AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 23, 1996
REGISTRATION NO. 333-
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
__________________
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
VALUE HEALTH, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 06-1194838
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
22 WATERVILLE ROAD
AVON, CONNECTICUT 06001
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
VALUE HEALTH, INC. RETIREMENT SAVINGS PLAN
(Full Title of the Plan)
PAUL M. FINIGAN
SENIOR VICE PRESIDENT AND GENERAL COUNSEL
VALUE HEALTH, INC.
22 WATERVILLE ROAD
AVON, CONNECTICUT 06001
(860) 678-3400
(Telephone number, including area code, of agent for service)
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From
time to time after the effective date of this Registration Statement
when warranted by market conditions and other factors.
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415
under the Securities Act of 1933, check the following box. [ X ]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check
the following box and list the Securities Act registration statement
number of the earlier effective registration statement for the
same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If delivery of the Prospectus is expected to be made pursuant to Rule
434, please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Title of Securities to be |Amount to be |Proposed Maximum Offering |Proposed Maximum Aggregate Amount of
Registered(1) | Registered | Price Per Unit(2) | Offering Price(2) Registration Fee
<S> <C> <C> <C> <C>
|Common Stock, without par |300,000 shares | $15.175 | $4,552,500 | $1,569.83
|value | | | |
</TABLE>
(1) In addition, pursuant to Rule 416(c) under the Securities Act of 1933,
this registration statement also covers an indeterminate amount of
interests to be offered or sold pursuant to the employee benefit plan
described herein.
(2) Estimated pursuant to subsections (c) and (h) of Rule 457 under the
Securities Act of 1933 as the estimated number of shares of Common
Stock without par value of Value Health, Inc. to be purchased by the
Value Health, Inc. Retirement Savings Plan (the "Plan") over a five-
year period with employee and employer contributions, which shares may
be acquired by participants in the Plan. For purposes of Rule 457(c),
the date specified for determining the average of the high and low
prices reported in the consolidated reporting system is August 19,
1996.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
This Registration Statement relates to participation interests in the
Value Health, Inc. Retirement Savings Plan (the "Plan") and to shares of common
stock, without par value ("Common Stock") of Value Health, Inc. (the "Company")
offered pursuant to the Plan.
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE
The following documents filed with the Securities and Exchange Commission
are incorporated herein by reference:
(a) The Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1995, filed pursuant to Sections 13(a) or 15(d) of the
Securities Exchange Act of 1934, as amended (the "1934 Act");
(b) The Company's Quarterly Report on Form 10-Q for the fiscal quarter
ended March 31, 1996; and
(c) The description of the Company's Common Stock which is contained in
its registration statements filed under the 1934 Act, and any amendment or
report filed under the 1934 Act for the purpose of updating such
description.
All documents subsequently filed by the Company and the Plan pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the 1934 Act, prior to the filing of a
post-effective amendment which indicates that all securities offered hereby
have been sold or which deregisters all securities remaining unsold, shall be
deemed to be incorporated by reference herein and to be a part hereof from the
date of the filing of such documents.
ITEM 4. DESCRIPTION OF SECURITIES
This Item is not applicable to the securities to be registered hereby.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
The consolidated financial statements and schedules of the Company as of
December 31, 1995 and 1994, and for each of the three years in the period ended
December 31, 1995, incorporated by reference in this Prospectus, have been
audited by Coopers & Lybrand LLP, independent accountants (except for the
financial statements of Diagnostek, Inc. as of December 31, 1994 and 1993 and
for the years ended December 31, 1994 and 1993 and Preferred Health Care Ltd.
for the year ended December 31, 1993 which are included in such consolidated
financial statements), as set forth in the 1995 Annual Report to stockholders
and Form 10-K of the Company included therein and incorporated herein by
reference. Such consolidated financial statements and schedules have been
incorporated herein by reference in reliance upon said report given upon the
authority of said firms as experts in accounting and auditing.
The financial statements of Diagnostek, Inc. as of December 31, 1994 and
1993 and for the years ended December 31, 1994 and 1993, have been audited by
KPMG Peat Marwick LLP, independent accountants, as set forth in their report
included on Form 10-K and incorporated herein by reference. Such financial
statements have been incorporated herein by reference in reliance upon said
report given upon the authority of said firm as experts in accounting and
auditing.
The financial statements of Preferred Health Care Ltd. for the year ended
December 31, 1993, have been audited by Deloitte & Touche LLP, independent
accountants, as set forth in their report included on Form 10-K and
incorporated herein by reference. Such financial statements have been
incorporated herein by reference in reliance upon said report given upon
the authority of said firm as experts in accounting and auditing.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The information required by this item is contained in Item 15 of the
Company's Statement on Form S-3 (No. 333-822) and is incorporated herein by
reference and made a part hereof.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED
This Item is not applicable to the securities to be registered hereby.
ITEM 8. EXHIBITS
Exhibit No. Description
4.1 Value Health, Inc. Retirement Savings Plan.
4.2 Certificate of Incorporation, including amendments
thereto (filed as Exhibits 3.4 and 4.1 to the
Company's Annual Report on Form 10-K for the fiscal
year ended December 31, 1993).
4.3 By-Laws of the Company (filed as Exhibit 3 (ii) to the
Company's Current Report on Form 8-K dated February 9, 1994).
23.1 Consent of Deloitte & Touche LLP
23.2 Consent of Coopers & Lybrand LLP
23.3 Consent of KPMG Peat Marwick LLP
24 Power of Attorney (See signature page).
Neither an opinion of counsel concerning compliance with ERISA nor an Internal
Revenue Service ("IRS") determination letter is required because the Company
has submitted the Plan to the IRS in a timely manner and has made all changes
required by the IRS to qualify the Plan.
ITEM 9. UNDERTAKINGS
A. Undertaking to Update Annually
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;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in
the Registration Statement or any material change to such
information in the Registration Statement;
provided, however, that paragraph (A)(1)(i) and (A)(1)(ii) do not apply if the
Registration Statement is on Form S-3 or Form S-8, and the information required
to be included in a post-effective amendment by those paragraphs is contained
in periodic reports filed by the registrant pursuant to Section 13 or Section
15(d) of the Securities Exchange Act of 1934 that are incorporated by reference
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. Undertaking With Respect to Incorporating Subsequent Exchange Act
Documents By Reference
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 each filing of the Plan's annual report
pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is
incorporated by reference in the Registration Statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
C. Undertaking With Respect to Indemnification of Directors, Officers or
Controlling Persons.
Insofar as indemnification for liability 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 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.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
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 Town of Avon, State of Connecticut, on August 22, 1996.
VALUE HEALTH, INC.
By: /s/ Robert E. Patricelli
Name: Robert E. Patricelli
Title: Chairman of the Board, President
and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities and on the dates indicated. Each person whose signature appears
below hereby constitutes Steven J. Schulman and David M. Wurzer and each of
them singly, such person's true and lawful attorneys, with full power to them
and each of them to sign for such person and in such person's name and capacity
indicated below any and all amendments to this Registration Statement, hereby
ratifying and confirming such person's signature as it may be signed
by said attorneys to any and all amendments.
<TABLE>
<CAPTION>
|Signature |Title |Date |
<S> <C> <C>
|/s/ Robert E. Patricelli |Chairman of the Board, President and |August 22, 1996 |
|Robert E. Patricelli |Chief Executive Officer | |
| |(Principal Executive Officer) | |
| | | |
|/s/ Steven J. Shulman |Director and President, Pharmacy and |August 22, 1996 |
|Steven J. Shulman |Disease Management Group | |
| | | |
|/s/ David M. Wurzer |Senior Vice President and Chief Financial |August 22, 1996 |
|David M. Wurzer |Officer (Principal Financial and | |
| |Accounting Officer) | |
| |Director |August , 1996 |
|William J. McBride | | |
| | | |
|/s/ David J. McDonnell |Director |August 22, 1996 |
|David J. McDonnell | | |
| |Director |August , 1996 |
|Walter J. McNerney | | |
| | | |
|/s/ Rodman W. Moorhead, III |Director |August 22, 1996 |
|Rodman W. Moorhead, III | | |
| | | |
| |Director |August 22, 1996 |
|/s/ Constance B. Newman | | |
|Constance B. Newman | | |
| | | |
|/s/ John L. Vogelstein |Director |August 22, 1996 |
|John L. Vogelstein | | |
| |Director |August , 1996 |
|Hicks B. Waldron | | |
</TABLE>
(A majority of the Board of Directors)
Pursuant to the requirements of the Securities Act of 1933, the trustees
have duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the Town of Avon, State of
Connecticut on August 22, 1996.
VALUE HEALTH, INC. RETIREMENT SAVINGS PLAN
By /s/ David M. Wurzer
Name: David M. Wurzer
Title: Co-Trustee
<PAGE>
EXHIBIT INDEX
Exhibit No. Description Page
4.1 Value Health, Inc. Retirement Savings Plan.
4.2 Certificate of Incorporation, including amendments thereto
(filed as Exhibits 3.4 and 4.1 to the Company's Annual
Report on Form 10-K for the fiscal year ended December 31, 1993).
4.3 By-Laws of the Company (filed as Exhibit 3(ii) to the
Company's Current Report on Form 8-K dated February 9, 1994).
23.1 Consent of Deloitte & Touche LLP.
23.2 Consent of Coopers & Lybrand LLP.
23.3 Consent of KPMG Peat Marwick LLP.
24 Power of Attorney (See signature page).
EXHIBIT 4.1
VALUE HEALTH, INC. RETIREMENT SAVINGS PLAN
IMPORTANT NOTE
Neither Connecticut General Life Insurance Company nor any of its employees can
provide you with legal advice in connection with the execution of this
document. Prior to execution of this document, you should consult your
attorney on whether this document is appropriate for you.
<PAGE>
Table Of Contents
ARTICLE I DEFINITIONS ...............................................1
ARTICLE II SERVICE ..................................................18
ARTICLE III ELIGIBILITY, ENROLLMENT AND PARTICIPATION ................21
ARTICLE IV CONTRIBUTIONS ............................................22
ARTICLE V LIMITATIONS ON ALLOCATIONS ...............................34
ARTICLE VI DISTRIBUTION OF BENEFITS .................................41
ARTICLE VII RETIREMENT BENEFITS ......................................50
ARTICLE VIII JOINT AND SURVIVOR ANNUITY REQUIREMENTS ..................51
ARTICLE IX TERMINATION OF EMPLOYMENT ................................56
ARTICLE X WITHDRAWALS ..............................................58
ARTICLE X-A LOANS ....................................................61
ARTICLE XI FIDUCIARY DUTIES AND RESPONSIBILITIES ....................63
ARTICLE XII THE ADMINISTRATOR ........................................64
ARTICLE XIII PARTICIPANTS' RIGHTS .....................................66
ARTICLE XIV AMENDMENT OR TERMINATION OF THE PLAN .....................69
ARTICLE XV SUBSTITUTION OF PLANS ....................................71
ARTICLE XVI MISCELLANEOUS ............................................72
ARTICLE XVI-A TOP-HEAVY PROVISIONS .....................................74
ARTICLE XVII TRUST AGREEMENT ..........................................79
APPENDIX A STOKELD HEALTH SERVICES CORPORATION
401(k) SALARY DEFERRAL PLAN AND TRUST ....................83
APPENDIX B CENTER FOR HUMAN RESOURCES, INC.401(k) AGE WEIGHTED PROFIT
SHARING PLAN & TRUST......................................84
APPENDIX C BURKE-TAYLOR ASSOCIATES, INC.401(k) PROFIT SHARING
RETIREMENT PLAN...........................................85
APPENDIX D PREFERRED HEALTH CARE SAVINGS AND RETIREMENT PLAN.........86
APPENDIX E PREFERRED WORKS, INC. 401(k) RETIREMENT PROGRAM...........87
APPENDIX F SQUARE LAKE CORPORATION PROFIT SHARING 401(k) PLAN........88
APPENDIX G DIVERSIFIED MEDICAL RETIREMENT PLAN.......................89
APPENDIX H COMMUNITY CARE NETWORK, INC. 401(k) SAVINGS PLAN..........90
APPENDIX I RX - NET, INC. 401(k) RETIREMENT SAVINGS PLAN.............91
APPENDIX J HEALTH MANAGEMENT STRATEGIES 401(k) RETIREMENT AND
SAVINGS PLAN .............................................92
APPENDIX K DIAGNOSTEK, INC. & SUBSIDIARIES 401(k) RETIREMENT SAVINGS
PLAN .....................................................94
<PAGE>
ARTICLE I
DEFINITIONS
1.1 ACCRUED BENEFIT. The term Accrued Benefit means the value on any
applicable date of the Participant's Account.
1.2 ACTIVE PARTICIPANT. The term Active Participant means any Participant
who (a) performs duties as an Employee for the Employer, and (b) is not
an Inactive Participant.
1.3 ACTUAL CONTRIBUTION PERCENTAGE. The term Actual Contribution
Percentage means the average of the Actual Contribution Ratios of a
specified group computed to the nearest one-hundredth of one percent.
1.4 ACTUAL CONTRIBUTION PERCENTAGE TEST.
(A) For each Plan Year, the Plan shall satisfy the contribution
percentage requirement described in section 401(m)(2) of the
Code and the regulations thereunder, which are incorporated
herein.
The Plan satisfies the Actual Contribution Percentage Test if:
(1) The Actual Contribution Percentage for the group of
eligible Highly Compensated Employees is not more than
the Actual Contribution Percentage for the group of all
other eligible Employees multiplied by 1.25; or
(2) The excess of the Actual Contribution Percentage for the
group of eligible Highly Compensated Employees over the
Actual Contribution Percentage for the group of all
other eligible Employees is not more than two percentage
points, and the Actual Contribution Percentage for
the group of eligible Highly Compensated Employees is
not more than the Actual Contribution Percentage for the
group of all other eligible Employees multiplied by two.
(B) Special Rules.
(1) Matching Contributions and Qualified Nonelective
Contributions will be considered for a Plan Year only if
allocated to the Employee's Account as of any date
within the Plan Year being tested and only if made
before the last day of the twelve month period
immediately following the Plan Year to which such
contributions relate.
(2) A Matching Contribution that is forfeited to correct
Excess Aggregate Contributions, or because the
contribution to which it relates is treated as an Excess
Contribution, Excess Deferral, or Excess Aggregate
Contribution, shall not be taken into account for
purposes of the Actual Contribution Percentage Test.
(3) The Employer shall maintain records sufficient to
demonstrate satisfaction of the Actual Contribution
Percentage Test, including records showing the extent to
which Qualified Nonelective Contributions and Elective
Deferral Contributions are taken into account.
1.5 ACTUAL CONTRIBUTION RATIO.
(A) An Employee's Actual Contribution Ratio is the sum of the
Contribution Percentage Amounts allocated to the Employee's
Account for the Plan Year (including any amounts required to be
taken into account under subparagraphs (B) (1) and (B) (2) of
this section) divided by the Employee's Compensation for
the Plan Year. If no Matching Contributions, Qualified
Nonelective Contributions, or Elective Deferral Contributions
are taken into account with respect to an eligible Employee, the
Actual Contribution Ratio of the Employee is zero.
(B) Special Rules.
(1) In the event that this Plan is aggregated with one or more plans
for purposes of section 410(b) of the Code (other than for
purposes of the average benefit percentage test), or if one or
more other plans satisfy the requirements of section 410(b) of
the Code (other than the average benefit percentage test)
only if aggregated with this Plan, then this section shall be
applied by determining the Actual Contribution Ratios of
Employees as if all such plans were a single plan. Plans may be
aggregated only if they have the same Plan Year
(2) The Actual Contribution Ratio of a Highly Compensated Employee
who is eligible to participate in more than one plan of the
Employer to which employee contributions or Matching
Contributions are made shall be calculated by treating all such
plans in which the Employee is eligible to participate as one
plan. For Plan Years beginning after December 31, 1988, if a
Highly Compensated Employee participates in two or more plans
that have different plan years, all plans ending with or within
the same calendar year shall be treated as a single plan.
However, plans that are not permitted to be aggregated under
Treasury Regulation section 1.401(m)-1(b)(3)(ii) shall not be
aggregated for purposes of this section.
(3) For purposes of determining the Actual Contribution Ratio of a
Participant who is a 5-percent owner or one of the ten most
highly-paid Highly Compensated Employees, the Contribution
Percentage Amounts and Compensation of such Participant shall
include the Contribution Percentage Amounts (including any
amounts required to be taken into account under subparagraphs
(B) (1) and (B) (2) of this section and Compensation for the
Plan Year of all Family Members.
If the Participant is required to be aggregated as a member of
more than one family group under the Plan, all eligible
Employees who are members of those family groups that include
that Employee are aggregated as one family group.
Family Members, with respect to Highly Compensated Employees,
shall be disregarded as separate Employees in determining the
Actual Contribution Ratio both for Participants who are
Nonhighly Compensated Employees and for Participants who are
Highly Compensated Employees.
(4) The determination and treatment of the Actual Contribution Ratio
amounts of any Participant shall satisfy such other requirements
as may be prescribed by the Secretary of the Treasury.
1.6 ACTUAL DEFERRAL PERCENTAGE. The term Actual Deferral Percentage means
the average of the Actual Deferral Ratios of a specified group,
computed to the nearest one-hundredth of one percent.
1.7 ACTUAL DEFERRAL PERCENTAGE TEST.
(A) For each Plan Year, the Plan shall satisfy the Actual Deferral
Percentage Test described in section 401(k)(3) and the
regulations thereunder, which are herein incorporated by
reference
The Plan satisfies the Actual Deferral Percentage Test for a
Plan Year only if:
(1) The Actual Deferral Percentage for the group of eligible
Highly Compensated Employees is not more than the Actual
Deferral Percentage for the group of all other eligible
Employees multiplied by 1.25; or
(2) The excess of the Actual Deferral Percentage for the
group of eligible Highly Compensated Employees over the
Actual Deferral Percentage for the group of all other
eligible Employees is not more than two percentage
points, and the Actual Deferral Percentage for the
group of eligible Highly Compensated Employees is not
more than the Actual Deferral Percentage for the group
of all other eligible Employees multiplied by two.
(B) Special Rules
(1) For purposes of determining the Actual Deferral
Percentage Test, Elective Deferral Contributions,
Qualified Nonelective Contributions, and Qualified
Matching Contributions must be allocated to the
Employee's Account as of a date within the Plan Year
being tested and must be made before the last day of the
twelve-month period immediately following the Plan Year
to which such contributions relate.
(2) The Excess Deferrals of a Highly Compensated Employee
shall be taken into account for purposes of the Actual
Deferral Percentage Test. Conversely, the Excess
Deferrals of an Employee who is a Nonhighly Compensated
Employee shall not be taken into account for purposes of
the Actual Deferral Percentage Test.
(3) The Employer shall maintain records sufficient to
demonstrate satisfaction of the Actual Deferral
Percentage Test, including the extent to which Qualified
Nonelective Contributions and Qualified Matching
Contributions are taken into account.
1.8 ACTUAL DEFERRAL RATIO.
(A) An Employee's Actual Deferral Ratio for the Plan Year is the sum
of the Employee's Deferral Percentage Amounts allocated to the
Employee's Account for the Plan Year (including any amounts
required to be taken into account under subparagraphs (B) (1)
and (B) (2) of this section, divided by the Employee's
Compensation taken into account for the Plan Year. If an
eligible Employee makes no Elective Deferral Contributions, and
no Qualified Matching Contributions or Qualified Nonelective
Contributions are taken into account with respect to the
Employee, the Actual Deferral Ratio of the Employee is zero.
(B) Special Rules.
(1) In the event that this Plan is aggregated with one or
more plans for purposes of section 410(b) of the Code
(other than for purposes of the average benefit
percentage test), or if one or more other plans satisfy
the requirements of section 410(b) of the Code (other
than the average benefit percentage test) only if
aggregated with this Plan, then this section shall be
applied by determining the Actual Deferral Ratio of
Employees as if all such plans were a single plan.
Plans may be aggregated only if they have the same Plan
Year.
(2) The Actual Deferral Ratio of a Highly Compensated
Employee who is eligible to participate in more than
one cash or deferred arrangement (as described in
section 401(k) of the Code) of the same Employer shall
be calculated by treating all the cash or deferred
arrangements in which the Employee is eligible to
participate as one arrangement. If the cash or deferred
arrangements that are treated as a single arrangement
under the preceding sentence are parts of plans that
have different Plan Years, the cash or deferred
arrangements are treated as a single arrangement with
respect to the Plan Years ending with or within the same
calendar year. However, plans that are not permitted to
be aggregated under Treasury Regulation section
1.401(k)-1(b)(3)(ii)(B) are not aggregated for purposes
of this section.
(3) For purposes of determining the Actual Deferral Ratio of
a Participant who is a 5 percent owner or one of the 10
most Highly Compensated Employees, the Deferral
Percentage Amounts and Compensation of such Participant
shall include the Deferral Percentage Amounts (including
any amounts required to be taken into account under
subparagraphs (B)(1) and (B) (2) of this section) and
Compensation for the Plan Year of Family Members.
If an Employee is required to be aggregated as a member
of more than one family group under the Plan, all
eligible Employees who are members of those family
groups that include that Employee are aggregated as one
family group.
Family Members, with respect to such Highly Compensated
Employees, shall be disregarded as separate Employees in
determining the Actual Deferral Percentage both for
Participants who are Nonhighly Compensated Employees and
for Participants who are Highly Compensated Employees.
(4) The determination and treatment of the Actual Deferral
Ratio amounts of any Participant shall satisfy such
other requirements as may be prescribed by the Secretary
of the Treasury.
1.9 ANNUITY. The term Annuity means a series of payments made over a
specified period of time which, for a fixed annuity are, of equal,
specified amounts, and for a variable annuity increase or decrease to
reflect changes in investment performance of the underlying portfolio.
1.10 ANNUITY STARTING DATE. The term Annuity Starting Date means the first
day of the first period for which an amount is payable as an Annuity.
In the case of a benefit not payable in the form of an Annuity, the
term Annuity Starting Date means the first day on which all events have
occurred which entitle the Participant to such benefit.
1.11 APPENDICES. The term Appendices (or Appendix) means the descriptions
(or one of the descriptions) attached to the Plan document which
describe any benefits which have been protected for specific groups of
Employees due to acquisitions and plan mergers by the Employer. Each
Appendix, as it may be in effect from time to time, shall be deemed a
part of this Plan document. The Employer reserves the right to add
further appendices as necessary.
1.12 BENEFICIARY. The Participant's Spouse is the designated Beneficiary of
the Participant's entire Vested Interest. However, each Participant
shall have the right to designate another Beneficiary and to specify
the form of death benefit the Beneficiary is to receive, subject to the
requirements of the "Qualified Election" provisions of Article VIII,
Joint and Survivor Annuity Requirements. The Participant may change
the Beneficiary and/or the form of death benefit at any time, subject
to the requirements of the "Qualified Election" provisions of Article
VIII, Joint and Survivor Annuity Requirements.
If any distribution hereunder is made to a Beneficiary in the form of
an Annuity, and if such Annuity provides for a death benefit, then such
Beneficiary shall also have the right to designate a Beneficiary and to
change that Beneficiary from time to time. As an alternative to
receiving the benefit in the form of an Annuity, the Beneficiary may
elect to receive a single cash payment or any other form of payment
provided for in the Plan.
If a Beneficiary has not been designated, or if a Beneficiary
designation or change of Beneficiary designation does not meet the
requirements of the "Qualified Election" provisions of Article VIII,
Joint and Survivor Annuity Requirements, (including any designation
made prior to August 23, 1984 by a married Participant who has an
Hour of Service on or after August 23, 1984), or if no designated
Beneficiary survives the Participant, the Participant's entire Vested
Interest shall be distributed to the Participant's Spouse, if living;
otherwise in equal shares to any surviving children of the Participant.
In the event none of the above named individuals survives the
Participant, the Participant's entire Vested Interest shall be paid to
the executor or administrator of the Participant's estate.
For purposes of Investment of Contributions as described in Article
XIII, an individual who is designated as an alternate payee in a
qualified domestic relations order (as defined in section 414(p) of the
Code) relating to a Participant's benefits under this Plan shall be
treated as a Beneficiary hereunder, to the extent provided by such
order.
1.13 BOARD OF DIRECTORS. The term Board of Directors means the Employer's
board of directors or other comparable governing body.
1.14 CODE. The term Code means the Internal Revenue Code of 1986, as
amended from time to time.
1.15 COMPENSATION.
(A) Except as otherwise provided in the Plan, the term Compensation
means wages within the meaning of section 3401(a) of the Code
for the purposes of income tax withholding at the source but
determined without regard to any rules that limit the
remuneration included in wages based on the nature or location
of the employment or the services performed (such as the
exception for agricultural labor in section 3401(a)(2) of the
Code).
Notwithstanding the foregoing, Compensation shall be reduced by
all of the following items (even if includible in gross income):
reimbursements or other expense allowances, fringe benefits
(cash and noncash), moving expenses, deferred compensation, and
welfare benefits.
For purposes of the Actual Deferral Percentage Test or the
Actual Contribution Percentage Test, or both, the definition of
Compensation shall be any definition of Compensation that
satisfies Code Section 414(s) or 415(c)(3).
(B) Compensation shall include only that Compensation which is
actually paid to the Participant during the determination
period. Except as provided elsewhere in the Plan, the
determination period shall be the Plan Year.
(C) Compensation shall include any amount which is contributed by
the Employer pursuant to a salary reduction agreement and which
is not includible in the gross income of the employee under
sections 125, 402(e)(3), 402(h), or 403(b) of the Code;
Compensation deferred under an eligible deferred compensation
plan within the meaning of section 457(d) of the Code; and
employee contributions described in section 414(h)(2) of the
Code that are picked up by the employing unit and thus, are
treated as employer contributions.
(D) The annual Compensation of each Participant taken into account
for determining all benefits provided under the Plan for any
determination period shall not exceed $200,000. This limitation
shall be adjusted by the Secretary of the Treasury at the time
and in the same manner as under section 415(d) of the Code,
except that the dollar increase in effect on January 1 of any
calendar year is effective for determination periods beginning
in such calendar year and the first adjustment to the $200,000
limitation is effected on January 1, 1990. If the period for
determining Compensation used in calculating an Employee's
allocation for a determination period is a short Plan Year
(i.e., shorter than 12 months), the annual Compensation limit is
an amount equal to the otherwise applicable annual Compensation
limit multiplied by a fraction, the numerator of which is the
number of months in the short Plan Year, and the denominator of
which is 12.
In determining the Compensation of a Participant for purposes of
this limitation, the rules of section 414(q)(6) of the Code
shall apply, except in applying such rules, the term "family"
shall include only the Spouse of the Participant and any lineal
descendants of the Participant who have not attained age 19
before the close of the year. If, as a result of the
application of such rules, the adjusted $200,000 limitation is
exceeded, then either the limitation shall be prorated among the
affected individuals in proportion to each such individual's
Compensation as determined under this section prior to the
application of this limitation, or the limitation shall be
allocated among the affected individuals in an objective and
nondiscriminatory manner based on a reasonable, good faith
interpretation of section 401(a)(17) of the Code. The method
chosen in the preceding sentence shall be uniformly applied to
all affected individuals in a Plan Year and shall be applied
consistently from year to year.
