Exhibit 10.4
[LOGO] Principal Life Insurance Company
Raleigh, NC 27612 THE EXECUTIVE
1-800-999-4031 NONQUALIFIED "EXCESS" PLAN(SM)
A member of the Principal Financial Group(R)
ADOPTION AGREEMENT
THIS AGREEMENT is the adoption by Union Bankshares, Inc. (the "Employer")
of the Executive Nonqualified Excess Plan ("Plan").
W I T N E S S E T H:
--------------------
WHEREAS, the Employer desires to adopt the Plan as an unfunded,
nonqualified deferred compensation plan; and
WHEREAS, the provisions of the Plan are intended to comply with the
requirements of Section 409A of the Code and the regulations thereunder, and
shall apply to amounts deferred after January 1, 2005, and to amounts deferred
under the terms of any predecessor plan which are not earned and vested before
January 1, 2005; and
WHEREAS, the Employer has been advised by Principal Life Insurance
Company to obtain legal and tax advice from its professional advisors before
adopting the Plan, and Principal Life Insurance Company disclaims all liability
for the legal and tax consequences which result from the elections made by the
Employer in this Adoption Agreement;
NOW, THEREFORE, the Employer hereby adopts the Plan in accordance with
the terms and conditions set forth in this Adoption Agreement:
ARTICLE I
Terms used in this Adoption Agreement shall have the same meaning as in
the Plan, unless some other meaning is expressly herein set forth. The Employer
hereby represents and warrants that the Plan has been adopted by the Employer
upon proper authorization and the Employer hereby elects to adopt the Plan for
the benefit of its Participants as referred to in the Plan. By the execution of
this Adoption Agreement, the Employer hereby agrees to be bound by the terms of
the Plan.
DD 2319-1 2/2006
ARTICLE II
The Employer hereby makes the following designations or elections for the
purpose of the Plan:
2.6 Committee: The duties of the Committee set forth in the Plan shall be
satisfied by:
___ (a) The administrative committee of at least three individuals
appointed by the Board to serve at the pleasure of the
Board.
___ (b) Employer.
XX (c) Compensation Committee.
___
2.7 Compensation: The "Compensation" of a Participant shall mean all of a
Participant's:
XX (a) Base salary.
___
XX (b) Service Bonus.
___
___ (c) Performance-Based Compensation earned in a period of 12
months or more.
___ (d) Commissions.
___ (e) Compensation received as an Independent Contractor
reportable on Form 1099.
___ (f) Employer Contributions Only.
XX (g) Compensation derived by being a member of the board of
___ either Union Bankshares or Union Bank.
2.8 Crediting Date: The Deferred Compensation Account of a Participant shall be
credited with the amount of any Participant Deferral to such account at the
time designated below:
___ (a) The last business day of each Plan Year.
___ (b) The last business day of each calendar quarter during the
Plan Year.
___ (c) The last business day of each month during the Plan Year.
___ (d) The last business day of each payroll period during the Plan
Year.
___ (e) Each pay day as reported by the Employer.
XX (f) Any business day on which the Participant Deferral is
___ received by the Provider.
___ (g) Other: ______________________________________________.
DD 2319-1 2 2/2006
2.12 Effective Date:
XX (a) This is a newly-established Plan, and the Effective Date of
___ the Plan is December 6, 2006.
___ (b) This is an amendment and restatement of a plan named
_______________________________ with an effective date of
____________. The Effective Date of this amended and
restated Plan is _____________. This is amendment number
___.
2.18 Normal Retirement Age: The Normal Retirement Age of a Participant shall
be:
___ (a) Age ___.
XX (b) The later of age _55_ or the _5th_ 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.
