<PAGE>
As filed with the Securities and Exchange Commission on June 15, 1999
Registration No. 333-
=============================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------
FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
GENESIS HEALTH VENTURES, INC.
(Exact name of Registrant as specified in its charter)
<TABLE>
<CAPTION>
<S> <C> <C>
Pennsylvania 101 East State Street 06-1132947
(State or other jurisdiction of Kennett Square, Pennsylvania 19348 (I.R.S. Employer
incorporation or organization) (Address of Principal Executive Offices) (Zip Code) Identification Number)
</TABLE>
GENESIS HEALTH VENTURES, INC.
AMENDED AND RESTATED EMPLOYEE STOCK OPTION PLAN
GENESIS HEALTH VENTURES, INC.
1998 NONQUALIFIED EMPLOYEE STOCK OPTION PLAN
GENESIS HEALTH VENTURES, INC. RETIREMENT PLAN
Michael R. Walker
Chairman and Chief Executive Officer
Genesis Health Ventures, Inc.
101 East State Street
Kennett Square, Pennsylvania 19348
(610) 444-6350
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Copies of Communications to:
Richard J. McMahon, Esquire
Blank Rome Comisky & McCauley LLP
One Logan Square
Philadelphia, Pennsylvania 19103
(215) 569-5554
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
========================================================================================================================
Proposed maximum Proposed maximum
Title of securities Amount to be offering price per aggregate Amount of
to be registered registered (2)(3) share offering price registration fee(5)
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, par value $.02 3,000,000 $4.6875(4) $14,062,500(4) $3,909.38
per share (1) shares
========================================================================================================================
</TABLE>
(1) Includes associated preferred share purchase rights issued under the Rights
Agreement between Genesis Health Ventures, Inc. and ChaseMellon Shareholder
Services, LLC, as Rights Agent dated as of April 20, 1995, which are
currently transferable with and only with the shares of Common Stock
registered hereby.
(2) This registration statement covers shares of Common Stock of Genesis Health
Ventures, Inc. which may be offered or sold pursuant to the Amended and
Restated Employee Stock Option Plan, the 1998 NonQualified Employee Stock
Option Plan and the Retirement Plan.
(3) This registration statement also relates to an indeterminate number of
shares of Common Stock that may be issued upon stock splits, stock
dividends or similar transactions in accordance with Rule 416.
(4) Pursuant to Rule 457(h), based upon the average of the high and low sale
prices of Genesis Health Ventures, Inc. Common Stock, par value $.02 per
share, reported on the New York Stock Exchange on June 14, 1999.
(5) Calculated pursuant to Section 6(b) as follows: proposed maximum aggregate
offering price multiplied by .000278.
<PAGE>
PART I. INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
Item 1. Plan Information.
- -------------------------
The document(s) containing the information specified in Item 1
will be sent or given to employees as specified in Rule 428(b)(1) and are not
required to be filed as part of this Registration Statement.
Item 2. Registrant Information and Employee Plan Annual Information.
- --------------------------------------------------------------------
The document(s) containing the information specified in Item 2
will be sent or given to employees as specified in Rule 428(b)(1) and are not
required to be filed as part of this Registration Statement.
PART II. INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Certain Documents by Reference.
- --------------------------------------------------------
The following documents filed with the Commission are incorporated
herein by reference:
(i) The Company's Annual Report on Form 10-K as amended for the
fiscal year ended September 30, 1998;
(ii) All other reports filed pursuant to Section 13(a) or 15(d) of
the Securities Exchange Act of 1934, as amended, since the end of the fiscal
year covered by the Annual Report on Form 10-K as amended referred to in (i)
above;
(iii) The description of the Company's Common Stock is
incorporated by reference to the Company's Registration Statement on Form 8-A
(File No. 1-11666) filed on April 16, 1992 under the Securities Exchange Act of
1934, as amended; and
(iv) The description of the Company's Series A Junior
Participating Preferred Share Purchase Rights is incorporated by reference to
the Company's Registration Statement on Form 8-A (File No. 1-11666) filed on May
11, 1995 under the Securities Exchange Act of 1934, as amended.
All reports and other documents subsequently filed by the Company
with the Commission pursuant to Sections 13(a), 13(c), 14 and 15(d) of the
Securities Exchange Act of 1934, as amended, after the date of this Registration
Statement but prior to the filing of a post-effective amendment which indicates
that all securities offered hereunder have been sold or which deregisters all
securities then remaining unsold hereunder, shall be deemed to be incorporated
by reference in this Registration Statement and to be a part hereof from the
date of filing of such documents.
Item 4. Description of Securities.
- ----------------------------------
Not Applicable.
Item 5. Interests of Named Experts and Counsel.
- -----------------------------------------------
Certain legal matters with respect to the legality of the Common
Stock offered hereby will be passed upon for the Company by Blank Rome Comisky &
McCauley LLP, Philadelphia, Pennsylvania. Stephen Luongo, a partner in Blank
Rome Comisky & McCauley LLP, is the beneficial owner of 56,518 shares of Common
Stock, including shares relating to 34,900 options received under the Genesis
Health Ventures, Inc. 1992 Stock Option Plan for Non-Employee Directors (the
"Director Plan"), and will receive future option grants under the Director Plan.
-2-
<PAGE>
Item 6. Indemnification of Directors and Officers.
- --------------------------------------------------
Sections 1741 through 1750 of Subchapter D, Chapter 17, of the
Pennsylvania Business Corporation Law of 1988, as amended (the "BCL"), contain
provisions for mandatory and discretionary indemnification of a corporation's
directors, officers and other personnel, and related matters.
Under Section 1741, subject to certain limitations, a corporation
has the power to indemnify directors and officers under certain prescribed
circumstances against expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred in connection with
an action or proceeding, whether civil, criminal, administrative or
investigative, to which any of them is a party by reason of his or her being a
representative, director or officer of the corporation or serving at the request
of the corporation as a representative of another corporation, partnership,
joint venture, trust or other enterprise, if he or she acted in good faith and
in a manner he or she reasonably believed to be in, or not opposed to, the best
interests of the corporation and, with respect to any criminal proceeding, had
no reasonable cause to believe his or her conduct was unlawful. Under Section
1743, indemnification is mandatory to the extent that the officer or director
has been successful on the merits or otherwise in defense of any action or
proceeding if the appropriate standards of conduct are met.
Section 1742 provides for indemnification in derivative actions
except in respect of any claim, issue or matter as to which the person has been
adjudged to be liable to the corporation unless and only to the extent that the
proper court determines upon application that, despite the adjudication of
liability but in view of all the circumstances of the case, the person is fairly
and reasonably entitled to indemnity for the expenses that the court deems
proper.
Section 1744 provides that, unless ordered by a court, any
indemnification under Section 1741 or 1742 shall be made by the corporation only
as authorized in the specific case upon a determination that the representative
met the applicable standard of conduct, and such determination will be made by
the board of directors (i) by a majority vote of a quorum of directors not
parties to the action or proceeding; (ii) if a quorum is not obtainable, or if
obtainable and a majority of disinterested directors so directs, by independent
legal counsel; or (iii) by the shareholders.
Section 1745 provides that expenses incurred by an officer,
director, employee or agent in defending a civil or criminal action or
proceeding may be paid by the corporation in advance of the final disposition of
such action or proceeding upon receipt of an undertaking by or on behalf of such
person to repay such amount if it shall ultimately be determined that he or she
is not entitled to be indemnified by the corporation.
Section 1746 provides generally that, except in any case where the
act or failure to act giving rise to the claim for indemnification is determined
by a court to have constituted willful misconduct or recklessness, the
indemnification and advancement of expenses provided by Subchapter 17D of the
BCL shall not be deemed exclusive of any other rights to which a person seeking
indemnification or advancement of expenses may be entitled under any bylaw,
agreement, vote of shareholders or disinterested directors or otherwise, both as
to action in his or her official capacity and as to action in another capacity
while holding that office.
Section 1747 grants to a corporation the power to purchase and
maintain insurance on behalf of any director or officer against any liability
incurred by him or her in his or her capacity as officer or director, whether or
not the corporation would have the power to indemnify him or her against the
liability under Subchapter 17D of the BCL.
Section 1748 and 1749 extend the indemnification and advancement
of expenses provisions contained in Subchapter 17D of the BCL to successor
corporations in fundamental changes and to representatives serving as
fiduciaries of employee benefit plans.
Section 1750 provides that the indemnification and advancement of
expenses provided by, or granted pursuant to, Subchapter 17D of the BCL, shall,
unless otherwise provided when authorized or ratified, continue as
-3-
<PAGE>
to a person who has ceased to be a director, officer, employee or agent and
shall inure to the benefit of the heirs and personal representative of such
person.
The Company's Bylaws provide in general that the Company shall
indemnify its officers and directors to the fullest extent authorized by law.
Item 7. Exemption from Registration Claimed.
- --------------------------------------------
Not Applicable.
Item 8. Exhibits.
- -----------------
The following exhibits are filed as part of this Registration
Statement or, where so indicated, have been previously filed and are
incorporated herein by reference.
<TABLE>
<CAPTION>
Exhibit No. Description
----------- -----------
<S> <C> <C>
5.1 Opinion of Counsel regarding legality
23.1 Consent of KPMG LLP
23.2 Consent of Counsel (included as part of Exhibit 5.1)
24.1 Power of Attorney (included on page 6)
99.1 Amended and Restated Employee Stock Option Plan
99.2 Retirement Plan
99.3 (1) 1998 Non-Qualified Employee Stock Option Plan
- ----------------------
</TABLE>
(1) Incorporated by reference to the Company's Form 10-K for the
fiscal year ended September 30, 1998.
Item 9. Undertakings.
- ---------------------
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration Statement;
(i) To include any prospectus required by section 10(a)(3)
of the Securities Act of 1933, as amended;
(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;
-4-
<PAGE>
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not
apply if the Registration Statement is on Form S-3 or 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, as amended, that are
incorporated by reference in the Registration Statement.
(2) That for the purpose of determining any liability under
the Securities Act of 1933, as amended, each such post-effective amendment shall
be deemed to be a new Registration Statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act of 1933, as
amended, each filing of the registrant's annual report pursuant to section 13(a)
or section 15(d) of the Securities Exchange Act of 1934, as amended (and, where
applicable, each filing of an employee benefit plan's annual report pursuant to
section 15(d) of the Securities Exchange Act of 1934, as amended) 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) Insofar as indemnification for liabilities arising under the
Securities Act of 1933, as amended, 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.
-5-
<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 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 Kennett Square, Pennsylvania, on the date indicated.
Date: June 15, 1999 GENESIS HEALTH VENTURES, INC.
By: /s/ Michael R. Walker
------------------------------
Michael R. Walker
Chairman, Chief Executive
Officer and Director
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Michael R. Walker and Richard R. Howard
and each of them, his true and lawful attorneys-in-fact and agents, with full
power of substitution of resubstitution, for him and in his name, place and
stead, in any and all capacities, to sign any and all amendments to this
Registration Statement, and to file the same, with all exhibits thereto, and
other documentation in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents full power and
authority to do and perform each and every act and thing requisite and necessary
to be done in and about the premises, as fully to all intents and purposes as he
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or their substitute or substitutes, may lawfully
do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as
amended, this Registration Statement has been signed below by the following
persons in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Name Capacity Date
---- -------- ----
<S> <C> <C>
/s/ Michael R. Walker Chairman, Director and Chief Executive June 15, 1999
- -------------------------- Officer
Michael R. Walker
/s/ Richard R. Howard
- -------------------------- President and Director June 15, 1999
Richard R. Howard
/s/ George V. Hager, Jr. Senior Vice President and Chief June 15, 1999
- -------------------------- Financial Officer
George V. Hager, Jr.
/s/ James V. McKeon
- -------------------------- Vice President and Corporate Controller June 15, 1999
James V. McKeon
/s/ Jack R. Anderson
- -------------------------- Director June 15, 1999
Jack R. Anderson
- -------------------------- Director June , 1999
Roger C. Lipitz
</TABLE>
-6-
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
- -------------------------- Director June , 1999
Alan B. Miller
/s/ Samuel H. Howard
- -------------------------- Director June 15, 1999
Samuel H. Howard
/s/ Stephen E. Luongo
- -------------------------- Director June 15, 1999
Stephen E. Luongo
</TABLE>
-7-
<PAGE>
EXHIBIT 5.1
[LETTERHEAD OF BLANK ROME COMISKY & McCAULEY LLP]
June 15, 1999
Genesis Health Ventures, Inc.
101 East State Street
Kennett Square, PA 19348
Gentlemen:
We have acted as counsel to Genesis Health Ventures, Inc. (the
"Company") in connection with the preparation of the Registration Statement on
Form S-8 (the "Registration Statement") to be filed by the Company with the
Securities and Exchange Commission under the Securities Act of 1933, as amended,
relating to the offer of up to 3,000,000 shares of common stock, par value $.02
per share (the "Common Stock"), by the Company pursuant to the Company's Amended
and Restated Employee Stock Option Plan, the Company's 1998 Nonqualified
Employee Stock Option Plan and the Company's Retirement Plan (collectively, the
"Plans"). This opinion is furnished pursuant to the requirement of Item
601(b)(5) of Regulation S-K.
Although as counsel to the Company we have advised the Company in
connection with a variety of matters referred to us by it, our services are
limited to specific matters so referred. Consequently, we may not have knowledge
of many transactions in which the Company has engaged or of its day-to-day
operations.
In rendering this opinion, we have examined the following documents:
(i) the Company's Articles of Incorporation and Bylaws, as amended and restated
since the inception of the Company; (ii) the Company's Minute Books; (iii) the
Registration Statement; and (iv) a certification from the Company's transfer
agent. We have assumed and relied, as to questions of fact and mixed questions
of law and fact, on the truth, completeness, authenticity and due authorization
of all documents and records examined and the genuineness of all signatures.
We have not made any independent investigation in rendering this
opinion other than the document examination described. Our opinion is therefore
qualified in all respects by the scope of that document examination. We make no
representation as to the sufficiency of our investigation for your purposes.
This opinion is limited to the laws of the Commonwealth of Pennsylvania. In
rendering this opinion we have assumed (i) compliance with all other laws,
including federal laws and (ii) compliance with all Pennsylvania securities and
antitrust laws.
Based upon and subject to the foregoing, we are of the opinion that:
The shares of Common Stock of the Company which are being offered by
the Company pursuant to the Registration Statement, when issued in the manner
and for the consideration contemplated by the Registration Statement, will be
legally issued, fully paid and non-assessable.
This opinion is given as of the date hereof. We assume no obligation to
update or supplement this opinion to reflect any facts or circumstances which
may hereafter come to our attention or any changes in laws which may hereafter
occur.
This opinion is strictly limited to the matters stated herein and no
other or more extensive opinion is intended, implied or to be inferred beyond
the matters expressly stated herein.
We consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to us under "Item 5. Interests of
Named Experts and Counsel" in the Registration Statement.
Sincerely,
/s/ BLANK ROME COMISKY & McCAULEY LLP
-8-
<PAGE>
EXHIBIT 23.1
Consent of Independent Auditors
The Board of Directors
Genesis Health Ventures, Inc.:
We consent to incorporation by reference in the registration statement
on Form S-8 for the Genesis Health Ventures, Inc. Amended and Restated Employee
Stock Option Plan, Genesis Health Ventures, Inc. 1998 Nonqualified Employee
Stock Option Plan, and Genesis Health Ventures, Inc. Retirement Plan of our
reports, dated December 15, 1998, relating to the consolidated balance sheets of
Genesis Health Ventures, Inc. and subsidiaries as of September 30, 1998 and 1997
and the related consolidated statements of operations, shareholders' equity and
cash flows for each of the years in the three-year period ended September 30,
1998 and the related financial statement schedule, which reports appear in the
September 30, 1998 annual report on Form 10-K/A of Genesis Health Ventures, Inc.
/s/ KPMG LLP
Philadelphia, Pennsylvania
June 15, 1999
-9-
<PAGE>
EXHIBIT 99.1
GENESIS HEALTH VENTURES, INC.
AMENDED AND RESTATED EMPLOYEE STOCK OPTION PLAN
1. Purpose of Plan
The purpose of this Amended and Restated Employee Stock Option Plan
(the "Plan") is to provide additional incentive to officers and key employees of
Genesis Health Ventures, Inc. (the "Company") and each present or future parent
or subsidiary corporation by encouraging them to invest in shares of the
Company's common stock, par value $.02 per share ("Common Stock"), and thereby
acquire a proprietary interest in the Company and an increased personal interest
in the Company's continued success and progress, to the mutual benefit of
directors, officers, employees and stockholders.
2. Aggregate Number of Shares
6,750,000 shares of the Company's Common Stock shall be the aggregate
number of shares which may be issued under this Plan. Notwithstanding the
foregoing, in the event of any change in the outstanding shares of the Common
Stock of the Company by reason of a stock dividend, stock split, combination of
shares, recapitalization, merger, consolidation, transfer of assets,
reorganization, conversion or what the Compensation Committee, hereinafter
referred to, deems in its sole discretion to be similar circumstances, the
aggregate number and kind of shares which may be issued under this Plan shall be
appropriately adjusted in a manner determined in the sole discretion of the
Compensation Committee. Reacquired shares of the Company's Common Stock, as well
as unissued shares, may be used for the purpose of this Plan. Common Stock of
the Company subject to options which have terminated unexercised, either in
whole or in part, shall be available for future options granted under this Plan.
3. Class of Persons Eligible to Receive Options
All officers and key employees of, and consultants and advisors to, the
Company and any present or future Company parent or subsidiary corporation are
eligible to receive an option or options under this Plan, provided that
Incentive Stock Options (as described below) may be issued only to employees.
The individuals who shall, in fact, receive an option or options shall be
selected by the Compensation Committee, in its sole discretion, except as
otherwise specified in Section 4 hereof. The maximum number of options which may
be granted to any participant in any one year is options for 500,000 shares of
Common Stock subject to appropriate adjustment in the event of any change in the
outstanding shares of the Common Stock of the Company by reason of a stock
dividend, stock split, combination of shares, recapitalization, merger,
consolidation, transfer of assets, reorganization, conversion or what the
Compensation Committee deems in its sole discretion to be similar circumstances.
4. Administration of Plan
(a) This Plan shall be administered by the Compensation Committee (the
"Committee") appointed by the Company's Board of Directors. The Committee shall
consist of a minimum of two and a maximum of seven members of the Board of
Directors, each of whom shall be a "disinterested person" as defined in Rule
16b-3(d)(3) under the Securities Exchange Act of 1934, as amended, of the
Securities and Exchange Commission (the "SEC") or any future corresponding rule.
The Committee shall, in addition to its other authority and subject to the
provisions of this Plan, determine which individuals are eligible to receive
options under this Plan, which individuals shall in fact be granted an option or
options, whether the option shall be an incentive stock option or a
non-qualified stock option, the number of shares to be subject to each of the
options, the time or times at which the options shall be granted, the rate of
option exercisability, and, subject to Section 5 hereof, the price at which each
of the options is exercisable and the duration of the option.