If Compensation for any prior determination period is taken into
account in determining an Employee's allocations or benefits for
the current determination period, the Compensation for such
prior determination period is subject to the applicable annual
Compensation limit in effect for that prior year. For this
purpose, for years beginning before January 1, 1990, the
applicable annual Compensation limit is $200,000.
(E) In addition to other applicable limitations set forth in the
Plan, and notwithstanding any other provision of the Plan to the
contrary, for Plan Years beginning on or after January 1, 1994,
the annual Compensation of each Employee taken into account
under the Plan shall not exceed the OBRA '93 annual Compensation
limit. The OBRA '93 annual Compensation limit is $150,000, as
adjusted by the Commissioner for increases in the cost of living
in accordance with section 401(a)(17)(B) of the Code.
The cost-of-living adjustment in effect for a calendar year
applies to any period, not exceeding 12 months, over which
Compensation is determined (determination period) beginning in
such calendar year. If a determination period consists of fewer
than 12 months, the OBRA '93 annual Compensation limit
will be multiplied by a fraction, the numerator of which is the
number of months in the determination period, and the
denominator of which is 12. For Plan Years beginning on or
after January 1, 1994, any reference in this Plan to the
limitation under section 401(a)(17) of the Code shall mean the
OBRA '93 annual Compensation limit set forth in this provision.
If Compensation for any prior determination period is taken into
account in determining an employee's benefits accruing in the
current Plan Year, the Compensation for that prior determination
period is subject to the OBRA '93 annual Compensation limit
in effect for that prior determination period. For this
purpose, for determination periods beginning before the first
day of the first Plan Year beginning on or after January 1,
1994, the OBRA '93 annual Compensation limit is $150,000.
1.16 CONSIDERED NET PROFITS. The term Considered Net Profits means the
entire amount of the accumulated or current operating profits
(excluding capital gains from the sale or involuntary conversion of
capital or business assets) of the Employer after all expenses and
charges other than (i) the contributions made by the Employer to
the Plan, and (ii) federal or state or local taxes based upon or
measured by income, as determined by the Employer, either on an
estimated basis or a final basis, in accordance with the generally
accepted accounting principles used by the Employer. When the amount
of Considered Net Profits has been determined by the Employer, and the
contributions are made by the Employer on the basis of such
determination, for any Plan Year, such determination and contribution
shall be final and conclusive and shall not be subject to change
because of any adjustments in income or expense which may be required
by the Internal Revenue Service or otherwise. Such determination and
contribution shall not be open to question by any Participant either
before or after the contributions by the Employer have been made.
1.17 CONTRIBUTION PERCENTAGE AMOUNTS. The term Contribution Percentage
Amounts means the sum of the Matching Contributions and Qualified
Matching Contributions (to the extent not taken into account for
purposes of the Actual Deferral Percentage Test) made under the Plan on
behalf of the Employee for the Plan Year. The term Contribution
Percentage Amounts also includes Qualified Nonelective Contributions
and Elective Deferral Contributions treated as Matching Contributions
and taken into account in determining the Employee's Actual
Contribution Ratio for the Plan Year.
1.18 CONTRIBUTION PERIOD. The term Contribution Period means that regular
period specified by the Employer in Article IV for which contributions
shall be made.
1.19 DEFERRAL PERCENTAGE AMOUNTS. The term Deferral Percentage Amounts
means an Employee's Elective Deferral Contributions for the Plan Year.
The term Deferral Percentage Amounts also includes Qualified
Nonelective Contributions and Qualified Matching Contributions treated
as Elective Deferral Contributions and taken into account in
determining the Employee's Actual Deferral Ratio for the Plan Year.
1.20 DISABILITY. The term Disability means a Participant*s incapacity to
engage in any substantial gainful activity because of a medically
determinable physical or mental impairment which can be expected to
result in death, or to be of long, continued and indefinite duration.
Such determination of Disability shall be made by the Administrator
with the advice of competent medical authority. All Participants in
similar circumstances will be treated alike.
1.21 DISABILITY RETIREMENT DATE. The term Disability Retirement Date means
the first day of the month after the Plan Administrator has determined
that a Participant's incapacity is a Disability.
1.22 EFFECTIVE DATE. The term Effective Date means May 1, 1991.
1.23 ELECTIVE DEFERRAL CONTRIBUTION. The term Elective Deferral
Contribution means any Employer Contribution made to the Plan at the
election of the Participant, in lieu of cash compensation, and includes
contributions made pursuant to a Salary Deferral Agreement or other
deferral mechanism.
Solely for purposes of the dollar limitation specified in section
402(g) of the Code, with respect to any taxable year, a Participant's
Elective Deferral Contributions are the sum of all employer
contributions made on behalf of such Participant pursuant to an
election to defer under any qualified cash or deferred arrangement as
described in section 401(k) of the Code, any simplified employee
pension cash or deferred arrangement described in section 402(h)(1)(B)
of the Code, any plan as described under section 501(c)(18) of the
Code, and any employer contributions made on behalf of a Participant
for the purchase of a tax sheltered annuity contract under section
403(b) of the Code pursuant to a salary reduction agreement.
The term Elective Deferral Contribution shall not include any deferrals
properly distributed as excess annual additions.
1.24 EMPLOYEE. The term Employee means an individual who performs services
for the Employer and who is either a common law employee of the
Employer or a self-employed individual/owner employee treated as an
Employee pursuant to Code section 401(c)(1). The term Employee also
includes a Leased Employee who is treated as an Employee of the
Employer-recipient pursuant to the provisions of Code section 414(n) or
414(o). For purposes of determining the Highly Compensated Employees,
the Employer may elect, on a reasonable and consistent basis, to treat
such Leased Employees covered by a plan described in Code section
414(n)(5) as Employees.
1.25 EMPLOYEE CONTRIBUTIONS. The Term Employee Contributions means any
contributions to the Plan or any other plan that are designated or
treated at the time of contribution as after-tax Employee Contributions
and are allocated to a separate account to which the attributable
earnings and losses are allocated. Such term includes Employee
Contributions applied to the purchase of life insurance policies.
Such term does not include repayment of loans or buy-back of benefits
described in code section (411)(a)(7)(c) or employee contributions
transferred to this Plan.
1.26 EMPLOYER. The term Employer means Value Health, Inc. and any
successor organization to such Employer which elects to continue the
Plan. In the case of a group of employers which constitutes a
controlled group of corporations (as defined in Code section 414(b)),
or which constitutes trades or businesses (whether or not incorporated)
which are under common control (as defined in Code section 414(c)), or
which constitutes an affiliated service group (as defined in Code
section 414(m)), all such employers shall be considered a single
employer for purposes of participation, vesting, Top-Heavy provisions
and determination of Highly Compensated Employees.
1.27 EMPLOYER CONTRIBUTION. The term Employer Contribution means any
contribution made to the Plan by the Employer on behalf of a
Participant, other than a Rollover Contribution or a mandatory or
voluntary contribution made to the Plan by the Employee that is treated
at the time of contribution as an after-tax employee contribution.
1.28 ENTRY DATE. The term Entry Date means either the Effective Date or the
January 1 or July 1 thereafter when an Employee who has fulfilled the
eligibility requirements commences participation in the Plan. However,
effective January 1, 1995, the term Entry Date means the January 1,
April 1, July 1 or October 1 when an Employee who has fulfilled the
eligibility requirements commences participation in the Plan.
Any Employee who has satisfied the maximum eligibility requirements
permissible under ERISA, shall be eligible to commence participation in
this Plan no later than the earlier of (A) or (B) below, as applicable,
provided that the Employee has not separated from the Service of the
Employer:
(A) The first day of the first Plan Year beginning after the date on
which the Employee satisfied such requirements; or
(B) The date six months after the date on which the Employee
satisfied such requirements.
If an Employee is not in the active Service of the Employer as of his
initial Entry Date, his subsequent Entry Date shall be the date he
returns to the active Service of the Employer, provided he still meets
the eligibility requirements. If an Employee does not enroll as a
Participant as of his initial Entry Date, his subsequent Entry
Date shall be the applicable Entry Date as specified above when the
Employee actually enrolls as a Participant.
1.29 ERISA. The term ERISA means the Employee Retirement Income Security
Act of 1974 (PL 93-406) as it may be amended from time to time, and any
regulations issued pursuant thereto as such Act and such regulations
affect this Plan and Trust.
1.30 EXCESS AGGREGATE CONTRIBUTIONS.
(A) The term Excess Aggregate Contributions means, with respect to
any Plan Year, the excess of the aggregate amount of the
Contribution Percentage Amounts actually made on behalf of
Highly Compensated Employees for the Plan Year (including any
amounts required to be taken into account under subparagraphs
(B) (1) and (B) (2) of Section 1.5 of the Plan), over the
maximum amount of contributions permitted under the Actual
Contribution Percentage Test. The amount of Excess Aggregate
Contributions for each Highly Compensated Employee is determined
by using the method described in paragraph (B) of this section.
(B) The amount of Excess Aggregate Contributions for a Highly
Compensated Employee for a Plan Year is the amount (if any) by
which the Employee's Matching Contributions must be reduced for
the Employee's Actual Contribution Ratio to equal the highest
permitted Actual Contribution Ratio under the Plan.
To calculate the highest permitted Actual Contribution Ratio
under the Plan, the Actual Contribution Ratio of the Highly
Compensated Employee with the highest Actual Contribution Ratio
is reduced by the amount required to cause the Employee's Actual
Contribution Ratio to equal the ratio of the Highly Compensated
Employee with the next highest Actual Contribution Ratio. If a
lesser reduction would enable the Plan to satisfy the Actual
Contribution Percentage Test, only this lesser reduction may be
made. This process shall be repeated until the Plan satisfied
the Actual Contribution Percentage Test. The highest Actual
Contribution Percentage Ratio remaining under the Plan after
leveling is the highest permitted Actual Contribution Ratio.
For each Highly Compensated Employee, the amount of Excess
Aggregate Contributions for a Plan Year is equal to the total
Contribution Percentage Amounts (including any amounts required
to be taken into account under subparagraphs (B) (1) and (B) (2)
of Section 1.5 of the Plan), minus the amount determined by
multiplying the Employees's highest permitted Actual
Contribution Ratio (determined after application of this
section) by the compensation used in determining the ratio.
1.31 EXCESS CONTRIBUTION.
(A) The term Excess Contribution means, with respect to a Plan Year,
the excess of Deferral Percentage Amounts made on behalf of
eligible Highly Compensated Employees for the Plan Year
(including any amounts required to be taken into account under
subparagraphs (B) (1) and (B) (2) of Section 1.8 of the
Plan) over the maximum amount of such contributions permitted
under the Actual Deferral Percentage Test for the Plan Year.
The amount of Excess Contributions for each Highly Compensated
Employee is determined by using the method described in
paragraph (B) of this section.
(B) The amount of Excess Contributions for a Highly Compensated
Employee for a Plan Year is the amount (if any) by which the
Employee's Elective Deferral Contributions must be reduced for
the Employee's Actual Deferral Ratio to equal the highest
permitted Actual Deferral Ratio under the Plan.
To calculate the highest permitted Actual Deferral Ratio under
the Plan, the Actual Deferral Ratio of the Highly Compensated
Employee with the highest Actual Deferral Ratio is reduced by
the amount required to cause the Employee's Actual Deferral
Ratio to equal the ratio of the Highly Compensated Employee
with the next highest Actual Deferral Ratio. If a lesser
reduction would enable the arrangement to satisfy the Actual
Deferral Percentage Test, only this lesser reduction shall be
made. This process shall be repeated until the cash or deferred
arrangement satisfies the Actual Deferral Percentage Test. The
highest Actual Deferral Ratio remaining under the Plan after
leveling is the highest permitted Actual Deferral Ratio.
1.32 EXCESS DEFERRALS. The term Excess Deferrals means those Elective
Deferral Contributions that are includible in a Participant's gross
income under section 402(g) of the Code to the extent such
Participant's Elective Deferral Contributions for a taxable year exceed
the dollar limitation under such Code section.
1.33 FAIL-SAFE CONTRIBUTION. The term Fail-Safe Contribution means a
Nonelective Contribution, designated by the Employer at the time of
contribution as a Qualified Nonelective Contribution, which is
contributed to the Plan solely for the purposes of satisfying either
the Actual Deferral Percentage Test or the Actual Contribution
Percentage Test and is made in accordance with the provisions of
Article IV of this Plan.
1.34 FAMILY MEMBER. The term Family Member means, with respect to any
Employee, such Employee's Spouse and lineal ascendants and descendants
and the spouses of such lineal ascendants and descendants.
1.35 FIDUCIARY. The term Fiduciary means any, or all, of the following, as
applicable:
(A) Any Person who exercises any discretionary authority or control
respecting the management of the Plan or its assets; or
(B) Any Person who renders investment advice for a fee or other
compensation, direct or indirect, respecting any monies or other
property of the Plan or has authority or responsibility to do
so; or
(C) Any Person who has discretionary authority or responsibility in
the administration of the Plan; or
(D) Any Person who has been designated by a Named Fiduciary pursuant
to authority granted by the Plan, who acts to carry out a
fiduciary responsibility, subject to any exceptions granted
directly or indirectly by ERISA.
1.36 FORFEITURE. The term Forfeiture means the amount, if any, by which the
value of a Participant's Account exceeds his Vested Interest following
such Participant's Termination of Employment, and at the time specified
in Section 9.1.
1.37 HIGHLY COMPENSATED EMPLOYEE. The term Highly Compensated Employee
means any Highly Compensated Active Employee or Highly Compensated
Former Employee as further defined herein.
For purposes of the determination of Highly Compensated Employees, the
term Compensation means Compensation as defined in Article V of the
Plan, but includes the amount of any elective contributions made
by the Employer on the Employee's behalf to a cafeteria plan
established in accordance with the provisions of Code section 125, a
qualified cash or deferred arrangement in accordance with the
provisions of Code section 402(e)(3), a simplified employee pension
plan in accordance with the provisions of Code Section 402(h), or a
tax sheltered annuity plan maintained in accordance with the provisions
of Code section 403(b).
A "Highly Compensated Active Employee" is any Employee who performs
services for the Employer during the current Plan Year and who during
the current Plan Year or the calendar year ending with the current Plan
Year:
(A) Owns (or is considered to own within the meaning of section 318
of the Code, as modified by section 416(i)(1)(B)(iii) of the
Code), more than 5% of the outstanding stock of the Employer or
stock possessing more than 5% of the total combined voting power
of all stock of the Employer, or, if the Employer is other than
a corporation, owns more than 5% of the capital or profits
interest in the Employer. The determination of 5% ownership
shall be made separately for each member of a controlled group
of corporations (as defined in Code section 414(b)), or of a
group of trades or businesses (whether or not incorporated) that
are under common control (as defined in Code section 414(c)), or
of an affiliated service group (as defined in Code section
414(m)); or
(B) Receives Compensation in excess of $75,000 multiplied by the
applicable cost-of-living adjustment factor prescribed under
Code section 415(d) and then prorated in the case of a short
Plan Year; or
(C) Receives Compensation in excess of $50,000, as adjusted for
cost-of-living increases in accordance with Code section 415(d)
and then prorated in the case of a short Plan Year, and is in
the top 20% of Employees ranked by Compensation; or
(D) Is, at any time, an officer of the Employer and receives
Compensation in excess of 50% of the amount in effect under Code
section 415(b)(1)(A) for the applicable period.
If no officer receives Compensation in excess of the amount
specified above, the highest paid officer for the applicable
period shall be a Highly Compensated Employee.
In no event if there are more than 500 Employees, shall more
than 50 Employees or, if there are less than 500 Employees,
shall the greater of three Employees or 10% of all Employees, be
taken into account as officers.
In determining both the top 20% of Employees ranked by Compensation for
purposes of paragraph (C) above, and officers of the Employer for
purposes of paragraph (D) above, Employees who have not completed six
months of Service by the end of the applicable period, Employees who
normally work less than 17-1/2 hours per week, Employees who normally
work less than six months during a year, Employees who have not
attained 21, and nonresident aliens who receive no earned income from
U.S. sources shall be excluded.
Also excluded under the above paragraph are Employees who are covered
by an agreement which the Secretary of Labor funds to be a collective
bargaining agreement. Such Employees will be excluded only if
retirement benefits were the subject of good faith bargaining, 90% of
the Employees of the Employer are covered by the agreement, and the
Plan covers only Employees who are not covered by the agreement.
Notwithstanding the above provisions, an Employee, other than a 5%
owner as described in paragraph (A) above who was not highly
compensated in the calendar year ending with or within the current Plan
Year will not be considered to be a Highly Compensated Employee in the
current Plan Year unless such Employee is one of the top 100 Employees
ranked by Compensation for the current Plan Year.
A "Highly Compensated Former Employee" is any former Employee who
separated from Service with the Employer in a Plan Year preceding the
current Plan Year and was a Highly Compensated Active Employee in
either:
(A) the Plan Year in which his separation from Service occurred: or
(B) any Plan Year ending on or after such former Employee's 55th
birthday.
A former Employee is an Employee who performs no services for the
Employer during a Plan Year (for example, by reason of a leave of
absence).
1.38 INACTIVE PARTICIPANT. The term Inactive Participant means any
Participant who does not currently meet the requirements to be an
Active Participant due to a suspension of the performance of duties for
the Employer.
1.39 INSTALLMENT REFUND ANNUITY. The term Installment Refund Annuity means
an annuity which provides fixed monthly payments for a period certain
of not less than three nor more than 15 years. If the Participant dies
before the period certain expires, the annuity will be paid to the
Participant's Beneficiary for the remainder of the period certain. The
period certain shall be chosen by the Participant at the time the
annuity is purchased, and the Installment Refund Annuity will be the
amount of benefit which can be purchased with the Participant's
Vested Interest. The Installment Refund Annuity is not a life annuity
and in no event shall the period certain extend to a period which
equals or exceeds the life expectancy of the Participant.
1.40 JOINT AND SURVIVOR ANNUITY. The term Joint and Survivor Annuity means
an Annuity for the life of the Participant with a survivor Annuity for
the life of the Participant's Spouse which is not less than one-half,
nor greater than, the amount of the Annuity payable during the joint
lives of the Participant and the Participant's Spouse. The Joint and
Survivor Annuity will be the amount of benefit which can be purchased
with the Participant's vested account balance. In the case of an
unmarried Participant, Joint and Survivor Annuity means an Annuity
payable over the Participant's life.
1.41 LATE RETIREMENT DATE. The term Late Retirement Date means the first
day of the month coinciding with or next following the date a
Participant is separated from Service with the Employer after his
Normal Retirement Age, for any reason other than death.
1.42 LEASED EMPLOYEE. The term Leased Employee means any person (other than
an Employee of the recipient) who, pursuant to an agreement between the
recipient and any other person ("leasing organization"), has
performed services for the recipient (or for the Employer and related
persons determined in accordance with Code section 414(n)(6)) on a
substantially full-time basis for a period of at least one year, and
such services are of a type historically performed by employees in the
business field of the recipient Employer. Contributions or benefits
provided a Leased Employee by the leasing organization which are
attributable to services performed for the recipient Employer shall be
treated as provided by the recipient Employer.
A Leased Employee shall not be considered an Employee of the recipient
if: (i) such employee is covered by a money purchase pension plan
providing: (1) a nonintegrated employer contribution rate of at least
10 percent of compensation, as defined in section 415(c)(3) of the
Code, but including amounts contributed pursuant to a salary reduction
agreement which are excludable from the employee's gross income under
Section 125, section 402(e)(3), section 402(h)(l)(B) or section 403(b)
of the Code, (2) immediate participation, and (3) full and immediate
vesting; and (ii) leased employees do not constitute more than 20
percent of the recipient's nonhighly compensated work force.
1.43 MATCHING CONTRIBUTIONS. The term Matching Contributions means
contributions made by the Employer to the Plan on behalf of a
Participant on account of either Elective Deferral Contributions, if
any, Employee Contributions, if any, or required contributions, if any.
In addition, any Forfeitures reallocated as a Matching Contribution,
pursuant to Article IV, shall be considered a Matching Contribution for
purposes of this Plan.
1.44 NAMED FIDUCIARY. The term Named Fiduciary means the Plan
Administrator, the Trustee and any other Fiduciary designated in
writing by the Employer, and any successor thereto.
1.45 NONELECTIVE CONTRIBUTIONS. The term Nonelective Contributions means
contributions made by the Employer (other than Matching Contributions)
that the Participant may not elect to have paid in cash or other
benefits instead of being contributed to the Plan; In addition, any
Forfeitures reallocated as a Nonelective Contribution, pursuant to
Article IV, shall be considered a Nonelective Contribution for purposes
of this Plan.
1.46 NONHIGHLY COMPENSATED EMPLOYEE. The term Nonhighly Compensated Employee
means an Employee who is not a Highly Compensated Employee.
1.47 NORMAL RETIREMENT AGE. The term Normal Retirement Age means the date
the Participant attains age 65, unless otherwise noted in the attached
Appendices.
1.48 NORMAL RETIREMENT DATE. The term Normal Retirement Date means the first
day of the month coinciding with or next following the date a
Participant attains his Normal Retirement Age.
1.49 PARTICIPANT. The term Participant means any Employee of the Employer,
who is or becomes eligible to participate under this Plan in accordance
with its provisions and shall include an Active Participant, Inactive
Participant and for purposes of Investment of Contributions as
described in Article XIII of the Plan, former participants. Former
participants shall include those Participant's who upon Termination of
Employment defer distribution in accordance with Section 6.2 of the
Plan.
1.50 PARTICIPANT'S ACCOUNT. The term Participant's Account means the sum of
the following sub-accounts held on behalf of each Participant:
- Elective Deferral Contributions, if any, and earnings thereon.
- Matching Contributions, if any, and earnings thereon.
- Qualified Matching Contributions, if any, and earnings thereon.
- Nonelective Contributions, if any, and earnings thereon.
- Qualified Nonelective Contributions, if any, and earnings
thereon.
- Prior HMS Employer Contributions, if any, and earnings thereon.
- Rollover Contributions, if any, and earnings thereon.
A Participant's Account shall be invested in accordance with the rules
established by the Plan Administrator, which shall be applied in a
consistent and nondiscriminatory manner.
1.51 PARTICIPANT'S EMPLOYER STOCK ACCOUNT. The term Participant's Employer
Stock Account means that portion, if any, of the Participant's Account
which is invested in shares of the Employer's stock. Such
Participant's Employer Stock Account shall be credited with dividends
paid, if any. Such Participant's Employee stock Account will be valued
on the last day of each month that the public exchange over which the
Employer's stock is traded is open for unrestricted trading.
Amounts which are to be invested in the Participant's Employer Stock
Account may be invested in any short-term account prior to actual
investment in the Participant's Employer Stock Account.
The Trustee will vote the shares of the Employer's stock invested in
the Participant's Employer Stock Account.
1.52 PERSON. The term Person means any natural person, partnership,
corporation, trust or estate.
1.53 PLAN. The term Plan means Value Health, Inc. Retirement Savings Plan,
the terms of which are set forth herein as it may be amended from time
to time.
1.54 PLAN ADMINISTRATOR. The terms Plan Administrator and Administrator are
used interchangeably throughout the Plan and Trust and shall mean the
Employer.
1.55 PLAN YEAR. The term Plan Year means the 12-month period commencing on
January 1 and ending on the following December 31.
1.56 PRIOR HMS EMPLOYER CONTRIBUTIONS. The term Prior HMS Employer
Contributions means employer contributions that were made to the Health
Management Strategies 401(k) Retirement and Savings Plan prior
to the date (October 1, 1995) such plan merged with the Plan. Prior
HMS Employer Contributions will vest according to the schedule outlined
in Appendix J.
1.57 QUALIFIED MATCHING CONTRIBUTIONS. The term Qualified Matching
Contributions shall mean Matching Contributions which are subject to
the distribution and nonforfeitability requirements under section
401(k) of the Code when made.
1.58 QUALIFIED NONELECTIVE CONTRIBUTIONS. The term Qualified Nonelective
Contributions shall mean Nonelective Contributions which are subject to
the distribution and nonforfeitability requirements under section
401(k) of the Code when made.
1.59 ROLLOVER CONTRIBUTION. The term Rollover Contribution means an amount
representing all or part of a distribution from a pension or
profit-sharing plan meeting the requirements of Code section 401(a)
that is eligible for rollover to this Plan in accordance with the
requirements set forth in Code section 402 or Code section 408(d)(3),
whichever is applicable.
1.60 SALARY DEFERRAL AGREEMENT. The term Salary Deferral Agreement means an
agreement between a Participant and the Employer to defer the
Participant's Compensation for the purpose of making Elective Deferral
Contributions to the Plan.
1.61 TERMINATION OF EMPLOYMENT. The term Termination of Employment means a
severance of the Employer-Employee relationship which occurs prior to a
Participant's Normal Retirement Age for any reason other than
Disability or death.
1.62 TRUST. The term Trust means the trust agreement entered into by the
Employer, the Administrator and the Trustee, which trust agreement
forms a part of, and implements the provisions of this Plan.
1.63 TRUSTEE. The term Trustee means one or more individuals collectively
appointed and acting under the trust agreement, and any successor
thereto.
1.64 VESTED INTEREST. The term Vested Interest on any date means the
nonforfeitable right to an immediate or deferred benefit in the amount
which is equal to the following:
(A) the value on that date of that portion of the Participant's
Account that is attributable to the following contributions:
- Elective Deferral Contributions, if any
- Rollover Contributions, if any
- Qualified Matching Contributions, if any
- Qualified Nonelective Contributions, if any
(B) plus the value on that date of that portion of the Participant's
Account that is attributable to and derived from:
- Matching Contributions, if any
- Nonelective Contributions, if any
- Prior HMS Employer Contributions, if any
- Forfeitures, if any
Such contributions pursuant to Subsection (B), plus the earnings
thereon, shall be, at any relevant time, a part of the
Participant's Vested Interest equal to an amount ({"}X")
determined by the following formula:
X= P(AB + D) - D
For the purposes of applying this formula:
P = The Participant's Vesting Percentage at the relevant
time.
AB= The account balance attributable to such contributions,
plus the earnings thereon, at the relevant time.
D= The amount of the distribution.
1.64 VESTING PERCENTAGE. The term Vesting Percentage means the percentage
used to determine a Participant's Vested Interest in contributions made
by the Employer, plus the earnings thereon, credited to his
Participant's Account that are not 100% immediately vested. The
Vesting Percentage for each Participant shall be determined in
accordance with the following schedule, unless otherwise noted in the
attached appendices, based on Years of Service with the Employer:
Years of Service Vesting Percentage
Less than 1 0%
1 but less than 20%
2 but less than 3 40%
3 but less than 4 60%
4 but less than 5 80%
5 or more 100%
However, if an Active Participant dies prior to attaining his Normal Retirement
Age, his Vesting Percentage shall be 100%.
