<PAGE>
Registration No. _______
FORM S-8
Registration Statement Under The Securities Act of 1933
Torchmark Corporation
(Exact name of registrant as specified in its charter)
Delaware 63-0780404
(State or other jurisdiction (I.R.S. Employer
or incorporation or Identification No.)
organization)
2001 Third Avenue South, Birmingham, Alabama 35233
(Address of Principal Executives Offices) (Zip Code)
Profit Sharing and Retirement Plan of
Liberty National Life Insurance Company
(Full title of the plan)
Carol A. McCoy
Associate Counsel & Secretary
Torchmark Corporation
2001 Third Avenue South
Birmingham, AL 35233
(Name and address of agent for service)
(205) 325-4243
(Telephone number, including area code, of agent for service)
Calculation of Registration Fee
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------
Titles of Amount to be Proposed Proposed Amount
Securities to registered maximum maximum of
be registered offering aggregate offering registration
price per unit* price fee
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Torchmark
Corporation
Common Stock 400,000 shares $35.06 $14,024,000 $4,137.08
- -------------
</TABLE>
* Calculated pursuant to Rule 457(c) and (h)(1) based upon the average of the
high and low prices reported for Torchmark Corporation common stock in the
consolidated reporting system on July 16, 1999.
<PAGE>
EXPLANATORY STATEMENT
This registration pertains to the Profit Sharing and Retirement Plan of
Liberty National Life Insurance Company, a qualified employee pension benefit
plan as defined in ERISA. Liberty National Life Insurance Company is a wholly-
owned subsidiary of the registrant.
The Plan is being amended to permit participants to make voluntary intra-
plan transfers into and out of a stock fund consisting of common stock of the
registrant. Accordingly, this registration statement covers common stock of the
registrant being offered to participants in connection with such fund option,
and also covers an indeterminant number of plan interests as provided in Rule
416(c).
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference
Torchmark Corporation (the "Registrant" or the "Company") and the Profit
Sharing and Retirement Plan of Liberty National Life Insurance Company (the
"Plan") hereby incorporate by reference into this Registration Statement the
following documents:
(a) Registrant's latest annual report on Form 10-K filed pursuant to Section
13(a) of the Securities Exchange Act of 1934 for the most recent fiscal
year;
(b) All other reports filed pursuant to Section 13(a) or 15(d) of the
Securities Exchange Act of 1934 since the end of the fiscal year covered
by the Registrant document referenced to in (a) above; and
(c) The description of Registrant's common stock contained in the Form 10
Registration Statement filed under the Securities and Exchange Act of
1934, including any amendment or report filed for the purpose of
updating such description.
All documents subsequently filed by the Registrant or the Plan pursuant to
Sections 13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934,
prior to the filing of a post-effective amendment which indicates that all
securities offered have been sold or which deregisters all securities then
remaining unsold, shall be deemed to be incorporated by reference in the
Registration Statement and to be a part thereof from the date of filing of such
documents.
Item 4. Description of Securities.
The class of securities to be offered is registered under Section 12 of the
Securities Exchange Act of 1934.
Item 5. Interests of Named Experts and Counsel.
Not Applicable.
Item 6. Indemnification of Directors and Officers.
Section 1 of Article Ninth of the Restated Certificate of Incorporation of
the Registrant provides that a director will not be personally liable to the
Registrant or its stockholders for monetary damages for breach of fiduciary duty
as a director except for liability (a) for any breach of the duty of loyalty to
the Registrant or its stockholders, (b) for acts or omissions not in good faith
or which involve intentional misconduct or a knowing violation of law, (c) for
paying a dividend or approving a stock repurchase in violation of the Delaware
General Corporation Law (the "Act"), or (d) for any transaction from which the
director derived an improper personal benefit.
Section 2(a) of Article Ninth provides that each person who was or is made
a party or is threatened to be made a party to, or is involved in, specific
actions, suits or proceedings by reason of the fact that he or she is or was a
director or officer of the Registrant (or is or was serving at the request of
the Registrant as a director, officer, employee or agent for another entity)
while serving in such capacity will be indemnified and held harmless by the
Registrant, to the full extent authorized by the Act, as in effect (or, to the
<PAGE>
extent indemnification is broadened, as it may be amended) against all expense,
liability or loss (including attorneys' fees, judgments, fines, ERISA excise
taxes or penalties and amounts paid or to be paid in settlement) reasonably
incurred by such person in connection therewith. With respect to derivative
actions, indemnification only extends to expenses (including attorneys' fees)
incurred in connection with defense or settlement of such an action and the Act
requires court approval before there can be any indemnification where the person
seeking indemnification has been found liable to the Registrant. Rights
conferred hereby are contract rights and include the right to be paid by the
Registrant the expenses incurred in defending the proceedings specified above,
in advance of their final disposition; provided that, if the Act so requires,
such payment will only be made upon delivery to the Registrant by the
indemnified party of an undertaking to repay all amounts advanced if it is
ultimately determined that the person receiving such payments is not entitled to
be indemnified under such Section 2(a) or otherwise. The Registrant may, by
action of its Board of Directors, provide indemnification to its employees and
agents with the same scope and effect as the foregoing indemnification of
directors and officers.
Section 2(b) of Article Ninth provides that persons indemnified under
Section 2(a) may bring suit against the Registrant to recover unpaid amounts
claimed thereunder, and that if such suit is successful, the expense of bringing
such suit will be reimbursed by the Registrant. While it is a defense to such a
suit that the person claiming indemnification has not met the applicable
standards of conduct making indemnification permissible under the Act, the
burden of proving the defense is on the Registrant and neither the failure of
the Registrant's Board of Directors, independent legal counsel or the
shareholders to have made a determination that indemnification is proper, nor an
actual determination that the claimant has not met the applicable standard of
conduct is a defense to the action or creates a presumption that the claimant
has not met the applicable standard of conduct.
The right to indemnification and the payment of expenses incurred in
defending a proceeding in advance of its final disposition conferred in
paragraphs 2(a) and 2(b) of Article Ninth is not exclusive of any other right
which any person may have or acquire under any statute, provision of the
Certificate of Incorporation or By-Laws, or otherwise. The Registrant may
maintain insurance, at its expense, to protect itself and any directors,
officers, employees or agents of the Registrant or other entity against any
expense, liability or loss, whether or not the Registrant would have the power
to indemnify such persons against such expense, liability or loss under the Act.
Item 7. Exemption from Registration Claimed.
Not Applicable.
Item 8. Exhibits.
(4)(a) Conformed copy of Profit Sharing and Retirement Plan of
Liberty National Life Insurance Company
(23)(a) Consent of KPMG Peat Marwick LLP to incorporation by reference of
their audit report of January 29, 1999, except for Note 17, which is
as of February 10, 1999, into the Form S-8 Registration Statement of
Torchmark Corporation pertaining to the Profit Sharing and Retirement
Plan of Liberty National Life Insurance Company.
(24) Powers of attorney
<PAGE>
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 of 1933;
(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.
Notwithstanding the foregoing, any increase or decrease in volume of securities
offered (if the total dollar value of securities offered would not exceed that
which was registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of prospectus
filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20% change in the maximum
aggregate offering price set forth in the "Calculation of Registration Fee"
table in the effective 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;
(2) That, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at the time shall be deemed to be the initial bona fide offering thereof.
(e) The undersigned registrant hereby undertakes to deliver or cause to be
delivered with the prospectus, to each person to whom the prospectus is sent or
given, the latest annual report to security holders that is incorporated by
reference in the prospectus and furnished pursuant to and meeting the
requirements of Rule 14a-3 or Rule 14c-3 under the Securities Exchange Act of
1934; and, where interim financial information required to be presented by
Article 3 of Regulation S-X is not set forth in the prospectus, to deliver, or
cause to be delivered to each person to whom the prospectus is sent or given,
the latest quarterly report that is specifically incorporated by reference in
the prospectus to provide such interim financial information.
(h) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
<PAGE>
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the 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 Act and will be governed by the final adjudication of
such issue.
(k) The registant undertakes that the registant has submitted the Profit
Sharing and Retirement Plan of Liberty National Life Insurance Company, and will
submit any amendment to the plan, to the Internal Revenue Service in a timely
manner, and will make all changes required by the IRS to qualify the plan.
<PAGE>
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 City of Birmingham, State of Alabama, on July 19, 1999.
TORCHMARK CORPORATION
*
By:---------------------------------
C.B. Hudson
Chairman, President, Chief
Executive Officer and Director
(Principal Financial Officer)
*
---------------------------------
Gary L. Coleman
Vice President and Chief
Accounting Officer
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the date indicated.
* *
- ---------------------------------- ---------------------------------
David L. Boren, Director Mark S. McAndrew, Director
* *
- ---------------------------------- ---------------------------------
Joseph M. Farley, Director Harold T. McCormick, Director
* *
- ---------------------------------- ---------------------------------
Louis T. Hagopian, Director George J. Records, Director
* *
- ---------------------------------- ---------------------------------
Joseph L. Lanier, Jr., Director R.K. Richey, Director
/s/ Carol A. McCoy
*By:______________________________ Date: July 19, 1999
Carol A. McCoy,
Attorney-in-fact
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, AmSouth Bank,
N.A., as trustee of the Profit Sharing and Retirement Plan of Liberty National
Life Insurance Company has duly caused this registration statement to be signed
on its behalf by the undersigned, thereunto duly authorized, in the City of
Birmingham, State of Alabama, on July 2, 1999.
PROFIT SHARING AND RETIREMENT PLAN OF
LIBERTY NATIONAL LIFE INSURANCE COMPANY
By: AMSOUTH BANK, N.A., trustee
By: /s/ Stuart W. White
Its Assistant Vice President
<PAGE>
EXHIBIT 4(a)
PROFIT SHARING AND RETIREMENT PLAN
OF
LIBERTY NATIONAL LIFE INSURANCE COMPANY
(As Amended and Restated Effective as of January 1, 1989)
(Including Amendments Effective as of January 1, 1990 and January 1, 1993)
[Conforming Copy with Amendment 1 Effective October 1, 1998, and
Amendment 2, Effective May 1, 1999]
<PAGE>
BACKGROUND
Effective as of January 1, 1950, LIBERTY NATIONAL LIFE INSURANCE
COMPANY (the "Company") established a defined contribution profit sharing plan
(the "Plan") which is intended to be qualified pursuant to the provisions of the
Internal Revenue Code of 1986, as amended. The Plan is intended to provide
eligible employees of the Company, and those of any affiliate which adopts the
Plan, with a supplemental source of retirement income.
Effective April 5, 1982, the Plan was amended to (i) cease admitting
new participants to the Plan; and (ii) fully vest all Plan participants whose
employment terminated on or after April 5, 1982. Effective June 1, 1986, the
Plan was amended to fully vest all other Plan participants. Effective January
1, 1989, the Plan was amended and restated to comply with the Tax Reform Act of
1986. Effective January 1, 1990, the Plan was amended to cease any further
contributions to the Plan. The Plan was further amended effective January 1,
1993.
The benefit under the Plan of any participant who terminates employment
shall be determined in accordance with the provisions of the Plan as in effect
on the date of such termination of employment.
<PAGE>
TABLE OF CONTENTS
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Page
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BACKGROUND. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
TABLE OF CONTENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . .
ARTICLE I: PURPOSE. . . . . . . . . . . . . . . . . . . .
ARTICLE II: ADMINISTRATION . . . . . . . . . . . . . . . .
ARTICLE III: DEFINITIONS. . . . . . . . . . . . . . . . . .
(a) "Adjustment Factor". . . . . . . . . . . . . . . . . . . . . .
(b) "Administrative Committee" . . . . . . . . . . . . . . . . . .
(c) "Administrator". . . . . . . . . . . . . . . . . . . . . . . .
(d) "Affiliate". . . . . . . . . . . . . . . . . . . . . . . . . .
(e) "Annuity Contract" . . . . . . . . . . . . . . . . . . . . . .
(f) "Beneficiary". . . . . . . . . . . . . . . . . . . . . . . . .
(g) "Benefit Commencement Date". . . . . . . . . . . . . . . . . .
(h) "Board of Directors" . . . . . . . . . . . . . . . . . . . . .
(i) "Code" . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(j) "Company". . . . . . . . . . . . . . . . . . . . . . . . . . .
(k) "Company Stock". . . . . . . . . . . . . . . . . . . . . . . .
(k1) "Company Stock Fund" . . . . . . . . . . . . . . . . . . . . .
(l) "Compensation" . . . . . . . . . . . . . . . . . . . . . . . .
(m) "Credited Service" . . . . . . . . . . . . . . . . . . . . . .
(n) "Effective Date" . . . . . . . . . . . . . . . . . . . . . . .
(o) "Employee" . . . . . . . . . . . . . . . . . . . . . . . . . .
(p) "Employer" . . . . . . . . . . . . . . . . . . . . . . . . . .
(q) "ERISA". . . . . . . . . . . . . . . . . . . . . . . . . . . .
(r) "Five-Percent Owner" . . . . . . . . . . . . . . . . . . . . .
(s) "Hour of Service". . . . . . . . . . . . . . . . . . . . . . .
(s1) "Investment Fund(s)" . . . . . . . . . . . . . . . . . . . . .
(t) "Lapse". . . . . . . . . . . . . . . . . . . . . . . . . . . .
(u) "Member" . . . . . . . . . . . . . . . . . . . . . . . . . . .
