iii) If an individual is covered as an Owner-Employee under the
plans of two or more trades or businesses which he or she does not
control and such individual controls another trade or business, then
the contributions or benefits of the employees under the plan of the
trade or business which such Owner-Employee does control must be as
favorable as those provided for such Owner-Employee under the most
favorable plan of the trade or business which he or she does not
control.
(iv) For purposes of (i), (ii) and (iii) above, an
Owner-Employee, or two or more Owner-Employees, will be considered to
control a trade or business if such Owner-Employee or such two or more
Owner-Employees together: (A) own the entire interest in an
unincorporated trade or business, or (B) in the case of a partnership,
own more than 50% of either the capital interest or the profits
interest in such partnership. For purposes of the preceding sentence,
an Owner-Employee or two or more Owner-Employees will be treated as
owning any interest in a partnership which is owned, directly or
indirectly, by a partnership which such Owner-Employee or such two or
more Owner-Employees are considered to control.
3.2 ELIGIBILITY TO SHARE IN EMPLOYER CONTRIBUTIONS -- An Employee will be
eligible to share in any Employer Contributions for each Plan Year, beginning
with the Plan Year in which he or she:
(a) becomes a Participant as provided in Section 3.1;
(b) satisfies the requirements of Sections 11 and 15 of the Adoption
Agreement; and
(c) is not ineligible to share in Employer Contributions as described
in subsection 3.1(c) or (d).
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An Employee's share of Employer Contributions will be computed under Section 13
of the Adoption Agreement.
3.3 YEARS OF SERVICE - HOURS OF SERVICE METHOD -- If the Employer has
elected the Hours of Service Method of computing Years of Service in Section 10
of the Adoption Agreement, Years of Service will be computed as follows:
(a) YEARS OF SERVICE FOR ELIGIBILITY PURPOSES -- An Employee will
receive credit for one Year of Service for the purposes of subsection 8(b)
of the Adoption Agreement (referred to as a "Year of Eligibility Service")
if an Employee is credited with not less than 1,000 Hours of Service, as
described in Section 3.5, in a twelve-consecutive-month period beginning on
the day he or she first renders an Hour of Service. If subsection 8(b) of
the Adoption Agreement requires more than one Year of Eligibility Service,
the second and subsequent twelve-month periods will begin on the
anniversary of the date such Employee first rendered an Hour of Service. If
subsection 8(b) of the Adoption Agreement requires only one Year of
Eligibility Service and an Employee fails to satisfy the 1,000 Hours of
Service Requirement in the first twelve-month period, the succeeding
twelve-consecutive-month period will commence with the first Plan Year
which commences prior to the first anniversary of the day such Employee
first renders an Hour of Service. If the Years of Eligibility Service
required by subsection 8(b) of the Adoption Agreement consist of or include
a fraction of a year, an Employee will receive credit for such fraction on
the date on which he or she completes, during the applicable twelve-month
period or Plan Year, the applicable fraction of a year in the Service of
the Employer without regard to the number of Hours of Service completed in
such fraction of a year.
(b) YEARS OF SERVICE FOR VESTING PURPOSES -- An Employee will receive
credit for one Year of Service for the purposes of Section 6.4 of the Plan
(referred to as a "Year of Vesting Service") for each Plan Year in which he
or she is credited with not less than 1,000 Hours of Service, as described
in Section 3.5. However, an Employee will not receive credit for a Year of
Vesting Service in any Plan Year specified in subsection 16(c) of the
Adoption Agreement. If an Employee completes a Break in Service but
subsequently returns to the Service of the Employer, he or she will retain
credit for the Years of Vesting Service completed at the time the Break in
Service began.
(c) BREAK IN SERVICE -- An Employee will complete a one-year Break in
Service at the close of any Plan Year in which he or she is not credited
with more than 500 Hours of Service, as described in Section 3.5. An
Employee will complete a six-year Break in Service when he or she has
completed six consecutive one-year Breaks in Service.
3.4 YEARS OF SERVICE - CONTINUOUS SERVICE METHOD -- If the Employer has
elected the Continuous Service Method of computing Years of Service in Section
10 of the Adoption Agreement, Years of Service for both eligibility and vesting
purposes will be based on Period of Service.
(a) PERIOD OF SERVICE -- A Period of Service will be measured from the
first date on which an Employee renders an Hour of Service, as described in
Section 3.5, until the day before he or she begins a Break in Service, as
described in subsection 3.4(d). If an Employee completes a Break in Service
but subsequently returns to the Service of the Employer, he or she will
retain credit for the Period of Service completed at the time the Break in
Service began and will begin another Period of Service on the first date on
which he or she is credited with one Hour of Service. Two or more such
separate Periods of Service will be combined to determine the total Period
of Service.
(b) YEARS OF SERVICE FOR ELIGIBILITY PURPOSES -- During an Employee's
Period of Service, he or she will ordinarily be credited with one Year of
Service for eligibility purposes under subsection 8(b) of the Adoption
Agreement (referred to as a "Year of Eligibility Service") on the first
anniversary of the date on which he or she first rendered an Hour of
Service to the Employer and an additional Year of Eligibility Service on
each subsequent anniversary of such date. However, if an Employee has two
or more Periods of Service which are combined as described in subsection
3.4(a), he or she will be credited with one Year of Eligibility Service on
the date on which he or she completes a total Period of Service equal to
365 days and an additional Year of Eligibility Service on each subsequent
date on which he or she completes an additional Period of Service equal to
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<PAGE>
365 days. If the Years of Eligibility Service required by subsection 8(b)
of the Adoption Agreement consist of or include a fraction of a year, an
Employee will receive credit for such fraction on the date on which he or
she completes a Period of Service equal to the product of such fraction
multiplied by 365 days.
(c) YEARS OF SERVICE FOR VESTING PURPOSES -- During an Employee's
Period of Service, he or she will ordinarily receive credit for one Year of
Service for vesting purposes under Section 6.4 of the Plan (referred to as
a "Year of Vesting Service") on the first anniversary of the date on which
he or she first rendered an Hour of Service and an additional Year of
Vesting Service on each subsequent anniversary of such date. A Period of
Service will not include any period of time excluded from Vesting Service
by subsection 16(c) of the Adoption Agreement. An Employee will be credited
with one Year of Vesting Service on the date on which he or she completes a
total Period of Service equal to 365 days and an additional Year of Vesting
Service on each subsequent date on which he or she completes an additional
Period of Service equal to 365 days.
(d) BREAK IN SERVICE -- An Employee will begin a Break in Service on
the earlier of:
(i) the date on which he or she retires, voluntarily resigns, is
discharged or dies; or
(ii) the first anniversary of the date on which an Employee is
first absent (with or without compensation) from active Service with
the Employer for any reason other than retirement, voluntary
resignation, discharge or death, such as vacation, holiday, illness,
temporary disability, leave of absence or layoff.
A Break in Service is a period of at least 12 consecutive months during which an
Employee is not employed by the Employer. An Employee will complete a one-year
Break in Service if he or she does not render at least one Hour of Service to
the Employer before the first anniversary of the date on which he or she began a
Break in Service. However, if the Employer grants a leave of absence, such
Employee will not incur a Break in Service provided he or she returns to active
Service with the Employer on or before the expiration of the leave of absence.
An Employee will complete a six-year Break in Service when he or she has
completed six consecutive one-year Breaks in Service.
(e) SPECIAL ENTRY DATE -- If an Employee's Service terminates due to
retirement, voluntary resignation, discharge or any other reason, and such
Employee has not satisfied the minimum age and Years of Eligibility Service
requirements but returns to active Service before completing a Break in
Service, such Employee will become a Participant retroactive to the
earliest Entry Date on which he or she would have become a Participant if
such termination or absence had not occurred.
3.5 HOURS OF SERVICE -- An Employee will receive credit for one Hour of
Service to the Employer, determined in accordance with Section 10 of the
Adoption Agreement, for:
(a) PERFORMANCE OF DUTIES -- Each hour for which an Employee is paid,
or entitled to payment, for the performance of duties for the Employer.
These hours will be credited for the computation period or periods in which
the duties are performed;
(b) VACATION, ILLNESS, LEAVE OF ABSENCE -- 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 his or her Service was terminated) due to vacation, holiday,
illness, temporary disability, layoff, jury duty, military duty or leave of
absence. No more than 501 Hours of Service will be credited under this
paragraph for any single continuous period (whether or not such period
occurs in a single computation period);
(c) BACK PAY -- Each hour for which back pay, irrespective of
mitigation of damages, is either awarded or agreed to by the Employer. The
same Hours of Service will not be credited both under subsection (a) or
subsection (b), as the case may be, and under this subsection (c). These
hours will be credited
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for the computation period or periods to which the award or agreement
pertains rather than the computation period in which the award, agreement
or payment is made; and
(d) PURPOSE OF CODE SECTION 414(N) -- Each Hour of Service of an
Employee as defined under Code section 414(n) or section 414(o) and the
regulations thereunder.
The computation of Hours of Service under Section 10 of the Adoption Agreement
and this Section will in any event be calculated and credited as required by
Section 2530.200b-2 of the United States Department of Labor regulations, which
are incorporated herein by reference.
3.6 AFFILIATED EMPLOYER -- In determining eligibility to participate under
Article III and non-forfeitable interest under Article VI, Years of Service,
Periods of Service and Hours of Service will be treated as if they had been
accumulated with the Employer if they have been accumulated with any of the
following: an Affiliated Employer, named in Section 22 of the Adoption
Agreement; a corporation which is a member of a controlled group of
corporations, as defined in Code section 414(b), of which the Employer is also a
member; a member of a group of trades or businesses under common control, as
defined in Code section 414(c), of which the Employer is also a member and any
other entity required to be aggregated with the Employer pursuant to Code
section 414(o) and the regulations thereunder; a member of an affiliated service
group, as defined in Code section 414(m), of which the Employer is also a
member; or a predecessor of the Employer, if the Employer maintains a plan of
such predecessor or is required by Code section 414(a) to give credit for
Periods of Service or Hours of Service with such predecessor. For Plan Years
beginning after December 31, 1989, Plans may be aggregated in order to satisfy
Code section 401(m) only if they have the same Plan Year.
3.7 OMISSION OF ELIGIBLE EMPLOYEE -- If any Employee who should be included
as a Participant in the Plan is erroneously omitted, the Employer must make a
contribution with respect to the omitted Employee in the amount which such
Employer should have contributed with respect to such Employee, together with
earnings at the average rate experienced by the Fund since the date the
contribution should have been made. Such contribution must be made regardless of
whether or not it is deductible in whole or in part in any taxable year under
applicable provisions of the Code.
3.8 INCLUSION OF INELIGIBLE EMPLOYEE -- If any Employee who should not be
included as a Participant in the Plan is erroneously included, the Employer is
not entitled to recover the contribution made with respect to the ineligible
person regardless of whether or not a deduction is allowable with respect to
such contribution. In such event, the amount contributed with respect to the
ineligible Employee shall be used to reduce Employer Contributions for the Plan
Year in which the discovery is made.
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IV.
CONTRIBUTIONS
4.1 EMPLOYER CONTRIBUTIONS -- For each Plan Year ending after the Effective
Date, the Employer will contribute to the Fund the amounts described below:
(a) MONEY PURCHASE PENSION PLAN -- If the Employer adopted this Plan
as a Money Purchase Pension Plan, the Employer will contribute to the Fund
the amount specified in Section 13 of the Adoption Agreement.
(b) PROFIT-SHARING PLAN -- If the Employer adopted this Plan as a
Profit-Sharing Plan, the Employer may contribute to the Fund the amount
specified in Section 13 of the Adoption Agreement. Any amount held in the
Suspense Account described in Section 5.10 will be deemed to be an Employer
Contribution. In no event, however, will the Employer contribute an amount
greater than the lesser of: (i) 15% of the total Compensation paid to all
Participants during such Plan Year plus such additional amount, if any, as
it may deduct as a carryover under Code section 404(a)(3), or (ii) the sum
of amounts described in Sections 5.6 through 5.9 or Section 8.3, whichever
is applicable, for all Participants reduced, but not below zero, by the
amounts held in the Suspense Account described in Section 5.10.
(c) RESTORATION OF FORFEITURES -- If Section 6.6 requires the
restoration of any amounts forfeited by a Participant prior to a Break in
Service, the Employer will contribute, within a reasonable time after the
repayment described in Section 6.6, an amount which, when added to the
amounts described in subsections 5.3(a) and (b), will be sufficient to
restore the amounts previously forfeited. Such contribution will be made
without regard to the Adjusted Net Income for the Plan Year.
4.2 EMPLOYER'S REPRESENTATIONS -- In adopting this Plan, the Employer does
not promise to make any contribution to the Fund in any Plan Year other than as
described in Section 13 of the Adoption Agreement and Sections 4.1, 6.6 and 8.3
of this Plan.
4.3 RETURN OF CONTRIBUTIONS -- Upon request of the Employer, the Funding
Agent will return:
(a) To the Employer and those Participants who have made
contributions, any contributions made under this Plan (adjusted to reflect
any earnings or loss and any appreciation or depreciation attributable
thereto) if the Internal Revenue Service refuses to issue an initial
determination letter to the effect that this Plan and the Fund meet the
requirements of the Code but only if the application for qualification is
made by the time prescribed by law for filing the Employer's tax return for
the taxable year in which the Plan is adopted, or such later date as the
Secretary of the Treasury may prescribe. Such contributions will be
returned within one year after the date of such denial of qualification and
this Plan and the Fund will thereupon terminate; and
(b) To the Employer or any Participant, any Employer Contribution or
Employee Contribution made under a good faith mistake of fact, and to the
Employer, any Employer Contribution conditioned in good faith upon its
deductibility under Code section 404. The amount which may be returned may
not exceed the amount contributed (reduced to reflect any loss or
depreciation attributable thereto) over the amount that would have been
contributed had there not occurred a mistake of fact or a mistake in
determining the deduction. Appropriate reductions will be made in the
accounts of Participants to reflect the return of any contributions
previously credited to such accounts. However, no contribution will be
returned to the extent that such reduction would reduce the account of a
Participant to an amount less than the balance that would have been
credited to his account had the contribution not been made. Any
contribution made under a mistake of fact will be returned within one year
after the date of payment. Any contribution conditioned on its
deductibility will be returned within one year after it is disallowed as a
deduction.
4.4 EMPLOYEE AFTER-TAX CONTRIBUTIONS -- The Plan will not accept After-Tax
Contributions or Matching Contributions for Plan Years beginning on or after
January 1, 1989 unless this Plan is adopted as a
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401(k) Plan. Any such contributions made after December 31, 1986 and prior to
the Plan Year beginning on or after January 1, 1989 will be limited pursuant to
Code section 401(m).
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<PAGE>
V.
PARTICIPANTS' ACCOUNTS
5.1 PARTICIPANTS' ACCOUNTS -- The Plan Administrator will maintain separate
Accounts in each Participant's name to record the amount of his or her interest
in the Fund. Accounts may be designated as an Employer Contributions Account,
After-Tax Contributions Account, Deductible Account, Rollover Account and Loan
Account. The Funding Agent will not be required, however, to segregate Fund
assets because of the maintenance of separate accounts.
5.2 DETERMINATION OF NET WORTH OF FUND -- The Funding Agent will determine
the net worth of the Fund as of each Valuation Date by valuing the assets of the
Fund at their fair market value on such date, and taking into account the income
and expense of the Fund determined on the accrual basis. The Funding Agent will
then determine the increase or decrease in the net worth of the Fund occurring
since the preceding Valuation Date. The Funding Agent will not take into account
any increases or decreases resulting from any Contributions made by the Employer
for the Plan Year or by Participants since the previous Valuation Date, nor any
Forfeitures or restorations of Forfeitures occurring since the last Anniversary
Date.
5.3 RESTORATION OF FORFEITURES -- As of each Anniversary Date and after
determining Forfeitures under Section 6.5, the Plan Administrator will determine
the Participants entitled, pursuant to Section 6.6, to restoration of amounts
forfeited prior to a six-year Break in Service. The Plan Administrator will
allocate to the Employer Contributions Account of each such Participant, from
the sources and in the order of priority described below, an amount sufficient
to restore the amount previously forfeited by such Participant. The sources for
restoration in the order in which they will be applied are:
(a) FORFEITURES -- Any Forfeitures determined under Section 6.5;
(b) EXCESS AMOUNTS -- Any Excess Amounts then credited to the Suspense
Account described in Section 5.10. If this Plan is adopted as a Money
Purchase Pension Plan, any amounts not so applied will be applied to reduce
Employer Contributions for the Plan Year and credited as described in
Section 5.5. If the Plan is adopted as a Profit-Sharing Plan or as a 401(k)
Plan, any amounts not so applied will be either reallocated as described in
Section 5.5 or applied to reduce Employer Contributions as determined by
Section 13 of the Adoption Agreement;
(c) PLAN YEAR EMPLOYER CONTRIBUTIONS -- Any Employer Contribution for
the Plan Year, including any amount required to be contributed pursuant to
subsection 4.1(b). Any Employer Contributions not so applied will be
allocated as provided in Section 5.5. This subsection 5.3(c) does not apply
if this Plan is adopted as a Money Purchase Pension Plan; and
(d) MAKE-UP EMPLOYER CONTRIBUTIONS -- Any Employer Contribution
pursuant to subsection 4.1(d).
5.4 ALLOCATION OF INCREASE OR DECREASE IN NET WORTH AND OF EMPLOYEE
CONTRIBUTIONS -- As of each Valuation Date, the Plan Administrator will allocate
the increase or decrease in net worth of the Fund, as determined under Section
5.2, among the Accounts of all Participants, including Participants whose
Accounts are being held in the Fund pending distribution. Each Account will
first be (a) increased by one-half of any Salary Reduction Deferrals or
After-Tax Contributions made to such Account through payroll deductions since
the preceding Valuation Date, (b) increased by one-half of any Matching
Contributions made to such account on a monthly or more frequent basis since the
preceding Valuation Date, and (c) reduced by the amount of any distributions
therefrom since the preceding Valuation Date and prior to any restorations
pursuant to Section 5.3. The allocation of the increase or decrease in net worth
will then be made in the ratio which the dollar value of each such Account bears
to the aggregate dollar value of all such Accounts as of the preceding Valuation
Date. After these allocations have been made, the Plan Administrator will credit
to the appropriate Account the balance of a
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Participant's Salary Reduction Deferrals and After-Tax Contributions made since
the previous Valuation Date and not taken into account.
5.5 ALLOCATION OF BALANCE OF EMPLOYER CONTRIBUTIONS -- As of each
Anniversary Date, the Plan Administrator will determine the Participants
eligible to share in Employer Contributions for that Plan Year in accordance
with Section 3.2. After the allocations required by Sections 5.3 and 5.4 have
been made, the Plan Administrator will then allocate the balance of Employer
Contributions for the Plan Year, to the extent not allocated as required by
Sections 5.3 and 5.4, among the Employer Contributions Accounts of all such
Participants as indicated in Section 13 of the Adoption Agreement. This
allocation will be made in the manner specified in Section 13 of the Adoption
Agreement, may not be reduced on account of age, but will be subject to the
limitations of Sections 5.6 through 5.9, whichever is applicable.
5.6 ANNUAL LIMITATIONS IF ONLY ONE PLAN -- If a Participant does not
participate in, and has never participated in, any other Qualified Defined
Contribution Plan, Qualified Defined Benefit Plan or a welfare benefit fund, as
defined in Code section 419(e), maintained by the Employer or an individual
medical account, as defined in Code section 415(l)(2), maintained by the
Employer and which provides an Annual Addition, the amount of Annual Additions
which may be allocated to the Participant's Accounts for a Limitation Year will
not exceed the lesser of the Maximum Permissible Amount or any other limitation
contained in this Plan. If the Employer Contributions that would otherwise be
contributed or allocated to a Participant's Accounts would cause the Annual
Additions for the Limitation Year to exceed the Maximum Permissible Amount, the
amount contributed or allocated will be reduced so that the Annual Additions for
the Limitation Year will equal the Maximum Permissible Amount.
(a) PRELIMINARY DETERMINATION OF MAXIMUM PERMISSIBLE AMOUNT -- Prior
to the determination of a Participant's actual Limitation Compensation for
a Limitation Year, the Plan Administrator will determine the Maximum
Permissible Amount on the basis of a Participant's estimated Limitation
Compensation for such Limitation Year. A Participant's estimated Limitation
Compensation will be determined on a reasonable basis and in the same
manner as for all other Participants similarly situated.
(b) FINAL DETERMINATION OF MAXIMUM PERMISSIBLE AMOUNT -- As soon as is
administratively feasible after the end of the Limitation Year, the Plan
Administrator will determine the Maximum Permissible Amount for such
Limitation Year on the basis of a Participant's actual Limitation
Compensation for such Limitation Year.
(c) DISPOSITION OF EXCESS AMOUNTS -- If the determination of a
Participant's Maximum Permissible Amount pursuant to subsection 5.6(b)
results in an Excess Amount, such Participant's After-Tax Contributions and
then Salary Reduction Deferrals will be returned to him or her, to the
extent that the return would reduce the Excess Amount. If a return of these
amounts does not eliminate the Excess Amount and the Participant is covered
by the Plan at the end of the Limitation Year, the Excess Amount will be
used to reduce Employer Contributions (including any allocation of
Forfeitures) for such Participant in the next Limitation Year and each
succeeding Limitation Year if necessary. If a return of these amounts does
not eliminate the Excess Amount and the Participant is not covered by the
Plan at the end of a Limitation Year, the remaining Excess Amount will be
credited to the Suspense Account described in Section 5.10. Notwithstanding
the foregoing, if return of Required Contributions would result in
discrimination in practice, the Plan Administrator will not return such
Required Contributions to such Participant.
5.7 ANNUAL LIMITATIONS IF OTHER MASTER OR PROTOTYPE PLANS --
(a) AMOUNT OF ANNUAL ADDITIONS -- If, in addition to this Plan, a
Participant is covered under any other Qualified Defined Contribution Plan
or Plans (all of which are qualified Master or Prototype Plans maintained
by the Employer) or a welfare benefit fund, as defined in Code section
419(e), maintained by the Employer or an individual medical account, as
defined in Code section 415(l)(2), maintained by the Employer and which
provides an Annual Addition, the amount of Annual Additions which may be
allocated to such Participant's Accounts under this Plan for any such
Limitation Year will not exceed the Maximum Permissible Amount reduced by
the Annual Additions allocated to such Participant's Accounts under the
other Plans and welfare benefit funds for the same
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Limitation Year; provided, however, that the limitation under Code section
415(c)(1)(B) shall not apply to amounts allocated to an individual medical
account and deemed annual additions pursuant to Code section 415(l). If the
Annual Additions allocated to a Participant's Accounts under other
Qualified Defined Contribution Plans and welfare benefit funds maintained
by the Employer are less than the Maximum Permissible Amount, and the
Employer Contribution that would otherwise be contributed or allocated to
such Participant's Accounts under this Plan would cause the Annual
Additions for the Limitation Year to exceed this limitation, the amount
contributed or allocated to this Plan will be reduced so that the Annual
Additions under all such Plans for the Limitation Year will equal the
Maximum Permissible Amount. If the Annual Additions allocated to a
Participant's Accounts under such other Defined Contribution Plans and
welfare benefit funds in the aggregate are equal to or greater than the
Maximum Permissible Amount, no amount will be contributed or allocated to
such Participant's Accounts under this Plan for the Limitation Year.
(b) PRELIMINARY DETERMINATION OF MAXIMUM PERMISSIBLE AMOUNT -- Prior
to the determination of a Participant's actual Limitation Compensation for
the Limitation Year, the Plan Administrator will determine the amounts
referred to in subsection 5.7(a), above, on the basis of such Participant's
estimated Limitation Compensation for such Limitation Year. A Participant's
estimated Limitation Compensation will be determined on a reasonable basis
and in the same manner as for all other Participants similarly situated.
(c) FINAL DETERMINATION OF MAXIMUM PERMISSIBLE AMOUNT -- As soon as is
administratively feasible after the end of the Limitation Year, the Plan
Administrator will determine the amounts referred to in subsection 5.7(a)
on the basis of a Participant's actual Limitation Compensation for such
Limitation Year.
(d) IDENTIFICATION OF EXCESS AMOUNT -- If a Participant's Annual
Additions under this Plan and all such other plans result in an Excess
Amount, such Excess Amount will be deemed to consist of the amounts last
allocated, except that annual additions attributable to a welfare benefit
fund or individual medical account will be deemed to have been allocated
first regardless of the actual allocation date. If an Excess Amount was
allocated to a Participant on an allocation date of this Plan which
coincides with an allocation date of another plan, the Excess Amount
attributed to this Plan will be the product of: (i) the total Excess Amount
allocated as of such date (including any amount which would have been
allocated but for the limitations of Code section 415) multiplied by (ii)
the ratio of (A) the amount allocated to such Participant as of such date
under this Plan to (B) the total amount allocated as of such date under all
Qualified Defined Contribution Plans (determined without regard to the
limitations of Code section 415).
(e) DISPOSITION OF EXCESS AMOUNTS -- If the application of this
Section 5.7 results in an Excess Amount attributed to this Plan, such
Excess Amount will be disposed of as provided in subsection 5.6(c).
5.8 ANNUAL LIMITATIONS IF QUALIFIED DEFINED CONTRIBUTION PLANS OTHER THAN
MASTER OR PROTOTYPE PLANS -- If a Participant is also covered under another plan
maintained by the Employer which is a Qualified Defined Contribution Plan other
than a Master or Prototype Plan or a welfare benefit fund, as defined in Code
section 419(e), the amount of Annual Additions allocated to such Participant's
Accounts under this Plan for a Limitation Year will be limited in accordance
with the provisions of Section 5.7, as though the other plan were a Master or
Prototype Plan, unless the Employer provides other limitations in the Adoption
Agreement.