<PAGE>
ARTICLE II
SERVICE
2.1 SERVICE. The term Service means active employment with the Employer as
an Employee. With respect to employment with any company acquired by
the Employer which is thereafter under common control with the
Employer as specified in section 414 of the Internal Revenue Code,
Service credited to an Employee shall include active employment with
such company commencing from the later of the following:
(A) the date of hire of the Employee; or
(B) the date of acquisition of the company by the Employer, provided
such company does not maintain a qualified plan.
2.2 ABSENCE FROM EMPLOYMENT. Absence from employment on account of a leave
of absence authorized by the Employer pursuant to the Employer's
established leave policy will be counted as employment with the
Employer provided that such leave of absence is of not more than two
years duration. Absence from employment on account of active duty with
the Armed Forces of the United States will be counted as employment
with the Employer. If the Employee does not return to active
employment with the Employer, his Service will be deemed to have ceased
on the date the Administrator receives notice that such Employee will
not return to the active Service of the Employer. The Employer's leave
policy shall be applied in a uniform and nondiscriminatory manner to
all Participants under similar circumstances.
2.3 HOUR OF SERVICE. The term Hour of Service means a period of Service
during which an Employee shall be credited with one Hour of Service as
described in (A), (B), (C), and (D) below:
(A) Each hour for which an Employee is directly or indirectly paid,
or entitled to payment, by the Employer for the performance of
duties. These hours shall be credited to the Employee for the
computation period or periods in which the duties are performed;
and
(B) Each hour for which an Employee is directly or indirectly paid,
or entitled to payment, by the Employer for reasons (such as
vacation, sickness or Disability) other than for the performance
of duties. Hours under this Subsection shall be calculated and
credited pursuant to section 2530.200b-2 of the Department
of Labor Regulations which are incorporated herein by this
reference; and
(C) Each hour for which back pay, irrespective of mitigation of
damages, has been either awarded or agreed to by the Employer.
These hours shall be credited to the Employee for the
computation period or periods to which the award or agreement
pertains rather than the computation period in which the award,
agreement or payment is made; and
(D) Each hour for which an Employee is on an authorized unpaid leave
(such as service with the Armed Forces, jury duty, educational
leave). These hours shall be credited to the Employee for the
computation period or periods in which such authorized leave
takes place. However, no more than 501 hours shall be credited
under this subparagraph (D).
Hours of Service will be credited for employment with other members of
an affiliated service group (under Internal Revenue Code section
414(m)), a controlled group of corporations (under Internal Revenue
Code section 414(b)), or a group of trades or businesses under common
control (under Internal Revenue Code section 414(c)), of which the
adopting employer is a member. Hours of Service will also be credited
for any individual considered an Employee under Internal Revenue Code
section 414(n).
Solely for purposes of determining whether a One-Year Break in Service,
as defined in Section 2.4, for participation and vesting purposes has
occurred in a computation period, an individual who is absent from work
for maternity or paternity reasons shall receive credit for the Hours
of Service which would otherwise have been credited to such individual
but for such absence, or in any case in which such hours cannot be
determined, eight Hours of Service per day of such absence. For
purposes of this paragraph, an absence from work for maternity
or paternity reasons means an absence (1) by reason of the pregnancy of
the individual, (2) by reason of a birth of a child of the individual,
(3) by reason of the placement of a child with the individual in
connection with the adoption of such child by such individual, or (4)
for purposes of caring for such child for a period beginning
immediately following such birth or placement. The Hours of Service
credited under this paragraph shall be credited (1) in the computation
period in which the absence begins if the crediting is necessary to
prevent a Break in Service in that period, or (2) in all other cases,
in the following computation period.
2.4 ONE-YEAR BREAK IN SERVICE. Except as provided below regarding
eligibility, the term One-Year Break in Service means any Plan Year
during which an Employee fails to complete more than 500 Hours of
Service.
2.5 DETERMINING VESTING PERCENTAGE. Vesting credit shall be given for each
Year of Service except those periods specified in Section 2.7.
If a Participant completes less than 1,000 Hours of Service during a
Plan Year while remaining in the Service of the Employer, his Vesting
Percentage shall not be increased for such Plan Year. However, at such
time as the Participant again completes at least 1,000 Hours of Service
in any subsequent Plan Year, his Vesting Percentage shall then take
into account all Year(s) of Service with the Employer except those
specified in Section 2.7.
If an individual who ceases to be an Employee and is subsequently
rehired as an Employee enrolls (or re-enrolls) in the Plan, upon his
participation (or subsequent participation) his Vesting Percentage
shall then take into account all Year(s) of Service except those
specified in Section 2.7.
2.6 YEAR(S) OF SERVICE. The term Year(s) of Service means a
12-consecutive-month period during which an Employee has completed at
least 1,000 Hours of Service.
(A) Eligibility Computation Period.
For purposes of determining Years of Service and Breaks in
Service for eligibility, the twelve-consecutive-month period
shall begin with the date on which an Employee's employment
commenced and, where additional periods are necessary, on
succeeding anniversaries of his employment commencement date.
The employment commencement date is the date on which the
Employee first performs an Hour of Service for the Employer
maintaining the Plan.
The eligibility requirement specified in Article III is one or
more full Years of Service. Such requirement shall be met upon
completion of at least 1,000 Hours of Service for each Year of
Service specified.
(B) Vesting Computation Period.
In computing Years of Service and Breaks in Service for vesting,
the 12-consecutive-month period shall be the Plan Year.
However, active participation as of the last day of the Plan
Year is not required in order for a Participant to be credited
with a Year of Service for vesting purposes.
For purposes of the Vesting Computation Period, if any Plan Year
is less than 12-consecutive months, and if a Participant would
have been credited with a Year of Service during the
12-consecutive-month period beginning on the first day of the
short Plan Year, then the Participant will receive a Year of
Service for the short Plan Year. The Participant receives
credit for an additional Year of Service if the Participant
would have been credited with a Year of Service for the Plan
Year immediately following the short Plan Year.
(C) Contribution Computation Period.
For purposes of determining a Participant's eligibility to
receive a contribution made by the Employer, pursuant to Article
IV, which is conditioned upon a Year of Service requirement, the
twelve-consecutive-month period shall be any Plan Year during
which the Active Participant is credited with at least 1,000
Hours of Service. However, when an Employee first becomes a
Participant or resumes active participation in the Plan
following a One-Year Break in Service on a date other than the
first day of the Plan Year, all Hours of Service credited to the
Participant during that Plan Year, including those hours
credited prior to the date the Employee enrolls (or re-enrolls)
as an Active Participant in the Plan, shall be counted.
For purposes of the Contribution Computation Period, if any Plan
Year is less than 12 consecutive months, the number of Hours of
Service required to accrue a Year of Service, in such short Plan
Year, shall bear the same ratio to 1000 as the number of days in
the short Plan Year bears to 365.
2.7 EXCLUDED YEARS OF SERVICE. In determining the Vesting Percentage of an
Employee, all Years of Service with the Employer shall be taken into
account, except:
- Plan Years during which a Participant did not complete at least
1,000 Hours of Service.
- Plan Years prior to the date the Employer acquires a company
which employs an Employee, provided such company does not
maintain a qualified plan.
2.8 PREDECESSOR ORGANIZATION SERVICE. For purposes of this Article,
Service with a predecessor organization of the Employer shall be
treated as Service with the Employer in any case in which the Employer
maintains the Plan of such predecessor organization.
<PAGE>
ARTICLE III
ELIGIBILITY, ENROLLMENT AND PARTICIPATION
3.1 ELIGIBILITY. Each Employee of Value Health, Inc. who was a
Participant in the Plan prior to the Effective Date and who is in the
Service of the Employer on the Effective Date shall continue as a
Participant in the Plan. Each other Employee of Value Health, Inc.,
including a Leased Employee, shall be eligible to become a Participant
as of the Entry Date when he is first credited with One Year of
Service. In the case of any acquisition by the Employer, the
following provisions shall apply:
- each Employee who was hired on or before the date of plan
merger shall be eligible to become a Participant as of the next
Entry Date;
- each Employee who was hired after the date of acquisition but
prior to the date of plan merger shall be eligible to become a
Participant as of the Entry Date when he first meets the earlier
of (1) the service requirement of his predecessor plan as
outlined in the attached appendices or (2) One Year of Service;
and
- each other Employee, including a Leased Employee, shall be
eligible to become a Participant as of the Entry Date when he is
first credited with One Year of Service.
3.2 ENROLLMENT AND PARTICIPATION. Each eligible Employee may enroll as of
his Entry Date by completing and delivering to the Administrator an
enrollment form and, if applicable, a Salary Deferral Agreement. He
will then become a Participant as of his Entry Date.
3.3 RE-EMPLOYED EMPLOYEE. In the case of an individual who ceases to be an
Employee and is subsequently rehired as an Employee, the following
provisions shall apply in determining his eligibility to again
participate in the Plan:
(A) If the Employee had met the eligibility requirement(s) specified
in Section 3.1 prior to his separation from employment, he shall
become an Active Participant in the Plan as of the date he is
re-employed, after completing the applicable form(s), in
accordance with Section 3.2.
(B) If the Employee had not met the eligibility requirement(s)
specified in Section 3.1 prior to his separation from
employment, he shall be eligible to participate in the Plan on
the first Entry Date following his fulfillment of such
eligibility requirement(s).
For purposes of this Subsection, all Years of Service with the
Employer, including any Years of Service prior to any Breaks in
Service, shall be taken into account.
<PAGE>
ARTICLE IV
CONTRIBUTIONS
4.1 ELECTIVE DEFERRAL CONTRIBUTIONS. Each Active Participant may enter
into a written Salary Deferral Agreement with the Employer in an amount
equal to not less than 2% nor more than 15% of his Compensation
for the Contribution Period. In consideration of such agreement, the
Employer will make a contribution for each Contribution Period on
behalf of the Participant in an amount equal to the total amount by
which the Participant's Compensation from the Employer was deferred
during the Contribution Period pursuant to the Salary Deferral
Agreement then in effect. Elective Deferral Contributions shall be
paid by the Employer to the Trust not less frequently than monthly, but
in no event later than 90 days following the date the amounts were
deferred.
Salary Deferral Agreements shall be governed by the following
provisions:
(A) Amounts contributed pursuant to a Salary Deferral Agreement
shall be 100% vested and nonforfeitable at all times.
(B) No Participant shall be permitted to have Elective Deferral
Contributions made under this Plan, or any other qualified plan
maintained by the Employer, during any taxable year, in excess
of the dollar limitation contained in section 402(g) of the Code
in effect at the beginning of the taxable year.
(C) Amounts contributed pursuant to a Salary Deferral Agreement,
which are not in excess of the limit described in Subsection (B)
above, shall be subject to the Limitations on Allocations in
accordance with Article V. Elective Deferral Contributions
that are in excess of the limit described in Subsection (B)
shall also be subject to the Limitations on Allocations in
accordance with Article V.
(D) A Salary Deferral Agreement may be changed by a Participant four
times during the Plan Year, on January 1, April 1, July 1 and
October 1, by filing written notice thereof with the
Administrator. Such notice shall be effective, and the Salary
Deferral Agreement shall be changed on the date specified in
such notice or as soon as administratively possible, which date
must be at least 15 days after such notice is filed.
(F) Elective Deferral Contributions shall be subject to the Actual
Deferral Percentage Test limitations.
(F) Correction of Excess Contributions.
(1) If the Employer determines prior to the end of the Plan
Year that the Actual Deferral Percentage Test may not be
satisfied, the Employer may take the corrective action
specified in Section 4.13 of the Plan.
(2) If, after the end of the Plan Year, the Employer
determines that the Plan will fail the Actual
Deferral Percentage Test, the Employer shall take the
corrective action specified in Section 4.15 or Section
4.18 of the Plan, or a combination of such corrective
actions, in order to ensure that the Plan does not fail
the Actual Deferral Percentage Test for the Plan Year
being tested.
4.2 MATCHING CONTRIBUTIONS. The Employer shall make a Matching
Contribution in an amount equal to $1.00 for each $1.00 by which a
Participant defers his Compensation pursuant to a Salary Deferral
Agreement up to a maximum of 2% of his Compensation, subject to the
Limitations on Allocations specified in Article V.
The Employer shall also make an additional Matching Contribution in an
amount equal to $0.50 for each $1.00 by which a Participant defers his
Compensation pursuant to a Salary Deferral Agreement in amounts over 2%
of his Compensation and up to a maximum of 4% of his Compensation,
subject to the Limitations on Allocations specified in Article V. The
Matching Contribution shall be paid to the Trust not less frequently
than monthly. Matching Contributions shall be subject to the Actual
Contribution Percentage Test. The Employer may designate at the time
of contribution that all or a portion of such Matching Contributions be
treated as Qualified Matching Contributions.
If the Employer determines prior to the end of the Plan Year that the
Actual Contribution Percentage Test may not be satisfied, the Employer
may take the corrective action specified in Section 4.14 of the Plan.
If, after the end of the Plan Year, the Employer determines that the
Plan will fail the Actual Contribution Percentage Test, the Employer
shall take the corrective action specified in Section 4.16 or Section
4.18 of the Plan, or a combination of such corrective actions, in order
to ensure that the Plan does not fail the Actual Contribution
Percentage Test for the Plan Year being tested.
Such Matching Contribution shall be allocated as of the last day of the
Contribution Period for which such contribution is made to each
Participant who:
- is an Active Participant as of the last day of the Contribution
Period.
4.3 NONELECTIVE CONTRIBUTIONS. The Employer may make a contribution under
the Plan for any Plan Year of an amount that the Employer's Board of
Directors shall determine by resolution. Such resolution shall either
specify a fixed amount or specify a definite formula by which a fixed
amount can be determined.
The Employer may designate at the time of contribution that all or a
portion of such Nonelective Contribution be treated as a Qualified
Nonelective Contribution.
Such Nonelective Contribution shall be allocated as of the last day of
the Plan Year for which such contribution is made to each Participant
who:
- has a Year of Service for contribution purposes, as defined in
Article II.
- is an Active Participant as of the last day of the Plan Year.
For each Plan Year the contribution shall be allocated to each
Participant in the proportion that the Compensation paid to each
Participant during the Plan Year bears to the Compensation paid to all
such Participants, subject to the Limitations on Allocations specified
in Article V.
The contribution as described above, for any Plan Year, shall be paid
to the Trust at the end of the Plan Year, or as soon as possible on or
after the last day of such Plan Year, but in any event not later than
the date which is prescribed by law for filing the Employer's income
tax return, including any extension thereof.
4.4 FAIL SAFE CONTRIBUTION. The Employer reserves the right to make a
discretionary Nonelective Contribution to the Plan for any Plan Year,
if the Employer determines that such a contribution is necessary to
ensure that either the Actual Deferral Percentage Test or the Actual
Contribution Percentage Test will be satisfied for that Plan Year.
Such amount shall be designated by the Employer at the time of
contribution as a Qualified Nonelective Contribution and shall be known
as a Fail-Safe Contribution.
The Fail-Safe Contribution shall be made on behalf of all eligible
Nonhighly Compensated Employees who are Participants and who are
considered under the Actual Deferral Percentage Test or the Actual
Contribution Percentage Test. This contribution shall be allocated to
the Participant's Account of each such Participant in an amount equal
to a fixed percentage of such Participant's Compensation. The fixed
percentage shall be equal to the minimum fixed percentage necessary to
be contributed by the Employer on behalf of each eligible Nonhighly
Compensated Employee who is a Participant so that the Actual Deferral
Percentage Test or the Actual Contribution Percentage Test is
satisfied.
The Fail-Safe Contribution tor any Plan Year as determined above shall
be paid to the Trust at the end of the Plan Year, or as soon as
possible on or after the last day of such Plan Year, but in no event
later than the date which is prescribed by law for filing the
Employer's income tax return, including any extensions thereof.
4.5 PROFITS NOT REQUIRED. Contributions to this Plan shall not be
precluded because the Employer does not have Considered Net Profits.
Notwithstanding the existence of Considered Net Profits, the Employer
may determine in its sole discretion that it will make no contributions
for such Plan Year.
4.6 PAYMENT OF EXPENSES. The Employer may contribute to the Plan the
amount necessary, to pay any applicable expense charges and
administration charges. In lieu of the Employer's contributing the
amount necessary to pay such charges, these expenses may be paid from
the Trust fund.
4.7 ALLOCATION OF FORFEITURES. Forfeitures generated pursuant to Section
9.3 shall be treated as follows:
(1) Any Forfeitures available shall be reallocated as a Qualified
Matching Contribution to the extent necessary to comply with the
Actual Contribution Percentage Test Any Forfeitures which are
reallocated as Qualified Matching Contributions shall be treated
as such contributions for the purposes of this Plan.
(2) Any remaining Forfeitures available shall be reallocated as an
Employer credit in accordance with Section 9.3 to reduce
contributions made by the Employer.
(3) Any remaining Forfeitures available for reallocation in
accordance with Section 9.3 shall be considered as part of
Matching Contributions made by the Employer, as more fully
described in this Article IV.
4.8 CREDITING OF ELECTIVE DEFERRAL AND OTHER CONTRIBUTIONS. Elective
Deferral Contributions and other contributions made by the Employer
(and any Forfeitures available for reallocation in accordance with
Section 9.3) shall be credited to the Participant Account of each
Participant for whom such contributions are made, in accordance with
the provisions of Article XIII.
4.9 ROLLOVER CONTRIBUTIONS. The Plan may receive Rollover Contributions on
behalf of an Employee. Receipt of a Rollover Contribution shall be
subject to the approval of the Plan Administrator. Before approving
the receipt of a Rollover Contribution, the Plan Administrator may
request any documents or other information from an Employee or opinions
of counsel which the Plan Administrator deems necessary to establish
that such amount is a Rollover Contribution
A Participant's Account shall be maintained on behalf of each Employee
from whom Rollover Contributions are received, regardless of such
Employee's eligibility to participate in the Plan in accordance with
the requirements of Article III, and Rollover Contributions may be
invested in any manner authorized under the provisions of this
Plan.
Rollover Contributions received from an Employee who is not otherwise
eligible to participate in the Plan may not be withdrawn in accordance
with the provisions of Article X until such Employee becomes a
Participant, except that such Employee may receive a distribution of
his Participant's Account if his Termination of Employment occurs.
Rollover Contributions shall be credited to the Participant's Account
and may be invested in any manner authorized under the provisions of
this Plan.
4.10 TRANSFERS. Without regard to the Limitations on Allocations imposed
under Article V, the Trustee may receive, directly from another
qualified pension or profit-sharing plan meeting the requirements of
Internal Revenue Code section 401(a), all or part of the entire amount
distributable on behalf of a Participant from such plan. Likewise, the
Trustee may receive Transfers representing the assets of any
predecessor plan.
Without regard to the Limitations on Allocations imposed under Article
V, the Trustee may directly receive from or transfer to another
qualified pension or profit-sharing plan of the Employer meeting the
requirements of Internal Revenue Code section 401(a) the entire account
balance of a Participant from such plan.
Transfers may be invested in any manner authorized under the provisions
of this Plan.
4.11 SUSPENSION OF ELECTIVE DEFERRAL CONTRIBUTIONS. The following
provisions shall apply with respect to suspension of Elective Deferral
Contributions.
(A) Elective Suspension. An Active Participant may elect to suspend
his Salary Deferral Agreement for Elective Deferral
Contributions by filing a written notice thereof with the
Administrator at any time. The Salary Deferral Agreement shall
be suspended on the date specified in such notice, which date
must be at least 15 days after such notice is filed. The notice
shall specify the period for which such suspension shall be
effective. Such period must be a minimum of three months and
may extend indefinitely.
(B) Suspension for Leave. A Participant who is absent from
employment on account of an authorized leave of absence or
military leave shall have his Salary Deferral Agreement
suspended during such leave. Such suspension of contributions
shall be effective on the date payment of Compensation by the
Employer to him ceases, and shall remain in effect until payment
of Compensation is resumed.
(C) Withdrawal Suspension. An Active Participant who elects a
withdrawal in accordance with Article X may have his Salary
Deferral Agreement suspended on the date such election becomes
effective. Such suspension shall remain in effect for the
number of months specified therein.
The Participant may elect to reactivate his Salary Deferral Agreement
for Elective Deferral Contributions by filing a written notice thereof
with the Plan Administrator. The Salary Deferral Agreement shall be
reactivated on the January 1, April 1, July 1 or October 1 following
the expiration of the suspension period described above.
4.12 LIMITATION OF ELECTIVE DEFERRAL CONTRIBUTIONS. If the Employer
determines prior to the end of the Plan Year that the Plan may not
satisfy the Actual Deferral Percentage Test for the Plan Year, the
Employer may require that the amount of Elective Deferral Contributions
being allocated to the accounts of Highly Compensated Employees be
reduced to the extent necessary to prevent Excess Contributions from
being made to the Plan.
Although the Employer may reduce the amount of Elective Deferral
Contributions that may be allocated to the Participant's Account of
Highly Compensated Employees, the affected Employees shall continue to
participate in the Plan. When the situation that resulted in the
reduction of Elective Deferral Contributions ceases to exist,
the Employer shall reinstate the amount of Elective Deferral
Contributions elected by the Participant in the Salary Deferral
Agreement to the fullest extent possible for all affected Participants
in a nondiscriminatory manner.
4.13 LIMITATION OF MATCHING CONTRIBUTIONS. If the Employer determines prior
to the end of the Plan Year that the Plan may not satisfy the Actual
Contribution Percentage Test for the Plan Year, the Employer may
require that the amount of Matching Contributions being allocated to
the Accounts of Highly Compensated Employees be reduced to the extent
necessary to prevent Excess Aggregate Contributions from being made to
the Plan.
4.14 CORRECTIVE DISTRIBUTION OF EXCESS CONTRIBUTIONS.
(A) The Employer may distribute Excess Contributions (and income
allocable thereto) to the appropriate Highly Compensated
Employee after the close of the Plan Year in which the Excess
Contribution arose and within 12 months after the close of that
Plan Year.
(B) The income allocable to Excess Contributions is equal to the sum
of the allocable gain or loss for the Plan Year and shall be
determined as follows:
(1) The income allocable to Excess Contributions is
determined by multiplying the income for the Plan Year
allocable to Deferral Percentage Amounts by a fraction.
The numerator of the fraction is the Excess
Contributions attributable to the Employee for the Plan
Year. The denominator of the fraction is equal to the
sum of (A) the total account balance of the Employee
attributable to Deferral Percentage Amounts as of the
beginning of the Plan Year, plus (B) the Employee's
Deferral Percentage Amounts for the Plan Year.
(2) The allocable gain or loss for the period between the
end of the Plan Year and the date of distribution shall
not be taken into consideration when determining the
income allocable to Excess Contributions.
(C) The amount of Excess Contributions to be distributed with
respect to an Employee for a Plan Year shall be reduced by
Excess Deferrals previously distributed to the Employee for the
Employee's taxable year ending with or within the Plan Year.
(D) The distribution of Excess Contributions made to the Family
Members of a family group that was combined for purposes of
determining a Highly Compensated Employee's Actual Deferral
Ratio shall be allocated among the Family Members in proportion
to the Elective Deferral Contribution (including any amounts
required to be taken into account under subparagraphs (B) (1)
and (B) (2) of Section 1.8 of the Plan) of each Family Member
that is combined to determine the Actual Deferral Ratio.
(E) A corrective distribution of Excess Contributions (and income)
shall be made without regard to any Participant or spousal
consent or any notice otherwise required under sections 41
l(a)(1 1) and 417 of the Code.
(F) Any Matching Contributions or Qualified Matching Contributions
that relate to the Excess Contribution being distributed shall
be forfeited. The Matching Contribution so forfeited shall be
in proportion to the applicable Employee's vested and nonvested
interest in Matching Contributions under the Plan for the
Plan Year in which the Excess Contribution arose. Forfeitures
of Matching Contributions or Qualified Matching Contributions
that relate to Excess Contributions shall be applied to reduce
Employer contributions or pay Plan expenses.
(G) In no case may the amount of Excess Contributions to be
distributed for a Plan Year with respect to any Highly
Compensated Employee exceed the amount of Elective Deferral
Contributions made on behalf of the Highly Compensated Employee
for the Plan Year.
(H) In the event of a complete termination of the Plan during the
Plan Year in which an Excess Contribution arose, the corrective
distribution must be made as soon as administratively feasible
after the date of the termination of the Plan, but in no event
later than 12 months after the date of termination.
(I) Any distribution of less than the entire amount of Excess
Contributions with respect to any Highly Compensated Employee
shall be treated as a pro-rata distribution of Excess
Contributions and allocable income or loss.
4.15 CORRECTION OF EXCESS AGGREGATE CONTRIBUTIONS.
(A) Excess Aggregate Contributions may be corrected using one of the
methods described in subparagraphs (1) and (2) below. The
Employer shall elect the method of correction to be used and
shall apply such method to the correction of the Excess Annual
Contribution for the Plan Year.
(1) Method 1:
(a) The Excess Aggregate Contribution (and income)
shall be forfeited, if forfeitable, or
distributed on a pro-rata basis from the
Employee's Account attributable to Contribution
Percentage Amounts. The distribution or
forfeiture shall be made after the close of the
Plan Year in which the Excess Aggregate
Contribution arose and within 12 months after
the close of that Plan Year. Whether an amount
is distributed or forfeited under this
subparagraph (a) shall be determined based on the
rules set forth in paragraph (B) of this section.
(2) Method 2:
(a) Any Matching Contributions (and Qualified
Matching Contributions, to the extent not
taken into account for purposes of the Actual
Deferral Percentage Test), and income allocable
thereto, shall be forfeited, if forfeitable, or
distributed to the appropriate Highly Compensated
Employee. The distribution or forfeiture shall
be made after the close of the Plan Year in which
the Excess Aggregate Contribution arose and
within 12 months after the close of that Plan
Year. Whether an amount is forfeited or
distributed shall be determined under the rules
set forth in paragraph (B) of this section.
(B) Determination of Distributable ind Forfeitable Amounts. For
purposes of paragraph (A) of this section:
(1) An Excess Aggregate Contribution attributable to vested
Matching Contributions, Qualified Matching Contributions
(and, if applicable, Qualified Nonelective Contributions
and Elective Deferral Contributions) shall be
distributed to the appropriate Highly Compensated
Employee in accordance with the terms of this section
(2) An Excess Aggregate Contribution attributable to an
Employee's nonvested Matching Contributions shall be
forfeited in accordance with the terms of this section.
(3) A Highly Compensated Employee's vested and nonvested
interest in Matching Contributions (and income allocable
thereto) attributable to Excess Aggregate Contributions
shall be based on the proportion that represents the
Employee's Vested Interest in Matching Contributions
under the Plan for the Plan Year in which the Excess
Aggregate Contribution arose.
(C) Forfeited Excess Aggregate Contributions. In accordance with
paragraph (B) of this section, the amount that represents the
Employee's nonvested interest in Matching Contributions (and
income), and is attributable to Excess Aggregate Contributions,
shall be forfeited and, as such, shall be applied to reduce
Employer contributions or pay expenses.