(v) "One Year Break in Service". . . . . . . . . . . . . . . . . .
(w) "Parent of the Company". . . . . . . . . . . . . . . . . . . .
(x) "Pension Plan" . . . . . . . . . . . . . . . . . . . . . . . .
(y) "Plan" . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(z) "Plan Year". . . . . . . . . . . . . . . . . . . . . . . . . .
(aa) "Qualified Joint and Survivor Annuity. . . . . . . . . . . . .
(bb) "Retirement Date". . . . . . . . . . . . . . . . . . . . . . .
(cc) "Spouse" . . . . . . . . . . . . . . . . . . . . . . . . . . .
(dd) "Surviving Spouse" . . . . . . . . . . . . . . . . . . . . . .
(ee) "Trust" or "Trust Fund". . . . . . . . . . . . . . . . . . . .
(ff) "Trust Agreement". . . . . . . . . . . . . . . . . . . . . . .
(gg) "Trustee". . . . . . . . . . . . . . . . . . . . . . . . . . .
(hh) "Valuation Date" . . . . . . . . . . . . . . . . . . . . . . .
(hh1) "W&R Class A Stock". . . . . . . . . . . . . . . . . . . . . .
(hh2) "W&R Class B Stock". . . . . . . . . . . . . . . . . . . . . .
(hh3) "W&R Investment Funds" . . . . . . . . . . . . . . . . . . . .
(ii) "Year of Service". . . . . . . . . . . . . . . . . . . . . . .
(jj) "W&R Financial Stock". . . . . . . . . . . . . . . . . . . . .
ARTICLE IV: PARTICIPATION IN THE PLAN. . . . . . . . . . . .
ARTICLE V: DEPOSITS . . . . . . . . . . . . . . . . . . . .
ARTICLE VI: CONTRIBUTIONS. . . . . . . . . . . . . . . . . .
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ARTICLE VII: ALLOCATION OF CONTRIBUTIONS. . . . . . . . . . .
ARTICLE VIII: LIMITATION ON ALLOCATIONS. . . . . . . . . . . .
ARTICLE IX: INVESTMENT OF ASSETS . . . . . . . . . . . . . .
ARTICLE X: LAPSES . . . . . . . . . . . . . . . . . . . . .
ARTICLE XI: VALUATION OF ACCOUNTS. . . . . . . . . . . . . .
ARTICLE XII: RETIREMENT DATE. . . . . . . . . . . . . . . . .
(a) Normal Retirement Date . . . . . . . . . . . . . . . . . . . .
(b) Early Retirement Date. . . . . . . . . . . . . . . . . . . . .
(c) Deferred Retirement Date . . . . . . . . . . . . . . . . . . .
ARTICLE XIII: RETIREMENT BENEFIT . . . . . . . . . . . . . . .
ARTICLE XIV: DEATH BENEFIT. . . . . . . . . . . . . . . . . .
(a) Payment of Account Balances. . . . . . . . . . . . . . . . . .
(b) Beneficiaries. . . . . . . . . . . . . . . . . . . . . . . . .
(c) Direct Rollovers . . . . . . . . . . . . . . . . . . . . . . .
ARTICLE XV: DISABILITY BENEFIT . . . . . . . . . . . . . . .
ARTICLE XVI: VESTING. . . . . . . . . . . . . . . . . . . . .
ARTICLE XVII: PAYMENT OF BENEFITS. . . . . . . . . . . . . . .
(a) Benefit Commencement Date. . . . . . . . . . . . . . . . . . .
(b) Normal Form of Payment . . . . . . . . . . . . . . . . . . . .
(c) Optional Forms of Payment. . . . . . . . . . . . . . . . . . .
(d) Election of Optional Forms . . . . . . . . . . . . . . . . . .
(e) Change in Form or Timing of Benefit Payments . . . . . . . . .
(f) Direct Rollovers . . . . . . . . . . . . . . . . . . . . . . .
ARTICLE XVIII: LOANS AND WITHDRAWALS. . . . . . . . . . . . . .
ARTICLE XIX: DEBTS. . . . . . . . . . . . . . . . . . . . . .
ARTICLE XX: POWERS AND DUTIES OF NAMED FIDUCIARIES . . . . .
(a) Trustee. . . . . . . . . . . . . . . . . . . . . . . . . . . .
(b) Administrative Committee . . . . . . . . . . . . . . . . . . .
(c) Company Stock Provisions . . . . . . . . . . . . . . . . . . .
(d) W&R Financial Stock Provisions . . . . . . . . . . . . . . . .
ARTICLE XXI: MERGER, CONSOLIDATION OR TRANSFER OF ASSETS. . .
ARTICLE XXII: DISTRIBUTION OF BENEFITS . . . . . . . . . . . .
ARTICLE XXIII: AMENDMENT OR TERMINATION . . . . . . . . . . . .
ARTICLE XXIV: IRREVOCABILITY OF TRUST. . . . . . . . . . . . .
ARTICLE XXV: RULES OF CONSTRUCTION. . . . . . . . . . . . . .
ARTICLE XXVI: LIMITATION OF LIABILITY. . . . . . . . . . . . .
ARTICLE XXVII: NONALIENABILITY OF BENEFITS. . . . . . . . . . .
ARTICLE XXVIII: CONTROLLING LAW. . . . . . . . . . . . . . . .
</TABLE>
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ARTICLE XXIX: CONDITIONAL RESTATEMENT. . . . . . . . . . . . .
</TABLE>
APPENDIX A - TOP-HEAVY PROVISIONS
<PAGE>
1. PURPOSE
The purpose of this Plan is to make it possible for eligible employees to
share in the Employer's profit and to furnish a means for the accumulation of
employee savings, Employer contributions, and investment earnings in order to
provide an income for such employees at retirement.
2. ADMINISTRATION
The Named Fiduciaries, who shall have authority to control and manage the
operation and administration of the Plan, are as follows:
(a) the Company, which shall have the sole right to (i) appoint and
remove from office the members of the Administrative Committee, the Trustee and
any investment manager, and (ii) amend or terminate the Plan;
(b) the Administrative Committee, which shall have the authority and
duties specified in Section 20 hereof;
(c) the Trustee, which shall have the authority and duties specified in
Section 20 hereof and the Trust Agreement;
(d) any investment manager or managers selected by the Company, who
renders investment advice with respect to Plan assets.
A "named fiduciary" with respect to the Plan (as defined in ERISA ss
402(a)(2)) and any "fiduciary" (as defined in ERISA ss 3(21)) appointed by such
a "named fiduciary," may employ one or more persons to render advice with regard
to any responsibility of such "named fiduciary" or "fiduciary" under the Plan.
Any "named fiduciary" with respect to the Plan (as defined in ERISA
ss402(a)(2)) and any other "fiduciary" (as defined in ERISA ss 3(21)) with
respect to the Plan may serve in more than one fiduciary capacity.
Any fiduciary with respect to the Plan may rely upon any direction,
information or action of any other fiduciary, acting within the scope of its
responsibilities under the Plan, as being proper under the Plan.
The responsibilities of the Administrative Committee and the Trustee for the
operation and administration of the Plan are allocated between them in
accordance with the provisions of the Plan and the Trust Agreement wherein their
respective duties are specified. Each fiduciary shall have only the authority
and duties as are specifically given to it under this Plan, shall be responsible
for the proper exercise of its own authorities and duties, and shall not be
responsible for any act or failure to act of any other fiduciary.
3. DEFINITIONS
The following terms as used herein shall have the meaning shown below unless
the context requires otherwise:
(a) "Adjustment Factor" shall mean the cost of living adjustment
factor prescribed by the Secretary of the Treasury under Code ss 415(d) for
years beginning after December 31, 1987, as applied to such items and in such
manner as the Secretary shall provide.
(b) "Administrative Committee" shall mean the committee appointed by the
Board of Directors of the Company pursuant to, and having the responsibilities
specified in, Section 20.
(c) "Administrator" shall mean the Company or committee appointed by the
Board of Directors of the Company pursuant to, and having the responsibilities
specified in, Section 20.
<PAGE>
(d) "Affiliate" shall mean any corporation or unincorporated trade or
business (other than the Company) while it is:
(i) a member of a "controlled group of corporations: (within the meaning
of Code ss 414(b)) of which the Company is a member;
(ii) a trade or business under "common control" (within the meaning of Code
ss 414(c)) with the Company;
(iii) a member of an "affiliated service group" (within the meaning of Code
ss 414(m)) which includes the Company; or
(iv) any other entity required to be aggregated with the Company under Code
ss 414(o).
(e) "Annuity Contract" shall mean an individual or group annuity
contract, issued by an insurance company, providing periodic benefits, whether
fixed, variable or both, the benefits or value of which a Participant or
Beneficiary cannot transfer, sell, assign, discount, or pledge as collateral for
a loan or as security for the performance of an obligation, or for any other
purpose to any person other than the issuer thereof.
(f) "Beneficiary" shall mean the person who has been duly designated by a
Member to receive any payment of benefits pursuant to the terms of this Plan.
(g) "Benefit Commencement Date" shall mean the date, determined under
Sections 13 through 17, as of which Member or a Beneficiary receives or begins
to receive, as the case may be, payment of his benefits under the Plan.
(h) "Board of Directors" shall mean the Board of Directors of the
Company.
(i) "Code" means the Internal Revenue Code of 1986, as amended from time
to time. Reference to any specific provision of the Code shall include such
provision and any applicable regulation pertaining thereto.
(j) "Company" shall mean Liberty National Life Insurance Company, an
Alabama Corporation, or any successor thereto by consolidation, merger, transfer
of assets or otherwise.
(k) "Company Stock" shall mean shares of common stock issued by a
Delaware Corporation known as Torchmark Corporation, and any successor to all or
a major portion of the assets of Torchmark Corporation.
(k1) "Company Stock Fund" shall mean the Investment Fund that is
predominantly invested in Company Stock. Elections to transfer funds in and out
of the Company Stock Fund must be made in increments of 1%. The Company Stock
Fund shall consist of investments in Company Stock and so much cash as is
necessary to meet the liquidity and distribution needs of the Company Stock Fund
and the Plan. The Company Stock Fund shall be a unitized fund that is valued on
a daily basis. Intra-Plan purchases and sales of units in the Company Stock Fund
shall be based on the value of such units as of the day of purchase or sale.
(b) The Plan is a profit-sharing plan which may invest more than 10% ofits
assets in qualifying employer securities within the meaning of Section
407(d)(5) of ERISA.
(c) If a Member or Beneficiary is entitled to a distribution of benefits
under Article 22, he may elect to receive in whole shares of Company Stock so
much of his account as is invested in the Company Stock Fund at the time of
distribution. [Effective May 1, 1999]
<PAGE>
(l) "Compensation" shall mean the total cash compensation paid to a
Member during a calendar year by his Employer including salary, wages and
commission payments but excluding the following items:
(1) bonuses payable under the Management Incentive Bonus Plan;
(2) deferred compensation accrued under any deferred compensation
agreement or contract or any amendment or replacement thereof;
(3) director's fees;
(4) any contributions made by an Employer to any form of employee
retirement, pension or profit sharing plan; and
(5) any reimbursements of or allowances for expenses.
Notwithstanding any other provision of this definition, the Compensation of any
Member (or with respect to a Participant who is a Five-Percent Owner or a
Highly Compensated Employee (as defined by Code ss 414(q)) who is one of the ten
most Highly Compensated Employees, his or her Spouse, and his or her lineal
descendants under age 19) for any Plan Year beginning after December 31, 1993
shall not exceed $150,000 (or such adjusted amount as may be prescribed for such
Plan Year pursuant to Code ss 401(a)(17)).
(m) "Credited Service" shall mean all of an Employee's Years of Service
as defined in 3(gg), except that if an Employee terminates employment on or
after January 1, 1976, and is subsequently re-employed after a One Year Break in
Service, his Credited Service accumulated prior to his most recent consecutive
One Year Break(s) in Service will be reinstated when he is eligible under
Section 4 to participate again under the Plan.
(n) "Effective Date" shall mean the effective date of this amended and
restated Plan which shall be January 1, l989. The original effective date of
the Plan was January 1, 1950.
(o) "Employee" shall mean any individual who, under the usual common law
rules applicable in determining the employer-employee relationship, has the
status of an employee of an Employer, or any individual who is under contract
with the Employer as a Career Agent and who performs services for remuneration
for the employer as a full-time life insurance salesman including leased
employees within the meaning of Code ss 414(n)(2). Notwithstanding the
foregoing, if such leased employees do not constitute more than twenty percent
of the Employer's nonhighly compensated work force within the meaning of Code ss
414(n)(5)(C)(ii), the term "Employee" shall not include those leased employees
covered by a plan described in Code ss 414(n)(5), unless otherwise provided by
the terms of this Plan.
(p) "Employer" shall mean the Company, an Affiliate of the Company which
has been authorized to participate in this Plan by the Board of Directors of the
Company and the Board of Directors of the Affiliate, or a predecessor of either
the Company or such Affiliate.
(q) "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time. Reference to a specific provision of ERISA shall
include such provision and any applicable regulation pertaining thereto.
(r) "Five-percent Owner" shall mean any person who owns (or is considered
as owning within the meaning of Code ss 318) more than 5% of the outstanding
stock of the Employer, or stock possessing more than 5% of the total voting
power of the Employer.
