As filed with the Securities and Exchange Commission on February 27, 1997
File No. 33-
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Form S-8
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
--------------
Trigon Healthcare, Inc.
(Exact name of registrant as specified in its charter)
VIRGINIA 54-1773225
(State or other jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or organization)
2015 Staples Mill Road, RICHMOND, VIRGINIA 23230
(804) 354-7000
(Address of principal executive office, including zip code)
EMPLOYEES' THRIFT PLAN OF
TRIGON BLUE CROSS BLUE SHIELD
TRIGON BLUE CROSS BLUE SHIELD
401(K) RESTORATION PLAN
(Full Title of the Plans)
COPIES OF ALL COMMUNICATIONS, INCLUDING COMMUNICATIONS SENT TO AGENT FOR
SERVICE, SHOULD BE SENT TO:
R. GORDON SMITH, ESQ. J. CHRISTOPHER WILTSHIRE, ESQ.
MCGUIRE, WOODS, BATTLE & BOOTHE, L.L.P. TRIGON HEALTHCARE, INC.
ONE JAMES CENTER LEGAL DEPARTMENT
901 EAST CARY STREET 2015 STAPLES MILL ROAD
RICHMOND, VIRGINIA 23219 RICHMOND, VIRGINIA 23230
(804) 775-1000 (804) 354-7284
CALCULATION OF REGISTRATION FEE(*)
<TABLE>
<CAPTION>
Amount Proposed Proposed
Title of Each Class of Securities to be Maximum Maximum Amount of
to be Registered (1) Registered (2) Offering Aggregate Registration
Price Per Offering Fee
Share Price (1)
<S> <C>
Class A Common stock, par value $0.01 1,000,000 shs. $16.75 $16,750,000 $5,076
per share ........
===============================================================================================
</TABLE>
- ----------
(1) Computed in accordance with Rule 457(h) under the Securities Act of 1933, as
amended (the Securities Act), solely for the purpose of calculating the
registration fee.
(2) In addition, pursuant to Rule 416(c) under the Securities Act, this
registration statement also covers an indeterminate amount of interests to be
offered or sold pursuant to the Trigon Blue Cross Blue Shield 401(k) Restoration
Plan.
1
<PAGE>
PART 1
INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS
ITEM 1. PLAN INFORMATION
Not required to be filed.
ITEM 2. REGISTRANT INFORMATION AND EMPLOYEE PLAN ANNUAL
INFORMATION
Not required to be filed.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents filed by Trigon Healthcare, Inc. (Trigon) with
the Securities and Exchange Commission (the Commission) are incorporated herein
by reference and made a part hereof: (I) the Trigon Form S-1 as filed with the
Securities and Exchange Commission on August 8, 1996, and as amended through
January 29, 1997.
In addition, all documents filed by Trigon pursuant to Section 13(a),
13(c), 14 or 15(d) of the Securities Exchange Act of 1934, as amended (the
Exchange Act), after the date of the Prospectus and prior to the filing of a
post-effective amendment that indicates that all securities offered hereby have
been sold or that deregisters all such securities then remaining unsold, shall
be deemed to be incorporated by reference into this registration statement and
to be a part hereof from the date of filing such documents.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTEREST OF NAMED EXPERTS AND COUNSEL.
Not applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Article 10 of the Virginia Stock Corporation Act allows, in general,
for indemnification, in certain circumstances, by a corporation of any person
threatened with or made a party to any action, suit or proceeding by reason of
the fact that he or she is, or was, a director, officer, employee or agent of
such corporation. Indemnification is also authorized with respect to
2
<PAGE>
a criminal action or proceeding where the person had no reasonable cause to
believe that his conduct was unlawful. Article 9 of the Virginia Stock
Corporation Act provides limitations on damages payable by officers and
directors, except in cases of willful misconduct or knowing violation of
criminal law or any federal or state securities law.
Section 12.3 of the Company's Articles of Incorporation provides for
mandatory indemnification of any director or officer of the Company who is, was,
or is threatened to be made a party to a proceeding (including a proceeding by
or in the right of the Company) because he is or was a director or officer of
the Company or because he is or was serving the Company or other legal entity in
any capacity at the request of the Company while a director or officer of the
Company, against all liabilities and expenses as are incurred because of such
director's or officer's willful misconduct or knowing violation of the criminal
law.
The Company maintains a standard policy of officers' and directors'
liability insurance.
In the Purchase Agreements attached as Exhibits 1.1 and 1.2 to the
Trigon Form S-1 as filed with the Securities and Exchange Commission on August
8, 1996, as amended through January 29, 1997, in connection with the initial
public offering of the Company's stock, the underwriters agree to indemnify,
under certain conditions, the Company, its directors, certain of its officers
and persons who control the Company within the meaning of the Securities Act,
against certain liabilities.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS
4(i) -- Articles of Incorporation of the Registrant
(Exhibit 3.1, Form S-1, as filed with the
Securities and Exchange Commission on August
8, 1996, as amended through January 29,
1997, incorporated by reference).
4(ii) -- Bylaws of the Registrant (Exhibit 3.1, Form
S-1, as filed with the Securities and
Exchange Commission on August 8, 1996, as
amended through January 29, 1997,
incorporated by reference).
5 -- Opinion of McGuire, Woods, Battle & Boothe,
L.L.P. (filed herewith).
3
<PAGE>
The Registrant will submit the restated
Employees' Thrift Plan of Trigon Blue Cross
Blue Shield (the Thrift Plan) and any
amendments thereto to the Internal Revenue
Service (the IRS) in a timely manner and
will make all changes required by the IRS in
order to qualify the Thrift Plan.
23(i) -- Consent of KPMG Peat Marwick, LLP (filed
herewith).
23(ii) -- Consent of McGuire, Woods, Battle & Boothe,
L.L.P. (included in Exhibit 5).
24 -- Power of Attorney (included herein).
99(i) -- Employees' Thrift Plan of Trigon Blue Cross
Blue Shield (filed herewith).
99(ii) -- Trigon Blue Cross Blue Shield 401(k)
Restoration Plan (filed herewith).
ITEM 9. UNDERTAKINGS
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by
section 10(a)(3) of the Securities Act;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration
statement (or the most recent post-effective
amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the
information set forth in the registration statement;
(iii) 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;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the registrant pursuant to
section 13 or section
4
<PAGE>
15(d) of the Exchange Act that are incorporated by reference in the registration
statement.
(2) That, for the purpose of determining any liability under
the Securities Act, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of this offer.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the Exchange
Act of (and, where applicable, each filing of an employee benefit plan's annual
report pursuant to Section 13(d) of the Exchange Act) that is incorporated by
reference in the registration statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
(h) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other that the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of such issue.
5
<PAGE>
POWERS OF ATTORNEY
Each person whose signature appears below hereby authorizes either agent for
service named in the registration statement as attorney-in-fact, to sign on his
behalf individually and in each capacity stated below and to file all amendments
and post-effective amendments to the registration statement, and Trigon hereby
confers like authority to sign and file on its behalf, with respect to the
proposed registration, offer and sale or issuance of Common Stock of Trigon, par
value $.01 per share, in connection with the Employees' Thrift Plan of Trigon
Blue Cross Blue Shield and the Trigon Blue Cross Blue Shield 401(k) Restoration
Plan.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing 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 County of Henrico, Commonwealth of Virginia, on the 19th day
of February, 1997.
TRIGON HEALTHCARE, INC.
By \s\ Thomas G. Snead, Jr.
------------------------------------
(Thomas G. Snead, Jr., Treasurer and
Chief Financial Officer)
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C>
\s\ Norwood H. Davis, Jr. Chairman of the Board February 19, 1997
- ------------------------------- Chief Executive
Norwood H. Davis, Jr. Officer
\s\ Lenox D. Baker, Jr., M.D. Director February 19, 1997
- -------------------------------
Lenox D. Baker, Jr., M.D.
\s\ James K. Candler Director February 19, 1997
- -------------------------------
James K. Candler
6
<PAGE>
\s\ John Cole, Jr., M.D. Director February 19, 1997
- -------------------------------
John Cole, Jr., M.D.
\s\ John L. Colley, Jr., Ph.D. Director February 19, 1997
- -------------------------------
John L. Colley, Jr., Ph.D.
\s\ Robert M. Freeman Director February 19, 1997
- -------------------------------
Robert M. Freeman
\s\ William R. Harvey Director February 19, 1997
- --------------------------------
William R. Harvey
\s\ Elizabeth G. Helm Director February 19, 1997
- --------------------------------
Elizabeth G. Helm
\s\ Gary A. Jobson Director February 19, 1997
- --------------------------------
Gary A. Jobson
\s\ Frank C. Martin, Jr. Director February 19, 1997
- -------------------------------
Frank C. Martin, Jr.
\s\ Donald B. Nolan, M.D. Director February 19, 1997
- --------------------------------
Donald B. Nolan, M.D.
\s\ William N. Powell Director February 19, 1997
- --------------------------------
William N. Powell
\s\ J. Carson Quarles Director February 19, 1997
- --------------------------------
J. Carson Quarles
\s\ R. Gordon Smith Director February 19, 1997
- --------------------------------
R. Gordon Smith
\s\ Jackie M. Ward Director February 19, 1997
- --------------------------------
Jackie M. Ward
\s\ Stirling L. Williamson, Jr. Director February 19, 1997
- -------------------------------
Stirling L. Williamson, Jr.
\s\ Thomas G. Snead, Jr. Treasurer and Chief February 19, 1997
- ------------------------------- Financial Officer
Thomas G. Snead, Jr.
7
<PAGE>
\s\ Thomas R. Byrd Principal Accounting February 19, 1997
- ------------------------------- Officer
Thomas R. Byrd
Pursuant to the requirements of the Securities Act of 1933, the Company
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the County of Henrico, Commonwealth
of Virginia, on the 19th day of February, 1997.
TRIGON BLUE CROSS BLUE SHIELD
401(K) RESTORATION PLAN
By: \s\ Ronald M. Nash
------------------
Ronald M. Nash
8
<PAGE>
EXHIBIT INDEX
Exhibit No. Exhibit
4(i) Articles of Incorporation of the Registrant (Exhibit
3.1, Form S-1, as filed with the Securities and
Exchange Commission on August 8, 1996, as amended
through January 29, 1997, incorporated by reference).
4 (ii) Bylaws of the Registrant (Exhibit 3.1, Form S-1, as
filed with the Securities and Exchange Commission on
August 8, 1996, as amended through January 29, 1997,
incorporated by reference).
5 Opinion of McGuire, Woods, Battle & Boothe, L.L.P.
The Registrant will submit the restated Employees'
Thrift Plan of Trigon Blue Cross Blue Shield (the
Thrift Plan) and any amendments thereto to the
Internal Revenue Service (the IRS) in a timely manner
and will make all changes required by the IRS in
order to qualify the Thrift Plan.
23(i) Consent of KPMG Peat Marwick LLP (filed herewith).
23(ii) Consent of McGuire, Woods, Battle & Boothe, L.L.P.
(contained in Exhibit 5).
24 Power of attorney (included on the signature pages
herein).
99(i) Employees' Thrift Plan of Trigon Blue Cross Blue
Shield (filed herewith).
99(ii) Trigon Blue Cross Blue Shield 401(k) Restoration Plan
(filed herewith).
9
</TABLE>
Exhibit 5
February 26, 1997
Securities and Exchange Commission
Washington, D.C. 20549
Dear Sir or Madam:
This will refer to the Registration Statement on Form S-8 (the
"Registration Statement") that is being filed by Trigon Healthcare, Inc. with
the Securities and Exchange Commission pursuant to the Securities Act of 1933,
as amended, with respect to 1,000,000 shares of Common Stock, par value $0.01
per share, of the Company ("Common Stock"), relating to the Employees' Thrift
Plan of Trigon Blue Cross Blue Shield and the Trigon Blue Cross Blue Shield
401(k) Restoration Plan.
It is our opinion that all necessary corporate proceedings have been
taken to authorize the issuance of the shares of Common Stock being registered
under the Registration Statement, and that when all such shares of Common Stock
are issued or sold they will be duly authorized, legally issued, fully paid and
non-assessable.
We hereby consent to the use of this opinion as Exhibit 5 to the
Registration Statement.
Very truly yours,
\s\ McGuire, Woods, Battle & Boothe, L.L.P.
Exhibit 23(i)
Consent of Independent Auditors
The Board of Directors
Trigon Healthcare, Inc.:
We consent to incorporation by reference in this registration statement on Form
S-8 of Trigon Healthcare, Inc. of our report dated November 6, 1996, relating to
the consolidated balance sheets of Blue Cross and Blue Shield of Virginia and
subsidiaries as of December 31, 1994 and 1995 and September 30, 1996, and the
related consolidated statements of operations, changes in surplus and cash flows
for each of the years in the three-year period ended December 31, 1995 and the
nine months ended September 30, 1996 which report appears in the registration
statement on Form S-1 of Trigon Healthcare, Inc. filed with the Securities and
Exchange Commission on August 8, 1996 and as amended through January 29, 1997,
incorporated herein by reference. Our report refers to changes in accounting for
investment securities, income taxes and postemployment benefits.
\s\ KPMG Peat Marwick
Richmond, Virginia
February 24, 1997
Exhibit 99(i)
EMPLOYEES' THRIFT PLAN
OF
TRIGON BLUE CROSS BLUE SHIELD
Effective Date
July 1, 1980
As Amended and Restated
January 1, 1996
<PAGE>
TABLE OF CONTENTS
ARTICLE PAGE
- ------- ----
INTRODUCTION...................................................................1
ARTICLE I......................................................................2
DEFINITIONS................................................................2
1.01 Administrative Committee..........................................2
1.02 Affiliate.........................................................2
1.03 After-Tax Contribution Account....................................2
1.04 Annual Additions..................................................2
1.05 Beneficiary.......................................................3
1.06 Board.............................................................3
1.07 Compensation......................................................3
1.08 Contributions.....................................................4
1.09 Corporation.......................................................4
1.10 Current Balance...................................................4
1.11 Deductible Account................................................4
1.12 Deductible Current Balance........................................4
1.13 Defined Benefit Plan..............................................5
1.14 Defined Contribution Plan.........................................5
1.15 Delayed Retirement Date...........................................5
1.16 Disability Retirement Date........................................5
1.17 Early Retirement Date.............................................5
1.18 Effective Date....................................................5
1.19 Employee..........................................................5
1.20 Employer..........................................................6
1.21 Employer Contribution Account.....................................6
1.22 Employer Contributions............................................6
1.23 Employment Date...................................................6
1.24 Entry Date........................................................7
1.25 ERISA.............................................................7
1.26 Fiduciary.........................................................7
1.27 Forfeiture........................................................7
1.28 Fund..............................................................7
1.29 Hardship..........................................................7
1.30 Highly Compensated Employee.......................................9
1.31 Hour of Service..................................................12
1.32 Individual Account...............................................14
1.33 IRC..............................................................14
1.34 Investment Committee.............................................14
1.35 Investment Manager...............................................14
1.36 Limited Participant..............................................14
1.37 Limitation Year..................................................14
1.38 Maximum Compensation.............................................15
1.39 Non-Highly Compensated Employee..................................16
1.40 Normal Retirement Age............................................16
1.41 Normal Retirement Date...........................................16
1.42 Participant......................................................16
1.43 Plan.............................................................16
1.44 Plan Year........................................................16
1.45 Pre-Tax Contribution Account.....................................16
1.46 Pre-Tax Contributions............................................17
1.47 Reemployment Date................................................17
1.48 Rollover Account.................................................17
1.49 Rollover Contributions...........................................17
1.50 Service..........................................................17
1.51 Severance from Service Date......................................19
1.52 Severance Period.................................................21
1.53 Total and Permanent Disability...................................21
1.54 Transfer Account.................................................22
1.55 Trust Agreement..................................................22
1.56 Trustee..........................................................23
ARTICLE II....................................................................24
ELIGIBILITY AND PARTICIPATION.............................................24
2.01 Eligibility......................................................24
2.02 Participation....................................................24
2.03 Limited Participants.............................................25
2.04 Designation of Beneficiary.......................................25
ARTICLE III...................................................................27
CONTRIBUTIONS.............................................................27
3.01 Pre-Tax Contributions............................................27
3.02 Employer Contributions...........................................28
3.03 Rollover Contributions...........................................28
3.04 Testing of Pre-Tax Contributions.................................29
3.05 Testing of Employer Contributions................................33
3.06 Multiple Use Limitation..........................................37
3.07 Maximum Pre-Tax Contributions....................................38
ARTICLE IV....................................................................40
INVESTMENT OPTIONS AND FUNDS..............................................40
4.01 Investment Options...............................................40
4.02 Election Procedure...............................................40
4.03 Investment Accounts..............................................41
ARTICLE V.....................................................................42
ALLOCATIONS TO INDIVIDUAL ACCOUNTS........................................42
5.01 Individual Accounts..............................................42
5.02 Allocation of After-Tax Contributions............................42
5.03 Allocation of Pre-Tax Contributions..............................42
5.04 Allocation of Employer Contributions.............................42
5.05 Allocation of Deductible Contributions...........................42
5.06 Allocation of Rollover Contributions.............................42
5.07 Allocation of Income, Gains and Losses...........................43
5.08 Forfeitures......................................................43
5.09 Maximum Additions................................................43
5.10 Multiple Plan Participation......................................44
ARTICLE VI....................................................................47
VESTING AND DISTRIBUTIONS.................................................47
6.01 Vesting..........................................................47
6.02 Normal Retirement................................................53
6.03 Delayed Retirement...............................................53
6.04 Early Retirement.................................................53
6.05 Disability Retirement............................................54
6.06 Death Prior to the Commencement of Benefits......................55
6.07 Death After the Commencement of Benefits.........................57
6.08 Method of Payment................................................58
6.09 Maximum Option Payable...........................................62
6.10 Benefits to Minors and Incompetents..............................62
6.11 Payment of Benefits..............................................63
6.12 Restriction on Distribution of Pre-Tax Contributions.............64
6.13 Special Retirement Opportunity...................................64
ARTICLE VII...................................................................66
WITHDRAWALS, REINSTATEMENTS AND LOANS.....................................66
7.01 Withdrawals Generally............................................66
7.02 Withdrawal of After-Tax Contributions............................66
7.03 Withdrawal of Rollover Account, Transfer
Account and Vested Employer Contribution Account...........66
7.04 Withdrawal of Deductible Account.................................67
7.05 Hardship Withdrawal..............................................67
7.06 Loans............................................................68
ARTICLE VIII..................................................................75
FUNDING...................................................................75
8.01 Contributions....................................................75
8.02 Trustee..........................................................75
8.03 Exclusive Benefit................................................76
ARTICLE IX....................................................................77
FIDUCIARIES...............................................................77
9.01 General..........................................................77
9.02 Corporation......................................................77
9.03 Trustee..........................................................78
9.04 Administrative Committee.........................................78
9.05 Investment Committee.............................................80
9.06 Claims Procedures................................................80
9.07 Records..........................................................82
9.08 Missing Persons..................................................82
9.09 Maintenance of Individual Accounts,
Deductible Accounts and Plan Operations....................83
9.10 Disclosure.......................................................83
9.11 Annual Accountings...............................................84
9.12 Funding Policy...................................................84
9.13 Indemnification of Fiduciaries...................................85
9.14 Equitable Allocations............................................85
ARTICLE X.....................................................................87
AMENDMENT AND TERMINATION OF THE PLAN.....................................87
10.01 Amendment of The Plan...........................................87
10.02 Termination of The Plan.........................................87
10.03 Allocation of Funds.............................................88
10.04 Application of Assets...........................................88
10.05 Automatic Termination...........................................89
10.06 Merger, Consolidation and Transfers of Assets or Liabilities....89
ARTICLE XI....................................................................90
PROVISIONS RELATIVE TO EMPLOYERS INCLUDED IN PLAN.........................90
11.01 Method of Participation.........................................90
11.02 Withdrawal......................................................90
ARTICLE XII...................................................................92
TOP HEAVY PLAN PROVISIONS.................................................92
12.01 General.........................................................92
12.02 Definitions.....................................................92
12.03 Minimum Top Heavy Contribution..................................95
12.04 Defined Benefit Plan Minimum Accrued Benefit....................96
12.05 Multiple Plan Participation.....................................96
12.06 No Duplication of Minimum Benefit...............................96
12.07 Top Heavy Assumptions...........................................97
12.08 Minimum Vesting.................................................97
ARTICLE XIII..................................................................98
MISCELLANEOUS.............................................................98
13.01 Governing Law...................................................98
13.02 Construction....................................................98
13.03 Expenses........................................................98
13.04 Participant's Rights; Acquittance...............................98
13.05 Spendthrift Clause..............................................98
13.06 Mistake of Fact................................................103
13.07 Counterparts...................................................104
ADOPTION OF THE PLAN.........................................................105
APPENDIX A...................................................................106
PROVISIONS APPLICABLE TO CONSOLIDATED RISK MANAGEMENT SERVICES...........106
APPENDIX B...................................................................110
PROVISIONS APPLICABLE TO PRIORITY HEALTH CARE, INC.......................110
<PAGE>
INTRODUCTION
The Employees' Thrift Plan of Blue Cross and Blue Shield of Virginia
became effective July 1, 1980, and was subsequently amended with the most recent
amendment and restatement being effective January 1, 1994.
The amended and restated Thrift Plan herein contained constitutes an
amendment effective January 1, 1996, to the earlier plan provisions, rather than
a replacement of such plan. The plan provisions as in effect immediately prior
to this January 1, 1996 amendment, modified by Section 10.02 of this amended and
restated Plan, shall remain in effect for those Participants who are not
actively employed by the participating Employers at any time after such date.
The assets held under the trust will continue to be held pursuant to the Plan as
herein amended. Any special provisions applicable to funds transferred to the
Plan from another qualified retirement plan in a plan-to-plan transfer shall be
contained in the appropriate adoption agreement or in an Appendix attached to
and made a part of the Plan.
It is intended that this Plan, together with the Trust Agreement, be
considered a profit sharing plan as defined in IRC Section 404(a)(3) and
regulations issued pursuant thereto, and meet all the requirements of the
Internal Revenue Code of 1986 ("IRC"), to the extent applicable, and the Plan
shall be interpreted, wherever possible, to comply with the terms of the IRC and
all formal regulations and rulings issued under the IRC and amendments thereto.
Effective January 1, 1996, the Plan as amended and restated has the
terms and provisions hereinafter set forth.
<PAGE>
ARTICLE I
DEFINITIONS
As used herein and in the Trust Agreement entered into pursuant hereto,
unless otherwise required by the context, the following words and phrases shall
have the meanings indicated:
1.01 Administrative Committee means the Administrative Committee provided for
in Section 9.04.
1.02 Affiliate means an organization which is a member of the same
controlled group of organizations as the Employer as determined
pursuant to IRC Sections 414(b), 414(c), 414(m) and 414(o) but which is
not an Employer.
1.03 After-Tax Contribution Account means that portion of a Participant's
Individual Account attributable to his After-Tax Basic Contributions and
After-Tax Additional Contributions made to the Plan for periods through
December 31, 1987, and the proportionate share of the adjustment of
the Fund determined in accordance with Section 5.07.
1.04 Annual Additions means for any Employee in any Limitation Year the sum
of (a) Contributions made by the Employer including excess Pre-Tax
Contributions returned pursuant to Sections 3.04 and 3.07 and any
Employer Contributions which are forfeited and used to reduce
Contributions of the Employer or distributed under the provisions of
Sections 3.04, 3.05 and 3.07, (b) Contributions made by the Participant,
(c) any Forfeitures allocated to his account in a given Limitation Year,
(d) amounts allocated after March 31, 1984, to an individual medical
account, as defined in IRC Section 415(l)(2), which is part of a
pension or annuity plan maintained by the Employer and (e) amounts
derived from contributions paid or accrued in taxable years after
December 31, 1985, which are attributable to post-retirement medical
benefits allocated to the separate account of a Key Employee under a
welfare benefit fund, as defined in IRC Section 419(e) maintained by the
Employer.
1.05 Beneficiary means any person designated by a Participant to receive such
benefits as may become payable after the death of such Participant.
1.06 Board means the Board of Directors of the Corporation.
1.07 Compensation means, for a Participant, total earnings, prior to
withholding, paid to him by his Employer during a Plan Year, including
bonuses, extra compensation, overtime payments and any other amounts
which the Employee could have elected to receive as cash in the current
year as taxable income in lieu of a non-taxable benefit under a plan
which is maintained by the Employer pursuant to IRC Section 125.
Compensation shall exclude flex dollars, tax gross ups, relocation
expenses, referral bonuses, tuition reimbursement, the imputed value of
group life insurance, the economic value attributable to the Employee
under split dollar life insurance, car allowances, contest earnings
(other than marketing or sales incentives) and any Contributions by
the Employer (other than Pre-Tax Contributions) to this or any other
employee benefit programs. Reference herein to Compensation with
respect to any period of time shall mean the Compensation, as
defined in the preceding sentences, of a Participant for such
period.
For purposes of determining Employer Contributions under
Section 3.02, Compensation shall mean the Compensation as defined in the
preceding sentences, of a Participant during the applicable pay period.