(b) The Committee shall adopt such rules for the conduct of its
business and administration of this Plan as it considers desirable. A majority
of the members of the Committee shall constitute a quorum for all purposes. The
vote or written consent of a majority of the members of the Committee on a
particular matter shall constitute the act
1
<PAGE>
of the Committee on such matter. The Committee shall have the right to construe
the Plan and the options issued pursuant to it, to correct defects and omissions
and to reconcile inconsistencies to the extent necessary to effectuate the Plan
and the options issued pursuant to it, and such action shall be final, binding
and conclusive upon all parties concerned. No member of the Committee or the
Board of Directors shall be liable for any act or omission (whether or not
negligent) taken or omitted in good faith, or for the exercise of an authority
or discretion granted in connection with the Plan to a Committee or the Board of
Directors, or for the acts or omissions of any other members of a Committee or
the Board of Directors. Subject to the numerical limitations on Committee
membership set forth in Section 4(a) hereof, the Board of Directors may at any
time appoint additional members of the Committee and may at any time remove any
member of the Committee with or without cause. Vacancies in the Committee,
however caused, may be filled by the Board of Directors, if it so desires.
5. Incentive Stock Options and Non-Qualified Stock Options
(a) Options issued pursuant to this Plan may be either Incentive Stock
Options granted pursuant to Section 5(b) hereof or Non-Qualified Stock Options
granted pursuant to Section 5(c) hereof, as determined by the Committee. An
"Incentive Stock Option" is an option which satisfies all of the requirements of
Section 422A of the Code and the regulations thereunder, and a "Non-Qualified
Stock Option" is an option which either does not satisfy all of those
requirements or the terms of the option provide that it will not be treated as
an Incentive Stock Option. The Committee may grant both an Incentive Stock
Option and a Non-Qualified Stock Option to the same person, or more than one of
each type of option to the same person. The option price for Incentive Stock
Options issued under this Plan shall be equal at least to the fair market value
(as defined below) of the Company's Common Stock on the date of the grant of the
option. The option price for Non-Qualified Stock Options issued under this Plan
shall be at least equal to the fair market value of the Common Stock on the date
of the grant of the option except that the minimum option price may be equal to
or greater than 85% of the fair market value of the Company's Common Stock as of
the date of the grant of the option if the discount is expressly granted in lieu
of a reasonable amount of salary or cash bonus. If an Incentive Stock Option is
granted to an individual who, at the time the option is granted, owns shares of
Common Stock equal to more than 10 percent of the total combined voting power of
the Common Stock of the Company or any subsidiary corporation of the Company (a
"10% Stockholder"), the option price shall not be less than 110 percent of the
fair market value, as determined by the Committee in accordance with its
interpretation of the requirements of Section 422A of the Code and the
regulations thereunder, of the Company's Common Stock on the date of grant of
the option, and such option shall not be exercisable after the expiration of
five years from the date the option is granted. The fair market value of the
Company's Common Stock on any particular date shall mean the last reported sale
price of a share of the Company's Common Stock on any stock exchange on which
such stock is then listed or admitted to trading, or on the NASDAQ National
Market System, on such date, or if no sale took place on such day, the last such
date on which a sale took place, or if the Common Stock is not then quoted on
the NASDAQ National Market System, or listed or admitted to trading on any stock
exchange, the average of the bid and asked prices in the over-the-counter market
on such date, or if none of the foregoing, a price determined by the Committee.
(b) Subject to the authority of the Committee set forth in Section 4(a)
hereof, Incentive Stock Options issued pursuant to this Plan shall be issued
substantially in the form set forth in Appendix I hereof, which form is hereby
incorporated by reference and made a part hereof, and shall contain
substantially the terms and conditions set forth therein. Incentive Stock
Options shall not be exercisable after the expiration of ten years (five years
in the case of 10% Stockholders) from the date such options are granted, unless
terminated earlier under the terms of the option. At the time of the grant of an
Incentive Stock Option hereunder, the Committee may, in its discretion, modify
or amend any of the option terms contained in Appendix I for any particular
optionee, provided that the option as modified or amended satisfies the
requirements of Section 422A of the Code and the regulations thereunder. Each of
the options granted pursuant to this Section 5(b) is intended, if possible, to
be an "Incentive Stock Option" as that term is defined in Section 422A of the
Code and the regulations thereunder. In the event this Plan or any option
granted pursuant to this Section 5(b) is in any way inconsistent with the
applicable legal requirements of the Code or the regulations thereunder for an
Incentive Stock Option, this Plan and such option shall be deemed automatically
amended as of the date hereof to conform to such legal requirements, if such
conformity may be achieved by amendment.
2
<PAGE>
(c) Subject to the authority of the Committee set forth in Section 4(a)
hereof, Non-Qualified Stock Options issued pursuant to this Plan shall be issued
substantially in the form set forth in Appendix II hereof, which form is hereby
incorporated by reference and made a part hereof, and shall contain
substantially the terms and conditions set forth therein. Non-Qualified Stock
Options shall expire ten years after the date they are granted, unless
terminated earlier under the option terms. At the time of granting a
Non-Qualified Stock Option hereunder, the Committee may, in its discretion,
modify or amend any of the option terms contained in Appendix II for any
particular optionee.
(d) Neither the Company nor any of its current or future parent,
subsidiaries or affiliates, nor their officers, directors, stockholders, stock
option plan committees, employees or agents shall have any liability to any
optionee in the event (i) an option granted pursuant to Section 5(b) hereof does
not qualify as an "Incentive Stock Option" as that term is used in Section 422A
of the Code and the regulations thereunder; (ii) any optionee does not obtain
the tax treatment pertaining to an Incentive Stock Option; or (iii) any option
granted pursuant to Section 5(c) hereof is an "Incentive Stock Option."
6. Modification, Amendment, Suspension and Termination
Options shall not be granted pursuant to this Plan after August 1,
2004. The Board of Directors reserves the right at any time, and from time to
time, to modify or amend this Plan in any way, or to suspend or terminate it,
effective as of such date, which date may be either before or after the taking
of such action, as may be specified by the Board of Directors; provided,
however, that such action shall not affect options granted under the Plan prior
to the actual date on which such action occurred. If a modification or amendment
of this Plan is required by the Code or the regulations thereunder to be
approved by the stockholders of the Company in order to permit the granting of
"Incentive Stock Options" (as that term is defined in Section 422A of the Code
and regulations thereunder) pursuant to the modified or amended Plan, such
modification or amendment shall also be approved by the stockholders of the
Company in such manner as is prescribed by the Code and the regulations
thereunder. If the Board of Directors voluntarily submits a proposed
modification, amendment, suspension or termination for stockholder approval,
such submission shall not require any future modifications, amendments (whether
or not relating to the same provision or subject matter), suspensions or
terminations to be similarly submitted for stockholder approval.
7. Effectiveness of Plan
This Plan shall become effective on the date of its adoption by the
Company's Board of Directors, subject however to approval by the holders of the
Company's Common Stock in the manner as prescribed in the Code and the
regulations thereunder. Options may be granted under this Plan prior to
obtaining stockholder approval, provided such options shall not be exercisable
until stockholder approval is obtained.
8. General Conditions
(a) Nothing contained in this Plan or any option granted pursuant to
this Plan shall confer upon any employee the right to continue in the employ of
the Company or any affiliated or subsidiary corporation or interfere in any way
with the rights of the Company or any affiliated or subsidiary corporation to
terminate his employment in any way.
(b) Corporate action constituting an offer of stock for sale to any
employee under the terms of the options to be granted hereunder shall be deemed
complete as of the date when the Committee authorizes the grant of the option to
the employee, regardless of when the option is actually delivered to the
employee or acknowledged or agreed to by him or her.
(c) Except as provided below, the terms "parent corporation" and
"subsidiary corporation" as used throughout this Plan, and the options granted
pursuant to this Plan, shall (except as otherwise provided in the option form)
have the meaning that is ascribed to that term when contained in Section 422A(b)
of the Code and the regulations thereunder, and the Company shall be deemed to
be the grantor corporation for purposes of applying such meaning. The term
"subsidiary corporation" shall also include The Multicare Companies, Inc.
(provided that
3
<PAGE>
only Non-Qualified Stock Options may be granted to officers and key employees
of, and consultant and advisors to The Multicare Companies, Inc.).
(d) References in this Plan to the Code shall be deemed to also refer
to the corresponding provisions of any future United States revenue law.
(e) The use of the masculine pronoun shall include the feminine gender
whenever appropriate.
4
<PAGE>
APPENDIX I
INCENTIVE STOCK OPTION
To:
------------------------------------ Name
------------------------------------ Address
------------------------------------
Date of Grant:
-----------------------------
You are hereby granted an option, effective as of the date hereof, to
purchase _____ shares of common stock, par value $.02 per share ("Common
Stock"), of Genesis Health Ventures, Inc. (the "Company") at a price of $_____
per share pursuant to the Company's Amended and Restated Employee Stock Option
Plan (the "Plan").
Your option may first be exercised on and after , but not before
that time. [On and after and prior to , your option may be exercised
for up to % of the total number of shares subject to the option minus the
number of shares previously purchased by exercise of the option (as adjusted for
any change in the outstanding shares of the Common Stock of the Company by
reason of a stock dividend, stock split, combination of shares,
recapitalization, merger, consolidation, transfer of assets, reorganization,
conversion or what the Compensation Committee deems in its sole discretion to be
similar circumstances). Each succeeding year thereafter, your option may be
exercised for up to an additional % of the total number of shares subject
to the option minus the number of shares previously purchased by exercise of the
option (as adjusted for any change in the outstanding shares of the Common Stock
of the Company by reason of a stock dividend, stock split, combination of
shares, recapitalization, merger, consolidation, transfer of assets,
reorganization, conversion or what the Compensation Committee deems in its sole
discretion to be similar circumstances).](1) No fractional shares shall be
issued or delivered.
This option shall terminate and is not exercisable after [five/ten]
years from the date of its grant (the "Scheduled Termination Date"), except if
terminated earlier as hereafter provided.
You may exercise your option by giving written notice to the Secretary
of the Company on forms supplied by the Company at its then principal executive
office, accompanied by payment of the option price for the total number of
shares you specify that you wish to purchase. The payment may be in any of the
following forms: (a) cash, which may be evidenced by a check; (b) certificates
representing shares of Common Stock of the Company, which will be valued by the
Secretary of the Company at the fair market value per share of the Company's
Common Stock (as determined in accordance with the Plan) on the last trading day
immediately preceding the delivery of such certificates to the Company,
accompanied by an assignment of the stock to the Company; or (c) any combination
of cash and Common Stock of the Company valued as provided in clause (b). Any
assignment of stock shall be in a form and substance satisfactory to the
Secretary of the Company, including guarantees of signature(s) and payment of
all transfer taxes if the Secretary deems such guarantees necessary or
desirable.
- ---------
(1) The bracketed portion of this paragraph should be included if the number
of shares which may be acquired upon exercise of the option will increase over
time.
5
<PAGE>
Your option will, to the extent not previously exercised by you,
terminate three months after the date on which your employment by the Company or
a Company subsidiary corporation is terminated other than by reason of (i)
disability as defined in Section 22(e)(3) of the Internal Revenue Code of 1986,
as amended (the "Code"), and the regulations thereunder, in which case your
option will terminate one year from the onset of disability, or death (but in no
event later than the Scheduled Termination Date), whether such termination be
voluntary or not. After the date your employment is terminated, as aforesaid,
you may exercise this option only for the number of shares which you had a right
to purchase and did not purchase on the date your employment terminated. If you
are employed by a Company subsidiary corporation, your employment shall be
deemed to have terminated on the date your employer ceases to be a Company
subsidiary corporation, unless you are on that date transferred to the Company
or another Company subsidiary corporation. Your employment shall not be deemed
to have terminated if you are transferred from the Company to a Company
subsidiary corporation, or vice versa, or from one Company subsidiary
corporation to another Company subsidiary corporation.
If you die while employed by the Company or a Company subsidiary
corporation, your legatee(s), distributee(s), executor or administrator, as the
case may be, may, at any time within one year after the date of your death (but
in no event later than the Scheduled Termination Date), exercise the option as
to any shares which you had a right to purchase and did not purchase during your
lifetime. If your employment by the Company or a Company subsidiary corporation
is terminated by reason of your becoming disabled (within the meaning of Section
22(e)(3) of the Code and the regulations thereunder), you or your legal guardian
or custodian may at any time within one year after the date of such termination
(but in no event later than the Scheduled Termination Date), exercise the option
as to any shares, which you have a right to purchase and did not purchase prior
to such termination. Your executor, administrator, guardian or custodian must
present proof of his authority satisfactory to the Company prior to being
allowed to exercise this option.
In the event of any change in the outstanding shares of the Common
Stock of the Company by reason of a stock dividend, stock split, combination of
shares, recapitalization, merger, consolidation, transfer of assets,
reorganization, conversion or what the Compensation Committee deems in its sole
discretion to be similar circumstances, the number and kind of shares subject to
this option and the option price of such shares shall be appropriately adjusted
in a manner to be determined in the sole discretion of the Compensation
Committee.
This option is not transferable otherwise than by will or the laws of
descent and distribution, and is exercisable during your lifetime only by you,
including, for this purpose, your legal guardian or custodian in the event of
disability. Until the option price has been paid in full pursuant to due
exercise of this option and the purchased shares are delivered to you, you do
not have any rights as a stockholder of the Company. The Company reserves the
right not to deliver to you the shares purchased by virtue of the exercise of
this option during any period of time in which the Company deems, in its sole
discretion, that such delivery would violate a federal, state, local or
securities exchange rule, regulation or law.
Notwithstanding anything to the contrary contained herein, this option
is not exercisable until all the following events occur and during the following
periods of time:
(a) Until the Plan pursuant to which this option is granted is
approved by the stockholders of the Company in the manner prescribed by the Code
and the regulations thereunder;
(b) Until this option and the optioned shares are approved and/or
registered with such federal, state or local regulatory bodies or agencies and
securities exchanges as the Company may deem necessary or desirable; or
(c) During any period of time in which the Company deems that the
exercisability of this option, the offer to sell the shares optioned hereunder,
or the sale hereof, may violate a federal, state, local or securities exchange
rule, regulation or law, or may cause the Company to be legally obligated to
issue or sell more shares than the Company is legally entitled to issue or sell.
The following two paragraphs shall be applicable if, on the date of
exercise of this option, the Common Stock to be purchased pursuant to such
exercise has not been registered under the Securities Act of 1933, as
6
<PAGE>
amended, and under applicable state securities laws, and shall continue to be
applicable for so long as such registration has not occurred:
(a) The optionee hereby agrees, warrants and represents that he
will acquire the Common Stock to be issued hereunder for his or her own account
for investment purposes only, and not with a view to, or in connection with, any
resale or other distribution of any of such shares, except as hereafter
permitted. The optionee further agrees that he or she will not at any time make
any offer, sale, transfer, pledge or other disposition of such Common Stock to
be issued hereunder without an effective registration statement under the
Securities Act of 1933, as amended, and under any applicable state securities
laws or an opinion of counsel acceptable to the Company to the effect that the
proposed transaction will be exempt from such registration. The optionee shall
execute such instruments, representations, acknowledgments and agreements as the
Company may, in its sole discretion, deem advisable to avoid any violation of
federal, state, local or securities exchange rule, regulation or law.
(b) The certificates for Common Stock to be issued to the optionee
hereunder shall bear the following legend:
"The shares represented by this certificate have not been
registered under the Securities Act of 1933, as amended, or under applicable
state securities laws. The shares have been acquired for investment and may not
be offered, sold, transferred, pledged or otherwise disposed of without an
effective registration statement under the Securities Act of 1933, as amended,
and under any applicable state securities laws or an opinion of counsel
acceptable to the Company that the proposed transaction will be exempt from such
registration."
The foregoing legend shall be removed upon registration of the legended
shares under the Securities Act of 1933, as amended, and under any applicable
state laws or upon receipt of an opinion of counsel acceptable to the Company
that said registration is no longer required.
The sole purpose of the agreements, warranties, representations and
legend set forth in the two immediately preceding paragraphs is to prevent
violations of the Securities Act of 1933, as amended, and any applicable state
securities laws.
It is the intention of the Company and you that this option shall, if
possible, be an "incentive stock option" as that term is used in Section 422A of
the Code and the regulations thereunder. In the event this option is in any way
inconsistent with the legal requirements of the Code or the regulations
thereunder for an "incentive stock option," this option shall be deemed
automatically amended as of the date hereof to conform to such legal
requirements, if such conformity may be achieved by amendment.
This option shall be subject to the terms of the Plan in effect on the
date this option is granted, which terms are hereby incorporated herein by
reference and made a part hereof. In the event of any conflict between the terms
of this option and the terms of the Plan in effect on the date of this option,
the terms of the Plan shall govern. This option constitutes the entire
understanding between the Company and you with respect to the subject matter
hereof and no amendment, modification or waiver of this option, in whole or in
part, shall be binding upon the Company unless in writing or signed by the
President of the Company. This option and the performances of the parties
hereunder shall be construed in accordance with and governed by the laws of the
Commonwealth of Pennsylvania.
7
<PAGE>
Please sign the copy of this option and return it to the Company's
Secretary, thereby indicating your understanding of and agreement with its terms
and conditions.
GENESIS HEALTH VENTURES, INC.
By: _______________________
I hereby acknowledge receipt of a copy of the foregoing stock option
and, having read it hereby signify my understanding of, and my agreement with,
its terms and conditions.
- ------------------------------- -------------------------
(Signature) (Date)
8
<PAGE>
APPENDIX II
NON-QUALIFIED STOCK OPTION
To:
-------------------------------- Name
-------------------------------- Address
--------------------------------
Date of Grant:
----------------------------------
You are hereby granted an option, effective as of the date hereof, to
purchase shares of common stock, par value $.02 per share ("Common Stock"), of
Genesis Health Ventures, Inc. (the "Company") at a price of $_____ per share
pursuant to the Company's Amended and Restated Employee Stock Option Plan (the
"Plan").
Your option may first be exercised on and after , but not
before that time. [On and after and prior to , your option may be exercised
for up to % of the total number of shares subject to the option minus the
number of shares previously purchased by exercise of the option (as adjusted for
any change in the outstanding shares of the Common Stock of the Company by
reason of a stock dividend, stock split, combination of shares,
recapitalization, merger, consolidation, transfer of assets, reorganization,
conversion or what the Compensation Committee deems in its sole discretion to be
similar circumstances). Each succeeding year thereafter, your option may be
exercised for up to an additional % of the total number of shares subject
to the option minus the number of shares previously purchased by exercise of the
option (as adjusted for any change in the outstanding shares of the Common Stock
of the Company by reason of a stock dividend, stock split, combination of
shares, recapitalization, merger, consolidation, transfer of assets,
reorganization, conversion or what the Compensation Committee deems in its sole
discretion to be similar circumstances).](1) No fractional shares shall be
issued or delivered.
This option shall terminate and is not exercisable after ten years from
the date of its grant (the "Scheduled Termination Date"), except if terminated
earlier as hereafter provided.
