AMAX GOLD INC.
DEFERRED COMPENSATION PLAN
Effective as of November 15, 1993
INTRODUCTION
The Amax Gold Inc. Deferred Compensation Plan (hereinafter the "Deferred
Compensation Plan") was authorized by the Board of Directors of Amax Gold Inc.
(the "Company") to be effective as of November 15, 1993. The purpose of the
Plan was to provide a means of restoring the contributions and, to the extent
possible, associated net income or net loss thereon of those employees of the
Company (as hereinafter defined) and its subsidiaries participating in the Amax
Gold Inc. Employee Thrift Plan (hereinafter the "Thrift Plan") with respect to
whom contributions under the Thrift Plan are limited by application of the
limitations imposed on qualified plans by the Employee Retirement Income
Security Act of 1974 (hereinafter "ERISA"), and Internal Revenue Code (the
"Code"), Section 415 enacted pursuant thereto, and for those employees whose
compensation exceeded the amount which may be taken into account under Section
401(a)(17) of the Code.
The Company intends to maintain the Plan (as hereinafter defined)
indefinitely and, in order to afford Plan Participants (as hereinafter defined)
and their beneficiaries maximum security, the Company has established a grantor
trust to aid it in accumulating the amounts necessary to satisfy its liability
to pay benefits attributable to Participant Contributions under the terms of
Articles II and III of the Plan. The Plan provides for the Company to pay all
benefits and administrative costs from its general assets to the extent not paid
by the grantor trust. The establishment of a grantor trust shall not affect the
Company's contingent liability to pay Plan benefits and administrative costs,
except that the Company's liability shall be offset by actual benefit and
administrative cost payments, if any, made by the trust.
AMAX GOLD INC.
DEFERRED COMPENSATION PLAN
TABLE OF CONTENTS
-----------------
ARTICLE Page
----
I DEFINITIONS..................................... 1
1.01 Definitions............................... 1
II AMOUNT AND PAYMENT OF EXCESS THRIFT PLAN
AND DEFERRED COMPENSATION BENEFITS............. 9
2.01 Amount of Participant Contribution........ 9
2.02 Amount of Company Contribution............ 9
2.03 Adjustments............................... 10
2.04 Vesting................................... 11
2.05 Payment................................... 11
2.06 Forfeitures............................... 12
III INVESTMENT AND VALUATION OF INTERESTS
IN THE TRUST AND ACCOUNTS...................... 13
3.01 Initial Investment Funds.................. 13
3.02 Additional Investment Funds............... 13
3.03 Individual Records........................ 14
3.04 Valuations................................ 14
IV GENERAL PROVISIONS.............................. 15
4.01 Funding................................... 15
4.02 Duration of Benefits...................... 16
V ADMINISTRATION.................................. 16
5.01 Modification, Amendment, Etc.............. 16
5.02 Termination and Discontinuance............ 17
5.03 Special Provisions Upon Change of Control. 17
5.04 Administration and Interpretation......... 17
5.05 Appointment of Subcommittees.............. 18
5.06 No Contract of Employment................. 18
5.07 Facility of Payment....................... 18
5.08 Withholding Taxes......................... 18
5.09 Nonalienation............................. 19
5.10 Construction.............................. 19
5.11 Claims Procedure.......................... 19
-i-
AMAX GOLD INC.
DEFERRED COMPENSATION PLAN
ARTICLE I
DEFINITIONS
1.01 DEFINITIONS. The following terms when capitalized herein shall have the
meanings assigned below.
ACCOUNT. The account established and maintained under the Plan for each
participant to reflect amounts credited under Article II of the Plan by
the Company for the benefit of each Participant and any earnings or losses
on amounts credited under Article III with respect to each Participant.
AFFILIATED COMPANY. Means any company which is a member of a controlled
group of corporations (as defined in Section 414(b) of the Code) which
also includes the Company as a member; any trade or business under common
control (as defined in Section 414(c) of the Code) with the Company, any
organization (whether or not incorporated) which is a member of an
affiliated service group (as defined in Section 414(m) of the Code) which
includes the Company; and any other entity required to be aggregated with
the Company pursuant to regulations under Section 414(o) of the Code. For
purposes of this Plan, the definitions in Sections 414(b) and (c) of the
Code shall be modified as provided in Section 415(h) of the Code.