Notwithstanding the preceding, in no event shall
Compensation during a Plan Year exceed one hundred fifty thousand
dollars ($150,000) or such legislated amount as may be determined
pursuant to IRC Section 401(a)(17), provided that the increase
determined as of any January 1 of a calendar year by the Secretary of
the Treasury shall be effective for Plan Years beginning in such calendar
year. In determining the Compensation of a Participant for purposes of
this limit, the rules of IRC Section 414(q)(6) shall apply, except in
applying such rules, the term "family" shall include only the
spouse of the Participant and any lineal descendants of the
Participant who have not attained age nineteen (19) before the close
of the year. If, as a result of the application of such rules,
the adjusted one hundred fifty thousand dollar ($150,000) limit is
exceeded, then 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 the limit.
1.08 Contributions means payments made to the Plan which are provided for
herein by the Employer and/or by Participants and Employees pursuant to
Article III for the purpose of providing the benefits under this Plan.
1.09 Corporation means Blue Cross and Blue Shield of Virginia, a Virginia
corporation doing business as Trigon Blue Cross Blue Shield, or any
successor thereto. The Corporation is the sponsor, named Fiduciary and
administrator of the Plan as it relates to the Employees of
participating Employers.
1.10 Current Balance as used in regard to a Participant's Individual
Account or stipulated portion thereof, means, as of any date, the
market value of the Participant's Individual Account or portion
thereof determined as of the next following Valuation Date.
1.11 Deductible Account means the account established for a Participant to
hold voluntary Deductible Contributions made to the Plan for periods
prior to January 1, 1987, and the proportionate share of the adjustment of
the Fund determined in accordance with Section 5.07. All amounts held in
a Participant's Deductible Account shall at all times be one hundred
percent (100%) vested.
1.12 Deductible Current Balance as used in regard to a Participant's
Deductible Account or stipulated portion thereof means, as of any date,
the market value of the Participant's Deductible Account as of the next
following Valuation Date.
1.13 Defined Benefit Plan means a plan established and qualified under IRC
Section 401 or 403, except to the extent it is, or is treated as, a
Defined Contribution Plan.
1.14 Defined Contribution Plan means a plan established and qualified under
IRC Section 401 or 403, which provides for individual accounts for each
participant therein and for benefits based solely on the amount
contributed to each participant's account and any income and expenses or
gains or losses (both realized and unrealized) which may be allocated to
such accounts.
1.15 Delayed Retirement Date means the date of the Participant's termination
of employment after his Normal Retirement Date.
1.16 Disability Retirement Date means the date the Administrative Committee
determines that a Participant is Totally and Permanently Disabled.
1.17 Early Retirement Date means the date of the Participant's termination of
employment prior to his Normal Retirement Date provided that the
Participant has attained the age of fifty-five (55).
1.18 Effective Date means July 1, 1980, or such later date as of which an
Employer adopts the Plan for its Employees. The effective date of this
amended and restated Plan shall be January 1, 1996.
1.19 Employee means any person employed by the Employer excluding any
person (a) considered a leased employee within the meaning of IRC
Section 414(n); (b) who is represented by a collective bargaining unit
for purposes of bargaining with the Employer with respect to wages,
hours of employment or other conditions of employment unless the resulting
bargaining agreement provides for participation in the Plan; and (c)
effective on and after January 1, 1992, any person deemed to be a
"temporary" employee in accordance with the Employer's established
human resource policy, and any employee holding the job "Homemaker",
job number 0068.
A leased employee is a person other than an employee of the
Employer who pursuant to an agreement between the Employer and any other
person (leasing organization) has performed services for the Employer or
for the Employer and related persons, determined in accordance with
IRC 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 Employer.
Contributions or benefits provided a leased employee by the leasing
organization which are attributable to services performed for the
Employer shall be treated as provided by the Employer.
1.20 Employer means, collectively or individually as the context may
indicate, the Corporation and any other corporation which (a) is a
member of the same controlled group of corporations as the
Corporation [as determined pursuant to IRC Sections 414(b), 414(c),
414(m) and 414(o)], (b) the Board has authorized to adopt the Plan and
(c) by taking appropriate action has adopted the Plan and become signatory
to the Trust Agreement, or any successor to one or more of such entities.
1.21 Employer Contribution Account means that portion of a Participant's
Individual Account attributable to the matching Employer
Contribution allocated to such Participant pursuant to Section 5.04 and
the proportionate share of the adjustment of the Fund determined in
accordance with Section 5.07 attributable to his Employer
Contribution Account. The Employer Contribution Account may include
amounts transferred to this Plan in a plan-to-plan transfer as
specified in an Appendix and/or in an appropriate adoption
agreement.
1.22 Employer Contributions means Contributions made by an Employer pursuant
to Section 3.02.
1.23 Employment Date means the date an Employee first performs an Hour of
Service for the Employer, except that with respect to an Employee who
was in the employ of the Employer on January 1, 1987, the term
"Employment Date" shall mean the most recent date coincident with or
immediately preceding January 1, 1987, on which such Employee first
performed an Hour of Service either for the first time or after being
reemployed.
1.24 Entry Date means January 1, 1987, and each January 1 and July 1
thereafter.
1.25 ERISA means the Employee Retirement Income Security Act of 1974, as
amended. Any reference to any Section of ERISA shall be deemed to include
any applicable regulations pertaining to such Section.
1.26 Fiduciary means the Corporation, Employer, Trustee, Administrative
Committee, Investment Committee and any individual, corporation, firm
or other entity which assumes, in accordance with Article IX,
responsibilities of the Corporation, Employer, Trustee,
Administrative Committee or Investment Committee respecting
management of the Plan or the disposition of its assets.
1.27 Forfeiture means any amount held upon termination of employment of a
Participant which he is not entitled to receive as a distribution in
accordance with the terms of Article VI.
1.28 Fund means the trust fund created in accordance with Article VIII.
1.29 Hardship means, with respect to the determination of certain
withdrawal rights hereunder, a withdrawal authorized by the
Administrative Committee based upon a finding that the following rules
are satisfied.
1.29(a) The withdrawal is necessary to enable the Participant to meet
unusual or special situations in his financial affairs which
result in an immediate and heavy financial need.
1.29(b) The amount of the withdrawal is not available from other
resources of the Participant.
1.29(c) The amount distributed does not exceed the amount required to
meet the immediate financial need created.
1.29(d) In furtherance of Section 1.29(a), a financial Hardship shall
be deemed to be present if the withdrawal request is on account
of:
(i) Medical expenses described in IRC Section 213(d)
incurred by the Participant, the Participant's spouse or
any dependents of the Participant (as defined in IRC
Section 152);
(ii) Purchase (excluding mortgage payments) of a principal
residence for the Participant;
(iii) Payment of tuition and related fees for the next
twelve (12) months of post-secondary education
for the Participant, his spouse, children or
dependents (as defined in IRC Section 152);
(iv) The need to prevent the eviction of the Participant from
his principal residence or foreclosure on the mortgage
on the Participant's principal residence;
(v) Payment of funeral expenses and unreimbursed medical
expenses related to the last illness of a member of the
Participant's immediate family;
(vi) Loss by the Participant or his spouse of more than fifty
percent (50%) of normal income;
(vii) Payment of an outstanding court ordered judgment greater
than five hundred dollars ($500); or
(viii) Such other events as may be determined by the Internal
Revenue Service.
1.29(e) The Administrative Committee shall make a determination of
Hardship on the basis of all relevant facts and circumstances
that the distribution is of an amount necessary to satisfy the
financial need and that it is not available from other resources
of the Participant. The Administrative Committee may rely upon
reasonable representations by the Participant that the need
cannot otherwise be satisfied by:
(i) Reimbursement or compensation by insurance or
otherwise;
(ii) Reasonable liquidation of the Participant's assets to the
extent the liquidation would not itself cause an immediate
and heavy financial need;
(iii) The cessation of Pre-Tax Contributions under this Plan or
other plans maintained by the Employer;
(iv) By other distributions or nontaxable (at the time of the
loan) loans from this Plan and any other plans maintained by
the Employer or any other employer; or
(v) By borrowing from commercial sources on reasonable
commercial terms.
1.30 Highly Compensated Employee means:
1.30(a) Any employee who during the Plan Year or preceding twelve (12)
month period meets one of the following criteria -
(i) was at any time a Five Percent (5%) Owner of the Employer
or Affiliate;
(ii) received Maximum Compensation from the Employer or
Affiliate in excess of seventy-five thousand dollars
($75,000) (or such larger amount as may be determined by
the Secretary of Treasury);
(iii) received Maximum Compensation from the Employer or
Affiliate in excess of fifty thousand dollars ($50,000)
(or such larger amount as may be determined by the
Secretary of Treasury) and was in the top-paid group
consisting of the top twenty percent (20%) of the
employees (considering all employees of the Employer or
Affiliate) when ranked on the basis of Maximum
Compensation during such Plan Year; or
(iv) was at any time an officer and received Maximum
Compensation greater than fifty percent (50%) of the
amount in effect under IRC Section 415(b)(1)(A) for such
Plan Year. If, for any Plan Year, no officer of the
Employer or Affiliate is identified pursuant to this
subsection, the highest paid employee of the Employer
or Affiliate for such Plan Year shall be treated as a
Highly Compensated Employee. No more than fifty (50)
employees, or if lesser, the greater of three (3) employees
or ten percent (10%) of the employees, shall be treated as
officers.
An employee shall be considered a Highly Compensated
Employee for purposes of Section 1.30(a)(i) if he was
a Five Percent (5%) Owner of the Employer or Affiliate
in the Plan Year of determination or the preceding Plan
Year. An employee shall not be considered a Highly
Compensated Employee for purposes of Sections
1.30(a)(ii), 1.30(a)(iii) and 1.30(a)(iv) if he was a
Highly Compensated Employee in the current Plan Year but
was not a Highly Compensated Employee in the
preceding Plan Year unless such employee is a member of
the group consisting of the one hundred (100) employees
paid the greatest Maximum Compensation by the Employer
or an Affiliate during the Plan Year for which such
determination is being made.
If an employee is a Family Member of another employee
who is (i) a Five Percent (5%) Owner of the Employer or
Affiliate, or (ii) one (1) of the top ten (10) highest
paid employees of the Employer or Affiliate in the
current or preceding Plan Year, the Maximum Compensation
paid to and Contributions made on behalf of such Family
Member shall be deemed to have been made on behalf of such
employee. In calculating the Maximum Compensation paid
to such Family Member, the Maximum Compensation of
the Employee, the Employee's spouse and any lineal
descendants under the age of nineteen (19) shall be
limited to one hundred fifty thousand dollars
($150,000), as adjusted by the Secretary of Treasury.
Any former employee shall be treated as a Highly
Compensated Employee if such employee was a Highly
Compensated Employee (i) when he terminated employment,
or (ii) in any year following attainment of age fifty-five
(55). In addition, an employee who works only a de minimis
amount of service may be considered a Highly
Compensated Employee.
1.30(b) The following employees shall be excluded for purposes
of determining who is in the top-paid group under
Section 1.30(a)(iii):
(i) employees who have not completed six (6) months of
service;
(ii) employees who normally work less than seventeen and
one-half (17 1/2) hours per week;
(iii) employees who normally work not more than six (6) months
during any year;
(iv) employees who have not attained age twenty-one (21);
(v) except to the extent provided in regulations, employees who
are included in a collective bargaining agreement between
employee representatives and an Employer or Affiliate; and
(vi) employees who are nonresident aliens and who receive no
earned income [within the meaning of IRC Section 911(d)(2)]
from an Employer or Affiliate which constitutes income
from sources within the United States [within the meaning
of IRC Section 861(a)(3)].
1.30(c) For purposes of this Section 1.30 and Sections 3.04 and
3.05 the following definitions shall apply:
(i) The term "Family Member" shall mean with respect to
any employee, such employee's spouse and lineal
ascendants or descendants and the spouses of such lineal
ascendants or descendants.
(ii) The term "Five Percent (5%) Owner" shall have the same
meaning as specified in IRC Section 416(i).
1.30(d) The determination of Maximum Compensation for purposes
of determining who is a Highly Compensated
Employee shall be made without regard to IRC Sections 125,
402(a)(8), and 402(h)(1)(B), and in the case of
contributions by the Employer made pursuant to a salary
reduction agreement, without regard to IRC Section 403(b).
1.31 Hour of Service means the sum of Section 1.31(a), Section 1.31(b), Section
1.31(c) and Section 1.31(d) following:
1.31(a) Each hour for which an Employee is paid, or entitled
to payment for the performance of duties for the Employer.
These hours shall be credited to the Employee for the
computation period in which the duties are performed.
1.31(b) Each hour for which an Employee is paid, or entitled
to payment, by the Employer on account of a period of
time during which no duties are performed
(irrespective of whether the employment relationship has
terminated) due to vacation, holiday, illness,
incapacity (including disability), layoff, jury duty, or
leave of absence. No more than five hundred one (501)
Hours of Service shall be credited under this Section
1.36(b) for any single continuous period (whether or not
such period occurs in a single computation period). Hours
of Service under this paragraph shall be calculated and
credited pursuant to Department of Labor Regulations
Section 2530.200b-2 which are incorporated herein by this
reference; and
1.31(c) Each hour for which an Employee presumably would have
performed services for and been compensated by the
Employer but for the fact that the Employee was on a
military leave of absence for service in the armed forces
of the United States of America, provided that the
Employee entered such service directly from the employ of
the Employer and was discharged from such service and
reemployed by the Employer within the period during
which his employment rights as a veteran are protected
by law.
1.31(d) 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 shall not be
credited both under Section 1.31(a) or Section 1.31(b),
as the case may be, and under this Section 1.31(d).
These hours shall be credited to the Employee 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
1.31(e) Hours of Service to be credited under the Plan shall be
determined on the basis of the actual hours for which an
Employee is paid or entitled to payment. However, any
Employee for whom no hourly employment records are kept by
the Employer shall be credited with ninety-five (95) Hours
of Service for each semi-monthly payroll period in which
he would have been credited with at least one (1) Hour
of Service under the foregoing provisions if hourly
records were available.
1.32 Individual Account means the detailed record kept of the amounts
credited or charged to each Participant in accordance with the terms
of this Plan. The Individual Account is comprised of a Pre-Tax
Contribution Account, an After-Tax Contribution Account, an Employer
Contribution Account, a Rollover Account and a Transfer Account, if
applicable. The Participant's Individual Account may include any
subaccounts deemed necessary to provide appropriate recordkeeping as
determined by the Administrative Committee.
1.33 IRC means the Internal Revenue Code of 1986, as amended. Any
reference to any section of the IRC shall be deemed to include any
applicable regulations and rulings pertaining to such section and
shall also be deemed a reference to comparable provisions of future
laws.
1.34 Investment Committee means the Investment Committee provided for in
Section 9.05.
1.35 Investment Manager means a person or entity, as defined in ERISA
Section 3(38), which has the power to manage, acquire, or dispose of
Plan assets and which is either:
1.35(a) an investment advisor registered under the Investment
Advisors Act of 1940; or
1.35(b) a bank as defined in the Investment Advisors Act of 1940;
or
1.35(c) an insurance company qualified to manage assets of
retirement plans or perform similar functions under
the laws of more than one state; and which acknowledges in
writing that it is a Fiduciary with respect to the Plan.
1.36 Limited Participant means a Participant whose participation in the
Plan has ceased as a result of (i) his transfer of employment from a
participating Employer to the employment of an Affiliate or (ii)
whose employment status changes to a temporary employee or a
collective bargaining employee as specified in Section 1.19.
1.37 Limitation Year means the twelve (12) month period commencing on
January 1 and ending on December 31.
1.38 Maximum 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 an 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, bonuses, fringe benefits, reimbursements and expense
allowances) and excluding the following:
1.38(a) Employer contributions to a plan of deferred
compensation to the extent contributions are not included
in the gross income of the Employee for the taxable
year in which contributed, Employer Contributions made
on behalf of an Employee pursuant to IRC Sections 125
and 401(k) or on behalf of an Employee to a simplified
employee pension plan described in IRC Section 408(k)
to the extent such contributions are deductible under
IRC Section 404(h), and any distributions from a plan
of deferred compensation whether or not included in the
gross income of the Employee when distributed.
1.38(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;
1.38(c) Amounts realized from the sale, exchange or other
disposition of stock acquired under a qualified stock
option; and
1.38(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 an
IRC Section 403(b) annuity contract (whether or not
the contributions are excluded from the gross income of
the Employee).
Maximum Compensation for any Limitation Year
is the compensation actually paid or included in gross
income during such year. Except for purposes of Section
5.09, for Limitation Years commencing on and after
January 1, 1994, Maximum Compensation shall be limited to
one hundred fifty thousand dollars ($150,000) or such
legislated amount as may be determined by the
Secretary of the Treasury pursuant to IRC Section
401(a)(17).
Maximum Compensation for purposes of determining
who is a Key Employee shall include Section 1.38(a) and
1.38(d).
This definition shall be interpreted consistent with
IRC Section 415. Further, such law and regulations shall
be controlling in all determinations under this
definition, inclusive of any provisions and requirements
stated thereunder but hereinabove absent.
1.39 Non-Highly Compensated Employee means any Employee who is not a
Highly Compensated Employee.
1.40 Normal Retirement Age means the date a Participant attains the age of
sixty-five (65).
1.41 Normal Retirement Date means the date on which a Participant
attains his Normal Retirement Age.
1.42 Participant means any Employee who becomes a Participant as provided
in Article II.
1.43 Plan means the Employees' Thrift Plan of Trigon Blue Cross Blue Shield as
contained herein or as duly amended.
1.44 Plan Year means initially the six (6) month period beginning July 1, 1980,
and ending on December 31, 1980. Thereafter, Plan Year shall mean the
twelve (12) month period beginning on each January 1 and ending on each
December 31.
1.45 Pre-Tax Contribution Account means that portion of a Participant's
Individual Account attributable to Pre-Tax Contributions allocated to
such Participant pursuant to Section 5.03 and the proportionate share of
the adjustment of the Fund determined in accordance with Section 5.07
attributable to his Pre-Tax Contribution Account. The Pre-Tax
Contribution Account may include amounts transferred to this Plan in a
plan-to-plan transfer as specified in an Appendix and/or in an
applicable adoption agreement.
1.46 Pre-Tax Contributions means Contributions made by an Employer on the
Participant's behalf pursuant to Section 3.01.
1.47 Reemployment Date means the date, following a Severance Period, on which
an Employee again performs an Hour of Service.
1.48 Rollover Account means the portion of the Individual Account established
on behalf of an Employee to hold the amount he elects to rollover into
this Plan pursuant to IRC Section 402(c)(4) and the Participant's
proportionate share of the adjustment of the Fund determined in
accordance with Section 5.07 attributable to his Rollover Account. The
Administrative Committee may establish subaccounts within the Rollover
Account as it deems applicable. All amounts held in a Participant's
Rollover Account shall at all times be one hundred percent (100%)
vested.
1.49 Rollover Contributions means Rollover Contributions made to the Fund
pursuant to Section 3.03.
1.50 Service means, as of any date, the aggregate of an Employee's
periods of Service required to be recognized under this Plan
commencing on the Employee's Employment Date or any Reemployment Date
subsequent thereto and ending on a Severance from Service Date. For
purposes of this Section 1.50, each completed month shall be counted
as Service hereunder.
For purposes of determining Service for vesting
under Section 6.01, the following provisions shall be
applicable.
1.50(a) For purposes of Section 6.01(b), a full month of Service
shall be granted for any month or portion thereof in which
a Participant contributes pursuant to Section 3.01.
If a Participant does not make a Contribution pursuant to
Section 3.01 for any month or portion thereof in order to
preclude his exceeding the seven thousand dollar
($7,000) all source limit (as adjusted) provided for in
IRC Section 402(g)(5), the Participant shall receive
credit for Service for any such month as if he had
made a Contribution pursuant to Section 3.01. Further, if
a Participant is transferred to an Affiliate and becomes
a Limited Participant, the Limited Participant shall
receive credit for Service for any month he is a Limited
Participant as if he had made a Contribution pursuant to
Section 3.01.
1.50(b) The following rule shall be applicable to
Employees employed by Blue Cross and Blue Shield of
Virginia on and/or before December 31, 1986. If an Employee
was a Participant in the Employees' Thrift Plan of Blue
Cross and Blue Shield of Virginia on and/or before
such date and is subsequently eligible for a
reinstatement of his Individual Account applicable to
Forfeitures occurring prior to January 1, 1987, and elects
to reinstate said amount pursuant to Section 6.01,
Service for purposes of Section 6.01 shall be applied
to such reinstated Employer Contributions by crediting
twelve (12) months of Service for each prior class year
of forfeiture.
1.50(c) The following rule shall be applicable to
Employees participating in the Blue Cross and Blue Shield
of Southwestern Virginia Employee Appreciation
Savings Plan on and/or before December 31, 1986.
If a Participant is subsequently eligible for a
reinstatement of his Individual Account applicable to
Forfeitures occurring prior to January 1, 1987, and elects
to reinstate said amount pursuant to Section 6.01,
Service for purposes of Section 6.01 shall be applied
to such reinstated Employer Contributions by crediting
service as determined under the Blue Cross and Blue
Shield of Southwestern Virginia Employee Appreciation
Savings Plan through December 31, 1986. To this end,
if a Participant has a Plan Year of Service under the
Employee Appreciation Savings Plan, each such period shall
be deemed to be twelve (12) months of Service
hereunder.
In addition, for purposes of determining Service for
vesting under Section 6.01, and effective for periods
commencing on and after January 1, 1992, for purposes of
determining Service for eligibility under Section 2.01,
inclusive of any such Service prior to January 1, 1992, the
following provisions shall be applicable.
1.50(d) Periods of employment with an Affiliate which would have
constituted Service had the Participant been employed
by the Employer shall be included as if such periods had
been performed for the Employer.
1.50(e) Periods of employment with the Employer other than as an
Employee which would have constituted Service had the
Participant been employed as an Employee shall be
included as if such periods had been performed as an
Employee.
Further, effective for periods commencing on and
after January 1, 1992, for purposes of determining Service
for eligibility under Section 2.01, the following
provision shall be applicable.
1.50(f) Periods of employment with any other Blue Cross and/or Blue
Shield organization shall be included as if such person
had been employed by the Employer provided that the
Employee was transferred or employed directly from such
other Blue Cross and/or Blue Shield organization to the
Employer.
1.51 Severance from Service Date means the earlier of the following:
1.51(a) The date on which an Employee quits, retires, is
discharged or dies, provided he is not credited with an
Hour of Service within twelve (12) months of such date
with an Employer or Affiliate; or
1.51(b) The first anniversary date of the beginning of a period
in which an Employee remains absent from service (with
or without pay) with the Employer or Affiliate for any
reason other than quitting, retiring, being discharged
or dying. Such absence includes, by way of example without
limitation: vacation, holiday, sickness, leave of absence
or a period of paid or unpaid leave taken pursuant to the
Family and Medical Leave Act of 1993, or layoff or
service in the armed forces of the United States of
America required by law or during a period of war or
national emergency, provided that the Employee entered
such service directly from the employ of the
Employer, and was discharged from such service and
reemployed by the Employer within the period during
which his employment rights as a veteran are protected
by law.
1.51(c) Notwithstanding anything in this Section 1.59 to the
contrary, effective for periods prior to January 1,
1985, no Severance from Service Date shall occur and all
completed years and months of service shall be aggregated
if the Employee is rehired by the Employer prior to the
expiration of twelve (12) complete months following the
date the Employee quits, retires or is discharged.
Effective for periods on and after January 1, 1985, no
Severance from Service Date shall occur and all completed
years and months of service shall be aggregated if the
Employee is rehired by the Employer prior to the
expiration of five (5) consecutive Plan Years, beginning
with the Plan Year in which the Employee separates from
service.
For periods commencing on or after January 1, 1985,
and to the extent not already credited, Service shall be
credited solely for purposes of determining whether a
Severance from Service Date has occurred with respect
to an Employee who is absent from work regardless of
whether the Employee is paid for such absence:
1.51(d) By reason of the pregnancy of the Employee,
1.51(e) By reason of the birth of a child of the Employee,
1.51(f) By reason of the placement of a child with the Employee in
connection with the adoption of such child by such
Employee, or
1.51(g) For purposes of caring for such child for a period
beginning immediately following such birth or placement.
For purposes of determining a Severance from Service
Date of an Employee who is absent from service beyond the
first anniversary of the first day of absence by reason of
a maternity or paternity absence described in Section
1.51(d), Section 1.51(e), Section 1.51(f) and Section
1.51(g), such Severance from Service Date shall be the
second (2nd) anniversary of the date of such absence.
The period between the first and second anniversaries of
the first day of absence from work is neither a period of
Service nor a Severance Period.
Further, the Administrative Committee may request
that the Employee furnish any information the
Administrative Committee may require to establish that
the absence is for the reasons hereinbefore provided
and the number of days for which there was such an
absence. If such information is not submitted in a
timely manner, no Hours of Service shall be credited
pursuant to this paragraph.
1.52 Severance Period means a period of time commencing on an Employee's
Severance from Service Date and ending on his subsequent Reemployment
Date.