(D) Income Allocable to Excess Aggregate Contributions. For
purposes of this section, the income allocable to Excess
Aggregate Contributions is equal to the sum of the allocable
gain or loss for the Plan Year, and shall be determined as
follows:
(1) The income allocable to Excess Aggregate Contributions
is determined by multiplying the income for the Plan
Year allocable to Contribution Percentage Amounts by a
fraction. The numerator of the fraction is the Excess
Aggregate Contributions for the Employee for the Plan
Year. The denominator of the fraction is equal to the
sum of (A) the total account balance of the Employee
attributable to Contribution Percentage Amounts as of
the beginning of the Plan Year, plus (B) the
Contribution Percentage Amounts for the Plan Year.
(2) The allocable gain or loss for the period between the
end of the Plan Year and the date of correction shall
not be taken into consideration when determining the
income allocable to Excess Aggregate Contributions.
(E) The distribution of Excess Aggregate Contributions (and income)
made to Family Members of a family group that was combined for
purposes of determining a Highly Compensated Employee's Actual
Contribution Ratio shall be allocated among Family Members in
proportion to the Contribution Percentage Amounts (including any
amounts required to be taken into account under subparagraphs
(B) (1) and (B) (2) of Section 1.5 of the Plan) of each Family
Member that are combined to determine the Actual Contribution
Ratio.
(F) In the event of a complete termination of the Plan during the
Plan Year in which an Excess Aggregate Contribution arose, the
corrective distribution or forfeiture shall be made as soon as
administratively feasible after the date of termination of the
Plan, but in no event later than 12 months after the date of
termination.
(G) If the entire account balance of a Highly Compensated Employee
is distributed during the Plan Year in which the Excess
Aggregate Contribution arose, the distribution shall be deemed
to have been a corrective distribution of Excess Aggregate
Contributions (and income) to the extent that a corrective
distribution would otherwise have been required.
(H) Any distribution of less than the entire amount of Excess
Aggregate Contributions (and income) shall be treated as a
pro-rata distribution of Excess Aggregate Contributions and
allocable income or loss.
(I) In no case may the amount of Excess Aggregate Contributions
distributed to a Highly Compensated Employee exceed the amount
of Matching Contributions made on behalf of the Highly
Compensated Employee for the Plan Year.
(J) A distribution of Excess Aggregate Contributions (and income)
shall be made under this section without regard to any notice or
consent otherwise required under sections 411(a)(11) and 417 of
the Code.
4.16 CORRECTIVE DISTRIBUTION OF EXCESS DEFERRALS. Notwithstanding any other
provision of the Plan, Excess Deferrals, plus any income and minus any
loss allocable thereto, may be distributed to any Participant
to whose account Excess Deferrals were allocated for the individual's
taxable year. Such a corrective distribution shall be made in
accordance with this section.
(A) Correction of Excess Deferrals After Taxable Year.
(1) Not later than the March 15 following the close of a
Participant's taxable year, the Participant may notify
the Plan of the amount of Excess Deferrals received by
the Plan during that taxable year. The notification
shall be in writing, shall specify the Participant's
Excess Deferrals, and shall be accompanied by the
Participant's written statement that if such amounts are
not distributed, these amounts, when added to all other
Elective Deferral Contributions made on behalf of the
Participant during the taxable year, shall exceed the
dollar limitation specified in section 402(g) of the
Code.
(2) The Participant is deemed to have notified the Plan of
Excess Deferrals if, not later than the March 1
following the close of a Participant's taxable year, the
Employer notifies the Plan on behalf of the Participant
of the Excess Deferrals. Such Excess Deferrals shall be
calculated by taking into account only Elective Deferral
Contributions under the Plan and any other plans of
the Employer.
(3) Not later than the April 15 following the close of the
taxable year, the Plan shall distribute to the
Participant the amount of Excess Deferrals designated
under subparagraphs (1) or (2) above.
(B) Correction of Excess Deferrals During the Taxable Year. A
Participant who has an Excess Deferral during a taxable year may
receive a corrective distribution during the same year. Such a
corrective distribution shall be made if:
(1) The Participant designates the distribution as an Excess
Deferral. The designation shall be made in the same
manner as the notification described in subparagraph (A)
(1) of this section. The Participant will be deemed to
have designated the distribution as an Excess Deferral
if the Employer makes the designation on behalf of the
Participant to the extent that the Participant
has Excess Deferrals for the taxable year calculated by
taking into account only Elective Deferral Contributions
to the Plan and other plans of the Employer.
(2) The corrective distribution is made after the date on
which the Plan received the Excess Deferral.
(3) The Plan designates the distribution as a distribution
of Excess Deferrals.
(C) If the Participant provides the Employer with satisfactory
evidence and written notice to demonstrate that all Elective
Deferral Contributions by the participant in this Plan and any
other qualified plan exceed the applicable limit under section
402(g) of the Code for such individual's taxable year, then the
Plan Administrator may (but is not required to) distribute
sufficient Elective Deferral Contributions (not to exceed the
amount of Elective Deferral Contributions actually contributed
on behalf of the Participant to this Plan during the
Participant's taxable year) from this Plan to allow the
Participant to comply with the applicable limit. The evidence
provided by the Participant must establish clearly the amount of
Excess Deferrals. The Participant must present this evidence to
the Plan Administrator by the March 1 following the end of the
calendar year in which the Excess Deferrals occurred.
(D) Income Allocable to Excess Deferrals. The income allocable to
Excess Deferrals is equal to the sum of allocable gain or loss
for the taxable year of the individual and shall be determined
as follows:
(1) The gain or loss allocable to Excess Deferrals is
determined by multiplying the income for the taxable
year allocable to Elective Deferral Contributions by a
fraction. The numerator of the fraction is the Excess
Deferrals by the Employee for the taxable year. The
denominator of the fraction is equal to the sum of:
(a) The total account balance of the Employee
attributable to Elective Deferral Contributions
as of the beginning of the Plan Year, plus
(b) The Employee's Elective Deferral Contributions
for the taxable year.
(2) The income allocable to Excess Deferrals shall not
include the allocable gain or loss for the period
between the end of the taxable year and the date of
distribution.
(E) No Employee or Spousal Consent Required. A corrective
distribution of Excess Deferrals (and income) shall be made
without regard to any notice or consent otherwise required under
sections 411(a)(11) and 417 of the Code.
(F) Any Matching Contributions or Qualified Matching Contributions
that relate to the Excess Deferral being distributed shall be
forfeited. The Matching Contribution so forfeited shall be in
proportion to the applicable Employee's vested and nonvested
interest in Matching Contributions under the Plan for the
Plan Year in which the Excess Deferral arose. Forfeitures of
Matching Contributions or Qualified Matching Contributions that
relate to Excess Deferrals shall be applied to reduce Employer
contributions or pay Plan expenses.
4.17 QUALIFIED CONTRIBUTIONS. In lieu of distributing Excess Contributions
as provided in Section 4.15 of the Plan, or Excess Aggregate
Contributions as provided in Section 4.16 of the Plan, the Employer may
take the actions specified below in order to satisfy the Actual
Deferral Percentage Test or the Actual Contribution Percentage Test, or
both, pursuant to the regulations under the Code.
(A) At the election of the Employer, Qualified Nonelective
Contributions or Qualified Matching Contributions, or both, may
be taken into account as Elective Deferral Contributions for
purposes of calculating the Actual Deferral Ratio of a
Participant.
The amount of Qualified Nonelective Contributions or Qualified
Matching Contributions made under the terms of this Plan and
taken into account as Elective Deferral Contributions for
purposes of calculating the Actual Deferral Ratio, subject to
such other requirements as may be prescribed by the Secretary of
the Treasury, shall be such Qualified Nonelective Contributions
or Qualified Matching Contributions, or both, that are needed to
meet the Actual Deferral Percentage Test.
(B) At the election of the Employer, Qualified Nonelective
Contributions or Elective Deferral Contributions, or both, may
be taken into account as Matching Contributions for purposes of
calculating the Actual Contribution Ratio of a Participant.
The amount of Qualified Nonelective Contributions or Elective
Deferral Contributions made under the terms of this Plan and
taken into account for purposes of calculating the Actual
Contribution Ratio, subject to such other requirements as may be
prescribed by the Secretary of the Treasury, shall be such
Qualified Nonelective Contributions or Elective Deferral
Contributions, or both, that are needed to meet the Actual
Contribution Percentage Test.
(C) Any Qualified Nonelective Contribution, Qualified Matching
Contribution, and Elective Deferral Contribution taken into
account under paragraphs (A) or (B) must be allocated to the
Employee's Account as of a date within the Plan Year in which
the Excess Contribution or Excess Aggregate Contribution arose
and must be paid to the Plan no later than the 12-month period
immediately following the Plan Year to which the contribution
relates.
4.18 MULTIPLE USE OF ALTERNATIVE LIMITATION.
(A) Multiple use of the alternative limitation occurs if all of the
conditions of this paragraph (A) are satisfied:
(1) One or more Highly Compensated Employee of the Employer
are eligible employees in both a cash or deferred
arrangement subject to section 401(k) and a plan
maintained by the Employer subject to section 401(m).
(2) The sum of the Actual Deferral Percentage of the entire
group of eligible Highly Compensated Employees under the
arrangement subject to section 401(k) and the Actual
Contribution Percentage of the entire group of eligible
Highly Compensated Employees under the Plan subject to
section 401(m) exceeds the aggregate limit of paragraph
(C) of this section.
(3) Actual Deferral Percentage of the entire group of
eligible Highly Compensated Employees under the
arrangement subject to section 401(k) exceeds the amount
described in section 401(k)(3)(A)(ii) (I).
(4) The Actual Contribution Percentage of the entire group
of eligible Highly Compensated Employees under the
arrangement subject to section 401(m) exceeds the amount
described in section 401(m)(2)(A)(i).
(B) For purposes of this section, the aggregate limit is the greater
of:
(1) The sum of-
(a) 1.25 times the greater of the relevant Actual
Deferral Percentage or the relevant Actual
Contribution Percentage, and
(b) Two percentage points plus the lesser of the
relevant Actual Deferral Percentage or the
relevant Actual Contribution Percentage. In no
event, however, may this amount exceed twice the
lesser of the relevant Actual Deferral Percentage
or the Actual Contribution Percentage; or
(2) The sum of-
(a) 1.25 times the lesser of the relevant Actual
Deferral Percentage or the relevant Actual
Contribution Percentage, and
(b) Two percentage points plus the greater of the
relevant Actual Deferral Percentage or the
relevant Actual Contribution Percentage. In no
event, however, may this amount exceed twice the
greater of the relevant Actual Deferral
Percentage or the relevant Actual Contribution
Percentage.
(C) For purposes of paragraph (B) of this section, the term
"relevant Actual Deferral Percentage" means the Actual Deferral
Percentage of the group of Nonhighly Compensated Employees under
the arrangement subject to section 401(k) for the Plan Year, and
the term "relevant Actual Contribution Percentage" means the
Actual Contribution Percentage of the group of Nonhighly
Compensated Employees eligible under the Plan subject to section
401(m) for the Plan Year beginning with or within the Plan Year
of the arrangement subject to section 401(k).
(D) The Actual Deferral Percentage and Actual Contribution
Percentage of the group of eligible Highly Compensated Employees
are determined after use of Qualified Nonelective Contributions
and Qualified Matching Contributions to meet the requirements of
the Actual Deferral Percentage Test and after use of Qualified
Nonelective Contributions and Elective Deferral Contributions to
meet the requirements of the Actual Contribution Percentage
Test. The Actual Deferral Percentage and Actual Contribution
Percentage of the group of Highly Compensated Employees are
determined after any corrective distribution or forfeiture of
Excess Deferrals, Excess Contributions, or Excess Aggregate
Contributions and after recharacterization of Excess
Contributions required without regard to this section. Only
plans and arrangements maintained by the Employer are taken into
account under paragraph (B). If the Employer maintains two or
more cash or deferred arrangements subject to section 401(k)
that must be mandatorily desegregated pursuant to section
401(k)-l(g)(1 1)(iii) multiple use is tested separately with
respect to each plan.
(E) If multiple use of the alternative limit occurs with respect to
two or more plans or arrangements maintained by the Employer, it
shall be corrected by reducing the Actual Contribution
Percentage of Highly Compensated Employees in the manner
described in paragraph F) of this section. Instead of
making this reduction, the Employer may eliminate the multiple
use of the alternative limitation by making Qualified
Nonelective Contributions to the Plan.
(F) The amount of the reduction by which each Highly Compensated
Employee's Actual Contribution Ratio is reduced shall be treated
as an Excess Aggregate Contribution. The Actual Contribution
Percentage of all Highly Compensated Employees under the plan
subject to reduction shall be reduced so that there is no
multiple use of the alternative limitation.
<PAGE>
ARTICLE V
LIMITATIONS ON ALLOCATIONS
5.1 LIMITATIONS ON ALLOCATIONS. Definitions - The following definitions
are atypical terms which refer only to terms used in the Limitations on
Allocations Sections of this Article V.
(A) Annual Additions. The term Annual Additions shall mean the sum
of the following amounts allocated on behalf of a Participant
for a Limitation Year:
(1) all contributions made by the Employer which shall
include:
- Elective Deferral Contributions, if any;
- Matching Contributions, if any;
- Qualified Matching Contributions, if any;
- Nonelective Contributions, if any;
- Qualified Nonelective Contributions, if any;
(2) all Forfeitures, if any;
(3) all Employee Contributions, if any.
For the purposes of this Article, Excess Amounts reapplied under
Section 5.2 (D) shall also be included as Annual Additions.
Also, for the purposes of this Article, Employee Contributions
are determined without regard to deductible employee
contributions within the meaning of section 72(o)(5) of the
Code.
Amounts allocated after March 31, 1984, to an individual medical
account, as defined in Internal Revenue Code section 415(l)(1),
which is part of a defined benefit plan maintained by the
Employer, are treated as Annual Additions to a defined
contribution plan. Also, amounts derived from contributions
paid or accrued attributable to post-retirement medical benefits
allocated to the separate account of a key employee, as defined
in Internal Revenue Code section 419A(d)(3), under a welfare
benefit fund, as defined in Internal Revenue Code section
419(e), maintained by the Employer, are treated as Annual
Additions to a defined contribution plan.
Contributions do not fail to be Annual Additions merely because
they are Excess Deferrals, Excess Contributions or Excess
Aggregate Contributions or merely because Excess Contributions
or Excess Aggregate Contributions are corrected through
distribution or recharacterization. Excess Deferrals that
are distributed in accordance with Section 4.17 of the Plan are
not Annual Additions.
Forfeited Matching Contributions that are forfeited because the
contributions to which they relate are treated as Excess
Aggregate Contributions, Excess Contributions, or Excess
Deferrals and that are reallocated to the Participant Accounts
of other Participants for the Plan Year in which the forfeiture
occurs, are treated as Annual Additions for the Participants to
whose accounts they are reallocated and for the Participants
from whose accounts they are forfeited.
(B) Compensation. The term Compensation means wages within the
meaning of section 3401(a) of the Code for the purposes of
income tax withholding at the source but determined without
regard to any rules that limit the remuneration included in
wages based on the nature or location of the employment or the
services performed (such as the exception for agricultural labor
in section 3401(a)(2) of the Code).
For Limitation Years beginning after December 31, 1991, for
purposes of applying the limitations of this article,
Compensation for a Limitation Year is the Compensation actually
paid or made available during such Limitation Year.
(C) Defined Contribution Dollar Limitation. The term Defined
Contribution Dollar Limitation shall mean $30,000 or, if
greater, one-fourth of the defined benefit dollar limitation set
forth in Internal Revenue Code section 415(b)(l) as in effect
for the Limitation Year.
(D) Employer. The term Employer shall mean the Employer that adopts
this Plan. In the case of a group of employers which
constitutes a controlled group of corporations (as defined in
Internal Revenue Code section 414(b) as modified by section
415(h)), or which constitutes trades or business (whether or not
incorporated) which are under common control (as defined in
section 414(c) as modified by section 415(h)), or affiliated
service groups (as defined in section 414(m)) of which the
adopting Employer is a part, all such employers shall be
considered a single Employer for purposes of applying the
limitations of this Article.
(E) Excess Amount. The term Excess Amount shall mean the excess of
the Participant's Annual Additions for the Limitation Year over
the Maximum Permissible Amount.
(F) Limitation Year. The term Limitation Year shall mean the
calendar year.
(G) Maximum Permissible Amount. The term Maximum Permissible Amount
shall mean the lesser of (1) the Defined Contribution Dollar
Limitation, or (2) 25% of the Participant's Compensation for the
Limitation Year.
If a short Limitation Year is created because of an amendment
changing the Limitation Year to a different period of 12
consecutive months, the Maximum Permissible Amount for the short
Limitation Year will be the lesser of (1) the Defined
Contribution Dollar Limitation multiplied by a fraction, the
numerator of which is the number of months in the short
Limitation Year, and the denominator of which is 12, or (2) 25%
of the Participant's Compensation for the short Limitation Year.
5.2 LIMITATIONS ON ALLOCATIONS. If the Employer does not maintain any
qualified plan in addition to this Plan:
(A) The amount of Annual Additions which may be allocated under this
Plan on a Participant's behalf for a Limitation Year shall not
exceed the lesser of the Maximum Permissible Amount or any other
limitation contained in this Plan.
(B) Prior to the determination of the Participant's actual
Compensation for a Limitation Year, the Maximum Permissible
Amount may be determined on the basis of the Participant's
estimated annual Compensation. Such Compensation shall be
determined on a reasonable basis and shall be uniformly
determined for all Participants similarly situated. Any
employer contributions based on estimated annual Compensation
shall be reduced by any Excess Amounts carried over from prior
years.
(C) As soon as is administratively feasible after the end of the
Limitation Year, the Maximum Permissible Amount for such
Limitation Year shall be determined on the basis of the
Participant's actual Compensation for such Limitation Year. In
the event a Participant separates from the Service of the
Employer prior to the end of the Limitation Year, the Maximum
Permissible Amount for such Participant shall be determined
prior to any distribution of his Participant's Account on the
basis of his actual Compensation. Any Excess Amounts shall be
disposed of in accordance with Section 5.2 (D).
(D) If there is an Excess Amount with respect to a Participant for a
Limitation Year as a result of a reasonable error in estimating
the Participant's annual compensation, an allocation of
forfeitures, a reasonable error in determining the amount of
elective deferrals (within the meaning of section 402(g)(3)
of the Code) that may be made with respect to any individual
under the limits of section 415 of the Code, or under other
limited facts and circumstances which the commissioner finds
justified, such Excess Amount shall be disposed of as follows:
(1) If an Excess Amount exists, the Excess Amount in the
Participant's Account (excluding Elective Deferral
Contributions) shall be held unallocated in a suspense
account for the Limitation Year and allocated and
reallocated in the next Limitation Year to all
Participants in the Plan. The excess amount must be
used to reduce Employer Contributions for the next
Limitation Year (and succeeding Limitation Years, as
necessary) for all of the Participants in the Plan. For
purposes of this subparagraph, the Excess Amount may not
be distributed to Participants or former Participants.
(2) If, after the application of subparagraph (1) an Excess
Amount still exists, then the Participant's Elective
Deferral Contributions (including earnings and losses
thereon) allocated for the Limitation Year shall be
returned to the Participant to the extent that an Excess
Amount exists. This distribution shall be made as soon
as administratively feasible after the Excess Amount is
determined. Any Elective Deferral Contributions
returned under this paragraph shall be disregarded for
purposes of the Actual Deferral Percentage Test.
(3) Alternatively, the Plan Administrator may elect to
dispose of the Excess Amount by applying the procedure
in subparagraph (2) before applying the procedure in
subparagraph (1). If the Plan Administrator makes this
election, the Plan Administrator must apply it uniformly
to all Participants in a Limitation Year.
(4) If a suspense account is in existence at any time during
a Limitation Year pursuant to this section, it will not
participate in the allocation of investment gains or
losses. If a suspense account is in existence at any
time during a particular Limitation Year, all amounts in
the suspense account must be allocated and reallocated
to Participants' Accounts before any Employer
Contributions which would constitute Annual Additions
may be made to the Plan for that Limitation Year.
5.3 LIMITATIONS ON ALLOCATIONS. If the Employer maintains one or more
defined contribution plans in addition to this Plan:
(A) The amount of Annual Additions which may be allocated under this
Plan on a Participant's behalf for a Limitation Year, shall not
exceed the lesser of:
(1) The Maximum Permissible Amount, reduced by the sum of
any Annual Additions allocated to the Participant's
Account for the same Limitation Year under this Plan and
such other defined contribution plan; or
(2) Any other limitation contained in this Plan.
Prior to the determination of the Participant's actual
Compensation for the Limitation Year, the amounts referred to in
Subsection (1) above may be determined on the basis of the
Participant's estimated annual Compensation for such Limitation
Year. Such estimated annual Compensation shall be determined
for all Participants similarly situated.
Any contribution made by the Employer based on estimated annual
Compensation shall be reduced by any Excess Amounts carried over
from prior years, if applicable.
(B) As soon as is administratively feasible after the end of the
Limitation Year, the amounts referred to in Section 5.3 (A)
shall be determined on the basis of the Participant's actual
Compensation for such Limitation Year.
(C) If amounts are contributed to a Participant's Account under this
Plan on an allocation date which does not coincide with the
allocation date(s) for all such other plans, and if a
Participant's Annual Additions under this Plan and all such
other plans result in an Excess Amount, such Excess Amount
shall be deemed to have derived from those contributions last
allocated.
(D) If an Excess Amount was allocated to a Participant on an
allocation date of this Plan which coincides with an allocation
date of another plan, the Excess Amount attributable to this
Plan will be the product of (1) and (2) below:
(1) The total Excess Amount allocated as of such date
(including any amount which would have been allocated
but for the limitations of Internal Revenue Code section
415).
(2) The ratio of (1) the amount allocated to the Participant
as of such date under this Plan, divided by (2) the
total amount allocated as of such date under all
qualified defined contribution plans (determined without
regard to the limitations of Internal Revenue Code
section 415).
(E) Any Excess Amounts attributed to this Plan shall be
disposed of as provided in Section 5.2 (D).
5.4 LIMITATIONS ON ALLOCATIONS. If the Employer maintains a defined
benefit plan in addition to this Plan:
(A) If an individual is a Participant at any time in both this Plan
and a defined benefit plan maintained by the Employer, the sum
of the Defined Benefit Plan Fraction and the Defined
Contribution Plan Fraction for any year may not exceed 1.0. In
the event that the sum of the Defined Contribution Plan
Fraction and the Defined Benefit Plan Fraction exceeds 1.0, the
Defined Contribution Plan Fraction will be reduced until the sum
of the Defined Contribution Plan Fraction and the Defined
Benefit Plan Fraction does not exceed 1.0.
If an individual was a Participant in this Plan or in any other
defined contribution plan maintained by the Employer which was
in existence on July 1, 1982, the numerator of the Defined
Contribution Plan Fraction will be adjusted if the sum of the
Defined Contribution Plan Fraction and the Defined Benefit Plan
Fraction would otherwise exceed 1.0 under the terms of this
Plan. Under the adjustment, an amount equal to the product of
(1) the excess of the sum of the Fractions over 1.0 times (2)
the denominator of the Defined Contribution Plan Fraction, will
be permanently subtracted from the numerator of the Defined
Contribution Plan Fraction. The adjustment is calculated using
the Fractions as they would be computed as of the later of the
end of the last Limitation Year beginning before January 1,
1983, or June 30, 1983. This adjustment also will be made if at
the end of the last Limitation Year beginning before January 1,
1984, the sum of the Fractions exceeds 1.0 because of accruals
or additions that were made before the limitations of this
Article became effective to any plans of the Employer in
existence on July 1, 1982.
In addition, if an individual was a Participant in this Plan or
in any other defined contribution plan maintained by the
Employer which was in existence on May 6, 1986, the numerator of
the Defined Contribution Plan Fraction will be adjusted if the
Employer's defined benefit plan was also in existence on May 6,
1986, and the sum of the Defined Contribution Plan Fraction and
the Defined Benefit Plan Fraction would otherwise exceed 1.0
under the terms of this Plan. Under the adjustment, an amount
equal to the product of (1) the excess of the sum of the
Fractions over 1.0 times (2) the denominator of the Defined
Contribution Plan Fraction, will be permanently subtracted
from the numerator of the Defined Contribution Plan Fraction.
This adjustment is calculated using the Fractions as they would
be computed as of the end of the last Limitation Year beginning
before January 1, 1987. In the event that a Participant's
accrued benefit as of December 31, 1986, under the defined
benefit plan exceeds the defined benefit dollar limitation set
forth in Internal Revenue Code section 415(b)(1), the amount of
that accrued benefit shall be used in both the numerator and the
denominator of the Defined Benefit Plan Fraction in making this
adjustment.
For purposes of this Section 5.4, all defined benefit plans of
the Employer, whether or not terminated, will be treated as one
defined benefit plan and all defined contribution plans of the
Employer, whether or not terminated, will be treated as one
defined contribution plan.
(B) The Defined Benefit Plan Fraction for any year is a fraction,
the numerator of which is the Participant's Projected Annual
Benefit under the defined benefit plan (determined as of the
close of the Limitation Year), and the denominator of which is
the lesser of (1) or (2) below:
(1) 1.25 times the dollar limitation in effect under
Internal Revenue Code section 415(b)(1)(A) on the last
day of the Limitation Year; or
(2) 1.4 times the amount which may be taken into account
under Internal Revenue Code section 415(b)(1)(B) with
respect to such Participant for the Limitation Year.
Notwithstanding the above, if the Participant was a participant
in one or more defined benefit plans maintained by the Employer
which were in existence on July 1, 1982, the denominator of the
Defined Benefit Plan Fraction will not be less than 125% of the
sum of the annual benefits under such plans which the
Participant had accrued as of the later of the end of the last
Limitation Year beginning before January 1, 1983 or June 30,
1983. The preceding sentence applies only if the defined
benefit plans individually and in the aggregate satisfied the
requirements of Internal Revenue Code section 415 as in effect
at the end of the 1982 Limitation Year.
(C) A Participant's Projected Annual Benefit is equal to the annual
benefit to which the Participant would be entitled under the
terms of the defined benefit plan based upon the following
assumptions:
(1) The Participant will continue employment until reaching
Normal Retirement Age as determined under the terms of
the plan (or current age, if that is later);
(2) The Participant's Compensation for the Limitation Year
under consideration will remain the same until the date
the Participant attains the age described in
sub-division (1) of this subparagraph; and
(3) All other relevant factors used to determine benefits
under the plan for the Limitation Year under
consideration will remain constant for all future
Limitation Years.
(D) The Defined Contribution Plan Fraction for any Limitation Year
is a fraction, the numerator of which is the sum of the Annual
Additions to the Participant's Accounts in such Limitation Year
and for all prior Limitation Years, and the denominator of which
is the lesser of (1) or (2) below for such Limitation Year and
for all prior Limitation Years of such Participant's employment
(assuming for this purpose, that Internal Revenue Code section
415(c) had been in effect during such prior Limitation Years):
(1) 1.25 times the dollar limitation in effect under
Internal Revenue Code section 415(c)(1)(A) on the last
day of the Limitation Year; or
(2) 1.4 times the amount which may be taken into account
under Internal Revenue Code section 415(c)(1)(B) with
respect to such Participant for the Limitation Year.