5.9 ANNUAL LIMITATIONS IF OTHER QUALIFIED DEFINED BENEFIT PLAN -- If, in
addition to this Plan, the Employer maintains, or at any time maintained, a
Qualified Defined Benefit Plan covering any Participant in this Plan, the sum of
a Participant's Defined Benefit Fraction and Defined Contribution Fraction will
not exceed 1.0 in any Limitation Year. The Plan Administrator will reduce the
amount of Annual Additions allocable to a Participant's Accounts under this Plan
to the extent necessary to comply with the 1.0 limitation unless the Employer
provides other limitations in the Adoption Agreement. Any amount not allocable
to a Participant's Accounts under this Plan because of the 1.0 limitation will
be disposed of as provided in subsection 5.6(c).
5.10 SUSPENSE ACCOUNT -- Excess Amounts to be disposed of pursuant to
subsection 5.6(c) will be credited to an account in the Fund, to be known as the
"Suspense Account." Amounts credited to the Suspense
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Account will be allocated as of each Anniversary Date to restore amounts
previously forfeited, as described in subsection 5.3(b). If a Suspense Account
is in existence at any time during a year pursuant to subsection 5.6(c), it will
not participate in the allocation of the Fund's investment gains and losses.
(a) MONEY PURCHASE PENSION PLAN -- If this Plan is adopted as a Money
Purchase Pension Plan, any excess remaining after the allocations described
in subsections 5.3(a) and (b) will be applied to reduce Employer
Contributions for the Fiscal Year ending on such Anniversary Date and each
succeeding Anniversary Date, if necessary, and credited as described in
Section 5.5. Any excess so applied will be considered Annual Additions for
such Limitation Year.
(b) PROFIT-SHARING PLAN OR 401(K) PLAN -- If this Plan is adopted as a
Profit-Sharing Plan or 401(k) Plan, any excess remaining after the
allocations described in subsections 5.3(a) and (b) will be allocated as an
additional Employer Contribution for the Plan Year ending on such
Anniversary Date, as described in Section 5.5, and each succeeding
Anniversary Date, if necessary, unless otherwise provided under Section 13
of the Adoption Agreement.
5.11 TRANSFER OF PRIOR PLAN ACCOUNTS -- If Section 7 of the Adoption
Agreement specifies that this Plan is an amendment and substitute for the Prior
Plan, a Participant's account under the Prior Plan representing his or her
interest in employer contributions and forfeitures under the Prior Plan will be
transferred to such Participant's Employer Contributions Account under this
Plan. Similarly, a Participant's account under the Prior Plan representing his
or her own contributions, if any, under the Prior Plan will be transferred to
his or her appropriate Accounts under this Plan. For the purposes of such a
transfer, the value of such Participant's accounts under the Prior Plan will be
determined as of the day before the day of such transfer.
5.12 ANNUAL REPORT -- The Plan Administrator will furnish each Participant
and Former Participant with a written statement as soon as practicable after
each Anniversary Date setting forth the balance of his or her Accounts, and
describing the amounts credited or charged thereto, as of such Anniversary Date.
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VI.
FORFEITABLE AND NON-FORFEITABLE INTERESTS
6.1 NATURE OF A PARTICIPANT'S INTEREST -- A Participant's interest in the
Fund is not an interest in any specific assets of the Fund, but rather a right
to receive non-forfeitable interest, as determined by the Plan Administrator, in
cash or in kind, from the Funding Agent at the time and in the manner described
in Article VII.
6.2 NON-FORFEITABLE AMOUNTS CREDITED TO A PARTICIPANT'S ACCOUNTS -- The
entire amount credited to a Participant's After-Tax Contribution Account,
Deductible Account, Rollover Account and Loan Account, including contributions
and earnings thereon, will always be non-forfeitable.
6.3 FORFEITABLE AMOUNTS CREDITED TO A PARTICIPANT'S ACCOUNTS -- The entire
amount credited to a Participant's Employer Contributions Account is forfeitable
and is subject to a vesting schedule with the following exception. If a
Participant's Service terminates because of death, regardless of his or her age
when death occurs, or because of retirement in accordance with Section 7.2, 100%
of a Participant's Employer Contributions Account will be non-forfeitable. If a
Participant's Service terminates for any other reason, the non-forfeitable
percentage of a Participant's Employer Contributions Account will be determined
under Section 16 of the Adoption Agreement. If a Participant became a
Participant on the Effective Date and this Plan is an amendment of a Prior Plan,
such Participant's non-forfeitable percentage on the Effective Date will be the
percentage determined under the Prior Plan if greater than that determined under
this Plan. In this event, such Participant's non-forfeitable percentage will not
increase until the percentage determined under this Plan is greater. If Section
11.6 applies, a Participant may elect to have his or her non-forfeitable
percentage computed under the vesting schedule in effect under the Prior Plan.
If Section 11.6 does not apply, a Participant's non-forfeitable percentage will
be determined under this Plan.
6.4 COMPUTATION OF YEARS OF VESTING SERVICE -- If Section 16 of the
Adoption Agreement provides for a graded vesting of a Participant's Employer
Contributions Account, a Participant's non-forfeitable interest therein will be
based on the number of Years of Vesting Service computed as provided in Section
3.3 or 3.4, whichever is applicable, that a Participant has accumulated at the
termination of Service.
6.5 FORFEITURES -- Whenever a Participant's Plan Benefit becomes
distributable in accordance with Article VII, the Plan Administrator will
determine the non-forfeitable percentage, if any, of such Participant's Accounts
under Section 16 of the Adoption Agreement. If the value of the non-forfeitable
interest in all of the Participant's Accounts (except for the Deductible
Account) is not greater than $3,500, the Participant will receive a distribution
of his or her entire non-forfeitable interest in such Accounts and the balance
will be treated as a Forfeiture. For purposes of this Section, if the value of
an Employee's non-forfeitable interest in such Accounts (exclusive of Deductible
Contributions) is zero, the Employee shall be deemed to have received a
distribution of such balance. If such value is greater than $3,500, the
non-forfeitable amount will be held for distribution as provided in Article VII
and the balance, if any, will be forfeited at the earlier of (a) the date the
Participant receives the distribution of any portion of his or her Employer
Contributions Account pursuant to Section 7.3, or (b) the date the Participant
completes a six-year Break in Service, if the Participant is entitled to
Deferred Payment pursuant to Section 7.3. Such Forfeitures will be applied as
described in subsection 5.3(a). If this Plan is adopted as a Profit-Sharing Plan
or a 401(k) Plan, any Forfeiture not applied as described in subsection 5.3(a)
will be allocated in the same manner as an Employer Contribution for the benefit
of Employees of the Employer who adopted this Plan for the Plan Year ending on
such Anniversary Date, as described in Section 5.5 unless otherwise provided in
Section 13 of the Adoption Agreement. If this Plan is adopted as a Money
Purchase Pension Plan, any Forfeiture not applied as described in subsection
5.3(a) will be used to reduce the contributions of the Employer who adopted this
Plan.
6.6 REEMPLOYMENT WITHOUT BREAK IN SERVICE -- If a Participant returns to
the Service of the Employer prior to completing a six-year Break in Service, and
such Participant received a distribution after the Effective Date of the entire
amount of the non-forfeitable portion of his or her Employer Contributions
Account but less than 100% of such Account, the amount forfeited pursuant to
Section 6.5, above, will be restored to the
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Participant's Employer Contributions Account in accordance with Section 5.3 at
the end of the Plan Year in which such Participant repays to the Fund the amount
previously distributed. Such repayment must be made before five years have
elapsed from the date of such Participant's reemployment. If a Participant is
deemed to receive a distribution under Section 6.5 and the Participant returns
to Service of the Employer prior to completing a six-year Break in Service, the
Participant's Employer Contributions Account shall be restored to the amount on
the date of such deemed distribution.
6.7 VESTING AFTER A BREAK IN SERVICE -- Any Years of Vesting Service
accumulated after a Participant completes a six-year Break in Service will not
be taken into account in determining the non-forfeitable percentage of the
amounts credited to a Participant's Employer Contributions Account before the
Break in Service began. Separate Employer Contributions Accounts will be
maintained for that portion of the Participant's Employer Contributions
attributable to Service prior to a six-year Break in Service and for that
portion of such contributions attributable to Service subsequent to a six-year
Break in Service, but both pre-break and post-break Service will count for
purposes of vesting the Employer Contributions attributable to Service
subsequent to a six-year Break in Service. Both Accounts will share in the gains
and losses of the Fund in the same manner as described in Section 5.4 of the
Plan. The Accounts may be joined when 100% vesting is achieved in the separate
Accounts.
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VII.
PAYMENT OF A PARTICIPANT'S PLAN BENEFIT
7.1 PLAN BENEFITS -- A Participant's Plan Benefits will be determined and
distributed only as described in this Article. Upon a Participant's retirement,
death or other termination of Service as described in Section 7.2 or 7.3, the
Plan Administrator will first determine the value of his or her Accounts, as of
the Valuation Date, described in Section 19 of the Adoption Agreement,
coincident with, or next preceding, the date on which a Participant's Service
terminates or the date on which payment of the Plan Benefits will begin,
whichever is later. The Plan Administrator will then credit to the Participant's
Accounts, other than the Employer Contributions Account, any contributions made
subsequent to such Valuation Date and charge to such Accounts any withdrawals
made by a Participant subsequent to such Valuation Date. The Plan Administrator
will thereafter determine the percentage of such Participant's Employer
Contributions Account which had become non-forfeitable, as described in Article
VI, at the termination of a Participant's Service. A Participant will be paid
the entire value of his or her non-forfeitable Accounts, as so adjusted, at the
time described in Section 7.2 or 7.3, whichever is applicable, and in the manner
described in Section 7.4. If payment is deferred as described in Section 7.3 or
7.4, the Participant's Accounts will continue to share in the increase or
decrease of the net worth of the Fund, as described in Section 5.4, or
accumulate interest, as described in Section 7.5. Unless a Participant elects
otherwise as provided in this Plan, payment of his or her Plan Benefits will
begin no later than 60 days after the latest of the close of the Plan Year in
which:
(a) RETIREMENT -- The Participant attains age 65 (or Normal Retirement
Age or Disability Retirement Date, if earlier);
(b) 10TH ANNIVERSARY -- The 10th anniversary of the first day of the
Plan Year in which the Participant commenced participation in the Plan
occurs; or
(c) TERMINATION -- The Participant terminates Service with the
Employer;
provided, however, that such payment will begin no later than such Participant's
Required Beginning Date. Notwithstanding the foregoing, the failure of a
Participant and Spouse to consent to a distribution while a benefit is
immediately distributable, within the meaning of Section 7.3 of the Plan, is
deemed to be an election to defer commencement of payment of any benefit
sufficient to satisfy this Section.
7.2 RETIREMENT OR DEATH -- A Participant's Plan Benefit will become payable
upon his or her retirement or death. Notwithstanding any other provisions of
this Plan, a Participant's Plan Benefit will be distributed to the Participant
commencing no later than his or her Required Beginning Date. Payment will begin
no later than 60 days after the close of the Plan Year in which a retired or
deceased Participant's Service terminates.
(a) NORMAL RETIREMENT DATE -- A Participant will be treated as having
retired if a Participant's Service terminates on or after Normal Retirement
Age as specified in Section 17 of the Adoption Agreement. A Participant
may, however, elect to remain in the Service of the Employer after Normal
Retirement Age. As long as the Participant remains in the Service of the
Employer, the Participant will continue to participate in the Plan in the
same manner as any other Participant.
(b) DISABILITY RETIREMENT DATE -- A Participant will be treated as
having retired upon the Plan Administrator's determination, based upon
standards uniformly applied by it and upon medical evidence satisfactory to
it, that such Participant is unable to engage in any substantial gainful
activity by reason of any medically determinable physical or mental
impairment which can be expected to result in death or to be of long
continued and indefinite duration.
7.3 OTHER TERMINATION OF SERVICE -- If a Participant's Service terminates
on or before his or her retirement or death, payment will begin no later than 60
days after the close of the Plan Year in which such
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Participant's Normal Retirement Date occurs. A Participant whose Service
terminates on or before his or her retirement or death may elect to receive
distribution of his or her accounts in a lump sum valued as of the Valuation
Date immediately preceding such distribution. However, the Plan Administrator
may direct the Funding Agent to begin payment within a reasonable time after the
Valuation Date as of which a Participant's Accounts were valued under Section
7.1. Notwithstanding the preceding sentence, if the value of a Participant's
Accounts is greater than $3,500, any such distribution will be made only:
(a) THE PARTICIPANT'S CONSENT -- With the Participant's written
consent if this Plan is adopted as a Profit-Sharing Plan or 401(k) Plan
which complies with the Safe Harbor Provisions; or
(b) THE PARTICIPANT'S CONSENT AND THE PARTICIPANT'S SPOUSE'S CONSENT
-- With the Participant's and the Participant's Spouse's written consent if
this Plan is adopted as a Profit-Sharing Plan or as a 401(k) Plan which
does not comply with the Safe Harbor Provisions, or as a Money Purchase
Pension Plan. A Participant's Spouse's written consent must be in the form
of a Qualified Election.
Any distribution of a Participant's Accounts before a Participant attains age
59-1/2 or before his or her Disability Retirement Date may incur a penalty tax
equal to 10% of the amount so distributed pursuant to Code section 72(t).
7.4 PAYMENT OF A PARTICIPANT'S PLAN BENEFIT -- A Participant may elect to
have his or her Plan Benefit distributed to such Participant (or to his or her
Beneficiary in the event of the Participant's death) under subsection 7.4(a)
below if this Plan is adopted as a Profit-Sharing Plan or as a 401(k) Plan or
under subsection 7.4(b) below if this Plan is adopted as a Money Purchase
Pension Plan. However, a Participant's Plan Benefit will be distributed to such
Participant under subsection 7.4(b) if this Plan is adopted as a Profit-Sharing
Plan which does not comply with the Safe Harbor Provisions or as a 401(k) Plan
which does not comply with the Safe Harbor Provisions. For purposes of this
Section 7.4, distribution of a Participant's interest is considered to begin on
the Participant's Required Beginning Date (or, if the Spouse dies after the
Participant, the date distribution is required to begin to the surviving Spouse
pursuant to subsection 7.4(a)(ii) below). The first day of the first period for
which an amount is paid as an annuity or any other form is the annuity starting
date.
(a) PROFIT-SHARING PLAN OR 401(K) PLAN
(i) DISTRIBUTION TO A PARTICIPANT OR TO A PARTICIPANT'S
BENEFICIARY AFTER THE PARTICIPANT'S REQUIRED BEGINNING DATE -- A
Participant may elect to have his or her Plan Benefit distributed as
follows:
(A) In a lump sum;
(B) In substantially equal, periodic installments payable
over a fixed period of more than one year but not longer than the
greater of the life expectancy of the Participant or the joint
and survivor life expectancy of the Participant and his or her
Beneficiary; or
(C) By any combination of a lump sum or installment
payments.
If payment of a Participant's Plan Benefit is made under paragraph (B)
above, the amount distributed in any given year must be an amount at least
equal to the quotient obtained by dividing the Participant's total Plan
Benefit at the beginning of that year by his or her life expectancy, or the
joint and survivor life expectancy of the Participant and the Participant's
Beneficiary, whichever is applicable, hereinafter referred to in this
subsection as the applicable life expectancy. The determination of the life
expectancies will be made at the time the Participant is entitled to his or
her initial distribution and will be computed by the use of the expected
return multiples in Tables V and VI of section 1.72-9 of the Income Tax
Regulations. The determination of the life expectancies of a Participant
and his or her Spouse will be redetermined on each Anniversary Date of the
initial distribution unless the Participant irrevocably elects otherwise
prior to his or her Required Beginning Date. For calendar years beginning
before January 1,
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1989, if a Participant's Spouse is not his or her Beneficiary, the
method of distribution selected must assure that at least 50% of the
present value of the amount available for distribution will be paid
within a Participant's life expectancy. For calendar years beginning
after December 31, 1988, the amount to be distributed each year,
beginning with distributions for the first distribution calendar year,
must not be less than the quotient obtained by dividing the
Participant's benefit by the lesser of (I) the applicable life
expectancy or (II) if the Participant's Spouse is not the Beneficiary,
the applicable divisor determined from the table set forth in Q&A-4 of
section 1.401(a)(9)-2 of the proposed regulations. Distributions after
the death of the Participant must be distributed using the applicable
life expectancy above as the relevant divisor without regard to
proposed regulations section 1.401(a)(9)-2. The minimum distribution
required for the Participant's first distribution calendar year must
be made on or before the Participant's Required Beginning Date. The
minimum distribution for other calendar years, including the minimum
distribution for the distribution calendar year in which the
Employee's Required Beginning Date occurs, must be made on or before
December 31 of that distribution calendar year. If a Participant's
Plan Benefit includes an Insurance Contract and the Participant elects
not to purchase such Insurance Contract, it will be converted into its
cash surrender value as provided in Section 5.13 and such cash
surrender value will be distributed in the same manner as the balance
of the Participant's Plan Benefit. If a Participant dies after his or
her Required Beginning Date, the remaining portion of his or her
interest will be distributed at least as rapidly as under the method
of distribution in effect prior to his or her death.
(ii) DISTRIBUTION TO A PARTICIPANT'S BENEFICIARY BEFORE THE
PARTICIPANT'S REQUIRED BEGINNING DATE -- If the Participant dies
before his or her Required Beginning Date, the Beneficiary may elect
to have the balance of the Participant's Plan Benefit distributed as
follows:
(A) In a lump sum;
(B) In substantially equal periodic installments payable
over a fixed period ending by December 31 of the calendar year
containing the fifth anniversary of the Participant's death; or
(C) In substantially equal periodic installments payable
over a period not extending beyond the life expectancy of the
Beneficiary; provided, however, either that the distribution
commences on or before December 31 of the calendar year
immediately following the calendar year in which the Participant
died or, if the Beneficiary is the Participant's Spouse, that the
distribution commences no later than December 31 of the calendar
year in which the Participant would have attained age 70-1/2.
If the Participant has not made an election pursuant to this Section
by the time of his or her death, the Participant's Beneficiary must
elect the method of distribution no later than the earlier of (I)
December 31 of the calendar year in which distribution would be
required to begin under this Section, or (II) December 31 of the
calendar year which contains the fifth anniversary of the date of
death of the Participant. If the Participant has no Beneficiary, or if
the Beneficiary does not elect a method of distribution, distribution
of the Participant's entire interest must be completed by December 31
of the calendar year containing the fifth anniversary of the
Participant's death. If the Spouse dies after the Participant, but
before payments to such Spouse begin, the provisions of this Section
shall be applied as if the surviving Spouse were the Participant. If
payment of a Participant's Plan Benefit is to be made under paragraph
(C) above, the amount distributed in any given year must be determined
pursuant to paragraph B of subsection 7.4(a)(i) above. Any amount paid
to any minor child of a Participant will be treated as if it were paid
to such Participant's Spouse, provided the amount is payable to such
Participant's Spouse upon the child's reaching the age of majority (or
such other event as may be specified in regulations promulgated by the
Secretary of the Treasury).
VII-3
<PAGE>
(b) MONEY PURCHASE PENSION PLAN
(i) DISTRIBUTION TO A PARTICIPANT -- A Participant's Plan Benefit
will be distributed under paragraph (A) below unless the Participant
elects to have his or her Plan Benefit distributed under paragraph (B)
below. Any annuity contract purchased and distributed by the Plan to a
Participant or Spouse must comply with the requirements of the Plan
and must be nontransferable.
(A) QUALIFIED JOINT AND SURVIVOR ANNUITY -- A Participant's
Plan Benefit will be paid in the form of a Qualified Joint and
Survivor Annuity if the Participant is married or in the form of
a life annuity if the Participant is not married, unless the
Participant has elected an optional form of benefit described in
paragraph (B) below. Such Qualified Joint and Survivor Annuity
will provide for monthly payments of a Participant's Plan Benefit
over the joint lives of the Participant and his or her Spouse, if
any, beginning at the date specified in Section 7.2 or 7.3,
whichever is applicable, and ending on the first day of the month
in which the death of the survivor of the Participant and his or
her Spouse, if any, occurs.
(B) OPTIONAL FORM OF BENEFIT -- A Participant may elect such
optional form of benefit pursuant to a Qualified Election within
the 90-day period ending on the first day of the first period for
which an amount is paid as an annuity or any other form. If a
Participant's Plan Benefit is distributable pursuant to Section
7.3, the Participant's Spouse, if any, may consent by a Qualified
Election to an optional form of payment before such payment is
made. An optional form of benefit is any form of distribution to
the Participant set forth in subsection 7.4(a)(i) above.
(ii) DISTRIBUTION TO THE PARTICIPANT'S BENEFICIARY -- If
distribution has not commenced prior to a Participant's death, the
Plan Benefit will be distributed under either paragraph (A) or
paragraph (B) below.
(A) QUALIFIED PRERETIREMENT SURVIVOR ANNUITY -- If a
Participant is married on the date of his or her death and if he
or she dies before payment of the Plan Benefit has commenced,
such Participant's Plan Benefit will be applied toward the
purchase of a Qualified Preretirement Survivor Annuity unless he
or she has selected an optional form of benefit as described in
paragraph (B) below within the Election Period pursuant to a
Qualified Election or unless, after the Participant's death, a
Beneficiary elects an optional form of benefit as described in
paragraph B below. If a Participant's Plan Benefit is applied
toward the purchase of a Qualified Preretirement Survivor
Annuity, the Participant's Spouse may elect to have such annuity
distributed within a reasonable period after the Participant's
death. The balance remaining after purchase of such annuity will
be distributed to the Beneficiary named pursuant to this Article
VII. If less than 100% of the Plan Benefit is paid to the Spouse,
the amount of the Participant's Employee-derived account balance
allocated to the Spouse will be in the same proportion as the
Employee-derived account balance is to the total account balance
of such Participant. A Participant who will not yet attain age 35
as of the end of the current Plan Year may make a special
Qualified Election to waive the Qualified Preretirement Survivor
Annuity for the period beginning on the date of such election and
ending on the first day of the Plan Year in which the Participant
will attain age 35. Such election will not be valid unless the
Participant receives notice comparable to that provided under
subsection 7.4(b)(iii) below. Qualified Preretirement Survivor
Annuity coverage will be automatically reinstated as of the date
the Participant attains age 35. Any new waiver on or after such
date will be subject to the full requirements of this Section.
(B) OPTIONAL FORM OF BENEFIT -- An optional form of benefit
is any form of distribution to a Beneficiary set forth in
subsection 7.4(a)(ii) above.
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<PAGE>
(iii) NOTICE REQUIREMENTS --
(A) QUALIFIED JOINT AND SURVIVOR ANNUITY -- In the case of a
Qualified Joint and Survivor Annuity, the Plan Administrator will
provide to the Participant, no less than 30 days nor more than 90
days prior to the annuity starting date (as defined at the end of
the first paragraph of Section 7.4), a written explanation of:
(I) the terms and conditions of a Qualified Joint and Survivor
Annuity; (II) the Participant's right to make, and the effect of,
a Qualified Election to waive the Qualified Joint and Survivor
Annuity form of benefit; (III) the rights of a Spouse; and (IV)
the right to make, and the effect of, a revocation of a previous
Qualified Election to waive the Qualified Joint and Survivor
Annuity.
(B) QUALIFIED PRERETIREMENT SURVIVOR ANNUITY -- In the case
of a Qualified Preretirement Survivor Annuity, the Plan
Administrator will provide the Participant a written explanation
of the Qualified Preretirement Survivor Annuity in such terms and
in such manner as would be comparable to the explanation provided
for a Qualified Joint and Survivor Annuity under (A) immediately
above and within the applicable period. The applicable period for
a Participant is whichever of the following periods ends last:
(i) the period beginning with the first day of the Plan Year in
which the Participant attains age 32 and ending with the close of
the Plan Year preceding the Plan Year in which the Participant
attains age 35; (ii) a reasonable period ending after the
individual becomes a Participant; (iii) a reasonable period
ending after this section first applies to the Participant.
Notwithstanding the foregoing, notice must be provided within a
reasonable period ending after separation from Service in the
case of a Participant who separates from Service before attaining
age 35. For purposes of applying this paragraph, a reasonable
period ending after the enumerated events described in (ii) and
(iii) is the end of the two-year period beginning one year prior
to the date the applicable event occurs, and ending one year
after that date. In the case of a Participant who separates from
Service before the Plan Year in which age 35 is attained, notice
shall be provided within the two-year period beginning one year
prior to separation and ending one year after separation. If such
a Participant thereafter returns to employment with the Employer,
the applicable period for such Participant shall be redetermined.
7.5 DEFERRED DISTRIBUTIONS -- If distribution of a Participant's Plan
Benefit is deferred pursuant to Section 7.3 or 7.4, the Participant may elect in
a writing delivered to the Plan Administrator to have the Plan Benefit held
under either subsection 7.5(a) or (b) below. If a Participant does not make an
election, the Plan Benefit will be held under subsection 7.5(a):
(a) NO INVESTMENT DIRECTIONS -- The Funding Agent will retain a
Participant's Plan Benefit in the Fund. Any balance retained in the Fund
will continue to share in any increase or decrease in the net worth of the
Fund in accordance with Section 5.4, but will not be allocated any share of
Employer Contributions or Forfeitures.
(b) INVESTMENT DIRECTIONS -- The Funding Agent will segregate a
Participant's Plan Benefit and invest the Account as the Participant may
direct from time to time by written instructions delivered to the Plan
Administrator forwarded to the Funding Agent; provided, however, no
investment will be made in collectibles as defined by Code section 408(m).
The Funding Agent will comply with a Participant's directions as soon as
practicable after receipt, but will not be required to comply therewith
earlier than ten banking business days after receipt. In the absence of any
change in directions, a Participant's Account will continue to be invested
in accordance with the most recent directions received by the Funding Agent
or, if no directions have been previously received, in such manner as the
Funding Agent in its discretion will determine. The Funding Agent will not
be responsible for any loss incurred by a Participant's Account because of
any directions, or absence of directions, received from the Participant.