1.53 Total and Permanent Disability means the incapacity of a Participant by
reason of bodily injury or physical or mental disease which prevents the
Participant from performing his customary duties with the Employer and
which, in the opinion of the Administrative Committee, will continue
to prevent the Participant from performing his customary duties for
the remainder of his lifetime. Total and Permanent Disability shall
be determined by the Administrative Committee in accordance with uniform
principles consistently. Total and Permanent Disability is determined
by the Administrative Committee in accordance with uniform
principles consistently applied on the basis of competent medical
evidence or such other evidence as the Administrative Committee
may deem sufficient or on the basis that the Participant is eligible for
disability benefits under the long term disability plan sponsored by the
Employer.
The date when a Participant's disability occurred
shall be determined by the Administrative Committee. A
Participant shall not, however, be considered disabled
if the Administrative Committee determines that his
disability resulted from or arose as a result of:
1.53(a) service in the armed forces of any country;
1.53(b) intentionally self-inflicted injury;
1.53(c) participation in a felonious criminal act which results in
the Participant's conviction in a court of law.
1.54 Transfer Account means the account established for a Participant to
hold the value of funds directly transferred to the Plan from
another qualified retirement plan that is not considered a Rollover
Contribution. The Administrative Committee may establish subaccounts
within the Transfer Account as it deems appropriate. The Participant
shall be vested in his Transfer Account as provided in an
appropriate adoption agreement or an Appendix to the Plan.
1.55 Trust Agreement means the agreement entered into between the
Employer and the Trustee pursuant to Article VIII.
1.56 Trustee means such individual, individuals or financial institution,
or a combination of them as shall be designated in the Trust
Agreement to hold in trust any assets of the Plan for the purpose of
providing benefits under the Plan, and shall include any successor
trustee to the trustee initially designated thereunder.
1.57 Valuation Date means each business day in which the New York Stock
Exchange is open as of which the Fund shall be valued at fair market
value.
<PAGE>
ARTICLE II
ELIGIBILITY AND PARTICIPATION
2.01 Eligibility - Each person who was a Participant on December 31, 1995,
shall continue as a Participant after such date, subject to the provisions
hereinafter contained.
Each person who was not a Participant on December 31, 1995, and
each person who becomes an Employee after such date and who is not
already a Participant shall be eligible to become a Participant on the
Entry Date coinciding with or next following the completion of six (6)
months of service, subsequent to the date on which he completed his
first Hour of Service.
Employees of an Affiliate who have otherwise met the
eligibility requirements hereunder shall be eligible to participate on
the date they are employed by an Employer.
If an Employee ceases to be a Participant due to his
termination of employment and is later reemployed, he shall be
eligible to participate on his Reemployment Date.
2.02 Participation - Participation in the Plan is voluntary. In order to
become a Participant, an Employee must complete an application form
provided by the Administrative Committee on or before the fifteenth
(15th) day of the month preceding the Entry Date as of which it is to be
effective and as of which he is eligible. Each eligible Employee, in
order to become a Participant, must have Pre-Tax Contributions
contributed on his behalf to the Plan in accordance with Section 3.01.
If an Employee does not participate when initially eligible, he may
elect to participate effective with the Entry Date coinciding with or
next following his election to participate if he is then eligible. For
periods prior to January 1, 1987, any Employee meeting the eligibility
requirements of Section 2.01 was also a Participant by electing to
make Deductible Contributions pursuant to Section 5.05.
Once a Participant, an Employee shall remain a Participant until such
time that he has no balance in his Individual Account.
2.03 Limited Participants - A Participant whose employment status changes
due to (i) a transfer of his employment from that of a participating
Employer to the employment of an Affiliate or (ii) whose employment
status changes to a temporary employee or a collective bargaining
employee as specified in Section 1.19, shall become a Limited
Participant hereunder as of the date of the change in employment status
and such Limited Participant shall continue to earn Service under
Section 6.01 for each month he is a Limited Participant as if he had made
a Contribution pursuant to Section 3.01. A Limited Participant shall
continue to be eligible for withdrawals pursuant to the provisions of
Sections 7.01, 7.02, 7.03, 7.04 and 7.05 but shall not be eligible
for loans pursuant to Section 7.06. A Limited Participant who had a
loan outstanding at the time he became a Limited Participant
shall be required to continue repaying such loan under the provisions of
Section 7.06. A Limited Participant shall continue to be eligible to make
investment option elections pursuant to the provisions of Sections
4.01 and 4.02. If a Limited Participant subsequently transfers to the
employment of an Employer or changes employment status to that of an
Employee, he shall be eligible to participate in the Plan as of the date
he becomes an Employee of an Employer at which time he shall have all
the rights provided in accordance with this Plan.
2.04 Designation of Beneficiary - Upon commencing participation, each
Employee shall designate a Beneficiary on forms furnished by the
Administrative Committee. A Participant from time to time may change his
designated Beneficiary by written notice to the Administrative
Committee, and upon such change, the rights of all previously
designated Beneficiaries to receive any benefits under this Plan shall
cease. If, at the date of death of the Participant, no duly designated
Beneficiary exists, or if the Beneficiary designated had died prior to the
death of the Participant, or if the Participant has revoked a prior
designation by a writing filed with the Administrative Committee
without having filed a new designation, then any death benefits which
would have been payable to the Beneficiary shall be payable to the
Participant's spouse, if living at the time of the Participant's death,
if his spouse is not living, such death benefits shall be payable
per stirpes to the Participant's then living lawful issue, or if
there is no living lawful issue, then to the Participant's estate.
If a Beneficiary designated by a Participant is not the
Participant's spouse, then the spouse's written consent shall be
required for the designation of the alternate Beneficiary to become
effective and such consent must be limited to a benefit for a
specific alternate Beneficiary or form of benefits and acknowledges the
effect of the consent. The Spouse's consent shall be witnessed by a
representative of the Administrative Committee or a notary public. Any
change in the designation of an alternate Beneficiary shall also require
the written consent of the spouse for such change to become effective.
The Administrative Committee may accept an election other than that
provided hereunder without the written consent of the spouse if there
is no spouse, the spouse cannot be located, or such other
circumstances exist as may be prescribed by regulations. Any spousal
consent shall be applicable only to the spouse granting such consent and
shall only apply to the Beneficiary with respect to which such consent was
granted.
<PAGE>
ARTICLE III
CONTRIBUTIONS
3.01 Pre-Tax Contributions - Commencing July 1, 1984, a Participant may
elect to have Pre-Tax Contributions made to the Plan on his behalf.
A Participant shall make such an election by entering into a salary
reduction agreement with his Employer in which it is agreed that the
Participant's Employer will reduce the Participant's Compensation
during each pay period by a designated percentage and contribute the
amount so determined, expressed as a percentage of Compensation, to
the Plan on behalf of the Participant. The designated percentage
elected by the Participant to be contributed on his behalf may be
any whole percentage from two percent (2%) to not more than sixteen
percent (16%) of his Compensation otherwise payable to the
Participant during the pay period.
All Pre-Tax Contribution elections shall be made on or
before fifteen (15) days prior to the Entry Date as of which they
are to be effective on appropriate forms provided by the
Administrative Committee or through interactive voice response. Such
forms shall authorize the Employer to deduct from the Compensation
thereafter payable to the Participant the Pre-Tax Contribution
amount so elected. A Participant's Pre-Tax Contributions shall be
made only by withholding from his paychecks and no Participant may
contribute cash to the Plan (other than pursuant to a repayment
under Section 6.01). Pre-Tax Contributions shall commence for
Participants on the first regular payday falling on or after July 1,
1984, and thereafter, the payday falling on or after the Entry Date
subsequent to the acceptance of such salary reduction agreement by
the Employer. In the absence of an election to enter into a salary
reduction agreement by the Participant, an eligible Employee shall
nevertheless be considered a Participant hereunder for purposes of
Section 3.04.
A Participant's designation of Pre-Tax Contributions shall
continue in force for future Plan Years, provided, however, a
Participant may upon at least fifteen (15) days prior written
notice, on an appropriate form provided by and submitted to the
Administrative Committee or through interactive voice response,
change his Pre-Tax Contribution percentage to any percentage
prescribed in this Section 3.01 to become effective as of any
subsequent pay day, but not retroactively.
With fifteen (15) days prior written notice to the
Administrative Committee or through interactive voice response, a
Participant may elect to cease future Pre-Tax Contributions to the
Plan. Such election shall become effective as of the first regular
payday following such fifteen (15) day notice. A Participant who has
suspended Pre-Tax Contributions may once again elect to have Pre-Tax
Contributions made on his behalf as of any subsequent Entry Date by
making a timely and proper application to the Administrative
Committee or through interactive voice response.
3.02 Employer Contributions - Concurrently with Pre-Tax Contributions,
each Employer shall contribute to the Plan for the account of each
Participant an amount equal to fifty percent (50%) of the Pre-Tax
Contributions made for a pay period up to a maximum Pre-Tax
Contribution of six percent (6%) of Compensation for such pay period
made to the Plan on the Participant's behalf. No Employer
Contribution shall be made for any pay period during which the
Participant did not make a Pre-Tax Contribution.
If an Employee does not receive an Employer Contribution due
to the absence of an election to make Pre-Tax Contributions, he
shall nevertheless be considered a Participant hereunder for
purposes of Section 3.05.
3.03 Rollover Contributions - An Employee may transfer to the Fund assets
initially distributed as a qualifying total distribution [determined
pursuant to IRC Section 402(c)(4)] within sixty (60) days of the
date the assets were distributed to the Employee. Nothing in this
Section 3.03 shall be construed as requiring the transfer of the
entire qualifying total distribution and to that end an amount less
than the entire qualifying total distribution may be accepted as a
Rollover Contribution. The transfer of such assets shall not include
(a) any assets attributable to contributions made on his behalf
under a qualified retirement plan while he was an employee within
the meaning of IRC Section 401(c)(1), (b) any assets representing
after-tax employee contributions or (c) any assets which would cause
this Plan to become a transferee plan pursuant to IRC Section
401(a)(11)(B). The Plan may accept rollover funds transferred from a
rollover individual retirement account and transfers from other
qualified plans not excluded in the preceding sentence. The
Administrative Committee shall determine the rules under which such
distribution shall be accepted and the procedures to be followed.
Any subsequent distribution of a Rollover Contribution shall
be subject to the terms of Article VI or Section 7.03 or 7.05.
3.04 Testing of Pre-Tax Contributions - Notwithstanding anything herein
to the contrary, in each Plan Year commencing on and after January
1, 1987, in which Pre-Tax Contributions not in excess of the
maximum additions set forth in IRC Section 415 are made to the
Plan, such Pre-Tax Contributions shall be subject to the
following tests. For purposes of these tests, all Pre-Tax
Contributions made under any plans that are aggregated for purposes
of IRC Section 410(b) [without regard to IRC Section
410(b)(2)(A)(ii)] shall be treated as made under a single plan
of the Employer and such aggregated plans must satisfy IRC Section
401(k) as though they were a single plan. Effective for Plan Years
commencing on and after January 1, 1990, plans may be aggregated
only if they have the same plan year.
Pre-Tax Contributions under this Plan and pre-tax
contributions under all other cash or deferred arrangements of the
Employer or Affiliate with plan years ending with or within the same
calendar year made on behalf of Highly Compensated Employees shall
be combined for purposes of these tests. These tests shall apply to
the Pre-Tax Contributions made for the Plan Year as determined as of
the end of the Plan Year. The Employer, however, may apply these
tests at any other time during the Plan Year.
Upon the application of the tests prior to the end of the
Plan Year if neither test is met, the Administrative Committee may
adjust the Highly Compensated Employee's election to the extent
necessary to meet either test. The adjustment of Pre-Tax
Contributions shall be done in a uniform and nondiscriminatory
manner.
Upon the application of the tests at the end of the Plan
Year if neither test is met, the Administrative Committee shall
adjust the Highly Compensated Employee's election to the extent
necessary to meet one of the tests. The adjustment of Pre-Tax
Contributions shall be done in descending order by reducing the
highest deferral percentage for all Highly Compensated Employees
similarly situated to the next lowest percentage, and if additional
reduction is necessary, to again reduce the highest deferral
percentage for all Highly Compensated Employees similarly situated
to the next lowest percentage. This process shall be used until one
of the tests is met.
The amount of the adjustment of Pre-Tax Contributions,
inclusive of earnings or losses, necessary to meet either test shall
be returned to the Highly Compensated Employee, within twelve (12)
months after the end of the Plan Year. If amounts are returned after
two and one-half (2 1/2) months after the end of the Plan Year, a
ten percent (10%) excise tax under IRC Section 4979 shall be imposed
on the Employer maintaining the Plan with respect to such amounts.
For purposes of determining the earnings or losses on Pre-Tax
Contributions which will be returned to the Highly Compensated
Employee, such earnings or losses shall include the earnings or
losses of the Fund determined in accordance with Section 5.07
attributable to such Pre-Tax Contributions for the Plan Year during
which the excess Pre-Tax Contributions were made.
The amount of excess Pre-Tax Contributions that may be
distributed shall be reduced by the amount of any excess Pre-Tax
Contributions previously distributed in the Participant's taxable
year ending with or within the applicable Plan Year.
It is specifically provided hereunder that any matching
Employer Contributions shall be conditioned upon permissible Pre-Tax
Contributions. Pre-Tax Contributions shall only be permissible to
the extent that they meet the nondiscrimination tests provided
herein. If such nondiscrimination tests require the return of excess
Pre-Tax Contributions, the corresponding matching Employer
Contribution shall not be made to the Plan. If matching Employer
Contributions have already been made to the Plan prior to the time
the following tests are performed, such matching Employer
Contribution, inclusive of earnings or losses, shall be forfeited
and used to reduce the Employer Contributions to the Plan. For
purposes of determining the earnings or losses on matching Employer
Contributions which are forfeited hereunder and used to reduce
Employer Contributions, such earnings or losses shall include the
earnings or losses of the Fund determined in accordance with Section
4.06 attributable to such matching Employer Contributions for the
Plan Year in which the matching Employer Contributions were made.
The determination of which test shall be met shall be based
upon the test which requires the adjustment of the smallest amount
of Pre-Tax Contributions.
The Administrative Committee shall establish rules and
procedures for modifying the election with respect to the Highly
Compensated Employees to ensure, to the extent possible, that either
of the tests will be met.
As of the last day of each Plan Year or more frequently as
determined by the Administrative Committee, all eligible Employees
shall be separated into two (2) groups -- the Highly Compensated
Employee group and the Non-Highly Compensated Employee group.
Only one (1) of the following two (2) tests needs to be
satisfied for there not to be an adjustment to Pre-Tax Contributions
as provided in this Section 3.08.
Test I The actual deferral percentage for the eligible Highly
Compensated Employee group is not more than the actual
deferral percentage of the Non-Highly Compensated Employee
group multiplied by 1.25.
Test II The excess of the actual deferral percentage for the
Highly Compensated Employee group over the Non-Highly
Compensated Employee group is not more than two (2)
percentage points, and the actual deferral percentage
for the Highly Compensated Employee group is not more
than the actual deferral percentage of the Non-Highly
Compensated Employee group multiplied by 2.0.
For purposes of this Section, actual deferral percentage
means, with respect to the Highly Compensated Employee group and
Non-Highly Compensated Employee group for a Plan Year, the average
of the ratios, calculated separately for each Participant in such
group of (i) the amount of Pre-Tax Contributions (including excess
Pre-Tax Contributions returned to the Participant and excluding
Pre-Tax Contributions taken into account in the actual contribution
percentage test provided that the actual deferral percentage test is
satisfied both with and without the exclusion of the Pre-Tax
Contributions allocated to each Participant) to (ii) the
Participant's Compensation for the Plan Year.
For any Plan Year in which an eligible Highly Compensated
Employee is considered a Five Percent (5%) Owner or is one (1) of
the ten (10) Highly Compensated Employees paid the greatest Maximum
Compensation during the current or preceding Plan Year, the actual
deferral percentage must be determined in aggregation with eligible
"Family Member" Employees. A Family Member of a Highly Compensated
Employee is the Employee's spouse, lineal ascendants or descendants,
and the spouses of such lineal ascendants or descendants who in the
aggregate shall be referred to as a "Family Group". For Plan Years
beginning after December 31, 1988, in calculating the combined
percentage for the Family Group, the Compensation of the Employee,
the Employee's spouse, and any lineal descendants under the age of
nineteen (19) shall be limited to one hundred fifty thousand dollars
($150,000) as adjusted by the Secretary of the Treasury.
All rules of application with reference to Test I and Test
II shall be governed by IRC Section 401(k) and any rules or
regulations issued pursuant thereto.
3.05 Testing of Employer Contributions - In each Plan Year in which
matching Employer Contributions are made to the Plan, such matching
Employer Contributions shall be subject to the following tests. For
purposes of these tests, all matching Employer Contributions made
under this Plan and all matching employer contributions made under
any plans that are aggregated for purposes of IRC Section 410(b)
[without regard to IRC Section 410(b)(2)(A)(ii)] shall be treated as
made under a single plan of the Employer, and such aggregated plans
must satisfy IRC Section 401(m) as though they were a single plan.
Effective for Plan Years commencing on and after January 1, 1990,
plans may be aggregated only if they have the same plan year.
The matching Employer Contributions under this Plan and
matching employer contributions under all other plans of the
Employer or Affiliate with plan years ending with or within the same
calendar year made on behalf of Highly Compensated Employees shall
be combined for purposes of these tests. These tests shall apply to
the matching Employer Contributions made for the Plan Year as
determined as of the end of the Plan Year. The Employer, however,
may apply these tests at any other time during the Plan Year.
Upon the application of the tests prior to the end of the
Plan Year if neither test is met, the Administrative Committee may
adjust the Highly Compensated Employee's matching Employer
Contribution to the extent necessary to meet either test. The
adjustment of matching Employer Contributions shall be done in a
uniform and nondiscriminatory manner.
Upon the application of the tests at the end of the Plan
Year if neither test is met, matching Employer Contributions made on
behalf of Highly Compensated Employees shall be reduced. The
adjustment of matching Employer Contributions shall be done in
descending order by reducing the highest actual contribution
percentage for all Highly Compensated Employees similarly situated
to the next lowest percentage, and if additional reduction is
necessary, to again reduce the highest actual contribution
percentage for all Highly Compensated Employees similarly situated
to the next lowest contribution percentage. This process shall be
used until one of the tests is met. To the extent that excess
matching Employer Contributions were not vested, then the excess
matching Employer Contributions, inclusive of earnings or losses,
shall be forfeited and used to reduce Employer Contributions to the
Plan. To the extent that excess matching Employer Contributions
would have been considered vested under Section 6.01, then the
excess matching Employer Contributions inclusive of earnings or
losses shall be distributed to the Highly Compensated Employee
within twelve (12) months after the end of the Plan Year. If amounts
are distributed after two and one-half (2 1/2) months after the
close of the Plan Year, a ten percent (10%) excise tax under IRC
Section 4979 shall be imposed on the Employer maintaining the Plan
with respect to such amounts. For purposes of determining the
earnings or losses on matching Employer Contributions which will be
forfeited and used to reduce Employer Contributions or distributed
to the Highly Compensated Employee, such earnings or losses shall
include the earnings of the Fund determined in accordance with
Section 5.07 attributable to such matching Employer Contributions
for the Plan Year during which the excess matching Employer
Contributions were made.
The determination of which test shall be met shall be based
upon the test which requires the adjustment of the smallest amount
of matching Employer Contributions.
The Administrative Committee shall establish rules and
procedures for modifying the election with respect to the Highly
Compensated Employees to ensure, to the extent possible, that either
of the tests will be met.
As of the last day of each Plan Year or more frequently as
determined by the Administrative Committee, all eligible Employees
shall be separated into two (2) groups -- the Highly Compensated
Employee group and the Non-Highly Compensated Employee group.
Only one (1) of the following two (2) tests needs to be
satisfied for there not to be an adjustment as hereinabove provided
in this Section 3.09.
Test I The actual contribution percentage for the eligible Highly
Compensated Employee group is not more than the actual
contribution percentage of the Non-Highly Compensated
Employee group multiplied by 1.25.
Test II The excess of the actual contribution percentage
for the Highly Compensated Employee group over the
Non-Highly Compensated Employee group is not more than
two (2) percentage points, and the actual contribution
percentage for the Highly Compensated Employee group is
not more than the actual deferral percentage of the
Non-Highly Compensated Employee group multiplied by 2.0.
For purposes of this Section, actual contribution percentage
means, with respect to the Highly Compensated Employee group and
Non-Highly Compensated Employee group for a Plan Year, the average
of the ratios, calculated separately for each Participant in such
group of (i) the amount of Employer Contributions (to the extent not
taken into account in the actual deferral percentage test) and
including, at the election of the Employer, Pre-Tax Contributions
provided the actual deferral percentage test is met before the
Pre-Tax Contributions are used in the actual contribution percentage
test and continues to be met following the exclusion of the Pre-Tax
Contributions that are used to meet the actual contribution
percentage test allocated to each Participant) to (ii) the
Participant's Compensation for the Plan Year.
For any Plan Year in which an eligible Highly Compensated
Employee is considered a Five Percent (5%) Owner or is one (1) of
the ten (10) Highly Compensated Employees paid the greatest Maximum
Compensation during the current or preceding Plan Year, the actual
contribution percentage must be determined in aggregation with
eligible "Family Member" Employees. A Family Member of a Highly
Compensated Employee is the Employee's spouse, lineal ascendants or
descendants, and the spouses of such lineal ascendants or
descendants who in the aggregate shall be referred to as a "Family
Group." In calculating the combined percentage for the Family Group,
the Compensation of the Employee, the Employee's spouse, and any
lineal descendants under the age of nineteen (19) shall be limited
to one hundred fifty thousand dollars ($150,000) as adjusted by the
Secretary of the Treasury.
All rules of application with reference to Test I and Test
II shall be governed by IRC Section 401(m) and any rules or
regulations issued pursuant thereto.
3.06 Multiple Use Limitation - Effective for Plan Years beginning after
December 31, 1988, if the Employer or an Affiliate sponsors one (1)
or more qualified plan(s) to which IRC Sections 401(k) and 401(m)
apply, additional rules shall be applicable to prevent the multiple
use of the alternative tests described in IRC Sections
401(k)(3)(A)(ii)(II) and 401(m)(2)(A)(ii) with respect to any
Participant.
The multiple use of the alternative tests occurs if (i) one
or more Highly Compensated Employees are eligible to participate in
a plan subject to IRC Sections 401(k) and 401(m) and (ii) the sum of
the actual deferral percentage of the entire group of eligible
Highly Compensated Employees subject to IRC Section 401(k) and the
actual contribution percentage of the entire group of eligible
Highly Compensated Employees under the plan subject to IRC Section
401(m) exceeds the "Aggregate Limit".
The Aggregate Limit is the sum of:
3.06(a) One hundred twenty-five percent (125%) of the
greater of (i) the actual deferral percentage of
the group of Non-Highly Compensated Employees
eligible under the plan subject to IRC Section
401(k) for the plan year or (ii) the actual
contribution percentage of the group of Non-Highly
Compensated Employees eligible under the plan
subject to IRC Section 401(m) for the plan year
beginning with or within the plan year of the plan
subject to IRC Section 401(k).
3.06(b) Two (2) plus the lesser of Section 3.06(a)(i) or
3.06(a)(ii). However, in no event shall this
amount exceed two hundred percent (200%) of the
lesser of Section 3.06(a)(i) or 3.06(a)(ii).
Notwithstanding the preceding, the Aggregate
Limit shall be the sum of the following alternate Aggregate Limit if
such alternate Aggregate Limit is greater than the Aggregate Limit
set forth above.
The alternate Aggregate Limit is the sum of:
3.06(c) One hundred twenty-five percent (125%) of the
lesser of (i) the actual deferral percentage of
the group of Non-Highly Compensated Employees
eligible under the plan subject to IRC Section
401(k) for the plan year, or (ii) the actual
contribution percentage of the group of Non-Highly
Compensated Employees eligible under the plan
subject to IRC Section 401(m) for the plan year
beginning with or within the plan year of the plan
subject to IRC Section 401(k).
3.06(d) Two (2) plus the greater of Section 3.06(c)(i) or
3.06(c)(ii). However, in no event shall this
amount exceed two hundred percent (200%) of the
greater of Section 3.06(c)(i) or 3.06(c)(ii).
If the Aggregate Limit is exceeded, the Employer may elect
to reduce the actual deferral ratios or the actual contribution
ratios either for all Highly Compensated Employees under the plan(s)
or only for those Highly Compensated Employees who are eligible in
both arrangements.
3.07 Maximum Pre-Tax Contributions - Notwithstanding anything herein to
the contrary, Pre-Tax Contributions contributed pursuant to this
Plan shall not exceed seven thousand dollars ($7,000) or such larger
amount as may be determined by the Secretary of Treasury for any
Participant in any calendar year.
If Pre-Tax Contributions are made to the Plan in excess of
this limit, the excess, inclusive of earnings or losses, shall be
returned to the Participant by April 15 of the calendar year
following the calendar year in which the Pre-Tax Contributions were
made. Further, if the Participant notifies the Administrative
Committee by March 1 of the calendar year following the calendar
year in which he made Pre-Tax Contributions, that he contributed in
excess of the seven thousand dollar ($7,000) limit (as adjusted) to
all plans to which the seven thousand dollar ($7,000) limit (as
adjusted) applies and requests a return of such excess, the
Administrative Committee shall return the excess inclusive earnings
or losses by April 15.