For the purposes of determining these Limitations on
Allocations, any nondeductible employee contributions made under
a defined benefit plan will be considered to be a separate
defined contribution plan and will be considered to be part of
the Annual Additions for the appropriate Limitation Year.
Annual Additions for any Limitation Year beginning before
January 1, 1987, shall not be recomputed to treat all Employee
Contributions as Annual Additions.
(E) Notwithstanding the foregoing, at the election of the Plan
Administrator, in computing the Defined Contribution Plan
Fraction with respect to any Plan Year ending after December 31,
1982, the denominator shall be an amount equal to the product
of:
(1) The denominator of the Defined Contribution Plan
Fraction, computed in accordance with the rules in
effect for the Plan Year ending in 1982; and
(2) the transition fraction, which is a fraction
(a) the numerator of which is the lesser of:
(i) $51,875, or
(ii) 1.4 times 25% of the Compensation of the
Participant for the Plan Year ending in
1981, and
(b) the denominator of which is the lesser of:
(i) $41,500, or
(ii) 25% of the Compensation of the
Participant for the Plan Year ending
in 1981.
<PAGE>
ARTICLE VI
DISTRIBUTION OF BENEFITS
6.1 DISTRIBUTIONS IN GENERAL. Each Participant may elect, with his
Spouse's consent if required, a distribution in the form of an Annuity,
a single sum cash payment, cash installments, or a combination of the
above. All distributions are subject to the provisions of Article VIII,
Joint and Survivor Annuity Requirements.
6.2 TIMING OF DISTRIBUTIONS. If the value of a Participant's Vested
Interest exceeds (or at the time of any prior distribution exceeded)
$3,500 and is immediately distributable (as defined in Section 8.5),
the Participant and his Spouse, if required, must consent to the
distribution before it is made.
Instead of consenting to a distribution, the Participant may make a
written election to defer the distribution for a specified period of
time ending no later than the Participant's Normal Retirement Age.
Such election to defer shall be irrevocable.
If the Participant and Spouse, if applicable, do not consent to a
distribution or if no election to defer is made within 90 days after
receiving a written explanation of the optional forms of benefit
available pursuant to Income Tax Regulation 1.411(a)(11), all benefits
shall be deferred to, and distribution shall be made as of the
Participant's Normal Retirement Age. The distribution will be made in
the form of a single sum cash payment (in the case of a Participant's
meeting the requirements of Section 8.1 (A)) or in accordance with
Section 8.2 (in the case of a Participant's not meeting the
requirements of Section 8.1 (A)), unless the Participant elects another
form of benefit within the 90-day period prior to the date the
distribution is made.
A Participant whose actual retirement date is on or after his Normal
Retirement Age may not elect to defer distribution of his benefit
beyond the date of his actual retirement.
If the value of a Participant's Vested Interest is $3,500 or less at
the time it becomes payable, the distribution shall be made in the form
of a single sum cash payment and shall be made upon such Participant's
Termination of Employment Such a distribution may not be deferred.
Unless the Participant elects otherwise, the payment of benefits under
this Plan to the Participant shall begin not later than the 60th day
after the close of the Plan Year in which the later of (A) or (B),
below, occurs:
(A) the date on which the Participant attains his Normal Retirement
Age or age 62, if later; or
(B) the date on which the Participant terminates his Service
(including Termination of Employment, death or Disability) with
the Employer.
Notwithstanding the foregoing, the failure of a Participant and Spouse,
if required, to consent to a distribution while a benefit is
immediately distributable shall be deemed to be an election to defer
commencement of payment of any benefit sufficient to satisfy the above
paragraph.
6.3 DISTRIBUTION LIMITATION. Elective Deferral Contributions, Qualified
Nonelective Contributions and Qualified Matching Contributions, and
income allocable to each, are not distributable to a Participant or a
Beneficiary, in accordance with such Participant's or Beneficiary's
election, earlier than upon the Participant's Termination of
Employment, death, or disability.
Such amounts may also be distributed upon:
(A) Termination of the Plan without the establishment or maintenance
of a successor plan.
For purposes of this paragraph, a successor plan is any other
defined contribution plan maintained by the same employer.
However, if fewer than two percent of the Employees who are
eligible under the Plan at the time of its termination are or
were eligible under another defined contribution plan at any
time during the 24 month period beginning 12 months before the
time of the termination, the other plan is not a successor plan.
The term "defined contribution plan" means a plan that is a
defined contribution plan as defined in section 414(i) of the
Code, but does not include an employee stock ownership plan as
defined in section 4975(e) or 409 of the Code or a simplified
employee pension as defined in section 408(k) of the Code. A
plan is a successor plan only if it exists at the time the Plan
is terminated or within the period ending 12 months after
distribution of all assets from the Plan.
A distribution may be made under this paragraph only if it is a
lump sum distribution. The term "lump sum distribution" has the
same meaning provided in section 402(e)(4) of the Code, without
regard to subparagraphs (A)(i) through (iv), (B), and (11)of
that section.
(B) The disposition by the Employer to an unrelated corporation of
substantially all the assets (within the meaning of section
409(b)(2) of the Code) used in the trade or business of the
Employer if the Employer continues to maintain this Plan after
the disposition. However, a distribution may be made
under this paragraph only to an Employee who continues
employment with the corporation acquiring such assets.
In addition, this requirement is satisfied only if the purchaser
does not maintain the Plan after the disposition. A purchaser
maintains the plan of the seller if it adopts the plan or
otherwise becomes an employer whose employees accrue benefits
under the Plan. A purchaser also maintains the Plan if
the Plan is merged or consolidated with, or any assets or
liabilities are transferred from the Plan to a plan maintained
by the purchaser in a transaction subject to section 414(l)(1)
of the Code. A purchaser is not treated as maintaining the Plan
merely because the Plan that it maintains accepts rollover
contributions of amounts distributed by the Plan.
For purposes of this paragraph, the sale of "substantially all"
the assets used in a trade or business means the sale of at
least 85 percent of the assets.
A distribution may be made under this paragraph only if it is a
lump sum distribution. The term "lump sum distribution" has the
same meaning provided in section 402(e)(4) of the Code, without
regard to subparagraphs (A)(i) through (iv), (B), and (H) of
that section.
(C) The disposition by the Employer to an unrelated entity or
individual of the Employer's interest in a subsidiary (within
the meaning of section 409(d)(3) of the Code) if the Employer
continues to maintain this Plan. However, a distribution may be
made under this paragraph only to an Employee who continues
employment with such subsidiary.
In addition, this requirement is satisfied only if the purchaser
does not maintain the Plan after the disposition. A purchaser
maintains the plan of the seller if it adopts the plan or
otherwise becomes an employer whose employees accrue benefits
under the Plan. A purchaser also maintains the Plan if
the Plan is merged or consolidated with, or any assets or
liabilities are transferred from the Plan to a plan maintained
by the purchaser in a transaction subject to section 414(l)(1)
of the Code. A purchaser is not treated as maintaining the Plan
merely because the Plan that it maintains accepts rollover
contributions of amounts distributed by the Plan.
A distribution may be made under this paragraph only if it is a
lump sum distribution. The term "lump sum distribution" has the
same meaning provided in section 402(e)(4) of the Code. without
regard to subparagraphs (A)(i) through (iv), (B), and (H) of
that section.
(D) In the case of Elective Deferral Contributions only, the
attainment of age 59-1/2, as described in Section 10.1 of the
Plan.
(E) In the case of Elective Deferral Contributions only, the
hardship of the Participant, as described in Section 10.3 of the
Plan.
6.4 COMMENCEMENT OF DISTRIBUTIONS. Notwithstanding the provisions of the
preceding Timing of Distributions Section, distributions to a
Participant will commence no later than the date determined in
accordance with the provisions of this Section.
Distribution to a Participant must commence no later than the required
beginning date. The first required beginning date of a Participant is
the first day of April of the calendar year following the calendar year
in which the Participant attains age 70-1/2.
The required beginning date of a Participant who attains age 70-1/2
before January 1, 1988, shall be the first day of April of the calendar
year following the calendar year in which the later of retirement or
attainment of age 70-1/2 occurs, provided the Participant was not a 5%
owner in the Plan Year ending in the year in which the Participant
attained age 66-1/2 or any later Plan Year. A Participant is treated
as a 5% owner for purposes of this section if such Participant is a 5%
owner as defined in section 416(i) of the Code (determined in
accordance with section 416 but without regard to whether the Plan is
Top-Heavy). The required beginning date of a Participant who is a 5%
owner during any year beginning after December 31, 1979, is the first
day of April following the later of:
(A) the calendar year in which the Participant attained age 70-1/2,
or
(B) the earlier of the calendar year with or within which ends the
Plan Year in which the Participant becomes a 5% owner, or the
calendar year in which the Participant retires.
Once distributions have begun to a 5% owner under this section, they
must continue to be distributed, even if the Participant ceases to be a
5% owner in a subsequent year. Distribution to such Participant must
commence no later than the first day of April following the calendar
year in which the Participant's Termination of Employment occurs.
If distribution to any Participant is made in other than a single sum
payment, the second payment shall be distributed no later than the
December 31 following the April 1 by which the first payment was
required to be distributed. Each succeeding payment shall be
distributed no later than each December 31 thereafter.
6.5 DISTRIBUTION REQUIREMENTS.
(A) Except as otherwise provided in Article VIII, the requirements
of this Section shall apply to any distribution of a
Participant's Accrued Benefit.
(B) All distributions required under this Article shall be
determined and made in accordance with the Income Tax
Regulations under section 401 (a)(9), including the minimum
distribution incidental benefit requirement of section
1.401(a)(9)-2 of the regulations.
(C) Limits on Settlement Options. Distributions, if not made in a
lump sum, may only be made over one of the following periods (or
a combination thereof):
(1) the life of the Participant,
(2) the life of the Participant and a designated
Beneficiary,
(3) a period certain not extending beyond the life
expectancy of the Participant, or
(4) a period certain not extending beyond the joint and last
survivor expectancy of the Participant and a designated
Beneficiary.
(D) Minimum Amounts to be Distributed.
(1) If the Participant's entire Vested Interest is to be
distributed in other than a lump sum, then the amount to
be distributed each year must be at least an amount
equal to the quotient obtained by dividing the
Participant's entire Vested Interest by the life
expectancy of the Participant or the joint and last
survivor expectancy of the Participant and designated
Beneficiary. Life expectancy and joint and last
survivor expectancy are computed by the use of the
return multiples contained in section 1.72-9 of the
Income Tax Regulations. For purposes of this
computation, a Participant's life expectancy may be
recalculated no more frequently than annually; however,
the life expectancy of a Beneficiary other than the
Participant's Spouse may not be recalculated.
(2) If the Participant's Spouse is not the designated
Beneficiary, the method of distribution selected must
assure that at least 50% of the present value of the
amount available for distribution is paid within the
life expectancy of the Participant.
(3) For calendar years beginning after December 31, 1988,
the amount to be distributed each year, beginning with
distributions for the first distribution calendar year,
shall not be less than the quotient obtained by dividing
the Participant's benefit by the lesser of (1) the
applicable life expectancy or (2) if the Participant's
Spouse is not the designated Beneficiary, the applicable
divisor determined from the table set forth in Q&A-4 of
section 1.401(a)(9)-2 of the Income Tax Regulations.
Distributions after the death of the Participant shall
be distributed using the applicable life expectancy in
subsection (d)( 1) above as the relevant divisor without
regard to regulations section 1.401(a)(9)-2.
(4) The minimum distribution required for the Participant's
first distribution calendar year must be made on or
before the Participant's required beginning date. The
minimum distribution for other calendar years, including
the minimum distribution for the distribution calendar
year in which the Employee's required beginning date
occurs, must be made on or before December 31 of that
distribution calendar year.
6.6 NON-TRANSFERABLE. The Participant's right to any Annuity payments,
benefits, and refunds is not transferable and shall be free from the
claims of all creditors to the fullest extent permitted by law.
6.7 DEATH DISTRIBUTION PROVISIONS. If the Participant dies before
distribution of his Vested Interest commences, the following provisions
shall apply:
(A) If a distribution is to be made to a Beneficiary other than the
Surviving Spouse:
(1) If the present value of the Participant's Vested
Interest exceeds (or at the time of any prior
distribution exceeded) $3,500, unless the Beneficiary
elects another form of distribution, that portion of the
Participant's Vested Interest payable to the Beneficiary
will be distributed in the form of a single sum cash
payment within a reasonable period of time after the
Plan Administrator is notified of the Participant's
death.
(2) If the present value of the Participant's Vested
Interest is $3,500 or less at the time it becomes
payable, the distribution shall always be made in the
form of a single sum cash payment and shall be paid
within a reasonable period of time after the Plan
Administrator is notified of the Participant's death.
(B) If the distribution is to be made to a Beneficiary who is the
Surviving Spouse, such distribution will be made in accordance
with the following:
(1) If the Participant had never elected a life Annuity form
of distribution under the Plan:
(a) If the present value of the Participant's Vested
Interest exceeds (or at the time of any
prior distribution exceeded) $3,500, unless the
surviving spouse elects another form of
distribution, that portion of the Participant's
Vested Interest payable to the Surviving Spouse
will be distributed in the form of a single sum
cash payment within a reasonable period of time
after the Plan Administrator is notified of the
Participant's death.
(b) If the present value of the Participant's Vested
Interest payable to the Surviving Spouse is
$3,500 or less at the time it becomes payable,
the distribution shall always be made in the form
of a single sum cash payment and shall be made
within a reasonable period of time after the Plan
Administrator is notified of the Participant's
death.
(2) If the Participant had previously elected a life Annuity
form of distribution under the Plan:
(a) If the present value of the Participant's Vested
Interest exceeds (or at the time of any
prior distribution exceeded) $3,500 and is
immediately distributable (as defined in
Section 8.5), the Surviving Spouse must consent
to the distribution before it is made.
If the Surviving Spouse does not consent to a
distribution, all benefits shall be deferred to a
date that complies with the terms of Section 6.8
(B).
The distribution shall be made in accordance with
the provisions of Section 8.3.
(b) If the present value of the Participant's Vested
Interest is $3,500 or less at the time it
becomes payable, the distribution shall always be
made in the form of a single sum cash payment and
shall be paid within a reasonable period of time
after the Plan Administrator is notified of the
Participant's death.
6.8 DEATH DISTRIBUTION COMMENCEMENT DATE. Upon the death of the
Participant, the following distribution provisions shall take effect:
(A) If the Participant dies after distribution of his entire Vested
Interest has commenced, the remaining portion of such Vested
Interest will continue to be distributed at least as rapidly as
under the method of distribution being used prior to the
Participant's death.
In no event shall distribution of the Participant's remaining
Vested Interest be made in a lump sum after the Participant's
death unless such distribution is consented to, in writing, by
the Participant's Surviving Spouse, if any.
(B) If the Participant dies before distribution of his Vested
Interest commences, the Participant's entire Vested Interest
will be distributed no later than five years after the
Participant's death except to the extent that an election is
made to receive distributions in accordance with (1) or (2)
below:
(1) If any portion of the Participant's Vested Interest is
payable to a designated Beneficiary, distributions may
be made in substantially equal installments over the
life or life expectancy of the designated Beneficiary
(or over a period not extending beyond the life
expectancy of such Beneficiary), commencing no later
than one year after the Participant's death;
(2) If the designated Beneficiary is the Participant's
Surviving Spouse, the date distributions are required to
begin in accordance with (1) above shall not be earlier
than the date on which the Participant would have
attained age 70-1/2. However, the Surviving Spouse may
elect, at any time following the Participant's death, to
defer the date on which distributions will begin
until no later than the date on which the Participant
would have attained age 70-1/2 and, if the Spouse dies
before payments begin, subsequent distributions shall be
made as if the Spouse had been the Participant.
(C) For purposes of (B) above, payments will be calculated by use of
the return multiples specified in section 1.72-9 of the Income
Tax Regulations. Life expectancy of a Surviving Spouse may be
recalculated annually; however, in the case of any other
designated Beneficiary, such life expectancy will be calculated
at the time payment first commences without further
recalculation.
(D) For purposes of this Section (Death Distribution Commencement
Date) any amount paid to a child of the Participant will be
treated as if it had been paid to the Surviving Spouse if the
amount becomes payable to the Surviving Spouse when the child
reaches the age of majority.
6.9 ALTERNATE PAYEE SPECIAL DISTRIBUTION. Distributions pursuant to
Section 16.8 may be made without regard to the age or employment status
of the Participant.
<PAGE>
ARTICLE VI-A
DIRECT ROLLOVERS
6A.1 Notwithstanding any provision of the Plan to the contrary that would
otherwise limit a Distributee's election under this Article, a
Distributee may elect, at the time and in the manner prescribed by the
Plan Administrator, to have any portion of an Eligible Rollover
Distribution paid directly to an Eligible Retirement Plan specified by
the Distributee in a Direct Rollover, except as otherwise provided by
the Employer's administrative procedures as permitted by regulations.
In addition, a Distributee's election of a Direct Rollover shall be
subject to the following requirements:
(A) If the Distributee elects to have only a portion of an Eligible
Rollover Distribution paid to an Eligible Retirement Plan in a
Direct Rollover, that portion must be equal to at least $500.
(B) If the entire amount of a Distributee's Eligible Rollover
Distribution is $500 or less, the distribution may not be
divided. Instead, the entire amount must either be paid to the
Distributee or to an Eligible Retirement Plan in a Direct
Rollover.
(C) A Distributee may not elect a Direct Rollover if the
Distributee's Eligible Rollover Distributions during a year are
reasonably expected by the Plan Administrator to total less than
$200 (or any lower minimum amount specified by the Plan
Administrator).
(D) A Distributee may not elect a Direct Rollover of an Offset
Amount.
(E) A Distributee's election to make or not make a Direct Rollover
with respect to one payment in a series of periodic payments
shall apply to all subsequent payments in the series, except
that a Distributee shall be permitted at any time to change,
with respect to subsequent payments in the series of periodic
payments, a previous election to make or not make a Direct
Rollover. A change of election shall be accomplished by the
Distributee notifying the Plan Administrator of the change.
Such notice must be in the form and manner prescribed by the
Plan Administrator.
6A.2 Definitions.
(A) Direct Rollover: A Direct Rollover is a payment by the plan to
the Eligible Retirement Plan specified by the Distributee.
(B) Distributee: A Distributee includes an Employee or former
Employee. In addition, the Employee's or former Employee's
Surviving Spouse and the Employee's or former Employee's Spouse
who is the alternate payee under a qualified domestic relations
order, as defined in section 414(p) of the Code, are
Distributees with regard to the interest of the Spouse or former
Spouse.
(C) Eligible Retirement Plan: An Eligible Retirement Plan is an
individual retirement account described in section 408(a) of the
code, an individual retirement annuity described in section
408(b) of the Code, an annuity plan described in section 403(a)
of the Code, or a qualified trust described in section 401(a) of
the Code, that accepts the Distributee's Eligible Rollover
Distribution. However, in the case of an Eligible Rollover
Distribution to the Surviving Spouse, an Eligible Retirement
Plan is an individual retirement account or an individual
retirement annuity.
(D) Eligible Rollover Distribution: An Eligible Rollover
Distribution is any distribution of all or any portion of the
balance to the credit of the Distributee, except that an
Eligible Rollover Distribution does not include; any
distribution that is one of a series of substantially equal
periodic payments (not less frequently than annually) made for
the life (or life expectancy) of the Distributee or the joint
lives (or life expectancies) of the Distributee and the
Distributee's designated beneficiary, or for a specified period
of ten years or more; any distribution to the extent such
distribution is required under section 401(a)(9) of the Code;
and the portion of any distribution that is not includible in
gross income (determined without regard to the exclusion for net
unrealized appreciation with respect to employer securities).
(E) Offset Amount: An Offset Amount is the amount by which a
Participant's Account is reduced to repay a loan from the Plan
(including the enforcement of the Plan's security interest in
the Participant's Account).
<PAGE>
ARTICLE VII
RETIREMENT BENEFITS
7.1 NORMAL RETIREMENT. A Participant who attains his Normal Retirement Age
shall have a Vesting Percentage of 100%. If a Participant retires from
the active Service of the Employer on his Normal Retirement Date, he
shall be entitled to receive a distribution of the entire value of his
Participant's Account as of his Normal Retirement Date.
7.2 LATE RETIREMENT. A Participant may continue in the Service of the
Employer after his Normal Retirement Age, and in such event he shall
retire on his Late Retirement Date. Such Participant shall continue as
a Participant under this Plan until such Late Retirement Date. The
Participant shall have a Vesting Percentage of 100% and shall be
entitled to receive a distribution of the entire value of his
Participant's Account as of his Late Retirement Date.
7.3 DISABILITY RETIREMENT. A Participant who retires from the Service of
the Employer on account of Disability shall have a Vesting Percentage
of 100% and shall be entitled to receive a distribution of the entire
value of his Participant's Account as of his Disability Retirement
Date.
<PAGE>
ARTICLE VIII
JOINT AND SURVIVOR ANNUITY REQUIREMENTS
8.1 GENERAL. The provisions of this Article shall take precedence over any
conflicting provision in this Plan.
The provisions of this Article shall apply to any Participant who is
credited with at least one Hour of Service with the Employer on or
after August 23, 1984, and such other Participants as provided in
Section 8.7, unless:
(A) upon the death of the Participant the Participant's entire
Vested Interest will be paid to the Participant's Surviving
Spouse, but if there is no Surviving Spouse, or, if the
Surviving Spouse has already consented in a manner conforming to
a Qualified Election, then to the Participant's designated
Beneficiary;
(B) the Participant does not elect payments in the form of a Life
Annuity and has not previously elected payments in the form of a
Life Annuity under the Plan, and
(C) as to the Participant, the Plan is not a direct or indirect
transferee of a defined benefit plan, money purchase pension
plan (including a target benefit plan), stock bonus, or
profit-sharing plan which would otherwise provide for a Life
Annuity form of payment to the Participant.
8.2 PAYMENT OF QUALIFIED JOINT AND SURVIVOR ANNUITY. Unless an optional
form of benefit is selected pursuant to a Qualified Election within the
ninety-day period ending on the first day on which all events have
occurred which entitle the Participant to a benefit, a married
Participant's Vested Interest will be paid in the form of a Qualified
Joint and Survivor Annuity.
An unmarried Participant will be provided a single Life Annuity unless
the Participant elects another form of benefit during the applicable
Election Period.
8.3 PAYMENT OF QUALIFIED PRERETIREMENT SURVIVOR ANNUITY. Unless an
optional form of benefit has been selected within the Election Period
pursuant to a Qualified Election, if a married Participant dies before
his Annuity Starting Date, then the Participant's entire Vested
Interest, less the amount of any unpaid loan balance outstanding under
the terms of Article X-A, shall be applied toward the purchase of an
immediate Annuity for the life of the Surviving Spouse. As an
alternative to receiving the benefit in this form of an Annuity, the
Surviving Spouse may elect to receive a single cash payment or any
other form of payment provided for in the Plan within a reasonable time
after the Participant's death.
8.4 DEFINITIONS.
(A) Election Period: The period which begins on the first day of the
Plan Year in which the Participant attains age 35 and ends on
the date of the Participant's death. If a Participant separates
from Service prior to the first day of the Plan Year in which
age 35 is attained, with respect to the account balance
as of the date of separation, the Election Period shall begin on
the date of separation.
A Participant who has not attained age 35 as of the end of a
Plan Year, may make a special Qualified Election to waive the
Qualified Preretirement Survivor Annuity for the period
beginning on the date of such election and ending on the first
day of the Plan Year in which the Participant will attain age
35. Such election shall not be valid unless the Participant
receives a written explanation of the Qualified Preretirement
Survivor Annuity in such terms as are comparable to the
explanation required under Section 8.6 (A). Qualified
Preretirement Survivor Annuity coverage will be automatically
reinstated as of the first day of the Plan Year in which the
Participant attains age 35. Any new waiver on or after such
date shall be subject to the full requirements of this Article.
(B) Qualified Election: A waiver of a Qualified Joint and Survivor
Annuity or a Qualified Preretirement Survivor Annuity. Any
waiver of a Qualified Joint and Survivor Annuity or a Qualified
Preretirement Survivor Annuity shall not be effective unless:
(a) the Participant's Spouse consents in writing to the
election; (b) the election designates a specific Beneficiary,
including any class of Beneficiaries or any contingent
Beneficiaries, which may not be changed without spousal consent
(or the Spouse expressly permits designations by the Participant
without any further spousal consent); (c) the Spouse's consent
acknowledges the effect of the election; and (d) the Spouse's
consent is witnessed by a Plan representative or notary public.
Additionally, a Participant's waiver of the Qualified Joint and
Survivor Annuity shall not be effective unless the election
designates a form of benefit payment which may not be changed
without spousal consent (or the Spouse expressly permits
designations by the Participant without any further spousal
consent). If it is established to the satisfaction of a Plan
representative that such written consent cannot be obtained
because:
(1) there is no Spouse;
(2) the Spouse cannot be located;
(3) the Participant is legally separated or has been
abandoned within the meaning of local law, and the
Participant has a court order to such effect;
(4) of other circumstances as the Secretary of the Treasury
may by regulations prescribe,
the Participant's election to waive coverage will be considered
a Qualified Election.
Any consent by a Spouse obtained under this provision (or
establishment that the consent of a Spouse may not be obtained)
shall be effective only with respect to such Spouse. A consent
that permits designations by the Participant without any
requirement of further consent by such Spouse must acknowledge
that the Spouse has the right to limit consent to a specific
Beneficiary, and a specific form of benefit where applicable,
and that the Spouse voluntarily elects to relinquish either
or both of such rights. A revocation of a prior waiver may be
made by a Participant without the consent of the Spouse at any
time before the commencement of benefits. The number of
revocations shall not be limited. No consent obtained under
this provision shall be valid unless the Participant has
received notice as provided in Section 8.6 below.
(C) Qualified Joint and Survivor Annuity: An immediate Annuity for
the life of the Participant with a survivor Annuity for the life
of the Spouse which is not less than 50% and not more than 100%
of the amount of the Annuity which is payable during the joint
lives of the Participant and the Spouse and which is the amount
of benefit which can be purchased with the Participant's entire
Vested Interest. If no survivor Annuity percentage has been
specified in an election, the percentage payable to the
Spouse will be 50%.
Notwithstanding the above paragraph, a Qualified Joint and
Survivor Annuity for an unmarried Participant shall mean an
Annuity for the life of the Participant.
(D) Qualified Preretirement Survivor Annuity: A survivor Annuity for
the life of the Spouse in the amount which can be purchased with
the Participant's entire Vested Interest.
(E) Spouse (Surviving Spouse): The Spouse or Surviving Spouse of the
Participant. A former Spouse may be treated as the Spouse or
Surviving Spouse to the extent provided under a Qualified
Domestic Relations Order as described in Internal Revenue Code
section 414(p).