7.6 EARLY DISTRIBUTIONS -- Although installment payment of a Participant's
Plan Benefit is begun under Section 7.4, the Plan Administrator may later direct
that the unpaid balance be distributed in a lump
VII-5
<PAGE>
sum, provided that, if the value of a Participant's Accounts is greater than
$3,500, any such distribution will be made only (a) with the Participant's
written consent if this Plan is adopted as a Profit-Sharing Plan or 401(k) Plan
which complies with the Safe Harbor Provisions, or (b) with the Participant's
and his or her Spouse's written consent in the form of a Qualified Election if
this Plan is adopted either as a Profit-Sharing Plan or 401(k) Plan which does
not comply with the Safe Harbor Provisions or as a Money Purchase Pension Plan.
However, no lump sum distribution will be made pursuant to the preceding
sentence after the first day of the first period for which an amount is received
as an annuity unless the Participant or his or her Spouse (or his or her
surviving Spouse) consents in writing to such distribution. All expenses
allocable to the maintenance or distribution of an amount held by the Funding
Agent for deferred or installment distribution will be charged against such
amount.
7.6A DIRECT ROLLOVERS.
(a) This Section applies to distributions made on or after January 1,
1993. Notwithstanding 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.
(b) DEFINITIONS --
(i) ELIGIBLE ROLLOVER DISTRIBUTION -- An eligible rollover
distribution is 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).
(ii) ELIGIBLE RETIREMENT PLAN -- An eligible retirement plan is
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.
(iii) DISTRIBUTEE -- A distributee includes an employee or former
employee. In addition, the employee's or former employee's surviving
spouse, 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.
(iv) DIRECT ROLLOVER -- A direct rollover is a payment by the
plan to the eligible retirement plan specified by the distributee.
7.7 WITHDRAWALS OF AFTER-TAX AND EMPLOYER CONTRIBUTIONS.
(a) AFTER-TAX CONTRIBUTIONS -- Upon a Participant's application, the
Plan Administrator may direct the Funding Agent to distribute from the
Participant's After-Tax Contributions Account, if any, an amount not
greater than the total After-Tax Contributions which such Participant has
made under this Plan or, if less, the value of the Participant's After-Tax
Contributions Account attributable to such contributions, determined as of
the last preceding Valuation Date, plus any After-Tax Contributions the
Participant has made since that Valuation Date.
VII-6
<PAGE>
(b) EMPLOYER CONTRIBUTIONS -- This subsection (b) applies if
withdrawals of Employer Contributions are authorized by Section 14 of the
Adoption Agreement. Upon a Participant's application, the Plan
Administrator may direct the Funding Agent to distribute such portion of a
Participant's Employer Contributions Account, determined as of the
preceding Valuation Date, which (i) has become vested as of such Valuation
Date; and (ii) exceeds that portion of his Employer Contributions Account
attributable to Employer Contributions (other than Salary Reduction
Contributions) made on his behalf for the current and two preceding Plan
Years. The restrictions of clause (i) shall not apply if the Employer
Contributions Account of the Participant has become 100 percent vested as
of the Valuation Date on which the withdrawal is made. A Participant may
not withdraw Employer Contributions more than once in a twelve-month
period.
(c) QUALIFIED ELECTION AND PENALTY -- If the value of a Participant's
Accounts is greater than $3,500, any withdrawal under this Section 7.7 may
be made only with the Participant's Spouse's written consent if this Plan
is adopted as a Profit-Sharing Plan or as a 401(k) Plan which does not
comply with the Safe Harbor Provisions or as a Money Purchase Pension Plan.
A Participant's Spouse's written consent must be in the form of a Qualified
Election. The distribution will be made as of the last business day of the
calendar month which is not less than 15 days after the Funding Agent
receives the Plan Administrator's direction. However, if a Participant
makes such a withdrawal of Required After-Tax Contributions, he or she will
not be eligible to share in any Employer Contributions or Forfeitures for
the Plan Year of the withdrawal and later Plan Years until the first
succeeding Plan Year in which such Participant makes the entire amount of
Required Salary Reduction or After-Tax Contributions. No Forfeitures will
occur solely as a result of a Participant's withdrawal of Required
Contributions.
7.8 HARDSHIP WITHDRAWALS -- If the Plan is adopted as a 401(k) Plan, see
Section 13.16 for hardship withdrawals. This Section applies if the Plan is
adopted as a Profit Sharing Plan and if hardship withdrawals are authorized by
Section 14 of the Adoption Agreement.
(a) PURPOSE OF DISTRIBUTION -- In the event of Hardship, as
hereinafter defined, endured by the Participant and recognized as such by
the Plan Administrator, and upon receipt by the Plan Administrator of an
application in writing for benefits hereunder, the Plan Administrator shall
direct the Trustee to make a payment or payments from either or both of the
accounts of such Participant to, or for the benefit of, the Participant or
the members of his family who are dependent upon him for support. Such
payment or payments shall be made in such a manner and in such an amount as
the Plan Administrator deems appropriate to maintain the customary standard
of living of such Participant or his family or to meet other extraordinary
and necessary expenses incurred by such Participant or his family during
such Hardship; provided, however, that the total amount of such payment
or payments shall in no event exceed the value, as of the date of the last
preceding Valuation Date, of the amounts then credited to the accounts of
such Participant.
(b) DEFINITION OF HARDSHIP -- "Hardship," as used herein, shall mean a
state of financial stringency occasioned by the incurrence of extraordinary
and necessary expenses by the Participant for medical or dental treatments
for himself or for members of his family who are dependent upon him for
support, for the education of his children, or to provide housing for his
family in the manner in which they are accustomed to living. Such a state
of financial stringency may also be occasioned by a loss or diminution of
earnings of the Participant because of his temporary inability, due to
physical or mental illness, accidental or otherwise, to perform the usual
duties of his employment, or because of a general deterioration of economic
conditions which affects substantially all of the Employees of the
Employer. A distribution will be for reasons of hardship if the
distribution is necessary in light of immediate and heavy financial needs
of the Participant. A distribution based upon financial hardship cannot
exceed the amount required to meet the immediate financial need created by
the hardship and cannot be reasonably available from other resources of the
Participant. The determination of the existence of financial hardship and
the amount distributed to meet the hardship shall be made on a uniform and
nondiscriminatory basis for all Employees.
(c) UNIFORMITY OF APPLICATION -- The provisions of this Section shall
be applied in a uniform manner to all similarly situated Participants.
VII-7
<PAGE>
7.9 WITHDRAWAL OF DEDUCTIBLE CONTRIBUTIONS -- Upon a Participant's
application, the Plan Administrator may direct the Funding Agent to distribute
to the Participant all or a portion of his or her Deductible Contributions as of
the last preceding Valuation Date.
7.10 LOANS -- If the Adoption Agreement so provides in Section 14 and if
the Participant is not an Owner-Employee or Shareholder-Employee, the
Participant may apply for a loan from the Fund. The Plan Administrator will
administer loans and will supply necessary forms upon request. The Plan
Administrator may direct the Funding Agent to loan a Participant an amount from
the Fund under the provisions set forth below. For purposes of this Section
only, Participant includes an individual who has an Account in the Fund and
whose Service has terminated as well as a Beneficiary who has an Account in the
Fund. It does not include an alternate payee pursuant to a Qualified Domestic
Relations Order.
(a) AMOUNT OF LOAN -- The amount of any loan will not exceed (when
added to the outstanding balance of all other loans a Participant has
received under all plans of the Employer determined in accordance with Code
sections 414(b), (c) and (m)) the lesser of (i) $50,000 reduced by the
excess of (A) the highest outstanding balance of such Participant's loans
from the Plan during the one-year period ending on the day before the date
on which such loan was made over (B) the outstanding balance of such
Participant's loans from the Plan on the date on which such loan was made,
or (ii) the greater of (A) one-half of the present value of such
Participant's Account (excluding any amounts credited as Deductible
Contributions and any accumulations thereon) determined as of the last
preceding Valuation Date, which has become non-forfeitable pursuant to
Article VI, or (B) $10,000. Notwithstanding the foregoing, a Participant's
loan may not exceed the present value of that portion of such Participant's
Account which has become non-forfeitable. No portion of Deductible
Contributions may be borrowed.
(b) TERMS OF LOAN -- The loan will be made under such terms as to
duration and repayment as may be approved by the Plan Administrator;
provided, however, that the terms of the loan will require at least
quarterly payments, level amortization and payment within five years from
the date the loan is made except when the loan is used to acquire the
Participant's principal residence.
(c) SOURCE -- A separate Loan Account will be maintained in the
Participant's name and the Trustee will transfer funds as the Participant
directs from his or her Accounts to his or her Loan Account to fund the
loan. If a Participant fails to direct the source of the loan, the loan
will be funded from the fund designated in the Participant's most recent
investment instructions. The loan will be made from the Participant's
Accounts only, and the Participant's Promissory Note will be an asset of
his or her Account only.
(d) SECURITY -- The loan will be secured by a pledge to the Fund of
50% of the nonforfeitable balance of a Participant's Accounts, including
any subsequent additions thereto but excluding any amounts credited as
Deductible Contributions and any accumulations thereon, and will bear a
reasonable rate of interest and repayment terms satisfactory to the Funding
Agent. Unless otherwise agreed by the Funding Agent, any loan made to a
Participant who is an Employee shall be repaid by payroll deduction.
(e) INTEREST -- The Loan will bear interest at a fixed rate equal to
the rate charged for fixed-rate loans in the same amount and for the same
term by a national bank in the geographic vicinity of the Employer's
principal place of business as designated by the Employer in writing from
time to time. However, if the Plan Administrator determines that such
interest rate does not provide the Plan with a return commensurate with the
interest rates charged by persons in the business of lending money for
loans which would be made under similar circumstances, the loan will bear
interest at a rate (determined by the Plan Administrator) that will provide
the Plan with such a return.
(f) SPOUSAL CONSENT -- Unless this Plan complies with the Safe Harbor
Provisions, a Participant must obtain the consent of his or her Spouse, if
any, within the 90-day period before the time the Account is used as
security for the loan. A new consent is required if the Account is used for
any increase in the amount of security. The consent must comply with the
requirements of a Qualified Election.
VII-8
<PAGE>
(g) PAYABLE UPON DISTRIBUTION -- The loan will be repaid in full
immediately upon distribution of any portion of a Participant's Plan
Benefit other than that portion consisting of Deductible Contributions and
any accumulations thereon.
(h) DEFAULT -- Failure to repay a loan in accordance with the terms of
the applicable promissory note constitutes a default. In the event of a
default, foreclosure on the note and attachment of the security will not
occur until a distributable event occurs in the Plan.
(i) NONDISCRIMINATION -- Loans made pursuant to this Section 7.10 will
be made available to all Participants on a reasonably equivalent basis
pursuant to uniform and non-discriminatory standards established by the
Plan Administrator.
7.11 DESIGNATION OF BENEFICIARY -- A Participant should designate a
Beneficiary or Beneficiaries, and a contingent Beneficiary or Beneficiaries, to
receive the undistributed portion of his or her Plan Benefit if he or she dies
before distribution is completed. A Participant may change any such designation
at any time. No designation, or change of designation, will be effective until
received by the Plan Administrator on a form prescribed by it.
(a) SPOUSE AS BENEFICIARY -- Unless a Participant's Spouse is entitled
to a Qualified Preretirement Survivor Annuity pursuant to subsection
7.4(b)(ii) or unless a Participant designates otherwise, the primary
Beneficiary for a Participant's entire benefit will be his or her Spouse.
If a Participant's Spouse is not entitled to a Qualified Preretirement
Survivor Annuity and the Participant does not designate his or her Spouse
as primary Beneficiary of his or her entire benefit, such Spouse must
consent to the Participant's designation pursuant to (b) below. No spousal
consent is required:
(i) If the Participant establishes to the satisfaction of the
Plan Administrator that he or she has no Spouse; or
(ii) If a Participant's Spouse cannot be located; or
(iii) Because of other circumstances under which no spousal
consent is required in accordance with applicable Treasury or
Department of Labor Regulations.
(b) SPOUSAL CONSENT -- If a spousal consent is required and a
Participant wishes to designate a Beneficiary other than his or her Spouse,
the Participant must obtain his or her Spouse's consent by a Qualified
Election. If spousal consent is required and a Qualified Election is not
obtained, the Participant will be deemed to have designated his or her
Spouse as Beneficiary. If a Participant has not designated a Beneficiary or
if no Beneficiary is living to receive complete payment of a Participant's
Plan Benefit, the Trustee will pay such Plan Benefit as follows:
(i) To the Participant's surviving Spouse,
(ii) To the Participant's issue by representation, as defined in
the Colorado Probate Code or, if no such issue survives the
Participant,
(iii) To the Participant's father and mother, in equal shares, or
all to the survivor or, if neither survives the Participant, (iv) To
the personal representative of the Participant's estate.
There are no benefits under the Plan payable to the Participant's survivors
except those described in this Section.
7.12 PAYMENTS TO MINORS OR PERSONS OF UNSOUND MIND -- A Participant or
Beneficiary may direct the Plan to pay all or any portion of a Plan Benefit to a
third party, provided the direction is revocable at
VII-9
<PAGE>
any time by the Participant or Beneficiary, as the case may be. In addition, the
third party must file a written acknowledgment with the Plan Administrator that
states the third party has no enforceable right in or to any Plan Benefit
payment or portion thereof, except to the extent of payments actually received
pursuant to the terms of the arrangement. The written acknowledgment must be
filed with the Plan Administrator no later than 90 days after the direction is
received. If no Participant or Beneficiary so directs the Plan and if the Plan
Administrator determines that any person entitled to receive any payment
hereunder is a minor, or suffers from such a degree of physical disability that
he or she is unable to take care of himself or herself, or is of unsound mind,
whether formally adjudicated so or not, such payment will be made to or for the
benefit of any such minor or person who is disabled or of unsound mind in any of
the following ways, as the Plan Administrator, in its sole discretion,
determines: (a) to the legal representative of such person; (b) directly to such
person; (c) to some near relative of such person; (d) in such other manner as
the Plan Administrator may deem appropriate under the circumstances. The Funding
Agent will not be required to see to the proper application of any such payment
made to any person pursuant to the provisions of this Section. 7.13
NON-ALIENATION OF BENEFITS -- A Participant's Account will not in any manner be
liable for, or subject to, the debts or liabilities of the Participant or his or
her Beneficiaries. Except with respect to loans made by the Fund to the
Participant under Section 7.10 above, no right or benefit under the Plan will be
subject at any time or in any manner to alienation, sale, transfer, assignment,
pledge, encumbrance, charge, garnishment, execution or levy of any kind, either
voluntary or involuntary, prior to actually being received by the person
entitled to the benefit under the terms of the Plan. Except as otherwise
provided in this Plan, all amounts payable hereunder by the Funding Agent will
be paid only to the person or persons entitled thereto, and all such payments
will be made directly to such person or persons, and not to any other person or
corporation. This Section will apply to the creation, assignment or recognition
of a right to any benefit payable with respect to a Participant pursuant to a
domestic relations order, unless such order is determined to be a Qualified
Domestic Relations Order or any domestic relations order entered before January
1, 1985.
7.14 QUALIFIED DOMESTIC RELATIONS ORDERS --
(a) PAYMENT -- The Plan will pay benefits to the person or persons
named in a Qualified Domestic Relations Order in the amount and to the
extent provided in such order. Payment of benefits pursuant to a Qualified
Domestic Relations Order will not be considered a violation of the
prohibition against assignment and alienation of benefits.
(b) DEFINITION -- In order to constitute a Qualified Domestic
Relations Order, the order must meet all of the following requirements:
(i) ALTERNATE PAYEE -- The order must create or recognize the
existence of the right of an Alternate Payee to, or must assign to an
Alternate Payee the right to, receive all or a portion of a
Participant's benefits payable under the Plan. "Alternative Payee"
means a Participant's Spouse, former Spouse, child or other dependent
who is recognized as having a right to receive all, or a portion of,
the Participant's benefits payable under the Plan;
(ii) JUDGMENT -- The order must constitute a judgment, decree or
order (including approval of a property settlement agreement) which
relates to the provision of child support, alimony payments or
property rights to a Spouse, former Spouse, child or other dependent
of a Participant, made pursuant to a state domestic relations law
(including a community property law);
(iii) INFORMATION -- The order must specify the following
information:
(A) the Participant's name and last known mailing address
(if any) and the name and mailing address of each Alternate Payee
covered by the order, unless the Plan Administrator has reason to
know that address independent of the order,
VII-10
<PAGE>
(B) the amount or percentage of a Participant's benefits to
be paid by the Plan to each Alternate Payee, or the manner in
which such amount or percentage will be determined,
(C) the number of payments or periods to which such order
applies, and
(D) the name of each plan to which the order applies;
(iv) PLAN BENEFIT -- The order must not require the Plan to
provide any type or form of benefit, or any option, not otherwise
provided under the terms of the Plan. The order must not require the
Plan to provide increased benefits (determined on the basis of
actuarial value) nor require the payment of benefits to an Alternate
Payee which are required to be paid to an Alternate Payee under a
previous Qualified Domestic Relations Order;
(v) PERMITTED DISTRIBUTION -- Notwithstanding the foregoing, the
order may require the payment of benefits to an Alternate Payee while
a Participant is still employed pursuant to Code section 414(p)(10);
and
(vi) FORM OF PAYMENT -- Payments may be required in any form in
which such benefits may be paid under the Plan to a Participant,
except in the form of a joint and survivor annuity with respect to the
Alternate Payee and his or her subsequent spouse.
(c) PROCEDURES -- Upon receipt of any domestic relations order by the
Plan, the Plan Administrator must take the following steps:
(i) NOTICE -- The Plan Administrator must promptly notify the
Participant and any Alternate Payee named in such order of the receipt
of a domestic relations order and the Plan's procedures for
determining whether such order is a Qualified Domestic Relations
Order. The notice to the Alternate Payee must include a statement that
he or she is entitled to designate a representative for receipt of
copies of any notices that are sent to the Alternate Payee with
respect to a domestic relations order. The notice must be sent to the
Participant and Alternate Payee with respect to a domestic relations
order. The Notice must be sent to the Participant and Alternate Payee
at the address specified in the order or, if none is specified, at the
Participant's address or the address of the Alternate Payee last known
to the Plan Administrator;
(ii) DETERMINATION OF VALIDITY -- Within a reasonable period of
time after receipt of such order, the Plan Administrator must
determine whether such order is a Qualified Domestic Relations Order
and notify the Participant and each Alternate Payee of such
determination. In making its determination, the Plan Administrator may
seek the advice of legal counsel;
(iii) SEGREGATED AMOUNTS -- Pending the Plan Administrator's
determination of whether a domestic relations order is a Qualified
Domestic Relations Order, the Plan Administrator must instruct the
Trustee to segregate the amounts payable to the Alternate Payee during
such period if the order is a Qualified Domestic Relations Order. If,
within 18 months, the Plan Administrator determines the order to be a
Qualified Domestic Relations Order, the Plan must pay the amounts so
segregated plus any interest thereon to the person or persons entitled
thereto pursuant to the terms of the Qualified Domestic Relations
Order. If the Plan Administrator determines an order is not a
Qualified Domestic Relations Order or fails to reach a decision within
18 months, the Plan must pay the segregated amounts to the person or
persons entitled to such amounts in the absence of the order. If the
Plan Administrator subsequently determines that an order is a
Qualified Domestic Relations Order, the Plan will pay benefits
subsequent to its determination in accordance with the order. If
action is taken in accordance with this subsection, the Plan's
obligation to the Participant and each Alternate Payee will be
discharged to the extent of any payment made pursuant to the Qualified
Domestic Relations Order.
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(d) RELATIONSHIP TO OTHER PLAN PROVISIONS -- The Plan will treat a
Participant's former Spouse as the Participant's Spouse for purposes of the
Qualified Joint and Survivor Annuity to the extent provided in the
Qualified Domestic Relations Order.
(e) BENEFICIARY STATUS -- Each Alternate Payee will be treated as a
Beneficiary under the Plan, with all the rights accorded to other
Beneficiaries under the terms hereof and as otherwise provided by law.
7.15 CLAIMS PROCEDURE -- Claims for benefits under the Plan should be filed
with the Plan Administrator on forms supplied by it. A claim will be deemed
allowed unless a written notice of denial is furnished to the claimant by the
Plan Administrator within 30 days after the claim is filed. If the claim is
denied, the notice will specifically set forth the reasons for the denial, the
pertinent provisions of the Plan upon which the denial is based and, where
appropriate, an explanation as to how the claimant can perfect his claim, what
additional material or information is necessary and why such additional
information or material is necessary. Such notice will also explain the claims
review procedure.
7.16 CLAIMS REVIEW PROCEDURE -- If a Participant's claim is denied, the
Participant will be entitled, upon written request delivered to the Plan
Administrator not later than 75 days after receipt of written notice of denial
of the claim, to a further review of his or her claim by the Plan Administrator.
Such request must set forth a statement of the Participant's position. A
Participant, or his or her duly authorized representative, may also request a
review of pertinent documents and may also set forth issues and comments in
support of his or her position. The Plan Administrator will schedule an
opportunity for a full and fair hearing of the issue within 30 days after
receipt of the request. The decision following this hearing will be made within
30 days and will be communicated in writing to the Participant, specify the
reasons for the decision, and give specific references to pertinent Plan
provisions on which the decision is based.
7.17 PLAN ADMINISTRATOR CONSENT OR DISCRETION -- Notwithstanding any other
provision in this Plan, any provision limiting the availability of any benefits
or rights described in this Plan because of consent of any person other than the
Participant or his or her Spouse will be null and void, thereby making such
benefit or right available without the consent of such other person.
7.18 UNCLAIMED ACCOUNT -- If the Funding Agent is unable to make payments
payable or distributable from an Account because it does not know the identity
or address of the Participant or Beneficiary entitled thereto, the Funding Agent
should suspend such payments until directed otherwise by the Plan Administrator.
The Plan Administrator must notify the Participant or Beneficiary by certified
or registered mail addressed to the last known address of record with the Plan
Administrator or the Employer that he or she is entitled to a distribution under
this Plan and that a response or claim must be made within six months from the
date of mailing of the notice or the Account will be forfeited. The Plan
Administrator may treat the Account as forfeited only if the Plan Administrator
could force a distribution under the Plan. If a Participant or Beneficiary who
has incurred a forfeiture of his or her Account under this Section makes a
claim, at any time, for his or her forfeited Account, the Plan Administrator
will restore the Participant's or Beneficiary's forfeited Account to the same
dollar amount as the dollar amount of the Account forfeited, unadjusted for any
gains or losses occurring subsequent to the date of the forfeiture. The
forfeiture provisions of this Section will apply solely to the Participant's or
to the Beneficiary's Account derived from Employer Contributions. The Funding
Agent will continue to hold Accounts derived from Employer Contributions for the
benefit of the Participant or Beneficiary until the earlier of receipt of
distribution directions from the Participant or Beneficiary or the time when the
Account escheats under the applicable laws of the State of Colorado.
Notwithstanding the foregoing, an Account which escheats to the State of
Colorado under the applicable law is not treated as a forfeiture subject to
restoration.
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VIII.
TOP-HEAVY PROVISIONS
8.1 GENERAL -- This Article is included in the Plan pursuant to Code
requirements and will prevail over any inconsistent provision of the Plan or
Funding Agreement.
8.2 VESTING -- For any Plan Year in which the Plan is a Top-Heavy Plan, the
percentage of a Participant's Employer Contributions Account which will be fully
vested and non-forfeitable will be determined under Section 16 of the Adoption
Agreement. The minimum vesting schedule applies to all benefits within the
meaning of Code section 411(a)(7) except those attributable to Employee
Contributions, including benefits accrued before the effective date of section
416 and benefits accrued before the Plan became Top-Heavy. Further, no decrease
in a Participant's non-forfeitable percentage may occur in the event the Plan's
status as Top-Heavy changes for any Plan Year. However, this Section does not
apply to the account balances of any Participant who does not have an Hour of
Service after the Plan has initially become Top-Heavy and such Participant's
Account balance attributable to Employer Contributions will be determined
without regard to this Section.
8.3 EMPLOYER CONTRIBUTIONS AND FORFEITURES -- For each Plan Year in which
the Plan is a Top- Heavy Plan and a Participant is a Non-Key Employee, the
Employer Contributions and Forfeitures allocated to a Participant's Employer
Contributions Account will be determined under (a) or (b) below. If the Employer
adopts the Plan as a Money Purchase Pension Plan, or if the Employer chooses to
apply Forfeitures to reduce Employer Contributions pursuant to Section 13 of the
Adoption Agreement, any references to Forfeitures in this Section 8.3 will have
no effect.
(a) NO QUALIFIED DEFINED BENEFIT PLAN -- If a Participant does not
participate in a Qualified Defined Benefit Plan, the Employer Contributions
and Forfeitures allocated to such Participant's Account will be not less
than 3% of his or her Limitation Compensation for that Plan Year. The 3%
minimum contribution requirement will be decreased for any Plan Year in
which the Employer does not make (or is not required to make) a
contribution equal to 3% of the Limitation Compensation for the Key
Employee for whom such percentage is the highest for the Plan Year. In such
a case, the percentage of a Participant's Limitation Compensation used in
determining the Employer Contributions and Forfeitures allocated to his or
her Account for such Plan Year will at least equal the greatest percentage
of Limitation Compensation used in determining similar contributions on
behalf of such Key Employee; provided, however, that this sentence and the
preceding sentence will not apply in any year in which the Plan enables a
Qualified Defined Benefit Plan which is part of the Required Aggregation
Group to meet the requirements of Code sections 401(a)(4) or 410. The
minimum contribution is determined without regard to any Social Security
contribution. The minimum contribution will be made even though, under
other Plan provisions, a Participant would not otherwise be entitled to
receive a contribution, or would have received a lesser contribution for
the Plan Year because of his or her failure to complete 1,000 Hours of
Service (or any equivalent provided in the Plan). The minimum contribution
for a Non-Key Employee will be made even though such Non-Key Employee is
not a Participant because of his or her failure to make Required
Contribution or because his or her Compensation is less than a stated
amount. The minimum contribution will not be made to a Participant's
Account if such Participant was not an Employee on the last day of the Plan
Year. The 3% minimum contribution will be increased to 4% for any Plan Year
in which the Employer also maintains a Qualified Defined Benefit Pension
Plan and determines to avoid the application of Code section 416(h)(1),
relating to special adjustments to the Code section 415 limits for
top-heavy plans. The minimum contribution required (to the extent required
to be non-forfeitable under Code section 416(b)) may not be forfeited under
Code sections 411(a)(3)(B) or 411(a)(3)(D). For Plan Years beginning on or
after January 1, 1989, the minimum contribution required hereunder may not
be satisfied by Salary Reduction Deferrals or Matching Contributions.