___ (c) Other: _______________________________________________.
2.22 Participating Employer(s): As of the Effective Date, the following
Participating Employer(s) are parties to the Plan:
Name of Employer Address Telephone No. EIN
---------------- ------- ------------- ---
20 Lower Main St.,
Union Bankshares, Inc. P.O. Box 667 (802) 888-6600 03-0283552
- ---------------------- --------------------- -------------- ----------
Morrisville, VT 05661
---------------------
Name of Employer Address Telephone No. EIN
---------------- ------- ------------- ---
20 Lower Main St.,
Union Bank P.O. Box 667 (802) 888-6600 03-0286322
- ---------------------- --------------------- -------------- ----------
Morrisville, VT 05661
---------------------
2.24 Plan: The name of the Plan as applied to the Employer is
The Nonqualified Excess Plan of Union Bankshares, Inc. & Subsidiaries
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DD 2319-1 3 2/2006
2.25 Plan Administrator: The Plan Administrator shall be:
___ (a) Committee.
XX (b) Employer.
___
___ (c) Other: _______ .
2.27 Plan Year: The Plan Year shall end each year on the last day of the month
of December.
2.35 Trust:
___ (a) The Employer does desire to establish a "rabbi" trust for
the purpose of setting aside assets of the Employer
contributed thereto for the payment of benefits under the
Plan.
___ (b) The Employer does not desire to establish a "rabbi" trust
for the purpose of setting aside assets of the Employer
contributed thereto for the payment of benefits under the
Plan.
XX (c) The Employer desires to establish a "rabbi" trust for the
___ purpose of setting aside assets of the Employer contributed
thereto for the payment of benefits under the Plan upon the
occurrence of a Change in Control.
4.1 Participant Deferral Credits: Subject to the limitations in Section 4.1 of
the Plan, a Participant may elect to have his Compensation (as selected in
Section 2.7 of this Adoption Agreement) deferred within the annual limits below
by the following percentage or amount as designated in writing to the
Committee:
XX (a) Base salary:
___
maximum deferral: $__________ or ____75____%
XX (b) Service Bonus:
___
maximum deferral: $__________ or ____90____%
___ (c) Performance-Based Compensation:
maximum deferral: $__________ or __________%
XX (d) Directors & Committee fees:
___
maximum deferral: $__________ or __________%
___ (e) Participant deferrals not allowed.
DD 2319-1 4 2/2006
4.2 Employer Credits: The Employer will make Employer Credits in the following
manner:
___ (a) Employer Discretionary Credits: The Employer may make
discretionary credits to the Deferred Compensation Account of each
Participant in an amount determined as follows:
___ (i) An amount determined each Plan Year by the Employer.
___ (ii) Other: _________________________________________.
___ (b) Employer Profit Sharing Credits: The Employer may make
profit sharing credits to the Deferred Compensation Account of each
Participant in an amount determined as follows:
___ (i) An amount determined each Plan Year by the Employer.
___ (ii) Other: _________________________________________.
___ (c) Other: ____________________________________________________.
XX (d) Employer Credits not allowed.
___
5.3 Death of a Participant: If the Participant dies while in Service, the
Employer shall pay a benefit to the Beneficiary in an amount equal to the
vested balance in the Deferred Compensation Account of the Participant
determined as of the date payments to the Beneficiary commence, plus:
___ (a) An amount to be determined by the Committee.
___ (b) Other: _______________________________________________.
XX (c) No additional benefits.
___
DD 2319-1 5 2/2006
5.4 In-Service Distributions: In-service accounts are permitted under the Plan:
XX (a) Yes, with respect to:
___
XX Participant Deferral Credits only.
___
___ Employer Credits only.
___ Participant Deferral and Employer Credits.
In-service distributions may be made in the following manner:
XX Single lump sum payment.
___
XX Annual installment payments over no more than
___ _6_ years.
If applicable, amounts not vested at the specified time
of distribution will be:
___ Forfeited
___ Distributed annually when vested
___ (b) No in-service distributions permitted.
5.5 Education Distributions: Education accounts are permitted under the Plan:
XX (a) Yes, with respect to:
___
XX Participant Deferral Credits only.
___
___ Employer Credits only.
___ Participant Deferral and Employer Credits.
Education distributions may be made in the following manner:
XX Single lump sum payment.
___
XX Annual installment payments over no more than
___ _6_ years.
If applicable, amounts not vested at the specified time of
distribution will be:
___ Forfeited
___ Distributed annually when vested
___ (b) No education distributions permitted.
5.6 Change in Control: Participant may elect to receive distributions under the
Plan upon a Change in Control:
___ (a) Yes, Participants may elect upon initial enrollment to have
accounts distributed upon a Change in Control.