BENEFICIAL OWNER. Means, with respect to any securities, any person who,
directly or indirectly, has or shares the right to vote or dispose of such
securities or otherwise has "beneficial ownership" of such securities
(within the meaning of Rule 13d-3 and Rule 13d-5 (as such Rules are in
effect on November 15, 1993) under the Securities Act of 1934, as amended
the ("Exchange Act")), including pursuant to any agreement, arrangement or
understanding (whether or not in writing); provided, however, that (i) a
person shall not be deemed the Beneficial Owner of any security as a
result of any agreement, arrangement or understanding to vote such
security (A) arising solely from
a revocable proxy or consent solicited pursuant to, and in accordance with,
the applicable provisions of the Exchange Act and the rules and regulations
thereunder or (B) made in connection with, or otherwise to participate in,
a proxy or consent solicitation made, or to be made, pursuant to, and in
accordance with, the applicable provisions of the Exchange Act and the
rules and regulations thereunder, in either case described in clause (A) or
clause (B) above whether or not such agreement, arrangement or
understanding is also then reportable by such person on Schedule 13D under
the Exchange Act (or any comparable or successor report), and (ii) a person
engaged in business as an underwriter of securities shall not be deemed to
be the Beneficial Owner of any securities acquired through such person's
participation in good faith in a firm commitment underwriting until the
expiration of forty days after the date of such acquisition.
Board of Directors. The Board of Directors of Amax Gold Inc.
Change in Control. Means the occurrence of any of the following events:
(i) any person other than AMAX Inc., a New York corporation, or any
successor to AMAX Inc. by merger, consolidation or sale of
substantially all of its assets ("Amax or its Successor") is or
becomes the Beneficial Owner, directly or indirectly, of securities of
the Company representing 20 percent or more of the combined voting
power of the Company's then-outstanding securities (a "20% Beneficial
Owner"); provided however, that (a) the term "20% Beneficial Owner"
shall not include any Beneficial Owner who has crossed such 20 percent
threshold while Amax or its Successor owns more of the combined voting
power of the Company's then outstanding securities than such
Beneficial Owner or such Beneficial Owner crossed such 20 percent
threshold solely as a result of an acquisition of securities directly
from the Company, or solely as a result of an acquisitions by the
Company of Company securities until, in each case, such time
thereafter as such person acquires additional voting securities other
than directly from the Company and, after giving effect to such
acquisition, such person would constitute a 20% Beneficial Owner and
own
-2-
more of the combined voting power of the Company's then outstanding
securities than Amax or its Successor owns; and (b) with respect to
any person eligible to file a Schedule 13G pursuant to Rule 133-
1(b)(1)(ii) under the Exchange Act with respect to Company
securities (an "Institutional Investor"), there shall be excluded
from the number of securities deemed to be beneficially owned by
such person a number of securities representing not more than 10
percent of the combined voting power of the Company's then-
outstanding securities;
(ii) during any period of two consecutive years beginning after January
1, 1993, individuals who at the beginning of such period constitute
the Board of Directors of the Company together with those
individuals who first become Directors during such period (other
than by reason of an agreement with the Company in settlement of a
proxy contest for the election of directors) and whose election or
nomination for election to the Board was approved by a vote of at
least two-thirds (2/3) of the Directors then still in office who
either were Directors at the beginning of the period or whose
election or nomination for election was previously so approved (the
"Continuing Directors"), cease for any reason to constitute a
majority of the Board of Directors of the Company;
(iii) the stockholders of the Company approve a merger, consolidation,
recapitalization or reorganization of the Company, or a reverse
stock split of any class of voting securities of the Company, or the
consummation of any such transaction if stockholder approval is not
obtained, other than any such transaction which would result in at
least 75% of the total voting power represented by the voting
securities of the Company or the surviving entity outstanding
immediately after such transaction being beneficially owned by
persons who together owned at least 75% of the combined voting power
of the voting securities of the Company outstanding immediately
prior to such transaction, with the relative voting power of each
such continuing holder compared to the voting power of each other
continuing holder not substantially altered as a result of the
transaction; provided that, for purposes of this
-3-
paragraph (iii), such continuity of ownership (and preservation of