(b) QUALIFIED DEFINED BENEFIT PLAN -- If a Participant participates in
a Qualified Defined Benefit Plan, the Employer Contributions and
Forfeitures allocated to such Participant's Account will satisfy at least
one of the following conditions:
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(i) If a Participant receives the minimum benefit required for an
Employee who participates only in the Qualified Defined Benefit Plan,
no allocation will be required under this Section; or
(ii) The Participant's allocation will be at least 5% of his or
her Limitation Compensation for such Plan Year.
(iii) If the denominator of the Defined Benefit Fraction and the
Defined Contribution Fraction is 125% for purposes of Section 5.9, the
Participant's allocation will be at least 7.5% of his or her
Limitation Compensation for such Plan Year.
8.4 ADJUSTMENTS IN ANNUAL LIMITATIONS -- In any Plan Year in which the Plan
is a Top-Heavy Plan, 100% will be substituted for 125% in the definition of the
denominator of the Defined Benefit Fraction and the Defined Contribution
Fraction for purposes of Section 5.9 unless (i) the Employer makes a minimum
contribution of 4% pursuant to subsection 8.3(a), and (ii) the Plan is not a
Super Top-Heavy Plan. This Section will be suspended with respect to any
Employee so long as there are no Employer Contributions, Forfeitures or
Voluntary Contributions allocated to such Employee under this Plan or accruals
for such Employee under a Qualified Defined Benefit Plan.
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IX.
ADMINISTRATION
9.1 THE PLAN ADMINISTRATOR TO BE ADMINISTRATOR -- The Plan Administrator
will consist of one or more persons appointed by the Employer to serve at its
pleasure. The Plan Administrator will be the administrator of the Plan and will
be responsible for the operation of the Plan, other than the investment of the
Fund and the payment of Plan Benefits. Any person appointed as Plan
Administrator may be removed by the Employer by delivery of written notice of
removal to such person. Any individual appointed as Plan Administrator may
resign at any time by delivery of written notice of resignation to the Employer.
Any notice of removal or resignation will specify the effective date of removal
or resignation, which will not be earlier than the date of delivery of the
notice.
9.2 POWERS AND DUTIES OF PLAN ADMINISTRATOR -- The Plan Administrator will
administer the Plan in accordance with its terms solely in the interest of
Participants, Former Participants and their Beneficiaries for the exclusive
purpose of providing benefits to such persons and defraying reasonable expenses
of administering the Plan and Fund. In administering the Plan, the Plan
Administrator will employ a degree of care, skill, prudence and diligence which,
under circumstances then prevailing, a prudent man acting in like capacity and
familiar with such matters would use in the conduct of an enterprise of like
character and with like aims. The Plan Administrator will have all powers
necessary to carry out the terms of the Plan. All interpretations of the Plan
and questions concerning its administration and application will be determined
by the Plan Administrator, and such determinations will be binding on all
persons except as otherwise expressly provided herein.
9.3 DELEGATION OF FIDUCIARY DUTIES -- The Plan Administrator will have the
power to delegate specific fiduciary responsibilities (other than those of the
Funding Agent with respect to the investment of the Fund). Such delegations may
be to the Funding Agent or to officers or employees of the Employer or to other
persons, all of whom will serve at the pleasure of the Plan Administrator and,
if full-time employees of the Employer, without compensation. Any such person
may resign by delivering a written resignation to the Plan Administrator.
Vacancies created by resignation, death or other cause may be filled by the Plan
Administrator, or the responsibilities delegated by the Plan Administrator may
be reassumed or redelegated by the Plan Administrator.
9.4 RECORDS AND REPORTS -- The Plan Administrator and those to whom it has
delegated fiduciary duties will keep a record of all their proceedings and
actions, and will maintain all such books of account, records and other data as
will be necessary for the proper administration of the Plan. The Plan
Administrator will be responsible for the preparation and filing of all reports,
returns, notices and statements that are required to be submitted to the federal
or state governmental agency or to any Employee or Participant.
9.5 INDEMNIFICATION FOR LIABILITY -- The Employer will indemnify the Plan
Administrator and those to whom the Plan Administrator has delegated fiduciary
duties against any and all claims, losses, damages, expenses and liabilities
arising from their responsibilities in connection with the Plan, unless the same
are determined to be due to gross negligence or willful misconduct.
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X.
ESTABLISHMENT OF FUND
10.1 THE FUNDING AGREEMENT -- The Employer has entered into a Funding
Agreement (either a Trust Agreement or a Custodial Agreement) concurrently with
the adoption of this Plan, providing for the establishment of a Fund to be held
and administered by a Funding Agent (either a Trustee or a Custodian) designated
in the Funding Agreement. The Funding Agreement will form a part of this Plan,
and all rights or benefits which accrue to any person under this Plan will be
subject to all the terms and provisions of the Funding Agreement.
10.2 EXPENSES OF FUND -- All taxes upon the Fund will be paid by the
Funding Agent out of the Fund. All expenses of administering the Fund will be
paid by the Funding Agent out of the Fund, to the extent they are not paid by
the Employer.
10.3 SOURCE OF PLAN BENEFIT -- All Plan Benefits will be paid or provided
for solely from the Fund, and the Employer does not assume any liability or
responsibility for such payments. Neither the Employer, the Funding Agent nor
the Plan Administrator guarantees the Fund in any manner against loss or
depreciation.
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XI.
CONTINUANCE AND AMENDMENT OF THE PLAN
11.1 CONTINUATION OF THE PLAN -- The Employer expects to continue this Plan
indefinitely, but the continuation of this Plan is not assumed as a contractual
obligation by the Employer, and the right is reserved to the Employer to
terminate the Plan and Trust Fund, or to discontinue contributions under the
Plan at any time without terminating the Trust Fund. If the Employer is a sole
proprietor and dies, the Plan will automatically terminate.
11.2 DISTRIBUTION OF TRUST FUND ON TERMINATION OF PLAN AND TRUST FUND -- If
the Plan and Trust Fund are terminated or partially terminated, at any time
other than as provided in Section 4.3, the entire amount then credited to the
Employer Contributions Account of each affected Participant will become
non-forfeitable. The Plan Administrator will promptly notify the Trustee of such
termination, and the last business day of the month in which such notice is
received will be a Valuation Date. Immediately after the allocations required by
Sections 5.3, 5.4 and 5.5 have been completed, the Plan Administrator will
direct the Trustee to distribute to each Participant the amount then credited to
his or her Accounts, in accordance with Section 7.4. If the value of the
Participant's Account is greater than $3,500, any such withdrawal will be made
only with the Participant's Spouse's written consent if this Plan is adopted
either as a Profit-Sharing Plan or as a 401(k) Plan which does not comply with
the Safe Harbor Provisions or as a Money Purchase Pension Plan. A Participant's
Spouse's written consent must be in the form of a Qualified Election. Any
remaining amount credited to the Suspense Account described in Section 5.10 will
be allocated as described in Section 5.3 and, to the extent not exhausted, as
provided in Section 5.5. If the entire Suspense Account cannot be allocated to
Participants' Accounts because of the limitations of Section 5.6, 5.7, 5.8 or
5.9, whichever is applicable, the balance will be distributed to the Employer.
11.3 VESTING UPON PERMANENT DISCONTINUANCE OF CONTRIBUTIONS -- This Section
11.3 will apply only if the Plan is adopted by the Employer as a Profit-Sharing
Plan or 401(k) Plan. In that event, if the Employer at any time elects to
permanently discontinue making contributions hereunder without terminating the
Trust Fund, the entire amount then credited to the Employer Contributions
Account of each Participant will become non- forfeitable. Any amount remaining
credited to the Suspense Account described in Section 5.10 will be allocated as
described in Section 5.3 and, to the extent not exhausted, as provided in
Section 5.5, as of the Anniversary Date next following the date of
discontinuance of contributions, and as of each succeeding Anniversary Date
until exhausted. The Trust Fund will be retained by the Trustee and administered
in accordance with the terms of the Plan and the Trust Agreement. Distributions
from the Trust Fund will be made to Participants at the times and in the manner
provided in Article VII.
11.4 AMENDMENT BY EMPLOYER -- The Employer reserves the right to amend the
Adoption Agreement, the Plan and the Trust Agreement from time to time, except
that no amendment will decrease a Participant's accrued benefit, decrease a
Participant's Account balance, reduce the non-forfeitable interest of any
Participant, eliminate an optional form of distribution, be made without the
consent of the Trustee or result in any part of the Trust Fund reverting or
being paid to the Employer except as provided in Sections 4.3 and 11.2. If the
vesting schedule of the Plan is amended, in the case of an Employee who is a
Participant as of the later of the date such amendment is adopted or the date it
becomes effective, the nonforfeitable percentage (determined as of such date) of
such Employee's right to his Employer-derived accrued benefit will not be less
than his percentage computed under the Plan without regard to such amendment. If
the Employer amends the Plan in any way (other than (i) an amendment which
changes an election in the Adoption Agreement, or (ii) an amendment stated in
the Adoption Agreement which allows the Plan to satisfy Code section 415 or to
avoid duplication of minimum contributions under Code section 416 because of the
required aggregation of multiple plans), or if the Employer objects to any
amendment by the Sponsor, the Employer will no longer participate in this Plan.
The Plan must be submitted to the Internal Revenue Service for approval as an
individually designed plan. Participants will be notified of any amendment
within a reasonable time of its adoption.
11.5 AMENDMENT BY SPONSOR -- The Employer hereby authorizes and empowers
the Sponsor to amend the Plan from time to time, subject to the following:
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(a) NOTICE -- Except as provided in subsections (b) and (c) below,
such amendment will not become effective until at least 30 days prior
notice thereof has been given to the Employer;
(b) EFFECTIVE DATE -- An amendment of the Plan made under this
Section, which the Sponsor deems necessary or appropriate to enable the
Plan to meet the requirements of the Code or the Act, may be made effective
as of the Effective Date of the Employer's Plan. An amendment of the Plan
under this Section, made to conform the Plan to any change in the law of
the United States, the state of the Employer's principal place of business,
or any political subdivision thereof or to any rule or regulation
thereunder, may take effect as of the date such amendment is required to be
effective under such law, rule or regulation; and
(c) EXCEPTION -- An amendment of the Plan under this Section, other
than one made under subsection (b) above, will not affect a feature of the
Plan as to which the Employer made an election in the Adoption Agreement.
11.6 AMENDMENTS CHANGING VESTING SCHEDULE -- If any amendment made by the
Employer or the Sponsor in any way directly or indirectly affects the
computation of the Participant's non-forfeitable percentage or if the Plan is
deemed amended by an automatic change to or from a top-heavy vesting schedule
pursuant to Section 16 of the Adoption Agreement or Section 6.3 of the Plan, and
such Participant has three or more Years of Service, he or she may, by filing a
written request with the Plan Administrator within the election period
hereinafter described, elect to have his or her non-forfeitable percentage
computed under the vesting schedule in effect prior to the amendment. The
election period will begin on the date the amendment is adopted and will end 60
days after the latest of the dates on which: (a) the amendment is adopted; (b)
the amendment becomes effective; or (c) Participants are issued written notice
of the amendment by the Employer or the Plan Administrator. 11.7 MERGER OR
CONSOLIDATION OF PLAN -- The Plan and Trust Fund will not be merged or
consolidated with, nor will any assets or liabilities be transferred to, any
other plan, unless the benefits payable to a Participant terminated immediately
after such action would be equal to or greater than the benefits to which such
Participant would have been entitled (determined without regard to Section 11.2
or 11.3) if this Plan had been terminated immediately before such action.
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XII.
MISCELLANEOUS
12.1 EFFECT OF PLAN -- Neither the establishment of this Plan nor the
payment of any benefits hereunder will be construed as giving to any Employee,
Participant, Former Participant or Beneficiary, or to any other person, any
legal right against the Employer, Plan Administrator or Trustee, except as
provided herein. Nothing contained in this Plan will be construed as a contract
of employment between the Employer and any Employee or Participant, as a right
of any Employee or Participant to be continued in the employ of the Employer, or
as a limitation on the right of the Employer to employ, discipline or discharge
any Employee or Participant.
12.2 LIMITATION OF LIABILITY -- The Plan Administrator will not be
responsible for any act or failure to act on the part of the Employer or the
Trustee. The Trustee will not be responsible for any act or failure to act on
the part of the Employer or the Plan Administrator.
12.3 PLAN TO CONFORM TO CODE AND ACT -- It is the intention of the Employer
that, except as described in Sections 4.3 and 11.2, it will be impossible for
any part of the Trust Fund ever to be used for or diverted to purposes other
than for the exclusive purpose of providing benefits to Participants and their
Beneficiaries and defraying reasonable expenses of administering the Plan and
Trust Fund. The Plan and Trust Agreement will therefore be construed and
administered to follow the spirit and intent of the Code and the Act.
12.4 SEPARATE ADMINISTRATION -- The Plan and Trust Fund, as established and
maintained by the Employer, will be administered separate and apart from any
other plan or fund established or maintained by any other employer which is not
designated as an Affiliated Employer in Section 20 of the Adoption Agreement.
12.5 FAILURE OF OTHER EMPLOYER TO QUALIFY -- If any employer joins in the
adoption of this Plan but fails to obtain or retain the qualification of the
Plan under the Code, such employer will withdraw from the Plan upon a final
determination by the Internal Revenue Service that the Plan, as adopted by such
employer, does not qualify under the Code. Upon such withdrawal, this Plan will
no longer be a prototype plan and will be considered an individually designed
plan.
12.6 NOTICE OF TAX COURT PROCEEDING -- If the Employer, the Plan
Administrator or any Employee files a petition in the United States Tax Court
pursuant to Code section 7476 for a determination as to the initial
qualification of the Plan (or continued qualification if the Plan is amended),
the petitioner will comply with the requirements of Code section 7476(b)(2) and
the regulations thereunder with respect to the delivery of written notice of the
filing of such petition to all Employees of the Employer and, if required by
such regulations, to all Former Participants and their Beneficiaries.
12.7 ROLLOVERS AND TRANSFERS FROM OTHER PLANS --
(a) ROLLOVER AMOUNT -- If a Participant has received a distribution
from another employee benefit plan qualified under Code section 401(a), he
or she may, with the consent of both the Plan Administrator and the
Trustee, elect to deposit in the Trust Fund any portion of such
distribution that qualifies as a "rollover amount" under Code section
402(a)(5). Such deposit may be made directly by a Participant or through
the medium of an individual retirement account described in Code section
408. Any such deposit will be credited to a Participant's Employee Rollover
Contributions Account and will be subject to all of the terms and
provisions of this Plan.
(b) ACCUMULATED DEDUCTIBLE EMPLOYEE CONTRIBUTIONS -- The Plan will also
accept accumulated deductible employee contributions (as defined in Code section
72(o)(5)) that were distributed from a qualified retirement plan and rolled over
pursuant to Code sections 402(a)(5), 402(a)(7), 403(a)(4) or 408(d)(3). Such
rolled over amount will be added to a Participant's Employee Deductible
Contributions Account but will not be taken into account in applying the
limitations on Deductible Contributions to this Plan. The Plan will not accept
rollovers of accumulated deductible employee contributions from a simplified
employee pension.
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(c) TRUSTEE TO TRUSTEE TRANSFER -- If the Plan Administrator and the
Trustee consent, a trustee to trustee transfer of a Participant's account
under another employee benefit plan qualified under Code section 401(a) may
be made to this Plan. Any such transfer will be treated as if it were a
transfer of a Prior Plan account under Section 5.11.
(d) INELIGIBLE EMPLOYEE -- If the Plan Administrator consents, an
Employee who is not a Participant in the Plan may exercise the rights
granted to a Participant under this Section 12.7. Accounts for such
Employee will be established pursuant to Section 5.11 or this Section 12.7,
as the case may be. Such Accounts will share in the allocation of increase
or decrease in net worth pursuant to Section 5.4. Such Employee will have
the same rights as a Participant regarding the distribution and investment
of the Accounts, but he or she will have no right to contribute to or share
in Employer Contributions or Forfeitures, if any, until he or she becomes a
Participant.
12.8 TEXT TO CONTROL -- The headings of Articles and Sections are included
solely for convenience of reference, and if there be any conflict between such
headings and the text of this Plan, the text will control.
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XIII.
401 (k) PLAN
13.1 APPLICATION -- This Article applies only if the Employer adopted this
Plan as a 401(k) Plan.
13.2 DEFINITIONS -- Certain capitalized words used in this Article have the
meanings set forth below, unless the context clearly indicates otherwise.
Masculine pronouns include the feminine and neuter, and the singular includes
the plural.
(a) "ACTUAL DEFERRAL PERCENTAGE" OR "ADP" means, for a specified group
of Eligible Participants for a Plan Year, the average of the ratios
(calculated separately for each Eligible Participant in such group) of (a)
the amount of Employer contributions actually paid to the Fund on behalf of
such Participant for the Plan Year to (b) the Participant's Compensation
for such Plan Year (whether or not the Employee was a Participant for the
entire Plan Year). Employer contributions on behalf of any Participant (i)
will include Salary Reduction Deferrals, including Excess Deferrals, but
excluding Salary Reduction Deferrals that are taken into account in the ACP
test (provided the ADP test is satisfied both with and without exclusion of
these Elective Deferrals), and (ii) may include, at the election of the
Employer, Qualified Nonelective Contributions and Qualified Matching
Contributions. For purposes of computing Actual Deferral Percentages, an
Employee who would be a Participant but for the failure to make Salary
Reduction Deferrals will be treated as a Participant on whose behalf no
Salary Reduction Deferrals are made.
(b) "ADDITIONAL CONTRIBUTIONS" means the contributions, if any, which
Section 12 of the Adoption Agreement permits, but does not require, a
Participant to make to the Fund.
(c) "AGGREGATE LIMIT" means the sum of (a) 125% of the greater of the
ADP of the Non-Highly Compensated Employees for the Plan Year or the ACP of
the Non-Highly Compensated Employees for the Plan Year beginning with or
within the Plan Year of the 401(k) Plan and (b) the lesser of 200% or two
plus the lesser of such ADP or ACP.
(d) "AVERAGE CONTRIBUTION PERCENTAGE" OR "ACP" means the average of
the ratios (calculated separately for each Eligible Participant in the
group) of the Contribution Percentages of the Eligible Participants in a
group.
(e) "CONTRIBUTION PERCENTAGE" means the ratio (expressed as a
percentage) of the Participant's Contribution Percentage Amounts to the
Participant's Compensation for the Plan Year (whether or not the Employee
was a Participant for the entire Plan Year).
(f) "CONTRIBUTION PERCENTAGE AMOUNTS" means the sum of the After-Tax
Contributions, Matching Contributions and Qualified Matching Contributions
(to the extent not taken into account for purposes of the ADP test) under
the Plan on behalf of an Eligible Participant for the Plan Year. Such
Contribution Percentage Amounts will include forfeitures of Excess
Aggregate Contributions or Matching Contributions allocated to the
Participant's Account as of the year in which such forfeiture is allocated.
The Employer may include Salary Reduction Deferrals, Qualified Nonelective
Contributions, or both, in the Contribution Percentage Amounts, as provided
by regulations. The Employer also may use Salary Reduction Deferrals in the
Contribution Percentage Amounts as long as the ADP test is met before the
Salary Reduction Deferrals are used in the ACP test and continues to be met
following the exclusion of those Salary Reduction Deferrals that are used
to meet the ACP test.
(g) "EMPLOYER CONTRIBUTIONS" means the amount contributed by the
Employer and includes Salary Reduction Contributions unless otherwise
specifically excluded.
(h) "EXCESS AGGREGATE CONTRIBUTIONS" means, with respect to any Plan
Year, the excess of:
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(i) The aggregate Contribution Percentage Amounts taken into
account in computing the numerator of the Contribution Percentage
actually made on behalf of Highly Compensated Employees for such Plan
Year, over
(ii) The maximum Contribution Percentage Amounts permitted by the
Average Contribution Percentage test (determined by reducing
contributions made on behalf of Highly Compensated Employees in order
of their Contribution Percentages beginning with the highest of such
percentages).
Such determination will be made after first determining Excess Deferrals and
then determining Excess Contributions.
(i) "EXCESS AMOUNT" means the excess of a Participant's Annual
Additions for the Limitation Year over the Maximum Permissible Amount.
(j) "EXCESS CONTRIBUTIONS" means, with respect to any Plan Year, the
excess of:
(i) The aggregate amount of Employer Contributions actually taken
into account in computing the ADP of Highly Compensated Employees for
such Plan Year, over
(ii) The maximum amount of such contributions permitted by the
ADP test (determined by reducing contributions made on behalf of
Highly Compensated Employees in order of the ADPs, beginning with the
highest of such percentages).
(k) "EXCESS DEFERRALS" means those Salary Reduction Deferrals that are
includable in a Participant's gross income under Code section 402(g) to the
extent such Participant's Salary Reduction Deferrals for a taxable year
exceed the dollar limitation under such Code section 402(g). Excess
Deferrals will be treated as Annual Additions under the Plan.
(l) "FAMILY MEMBER" means an individual described in Code section
414(q)(6)(B) which includes the Employee's Spouse and lineal ascendants or
descendants and the spouses of such lineal ascendants or descendants.
(m) "HIGHLY COMPENSATED EMPLOYEE" means highly compensated active
Employees and highly compensated former Employees as follows:
(i) A highly compensated active Employee includes any Employee
who performs Service for the Employer during the determination year
and who, during the look-back year:
(A) received Compensation from the Employer in excess of
$75,000 (as adjusted pursuant to Code section 415(d));
(B) received Compensation from the Employer in excess of
$50,000 (as adjusted pursuant to Code section 415(d)) and was a
member of the top-paid group for such year; or
(C) was an officer of the Employer and received compensation
during such year that is greater than 50% of the dollar
limitation in effect under Code section 415(b)(1)(A).
(ii) The term Highly Compensated Employee also includes:
(A) an Employee who is described in (a) above if the term
"determination year" is substituted for the term "look-back year"
and if the Employee is one of
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the 100 Employees who received the most Compensation from the
Employer during the determination year; and
(B) an Employee who is a 5 Percent Owner at any time during
the look-back year or determination year.
(iii) If no officer has satisfied the Compensation requirement of
(i)(C) above during either a determination year or a look-back year,
the highest paid officer for such year will be treated as a Highly
Compensated Employee.
(iv) The determination year is the Plan Year. The look-back year
is the twelve-month period immediately preceding the determination
year.
(v) A highly compensated former Employee includes any Employee
who separated from service (or was deemed to have separated) prior to
the determination year, performed no Service for the Employer during
the determination year, and was a highly compensated active Employee
for either the separation year or any determination year ending on or
after the Employee's 55th birthday.
(vi) If an Employee is, during a determination year or look-back
year, a Family Member of either a 5 Percent Owner who is an active or
former Employee or a Highly Compensated Employee who is one of the 10
most Highly Compensated Employees ranked on the basis of Compensation
paid by the Employer during such year, then the Family Member and the
5 Percent Owner or top-ten Highly Compensated Employee are aggregated.
In such case, the Family Member and 5 Percent Owner or top-ten Highly
Compensated Employee are treated as a single Employee receiving
Compensation and Plan contributions or benefits equal to the sum of
such Compensation and contributions or benefits of the Family Member
and 5 Percent Owner or top-ten Highly Compensated Employee.
(vii) The determination of who is a Highly Compensated Employee,
including determinations of the number and identity of Employees in
the top-paid group, the top 100 Employees, the number of Employees
treated as officers and the Compensation that is considered, will be
made in accordance with Code section 414(q) and the regulations
thereunder.
(n) "MATCHING CONTRIBUTION" means an Employer contribution made to
this or any other defined contribution plan on behalf of a Participant on
account of a Participant's Required Contribution and which is not used to
satisfy the test provided under Code section 401(k)(3).
(o) "MATCHING CONTRIBUTIONS ACCOUNT" means the Account in the name of
the Participant to record such Participant's Matching Contributions.
(p) "NON-HIGHLY COMPENSATED EMPLOYEE" means an Employee of the
Employer who is neither a Highly Compensated Employee nor a Family Member.
(q) "QUALIFIED CONTRIBUTIONS ACCOUNT" means the Account in the name of
the Participant to record the Qualified Matching Contributions and
Qualified Nonelective Contributions allocated to such Participant.
(r) "QUALIFIED MATCHING CONTRIBUTIONS" means Employer contributions
that are allocated to the Participants' Qualified Contributions Accounts,
that are made to the Plan pursuant to Code section 401(m), that are subject
to the distribution and nonforfeitability requirements under Code section
401(k) when made and that are used to satisfy the test provided for under
Code section 401(k)(3).
(s) "QUALIFIED NONELECTIVE CONTRIBUTIONS" means Employer contributions
(other than Matching Contributions or Qualified Matching Contributions),
that are allocated to the Participants' Qualified
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<PAGE>
Contributions Accounts, and that are subject to the distribution and
nonforfeitability requirements under Code section 401(k) when made and that
are used to satisfy the test provided for under Code section 401(k)(3).