You may exercise your option by giving written notice to the Secretary
of the Company on forms supplied by the Company at its then principal executive
office, accompanied by payment of the option price for the total number of
shares you specify that you wish to purchase. The payment may be in any of the
following forms: (a) cash, which may be evidenced by a check; (b) certificates
representing Common Stock of the Company which will be valued by the Secretary
of the Company at the fair market value per share of the Company's Common Stock
(as determined in accordance with the Plan) on the last trading day immediately
preceding the delivery of such certificates to the Company, accompanied by an
assignment of the stock to the Company; or (c) any combination of cash and
Common Stock of the Company valued as provided in clause (b). Any assignment of
stock shall be in a form and substance satisfactory to the Secretary of the
Company, including guarantees of signature(s) and payment of all transfer taxes
if the Secretary deems such guarantees necessary or desirable.
- -----------
(1) The bracketed portion of this paragraph should be included if the number
of shares which may be acquired upon exercise of the option will increase over
time.
9
<PAGE>
Your option will, to the extent not previously exercised by you,
terminate three months after the date on which your employment by the Company or
a Company subsidiary corporation is terminated other than by reason of (i)
disability as defined in Section 22(e)(3) of the Internal Revenue Code of 1986,
as amended (the "Code"), and the regulations thereunder, in which case your
option will terminate one year from the onset of disability, or death (but in no
event later than the Scheduled Termination Date), whether such termination be
voluntary or not. After the date your service or employment is terminated, as
aforesaid, you may exercise this option only for the number of shares which you
had a right to purchase and did not purchase on the date you ceased to be a
director or your employment terminated. If you are employed by a Company
subsidiary corporation, your employment shall be deemed to have terminated on
the date your employer ceases to be a Company subsidiary corporation, unless you
are on that date transferred to the Company or another Company subsidiary
corporation. Your employment shall not be deemed to have terminated if you are
transferred from the Company to a Company subsidiary corporation, or vice versa,
or from one Company subsidiary corporation to another Company subsidiary
corporation.
If you die while employed by the Company or a Company subsidiary
corporation, your legatee(s), distributee(s), executor or administrator, as the
case may be, may, at any time within one year after the date of your death (but
in no event later than the Scheduled Termination Date), exercise the option as
to any shares which you had a right to purchase and did not purchase during your
lifetime. If your service with the Company or a Company parent or subsidiary
corporation is terminated by reason of your becoming disabled (within the
meaning of Section 22(e)(3) of the Code and the regulations thereunder), you or
your legal guardian or custodian may at any time within one year after the date
of such termination (but in no event later than the Scheduled Termination Date),
exercise the option as to any shares which you had a right to purchase and did
not purchase prior to such termination. Your executor, administrator, guardian
or custodian must present proof of his authority satisfactory to the Company
prior to being allowed to exercise this option.
In the event of any change in the outstanding shares of the Common
Stock of the Company by reason of a stock dividend, stock split, combination of
shares, recapitalization, merger, consolidation, transfer of assets,
reorganization, conversion or what the Compensation Committee deems in its sole
discretion to be similar circumstances, the number and kind of shares subject to
this option and the option price for such shares shall be appropriately adjusted
in a manner to be determined in the sole discretion of the Compensation
Committee.
The options are not transferrable otherwise than by will or the laws of
the descent and distribution, and are exercisable during your lifetime only by
the option holder, including, for this purpose, the option holder's legal
guardian or custodian in the event of disability. The foregoing notwithstanding,
the option holder may transfer all or, subject to the approval of the Company,
part of an option to the option holder's spouse, children, and grandchildren and
to a trust, partnership, or limited liability company the entire beneficial
interest of which, following a transfer, is held solely by the option holder or
one or more of the foregoing persons. No other transfers will be permitted. Upon
a transfer of an option or a part thereof, all provisions of the transferred
option as governed by the Plan shall remain in effect. No transfer will be
recognized by the Company unless written notice of such transfer shall have been
provided to the Company together with any documentation that the Company may
request.
Notwithstanding anything to the contrary contained herein, this option
is not exercisable until all the following events occur and during the following
periods of time:
(a) Until the Plan pursuant to which this option is granted is
approved by the stockholders of the Company in the manner prescribed by the Code
and the regulations thereunder;
(b) Until this option and the optioned shares are approved
and/or registered with such federal, state and local regulatory bodies or
agencies and securities exchanges as the Company may deem necessary or
desirable; or
(c) During any period of time in which the Company deems that
the exercisability of this option, the offer to sell the shares optioned
hereunder, or the sale thereof, may violate a federal, state, local or
securities exchange rule, regulation or law, or may cause the Company to be
legally obligated to issue or sell more shares than the Company is legally
entitled to issue or sell.
10
<PAGE>
The following two paragraphs shall be applicable if, on the date of
exercise of this option, the Common Stock to be purchased pursuant to such
exercise has not been registered under the Securities Act of 1933, as amended,
and under applicable state securities laws, and shall continue to be applicable
for so long as such registration has not occurred:
(a) The optionee hereby agrees, warrants and represents that
he will acquire the Common Stock to be issued hereunder for his own account for
investment purposes only, and not with a view to, or in connection with, any
resale or other distribution of any of such shares, except as hereafter
permitted. The optionee further agrees that he will not at any time make any
offer, sale, transfer, pledge or other disposition of such Common Stock to be
issued hereunder without an effective registration statement under the
Securities Act of 1933, as amended, and under any applicable state securities
laws or an opinion of counsel acceptable to the Company to the effect that the
proposed transaction will be exempt from such registration. The optionee shall
execute such instruments, representations, acknowledgments and agreements as the
Company may, in its sole discretion, deem advisable to avoid any violation of
federal, state, local or securities exchange rule, regulation or law.
(b) The certificates for Common Stock to be issued to the
optionee hereunder shall bear the following legend:
"The shares represented by this certificate have not been
registered under the Securities Act of 1933, as amended, or under applicable
state securities laws. The shares have been acquired for investment and may not
be offered, sold, transferred, pledged or otherwise disposed of without an
effective registration statement under the Securities Act of 1933, as amended,
and under any applicable state securities laws or an opinion of counsel
acceptable to the Company that the proposed transaction will be exempt from such
registration."
The foregoing legend shall be removed upon registration of the legended
shares under the Securities Act of 1933, as amended, and under any applicable
state laws or upon receipt of an opinion of counsel acceptable to the Company
that said registration is no longer required.
The sole purpose of the agreements, warranties, representations and
legend set forth in the two immediately preceding paragraphs is to prevent
violations of the Securities Act of 1933, as amended, and any applicable state
securities laws.
It is the intention of the Company and you that this option shall not
be an "incentive stock option" as that term is used in Section 422A of the Code
and the regulations thereunder.
This option shall be subject to the terms of the Plan in effect on the
date this option is granted, which terms are hereby incorporated herein by
reference and made a part hereof. In the event of any conflict between the terms
of this option and the terms of the Plan in effect on the date of this option,
the terms of the Plan shall govern. This option constitutes the entire
understanding between the Company and you with respect to the subject matter
hereof and no amendment, modification or waiver of this option, in whole or in
part, shall be binding upon the Company unless in writing and signed by the
President of the Company. This option and the performances of the parties
hereunder shall be construed in accordance with and governed by the laws of the
Commonwealth of Pennsylvania.
Please sign the copy of this option and return it to the Company's
Secretary, thereby indicating your understanding of and agreement with its terms
and conditions.
GENESIS HEALTH VENTURES, INC.
By: ___________________________
I hereby acknowledge receipt of a copy of the foregoing stock option
and, having read it hereby signify my understanding of, and my agreement with,
its terms and conditions.
- ----------------------------- ------------------------
(Signature) (Date)
11
<PAGE>
GENESIS HEALTH VENTURES, INC.
RETIREMENT PLAN
(Restated, Effective January 1, 1989)
<PAGE>
GENESIS HEALTH VENTURES, INC.
RETIREMENT PLAN
(Restated, Effective January 1, 1989)
TABLE OF CONTENTS
ARTICLE SUBJECT MATTER Page
- ------- -------------- ----
I. DEFINITIONS.............................. 1
II. PARTICIPATION ELIGIBILITY................ 20
III. EMPLOYER CONTRIBUTIONS................... 23
IIIA. TOP-HEAVY PLAN PROVISIONS................ 31
IV. PARTICIPANT CONTRIBUTIONS AND SALARY
REDUCTION ARRANGEMENTS........ 39
V. ALLOCATION OF CONTRIBUTIONS.............. 51
VI. ADMINISTRATIVE PROVISIONS................ 60
VII. RETIREMENT AND DISABILITY BENEFITS....... 72
VIII. DEATH BENEFITS........................... 73
IX. VESTING PROVISIONS....................... 80
X. METHODS AND TIMING OF BENEFIT
DISTRIBUTIONS.......................... 83
XI. PLAN ADMINISTRATION...................... 93
XII. ALLOCATION AND DELEGATION OF
AUTHORITY AND RESPONSIBILITY........... 97
XIII. APPLICATION FOR BENEFITS AND
CLAIMS PROCEDURES...................... 99
XIV. AMENDMENT AND TERMINATION................ 102
XV. MISCELLANEOUS PROVISIONS................. 105
<PAGE>
GENESIS HEALTH VENTURES, INC.
RETIREMENT PLAN
(Restated, Effective January 1, 1989)
ARTICLE I
DEFINITIONS
Sec. 1.01 "Account" shall mean the entire interest of a Participant in
the Plan. Unless otherwise specified, the value of a Participant's Account shall
be determined as of the Valuation Date coincident with or next following the
occurrence of the event to which reference is made. A Participant's Account
shall consist of such of the following as the Participant has under the Plan:
(a) Employer Profit-Sharing Contribution Account; (b) Employer Salary Reduction
Contribution Account; and (c) Employer Matching Contribution Account.
Sec. 1.02 "Accrual Computation Period" shall mean the twelve-month
period corresponding to the Plan Year.
Sec. 1.03 "Actual Deferral Percentage" shall mean, for any Plan Year,
the average of the ratios, calculated separately for each Participant in the
group of Highly Compensated Employees and for the group of all other Employees,
of a Participant's Salary Reduction Amounts to his/her Compensation for the Plan
Year.
Sec. 1.04 "Affiliated Company" shall mean any entity which, with any
entity constituting Employer, constitutes (a) a "controlled group of
corporations" within the meaning of Section 414(b) of the Code, (b) a "group of
trades or businesses under common control" within the meaning of Section 414(c)
of the Code, or (c) an "affiliated service group" within the meaning of Section
414(m) of the Code. The term Affiliated Company shall include any other entity
required to be aggregated with the Employer pursuant to regulations under
Section 414(o) of the Code. If an Owner-Employee, who is described in Section
401(d) of the Code, is a Participant and his/her Account is credited with an
allocation of an Employer contribution, any entity described in Section 401(d)
of the Code shall constitute an Affiliated Company. An entity shall be
considered an Affiliated Company only with respect to such period as the
relationship described in the preceding sentence exists. Solely for purposes of
Article V of this Plan, whether an entity constitutes an Affiliated Company
under Paragraph (a) or (b) above, shall be determined by application of the
provisions of Section 415(h) of the Code.
<PAGE>
Sec. 1.05 "Age" shall mean the chronological age attained by the
Participant at his/her most recent birthday.
Sec. 1.06 "Alternate Payee" shall mean any person entitled to current
or future payment of benefits under the Plan pursuant to a QDRO.
Sec. 1.07 "Anniversary Date" shall mean the last day of the Plan Year.
Sec. 1.08 "Beneficiary" shall mean:
(a) Any Alternate Payee named in a QDRO to receive
benefits in the event of the death of the Participant, to the extent of
the rights granted in such QDRO;
(b) As to any Participant who is married at the time
of his/her death, the Participant's Spouse, except as provided in
Paragraphs (c) and (d) of this section;
(c) As to any Participant who (1) is not married at
the time of his/her death, or (2) is married, but whose Spouse has
consented to the designation of a Beneficiary other than
himself/herself (to the extent of such consent), the persons or
entities designated by the Participant in writing to be his/her
Beneficiaries hereunder; and
(d) As to any Participant who dies not survived by a
Spouse, whose death benefit is not subject to a QDRO, and who has not
designated a Beneficiary (or who is not survived by any such designated
Beneficiary), the following classes of takers, each class to take to
the exclusion of all subsequent classes, with all members of each class
to share equally:
(1) Lineal descendants (including adopted
persons and step-children) per stirpes;
(2) Surviving parents; and
(3) The Participant's estate.
Sec. 1.09 "Benefit Commencement Date" shall mean the first day of the
first period for which an amount is paid as an annuity or in any other form.
-2-
<PAGE>
Sec. 1.10 "Board" shall mean the board of directors of the Employer if
the Employer is a corporation. "Board" shall mean the sole proprietor if the
Employer is a sole proprietorship or the appropriately authorized partner(s) if
the Employer is a partnership.
Sec. 1.11 "Break in Service" shall mean failure by a Participant or
Employee to complete more than five hundred (500) Hours of Service during any
Eligibility or Vesting Computation Period. However, no Break in Service shall be
deemed to have occurred until there occurs a termination of the
employer-employee relationship between the Employer and the Employee or
Participant involved. Any Break in Service shall be deemed to have commenced on
the first day of the Computation Period in which it occurs, or, if later, the
date on which the Employee last renders service for which he/she is entitled to
credit for an Hour of Service during such Computation Period. No Break in
Service shall be deemed to occur during an Employee's initial Eligibility
Computation Period solely because of his/her failure to complete more than five
hundred (500) Hours of Service during any one Plan Year occurring in part during
such twelve-month period if the Employee completes one (1) Year of Service
during such initial Eligibility Computation Period. A Break in Service shall not
be deemed to have occurred during any period of Excused Absence if the Employee
returns to the service of the Employer within the time permitted pursuant to the
provisions of this Plan setting forth circumstances of Excused Absence. Solely
for the purposes of determining whether or not a Break in Service has occurred,
there shall be credited to each Employee absent from service on a Parenthood
Absence the lesser of (a) the number of Hours of Service that would normally
have been credited to the Participant but for such absence (if determinable, and
if not determinable, then the number of Hours of Service determined by
multiplying the number of days of such absence by 8), or (b) five hundred one
(501) Hours of Service, with all of the Hours of Service so credited being
deemed to have been credited to the Eligibility and Vesting Computation Periods
in which such absence begins if necessary to avoid a Break in Service in such
Computation Periods, or, if not necessary to avoid such Breaks in Service, then
to the Eligibility and Vesting Computation Periods next following the
Computation Periods in which such absence commenced.
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Sec. 1.12 "Compensation" shall mean:
(a) In General. Compensation shall mean the wages (as
defined in Section 3401(a) of the Code for purposes of income tax
withholding at the source) paid by the Employer during the Accrual
Computation Period of reference, 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. Compensation paid
with respect to service performed prior to the Entry Date on which the
Eligible Class Employee becomes a Participant under this Plan and with
respect to service performed after the date on which an Employee ceases
to be an Eligible Class Employee shall be disregarded.
(b) Amounts Excluded. (1) In General. However,
Compensation shall not include (i) Employer contributions to a plan of
deferred compensation which are not includable in the Participant's
gross income for the taxable year in which contributed, or Employer
contributions under a simplified employee pension plan to the extent
such contributions are deductible by the Participant, or any
distributions from a qualified plan of deferred compensation; (ii)
amounts realized from the exercise of a nonqualified stock option, or
when restricted stock (or property) held by the Participant either
becomes freely transferable or is no longer subject to a substantial
risk of forfeiture; (iii) amounts realized from the sale, exchange or
other disposition of stock acquired under a qualified stock option; and
(iv) other amounts which receive special tax benefits, or contributions
made by the Employer (whether or not under a salary reduction
agreement) towards the purchase of an annuity described in Section
403(b) of the Code (whether or not the amounts are excludable from the
gross income of the Participant).
(2) Other Amounts Excluded. In addition,
Compensation shall not include reimbursement or other expense
allowances, fringe benefits (cash and non-cash), moving
expenses, deferred compensation and welfare benefits.
(c) Inclusion of Certain Deferred Amounts.
Notwithstanding the foregoing, Compensation shall also include any
amount contributed by the Employer pursuant to a salary reduction
agreement and which is not includable in the gross income of the
Participant in accordance with Section 125, 402(a)(8), 402(h), 403(b),
414(h)(2) or 457(b) of the Code.
(d) Compensation of Self-Employed Individuals. If an
Employer is a sole proprietorship or partnership, a Self-Employed
Individual shall be treated as an Employee and, with respect to such
individual, Compensation shall mean his/her Earned Income for the
Accrual Compensation Period multiplied by a fraction,
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the numerator of which is the Compensation which would be taken into
account if such Employee were not a Self-Employed Individual and the
denominator of which is such individual's Earned Income (determined
without regard to Paragraph (b)(2)).
(e) Limitation on Compensation.
(1) For Plan Years Beginning January 1, 1994
and Thereafter. 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 Compensation of each Employee taken
into account under the Plan shall not exceed the Omnibus
Budget and Reconciliation Act of 1993 ("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 twelve (12) months,
over which Compensation is determined ("Accrual Computation
Period"), beginning in such calendar year. If such Accrual
Computation Period consists of fewer than twelve (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 Accrual Computation Period, and the denominator of which
is twelve (12).
If Compensation for any prior Accrual Computation
Period is taken into account in determining an Employee's
benefits accruing in the current Plan Year, Compensation for
that prior Accrual Computation Period is subject to the OBRA
'93 annual compensation limit in effect for such prior Accrual
Computation Period. For this purpose, for Accrual Computation
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.
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(2) For Plan Years Beginning Prior to
January 1, 1994. Notwithstanding the foregoing, Compensation
for any Accrual Computation Period shall exclude annual
earnings of any Employee in excess of $200,000 (or such
adjusted amount as is determined by the Secretary of the
Treasury or his delegate pursuant to the provisions of Section
401(a)(17) of the Code). In the event of an Accrual
Computation Period which is less than twelve months in
duration, Compensation for such Accrual Computation Period
shall exclude annual earnings of any Employee in excess of an
amount determined by multiplying the amount referred to in the
preceding sentence by a fraction, the numerator of which is
the number of complete calendar months during such Accrual
Computation Period and the denominator of which is twelve
(12). For purposes of this paragraph, the Compensation of
certain Highly Compensated Employees shall include the
Compensation of Family Members (as defined in the definition
of "Highly Compensated Employee") limited, however, to the
spouse of such Employee and any lineal descendants of such
Employee who have not attained age 19 by the close of the
Accrual Computation Period.
Sec. 1.13 "Computation Period" shall mean the period of twelve (12)
consecutive months designated as the Accrual Computation Period, the Eligibility
Computation Period, or the Vesting Computation Period, as indicated by the
context of usage.
Sec. 1.14 "Contract" shall mean any annuity, pension, retirement
income, or insurance contract or policy providing for payment of benefits under
this Plan, and any deposit administration or other contract or policy providing
for the management of the assets of the Plan by an insurance company. No
Contract providing benefits under this Plan shall be inconsistent with the
provisions of this Plan. All Contracts shall be nontransferable (as defined in
Section 401(g) of the Code).
Sec. 1.15 "Deferred Retirement Date" shall mean the date of a
Participant's retirement from the service of the Employer subsequent to his/her
Normal Retirement Age.