relative voting power) shall be deemed to be satisfied if the failure
to meet such 75% threshold (or to preserve such relative voting power)
is due solely to the acquisition of voting securities by an employee
benefit plan of the Company or such surviving entity or of any
subsidiary of the Company or such surviving entity;
(iv) the stockholders of the Company approve a plan of complete liquidation
or dissolution of the Company or an agreement for the sale or
disposition of all or substantially all the assets of the Company; or
(v) any other event which the Board of Directors of the Company determines
shall constitute a Change in Control for purposes of this Plan;
provided, however, that a Change in Control shall not be deemed to have
occurred if one of the following exceptions applies:
(1) Unless a majority of the Continuing Directors of the Company
determines that the exception set forth in this paragraph (1) shall
not apply, none of the foregoing conditions would have been satisfied
but for one or more of the following persons acquiring or otherwise
becoming the Beneficial Owners of securities of the Company: (A) any
person who has entered into a binding agreement with the Company,
which agreement has been approved by two-thirds (2/3) of the
Continuing Directors, limiting the acquisition of additional voting
securities by such person, the solicitation of proxies by such person
or proposals by such person concerning a business combination with the
Company (a "Standstill Agreement"); (B) any employee benefit plan, or
trustee or other fiduciary thereof, maintained by the Company, Amax or
its Successor or any subsidiary of the Company or of Amax or its
Successor; (C) any subsidiary of the Company or of Amax or its
Successor; or (D) the Company; or
-4-
(2) Unless a majority of the Continuing Directors of the Company
determines that the exception set forth in this paragraph (2) shall
not apply, none of the foregoing conditions would have been satisfied
but for the acquisition by the Company of another entity (whether by
the merger or consolidation, the acquisition of stock or assets, or
otherwise) in exchange, in whole or in part, for securities of the
Company, provided that, immediately following such acquisition, the
Continuing Directors constitute a majority of the Board of Directors
of the Company, or a majority of the board of directors of any other
surviving entity, and, in either case, no agreement, arrangement or
understanding exists at that time which would cause such Continuing
Directors to cease thereafter to constitute a majority of the Board of
Directors or of such other board of directors.
Notwithstanding the foregoing, unless a majority of the Continuing
Directors determines otherwise, no Change in Control shall be deemed to
have occurred with respect to a particular Participant if the Change in
Control results from actions or events in which such Participant is a
participant in a capacity other than solely as an officer, employee or
director of the Company.
Code. The Internal Revenue Code of 1986, as amended from time to time.
Committee. The Committee responsible for the administration of the Thrift
Plan.
Company. Amax Gold Inc. or any successor by merger, consolidation, sale of
assets or otherwise, with respect to its employees and those of its
divisions, subsidiaries and Affiliated Companies which are designated as
participating companies, with respect to their employees, under the Thrift
Plan.
Company Contribution. The amount contributed by the Company pursuant to
Section 2.02.
-5-
Compensation. An employee's compensation as defined in the Thrift Plan for
purposes of Article III.
Investment Fund. The separate funds in which amounts allocable to
Participants and held in the Trust may be invested in accordance with
Article III.
Participant. Each participant in the Thrift Plan whose annual addition (as
defined in Section 415(c)(2) of the Code) in any Plan Year exceeds the
limitations imposed by Code Sections 415(c)(1) or 415(e) or each
participant in the Thrift Plan who qualifies as a member of a select group
of management or highly compensated employees as defined in ERISA Section
201(2) whose contributions to the Thrift Plan are limited by reason of
Section 401(a)(17), 401(a)(30), 401(k)(3)(A)(ii), 401(m)(2) or 402(g)(1) of
the Code.
Participant Contribution. The amount of compensation the receipt of which
a Participant elects to defer and instead have credited to the
Participants's Account pursuant to Article II, which election must be made
prior to the beginning of the period during which the compensation is
earned and for which amounts are contributed. A Participant shall not be
entitled to have a Participant Contribution made on his behalf for any Plan
Year unless (i) the Participant is precluded under Sections 415 401(a)(30),
401(k)(3)(a)(ii) or 402(g)(1) of the Code from making the maximum
permissible contribution under Sections 2.02, 2.03, or 3.01 of the Thrift
Plan for that Plan Year, or (ii) the Participant's compensation for
determining the contributions under Sections 2.02, 2.03, or 3.01 of the
Thrift Plan is reduced by reason of Section 401(a)(17) of the Code.