(t) "REQUIRED CONTRIBUTION" means the contribution, if any, which
Section 11 of the Adoption Agreement requires a Participant to make in
order to share in Matching Contributions.
(u) "SALARY REDUCTION ACCOUNT" means the Account in the name of the
Participant to record such Participant's Salary Reduction Deferrals.
(v) "SALARY REDUCTION CONTRIBUTIONS" means the contributions the
Employer makes to the Fund pursuant to Subsection 4.1(c).
(w) "SALARY REDUCTION DEFERRALS" means any Employer contributions made
to the Plan at the election of the Participant, in lieu of cash
compensation, and includes contributions made pursuant to a salary
reduction agreement or other deferral mechanism. With respect to any
taxable year, a Participant's Salary Reduction Deferral is the sum of all
Employer contributions made on behalf of such Participant pursuant to any
qualified cash or deferred arrangement, any simplified employee pension
cash or deferred arrangement, as described in Code section 402(h)(1)(B),
any eligible deferred compensation plan under Code section 457, any plan,
as described under Code section 501(c)(18), and any Employer contributions
made on behalf of a Participant for the purchase of an annuity contract
under Code section 403(b) pursuant to a salary reduction agreement.
13.3 EMPLOYER CONTRIBUTIONS -- The Employer will contribute to the Salary
Reduction Accounts in the Fund the amount specified in Section 13 of the
Adoption Agreement. The limitations on Employer Contributions set forth in
subsection 4.1(a) also apply.
13.4 EMPLOYEE SALARY REDUCTION DEFERRALS OR AFTER-TAX CONTRIBUTIONS -- A
Participant may contribute to the Plan if he or she is eligible under Section
3.1 and if the Employer so provides in Sections 11 and 12 of the Adoption
Agreement. A Participant may choose two types of Employee Required or Additional
Contributions as follows:
(a) REQUIRED SALARY REDUCTION DEFERRALS AND AFTER-TAX CONTRIBUTIONS --
These are deferrals or contributions which the Adoption Agreement may
require a Participant to make as a condition of participation. A
Participant will not be entitled to share in Employer Contributions in any
Plan Year in which he or she does not make the Required Salary Reduction
Deferrals or After-Tax Contributions except as provided in Article VIII.
(b) ADDITIONAL SALARY REDUCTION DEFERRALS AND AFTER-TAX CONTRIBUTIONS
-- These are deferrals or contributions which the Adoption Agreement may
permit, but not require, a Participant to make. Failure to make these
deferrals or contributions will not affect a Participant's right to share
in Employer Contributions.
13.5 REQUIRED AND ADDITIONAL SALARY REDUCTION DEFERRALS -- The Participant
and the Employer may enter into a written Salary Reduction Agreement which will
provide for Salary Reduction Deferrals as follows:
(a) EMPLOYEE PAYROLL DEDUCTION -- The Participant agrees to accept a
reduction in salary by payroll deduction pursuant to Sections 11 and 12 of
the Adoption Agreement;
(b) EMPLOYER SALARY REDUCTION CONTRIBUTION -- The Employer agrees to
make a Salary Reduction Contribution equal to a Participant's payroll
deduction to such Participant's Salary Reduction Account within 30 days
after collection;
(c) NON-FORFEITABLE -- The entire amount credited to such
Participant's Salary Reduction Account will be non-forfeitable;
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<PAGE>
(d) EFFECTIVE DATE -- The Salary Reduction Agreement will be effective
for the payroll period indicated in the Agreement which begins following
the execution of the Agreement and will continue in effect until the
earlier of an amendment or revocation under (e) or (f) below, or
termination of Service;
(e) EMPLOYEE AMENDMENT -- A Participant may amend or revoke in writing
a Salary Reduction Agreement at least 3 business days before the beginning
of a pay period effective the first day of the following pay period or as
otherwise provided in the Agreement;
(f) EMPLOYER AMENDMENT -- The Employer may also unilaterally amend or
revoke in writing the Salary Reduction Agreements of Highly Compensated
Employees to comply with Code section 401(k).
13.6 COLLECTION OF REQUIRED OR OPTIONAL AFTER-TAX CONTRIBUTIONS -- If the
Adoption Agreement allows a Participant to make After-Tax Contributions, such
Contributions will be collected by payroll deductions after a Participant has
filed an appropriate payroll deduction authorization form with the Employer. Any
such payroll deduction authorization will remain in effect until changed. A
Participant may change or terminate his or her contributions at any time by
filing a new payroll deduction authorization form with the Employer, but may
make only two changes during a Plan Year. Any change or termination will be
effective when received by the Employer and will remain effective until changed.
In addition to any contributions collected through payroll deductions, a
Participant may make one lump sum contribution to the Fund in any Plan Year by
delivering to the Employer before the end of such Plan Year a check payable to
the Funding Agent in the amount the Participant desires to contribute. All
Employee After-Tax Contributions will be remitted to the Funding Agent within 30
days after collection.
13.7 DISTRIBUTION OF EXCESS SALARY REDUCTION DEFERRALS --
(a) NOTICE -- A Participant may allocate to the Plan any Excess Salary
Reduction Deferrals made during a calendar year by notifying the Plan
Administrator by March 15 of the amount of the Excess Salary Reduction
Deferrals to be assigned to the Plan.
(b) DISTRIBUTION -- Notwithstanding any other provision of the Plan,
if an Employee gives notice under (a) immediately above, Excess Salary
Reduction Deferrals, plus any income and minus any loss allocable thereto,
will be distributed no later than April 15 to any Participant to whose
account Excess Salary Reduction Deferrals were allocated for the preceding
year and who claims Excess Salary Reduction Deferrals for such calendar
year.
(c) DETERMINATION OF INCOME OR LOSS -- Excess Salary Reduction
Deferrals will be adjusted for any income or loss up to the date of
distribution. The income or loss allocable to Excess Deferrals is the sum
of (i) income or loss allocable to the Participant's Salary Reduction
Account for the taxable year multiplied by a fraction, the numerator of
which is such Participant's Excess Deferrals for the year and the
denominator is the Participant's Salary Reduction Account balance without
regard to any income or loss occurring during such taxable year, and (ii)
10% of the amount determined under (i) multiplied by the number of whole
calendar months between the end of the Participant's taxable year and the
date of distribution, counting the month of distribution if distribution
occurs after the 15th of such month.
(d) CLAIM -- If a Participant claims Excess Salary Reduction Deferrals
for the preceding calendar year, such Participant must submit claims in
writing to the Plan Administrator by March 15.
13.8 PERCENTAGE LIMITATION ON SALARY REDUCTION DEFERRALS, QUALIFIED
NONELECTIVE CONTRIBUTIONS AND QUALIFIED MATCHING CONTRIBUTIONS --
(a) THE ACTUAL DEFERRAL PERCENTAGE TEST -- The Actual Deferral
Percentage (ADP) for Eligible Participants who are Highly Compensated
Employees for each Plan Year and the ADP for Eligible Participants who are
Non-Highly Compensated Employees for the same Plan Year will satisfy one of
the following tests:
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<PAGE>
(i) The ADP for Eligible Participants who are Highly Compensated
Employees for the Plan Year will not exceed the ADP for Eligible
Participants who are Non-Highly Compensated Employees for the same
Plan Year multiplied by 1.25; or
(ii) The ADP for Eligible Participants who are Highly Compensated
Employees for the Plan Year will not exceed the ADP for Eligible
Participants who are Non-Highly Compensated Employees for the same
Plan Year multiplied by two, provided that the ADP for Eligible
Participants who are Highly Compensated Employees does not exceed the
ADP for Eligible Participants who are Non-Highly Compensated Employees
by more than two percentage points or such lesser amount as the
Secretary of the Treasury prescribes to prevent the multiple use of
this alternative limitation with respect to any Highly Compensated
Employee.
(b) SPECIAL RULES --
(i) The ADP for any Eligible Participant who is a Highly
Compensated Employee for the Plan Year and who makes Salary Reduction
Deferrals under two or more arrangements described in Code section
401(k) and maintained by the Employer will be determined as if such
Salary Reduction Deferrals were made under a single arrangement. Such
Salary Reduction Deferrals will include Qualified Nonelective
Contributions or Qualified Matching Contributions, or both, if treated
as Employer Contributions for purposes of the ADP test. If a Highly
Compensated Employee participates in two or more cash or deferred
arrangements that have different Plan Years, all cash or deferred
arrangements ending with or within the same calendar year will be
treated as a single arrangement.
(ii) In the event that this Plan satisfies the requirements of
Code sections 401(k), 401(a)(4) or 410(b) only if aggregated with one
or more other plans, or if one or more other plans satisfy the
requirements of such sections of the Code only if aggregated with this
Plan, then this Section shall be applied by determining the ADP of
employees as if all such plans were a single plan. For Plan Years
beginning after December 31, 1989, plans may be aggregated in order to
satisfy Code section 401(k) only if they have the same Plan Year.
(iii) For purposes of determining the ADP of an Eligible
Participant who is a 5 Percent Owner or one of the ten most highly
paid Highly Compensated Employees, the Salary Reduction Deferrals and
Compensation of such Participant will include the Salary Reduction
Deferrals and Compensation for the Plan Year of Family Members. Family
Members of such Highly Compensated Employees will be disregarded as
separate Employees in determining the ADP both for such Participants
who are Non-Highly Compensated Employees and for Participants who are
Highly Compensated Employees. Such Salary Reduction Deferrals will
include Qualified Nonelective Contributions or Qualified Matching
Contributions, or both, if treated as Employer contributions for
purposes of the ADP test.
(iv) For purposes of determining the ADP test, Salary Reduction
Deferrals, Qualified Nonelective Contributions and Qualified Matching
Contributions must be made before the last day of the twelve-month
period immediately following the Plan Year to which contributions
relate. (v) The Employer must maintain records sufficient to
demonstrate satisfaction of the ADP test, including the amount of
Qualified Nonelective Contributions or Qualified Matching
Contributions, or both, used in such test.
(vi) The determination and treatment of the ADP amounts of any
Eligible Participant will satisfy such other requirements as may be
prescribed by the Secretary of the Treasury.
(c) EMPLOYER CONTRIBUTIONS -- Qualified Matching Contributions and
Qualified Nonelective Contributions may be taken into account as Employer
Contributions for purposes of calculating the ADP as the Employer may
determine.
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<PAGE>
13.9 DISTRIBUTION OF EXCESS CONTRIBUTIONS --
(a) DISTRIBUTION -- Notwithstanding any other provision of this Plan,
Excess Contributions, plus any income and minus any loss allocable thereto,
will be distributed no later than the last day of each Plan Year to
Participants to whose accounts such Excess Contributions were allocated for
the preceding Plan Year. If such excess amounts are distributed more than
2-1/2 months after the last day of the Plan Year in which such excess
amounts arose, a 10% excise tax will be imposed on the Employer maintaining
the Plan with respect to such amounts. Such distributions will be made to
Highly Compensated Employees on the basis of the respective portions of the
Excess Contributions attributable to each of such Employees. Excess
Contributions will be allocated to Participants who are subject to the
Family Member aggregation rules of Code section 414(q)(6) in the manner
prescribed by the regulations. Excess Contributions (including the amounts
recharacterized) will be treated as Annual Additions under the Plan.
(b) DETERMINATION OF INCOME OR LOSS -- Excess Contributions will be
adjusted for any income or loss up to the date of distribution. The income
or loss allocable to Excess Contributions is the sum of: (i) income or loss
allocable to the Participant's Salary Reduction Account (and, if
applicable, the Qualified Contributions Account) for the Plan Year
multiplied by a fraction, the numerator of which is such Participant's
Excess Contributions for the year and the denominator is the Participant's
account balance attributable to Salary Reduction Deferrals (and Qualified
Nonelective Contributions or Qualified Matching Contributions, or both, if
any of such contributions are included in the ADP test) without regard to
any income or loss occurring during such Plan Year; and (ii) 10% of the
amount determined under (i) multiplied by the number of whole calendar
months between the end of the Plan Year and the extent that such amount in
combination with other Employee Contributions made by that Employee would
exceed any stated limit under the Plan on Employee Contributions.
(c) ACCOUNTING FOR EXCESS CONTRIBUTIONS -- Excess Contributions will
be distributed from the Participant's Salary Reduction Account (and, if
applicable, the Qualified Contributions Account) in proportion to the
Participant's Salary Reduction Deferrals and Qualified Matching
Contributions for the Plan Year. Excess Contributions will be deemed
distributed from the Participant's Qualified Nonelective Contributions only
to the extent that such Excess Contributions exceed the Participant's
Salary Reduction Deferral and Qualified Matching Contribution for the Plan
Year.
(d) RECHARACTERIZATION -- To the extent provided in regulations under
the Code, a Participant may elect to treat Excess Contributions allocated
to a Participant's Salary Reduction Account as amounts distributed to the
Participant and contributed by the Participant to the Plan as an After-Tax
Contribution if the Adoption Agreement in Section 11 or 12 permits Employee
After-Tax Contributions. Recharacterization must occur no later than 2-1/2
months after the last day of the Plan Year in which such Excess
Contributions arose and is deemed to occur no earlier than the date the
last Highly Compensated Employee is informed in writing of the amount
recharacterized and the consequences thereof. Recharacterized amounts will
be taxable to the Participant for the Participant's tax year in which the
Participant would have received them in cash.
13.10 PERCENTAGE LIMITATION ON AFTER-TAX CONTRIBUTIONS AND MATCHING
CONTRIBUTIONS UNDER CODE SECTION 401(M) -- This Section applies if the Adoption
Agreement in Section 12 or 13 permits either Employee After-Tax Contributions,
Employer Matching Contributions, or both.
(a) THE AVERAGE CONTRIBUTION PERCENTAGE TEST -- The Average
Contribution Percentage (ACP) for Eligible Participants who are Highly
Compensated Employees for each Plan Year and the ACP for Eligible
Participants who are Non-Highly Compensated Employees for the same Plan
Year will satisfy one of the following tests:
(i) The ACP for Eligible Participants who are Highly Compensated
Employees for the Plan Year will not exceed the ACP for Eligible
Participants who are Non-Highly
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Compensated Employees for the same Plan Year multiplied by 1.25; or
(ii) The ACP for Eligible Participants who are Highly Compensated
Employees for the Plan Year will not exceed the ACP for Eligible
Participants who are Non-Highly Compensated Employees for the same
Plan Year multiplied by two, provided that the ACP for Eligible
Participants who are Highly Compensated Employees do not exceed the
ACP for Eligible Participants who are Non-Highly Compensated Employees
by more than two percentage points or such lesser amount as the
Secretary of the Treasury will prescribe to prevent the multiple use
of this alternative limitation with respect to any Highly Compensated
Employee.
(b) SPECIAL RULES --
(i) If one or more Highly Compensated Employees participate in
both a 401(k) Plan and a plan subject to the ACP test maintained by
the Employer and the sum of the ADP and ACP of those Highly
Compensated Employees subject to either or both tests exceeds the
Aggregate Limit, then the ACP of those Highly Compensated Employees
who also participate in a 401(k) Plan will be reduced (beginning with
such Highly Compensated Employee whose ACP is the highest) so that the
limit is not exceeded. The amount by which each Highly Compensated
Employee's Contribution Percentage Amounts are reduced will be treated
as an Excess Aggregate Contribution. The ADP and ACP of the Highly
Compensated Employees are determined after any corrections required to
meet the ADP and ACP tests. Multiple use does not occur if both the
ADP and ACP of the Highly Compensated Employees do not exceed 1.25
multiplied by the ADP and ACP of the Non-Highly Compensated Employees.
(ii) The Contribution Percentage for any Eligible Participant who
is a Highly Compensated Employee and who is eligible to have
Contribution Percentage Amounts allocated to his or her account under
two or more plans described in Code section 401(a), or arrangements
described in Code section 401(k), that are maintained by the Employer
will be determined as if the total of such Contribution Percentage
Amounts were made under each plan. If a Highly Compensated Employee
participates in two or more cash or deferred arrangements that have
different plan years, all cash or deferred arrangements ending with or
within the same calendar year shall be treated as a single
arrangement.
(iii) In the event that this Plan satisfies the requirements of
Code section 410(b) only if aggregated with one or more other plans,
or if one or more other plans satisfy the requirements of Code section
410(b) only if aggregated with this Plan, then this Section will be
applied by determining the Contribution Percentage of Employees as if
all such plans were a single plan. For plan years beginning after
December 31, 1989, plans may be aggregated in order to satisfy Code
section 401(m) only if they have the same plan year.
(iv) For purposes of determining the Contribution Percentage of
an Eligible Participant who is a 5 Percent Owner or one of the ten
most highly paid Highly Compensated Employees, the Contribution
Percentage Amounts and Compensation of such Participant will include
the Contribution Percentage Amounts and Compensation for the Plan Year
of Family Members. Family Members of Highly Compensated Employees will
be disregarded as separate Employees in determining the Contribution
Percentage both for Employees who are Non-Highly Compensated Employees
and for Employees who are Highly Compensated Employees.
(v) For purposes of determining the Contribution Percentage test,
Employee Contributions are considered to have been made in the Plan
Year in which contributed to the Fund. Matching Contributions and
Qualified Nonelective Contributions will be considered made for a Plan
Year if made by the date specified in the applicable regulations, and
allocated to a Participant's account for the Plan Year if made no
later than the end of the twelve-month period beginning on the day
after the close of the Plan Year.
(vi) The Employer must maintain records sufficient to demonstrate
satisfaction of the ACP test, including the amount of Qualified
Nonelective Contributions or Qualified Matching Contributions, or
both, used in such test.
(vii) The determination and treatment of the Contribution
Percentage of any Employee will satisfy such other requirements as may
be prescribed by the Secretary of the Treasury.
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13.11 DISTRIBUTION OF EXCESS AGGREGATE CONTRIBUTIONS -- This Section
applies if the Adoption Agreement permits either Employee After-Tax
Contributions, Employer Matching Contributions, or both.
(a) DISTRIBUTION -- Notwithstanding any other provision of this Plan,
Excess Aggregate Contributions, plus any income and minus any loss
allocable thereto, will be forfeited, if forfeitable, or, if not
forfeitable, distributed no later than the last day of each Plan Year to
Participants to whose accounts such Excess Aggregate Contributions were
allocated for the preceding Plan Year. Excess Aggregate Contributions will
be allocated to Participants who are subject to the family member
aggregation rules of Code section 414(q)(6) in the manner prescribed by the
regulations. If such Excess Aggregate Contributions are distributed more
than 2-1/2 months after the last day of the Plan Year in which such excess
amounts arose, a 10% excise tax will be imposed on the Employer maintaining
the Plan with respect to those amounts. Excess Aggregate Contributions
shall be treated as Annual Additions under the Plan.
(b) DETERMINATION OF INCOME OR LOSS -- The Excess Aggregate
Contributions will be adjusted for income or loss. The income or loss
allocable to Excess Aggregate Contributions is the sum of: (i) income or
loss allocable to the Participant's After-Tax Contribution Account,
Qualified Contribution Account (if any, and if all amounts therein are not
used in the ADP test) and Salary Reduction Account for the Plan Year
multiplied by a fraction, the numerator of which is such Participant's
Excess Aggregate Contributions for the year and the denominator is the
Participant's Account balance(s) attributable to Contribution Percentage
Amounts without regard to any income or loss occurring during such Plan
Year; and (ii) 10% of the amount determined under (i) multiplied by the
number of whole calendar months between the end of the Plan Year and the
date of distribution, counting the month of distribution if distribution
occurs after the 15th of such month.
(c) FORFEITURES OF EXCESS AGGREGATE CONTRIBUTIONS -- Forfeitures of
Excess Aggregate Contributions may either be reallocated to the accounts of
Non-Highly Compensated Employees or applied to reduce Employer
Contributions, as determined by the Employer in the Adoption Agreement.
Amounts forfeited by Highly Compensated Employees under this Section will
be treated as Annual Additions under the Plan.
(d) ACCOUNTING FOR EXCESS AGGREGATE CONTRIBUTIONS -- Excess Aggregate
Contributions will be forfeited, if forfeitable, or distributed on a pro
rata basis from the applicable Participant's After-Tax Contribution
Account, Employer Contribution Account, or Salary Reduction Account to
which they were initially allocated.
(e) ALLOCATION OF FORFEITURES -- Forfeitures of Excess Aggregate
Contributions will be applied to reduce Employer Contributions or, if none
are required because of termination of the Plan, will be allocated, after
all other Forfeitures under the Plan, to each Employer Contribution Account
in the ratio to which each Employee's Compensation for the Plan Year bears
to the total Compensation of all Employees for such Plan Year. Such
Forfeitures will not be allocated to the account of any Highly Compensated
Employee.
13.12 QUALIFIED NONELECTIVE CONTRIBUTIONS -- This Section applies if the
Employer makes Qualified Nonelective Contributions under the Plan on behalf of
Employees under Section 13 of the Adoption Agreement. The Employer may make
Qualified Nonelective Contributions on behalf of Non-Highly Compensated
Employees that are sufficient to satisfy either the ADP test or the ACP test, or
both, pursuant to regulations under the Code, in lieu of distributing Excess
Contributions or Excess Aggregate Contributions.
13.13 PARTICIPANTS' ACCOUNTS -- In addition to the Accounts established
pursuant to Section 5.1, Accounts shall be established and designated as a
Salary Reduction Account, a Qualified Contributions Account, and a Matching
Contributions Account. The entire amounts credited to such Accounts, including
contributions and earnings thereon, will always be nonforfeitable.
13.14 ALLOCATION OF INCREASE OR DECREASE IN NET WORTH AND OF EMPLOYEE
CONTRIBUTIONS -- As of each Valuation Date, the Plan Administrator will allocate
the increase or decrease in net worth of the Fund, as determined under Section
5.2, among the Accounts of all Participants, including Participants whose
Accounts are being held in the Fund pending distribution. Each Account will
first be increased by one-half of any Salary
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Reduction Deferrals or After-Tax Contributions made to such Account through
payroll deductions since the preceding Valuation Date and will be reduced by the
amount of any distributions therefrom since the preceding Valuation Date and
prior to any restorations pursuant to Section 5.3. The allocation of the
increase or decrease in net worth will then be made in the ratio which the
dollar value of each such Account bears to the aggregate dollar value of all
such Accounts as of the preceding Valuation Date. After these allocations have
been made, the Plan Administrator will credit to the appropriate Account the
balance of a Participant's Salary Reduction Deferrals and After-Tax
Contributions made since the previous Valuation Date and not taken into account.
This Section supersedes Section 5.4.
13.15 WITHDRAWAL OF SALARY REDUCTION DEFERRALS, QUALIFIED NONELECTIVE
CONTRIBUTIONS AND QUALIFIED MATCHING CONTRIBUTIONS -- A Participant may withdraw
his or her Salary Reduction Contributions, Qualified Nonelective Contributions
and Qualified Matching Contributions, and income allocable to each, only upon
termination of Service, death or disability. Such amounts may also be
distributed, in accordance with a Participant's election and a Qualified
Election, if applicable, upon:
(a) PLAN TERMINATION -- Termination of the Plan without the
establishment of another defined contribution plan;
(b) SALE OF ASSETS -- The disposition by a corporation to an unrelated
corporation of substantially all of the assets (within the meaning of Code
section 409(d)(2)) used by such corporation in a trade or business of such
corporation if such corporation continues to maintain this Plan after the
disposition, but only with respect to Employees who continue employment
with the corporation acquiring such assets;
(c) SALE OF SUBSIDIARY -- The disposition by a corporation of such
corporation's interest in a subsidiary (within the meaning of Code section
409(d)(3)) if such corporation continues to maintain this Plan, but only
with respect to Employees who continue employment with such subsidiary;
(d) AGE 59-1/2 -- A Participant's attainment of age 59-1/2; or
(e) HARDSHIP -- A Participant's hardship in accordance with Section
7.9 and applicable regulations. All distributions which may be made
pursuant to one or more of the foregoing distributable events are subject
to the spousal and participant consent requirements (if applicable)
contained in Code sections 401(a)(11) and 417.
13.16 HARDSHIP WITHDRAWALS -- This Section applies if hardship withdrawals
are authorized by Section 14 of the Adoption Agreement. Upon a Participant's
application, the Plan Administrator may approve a hardship withdrawal for a
Participant from his or her Salary Reduction Account, provided the Participant
meets the criteria set forth below.
(a) AN IMMEDIATE AND HEAVY FINANCIAL NEED -- A Participant will be
permitted to make a hardship withdrawal if the Plan Administrator
determines that such Participant has an immediate and heavy financial need.
A Participant will automatically be considered to have an immediate and
heavy financial need if the need results from any of the following:
(i) MEDICAL EXPENSE -- Medical expenses (other than amounts paid
by insurance) incurred by the Participant or on the Participant's
behalf, on behalf of his or her Spouse or any of his or her eligible
dependents;
(ii) PRINCIPAL RESIDENCE -- The purchase of a principal residence
for the Participant (but not the payment of a Participant's mortgage);
(iii) EDUCATION -- Post-secondary education tuition (for the next
semester or quarter) for the Participant, his or her Spouse, child or
dependent; or
XIII-10
<PAGE>
(iv) EVICTION -- The prevention of the Participant's eviction
from his or her principal residence or foreclosure on the mortgage of
his or her principal residence.
(b) NO OTHER AVAILABLE FINANCIAL RESOURCES -- A Participant will not
be permitted to make a hardship withdrawal unless the Participant and his
or her Spouse have no other financial resources available. Unless the Plan
Administrator has reason to believe otherwise, the Plan Administrator may
rely upon the Participant's signed statement that the need cannot be
satisfied in ANY of the following ways:
(i) REIMBURSEMENT -- Through reimbursement or compensation by
insurance or otherwise;
(ii) LIQUIDATION -- By reasonable liquidation of the
Participant's actual and deemed assets to the extent the liquidation
would not in itself cause an immediate and heavy financial need;
(iii) DEFERRALS OR CONTRIBUTIONS -- By ceasing deferrals and
contributions to the Plan; or
(iv) LOANS -- By other distributions or nontaxable loans from
Plans maintained by the Employer or any other employer or by borrowing
from commercial lenders on reasonable commercial terms.