8.5 CONSENT REQUIREMENTS. Only the Participant need consent to the
commencement of a distribution in the form of a Qualified Joint and
Survivor Annuity while the account balance is immediately
distributable. Neither the consent of the Participant nor the
Participant's Spouse shall be required to the extent that a
distribution is required to satisfy section 401(a)(9) or section 415 of
the Code. An account balance is immediately distributable if any part
of the account balance could be distributed to the Participant (or
Surviving Spouse) before the Participant attains (or would have
attained if not deceased) the later of Normal Retirement Age or age 62.
8.6 NOTICE REQUIREMENTS.
(A) In the case of a Qualified Joint and Survivor Annuity as
described in Section 8.4 (C), the Plan Administrator shall, no
less than 30 days and no more than 90 days prior to the Annuity
Starting Date, provide each Participant with a written
explanation of: (i) the terms and conditions of a Qualified
Joint and Survivor Annuity; (ii) the Participant's right to make
and the effect of an election to waive the Qualified Joint and
Survivor Annuity form of benefit; (iii) the rights of a
Participant's Spouse; (iv) the right to make, and the effect of,
a revocation of a previous election to waive the Qualified Joint
and Survivor Annuity; (v) a general description of the
eligibility conditions and other material features of the
optional forms of benefit; and (vi) sufficient additional
information to explain the relative values of the optional forms
of benefit available to them under this Plan.
(B) If a distribution is one to which sections 401(a)(11) and 417 of
the Code do not apply, such distribution may commence less than
30 days after the notice required provided that:
(1) the plan administrator clearly informs the Participant
that the Participant has a right to a period of at least
30 days after receiving the notice to consider the
decision of whether or not to elect a distribution (and,
if applicable, a particular distribution option), and
(2) the Participant, after receiving the notice,
affirmatively elects a distribution.
(C) In the case of a Qualified Preretirement Survivor Annuity as
described in Section 8.4 (D), the Plan Administrator shall
provide each Participant within the period beginning on the
first day of the Plan Year in which the Participant attains age
32 and ending with the close of the Plan Year preceding the
Plan Year in which the Participant attains age 35, a written
explanation of the Qualified Preretirement Survivor Annuity in
such terms and in such manner as would be comparable to the
explanation provided for meeting the requirements of Section 8.6
(A) to a Qualified Joint and Survivor Annuity.
If a Participant enters the Plan after the first day of the Plan
Year in which the Participant attained age 32, the Plan
Administrator shall provide notice no later than the close of
the second Plan Year succeeding the entry of the Participant in
the Plan.
If a Participant enters the Plan after he has attained age 35,
the Plan Administrator shall provide notice within a reasonable
period of time following the entry of the Participant in the
Plan.
If a Participant*s Termination of Employment occurs before the
Participant attains age 35, the Plan Administrator shall provide
notice within one year of such Termination of Employment.
8.7 TRANSITIONAL RULES.
(A) Any living Participant not receiving benefits on August 23,
1984, who would otherwise not receive the benefits prescribed by
the previous Sections of this Article must be given the
opportunity to elect to have the prior Sections of this Article
relating to the Qualified Preretirement Survivor Annuity
apply if such Participant is credited with at least one Hour of
Service under this Plan or a predecessor plan in a Plan Year
beginning on or after January 1, 1976, and such Participant had
at least 10 Years of Service for vesting purposes when he
separated from Service.
(B) Any living Participant not receiving benefits on August 23,
1984, who was credited with at least one Hour of Service under
this Plan or a predecessor plan on or after September 2, 1974,
and who is not otherwise credited with any Service in a Plan
Year beginning on or after January 1, 1976, must be given the
opportunity to have his or her benefits paid in accordance with
Section 8.7 (D).
(C) The respective opportunities to elect (as described in Sections
8.7 (A) and 8.7 (B) above) must be afforded to the appropriate
Participants during the period commencing on August 23, 1984,
and ending on the date benefits would otherwise commence to said
Participants.
(D) Any Participant who has elected pursuant to Section 8.7 (B) of
this Article and any Participant who does not elect under
Section 8.7 (A) or who meets the requirements of Section 8.7 (A)
except that such Participant does not have at least 10 Years of
Service for vesting purposes when he separates from Service,
shall have his benefits distributed in accordance with all of
the following requirements if benefits would have been payable
in the form of a Life Annuity:
(1) Automatic Joint and Survivor Annuity. If benefits in
the form of a Life Annuity become payable to a married
Participant who:
(a) begins to receive payments under the Plan on or
after Normal Retirement Age; or
(b) dies on or after Normal Retirement Age while
still working for the Employer; or
(c) begins to receive payments on or after the
Qualified Early Retirement Age; or
(d) separates from Service on or after attaining
Normal Retirement Age (or the Qualified
Early Retirement Age) and after satisfying the
eligibility requirements for the payment
of benefits under the Plan and thereafter dies
before beginning to receive such benefits;
then such benefits will be received under this Plan in
the form of a Qualified Joint and Survivor Annuity,
unless the Participant has elected otherwise during the
election period. The election period must begin at
least six months before the Participant attains
Qualified Early Retirement Age and end not more than 90
days before the commencement of benefits. Any election
hereunder will be in writing and may be changed by the
Participant at any time.
(2) Election of Early Survivor Annuity: A Participant who is
employed after attaining the Qualified Early Retirement
Age will be given the opportunity to elect, during the
election period, to have a survivor Annuity payable on
death. If the Participant elects the survivor Annuity,
payments under such Annuity must not be less than the
payments which would have been made to the Spouse under
the Qualified Joint and Survivor Annuity if the
Participant had retired on the day before his or her
death. Any election under this provision will be in
writing and may be changed by the Participant at any
time. The election period begins on the later of (1)
the 90th day before the Participant attains the
Qualified Early Retirement Age, or (2) the date on which
participation begins, and ends on the date the
Participant terminates employment.
(3) For purposes of this Section 8.7 (D):
(a) Qualified Early Retirement Age is the latest of:
(i) the earliest date, under the Plan, on which the
Participant may elect to receive retirement
benefits; or
(ii) the first day of the 120th month beginning before
the Participant reaches Normal Retirement Age; or
(iii) the date the Participant begins participation.
(b) Qualified Joint and Survivor Annuity is an Annuity for
the life of the Participant with a survivor Annuity for
the life of the Spouse as described in Section 8.4 (C).
<PAGE>
ARTICLE IX
TERMINATION OF EMPLOYMENT
9.1 DISTRIBUTION. As of a Participant's Termination of Employment, he
shall be entitled to receive a distribution of his entire Vested
Interest. Such distribution shall be further subject to the terms and
conditions of Article VI.
If at the time of his Termination of Employment the Participant's
Vesting Percentage is not 100% and the Participant does not take a
distribution from the portion of his Vested Interest subject to the
Vesting Percentage, the nonvested portion of his Participant's Account
will become a Forfeiture upon the date the Participant incurs
five consecutive One-Year Breaks in Service.
If at the time of his Termination of Employment the Participant's
Vesting Percentage is not 100% and such Participant does take a
distribution from the portion of his Vested Interest subject to the
Vesting Percentage, or if the Participant's Vesting Percentage is 0%,
the nonvested portion of his Participant's Account will become a
Forfeiture immediately.
If the Participant, whose nonvested portion of his Participant's
Account became a Forfeiture in accordance with the terms of the
preceding paragraph, is later rehired by the Employer and re-enrolls in
the Plan, Subsection (A), (B) or (C) below, as applicable, will apply:
(A) If the Participant was 0% vested at his Termination of
Employment and did not incur five consecutive One-Year Breaks in
Service after such date, the amount which became a Forfeiture,
if any, shall be restored by the Employer at the time such
Participant re-enrolls in the Plan. The Forfeiture, so
restored, shall be included as part of that portion of his
Participant's Account subject to the Vesting Percentage.
(B) If the Participant's Vesting Percentage was not 100% at his
Termination of Employment and if the Participant did not incur
five consecutive One-Year Breaks in Service after such date, the
Participant shall be entitled to repay the portion of the
distribution made at his Termination of Employment derived
from Employer Contributions. The portion of the repayment that
is attributable to amounts that were subject to the Vesting
Percentage will no longer be considered a distribution for
purposes of determining the Participant's Vested Interest. The
repayment of such portion must be made before the Participant
has incurred five consecutive One-Year Breaks in Service
following the date he received the distribution or five years
after the Participant is rehired by the Employer, whichever is
earlier.
If the Participant elects to make such repayment, the amount
which became a Forfeiture, if any, shall be restored by the
Employer at the same time such repayment is made. The
Forfeiture, so restored, and the repayment shall be included as
part of that portion of his Participant's Account subject to the
Vesting Percentage. However, if the Participant does not elect
to repay the distribution made in accordance with this Article
within the period of time specified above, that Forfeiture shall
remain a Forfeiture.
(C) If the Participant had incurred five consecutive One-Year Breaks
in Service after his Termination of Employment, the amount which
became a Forfeiture shall remain a Forfeiture and such
Participant shall be prohibited from repaying a distribution
made at his Termination of Employment.
9.2 NO FURTHER RIGHTS OR INTEREST. A Participant shall have no further
interest in or any rights to any portion of his Participant's Account
that becomes a Forfeiture due to his Termination of Employment once the
Participant incurs five consecutive One-Year Breaks in Service in
accordance with Article II.
9.3 APPLICATION OF FORFEITURES. Any Forfeiture arising in accordance with
the provisions of Section 9.1 shall be reallocated in the manner set
forth in Section 4.7 for the Allocation of Forfeitures.
The provisions of the preceding sentence notwithstanding, in the event
that a former Participant is rehired by the Employer and the Employer
is required by the provisions of Section 9.1 of this Plan to restore
the amount of a separate account that had been created upon such
Participant's prior Termination of Employment and later forfeited,
Forfeitures, if any, will first be used to restore such separate
account to its value as of such Participant's prior Termination of
Employment date. In the event that the available Forfeitures are not
sufficient to make such restoration, the Employer will make an
additional contribution sufficient to make such restoration.
<PAGE>
ARTICLE X
WITHDRAWALS
10.1 WITHDRAWAL AFTER AGE 59-1/2. A Participant who has attained age
59-1/2, may elect to withdraw from his Participant's Account, once
every Plan Year, an amount which is equal to any whole percentage (not
exceeding 100%) of his Vested Interest in his Participant's Account
attributable to:
- Elective Deferral Contributions, including earnings
- Matching Contributions, including earnings
- Nonelective Contributions, including earnings
- Qualified Matching Contributions, including earnings
- Qualified Nonelective Contributions, including earnings.
10.2 WITHDRAWAL FOR SERIOUS FINANCIAL HARDSHIP OF CONTRIBUTIONS OTHER THAN
ELECTIVE DEFERRAL CONTRIBUTIONS. In the event a Participant suffers a
Serious Financial Hardship, such Participant may withdraw a portion of
his Vested Interest attributable to the following to meet such need:
- Matching Contributions that are not designated as Qualified
Matching Contributions, including earnings
- Nonelective Contributions that are not designated as Qualified
Nonelective Contributions, including earnings.
- Prior HMS Employer Contributions that are not designated as
Qualified Matching or Qualified Nonelective Contributions,
including earnings.
In no event may any such withdrawal exceed the amount required to meet
the immediate financial need created by the Serious Financial Hardship.
Such Serious Financial Hardship must be shown by positive evidence
submitted to the Plan Administrator that the hardship is of sufficient
magnitude to impair the Participant's financial security. Withdrawals
shall be determined in a consistent and nondiscriminatory manner, and
shall not affect the Participant's right under the Plan to make
additional withdrawals or to continue to be a Participant.
10.3 WITHDRAWAL FOR SERIOUS FINANCIAL HARDSHIP OF ELECTIVE DEFERRAL
CONTRIBUTIONS. Distributions of Elective Deferral Contributions may be
made to a Participant in the event of a hardship. For purposes of this
section, a distribution is made on account of hardship only if the
distribution is made both on account of an immediate and heavy
financial need of the Employee and is necessary to satisfy the
financial need. In addition, any distribution on account of hardship
shall be limited to the distributable amount described in paragraph (C)
of this section.
<PAGE>
(A) The following are the only financial needs considered immediate and
heavy for purposes of this section:
(1) Expenses for medical care described in section 213(d) of the
Code previously incurred by the Employee, the Employee*s Spouse,
or any dependents of the Employee (as defined in section 152 of
the Code) or necessary for these persons to obtain medical care
described in section 213(d) of the Code;
(2) Payment of tuition, related educational fees and room and board
expenses for the next 12 months of post-secondary education for
the Employee, his Spouse, children, or dependents (as defined in
Section 152 of the Code);
(3) Costs directly related to the purchase of a principal residence
for the Employee (excluding mortgage payments); or
(4) Payments necessary to prevent the eviction of the Employee from
the Employee*s principal residence or foreclosure on the
mortgage on that residence.
(B) A distribution will be considered as necessary to satisfy an immediate
and heavy financial need of the Employee only if all of the following
requirements are satisfied:
(1) The hardship distribution is not in excess of the amount of the
immediate and heavy financial need of the Employee. The amount
of an immediate and heavy financial need may include the amounts
necessary to apply any federal, state, or local income taxes or
penalties reasonably anticipated to result from the
distribution.
(2) The Employee had obtained all distributions, other than hardship
distributions, and all nontaxable (at the time of the loan)
loans currently available under all plans maintained by the
Employer.
(3) The Employee is suspended from making Elective Deferral
Contributions to the Plan for at least 12 months after receipt
of the hardship distribution. In addition, the Employee must be
prohibited under the terms of the plan or an otherwise
enforceable agreement from making Elective Deferral
Contributions and Employee Contributions to all other plans
maintained by the Employer for at least 12 months after receipt
of the hardship distribution.
For this purpose, the phrase "all other plans of the Employer"
means all qualified and nonqualified plans of deferred
compensation maintained by the Employer. The phrase includes a
stock option, stock purchase, or similar plan, or a cash or
deferred arrangement that is part of a cafeteria plan within the
meaning of section 125 of the Code. However, it is does not
include the mandatory employee contribution part of a defined
benefit plan. It also does not include a health or welfare
benefit plan, including one that is part of a cafeteria plan
within the meaning of section 125 of the Code.
<PAGE>
(4) The Employee may not make Elective Deferral
Contributions to the Plan for the Employee*s taxable
year immediately following the taxable year of the
hardship distribution in excess of the applicable limit
under section 402(g) of the Code for such taxable year
less the amount of such Employee's Elective Deferral
Contributions for the taxable year of the hardship
distribution. In addition, all other plans maintained
by the Employer must limit the Employee's Elective
Deferral Contributions for the next taxable year to the
applicable limit under section 402(g) of the Code for
that year minus the Employee's Elective Deferral
Contributions for the year of the hardship distribution.
(C) The distributable amount is equal to the Employee's total
Elective Deferral Contribution as of the date of distribution,
reduced by the amount of previous distributions of Elective
Deferral Contributions on account of hardship. The Employee's
total Elective Deferral Contributions shall not include income
allocable to such Elective Deferral Contributions.
10.4 WITHDRAWAL OF ROLLOVER CONTRIBUTIONS. Once during a Plan Year a
Participant may elect to withdraw from his Participant's Account an
amount up to 100% of the value of that portion of his account
attributable to his Rollover Contributions as defined in Article IV.
Such an election shall become effective in accordance with the
Notification Section below.
10.5 NOTIFICATION. The Participant shall notify the Administrator in
writing of his election to make a withdrawal under the preceding
provisions of this Article X. Any such election shall be effective as
of the date specified in such notice, which date must be at least 15
days after such notice is filed. Payment of the withdrawal shall be
subject to the terms and conditions of Article VI.
10.6 NON-REPAYMENT. Withdrawals made in accordance with this Article X may
not be repaid.
10.7 SPOUSAL CONSENT TO WITHDRAWAL. Prior to obtaining a withdrawal in
accordance with this Article X, a married Participant must obtain
spousal consent in accordance with the provisions of Article VIII
unless such Participant meets the requirements set forth in Sections
8.1(A), (B) and (C).
<PAGE>
ARTICLE X-A
LOANS
10A.1 LOANS TO PARTICIPANTS. The Plan Administrator may make a bona fide
loan to an Employee, in an amount which, when added to the outstanding
balance of all other loans to the Participant from all qualified plans
of the Employer, does not exceed the lesser of $50,000 reduced by the
excess of the Participant's highest outstanding loan balance during the
12 months preceding the date on which the loan is made over the
outstanding loan balance on the date the new loan is made, or 50% of
the Participant's Vested Interest in his Participant's Account. Loans
may be taken from the Participant's Vested Interest in his
Participant's Account attributable to Elective Deferral Contributions,
Matching Contributions, Rollover Contributions, Prior HMS Employer
Contributions, Qualified Matching Contributions and Qualified
Nonelective Contributions. Notwithstanding any provisions in this
paragraph to the contrary, loans may not exceed a Participant's Vested
Interest attributable to these specific types of contributions.
The loan shall be made under such terms, security interest, and
conditions as the Plan Administrator deems appropriate, provided,
however, that all loans granted hereunder:
(A) are available to all Participants and Beneficiaries, who are
parties-in-interest pursuant to section 3(14) of ERISA, on a
reasonably equivalent basis:
(B) are not made available to Highly Compensated Employees on a
basis greater than the basis made available to other Employees;
(C) bear a reasonable rate of interest;
(D) are adequately secured;
(E) unless a Participant meets the requirements set forth in
Sections 8.1(A), (B) and (C), are made only after a Participant
obtains the consent of his Spouse, if any, to use his
Participant'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 if the Participant's Account is used for
renegotiation, extension, renewal or other revision of the loan.
(F) are made in accordance with and subject to all of the provisions
of this Article.
10A.2 LOAN PROCEDURES. The Plan Administrator shall establish a written set
of procedures, set forth in the summary plan description, by which all
loans will be administered. Such rules, which are incorporated herein
by reference, will include, but not be limited to, the following:
(A) the person or persons authorized to administer the loan program,
identified by name or position;
(B) the loan application procedure;
(C) the basis for approving or denying loans;
(D) any limits on the types of loans permitted;
(E) the procedure for determining a "reasonable" interest rate;
(F) acceptable collateral;
(G) default conditions; and
(H) steps which will be taken to preserve Plan assets in the event
of default.
<PAGE>
ARTICLE XI
FIDUCIARY DUTIES AND RESPONSIBILITIES
11.1 GENERAL FIDUCIARY STANDARD OF CONDUCT. Each Fiduciary of the Plan
shall discharge his duties hereunder solely in the interest of the
Participants and their Beneficiaries and for the exclusive purpose of
providing benefits to Participants and their Beneficiaries and
defraying reasonable expenses of administering the Plan. Each
Fiduciary shall act with the care, skill, prudence, and diligence under
the circumstances that a prudent man acting in a like capacity and
familiar with such matters would use in conducting an enterprise of
like character and with like aims, in accordance with the documents and
instruments governing this Plan, insofar as such documents and
instruments are consistent with this standard.
11.2 SERVICE IN MULTIPLE CAPACITIES. Any Person or group of persons may
serve in more than one fiduciary capacity with respect to this Plan.
11.3 LIMITATIONS ON FIDUCIARY LIABILITY. Nothing in this Plan shall be
construed to prevent any Fiduciary from receiving any benefit to which
he may be entitled as a Participant or Beneficiary in this Plan, so
long as the benefit is computed and paid on a basis which is consistent
with the terms of this Plan as applied to all other Participants and
Beneficiaries. Nor shall this Plan be interpreted to prevent any
Fiduciary from receiving any reasonable compensation for services
rendered, or for the reimbursement of expenses properly and actually
incurred in the performance of his duties with the Plan; except that no
Person so serving who already receives full-time pay from an Employer
shall receive compensation from this Plan, except for reimbursement of
expenses properly and actually incurred.
11.4 INVESTMENT MANAGER. When an Investment Manager has been appointed, he
is required to acknowledge in writing that he has undertaken a
Fiduciary responsibility with respect to the Plan.
<PAGE>
ARTICLE XII
THE ADMINISTRATOR
12.1 DESIGNATION AND ACCEPTANCE. The Employer shall designate a person or
persons to serve as Administrator under the Plan and such person, by
joining in the execution of this Plan and Trust Agreement accepts such
appointment and agrees to act in accordance with the terms of the Plan.
12.2 DUTIES AND AUTHORITY. The Administrator shall administer the Plan in a
nondiscriminatory manner for the exclusive benefit of Participants and
their Beneficiaries.
The Administrator shall perform all such duties as are necessary to
operate, administer, and manage the Plan in accordance with the terms
thereof, including but not limited to the following:
(A) To determine all questions relating to a Participant's coverage
under the Plan;
(B) To maintain all necessary records for the administration of the
Plan;
(C) To compute and authorize the payment of retirement income and
other benefit payments to eligible Participants and
Beneficiaries;
(D) To interpret and construe the provisions of the Plan and to make
regulations which are not inconsistent with the terms thereof;
and
(E) To advise or assist Participants regarding any rights, benefits,
or elections available under the Plan.
The Administrator shall take all such actions as are necessary to
operate, administer, and manage the Plan as a retirement program which
is at all times in full compliance with any law or regulation affecting
this Plan.
The Administrator may allocate certain specified duties of plan
administration to an individual or group of individuals who, with
respect to such duties, shall have all reasonable powers necessary or
appropriate to accomplish them.
12.3 EXPENSES AND COMPENSATION. All expenses of administration may be paid
out of the Trust fund unless paid by the Employer. Such expenses shall
include any expenses incident to the functioning of the Administrator,
including, but not limited to, fees of accountants, counsel, and other
specialists and their agents, and other costs of administering the
Plan. Until paid, the expenses shall constitute a liability of the
Trust fund. However, the Employer may reimburse the Trust fund for any
administration expense incurred. Any administration expense paid to
the Trust fund as a reimbursement shall not be considered an Employer
Contribution. Nothing shall prevent the Administrator from receiving
reasonable compensation for services rendered in administering this
Plan, unless the Administrator already receives full-time pay from any
Employer adopting the Plan.
12.4 INFORMATION FROM EMPLOYER. To enable the Administrator to perform his
functions, the Employer shall supply full and timely information to the
Administrator on all matters relating to this Plan as the Administrator
may require.
12.5 ADMINISTRATIVE COMMITTEE; MULTIPLE SIGNATURES. In the event that more
than one person has been duly nominated to serve on the Administrative
Committee and has signified in writing the acceptance of such
designation, the signature(s) of one or more persons may be accepted by
an interested party as conclusive evidence that the Administrative
Committee has duly authorized the action therein set forth and as
representing the will of and binding upon the whole Administrative
Committee. No person receiving such documents or written instructions
and acting in good faith and in reliance thereon shall be obliged to
ascertain the validity of such action under the terms of this Plan and
Trust. The Administrative Committee shall act by a majority of its
members at the time in office and such action may be taken either by a
vote at a meeting or in writing without a meeting.
12.6 RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR. The Administrator,
or any member of the Administrative Committee, may resign at any time
by delivering to the Employer a written notice of resignation, to take
effect at a date specified therein, which shall not be less than 30
days after the delivery thereof, unless such notice shall be waived.
The Administrator may be removed with or without cause by the Employer
by delivery of written notice of removal, to take effect at a date
specified therein, which shall be not less than 30 days after delivery
thereof, unless such notice shall be waived.
The Employer, upon receipt of or giving notice of the resignation or
removal of the Administrator, shall promptly designate a successor
Administrator who must signify acceptance of this position in writing.
In the event no successor is appointed, the Board of Directors of the
Employer will function as the Administrative Committee until a new
Administrator has been appointed and has accepted such appointment.
12.7 INVESTMENT MANAGER. The Administrator may appoint, in writing, an
Investment Manager or Managers to whom is delegated the authority to
manage, acquire, invest, or dispose of all or any part of the Trust
assets. With regard to the assets entrusted to his care, the
Investment Manager shall provide written instructions and directions to
the Trustee, who shall in turn be entitled to rely upon such written
direction. This appointment and delegation shall be evidenced by a
signed written agreement.
12.8 DELEGATION OF DUTIES. The Administrator shall have the power, to the
extent permitted by law, to delegate the performance of such Fiduciary
and non-Fiduciary duties, responsibilities, and functions as the
Administrator shall deem advisable for the proper management and
administration of the Plan in the best interests of the Participants
and their Beneficiaries.
<PAGE>
ARTICLE XIII
PARTICIPANTS' RIGHTS
13.1 GENERAL RIGHTS OF PARTICIPANTS AND BENEFICIARIES. The Plan is
established and the Trust assets are held for the exclusive purpose of
providing benefits for such Employees and their Beneficiaries as have
qualified to participate under the terms of the Plan.
13.2 FILING A CLAIM FOR BENEFITS. A Participant or Beneficiary or the
Employer acting in his behalf, shall notify the Administrator of a
claim of benefits under the Plan. Such request shall be in writing to
the Administrator and shall set forth the basis of such claim and shall
authorize the Administrator to conduct such examinations as may be
necessary to determine the validity of the claim and to take such steps
as may be necessary to facilitate the payment of any benefits to which
the Participant or Beneficiary may be entitled under the terms of the
Plan.
A decision by the Administrator shall be made promptly and not later
than 90 days after the Administrator's receipt of the claim of benefits
under the Plan, unless special circumstances require an extension of
the time for processing, in which case a decision shall be rendered as
soon as possible, but not later than 180 days after the initial receipt
of the claim of benefits.
13.3 DENIAL OF CLAIM. Whenever a claim for benefits by any Participant or
Beneficiary has been denied by a Plan Administrator, a written notice,
prepared in a manner calculated to be understood by the Participant,
must be provided, setting forth (1) the specific reasons for the
denial; (2) the specific reference to pertinent Plan provisions on
which the denial is based; (3) a description of any additional material
or information necessary for the claimant to perfect the claim and an
explanation of why such material or information is necessary; and (4)
an explanation of the Plan's claim review procedure.
13.4 REMEDIES AVAILABLE TO PARTICIPANTS. A Participant or Beneficiary may
(1) request a review by a Named Fiduciary, other than the
Administrator, upon written application to the Plan; (2) review
pertinent Plan documents; and (3) submit issues and comments in writing
to a Named Fiduciary. A Participant or Beneficiary shall have 60 days
after receipt by the claimant of written notification of a denial of a
claim to request a review of a denied claim.
A decision by a Named Fiduciary shall be made promptly and not later
than 60 days after the Named Fiduciary's receipt of a request for
review, unless special circumstances require an extension of the time
for processing, in which case a decision shall be rendered as soon as
possible, but not later than 120 days after receipt of a request
for review. The decision on review by a Named Fiduciary shall be in
writing and shall include specific reasons for the decision, written in
a manner calculated to be understood by the claimant, and specific
references to the pertinent Plan provisions on which the decision is
based.
A Participant or Beneficiary shall be entitled, either in his own name
or in conjunction with any other interested parties, to bring such
actions in law or equity or to undertake such administrative actions or
to seek such relief as may be necessary or appropriate to compel the
disclosure of any required information, to enforce or protect
his rights, to recover present benefits due to him, or to clarify his
rights to future benefits under the Plan.