In the event the return of excess Pre-Tax Contributions
pursuant to this Section 3.06 causes a reduction of Pre-Tax
Contributions, the corresponding matching Employer Contributions
shall be forfeited and used to reduce Employer Contributions. To
this end, the vesting provisions of this Plan applicable to matching
Employer Contributions are conditioned on Pre-Tax Contributions
being permissible Pre-Tax Contributions. Pre-Tax Contributions in
excess of the seven thousand dollar ($7,000) all source limit (as
adjusted) provided for in IRC Section 402(g)(5) are specifically
prohibited hereunder and, as a result, the Employer reserves the
right for up to one (1) Plan Year following the Plan Year in which
matching Employer Contributions were made to recapture any matching
Employer Contributions, inclusive of earnings or losses, mistakenly
made to the Plan due to the Employee exceeding the IRC Section
402(g) limit.
For purposes of determining the earnings or losses on
Pre-Tax Contributions which will be returned to the Participant or
matching Employer Contributions which are forfeited and used to
reduce Employer Contributions, such earnings or losses shall include
the earnings or losses of the Fund determined in accordance with
Section 5.07 attributable to such Pre-Tax Contributions and matching
Employer Contributions for the calendar year during which the excess
Pre-Tax Contributions and matching Employer Contributions were made.
<PAGE>
ARTICLE IV
INVESTMENT OPTIONS AND FUNDS
4.01 Investment Options - All Contributions credited to a Participant's
account shall be invested in the investment funds as designated by
the Investment Committee and elected by the Participant. Investment
Fund elections shall be made on forms provided by the Administrative
Committee. If investments are to be made among the Funds,
investments shall be made in increments of no less than one percent
(1%). It is intended that the Plan shall comply with Section 404(c)
of ERISA and that each Participant should be furnished with
appropriate disclosure information to ensure compliance.
Further, in the event a Participant shall obtain a loan from
the Plan pursuant to Section 7.06, the Administrative Committee
shall establish a segregated account with respect to any such
Participant and any interest paid on such loan by the Participant
shall be held for his benefit and reinvested along with any
principal payments pursuant to the investment elections made
hereunder.
4.02 Election Procedure - Upon commencing participation, each Participant
shall make an election before his initial Entry Date regarding the
investment options in Section 4.01. Further, an Employee electing to
make a Rollover Contribution or Transfer Contribution prior to the
time he is eligible to become a Participant shall make an election
regarding the investment options in Section 4.01 at the time the
Rollover Contribution or Transfer Contribution is made. Any such
election shall continue in effect until amended or revoked.
Any election may be amended or revoked with regard to future
Contributions as of any payday based on processing schedules and
procedures as adopted by the Administrative Committee and
communicated to Participants.
A Participant may change an investment election applicable
to his existing Individual Account as of any business day, based on
processing schedules and procedures as adopted by the Administrative
Committee and communicated to Participants.
4.03 Investment Accounts - The Investment Committee shall establish and
maintain investment funds as it deems appropriate. The Investment
Committee shall credit or charge all Contributions made to such
Funds by or on behalf of each such Participant, any distributions
made from such Funds to such Participant, and his share of the
adjustment of the unit value of such Funds. The maintenance of such
accounts shall be for accounting purposes only and separate records
for each Fund shall be maintained, but a segregation of assets to
each account shall not be required, nor shall any Participant have
title to any specific assets of such Funds. The Investment Committee
shall compute the unit value of each Fund as of each Valuation Date.
<PAGE>
ARTICLE V
ALLOCATIONS TO INDIVIDUAL ACCOUNTS
5.01 Individual Accounts - The Administrative Committee shall establish
and maintain an Individual Account in the name of each Participant
to which the Administrative Committee shall credit all amounts
contributed by or on behalf of each such Participant pursuant to
Article III and shall credit or debit the unit value for income,
gains, losses or distributions pursuant to Articles IV, V, VI and
VII.
5.02 Allocation of After-Tax Contributions - A Participant's After-Tax
Contributions made to the Plan prior to July 1, 1984, were credited
to a Participant's After-Tax Contribution Account and shall not be
subject to withdrawal except as provided in Article VII.
5.03 Allocation of Pre-Tax Contributions - Pre-Tax Contributions, as
provided in Section 3.01, shall be credited to the Participant's
Pre-Tax Contribution Account as of the date received by the Trust
and shall not be subject to withdrawal except as provided in Article
VII.
5.04 Allocation of Employer Contributions - The Employer Contribution
Account of each Participant shall be credited as of the date
received by the Trust with his allocable share of the Employer
Contribution made pursuant to Section 3.02.
5.05 Allocation of Deductible Contributions - Deductible Contributions
made to the Plan prior to January 1, 1987 were credited to the
Participant's Deductible Account and shall not be subject to
withdrawal except as provided in Section 7.04. 5.06
Allocation of Rollover Contributions - Rollover Contributions, as
provided in Section 3.03, shall be credited at fair market value to
the Participant's Rollover Account as of the date received by the
Trust and shall be fully vested at all times. Rollover Contributions
shall share in the investment experience of the Funds pursuant to
Section 5.07.
5.07 Allocation of Income, Gains and Losses - Each Participant's account
shall be adjusted as of each Valuation Date to reflect the
investment experience of the Funds pursuant to Section 4.03.
5.08 Forfeitures - The Administrative Committee shall determine the
amount of Forfeitures applicable for Participants of each Employer
as of each Valuation Date by adding together all amounts
relinquished through terminations of employment pursuant to Section
6.01 since the last preceding Valuation Date. From such Forfeitures
shall then be subtracted an amount necessary (to the extent
Forfeitures are sufficient) to reinstate a Participant's Employer
Contribution Account in accordance with Section 6.01. The balance
shall then be held in a suspense account until the Plan Year
following the Valuation Date on which the Forfeiture occurred and be
used to reduce the applicable Employer's Contribution to the Plan
for such Plan Year.
Notwithstanding the application of Forfeitures as
hereinabove provided, a Forfeiture, if any, shall be deemed to occur
upon termination of employment pursuant to Section 6.01, subject to
reinstatement pursuant to Section 6.01.
5.09 Maximum Additions - Anything herein to the contrary notwithstanding,
the total Annual Additions made to the Individual Account of a
Participant for any Limitation Year commencing on and after January
1, 1983, when combined with any similar Annual Additions credited
the Participant for the same period from another qualified Defined
Contribution Plan maintained by the Employer or an Affiliate, shall
not exceed the lesser of Section 5.09(a) and Section 5.09(b)
following:
5.09(a) Thirty thousand dollars ($30,000) or, if greater,
twenty-five percent (25%) of the dollar limitation in
effect under IRC Section 415(b)(1)(A); and
5.09(b) Twenty-five percent (25%) of the Participant's Maximum
Compensation received from the Employer for such Plan Year.
If a Participant is covered by one or more Defined
Contribution Plans maintained by the Employer or an
Affiliate, the maximum Annual Additions as noted above shall be
decreased as determined necessary by the Employer, prior to the
reduction of such other Defined Contribution Plans, to ensure
that all such plans will remain qualified under the IRC.
If as of any December 31 Valuation Date corrective
adjustments in the Annual Additions to any Individual Account are
required under this Section 5.09, then the following adjustments
shall be made. For Participants who are employed on the December 31
Valuation Date, the Pre-Tax Contribution Account and the Employer
Contribution Account shall be reduced on a pro-rata basis. For
Participants who are not employed on the December 31 Valuation Date,
the Employer Contribution Account shall be reduced first and then
the Pre-Tax Contribution Account.
If, (a) as a result of the allocation of forfeitures, (b) a
reasonable error is made in estimating a Participant's annual
Maximum Compensation, or (c) under other facts and circumstances
which the Internal Revenue Service finds justify the availability of
these rules, any amount withheld or taken from a Participant's
Individual Account pursuant to the above shall be segregated in the
Fund in a separate account and applied toward Contributions by the
Employer for the next Limitation Year in accordance with Section
1.415-6(b)(6)(ii) of the regulations under IRC Section 415.
Notwithstanding the above, any reduction of a Participant's Pre-Tax
Contribution Account shall be returned to the Participant. Further,
the Employer shall reimburse the Employee for any reduction in the
Employee's After-Tax Contribution Account or After-Tax pursuant to
this Section 5.09.
5.10 Multiple Plan Participation - If a Participant is a participant of a
Defined Benefit Plan maintained by the Employer or an Affiliate, the
sum of his defined benefit plan fraction and his defined
contribution plan fraction for any Limitation Year may not exceed
1.0.
For purposes of maximum Annual Additions to Defined
Contribution Plans, all Defined Contribution Plans, whether or not
terminated, shall be combined and treated as one (1) plan and all
Defined Benefit Plans, whether or not terminated, shall be combined
and treated as one (1) plan.
For purposes of this Section 5.10, the term "defined
contribution plan fraction" shall mean a fraction the numerator of
which is the sum of all of the Annual Additions to the Participant's
Individual Account under this Plan as of the close of the Limitation
Year and the denominator of which is the sum of the lesser of the
following amounts determined for such Limitation Year and for each
prior Limitation Year of employment with the Employer:
5.10(a) the product of 1.25 multiplied by the dollar
limitation in effect in Section 5.10(a) for such
year determined without regard to IRC Section
415(c)(6); or
5.10(b) the product of 1.4 multiplied by an amount
determined pursuant to Section 5.09(b) with
respect to each individual under the Plan for such
Limitation Year.
For purposes of this Section 5.10, the term, "defined
benefit plan fraction" shall mean a fraction the numerator of which
is the Participant's projected annual benefit (as defined in the
said defined benefit plan) determined as of the close of the
Limitation Year and the denominator of which is the lesser of:
5.10(c) the product of 1.25 multiplied by the dollar
limitation in effect pursuant to IRC Section
415(b)(1)(A) for such Limitation Year; or
5.10(d) the product of 1.4 multiplied by the amount which
may be taken into account pursuant to IRC Section
415(b)(1)(B) with respect to each individual under
the Plan for such Limitation Year.
The limitation on aggregate benefits from a Defined Benefit
Plan and a Defined Contribution Plan which is contained in IRC
Section 415(e) shall be complied with by a reduction (if necessary)
in the Participant's benefits under the Defined Benefit Plan(s) [in
accordance with the provisions of such plan(s)] before a reduction
of any such Defined Contribution Plan.
<PAGE>
ARTICLE VI
VESTING AND DISTRIBUTIONS
6.01 Vesting - A Participant shall at all times be fully vested in his
After-Tax Contribution Account, Pre-Tax Contribution Account,
Rollover Account, Deductible Account, and Transfer Account if
provided in the adoption agreement or Appendix to the Plan.
Further, effective January 1, 1987, any Participant
maintaining a credit balance in his Employer Contribution Account,
who was actively employed by an Employer or an Affiliate on December
31, 1986, shall hereafter be one hundred percent (100%) vested in
his Employer Contribution Account.
An Employee initially becoming a Participant on and after
January 1, 1987, shall have the vested percentage of his Employer
Contribution Account determined as hereinafter provided in this
Section 6.01.
6.01(a) A Participant shall be fully vested in his Employer
Contribution Account when he dies, incurs a Total and
Permanent Disability, is eligible to retire pursuant to the
terms of the Plan or attains his Normal Retirement Age.
6.01(b) Except as provided in Section 6.01(a), a
Participant shall be fully vested in his Employer
Contribution Account upon the earlier of (i) the
completion of thirty-six (36) months of Service as a
Participant while making Contributions pursuant to Section
3.01 or (ii) forty-eight (48) months of Service with an
Affiliate. Notwithstanding the preceding, in the case of
an Affiliate who becomes an Employer hereunder or in
the case of an Employee who transfers from employment
with an Affiliate to employment with an Employer
hereunder, such Employee shall be fully vested in his
Individual Account attributable to his Employer
Contribution Account upon the completion of forty-eight
(48) months of Service as a Participant while making
Contributions pursuant to Section 3.01 with such Service
deemed to include his Service while an Employee of an
Affiliate. For purposes of this Section 6.01(b), if a
Participant cannot make a Contribution pursuant to
Section 3.02 for any month or portion thereof in order to
preclude his exceeding the seven thousand dollar ($7,000)
all source limit (as adjusted) provided for in IRC
Section 402(g)(5), the Participant shall receive credit
for Service for any such month as if he had made a
Contribution pursuant to Section 3.01. Further, if a
Participant is transferred to an Affiliate and becomes a
limited Participant, the Limited Participant shall receive
credit for Service for each month he is a Limited
Participant as if he had made a Contribution pursuant
to Section 3.01.
6.01(c) Notwithstanding anything contained herein to the
contrary, if a Participant's termination of
employment occurs because the Employer has
eliminated his job function and no alternative job function
for which the Participant is reasonably suited by
education, training and experience has been offered to
such Participant within ninety (90) days thereafter,
such Participant shall be deemed one hundred percent
(100%) vested in his Employer Contribution Account.
For purposes of this Section 6.01, employment with any
participating Employer shall be deemed employment with any other
participating Employer. The transfer of an Employee from one
participating Employer to another participating Employer or to an
Affiliate shall not constitute a Severance from Service Date and
such Participant's Individual Account and Deductible Account shall
be maintained until he is thereafter eligible for a distribution in
accordance with the terms of the Plan.
Upon termination of employment if the vested portion of the
Current Balance of the Participant's Individual Account and the
Deductible Current Balance of the Deductible Account does not exceed
three thousand five hundred dollars ($3,500) (including any previous
distributions made to the Participant), the Administrative Committee
shall direct the Trustee to distribute to the Participant the vested
portion of the Current Balance of his Individual Account and the
Deductible Current Balance of his Deductible Account in a lump sum
as soon as reasonably possible following his termination of
employment. If the Current Balance of the Participant's Individual
Account and Deductible Current Balance of the Participant's
Deductible Account exceeds three thousand five hundred dollars
($3,500) (including any previous distributions made to the
Participant), the Participant's consent shall be required for any
distribution to be made due to his termination of employment. If the
Current Balance of a Participant's Individual Account and the
Deductible Current Balance of the Participant's Deductible Account
at the time of any distribution exceeds three thousand five hundred
dollars ($3,500) (including any previous distributions made to the
Participant), then the Current Balance of his Individual Account and
the Deductible Current Balance of his Deductible Account at any time
thereafter shall be deemed to exceed three thousand five hundred
dollars ($3,500) and the Participant's consent shall be required for
any distribution to be made due to his termination of employment. If
the Participant does not consent to a distribution being made upon
his termination of employment, the vested portion of the Current
Balance of his Individual Account and the Deductible Current Balance
of his Deductible Account shall continue to be held as a part of the
Fund until what would otherwise be the Participant's Normal
Retirement Date, at which time the Administrative Committee shall
direct the Trustee to distribute to the Participant the Current
Balance held in the Participant's Individual Account and the
Deductible Current Balance held in his Deductible Account in
accordance with Section 6.08. Notwithstanding the preceding,
effective January 1, 1995, the Participant shall have the right at
any time on or after his termination of employment to elect to have
the Current Balance held in his Individual Account and the
Deductible Current Balance held in his Deductible Account paid to
him in accordance with Section 6.08; provided that any payment of
the Deductible Current Balance of the Participant's Deductible
Account on or after his Disability Retirement Date shall be subject
to the provision of Section 6.05 related to such payment. Further,
if a terminated Participant dies prior to otherwise electing to
commence his benefit hereunder, his Beneficiary shall have the right
at any time after the Participant's death to have the Current
Balance held in the Participant's Individual Account and the
Deductible Current Balance held in the Participant's Deductible
Account paid to him in accordance with Section 6.08(b).
Notwithstanding anything contained in the previous paragraph
to the contrary, upon termination of employment, a Participant may
request the Administrative Committee to transfer the Deductible
Current Balance of his Deductible Account to a successor depository.
In such event, the Administrative Committee shall notify the Trustee
to transfer the Deductible Current Balance of the Participant's
Deductible Account to such successor depository as soon as
reasonably possible following receipt of such request from the
Participant.
The vested portion of the Current Balance of the
Participant's Individual Account and the Deductible Current Balance
of his Deductible Account held on termination of employment shall be
subject to the same investment option elections as specified in
Article IV. Amounts held upon a Participant's termination of
employment as hereinbefore provided shall not be subject to
withdrawals or loans in accordance with Article VII. While such
amount is being held, it shall share in the adjustment of the unit
value as provided in Section 5.07.
If the Participant is reemployed prior to receiving payment
of his Individual Account and Deductible Account being held
hereunder and again becomes a Participant, he shall not be entitled
to a distribution hereunder but shall be entitled to a distribution
as determined under this Article VI at his subsequent termination of
employment for any reason. Further, such a Participant shall once
again be eligible for withdrawals and loans as provided in Article
VII and investment elections in accordance with Section 4.02.
The non-vested portion of the Current Balance of the
Participant's Employer Contribution Account shall be held in the
Participant's Employer Contribution Account until the Valuation Date
coinciding with or next following the date the Participant receives
a distribution of the vested portion of his Employer Contribution
Account or would have received a distribution except for the fact
that he did not consent to the distribution being made to him at
which time it shall be treated as a Forfeiture, subject to the
reinstatement provisions hereinafter provided, and held in a
suspense account until the Plan Year following the Valuation Date in
which the Forfeiture occurred and be used to reduce the applicable
Employer's Contribution to the Plan for such Plan Year in accordance
with Section 5.08.
If a Participant who received a distribution under this
Section 6.01 was less than one hundred percent (100%) vested in his
Individual Account at his termination of employment, is reemployed
prior to incurring five (5) consecutive Severance Periods of twelve
(12) consecutive months, and repays the amount of the distribution
previously paid to him as a result of his termination of employment
prior to the earlier of the completion of five (5) years subsequent
to the Employee's Reemployment Date or the close of the first period
of five (5) consecutive Severance Periods of twelve (12) consecutive
months commencing after the distribution, the amount previously
treated as a Forfeiture shall be reinstated by the Employer to his
Employer Contribution Account. The amount previously treated as a
Forfeiture shall be restored, at the Employer's discretion, from the
income or gains of the Fund, Forfeitures or from Employer
Contributions. A distribution of the entire value of a Participant's
Individual Account that is one hundred percent (100%) vested shall
not be subject to repayment.
If a Participant who did not consent to receive a
distribution as a result of his termination of employment pursuant
to this Section 6.01 is reemployed prior to incurring five (5)
consecutive Severance Periods of twelve (12) consecutive months, the
amount previously treated as a Forfeiture shall be reinstated by the
Employer to his Employer Contribution Account. The amount previously
treated as a Forfeiture shall be restored, at the Employer's
discretion, from the income or gains of the Fund, Forfeitures or
from Employer Contributions.
If the vested portion of the Current Balance of a
Participant's Individual Account is zero at his date of termination,
the Participant shall be deemed to have received a distribution of
the vested portion of the Current Balance of his Individual Account
and the non-vested portion shall be treated as a Forfeiture as of
the Valuation Date coinciding with or next following the date of the
deemed distribution. If a Participant who was deemed to receive a
distribution is reemployed prior to the occurrence of five (5)
consecutive Severance Periods of twelve (12) consecutive months, the
amount previously treated as a Forfeiture shall be reinstated by the
Employer. The amount previously treated as a Forfeiture shall be
restored, at the Employer's discretion, from the income or gains of
the Fund, Forfeitures or from Employer Contributions.
If a Participant terminated his employment and the
non-vested portion of his Employer Contribution Account was
transferred to a suspense account is reemployed prior to such amount
being used to reduce Employer Contributions, then the amount
previously transferred to the suspense account as a result of his
termination of employment shall be transferred back to the
Participant's Employer Contribution Account as of the Valuation Date
following his reemployment.
6.02 Normal Retirement - Upon the retirement of a Participant at his
Normal Retirement Date, the Participant shall be eligible to receive
the Current Balance of his Individual Account and the Deductible
Current Balance of his Deductible Account. The Administrative
Committee shall direct the Trustee to distribute to such Participant
such amount in accordance with Section 6.08.
6.03 Delayed Retirement - Upon the retirement of a Participant at his
Delayed Retirement Date, the Participant shall be eligible to
receive the Current Balance of his Individual Account and the
Deductible Current Balance of his Deductible Account. The
Administrative Committee shall direct the Trustee to distribute to
such Participant such amount in accordance with Section 6.08.
6.04 Early Retirement - Upon the retirement of a Participant at his Early
Retirement Date, the Current Balance of his Individual Account and
the Deductible Current Balance of his Deductible Account shall
continue to be held as a part of the Fund until what would otherwise
be the Participant's Normal Retirement Date at which time the
Administrative Committee shall direct the Trustee to distribute to
such Participant the Current Balance held in the Participant's
Individual Account and the Deductible Current Balance held in his
Deductible Account in accordance with Section 6.08.
Notwithstanding the preceding, a Participant who retires at
his Early Retirement Date shall have the right, at any time prior to
his Normal Retirement Date, to elect to have the Current Balance
held in his Individual Account and the Deductible Current Balance
held in his Deductible Account paid at an earlier date including the
commencement of his benefit as of his Early Retirement Date. If the
Participant makes such an election, the Administrative Committee
shall direct the Trustee to distribute to such Participant the
Current Balance held in the Participant's Individual Account and the
Deductible Current Balance held in his Deductible Account in
accordance with Section 6.08.
All assets held on behalf of a Participant pursuant to this
Section shall continue to be invested pursuant to Article IV and
shall continue to share in the adjustment of the unit value of the
Funds in accordance with Section 5.07.
6.05 Disability Retirement - Upon the retirement of a Participant at his
Disability Retirement Date, the Current Balance of his Individual
Account and the Deductible Current Balance of his Deductible Account
shall continue to be held as a part of the Fund until what would
otherwise be the Participant's Normal Retirement Date at which time
the Administrative Committee shall direct the Trustee to distribute
to such Participant the Current Balance held in the Participant's
Individual Account and the Deductible Current Balance held in his
Deductible Account in accordance with Section 6.08.
Notwithstanding the preceding, a Participant who retires at
his Disability Retirement Date shall have the right, at any time
prior to his Normal Retirement Date, to elect to have the Current
Balance held in his Individual Account and the Deductible Current
Balance of his Deductible Account paid at an earlier date including
commencement of his benefit as of his Disability Retirement Date. If
the Participant makes such an election, the Administrative Committee
shall direct the Trustee to distribute to such Participant the
Current Balance held in the Participant's Individual Account and the
Deductible Current Balance held in his Deductible Account in
accordance with Section 6.08.
Notwithstanding anything contained herein to the contrary,
for purposes of this Section 6.05 as it relates to distribution of a
Participant's Deductible Account, the term "disability" means an
incapacity which leaves the Participant unable to engage in any
substantially 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.
If the Participant does not meet the definition of disability as
provided in this paragraph, his Deductible Account shall continue to
be held until what would otherwise be the Participant's Normal
Retirement Date at which time the Administrative Committee shall
direct the Trustee to distribute to the Participant the Deductible
Current Balance held in his Deductible Account in accordance with
Section 6.08.
All assets held on behalf of a Participant pursuant to this
Section shall continue to be invested pursuant to Article IV and
shall continue to share in the adjustment of the unit value of the
Funds in accordance with Section 5.07.
6.06 Death Prior to the Commencement of Benefits - Upon the death of (a)
a Participant on or after attaining his Normal Retirement Age but
prior to the commencement of his benefit, (b) an active Participant,
or (c) a vested terminated Participant or retired Participant prior
to the commencement of his benefit, a death benefit shall be paid
and the Administrative Committee shall direct the Trustee to
distribute the benefit in accordance with the following provisions
of this Section 6.06.
6.06(a) If the designated Beneficiary is the spouse of the
Participant, the Beneficiary may elect to commence the
benefit within a reasonable period of time after the
Participant's death. In no event may such election be made
later than the later of (i) or (ii) following:
(i) December 31 of the calendar year immediately
following the calendar year in which the
Participant died, or
(ii) December 31 of the calendar year in which the
Participant would have attained age seventy and
one-half (70 1/2).
The benefit may be paid over the life of the
Beneficiary or over a period certain not extending beyond
the life expectancy of the designated Beneficiary. At the
time the election is made, the Administrative Committee
shall direct the Trustee to distribute the Current
Balance of the Participant's Individual Account and the
Deductible Current Balance of his Deductible Account in
accordance with Section 6.08. If the spouse dies before the
distribution begins, then the five (5) year distribution
requirement of Section 6.06(c) shall apply as if the
Beneficiary were the Participant.
6.06(b) If the benefit is paid to a designated
Beneficiary, as defined in IRC Section
401(a)(9)(E) inclusive of Section 1.401(a)(9)-1 D-1 and
D-2 of the regulations, other than the Participant's
spouse, the distribution shall commence no later than
December 31 of the calendar year immediately following
the calendar year in which the Participant died. The
benefit may be paid over the life of the Beneficiary or
over a period certain not extending beyond the life
expectancy of the designated Beneficiary. The
Beneficiary may elect that the benefit be paid at an
earlier date. At the time the election is made or the
benefit is required to commence, the Administrative
Committee shall direct the Trustee to distribute the
Current Balance of the Participant's Individual
Account and the Deductible Current Balance of his
Deductible Account to his Beneficiary in accordance
with Section 6.08.