However, the maximum Participant Contribution the Participant can make for
the Plan year shall be the difference between (A) 15% of the Participant's
compensation (within the meaning of Section 1.11 of the Thrift Plan, but
without regard to the limitation imposed by Section 401(a)(17) of the Code)
for the Plan year, and (B) the Participant's actual contributions for the
Plan Year made pursuant to Sections 2.02 and 2.03 of the Thrift Plan, or
(C) such higher percentage of the Participant's compensation as may be
approved on an individual basis by the Compensation Committee of the Board
of Directors.
-6-
Plan. The Amax Gold Inc. Deferred Compensation Plan, as set forth herein
or as amended from time to time.
Plan Year. The calendar year.
Portfolio Committee. The Employee Benefits Portfolio Review Committee of
the Thrift Plan.
Thrift Plan. The Amax Gold Inc. Employee Thrift Plan, as amended from time
to time.
Trust. The grantor trust in which amounts allocable to Participants are
held, as provided in Article III.
Trustee. The trustee or trustees of the Trust.
Valuation Date. The last day of each calendar quarter of each Plan year,
or such other dates as the Committee determines necessary or appropriate to
value the Accounts of Participants.
ARTICLE II
AMOUNT AND PAYMENT OF EXCESS THRIFT PLAN
AND DEFERRED COMPENSATION BENEFITS
2.01 Amount of Participant Contribution. As of each Valuation Date, each
Participant's Account shall be credited with an amount equal to the
Participant Contributions, if any, for the period beginning on the day
after the next preceding Valuation Date and ending on the current Valuation
Date.
2.02 Amount of Company Contribution. As of each Valuation Date, each
Participant's Account shall be credited with an additional amount equal to
the sum of:
-7-
(a) An amount equal to the value of the contribution that would have been made
by the Company as of such day on behalf of the Participant under Article IV
of the Thrift Plan on account of the Participant Contribution if the
Participant Contribution had been made to the Thrift Plan pursuant to
Sections 2.02 and 2.03 thereof (assuming such Company contribution was not
limited by Sections 401(a)(17) or 415 of the Code); and
(b) An amount equal to the excess, if any, of the value of the contribution
that would have been made by the Company as of such day on behalf of the
Participant under Article IV of the Thrift Plan (based upon the
contributions actually made to the Thrift Plan by the Participant) without
regard to any limitation imposed by Sections 401(a)(17), 401(m)(2)(A) or
415 of the Code over the contribution actually made and allocated on behalf
of the Participant as of that date.
2.03 Adjustments. Notwithstanding the foregoing provisions of this Article II,
the amount credited to each Participant's Account as of each Valuation Date
shall be adjusted as of the last Valuation Date of each Plan Year, except
the first Plan Year which shall be a short Plan Year (or, in the case of a
Participant who terminates employment during a Plan Year, as of such
termination date), so that the total amount contributed to the Plan on the
Participant's behalf for that Plan Year equals the amount that would have
been so contributed had the amounts contributed under Sections 2.01 and
2.02 above been computed based on compensation and contributions made for
the entire Plan Year (or, in the case of a Participant who terminates
employment during a Plan Year, the portion of the Plan Year during which he
was so employed), rather than compensation and contributions made for the
period between Valuation Dates. If adjustments required by the foregoing
sentence require amounts held in the Trust with respect to a Participant's
Account to be reduced, the amount of such reduction shall be used to reduce
the Company's future contributions to the Trust for the benefit of other
Participants or that Participant.
2.04 Vesting. Each Participant shall be vested in his Account as follows:
-8-
(a) with respect to amounts credited pursuant to Section 2.01 (and earnings
thereon), the Participant shall at all times be fully vested;
(b) with respect to amounts credited pursuant to Section 2.02 (and earnings
thereon), the Participant shall be vested to the same extent he is vested
in his Company matching contributions subaccount in the Thrift Plan; and
(c) Notwithstanding any provision of this Plan to the contrary, in the event of
a Change in Control, all Participants shall become fully vested in the
benefits provided under this Article II and such benefits shall be paid in
a single sum as provided in Section 2.05.
2.05 Payment.
(a) Upon a Participant's termination of employment with the Company (and all
affiliated Companies) or upon a Change in Control, the Participant shall be
paid a benefit of a single lump sum equal to the balance credited to his
Account as of the next preceding Valuation Date, to the extent vested. To
the extent the Trustee pays the participant an amount equal to such
balance, the payment shall be a complete discharge of the Company's
obligation under this Article II with respect to that Participant. If the
Trustee pays the Participant an amount which is less than the vested
balance credited to his Account (computed using the amount credited to his
Account as of the next preceding Valuation Date) the Company shall pay the
Participant the difference between the amount paid by the Trustee and such
balance. Payment shall be made as soon as practicable following the
Participant's termination of employment or the Change in Control.