(s) "Hour of Service" shall mean:
(i) Each hour for which an Employee is paid, or entitled to
<PAGE>
payment, for the performance of duties for an Employer, or an Affiliate of the
Employer in the case of an Employee who has transferred his employment to the
Employer from such Affiliate of the Employer, during the applicable computation
period.
(ii) Each hour for which an Employee is paid, or entitled to payment, by
an Employer, or an Affiliate of the Employer in the case of an Employee who has
transferred his employment to the Employer from such Affiliate of 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), lay-off, jury
duty, military duty or leave of absence. An hour for which an Employee is
directly or indirectly paid or entitled to payment on account of a period during
which no duties are performed is not credited to the Employee if such payment is
made or due under a plan maintained solely for the purpose of providing
severance benefits or complying with the applicable unemployment compensation
laws. Hours of Service are not credited for a payment which solely reimburses an
Employee for medical or medically related expenses incurred by the Employee.
(iii) Each hour for which back pay, irrespective of mitigation of
damages, is either awarded or agreed to by an Employer or an Affiliate of the
Employer in the case of an Employee who has transferred his employment to the
Employer from such Affiliate of the Employer. The same Hours of Service shall
not be credited both under paragraph (i) or paragraph (ii), as the case may be,
and under this paragraph (iii).
(iv) If an Employer determines in writing that an Employee's approved,
unpaid leave of absence furthers the interest of the Employer, each hour for
which the Employee on the approved unpaid leave of absence would normally have
received credit under this Plan if he had been working in his regular employment
for the Employer or an Affiliate of the Employer in the case of an Employee who
has transferred his employment to the Employer from such Affiliate of the
Employer.
(v) An Employee, who is regularly employed by the Employer (or an
Affiliate in the case of an Employee who has transferred his employment to the
Employer from such Affiliate) for at least 37-1/2 hours a week, or whose
Compensation consists in whole or in part of commissions from such Employer (or
Affiliate), shall be credited with forty-five Hours of Service if, under this
Plan, he would be credited with at least one Hour of Service during the week.
(vi) An Employee, who is not regularly employed by the Employer (or an
Affiliate in the case of an Employee who has transferred his employment to the
Employer from such Affiliate) for at least 37-1/2 hours a week, and whose
Compensation does not consist in part of commissions from such Employer (or
Affiliate), shall be credited with the actual Hours of Service for which he is
paid or entitled to credit under this Plan.
(vii) Hours of Service under this section shall be calculated and
credited pursuant to section 2530-200b-2 of the Department of Labor Regulations
which are incorporated herein by this reference.
(s1) "Investment Fund(s)" shall mean the investment funds selected by the
Plan Administrative Committee as investment options under the Plan. The
Investment Funds shall be identified by the Administrative Committee in a
separate Investment Policy, and shall be reviewed by the Administrative
Committee not less frequently than annually.
In addition to the Investment Funds identified in the Investment Policy, the
following itemized stock funds shall be available for investment under the Plan:
Company Stock Fund
Waddell & Reed (W&R) Class A Stock Fund
<PAGE>
Waddell & Reed (W&R) Class B Stock Fund
The W&R Class A and Class B Stock Funds shall be available to Members only
with respect to investment directions to move assets out of the fund. A Member
may not direct investment of additional assets or reinvestment of assets in the
W&R Class A or Class B Stock Funds. [Effective May 1, 1999]
(t) "Lapse" shall mean any amount standing to the credit of the account
of a withdrawing Member to which such Member was not entitled under the
provisions of Section 16 prior to June 1, 1986.
(u) "Member" shall mean a participant in the Plan as provided in Section
4.
(v) "One Year Break in Service" shall mean any period of twelve
consecutive months beginning with the date of an Employee's employment by the
Employer, or any anniversary of the date of such employment during which the
Employee has not completed more than 500 Hours of Service for the Employer (or
an Affiliate of the Employer in the case of an Employee who has transferred his
employment to the Employer from such Affiliate of the Employer) except that
effective January 1, 1985, for absences beginning on or after January 1, 1985, a
Member who is absent from work (due to such Member's pregnancy, the birth of the
Member's child or by reason of the adoption of a minor child by the Member for
the purpose of caring for such child immediately following its birth or
adoption) and who provides timely information establishing (to the satisfaction
of the Administrator) the reasons for the absence and the number of days of such
absence will be treated as performing a normal schedule (or eight hours per day)
of Hours of Service while absent (up to 501 hours) in either the year in which
the absence begins or the year immediately following the year in which the
absence begins as necessary to prevent such Member from incurring a Break in
Service in either (but not both) the year in which the absence begins or the
year immediately following the year in which the absence begins.
(w) "Parent of the Company" shall mean Torchmark Corporation, a Delaware
corporation, and any successor to all or a major portion of the assets thereof.
(x) "Pension Plan" means, where applicable, the United Investors
Management Company Retirement Income Plan and Trust as in effect on January 1,
1973 and as amended from time to time thereafter; the Liberty National Life
Insurance Company Pension Plan and Trust as in effect on January 1, 1976 and as
amended from time to time thereafter; the Torchmark Corporation Pension Plan and
Trust as in effect on January 1, 1983 and as amended from time to time
thereafter; or the Liberty National Life Insurance Company Pension Plan for
Non-Commissioned Employees and Trust as in effect on January 1, 1986 and as
amended from time to time thereafter.
(y) "Plan" shall mean the Profit-Sharing and Retirement Plan of Liberty
National Life Insurance Company.
(z) "Plan Year" shall mean each twelve consecutive month period ending on
December 31, during any part of which the Plan is in effect.
(aa) "Qualified Joint and Survivor Annuity" shall mean an annuity for the
life of the Member with a survivor annuity continuing after the Member's death
to the Member's Surviving Spouse for the Surviving Spouse's life in an amount
equal to fifty percent of the amount payable during the joint lives of the
Member and such Surviving Spouse.
(bb) "Retirement Date" shall mean the date upon which a Member retires from
active employment by the Employer under the terms of the Plan.
(cc) "Spouse" shall mean the person lawfully married to the Member.
<PAGE>
(dd) "Surviving Spouse" shall mean the Spouse of a Member on the earlier of:
(i) the date of the Member's death; or
(ii) the Member's Benefit Commencement Date.
(ee) "Trust" or "Trust Fund" or "Fund" means the trust established under the
Plan in which Plan assets are held.
(ff) "Trust Agreement" means the agreement between the Company and the
Trustee with respect to the Trust.
(gg) "Trustee" means the person appointed as trustee pursuant to Section
20, and any successor trustee.
(hh) "Valuation Date" shall mean the date for valuing Plan Accounts
determined in accordance with Article ll.
(hh1) "W&R Class A Stock" shall mean Waddell & Reed Class A common stock
held as a closed Investment Fund under the Plan. [Effective May 1, 1999]
(hh2) "W&R Class B Stock" shall mean Waddell & Reed Class B common stock
held as a closed Investment Fund under the Plan. [Effective May 1, 1999]
(hh3) "W&R Investment Funds" shall mean, collectively, the unitized funds
established with respect to W&R Class A Stock and W&R Class B Stock. These
funds shall constitute separate Investment Funds under the Plan unless removed
by the Plan Administrative Committee in its discretion. A Member is permitted
to transfer all or a portion of his existing investment in the W&R Investment
Funds to another Investment Fund under the Plan, but is not permitted to
reinvest or invest additional funds in the W&R Investment Funds. If all assets
held in the W&R Investment Funds are transferred out of the W&R Investment
Funds, these unitized funds shall be eliminated from the Plan's investment
options. [Effective May 1, 1999]
(ii) "Year of Service" shall mean:
(i) for employment or re-employment after a One Year Break in
Service, beginning in 1975 or later years, a period of twelve consecutive months
beginning with the date of employment or re-employment during which an Employee
has not less than 1000 Hours of Service for an Employer or an Affiliate in the
case of an Employee who has transferred his employment to the Employer from such
Affiliate;
(ii) for employment which began before 1975, with respect to periods
before the 1975 anniversary of such employment, an aggregate of fifty-two weeks
during each of which an Employee was employed on a permanent basis for at least
35 hours a week by an Employer or by an Affiliate in the case of an Employee who
has transferred his employment to the Employer from such Affiliate; and
(iii) for employment which began before 1975 with respect to periods
after the 1975 anniversary of such employment, a period of twelve consecutive
months beginning with the date of such anniversary in 1975 or later years during
which an Employee has not less than 1000 Hours of Service for an Employer of an
Employer in the case of an Employee who has transferred his employment to the
Employer from such Affiliate.
(jj) "W&R Financial Stock" shall mean shares of Class A or Class B common
stock of Waddell & Reed Financial, Inc. issued as a dividend on shares of common
stock of Torchmark Corporation held in the Member's account. [Effective October
1, 1998]
<PAGE>
4. PARTICIPATION IN THE PLAN
The Employees who became Members of the Plan and the dates when they became
Members are as follows:
(a) On January 1, 1976, every Employee of the Company or of an Affiliate
which was then authorized to participate in this Plan, who had one Year of
Service since the date of his then most recent employment by the Company or
Affiliate became a Member of the Plan. The period for determining the Year of
Service began on the date of his employment by the Employer. If an Employee had
not completed 1000 Hours of Service for the Employer by the anniversary of his
employment, the next twelve-month period for determining the Year of Service
began on the January 1 next after the date of his employment and any such
twelve-month period after that began on the anniversary of his employment.
(b) Prior to April 5, 1982 every other Employee of the Company or of an
Affiliate which was then authorized to participate in the Plan, became a Member
of the Plan on the first day of the payroll period in which he completed a Year
of Service for such Employer.
(c) Notwithstanding any other provisions of this section, no Employee
became or may become a Member of the Plan after April 4, 1982.
Members who are on a leave of absence approved in writing by the Employer or
Members who are totally and permanently disabled shall continue to be Members in
the Plan.
Membership in the Plan normally terminates when a Member retires, dies, ceases
to be an Employee (except because of an approved leave of absence or
disability), or withdraws the entire amount credited to his account to which he
would be entitled under the provisions of the Plan. Membership of a Member on a
paid leave of absence normally terminates when his paid leave of absence
terminates. However, unless a terminating Employee whose account exceeds $3,500
elects, in writing, to terminate his Membership in the Plan (and, if married,
his spouse consents to the election), he will continue to be a Member of the
Plan until his normal retirement date as defined in Section 12(a) of the Plan.
Any previous Member of the Plan who on January 1, 1980 was on an unpaid leave
of absence approved in writing by the Employer or who had begun such an unpaid
leave of absence between January 1, 1980 and July 22, 1980 again became a Member
of the Plan as of the later of January 1, 1980 or the date on which he
previously became a Member of the Plan. Such person was required to repay to the
Trustee of the Plan, by December 1, 1980, any amount which was paid to him from
his account in the Plan when his previous membership terminated. The Employer
was required to contribute to the Plan the amount by which the person's account
on the date of termination of his membership exceeded the amount paid to such
person. On the date on which such person again became a Member of the Plan, the
amount of his account in the Plan was equal to the total of the amount repaid by
such person to the Trustee and the amount contributed by the Employer in
accordance with this paragraph.
A previous Member of the Plan who was re-employed by an Employer before April
5, 1982 became a Member of the Plan immediately. If at the time of his re-
employment such a Member either had a one year break in service or could not
reasonably be expected to complete 500 hours of service between the most recent
anniversary of his previous employment by the Employer and the next anniversary
of such previous employment, the Member was not permitted to make deposits to
the Fund nor participate in the Employer contributions until he completed a year
of service for the Employer after his re-employment.
5. DEPOSITS
Except as provided in Section 4 and in the second paragraph of this Section,
each Member deposited 3% of his Compensation into the Fund. The amount
<PAGE>
deposited by each Member was deducted by the Employer from each payment of
Compensation to the Member and periodically paid by the Employer into the Fund
to be credited to the account of the Member.
Effective April 5, 1982, no Member was required or permitted to make deposits
into the Fund.
6. CONTRIBUTIONS
Except as hereafter provided, each Employer shall make a contribution to the
Fund each year from its profits on or before March 1 of each year as follows:
(a) With respect to the Plan Year beginning on January 1, 1989, each
Employer shall make a contribution to the Fund in an amount equal to the total
amount which would have been treated as Lapses under Section 10 of the Plan had
the Plan not been amended to fully vest all Members (without regard to such
Member's date of termination of employment or Credited Service).
(b) With respect to each Plan Year commencing on January 1, 1990, and
thereafter, no Employer shall make any further contributions to the Plan.
7. ALLOCATION OF CONTRIBUTIONS
Contributions in accordance with Section 6(a) shall be distributed to the
accounts of Members in the manner described in Section 10. For Plan Years
commencing on January 1, 1990, and thereafter, no further contributions shall be
distributed to the accounts of Members.
8. LIMITATION ON ALLOCATIONS
(a) As used in this Section, each of the following terms shall have the
meanings for that term set forth below:
(i) "Annual Additions" means, for each Member, the sum of the following
amounts credited to the Participant's account for the Limitation Year:
(A) Company or Affiliate contributions;
(B) Employee contributions;
(C) forfeitures; and
(D) amounts described in Code ss 415(l)(1) and 419A(d)(2).
Notwithstanding the foregoing provisions of this Section 8(a), Annual Additions
shall not include amounts attributable to rollover contributions or trust to
trust transfers.
(ii) "Limitation Year" means each twelve consecutive month period ending
on the same last day as the Plan Year.