6.06(c) If there is no designated Beneficiary, as defined in IRC
Section 401(a)(9) inclusive of Section 1.401(a)(9)-1
D-1 and D-2 of the regulations, at the death of the
Participant, then distribution of the Participant's
entire interest shall be completed by December 31 of
the calendar year containing the fifth (5th)
anniversary of the Participant's death. The Beneficiary
may elect that the benefit be paid at an earlier date. At
the time the election is made or the benefit is required
to be distributed, the Administrative Committee shall
direct the Trustee to distribute the Current Balance
of the Participant's Individual Account and the
Deductible Current Balance of his Deductible Account
to the Beneficiary in accordance with Section 6.08;
provided, that the benefit may not be paid in any manner
or form which would violate the required distribution
requirements of this Section 6.06(c).
6.06(d) The benefit payable under the provisions of this Section
6.06 may not be paid in any form which would violate
the required distribution requirements of Sections
6.06(a), 6.06(b) or 6.06(c).
6.06(e) Any amount held on a Participant's behalf under this
Section 6.06 shall continue to be invested pursuant to
Article IV and shall continue to share in the adjustment
of the unit value of the Funds in accordance with Section
5.07.
6.07 Death After the Commencement of Benefits - Upon the death of a
Participant who is receiving benefit payments in accordance with
Section 6.08(c) the provisions of Section 6.08(c) shall control
concerning any payments upon the death of such Participant. The
Beneficiary, however, shall have the right to elect that any
remaining benefit payments be paid under Section 6.08(b). Upon the
death of a Participant who is receiving benefits, the remaining
portion of such interest must be distributed at least as rapidly as
under the method of distribution being used at the date of the
Participant's death.
6.08 Method of Payment
6.08(a) Application for Benefits - In order to receive a benefit
under the Plan, a Participant, his Beneficiary,
committee, or next of kin, must make written application
therefor on a form or forms provided by the
Administrative Committee or through interactive voice
response. The Administrative Committee may require that
there be furnished to it in connection with such
application all information pertinent to any question
of eligibility and the amount of any benefit. Benefit
payment shall commence as soon as reasonably possible
following approval by the Administrative Committee of
the Participant's claim for benefits, based on processing
schedules and procedures adopted by the Administrative
Committee.
Each Participant who has attained his Normal
Retirement Date, Early Retirement Date or
Disability Retirement Date or who has terminated
employment and met the age and service
requirements for Early Retirement, either prior to or after
his termination of employment, shall have the right to
request to have his benefit paid under the option
hereinafter set forth in Section 6.08(c) in lieu of the
benefit otherwise provided for in Section 6.08(b).
A Participant who desires to have his benefits
paid under the optional form provided in Section 6.08(c)
shall make such an election in writing to the
Administrative Committee on forms provided by the
Administrative Committee or through interactive voice
response. An election by a Participant to receive his
benefit under Section 6.08(c) may be revoked by such
Participant and a new election made in writing to the
Administrative Committee or through interactive voice
response at any time prior to the commencement of benefits.
6.08(b) Normal Form - In the absence of the election of the
optional method of payment provided in Section 6.08(c), the
benefit shall be paid in a lump sum.
6.08(c) Optional Form - In lieu of receiving payment in
accordance with Section 6.08(b), a Participant may elect
that his benefit be paid in approximately equal monthly,
quarterly, semi-annual, or annual installments from the
Fund, over a period of years not to exceed the lesser of
(i) ten (10) years or (ii) the life expectancy of the
Participant and his Beneficiary.
If the optional form of payment under this Section
6.08(c) is elected by the Participant, the Current Balance
of the Participant's Individual Account and Deductible
Current Balance of his Deductible Account from which
such installments are to be paid shall be invested
pursuant to an investment option as described in
Article IV as elected by the Participant to be applicable
to such Individual Account and Deductible Account and the
Current Balance of his Individual Account and Deductible
Current Balance of his Deductible Account shall be
invested accordingly. All assets held on behalf of a
Participant pursuant to this Section 6.08(c) shall
continue to share in the adjustment of the unit value
of the Funds in accordance with Section 5.07.
Notwithstanding the preceding, if the optional
form of payment provided in Section 6.08(c) is
elected, the Participant may invest in the investment
Funds as provided in Section 4.02.
Notwithstanding anything contained herein to the
contrary, a Participant may elect at any time after the
commencement of benefit payments under the Section 6.08(c)
that any remaining payments be paid to him in a lump sum.
If a Participant makes this election, the lump sum
payment shall be made to the Participant as soon as
reasonably possible following such election.
5.05(e) Direct Rollover - Effective January 1, 1993, and
notwithstanding any provision of the Plan to the contrary
that would otherwise limit a Distributee's
election under this Section 5.05(e), a Distributee
may elect, at the time and in the manner prescribed by
the Committee, to have any portion of an Eligible
Rollover Distribution paid directly to an Eligible
Retirement Plan specified by the Distributee in a Direct
Rollover. Such distribution may commence less than
thirty (30) days after the notice required under Section
1.411(a)-11(c) of the Income Tax Regulations is given,
provided that (a) the Committee clearly informs the
Participant that the Participant has a right to a period
of at least thirty (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 (b) the Participant, after
receiving the notice, affirmatively elects a distribution.
The Account of a Participant who has been provided
the notice specified in IRC Section 402(f) but who makes
no election with regard to an Eligible Rollover
Distribution within thirty (30) days of receiving such
notice shall be distributed directly to the Participant as
soon thereafter as is practicable, assuming that the
value of the vested Account of such Participant has
never exceeded three-thousand five hundred dollars
($3,500) at any time after it was first distributable.
For purposes of this Section 5.05(e), the
following definitions shall apply:
(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:
(A) 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 (10) years or more;
(B) any distribution to the extent such
distribution is required under IRC Section
401(a)(9); and
(C) 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 IRC Section 408(a), an
individual retirement annuity described in IRC
Section 408(b), an annuity plan described in IRC
Section 403(a), or a qualified trust described
in IRC Section 401(a), 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
and the Employee's or former Employee's spouse
or former spouse who is the alternate payee under a
qualified domestic relations order, as defined
in IRC Section 414(p), 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.
6.09 Maximum Option Payable - If a Participant elects to have his benefit
paid under Section 6.08(c) and the designated Beneficiary is not the
spouse of the Participant, the option elected shall be restricted so
that the minimum distribution incidental benefit requirements of IRC
Section 401(a)(9) and Treasury Regulation 1.401(a)(9)-2 are met.
6.10 Benefits to Minors and Incompetents - If any person entitled to
receive payment under the Plan shall be a minor, the Administrative
Committee, in its discretion, may dispose of such amount in any one
or more of the following ways:
(a) by payment thereof directly to such minor;
(b) by application thereof for benefit of such minor;
(c) by payment thereof to either parent of such minor or to any
adult person with whom such minor may at the time be living
or to any person who shall be legally qualified and acting
as guardian of the person or the property of such minor;
provided only that the parent or adult person to whom any
amount is paid has advised the Administrative Committee in
writing that he will hold or use such amount for the benefit
of such minor.
If a person entitled to receive payment under the Plan is
physically or mentally incapable of personally receiving and
giving a valid receipt for any payment due (unless prior claim
therefor shall have been made by a duly qualified committee
or other legal representative), such payment may be made to
the spouse, son, daughter, parent, brother, sister or other
person deemed by the Administrative Committee to have incurred
expense for such person otherwise entitled to payment.
6.11 Payment of Benefits - If a portion of a Participant's Individual
Account and Deductible Account which is due and payable under this
Article VI, and the Participant has not elected otherwise in
accordance with the provisions of the Plan, any payment of benefits
or commencement thereof to the Participant shall begin not later
than sixty (60) days after the close of the Plan Year in which
occurs the later of:
6.11(a) the Participant's having attained his Normal Retirement Age;
and
6.11(b) the termination of service of the Participant
Notwithstanding anything contained herein to the contrary,
the interest of each Participant shall begin to be distributed no
later than the April 1 of the calendar year following the calendar
year in which the Participant attains age seventy and one-half (70
1/2) in accordance with IRC Section 401(a)(9) and the regulations
issued thereunder, inclusive of the minimum distribution incidental
death benefit requirement of Section 1.401(a)(9)-2 of the
regulations. Life expectancy of the Participant and the
Participant's spouse (other than for a life annuity) may be
redetermined annually if the Participant so elects.
6.12 Restriction on Distribution of Pre-Tax Contributions - Amounts
attributable to Pre-Tax Contributions shall not be distributed prior
to the earliest of one of the following events:
6.12(a) The Participant's retirement, death, Total and Permanent
Disability, or separation from service;
6.12(b) The termination of the Plan without establishment or
maintenance of a successor Defined Contribution Plan;
6.12(c) The date of the sale or disposition of substantially all of
the assets sale of eighty-five percent (85%) of the
assets shall be deemed to be substantially all) used by
the Employer in its trade or business to an unrelated
corporation provided the Employer continues to maintain
this Plan and the Participant continues employment with the
corporation acquiring such assets;
6.12(d) The date of sale or other disposition of the Employer
of its interest in a subsidiary to an unrelated entity
provided the Employer continues to maintain this Plan
and the Participant continues employment with the
unrelated entity;
6.12(e) The Participant's attainment of age fifty-nine and
one-half (59 1/2); or
6.12(f) The Participant's Hardship.
All distributions shall be subject to the Participant (and
spousal, if applicable) consent requirements pursuant to IRC Section
401(a)(11) and 417.
6.13 Special Retirement Opportunity - Notwithstanding the provisions of
Section 6.04, the following individuals shall be subject to the
provisions of Section 6.04 as if they had attained the age of
fifty-five (55) prior to retirement:
Wallace D. Brooks
Roderick D. Brown
Ann L. Burks
Joyce W. Davis
Mary D. Davis
Mary M. Duty
James L. Gore
A. Wayne Harris
John D. Kepliger
Peggy K. Mawyer
Floydie M. Peeples
Leon H. Shelton
Delores S. Thomas
Richard T. Willis
Lettie M. Cooke
<PAGE>
ARTICLE VII
WITHDRAWALS, REINSTATEMENTS AND LOANS
7.01 Withdrawals Generally - Subject to the terms and conditions set
forth below, a Participant may withdraw all or a part of the vested
interest in the Current Balance in his Individual Account.
Withdrawal requests are considered by the Administrative Committee
once a week based on processing schedules and procedures adopted by
the Administrative Committee. Payment of withdrawals shall be made
in a lump sum as soon as reasonably possible after the
Administrative Committee's approval of the withdrawal request.
Amounts withdrawn may not be repaid. The provisions of this Article
VII are applicable to withdrawals from a Participant's Individual
Account. Withdrawals from a Participant's Deductible Account are
permitted pursuant to Section 7.05.
7.02 Withdrawal of After-Tax Contributions - A Participant may withdraw
all or a portion of his After-Tax Contribution Account attributable
to After-Tax Contributions by requesting such withdrawal on forms
provided by the Administrative Committee.
If a Participant's Individual Account attributable to his
After-Tax Contribution Account is invested in more than one of the
Funds, any partial withdrawal hereunder shall be taken from each
such Fund(s) in the same proportion that the total amount to be
withdrawn pursuant to this Section 7.02 bears to the total Current
Balance of the Participant's After Tax Contribution Account.
Amounts withdrawn pursuant to this Section 7.02 may not be
repaid to the Fund.
7.03 Withdrawal of Rollover Account, Transfer Account and Vested Employer
Contribution Account - A Participant may request a withdrawal of all
or a portion of his Rollover Account or the vested portion of his
Employer Contribution Account held on his behalf. A withdrawal from
the Participant's Transfer Account shall be allowed as provided in
an adoption agreement or an Appendix to the Plan. A Participant's
withdrawal request must identify the desired amount of the Current
Balance in such accounts that he wishes to withdraw. A Participant
must first exhaust his Rollover Account and then his Transfer
Account, if applicable, before making a withdrawal from his Employer
Contribution Account. Further, withdrawals from a Participant's
Transfer Account or Employer Contribution Account shall not include
those employer contributions under the transfer plan or Employer
Contributions which have been deposited in the Fund in the current
Plan Year and the two (2) previous Plan Years.
Any withdrawal under this Section 7.03 shall not be
available until the Participant has first exhausted by withdrawal
the balance of his entire account under the provisions of Section
7.02.
If a Participant's Individual Account attributable to his
Rollover Account, Transfer Account and Employer Contribution Account
is invested in more than one of the Funds as provided in Article IV,
any partial withdrawal hereunder shall be taken from each such Fund
in the same proportion that the total amount to be withdrawn
pursuant to this Section 7.03 bears to the total Current Balance of
the Participant's Rollover Account, Transfer Account and/or Employer
Contribution Account.
Amounts withdrawn pursuant to this Section 7.03 may not be
repaid to the Fund.
7.04 Withdrawal of Deductible Account - A Participant may request a
withdrawal of all of the Deductible Current Balance of his
Deductible Account. A withdrawal from a Participant's Deductible
Account may be made independent of and without interrupting a
Participant's participation in other aspects of the Plan. Payment of
such amount shall be in a lump sum and shall be made as soon as
reasonably possible after the Administrative Committee receives the
withdrawal request.
7.05 Hardship Withdrawal - Upon the written request of a Participant with
proof of Hardship as determined by the Administrative Committee, a
Participant shall be allowed to withdraw all or a portion of the
Current Balance of his After-Tax Contribution Account, Pre-Tax
Contribution Account, Rollover Account, and the vested portions of
his Employer Contribution Account and Transfer Account.
Withdrawals made pursuant to this Section 7.05 shall be made
so that any distribution will first reduce a Participant's After-Tax
Contribution Account, Rollover Account, the vested portion of his
Transfer Account, if applicable, the vested portion of his Employer
Contribution Account and lastly, his Pre-Tax Contribution Account,
inclusive of the investment gains on Pre-Tax Contributions earned
through December 31, 1988. Notwithstanding the preceding, effective
January 1, 1989, any withdrawal hereunder from Pre-Tax Contribution
Accounts shall be limited to Employee deferrals attributable to such
Pre-Tax Contribution Accounts and not be available from investment
gains earned on and after January 1, 1989, on such Pre-Tax
Contributions. Withdrawals occasioned pursuant to this Section 7.05
shall not invoke a forfeiture of a Participant's Employer
Contribution Account or bar a Participant from future Pre-Tax
Contributions hereunder. If a Participant's Individual Account is
invested in more than one investment Fund as provided in Article IV,
any partial withdrawal hereunder from a Participant's After-Tax
Contribution Account, Rollover Account, the vested portion of his
Employer Contribution Account and Transfer Account, or his Pre-Tax
Contribution Account shall be taken from each such Fund in the same
proportion that the total amount to be withdrawn from such accounts
bears to the total Current Balance in the account from which the
withdrawal arises.
Amounts withdrawn pursuant to this Section 7.05 may not be
repaid to the Fund.
7.06 Loans - Upon written application of a Participant, the
Administrative Committee may direct that a loan from the Fund be
made to the Participant. Loan requests shall be processed once a
week based on processing schedules and procedures as adopted by the
Administrative Committee and communicated to Participants. In order
to apply for a loan, a Participant shall complete a loan application
form provided by the Administrative Committee and provide any
additional documentation or financial information which the loan
request form or Administrative Committee requests. The application
for a loan, approval or denial of the loan and the resulting loan
must be made in accordance with the following requirements:
7.06(a) Loans shall be made available to Participants who are
parties in interest, as such term is defined in ERISA
Section 3(14), and who are Employees in a uniform and
nondiscriminatory manner with all Participants in
similar circumstances being treated alike. In no event
shall any discretionary power in granting or refusing
a loan be applied so as to discriminate in favor of any
Highly Compensated Employee or former Highly Compensated
Employee.
7.06(b) In approving or denying a loan request by a
Participant, consideration shall only be given to the
factors which would be considered in a normal commercial
setting by an entity in the business of making similar
types of loans based on the Participant's
creditworthiness determined on the basis that the
Participant's wages have not be garnished in the year
preceding the date the loan is requested and that the
semi-monthly repayment amount on any loan may not exceed
fifteen percent (15%) of the Participant's semi-monthly
gross pay. Also, the Administrative Committee will
not approve any loan that would exceed the sum of:
(i) forty-five percent (45%) of the last known
vested portion of the Current Balance
of the Participant's Individual Account
invested in the Equity Fund and/or
Aggressive Growth Fund, and
(ii) fifty percent (50%) of the last known vested
portion of the Current Balance of the
Participant's Individual Account invested in
the Fixed Income Fund.
Effective July 1, 1994, the requirement
that creditworthiness be determined on the
basis that the Participant's wages have not
been garnished in the year preceding that date of
the request and requirements specified in
subparagraphs (i) and (ii), shall no longer apply.
7.06(c) Upon receipt of a completed loan application, the
Administrative Committee shall review the
application and notify the Participant in a
reasonable period of time whether the loan has been
approved or denied.
7.06(d) The amount of any such loan from the Fund shall be limited
to no more than the amount the Participant would be
entitled to receive from his Pre-Tax Contribution
Account, Rollover Account, and vested Employer Contribution
Account and Transfer Account pursuant to the provisions of
Section 6.01 if he terminated his employment as of such
date.
7.06(e) The maximum permissible loan available in any Plan Year
from all qualified plans of the Employer shall not
exceed the lesser of: (i) fifty thousand dollars ($50,000)
reduced by the excess (if any) of:
(A) the highest outstanding balance of loans
from the Plan during the one (1) year
period ending on the day before the date on
which the loan was made, over
(B) the outstanding balance of loans from the
Plan on the date on which such loan was
made, or
(ii) fifty percent (50%) of the vested
portion of the Current Balance of
the Participant's Individual Account
which he would have been entitled
to pursuant to the provisions of
Section 6.01, assuming the
Participant terminated on the day
the loan was approved by the
Administrative Committee.
7.06(f) Any loan made pursuant to this Section must
generally be repaid within a period not to exceed (5)
years. However, the Administrative Committee, in its
discretion, may grant a loan, the purpose of which is
the acquisition of the primary residence of the
Participant. In such event, the repayment period may be
up to ten (10) years. The period of repayment for any loan
shall be arrived at by mutual agreement between the
Administrative Committee and the Participant. Except as
may be provided in regulations, each loan to which this
Section applies must provide for a substantially level
amortization of the loan with payments being made not less
frequently than quarterly.
7.06(g) The method of timing for repayment of any loan
hereunder shall be determined at the time the loan is made
and a copy shall be kept with the promissory note.
Repayment of any loan shall be by payroll deduction or by
a lump sum payment. Notwithstanding the preceding, if a
Participant is on a leave of absence and is not
receiving Compensation from the Employer, he shall be
permitted to make loan payments by personal check on the
dates the loan payments otherwise would be due. A
Participant who is on a leave of absence from the
Employer, not longer than one (1) year, either without
compensation or with compensation (after income and
employment tax withholding) that is less than the amount of
his loan payment, does not have to make loan payments
while on the leave of absence. At the end of the leave
of absence (or, if earlier, after the first year of
leave), the Participant must make arrangements with the
Administrative Committee to repay the loan in full,
including accrued interest for the period during which
loan payments were not made, by the latest date permitted
in Section 7.06(b). Also, each loan payment due after
the end of the leave (or, if earlier, after the first
year of leave) must be at least equal to the amount of
each loan payment required under the terms of the
original loan.
7.06(h) Interest on any loan hereunder shall be based on a
reasonable rate of interest being charged in
Richmond, Virginia, which shall be deemed to be one
hundred (100) basis points above the prime rate listed
in the Wall Street Journal, as determined by the
Administrative Committee as of the second to last
business day of the month preceding the month in which
the loan application is made. The interest rate, once
fixed, shall remain in effect for the duration of the
loan.
7.06(i) All loans shall be evidenced by a promissory note and such
note shall be held as an asset of the Fund in a
segregated account applicable to the Participant to whom
the loan is granted. The loan shall be collateralized with
the vested portion of the Current Balance of the
Participant's Individual Account; however, in no event
shall more than fifty percent (50%) of the vested
portion of the Participant's Individual Account be used as
collateral.
7.06(j) The Administrative Committee shall have the
discretion to establish a fair and equitable policy
regarding the administration of loan within the Plan. In
establishing this policy, to the extent practicable, the
Participant's Individual Account will be reduced in the
following order, with such account balances thereafter
reflected in the form of a promissory note held by the
Trustee on behalf of the Participant:
Order of Individual Account Reduction
Pre-Tax Contribution Account
Rollover Account
Transfer Account
Employer Contribution Account
Commencing on and after July 1, 1994, the
Participant's Individual Account shall be reduced in the
order shown above, and the investment funds within each
sub-account shall be reduced on a pro-rata basis.
7.06(k) All payments by a Participant representing interest shall
be considered as investment income of the Fund
applicable to the Participant.
7.06(l) All payments by a Participant representing principal shall
be used to reduce the outstanding balance of the loan and
principal and interest payments shall be credited to the
other investment accounts as may be chosen by the
Participant with respect to future Contributions to the
Plan.
7.06(m) No distribution shall be made to or by any
Participant or Beneficiary of a Participant unless and
until all unpaid loans, including accrued interest
thereon, have been liquidated. In the event of the
death, retirement or termination of employment of a
Participant prior to the time the loan is repaid, or
failure to comply with any terms of the loan, the loan
shall be considered to be in default and the balance of
such loan shall become due and payable with such repayment
being satisfied (i) by satisfying the indebtedness from
the amount held in the Participant's Individual Account
before making payments to the Participant or his
Beneficiary, (ii) by an adjustment to any outstanding
payroll due to the Participant, and, lastly, (iii) from
any other assets of the Participant.
A loan shall be deemed to be in default as of the
end of a calendar year if at that time loan payments have
not been made on the scheduled due dates for a period
of three (3) or more consecutive calendar months. At
the time the loan is considered to be in default, the
outstanding loan balance and the interest thereon shall
be treated as a taxable distribution to the
Participant and reported to the Participant and the
Internal Revenue Service for such calendar year.
Commencing January 1, 1996, a loan shall be deemed
to be in default if, at the end of a calendar
quarter, loan repayments are three (3) or more months in
arrears. The outstanding balance and accrued interest
thereon of a defaulted loan shall be a "deemed
distribution" to the Participant and reported as
taxable income to the Participant and the Internal Revenue
Service for such calendar year.
7.06(n) No loan shall be granted to a Participant unless the
Participant consents, in writing, that in the event of
default of the loan, the outstanding loan balance and any
interest credited pursuant to the loan thereafter shall
be deemed a taxable distribution to the Participant.
Such written consent shall be of the type and manner
intended to satisfy the requirements of IRC Section
411(a)(11) and shall be specified in the
promissory note.
7.06(o) No more than one (1) Plan loan per Participant may be
outstanding at any time.
7.06(p) No loan shall be granted for less than one thousand dollars
($1,000.00).
<PAGE>
ARTICLE VIII
FUNDING
8.01 Contributions - Contributions as provided for in Article III shall
be paid over to the Trustee within a reasonable time following the
time such Contributions were withheld from the Participant's
Compensation or made by the Employer. All Contributions by the
Employer shall be irrevocable, except as herein provided. On receipt
of Contributions, the Trustee shall manage and administer the funds
so received in accordance with the provisions of the Plan.
8.02 Trustee - The Corporation will enter into an agreement with the
Trustee whereunder the Trustee will receive, invest and administer
as a trust fund Contributions made under this Plan in accordance
with the Trust Agreement. The Trustee shall, in accordance with the
terms of the Trust Agreement, accept and receive all sums of money
paid to it from time to time by the Employer.
The Trust Agreement is attached hereto and incorporated by
reference as a part of the Plan, and the rights of all persons
hereunder are subject to the terms of the Trust Agreement. The Trust
Agreement specifically provides, among other things, for the
investment and reinvestment of the Fund and the income thereof, the
management of the Fund, the responsibilities and immunities of the
Trustee, removal of the Trustee and appointment of a successor,
accounting by the Trustee and the disbursement of the Fund.
The Trustee shall establish and maintain investment funds in
accordance with the provisions of Article IV. Contributions shall be
allocated to and invested as part of the appropriate investment
funds as directed by the Investment Committee. Assets shall be
transferred from one investment fund to another as directed by the
Investment Committee to maintain the investment division desired by
the Participants.
8.03 Exclusive Benefit - No part of the corpus or income of the Fund
shall be used for or diverted to purposes other than for the
exclusive benefit of Participants and their Beneficiaries or for
payment of expenses of operating the Plan and Fund as provided in
Section 13.03, nor shall any part thereof be recoverable to the
Employee except as provided in Section 13.06.
<PAGE>
ARTICLE IX
FIDUCIARIES
9.01 General - Each Fiduciary who is allocated specific duties or
responsibilities under the Plan or any Fiduciary who assumes such a
position with respect to the Plan shall discharge his duties solely
in the interest of Participants and Beneficiaries and for the
purpose of providing such benefits as stipulated herein to such
Participants and Beneficiaries, or defraying the operating expenses
of the Plan and Fund as provided in Section 13.03. Each Fiduciary in
carrying out such duties and responsibilities shall act 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 exercising such authority or duties.
A Fiduciary may serve in more than one Fiduciary capacity
and may employ one or more persons to render advice with regard to
his Fiduciary responsibilities. All expenses reasonably incurred by
a Fiduciary on behalf of the Plan and Trust shall be reimbursed by
the Corporation or, at the Corporation's direction in accordance
with Section 13.03, from the Fund by the Trustee.