Sec. 1.16 "Disregarded Prior Service" shall mean Years of Service
completed prior to any Break in Service, if
(a) (1) the Employee was not a Participant in the
Plan, or (2) the Participant had no vested interest in that portion of
his/her Account under the Plan attributable to Employer contributions
prior to such Break in Service; and
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(b) the number of consecutive one-year Breaks in
Service incurred (including in such series of consecutive one-year
Breaks in Service the Break in Service with regard to which a
determination is being made as to whether prior Years of Service are
Disregarded Prior Service hereunder) equals or exceeds the greater of:
(1) five (5), or
(2) the number of Years of Service, other
than Disregarded Prior Service, completed by the Employee
(whether or not such Years of Service were completed as an
Eligible Class Employee) prior to such Break
in Service.
Sec. 1.17 "Earned Income" shall mean the net earnings from
self-employment for personal services rendered in the course of employment with
the Employer, calculated in accordance with Section 401(c)(2) of the Code.
Sec. 1.18 "Effective Date" shall mean January 1, 1989. The Effective
Date of this restatement is January 1, 1989. However, those provisions of this
Plan which are required for compliance with the Tax Reform Act of 1986, the
Omnibus Budget Reconciliation Act of 1986, the Omnibus Budget Reconciliation Act
of 1987, the Technical and Miscellaneous Revenue Act of 1988 and the Omnibus
Budget Reconciliation Act of 1989 shall take effect no earlier than the dates
required by such Acts, and such provisions shall be deemed to be amendments to
The Meridian Healthcare, Inc. Retirement Savings Plan as such plan existed prior
to January 1, 1995.
Sec. 1.19 "Eligibility Computation Period" shall mean:
(a) with respect to each Employee, the twelve-month
period commencing on his/her most recent Employment Commencement Date
(his/her "initial" Eligibility Computation Period), and
(b) commencing with the Plan Year in which the
Employee's initial Eligibility Computation Period ends, each and every
full Plan Year during which an Employee is in the service of the
Employer.
Sec. 1.20 "Eligible Class Employee" shall mean each Employee of the
Employer, except as hereinafter provided. The term Eligible Class Employee shall
not include any person whose terms and conditions of employment are determined
through
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collective bargaining with a third party if the issue of retirement benefits has
been a bona fide subject of collective bargaining, unless the collective
bargaining agreement provides for the inclusion of such person as a Participant
in this Plan. In addition, the term Eligible Class Employee shall not include
any Leased Employee.
Sec. 1.21 "Employee" shall mean each person in the employ of the
Employer.
Sec. 1.22 "Employee Retirement Income Security Act of 1974" or "ERISA"
shall mean the Act known by that name (P.L. 93-406), including all amendments
thereto.
Sec. 1.23 "Employer" shall mean Genesis Health Ventures, Inc. and Team
Rehabilitation Company (until November 30, 1989), both Pennsylvania
corporations, and any successor or related entity thereto which adopts this Plan
and joins in the corresponding Trust Agreement. The term "Employer" also
includes any other entity which, with the consent of the Board, adopts this Plan
and joins in the corresponding Trust Agreement.
Sec. 1.24 "Employer Contribution Account" shall mean that portion of a
Participant's Account consisting of Employer Profit-Sharing contributions,
reallocated forfeitures, earnings and accretions attributable thereto, and
Employer Matching contributions, reallocated forfeitures and the earnings and
accretions attributable thereto.
Sec. 1.25 "Employer Matching Contribution Account" shall mean that
portion of a Participant's Account consisting of Employer Matching contributions
pursuant to Section 3.01(b) of the Plan, reallocated forfeitures and the
earnings and accretions attributable thereto.
Sec. 1.26 "Employer Profit-Sharing Contribution Account" shall mean
that portion of a Participant's Account consisting of Employer Profit-Sharing
contributions pursuant to Section 3.01(c) of the Plan, reallocated forfeitures
and the earnings and accretions attributable thereto.
Sec. 1.27 "Employer Salary Reduction Contribution Account" shall mean
that portion of a Participant's Account consisting of contributions made by the
Employer pursuant to a Salary Reduction Agreement and the provisions of Section
3.01(a) of the Plan, together with the earnings and accretions attributable
thereto.
Sec. 1.28 "Employment Commencement Date" shall mean, with respect to
any individual, the first date on which that individual performs an Hour of
Service, whether or not such service was performed as an Eligible Class
Employee.
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Sec. 1.29 "Entry Date" shall mean, effective as of January 1, 1991,
every January 1st and July 1st thereafter during which this Plan is in effect.
Prior to January 1, 1991, "Entry Date" shall mean every January 1st during which
this Plan is in effect; "401(k) Entry Date" shall mean the Effective Date and
every July 1st and January 1st thereafter during which this Plan is in effect.
Sec. 1.30 "Excused Absence" means any of the following:
(a) Absence on leave granted by the Employer for any
cause for the period stated in such leave or, if no period is stated,
then for six (6) months and any extensions that the Employer may grant
in writing. For the purposes of this provision, the Employer will give
similar treatment to all Employees in similar circumstances.
(b) Absence in any circumstance so long as the
Employee continues to receive his/her regular compensation from the
Employer.
(c) Absence in the armed forces of the United States
or government service in time of war or national emergency.
(d) Absence by reason of illness or disability until
such time as the employment relationship between Employer and Employee
is severed.
An "Excused Absence" shall cease to be an "Excused Absence" and shall
be deemed a Break in Service as of the later of (1) and (2), if
(1) Is the first day of such absence if the
Employee fails to return to the service of the Employer (i)
within five (5) days of the expiration of any leave of absence
referred to in Paragraph (a) of this section; (ii) at such
time as the payment of regular compensation referred to in
Paragraph (b) of this section is discontinued; (iii) within
the period after his/her discharge or release from active duty
during which the Employee's employment rights are protected by
Federal statute, or, if the Employee does not return to the
service of the Employer within such period by reason of a
disability incurred while in the armed forces, if he/she
returns to service with the Employer upon the termination of
such disability as evidenced by release from confinement in a
military or veterans health care facility; or (iv) upon
recovery from the illness or disability referred to in
Paragraph (d) of this section; or
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(2) Is the first day of the first Plan Year
in which the Employee fails to complete more than five hundred
(500) Hours of Service.
The Plan Administrator shall be the sole judge of whether recovery from
illness or disability has occurred for this purpose.
Sec. 1.31 "Five-percent Owner" shall mean any person who owns (or is
considered as owning within the meaning of Section 318 of the Code, as modified
by Section 416(i) of the Code) more than five percent (5%) of the outstanding
voting stock of the Employer (or any entity constituting an Affiliated Company)
or stock possessing more than five percent (5%) of the total combined voting
power of all of the stock of such entity. If an entity is not a corporation, a
person shall be considered a "Five-percent Owner" if he/she owns more than
five-percent (5%) of either the capital or the profits interest in the entity.
Sec. 1.32 "Fund" shall mean all of the assets of the Plan held by the
Trustee (or any nominee thereof) at any time under the Trust Agreement.
Sec. 1.33 "Highly Compensated Employee" means any Employee who:
(a) is a Five-Percent Owner at any time during the
Look-Back Year or the Determination Year;
(b) receives annual Compensation from the Employer or
an Affiliated Company during the Look-Back Year in excess of $75,000
(or such higher amount as may be established by the Secretary of the
Treasury to reflect cost of living adjustments);
(c) receives Annual Compensation from the Employer or
an Affiliated Company during the Determination Year in excess of
$75,000 (or such higher amount as may be established by the Secretary
of the Treasury to reflect cost of living adjustments); provided,
however, that such Employee is one of the one hundred (100) Employees
(excluding former Employees) who receives the most Annual Compensation
from the Employer or an Affiliated Company during the Determination
Year;
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(d) receives Annual Compensation from the Employer or
an Affiliated Company during the Look-Back Year in excess of $50,000
(or such higher amount as may be established by the Secretary of the
Treasury to reflect cost of living adjustments) and such Employee is in
the Top-Paid Group of Employees for such year;
(e) is an officer of the Employer or an Affiliated
Company at any time during the Look-Back Year and who receives Annual
Compensation from the Employer during such year in excess of fifty
percent (50%) of the dollar limitation in effect under Section
415(b)(1)(A) of the Code for such year;
(f) is an officer of the Employer or an Affiliated
Company at any time during the Determination Year and who receives
Annual Compensation from the Employer or an Affiliated Company during
such year in excess of fifty percent (50%) of the dollar limitation in
effect under Section 415(b)(1)(A) of the Code for such year and is one
of the one hundred (100) Employees (excluding former Employees) who
receives the most Annual Compensation from the Employer or an
Affiliated Company during the Determination Year; or
(g) is the officer of the Employer or an Affiliated
Company who receives the greatest Annual Compensation during the
Look-Back Year or the Determination Year; provided, however that this
Paragraph (g) shall apply only if no other officer is described in
Paragraph (e) during the Look-Back Year or Paragraph (f) during the
Determination Year solely because no officer receives Compensation from
the Employer in excess of fifty percent (50%) of the dollar limitation
in effect under Section 415(b)(1)(A) of the Code for such year.
Notwithstanding the provisions of Paragraphs (e) and (f), the maximum
number of officers included during the Look-Back Year or the Determination Year
shall be limited in accordance with the rules set forth in Section 414(q)(5) of
the Code, which is hereby incorporated by reference.
Following the determination of the Employees who are Highly Compensated
Employees, the ten most highly compensated Employees, members of the Top-Paid
Group and the 100 most Highly Compensated Employees, each Family Member of each
Highly Compensated Employee who is a Five-Percent Owner or one of the ten most
highly compensated employees ranked on the basis of Annual Compensation
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received during the Look-Back Year or Determination Year shall not be considered
a separate Employee and any Annual Compensation paid to such Family Member and
any applicable contribution or benefit of such Family Member shall be treated as
if it were on behalf of such Five-Percent Owner or Highly Compensated Employee.
For purposes of this section, each former Employee with respect to a
Determination Year who has a Separation Year prior to the Determination Year and
is a Highly Compensated Employee during such Employee's Separation Year or any
Determination Year ending on or after such Employee's 55th birthday, shall be
considered a Highly Compensated Employee.
For purposes of determining the number of Employees in the Top-Paid
Group, and the maximum number of officers taken into account for purposes of
Paragraphs (e) and (f) above, there shall be excluded the employees described in
Section 414(q)(8) of the Code, which is hereby incorporated by reference.
For purposes of this section:
"Annual Compensation" shall mean a Participant's annual
compensation (as determined under Article V, increased, however, by
income from services outside the United States excluded from "gross
income" under Section 911 of the Code and any amount contributed by the
Employer pursuant to a salary reduction agreement and which is not
includable in the gross income of such Employee under Section 125,
402(a)(8), 402(h), 403(b), 414(h)(2) or 457(b) of the Code).
"Determination Year" shall mean the Plan Year for which a
determination is made.
"Family Member" shall mean any Employee's, or former
Employee's, spouse, lineal ascendants, lineal descendants and the
spouses of such lineal ascendants and lineal descendants.
"Look-Back Year" shall mean the twelve (12) month period
immediately preceding the Determination Year.
"Separation Year" shall mean the Determination Year during
which the Employee separates from service with the Employer or performs
no services for the Employer. An Employee shall be deemed to have a
Separation Year if, during a Determination Year prior to attainment of
Age 55, the Employee's Annual Compensation is less than 50% of the
Employee's average
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Annual Compensation for the three consecutive calendar years preceding
such Determination Year during which the Employee receives the greatest
amount of Annual Compensation from the Employer (or the total period of
the Employee's service with the Employer, if less).
"Top-Paid Group" shall mean the group consisting of the top
twenty percent (20%) of Employees (excluding former Employees) of the
Employer and all Affiliated Companies, when ranked on the basis of
Annual Compensation received from the Employer and all Affiliated
Companies.
Sec. 1.34 "Hour of Service" shall mean (a) each hour for which an
Employee is paid or entitled to payment for the performance of duties for the
Employer during the applicable Computation Period, (b) each hour for which an
Employee is paid or entitled to payment by the Employer on account of a period
of time during which no duties are performed (irrespective of whether or not the
employment relationship has terminated) due to vacation, holiday, illness,
incapacity (including disability), layoff, jury or military duty, or leave of
absence, and (c) each hour for which back pay, irrespective of mitigation of
damages, is either awarded or agreed to by the Employer. Hours of Service shall
be credited in a manner which is consistent with regulations published by the
Secretary of Labor at Title 29, Code of Federal Regulations, Section
2530.200b-2(b) and (c). Hours of Service shall be credited to the Computation
Period in which earned, regardless of when determined or awarded.
Notwithstanding the foregoing, (1) not more than five hundred and one (501)
Hours of Service shall be credited to an Employee on account of any single
continuous period during which the Employee performs no duties for the Employer;
(2) no credit shall be granted for any period with respect to which an Employee
receives payment or is entitled to payment under a plan maintained solely for
the purpose of complying with applicable workmen's compensation or disability
insurance laws; and (3) no credit shall be granted for a payment which solely
reimburses an Employee for medical or medically related expenses incurred by the
Employee. Each week of absence for military service in the armed forces of the
United States from which service the Employee returns to the Employer within the
period during which he/she has legally protected reemployment rights shall count
as a number of Hours of Service equal to the number of Hours of Service that
would have been credited to the Employee with respect to the Employee's
customary week of employment during the month immediately preceding the date on
which absence for military service commenced. Service rendered at overtime or
other premium rates shall be credited at the rate of one (1) Hour of Service for
each hour for which pay is earned, regardless of the rate of
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compensation in effect with respect to such hour. If the Employer maintains the
plan of a predecessor employer, Hours of Service with such employer shall be
considered to be Hours of Service with the Employer. Service with an Affiliated
Company in any Computation Period shall be considered service with the Employer
in that Computation Period for the purposes of this Plan; provided, however,
that except as may otherwise be specifically provided under the Plan, Hours of
Service with any entity prior to the date on which it became an Affiliated
Company and Hours of Service with any entity subsequent to the date on which it
ceased to be an Affiliated Company shall not be considered to be Hours of
Service with the Employer.
Hours of service performed prior to October 1, 1989 by former employees
of ASCO Healthcare, Inc. who became Employees of the Employer as of such date
shall be deemed to be Hours of Service performed for the Employer for purposes
of the eligibility provisions of the Plan. Hours of service performed prior to
July 30, 1992 by former employees of Suburban Medical Services, Inc. who became
Employees of the Employer as of such date shall be deemed to be Hours of Service
performed for the Employer for purposes of the eligibility provisions of the
Plan. Hours of service performed prior to April 30, 1993 by former employees of
Health Concepts & Services, Inc. who became Employees of the Employer as of such
date shall be deemed to be Hours of Service performed for the Employer for
purposes of the eligibility, vesting and benefit accrual provisions of the Plan.
Hours of service performed prior to August 1, 1993 by former employees of Manor
Care Systems, Inc. at the Towne Manor Nursing & Rehabilitation Center East,
Towne Manor Nursing & Rehabilitation Center West and Dorrance Manor Nursing &
Rehabilitation Center facilities who became Employees of the Employer as of such
date shall be deemed to be Hours of Service performed for the Employer for
purposes of the eligibility, vesting and benefit accrual provisions of the Plan.
Hours of Service performed prior to November 30, 1993, by former employees of
Meridian Healthcare, Inc. who became Employees of the Employer as of such date
shall be deemed to be Hours of Service performed for the Employer for purposes
of the eligibility, vesting and benefit accrual provisions of the Plan. Hours of
Service performed prior to August 1, 1993 by former employees of Edgemont
Partners, L.P., a Tennessee limited partnership, who became Employees of the
Employer as of such date shall be deemed to be Hours of Service performed for
the Employer for purposes of the eligibility, vesting and benefit accrual
provisions of the Plan.
For purposes of this section, the term "Employee" includes an Employee
and a Leased Employee.
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If an Employee's payroll records are normally kept on other than an
hourly basis, as described below, the following equivalencies may be utilized in
determining the number of Hours of Service to which the Employee is entitled to
be credited.
Basis Upon Which the Credit Granted If Participant
Participant's Payroll Earns At Least One (1) Hour
Records Are Maintained Of Service During Period
- ---------------------- -----------------------------
Shift............................. Actual hours for full shift
Day............................... 10 Hours of Service
Week.............................. 45 Hours of Service
Semi-monthly Payroll Period....... 95 Hours of Service
Months of Employment.............. 190 Hours of Service
Sec. 1.35 "Internal Revenue Code" or "Code" shall mean the Internal
Revenue Code of 1986 as the same may be amended from time to time.
Sec. 1.36 "Investment Manager" shall mean any fiduciary (other than a
Trustee or Named Fiduciary) who has the power to manage, acquire, or dispose of
any asset of the Plan and who has qualified as an "Investment Manager" within
the meaning of Section 3(38) of ERISA.
Sec. 1.37 "Leased Employee" shall mean any individual (other than an
Employee) who pursuant to an agreement between the Employer and any other entity
("Leasing Organization"), has performed services for the Employer (or related
entities determined in accordance with Section 414(n)(6) of the Code) on a
substantially full-time basis for a period of at least one year, and such
services are of a type historically performed by employees in the business field
of the Employer. Contributions or benefits provided a Leased Employee by a
Leasing Organization which are attributable to services performed for the
Employer shall be treated as if they had been provided by the Employer. An
individual shall not be considered as a Leased Employee if he/she is covered by
a safe harbor plan which satisfies the requirements of Section 414(n) of the
Code.
Sec. 1.38 "Named Fiduciary" shall mean the Employer, the Trustee, the
Plan Administrator (if other than the Employer) and the Named Appeals Fiduciary.
Each Named Fiduciary shall have only those particular powers, duties,
responsibilities and obligations as are specifically delegated to him/her/it
under this Plan and/or the Trust Agreement. Any fiduciary, if so appointed, may
serve in more than one fiduciary capacity.
Sec. 1.39 "Net Income" shall mean the current and accumulated earnings
of the Employer as determined by the Employer's regularly engaged accountant
upon the basis of the
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Employer's books of account, in accordance with generally accepted accounting
principles, but without any deduction being taken for any of the following: (a)
depreciation, (b) extraordinary losses, (c) casualty losses in excess of
recovery, (d) contributions to this or any other qualified retirement plan, or
(e) federal, state, county, or municipal income taxes or taxes on income imposed
by any other political subdivision.
Sec. 1.40 "Normal Retirement Age" shall mean the date on which the
Participant attains Age 65.
Sec. 1.41 "Owner-Employee" shall mean a Self-Employed Individual of an
Employer who owns more than ten percent (10%) of either the capital or profits
interest of such entity.
Sec. 1.42 "Parenthood Absence" shall mean an absence from work (a) due
to the pregnancy of the individual, (b) due to the birth of a child of the
individual, (c) due to the placement of a child in connection with the adoption
of that child by the individual, or (d) for the purposes of caring for a child
during the period immediately following the birth or placement for adoption of
such child.
Sec. 1.43 "Participant" shall mean any person who has been or who is an
Eligible Class Employee of Employer and who has been admitted to participation
in this Plan pursuant to the provisions of Article II. The term "Participant"
shall include Active Participants (those who are currently eligible to share in
Employer contributions to the Plan), Retired Participants (those former
Employees presently receiving benefits under the Plan or entitled to receive
such benefits), and Vested Participants (Employees and former Employees who are
no longer Active Participants, and, if this Plan is terminated, former Active
Participants who remain Employees of Employer, any of whom are or may become
entitled at some future date to the distribution of benefits from this Plan by
reason of their having been Active Participants herein).