(b) Notwithstanding any other provisions of the Plan, a Member's Annual
Addition shall not exceed the limitations of Code ss 415 which are hereby
incorporated by reference. In the event that the limitations of Code ss 415(e)
would otherwise be violated, a Member's benefits and/or annual additions under
plans of the Company or an Affiliate will be reduced as necessary in the
following order: (i) the accrued benefit under any defined benefit plan (pro
rata with respect to two or more such plans); (ii) unmatched employee
contributions under any defined contribution plan; and (iii) matched employee
contributions under any defined contribution plan. If after the application of
(i)-(iii) above, an excess amount still exists and the Member is covered by the
Plan at the end of the Limitation Year, the excess amount in the Member's
account will be used to reduce Employer contributions including any allocation
<PAGE>
of Lapse amounts under Section 10 of the Plan for such Member in the next
Limitation Year and each succeeding Limitation Year, if necessary. If after the
application of (i)-(iii) above, an excess still exists and the Member is not
covered by the Plan at the end of the limitation year, the excess amount will be
held unallocated in a suspense account and the suspense account will be applied
to reduce future Employer contributions including allocations of any Lapse
amounts under Section 10 of the Plan for all remaining Members in the next
Limitation Year and each succeeding Limitation Year, if necessary. If a suspense
account is in existence at any time during the Limitation Year pursuant to this
section, it will not participate in the allocation of the trust's investment
gains and losses.
9. INVESTMENT OF ASSETS
9.1 Initial Investment Election
The Member shall have the right and the duty to direct the Trustee as to the
investment of the Member's account in the Plan. The Administrator shall inform
the Member of the Investment Funds available under the Plan for investment of
accounts and will make available to him a prospectus for each Investment Fund.
The Member shall make an initial investment election on or before June 1, 1999
which will apply to the investment of his entire account balance, other than the
portion of the Member's account that is then invested in Company Stock or the
W&R Class A and Class B Stock Funds. A Member's initial investment election will
be made in a manner and form acceptable to the Administrator. The Member may
elect to have his account invested in increments of 1%, in any of the Investment
Funds under the Plan. The election of Investment Funds is the sole
responsibility of each Member and no Employer or representative of the Employer
including the Administrator is authorized to make any recommendation to the
Member with respect thereto.
Account balances to be invested in Investment Funds will be so invested and
credited to the accounts of a Member as soon as practicable following receipt by
the Trustee of an initial investment election for all or part of a Member's
account. The purchase and sale of investments shall be determined in accordance
with the closing price of the elected Investment Fund as of the date the
investment election is delivered to the Trustee. The Member shall be
responsible for the cost of brokerage commissions, transfer taxes and any other
transaction costs incurred in an asset transaction.
Members shall not make an affirmative election to have any portion of their
account invested in the W&R Class A and Class B Stock Funds.
9.2 Change in Investment Election
A Member may change his investment election with respect to investment of his
account balance at any time. The new election will be effective as soon as
practicable following receipt of the election by the Trustee.
9.3 Sales of W&R Stock Funds
If the Administrator receives an election to transfer assets out of the W&R
Class A or Class B Stock Funds, the transfer will be effected by selling the
required number of units of the W&R Class A or Class B Stock Funds as soon as
practicable following receipt of the election.
9.4 Reinvestment
9.4.1 All dividends and capital gains or other distributions received for
the Investment Funds held for each Member's account will be reinvested in units
of the same Investment Fund.
9.4.2 All dividends, interest and other distributions received on assets of
a unitized stock fund will (unless received in additional stock) be
<PAGE>
reinvested in units of the same investment in the same stock fund.
9.4.3 If any dividends or capital gain or other distributions may be
received at the election of the shareholder in additional shares or in cash or
other property, the Trustee will elect to receive such dividends or
distributions in additional shares or in cash, at the Trustee's direction.
9.5 Voting of Company Stock and W&R Class A and Class B Investments
Subject to any requirements of applicable law, the Administrator will deliver
to each Member copies of any notices of shareholders'meetings, proxies and
proxy-soliciting materials, prospectuses and the annual and other reports to
shareholders which have been received with respect to shares of Company Stock
and W&R Class A or Class B Stock represented by the units of the Company Stock
Fund or the W&R Class A or Class B Stock Funds held by the Member.
Each Member may direct the Administrator to direct the Trustee to vote the
Company Stock shares or W&R Class A or Class B Stock shares (including
fractional shares) held by the Trustee under the Plan with respect to his
account and with respect to matters to be voted upon by the shareholders of such
stock. The Member's directions must be in writing, on a form approved by the
Administrator, and delivered to the Administrator within the time prescribed by
it. With respect to shares of stock for which the Administrator receives no
written directions from the Members, the Administrator will direct the Trustee
to vote such shares in the same proportion as the shares instructed by the
Members.
9.6 Valuation of Accounts
A Member's accounts shall be valued on a daily basis based on the gains or
losses of the Member's elected Investment Fund. Earnings shall be posted to
holdings in an Investment Fund according to the fund's earnings cycle.
9.7 Distributions or Withdrawals
If the Trustee receives a request for withdrawal or distribution of assets
from an Investment Fund, the withdrawal or distribution will be effected by
redeeming the requested amount from the Investment Fund as soon as practicable
following receipt of the request by the Trustee.
If the Administrator receives a request for withdrawal or distribution of
assets out of the Company Stock Fund, the withdrawal or distribution will be
effected by selling or transferring if a withdrawal or distribution in kind is
requested, the required number of shares of Company Stock (or netting sales
against other required purchases) as soon as practicable following receipt of
the request. All withdrawals or distributions out of the Company Stock Account
will be settled as soon as practicable based on the unitized values of Company
Stock on the date the transaction settles.
If the Administrator receives a request for withdrawal or distribution of
assets from the W&R Class A or Class B Stock Funds, the withdrawal or
distribution will be effected by selling or transferring if a withdrawal or
distribution in kind is requested, the required number of shares of stock as
soon as practicable following receipt of the request by the Trustee. All
withdrawals or distributions out of the W&R Class A or Class B Stock Funds will
be settled as soon as practicable based on the fair market value of W&R Class A
or Class B Stock on the date the sale settles.
9.8 Transfer of Trusteeship to AmSouth Bank
Effective as of May 1, 1999, the Trustee of the Plan is AmSouth Bank. Pursuant
to a procedure adopted by the Administrator, Members shall be given the
opportunity to direct the investment of their accounts into the Investment Funds
(other then the W&R Stock Funds) made available under the Plan following
<PAGE>
AmSouth's appointment as Trustee. The Administrator may impose any reasonable
restrictions on fund transfers or withdrawals necessary or desirable in
connection with the movement of Trust Fund assets to AmSouth Bank. The
Administrator may also impose reasonable investment defaults if Members fail to
instruct AmSouth Bank concerning the investment of their account balances.
9.9 Black Out Period
Effective as of May 1, 1999, there shall be a black out period during which,
notwithstanding anything in the Plan to the contrary, no Member in the Plan
shall be allowed to transfer assets to or between Investment Funds or receive a
withdrawal, loan or distribution of benefits. The black out period shall last as
long as necessary to complete the transfer of record keeping functions from the
Plan's current recordkeeper (as of April 30, 1999) to the Plan's new
recordkeeper. All Members shall be notified once the transfer has been completed
and transactions shall thereafter resume according to the Plan.
[Effective May 1, 1999]
10. LAPSES
When a person whose membership in the Plan terminated after December 31, 1975,
and before December 31, 1989, had a One Year Break in Service, the resulting
Lapse was credited at the end of the calendar year in which the One Year Break
in Service was completed to the accounts of Members who were employed at the end
of such calendar year by the Employer of the terminating Member in proportion to
the total amount of their respective deposits at the beginning of the calendar
year not withdrawn during the year.
11. VALUATION OF ACCOUNTS
The value of the general assets of the Fund credited to the account of each
Member shall be determined as of the close of each business day after his
account shall have been credited with the sales proceeds of any sales of
Investment Funds. A statement shall be furnished to each member on a quarterly
basis showing the value of the Member's account balance as of each March 31,
June 30, September 30, and December 31.
Upon termination of membership in the Plan, the value of a Member's account
shall be the value of such account balance as of the end of the business day on
which the final distribution request is processed by the Trustee, increased or
decreased, as the case may be, by the unpaid balance of any loans. Earnings
which accrue following the date the Member's membership terminates in the Plan
shall be forfeited. [Effective May 1, 1999]
12. RETIREMENT DATE
Every Member shall retire on his normal retirement date unless early
retirement is elected by the Member or unless the retirement date of the Member
is deferred.
(a) Normal Retirement Date. The normal retirement date of any Member
shall be the last day of the payroll period of the Employer coinciding with or
next following the 65th birthday of the Member.
(b) Early Retirement Date. Any Member who has attained 60 years of age,
or who has attained 55 years of age and has completed at least 15 years of
Credited Service may elect to retire on the last day of any payroll period
preceding his Normal Retirement Date. Written notice of the date selected for
early retirement must be furnished to the Employer on or before such date.
(c) Deferred Retirement Date. The retirement date of a Member shall, to
the extent allowed by law, be deferred beyond his Normal Retirement Date to the
last day of the payroll period of the Employer coinciding with or next
<PAGE>
following his termination of employment.
13. RETIREMENT BENEFIT
When a Member retires on his Normal, Early or Deferred Retirement Date, the
entire amount credited to his account shall be paid in accordance with the
provisions of Section 17.
14. DEATH BENEFIT
(a) Payment of Account Balances
If a Member dies before distribution of his interest in the Plan, if any,
has commenced, the Member's nonforfeitable account balances shall, subject to
the next paragraph, be distributed to the Member's Beneficiary in the form, at
the time and from among the methods specified in Section 17(b) as elected by the
Beneficiary within 60 days following the Member's death. If an election is not
received by the Administrator, the distribution shall be made, if to a Surviving
Spouse, in accordance with Section 14(a)(ii), and, if to some other Beneficiary,
to the Beneficiary in a lump sum. Notwithstanding the foregoing, if the total
amount distributable to the Beneficiary is $3500 or less, the distribution shall
be made in a lump sum.
Notwithstanding any other provision of the Plan to the contrary:
(i) If the Member dies leaving a Surviving Spouse before distribution
of his interest in the Plan has commenced, and unless the Member's Surviving
Spouse has elected, by written notice to the Administrator within sixty days
after the Member's death, any other form of benefit payment specified in Section
17(b), or the Member's Surviving Spouse has already consented in a manner
described in the fourth paragraph of Section 17(d) to a distribution to some
other Beneficiary designated by the Member, the Member's Account Balance shall
be distributed to the Member's Surviving Spouse in the form of an annuity for
the life of the Surviving Spouse (under an Annuity Contract purchased with the
aggregate account balance of the Member's account) or in lump sum form if the
total amount distributable is $3500 or less.
(ii) If the Member dies before distribution of his or her interest in
the Plan has commenced, the Member's entire interest must be distributed within
five years after the Member's death; provided, however, that if any portion of
the Member's interest is payable to his Beneficiary, distributions may be made
in substantially equal installments over the life or life expectancy of the
Beneficiary, commencing (A) in the case of a Beneficiary other than a Surviving
Spouse, no later than one year after the Member's death; and (B) in the case of
a Surviving Spouse, no later than the latter of one year after the Member's
death or the date on which the Member would have attained age 70 1/2.
If the Surviving Spouse dies before payments to such Spouse begin, subsequent
distributions shall be made as if the Surviving Spouse had been the Member.
(b) Beneficiaries
Subject to the spousal consent requirements of Section 14(a)(i), a Member may
designate a Beneficiary for his account.
If a Member who is unmarried as of the date of his death has designated a
Beneficiary and such Beneficiary predeceases the Member, or if no Beneficiary
has been designated by such Member, the Member's interest remaining in the Plan
shall be paid to the estate of the Member. If a Member who is married as of the
date of his death designates a Beneficiary pursuant to Section 14(a) and such
Beneficiary predeceases the Member, the Member's interest remaining in the Plan
shall be paid to the Member's Surviving Spouse, or to the Member's estate if
such spouse is no longer living. If two or more Beneficiaries are named, the
<PAGE>
interest of any Beneficiary, who does not survive the Member, shall pass to the
surviving Beneficiary or Beneficiaries in accordance with their respective
interests unless otherwise agreed in writing between the Administrator and the
Member.
Subject to the consent requirements applicable with respect to a Spouse, any
designation of a Beneficiary to whom amounts due after the Member's death shall
be paid must be filed with the Administrator, in a time and manner designated by
the Administrator, in order to be effective. Any such designation of a
Beneficiary may be revoked by filing a later designation or an instrument of
revocation with the Administrator, in a time and manner designated by the
Administrator. If a Beneficiary fails to survive a Member for at least 30 days,
it shall be presumed that the Member survived the Beneficiary.
(c) Direct Rollovers
Any lump sum payment payable to a Spouse pursuant to this Section 14 shall be
eligible for a direct rollover in accordance with Section 17(f).
15. DISABILITY BENEFIT
In the event the Employer determines any Member to be totally and permanently
disabled, the Administrator shall: (a) furnish the Member the general
information described in Section 17 if they have not already furnished it, (b)
furnish the information specifically relating to the Member as described in
Section 17 if the Member requests it and (c) continue to hold the account of
such Member until his Retirement Date except as provided hereafter in this
section.