A Fiduciary may allocate any of his responsibilities for the
operation and administration of the Plan. In limitation of this
right, a Fiduciary may not allocate any responsibilities as
contained herein relating to the management or control of the Fund
except through the employment of an Investment Manager as provided
in Section 9.03 and in the Trust Agreement relating to the Fund.
9.02 Corporation - The Corporation established and maintains the Plan for
the benefit of its Employees and of necessity retains control of the
operation and administration of the Plan. The Corporation in
accordance with specific provisions of the Plan has, as herein
indicated, delegated certain of these rights and obligations to the
Trustee the Administrative Committee and the Investment Committee
and these parties shall be solely responsible for these, and only
these, delegated rights and obligations.
The Corporation shall supply such full and timely
information for all matters relating to the Plan as (a) the
Investment Committee, (b) the Administrative Committee, (c) the
Trustee, and (d) the accountant engaged on behalf of the Plan by the
Corporation may require for the effective discharge of their
respective duties.
9.03 Trustee - The Trustee, in accordance with the Trust Agreement, shall
have exclusive authority and discretion to manage and control the
Fund, except that the Corporation may in its discretion direct the
Trustee with regard to investments to be made or employ at any time
and from time to time an Investment Manager, with respect to all or
a designated portion of the assets comprising the Fund, in which
case the Corporation or Investment Manager, as may be applicable,
shall have complete control and responsibility over all matters
pertaining to the investment of such assets as so directed.
9.04 Administrative Committee - The Corporation shall appoint a committee
of not less than three (3) persons to hold office during the
pleasure of the Corporation, such committee to be known as the
Administrative Committee. The Administrative Committee shall choose
from among its members a chairman and a secretary. Any action of the
Administrative Committee shall be determined by the vote of a
majority of its members. Either the chairman or the secretary may
execute any certificate or other written direction on behalf of the
Administrative Committee.
The Administrative Committee shall hold meetings upon such
notice, at such place or places and at such time or times as the
Administrative Committee may from time to time determine. Meetings
may be called by the chairman or any two (2) members. A majority of
the members of the Administrative Committee at the time in office
shall constitute a quorum for the transaction of business.
In accordance with the provisions hereof, the Administrative
Committee has been delegated certain administrative functions
relating to the Plan with all powers necessary to enable it to
properly carry out such duties. The Administrative Committee shall
have no power in any way to modify, alter, add to or subtract from,
any provisions of the Plan. The Administrative Committee shall have
the duty and discretionary authority to construe the Plan and to
determine all questions that may arise thereunder relating to (a)
the eligibility of individuals to participate in the Plan, (b) the
amount of benefits to which any Participant or Beneficiary may
become entitled hereunder and (c) any situation not specifically
covered by the provisions of the Plan. All disbursements by the
Trustee, except for the payment of operating expenses of the Plan
and Fund at the direction of the Corporation as provided in Section
13.03, shall be made upon, and in accordance with, the written
directions of the Administrative Committee. When the Administrative
Committee is required in the performance of its duties hereunder to
administer or construe, or to reach a determination, under any of
the provisions of the Plan, it shall do so in a uniform, equitable
and nondiscriminatory basis. The Administrative Committee may
delegate certain duties as specified herein as provided in Section
9.01.
After the close of each calendar quarter in the Plan Year or
more frequently as determined by the Administrative Committee, the
Administrative Committee shall distribute to each Participant a
statement setting forth a summary of his and his Employer's
Contributions and the Current Balance in his Individual Account and
Deductible Current Balance of his Deductible Account.
The Administrative Committee shall establish rules and
procedures to be followed by Participants and Beneficiaries in
filing applications for benefits and for furnishing and verifying
proofs necessary to establish age, Service, Years of Service and any
other matters required in order to establish their rights to
benefits in accordance with the Plan.
9.05 Investment Committee - Investment Committee means the committee, as
specified in the Trust Agreement, as constituted from the time to
time which has the responsibility for allocating the assets of the
Fund among the separate accounts and any Trustee investment
accounts, for monitoring the diversification of the investment of
the Fund in foreign securities and of maintaining the custody of
foreign investments abroad, for assuring that the Plan does not
violate any provisions of ERISA limiting the acquisition or holding
of "employer securities" or "employer real property" and for the
appointment and removal of Investment Managers.
9.06 Claims Procedures - The Administrative Committee shall receive all
applications for benefits. Upon receipt by the Administrative
Committee of such an application, it shall determine all facts which
are necessary to establish the right of an applicant to benefits
under the provisions of the Plan and the amount thereof as herein
provided. Upon request, the Administrative Committee will afford the
applicant the right of a hearing with respect to any finding of fact
or determination. The applicant shall be notified in writing of any
adverse decision with respect to his claim within ninety (90) days
after its submission. The notice shall be written in a manner
calculated to be understood by the applicant and shall include:
9.06(a) the specific reason or reasons for the denial;
9.06(b) specific references to the pertinent Plan provisions on
which the denial is based;
9.06(c) a description of any additional material or information
necessary for the applicant to perfect the claim and an
explanation why such material or information is necessary;
and
9.06(d) an explanation of the Plan's claim review procedures.
If special circumstances require an extension of time for
processing the initial claim, a written notice of the extension and
the reason therefor shall be furnished to the claimant before the
end of the initial ninety (90) day period. In no event shall such
extension exceed ninety (90) days.
In the event a claim for benefits is denied or if the
applicant has had no response to such claim within ninety (90) days
of its submission (in which case the claim for benefits shall be
deemed to have been denied), the applicant or his duly authorized
representative, at the applicant's sole expense, may appeal the
denial to the Administrative Committee within sixty (60) days of the
receipt of written notice of denial or sixty (60) days from the date
such claim is deemed to be denied. In pursuing such appeal the
applicant or his duly authorized representative:
9.06(e) may request in writing that the Administrative Committee
review the denial;
9.06(f) may review pertinent documents; and
9.06(g) may submit issues and comments in writing.
The decision on review shall be made within sixty (60) days
of receipt of the request for review, unless special circumstances
require an extension of time for processing, in which case a
decision shall be rendered as soon as possible, but not later than
one hundred twenty (120) days after receipt of a request for review.
If such an extension of time is required, written notice of the
extension shall be furnished to the claimant before the end of the
original sixty (60) day period. The decision on review shall be made
in writing, shall be written in a manner calculated to be understood
by the claimant, and shall include specific references to the
provisions of the Plan on which such denial is based. If the
decision on review is not furnished within the time specified above,
the claim shall be deemed denied on review.
9.07 Records - All acts and determinations of the Administrative
Committee shall be duly recorded by the secretary thereof and all
such records, together with such other documents as may be necessary
in exercising its duties under the Plan shall be preserved in the
custody of such secretary. Such records and documents shall at all
times be open for inspection and for the purpose of making copies by
any person designated by the Corporation. The Administrative
Committee shall provide such timely information, resulting from the
application of its responsibilities under the Plan, as needed by the
Trustee and the accountant engaged on behalf of the Plan by the
Corporation, for the effective discharge of their respective duties.
9.08 Missing Persons - The Administrative Committee shall direct the
Trustee to make a reasonable effort to locate all persons entitled
to benefits under the Plan; however, notwithstanding any provision
in the Plan to the contrary, if, after a period of five (5) years
from the date such benefit shall be due, any such persons entitled
to benefits have not been located, their rights under the Plan shall
be construed as if the Participant had died. Before this provision
becomes operative, the Trustee shall send a certified letter to all
such persons at their last known address advising them that their
interest or benefits under the Plan shall be so construed. Any such
amounts shall be held by the Trustee for a period of three (3)
additional years (or a total of eight (8) years from the time the
benefits first become payable). If no distributee can be found, then
any unclaimed benefits shall be dealt with according to the laws of
the Commonwealth of Virginia pertaining to abandoned intangible
personal property held in a fiduciary capacity.
9.09 Maintenance of Individual Accounts, Deductible Accounts and Plan
Operations - It shall be the duty of the Administrative Committee or
such person as it may designate to maintain an up-to-date record of
all transactions pursuant to each Participant's Individual Account
and Deductible Account and to process all other day-to-day
operations of the Plan including: the enrollment of Participants;
the distribution of booklets, notices and other information
regarding the Plan; maintaining Beneficiary designation forms;
explaining the optional forms of benefit payouts which may be
elected by a Participant under the Plan; and communicating all other
matters relating to participation and entitlement to benefits to the
Participants, the accountant and other entities performing services
for the Plan as may be necessary to enable them to discharge their
duties in a uniform, equitable and nondiscriminatory manner with
regard to all Participants or Beneficiaries under similar
circumstances.
9.10 Disclosure - The Administrative Committee shall see that
descriptions of the Plan are prepared for filing with the Department
of Labor and shall make available to Participants and Beneficiaries
receiving benefits under the Plan a summary of the Plan at such
place and at such times as may be required by federal statutes and
regulations issued thereunder.
The Administrative Committee shall arrange for the
preparation and filing of such annual reports, including financial
statements of the Plan's assets and liabilities, schedules, receipts
and disbursements and changes in financial position in such form, at
such place and at such times as may be required by federal statutes
and regulations.
The Administrative Committee shall furnish annually to all
Participants and Beneficiaries receiving benefits under the Plan a
copy of a summary of the financial statement of the Plan's assets
and liabilities and schedules of receipts and disbursements and such
other material as is necessary to fairly summarize the latest annual
report at such times and to the extent required by federal statutes
and regulations.
The Administrative Committee shall also make available, at
its principal office, copies of the Plan, the Trust Agreement,
copies of any contracts relating to the Plan, descriptions of the
Plan, and annual reports for examination by any Participant or
Beneficiary. Upon written request of any Participant or Beneficiary
receiving benefits under the Plan, the Administrative Committee
shall furnish him a copy of the latest Plan description, summary
plan description, latest annual report and a copy of the Plan and
Trust Agreement. The Administrative Committee may make a reasonable
charge for the costs of furnishing copies of such documents.
9.11 Annual Accountings - The Corporation shall engage, on behalf of all
Participants, an independent qualified public accountant to certify
and render an opinion that the financial statements and schedules
prepared in conjunction with the Plan are presented fairly and are
in conformity with generally accepted accounting principles
consistently applied. Where assets of the Plan are held by a bank,
supervised and subject to periodic examination by a state or federal
agency, which bank prepares information concerning the assets of the
Plan and certifies that such information is accurate and the
information is made a part of the annual report, the accountant may
rely on such statements as accurate. If the assets are held by a
bank, the Corporation may delegate the responsibility for
preparation of such statements to the bank and may delegate the
responsibility for the preparation of such other forms and reports
to such entity as it shall select.
9.12 Funding Policy - The Corporation in consultation with the Investment
Committee, Trustee and Investment Manager, where applicable, shall
establish a funding policy and method to carry out the objectives of
the Plan. To formulate and maintain such policy, the Corporation,
the Trustee, the Investment Committee, the Investment Manager, where
applicable, and such other persons as may be designated by the
Corporation shall consult at least annually and more frequently if
necessary, to review the short- and long-range financial needs of
the Plan, the anticipated level of annual contributions and any
material changes thereto occurring during the year. The results of
such annual consultations shall be documented by the Corporation or
its designee.
9.13 Indemnification of Fiduciaries - Each member of the Board, and each
other employee of the Corporation who is determined to be a
Fiduciary under the terms of ERISA with respect to the Plan, shall
be indemnified by the Corporation against liability imposed on him
and against all expenses and costs which may be reasonably incurred
by him in connection with or resulting from any action, suit or
proceeding, or any claim against him, if he shall have been made a
party to such action, suit or proceeding, or such claim shall have
been made by reason of his being or having been a Fiduciary with
respect to the Plan. In the case of a settlement of any such action,
proceeding or claim before a final adjudication thereof, the right
of indemnification shall exist only to the extent that the
Corporation shall have consented to the settlement.
9.14 Equitable Allocations - The Administrative Committee shall establish
accounting procedures for the purpose of making allocations,
valuations and adjustments to Individual Accounts and Deductible
Accounts. Should the Administrative Committee determine that the
strict application of its accounting procedures will not result in
an equitable and nondiscriminatory allocation among Individual
Accounts and Deductible Accounts, or other circumstances arise which
are not covered hereunder, it may modify its procedures for the
purposes of achieving an equitable and nondiscriminatory allocation
in accordance with the general concepts of the Plan.
Further, notwithstanding anything contained herein to the
contrary, in order to administer the Plan in an equitable and
nondiscriminatory manner, the Administrative Committee may choose an
alternate date to value Individual Accounts and Deductible Accounts
for all purposes including distributions from the Plan, transfers
among funds within the plan, loans and any other transactions
needing a specific Valuation Date, provided such alternate Valuation
Date is within sixty (60) days after the date the Plan would
otherwise value Individual Accounts and Deductible Accounts.
<PAGE>
ARTICLE X
AMENDMENT AND TERMINATION OF THE PLAN
10.01 Amendment of The Plan - The Corporation shall have the right to
modify, alter or amend the Plan in whole or in part; provided,
however, (a) that any such action which affects Employer
Contributions to the Plan shall require approval of the Board of
Directors and (b) that the duties, powers and liabilities of any
Trustee hereunder shall not be increased without its written
consent; and provided, further, that any such action shall not, in
any way, affect adversely the benefits of persons who have retired
under the Plan prior to the effective date of such action, or of
their Beneficiaries, nor shall it adversely affect benefits accrued
prior to the effective date of such action. No amendment,
modification or alteration shall have the effect of causing a
reversion to the Employer of any part of the principal or income of
the Fund. Notwithstanding anything contained herein to the contrary,
no amendment to the Plan shall decrease a Participant's Individual
Account and Deductible Account balance or eliminate an optional form
of distribution, except as permitted by law.
If the Plan's vesting schedule is amended or the Plan is
amended in any way that directly or indirectly affects the
computation of a Participant's vested benefit, each Participant with
at least three (3) years of Service may elect within a reasonable
period of time after the adoption of the amendment or change to have
his vested percentage computed under the Plan without regard to such
amendment or change. The period during which the election may be
made shall commence with the date the amendment is adopted or deemed
to be made and shall end on the latest of sixty (60) days after (a)
the amendment is adopted, (b) the amendment is effective or (c) the
Participant is issued written notice of the amendment by the
Employer or Administrative Committee.
10.02 Termination of The Plan - While the Employer expects to continue the
Plan indefinitely, continuance of the Plan is not assumed as a
contractual obligation. Each Employer reserves the right to
discontinue its Contributions and to terminate the Plan as it
relates to its Employees without terminating the Plan with respect
to any other Employer by action of the Employer's Board of
Directors. Any Employer desiring to terminate the Plan as it relates
to its Employees shall give notice of such termination to the
Corporation and the Trustee at least six (6) months prior to the
effective date thereof (unless a shorter notice shall be agreed to
by the Corporation). On termination of the Plan or in the event of a
partial termination or curtailment), or discontinuance of
Contributions, the rights of present Participants (to the extent
affected by such action) in their account balances held pursuant to
the Plan as of the date of such event shall be nonforfeitable and
the Trustee shall continue to administer the Fund in accordance with
the provisions of the Plan and the Trust Agreement for the sole
benefit of the then Participants or Beneficiaries then receiving or
entitled to receive future benefits. In the event of a termination
no further Contributions will be made to the Plan.
10.03 Allocation of Funds - In the event of termination of the Plan, the
Administrative Committee shall allocate to the terminating
Employer's Employees as of the date of termination any previously
unallocated Contributions, such Employer's share of the Forfeitures,
realized and unrealized appreciation or depreciation, income or loss
of the Fund to the accounts of the Participants of the Plan affected
by the termination and any income, losses, realized and unrealized
appreciation or depreciation to Participants of the Plan who have
not received their benefits under the Plan.
10.04 Application of Assets - After assets of the Fund pertaining to the
terminating Employer have been allocated as provided in Section
10.03, such assets shall be applied to whichever of the following
options is specified by the terminating Employer:
10.04(a) Transfer to a separate trust and held therein to provide
benefits, to the extent such assets have been allocated,
to the persons entitled to benefits under the Plan as it
applies to the terminating Employer.
10.04(b) Distribution in a single lump sum, in cash or as a
rollover to each individual pursuant to Section 10.03,
provided such distribution is permitted in accordance with
IRC Section 401(k) and the regulations issued thereunder.
10.05 Automatic Termination - Unless otherwise provided for, the Plan
shall be deemed to have automatically terminated with respect to any
Employer who becomes insolvent, is adjudged bankrupt, or is
dissolved. In the event of such automatic termination, the
provisions of Sections 10.03 and 10.04 shall govern.
10.06 Merger, Consolidation and Transfers of Assets or Liabilities - No
merger or consolidation with, or transfer of assets or liabilities
to this Plan or from this Plan to any other plan shall be made,
unless each Participant would receive immediately after such event,
a benefit (determined as if the Plan had terminated at that time)
which is equal to or greater than the benefit he would have been
entitled to receive under the Plan immediately before such event had
the Plan terminated at that time.
<PAGE>
ARTICLE XI
PROVISIONS RELATIVE TO EMPLOYERS INCLUDED IN PLAN
11.01 Method of Participation - Any organization which is a member of the
same controlled group of organizations as determined pursuant to IRC
Sections 414(b), 414(c), 414(m) and 414(o) as the Corporation which
the Corporation shall have authorized to adopt the Plan may, by
taking appropriate action, become a party to the Plan by adopting
the Plan as a thrift plan for its Employees. Any corporation which
becomes a party to the Plan shall thereafter promptly deliver to the
Trustee provided for in Article VIII a certified copy of the
resolutions or other documents evidencing its adoption of the Plan
and also a written instrument showing the Corporation's approval of
such organization becoming party to the Plan. The Plan shall be
maintained as a single Plan for all participating Employers.
11.02 Withdrawal - Any one or more of the Employers included in the Plan
may withdraw from the Plan at any time by giving six (6) months
advance notice in writing of its or their intention to withdraw to
the Corporation and the Administrative Committee (unless a shorter
notice shall be agreed to by the Corporation).
Upon receipt of notice of any such withdrawal, the
Administrative Committee shall certify to the Trustee the equitable
share of such withdrawing Employer in the Fund as applicable to be
determined by the Administrative Committee. The Trustee shall
thereupon set aside from the Fund then held by it such securities
and other property as it shall, in its sole discretion, deem to be
equal in value to such equitable share. If the Plan is to be
terminated with respect to such Employer, the amount set aside shall
be dealt with in accordance with the provisions of Article X. If the
Plan is not to be terminated with respect to such Employer, the
Trustee shall turn over such amount to such trustee as may be
designated by such withdrawing Employer, and such securities and
other property shall thereafter be held and invested as a separate
trust of the Employer which has so withdrawn, and shall be used and
applied according to the terms of a new agreement and declaration of
trust between the Employer so withdrawing and the trustee so
designated.
Neither the segregation of the Fund assets upon the
withdrawal of an Employer, nor the execution of a new agreement and
declaration of trust pursuant to any of the provisions of this
Section 11.02, shall operate to permit any part of the corpus or
income of the Fund to be used for or diverted to purposes other than
for the exclusive benefit of Participants and Beneficiaries except
as may be otherwise provided in Section 13.03 and Section 13.06.
<PAGE>
ARTICLE XII
TOP HEAVY PLAN PROVISIONS
12.01 General - Notwithstanding anything contained herein to the contrary,
in the event that this Plan when combined with all other plans
required to be aggregated pursuant to IRC Section 416(g) is deemed
to be a Top Heavy Plan for any Plan Year, the following conditions
shall become operative.
12.02 Definitions - For purposes of this Article, the following
definitions shall be applicable:
12.02(a) Determination Date means the last day of the Plan Year
preceding the Plan Year in which the determination is being
made. In the case of the first Plan Year, Determination
Date means the last day of such Plan Year.
12.02(b) Key Employee means any employee, former employee or
beneficiary of a former employee in an Employer plan who,
at any time during the Plan Year or any of the four (4)
preceding Plan Years is:
(i) An officer of the Employer having annual
Maximum Compensation greater than fifty
percent (50%) of the amount in effect under
IRC Section 415(b)(1)(A) for any such Plan
Year;
(ii) One (1) of the ten (10) employees having
annual Maximum Compensation from the
Employer of more than the limitation in
effect under IRC Section 415(c)(1)(A) and
owning (or considered as owning within the
meaning of IRC Section 318) more than a
one-half percent (1/2%) interest and the
largest interest in the Employer;
(iii) A Five Percent (5%) Owner of the Employer;
or
(iv) A one percent (1%) owner of the Employer
having annual Maximum Compensation from
the Employer of more than one hundred
fifty thousand dollars ($150,000).
For purposes of Section 12.02(b)(i), no more than
fifty (50) employees or, if lesser, the greater of
three (3) or ten percent (10%) of employees shall be
treated as officers. Further, for purposes of determining
the number of officers taken into account under Section
12.02(b)(i), employees described in IRC Section 414(q)(8)
shall be excluded.
With respect to Section 12.02(b)(ii), if two (2)
employees have the same ownership interest in the
Employer, the employee having the greater annual
Maximum Compensation shall be treated as having a larger
interest.
12.02(c) Non-Key Employee means an employee, former employee or
beneficiary of a former employee who is not a Key Employee.
12.02(d) Top Heavy Plan generally means on or after January 1, 1984,
any plan under which, as of any Determination Date, the
present value of the cumulative accrued benefits
(inclusive of Pre-Tax Contributions) under the plan for
Key Employees exceeds sixty percent (60%) of the present
value of the cumulative accrued benefits under the plan
for all employees.
For purposes of this definition:
(i) If such plan is a Defined Contribution Plan,
the present value of cumulative accrued
benefits shall be deemed to be the market
value of all employee accounts under the plan
as of the Top Heavy Valuation Date plus
contributions to the plan as of the
Determination Date. If the plan is a Defined
Benefit Plan, the present value of cumulative
accrued benefits shall be deemed to be the
lump sum present value of a participant's
accrued benefit under such plan calculated on
the basis of interest and mortality as set
forth in said plan as of the Top Heavy
Valuation Date plus contributions due under
the plan as of the Determination Date.
Notwithstanding the above, for purposes of
determining the present value of the
cumulative accrued benefits, distributions
made within a five (5) year period ending on
the Determination Date must be included. The
account balances and accrued benefits of a
Non-Key Employee who was previously a Key
Employee shall be excluded from the
computation hereunder.
(ii) Each plan of the Employer required to be
included in an "aggregation group" shall be
treated as a Top Heavy Plan if such group is a
top heavy group.
(iii) The term "aggregation group" means
(A) each plan of the Employer which is
currently effective or which has
terminated within the five (5) year
period ending on the Determination Date
in which a Key Employee is a
participant in the Plan Year containing
the Determination Date or any of the
four (4) preceding Plan Years; and
(B) each other plan of the Employer which
enables any plan in (A) to meet the
requirements of IRC Sections 401(a)(4) or
410.
A permissive aggregation group
consists of plans of the Employer that
are required to be aggregated, plus one
(1) or more plans of the Employer that
are not part of a required aggregation
group but that satisfy the requirements
of IRC Sections 401(a)(4) and 410 when
considered together with the required
aggregation group.
(iv) If any individual has not performed
any service for the Employer at any time
during the five (5) year period ending on the
Determination Date, any accrued benefit for
such individual shall not be taken into
account in the testing procedure herein
described.
12.02(e) Top Heavy Valuation Date means the most recent Valuation
Date occurring within a twelve (12) month period ending on
the Determination Date. These definitions shall be
interpreted consistent with IRC Section 416 and rules and
regulations issued thereunder. Further, such law and
regulations shall be controlling in all determinations
under these definitions inclusive of any provisions and
requirements stated thereunder but hereinabove absent.
12.03 Minimum Top Heavy Contribution - In a Plan Year in which the Plan
becomes a Top Heavy Plan, inclusive of a Plan Year in which the Plan
is considered a Top Heavy Plan pursuant to the provisions of Section
1.416-1 T-5 of the regulations under IRC Section 416 but has not
terminated, and the aggregate Contributions by the Employer to all
Non-Key Employees allocated to their Individual Accounts are less
than three percent (3%) of Maximum Compensation (exclusive of
Pre-Tax Contributions for Plan Years beginning after December 31,
1988), then the Employer shall contribute to the Plan an amount
necessary to provide a minimum Contribution including Forfeitures of
at least three percent (3%) of Maximum Compensation to such Non-Key
Employees who are employed as of the last day of the Plan Year
regardless of (a) whether such Non-Key Employee has completed one
thousand (1,000) Hours of Service, (b) whether such Non-Key Employee
has made Pre-Tax Contributions to the Plan, or (c) the level of the
Non-Key Employee's Compensation. The minimum Contribution required
herein shall not be forfeited in the event the Participant withdraws
his Pre-Tax Contributions. In no event, however, shall the
allocation of the minimum Contribution to the Individual Accounts of
Non-Key Employees be greater than the total allocation of
Contributions by the Employer (inclusive of Pre-Tax Contributions)
to the Individual Accounts for Key Employees. Any special
Contribution or reallocation as herein provided shall be made to the
Employer Contribution Account on the basis of the ratio that the
Non-Key Employees' Maximum Compensation bears to the total Maximum
Compensation of all Non-Key Employees.