(c) DISTRIBUTION DEEMED NECESSARY TO SATISFY FINANCIAL NEED. A
distribution will be deemed to be necessary to satisfy an immediate and
heavy financial need of a Participant if all of the following requirements
are satisfied:
(i) NEED -- the distribution is not in excess of the amount of
the immediate and heavy financial need of the Participant;
(ii) ALL OTHER DISTRIBUTIONS -- the Participant has obtained all
distributions, other than hardship distributions, and all nontaxable
loans currently available under all plans maintained by the Employer;
(iii) SUSPENSION OF CONTRIBUTIONS -- the Participant's
contributions are suspended for at least 12 months after receipt of
the hardship distribution under this Plan and all other plans
maintained by the Employer; and
(iv) LIMIT -- The Participant may not make contributions for the
taxable year immediately following the taxable year of the hardship
distribution in excess of the applicable limit under Code section
402(g) less the amount of such Participant's contributions for the
taxable year of the hardship distribution under this Plan and all
other plans maintained by the Employer.
An Employee will not fail to be treated as an eligible employee for
purposes of coverage merely because his or her contributions are suspended
in accordance with this provision.
(d) LIMITATIONS ON HARDSHIP WITHDRAWALS -- Hardship withdrawals will
not be allowed from Qualified Matching Contributions, Qualified Nonelective
Contributions, or earnings allocated on Salary Reduction Deferrals.
Hardship withdrawals will first be made from any Salary Reduction Account
and then from any Employer Contributions Account.
XIII-11
Exhibit 4.3
MODEL AMENDMENT TO DAVIS, GRAHAM & STUBBS
PROTOTYPE DEFINED CONTRIBUTION PLAN
Davis, Graham & Stubbs, as sponsor for the Davis, Graham & Stubbs Prototype
Defined Contribution Plan (the Plan), has retained the right to amend the Plan
under Article XI, Section 11.5.
Davis, Graham & Stubbs pursuant to such right desires to amend the Plan to
allow the waiver of a 30-day notice period with respect to a distribution to
which Sections 401(a)(11) and 417 of the Code do not apply, through adoption of
the IRS Model Amendment.
NOW THEREFORE, effective January 1, 1993 Article VII, ss. 7.3 of the Plan
shall be amended by the addition of the following provision.
"If a distribution is one to which Sections 401(a)(11) and 417 of the
Internal Revenue Code do not apply, such distribution may commence less
than 30 days after the notice required under Section 1.411(a)-11(c) of the
Income Tax Regulations is given provided that:
(1) The Plan Administrator clearly informs the Participant that the
Participant has a right to a period of at least 30 days after receiving the
notice to consider the decision of whether or not to elect a distribution
(and, if applicable, a particular distribution option), and
(2) The Participant, after receiving the notice, affirmatively elects
a distribution."
Exhibit 4.4
MODEL AMENDMENT TO DAVIS, GRAHAM & STUBBS
PROTOTYPE DEFINED CONTRIBUTION PLAN
Davis, Graham & Stubbs, as sponsor for the Davis, Graham & Stubbs Prototype
Defined Benefit Plan, has retained the right to amend the Davis, Graham & Stubbs
Prototype Defined Contribution Plan under Article XI, Section 11.5.
Davis, Graham & Stubbs pursuant to such right desires to amend the Plan to
comply with the new Compensation limits of IRC 401(a)17 as amended by OBRA '93,
through adoption of the IRS Model Amendment.
NOW, THEREFORE, effective January 1, 1994, in the last paragraph of Article
II Section 2.19 "(c)" is inserted before the first sentence and "(d)" is
inserted before the next sentence. After such first sentence, the following is
inserted:
"In addition to other applicable limitations set forth in the Plan,
and notwithstanding any other provision of the Plan to the contrary, for
Plan Years beginning on or after January 1, 1994, the annual Compensation
of each Employee taken into account under the Plan shall not exceed the
OBRA '93 annual compensation limit. The OBRA '93 annual compensation limit
is $150,000, as adjusted by the Commissioner for increases in the cost of
living in accordance with Code ss. 401(a)(17)(B). The cost-of-living
adjustment in effect for a calendar year applies to any period, not
exceeding 12 months, over which Compensation is determined (determination
period) beginning in such calendar year. If a determination period consists
of fewer than 12 months, the OBRA '93 annual compensation limit will be
multiplied by a fraction, the numerator of which is the number of months in
the determination period, and the denominator of which is 12. For Plan
Years beginning on or after January 1, 1994, any reference in this Plan to
the limitation under Code ss. 401(a)(17) shall mean the OBRA '93 annual
compensation limit set forth in this provision. If Compensation for any
prior determination period is taken into account in determining an
Employee's benefits accruing in the current Plan Year, the Compensation for
that prior determination period is subject to the OBRA '93 annual
compensation limit in effect for that prior determination period. For this
purpose, for determination periods beginning before the first day of the
first Plan Year beginning on or after January 1, 1994, the OBRA '93 annual
compensation limit is $150,000."
Exhibit 4.5
401(k) and
Profit-Sharing Version
MODEL AMENDMENT TO DAVIS, GRAHAM & STUBBS
PROTOTYPE DEFINED CONTRIBUTION PLAN
Davis, Graham & Stubbs LLP, as sponsor, has amended the Davis, Graham &
Stubbs Prototype Defined Contribution Plan (the "Plan") to comply with the
Uniformed Services Employment and Reemployment Rights Act and Internal Revenue
Code ss. 414(u) effective December 12, 1994 and to comply with Revenue Ruling
94-76 effective January 1, 1995 as follows:
I. Effective December 12, 1994:
A. Section 12.8 of the Plan has been amended by changing the Section
number to 12.10.
B. A new section 12.8 is added as follows:
"12.8 COMPLIANCE WITH UNIFORMED SERVICES EMPLOYMENT AND REEMPLOYMENT
RIGHTS ACT -- Notwithstanding any provision of this Plan to the
contrary, contributions, benefits and service credit with respect to
qualified military service will be provided in accordance with section
414(u) of the Internal Revenue Code."
C. The following sentence is added to the end of Section 7.10(b):
"Loan repayments will be suspended under this Plan as permitted under
section 414(u)(4) of the Internal Revenue Code."
II. Effective January 1, 1995:
A. A new section 12.9 is added as follows:
"12.9 TRANSFERS FROM A QUALIFIED MONEY PURCHASE PENSION PLAN --
Notwithstanding any provision of this plan to the contrary, to the
extent that any optional form of benefit under this plan permits a
distribution prior to the employee's retirement, death, disability, or
severance from employment, and prior to plan termination, the optional
form of benefit is not available with respect to benefits attributable
to assets (including the post-transfer earnings thereon) and
liabilities that are transferred, within the meaning of section 414(1)
of the Internal Revenue Code, to this plan from a money purchase
pension plan qualified under section 401(a) of the Internal Revenue
Code."
Date: June 30, 1997
Exhibit 4.6
DAVIS, GRAHAM & STUBBS
PROTOTYPE DEFINED CONTRIBUTION PLAN
401(K) PLAN
ADOPTION AGREEMENT
JANUARY 1, 1989
1. NAME AND ADDRESS OF EMPLOYER:
UNION BANKSHARES, LTD.
1825 LAWRENCE STREET, SUITE 444
DENVER, COLORADO 80202
2. ADOPTION OF PLAN: The Employer hereby adopts the "Union Bankshares, Ltd.
Profit Sharing 401(k) Plan." The terms of the Plan are set forth in (a)
this Adoption Agreement, and (b) the Davis, Graham & Stubbs Prototype
Defined Contribution Plan dated January 1, 1989. The Plan defines the
capitalized words in this Adoption Agreement.
3. NATURE OF BUSINESS: The Employer is a /X/ C corporation; S corporation;
partnership; sole proprietorship; or
(describe other entity); and is engaged in the following business: BANKING.
4. IDENTIFYING NUMBERS: Employer Identification No.: 84-0986148; Plan Serial
No.: 001.
5. PLAN YEAR: The Plan Year of the Employer is the twelve-consecutive-month
period ending on the last day of DECEMBER.
6. (X) NEW PLAN AND TRUST AND EFFECTIVE DATE: (check if applicable) This
is a new Plan and Trust and is effective on the first day of October
1993. The initial Anniversary Date is the last day of September 1994.
7. ( ) AMENDMENT OF PRIOR PLAN AND TRUST AND EFFECTIVE DATE: (check if
applicable) This is an Amendment in its entirety of the Employer's
existing retirement plan and trust agreement, as heretofore amended
("Prior Plan"). The effective date of the Prior Plan was the first day
of 19 . The initial Anniversary Date of the Prior Plan was
the last day of , 19 . This Amendment is intended to
qualify under Code ss. 401(a) and is effective as of the first day of
the Plan Year beginning after December 31, 1986 as to those provisions
of the Tax Reform Act
<PAGE>
of 1986 that (a) relate to plan qualification under Code ss. 401(a),
(b) and are effective for Plan Years beginning before January 1, 1989.
This amendment is effective as of the first day of the Plan Year
beginning on or after January 1, 1989 as to all other provisions.
8. ELIGIBILITY TO ENTER PLAN: An Employee may enter the Plan as provided in
Section 3.1 of the Plan on the Entry Date coinciding with or next following
the date the Employee satisfies the requirements of (a), (b) and (c) below.
(a) MINIMUM AGE: The Employee is 21 years old (not greater than "21").
(b) YEARS OF ELIGIBILITY SERVICE: The Employee has 1 Year of Service.
(Enter not more than "one.")
(c) OTHER: (complete if applicable) The Employee is .
(Do not enter age or service conditions here.)
9. ENTRY DATES: The Employee will enter the Plan on the Entry Date which is:
(check one)
(X) FIRST OR SEVENTH: The first day of the first or seventh calendar month
of the Plan Year.
( ) OTHER:
(enter a date or dates that are no later than the earlier of the first
day of the next Plan Year or six months after the Employee satisfies
the conditions under Section 8 above).
10. METHOD OF COMPUTING YEARS OF SERVICE: Years of Service will be computed
under: (check one)
(X) HOURS OF SERVICE: The Hours of Service Method described in Section 3.3
of the Plan computed as follows: (check one)
(X) ACTUAL HOURS: An Employee will be credited on the basis of actual
hours for which the Employee is paid or is entitled to payment.
( ) BASED ON DAYS WORKED: An Employee will be credited with 10
Hours of Service per day if, under Section 3.5 of the Plan, such
Employee would be credited with at least one Hour of Service
during the day.
( ) BASED ON WEEKS WORKED: An Employee will be credited with 45
Hours of Service per calendar week if, under Section 3.5 of
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<PAGE>
the Plan, such Employee would be credited with at least one Hour
of Service during the week.
( ) BASED ON MONTHS WORKED: An Employee will be credited with 190
Hours of Service per calendar month if, under Section 3.5 of the
Plan, such Employee would be credited with at least one Hour of
Service during the month.
( ) CONTINUOUS SERVICE: The Continuous Service Method described in
Section 3.4 of the Plan.
11. (X) REQUIRED EMPLOYEE SALARY REDUCTION DEFERRAL OR REQUIRED AFTER-TAX
CONTRIBUTION: (check if applicable) A Participant will be eligible to
share in Employer Matching Contributions for each Plan Year in which
the Participant makes a Required Salary Reduction Deferral or a
Required After-Tax Contribution or a combination of both under (a) and
(b) below (check if applicable):
(a) (X) REQUIRED SALARY REDUCTION DEFERRAL: The Participant
enters into a written Salary Reduction Agreement with the
Employer and agrees to accept a Salary Reduction Deferral of
from 2% up to 6% of Compensation. Such Deferral must not
exceed the lesser of 6% of Compensation or $7,000, as
increased for cost-of-living adjustments by law or
regulation.
(b) ( ) REQUIRED AFTER-TAX CONTRIBUTION: The Participant
contributes from % up to % of Compensation not to
exceed a maximum of 6% of Compensation.
(c) MAXIMUM: The Participant's combined Required Salary Reduction
Deferral and Required After-Tax Contribution under this Section
11 may not exceed 6% of Compensation.
12. (X) OPTIONAL EMPLOYEE SALARY REDUCTION DEFERRALS OR AFTER-TAX
CONTRIBUTIONS: A Participant may make optional Salary Reduction
Deferrals or After-Tax Contributions or a combination of both under
(a) and (b) below (check if applicable):
(a) (X) OPTIONAL SALARY REDUCTION DEFERRAL: The Participant
enters into a written Salary Reduction Agreement with the
Employer and agrees to accept a Salary Reduction Deferral of
from 7% up to 15% of Compensation.
(b) ( ) OPTIONAL AFTER-TAX CONTRIBUTION: The Participant
contributes from % to % of Compensation.
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<PAGE>
(c) MAXIMUM: The Participant's combined Required Salary Reduction
Deferrals under Section 11 and the Optional Salary Reduction
Deferral under this Section may not exceed $7,000, as increased
for cost-of-living adjustments by law or regulation.
(d) Participants who claim Excess Salary Reduction Deferrals for the
preceding taxable year must submit their claims in writing to the
Plan Administrator according to Section 13.7(a) of the Plan by
March 15.
13. EMPLOYER CONTRIBUTIONS:
(a) SALARY REDUCTION CONTRIBUTIONS: For each Plan Year, the Employer
will contribute an amount equal to the Required and Optional
Salary Reduction Deferrals set forth in the Salary Reduction
Agreements entered into for such Plan Year. Any such
contributions will be allocated to the Salary Reduction Account
of each Participant entitled thereto pursuant to the applicable
Salary Reduction Agreement and will be 100% vested in such
Participant.
(b) (X) REQUIRED MATCHING CONTRIBUTIONS: (check if applicable)
For each Plan Year, the Employer will contribute to the
Trust Fund:
(i) AMOUNT OF REQUIRED MATCHING CONTRIBUTIONS: (check one)
( ) A DEFINITE PERCENT: An amount equal to 100% of the
Required Salary Reduction Deferrals and Required
After-Tax Contributions;
(X) A DEFINITE PERCENT LIMITED TO A PERCENT OF
COMPENSATION: An amount equal to 50% of the Required
Salary Reduction Deferrals and Required After-Tax
Contributions not to exceed 3% of each Participant's
Compensation.
( ) A DEFINITE PERCENT FOR YEARS OF SERVICE: An amount
for each Participant equal to the percent of the first
% of Required Salary Reduction Deferrals and
Required After-Tax Contributions that is listed below
opposite the Years of Service for such Participant as
of the end of the Plan Year.
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Percentage of
Required Salary Reduction
Completed Deferrals and Required
Years of Service After-Tax Contributions
---------------- -----------------------
%
---- ----
%
---- ----
%
---- ----
%
---- ----
%
---- ----
%
---- ----
%
---- ----
%
---- ----
(ii) ALLOCATION AND VESTING OF REQUIRED MATCHING CONTRIBUTIONS: (check
one)
( ) QUALIFIED MATCHING CONTRIBUTIONS: Any Matching
Contributions will be 100% vested and will be allocated to
the Qualified Contributions Account of each Participant
entitled thereto.
( ) OTHER: Any Matching Contributions will be subject to the
vesting schedule and will be allocated to the Employer
Contributions Account of each Participant entitled thereto.
(c) ( ) DISCRETIONARY QUALIFIED MATCHING CONTRIBUTIONS: (check if
applicable) For each Plan Year, the Employer may contribute
Qualified Matching Contributions to the Trust Fund in an amount
which the Employer may determine in its discretion. Qualified
Matching Contributions will be 100% vested and will be allocated
among the Qualified Contributions Accounts of either all the
Participants determined under Section 3.2 of the Plan who made
Required Contributions for such Plan Year or only such Non-Highly
Compensated Participants who made Required Contributions for such
Plan Year as determined by the Employer in its sole discretion
for such Plan Year. Each Plan Year for which the Employer makes
Qualified Matching Contributions, the Employer will specify in a
written resolution whether or not such Contributions will be
limited to Non-Highly Compensated Participants. Any allocation
will be made in proportion to all of the Compensation of the
eligible Participants for the portion of the Plan Year during
which they were Participants.
(d) ( ) DISCRETIONARY QUALIFIED NONELECTIVE CONTRIBUTIONS: (check if
applicable) For each Plan Year, the Employer may contribute
Qualified Nonelective Contributions to the Trust Fund in an
amount which the
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<PAGE>
Employer may determine in its discretion. Qualified Nonelective
Contributions will be 100% vested and will be allocated among the
Qualified Contributions Accounts of either all the Participants
determined under Section 3.2 of the Plan or only such Non-Highly
Compensated Participants for such Plan Year as determined by the
Employer in its sole discretion for such Plan Year. Each Plan
Year for which the Employer makes Qualified Nonelective
Contributions, the Employer will specify in a written resolution
whether or not such Contributions will be limited to Non-Highly
Compensated Participants. Any allocation will be made in
proportion to all of the Compensation of the eligible
Participants for the portion of the Plan Year during which they
were Participants.
(e) (X) PROFIT SHARING EMPLOYER CONTRIBUTIONS: (check if applicable)
For each Plan Year, the Employer may contribute to the Trust Fund
an amount which the Employer determines in its discretion. The
Contributions under this subsection will be subject to the
vesting schedule and will be allocated among the Employer
Contributions Accounts of Participants determined under Section
3.2 of the Plan for such Plan Year: (check one or both)
(X) in proportion to all of their Compensation for the portion of the
Plan Year during which they were Participants regardless of
whether such Participants made any Contributions.
(X) as Matching Contributions in proportion to such Participant's
*Salary Reduction or After-Tax Contributions.
* Required
(f) FORFEITURES: (check one)
(X) NO REDUCTION: Forfeitures will not reduce Employer Contributions
but will be allocated in the same manner as Matching
Contributions or, if none, in proportion to all of the
Compensation of the Participants determined under Section 3.2 of
the Plan for the portion of the Plan Year during which they were
Participants. Forfeitures will be subject to the same limitations
as Employer Contributions.
( ) REDUCTION: Forfeitures will reduce Employer Contributions;
provided, however, that Excess Aggregate Contributions will not
reduce Matching Contributions.
(g) SOURCE OF EMPLOYER CONTRIBUTIONS: (check one)
( ) PROFITS REQUIRED: Any amount contributed under this Section
(other than under (a) above) will not exceed Adjusted Net Income
for such Plan Year
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<PAGE>
and will be adjusted and allocated on a pro rata basis to the
appropriate accounts if such Adjusted Net Income is insufficient.
(X) PROFITS NOT REQUIRED: Any amount contributed under this
Section will be determined without regard to Adjusted Net Income.
14. WITHDRAWALS AND LOANS: (cross out the word(s) in parentheses if not
applicable)
(a) WITHDRAWALS OF EMPLOYER CONTRIBUTIONS (excluding Salary Reduction
Contributions): An Employee (may not) withdraw Employer Contributions
as set forth in Section 7.7 of the Plan.
(b) HARDSHIP WITHDRAWALS: An Employee (may) withdraw from his Account for
hardship as set forth in Section 13.16 of the Plan.
(c) LOANS: An Employee (may not) borrow from his Account as set forth
in Section 7.10 of the Plan.
15. LIMITATIONS ON BENEFIT ACCRUAL: The Participant will be eligible to
share in Employer Contributions and Forfeitures for all Service in the
Plan Year provided:
(a) IF THE HOURS OF SERVICE METHOD UNDER SECTION 3.3 APPLIES: (check if
applicable)
( ) 1,000 HOURS: The Participant is credited with at least 1,000
Hours of Service, as described in Section 3.5 of the Plan, during
the Plan Year (or a proportionate part of 1,000 Hours of Service
if participation began on other than the first business day of
the Plan Year).
( ) EXCEPTION: (check if applicable) This limitation will not apply
to accruals of Matching Contributions.
( ) LAST DAY: The Participant is an Employee on the last business
day of the period for which the contribution is made (e.g., last
business day of quarter for quarterly contribution, last business
day of the Plan Year for annual contribution).
( ) EXCEPTION: (check if applicable) This limitation will not apply
to accruals of Matching Contributions.
-7-
<PAGE>
(b) IF THE CONTINUOUS SERVICE METHOD UNDER SECTION 3.4 APPLIES: (check if
applicable)
( ) FIRST AND LAST DAY: The Participant is credited with a Period
of Service, as described in Section 3.4 of the Plan, encompassing
the first and last business days of the Plan Year.
( ) EXCEPTION: (check if applicable) This limitation will not
apply to accruals of Matching Contributions.
(c) OTHER RETIREMENT PLAN: (complete if applicable) The Participant is
covered by the following retirement plan to which the Employer
contributes:
----------------------------------------------------------------------
(enter name of Plan)
(d) EXCEPTION: Even though the limitations above apply: (check if
applicable)
( ) The Participant will not be required to satisfy the above
requirements in the Plan Year in which Service terminates if such
termination is due to death or retirement under Section 7.2 of
the Plan.
(e) These limitations do not apply to Salary Reduction Contributions.
16. VESTING OF EMPLOYER CONTRIBUTIONS:
(a) SCHEDULE OF VESTING: Amounts credited to a Participant's Salary
Reduction Account, After-Tax Contributions Account, Qualified
Contributions Account, Deductible Account, Loan Account and Rollover
Account will always be 100% vested and non-forfeitable. Amounts
credited to a Participant's Employer Contributions Account will become
non-forfeitable in accordance with the following Schedule of Vesting.
The Participant's Years of Vesting Service will be computed as
provided in Section 6.4 of the Plan excluding all years described in
16(c) of this Adoption Agreement. The Schedule of Vesting must provide
for non-forfeitability no less favorable than: (i) 100% after five or
more Years of Vesting Service; or (ii) 20% with three Years of Vesting
Service and 20% for each of the next four Years of Vesting Service.
The Schedule of Vesting will be:
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<PAGE>
NON-FORFEITABLE
YEARS OF VESTING SERVICE PERCENTAGE OF ACCOUNT
Less than 1 Year 0%
1 Year 0%
2 Years 20%
3 Years 40%
4 Years 60%
5 Years 80%
6 Years 100%
7 Years %
---
(b) TOP HEAVY PLAN: For any Plan Year in which the Plan is a Top-Heavy
Plan and for any Plan Year thereafter, the Schedule of Vesting will
be: (check one)
(X) SCHEDULE OF VESTING ABOVE: The Schedule of Vesting in 16(a) above
if it provides for non-forfeitability no less favorable than
either of the two Schedules of Vesting immediately below.
( ) SCHEDULE OF VESTING AS FOLLOWS:
NON-FORFEITABLE
YEARS OF VESTING SERVICE PERCENTAGE OF ACCOUNT
Less than 1 Year 0%
1 Year 0%
2 Years 20%
3 Years 40%
4 Years 60%
5 Years 80%
6 Years 100%
( ) SCHEDULE OF VESTING AS FOLLOWS:
NON-FORFEITABLE
YEARS OF VESTING SERVICE PERCENTAGE OF ACCOUNT
Less than 1 Year 0%
1 Year 0%
2 Years 0%
3 Years 100%
(c) EXCLUSION FROM YEARS OF VESTING SERVICE: Notwithstanding the
provisions of the Plan, an Employee shall not receive credit for a
Year of Vesting Service: (check if applicable)
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<PAGE>
( ) EFFECTIVE DATE: Prior to the beginning of the Plan Year in
which the Effective Date of the Plan occurred or, if earlier, the
effective date of a predecessor plan occurred.
( ) 18TH BIRTHDAY: Prior to the beginning of the Plan Year in which
the Employee attained his 18th birthday, provided he was not then
a Participant.
17. NORMAL RETIREMENT AGE: The normal retirement age will be the later of (a)
65 (not earlier than "55" nor later than "65") or (b) the fifth anniversary
of the participation commencement date. The participation commencement date
is the first day of the first Plan Year in which the Participant commenced
participation in the Plan.
18. COMPENSATION:
(a) AMOUNT: Compensation for any Plan Year will mean: (check one)
(X) W-2 earnings.
( ) W-2 earnings plus elective or salary reduction contributions to
a cafeteria plan, cash or deferred arrangement or tax-sheltered
annuity.
(b) MODIFICATION: Compensation for any Plan Year will be that amount in
(a) above which is actually paid within such year, excluding the
following: (check if applicable)
( ) Overtime.
( ) Bonuses.
( ) Commissions.
( ) Other extraordinary remuneration:
-------------------------------
(specify)
19. VALUATION DATE(S): The Valuation Date(s) of the Plan will be: (check one)
( ) ANNUAL: The Anniversary Date; provided, however, that if, during any
three- month period ending on the 3rd, 6th, 9th, or 12th month of the
Plan Year, the Service of more than 25% of the Employees who were
Participants on the preceding Anniversary Date terminates, the first
day of such three-month period shall be a Valuation Date for the
purpose of Article V of the Plan.
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<PAGE>
( ) SEMIANNUAL: The last business day of the 6th and 12th months of the
Plan Year.
(X) QUARTERLY: The last business day of the 3rd, 6th, 9th and 12th months
of the Plan Year.
( ) MONTHLY. The last business day of each month.
20. INSURANCE CONTRACTS: (check if applicable)
( ) A Participant may direct the Trustee to invest a portion of his
Account in Insurance Contracts as provided in the Plan to be issued by
. The aggregate premiums, in the case of each
Participant, on such Insurance Contracts shall be less than (i) 25%,
if such Insurance Contracts involve insurance other than whole life
insurance, or (ii) 50%, if such Insurance Contracts involve whole life
insurance, of the aggregate Employer Contributions allocated to such
Participant's Employer Contributions Account, or (iii) 25%, if such
Insurance Contracts involve whole life insurance and other types of
insurance. In determining the aggregate amount of premiums paid for
purposes of (iii), one-half the premiums of whole life insurance shall
be added to the premiums of other types of insurance. Whole life
insurance contracts are contracts with nondecreasing death benefits
and nonincreasing premiums. Such premiums shall be paid from the
non-forfeitable portion of the Participant's Employer Contributions
Account.