Members, who become totally and permanently disabled (as defined herein) and
who demonstrate to the Administrator that they have an immediate need (for a
portion or all of their plan benefits) which can reasonably be expected to
exceed their need for such benefits at such Members' retirement to the extent
that without an immediate distribution of such benefits such Members would
suffer an undue hardship, may elect to receive such benefits.
Such Members shall demonstrate to the Administrator such greater immediate
need of such benefits and shall furnish the following information for the
purpose of enabling the Administrator to determine whether to grant a
distribution by reason of such Member's disability:
(1) the nature of their disability,
(2) unusual medical, hospital, or nursing expenses,
(3) the Member's other financial needs,
(4) the Member's lack of other immediate financial resources, or
(5) the Member's additional financial resources available at retirement.
Upon the Member's demonstration of need as described above, the portion of the
Member's benefit which is demonstrated to be needed for immediate distribution
to the Member shall be available for payment regardless of the Member's length
of service.
In such event, the Administrator shall order the Trustee to pay all or part of
such Member's account as follows:
If the Member has a Spouse on the date on which the payments are to begin,
unless the Member has made an election under Section 17 of this Plan not to have
benefits under this Plan paid in the form of a Qualified Joint and Survivor
Annuity, the part or entire amount of the Member's account to be paid under this
<PAGE>
Section shall be applied to provide an immediate Qualified Joint and Survivor
Annuity with the Spouse entitled to receive a monthly payment of 50% of the
monthly payment received by the Member.
If the Member has a Spouse on the date on which the payments are to begin and
has made an election under Section 17 of this Plan not to have benefits under
this Plan paid in the form of a Qualified Joint and Survivor Annuity, or if the
Member does not have a Spouse on the date on which payments are to begin, the
part or the entire amount of the Member's account to be paid under this Section
shall be paid in such other form of payment as may be elected by the Member by a
request in writing filed with the Administrator.
A Member shall be considered totally and permanently disabled if the Member is
wholly and continuously disabled as a result of illness or injury and is thereby
prevented from engaging in any occupation or performing any work of financial
value. Total disability shall be presumed to be permanent when it is present and
has existed continuously for six consecutive months.
16. VESTING
Upon termination of his membership at retirement or death or during total and
permanent disability, a Member shall be entitled to receive the entire amount
credited to his account as provided in Sections 13, 14 and 15. Effective June 1,
1986, all Members of the Plan were fully vested in their accounts as to the
Company Contributions (and income credited thereto) as well as the Member's own
contributions to the Plan (and income credited thereto). Payment of the amount
to which a terminating Member is entitled shall be made in accordance with the
provisions of Section 17.
17. PAYMENT OF BENEFITS
(a) Benefit Commencement Date
Except as provided in or by operation of this Section 17, a Member's Benefit
Commencement Date shall be as soon as practicable after the first to occur of:
(i) the date the Member properly requests such distribution to commence
after termination of the Member's Employment with the Employer and all
Affiliates provided, however, any such request by a Member shall not be valid
unless the Member is furnished with a written explanation of his right to defer
the commencement of the benefit payment; or
(ii) the date the Member properly requests such distribution to commence
following the incurrence of a total and permanent disability within the meaning
of Section 15; or
(iii) the 60th day after the close of the Plan Year in which the Member
attains Normal Retirement Age or, if later, when he terminates Employment with
the Employer and all Affiliates, unless the Member has requested to defer the
distribution to a later date; or
(iv) the April 1 following the later of (1) the calendar year in which
the Member attains age 70-1/2, or (2) (for other than a Five-percent Owner of
the Employer) the year the Member retires from employment. [Effective May 1,
1999]
(A) In the case of a Member who was born prior to July 1, 1917 and
at no time during a Plan Year ending in or after the calendar year in which he
attains age 66-1/2 was a Five-percent Owner of the Employer within the meaning
of Code ss 416(i)(1), such date shall be the April 1 following the later of (i)
the calendar year during which he attains age 70-1/2, or (ii) the calendar year
in which the Member retires; and
<PAGE>
(B) In the case of a Member who was born prior to July 1, 1917 and
at any time during a Plan Year ending in or after the calendar year in which he
attains age 66-1/2, was a Five-percent Owner of the Employer within the meaning
of Code ss 416, such date shall be the April 1 following the later of (i) the
calendar year during which he attained age 70-1/2, or (ii) the earlier of (1)
the calendar year ending in the Plan Year during which he first became a Five-
percent Owner, or (2) the calendar year in which the Member retires.
If the value of a Member's Account exceeds $3,500 at the time of any
distribution, the Member (and, if applicable, his Spouse) must consent in a
written election filed with the Administrator, to any distribution before the
Member's attainment of Normal Retirement Age. Notwithstanding anything in this
Article to the contrary, the Administrator may direct the Trustee to distribute
to the Member the distributable balance of the Member's account as soon as
practicable without such Member's written consent if, at the time of
distribution, the value of the Member's account does not exceed $3,500.
In no event shall the amount distributable in any year be less than the amount
determined in accordance with the minimum distribution incidental benefit
requirements of Treasury Regulation Section 1.401(a)(9)-2.
(b) Normal Form of Payment
A Member's benefits shall be payable in the normal form of a Qualified Joint
and Survivor Annuity (under an Annuity Contract purchased with the aggregate
account balance of the Member's account at the Benefit Commencement Date) if the
Member is married on his Benefit Commencement Date and in the normal form of a
life annuity with payments guaranteed for 120 (under an Annuity Contract
purchased with the aggregate account balance of the Member's account at the
Benefit Commencement Date) months if the Member is not married on that date,
provided that a Member may at any time prior to the Benefit Commencement Date
elect, in accordance with Section 17(c), any of the following optional forms of
benefit payment instead of the normal form:
(i) A lump sum in cash or in kind, or part in cash and part in kind; or
(ii) An annuity (under an Annuity Contract purchased with the aggregate
account balance of the Member's account at the Benefit Commencement Date) of the
type described in Section 17(c).
Anything in this Section 17 to the contrary notwithstanding, if the
nonforfeitable account balance of a terminated Member shall be equal to or less
than $3500 when the amount thereof is first determined, the entire amount shall
be distributed in a lump sum as promptly as possible.
(c) Optional Forms of Payments
For purposes of Section 17(b)(ii), the optional annuity form may be any one of
the following:
(i) A single life annuity, under which equal or substantially equal
monthly installments are paid to the Member during his lifetime, with no further
payments to anyone after his death.
(ii) An annuity under which equal or substantially equal monthly
installments are paid to the Member during his lifetime, with payment of monthly
installments guaranteed for a period selected by the Member which may be either
60, 120, 180, 240 or 300 months.
(iii) An annuity under which equal or substantially equal annual,
semi-annual, quarterly or monthly installments are paid in an amount specified
in the election until the net sum payable with interest thereon at the rate of
<PAGE>
3% per annum and such additional interest, if any, as may be declared under the
Annuity Contract is exhausted. Any balance remaining at the end of twenty-five
years shall be paid in a lump sum.
(iv) An annuity under which equal or substantially equal annual,
semi-annual, quarterly or monthly installments, except for any excess interest,
are paid for a fixed period not exceeding twenty-five years. Such amounts shall
include interest on the unpaid balance at a rate (not less than 3% per annum)
declared annually under the Annuity Contract.
(v) An annuity under which equal or substantially equal monthly
installments are paid to the Member during his lifetime with such payments
continuing during the lifetime of a contingent annuitant if the contingent
annuitant survives the Member.
(vi) An annuity under which equal or substantially equal monthly
installments are paid for the longer of the lifetime of the Member, the lifetime
of a contingent annuitant or a guaranteed period selected by the Member. The
period may be either 60, 120, 180, 240 or 300 months.
(vii) An annuity under which equal or substantially equal monthly
installments are paid for the Member so long as both the Member and a contingent
annuitant shall live. Upon the death of the first of them to die the amount of
each installment shall be reduced to two-thirds of the amount previously paid,
and such reduced installments shall be paid to the survivor for his lifetime.
(viii) An annuity under which equal or substantially equal monthly
installments are paid for the longer of the period during which both the Member
and a contingent annuitant shall live or a guaranteed period selected by the
Member. The guaranteed period may be either 60, 120, 180, 240 or 300 months.
Upon the later of (A) the death of the first to die of the Member or the
contingent annuitant or (B) the expiration of the guaranteed period, if one of
them is then living the amount of each installment shall be reduced to
two-thirds of the amount previously paid and such reduced installments shall be
paid to the survivor for his lifetime.
(d) Election of Optional Forms
By notice to the Administrator within the 90-day period prior to a Member's
Benefit Commencement Date, the Member may elect, in writing, not to receive the
normal form of benefit payment otherwise applicable and to receive instead an
optional form of benefit payment provided for in Section 17(c).
Within a reasonable period, but in no event later than a married Member's
Benefit Commencement Date, the Administrator shall provide to each married
Member a written explanation of:
(i) the terms and conditions of the Member's normal form of benefit
payment;
(ii) the Member's right to make, and the effect of, an election to waive
the normal form of benefit payment;
(iii) the rights of the Member's Spouse under the sixth paragraph of this
Section; and
(iv) the right to make, and the effect of, a revocation of a previous
election to waive the normal form of benefit payment.
The Administrator may, on a uniform and nondiscriminatory basis, provide for
such other notices, information or election periods or take such other action as
the Administrator considers necessary or appropriate so that this Section is
implemented in such a manner as to comply with Code ss 401(a)(11) and 417.
<PAGE>
A Member may revoke his election to take an optional form of benefit, and
elect a different form of benefit, at any time prior to the Member's Benefit
Commencement Date.
The election of an optional benefit by a married Member must also be a waiver
of a Qualified Joint and Survivor Annuity by the Member. A waiver of a Qualified
Joint and Survivor Annuity shall not be effective unless: (i) the Member's
Spouse consents in writing; (ii) the Spouse's consent to the waiver is witnessed
by a plan representative or notary public; and (iii) the Spouse's consent
acknowledges the effect of the election. Additionally, a Member's waiver of the
Qualified Joint and Survivor Annuity will not be effective unless the election
designates a form of benefit payment which, if the Member is married, may not be
changed without spousal consent. Notwithstanding this consent requirement, if
the Member establishes to the satisfaction of a plan representative that such
written consent may not be obtained because there is no Spouse or the Spouse
cannot be located, the election will be deemed effective. Any consent necessary
under this provision will not be valid with respect to any other Spouse.
The election of an optional form of benefit which contemplates the payment of
an annuity shall not be given effect if any person who would receive benefits
under the annuity dies before the annuity starting date.
(e) Change in Form or Timing of Benefit Payments.
Subject to the Administrator's consent, any former Employee whose payments are
being deferred or who is receiving installment payments may request acceleration
or other modification of the form of benefit distribution, provided that any
necessary consent to such change required pursuant to the fourth paragraph of
Section 17(d) is obtained from the former Employee's Spouse.
(f) Direct Rollovers.
Effective with respect to distributions made on or after January 1, 1993, a
Participant or Spouse may elect to have all or a portion of any amount payable
to him or her from the Plan which is an "eligible rollover distribution" (as
defined below) transferred directly to an "eligible retirement plan" (as defined
below). Any such election shall be made in accordance with such uniform rules
and procedures as the Administrative Committee may prescribe from time to time
as to the timing and manner of the election in accordance with Code ss
401(a)(31). For purposes of this Section and Section 14(c), "eligible rollover
distribution" shall mean any distribution of all or any portion of the balance
to the credit of the distributee other than: (1) 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; (2) any distribution for a specified period of ten (10)
years or more; (3) any distribution to the extent such distribution is required
under Code ss 401(a)(9); or (4) the portion of any distribution that is not
includable in gross income. "Eligible retirement plan" shall mean, with respect
to a Participant, an individual retirement account or annuity described in Code
ss 408(a) or 408(b) ("IRA"); an annuity plan described in Code ss 403(a); or a
qualified plan described in Code ss 401(a), that accepts the distributee's
eligible rollover distribution and, with respect to a Spouse, shall mean an IRA.
18. LOANS AND WITHDRAWALS
Since it is the purpose of the Plan to provide a retirement income, a Member
shall have no right to withdraw or borrow any portion of the amount credited to
his account, except as provided in Article 15. The Administrator shall have the
right, however, in its sole discretion and upon such uniformly applicable
conditions as it shall prescribe to make loans to Members secured by such
Member's accounts.
<PAGE>
(a) The Administrator is authorized to promulgate rules and regulations of
uniform application as to the availability and terms of loans under the Plan.
Such loans shall be made available to all Members on a reasonably equivalent
basis.
(b) The aggregate amount of all such loans to a Member shall not exceed 50%
of his vested interest in his account under the Plan; provided that such amount
shall not exceed $10,000.
(c) A secured promissory note shall be delivered to the Trustee pledging as
collateral the Member's vested interest in his account with regard to each loan.
Interest on a loan shall be fixed by the Administrator at a rate reasonably
equivalent to prevailing market interest rates. Said interest rate shall be
fixed for the duration of the loan unless repaid in accordance with Section
18(d).
(d) Each loan shall be repaid in regular installments no less frequently than
monthly, by means of after-tax payroll deductions. The term of a loan shall not
exceed 5 years. Prepayment of a loan in its entirety without penalty shall be
permitted at any time. Notwithstanding the foregoing, such installments may be
paid directly by the Member to the Trustee during any authorized leave of
absence.