Sec. 1.44 "Plan" shall mean the Genesis Health Ventures, Inc.
Retirement Plan as set forth herein, and as the same may from time to time
hereafter be amended. This Plan is intended to satisfy the requirements of
Section 401(k) of the Code and to constitute a qualified cash or deferred
arrangement within the meaning of that section. The Plan constitutes the merger
of the Meridian Healthcare, Inc. Retirement Savings Plan into this Plan,
effective as of January 1, 1995.
Sec. 1.45 "Plan Administrator" shall mean the person or committee
named as such pursuant to the provisions hereof, or, in the absence of any such
appointment, Genesis Health Ventures, Inc.
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Sec. 1.46 "Plan Year" shall mean the twelve-month period commencing
each January 1 and ending on the subsequent December 31.
Sec. 1.47 "QDRO" shall mean a "qualified domestic relations order"
within the meaning of Section 206(d)(3)(B) of ERISA.
Sec. 1.48 "Qualified Joint and Survivor Annuity" shall mean an annuity
for the life of the Participant, with a benefit payable after the death of the
Participant to the surviving Spouse of the Participant for the life of such
surviving Spouse, where the periodic benefit payable to such surviving Spouse is
not less than fifty percent (50%) nor more than one hundred percent (100%) of
the periodic benefit payable to the Participant during his/her lifetime, and
where the annuity provided is the actuarial equivalent of a single life annuity
for the life of the Participant as of the Benefit Commencement Date. Unless
otherwise specified in the Plan, any reference to a Qualified Joint and Survivor
Annuity shall be a reference to such an annuity providing a surviving Spouse's
benefit of fifty percent (50%) of the benefit that was payable to the
Participant during his/her lifetime.
Sec. 1.49 "Qualified Preretirement Benefit Survivor Annuity" shall mean
an annuity for the life of the Participant's Spouse the actuarial equivalent of
which is not less than fifty percent (50%) nor more than one hundred percent
(100%) of the Participant's vested Account balance as of the date of the
Participant's death, determined as of the Valuation Date coincident with or next
following the date of such death. Unless otherwise specified in the Plan, any
reference to a Qualified Preretirement Benefit Survivor Annuity in the Plan
shall be a reference to such an annuity providing a surviving Spouse's benefit
of one hundred percent (100%) of the Participant's vested Account balance as of
the date of the Participant's death.
Sec. 1.50 "Required Beginning Date" shall mean the April 1 of the
calendar year next following the calendar year in which the Participant attains
Age 70-1/2, except that with respect to any Participant who attained age 70-1/2
prior to January 1, 1988 (other than a Participant who was a Five-Percent Owner
at any time after attaining age 66-1/2), the "Required Beginning Date" shall
mean the April 1 of the calendar year next following the calendar year in which
he/she attains Age 70-1/2, or if later, the April 1 of the calendar year next
following the calendar year in which he/she retires.
Sec. 1.51 "Restoration Contribution Account" shall mean so much of the
Participant's Account as is attributable to amounts returned to the Plan under
the "cash out-buy back" provisions of Article IV.
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Sec. 1.52 "Salary Reduction Agreement" shall mean the written agreement
between a Participant and the Employer pursuant to which the Participant agrees
to accept a reduction in Compensation, or declines an increase in the same, and
pursuant to which the Employer agrees to contribute the amount of such reduction
or declined increase as an Employer contribution to the Participant's Employer
Salary Reduction Contribution Account under this Plan.
Sec. 1.53 "Salary Reduction Amount" shall mean the amount of
remuneration which is yielded or declined by the Participant pursuant to a
Salary Reduction Agreement and which the Employer has agreed to contribute to
the Participant's Employer Salary Reduction Contribution Account under this
Plan.
Sec. 1.54 "Self-Employed Individual" shall mean an individual who has
Earned Income from the Employer.
Sec. 1.55 "Spouse" shall mean (a) the person to whom the Participant
was married on his/her Benefit Commencement Date, or (b) if the Participant's
Benefit Commencement Date had not occurred at the time of his/her death, the
person to whom the Participant was married at the time of his/her death. When
the word "spouse" is used without an initial capital letter in the Plan, the
term means the person to whom the Participant was married or is married as of
the date of reference.
Sec. 1.56 "Total Disability" shall mean: (a) Effective as of January 1,
1994, a physical or mental condition of such severity and duration as to entitle
the Participant to disability retirement benefits under the Social Security Act;
or (b) prior to January 1, 1994, a physical or mental condition of such severity
and probable prolonged duration as to render it unlikely, in the judgment of the
Plan Administrator, that the Participant will be able to resume the duties
he/she was performing for the Employer prior to the onset of the condition
resulting in Total Disability. The Plan Administrator shall rely, in making any
such determination, upon the judgment of one or more medical practitioners
selected by the Plan Administrator and upon such evidence as is presented by the
Participant. No determination of Total Disability shall be made if the
Participant fails to provide such evidence as is required by the Plan
Administrator and/or fails to submit to examination by the medical
practitioner(s) selected by the Plan Administrator.
Sec. 1.57 "Transferee Plan" shall mean a plan which accepts an
inter-plan transfer in accordance with Article IV, directly or indirectly, from
a plan (the "Transferor Plan") which is required to provide Qualified Joint and
Survivor Annuities and Qualified Preretirement Benefit Survivor Annuities, or
optional forms of benefits not provided hereunder.
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Sec. 1.58 "Trust Agreement" shall mean the Genesis Health Ventures,
Inc. Retirement Plan Trust Agreement as the same is presently constituted, as it
may hereafter be amended, and such additional and successor trust agreements as
may be executed for the purpose of providing for the management of the assets of
the Plan.
Sec. 1.59 "Trustee" shall mean the party or parties so designated
pursuant to the Trust Agreement and each of their respective successors.
Sec. 1.60 "Valuation Date" shall mean the last day of the Plan Year
(the "Annual Valuation Date") and each other interim date during the Plan Year
on which a valuation of the Fund is made.
Sec. 1.61 "Vesting Computation Period" shall mean the Plan Year.
Sec. 1.62 "Year of Participation" shall mean any Accrual Computation
Period in which the Participant completes one thousand (1,000) or more Hours of
Service.
Sec. 1.63 "Year of Service" shall have the following meanings when used
in this Plan:
(a) When applied to eligibility provisions, a "Year
of Service" shall mean completion of an Eligibility Computation Period
in which the person is credited with one thousand (1,000) or more Hours
of Service, whether or not that service is performed as an Eligible
Class Employee.
(b) When applied to vesting provisions, a "Year of
Service" shall mean a Vesting Computation Period in which the person
completes one thousand (1,000) or more Hours of Service, whether or not
that service is performed as an Eligible Class Employee, subject,
however, to the limitations on service which is credited for vesting
purposes as provided in this Plan.
(c) All Years of Service which become Disregarded
Prior Service shall cease to be Years of Service for all purposes under
the Plan.
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ARTICLE II
PARTICIPATION ELIGIBILITY
Sec. 2.01 (a) Eligibility Provisions as of January 1, 1991. Every
Eligible Class Employee shall become a Participant on the Entry Date coincident
with or next following the date on which he/she completes one (1) Year of
Service. Notwithstanding the foregoing, no person shall be admitted as a
Participant if he/she is no longer an Employee on the Entry Date as of which
he/she would otherwise have become a Participant.
(b) Eligibility Provisions Prior to January 1, 1991.
Every Eligible Class Employee shall become eligible to enter into a
Salary Reduction Agreement on the 401(k) Entry Date coincident or next
following the date on which he/she is credited with one (1) Year of
Service. Every Eligible Class Employee shall become a Participant and
be eligible to participate in allocations of Employer Matching
contributions and Employer Profit-Sharing contributions made pursuant
to Sections 3.01(b) and 3.01(c) as of the Entry Date for the Plan Year
during which he/she completes one (1) Year of Service.
Sec. 2.02 Procedure for and Effect of Admission. Each Eligible Class
Employee who becomes eligible for admission to participation in this Plan shall
complete such forms and provide such data as are reasonably required by the Plan
Administrator as a precondition of such admission. In addition, such Employee
must execute and deliver such documents as are required by the Plan
Administrator in connection with a Salary Reduction Agreement, if applicable. By
becoming a Participant, each Employee shall for all purposes be deemed
conclusively to have assented to the terms and provisions of this Plan, the
corresponding Trust Agreement, and to all amendments to such instruments.
Sec. 2.03 Waiver of Participation. An Employee, once having become
eligible for participation in this Plan, shall not have the right to waive such
participation unless the Plan Administrator, in its sole discretion, determines
to allow written waivers of participation. If such waivers are permitted, they
shall be permitted on a nondiscriminatory basis and shall be effective on a
year-to-year basis only. The Plan Administrator retains the right not to permit
waivers in any year or years, even if such waivers were permitted in prior
years. Any Participant who waives participation shall be deemed to have bound
his/her heirs, personal representatives and assigns by such waiver. No waiver
shall be accepted from a Participant subject
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to a QDRO unless it is determined by the Plan Administrator that such waiver
would not diminish the entitlement of the party or parties for the benefit of
whom such QDRO exists.
Sec. 2.04 Readmission after Breaks in Service and Employment
Termination.
(a) For the purposes of determining eligibility to be
an Active Participant, service prior to the occurrence of a Break in
Service shall be combined with service subsequent to such Break in
Service except if the service prior to the Break in Service is
Disregarded Prior Service.
(b) The following persons shall be admitted or
readmitted to Active Participant status as of the date on which they
resume their status as Eligible Class Employees:
(1) Any person who satisfied the minimum age
and service requirements for Active Participant status, who
experienced a termination of employment prior to the Entry
Date on which he/she would have assumed Active Participant
status and was not in the employ of the Employer on that Entry
Date, and who subsequently again becomes an Eligible Class
Employee, unless such prior service constitutes Disregarded
Prior Service.
(2) Any person who experienced a Break in
Service but who had a vested interest in his/her Account under
this Plan by reason of a prior period of participation.
(c) Any person who experiences a Break in Service
after becoming a Participant, but who does not cease to be an Eligible
Class Employee at the time of such Break in Service, shall be deemed to
have again become an Active Participant as of the first day of the
first Accrual Computation Period in which he/she completes a Year of
Service after such Break in Service.
(d) Any person who experiences a Break in Service,
whose prior service is not protected under the provisions of Paragraph
(a) of this section, and who thereafter retains or resumes a status as
an Eligible Class Employee shall be considered a new Employee upon
performance of one (1) Hour of Service subsequent to
such Break in Service, and shall be required to satisfy the minimum
service requirements of Section 2.01 without regard to service prior to
a Break in Service or employment termination.
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Sec. 2.05 Changes in Status. In the event that a person, who has been
in the employ of the Employer in a category of employment not eligible for
participation in this Plan, or who was employed by an Affiliated Company,
subsequently becomes an Eligible Class Employee of the Employer by reason of a
change in status to a category of employment eligible for participation, or by
reason of becoming an Employee of the Employer, and subject to the provisions
set forth in the remainder of this section, he/she shall become a Participant as
of the date on which occurs such change to Eligible Class Employee status.
However, if on the date of such change, he/she has not satisfied all of the
requirements of Section 2.01, he/she will not become a Participant until the
Entry Date coincident with or next following the date on which he/she first
satisfies all of the requirements of Section 2.01, and will then become a
Participant only if he/she is still then an Eligible Class Employee.
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ARTICLE III
EMPLOYER CONTRIBUTIONS
Sec. 3.01 Determination of Amount.
(a) Employer Salary Reduction Contributions. The
Employer shall contribute with respect to each Accrual Computation
Period the aggregate of the Salary Reduction Amounts applicable to such
Accrual Computation Period, as determined pursuant to Salary Reduction
Agreements in force between the Employer and Participants in this Plan.
(b) Employer Matching Contributions. As of the last
day of each Accrual Computation Period, the Employer shall contribute
to the Trust an Employer Matching contribution, expressed as a dollar
amount or percentage of the Salary Reduction Amounts made on behalf of
each Participant, in such amount as the Board, in its absolute
discretion, shall timely determine to be the Employer Matching
contribution for the Accrual Computation Period then ending.
(c) Employer Profit-Sharing Contributions. As of the
last day of each Accrual Computation Period, the Employer shall
contribute to the Trust, from Net Income, such amounts as the Board, in
its absolute discretion, shall timely determine to be the Employer's
Profit-Sharing contribution for the Accrual Computation Period then
ending, which contributions shall be reduced, however, by any amounts
forfeited from the accounts of Participants or former Participants
pursuant to the provisions of Section 5.02. This provision shall not be
construed as requiring Employer to make contributions in (or with
respect to) any Accrual Computation Period, whether or not there exists
Net Income from which such contributions could be made.
Sec. 3.02 Timing of Contributions. Employer shall pay its contribution
made with respect to any Accrual Computation Period to the Trustee on or before
the date established for the filing of the Employer's federal income tax return
(including any extensions of that date) for the fiscal year of the Employer
ending with or within the Accrual Computation Period with respect to which such
contribution is made. However, any Salary Reduction Amount shall be contributed
to the Plan within a reasonable period of time not to exceed ninety (90) days
after such Salary Reduction Amount is withheld from the Participant's pay or
such shorter period of time as may be specified in the regulations under Section
401(k) of the Code.
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Sec. 3.03 Contingent Nature of Contributions. To the extent that the
deductibility thereof is subsequently denied, each contribution made by Employer
pursuant to the provisions of Section 3.01 hereof is hereby made expressly
contingent on the deductibility thereof for Federal income tax purposes for the
year with respect to which such contribution is made.
Sec. 3.04 Exclusive Benefit; Refund of Contributions. All contributions
made by the Employer are made for the exclusive benefit of the Participants and
their Beneficiaries, and such contributions shall not be used for nor diverted
to purposes other than for the exclusive benefit of the Participants and their
Beneficiaries (including the costs of maintaining and administering the Plan and
Trust). Notwithstanding the foregoing, to the extent that such refunds do not,
in themselves, deprive the Plan of its qualified status, refunds of
contributions shall be made to the Employer under the following circumstances
and subject to the foregoing limitations:
(a) Initial Nonqualification. If the Plan fails
initially to satisfy the qualification requirements of Section 401(a)
of the Code, and if Employer declines to amend the Plan to satisfy such
qualification requirements, contributions made prior to the
determination that the Plan has failed to qualify shall be returned to
the Employer.
(b) Disallowance of Deduction. To the extent that a
Federal income tax deduction is disallowed for any contribution made by
Employer, Trustee shall refund to the Employer the amount so disallowed
within one (1) year of the date of such disallowance.
(c) Mistake of Fact. In the case of a contribution
which is made in whole or in part by reason of a mistake of fact (for
example, incorrect information as to the eligibility or compensation of
an Employee, or a mathematical error), so much of the Employer
contribution as is attributable to the mistake of fact shall be
returnable to the Employer upon demand, upon presentation of evidence
of the mistake of fact to the Trustee and of calculations as to the
impact of such mistake. Demand and repayment must be effectuated within
one (1) year after the payment of the contribution to which the mistake
applies.
In the event that any refund of amounts contributed pursuant to Section
3.01(b) or Section 3.01(c) is paid to the Employer hereunder, such refund shall
be made without interest and shall
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be deducted from among the Employer Matching Contribution Accounts or Employer
Profit-Sharing Contribution Accounts of the Participants, as the case may be, as
an investment loss except to the extent that the amount of the refund can be
identified to one or more specific Participants (as in the case of certain
mistakes of fact, disallowances of compensation resulting in reduction of
deductible contributions, etc.) in which case the amount of the refund
identifiable to each such Participant's Account shall be deducted directly from
such Account. Refunds of Salary Reduction Amounts are described in Article IV of
this Plan.
Notwithstanding any other provision of this Section 3.04, no refund
shall be made to the Employer which is specifically chargeable to the Account(s)
of any Participant(s) in excess of one hundred percent (100%) of the amount in
such Account(s) nor shall a refund be made by the Trustee of any funds,
otherwise subject to refund hereunder, which have been distributed to
Participants and/or beneficiaries. In the case that such distributions become
refundable, Employer shall have a claim directly against the distributees to the
extent of the refund to which it is entitled.
All refunds pursuant to this section shall be limited in amount,
circumstance and timing to the provisions of Section 403(c) of ERISA, if
applicable, and no such refund shall be made if, solely on account of such
refund, the Plan would cease to be a qualified plan pursuant to Section 401(a)
of the Code.
Sec. 3.05 Limitation on Employer Matching Contributions.
(a) Definitions.
(1) "Aggregate Limit" shall mean the greater
of (i) the sum of (A) one hundred twenty-five percent (125%)
of the greater of the Actual Deferral Percentage of the group
of Participants who are not Highly Compensated Employees for
the Accrual Computation Period ("Relevant Actual Deferral
Percentage") or the Average Contribution Percentage of the
group of Participants who are not Highly Compensated Employees
for the Accrual Computation Period ("Relevant Average
Contribution Percentage"); and (B) two (2) percentage points
plus the lesser of the Relevant Actual Deferral Percentage or
the Relevant Average Contribution Percentage; provided,
however, that in no event shall the
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amount in this Paragraph (a)(1)(i)(B) exceed two hundred
percent (200%) of the lesser of the Relevant Actual Deferral
Percentage or the Relevant Average Contribution Percentage; or
(ii) the sum of (A) one hundred twenty-five percent (125%) of
the lesser of the Relevant Actual Deferral Percentage or the
Relevant Average Contribution Percentage; and (B) two (2)
percentage points plus the greater of the Relevant Actual
Deferral Percentage or the Relevant Average Contribution
Percentage; provided, however, that in no event shall the
amount in this Paragraph (a)(1)(ii)(B) exceed two hundred
percent (200%) of the greater of the Relevant Actual Deferral
Percentage or the Relevant Average Contribution Percentage.
(2) "Average Contribution Percentage" shall
mean the average, expressed as a percentage, of the
Contribution Percentages of the Participants to whom reference
is made.
(3) "Contribution Percentage" shall mean the
ratio, expressed as a percentage of, of a Participant's
Contribution Amounts to his/her Compensation for the Accrual
Computation Period.
(4) "Contribution Amount" shall mean the
Employer Matching contributions allocable to a Participant for
the Plan Year. To the extent that Employer Matching
contributions are treated as Salary Reduction Amounts pursuant
to Section 4.04(c), such contributions shall not be treated as
Contribution Amounts for purposes of this section. To the
extent provided in regulations, Salary Reduction Amounts may
be treated as Contribution Amounts for purposes of this
section; provided, however, that the requirements of Section
4.04(b) are satisfied prior to including such Salary Reduction
Amounts as Contribution Amounts and Section 4.04(b) continues
to be satisfied after such Salary Reduction Amounts are
treated as Contribution Amounts. In addition, Employer
Profit-Sharing contributions shall be treated as Contribution
Amounts if such contributions satisfy the vesting and
distribution requirements of Section 4.04(c).
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(5) "Excess Aggregate Contributions" shall
mean, with respect to any Plan Year, the excess of:
(A) the Contribution Amount of a Highly
Compensated Employee for such Plan Year, over
(B) the maximum allowable Contribution
Amount determined in accordance with the Average
Contribution Percentage test described in Paragraph
(b) of this
Section.
Such determination shall be made after first determining
"Excess Deferrals" pursuant to Section 4.06(b) and then
determining "Excess Contributions" pursuant to Section
4.04(b).