21. INVESTMENT: (check one or more)
(X) TRUSTEE DISCRETION: All Employer and Matching Contributions will be
invested in Qualifying Employer Securities.
(X) PARTICIPANT DIRECTION IN OPTIONS: Each Participant may direct the
Trustee to invest his Salary Reduction Contributions in Investment
Options provided by the Trustee pursuant to Section 2.2 and the
addendum to the Trust Agreement.
( ) PARTICIPANT DISCRETION: Each Participant will have complete
discretion to invest his Accounts in the Trust Fund and may direct the
Trustee to invest his Accounts pursuant to Section 2.3 of the Trust
Agreement.
( ) INVESTMENT MANAGER: The Trustee will invest all or a portion of the
Trust Fund pursuant to the directions of an Investment Manager
selected from time to time by the Employer pursuant to the Trust
Agreement.
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<PAGE>
22. AFFILIATED EMPLOYERS: (complete if applicable) The following employers will
be deemed Affiliated Employers for the purpose of Section 3.6 of the Plan:
UNION BANK & TRUST
23. LIMITATIONS ON ALLOCATIONS AND MINIMUM BENEFIT OR ALLOCATION REQUIREMENTS:
(a) DEFINED CONTRIBUTION PLANS: The Employer should complete this Section
if the Employer maintains other Qualified Defined Contribution Plans
which are not Master or Prototype Plans, a welfare benefit fund
pursuant to Code ss. 419(e) or an individual medical account pursuant
to Code ss. 415(l)(2) under which amounts are treated as Annual
Additions with respect to any Participant in the Plan and if the
Employer wants to override the provisions of Sections 5.8 and 8.3 of
the Plan.
(i) ( ) ATTACHMENT: (check if applicable) Annual Additions which may
be credited to any Participant's Account under this Plan for any
Limitation Year will be limited as described in the attachment.
(ii) ( ) CREDITED IN OTHER PLAN: (check if applicable) The minimum
allocation of benefit which could be credited to any
Participant's Account under this Plan for any Plan Year will be
credited to such Participant's Account under the other Qualified
Defined Contribution Plan or Plans which the Employer maintains.
(b) DEFINED BENEFIT PLANS: The Employer should complete this Section if
the Employer maintains, or at any time maintained, one or more
Qualified Defined Benefit Plans, a welfare benefit fund pursuant to
Code ss. 419(e) or an individual medical account pursuant to Code ss.
415(l)(2) under which amounts are treated as Annual Additions with
respect to any Participant in the Plan and if the Employer wants to
override the provisions of Sections 5.9 and 8.3 of the Plan.
(i) LIMIT: The sum of the Defined Contribution Fraction and the
Defined Benefit Fraction with respect to any Participant for a
Limitation Year may not exceed 1.0. The 1.0 limitation will be
met as follows: (check one)
( ) LIMIT UNDER DEFINED CONTRIBUTION PLAN: By limiting the
Annual Additions to this and any other Qualified Defined
Contribution Plan for the Limitation Year so that the sum of
the Defined Contribution Fraction and the Defined Benefit
Fraction does not exceed 1.0.
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<PAGE>
( ) LIMIT UNDER DEFINED BENEFIT PLAN: By reducing the
projected annual benefit in one or more of the Qualified
Defined Benefit Plans so that the sum of the Defined
Contribution Fraction and the Defined Benefit Fraction does
not exceed 1.0.
( ) ATTACHMENT: Other method of limiting Annual Additions as
described in the attachment.
(ii) MINIMUM ALLOCATION: The minimum allocation or benefit which could
be credited to any Participant's Account under this Plan for any
Plan Year will: (check if applicable)
( ) QUALIFIED BENEFIT PLAN: Be met under the Qualified Defined
Benefit Plan or Plans which the Employer maintains.
( ) INCREASE: Be increased from 3% to 4% in any Plan Year in
which the Plan is a Top-Heavy Plan.
24. TOP-HEAVY PROVISION: The Employer should complete this Section if the
Employer maintains one or more Qualified Defined Benefit Plans which have
accrued benefits during the five-year period ending on the Determination
Date. For purposes of establishing present value to compute the Top-Heavy
Ratio, any benefit shall be discounted only for mortality, interest and as
of the Valuation Date as follows:
Interest rate: % Mortality table:
Valuation Date:
The following space is provided to enable the Employer to add such language
as is necessary to satisfy Code ss. 416 in the event that the Employer is
required to aggregate this Plan with other plans.
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25. (X) EMPLOYER SECURITIES: (check if applicable) The Trustee is
authorized and empowered to invest the Trust Fund primarily in
Qualifying Employer Securities ("primarily" meaning the authority to
invest, to acquire and to hold up to 100% of the Trust Fund in
Qualifying Employer Securities).
-13-
<PAGE>
26. RELIANCE ON OPINION LETTER: The Employer who adopts this Plan may not rely
on an opinion letter issued to the Sponsor by the Internal Revenue Service
as evidence that this Plan is qualified under Code ss. 401. If the Employer
wishes to obtain reliance that this Plan is qualified, application for a
determination letter should be made to the appropriate Key District
Director of Internal Revenue. This Adoption Agreement may only be used in
conjunction with Davis, Graham & Stubbs Prototype Defined Contribution Plan
Basic Document No. 1.
27. COMPLETENESS: Failure to properly fill out this Adoption Agreement may
result in disqualification of the Plan. The Sponsor will inform the
Employer of any amendments made to the Plan or of the discontinuance or
abandonment of the Plan. The name, address and telephone number of the
Sponsor are:
Name: Davis, Graham & Stubbs
Address: 370 17th Street, #4700
Denver, CO 80202
Telephone Number: (303) 892-9400
IN WITNESS WHEREOF, the Employer has executed this Adoption Agreement this
30th day of September, 1993.
Employer: UNION BANKSHARES, LTD.
By: /s/Bruce E. Hall
-----------------------------------------
Title: Vice President/Secretary
-14-
Exhibit 4.7
FIRST AMENDMENT
TO THE ADOPTION AGREEMENT OF
UNION BANKSHARES, LTD.
PROFIT SHARING 401(k) PLAN
RECITALS:
1. Union Bankshares, Ltd. is the Employer under the Union Bankshares, Ltd.
Profit Sharing 401(k) Plan (the "Plan") which was originally effective January
1, 1989 as to certain qualification provisions and effective October 1, 1993 as
to other provisions.
2. The Employer wants to amend the Plan to provide that if a Profit Sharing
Contribution is made as of the last day of the Plan Year, such contribution
shall be allocated only to those Participants who are Employees as of the last
day of the Plan Year.
AMENDMENT:
A. Section 15(a) of the Adoption Agreement of the Plan shall be
amended as follows:
"15. LIMITATIONS ON BENEFIT ACCRUAL: The Participant will be eligible to share
in Employer Contributions and Forfeitures for all Service in the Plan Year
provided:
(a) IF THE HOURS OF SERVICE METHOD UNDER SECTION 3.3 APPLIES: (check if
applicable)
( ) 1,000 HOURS: The Participant is credited with at least 1,000
Hours of Service, as described in Section 3.5 of the Plan, during
the Plan Year (or a proportionate part of 1,000 Hours of Service
if participation began on other than the first business day of
the Plan Year).
( ) EXCEPTION: (check if applicable) This limitation will not
apply to accruals of Matching Contributions.
(X) LAST DAY: The Participant is an Employee on the last business day
of the period for which the contribution is made (e.g., last
business day of quarter for quarterly contribution, last business
day of the Plan Year for annual contribution).
(X) EXCEPTION: (check if applicable) This limitation will not
apply to accruals of Matching Contributions made pursuant to
13(b)."
<PAGE>
This amendment shall be effective for Plan Years beginning on or after January
1, 1994.
IN WITNESS WHEREOF, the employer has executed this amendment to the
Adoption Agreement this 10th day of November, 1994.
/s/Bruce Hall
-------------------------------------------
Bruce Hall
Vice President and Secretary
-2-
Exhibit 4.8
SECOND AMENDMENT
TO THE ADOPTION AGREEMENT OF
UNION BANKSHARES, LTD.
PROFIT SHARING 401(K) PLAN
RECITALS:
1. Union Bankshares, Ltd. is the Employer under the Union Bankshares, Ltd.
Profit Sharing 401(k) Plan (the "Plan") which was originally effective January
1, 1989 as to certain qualification provisions and effective October 1, 1993 as
to other provisions.
2. The Employer wants to amend the Plan to change the definition of
Compensation to include elective or salary reduction contributions to a
cafeteria plan, cash or deferred arrangement or tax-sheltered annuity.
AMENDMENT:
Section 18(a) of the Adoption Agreement of the Plan shall be amended as
follows:
"18. COMPENSATION:
(a) AMOUNT: Compensation for any Plan Year will mean: (check one)
( ) W-2 earnings.
(X) W-2 earnings plus elective or salary reduction contributions to a
cafeteria plan, cash or deferred arrangement or tax-sheltered
annuity."
This amendment shall be effective for Plan years beginning on or after January
1, 1996.
IN WITNESS WHEREOF, the employer has executed this amendment to the
Adoption Agreement this 6th day of December, 1996.
UNION BANKSHARES, LTD.
By: /s/Bruce Hall
-----------------------------
Bruce Hall
Vice President and Secretary
Exhibit 4.9
THIRD AMENDMENT
TO THE ADOPTION AGREEMENT OF
UNION BANKSHARES, LTD.
PROFIT SHARING 401(k) PLAN
RECITALS:
1. Union Bankshares, Ltd. is the Employer under the Union Bankshares, Ltd.
Profit Sharing 401(k) Plan (the "Plan") which was originally effective January
1, 1989 as to certain qualification provisions and effective October 1, 1993 as
to other provisions.
2. The Employer wants to amend the Plan to provide that forfeitures will
reduce Employer Contributions.
AMENDMENT:
A. Section 13(f) of the Adoption Agreement of the Plan shall be amended as
follows:
"(f) FORFEITURES: (check one)
( ) NO REDUCTION: Forfeitures will not reduce Employer Contributions but
will be allocated in the same manner as Matching Contributions or, if
none, in proportion to all of the Compensation of the Participants
determined under Section 3.2 of the Plan for the portion of the Plan
Year during which they were Participants. Forfeitures will be subject
to the same limitations as Employer Contributions.
(X) REDUCTION: Forfeitures will reduce Employer Contributions; provided,
however, that Excess Aggregate Contributions will not reduce Matching
Contributions."
This amendment shall be effective for Plan Years beginning on or after January
1, 1996.
IN WITNESS WHEREOF, the employer has executed this amendment to the
Adoption Agreement this 27th day of January, 1997.
/s/Bruce Hall
------------------------------
Bruce Hall
Vice President and Secretary
Exhibit 4.10
Davis, Graham & Stubbs
Prototype Defined
Contribution Plan Trust
Agreement
TRUST AGREEMENT
BETWEEN
UNION BANKSHARES, LTD.
AND
HERMAN J. ZUECK
CHARLES R. HARRISON
AND
BRUCE E. HALL, TRUSTEES
FOR THE
UNION BANKSHARES, LTD.
PROFIT-SHARING 401(K) PLAN
<PAGE>
TABLE OF CONTENTS
PAGE
RECITALS .................................................................. 1
AGREEMENT.................................................................. 1
I. GENERAL DUTIES OF PARTIES......................................... 1
1.1 Establishment of Trust................................... 1
1.2 General Duties of Trustee................................ 1
1.3 General Duties of Employer............................... 2
II. INVESTMENT OF FUND................................................ 2
2.1 Discretionary Investments................................ 2
2.2 Participant Direction of Certain Investment Options...... 2
(a) Equity Fund Option.............................. 2
(b) Fixed Income Option............................. 3
(c) Balanced Fund Option............................ 3
(d) Short-Term Investment Option.................... 3
(e) Guaranteed Investment Contract.................. 3
(f) Other Option.................................... 3
2.3 Participant Investment Discretion........................ 3
2.4 Investment Manager....................................... 4
2.5 Restrictions on Investments.............................. 4
2.6 Loans to Participants.................................... 5
2.7 Powers of Trustee........................................ 5
2.8 Prohibited Transactions.................................. 6
2.9 Pooled Funds............................................. 6
III. DISTRIBUTIONS..................................................... 6
3.1 Information and Directions............................... 6
3.2 Distributions from the Trust Fund........................ 7
IV. TRUSTEE ADMINISTRATIVE PROVISIONS................................. 7
4.1 Reliance on Directions of Plan Administrator............. 7
4.2 Advice of Counsel........................................ 7
4.3 Compromise of Claims..................................... 7
4.4 Third Parties............................................ 7
4.5 Duty of Prudence......................................... 7
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<PAGE>
PAGE
4.6 Information Furnished Trustee............................ 8
4.7 Directions to Trustee.................................... 8
4.8 Administration of the Plan............................... 8
4.9 Signatures............................................... 8
V. TAXES, EXPENSES AND COMPENSATION OF TRUSTEE....................... 8
5.1 Taxes.................................................... 8
5.2 Expenses and Compensation................................ 8
VI. RESIGNATION, REMOVAL AND APPOINTMENT OF TRUSTEE................... 9
6.1 Resignation of Trustee................................... 9
6.2 Removal of Trustee....................................... 9
6.3 Appointment of Successor Trustee......................... 9
6.4 Transfer of Fund to Successor............................ 9
6.5 Merger or Consolidation of Trustee....................... 9
VII. SETTLEMENT OF ACCOUNTS -- ENFORCEMENT OF TRUST --
LEGAL PROCEEDINGS................................................. 10
7.1 Reports of Trustee....................................... 10
7.2 Settlement of Account.................................... 10
7.3 Judicial Settlement...................................... 10
7.4 Determination of Interest under Plan or in Trust Fund.... 10
7.5 Legal Proceedings........................................ 10
VIII. DURATION AND TERMINATION OF TRUST -- AMENDMENT.................... 11
8.1 Duration and Termination................................. 11
8.2 Distribution upon Termination............................ 11
8.3 Amendment................................................ 11
IX. MISCELLANEOUS..................................................... 11
9.1 Governing................................................ 11
9.2 Titles and Headings Not to Control....................... 11
9.3 Tax-Exemption............................................ 11
-ii-
<PAGE>
DAVIS, GRAHAM & STUBBS
PROTOTYPE DEFINED CONTRIBUTION PLAN
TRUST AGREEMENT
RECITALS
I. This Trust Agreement is entered into between UNION BANKSHARES, LTD. as
Employer and HERMAN J. ZUECK, CHARLES R. HARRISON AND BRUCE E. HALL as Trustee.
II. The Employer has established a retirement plan pursuant to the Davis,
Graham & Stubbs Prototype Defined Contribution Plan ("Plan"). The Adoption
Agreement and Plan are incorporated herein by reference. Capitalized words and
phrases in this Agreement have the meanings set forth in the Plan and in this
Trust Agreement.
III. The Plan authorizes and requires the creation of a Trust Fund to hold,
invest and distribute contributions by the Employer and Participants and any
appreciation and net income attributable to such contributions.
IV. If the Employer has so designated in the Adoption Agreement, this Trust
Agreement shall constitute an amendment to and substitute for the trust
agreement or custodial agreement executed by the Employer in conjunction with
the Prior Plan.
AGREEMENT
I.
GENERAL DUTIES OF PARTIES
1.1 ESTABLISHMENT OF TRUST -- The Trustee accepts the trust created hereby
and covenants that it shall hold all property which it may receive hereunder in
trust for the exclusive purposes of providing benefits to Participants, Former
Participants and their Beneficiaries and defraying reasonable expenses of
administering the Plan and Trust Fund, upon the terms and conditions hereinafter
stated.
1.2 GENERAL DUTIES OF TRUSTEE -- The Trustee shall hold all property
received by it hereunder, which, together with the income and gains therefrom
and additions thereto, shall constitute the Trust Fund. The Trustee shall
manage, invest and reinvest the Trust Fund, collect the income thereof, and make
payments therefrom, all as hereinafter provided. The Trustee shall be
responsible only for the property actually received by it hereunder. It shall
have no duty to administer the Plan, to compute any amount to be paid to it by
the Employer or any Participant, or to bring any action or proceeding to enforce
the collection from the Employer of any contribution to the Trust Fund.
-1-
<PAGE>
1.3 GENERAL DUTIES OF EMPLOYER -- The Employer shall from time to time
certify to the Trustee the name or names and specimen signatures of the Plan
Administrator and of any other persons then acting who have been authorized by
the Plan Administrator to control and manage the operation and administration of
the Plan. The Employer shall make its Contributions as the same may be due under
the Plan and shall promptly remit to the Trustee any Employee Contributions. All
Contributions shall be in cash unless the Trustee is authorized to invest the
Trust Fund primarily in Qualifying Employer Securities, in which case,
Contributions may be made in Qualifying Employer Securities. The Employer shall
keep accurate books and records with respect to Employees, Participants and
their Service and Compensation.
II.
INVESTMENT OF FUND
2.1 DISCRETIONARY INVESTMENTS -- Except as otherwise provided in the
Adoption Agreement or this Article, and subject to the limitations of Sections
2.2, 2.3, 2.4, 2.5 and 2.6, the Trustee shall have complete discretion with
respect to the investment of the Trust Fund. The Trustee shall invest and
reinvest the Trust Fund in any property, real, personal or mixed, wherever
situate, and whether or not productive of income or consisting of wasting
assets, including, without limitation, common and preferred stocks, bonds, notes
and debentures (including convertible stocks and securities but not including
any stock or securities of the Trustee or any corporation 50% or more of the
stock of which is owned by the Trustee which are not Qualifying Employer
Securities), leaseholds, mortgages (including, without limitation, any
collective or part interest in any bond and mortgage or note and mortgage),
certificates of deposit, demand or time deposits (including any such deposit
with the Trustee or any other bank, any of the stock of which is owned by the
Trustee), shares of investment companies and mutual funds, interests in
partnerships and trusts, insurance policies and contracts, and oil, mineral or
gas properties, royalties, interests or rights (including equipment pertaining
thereto), without being limited to the classes of property in which trustees are
authorized to invest trust funds by any law or any rule of court and without
regard to the proportion any such property may bear to the entire amount of the
Trust Fund; provided, however, that investments shall be so diversified as to
minimize the risk of large losses unless under the circumstances it is, in the
sole judgment of the Trustee, clearly prudent not to do so.
2.2 PARTICIPANT DIRECTION OF CERTAIN INVESTMENT OPTIONS -- If the Adoption
Agreement permits a Participant to direct investment in Investment Options
provided by the Trustee, the Trustee shall invest each Participant's Accounts
pursuant to Investment Directions given by the Participant under one or more of
the investment options described below or in the addendum, unless Section 2.4
otherwise applies. A Participant shall not, however, have the power to direct
the Trustee as to specific investments to be made under any Investment Option.
(a) EQUITY FUND OPTION. This Option shall consist of a fund of common
stocks and other equity securities, including interests in pooled trust
funds maintained by the Trustee which invest primarily in common stocks and
other equity securities.
-2-
<PAGE>
(b) FIXED INCOME OPTION. This Option shall consist of a fund of bonds,
mortgages, notes and other fixed income securities, including interests in
pooled trust funds maintained by the Trustee which invests primarily in
fixed income obligations.
(c) BALANCED FUND OPTION. This Option shall be a fund consisting of
such common stocks, other equity securities, bonds, mortgages, notes, other
fixed income securities and interests in pooled trust funds maintained by
the Trustee, as the Trustee shall, in its sole discretion, from time to
time determine.
(d) SHORT-TERM INVESTMENT OPTION. This Option shall consist of a fund
including one or more of the following kinds of investments:
interest-bearing savings accounts and time deposits offered by the Trustee,
commercial paper, variable amount notes, money market funds or similar
interest-bearing investments.
(e) GUARANTEED INVESTMENT CONTRACT. This Option shall consist of an
investment contract which guarantees a certain return and which is
purchased by the Trustee as directed by the Committee.
(f) OTHER OPTION. This Option shall consist of such other investment
options which the Trustee may offer from time to time.
A Participant's Investment Directions shall apply to his or her Accounts, shall
be in writing on a form provided by the Plan Administrator, shall be delivered
to the Plan Administrator for transmission to the Trustee and shall be of a
frequency determined by the Employer. Any Investment Directions relating to a
Guaranteed Investment Contract under subsection 2.2(e) shall be subject to the
terms and provisions of such contract including any prohibitions or penalties
for early withdrawal. A Participant shall be entitled to give Investment
Directions, or to change any Investment Directions previously given by him
effective as of the first day following the next Valuation Date provided that
the Investment Directions are received by the Trustee at least fifteen business
days prior to such Valuation Date. Any such Investment Directions or change in
Investment Directions shall apply to the Participant's entire Accounts unless
otherwise directed in writing. In the absence of any change in Investment
Directions, a Participant's Accounts shall be invested in accordance with his
most recent Investment Directions or, if no Investment Directions have been
previously given, in accordance with the Short-Term Investment Option described
in subsection 2.2(d). Any Investment Directions given by a Participant shall not
be effective unless and until received by the Trustee and shall be implemented
by the Trustee as soon as practicable after receipt, but Trustee shall not be
required to comply therewith earlier than ten banking business days after
receipt.
2.3 PARTICIPANT INVESTMENT DISCRETION -- If the Adoption Agreement permits
a Participant to exercise complete discretion to invest his Accounts, a
Participant may direct the investment of his Account by written Investment
Instructions delivered to the Employer for transmission to the Trustee;
provided, however, no investment shall be made in collectibles as defined by
Code ss. 408(n), as amended. The Trustee shall comply with such Investment
Instructions as soon as practicable after receipt, but shall not be required to
comply therewith earlier than ten banking business days after receipt. In the
absence of any change in Investment
-3-
<PAGE>
Instructions, the Participant's Accounts shall continue to be invested in
accordance with the most recent Investment Instructions received by the Trustee
or, if no Investment Instructions have been previously received, in an
interest-bearing account as the Trustee in its discretion shall determine. The
Trustee shall not be responsible for any loss incurred by the Participant's
Accounts because of any Investment Instructions, or absence of Investment
Instructions, received from the Participant.
2.4 INVESTMENT MANAGER -- If the Adoption Agreement so permits, the
Employer may from time to time appoint an Investment Manager who is registered
as an investment adviser under the Investment Advisors Act of 1940, a bank as
defined under such Act or an insurance company which has power to manage a trust
fund under the laws of Colorado and at least one other state. Such Investment
Manager shall be a fiduciary with power to manage, acquire or dispose of all or
any specified portion of the Trust Fund. Such appointment shall be effected by
delivery of a written instrument to the Trustee designating the Investment
Manager, the effective date of such appointment, the portion of the Trust Fund
to which such appointment applies and the Investment Manager's acceptance of
such appointment. Such appointment shall be effective until the Employer
delivers to the Trustee a written notice of the termination of the appointment
of the Investment Manager. The Investment Manager so appointed shall have power
to direct the Trustee as to the manner in which the assets of the Trust Fund
shall be invested and reinvested. The Trustee shall comply with the directions
of the Investment Manager as to the investment of that portion of the Trust Fund
for which the Investment Manager has investment responsibility. If the
Investment Manager shall fail to give such investment directions to the Trustee,
the Trustee shall invest any uninvested assets of the Trust Fund in interest
bearing accounts pending the receipt of directions from the Investment Manager.
If the Investment Manager has investment responsibility for less than the entire
Trust Fund, the Trustee shall have investment responsibility for the balance of
the Trust Fund and shall invest and reinvest such balance in accordance with
this Article. Upon receipt of written notice of the termination of the
appointment of the Investment Manager, the Trustee shall reassume investment
responsibility. The Trustee shall not be responsible for any loss sustained by
the Trust Fund, or any Participant, former Participant or Beneficiary of any
Participant or former Participant, as the result of the Employer's appointment
of any Investment Manager or as the result of any act or failure to act on the
part of any Investment Manager appointed by the Employer.
2.5 RESTRICTIONS ON INVESTMENTS -- The Trustee shall not invest any portion
of the Trust Fund in stocks, bonds, notes, debentures or other obligations
issued by the Employer unless the Adoption Agreement authorizes the Trustee to
invest the Trust Fund primarily in Qualifying Employer Securities, nor shall the
Trustee acquire or hold any real property (and related personal property) which
is leased to the Employer, without in either case first obtaining such prior
rulings from the Internal Revenue Service and the United States Department of
Labor, as the Trustee deems appropriate, that such investment, acquisition,
holding or lease will not adversely affect the qualification of the Plan under
Code ss. 401 or violate the provisions of Act ss. 406. For the purpose of this
Section, the word "Employer" shall include any corporation which is a member of
a controlled group of corporations (as defined in Code ss. 1563(a), except that
the percentage applicable in determining control shall be 50%, or such lower
percentage as may be specified by the Secretary of Labor) of which the Employer
is a
-4-
<PAGE>
member. A person other than a corporation shall be treated as an affiliate
of the Employer to the extent prescribed by the Secretary of Labor. If the
Employer is not a corporation, it shall be treated as affiliated with another
person to the extent prescribed by the Secretary of Labor.
2.6 LOANS TO PARTICIPANTS -- Upon direction of the Plan Administrator
pursuant to Section 7.11 of the Plan, the Trustee shall make loans from the
Trust Fund to Participants in such amounts as the Plan Administrator shall
specify. The Trustee shall not be obligated to determine whether the amount of
any such loan or the circumstances under which it is granted comply with Section
7.11 of the Plan. Any such loan, however, shall be secured by a pledge of 50% of
the balance of the Participant's Accounts, including any subsequent additions
thereto but excluding any amounts credited as Deductible Contributions and any
accumulations thereon, and shall bear a reasonable rate of interest and
repayment terms satisfactory to the Trustee.