(b) Upon the death of a Participant while employed by the Company (or an
Affiliated Company) the Participant's beneficiary designated under the
Thrift Plan shall be paid a benefit of a single lump sum equal to the
balance credited to the Participant's Account as of the next preceding
Valuation Date, to the extent vested. To the extent the Trustee pays the
Participant's designated beneficiary an amount equal to such balance, the
payment shall be a complete discharge of the Company's obligation under
-9-
this Article II with respect to that Participant. If the Trustee pays the
Participant's designated beneficiary an amount which is less than the
vested balance credited to the Participant's Account (computed using the
amount credited to his Account as of the next preceding Valuation Date) the
Company shall pay the beneficiary the difference between the amount paid by
the Trustee and such balance. Payment shall be made as soon as practicable
following the Participant's death.
2.06 Forfeitures. Upon termination of a Participant's employment with the
Company and all Affiliated Companies, any unvested portion of his Account
shall be forfeited and any amounts attributable thereto that are held in
the Trust shall be used to reduce the Company's obligations under the Plan
to other Participants. If a Participant who forfeits a benefit under the
Plan is subsequently reemployed by the Company or an Affiliated Company and
his unvested benefits that were forfeited under the Thrift Plan are
reinstated under the Thrift Plan as a result of such reemployment, the
forfeited benefits under this Plan shall also be reinstated and his Account
shall be credited on the Valuation Date next succeeding his reemployment
with an amount equal to such forfeited benefits.
ARTICLE III
INVESTMENT AND VALUATION OF INTERESTS
IN THE TRUST AND ACCOUNTS
3.01 Initial Investment Funds.
(a) The Company may establish a Trust pursuant to Section 4.01(b), and the
assets held in the Trust shall be subdivided, upon the direction and
authorization of the Portfolio Committee, into one or more Investment
Funds. Effective November 15, 1993, all amounts contributed by a
Participant pursuant to Section 2.01 of this Plan shall be invested in the
Investment Fund designated for this purpose by the Portfolio Committee.
-10-
(b) All amounts contributed by the Company pursuant to Section 2.02 of this
Plan shall be credited or debited with earnings or losses based upon the
performance of the Common Stock of the Company.
3.02 Additional Investment Funds.
The Committee may designate one or more other Investment Funds for the
investment of amounts described in Section 3.01(a). The Committee may
change the designation of Investment Funds from time to time, in its sole
discretion. In the event the Committee designates more than one Investment
Fund, each Participant shall file an investment election with the Committee
designating one or more of the Investment Funds in which the amounts
described in Section 3.01(a) of the Plan that are credited to his Account
shall be invested. The election shall be effective as soon as practicable
following receipt of the Participant's election by the Committee. A
Participant may change the Investment Funds in which the amounts described
herein are invested in accordance with such rules and procedures as the
Committee shall determine. Assets for which no effective investment
designation is made shall be invested in the Investment Fund designated for
this purpose by the Committee.
3.03 Individual Records. The Committee shall maintain, or cause to be
maintained, records showing the individual balances of each Participant's
Account and the amounts allocable to each Participant under this Plan and
under the Trust; provided, however, the Committee may delegate this
responsibility to the Trustee or another administrator. Maintenance of
such records shall not require any segregation of the funds of the Trust.
3.04 Valuations.
(a) On each Valuation Date each Participant's Account shall be allocated his
proportionate share of the increase or decrease (including earnings) in the
fair market value of that portion of the Investment Funds which is
allocable to him and which is invested in each Investment Fund as well as
any expenses paid from the assets of the Trust. Any
-11-
portion of the Trust allocable to a Participant which is not invested in an
Investment Fund shall not be credited with any earnings.
(b) Immediately after any gain or loss or earnings are allocated to a
Participant under the Trust in accordance with Section 3.04(a), an equal
amount of gain or loss or earnings shall be credited to the Participant's
Account under the Plan.
(c) At least once a year, each Participant shall be furnished with a statement
setting forth the balance credited to his Account and the value of the
amount in the Investment Funds and/or in the Trust allocable to him.