(b) Average Contribution Percentage Test. The
Contribution Amount of any Highly Compensated Employee shall
not exceed the maximum amount determined by the Employer to be
acceptable so that the Average Contribution Percentage for all
Participants who are Highly Compensated Employees is not more
than one hundred twenty-five percent (125%) of the Average
Contribution Percentage for all other Participants.
Notwithstanding the preceding sentence, the Average
Contribution Percentage for the Participants who are Highly
Compensated Employees may be greater than one hundred
twenty-five percent (125%) of the Average Contribution
Percentage of the other Participants, to a maximum of two
hundred percent (200%) of such Average Contribution Percentage
for the other Participants if the Average Contribution
Percentage for such Highly Compensated Employees does not
exceed the Average Contribution Percentage of the other
Participants by more than two (2) percentage points. However,
if Participants who are Highly Compensated Employees have
Contribution Amounts under this Plan and may elect to have the
Employer make Salary Reduction Amounts on their behalf, the
limitation in this paragraph may be further reduced in
accordance with the limitation described in Paragraph (c)(1).
The Excess Aggregate Contributions with respect to the Highly
Compensated Employees shall be reduced progressively to the
highest uniform percentage of each such Participant's
Compensation which the Employer, in its discretion, shall deem
to be permissible to ensure that the Average Contribution
Percentage of such group does not exceed the maximum allowable
percentage.
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(c) Special Rules.
(1) If, with respect to an Accrual
Computation Period, Salary Reduction Amounts and Contribution
Amounts are credited to the Account of a Participant who is a
Highly Compensated Employee and the sum of the Actual Deferral
Percentage and the Average Contribution Percentage of such
Participant exceeds the Aggregate Limit, then the Contribution
Percentage of such Participant shall be reduced (beginning
with the Highly Compensated Employee whose Contribution
Percentage is the highest) so that such limit is not exceeded.
The amount by which each such Highly Compensated Employee's
Contribution Percentage is reduced shall be treated as an
Excess Aggregate Contribution. For this purpose, the Actual
Deferral Percentage and the Contribution Percentage of such
Highly Compensated Employee are determined after any
corrections described in Paragraph (d) and Section 4.04(e).
The limitation described in this Paragraph (c)(1) shall not be
exceeded if the Actual Deferral Percentage and the Average
Contribution Percentage for the group of Highly Compensated
Employees does not exceed one hundred twenty-five percent
(125%) of the Relevant Actual Deferral Percentage and the
Relevant Average Contribution Percentage.
(2) For purposes of this section, the
Contribution Percentage of any Participant who is a Highly
Compensated Employee and who is eligible to have Contribution
Amounts allocated to his/her Account under two or more plans
described in Section 401(a) of the Code, including
arrangements described in Section 401(k) of the Code that are
maintained by the Employer or any Affiliated Company, shall be
determined as if all such Contribution Amounts are made under
each plan. In addition, if a Highly Compensated Employee
participates in two or more such plans that have different
plan years, all such plans having plan years ending with or
within the same calendar year shall be treated as a single
plan.
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(3) In the event that this Plan satisfies
the requirements of Section 401(m), 401(a)(4) or 410(b) of the
Code only if aggregated with one or more other plans, or if
one or more other plans satisfy the requirements of such
section of the Code only if aggregated with this Plan, then
this section shall be applied by determining the Contribution
Percentages of participants in such plans, as if such plans
were a single plan, provided, however, that plans may be
aggregated in order to satisfy Section 401(m) of the Code only
if they have the same Plan Year.
(4) With respect to any Participant who is a
Highly Compensated Employee and who is either a Five-percent
Owner or one of the ten (10) most highly compensated employees
when ranked on the basis of Compensation, his/her Contribution
Percentage shall be equal to the Contribution Percentage
determined by combining the Contribution Amounts and
Compensation of all Family Members. Therefore, Family Members
of such Highly Compensated Employees shall be disregarded as
separate employees for purposes of determining the
Contribution Percentage.
(5) For purposes of the Contribution
Percentage test, Employer Matching contributions and Employer
Profit-Sharing contributions will be considered made for an
Accrual Computation Period if they are made within the time
prescribed by Section 3.02 and allocated to a Participant's
Account with respect to the Accrual Computation Period.
(d) Distributions of Excess Aggregate
Contributions.
(1) Notwithstanding any other provision of
this Plan, Excess Aggregate Contributions, together with the
earnings thereon, shall be forfeited, if forfeitable, or if
not forfeitable, distributed to those Participants whose
Accounts include such Excess Aggregate Contributions as
promptly as practicable but not later than the last day
of the Plan Year following the Plan Year in which the Excess
Aggregate Contributions were allocated. For purposes of
Article V, Excess Aggregate Contributions shall be considered
Annual Additions.
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(2) Earnings allocable to Excess Aggregate
Contributions shall be determined as of the last day of the
Accrual Computation Period with respect to which such Excess
Aggregate Contributions are attributable and shall be equal to
the net earnings for such Accrual Computation Period allocable
to the Participant's aggregate Contribution Amounts,
multiplied by a fraction, the numerator of which is the
Participant's Excess Aggregate Contributions for the Accrual
Computation Period and the denominator of which is that
portion of the Participant's Account attributable to his/her
aggregate Contribution Amounts (determined prior to adjustment
for net investment experience for such Accrual Computation
Period).
(3) Excess Aggregate Contributions shall be
reduced by forfeiting, if forfeitable, or distributing if
nonforfeitable, the Participant's Employer Matching
contributions (and, if applicable, the Participant's Employer
Profit-Sharing contributions and Salary Reduction Amounts)
proportionately.
(4) With respect to any Participant who is a
Highly Compensated Employee to whom the rules of Paragraph
(c)(4) apply, Excess Aggregate Contributions are determined
and corrected by reducing the Contribution Percentage of such
Participant as determined under Paragraph (c)(4) and
allocating the Excess Aggregate Contributions among all Family
Members in proportion to the Contribution Amounts of each
Family Member that are combined for purposes of determining
such Participant's Contribution Percentage.
(5) Excess Aggregate Contributions forfeited
pursuant to this section shall be applied in accordance with
Section 5.02.
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ARTICLE IIIA
TOP-HEAVY PLAN PROVISIONS
Sec. 3A.01 Application. For each Plan Year beginning in which this Plan
is or becomes a Top-Heavy Plan, as hereinafter defined, the provisions of this
Article IIIA shall supersede any conflicting provisions of this Plan. Under the
provisions of this article, a Participant may receive increased Employer
contributions and/or an increase in his/her vested interest.
Sec. 3A.02 Minimum Contribution.
(a) Except as otherwise provided in this section,
with respect to each Top-Heavy Plan Year, a minimum contribution from
Net Income shall be made by the Employer and allocated to the Employer
Contribution Account of each Active Participant who is not a Key
Employee. Except as otherwise provided in this section, such minimum
contribution and allocation shall be an amount determined by
multiplying (1) three percent (3%) by (2) the Active Participant's
compensation, as defined in Section 415 of the Code and the regulations
thereunder.
(b) The minimum contribution and allocation described
in Paragraph (a) of this section, may be reduced if no Key Employee's
Employer Contribution Account is credited (or required to be credited)
with an amount of Employer contribution (with respect to that Top-Heavy
Plan Year) equal to or exceeding three percent (3%) of his/her
compensation (as defined in Section 415 of the Code and the regulations
thereunder) for that Top-Heavy Plan Year. For such Top-Heavy Plan Year,
the largest percentage calculated in accordance with the preceding
sentence shall be determined and such lesser percentage shall be
substituted for the three percent (3%) stated in Subparagraph (a)(1) of
this section. For the purpose of this paragraph, all defined
contribution plans included in a Required Aggregation Group will be
treated as one plan. This paragraph shall not apply in any Plan Year in
which this Plan is a part of an Aggregation Group containing a defined
benefit pension plan if this Plan enables a defined benefit plan
required to be included in such group to meet the requirements of
Sections 401(a)(4) or 410 of the Code.
(c) The minimum contribution and allocation described
in Paragraphs (a) and (b) of this section, shall be reduced to the
extent that a Participant's Employer Contribution Account is credited
with an Employer contribution under the terms of this Plan without the
application of Paragraph (a) of this section. In the event a
Participant is covered by any other qualified defined contribution
plan(s) sponsored by the Employer, the minimum contribution and
allocation described in Paragraphs (a) and (b) of this section shall
be reduced by the amount of Employer contributions allocated to the
account of such Participant under such other qualified defined
contribution plan(s).
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(d) In the event that an Active Participant is also a
Participant in a qualified defined benefit plan(s) sponsored by the
Employer, then for each Top-Heavy Plan Year five percent (5%) shall be
substituted for three percent (3%) and the phrase "from Net Income"
shall be deleted in Paragraph (a) of this section for purposes of
determining the amount of minimum contribution and allocation that may
be required to be made by the Employer.
(e) The following special rules shall apply for
purposes of determining what Employer contributions are made or are
required to be made:
(1) Benefits under or contributions made to
Social Security or related to self-employment income shall be
disregarded;
(2) Solely for purposes of determining the
amount described in Paragraph (b), Employee contributions
attributable to any salary reduction or similar arrangement
shall be taken in account with respect to any Plan Year;
(3) Employer contributions shall include
forfeitures; and
(4) A waiver of the minimum funding
standards of Section 412(d) of the Code shall be disregarded.
(f) Any minimum Employer contribution which the
Employer may be required to make under the provisions of this article
shall be allocated to the Employer Contribution Account of each Active
Participant employed by the Employer on the last day of the Plan Year
even though such Employee would not otherwise receive an allocation of
Employer contributions to this Plan because he/she (1) fails to
make a mandatory contribution to this Plan, (2) fails to complete 1,000
Hours of Service, or (3) fails to have a stated minimum amount of
remuneration.
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Sec. 3A.03 Adjustment to Section 415 Limits. Subject to the transition
rule stated in Section 416(h)(3) of the Code, if, during any Limitation Year,
this Plan is a Top-Heavy Plan, the limitations on Annual Additions described in
Article V of this Plan shall be applied with respect to a Participant by
substituting 1.00 for 1.25 each place it appears in the Defined Benefit Fraction
and Defined Contribution Fraction described in Article V. However, this section
shall not apply if this Plan is not a Super Top-Heavy Plan and the minimum
contribution and allocation requirements of Section 3A.02 are satisfied:
(a) after substituting four percent (4%) for three
percent (3%) where it appears in Subparagraph (a)(1) of such section;
or
(b) after substituting seven and one-half percent
(7-1/2%) for five percent (5%) where it appears in Paragraph (d) of
such section.
Sec. 3A.04 Top-Heavy Vesting.
(a) Except as otherwise provided in this section, a
Participant's vested interest in his/her Employer Contribution Account
shall be determined from the following schedule with respect to any
Top-Heavy Plan Year during which he/she is a Participant, and as of the
date on which he/she experiences a Break in Service (other than by
reason of Total Disability or death), subject, however, to the
provisions of Article IX with respect to disregarded periods of
service.
Participant's Years Participant's Vested
of Service Percentage
------------------- --------------------
Less than 3 Years of Service................ None
3 Years of Service or more.................. 100%
Attainment of Normal Retirement Age
regardless of service..................... 100%
Upon the death or Total Disability of a
Participant while in the employ of the
Employer or an Affiliated Company......... 100%
(b) The vesting schedule provided herein applies for
purposes of determining a Participant's vested interest in his/her
Employer Contribution Account with respect to benefits accrued before
the effective date of Section 416 of the Code and benefits accrued
prior to the first Top-Heavy Plan Year.
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(c) In the event this Plan becomes a Top-Heavy Plan
and thereafter ceases to be a Top-Heavy Plan, the vesting schedule
provided in Article IX shall apply; provided, a Participant with three
(3) or more Years of Service at the time of such change shall be
entitled to elect to have his/her vested percentage computed under the
vesting schedule provided in this section or the schedule provided in
Article IX. Any such election shall be made in accordance with the
requirements of Article IX relating to amendments to the vesting
schedule.
(d) This section does not apply for purposes of
determining a Participant's vested interest in his/her Employer
Contribution Account if such Participant does not have an Hour of
Service after this Plan has first become a Top-Heavy Plan. Such
Participant's vested interest shall continue to be determined under
Article IX.
(e) A Participant's vested interest in the portion of
his/her Employer Contribution Account, which is attributable to the
minimum contribution and allocation described in Paragraphs (a) and (b)
of Section 3A.02, may not be forfeited under Section 411(a)(3)(B) of
the Code relating to suspension of benefits upon reemployment of a
retiree or Section 411(a)(3)(D) of the Code relating to withdrawal of
mandatory Employee contributions.
Sec. 3A.05 Determination of Top-Heavy Status. This Plan shall be deemed
to be a Top-Heavy Plan as to any Plan Year if, as of the Determination Date, any
of the following conditions are met:
(a) This Plan is not part of any Required Aggregation
Group or Permissive Aggregation Group and the Key-Employee Ratio under
the Plan exceeds sixty percent (60%);
(b) This Plan is part of a Required Aggregation
Group, there is no Permissive Aggregation Group of which the Plan is a
part, and the Key-Employee Ratio of the Required Aggregation Group of
which this Plan is a part exceeds sixty percent (60%); or
(c) This Plan is part of a Required Aggregation Group
and part of a Permissive Aggregation Group and the Key-Employee Ratio
for the Permissive Aggregation Group exceeds sixty percent (60%).
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Sec. 3A.06 Definitions. With respect to any Plan Year in which this
Plan is a Top-Heavy Plan, the following additional definitions shall apply:
(a) "Aggregation Group" shall mean a Required
Aggregation Group or Permissive Aggregation Group. "Required
Aggregation Group" shall consist of each qualified retirement plan of
the Employer in which a Key Employee is a Participant and each other
qualified retirement plan of the Employer which enables any plan in
which a Key Employee participates to meet the requirements of Sections
401(a)(4) or 410 of the Code whether or not the plan is terminated
(including plans for self-employed individuals). "Permissive
Aggregation Group" shall consist of the Required Aggregation Group plus
one or more additional qualified retirement plans sponsored by the
Employer and which the Employer elects to include in the Aggregation
Group if such total group of plans considered together continues to
meet the requirements of Sections 401(a)(4) and 410 of the Code.
(b) "Determination Date" shall mean the last day of
the preceding Plan Year or in the case of the Plan's first Plan Year,
the last day of such Plan Year.
(c) "Employer" shall include all Affiliated Companies
for purposes of this article.
(d) "Key Employee" shall mean an Employee or former
Employee who during the Plan Year or any of the four (4) preceding Plan
Years was any of the following:
(1) An officer of the Employer. The term
officer means a duly elected or appointed administrative
executive rendering regular and continuous service to an
Employer whose annual compensation (as determined under
Article V, increased, however, by any amount contributed by
the Employer pursuant to a salary reduction agreement and
which is not includable in the gross income of the Participant
under Section 125, 402(a)(8), 402(h), 403(b), 414(h)(2) or
457(b) of the Code) exceeds fifty percent (50%) of the amount
in effect under Section 415(b)(1)(A) of the Code for the
calendar year in which such Plan Year ends.
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(2) One (1) of the ten (10) Employees of the
Employer owning (or considered as owning within the meaning of
Section 318 of the Code, as modified by Section 416(i) of the
Code) the largest interests in the Employer or any Affiliated
Company; except that an Employee who owns not more than a 1/2
percent interest in the Employer or any Affiliated Company, or
whose annual compensation does not exceed the maximum dollar
limitation under Section 415(c)(1)(A) of the Code as in effect
for the calendar year in which the Determination Date falls
shall not be included as a Key Employee.
(3) An Employee who is a Five-percent Owner
of the Employer.
(4) An Employee whose annual compensation
(as determined under Article V, increased, however, by any
amount contributed by the Employer pursuant to a salary
reduction agreement and which is not includable in the gross
income of the Participant under Section 125, 402(a)(8),
402(h), 403(b), 414(h)(2) or 457(b) of the Code) from the
Employer and all Affiliated Companies exceeds $150,000 and who
would be described in Subparagraph (3) above if "one percent
(1%)" were substituted for "five percent (5%)" each place it
appears in the definition of "Five-percent Owner."
The Beneficiary of any deceased Employee shall be considered
as either a Key Employee or not a key employee for the same period the
deceased Employee would have been so considered.
(e) "Key Employee Ratio" shall mean the ratio for any
Plan Year, as of the Determination Date with respect to such Plan Year,
determined by comparing the amount described in Subparagraph (1) of
this paragraph with the amount described in Subparagraph (2) of this
paragraph after deducting from both such amounts the amount described
in Subparagraph (3).
(1) The amount described in this
subparagraph is the sum of (i) the aggregate of the present
values of all accrued benefits of Key Employees under all
qualified defined benefit plans included in the Aggregation
Group, (ii) the aggregate of the balances in all of the
accounts standing to the credit of Key Employees under all
qualified defined contribution plans included in the
Aggregation Group, and (iii) the aggregate amount distributed
from all plans in such Aggregation Group to or on behalf of
any Key Employee during the period of five (5) Plan Years
ending on the Determination Date.
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(2) The amount described in this
subparagraph is the sum of (i) the aggregate of the present
values of all accrued benefits of all Participants under all
qualified defined benefit plans included in the Aggregation
Group, (ii) the aggregate of the balances in all of the
accounts standing to the credit of all Participants under all
qualified defined contribution plans included in the
Aggregation Group, and (iii) the aggregate amount distributed
from all plans in such Aggregation Group to or on behalf of
any Participant during the period of five (5) Plan Years
ending on the Determination Date.
(3) The amount described in this
subparagraph is the sum of (i) all rollover contributions (or
similar transfers) to the Plan initiated by an Employee and
(ii) any amount that is included in Subparagraph (2) hereof
for, on behalf of, or on account of, an individual who is not
a Key Employee as to the Plan Year of reference but who was a
Key Employee as to any earlier Plan Year and (iii) any amount
that is included in Subparagraph (2) hereof for, on behalf of,
or on account of an individual who has not performed any
services for the Employer at any time during the five (5) year
period ending on the Determination Date.
For purposes of computing the present value of accrued
benefits in any defined benefit plan, the valuation date shall be the
most recent valuation date specified in such plan which falls within
the twelve (12) month period ending on the Determination Date. The
actuarial assumptions that shall be used for such purposes shall be the
assumptions used for determining actuarial equivalence of optional
benefits under the plan(s). If plans are aggregated, the value of
account balances and accrued benefits shall be calculated with
reference to the Determination Dates that fall within the same calendar
year.
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(f) "Super Top-Heavy Plan" shall mean this Plan for
any Plan Year in which this Plan would be deemed "top-heavy" pursuant
to Section 3A.05 if "ninety (90%) percent" were substituted for "sixty
(60%) percent" at each place where "sixty (60%) percent" appears in
such section.
(g) "Top-Heavy Plan" shall mean this Plan for any
Plan Year in which this Plan is determined to be "top-heavy" pursuant
to the provisions of Section 3A.05 hereof.
(h) "Top-Heavy Plan Year" shall mean a Plan Year in
which this Plan is a Top-Heavy Plan.