13.5 REINSTATEMENT OF BENEFIT. In the event any portion of a distribution
which is payable to a Participant or a Beneficiary shall remain unpaid
on account of the inability of the Plan Administrator, after diligent
effort, to locate such Participant or Beneficiary, the amount so
distributable shall be treated as a Forfeiture under the Plan. If a
claim is made by the Participant or Beneficiary for any benefit
forfeited under this section, such benefit shall be reinstated.
13.6 LIMITATION OF RIGHTS. Participation hereunder shall not grant any
Participant the right to be retained in the Service of the Employer or
any other rights or interest in the Plan or Trust fund other than those
specifically herein set forth.
13.7 PARTICIPANT CONTRIBUTIONS. Each Participant, regardless of his length
of Service with the Employer, shall be fully vested (100%) at all times
in any portion of his Participant's Account attributable to the
following:
- Elective Deferral Contributions
- Rollover Contributions.
13.8 MERGERS OR TRANSFERS. In the case of any merger or consolidation with
or transfer of assets or liabilities to any other qualified plan after
September 2, 1974, the following conditions must be met:
(A) The sum of the account balances in each plan shall equal the
fair market value (determined as of the date of the merger or
transfer as if the plans had then terminated) of the entire plan
assets.
(B) The assets of each plan shall be combined to form the assets of
the plan as merged (or transferred).
(C) Immediately after the merger (or transfer), each Participant in
the plan merged (or transferred) shall have an account balance
equal to the sum of the account balances the Participant had in
the plans immediately prior to the merger (or transfer).
(D) Immediately after the merger (or transfer) each Participant in
the plan merged (or transferred) shall be entitled to the same
optional benefit forms as he was entitled to immediately prior
to the merger (or transfer).
In the case of any merger or consolidation with or transfer of assets
or liabilities to any defined benefit plan after September 2, 1974, one
of the plans before such merger, consolidation, or transfer shall be
converted into the other type of plan and either the rules described
above, applicable to the merger of two defined contribution plans, or
the rules applicable to the merger of two defined benefit plans, as
appropriate, shall be applied.
13.9 PARTICIPANT'S ACCOUNT AND VALUATION. A Participant's Account shall be
maintained on behalf of each Participant until such account is
distributed in accordance with the terms of this Plan. At least once
per year, as of the last day of the Plan Year, each Participant's
Account shall be adjusted for any earnings, gains, losses,
contributions, withdrawals, loans, and expenses, attributable to such
Plan Year, in order to obtain a new valuation of the Participant's
Account.
13.10 INVESTMENT OF CONTRIBUTIONS. Each Participant and/or Beneficiary shall
have the exclusive authority to direct the investment of contributions
made to his Participant's Account. In accordance with the procedures
established by the Plan Administrator, the Participant and/or
Beneficiary shall elect to have a specified percentage vested in one or
more investment funds, as long as the designated percentage for each
fund is a whole number, and the sum of the percentages allocated is
equal to 100%. In addition, the Participant and/or Beneficiary may
change such election four times per Plan Year, once every three months.
All investment changes are subject to the rules of the investment
fund(s) in which the Participant's Account is or is to be invested.
13.11 TRANSFERS BETWEEN INVESTMENT FUNDS. A Participant and/or Beneficiary
may designate amounts invested pursuant to the section above to be
transferred between the investment funds four times per Plan Year,
once every three months, in accordance with the procedures established
by the Plan Administrator.
Notwithstanding the above, the transfer of amounts between investment
funds shall be subject to the rules of the investment funds in which
the Participant's Account is invested or is to be invested.
<PAGE>
ARTICLE XIV
AMENDMENT OR TERMINATION OF THE PLAN
14.1 AMENDMENT OF PLAN. The Employer shall have the right from time to time
to modify or amend, in whole or in part, any or all provisions of the
Plan, provided that a Board of Directors' resolution pursuant to such
modification or amendment shall first be adopted and provided further
that the modification or amendment is signed by the Employer, the
Administrator and the Trustee. Upon any such modification or amendment
the Administrator and the Trustee shall be furnished a copy thereof.
No amendment shall deprive any Participant or Beneficiary of any Vested
Interest hereunder. Any Participant having not less than three Years
of Service shall be permitted to elect, in writing, to have his Vesting
Percentage computed under the Plan without regard to such amendment.
The period during which the election must be made by the Participant
shall begin no later than the date the Plan Amendment is adopted and
end no later than after the latest of the following dates:
(A) The date which is 60 days after the day the amendment is
adopted; or
(B) The date which is 60 days after the day the amendment becomes
effective; or
(C) The date which is 60 days after the day the Participant is
issued written notice of the amendment by the Employer or
Administrator.
Such written election by a Participant shall be made to the
Administrator.
No amendment to the Plan shall decrease a Participant's Account balance
or eliminate an optional form of distribution. Notwithstanding the
preceding sentence, a Participant's Account balance may be reduced to
the extent permitted under Internal Revenue Code section 412(c)(8).
Furthermore, no amendment to the Plan shall have the effect of
decreasing a Participant's Vested Interest determined without regard to
such amendment as of the later of the date such amendment is adopted or
the date it becomes effective.
14.2 CONDITIONS OF AMENDMENT. The Employer shall not make any amendment
which would cause the Plan to lose its status as a qualified plan
within the meaning of section 401(a) of the Code.
14.3 TERMINATION OF THE PLAN. The Employer intends to continue the Plan
indefinitely for the benefit of its Employees, but reserves the right
to terminate the Plan at any time by resolution of its Board of
Directors. Upon such termination, the liability of the Employer to
make contributions hereunder shall terminate.
14.4 FULL VESTING. Upon the termination or partial termination of the Plan,
or upon complete discontinuance of Employer contributions, the rights
of all affected Participants in and to the amounts credited to each
such Participant's Account shall be 100% vested and nonforfeitable.
14.5 DISTRIBUTIONS UPON PLAN TERMINATION. If this Plan is terminated and
the Employer does not maintain or establish another defined
contribution plan, pursuant to Code section 401(k)( 10)(A)(i), each
Participant shall receive a total distribution, in the form of a
lump-sum distribution as defined in Code section 401(k)(10)(B)(ii), of
his Participant's Account in accordance with the terms and conditions
of Article VI.
However, if this Plan is terminated and the Employer does maintain or
establish another defined contribution plan as discussed in the above
paragraph, or if the Plan is only partially terminated, each
Participant shall receive a total distribution of his Participant's
Account, excluding any amounts attributable to Elective Deferral
contributions and contributions made by the Employer designated as
401(k) contributions in accordance with the terms and conditions of
Article VI. In such a situation, any amounts in a Participant's
Account attributable to Elective Deferral Contributions and
contributions made by the Employer designated as 401(k) contributions
may be distributed only upon the occurrence of an event described in
Article VI.
No Participant and/or spousal consent will be required for a
distribution where no successor plan exists. However, if the Employer
does maintain a successor plan, Participant and/or spousal consent is
required for a distribution exceeding $3,500. The Participant's
Account will be transferred to such successor plan if the required
consents are not received.
14.6 APPLICATION OF FORFEITURES. Upon the termination of the Plan, any
Forfeitures which have not been allocated as of such termination shall
be allocated and credited to each Participant's Account of the then
Active Participants in the same manner as the last contribution made by
the Employer under the Plan.
14.7 APPROVAL BY THE INTERNAL REVENUE SERVICE. Notwithstanding any other
provisions of this Plan, the Employer's adoption of this Plan is
subject to the condition precedent that the Employer's Plan shall be
approved and qualified by the Internal Revenue Service as meeting the
requirements of section 401(a) of the Internal Revenue Code and that
the Trust established hereunder shall be entitled to exemption under
the provisions of section 501(a). In the event the Plan initially
fails to qualify and the Internal Revenue Service issues a final ruling
that the Employer's Plan or Trust fails to so qualify as of the
Effective Date, all liability of the Employer to make further
contributions hereunder shall cease. The Plan Administrator, Trustee
and any other Named Fiduciary shall be notified immediately by the
Employer, in writing, of such failure to qualify. Upon such
notification, the value of the Participants' Accounts shall be
distributed in cash to the Employer, subject to the terms and
conditions of Article VI.
That portion of such distribution which is attributable to Participant
Contributions as specified in Section 13.7, if any, shall be paid to
the Participant, and the balance of such distribution shall be paid to
the Employer.
14.8 SUBSEQUENT UNFAVORABLE DETERMINATION. If the Employer is notified
subsequent to initial favorable qualification that the Plan is no
longer qualified within the meaning of section 401(a) of the Internal
Revenue Code, or that the Trust is no longer entitled to exemption
under the provisions of section 501(a), and if the Employer shall fail
within a reasonable time to make any necessary changes in order that
the Plan and/or Trust shall so qualify, the Participants' Accounts
shall be fully vested and nonforfeitable and shall be disposed
of as if the Plan had terminated, in the manner set forth in this
Article XIV.
<PAGE>
ARTICLE XV
SUBSTITUTION OF PLANS
15.1 SUBSTITUTION OF PLANS. Subject to the provisions of Section 13.8 the
Employer may substitute an individually designed plan or a master or
prototype plan for this Plan without terminating this Plan as embodied
herein and this shall be deemed to constitute an amendment and
restatement in its entirety of this Plan as heretofore adopted by the
Employer; provided, however, that the Employer shall have certified to
the Trustee that this Plan is being continued on a restated basis which
meets the requirements of section 401(a) of the Internal Revenue Code
and ERISA.
15.2 TRANSFER OF ASSETS. Upon 90 days written notification from the
Employer and the Trustee that a different plan meeting the requirements
set forth in Section 15.1 above has been executed and entered into by
the Administrator and the Employer, and after the Trustee has been
furnished the Employer's certification in writing that the Employer
intends to continue the Plan as a qualified Plan under section 401(a)
of the Internal Revenue Code and ERISA, assets which represent the
value of all Participant's Accounts may be transferred in accordance
with the instructions received from or on behalf of the Employer. The
Trustee may rely fully on the representations or directions of the
Employer with respect to any such transfer and shall be fully protected
and discharged with respect to any such transfer made in accordance
with such representations, instructions, or directions.
<PAGE>
ARTICLE XVI
MISCELLANEOUS
16.1 NON-REVERSION. This Plan has been established by the Employer for the
exclusive benefit of the Participants and their Beneficiaries. Except
as otherwise provided in Sections 14.7, 16.7, and 16.8, under no
circumstances shall any funds contributed hereunder, at any time,
revert to or be used by the Employer, nor shall any such funds
or assets of any kind be used other than for the benefit of the
Participants or their Beneficiaries.
16.2 GENDER AND NUMBER. When necessary to the meaning hereof, and except
when otherwise indicated by the context, either the masculine or the
neuter pronoun shall be deemed to include the masculine, the feminine,
and the neuter, and the singular shall be deemed to include the plural.
16.3 REFERENCE TO THE CODE AND ERISA. Any reference to any section of the
Internal Revenue Code, ERISA, or to any other statute or law shall be
deemed to include any successor law of similar import.
16.4 GOVERNING LAW. The Plan and Trust shall be governed and construed in
accordance with the laws of the state where the Trustee has its
principal office if the Trustee is a corporation or an association,
otherwise under the laws of the state where the Employer has its
principal office.
16.5 COMPLIANCE WITH THE CODE AND ERISA. This Plan is intended to comply
with all requirements for qualification under the Internal Revenue Code
and ERISA, and if any provision hereof is subject to more than
one interpretation or any term used herein is subject to more than one
construction, such ambiguity shall be resolved in favor of that
interpretation or construction which is consistent with the Plan being
so qualified. If any provision of the Plan is held invalid or
unenforceable, such invalidity or unenforceability shall not affect any
other provisions, and this Plan shall be construed and enforced as if
such provision had not been included.
16.6 NON-ALIENATION. It is a condition of the Plan, and all rights of each
Participant shall be subject thereto, that no right or interest of any
Participant in the Plan shall be assignable or transferable in whole or
in part, either directly or by operation of law or otherwise,
including, but without limitation, execution, levy, garnishment,
attachment, pledge, bankruptcy or in any other manner, and no right or
interest of any Participant in the Plan shall be liable for or subject
to any obligation or liability of such Participant. The preceding
sentence shall not preclude the enforcement of a federal tax levy made
pursuant to section 6331 of the Code or the collection by the United
States on a judgement resulting from an unpaid tax assessment.
16.7 CONTRIBUTION RECAPTURE. Notwithstanding any other provisions of this
Plan, (1) in the case of a contribution which is made by an Employer by
a mistake of fact, Section 16.1 shall not prohibit the return of such
contribution to the Employer within one year after the payment of the
contribution, and (2) if a contribution is conditioned upon the
deductibility of the contribution under section 404 of the Code, then,
to the extent the deduction is disallowed, Section 16.1 shall not
prohibit the return to the Employer of such contribution (to the
extent disallowed) within one year after the disallowance of the
deduction. The amount which may be returned to the Employer is the
excess of (1) the amount contributed over (2) the amount that would
have been contributed had there not occurred a mistake of fact or a
mistake in determining the deduction. Earnings attributable to the
excess contribution may not be returned to the Employer, but losses
attributable thereto must reduce the amount to be so returned.
Furthermore, if the withdrawal of the amount attributable to the
mistaken contribution would cause the balance of the individual account
of any Participant to be reduced to less than the balance which would
have been in the account had the mistaken amount not been contributed,
then the amount to be returned to the Employer would have to be limited
so as to avoid such reduction.
16.8 QUALIFIED DOMESTIC RELATIONS ORDERS. Notwithstanding any other
provisions of this Plan, the Participant's Account may be segregated
and distributed pursuant to a Qualified Domestic Relations Order within
the meaning of Internal Revenue Code section 414(p). The Plan
Administrator shall establish procedures for determining if a Domestic
Relations Order is qualified within the meaning of section 414(p).
<PAGE>
ARTICLE XVI-A
TOP-HEAVY PROVISIONS
16A.1 DEFINITIONS. The following definitions are atypical terms used only in
this Article XVI-A.
(A) Compensation. The term Compensation, whenever used in this
Article XVI-A, means Compensation as defined in Article V of the
Plan, but includes the amount of any elective contributions made
by the Employer on the Employee's behalf to a cafeteria plan
established in accordance with the provisions of Code section
125, a qualified cash or deferred arrangement in accordance with
the provisions of Code section 402(e)(3), a simplified employee
pension plan in accordance with the provisions of Code section
402(h), or a tax sheltered annuity plan maintained in accordance
with the provisions of Code section 403(b).
(B) Key Employee. The term Key Employee means any Employee or
former Employee (including deceased Employees) of the Employer
who at any time during the Plan Year or the four preceding Plan
Years was:
(1) An officer of the Employer, but in no event if there are
more than 500 Employees, shall more than 50 Employees be
considered Key Employees. If there are less than 500
Employees, in no event shall the greater of three
Employees or 10% of all Employees, be taken into account
under this Subsection as Key Employees. If the number
of officers is limited by the terms of the preceding
sentence, the Employees with the highest Compensation
will be considered to be officers.
In no event shall an officer whose annual Compensation
is less than 50% of the dollar limitation in effect
under Code section 415(b)(1)(A) as adjusted from time to
time, be a Key Employee for any such Plan Year.
In making a determination under this Subsection,
Employees who have not completed six months of Service
by the end of the applicable Plan Year, Employees who
normally work less than 17-1/2 hours per week, Employees
who normally work less than six months during a year,
Employees who have not attained 21, and nonresident
aliens who receive no earned income from U.S. sources,
shall be excluded.
Also excluded under the above paragraph are Employees
who are covered by an agreement which the Secretary of
Labor finds to be a collective bargaining agreement.
Such Employees will be excluded only if retirement
benefits were the subject of good faith bargaining, 90%
of the Employees of the Employer are covered by the
agreement, and the Plan covers only Employees who are
not covered by the agreement.
(2) One of the 10 Employees who has annual Compensation
greater than the amount in effect under Internal Revenue
Code section 415(c)(1)(A) and who owns (or is considered
to own within the meaning of Internal Revenue Code
section 318, as modified by section 416(i)(1)(B)(iii))
both more than 1/2% interest and the largest interest in
the Employer. If two or more Employees own equal
interests in the Employer, the ranking of ownership
share will be in descending order of such Employees'
Compensation. If the Employer is other than a
corporation, the term "interest" as used herein shall
refer to capital or profits interest.
(3) An Employee who owns (or is considered to own within the
meaning of Internal Revenue Code section 318, as
modified by section 416(i)(1)(B)(iii)) more than 5% of
the outstanding stock of the Employer or stock
possessing more than 5% of the total combined voting
power of all stock of the Employer. If the Employer is
other than a corporation, an Employee who owns, or is
considered to own, more than 5% of the capital or
profits interest in the Employer. The determination of
5% ownership shall be made separately for each member of
a controlled group of corporations (as defined in Code
section 414(b)), or of a group of trades or businesses
(whether or not incorporated) that are under common
control (as defined in Code section 414(c)), or of an
affiliated service group (as defined in Code section
414(m)).
(4) An Employee who owns (or is considered to own within the
meaning of Internal Revenue Code section 318, as
modified by section 416(i)(1)(B)(iii)) more than 1% of
the outstanding stock of the Employer or stock
possessing more than 1% of the total combined voting
power of all stock of the Employer, and whose annual
Compensation is more than $150,000. If the Employer is
other than a corporation, an Employee who owns, or is
considered to own, more than 1% of the capital or
profits interest in the Employer, and whose annual
Compensation is more than $150,000.
For the purposes of paragraphs (2), (3) and (4) above, if an
Employee's ownership interest changes during a given Plan Year,
his ownership interest for that Plan Year is the largest
interest owned at any time during the Plan Year.
The Beneficiary of any deceased Employee who was a Key Employee
shall be considered a Key Employee for the same period as the
deceased Employee would have been so considered.
(C) Non-Key Employee. The term Non-Key Employee means any Employee
or former Employee of the Employer who is not a Key Employee.
The Beneficiary of any deceased Employee who is a Non-Key
Employee shall be considered a Non-Key Employee for the same
period as the deceased Employee would have been so considered.
(D) Determination Date. The term Determination Date means, with
respect to a Plan Year, the last day of the preceding Plan Year,
or, in the case of the first Plan Year of a plan, the last day
of the first Plan Year.
(E) Valuation Date. The term Valuation Date means, with respect to
a Plan Year, the last day of the preceding Plan Year and is the
date on which Account Balances are valued for the purpose of
determining the Plan's Top-Heavy status.
(F) Account Balance. The term Account Balance means the value of
the Participant's Account standing to the credit of a
Participant, a former Participant, or the Beneficiary of a
former Participant, as the case may be, as of the Valuation
Date. Such Account Balance shall include any contributions due
as of the Determination Date and all distributions made to the
Participant (or former Participant or Beneficiary, as the case
may be) during the Plan Year or the preceding four Plan Years,
except for distributions of Related Rollovers. However, the
Account Balance shall not include any deductible Employee
Contributions made pursuant to Internal Revenue Code section 219
or Unrelated Rollovers made to the Plan after December 31, 1983.
A Related Rollover is a Rollover Contribution or Transfer that
either was not initiated by the Employee or was made to a plan
maintained by the same Employer.
An Unrelated Rollover is a Rollover Contribution or Transfer
that was initiated by the Employee and was made from a plan
maintained by one employer to a plan maintained by another
employer.
For purposes of this Subsection (F), the term Employer shall
include all employers that are required to be aggregated in
accordance with Internal Revenue Code sections 414(b), (c) or
(m).
(G) Required Aggregation Group. The term Required Aggregation Group
means all of the plans of the Employer which cover a Key
Employee, including any such plan maintained by the Employer
pursuant to the terms of a collective bargaining agreement, and
each other plan of the Employer which enables any plan in which
a Key Employee participates to satisfy the requirements of
Internal Revenue Code sections 401(a)(4) or 410.
(H) Permissive Aggregation Group. The term Permissive Aggregation
Group means all of the plans of the Employer which are included
in the Required Aggregation Group plus any plans of the Employer
which provide comparable benefits to the benefits provided by
the plans in the Required Aggregation Group and are not included
in the Required Aggregation Group, but which satisfy the
requirements of Internal Revenue Code sections 401 (a)(4) and
410 when considered together with the Required Aggregation
Group, including any plan maintained by the Employer pursuant to
a collective bargaining agreement which does not include a Key
Employee.
(I) Top-Heavy Plan. The Plan is Top-Heavy if it meets the
requirements of Section 16A.2.
(J) Super Top-Heavy Plan. The Plan is Super Top-Heavy if it meets
the requirements of Section 16A.3.
(K) Terminated Plan. A plan shall be considered to be a Terminated
Plan if it:
(1) has been formally terminated;
(2) has ceased crediting service for benefit accruals and
vesting; or
(3) has been or is distributing all plan assets to
Participants (or Beneficiaries) as soon as
administratively possible.
With the exception of the Minimum Employer Contribution
Requirements and the Minimum Vesting Requirements, the Top-Heavy
provisions of this Article XVI-A will apply to any Terminated
Plan which was maintained at any time during the five years
ending on the Determination Date.
(L) Frozen Plan. A plan shall be considered to be a Frozen Plan if
all benefit accruals have ceased but all assets have not been
distributed to Participants or Beneficiaries. The Top-Heavy
provisions of this Article XVI-A will apply to any such Frozen
Plan.
16A.2 TOP-HEAVY PLAN STATUS. This Plan shall be determined to be Top-Heavy
if, as of the Determination Date, the aggregate of the Account Balances
of Key Employees exceeds 60% of the aggregate of the Account Balances
of all Employees covered by the Plan. The determination of whether the
Plan is Top-Heavy shall be made after aggregating all plans in the
Required Aggregation Group, and after aggregating any other plans which
are in the Permissive Aggregation Group, if such permissive aggregation
thereby eliminates the Top-Heavy status of any plan within such
Required Aggregation Group.
In determining whether this Plan is Top Heavy, the Account Balance of a
former Key Employee who is now a Non-Key Employee will be disregarded.
Likewise, for Plan Years beginning after December 31, 1984, the
Account Balance of any Employee who has not performed an Hour of
Service during the five-year period ending on the Determination Date
will be excluded.
16A.3 SUPER TOP-HEAVY PLAN STATUS. This Plan shall be determined to be Super
Top-Heavy if, as of the Determination Date, the Plan would meet the
test specified in Section 16A.2 above, if 90% were substituted for
60% in each place where it appears. The Plan may be permissively
aggregated in order to avoid being Super Top-Heavy.
16A.4 TOP-HEAVY REQUIREMENTS. Notwithstanding anything in the Plan to the
contrary, if the Plan is Top-Heavy with respect to any Plan Year
beginning after December 31, 1983, then the Plan shall meet the
following requirements for such Plan Year:
(A) Compensation Limit. The annual Compensation of each Participant
taken into account under the Plan shall not exceed $150,000;
however, such dollar limitation shall be adjusted to take into
account any adjustments made by the Secretary of the Treasury or
his delegate pursuant to Internal Revenue Code section
416(d)(2).
(B) Minimum Employer Contribution Requirements. A Minimum Employer
Contribution of 3% of each Eligible Employee's Compensation will
be made on behalf of each Eligible Employee in the Plan.
If the actual Employer Contribution made or required to be made
for Key Employees is less than 3%, the Minimum Employer
Contribution required hereunder shall not exceed the percentage
contribution made for the Key Employee for whom the percentage
of Employer Contributions and Forfeitures relative to the first
$150,000 of Compensation is the highest for the Plan Year after
taking into account contributions or benefits under other
qualified plans in the Plan's Required Aggregation Group.
However, if a Participant in this Plan is also a participant in
a defined benefit plan maintained by the Employer, such
Participant shall receive the Top-Heavy minimum benefit under
the defined benefit plan in lieu of the Minimum Employer
Contribution described herein. Such minimum benefit will be
equal to the Participant's average yearly Compensation during
his five highest-paid consecutive years, multiplied by the
lesser of 2% per Year of Service or 20%. Compensation periods
and Years of Service to be taken into account in the calculation
of this benefit shall be subject to any limitations set forth in
the defined benefit plan.
For any Limitation Year in which this Plan is Top-Heavy but not
Super Top-Heavy, the Minimum Employer Contribution shall be
increased to 4% of each Eligible Employee's Compensation in
order to preserve the use of the factor 1.25 in the denominators
of the fractions described in Section 5.4 (B) (1) and Section
5.4 (D) (1). A Participant who receives the Top-Heavy minimum
benefit in lieu of the Minimum Employer Contribution shall
receive an increased minimum benefit equal to the Participant's
average yearly Compensation during his five highest-paid
consecutive years, multiplied by the lesser of 3% per Year of
Service or 20% plus one percentage point (to a maximum of 10
percentage points) for each year that this Plan is maintained.
Compensation periods and Years of Service to be taken into
account in the calculation of this increased minimum benefit
shall be subject to any limitations set forth in the defined
benefit plan.
For any Limitation Year in which this Plan is Super Top-Heavy,
the factor of 1.25 in the denominators of the fractions
described in Sections 5.4 (B) (1) and 5.4 (D) (1) shall be
reduced to 1.0. The Minimum Employer Contribution payable in
such years shall be 3% of each Eligible Employee's Compensation
and the defined benefit Top-Heavy minimum benefit shall be
average Compensation multiplied by the lesser of 2% per Year of
Service or 20%.
Eligible Employees are all Non-Key Employees who are
Participants in the Plan as of the last day of the Plan Year
regardless of whether they had completed 1,000 Hours of Service
during the Plan Year. Also included are Non-Key Employees who
would have been Participants as of the last day of the Plan Year
except:
- The Employee's Compensation was below a required minimum
level; or
- The Employee chose not to make Elective Deferral
Contributions when he was eligible to do so.
In computing the Minimum Employer Contribution under this
Subsection, Forfeitures allocated to a Participant's Account
shall be included in the Minimum Employer Contribution.
(C) Minimum Vesting Requirements. The vesting provisions set forth
in the definition of Vesting Percentage in Article I shall
continue to apply whether or not the Plan is a Top-Heavy Plan.
Such vesting provisions satisfy the requirements of section
416(b) of the Internal Revenue Code, as applicable to Top-Heavy
Plans.
<PAGE>
ARTICLE XVII
TRUST AGREEMENT
17.1 CREATION AND ACCEPTANCE OF TRUST. The Trustee, by joining in the
execution of the Plan and trust agreement, accepts the Trust hereby
created and agrees to act in accordance with the express terms and
conditions herein stated.
17.2 TRUSTEE CAPACITY; CO-TRUSTEES. The Trustee may be a bank, trust
company or other corporation possessing trust powers under applicable
state or federal law or one or more individuals or any combination
thereof.
When two or more persons serve as Trustee, they are specifically
authorized, by a written agreement between themselves, to allocate
specific responsibilities, obligations or duties among themselves. An
original copy of such written agreement is to be delivered to the
Administrator.
17.3 RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR TRUSTEE. Any Trustee
may resign at any time by delivering to the Administrator a written
notice of resignation, to take effect at a date specified therein,
which shall not be less than 30 days after the delivery thereof, unless
such notice shall be waived.