ARTICLE IV
GENERAL PROVISIONS
4.01 Funding.
(a) All amounts payable in accordance with this Plan shall constitute a
contractual general unsecured obligation of the Company. Such amounts as
well as any administrative costs relating to the Plan, shall be paid out of
the general assets of the Company, to the extent not paid from the assets
of the Trust established pursuant to paragraph (b) below.
(b) The Company has established a grantor trust for the benefit of Participants
with Accounts under the Plan. The assets placed in the Trust shall be
comprised of all or any portion of amounts in Accounts and shall be held
separate and apart from other Company funds, and shall be used exclusively
for the purposes set forth in the Plan and the applicable trust agreement,
subject to the following conditions:
(i) the creation of the Trust shall not cause the Plan to be other than
"unfunded" for purposes of Title I of the Employee Retirement Income
Security Act of 1974;
-12-
(ii) the Company shall be treated as "grantor" of the Trust for purposes
of Section 577 of the Code; and
(iii) the agreement of the Trust shall provide that its assets may be used
upon the insolvency of the Company to satisfy claims of the Company's
general creditors, and that the rights of such general creditors are
enforceable by them under federal and state law.
4.02 Duration of Benefits. Benefits shall accrue under the Plan on behalf of a
Participant only for Plan Years for which the provisions of Sections 415,
401(a)(17), 401(a)(30, 401(k)(3)(A)(ii), 401(m)(2), or 402(g)(1), of the
Code (relating to the maximum limitation on contributions under the Thrift
Plan) actually limit the contributions that can be made by or on the
Participant's behalf under the Thrift Plan.
ARTICLE V
ADMINISTRATION
5.01 Modification, Amendment, Etc. The Board of Directors reserves the right to
modify, amend in whole or in part, discontinue benefit accrual under, or
terminate the Plan at any time. However, no modification or amendment
shall be made to Section 2.04(c) or 5.02 and no modification,
discontinuance, amendment or termination shall adversely affect the right
of any Participant to receive the benefits accrued and the balance to the
credit of such Participant's Account as of the date of such modification,
discontinuance, amendment, or termination, as adjusted as a result of
changes in the value of the Investment Funds in which the amount in the
Trust allocable to the Participant is invested.
5.02 Termination and Discontinuance. If the Company terminates the Plan, or
discontinues benefit accruals thereunder, Participants shall continue to
vest in their accrued benefits and their Accounts in accordance with
Section 2.04 and Accounts under the Plan shall be paid in the manner and at
the times indicated in Article II, unless the Board of
-13-
Directors shall determine in its sole and absolute discretion that
Participants shall be fully vested in their Accounts, in which case
Accounts under the Plan shall be paid within 90 days of such determination.
If participant contributions have been discontinued under the Plan, the
Company may recommence such accruals at any time by appropriate action.
5.03 Special Provisions Upon Change of Control. Notwithstanding the provisions
of Section 6.01 and Section 6.02, however, upon the occurrence of a Change
in Control and at all times thereafter, the Board of Directors of the
Company shall not discontinue, terminate, suspend or amend the Plan, in
whole or in part, in any manner that would adversely affect the right of
any Participant to receive the benefits otherwise provided under the Plan
as of the effective date of such action by the Board of Directors.
5.04 Administration and Interpretation. Full power and authority to construe,
interpret and administer the Plan shall be vested in the Committee. Any
interpretation of the Plan by the Committee or any administrative act by
the Committee shall be final and binding on all Participants. All rules
relating to the quorum of the Committee and to the conduct of its business
shall also apply to the Committee in administering this Plan.
5.05 Appointment of Subcommittees. The members of the Committee may appoint from
their number such subcommittees with such powers as they shall determine,
may authorize one or more of their number of any agent to execute or
deliver any instrument or instruments in their behalf, and may employ such
counsel, agents and other services as they may require in carrying out
their duties. Subject to the limitations of the Plan, the Committee shall,
from time to time, establish rules and regulations for the administration
of the Plan and the transaction of its business and shall maintain or cause
to be maintained all records which it shall deem necessary for purposes of
the Plan.
-14-
5.06 No Contract of Employment. The establishment of the Plan shall not be
construed as conferring any legal rights upon any person for a continuation
of employment, nor shall it interfere with the rights of the Company to
discharge any employee and to treat him without regard to the effect which
such treatment might have upon him as a Participant in the Plan.