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ARTICLE IV
PARTICIPANT CONTRIBUTIONS AND
SALARY REDUCTION ARRANGEMENTS
Sec. 4.01 Participant Contributions. Except as otherwise provided in
this article, no contributions shall be required of, nor shall any contributions
be accepted from any Participant.
Sec. 4.02 Eligibility for Salary Reduction Arrangement. Effective as of
January 1, 1991, any Employee who is an Active Participant or who anticipates
becoming a Participant as of the next Entry Date may enter into a written Salary
Reduction Agreement with the Employer pursuant to which such Participant's
Compensation shall be reduced by his/her Salary Reduction Amount. Prior to
January 1, 1991, any Employee who is an Active Participant or who anticipates
becoming a Participant as of the next 401(k) Entry Date may enter into a written
Salary Reduction Agreement with the Employer pursuant to which such
Participant's Compensation shall be reduced by his/her Salary Reduction Amount.
Sec. 4.03 Effective Date of Salary Reduction Agreements.
(a) Initial Effective Date. Effective as of January
1, 1991, any Salary Reduction Agreement (and any change in any existing
Salary Reduction Agreement) shall become effective as of the Entry Date
next following the date on which the Participant's signed Salary
Reduction Agreement (or modification) is delivered to the Plan
Administrator. Prior to January 1, 1991, any Salary Reduction Agreement
(and any change in any existing Salary Reduction Agreement) shall
become effective as of the 401(k) Entry Date next following the date on
which the Participant's signed salary reduction agreement (or
modification) is delivered to the Plan Administrator.
(b) Cancellation and Reinstatement. A Salary
Reduction Agreement may be canceled or suspended by a Participant or by
the Employer as of the end of any payroll period by delivery, prior to
the end of such payroll period, by either party to the other, of
written notice. In the event of such a cancellation or suspension by or
at the request of the Participant, no Salary Reduction Agreement may be
reinstated or become effective with respect to such Participant until
the Entry Date (or, if applicable, the 401(k) Entry Date) next
following the date on which such cancellation or suspension becomes
effective.
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Sec. 4.04 Salary Reduction Amounts.
(a) Effective as of January 1, 1994, the tentative
Salary Reduction Amount set forth in any Salary Reduction Agreement
shall be an amount not less than one percent (1%) of the Participant's
Compensation nor more than fifteen percent (15%) of the Participant's
Compensation (in increments of full percentage points) which does not
exceed the dollar amount described in Paragraph (d). Notwithstanding
the foregoing, effective as of the Plan Year beginning on January 1,
1995, the tentative Salary Reduction Amount of any Participant whose
employment classification is Grade Level 15 or above, shall be an
amount not in excess of two percent (2%) of the Participant's
Compensation. Tentative Salary Reduction Amounts shall become Salary
Reduction Amounts only after the Employer or the Plan Administrator has
made such adjustments thereto as they (or either of them) deem
necessary to maintain the qualified status of this Plan and/or to
maintain the treatment of Salary Reduction Amounts as a qualified cash
or deferred arrangement.
(b) If a Participant for any Accrual Computation
Period is a Highly Compensated Employee, his/her Salary Reduction
Amount shall not exceed the maximum amount determined by the Employer
to be acceptable so that the Actual Deferral Percentage for all Highly
Compensated Employees is not more than one hundred twenty-five percent
(125%) of the Actual Deferral Percentage for all other Participants,
except that the Actual Deferral Percentage for the Highly Compensated
Employees may be greater than one hundred twenty-five percent (125%) of
the Actual Deferral Percentage of the other Participants, to a maximum
of two hundred percent (200%) of such Actual Deferral Percentage for
all Participants if the Actual Deferral Percentage for the Highly
Compensated Employees does not exceed the Actual Deferral Percentage of
the other Participants by more than two (2) percentage points.
(c) In order to satisfy the requirements of Paragraph
(b), the Employer may:
(1) Make an optional Employer Profit-Sharing
contribution which is fully vested and nonforfeitable when
made and which shall be allocated proportionately among all
Participants who are not Highly Compensated Employees on the
basis of their respective Salary Reduction Amounts for the
Accrual Computation Period of reference;
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(2) Take into account Employer Matching
contributions which are fully vested and nonforfeitable when
made;
(3) Take into account Employer
Profit-Sharing contributions which are fully vested and
nonforfeitable when made; or
(4) Reduce the tentative Salary Reduction
Amounts of Highly Compensated Employees.
Contributions described in Subparagraph (1), (2) or (3) of this
paragraph shall be credited to the Employer Salary Reduction
Contribution Accounts of the Participants and shall be deemed to be
additional Salary Reduction Amounts for purposes of Paragraph (b) of
this section and Section 4.06(a). However, if the reduction under
Subparagraph (4) of this paragraph is to be made, the Employer shall
calculate the maximum Actual Deferral Percentage for such group
pursuant to Paragraph (b). The Salary Reduction Amounts of the Highly
Compensated Employees shall be reduced progressively to the highest
uniform percentage of each such Participant's Compensation which the
Employer, in its discretion, shall deem to be permissible to ensure
that the Actual Deferral Percentage of such group does not exceed the
maximum allowable percentage. Any Employer Matching Contributions to
which such Salary Reduction Amounts relate shall be forfeited and
applied in accordance with Section 5.02.
(d) Notwithstanding any provision in this Plan to the
contrary, in no event shall the Salary Reduction Amounts under this
Plan and the elective deferrals (as defined in Section 402(g)(3) of the
Code) to any other plans, contracts or arrangements of the Employer,
made with respect to any Participant during any calendar year exceed
$7,000 (or such higher amount as may be established by the Secretary of
the Treasury to reflect cost of living adjustments). In the event that
a Participant's Salary Reduction Amount exceeds the limitation of the
preceding sentence, such excess amount ("Excess Deferrals") shall be
distributed in accordance with the provisions of Section 4.06(b).
(e) All amounts withheld pursuant to a Salary
Reduction Agreement and thereafter delivered to the Trustee shall be so
delivered only if the Employer in good faith believes that such amounts
do not exceed the
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amounts permissible pursuant to the limitations hereinabove set forth.
If any amount shall be withheld from the Compensation of a Participant
pursuant to a Salary Reduction Agreement which exceeds the maximum
amount permissible pursuant to Paragraph (b) hereof, and if such amount
is delivered to the Trustee prior to the discovery of the fact that
such amount exceeds the limitations hereinabove set forth, and if such
excess is not eliminated by means of the optional contribution
described in Paragraph (c) above, such amount ("Excess Contributions"),
together with the earnings and losses thereon, shall be deemed to have
been contributed to the Plan by way of a mistake of fact, shall be
refunded to the Employer, and shall thereafter be paid as promptly as
practicable, but no later than the last day of the Plan Year following
the Plan Year with respect to which such Excess Contributions arose
(subject, however, to the withholding of taxes and other amounts as
though such amount were current compensation) by the Employer to the
Employee from whose Compensation such amount was obtained pursuant to a
Salary Reduction Agreement). For purposes of Section 5.03, Excess
Contributions shall be considered Annual Additions. For purposes of
this paragraph, earnings allocable to Excess Contributions shall be
determined as of the last day of the Accrual Computation Period with
respect to which such Excess Contributions are attributable and shall
be equal to the net earnings allocable to the Participant's Employer
Salary Reduction Contribution Account, multiplied by a fraction, the
numerator of which is the Participant's Excess Contributions for the
Accrual Computation Period and the denominator of which is the
Participant's Employer Salary Reduction Contribution Account
(determined prior to adjustment for net investment experience for such
Accrual Computation Period).
(f) The aggregate of all Salary Reduction Amounts
with respect to any Plan Year shall not exceed amounts determined by
the Employer to be deductible to the Employer under Section 404(a) of
the Code when contributed to the Plan for such Plan Year. If the
Employer deems it necessary to reduce the Salary Reduction Amount
called for in any Salary Reduction Agreement to satisfy the aforesaid
limitation, the Salary Reduction Amounts of all Participants shall be
reduced proportionately until the aggregate of all Salary Reduction
Amounts are within the limitations of Section 404(a) of the Code,
taking into account all other contributions made by the Employer.
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(g) For purposes of this section, the Actual Deferral
Percentage of any Participant who is a Highly Compensated Employee and
who is eligible to have Salary Reduction Amounts (and contributions
treated as Salary Reduction Amounts) allocated to his/her Account under
two or more arrangements described in Section 401(k) of the Code that
are maintained by the Employer or any Affiliated Company, shall be
determined as if the total of such amounts are made under a single
arrangement. In addition, if a Highly Compensated Employee participates
in two or more such plans that have different plan years, all such
plans ending with or within the same calendar year shall be treated as
a single plan.
(h) The Actual Deferral Percentage of a Highly
Compensated Employee who is either a Five-Percent Owner or one of the
ten (10) most highly compensated Employees when ranked on the basis of
Compensation (including Family Members) shall be equal to the Actual
Deferral Percentage determined by combining the Salary Reduction
Amounts (and contributions treated as Salary Reduction Amounts) and
Compensation of all Family Members. With respect to any Participant
described in this paragraph, Excess Contributions are determined and
corrected by reducing the Actual Deferral Percentage of such Highly
Compensated Employee (as determined under this paragraph) and
allocating the Excess Contributions among all Family Members in
proportion to the Salary Reduction Amounts (and contributions treated
as Salary Reduction Amounts) of each Family Member that are combined
for purposes of determining such Participant's Actual Deferral
Percentage.
(i) For purposes of determining the Actual Deferral
Percentage, Salary Reduction Amounts and contributions treated as
Salary Reduction Amounts will be considered made for an Accrual
Computation Period if they are made within the time prescribed by
Section 3.02 and allocated to a Participant's Account with respect to
the Accrual Computation Period.
(j) In the event that this Plan satisfies the
requirements of Section 401(k), 401(a)(4) or 410(b) of the Code only if
aggregated with one or more other plans, or if one or more other plans
satisfy the requirements of such section of the Code only if aggregated
with this Plan, then this Section 4.04 shall be applied by determining
the Actual Deferral Percentages of participants in such plans, as if
such
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plans were a single plan. Provided, however, that plans may be
aggregated in order to satisfy Section 401(k) of the Code only if they
have the same Plan Year.
Section 4.05 Establishment of Separate Account. The Plan Administrator
shall establish on behalf of each Participant who enters into a Salary Reduction
Agreement an Employer Salary Reduction Contribution Account. All Salary
Reduction Amounts resulting from the reduction of the remuneration of any
Participant shall be credited directly to that Participant's Employer Salary
Reduction Contribution Account, such crediting to be effective as of a date (or
dates) no later than the last day of such Accrual Computation Period. Crediting
of any Salary Reduction Amount shall not be contingent upon continued
participation in the Plan as of any date subsequent to the date on which such
Salary Reduction Amount was earned by the Participant to whom it is to be
credited.
Sec. 4.06 Distributions from Participant's Employer Salary Reduction
Contribution Account.
(a) No portion of a Participant's Employer Salary
Reduction Contribution Account shall be distributed or withdrawn
earlier than upon one of the following events:
(1) The Participant's retirement, death,
Total Disability or separation from service of the Employer;
(2) The termination of the Plan without the
establishment or maintenance of a "successor plan" (as defined
in Treasury Regulation Section 1.401(k)-1(d)(3)); provided,
however, that the Participant receives a lump sum distribution
(as defined in Section 402(e)(4) of the Code, without regard
to Clauses (i), (ii), (iii) and (iv) of Subparagraph (A),
Subparagraph (B) or Subparagraph (H) thereof) by reason of
such termination;
(3) The disposition by the Employer of
substantially all of the assets (within the meaning of Section
409(d)(2) of the Code) used by the Employer in a trade or
business with respect to a Participant who continues
employment with the corporation acquiring such assets;
provided, however,
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that the Participant receives a lump-sum distribution (as
defined in Section 402(e)(4) of the Code, without regard to
Clauses (i), (ii), (iii) and (iv) of Subparagraph (A),
Subparagraph (B) or Subparagraph (H) thereof) by reason of
such disposition;
(4) The disposition by the Employer of its
interest in a subsidiary (within the meaning of Section
409(d)(3) of the Code) with respect to a Participant who
continues employment with such subsidiary; provided, however,
that the Participant receives a lump-sum distribution (as
defined in Section 402(e)(4) of the Code, without regard to
Clauses (i), (ii), (iii) and (iv) of Subparagraph (A),
Subparagraph (B) or Subparagraph (H) thereof) by reason of
such disposition;
(5) The Participant's attainment of Age
59-1/2, provided, however, that any such distribution or
withdrawal shall not exceed his/her net aggregate Salary
Reduction Amounts. A Participant may request distribution or
withdrawal pursuant to this Subparagraph (5) only once with
respect to any Plan Year; or
(6) The Participant's hardship, as provided
in Section 4.07;
provided, however, that with respect to the portion of a married Participant's
Account attributable to assets from a Transferor Plan, no distribution or
withdrawal permitted by this section shall be made, unless such Participant's
spouse consents thereto in the manner described in Article X.
(b) Notwithstanding any other provision in this Plan
to the contrary, if, on or before any March 1, a Participant notifies
the Plan Administrator that during the prior calendar year, he/she has
made an Excess Deferral and that all or a portion of such Excess
Deferral has been allocated to the Plan, the Plan Administrator may, in
its sole discretion, direct the Trustee to refund such Excess Deferral,
together with the earnings and losses thereon, to the Employer and
thereafter such amount may be paid by the Employer on or before the
next following April 15 (subject,
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however, to the withholding of taxes and other amounts as though such
amount were current compensation) to the Participant from whose
Compensation such Excess Deferral was obtained pursuant to a Salary
Reduction Agreement. For purposes of Section 5.03, Excess Deferrals
shall be considered Annual Additions. Any Employer Matching
contributions to which such Excess Deferrals relate shall be forfeited
and applied in accordance with Section 5.02. The refund of an Excess
Deferral pursuant to this section shall not affect the calculation of
the Actual Deferral Percentage for any Accrual Computation Period
falling within the calendar year with respect to which such excess
deferral had been made.
(c) For purposes of this section, earnings allocable
to Excess Deferrals shall be determined as of the last day of the
calendar year with respect to which such Excess Deferrals are
attributable and shall be equal to the net earnings for such calendar
year allocable to the Participant's Employer Salary Reduction
Contribution Account, multiplied by a fraction, the numerator of which
is such Participant's Excess Deferrals for such calendar year and the
denominator of which is the Participant's Employer Salary Reduction
Contribution Account (determined prior to adjustment for net investment
experience for such calendar year).
Sec. 4.07 Hardship Withdrawals: Participant's Employer Salary Reduction
Contribution Account. Notwithstanding any provision of this Article IV to the
contrary, the Plan Administrator, in its sole discretion, may approve
distribution of any amount made on account of an immediate and heavy financial
need of the Participant if the distribution is necessary to satisfy such
financial need. Only one (1) such distribution shall be permitted for a
Participant with respect to any Plan Year.
For this purpose, a distribution will be deemed to be made on account
of an immediate and heavy financial need of the Participant if the distribution
is on account of:
(a) Medical expenses incurred or anticipated by the
Participant, the Participant's Spouse or dependents;
(b) The purchase (excluding mortgage payments) of a
principal residence for the Participant;
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(c) The payment of tuition and related educational
fees (as such term is defined in Treasury Regulations under Section
401(k) of the Code or otherwise by the Commissioner of Internal
Revenue, from time to time, in regulations, revenue rulings, notices,
and other documents of general applicability) for the next twelve (12)
months of post-secondary education for the Participant, his/her Spouse
or dependents; or
(d) The need to prevent the eviction of the
Participant from his/her principal residence or foreclosure on the
mortgage of the Participant's principal residence.
A distribution will be deemed to be necessary to meet an immediate and
heavy financial need of the Participant if (1) the distribution does not exceed
the lesser of (i) the aggregate Employer Salary Reduction Amounts (plus (A)
earnings attributable to such Participant's Employer Salary Reduction
Contribution Account, and (B) Employer contributions made pursuant to Section
4.04(c)(1), (2) or (3) of this Plan and the earnings thereon, if credited to the
Participant's Account by the last day of the last Plan Year ending prior to July
1, 1989) made on behalf of the Participant as of the date the Participant
applies to the Plan Administrator for a distribution hereunder, reduced by any
prior withdrawals therefrom or (ii) the amount of the immediate and heavy
financial need of the Participant; and (2) the Participant presents a
certification acceptable to the Plan Administrator that the need cannot be
relieved (i) through reimbursement or compensation by insurance or otherwise,
(ii) by reasonable liquidation of the Participant's assets (including those
assets owned by his/her Spouse and minor children that are reasonably available
to the Participant) to the extent such liquidation would not itself cause an
immediate and heavy financial need, (iii) by cessation of Salary Reduction
Amounts; or (iv) by other distributions or nontaxable loans from Plans
maintained by the Employer or any other employer, or by borrowing from
commercial sources on reasonable commercial terms. A distribution made pursuant
to this paragraph may include any amounts necessary to pay any federal, state or
local income taxes or penalties reasonably anticipated as a result of such
distribution.
Sec. 4.08 Transfer and Rollover Contributions
(a) Direct Inter-Plan Transfers. Any Participant may,
with the written consent of the Plan Administrator, direct the
appropriate funding agency or fiduciary of any qualified retirement
plan to distribute directly to the Trustee so much of such
Participant's entire interest in the distributing plan as constitutes a
rollover amount within the meaning of Section 402(a)(5) of the Code.
Any amount presented by
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a Participant to the Trustee within sixty (60) days of the receipt
thereof as a distribution from any other qualified plan shall be
treated as having been received directly from the appropriate
disbursing officer or fiduciary of the distributing plan. Amounts
transferred pursuant to this paragraph shall be subject to the
restrictions and limitations set forth in Paragraphs (c) through (g),
inclusive, of this section and may be placed in a segregated account on
behalf of the Participant. The Plan Administrator shall have the right
to direct the Trustee to refuse to receive any direct inter-plan
transfer or rollover amount and the Trustee shall be fully protected in
such a refusal.
(b) IRA Rollovers. Any Participant who has
established an Individual Retirement Account ("IRA") pursuant to the
provisions of Section 408 of the Code solely for the purposes of
serving as a repository for rollover amounts (as defined in Section
402(a)(5) of the Code) received from qualified retirement plans,
exclusive of amounts contributed by the Employee as a participant
therein, and who has not made any contributions to such IRA on his/her
own behalf, may, with the consent of the Plan Administrator, transfer
all of the assets of such IRA to the Trustee, which assets may then be
placed in a segregated account on behalf of the Participant. The Plan
Administrator shall have the right to direct the Trustee to refuse to
receive any rollover amount from an IRA, including a rollover to which
a QDRO applies (or that was received from a plan to which a QDRO
applied with respect to the Participant), and the Trustee shall be
fully protected in honoring such refusal instruction.
(c) Special Limitations. No transfer of assets will
be accepted which consists, in whole or in part, of insurance contracts
with respect to which future premium payments are or may become due
unless the Plan Administrator is satisfied that there are sufficient
other assets being transferred so as to make maintenance of such
contribution(s) feasible without violation of any limitation on assets
which may be applied for that purpose.
(d) Investment of Rollover/Transfer Amounts.
Rollover/transfer amounts shall be treated as contributions to separate
sub-accounts and may be held in interest-bearing form until the
Valuation Date next following the date of receipt by the Trustee, or
until such earlier date as the Trustee finds it convenient to include
such rollover/transfer amounts in the general investments of the Fund.