The Trustee may be removed with or without cause by the Board of
Directors by delivery of a written notice of removal, to take effect at
a date specified therein, which shall not be less than 30 days after
delivery thereof, unless such notice shall be waived.
In the case of the resignation or removal of a Trustee, the Trustee
shall have the right to a settlement of its account, which may be made,
at the option of the Trustee, either (1) by judicial settlement in an
action instituted by the Trustee in a court of competent jurisdiction,
or (2) by written agreement of settlement between the Trustee
and the Administrator.
Upon such settlement, all right, title and interest of such Trustee in
the assets of the Trust and all rights and privileges under this
Agreement theretofore vested in such Trustee shall vest in the
successor Trustee, and thereupon all future liability of such Trustee
shall terminate; provided, however, that the Trustee shall execute,
acknowledge and deliver all documents and written instruments which are
necessary to transfer and convey the right, title and interest in the
Trust assets, and all rights and privileges to the successor Trustee.
The Board of Directors, upon receipt of notice of the resignation or
removal of the Trustee, shall promptly designate a successor Trustee,
whose appointment is subject to acceptance of this Trust in writing and
shall notify in writing the insurance company of such successor
Trustee.
17.4 TAXES, EXPENSES AND COMPENSATION OF TRUSTEE. The Trustee shall deduct
from and charge against the Trust fund any taxes paid by it which may
be imposed upon the Trust fund or the income thereof or which the
Trustee is required to pay with respect to the interest of any person
therein.
The Trustee shall be paid such reasonable compensation as shall from
time to time be agreed upon in writing by the Employer and the Trustee.
An individual serving as Trustee who already receives full-time pay
from the Employer shall not receive compensation from the Plan. In
addition, the Trustee shall be reimbursed for any reasonable expenses,
including reasonable counsel fees incurred by it as Trustee. Such
compensation and expense shall be paid from the Trust fund unless paid
or advanced by the Employer.
17.5 TRUSTEE ENTITLED TO CONSULTATION. The Trustee shall be entitled to
advice of counsel, which may be counsel for the Plan or the Employer,
in any case in which the Trustee shall deem such advice necessary.
With the exception of those powers and duties specifically allocated to
the Trustee by the express terms of this Plan, it shall not be the
responsibility of the Trustee to interpret the terms of the Plan or
Trust and the Trustee may request, and is entitled to receive guidance
and written direction from the Administrator on any point requiring
construction or interpretation of the Plan documents.
17.6 RIGHTS, POWERS AND DUTIES OF TRUSTEE. The Trustee shall have the
following rights, powers, and duties:
(A) The Trustee shall be responsible for the safekeeping and
administering of the assets of this Plan and Trust in accordance
with the provisions of this Agreement and any amendments
thereto. The duties of the Trustee under this Agreement shall
be determined solely by the express provisions of this Agreement
and no further duties or responsibility shall be implied.
Subject to the terms of this Plan and Trust, the Trustee shall
be fully protected and shall incur no liability in acting in
reliance upon the written instructions or directions of the
Administrator or a duly designated Investment Manager or any
other Named Fiduciary.
(B) The Trustee shall have all powers necessary or convenient for
the orderly and efficient performance of its duties hereunder,
including but not limited to those specified in this section.
The Trustee may appoint one or more administrative agents or
contract for the performance of such administrative and service
functions as it may deem necessary for the effective
installation and operation of the Plan and Trust.
(C) The Trustee shall have the power to collect and receive any and
all monies and other property due hereunder and to give full
discharge and acquittance therefor; to settle, compromise or
submit to arbitration any claims, debits or damages due or owing
to or from the Trust; to commence or defend suits or legal
proceedings wherever, in its judgment, any interest of the Trust
requires it; and to represent the Trust in all suits or legal
proceedings in any court of law or equity or before any other
body or tribunal. It shall have the power generally to do all
acts, whether or not expressly authorized, which the Trustee
in the exercise of its Fiduciary responsibility may deem
necessary or desirable for the protection of the Trust and the
assets thereof.
(D) The Trustee may temporarily hold cash balances and shall be
entitled to deposit any such funds received in a bank account or
bank accounts in the name of the Trust in any bank or banks
selected by the Trustee, including the banking department of the
Trustee, pending disposition of such funds in accordance with
the Trust. Any such deposit may be made with or without
interest.
(E) The Trustee shall deal with any assets of this Trust held or
received under this Plan only in accordance with the written
directions from the Administrator. The Trustee shall be under
no duty to determine any facts or the propriety of any action
taken or omitted by it in good faith pursuant to instructions
from the Administrator.
(F) If the whole or any part of the Trust shall become liable for
the payment of any estate, inheritance, income or other tax
which the Trustee shall be required to pay, the Trustee shall
have full power and authority to pay such tax out of any monies
or other property in its hands for the account of the person
whose interest hereunder is so liable. Prior to making any
payment, the Trustee may require such releases or other
documents from any lawful taxing authority as it shall deem
necessary. The Trustee shall not be liable for any nonpayment
of tax when it distributes an interest hereunder on instructions
from the Administrator.
(G) The Trustee shall keep a full, accurate and detailed record of
all transactions of the Trust which the Administrator shall have
the right to examine at any time during the Trustee's regular
business hours. Following the close of the fiscal year of the
Trust, or as soon as practical thereafter, the Trustee shall
furnish the Administrator with a statement of account. This
account shall set forth all receipts, disbursements and other
transactions effected by the Trustee during said year.
The Administrator shall promptly notify the Trustee in writing
of its approval or disapproval of the account. The
Administrator's failure to disapprove the account within 60 days
after receipt shall be considered an approval. The approval by
the Administrator shall be binding as to all matters embraced
in any statement to the same extent as if the account of the
Trustee had been settled by judgment or decree of a court of
competent jurisdiction under which the Trustee, Administrator,
Employer and all persons having or claiming any interest in the
Trust were parties; provided, however, that the Trustee
may have its account judicially settled if it so desires.
(H) If, at any time, there shall be a dispute as to the person to
whom payment or delivery of monies or property should be made by
the Trustee, or regarding any action to be taken by the Trustee,
the Trustee may postpone such payment, delivery or action,
retaining the funds or property involved, until such dispute
shall have been resolved in a court of competent jurisdiction or
the Trustee shall have been indemnified to its satisfaction or
until it has received written direction from the Administrator.
(I) Anything in this instrument to the contrary notwithstanding, it
shall be understood that the Trustee shall have no duty or
responsibility with respect to the determination of matters
pertaining to the eligibility of any Employee to become or
remain a Participant hereunder, the amount of benefit to which
any Participant or Beneficiary shall be entitled hereunder, all
such responsibilities being vested in the Administrator. The
Trustee shall have no duty to collect any contribution from the
Employer and shall not be concerned with the amount of any
contribution nor the application of the contribution formula.
17.7 EVIDENCE OF TRUSTEE ACTION. In the event that the Trustee is comprised
of two or more Trustees, then those Trustees may designate one such
Trustee to transmit all decisions of the Trustee and to sign all
necessary notices and other reports on behalf of the Trustee. All
notices and other reports bearing the signature of the individual
Trustee so designated shall be deemed to bear the signatures of all the
individual Trustees and all parties dealing with the Trustee are
entitled to rely on any such notices and other reports as authentic and
as representing the action of the Trustee.
17.8 INVESTMENT POLICY. This Plan has been established for the sole purpose
of providing benefits to the Participants and their Beneficiaries. In
determining its investments hereunder, the Trustee shall take account
of the advice provided by the Administrator as to funding policy and
the short and long range needs of the Plan based on the evident and
probable requirements of the Plan as to the time benefits shall be
payable and the requirements therefore.
17.9 PERIOD OF TRUST. If it shall be determined that the applicable state
law requires a limitation on the period during which the Employer's
Trust shall continue, then such Trust shall not continue for a period
longer than 21 years following the death of the last of those
Participants including future Participants who are living at the
effective date hereof. At least 180 days prior to the end of the
twenty-first year as described in the first sentence of this Section,
the Employer, the Administrator and the Trustee shall provide for the
establishment of a successor trust and transfer of Plan assets to the
successor trustee. If the applicable state law requires no such
limitation, then this Section shall not be operative.
<PAGE>
APPENDIX A
STOKELD HEALTH SERVICES CORPORATION
401(k) SALARY DEFERRAL PLAN AND TRUST
WHEREAS, Stokeld Health Services Corporation (hereinafter referred to as the
"Prior Employer") established the Stokeld Health Services Corporation 401(k)
Salary Deferral Plan and Trust (hereinafter referred to as the "Prior Plan")
effective January 1, 1992 for the benefit of its eligible Employees and their
Beneficiaries; and
WHEREAS, the Prior Employer was acquired by Value Health, Inc.;
NOW THEREFORE, effective January 1, 1993, the Prior Plan was merged and
consolidated into the Value Health, Inc. Retirement Savings Plan. As a result,
the Value Health, Inc. Retirement Savings Plan shall represent a continuation
of the Prior Plan as heretofore set forth and shall not abridge or curtail any
rights or privileges accorded to Participants under the Prior Plan. Except as
noted below, the Prior Plan will continue in accordance with the terms of the
Value Health, Inc. Retirement Savings Plan.
As referenced in the attached Plan document, the following provisions may
continue with respect to Employees of the Prior Employer:
(1) With respect to eligibility to participate in the Plan, completion of
1/2 Year of Service.
IN WITNESS WHEREOF, the Prior Employer does hereby adopt the Value Health, Inc.
Retirement Savings Plan and agree to be bound by all of its terms, conditions
and amendments except as noted above.
Executed at on
STOKELD HEALTH SERVICES CORPORATION
By
Witness
Title
<PAGE>
APPENDIX B
CENTER FOR HUMAN RESOURCES, INC.
401(k) AGE WEIGHTED PROFIT SHARING PLAN & TRUST
WHEREAS, Center for Human Resources, Inc. (hereinafter referred to as the
"Prior Employer") established the Center for Human Resources, Inc. 401(k) Age
Weighted Profit Sharing Plan & Trust (hereinafter referred to as the "Prior
Plan") effective January 1, 1991 for the benefit of its eligible Employees and
their Beneficiaries; and
WHEREAS, the Prior Employer was acquired by Value Health, Inc.;
NOW THEREFORE, effective July 1, 1994, the Prior Plan was merged and
consolidated into the Value Health, Inc. Retirement Savings Plan. As a result,
the Value Health, Inc. Retirement Savings Plan shall represent a continuation
of the Prior Plan as heretofore set forth and shall not abridge or curtail any
rights or privileges accorded to Participants under the Prior Plan. The Prior
Plan will continue in accordance with the terms of the Value Health, Inc.
Retirement Savings Plan.
IN WITNESS WHEREOF, the Prior Employer does hereby adopt the Value Health, Inc.
Retirement Savings Plan and agree to be bound by all of its terms, conditions
and amendments.
Executed at on
CENTER FOR HUMAN RESOURCES, INC.
By
Witness
Title
<PAGE>
APPENDIX C
BURKE-TAYLOR ASSOCIATES, INC.
401(k) PROFIT SHARING RETIREMENT PLAN
WHEREAS, Burke-Taylor Associates, Inc. (hereinafter referred to as the "Prior
Employer") established the Burke-Taylor Associates, Inc. 401(k) Profit Sharing
Retirement Plan (hereinafter referred to as the "Prior Plan") effective
December 1, 1988 for the benefit of its eligible Employees and their
Beneficiaries; and
WHEREAS, the Prior Employer was acquired by Value Health, Inc.;
NOW THEREFORE, effective July 1, 1994, the Prior Plan was merged and
consolidated into the Value Health, Inc. Retirement Savings Plan. As a result,
the Value Health, Inc. Retirement Savings Plan shall represent a continuation
of the Prior Plan as heretofore set forth and shall not abridge or curtail any
rights or privileges accorded to Participants under the Prior Plan. Except as
noted below, the Prior Plan will continue in accordance with the terms of the
Value Health, Inc. Retirement Savings Plan.
As referenced in the attached Plan document, the following provisions may
continue with respect to Participants in the Prior Plan:
(1) With respect to account balances accumulated prior to July 1, 1994, the
term Qualified Preretirement Survivor Annuity shall mean a survivor
Annuity for the life of the Spouse in the amount which can be purchased
with 50% of the Participant's Vested Interest.
IN WITNESS WHEREOF, the Prior Employer does hereby adopt the Value Health, Inc.
Retirement Savings Plan and agree to be bound by all of its terms, conditions
and amendments except as noted above.
Executed at on
BURKE-TAYLOR ASSOCIATES, INC.
By
Witness
Title
<PAGE>
APPENDIX D
PREFERRED HEALTH CARE SAVINGS AND RETIREMENT PLAN
WHEREAS, Preferred Health Care, LTD. (hereinafter referred to as the "Prior
Employer") established the Preferred Health Care Savings and Retirement Plan
(hereinafter referred to as the "Prior Plan") effective January 1, 1988 for the
benefit of its eligible Employees and their Beneficiaries; and
WHEREAS, the Prior Employer was acquired by Value Health, Inc.;
NOW THEREFORE, effective January 1, 1995, the Prior Plan was merged and
consolidated into the Value Health, Inc. Retirement Savings Plan. As a result,
the Value Health, Inc. Retirement Savings Plan shall represent a continuation
of the Prior Plan as heretofore set forth and shall not abridge or curtail any
rights or privileges accorded to Participants under the Prior Plan. Except as
noted below, the Prior Plan will continue in accordance with the terms of the
Value Health, Inc. Retirement Savings Plan.
As referenced in the attached Plan document, the following provisions may
continue with respect to Employees of the Prior Employer:
(1) With respect to eligibility to participate in the Plan, completion of
1/4 Year of Service.
IN WITNESS WHEREOF, the Prior Employer does hereby adopt the Value Health, Inc.
Retirement Savings Plan and agree to be bound by all of its terms, conditions
and amendments except as noted above.
Executed at on
PREFERRED HEALTH CARE, LTD.
By
Witness
Title
<PAGE>
APPENDIX E
PREFERRED WORKS, INC. 401(k) RETIREMENT PROGRAM
WHEREAS, Preferred Works, Inc. (hereinafter referred to as the "Prior
Employer") established the Preferred Works, Inc. 401(k) Retirement Program
(hereinafter referred to as the "Prior Plan") effective January 1, 1988 for the
benefit of its eligible Employees and their Beneficiaries; and
WHEREAS, the Prior Employer was acquired by Value Health, Inc.;
NOW THEREFORE, effective January 1, 1995, the Prior Plan was merged and
consolidated into the Value Health, Inc. Retirement Savings Plan. As a result,
the Value Health, Inc. Retirement Savings Plan shall represent a continuation
of the Prior Plan as heretofore set forth and shall not abridge or curtail any
rights or privileges accorded to Participants under the Prior Plan. The Prior
Plan will continue in accordance with the terms of the Value Health, Inc.
Retirement Savings Plan.
IN WITNESS WHEREOF, the Prior Employer does hereby adopt the Value Health, Inc.
Retirement Savings Plan and agree to be bound by all of its terms, conditions
and amendments.
Executed at on
PREFERRED WORKS, INC.
By
Witness
Title
<PAGE>
APPENDIX F
SQUARE LAKE CORPORATION PROFIT SHARING 401(k) PLAN
WHEREAS, Square Lake Corporation (hereinafter referred to as the "Prior
Employer") established the Square Lake Corporation Profit Sharing 401(k) Plan
(hereinafter referred to as the "Prior Plan") effective January 1, 1992 for the
benefit of its eligible Employees and their Beneficiaries; and
WHEREAS, the Prior Employer was acquired by Value Health, Inc.;
NOW THEREFORE, effective January 1, 1995, the Prior Plan was merged and
consolidated into the Value Health, Inc. Retirement Savings Plan. As a result,
the Value Health, Inc. Retirement Savings Plan shall represent a continuation
of the Prior Plan as heretofore set forth and shall not abridge or curtail any
rights or privileges accorded to Participants under the Prior Plan. Except as
noted below, the Prior Plan will continue in accordance with the terms of the
Value Health, Inc. Retirement Savings Plan.
As referenced in the attached Plan document, the following provisions may
continue with respect to Employees of the Prior Employer and/or Participants
from the Prior Plan:
(1) With respect to eligibility to participate in the Plan, completion of
90 days of employment.
(2) With respect to Participants who entered the Square Lake Corporation
Profit Sharing 401(k) Plan prior to January 1, 1995, the term Normal
Retirement Age means the date the Participant attains age 59 1/2.
IN WITNESS WHEREOF, the Prior Employer does hereby adopt the Value Health, Inc.
Retirement Savings Plan and agree to be bound by all of its terms, conditions
and amendments except as noted above.
Executed at on
SQUARE LAKE CORPORATION
By
Witness
Title
<PAGE>
APPENDIX G
DIVERSIFIED MEDICAL RETIREMENT PLAN
WHEREAS, Diversified Medical Resources Corporation (hereinafter referred to as
the "Prior Employer") established the Diversified Medical Retirement Plan
(hereinafter referred to as the "Prior Plan") effective May 1, 1990 for the
benefit of its eligible Employees and their Beneficiaries; and
WHEREAS, the Prior Employer was acquired by Value Health, Inc.;
NOW THEREFORE, effective January 1, 1995, the Prior Plan was merged and
consolidated into the Value Health, Inc. Retirement Savings Plan. As a result,
the Value Health, Inc. Retirement Savings Plan shall represent a continuation
of the Prior Plan as heretofore set forth and shall not abridge or curtail any
rights or privileges accorded to Participants under the Prior Plan. Except as
noted below, the Prior Plan will continue in accordance with the terms of the
Value Health, Inc. Retirement Savings Plan.
As referenced in the attached Plan document, the following provisions may
continue with respect to Employees of the Prior Employer and/or Participants
from the Prior Plan:
(1) With respect to eligibility to participate in the Plan, completion of
1/2 Year of Service.
(2) As a result of plan merger, a short Plan Year will be in effect from
November 1, 1994 to December 31, 1994. Participants will be awarded
with a Year of Service for purposes of vesting during this shortened
Plan Year.
IN WITNESS WHEREOF, the Prior Employer does hereby adopt the Value Health, Inc.
Retirement Savings Plan and agree to be bound by all of its terms, conditions
and amendments except as noted above.
Executed at on
DIVERSIFIED MEDICAL RESOURCES
CORPORATION
By
Witness
Title
<PAGE>
APPENDIX H
COMMUNITY CARE NETWORK, INC. 401(k) SAVINGS PLAN
WHEREAS, Community Care Network, Inc. (hereinafter referred to as the "Prior
Employer") established the Community Care Network, Inc. 401(k) Savings Plan
(hereinafter referred to as the "Prior Plan") effective September 1, 1989 for
the benefit of its eligible Employees and their Beneficiaries; and
WHEREAS, the Prior Employer was acquired by Value Health, Inc.;
NOW THEREFORE, effective January 1, 1995, the Prior Plan was merged and
consolidated into the Value Health, Inc. Retirement Savings Plan. As a result,
the Value Health, Inc. Retirement Savings Plan shall represent a continuation
of the Prior Plan as heretofore set forth and shall not abridge or curtail any
rights or privileges accorded to Participants under the Prior Plan. Except as
noted below, the Prior Plan will continue in accordance with the terms of the
Value Health, Inc. Retirement Savings Plan.
As referenced in the attached Plan document, the following provisions may
continue with respect to Participants from the Prior Plan:
(1) As a result of plan merger, a short Plan Year will be in effect from
November 1, 1994 to December 31, 1994. Participants will be awarded
with a Year of Service for purposes of vesting during this shortened
Plan Year.
IN WITNESS WHEREOF, the Prior Employer does hereby adopt the Value Health, Inc.
Retirement Savings Plan and agree to be bound by all of its terms, conditions
and amendments except as noted above.
Executed at on
COMMUNITY CARE NETWORK, INC.
By
Witness
Title
<PAGE>
APPENDIX I
RX - NET, INC. 401(k) RETIREMENT SAVINGS PLAN
WHEREAS, RX - Net, Inc. (hereinafter referred to as the "Prior Employer")
established the RX - Net, Inc. 401(k) Retirement Savings Plan (hereinafter
referred to as the "Prior Plan") effective August 1, 1994 for the benefit of
its eligible Employees and their Beneficiaries; and
WHEREAS, the Prior Employer was acquired by Value Health, Inc.;
NOW THEREFORE, effective September 1, 1995, the Prior Plan was merged and
consolidated into the Value Health, Inc. Retirement Savings Plan. As a result,
the Value Health, Inc. Retirement Savings Plan shall represent a continuation
of the Prior Plan as heretofore set forth and shall not abridge or curtail any
rights or privileges accorded to Participants under the Prior Plan. Except as
noted below, the Prior Plan will continue in accordance with the terms of the
Value Health, Inc. Retirement Savings Plan.
As referenced in the attached Plan document, the following provisions may
continue with respect to Employees of the Prior Employer:
(1) With respect to eligibility to participate in the Plan, there will be
no service requirement.
IN WITNESS WHEREOF, the Prior Employer does hereby adopt the Value Health, Inc.
Retirement Savings Plan and agree to be bound by all of its terms, conditions
and amendments except as noted above.
Executed at on
RX - NET, INC.
By
Witness
Title
<PAGE>
APPENDIX J
HEALTH MANAGEMENT STRATEGIES 401(k) RETIREMENT AND
SAVINGS PLAN
WHEREAS, Health Management Strategies International, Inc. (hereinafter referred
to as the "Prior Employer") established the Health Management Strategies 401(k)
Retirement and Savings Plan (hereinafter referred to as the "Prior Plan")
effective April 1, 1989 for the benefit of its eligible Employees and their
Beneficiaries; and
WHEREAS, the Prior Employer was acquired by Value Health, Inc.;
NOW THEREFORE, effective October 1, 1995, the Prior Plan was merged and
consolidated into the Value Health, Inc. Retirement Savings Plan. As a result,
the Value Health, Inc. Retirement Savings Plan shall represent a continuation
of the Prior Plan as heretofore set forth and shall not abridge or curtail any
rights or privileges accorded to Participants under the Prior Plan. Except as
noted below, the Prior Plan will continue in accordance with the terms of the
Value Health, Inc. Retirement Savings Plan.
As referenced in the attached Plan document, the following provisions may
continue with respect to Employees of the Prior Employer and/or Participants
from the Prior Plan:
(1) With respect to eligibility to participate in the Plan, completion of
1/4 Year of Service.
(2) With respect to Participants who entered the Health Management
Strategies 401(k) Retirement and Savings Plan prior to July 1, 1995,
the Vesting Percentage used to determine a Participant's Vested
Interest in contributions made by the Employer to his account prior to
July 1, 1995, shall be determined in accordance with the following
schedule based on Years of Service with the Employer:
Years of Service Vesting Percentage
Less than 1 0%
1 but less than 2 25%
2 but less than 3 50%
3 or more 100%
However, if an Active Participant dies prior to attaining his Normal Retirement
Age, his Vesting Percentage shall be 100%.
<PAGE>
IN WITNESS WHEREOF, the Prior Employer does hereby adopt the Value Health, Inc.
Retirement Savings Plan and agree to be bound by all of its terms, conditions
and amendments except as noted above.
Executed at on
HEALTH MANAGEMENT STRATEGIES
INTERNATIONAL, INC.
By
Witness
Title
<PAGE>
APPENDIX K
DIAGNOSTEK, INC. & SUBSIDIARIES 401(k) RETIREMENT SAVINGS
PLAN
WHEREAS, Diagnostek, Inc. (hereinafter referred to as the "Prior Employer")
established the Diagnostek, Inc. & Subsidiaries 401(k) Retirement Savings Plan
(hereinafter referred to as the "Prior Plan") effective January 1, 1987 for
the benefit of its eligible Employees and their Beneficiaries; and
WHEREAS, the Prior Employer was acquired by Value Health, Inc.;
NOW THEREFORE, effective March 1, 1996, the Prior Plan was merged and
consolidated into the Value Health, Inc. Retirement Savings Plan. As a result,
the Value Health, Inc. Retirement Savings Plan shall represent a continuation
of the Prior Plan as heretofore set forth and shall not abridge or curtail any
rights or privileges accorded to Participants under the Prior Plan. Except as
noted below, the Prior Plan will continue in accordance with the terms of the
Value Health, Inc. Retirement Savings Plan.
As referenced in the attached Plan document, the following provisions may
continue with respect to Employees of the Prior Employer and/or Participants
from the Prior Plan:
(1) With respect to eligibility to participate in the Plan, completion of
1/2 Year of Service.
IN WITNESS WHEREOF, the Prior Employer does hereby adopt the Value Health, Inc.
Retirement Savings Plan and agree to be bound by all of its terms, conditions
and amendments except as noted above.
Executed at on
DIAGNOSTEK, INC.
By
Witness
Title
EXHIBIT 23.1
INDEPENDENT AUDITORS* CONSENT
We consent to the incorporation by reference in this Registration Statement of
the Value Health, Inc. Retirement Savings Plan on Form S-8 of our report on
Preferred Health Care Ltd. dated February 24, 1994, filed as an exhibit to the
Annual Report on Form 10-K of Value Health, Inc., for the year ended December
31, 1995 and to the reference to us under the heading "Experts" contained in
such Registration Statement.
DELOITTE & TOUCHE LLP
Stamford, Connecticut
August 22, 1996
<PAGE>
EXHIBIT 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this Registration Statement on
Form S-8 of our reports dated February 21, 1996 on our audits of the
consolidated financial statements and financial statement schedule of Value
Health, Inc. and Subsidiaries, which reports are included in the 1995 Value
Health, Inc. Annual Report to Shareholders and 1995 Value Health, Inc. Form
10-K. Our opinions on such financial statements and financial statement
schedule indicated that we did not audit the financial statements of
Diagnostek, Inc. for the years ended December 31, 1994 and 1993 or of Preferred
Health Care Ltd. for the year ended December 31,1993, which statements reflect
revenues of approximately 40% and 49% for the years ended December 31,
1994 and 1993, respectively, and total assets of approximately 32% as of
December 31, 1994, of the related consolidated totals. Those financial
statements were audited by other auditors whose reports have been furnished to
us, and our opinions, insofar as they relate to amounts included for
these wholly-owned subsidiaries of Value Health, Inc., were based solely on the
reports of such other auditors. Additionally, our opinion indicated that the
Company adopted the provisions of Statement of Financial Accounting Standards
No. 115, Accounting for Certain Investments in Debt and Equity Securities, as
of January 1, 1994. We also consent to the reference to our firm under the
caption "Experts".
/s/ COOPERS & LYBRAND L.L.P.
Hartford, Connecticut
August 22, 1996
<PAGE>
EXHIBIT 23.3
INDEPENDENT AUDITORS* CONSENT
The Board of Directors and Stockholders
Value Health, Inc.:
We consent to the use of our report incorporated herein by reference and to the
reference to our firm under the heading "Interests of Named Experts and
Counsel".
KPMG PEAT MARWICK LLP
Albuquerque, New Mexico
August 21, 1996