XX (b) Participants may not elect to have accounts distributed upon
___ a Change in Control.
DD 2319-1 6 2/2006
6.1 Payment Options: Any benefit payable under the Plan upon a Qualifying
Distribution Event may be made to the Participant or his Beneficiary (as
applicable) in any of the following payment forms, as selected by the
Participant in the Participant Deferral Agreement:
1. Separation from Service other than Retirement (Retirement is
defined by the Employer)
XX (a) A lump sum in cash as soon as practicable following the date
___ of the Qualifying Distribution Event.
XX (b) Approximately equal annual installments over a term certain
___ as elected by the Participant upon his entry into the Plan
not to exceed _5_ years.
___ (c) Other: _______________________________________________.
2. Separation from Service due to Retirement
XX (a) A lump sum in cash as soon as practicable following the date
___ of the Qualifying Distribution Event.
XX (b) Approximately equal annual installments over a term certain
___ as elected by the Participant upon his entry into the Plan
not to exceed _15_ years.
___ (c) Other: _______________________________________________.
3. Death
XX (a) A lump sum in cash upon the date of the Qualifying
___ Distribution Event.
XX (b) Approximately equal annual installments over a term certain
___ as elected by the Participant upon his entry into the Plan
not to exceed _5_ years.
___ (c) Other: _______________________________________________.
DD 2319-1 7 2/2006
4. Disability
XX (a) A lump sum in cash upon the date of the Qualifying
___ Distribution Event.
XX (b) Approximately equal annual installments over a term certain
___ as elected by the Participant upon his entry into the Plan
not to exceed _5_ years.
___ (c) Other: _______________________________________________.
5. Change in Control
___ (a) A lump sum in cash upon the date of the Qualifying
Distribution Event.
___ (b) Approximately equal annual installments over a term certain
as elected by the Participant upon his entry into the Plan
not to exceed _____ years.
___ (c) Other: _______________________________________________.
XX (d) Not applicable (if not permitted in 5.6)
___
6.2 De Minimis Amounts. Notwithstanding any payment election made by the
Participant, the vested balance in the Deferred Compensation Account of the
Participant will be distributed in a single lump sum payment if the payment
accompanies the termination of the Participant's entire interest in the Plan
and the amount of such payment does not exceed $10,000.
DD 2319-1 8 2/2006
7. Vesting: An Active Participant shall be fully vested in the Employer Credits
made to the Deferred Compensation Account upon the first to occur of the
following events:
___ (a) Normal Retirement Age.
___ (b) Death.
___ (c) Disability.
___ (d) Change in Control.
___ (e) Other: _______________________________________________.
___ (f) Satisfaction of the vesting requirement specified below:
___ Employer Discretionary Credits:
___ (i) Immediate 100% vesting.
___ (ii) 100% vesting after _________ Years of Service.
___ (iii) 100% vesting at age ____.
___ (iv) Number of Years Vested
of Service Percentage
--------------- ----------
Less than 1 ___%
1 ___%
2 ___%
3 ___%
4 ___%
5 ___%
6 ___%
7 ___%
8 ___%
9 ___%
10 or more ___%
For this purpose, Years of Service of a Participant shall be
calculated from the date designated below:
___ (1) First Day of Service.
___ (2) Effective Date of the Plan Participation.
___ (3) Each Crediting Date. Under this option (3),
each Employer Credit shall vest based on the
Years of Service of a Participant from the
Crediting Date on which each Employer
Discretionary Credit is made to his or her
Deferred Compensation Account. Notwithstanding
the vesting schedule elected above, all
Employer Discretionary Credits to the Deferred
Compensation Account shall be 100% vested upon
the following event(s): ______________________.