A Top Heavy Contribution of less than three percent (3%)
shall not be permissible if the Employer maintains a Defined Benefit
Plan which designates this Plan to satisfy IRC Section 401(a).
12.04 Defined Benefit Plan Minimum Accrued Benefit - If the Employer also
maintains a Defined Benefit Plan and the Defined Benefit Plan
provides the minimum accrued benefit determined pursuant to IRC
Section 416(c)(1), then the adjustment provided in Section 12.03
shall not be required.
12.05 Multiple Plan Participation - If Section 12.03 or Section 12.04 is
applicable, then the multiplier of 1.25 in Sections 5.10(a) and
5.10(c) shall be reduced to 1.0.
12.06 No Duplication of Minimum Benefit - These Top Heavy Plan provisions
shall not require that the entire defined benefit minimum benefit
and the defined contribution minimum contribution be provided. To
the extent that there is a defined benefit accrued benefit, it shall
be controlling. To the extent that there shall be a contribution by
the Employer to a Defined Contribution Plan, then there shall be a
determination as to whether the defined contribution amount is
comparable to the difference between the defined benefit minimum
benefit and the minimum defined benefit accrued benefit required
under IRC Section 416. If the defined contribution amount is not
comparable, then the difference shall be provided in the Defined
Benefit Plan.
12.07 Top Heavy Assumptions - For purposes of determining whether a
Defined Benefit Plan is a Top Heavy Plan, calculations shall be
based upon actuarial assumptions stipulated in such plan for this
purpose. If no assumptions are provided, the calculation shall be
based upon The UP-1984 Table of Mortality at six percent (6%)
interest with such determination being made on the Determination
Date.
12.08 Minimum Vesting - If the vesting schedule provided in Section 6.01
is less liberal than the vesting schedule hereinafter provided, then
such vesting schedule shall be substituted with the following for
each Participant with an Hour of Service after the Plan becomes a
Top Heavy Plan, and such schedule shall remain in effect in all
future Plan Years.
Vested
Service Percentage
Less than 3 year 0%
3 years or more 100%
<PAGE>
ARTICLE XIII
MISCELLANEOUS
13.01 Governing Law - The Plan shall be construed, regulated and
administered according to the laws of the Commonwealth of Virginia
except in those areas preempted by the laws of the United States of
America.
13.02 Construction - The headings and subheadings in the Plan have been
inserted for convenience of reference only and shall not affect the
construction of the provisions hereof. In any necessary construction
the masculine shall include the feminine and the singular the
plural, and vice versa.
13.03 Expenses - The operating expenses of the Plan and Fund shall be paid
by the Employer or, upon the direction of the Corporation from the
Fund to the extent such expenses are permitted to be paid from the
Fund. The determination of whether expenses may be charged against
the Fund shall be made by the Corporation. No Employee shall be
entitled to compensation for his services with respect to the Plan
other than his normal compensation received as an Employee.
13.04 Participant's Rights; Acquittance - No Participant in the Plan shall
acquire any right to be retained in the Employer's employ by virtue
of the Plan, nor, upon his dismissal, or upon his voluntary
termination of employment, shall he have any right or interest in
and to the Fund other than as specifically provided herein. The
Employer shall not be liable for the payment of any benefit provided
for herein; all benefits hereunder shall be payable only from the
Fund.
13.05 Spendthrift Clause - Except as provided in IRC Section 401(a)(13)(B)
relating to qualified domestic relations orders as defined in IRC
Section 414(p), none of the benefits, payments, proceeds or
distributions under this Plan shall be subject to the claim of any
creditor of the Participant or to the claim of any creditor of any
Beneficiary hereunder or to any legal process by any creditor of
such Participant of any such Beneficiary; and neither such
Participant or any such Beneficiary shall have any right to
alienate, commute, anticipate, or assign any of the benefits,
payments, proceeds or distributions under this Plan.
Notwithstanding anything contained herein to the contrary,
upon the receipt by the Plan of a Domestic Relations Order, the
following provisions of this Section 13.05 shall become effective.
13.05(a) Determination of Qualified Domestic Relations Order - Upon
receipt by the Plan of a Domestic Relations Order, the
Administrative Committee shall promptly notify the
Participant and any Alternate Payee of such receipt
and the Plan's procedures for determining if such order is
a Qualified Domestic Relations Order. In accordance with
reasonable procedures established by the Administrative
Committee, the Administrative Committee shall determine
whether such order is a Qualified Domestic Relations Order
and shall notify the Participant and Alternate Payee of
such determination within a reasonable time thereafter.
Notwithstanding anything contained herein to the
contrary, if a benefit is being paid pursuant to a
Domestic Relations Order on January 1, 1985, such order
shall be considered to be a Qualified Domestic Relations
Order. During the period of time in which the
Administrative Committee is making the determination of
whether the Domestic Relations Order is a Qualified
Domestic Relations Order, the Administrative
Committee shall segregate in a separate account in the Plan
or in an escrow account the amounts which would have been
payable to the Alternate Payee during such period if
the order had been determined to be a Qualified
Domestic Relations Order.
In the case of any payment before a
Participant has separated from service with the
Employer, a Domestic Relations Order shall be a
Qualified Domestic Relations Order regardless of the fact
that such order requires that payment of benefits be made
to an Alternate Payee
(i) on or after the date on which the Participant
attains or first would have attained his
Early Retirement Date,
(ii) as if the Participant had retired on the
date on which such payment is to begin under
such order taking into account only the
present value of the benefits actually
accrued and not taking into account the
present value of any Employer subsidy for
early retirement based on the interest rate
specified in the Plan or, if no rate is
specified, five percent (5%), and
(iii) in any form in which such benefits may be
paid under the Plan to the Participant (other
than in the form of a joint and survivor
annuity with respect to the Alternate Payee
and his or her subsequent spouse).
In the event a Qualified Domestic Relations
Order specifies that benefits commence
immediately to the Alternate Payee in one of the
forms of payment provided hereunder, payment from
the Plan shall commence in accordance with such
Qualified Domestic Relations Order.
13.05(b) Payment to Alternate Payee - If the Domestic
Relations Order is determined to be a Qualified Domestic
Relations Order within eighteen (18) months, the
Administrative Committee shall pay the segregated amounts
to the person or persons entitled thereto.
If it is determined that the order is not a Qualified
Domestic Relations Order or the issue as to whether such
order is a Qualified Domestic Relations Order is not
resolved within eighteen (18) months, then the
Administrative Committee shall pay the segregated amount
to the person who would have been entitled to such
amounts as if there had been no order.
Any determination that an order is a Qualified
Domestic Relations Order which is made after the close of
the eighteen (18) month period shall be applied
prospectively only.
13.05(c) Definitions - For purposes of this Section 13.05, the
following definitions shall be applicable:
(i) Alternate Payee means any spouse, child or other
dependent of a Participant who is recognized by
a Domestic Relations Order as having a right to
receive all, or a portion of, the benefits
payable under a Plan with respect to such
Participant.
(ii) Domestic Relations Order - Any judgment, decree
or order (including approval of a property
settlement agreement) which
(A) relates to the provisions of child support,
alimony payments, or marital property
rights to a spouse, child or other dependent
of a Participant, and
(B) is made pursuant to a state domestic
relations law (including a community
property law).
(iii) Qualified Domestic Relations Order - A Domestic
Relations Order which creates or recognizes the
existence of an Alternate Payee's right to, or
assigns to an Alternate Payee the right to,
receive all or a portion of the benefits
payable with respect to a Participant under
the Plan; provided that such Domestic Relations
Order clearly specifies
(A) the name and last known mailing address
(if any) of the Participant and the name and
mailing address of each Alternate Payee
covered by the order,
(B) the amount or percentage of the Participant's
benefit to be paid by the Plan to each
Alternate Payee or the manner in which such
amount or percentage is to be determined,
(C) the number of payments or period to
which such order applies, and
(D) each plan to which such order applies.
A Domestic Relations Order meets the
requirements of this subsection only if such
order does not require the Plan
(E) to provide any type or form of
benefits, or any optional payment form, not
otherwise provided under the Plan,
(F) to provide increased benefits (determined on
the basis of Actuarial Equivalent value),
or
(G) to make payment of benefits to an Alternate
Payee which are required to be paid to
another Alternate Payee under another order
previously determined to be a Qualified
Domestic Relations Order.
13.05(d) Establishment of Plan Procedures - For purposes of this
Section 13.05, reasonable procedures shall be established
under the Plan to determine the qualified status of
Domestic Relations Orders and to administer distributions
under Qualified Domestic Relations Orders. The
procedures established by the Plan shall:
(i) be set forth in writing,
(ii) provide for the notification of each person
specified in a Domestic Relations Order as
entitled to payment of benefits under the
Plan (at the address included in the
Domestic Relations Order) of such
procedures promptly upon receipt by the Plan
of the Domestic Relations Order, and
(iii) permit an Alternate Payee to designate a
representative for receipt of copies of
notices that are sent to the Alternate Payee
with respect to a Domestic Relations Order.
13.06 Mistake of Fact - Notwithstanding anything herein to the contrary,
there shall be returned to the Employer any Contribution which was
made as follows:
13.06(a) By mistake of fact, as determined by the Internal Revenue
Service or in such other manner as the Internal Revenue
Service may permit;
13.06(b) Prior to the receipt of initial qualification; provided
that such Contribution was conditioned on initial
qualification of the Plan, the Plan received an
adverse determination with respect to its initial
qualification, and the application for determination of
initial qualification was made by the time prescribed by
law for filing the Employer's tax return for the
taxable year in which the Plan was adopted, or such later
date as the Secretary of Treasury may prescribe; or
13.06(c) In an amount that exceeded the deductible limits on such
Contribution as set forth under IRC Section 404, as
determined by the Internal Revenue Service or in such other
manner as the Internal Revenue Service may permit, provided
such Contribution was conditioned on its deductibility.
The return of any Contribution as hereinbefore provided shall be
made within one (1) year after the payment of the Contribution,
denial of the initial qualification of disallowance of the deduction
(to the extent disallowed, whichever is applicable. Any Contribution
returned due to mistake of fact under Section 13.06(a) or
disallowance of a tax deduction under Section 13.06(c) shall be
reduced by its share of the losses and expenses of the Fund but
shall not be increased by income or gains of the Fund, provided that
the return of such Contribution shall not be permitted to cause the
balance of the Individual Account of any Participant to be less than
the balance that would have been in his Individual Account had such
Contribution not been made. Any Contribution returned to the
Employer due to denial of initial qualification under Section
13.06(b) shall be equal to the entire assets of the Plan
attributable to Contributions by the Employer.
13.07 Counterparts - The Plan and the Trust Agreement may be executed in
any number of counterparts, each of which shall constitute but one
and the same instrument and may be sufficiently evidenced by any one
counterpart.
<PAGE>
ADOPTION OF THE PLAN
Anything herein to the contrary notwithstanding, this Plan is amended and
maintained under the condition that it shall continue to be approved and
qualified by the Internal Revenue Service under IRC Section 401(a) and that the
Trust hereunder is exempt under IRC Section 501(a), or under any comparable
sections of any future legislation which amends, supplements or supersedes such
sections. If it should be found by the Internal Revenue Service that the Plan as
amended and restated hereby is not qualified, the Corporation may modify the
Plan to meet Internal Revenue Service requirements.
As evidence of its adoption of the Plan, Blue Cross and Blue Shield of
Virginia has caused this instrument to be signed by its duly authorized
officers, and its corporate seal to be affixed hereto this day of , 19 .
BLUE CROSS AND BLUE SHIELD
OF VIRGINIA
By:
-----------------------------------------
Senior Vice President, Corporate Services
ATTEST:
By:
------------------
Secretary
<PAGE>
APPENDIX A
PROVISIONS APPLICABLE TO CONSOLIDATED RISK MANAGEMENT SERVICES
Introduction - Effective as of December 31, 1990, Consolidated Risk Management
Services ("CRMS"), a subsidiary of Blue Cross and Blue Shield of Virginia became
a participating Employer by adoption of the Employees' Thrift Plan of Blue Cross
and Blue Shield of Virginia. CRMS had previously maintained the Consolidated
Risk Management Services Employee Retirement Plan ("CRMS Plan") and effective as
of December 31, 1990, the CRMS Plan was merged into the Employee Thrift Plan of
Blue Cross and Blue Shield of Virginia and assets of the CRMS Plan were
transferred to the Fund held pursuant to this Plan.
CRMS Employer Account means the account established for a Participant to hold
the value of discretionary and matching contributions made under the
provisions of the CRMS Plan through December 31, 1990, and the proportionate
share of the adjustment of the Fund determined in accordance with Section
5.07. All amounts held in a Participant's CRMS Employer Account shall at all
times be one hundred percent (100%) vested.
CRMS Plan means the Consolidated Risk Management Services Employee Retirement
Plan as in effect through December 31, 1990, and which was merged into this Plan
as of December 31, 1990.
Rollover Account - The value of rollover contributions made pursuant to the
provisions of the CRMS Plan for periods through December 31, 1990 shall be
credited to the Participant's Rollover Account.
Pre-Tax Contribution Account - The value of pre-tax contributions made
under the provisions of the CRMS Plan through December 31, 1990 shall be
credited to the Participant's Pre-Tax Contribution Account.
CRMS Employer Account - Effective as of December 31, 1990, a CRMS Employer
Account shall be established for discretionary and matching contributions
of Participants who were participants of the CRMS Plan on December 31, 1990. A
Participant shall at all times be fully vested in his CRMS Employer Account.
Withdrawal of CRMS Employer Account - A Participant may request a withdrawal
of all or a portion of his CRMS Employer Account held on his behalf. A
Participant's withdrawal request must identify the desired amount of the
Current Balance in his CRMS Employer Account that he wishes to withdraw. A
Participant must first exhaust his Rollover Account, and then his CRMS Employer
Account, if applicable, before making a withdrawal from his Employer
Contribution Account. Further, withdrawals from a Participant's CRMS Employer
Account shall not include those employer contributions under the CRMS Plan
which have been deposited in the Fund in the current Plan Year and the two (2)
previous Plan Years.
Any withdrawal under this Appendix A shall not be available until the
Participant has first exhausted by withdrawal the balance of his entire account
under the provisions of Section 7.02.
If a Participant's Individual Account attributable to his CRMS Employer
Account is invested in more than one of the Funds as provided in Article IV, any
partial withdrawal hereunder shall be taken from each such Fund in the same
proportion that the total amount to be withdrawn pursuant to this Appendix bears
to the total Current Balance of the CRMS Employer Account. Amounts withdrawn
pursuant to this Appendix A may not be repaid to the Fund.
Hardship Withdrawal - Upon the written request of a Participant with proof of
Hardship as determined by the Administrative Committee, a Participant shall be
allowed to withdraw all or a portion of the Current Balance of his CRMS Employer
Account.
Withdrawals made pursuant to this Appendix A shall be made so that any
distribution will first reduce a Participant's After-Tax Contribution Account
and then his Rollover Account, inclusive of the investment gains on Pre-Tax
Contributions earned through December 31, 1988. Further any withdrawal from
Pre-Tax Contribution Accounts shall first be made from pre-tax contributions
made under the provisions of the CRMS Plan, if any, which are held in Pre-Tax
Contribution Accounts. Notwithstanding the preceding, effective January 1, 1989,
any withdrawal hereunder from Pre-Tax Contribution Accounts shall be limited to
Employee deferrals attributable to such Pre-Tax Contribution Accounts and not be
available from investment gains earned on and after January 1, 1989, on such
Pre-Tax Contributions. Withdrawals occasioned pursuant to this Appendix A shall
not invoke a forfeiture of a Participant's Employer Contribution Account or bar
a Participant from future Pre-Tax Contributions hereunder. If a Participant's
CRMS Account is invested in more than one Investment Fund, any partial
withdrawal hereunder from a Participant's CRMS Employer Account shall be taken
from each such Fund in the same proportion that the total amount to be withdrawn
from such account bears to the total Current Balance in the account from which
the withdrawal arises. Amounts withdrawn pursuant to this Appendix A may not be
repaid to the Fund.
Withdrawals While Employed - Applicable to CRMS Plan Participants - A
Participant who participated in the CRMS Plan may request a withdrawal of
all or a portion of the lesser of Section (a) or (b) at any time after
attaining age fifty-nine and one-half (59 1/2).
(a) The value as of December 31, 1990 of:
(i) his CRMS Employer account;
(ii) his pre-tax contributions made under the CRMS Plan which
are held in his Pre-Tax Contribution Account; and
(iii) his rollover contributions under the CRMS Plan which are
held in his Rollover Account.
(b) The balance held in:
(i) his CRMS Employer Account;
(ii) his Pre-Tax Contribution Account attributable to
pre-tax contributions made under the CRMS Plan; and
(iii) his Rollover Account attributable to rollover
contributions made under the CRMS Plan.
Withdrawals shall be made in a manner that the distribution will first
reduce the amount that is available from his Pre-Tax Contribution Account, then
his CRMS Employer Account and lastly, the amount available from his Rollover
Account.
Effective January 1, 1996, amounts withdrawn under this Appendix come from
investment funds on a pro-rata basis.
The Administrative Committee shall direct the Trustee to make the
distribution in a lump sum as soon as reasonably possible following the date the
withdrawal request is received. Amounts withdrawn under this Section may not be
repaid to the Fund.
Loans - The amount of any loan from the Fund shall be limited to no more
than the amount the Participant would be entitled to receive
from his CRMS Employer Account pursuant to the provisions of
Section 6.01 if he terminated his employment as of such date.
<PAGE>
APPENDIX B
PROVISIONS APPLICABLE TO PRIORITY HEALTH CARE, INC.
Introduction - Effective as of July 1, 1995, employees of Priority Health Care,
Inc. and its following subsidiaries - Priority Health Plan, Inc., Priority
Insurance Agency, Inc. and Health First, Inc., (hereinafter referred to as
Priority Employees) became employees of HealthKeepers, Inc. Prior to July 1,
1995, Priority Employees participated in the Tidewater Medical Group, Inc.
401(k) Plan (hereinafter referred to as the Tidewater Plan). Effective July 1,
1995, the value of the account balances of the Priority Employees were
transferred from the Tidewater Plan into the Transfer Account in the Plan.
Vesting - A Participant who was a Priority Employee shall be fully vested in his
Transfer Account attributable to funds transferred from the Tidewater Plan.
Exhibit 99(ii)
TRIGON BLUE CROSS BLUE SHIELD
401(k) RESTORATION PLAN
<PAGE>
TRIGON BLUE CROSS BLUE SHIELD
401(k) RESTORATION PLAN
TABLE OF CONTENTS
Page
----
ARTICLE I
PURPOSE AND EFFECTIVE DATE
1.1 Title............................................ 1
1.2 Purpose.......................................... 1
1.3 Effective Date................................... 1
ARTICLE II
DEFINITIONS AND CONSTRUCTION OF THE PLAN DOCUMENT
2.1 Alternate Payee.................................. 2
2.2 Beneficiary...................................... 2
2.3 Board............................................ 2
2.4 Bookkeeping Account.............................. 2
2.5 Change of Control................................ 2
2.6 Committee........................................ 3
2.7 Company.......................................... 3
2.8 Compensation..................................... 3
2.9 Deferred Compensation............................ 3
2.10 Disability....................................... 3
2.11 Domestic Relations Order......................... 3
2.12 Election Date.................................... 4
2.13 Employee......................................... 4
2.14 Enrollment/Change Form........................... 4
2.15 Participant...................................... 4
2.16 Plan............................................. 4
2.17 Plan Administrator............................... 4
2.18 Plan Year........................................ 4
2.19 Qualified Plan................................... 4
2.20 Termination of Service........................... 4
2.21 Valuation Date................................... 4
2.22 Gender and Number................................ 4
2.23 Titles........................................... 5
ARTICLE III
ELIGIBILITY AND PARTICIPATION
3.1 Eligibility...................................... 6
3.2 Participation.................................... 6
ARTICLE IV
PARTICIPANT DEFERRALS OF COMPENSATION AND COMPANY
MATCHING CONTRIBUTIONS
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4.1 Compensation Deferral............................ 7
4.2 Matching Contribution............................ 7
4.3 Election to Participate, Modify, or Terminate
Future Contributions............................. 7
4.4 No Deferral Without Completion of
Enrollment/Change Form........................... 7
4.5 Duration of Enrollment/Change Forms.............. 7
4.6 Change in Status................................. 8
4.7 Deferrals on Change of Status of
Participation.................................... 8
ARTICLE V
DEFERRAL ACCOUNT AND EARNINGS CREDITING RATE
5.1 Bookkeeping Account.............................. 9
5.2 Deemed Investment of the Bookkeeping Account..... 9
5.3 Earnings Crediting Rate.......................... 9
ARTICLE VI
DISTRIBUTION
6.1 Distribution of Account Balance.................. 10
6.2 Change in Distribution Method.................... 10
6.3 Payment Upon Change of Control................... 10
6.4 Nonforfeitable Right to Contributions............ 10
6.5 Form of Distribution............................. 11
6.6 Timing of Distribution........................... 11
ARTICLE VII
HARDSHIP DISTRIBUTIONS
7.1 Hardship......................................... 12
ARTICLE VIII
BENEFICIARY
8.1 Beneficiary Designation.......................... 13
8.2 Proper Beneficiary............................... 13
8.3 Minor or Incompetent Beneficiary................. 13
ARTICLE IX
ADMINISTRATION OF THE PLAN
9.1 Majority Vote.................................... 14
9.2 Finality of Determination........................ 14
9.3 Certificates and Reports......................... 14
9.4 Indemnification and Exculpation.................. 14
9.5 Expenses......................................... 14
ARTICLE X
CLAIMS PROCEDURE
10.1 Written Claim.................................... 15
10.2 Denied Claim..................................... 15
10.3 Review Procedure................................. 15
10.4 Committee Review................................. 15
ii
<PAGE>
ARTICLE XI
GENERAL PROVISIONS
11.1 No Funding....................................... 16
11.2 No Contract of Employment........................ 16
11.3 Withholding Taxes................................ 16
11.4 Restrictions on Transfer......................... 16
11.5 Domestic Relations Order/Alternate Payee......... 16
11.6 Construction..................................... 17
11.7 Binding Upon Successors and Assigns.............. 17
11.8 Life Insurance and Funding....................... 17
11.9 Form of Communication............................ 17
11.10 Right to Terminate...................... 18
11.11 Right to Amend.......................... 18
iii
<PAGE>
ARTICLE I
PURPOSE AND EFFECTIVE DATE
1.1 TITLE. This Plan shall be known as Trigon Blue Cross Blue Shield
401(k) Restoration Plan (hereinafter referred to as the "Plan").
1.2 PURPOSE. The purpose of the Plan is to permit a select group of
management or highly compensated employees of Blue Cross and Blue Shield of
Virginia to defer the receipt of compensation without regard to the limits
imposed by the Internal Revenue Code on tax-qualified plans that include a cash
or deferred arrangement. The Plan constitutes an unfunded "top hat" arrangement
under Title I of ERISA.
1.3 EFFECTIVE DATE. The effective date of this Plan shall be
January 1, 1995.
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<PAGE>
ARTICLE II
DEFINITIONS AND CONSTRUCTION OF THE PLAN DOCUMENT
2.1 ALTERNATE PAYEE. "Alternate Payee" means any spouse, former
spouse, child or other dependent of a Participant who is recognized by a
Domestic Relations Order as having a right to receive all or a portion of the
benefits payable under the Plan with respect to such Participant.
2.2 BENEFICIARY. "Beneficiary" means the person or persons or the
estate of a Participant entitled to receive any benefits under this Plan in the
event of the Participant's death.
2.3 BOARD. "Board" means the Board of Directors of Blue Cross and
Blue Shield of Virginia.
2.4 BOOKKEEPING ACCOUNT. "Bookkeeping Account" means the
bookkeeping record established by the Company for each Participant who elects to
defer Compensation under this Plan.
2.5 CHANGE OF CONTROL. "Change of Control" means:
(a) The acquisition, other than from the Company, by any
individual, entity or group (within the meaning of Section 13(d)(3) or
14(d)(2) of the Securities Exchange Act of 1934, as amended, of
beneficial ownership (within the meaning of Rule 13d-3 promulgated
under the Securities Exchange Act of 1934) of 20% or more of either the
then outstanding shares of common stock of the Company or the combined
voting power of the then outstanding voting securities of the Company
entitled to vote generally in the election of directors, but excluding
for this purpose, any such acquisition by the Company or any of its
subsidiaries, or any employee benefit plan (or related trust) of the
Company or its subsidiaries, or any corporation with respect to which,
following such acquisition, more than 50% of, respectively, the then
outstanding shares of common stock of such corporation and the combined
voting power of the then outstanding voting securities of such
corporation entitled to vote generally in the election of directors is
then beneficially owned, directly or indirectly, by the individuals and
entities who were the beneficial owners, respectively, of the common
stock and voting securities of the Company immediately prior to such
acquisition in substantially the same proportion as their ownership,
immediately prior to such acquisition, of the then outstanding shares
of common stock of the Company or the combined voting power of the then
outstanding voting securities of the Company entitled to vote generally
in the election of directors, as the case may be; or
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<PAGE>
(b) Individuals who, as of January 1, 1996, constitute the
Board (as of the date hereof the "Incumbent Board") cease for any
reason to constitute at least a majority of the Board, provided that
any individual becoming a director subsequent to January 1, 1996 whose
election or nomination for election by the Company's shareholders was
approved by a vote of at least a majority of the directors then
comprising the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but excluding, for
this purpose, any such individual whose initial assumption of office is
in connection with an actual or threatened election contest relating to
the election of the Directors of the Company (as such terms are used in
Rule 14a-11 of Regulation 14A promulgated under the Securities Exchange
Act of 1934); or
(c) Approval by the shareholders of the Company of a
reorganization, merger or consolidation, in each case, with respect to
which the individuals and entities who were the respective beneficial
owners of the common stock and voting securities of the Company
immediately prior to such reorganization, merger or consolidation do
not, following such reorganization, merger or consolidation,
beneficially own, directly or indirectly, more than 50% of,
respectively, the then outstanding shares of common stock and the
combined voting power of the then outstanding voting securities en
titled to vote generally in the election of directors, as the case may
be, of the corporation resulting from such reor ganization, merger or
consolidation, or a complete liquidation or dissolution of the Company
or of its sale or other disposition of all or substantially all of the
assets of the Company.