(e) If a Member ceases to be an Employee before his loan is repaid in full,
the unpaid balance thereof, shall become due and payable, and the Trustee shall
first satisfy the indebtedness from the amount payable to the Member or his
Beneficiary before making any payments thereon.
(f) If a Member fails to repay a loan within the terms of the loan, or, if he
has failed to make loan repayments for a total of three consecutive months, the
loan shall go into default.
(g) A Member must obtain the consent of his Spouse, if any, to use of the
Member's account as security for the loan. Spousal consent shall be obtained no
earlier than the beginning of the 90-day period that ends on the date on which
the loan is to be so secured. The consent must be in writing, must acknowledge
the effect of the loan, and must be witnessed by a plan representative or notary
public. Such consent shall thereafter be binding with respect to the consenting
Spouse or any subsequent Spouse with respect to that loan. A new consent shall
be required for each loan. [Effective May 1, 1999]
19. DEBTS
Except with respect to any indebtedness to the Trustee or a voluntary,
revocable assignment in writing by a Member who is receiving benefits under the
Plan of an amount not exceeding 10% of any benefit payment, the interests of
Members and Beneficiaries under the Plan are not in any way subject to their
debts or obligations and may not be voluntarily sold, transferred or assigned
and shall not be subject to attachment or garnishment or any other legal process
by any creditor of any Member or Beneficiary. With respect to any indebtedness
owing to the Employer under a revocable assignment or to the Trustee, the
Member's vested interest in his account shall serve as collateral security for
the payment thereof.
20. POWERS AND DUTIES OF NAMED FIDUCIARIES
(a) Trustee
The Company shall enter into one or more Trust Agreements with the Trustee or
Trustees selected by it in its sole discretion, and the Trustee shall receive
the contributions to the Trust Fund made by the Employer pursuant to the Plan
and shall hold, invest, reinvest, and distribute such fund, as applicable, in
accordance with the terms and provisions of the Trust Agreement. The Company
will determine the form and terms of such Trust Agreement and may modify such
<PAGE>
Trust Agreement from time to time to accomplish the purposes of this Plan and
may, in its sole discretion, remove any Trustee and select any successor
Trustee.
Except as otherwise permitted under the Plan, all assets of the Plan shall be
held in trust by the Trustee who upon acceptance of such office shall have such
authority as is set forth in the Trust Agreement.
(b) Administrative Committee
The administration of the Plan shall be vested in an Administrative Committee
of at least three (3) persons who shall be appointed by the Board of Directors
of the Company, and may include persons who are not Members under the Plan. A
person appointed a member of the Committee shall signify his acceptance in
writing. The Board may remove or replace any member of the Committee at any time
in its sole discretion, and any Committee member may resign by delivering his
written resignation to the Board, which resignation shall become effective upon
its delivery or at any later date specified therein. If at any time there shall
be a vacancy in the membership of the Committee, the remaining member or members
of the Committee shall continue to act until such vacancy is filled by action of
the Board.
The Committee shall appoint from among its members a chairman, and shall
appoint as secretary a person who may be, but need not be, a member of the
Committee or a Member under the Plan.
The Committee shall hold meetings upon such notice, at such place or places,
and at such times as its members may from time to time determine. A majority of
its members at the time in office shall constitute a quorum for the transaction
of business. All action taken by the Committee at any meeting shall be by vote
of the majority of its members present at such meeting, except that the
Committee also may act without a meeting by a consent signed by a majority of
its members. Any member of the Committee who is a Member under the Plan shall
not vote on any question relating exclusively to himself.
Subject to the terms of the Plan, the Committee may from time to time adopt
such rules and regulations as it shall deem appropriate for the administration
of the Plan and for the conduct and transaction of its business and affairs.
The Committee shall have such powers as may be necessary to discharge its
duties under the Plan, including the power:
(i) to interpret and construe the Plan in its discretion, to determine
all questions with regard to employment, eligibility, credited service,
compensation, retirement benefits, and such factual matters as date of birth and
marital status, and similarly related matters for the purpose of the Plan. The
Committee's determination of all questions arising under the Plan shall be
conclusive upon all Members, the Board, the Company, Employers, the Trustee, and
other interested parties;
(ii) to prescribe procedures to be followed by Members and Beneficiaries
filing application for benefits;
(iii) to prepare and distribute to Members information explaining the
Plan;
(iv) to appoint or employ individuals to assist in the administration of
the Plan and any other agents it deems advisable, including legal, accounting
and actuarial counsel;
(v) to instruct the Trustee to make benefit payments pursuant to the
Plan;
(vi) to appoint an enrolled actuary and to receive and review the
<PAGE>
periodic valuation of the Plan made by such actuary;
(vii) to receive and review reports of disbursements from the Trust Fund
made by the Trustees; and
(viii) to receive and review the periodic audit of the Plan made by a
certified public accountant appointed by the Company.
Each Member under the Plan shall be required to furnish to the Committee, in
the form prescribed by it, such personal data, affidavits, authorizations to
obtain information, and other information as the Committee may deem appropriate
for the proper administration of the Plan.
The Committee shall prepare, or cause to be prepared, such periodic reports
to the U.S. Labor Department, the Internal Revenue Service and the Pension
Benefit Guaranty Corporation as may be required pursuant to the Code or ERISA.
The Committee may authorize one or more of its members, officers, or agents
to sign on its behalf any of its instructions, directions, notifications, or
communications to the Trustee, and the Trustee may conclusively rely thereon and
on the information contained therein.
The members of the Committee shall be entitled to rely upon all valuations,
certificates and reports furnished by the Plan actuary or accountant and upon
all opinions given by any legal counsel selected by the Committee, and the
members of the Committee shall be fully protected with respect to any action
taken or suffered by their having relied in good faith upon such actuary,
accountant or counsel and all action so taken or suffered shall be conclusive
upon each of them and upon all Participants and their Beneficiaries. No member
of the Committee shall incur any liability for anything done or omitted by him
except only liability for his own gross negligence or willful misconduct.
Unless authorized by the Board, a member or officer of the Committee shall
not be compensated for his service in such capacity, but shall be reimbursed for
reasonable expenses incident to the performance of such duty.
The Company shall indemnify the members of the Committee and any of their
agents acting in behalf of the Plan against any and all liabilities or expenses,
including all legal fees related thereto, to which they may be subjected as
members of the Committee by reason of any act or failure to act which
constitutes a breach or an alleged breach of fiduciary responsibility under
ERISA or otherwise, except that due to a person's own willful misconduct.
If any application for payment of a benefit under the Plan shall be denied,
the Committee shall with the denial write the claimant setting forth the
specific reasons for the denial and explaining the Plan's claim review
procedure. If a claimant whose claim has been denied wishes further
consideration of his claim, he may request the Committee to review his claim in
a written statement of the claimant's position filed with the Committee no later
than 60 days after the claimant receives such denial. The Committee shall make a
full review of the claim and the denial, giving the claimant written notice of
its decision within the next 60 days. Due to special circumstances, if no
decision has been made within the first 60 days and notice of the need for
additional time has been furnished within such period, the decision may be made
within the following 60 days. A claimant shall be required to exhaust the
administrative remedies provided by this paragraph prior to seeking any other
form of relief.
(c) Company Stock Provisions
Before each annual or special meeting of the shareholders of the Parent of
the Company, the Company shall cause to be sent to each Member whose account
includes shares of Company Stock, a copy of the proxy solicitation material for
such meeting, together with a form requesting confidential instructions to the
<PAGE>
Trustee as to the voting of the shares of Company Stock in each such Member's
account. The Trustee shall itself, or by proxy, vote the shares of Company
Stock allocated to a Member's account in accordance with the instructions of the
Member. If, prior to the time of such meeting of shareholders, the Trustee
shall not have received instructions with respect to all shares in the accounts
of Members, the Trustee shall itself, or by proxy, vote all such shares in the
same proportion for which the Trustee received voting instructions from voting
Members.
Each Member shall have the right to direct the Trustee in writing as to the
manner in which to respond to a tender or exchange offer with respect to shares
of Company Stock at that time in his account. The Trustee shall utilize its
best efforts to distribute, or cause to be distributed, on a timely basis, to
each Member such information as will be distributed to shareholders of the
Parent of the Company in connection with any such tender or exchange offer. If
the Trustee has not received timely directions from a Member as to the manner in
which to respond to such a tender or exchange offer, the Trustee shall not
tender or exchange any shares of Company Stock with respect to which such Member
has the right of direction.
Any decision by a Member to tender (or not tender) or to exchange (or not
exchange) shall constitute an exercise of control over the assets credited to
the Member's account by such Member within the meaning of Section 404 (c) of
ERISA and each Member who so exercises such control shall, by such exercise,
release and agree (on the Member's own behalf and on behalf of the Member's
heirs and beneficiaries) to indemnify and hold harmless the Trustee and the
Employer from and against any claim, demand, loss, liability, cost or expense
(including reasonable attorneys' fees) caused by or arising out of the exercise
of such control, including without limitation any diminution in value or losses
incurred by reason of such exercise. [Effective May 1, 1999]
(d) W&R Financial Stock Provisions
Before each annual or special meeting of the shareholders of Waddell & Reed
Financial, Inc. ("W&R Financial"), the Company shall cause to be sent to each
Member whose account includes shares of W&R Financial Stock, a copy of the proxy
solicitation material for such meeting, together with a form requesting
confidential instructions to the Trustee as to the voting of the shares of W&R
Financial Stock in each such Member's account. The Trustee shall itself, or by
proxy, vote the shares of W&R Financial Stock allocated to a Member's account in
accordance with the instructions of the Member. If, prior to the time of such
meeting of shareholders, the Trustee shall not have received instructions with
respect to all shares in the accounts of Members, the Trustee shall itself, or
by proxy, vote all such shares with respect to all shares in the accounts of
Members, the Trustee shall itself, or by proxy, vote all such shares with
respect to which no instructions were received in its discretion.
Each Member shall have the right to direct the Trustee in writing as to the
manner in which to respond to a tender or exchange offer with respect to shares
of W&R Financial Stock at that time in his account. The Trustee shall utilize
its best efforts to distribute, or cause to be distributed, on a timely basis,
to each Member such information as will be distributed to shareholders of W&R
Financial in connection with any such tender or exchange offer. If the Trustee
has not received timely directions from a Member as to the manner in which to
respond to such a tender or exchange offer, the Trustee shall not tender or
exchange any shares of W&R Financial Stock with respect to which such Member has
the right of direction.
Any Member may direct the Trustee to sell any or all shares of W&R Financial
Stock in his account by executing and delivering to the Trustee a written
instrument in such form as the Trustee may prescribe or approve. In the event a
Member so directs the Trustee to sell shares of W&R Financial Stock in his
account, the Trustee shall make such sale as promptly as practicable but not
later than the calendar week next following the calendar week in which such
<PAGE>
instructions were received. The sales proceeds shall be held as general assets
of the Fund and credited to the Member's account as provided in Section 11.
Any decision by a Member to tender (or not tender) or to exchange (or not
exchange) or to cause the Trustee to sell shares of W&R Financial Stock credited
to his account shall constitute an exercise of control over the assets credited
to the Member's account by such Member within the meaning of Section 404(c) of
ERISA, and each Member who so exercises such control shall, by such exercise,
release and agree (on the Member's own behalf and on behalf of the Member's
heirs and beneficiaries) to indemnify and hold harmless the Trustee and the
Employers from and against any claim, demand, loss, liability, cost or expense
(including reasonable attorneys' fees) caused by or arising out of the exercise
of such control, including without limitation any diminution in value or losses
incurred by reason of such exercise. [Effective October 1, 1998]
(e) A Member in the Plan shall be a Named Fiduciary under the Plan with
respect to the Member's exercise of his right to direct investments of his
Member's account under Article 9 of the Plan, and with respect to his exercise
of the right to direct the Trustee as to the voting or tender of shares of
Employer Stock or Waddell & Reed Class A or Class B Stock, and further, with
respect to the Trustee's proportional voting or tender of such stock for which
the Trustee does not receive a Member's direction to vote or tender. [Effective
May 1, 1999]
21. MERGER, CONSOLIDATION OR TRANSFER OF ASSETS
In the event of the merger or consolidation of an Employer with or into any
other corporation, or in the event all or substantially all of the assets of an
Employer shall be transferred to another corporation, this Plan and the trust
created hereunder may be entirely or partially terminated on the effective date
of such merger, consolidation or transfer of assets. However, if the surviving
corporation resulting from such merger or consolidation, or the corporation to
which said assets of the Employer shall be transferred as aforesaid shall have
in effect or shall then establish a qualified profit sharing, pension or
retirement plan for the benefit of its employees, the assets of the Fund under
this Plan standing to the account of each Member of this Plan who shall be
continued in the employ of such surviving or transferee corporation may be paid,
for their respective accounts, to the profit sharing, pension or retirement plan
or trust of said surviving or transferee corporation, as the case may be, for
the benefit of such Member. No merger or consolidation of this Plan with or
transfer of assets or liabilities of this Plan to any other Plan shall be made
however, unless each Member of this Plan would, if the Plan terminated
immediately after the merger, consolidation or transfer, receive a benefit which
is equal to or greater than the benefit he would have been entitled to receive
if this Plan had terminated immediately before the merger, consolidation or
transfer.