DD 2319-1 9 2/2006
___ Employer Profit Sharing Credits:
___ (i) Immediate 100% vesting.
___ (ii) 100% vesting after _________ Years of Service.
___ (iii) 100% vesting at age ____.
___ (iv) Number of Years Vested
of Service Percentage
--------------- ----------
Less than 1 ___%
1 ___%
2 ___%
3 ___%
4 ___%
5 ___%
6 ___%
7 ___%
8 ___%
9 ___%
10 or more ___%
For this purpose, Years of Service of a Participant shall be
calculated from the date designated below:
___ (1) First Day of Service.
___ (2) Effective Date of the Plan Participation.
___ (3) Each Crediting Date. Under this option (3),
each Employer Credit shall vest based on the
Years of Service of a Participant from the
Crediting Date on which each Employer Profit
Sharing Credit is made to his or her Deferred
Compensation Account. Notwithstanding the
vesting schedule elected above, all Employer
Profit Sharing Credits to the Deferred
Compensation Account shall be 100% vested upon
the following event(s): _____________________.
DD 2319-1 10 2/2006
___ Other Employer Credits:
___ (i) Immediate 100% vesting.
___ (ii) 100% vesting after _________ Years of Service.
___ (iii) 100% vesting at age ____.
___ (iv) Number of Years Vested
of Service Percentage
--------------- ----------
Less than 1 ___%
1 ___%
2 ___%
3 ___%
4 ___%
5 ___%
6 ___%
7 ___%
8 ___%
9 ___%
10 or more ___%
For this purpose, Years of Service of a Participant shall be
calculated from the date designated below:
___ (1) First Day of Service.
___ (2) Effective Date of the Plan Participation.
___ (3) Each Crediting Date. Under this option (3),
each Employer Credit shall vest based on the
Years of Service of a Participant from the
Crediting Date on which each Employer Credit
is made to his or her Deferred Compensation
Account. Notwithstanding the vesting schedule
elected above, all other Employer Credits to
the Deferred Compensation Account shall be
100% vested upon the following event(s):
_________________________________.
14. Amendment and Termination of Plan: Notwithstanding any provision in this
Adoption Agreement or the Plan to the contrary, Section 13 of the Plan shall be
amended to read as provided in attached Exhibit A.
DD 2319-1 11 2/2006
17.9 Construction: The provisions of the Plan and Trust (if any) shall be
construed and enforced according to the laws of the State of Vermont, except to
the extent that such laws are superseded by ERISA and the applicable provisions
of the Code.
IN WITNESS WHEREOF, this Agreement has been executed as of the day and
year stated below.
Union Bankshares, Inc.
----------------------
Name of Employer
By:
____________________________________
Authorized Person
Date: __________________________________
Union Bank
----------
Name of Employer
By:
____________________________________
Authorized Person
Date:___________________________________
NOTE: Execution of this Adoption Agreement creates a legal liability of the
Employer with significant tax consequences to the Employer and Participants.
The Employer should obtain legal and tax advice from its professional advisors
before adopting the Plan. Principal Life Insurance Company disclaims all
liability for the legal and tax consequences which result from the elections
made by the Employer in this Adoption Agreement.
DD 2319-1 12 2/2006
Exhibit A
The Participant's beneficiary shall be the person or persons designated by the
Participant on the beneficiary designation form provided by and filed with the
Committee or its designee. If the Participant does not designate a beneficiary,
the beneficiary shall be his Surviving Spouse or Civil Union Partner as defined
by the state of Vermont. If the Participant does not designate a beneficiary
and has no Surviving Spouse/Civil Union Partner, the beneficiary shall be the
Participant's estate. The designation of a beneficiary may be changed or
revoked only by filing a new beneficiary designation form with the Committee or
its designee. If a beneficiary (the "primary beneficiary") is receiving or is
entitled to receive payments under the Plan and dies before receiving all of
the payments due him, the balance to which he is entitled shall be paid to the
contingent beneficiary, if any, named in the Participant's current beneficiary
designation form. If there is no contingent beneficiary, the balance shall be
paid to the estate of the primary beneficiary. Any beneficiary may disclaim all
or any part of any benefit to which such beneficiary shall be entitled
hereunder by filing a written disclaimer with the Committee before payment of
such benefit is to be made. Such a disclaimer shall be made in a form
satisfactory to the Committee and shall be irrevocable when filed. Any benefit
disclaimed shall be payable from the Plan in the same manner as if the
beneficiary who filed the disclaimer had predeceased the Participant.
DD 2319-1 13 2/2006