2.6 COMMITTEE. "Committee" means the Human Resources, Compensation
and Employee Benefits Committee of the Board of Directors.
2.7 COMPANY. "Company" means Blue Cross and Blue Shield of Virginia
d/b/a Trigon Blue Cross Blue Shield and any subsidiary or affiliated company
that adopts the Plan, with the Company's approval, for its Employees.
2.8 COMPENSATION. "Compensation" shall have the same meaning as
provided in the Qualified Plan without regard to any limitations imposed by
Sections 401(a)(17), 402(g) and 415 of the Internal Revenue Code and without
regard to any deferrals made under the terms of this Plan.
2.9 DEFERRED COMPENSATION. "Deferred Compensation" means the
portion of a Participant's Compensation earned after the effective date of the
Participant's Enrollment/Change Form for any calendar year, or part thereof,
that has been deferred pursuant to the Plan.
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<PAGE>
2.10 DISABILITY. "Disability" means Total and Permanent Disability
for purposes of and determined under the terms of the Company's long-term
disability plan in effect at the time of such determination of Disability.
2.11 DOMESTIC RELATIONS ORDER. "Domestic Relations Order" means any
judgement, decree or order (including approval of a property settlement
agreement) which relates to the provision of child support, alimony payments or
marital 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).
2.12 ELECTION DATE. "Election Date" means the date established by this
Plan as the date before which an Employee must submit a valid Enrollment/Change
Form to the Committee. The applicable Election Dates are as follows: (a) 15 days
after adoption of the Plan for Employees who are eligible to participate at the
time the Plan is adopted, or (b) 15 days after a newly eligible Employee is
notified of the right to participate in the Plan.
2.13 EMPLOYEE. "Employee" means any member of management or highly
compensated employee employed by the Company or subsidiary or affiliated company
who is selected for participation by the Committee.
2.14 ENROLLMENT/CHANGE FORM. "Enrollment/Change Form" means the written
form submitted to the Plan Administrator prior to the applicable Election Date.
Each Enrollment/Change Form shall indicate (a) whether the Employee wishes to
defer a portion of Compensation and, (b) the percentage of compensation to be
deferred. No Enrollment/Change Form shall be effective until acknowledged by the
Company.
2.15 PARTICIPANT. "Participant" means an Employee who has Deferred
Compensation pursuant to the terms of this Plan, and whose Bookkeeping Account
balance has not yet been fully distributed.
2.16 PLAN. "Plan" means Trigon Blue Cross Blue Shield 401(k)
Restoration Plan as amended from time to time.
2.17 PLAN ADMINISTRATOR. "Plan Administrator" means the Senior
Vice President, Corporate Services of the Company.
2.18 PLAN YEAR. "Plan Year" means the twelve month period
commencing January 1 and ending December 31.
2.19 QUALIFIED PLAN. "Qualified Plan" means the Employees Thrift
Plan of Trigon Blue Cross Blue Shield, as in effect at the date of the adoption
of this Plan and as amended from time to time.
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<PAGE>
2.20 TERMINATION OF SERVICE. "Termination of Service" or similar
expression means the termination of the Participant's employment as a common-law
employee of the Company or any subsidiary or affiliate thereof.
2.21 VALUATION DATE. "Valuation Date" means the date on which
Deferred Compensation would otherwise be credited with interest or earnings
pursuant to the Qualified Plan.
2.22 GENDER AND NUMBER. Wherever the context so requires,
masculine pronouns include the feminine and singular words shall include the
plural.
2.23 TITLES. Titles of the Articles of this Plan are included for ease
of reference only and are not to be used for the purpose of construing any
portion or provision of this Plan document.
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<PAGE>
ARTICLE III
ELIGIBILITY AND PARTICIPATION
3.1 ELIGIBILITY. Eligibility for participation in this Plan shall be
determined by the Committee, in its sole discretion, but all Participants must
be a member of a select group of management or highly-compensated employees of
the Company and must be an eligible participant in the Qualified Plan.
3.2 PARTICIPATION. In order to become a Participant, an Employee
selected for participation by the Committee shall complete and return to the
Plan Administrator a duly executed Enrollment/Change Form. A Bookkeeping Account
will be established by the Company for each Participant as provided in Section
5.1.
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<PAGE>
ARTICLE IV
PARTICIPANT DEFERRALS OF COMPENSATION AND
COMPANY MATCHING CONTRIBUTIONS
4.1 COMPENSATION DEFERRAL. Each Participant in the Plan may elect to
have a percentage of Compensation deferred in accordance with the terms and
conditions of this Plan. The percentage of such Compensation to be deferred each
pay period shall be any whole percentage from 2% to 16% of Compensation, offset
by amounts actually deferred in the applicable pay period to the Company's
Qualified Plan.
4.2 MATCHING CONTRIBUTION. The Company shall add to each Participant's
Bookkeeping Account as of the last day of each pay period with respect to
amounts deferred by a Participant under Section 4.1, an amount equal to the
difference between the amounts described in (a) and (b) as follows:
(a) The amount equal to the matching contribution the Company
would have made to the Qualified Plan based on the Participant's
Compensation for such pay period if the Participant had made a
contribution to the Qualified Plan in the amount of the contributions
under Section 4.1 above without regard to the offset for amounts
actually deferred during the applicable pay period under the Company's
Qualified Plan.
(b) The amount equal to the Company's actual matching
contribution to the Qualified Plan for such pay period.
4.3 ELECTION TO PARTICIPATE, MODIFY, OR TERMINATE FUTURE CONTRIBUTIONS.
An eligible Employee desiring to participate in the Plan, or a Participant who
desires to modify or terminate the amount of future Compensation being deferred
under the Plan, must notify the Plan Administrator at least 15 days before the
payroll date for which the deferral is effective in writing on an
Enrollment/Change Form provided by the Plan Administrator.
4.4 NO DEFERRAL WITHOUT COMPLETION OF ENROLLMENT/CHANGE FORM. A
Participant who has not submitted a valid Enrollment/Change Form to the Plan
Administrator before the relevant Election Date may not defer any Compensation
under this Plan for the applicable pay period.
4.5 DURATION OF ENROLLMENT/CHANGE FORMS. Enrollment/Change Forms
shall remain in effect until modified or terminated as provided in Section 4.3.
Future deferrals will be terminated automatically for any Participant who is
deemed (by the Plan Administrator) to no longer be eligible for participation in
the Plan.
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<PAGE>
4.6 CHANGE IN STATUS. If a Participant ceases to be eligible to
participate or elects not to be an active Participant but continues to be
employed by the Company, deferrals shall be suspended as provided in Section
4.7. All other provisions of the Plan shall remain in effect, and the
Participant shall continue to be entitled to credits under Section 5.2 of the
Plan until the Participant's Bookkeeping Account is fully distributed as
provided in Article VI.
4.7 DEFERRALS ON CHANGE OF STATUS OF PARTICIPATION. Deferral credits
pursuant to Sections 4.1 and 4.2 for a Participant whose status changes will be
governed by the following provisions:
(a) A Participant who elects not to participate in the Plan
will be credited with deferrals through and ending with the payroll
period within which the Participant's Election/Change Form is received
by the Plan Administrator.
(b) A Participant who becomes an ineligible Participant
because he ceases to be within the group of employees determined by the
Committee to be eligible to participate in the Plan will be entitled to
Participant credits and Employer matching credits pursuant to Sections
4.1 and 4.2 through the end of the pay period within which the
Participant ceases to be eligible.
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<PAGE>
ARTICLE V
DEFERRAL ACCOUNT AND EARNINGS CREDITING RATE
5.1 BOOKKEEPING ACCOUNT. Compensation deferred by a Participant under
Section 4.1 and matching contributions under Section 4.2, and earnings credited
pursuant to Section 5.2, shall be credited to a separate Bookkeeping Account for
each Participant. Distributions pursuant to Articles VI and VII shall be debited
against the Participant's Bookkeeping Account.
5.2 DEEMED INVESTMENT OF THE BOOKKEEPING ACCOUNT. Each Participant's
Bookkeeping Account, and Deferred Compensation and Matching Contributions
credited to his or her Bookkeeping Account for each pay period, shall be deemed
to be invested as the Participant directs from time to time the investment of
his account balance and future contributions to the Qualified Plan. No separate
election by the Participant with respect to deemed investments in the Plan is
permitted or required.
5.3 EARNINGS CREDITING RATE. The amount in the Participants Bookkeeping
Account shall be credited or debited with earnings based on the adjustment of
the unit value of the participant's deemed investment funds on the date the
amounts are credited to the Participant's account balance in the Qualified Plan.
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<PAGE>
ARTICLE VI
DISTRIBUTION
6.1 DISTRIBUTION OF ACCOUNT BALANCE. Distribution of the value of a
Participant's Bookkeeping Account balance shall be in a lump sum or in up to 10
annual installments as specified by the Participant on the Participant's initial
Enrollment/Change Form. If the lump sum method has been specified by the
Participant, payment shall be made as soon as practicable after Termination of
Service for any reason. If the annual installment method has been selected and
the Participant has a Termination of Service prior to becoming eligible for
early retirement (other than Termination of Service due to death or Disability),
the Participant's Bookkeeping Account balance will nonetheless be distributed in
a lump sum. Annual installments may be selected in the event of death,
Disability, or Early Retirement. If a payment form is not specified on an
Enrollment/Change Form, a Participant's Bookkeeping Account balance shall be
distributed as a lump sum.
6.2 CHANGE IN DISTRIBUTION METHOD. A Participant may change the method
of distribution under Section 6.1 by filing a new Enrollment/Change Form, but
such change shall be effective only with respect to amounts credited to the
Participant's Bookkeeping Account for the pay period beginning after the date
the new Enrollment/Change Form is received by the Plan Administrator and, except
as hereinafter provided, the balance in the Participant's Bookkeeping Account
will be frozen as of such date (the "Frozen Balance"). Distribution of the
Frozen Balance shall be governed by the terms of the elections specified in the
Enrollment/Change Form pursuant to which the Compensation was deferred. Earnings
adjustments attributable to the Frozen Balance made pursuant to Section 5.2 will
be governed by the terms of the new Enrollment/Change Form. A Participant may
make a special election to change the method of distribution of a Frozen Balance
by filing a form designed for that purpose with the Plan Administrator, but such
change shall become effective on a date that is twelve months after the date
such form is filed with the Plan Administrator. If the Participant becomes
entitled to a distribution from the Plan before such twelve-month period has
expired, the election shall be of no effect.
6.3 PAYMENT UPON CHANGE OF CONTROL. Notwithstanding any other provision
of the Plan to the contrary, and unless the Participant made and filed with the
Plan Administrator as soon as practicable after becoming a Participant, but in
any event not later than six months before the occurrence of a Change of
Control, an irrevocable election to defer receipt of payment to the date of his
or her retirement or earlier termination of employment, upon a Change of
Control, the Company shall pay to such Participant,
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<PAGE>
Beneficiary or Alternate Payee of the Participant, within 30 days of a Change of
Control a lump sum in cash in an amount equal to the amount credited to his or
her Bookkeeping Account as of the Change of Control.
6.4 NONFORFEITABLE RIGHT TO CONTRIBUTIONS. The Participant shall have a
nonforfeitable right to the value of the Bookkeeping Account attributable to the
Participant's contributions plus deemed earnings on the Participant's
contributions under the terms of this Plan. The Participant shall have a
nonforfeitable right to the value of the Bookkeeping Account attributable to the
Matching Contributions plus deemed earnings on the Matching Contributions at the
same time he or she becomes vested in the Qualified Plan.
6.5 FORM OF DISTRIBUTION. All distributions of a Participant's
Bookkeeping Account shall be made only in cash.
6.6 TIMING OF DISTRIBUTION. Distributions shall commence, or be paid
in a lump sum if so elected, as soon as administratively feasible after the
Participant's last day of employment.
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ARTICLE VII
HARDSHIP DISTRIBUTIONS
7.1 HARDSHIP. At the request of a Participant or at the request of any
of the Participant's Beneficiaries after the Participant's death, the Committee
may, in its sole discretion, accelerate and pay all or part of the value of a
Participant's Bookkeeping Account due under this Plan. Accelerated distributions
at the request of the Participant or a Participant's Beneficiary may be allowed
only in the event of a financial emergency beyond the Participant's or
Beneficiary's control due to unforeseeable circumstances and only if
disallowance of a distribution would create a severe hardship for the
Participant or Beneficiary. An accelerated distribution must be limited to only
that amount necessary to relieve the financial emergency. The determination of
hardship and the amount of the hardship distribution by the Committee shall be
final and conclusive and binding on the Participant or Beneficiary making the
request.
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ARTICLE VIII
BENEFICIARY
8.1 BENEFICIARY DESIGNATION. A Participant shall designate a
Beneficiary to receive benefits under the Plan on appropriate forms provided by
and filed with the Plan Administrator. If more than one Beneficiary is named,
the shares and/or precedence of each Beneficiary shall be indicated. A
Participant shall have the right to change the Beneficiary by submitting to the
Plan Administrator a change of Beneficiary form. However, no change of
Beneficiary shall be effective until acknowledged in writing by the Plan
Administrator.
8.2 PROPER BENEFICIARY. If the Plan Administrator has any doubt as to
the proper Beneficiary to receive payments hereunder, the Plan Administrator
shall have the right to withhold such payments until the matter is finally
adjudicated. However, any payment made by the Plan Administrator, in good faith
and in accordance with this Plan, shall fully discharge the Company from all
further obligations with respect to that payment.
8.3 MINOR OR INCOMPETENT BENEFICIARY. In making any payments to or for
the benefit of any minor or an incompetent Beneficiary, the Plan Administrator,
in its sole and absolute discretion may make a distribution to a legal or
natural guardian or other relative of a minor or court appointed representative
of such incompetent. Or, it may make a payment to any adult with whom the minor
or incompetent temporarily or permanently resides. The receipt by a guardian,
representative, relative or other person shall be a complete discharge to the
Company. Neither the Company nor the Plan Administrator shall have any
responsibility to see to the proper application of any payments so made.
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ARTICLE IX
ADMINISTRATION OF THE PLAN
9.1 MAJORITY VOTE. All resolutions or other actions taken by the
Committee shall be by vote of a majority of those present at a meeting at which
a majority of the members are present, or in writing by all the members at the
time in office if they act without a meeting.
9.2 FINALITY OF DETERMINATION. Subject to the Plan, the Committee in
administering the Plan shall, from time to time, establish rules, forms and
procedures for the administration of the Plan. Except as herein otherwise
expressly provided, the Committee shall have the exclusive right to interpret
the Plan and to decide any and all matters arising thereunder or in connection
with the administration of the Plan, and it shall endeavor to act, whether by
general rules or by particular decisions, so as not to discriminate in favor of
or against any person. The decisions, actions and records of the Committee shall
be conclusive and binding upon the Company and all persons having or claiming to
have any right or interest in or under the Plan, and cannot be overruled by a
court of law unless arbitrary or capricious.
9.3 CERTIFICATES AND REPORTS. The members of the Committee, the Plan
Administrator and the officers and directors of the Company shall be entitled to
rely on all certificates and reports made by any duly appointed accountants, and
on all opinions given by any duly appointed legal counsel, which legal counsel
may be counsel for the Company.
9.4 INDEMNIFICATION AND EXCULPATION. The Company shall indemnify and
hold harmless persons serving from time to time as Plan Administrator and each
current and former member of the Committee and each current and former member of
the Board ("Indemnitees") against any and all expenses and liabilities (to the
extent not indemnified under any liability insurance contract or other
indemnification agreement) which the person incurs on account of any act or
failure to act in connection with the good faith administration of the Plan.
Expenses against which an Indemnitee shall be indemnified hereunder shall
include, without limitation, the amount of any settlement or judgment, costs,
counsel fees, and related charges reasonably incurred in connection with a claim
asserted, or a proceeding brought or settlement thereof. The foregoing right of
indemnification shall be in addition to any other rights to which any such
Indemnitee may be entitled as a matter of law, but shall be conditioned upon the
person's notifying the Company of the claim of liability within 60 days of the
notice of that claim and offering the Company the right
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to participate in and control the settlement and defense of the claim.
9.5 EXPENSES. The expenses of administering the Plan shall be borne
by the Company.
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ARTICLE X
CLAIMS PROCEDURE
10.1 WRITTEN CLAIM. Benefits shall be paid in accordance with the
provisions of this Plan. The Participant, or a designated recipient or any other
person claiming through the Participant shall make a written request for
benefits under this Plan. This written claim shall be mailed or delivered to the
Plan Administrator. Such claim shall be reviewed by the Plan Administrator or a
delegate.
10.2 DENIED CLAIM. If the claim is denied, in full or in part, the Plan
Administrator shall provide a written notice within ninety (90) days setting
forth the specific reasons for denial, and any additional material or
information necessary to perfect the claim, and an explanation of why such
material or information is necessary, and appropriate information and
explanation of the steps to be taken if a review of the denial is desired.
10.3 REVIEW PROCEDURE. If the claim is denied and a review is desired,
the Participant (or Beneficiary) shall notify the Plan Administrator in writing
within sixty (60) days after receipt of the written notice of denial. In
requesting a review, the Participant or Beneficiary may request a review of the
Plan Document or other pertinent documents with regard to the employee benefit
Plan created under this agreement, may submit any written issues and comments,
may request an extension of time for such written submission of issues and
comments, and may request that a hearing be held, but the decision to hold a
hearing shall be within the sole discretion of the Committee.
10.4 COMMITTEE REVIEW. The decision on the review of the denied claim
shall be rendered by the Committee within sixty (60) days after the receipt of
the request for review (if no hearing is held) or within sixty (60) days after
the hearing if one is held. The decision shall be written and shall state the
specific reasons for the decision including reference to specific provisions of
this Plan on which the decision is based.
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ARTICLE XI
GENERAL PROVISIONS
11.1 NO FUNDING. Nothing contained in this Plan shall require the
Company or any subsidiary or affiliate to segregate any assets from its general
funds, or to create any trusts, or to make any special deposits for any amounts
to be paid to any Participant, former Participant, Beneficiary or Alternate
Payee. Participants, former Participants and any Beneficiary of a Participant or
Alternate Payee shall not have any right, title or interest in or to any
specific funds or property of the Company or any subsidiary or affiliate, and
their interest shall be those of a general creditor.
11.2 NO CONTRACT OF EMPLOYMENT. The existence of this Plan does not
constitute a contract for continued employment between a Participant and the
Company or any subsidiary or affiliate.
11.3 WITHHOLDING TAXES. All payments under the Plan shall be subject
to and net of an amount sufficient to satisfy all federal, state or local
withholding tax requirements.
11.4 RESTRICTIONS ON TRANSFER. Any benefits to which a Participant, his
Beneficiary or Alternate Payee may become entitled under this Plan are not
subject in any manner to anticipation, alienation, sale, transfer, assignment,
pledge, or encumbrance, and any attempt to do so is void. Benefits are not
subject to attachment or legal process for the debts, contracts, liabilities,
engagements or torts of a Participant, his Beneficiary or Alternate Payee. This
Plan does not give a Participant, his Beneficiary or Alternate Payee any
interest, lien, or claim against any specific assets of the Company or any
subsidiary or affiliate. Participants and their Beneficiaries have only the
rights of general creditors of the Company or any subsidiary or affiliate.
11.5 DOMESTIC RELATIONS ORDER/ALTERNATE PAYEE.
(a) Notwithstanding the provisions of Section 11.4, an
Alternate Payee shall be entitled to receive a benefit under the Plan, computed
by reference to the Participant's benefit in accordance with the terms of the
Domestic Relations Order. Benefits shall be paid at the time and in the manner
benefits begin to be paid or are paid to the Participant unless the Domestic
Relations Order requires an earlier and/or different manner of payment. If the
Alternate Payee predeceases the Participant before payments begin to be paid or
are paid to the Participant, the Alternate Payee's interest in the Plan shall
begin to be paid or shall be paid (i) at the time and in the manner the
Alternate Payee would have received or began to receive payment had the
Alternate
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Payee survived, and (ii) if not inconsistent with the terms of the Domestic
Relations Order, to the person or persons designated by the Alternate Payee in a
writing filed with and acknowledged by the Company, or, if no writing has been
filed or if the person or persons designated predecease the Alternate Payee, to
the legal representative of the Alternate Payee.
(b) The Domestic Relations Order shall clearly specify (i) the
name and last known mailing address of the Participant and the name and mailing
address of each Alternate Payee covered by the order, (ii) the amount or
percentage of the Participant's benefit to be paid by the Plan to each Alternate
Payee, or the manner in which such amount or percentage is to be determined, and
(iii) any limitation on the number of payments or period to which such order
applies. The Company shall not be required to make payments to an Alternate
Payee pursuant to a Domestic Relations Order that requires the Plan to (i)
provide any type or form of benefit, or payment option, not otherwise provided
under the Plan, (ii) provide increased benefits (determined on the basis of
actuarial value), or (iii) pay benefits to an Alternate Payee otherwise required
to be paid to another Alternate Payee under an order previously determined to be
a Domestic Relations Order.
(c) The Company shall have the right to delay any payment of a
benefit under the Plan to an Alternate Payee for up to 180 days if necessary to
determine whether the Domestic Relations Order complies with the provisions of
this section.
(d) If an Alternate Payee cannot be located after a diligent
search has been conducted, the interest of the Alternate Payee can be forfeited
at the direction of the Company at any time after a two-year period and restored
to the Participant on such conditions and terms as the Company shall determine.
11.6 CONSTRUCTION. For construction, one gender includes the other, and
the singular and plural include each other where the meaning would be
appropriate. This Plan is construed in accordance with the laws of the
Commonwealth of Virginia, except to the extent that the laws of the United
States of America have superseded those laws. The headings in this Plan have
been inserted for convenience of reference only and are to be ignored in any
construction of the provision. If a provision of this Plan is not valid, that
invalidity does not affect the remaining provisions.
11.7 BINDING UPON SUCCESSORS AND ASSIGNS. The provisions of the Plan
shall be binding upon the Participant and the Company and their successors,
assigns, heirs, executors and beneficiaries.
11.8 LIFE INSURANCE AND FUNDING. The Company in its discretion may
apply for and procure as owner and for its own benefit insurance on the life of
the Participant, in such amounts
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and in such forms as the Company may choose. The Participant shall have no
interest whatsoever in any such policy or policies, but, as a condition of
participation and at the request of the Company, the Participant shall submit to
medical examinations and supply such information and execute such documents as
may be required by the insurance company or companies to whom the Company has
applied for insurance.
11.9 FORM OF COMMUNICATION. Any election, application, claim, notice or
other communication required or permitted to be made by a Participant shall be
in writing and in such form as the Committee shall prescribe. Such communication
shall be effective upon mailing, if sent by first class mail, postage pre-paid,
and addressed to the Company's office at 2015 Staples Mill Road, Richmond,
Virginia 23230.
11.10 RIGHT TO TERMINATE. The Board may, in its sole discretion,
terminate this Plan at any time. If the Plan is terminated, each Participant,
former Participant or Beneficiary whose benefits are not in pay status shall be
entitled to (a) begin to receive installment payments as provided, in Section
6.1, or (b) receive a single lump sum payment equal to the balance in his
Bookkeeping Account (including the unpaid balance of the Bookkeeping Account of
a Participant whose benefits are in pay status), as determined by the Company.
The single lump sum payment shall be made as soon as practicable (but not later
than 60 days) following the date the Plan is terminated and shall be in lieu of
any other benefit which may be payable to the Participant, former Participant or
Beneficiary under the Plan.
11.11 RIGHT TO AMEND. The Board may, in its sole discretion, amend this
Plan in any way, provided no amendment shall adversely affect the rights of a
Participant, former Participant or Beneficiary with respect to amounts credited
to a Participant's, former Participant's or Beneficiary's Bookkeeping Account as
of the date of the amendment.
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IN WITNESS WHEREOF, the Company has caused this instrument to be executed by its
duly authorized officer on this 2nd day of October, 1995, effective as of
January 1, 1995.
BLUE CROSS BLUE SHIELD OF VIRGINIA
BY______________________________________
Ronald M. Nash
Senior Vice President,
Corporate Services
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