If an Employer shall be the surviving corporation of a merger or consolidation
with another corporation, or if all or substantially all of the assets of
another corporation be transferred to the Employer, and if, on the effective
date of any such merger, consolidation, or transfer, such other corporation
shall have in effect a qualified profit sharing, pension or retirement plan for
the benefit of its employees, the assets of said Plan standing to the credit of
its participants who shall become Members of this Plan may be paid for their
respective accounts into the Fund under this Plan to be held in accordance with
the terms of this Plan. If a subsidiary of the Company shall have in effect a
qualified profit sharing, pension or retirement plan for the benefit of its
employees and shall terminate such plan, the assets of said plan standing to the
credit of its participants who shall become Members of this Plan may be paid for
their respective accounts into the Fund under this Plan to be held in accordance
with the terms of this Plan. In such a case, deposits made by participants under
such other plans which are transferred to the Fund under this Plan shall be
deemed to be deposits made by such participant under this Plan. Similarly, the
contributions made by the employer corporation under
<PAGE>
such plans on account of participants who then become Members of this Plan shall
be treated, from the date of receipt into the Fund, as though such contributions
were made by the Employer for all purposes under this Plan, except as provided
in Section 18, and except that a participant under such other plan who becomes a
Member of this Plan shall have fully vested interests in all deposits or
contributions standing to his account so transferred to the Fund under this Plan
as of the effective date of such transfer.
22. DISTRIBUTION OF BENEFITS
In keeping with the purpose for which this Plan was established; that is, to
provide retirement benefits for Members, distribution of benefits to Members or
their Beneficiaries under this Plan shall be made only upon the retirement or
death of the Member; provided, however, that the Administrator may in its
discretion and upon a sufficient showing of the reasons therefor, permit
distribution upon total and permanent disability of the Member within the limits
elsewhere expressed in this Plan; and, provided further, that upon termination
of employment of a Member by reason other than death or retirement the
Administrator shall make distribution to the terminating Member (subject to such
Member's written consent if his account exceeds $3,500) or, upon receipt of a
written request by the Member, may authorize the value of the vested account of
such terminated Member to be portable and to be paid over or distributed to and
held under the provisions of another qualified retirement plan or plans for the
benefit of such Member. Any distribution made pursuant to the provisions hereof
shall discharge the Administrator and the Plan from any further obligation to
the Member or to his or her Beneficiaries.
23. AMENDMENT OR TERMINATION
The Company reserves the right to amend the Plan and the Trust created hereby
at any time by action of its Board of Directors. No such amendment shall affect
the rights, privileges and benefits which have already accrued to any Member. It
is the intention of the Company that this Plan shall be permanent. The Company
reserves the right, however, to terminate the Plan at any time by written notice
to the Members. Upon the termination or partial termination of the Plan, or upon
the complete discontinuance of contributions under the Plan, the entire amount
credited to the account of each Member will become fully vested and will be paid
to such Member upon the earlier of such Member's death, separation from service
or retirement in accordance with the provisions of Section 17.
24. IRREVOCABILITY OF TRUST
The trust hereby created shall be irrevocable. In the event the Plan is
terminated by the Company as provided in Section 23, the Trust shall
nevertheless continue until such time as all assets of the Fund have been paid
out to the Members or their beneficiaries or estates. In no event shall any
part of the Employers' contributions, Members' deposits, or investment earnings
of the Fund revert to an Employer or be used for or diverted to purposes other
than for the exclusive benefit of the Members or their beneficiaries under this
Plan.
25. RULES OF CONSTRUCTION
Wherever any words are used herein in the masculine gender, they shall be
construed as though they were also used in the feminine gender in all cases
where they would so apply. Wherever any words are used herein in the single
form, they shall be construed as though they were also used in the plural form
in all cases where they would so apply. Titles of Sections of the Plan are for
convenience of reference only and are to be disregarded in applying the
provisions of the Plan. Any reference in this Plan to a Section is to the
Section so specified of the Plan.
26. LIMITATION OF LIABILITY
<PAGE>
Neither the establishment of the Plan and the Trust, nor any amendment
thereof, nor the creation of any fund or account, nor the payment of any
benefits, will be construed as giving to any Member or other person any legal or
equitable right against the Employer, Administrator or the Trustee, except as
provided herein; and in no event will the terms of employment or service of any
Member be modified or in any way be affected hereby. It is a condition of the
Plan, and each Member expressly agrees by his participation herein, that each
Member will look solely to the assets held in the Trust for the payment of any
benefit to which he is entitled under the Plan.
27. NONALIENABILITY OF BENEFITS
Benefits provided under the Plan may not be assigned or alienated, either
voluntarily or involuntarily. The preceding sentence shall also apply to the
creation, assignment or recognition of a right to any benefit payable with
respect to a Member pursuant to a "domestic relations order" (as defined in Code
ss 414(p)) unless such order is determined by the Administrator to be a
"qualified domestic relations order" (as defined in Code ss 414(p)) or, in the
case of a "domestic relations order" entered before January 1, 1985, if either
payment of benefits pursuant to the order has commenced as of that date or the
Administrator decides to treat such order as a "qualified domestic relations
order" within the meaning of Code ss 414(p) even if it does not otherwise
qualify as such.
Any other provision of the Plan to the contrary notwithstanding, the
Administrator shall have all powers necessary with respect to the Plan for the
proper operation of Code ss 414(p) with respect to "qualified domestic relations
orders" (or "domestic relations orders" treated as such) referred to in the
preceding paragraph, including, but not limited to, the power to establish all
necessary or appropriate procedures, to authorize the establishment of new
accounts with such assets and subject to such restrictions as the Administrator
may deem appropriate, and the Administrator may decide upon and direct
appropriate distributions therefrom.
An alternate payee's interest in the Plan pursuant to a "qualified domestic
relations order" shall not be distributable to the alternate payee until the
earlier of the date on which the member is entitled to a distribution under the
Plan or the date on which the member attains age 50, unless the alternate payee
demonstrates to the Administrator a "financial hardship" (as described below)
warranting an earlier distribution. A "financial hardship" shall be deemed to
exist only on account of:
(i) Unreimbursed medical expenses (described in Code ss 213(d))
incurred by the alternate payee or any dependents of the alternate payee (as
defined in Code ss 152);
(ii) Purchase (excluding mortgage payments) of a principal residence for
the alternate payee;
(iii) Payment of unreimbursed tuition for the next semester or quarter of
postsecondary education for the alternate payee or the alternate payee's
children or dependents;
(iv) The need to prevent the eviction of the alternate payee from his
principal residence or foreclosure on the alternate payee's mortgage of his
principal residence; or
(v) Such other financial need which the Commissioner of Internal
Revenue, through the publication of revenue rulings, notices and other documents
of general applicability, deems to be immediate and heavy.
A distribution shall not be made with respect to an event of financial hardship
unless the alternate payee certifies to the satisfaction of the Administrator,
and provides such additional data and documentation as the Administrator may
<PAGE>
require, that the amount of the requested distribution is not in excess of the
amount necessary to satisfy the financial hardship and that the hardship cannot
be satisfied:
(a) through reimbursement or compensation by insurance or otherwise,
(b) by reasonable liquidation of the alternate payee's assets, to the
extent such liquidation would not itself cause an immediate and heavy financial
need,
(c) by other distributions or nontaxable (at the time of the loan) loans
from plans maintained by the Employer or by any other employer, or by borrowing
from commercial sources on reasonable commercial terms.
28. CONTROLLING LAW
The Plan is intended to qualify under Code ss 401(a) and to comply with ERISA,
and its terms shall be interpreted accordingly. Otherwise, to the extent not
preempted by ERISA, the laws of the State of Alabama shall control the
interpretation and performance of the terms of the Plan.
29. CONDITIONAL RESTATEMENT
Anything in the foregoing to the contrary notwithstanding, the Plan has been
restated on the express condition that it will be considered by the Internal
Revenue Service as qualifying under the provisions of Code ss 401(a) and the
Trust qualifying for exemption from taxation under Code ss 501(a). If the
Internal Revenue Service determines that the Plan or Trust does not so qualify,
the Plan shall be amended or terminated as decided by the Company.
IN WITNESS WHEREOF, LIBERTY NATIONAL LIFE INSURANCE COMPANY has caused this
Plan to be restated, effective as of January 1, 1989.
LIBERTY NATIONAL LIFE INSURANCE
COMPANY
By: _________________________
<PAGE>
APPENDIX A
TOP-HEAVY PROVISIONS
A. As used in this Appendix A, each of the following terms shall have the
meanings for that term set forth below:
(a) Defined Benefit Plan means a plan of the type defined in Code ss
414(j) maintained by the Company or an Affiliate, as applicable.
(b) Defined Contribution Plan means a plan of the type defined in Code ss
414(i) maintained by the Company or an Affiliate, as applicable.
(c) Determination Date means, for any Plan Year subsequent to the first
Plan Year, the last day of the preceding Plan Year. For the first Plan Year of
the Plan, Determination Date means the last day of that year.
(d) Determination Period means the Plan Year containing the Determination
Date and the four preceding Plan Years.
(e) Key Employee means any Employee or former Employee (and the
Beneficiaries of such Employee) who at any time during the Determination Period
was:
(i) an officer of an Employer having Limitation Compensation greater
than 50% of the dollar limitation under Code ss 415(b)(1)(A) for any Plan Year
within the Determination Period,
(ii) an owner (or individual considered an owner under Code ss 318) of one
of the ten largest interests in an Employer if such individual's Limitation
Compensation exceeds 100% of the dollar limitation in effect under Code ss
415(c)(1)(A),
(iii) a "5-percent owner" (as defined in Code ss 416(i)) of an Employer, or
(iv) a "1-percent owner" (as defined in Code ss 416(i)) of an Employer who
has Limitation Compensation of more than $150,000.
(f) Limitation Compensation means, for an Employee, the Employee's earned
income, wages, salaries, fees for professional services and other amounts
received for personal services actually rendered in the course of Employment
(including, but not limited to, commissions paid salesmen, compensation for
services on the basis of a percentage of profits, commissions on insurance
premiums, tips and bonuses); amounts described in Code ss 104(a)(3), 105(a) and
105(h) to the extent includable in the Employee's gross income; amounts
described in Code ss 105(d) whether or not excludable from the Employee's gross
income; reimbursed non- deductible moving expenses; the value of nonqualified
stock options to the extent includable in the Employee's gross income in the
year of grant; the amount includable in the Employee's gross income pursuant to
an election under Code ss 83(b); distributions from an unfunded, non-qualified
plan of deferred compensation; and excluding the following:
(i) contributions to a plan of deferred compensation which are not
includible in the Employee's gross income for the taxable year in which
contributed, or contributions under a "simplified employee pension" (within the
meaning of Code ss 408(k)) to the extent such contributions are deductible by
the Employee, or any distributions from a plan of deferred compensation (other
than an unfunded non-qualified plan);
(ii) amounts realized from the exercise of a non-qualified stock option,
or when restricted stock (or other property) held by the Employee either becomes
freely "transferable" or is no longer subject to a "substantial risk of
<PAGE>
forfeiture" (both quoted terms within the meaning of Code ss 83(a));
(iii) amounts realized from the sale, exchange or other disposition of
stock acquired under a qualified stock option; and
(iv) other amounts which received special tax benefits, or contributions
made (whether or not under a salary reduction agreement) towards the purchase of
an annuity described in Code ss 403(b) (whether or not the amounts are actually
excludable from the gross income of the Employee).
(g) Non-Key Employee means any Employee who is not a Key Employee.
(h) Permissive Aggregation Group means the Required Aggregation Group of
plans plus any other plan or plans of the Company or an Affiliate which, when
considered as a group with the Required Aggregation Group, would continue to
satisfy the requirements of Code ss 401(a)(4) and 410.
(i) Required Aggregation Group means (i) each Qualified Plan of an
Employer in which at least one Key Employee participates, and (ii) any other
Qualified Plan of an Employer which enables a plan described in (i) to meet the
requirements of Code ss 401(a)(4) and 410.
(j) Super Top-Heavy Plan means, for any Plan Year beginning after
December 31, 1983, the Plan if any Top-Heavy Ratio as determined under the
definition of Top-Heavy Plan exceeds 90%.
(k) Top-Heavy Plan means, for any Plan Year beginning after December 31,
1983, the Plan if any of the following conditions exists:
(i) If the Top-Heavy Ratio for the Plan exceeds sixty percent and
the Plan is not part of any Required Aggregation Group or Permissive Aggregation
Group of plans.
(ii) If the Plan is a part of a Required Aggregation Group of plans but
not part of a Permissive Aggregation Group and the Top-Heavy Ratio for the
Required Aggregation Group of plans exceeds sixty percent.
(iii) If the Plan is a part of a Required Aggregation Group and part of a
Permissive Aggregation Group of plans and the Top-Heavy Ratio for the Permissive
Aggregation Group exceeds sixty percent.
(l) Top-Heavy Ratio means,
(i) If the Company or an Affiliate maintains one or more Defined Benefit
Plans and the Company or an Affiliate has never maintained any Defined
Contribution Plan (including any "simplified employee pension" within the
meaning of Code ss 408(k)) which during the five-year period ending on the
Determination Date has or has had account balances, the Top-Heavy Ratio for the
Plan alone or for the Required or Permissive Aggregation Group, as appropriate,
is a fraction, the numerator of which is the sum of the present values of
accrued benefits under the aggregated Defined Benefit Plans of all Key Employees
as of the respective Determination Date for each plan (including any part of any
accrued benefit distributed in the five-year period ending on the Determination
Date), and the denominator of which is the sum of the present values of all
accrued benefits under the aggregated Defined Benefit Plans as of the respective
Determination Date for each plan (including any part of any accrued benefit
distributed in the five-year period ending on the Determination Date) determined
in accordance with Code ss 416.