5.07 Facility of Payment. In the event that the Committee shall find that a
Participant is unable to care for his affairs because of illness or
accident, the Committee may direct that any benefit payment due him, unless
a claim shall have been made therefor by a duly appointed legal
representative, be paid to his spouse, a child, a partner or other blood
relative, or to a person with whom he resides, and any such payment so made
shall be a complete discharge of the liabilities of the Company and the
Plan therefor.
5.08 Withholding Taxes. The Company and the Trustee shall have the right to
deduct from each payment to be made under the Plan and the Trust any
required withholding or other taxes.
5.09 Nonalienation. Subject to any applicable law, no benefit under the Plan
shall be subject in any manner to anticipation, alienation, sale, transfer,
assignment, pledge, encumbrance or charge, and any attempt to do so shall
be void, nor shall any such benefit be in any manner liable for or subject
to garnishment, attachment, execution of levy, or liability for or subject
to the debts, contracts, liabilities, engagements or torts of a
Participant.
5.10 Construction.
(a) The Plan shall be construed, regulated and administered under the laws of
the State of Colorado to the extent not preempted by the Employee
Retirement Income Security Act of 1974 or other federal law.
(b) When used herein the masculine pronoun shall include the feminine pronoun,
and the singular shall include the plural, where appropriate.
-15-
5.11 Claims Procedure:
----------------
(a) Filing and Initial Determination of Claim: Any Participant, beneficiary,
or his duly authorized representative may file a claim for a Plan benefit
to which the claimant believes that he or she is entitled. Such a claim
must be in writing and delivered to the Committee in person on by express
delivery service or certified mail, postage prepaid. Within 90 days after
receipt of such claim, the Committee shall send to the claimant by
certified mail, postage prepaid, notice of the granting or denying, in
whole or in part, of such claim, unless special circumstances require an
extension of time for processing the claim. In no event may the extension
exceed 90 days from the end of the initial period. If such extension is
necessary, the claimant will be given a written notice to this effect prior
to the expiration of the initial 90-day period. The Committee shall have
full discretion to deny or grant a claim in whole or in part. If notice of
the denial of a claim is not furnished in accordance with this paragraph
(a), the claim shall be deemed denied as of the 100th day after receipt of
such claim (or the 10th day after the expiration of any extension of time
of which claimant has been given written notice by the Committee) and the
claimant shall be permitted to exercise his right of review pursuant to
paragraphs (c) and (d) of this section.
(b) Duty of Committee Upon Denial of Claim: The Committee shall provide to
every claimant who is denied a claim for benefits written notice setting
forth in a manner calculated to be understood by the claimant:
(1) the specific reason or reasons for the denial;
(2) specific reference to pertinent Plan provisions on which the denial is
based;
(3) a description of any additional material or information necessary for
the claimant to perfect the claim and an explanation of why such
material is necessary; and
(4) an explanation of the Plan's claim review procedure.
-16-
(c) Request for Review of Claim Denial: Within 60 days after receipt by the
claimant of written notification of the denial in whole or in part of his
claim (or, if notice of denial has not been given, within 60 days after the
date as of which the claim is deemed denied), the claimant or his duly
authorized representative, upon written application to the Committee in
person or by certified mail, postage prepaid may request a review of such
denial, may review pertinent documents and may submit issues and comments
in writing.
(d) Claims Reviewer: Upon receipt of notice of a request for review, the
Committee shall be the claims reviewer. The claims reviewer shall make a
prompt decision on the review. The decision on review shall be written in
a manner calculated to be understood by the claimant, and shall include
specific reasons for the decision and specific references to the pertinent
Plan provisions on which the decision is based. The decision on review
shall be made not later than 60 days after the Committee's receipt of a
request for a review, unless special circumstances require an extension of
time for processing in which case a decision shall be rendered not later
than 120 days after receipt of a request for review. If such extension is
necessary, the claimant shall be given written notice of the extension
prior to the expiration of the initial 60-day period. If notice of the
decision on the review is not furnished in accordance with this paragraph
(d), the claim shall be deemed denied as of the 70th day after claimant's
request for review (or the 10th day after the expiration of any extension
of time of which claimant has been given written notice by the Committee)
and the claimant shall be permitted to exercise his right to legal remedy
pursuant to paragraph (c) of this section.
(e) Legal Remedy: After exhaustion of the claims procedure as provided under
this Plan. nothing shall prevent any person from pursuing any other legal
remedy.
-17-