2.7 POWERS OF TRUSTEE -- In addition to, and not by way of limitation of,
any powers now or hereafter vested in the Trustee by law, and subject to the
provisions of the Code and the Act, the Trustee shall have all powers reasonably
necessary to its investment and administration of the Trust Fund, including, but
not limited to, the power to do the following with respect to any securities or
property held in the Trust Fund:
(a) To sell, exchange, convey, transfer, lease for any period, pledge,
mortgage, grant options, contract with respect to or otherwise encumber or
dispose thereof at public or private sale for cash or upon credit or partly
for both, and no person dealing with Trustee shall be bound to see to the
application of the purchase money or to inquire into the validity,
expediency or propriety of any such sale or other disposition;
(b) To sue, defend, compromise, arbitrate, compound and settle any
debt, obligation or claim due to or from it as Trustee or any other suit or
legal proceeding involving the Trust Fund, and to increase or reduce the
rate of interest on, to extend or otherwise modify, or to foreclose upon
default or otherwise enforce any such debt, obligation or claim;
(c) To give general or specific proxies or powers of attorney with or
without powers of substitution;
(d) To vote in person or by proxy on any stocks, bonds or other
securities, or otherwise consent to or request any action on the part of
the issuer;
(e) To exercise any options appurtenant to any stocks, bonds or other
securities for the conversion thereof into other stocks, bonds or
securities, or to deposit them in any voting trust or with any protective
or like committee, or with a trustee or depositories designated thereby, or
to exercise any rights to subscribe for additional stocks, bonds or other
securities and to make any and all necessary payments therefor, and to join
and participate in, or to dissent from and oppose, any reorganization,
recapitalization, consolidation, liquidation, sale or merger of
corporations or properties in which it may be interested as the Trustee,
upon such terms and conditions as it may deem wise;
-5-
<PAGE>
(f) To retain, manage, operate, repair, improve, insure, lease,
encumber, partition, dedicate or otherwise deal with any real estate held
by it;
(g) To retain uninvested such cash as it may deem necessary, without
obligation to pay interest thereon;
(h) If the Adoption Agreement so authorizes the Trustee, to invest the
Trust Fund primarily in Qualifying Employer Securities ("primarily" meaning
the authority to invest, to acquire and to hold up to 100% of the Trust
Fund in Qualifying Employer Securities).
(i) In general, to exercise all powers in the management of the Trust
Fund which any individual could exercise in the management of property
owned in his own right.
2.8 PROHIBITED TRANSACTIONS -- Neither the Trustee, nor the Plan
Administrator, nor the Employer shall engage, or cause the Trust Fund to engage,
in any transaction if it knows or should know that the transaction directly or
indirectly constitutes a transaction prohibited by Code ss. 4975(c) or Act ss.
406. Such prohibited transactions include, but are not limited to, transactions
between the Trust Fund and a "disqualified person" (as defined in Code ss.
4975(e)(2)) or a "party in interest" (as defined in Act ss. 3(14)) involving:
(i) the sale or leasing of property; (ii) the lending of money or other
extension of credit; (iii) the furnishing of goods, services or facilities; (iv)
the transfer to or use by a disqualified person or party in interest of Trust
Fund assets; and (v) the acquisition of employer securities or real property in
violation of Act ss. 407(a). A "disqualified person" or "party in interest"
includes, but is not limited to, the Trustee, the Employer, Highly Compensated
Employees, officers, directors and shareholders of the Employer, certain persons
and corporations related to or affiliated with the Employer and the Plan
Administrator.
2.9 POOLED FUNDS -- Notwithstanding any other provision of this Trust
Agreement, the Trustee may cause all or any part of the assets of the Trust Fund
to be commingled with the assets of trusts created by itself or others provided
that the Trustee do this by causing such assets to be invested as a part of one
or more of the funds created by any declaration of trust of any bank or trust
company under which funds from other retirement, profit-sharing, stock bonus or
other trusts which are exempt from income taxation under the Code are held.
Assets of this Trust Fund so added to one or more of such funds at any time
shall be subject to all of the provisions of such declaration of trust as
amended from time to time. Such declaration of trust is adopted as part of this
Trust Agreement.
III.
DISTRIBUTIONS
3.1 INFORMATION AND DIRECTIONS -- The Plan Administrator shall give full
and timely information and directions in writing to the Trustee relating to
payment of all Plan Benefits. The Trustee shall hold or distribute all Plan
Benefits in such form, in such amounts, at such time and to such payees as the
Plan Administrator directs in writing. The Trustee shall have no duty to inquire
into the correctness or propriety of any directions.
-6-
<PAGE>
3.2 DISTRIBUTIONS FROM THE TRUST FUND -- The Plan Administrator shall
direct the Trustee regarding the manner of payments due under this Agreement.
Any payment may be mailed by the Trustee either directly to the distributee or
to the Plan Administrator. Any distribution may be made either in cash, in kind,
or partly in cash and in kind. For the purposes of such distribution, the
Trustee's valuation of the property or securities so distributed shall be
binding and conclusive on all persons.
IV.
TRUSTEE ADMINISTRATIVE PROVISIONS
4.1 RELIANCE ON DIRECTIONS OF PLAN ADMINISTRATOR -- The Trustee may rely
upon, and shall be held harmless in relying upon, any certificate, notice or
direction of the Plan Administrator which the Trustee believes to have been
signed by the person or persons designated to act on behalf of the Plan
Administrator, until notified otherwise. Communications to the Trustee shall be
sent to the Trustee's office or to such other address as the Trustee may
specify. No communication shall be binding upon the Trust Fund or the Trustee
until it is received in writing by the Trustee, but the Trustee may act on any
other communication it believes to be genuine. Communications to the Plan
Administrator shall be sent to the Plan Administrator at the Employer's office
designated in Section 1 of the Adoption Agreement or to such other address as
the Plan Administrator may specify.
4.2 ADVICE OF COUNSEL -- The Trustee may consult with any legal counsel,
including its own counsel or counsel to the Employer, with respect to the
construction of the Adoption Agreement, Plan or Trust Agreement, its duties
thereunder, or any act which it proposes to take or omit.
4.3 COMPROMISE OF CLAIMS -- The Trustee is authorized to accept, compromise
or otherwise settle any obligation or liability due to or from it as Trustee
hereunder, including any claims that may be asserted for taxes under present or
future laws, or to enforce or contest the same by appropriate legal proceedings.
The Trustee shall not be required to institute or continue litigation unless it
is in possession of funds sufficient for that purpose or unless it has been
indemnified to its satisfaction against its counsel fees and all other expenses
and liabilities to which it may in its judgment be subjected in such action. The
Trustee shall be entitled, out of the recoveries of any litigation, to
reimbursement for its expenses in connection therewith.
4.4 THIRD PARTIES -- No third party dealing with the Trustee shall be
required to make any inquiry whether the Trustee is authorized to take or omit
any action, or to follow the application by the Trustee of any money or property
which may be paid or delivered to the Trustee.
4.5 DUTY OF PRUDENCE -- The Trustee shall discharge its duties hereunder
with the care, skill, prudence and diligence under the circumstances then
prevailing that a prudent man acting in a like capacity and familiar with such
matters would use in the conduct of an enterprise of a like character and with
like aims. The Trustee shall not be liable for any loss
-7-
<PAGE>
sustained by the Trust Fund by reason of the purchase, retention, sale or
exchange of any investment in good faith and in accordance with the provisions
of this Agreement and of any applicable federal law.
4.6 INFORMATION FURNISHED TRUSTEE -- The Trustee shall have no
responsibility for the accuracy of any information furnished it by the Employer
or the Plan Administrator.
4.7 DIRECTIONS TO TRUSTEE -- To the extent that this Trust Agreement
directs the Trustee to act or refrain from acting or to the extent that the
Trustee invests all or part of the Trust Fund as directed by the Employer, the
Plan Administrator, a Participant or some third party pursuant to written
Investment Directions or Investment Instructions, the Employer shall indemnify
the Trustee for any and all liability or expense, including attorneys' fees,
that the Trustee may incur from acting or refraining from acting in accordance
with such Investment Directions or Investment Instructions or from failure to
receive any directions or instructions timely and in writing.
4.8 ADMINISTRATION OF THE PLAN -- The Trustee shall not be responsible for
the administration of the Plan. Notwithstanding any reference herein to the
Plan, it is hereby understood and agreed that the duties, obligations and rights
of the Trustee shall be limited to the terms and provisions of this Trust
Agreement. Neither any Participant, nor any Beneficiary, nor the Employer, nor
the Plan Administrator, nor any person interested under the provisions of the
Plan shall have any claims against the Trustee by virtue of any payments made by
the Trustee to any Participant or Beneficiary in accordance with the
instructions of the Plan Administrator or except as provided by this Agreement.
4.9 SIGNATURES -- Any action by the Employer pursuant to this Agreement
must be evidenced by a writing signed by the President, Vice-President or
Managing Partner of the Employer.
V.
TAXES, EXPENSES AND COMPENSATION OF TRUSTEE
5.1 TAXES -- The Trustee shall deduct from and charge against the Trust
Fund any taxes on the Trust Fund or the income thereof or which the Trustee is
required to pay with respect to the interest of any person therein.
5.2 EXPENSES AND COMPENSATION -- The Trustee shall pay from the Trust Fund,
to the extent not paid by the Employer, the reasonable expenses of management
and administration of the Trust Fund, including reasonable compensation of
counsel and any agents engaged by the Trustee to assist it in such management
and administration and, when so directed by the Employer, shall pay any
specified expenses of administration of the Plan. The Employer shall pay the
Trustee reasonable compensation for its services as Trustee hereunder. The
Trustee shall have a lien on the Trust Fund for such compensation until paid and
may pay such compensation from the Trust Fund if the Employer has not so paid
within 60 days of the Trustee's statement for services rendered.
-8-
<PAGE>
VI.
RESIGNATION, REMOVAL AND APPOINTMENT OF TRUSTEE
6.1 RESIGNATION OF TRUSTEE -- The Trustee may resign at any time by filing
with the Employer its written resignation. Such resignation shall take effect 30
days from the date of such filing or upon appointment of a successor pursuant to
Section 6.3, whichever shall first occur. If the Employer fails to appoint a
successor Trustee, the Employer shall be deemed to be the Trustee.
6.2 REMOVAL OF TRUSTEE -- The Employer may remove the Trustee at any time
by delivering to the Trustee a written notice of its removal and an appointment
of a successor pursuant to Section 6.3. Such removal shall not take effect prior
to 30 days from delivery unless the Trustee agrees to an earlier effective date.
If the Trustee is removed, the Employer may no longer participate in this
Prototype Plan unless the successor Trustee is also a Sponsor of this Prototype
Plan.
6.3 APPOINTMENT OF SUCCESSOR TRUSTEE -- The appointment of a successor
Trustee shall take effect upon delivery to the Trustee of (a) an instrument in
writing appointing such successor, executed by the Employer, and (b) an
acceptance in writing, executed by such successor. All of the provisions set
forth herein with respect to the Trustee shall relate to each successor with the
same force and effect as if such successor had been originally named as Trustee
hereunder. A successor Trustee shall not have any obligation or liability with
respect to the acts or omissions of its predecessor. If a successor is not
appointed within 30 days after the Trustee gives notice of its resignation
pursuant to Section 6.1, the Trustee or the Employer may apply to any court of
competent jurisdiction for appointment of a successor.
6.4 TRANSFER OF FUND TO SUCCESSOR -- Upon the resignation or removal of the
Trustee and appointment of a successor, and after the final account of the
Trustee has been settled as provided in Article VIII, the Trustee shall transfer
and deliver the Trust Fund to such successor less such reasonable amount as it
shall deem necessary to provide for its expenses and compensation, and any taxes
or advances chargeable or payable out of the Trust Fund.
6.5 MERGER OR CONSOLIDATION OF TRUSTEE -- Any corporation into which the
Trustee may be merged or with which it may be consolidated, or any corporation
resulting from any merger, reorganization or consolidation to which the Trustee
may be a party, or any corporation to which all or substantially all of the
trust business of the Trustee may be transferred shall be the successor of the
Trustee hereunder without the execution or filing of an instrument or the
performance of any further act.
-9-
<PAGE>
VII.
SETTLEMENT OF ACCOUNTS --
ENFORCEMENT OF TRUST --
LEGAL PROCEEDINGS
7.1 REPORTS OF TRUSTEE -- The Trustee shall keep full records of its
administration of the Trust Fund, which shall be open to inspection by the
Employer, the Plan Administrator, or their authorized representatives at all
reasonable times during business hours of the Trustee. Within 120 days after
each Anniversary Date, or any termination of the duties of the Trustee, and at
such other time or times as the Trustee may determine, the Trustee shall furnish
to the Employer a report setting forth all investments, all receipts and
disbursements, and all other financial transactions affecting the Trust Fund
during the period since the preceding report.
7.2 SETTLEMENT OF ACCOUNT -- If the Employer finds the Trustee's report to
be correct, the Employer shall approve the report by signing one counterpart of
the report and returning such counterpart to the Trustee. If within 60 days
after receipt of the report, or of any amended report, the Employer has not
signed and returned a counterpart to the Trustee, or filed with the Trustee
notice of any objection to any act or transaction of the Trustee, the report, or
amended report, shall be deemed to have been approved by the Employer. If any
objection has been filed, and if the Employer is satisfied that it should be
withdrawn, or if the account is adjusted to its satisfaction, the Employer shall
in writing filed with the Trustee signify its approval of the report. Upon
approval of the Trustee's report, pursuant to any provision of this Section 7.2,
the Trustee shall be completely discharged and released, as if such report has
been settled and allowed by a judgment or decree of a court of competent
jurisdiction in an action or proceeding in which the Trustee and the Employer
were parties.
7.3 JUDICIAL SETTLEMENT -- The Trustee or the Employer shall have the right
to apply at any time to a court of competent jurisdiction for judicial
settlement of any report of the Trustee not previously settled as hereinabove
provided. In any such action or proceeding, it shall be necessary to join as
parties only the Trustee and the Employer (although the Trustee may also join
such other parties as it may deem appropriate), and any judgment or decree
entered therein shall be conclusive on all persons having or claiming an
interest in the Trust Fund.
7.4 DETERMINATION OF INTEREST UNDER PLAN OR IN TRUST FUND -- The Plan
Administrator shall have authority to determine the interest of all persons in
the Trust Fund or under the Plan, and the Trustee shall have no duty to question
any direction given by the Plan Administrator to the Trustee. The Employer shall
have authority to enforce this Agreement on behalf of all persons claiming any
interest in the Trust Fund or under the Plan.
7.5 LEGAL PROCEEDINGS -- In any legal proceedings involving the Trust Fund,
only the Employer, the Plan Administrator and the Trustee shall be necessary
parties and entitled to any notice or service of process with regard to such
proceedings. Any judgment entered in such proceedings shall be conclusive upon
all persons claiming any rights in the Trust Fund.
-10-
<PAGE>
VIII.
DURATION AND TERMINATION OF TRUST -- AMENDMENT
8.1 DURATION AND TERMINATION -- This Trust shall continue for such time as
may be necessary to accomplish the purpose for which it was created but may be
terminated at any time by the Employer. Notice of such termination shall be
given to the Trustee by an instrument in writing executed by the Employer. The
Employer shall send a copy of such notice to each Participant and Former
Participant.
8.2 DISTRIBUTION UPON TERMINATION -- If this Trust is terminated, the
Trustee, upon written direction of the Plan Administrator, shall liquidate the
Trust Fund to the extent required for distribution and, after its final account
has been settled as provided in Article VII, shall distribute the net balance
thereof as provided in the Plan. Upon making such distributions, the Trustee
shall be relieved from all further liability. The powers of the Trustee
hereunder shall continue so long as any assets of the Trust Fund remain in its
hands.
8.3 AMENDMENT -- The Trust Agreement may be amended from time to time by
the Employer and Trustee as provided in the Plan. In no event shall any
amendment divert any part of the Trust Fund to purposes other than the exclusive
benefit of Participants, Former Participants and their Beneficiaries, or payment
of the expenses of the Trust Fund.
IX.
MISCELLANEOUS
9.1 GOVERNING -- This Trust Agreement and the Trust hereby created shall be
construed and regulated by the Code, the Act and the laws of the State of
Colorado. In the event of any conflict between the Code or Act and the laws of
Colorado, the provisions of said Code or Act shall govern.
9.2 TITLES AND HEADINGS NOT TO CONTROL -- The titles to Articles and
headings of Sections in this Trust Agreement are placed herein for convenience
of reference only and, in case of any conflict, the text of this Agreement,
rather than such titles or headings, shall control.
9.3 TAX-EXEMPTION -- Unless otherwise advised, the Trustee may assume that
the Plan at all times qualifies under Code ss. 401(a), that this Trust is at all
times tax-exempt under Code ss. 501(a), and that the Employer or Plan
Administrator will file all returns, reports, forms and schedules regarding the
Plan required by the Code and Act, and rules and regulations issued thereunder.
-11-
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Trust Agreement as of
the 30th day of September, 1993.
Trustees: Employer: UNION BANKSHARES, LTD.
/s/Herman J. Zueck
- ------------------------------ By: /s/Bruce E. Hall
Herman J. Zueck ------------------------------------
Title: Vice President/Secretary
/s/Charles R. Harrison
- ------------------------------
Charles R. Harrison
/s/Bruce E. Hall
- ------------------------------
Bruce E. Hall
-12-
<PAGE>
ADDENDUM TO TRUST AGREEMENT
INVESTMENT OPTIONS
Section 2.2 PARTICIPANT DIRECTION OF CERTAIN INVESTMENT OPTIONS shall
include the following Investment Options:
* Union Bankshares, Ltd. common stock
and the following no load mutual funds offered by American Funds:
* New Perspective Fund - a global growth fund
* Investment Company of America - A conservative domestic growth fund
* Income Fund of America - A balanced fund of stocks, bonds and cash
* Bond Fund of America - A fixed income fund of corporate and government
bonds
* Cash Management Trust of America - A money market fund.
To the extent that the Investment Options in Section 2.2 of the Trust
Agreement conflict with this Addendum, the Addendum shall control.
Exhibit 5.2
INTERNAL REVENUE SERVICE DEPARTMENT OF THE TREASURY
DISTRICT DIRECTOR
1100 COMMERCE STREET
DALLAS, TX 75242
Employer Identification Number:
Date: May 4, 1994 84-0986148
File Folder Number:
840019759
UNION BANKSHARES LTD Person to Contact:
C/O MARCIA CHADWICK HOLT JILL RUTHERFORD
DAVIS, GRAHAM & STUBBS LLP Contact Telephone Number:
PO BOX 185 (214) 767-6023
DENVER, CO 80201-0185 Plan Name:
UNION BANKSHARES LTD PROFIT
SHARING 401K PLAN
Plan Number: 001
Dear Applicant:
We have made a favorable determination on your plan, identified above,
based on the information supplied. Please keep this letter in your permanent
records.
Continued qualification of the plan under its present form will depend on
its effect in operation. (See section 1.401-1(b)(3) of the Income Tax
Regulations.) We will review the status of the plan in operation periodically.
The enclosed document explains the significance of this favorable
determination letter, points out some features that may affect the qualified
status of your employee retirement plan, and provides information on the
reporting requirements for your plan. It also describes some events that
automatically nullify it. It is very important that you read the publication.
This letter relates only to the status of your plan under the Internal
Revenue Code. It is not a determination regarding the effect of other federal or
local statutes.
This determination letter is applicable for the plan adopted on September
30, 1993.
This is a nonstandardized safe harbor plan as defined in Rev. Proc. 93-10.
This letter is issued under Rev. Proc. 93-39 and considers the amendments
required by the Tax Reform Act of 1986 except as otherwise specified in this
letter.
We have sent a copy of this letter to your representative as indicated in
the power of attorney.
<PAGE>
If you have questions concerning this matter, please contact the person
whose name and telephone number are shown above.
Sincerely yours,
/s/ Bobby E. Scott
------------------------------------
Bobby E. Scott
District Director
Enclosures:
Publication 794
Exhibit 5.3
September 30, 1997
Union Bankshares, Ltd.
1825 Lawrence, Suite 444
Denver, Colorado 80202
Gentlemen:
At your request, we have examined the Union Bankshares, Ltd. Profit Sharing
401(k) Plan (Effective Date October 1, 1993) executed on September 30, 1993 (the
"Plan"), along with the Determination Letter from the Internal Revenue Service
(the "IRS") dated May 4, 1994, relating to the qualification of the Plan under
Section 401 of the Internal Revenue Code OF 1986, as amended (the "Code").
We have also examined the following amendments to the Plan which were
adopted subsequent to the issuance of the above-described Determination Letter:
Model Amendment effective January 1, 1993
Model Amendment effective January 1, 1994
Model Amendment effective December 12, 1994
Model Amendment effective January 1, 1995
First Amendment to the Adoption Agreement dated November 10, 1994
Second Amendment to the Adoption Agreement dated December 6, 1996
Third Amendment to the Adoption Agreement dated January 27, 1997
(These amendments are collectively referred to as "the Amendments"). In
addition, we have examined such provisions of the Employee Retirement Income
Security Act of 1994 ("ERISA"), the Code and regulations issued thereunder and
other rulings as we have deemed appropriate.
Based on the foregoing, it is our opinion that the amended provisions of
the Plan, as set forth in the Amendments, comply with the applicable
requirements of ERISA pertaining to such Amendments and that the Amendments do
not adversely affect the Plan's qualification under Section 401 of the Code. Our
opinion is limited to and covers only the compliance of the Amendments with the
applicable requirements of ERISA. We offer no opinion as to any other
<PAGE>
Union Bankshares, Ltd.
September 30, 1997
Page 2
matters including but not limited to the proper administration of the Plan in
accordance with the terms of the Plan and ERISA.
We hereby consent to the filing of this opinion with the Securities and
Exchange Commission as Exhibit 5.3 to the Registration Statement on form S-8. In
giving such consent, we do not thereby admit that we come within the category of
persons whose consent is required under Section 7 of the Securities Act of 1933
and the rules promulgated thereunder.
Very truly yours,
/s/ Davis, Graham & Stubbs LLP
DAVIS, GRAHAM & STUBBS LLP
Exhibit 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this Registration Statement on
Form S-8, relating to the Union Bankshares, Ltd. Profit Sharing 401(k) Plan
dated September 30, 1997, of our report on the consolidated financial statements
and schedules included in the Annual Report on Form 10-KSB of Union Bankshares,
Ltd. for the year ended December 31, 1996 dated January 17, 1997 included in the
Company's Annual Report on Form 10-KSB, filed with the Securities and Exchange
Commission, for the year ended December 31, 1996.
/s/Baird, Kurtz and Dobson
September 29, 1997
Denver, Colorado
CONSENT OF INDEPENDENT AUDITORS
The Board of Directors
Union Bankshares, Ltd.
We consent to incorporation by reference in the registration statement on Form
S-8 relating to the Company's Profit Sharing 401(k) Plan, of our report dated
January 23, 1996 (except for Note 15 as to which the date is March 4, 1996)
relating to the consolidated balance sheets of Union Bankshares, Ltd., and
subsidiary as of December 31, 1995, and the related consolidated statements of
income, stockholders' equity and cash flows for the year then ended, which
report appears in the December 31, 1995 annual report on Form 10-KSB of Union
Bankshares, Ltd.
/s/McGladrey & Pullen, LLP
McGLADREY & PULLEN, LLP
Charlotte, North Carolina
September 29, 1997
Exhibit 24.1
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints jointly and severally, Charles R. Harrison,
Herman J. Zueck and Bruce E. Hall, and each or any one of them, his or her true
lawful attorney or attorneys and agent or agents, with full power of
substitution, to do any and all acts and to execute in his or her name, place
and stead in such capacity or capacities (whether on behalf of the Company or
otherwise) any and all instruments which said attorney or attorneys and agent or
agents deem necessary or advisable to enable the Company and each of the
undersigned to comply with the United States Securities Act of 1933 (the "1933
Act"), as amended, and any rules, regulations, requirements or requests of the
Securities and Exchange Commission thereunder or in respect thereof in
connection with the registration under the 1933 Act of the Common Shares of the
Company and the plan interests which are issuable under the Company's Profit
Sharing 401(k) Plan, including specifically, but without limiting the generality
of the foregoing, power and authority to execute the respective names of the
undersigned directors and/or officers as indicated below (whether on behalf of
the Company or as a director and/or officer of the Company, or by attesting the
seal of the Company or otherwise) to a Registration Statement on Form S-8
covering such Common Shares, and any amendment, and each of the undersigned does
hereby ratify and confirm all that such attorney or attorneys and agent or
agents or any one of them shall do or cause to be done by virtue thereof.
IN WITNESS WHEREOF, each of the undersigned have affixed their signatures
hereto on the date indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
<S> <C> <C>
/s/Charles R. Harrison Chairman of the Board and September 29, 1997
- ------------------------------ Chief Executive Officer
Charles R. Harrison (Principal Executive Officer)
/s/Bruce E. Hall Vice President, Treasurer and September 29, 1997
- ------------------------------ Secretary and a Director
Bruce E. Hall (Principal Financial and
Accounting Officer)
/s/Herman J. Zueck President and a Director September 29, 1997
- ------------------------------
Herman J. Zueck
<PAGE>
- ------------------------------ Director
Wayne T. Biddle
/s/Ralph D. Johnson
- ------------------------------ Director September 29, 1997
Ralph D. Johnson
/s/Richard C. Saunders
- ------------------------------ Director September 29, 1997
Richard C. Saunders
/s/C. Gale Sellens
- ------------------------------ Director September 29, 1997
C. Gale Sellens
/s/Jerrold B. Evans
- ------------------------------ Director September 29, 1997
Jerrold B. Evans
</TABLE>