(ii) If the Company or an Affiliate maintains one or more Defined Benefit
Plans and the Company or an Affiliate maintains or has maintained one or more
Defined Contribution Plans (including any "simplified employee pension" within
the meaning of Code ss 408(k)) which during the five-year period ending on the
Determination Date has or has had any account balances, the Top-Heavy
<PAGE>
Ratio for any Required or Permissive Aggregation Group, as appropriate, is a
fraction, the numerator of which is the sum of the present value of accrued
benefits under the aggregated Defined Benefit Plans for all Key Employees,
determined in accordance with (i) above, plus the sum of account balances under
the aggregated Defined Contribution Plans for all Key Employees as of the
respective Determination Date for each plan, and the denominator of which is the
sum of the present value of all accrued benefits under the aggregated Defined
Benefit Plans, determined in accordance with (i) above, plus the sum of all
account balances under the aggregated Defined Contribution Plans for all Members
as of the respective Determination Date for each plan, all determined in
accordance with Code ss 416. The account balances under a Defined Contribution
Plan in both the numerator and denominator of the Top-Heavy Ratio are adjusted
for any distribution of any account balance made in the five-year period ending
on the Determination Date.
(iii) For purposes of (i) and (ii) above, the value of account balances and
the present value of accrued benefits will be determined as of the most recent
Valuation Date that falls within or ends with the 12-month period ending on the
Determination Date, except as provided in Code ss 416 for the first and second
plan year of a Defined Benefit Plan. The account balances and accrued benefits
of a Member (A) who is a Non-Key Employee but who was a Key Employee in a prior
year, or (B) who has not been credited with at least one Hour of Service with
any Employer at any time during the five-year period ending on the Determination
Date will be disregarded. The calculation of the Top- Heavy Ratio, and the
extent to which distributions, rollovers, and transfers are taken into account
will be made in accordance with Code ss 416. Deductible employee contributions
will not be taken into account for purposes of computing the Top-Heavy Ratio.
When aggregating plans, the value of account balances and accrued benefits will
be calculated with reference to the respective Determination Dates for the
aggregated plans that fall within the same calendar year.
(iv) Solely for the purpose of determining if the Plan, or any other plan
included in a Required Aggregation Group of which this Plan is a part, is Top-
Heavy (within the meaning of Code ss 416(g)) such determination shall be made
under (A) the method, if any, that uniformly applies for accrual purposes under
all plans maintained by the Employer, or (B) if there is no such method, as if
such benefit accrued not more rapidly than the slowest accrual rate permitted
under the fractional accrual rate of Code ss 411(b)(l)(C).
(m) Valuation Date means, the date as of which account balances, or accrued
benefits are valued for purposes of calculating the Top-Heavy Ratio.
B. If the Plan is determined to be a Top-Heavy Plan or a Super Top-Heavy
Plan as of any Determination Date, then it shall be subject to the rules set
forth in this Appendix A, beginning with the first Plan Year commencing after
such Determination Date.
C. For each Plan Year beginning before January 1, 1989 in which the Plan
is a Top- Heavy Plan or Super Top-Heavy Plan, Compensation for the purpose of
this Plan shall be limited to the first $200,000 (or such larger amount as may
be prescribed for the Plan Year involved pursuant to Code ss 416(d)(2)) of the
amount that would otherwise have been Compensation.
D. (a) Except as provided in subparagraph (b) below and except if any
other Defined Contribution Plan or Defined Benefit Plan provides such minimum
benefit to the Member, for any Plan Year in which the Plan is a Top-Heavy Plan,
Employer contributions and forfeitures allocated to the account of any Member
who is not a Key Employee, whether or not such Member has completed 1,000 Hours
of Service in that Plan Year and whether or not such Member has elected to
participate in the Plan, in respect of that Plan Year shall not be less than the
smaller of:
(i) three percent of such Member's Limitation Compensation, or
<PAGE>
(ii) the largest percentage of Employer contributions and forfeitures,
as a percentage of the Key Employee's Limitation Compensation, allocated in the
aggregate to the account of any Key Employee for that year.
(b) The provision in (a) above shall not apply to any Member who was not
employed by the Employer or an Affiliate on the last day of the Plan Year.
E. If the Plan is a Top-Heavy Plan for any Plan Year, then the maximum
benefit which can be provided under Code ss 415 shall be determined by
substituting "1.00" for "1.25" in Code ss 415(e)(2)(B) and (3)(B), unless the
Plan meets the requirements of Code ss 416(h)(2)(B) and the Administrator
increases the minimum rate of benefit accrual provided in Section D by one
percent.
F. Beginning with the Plan Year in which this Plan is Top-Heavy, the
following vesting schedule will apply:
Completed Years of Vested
Vesting Service Percentage
2 20%
3 40%
4 60%
5 100%
G. In the event that any provision of this Appendix A is no longer
required to qualify the Plan under the Code, then such provision shall thereupon
be void without the necessity of further amendment of the Plan.
<PAGE>
EXHIBIT 23(a)
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The Board of Directors
Torchmark Corporation:
We consent to the use of our reports incorporated herein by reference.
/s/ KPMG Peat Marwick LLP
Birmingham, Alabama
July 20, 1999
<PAGE>
EXHIBIT 24.1
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, THAT:
The undersigned officer and director of Torchmark Corporation (the
"Company") constitutes and appoints Michael J. Klyce, Gary Coleman, Larry M.
Hutchison and Carol A. McCoy, and each of them severally, his true and lawful
attorneys-in-fact for him and in his name, place and stead, in any and all
capacities, to sign the Form S-8 Registration Statement for the Profit Sharing
and Retirement Plan of Liberty National Life Insurance Company and any and all
amendments and post-effective amendments thereto, and to file the same with all
exhibits thereto and other documents required in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done as fully to all intents
and purposes as he might or could do in person, hereby ratifying and confirming
all said attorneys-in-fact and agents or any of them or their substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, I have signed this Power of Attorney in the capacity
and on the date indicated below.
Date: June 10, 1999 /s/ C.B. Hudson
------------------------------
C.B. Hudson
Chairman, President and Chief
Executive Officer and Director
(Principal Financial Officer)
<PAGE>
EXHIBIT 24.2
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, THAT:
The undersigned officer of Torchmark Corporation (the "Company")
constitutes and appoints Michael J. Klyce, Larry M. Hutchison and Carol A.
McCoy, and each of them severally, his true and lawful attorneys-in-fact for him
and in his name, place and stead, in any and all capacities, to sign the Form
S-8 Registration Statement for the Profit Sharing and Retirement Plan of Liberty
National Life Insurance Company and any and all amendments and post- effective
amendments thereto, and to file the same with all exhibits thereto and other
documents required in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite and necessary to be done as fully to all intents and purposes as he
might or could do in person, hereby ratifying and confirming all said attorneys-
in-fact and agents or any of them or their substitute or substitutes, may
lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, I have signed this Power of Attorney in the capacity
and on the date indicated below.
Date: June 10, 1999 /s/ Gary L. Coleman
--------------------------------
Gary L. Coleman
Vice President and Chief
Accounting Officer
<PAGE>
EXHIBIT 24.3
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, THAT:
The undersigned director of Torchmark Corporation (the "Company")
constitutes and appoints Michael J. Klyce, Gary Coleman, Larry M.
Hutchison and Carol A. McCoy, and each of them severally, his true and lawful
attorneys-in-fact for him and in his name, place and stead, in any and all
capacities, to sign the Form S-8 Registration Statement for the Profit Sharing
and Retirement Plan of Liberty National Life Insurance Company and any and all
amendments and post-effective amendments thereto, and to file the same with all
exhibits thereto and other documents required in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done as fully to all intents
and purposes as he might or could do in person, hereby ratifying and confirming
all said attorneys-in-fact and agents or any of them or their substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, I have signed this Power of Attorney in the capacity
and on the date indicated below.
Date: June 14, 1999 /s/ David L. Boren
--------------------------------
David L. Boren, Director
<PAGE>
EXHIBIT 24.4
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, THAT:
The undersigned director of Torchmark Corporation (the "Company")
constitutes and appoints Michael J. Klyce, Gary Coleman, Larry M.
Hutchison and Carol A. McCoy, and each of them severally, his true and lawful
attorneys-in-fact for him and in his name, place and stead, in any and all
capacities, to sign the Form S-8 Registration Statement for the Profit Sharing
and Retirement Plan of Liberty National Life Insurance Company and any and all
amendments and post-effective amendments thereto, and to file the same with all
exhibits thereto and other documents required in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done as fully to all intents
and purposes as he might or could do in person, hereby ratifying and confirming
all said attorneys-in-fact and agents or any of them or their substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, I have signed this Power of Attorney in the capacity
and on the date indicated below.
Date: June 14, 1999 /s/ Joseph M. Farley
--------------------------------
Joseph M. Farley, Director
<PAGE>
EXHIBIT 24.5
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, THAT:
The undersigned director of Torchmark Corporation (the "Company")
constitutes and appoints Michael J. Klyce, Gary Coleman, Larry M.
Hutchison and Carol A. McCoy, and each of them severally, his true and lawful
attorneys-in-fact for him and in his name, place and stead, in any and all
capacities, to sign the Form S-8 Registration Statement for the Profit Sharing
and Retirement Plan of Liberty National Life Insurance Company and any and all
amendments and post-effective amendments thereto, and to file the same with all
exhibits thereto and other documents required in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done as fully to all intents
and purposes as he might or could do in person, hereby ratifying and confirming
all said attorneys-in-fact and agents or any of them or their substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, I have signed this Power of Attorney in the capacity
and on the date indicated below.
Date: June 11, 1999 /s/ Louis T. Hagopian
--------------------------------
Louis T. Hagopian, Director
<PAGE>
EXHIBIT 24.6
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, THAT:
The undersigned director of Torchmark Corporation (the "Company")
constitutes and appoints Michael J. Klyce, Gary Coleman, Larry M.
Hutchison and Carol A. McCoy, and each of them severally, his true and lawful
attorneys-in-fact for him and in his name, place and stead, in any and all
capacities, to sign the Form S-8 Registration Statement for the Profit Sharing
and Retirement Plan of Liberty National Life Insurance Company and any and all
amendments and post-effective amendments thereto, and to file the same with all
exhibits thereto and other documents required in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done as fully to all intents
and purposes as he might or could do in person, hereby ratifying and confirming
all said attorneys-in-fact and agents or any of them or their substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, I have signed this Power of Attorney in the capacity
and on the date indicated below.
Date: June 14, 1999 /s/ Joseph L. Lanier, Jr.
--------------------------------
Joseph L. Lanier, Jr., Director
<PAGE>
EXHIBIT 24.7
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, THAT:
The undersigned director of Torchmark Corporation (the "Company")
constitutes and appoints Michael J. Klyce, Gary Coleman, Larry M. Hutchison and
Carol A. McCoy, and each of them severally, his true and lawful attorneys-in-
fact for him and in his name, place and stead, in any and all capacities, to
sign the Form S-8 Registration Statement for the Profit Sharing and Retirement
Plan of Liberty National Life Insurance Company and any and all amendments and
post-effective amendments thereto, and to file the same with all exhibits
thereto and other documents required in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done as fully to all intents
and purposes as he might or could do in person, hereby ratifying and confirming
all said attorneys-in-fact and agents or any of them or their substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, I have signed this Power of Attorney in the capacity
and on the date indicated below.
Date: June 11, 1999 /s/ Mark S. McAndrew
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Mark S. McAndrew, Director
<PAGE>
EXHIBIT 24.8
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, THAT:
The undersigned director of Torchmark Corporation (the "Company")
constitutes and appoints Michael J. Klyce, Gary Coleman, Larry M. Hutchison and
Carol A. McCoy, and each of them severally, his true and lawful attorneys-in-
fact for him and in his name, place and stead, in any and all capacities, to
sign the Form S-8 Registration Statement for the Profit Sharing and Retirement
Plan of Liberty National Life Insurance Company and any and all amendments and
post-effective amendments thereto, and to file the same with all exhibits
thereto and other documents required in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done as fully to all intents
and purposes as he might or could do in person, hereby ratifying and confirming
all said attorneys-in-fact and agents or any of them or their substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, I have signed this Power of Attorney in the capacity
and on the date indicated below.
Date: June 14, 1999 /s/ Harold T. McCormick
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Harold T. McCormick, Director
<PAGE>
EXHIBIT 24.9
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, THAT:
The undersigned director of Torchmark Corporation (the "Company")
constitutes and appoints Michael J. Klyce, Gary Coleman, Larry M. Hutchison and
Carol A. McCoy, and each of them severally, his true and lawful attorneys-in-
fact for him and in his name, place and stead, in any and all capacities, to
sign the Form S-8 Registration Statement for the Profit Sharing and Retirement
Plan of Liberty National Life Insurance Company and any and all amendments and
post-effective amendments thereto, and to file the same with all exhibits
thereto and other documents required in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done as fully to all intents
and purposes as he might or could do in person, hereby ratifying and confirming
all said attorneys-in-fact and agents or any of them or their substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, I have signed this Power of Attorney in the capacity
and on the date indicated below.
Date: June 14, 1999 /s/ R. K. Richey
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R. K. Richey, Director