Thereafter, such accounts shall be held, at the Trustee's discretion,
either as segregated interest-bearing accounts or as separate
sub-accounts in the Fund.
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(e) Vesting of Rollover/Transfer Accounts. All
rollover/transfer accounts shall be fully vested in the Participant on
whose behalf they are established.
(f) Withdrawal of Rollover/Transfer Accounts. There
shall be no withdrawals of any portion of any rollover/transfer account
by any Participant until such time as he/she is otherwise eligible to
receive his/her vested interest attributable to Employer contributions
under this Plan (or would have been eligible, had he/she been vested in
any part of his/her Employer Contribution Account). All transfer
amounts, and the earnings and accretions attributable thereto, shall be
subject to the provisions of any QDRO applicable to the Participant
under either the Plan or the plan from which the transfer amount was
received.
(g) Distribution of Rollover/Transfer Accounts. The
assets held on behalf of any Participant in a rollover/transfer account
shall be aggregated with any other vested interest he/she may have in
this Plan for the purpose of distribution and shall be distributed at
the same time as the remainder of his/her vested interest in this Plan,
and, to the extent feasible, by the same method of distribution of
benefits, subject, however, to the provisions of any applicable QDRO.
Sec. 4.09 Restoration Contributions. Any former Participant who once
again qualifies as an Active Participant and who has received a "cash-out" of
his/her vested interest attributable to his/her prior participation in this
Plan, may, after reinstatement to employment covered by the Plan, "buy back" (or
restore) his/her Account balance by paying to the Trustee in cash the full
amount of the "cash-out" he/she previously received. The Account balance so
restored shall be the sum of (i) the restoration contribution made by the
Participant, plus (ii) the amount attributable to that portion of the
Participant's Account that was not distributed to him/her as part of the
"cash-out", which amount shall be provided from forfeitures, Employer
contributions and/or earnings of the Fund for the Plan Year of the restoration
contribution. Any such restoration contribution must be made before the earlier
of (a) five (5) years after the first date on which the Participant is
subsequently re-employed by the Employer or (b) the date on which
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the Participant has five (5) consecutive one-year Breaks in Service commencing
after the "cash-out." All such restoration contributions shall be credited to
the Participant's Restoration Contribution Account as of the Valuation Date
coincident with or next following the date on which the restoration contribution
is made, but such amount shall be established in a separate subaccount. Any
Participant who fails to make a restoration contribution within the time
limitation herein established shall be deemed to have waived his/her right to
make any such contribution.
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ARTICLE V
ALLOCATION OF CONTRIBUTIONS
Sec. 5.01 Employer Contributions.
(a) Employer Salary Reduction Contributions. There
shall be directly and promptly allocated to the Employer Salary
Reduction Contribution Account of each Participant the Salary Reduction
Amounts contributed by the Employer to the Plan by reason of any Salary
Reduction Agreement in force between the Employer and that Participant.
(b) Employer Matching Contributions. Effective as of
January 1, 1994, the last day of each Accrual Computation Period, there
shall be directly and promptly allocated to the Employer Matching
Contribution Account of each Active Participant, an Employer Matching
contribution equal to the amount or percentage determined by the Board
in accordance with Section 3.01(b), limited to the dollar amount or
percentage of the Salary Reduction Amounts, if any, determined by the
Board. Prior to January 1, 1994, Employer Matching contributions made
with respect to any Accrual Computation Period shall be allocated among
the Active Participants' Employer Matching Contribution Accounts in the
proportion that the Salary Reduction Amount not in excess of two
percent (2%) of Compensation earned and credited to the Account of each
Active Participant with respect to such Accrual Computation Period
bears to the aggregate of the Salary Reduction Amounts of up to two
percent (2%) of Compensation credited to the Accounts of all Active
Participants with respect to such Accrual Computation Period.
(c) Employer Profit-Sharing Contributions. As of each
Anniversary Date, there shall be allocated to the Employer Contribution
Account of each Active Participant an amount determined by multiplying
the Employer's Profit-Sharing contribution for the Accrual Computation
Period ending with or immediately prior to such Anniversary Date by a
fraction, the numerator of which is the Participant's Compensation for
such Accrual Computation Period and the denominator of which is the
aggregate Compensation of all Active Participants for such Accrual
Computation Period.
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(d) Entitlement to Share in Allocation.
(1) Employer Matching Contribution.
(i) Allocation of Matching
Contributions. A Participant shall be an Active
Participant for the purposes of Section 5.01(b), and
shall be entitled to share in the allocation of the
Employer Matching contribution for a specified
Accrual Computation Period only if he/she did at
least one of the following during that Accrual
Computation Period:
(A) Remained in the employ of the
Employer or of an Affiliated Company through
the end of the Accrual Computation
Period;
(B) Retired (at or after Normal
Retirement Date), experienced Total
Disability or died during the Accrual
Computation Period; or
(C) Was on an Excused Absence at
the end of the Accrual Computation Period.
(2) Employer Profit-Sharing Contributions.
(i) January 1, 1992 and Thereafter.
A Participant shall be an Active Participant for the
purposes of Section 5.01(c), and shall be entitled to
share in the allocation of the Employer
Profit-Sharing contribution for a specific Accrual
Computation Period only if he/she did at least one of
the following during that Accrual Computation Period:
(A) Remained in the employ of
the Employer or of an Affiliated Company
through the end of the Accrual Computation
Period, and, completed a Year of
Participation in such Accrual Computation
Period;
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(B) Retired (at or after Normal
Requirement Date), experienced Total
Disability or died during the Accrual
Computation Period; or
(C) Was on Excused Absence at
the end of the Accrual Computation Period.
(ii) Prior to January 1, 1992. A
Participant shall be an Active Participant for the
purposes of Section 5.01(c), and shall be entitled to
share in the allocation of the Employer
Profit-Sharing contribution for a specific Accrual
Computation Period only if he/she did at least one of
the following during that Accrual Computation Period:
(A) Remained in the employ of
the Employer or of an Affiliated Company
through the end of the Accrual Computation
Period;
(B) Retired (at or after Normal
Retirement Date), experienced Total
Disability or died during the Accrual
Computation Period; or
(C) Was on excused Absence at
the end of the Accrual Computation Period.
Notwithstanding the foregoing provisions of this paragraph to
the contrary, in the event that the Plan fails to satisfy the
requirements of Section 410(b) and/or Section 401(a)(26) of the Code,
disregarding for this purpose those Participants entitled to a minimum
contribution pursuant to Article IIIA, then some or all
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of such Participants shall be deemed to satisfy the requirements of
this paragraph to the extent necessary to satisfy Section 410(b) and/or
Section 401(a)(26) of the Code. If after taking into account the
preceding sentence the Plan continues to fail to satisfy the
requirements of Section 410(b) and/or Section 401(a)(26) of the Code,
then to the extent necessary to satisfy such requirements, some or all
of those Participants who completed more than 500 Hours of Service
during the Accrual Computation Period of reference or who are employed
by Employer on the last day of such Accrual Computation Period shall be
deemed to satisfy the provisions of this paragraph. The selection of
those Participants who are deemed to satisfy the requirements of this
paragraph shall be based upon Compensation starting with the
Participant having the lowest Compensation during the Accrual
Computation Period of reference.
(e) Effect of Status Change. Any Participant who
remained in the employ of the Employer through the end of the Accrual
Computation Period, but who changed from an Eligible Class Employee to
an ineligible classification (or vice-versa) during the Computation
Period shall be considered an Active Participant only with respect to
his/her Compensation paid for Hours of Service completed as an Eligible
Class Employee during such Computation Period, and shall be deemed an
Active Participant for such Computation Period only if he/she completed
at least one thousand (1,000) Hours of Service during such Accrual
Computation period.
Sec. 5.02 Forfeitures. Effective as of January 1, 1991, forfeitures of
Employer Profit-Sharing contributions arising from Breaks in Service experienced
by Participants with less than fully vested interests in the Plan shall be
applied as promptly as practicable to reduce Employer Profit-Sharing
contributions pursuant to Section 3.01(c) and/or Employer Matching contributions
pursuant to Section 3.01(b). In the event forfeitures exceed the appropriate
Employer Matching contribution or Employer Profit-Sharing contribution for an
Accrual Computation Period, such excess shall be used to reduce such
contribution in the succeeding Accrual Computation Period. Prior to January 1,
1991, forfeitures arising from Breaks in Service experienced by Participants
with less than fully vested interests in the Plan shall be considered as
additional Employer Matching contributions or Employer Profit-Sharing
contributions, as the case may be, shall be added to the Employer contribution,
if any, for the Accrual Computation Period with respect to which such
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forfeitures arise, and shall be allocated as part of the Employer Matching
contribution or Employer Profit-Sharing contribution pursuant to the provisions
of Section 5.01(b) or 5.01(c), as the case may be. Forfeitures of Employer
Matching contributions may arise from (i) Breaks in Service experienced by
Participants with less than fully vested interests in their Employer Matching
Contribution Accounts; (ii) the treatment of a portion of the Employer Matching
contributions made with respect to a Participant for the Accrual Computation
Period of reference as Excess Aggregate Contributions to the extent that such
Participant is not vested in his/her Employer Matching Contribution Account; and
(iii) the treatment of a portion of the Salary Reduction Amounts to which such
Employer Matching contributions relate as Excess Contributions and/or Excess
Deferrals. Except in the case of a vested Participant who is not in the employ
of the Employer at the time of his/her death, and with respect to whom the death
benefit is less than 100% of the balance standing to his/her credit in his/her
Account, no portion of a Participant's Account shall be forfeited until such
time as that Participant has experienced five (5) consecutive one-year Breaks in
Service. Notwithstanding the above, the non-vested portion of a Participant's
Account shall be immediately forfeited, and reallocated as provided above, upon
distribution to the Participant, in accordance with Article IX, of the entire
vested interest in his/her Account; subject, however, to restoration upon the
Participant's repayment of his/her vested interest as provided in Article IV.
Sec. 5.03 Annual Additions Limitations.
(a) General Limitation. Notwithstanding any other
provision of this Article V, in no event shall the Annual Addition to a
Participant's Account for any Limitation Year exceed the lesser of (1)
the greater of (i) $30,000 or (ii) twenty-five percent (25%) of the
dollar limitation set forth in Section 415(b)(1)(A) of the Code, or (2)
twenty-five percent (25%) of such Participant's compensation for the
Limitation Year.
(b) Combination and Aggregation of Plans. For
purposes of this section, the amounts contributed to any defined
contribution plan maintained by the Employer (or any Affiliated
Company) shall be aggregated with contributions made by the Employer
under this Plan for any Employee in computing his/her Annual Addition
Limitations. To the extent required, all plans, whether or not
terminated, of the Employer and Affiliated Companies shall be taken
into account for purposes of these limitations.
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(c) Disposition of Excess Annual Additions. In the
event that the amount tentatively available for allocation to the
Account of any Participant in any Limitation Year exceeds the maximum
permissible hereunder, there shall first be returned to the Participant
such portion of the voluntary contributions he/she made during such
Limitation Year (if any such voluntary contributions were made) as is
necessary to reduce the Annual Addition to his/her Account to the
maximum allowable hereunder. If further reduction in the amount
allocable to the Participant's Account is required, the Participant's
share of Employer contributions shall be reduced to the extent
necessary to result in conformity to the limitations expressed herein.
Other than Salary Reduction Amounts that have been contributed to
Employer Salary Reduction Contribution Accounts, amounts released
pursuant to the preceding sentence shall then be reallocated among the
Accounts of the remaining Active Participants as an additional Employer
Profit-Sharing contribution for the Accrual Computation Period ending
with or within said Limitation Year; provided, however, that such
amounts shall be credited to the Accounts of Participants only to the
extent that is permissible without causing any such Accounts to
experience Annual Additions in excess of the maximum allowable
hereunder. If, after all such reallocations have been completed, there
remains a reallocable amount which can not be reallocated to the
Accounts of any of the Active Participants (because all such Accounts
have been credited with the maximum allowable Annual Addition for the
Limitation Year in issue), such remaining reallocable amount shall be
placed in a suspense account, to be held and applied as an additional
Employer Profit-Sharing contribution in the next succeeding Limitation
Year(s) until exhausted. Such a suspense account shall not participate
in the allocation of the Trust Fund's investment earnings and losses.
All amounts in the suspense account shall be allocated to Participants'
Accounts prior to the allocation of Employer or Employee contributions
for that Limitation Year. Any Employer Salary Reduction contributions
that would be violative of Section 415 of the Code if allocated to the
Employer Salary Reduction Contribution Account of the Participant on
whose behalf it was made shall be returned immediately to the Employer
and thereafter paid to the Participant (net of any tax withholding and
other deductions normally attached to current compensation) on whose
behalf it was originally received by the Trust.
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(d) Overall Limitation on Contributions and Benefits.
Notwithstanding any other provision in this article, in no event shall
the amount allocated to the Account of any Participant cause the sum of
the Defined Contribution Fraction and the Defined Benefit Fraction to
exceed 1.00, or such other limitation as may be applicable under
Section 415 of the Code with respect to any combination of qualified
plans without disqualification of any such plan.
(i) The term Defined Benefit Fraction shall
mean a fraction,
(1) the numerator of which is the
projected annual benefit of the Participant under the
plan (as of the close of the Limitation Year of
reference), and
(2) the denominator of which is the
lesser of (i) 1.25 multiplied by the dollar
limitation in effect under Section 415(b)(1)(A) of
the Code as to such Limitation Year, or (ii) the
product of (A) 1.4, multiplied by (B) the amount
which may be taken into account under Section
415(b)(1)(B) of the Code with respect to such
individual for such Limitation Year.
(ii) The term Defined Contribution Fraction
shall mean a fraction,
(1) the numerator of which is the
sum of the Annual Additions to the Participant's
Account as of the close of the Limitation Year of
reference, and
(2) the denominator of which is the
sum of the lesser of the following amounts determined
for such Limitation Year and each prior year: (i) the
product of 1.25 multiplied by the dollar limitation
in effect under Section 415(c)(1)(A) of the Code for
such Limitation Year (determined without regard to
Section 415(c)(6) of the Code or (ii) the product of
(A) 1.4, multiplied by (B) the amount which may be
taken into account under Section 415(c)(1)(B) of the
Code (or Section 415(c)(7) of the Code, if
applicable) with respect to such individual for such
Limitation Year.
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(e) Annual Addition. The term Annual Addition, as it
applies to the Account of any Participant, shall mean, for any
Limitation Year (as defined below), the sum of:
(1) Employer contributions allocated to
his/her Employer Contribution Account;
(2) The amount of the Participant's
voluntary after-tax contributions;
(3) Forfeitures reallocable to the
Participant's Account;
(4) Amounts allocated with respect to a
Participant, after March 31, 1984, to an individual medical
benefit account, as defined in Section 415(1)(2) of the Code,
which is part of a pension or annuity plan maintained by the
Employer; and
(5) Amounts derived from contributions paid
or accrued after December 31, 1985, in taxable years ending
after such date, which are attributable to post-retirement
medical benefits allocated to the separate account of a
Participant who is a key employee, as defined in Section
419A(d)(3) of the Code, under a welfare benefit fund, as
defined in Section 419(e) of the Code, maintained by the
Employer.
The limitation in Paragraph (a)(2) of this section shall not apply to
any amount treated as an Annual Addition under the two immediately preceding
subparagraphs.
Unless otherwise defined by resolution of the Board, the "Limitation
Year" shall correspond to the Accrual Computation Period.
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(f) Compensation. The term "compensation" as used in
this section shall mean wages (as defined in Section 3401(a) of the
Code for purposes of income tax withholding at the source) paid by the
Employer during the Limitation Year, determined without regard to any
rules that limit remuneration included in wages based on the nature or
location of the employment or the services performed.
If an Employer is a sole proprietorship or partnership, compensation
with respect to a Self-Employed Individual shall mean his/her Earned Income for
the Limitation Year.
Sec. 5.04 Inter-Plan Transfers and Rollover Contributions. All direct
inter-plan transfers and rollover contributions provided for in Article IV shall
be allocated directly to the Accounts of the respective Participants on whose
behalf received.
Sec. 5.05 Restoration Contributions. All restoration contributions made
by Participants pursuant to the provisions of Article IV shall be allocated
directly to their respective Restoration Contribution Accounts.
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ARTICLE VI
ADMINISTRATIVE PROVISIONS
Sec. 6.01 Investment of Assets. All contributions shall be paid over to
the Trustee and shall be invested by the Trustee in accordance with the Plan and
Trust Agreement.
Sec. 6.02 Valuations. The Fund (and, if applicable, each of its
sub-funds) shall be valued by the Trustee at fair market value annually as of
the close of business on the Annual Valuation Date. A similar valuation (or the
partial valuation of one or more sub-funds, if appropriate) may occur at the end
of any calendar month upon the direction of the Plan Administrator.
Sec. 6.03 Crediting of Contributions.
(a) Employer Matching Contributions; Employer
Profit-Sharing Contributions. Any contribution made in respect of any
Plan Year (or fiscal year ending during a Plan Year) by the Employer
shall be deemed to have been made no later than immediately following
the valuation occurring at the end of the Plan Year with respect to
which such contribution was made or during which such fiscal year
ended.
(b) Contributions to Employer Salary Reduction
Contribution Accounts. Employer contributions to Employer Salary
Reduction Contribution Accounts shall be credited as promptly as
practicable after receipt thereof and shall in no event be deemed to
have been made later than the last day of the Plan Year with respect to
which made. Notwithstanding the foregoing, if the Participant becomes
entitled to receive the entire amount standing to his/her credit during
any Plan Year and such amount is distributed to him/her (or to his/her
Beneficiary), the distribution shall include all Salary Reduction
Amounts contributed to his/her Account by the Employer during the Plan
Year in which the distribution occurs, as though the same were credited
to his/her Account as of the date of distribution.
(c) Rollover and Restoration Contributions;
Inter-Plan Transfers. Rollover and restoration contributions and
inter-plan transfers of funds shall be credited to segregated accounts
established on behalf of the Participant on whose behalf contributed as
promptly as practicable following receipt thereof by the Trustee. If
the Participant becomes entitled to receive the entire vested amount
standing to his/her credit during any Plan Year and such amount is
distributed to him/her (or his/her Beneficiary), the distribution shall
include all amounts contributed as rollover or restoration
contributions or received as inter-plan transfers on the Participant's
behalf during the Plan Year of the distribution, whether or not such
amount had been formally credited to his/her Account prior to the date
of distribution.
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Sec. 6.04 Crediting of Investment Results.
(a) General. As of any Valuation Date, the earnings
and accretions of the Trust Fund attributable to investment of Trust
Fund assets, reduced by losses experienced (whether or not realized)
and expenses incurred since the preceding Valuation Date, shall be
credited among the Accounts of the Participants and Beneficiaries in
proportion to the balances in such Accounts, after reducing such
balances by any amounts withdrawn by or distributed from that Account
since such prior Valuation Date. For the purposes of this paragraph,
the balance in any Participant's Account shall not include values
contained in Contracts. If there is maintained for any Participant or
Beneficiary, in addition to the Employer Profit-Sharing Contribution
Account, sub-accounts such as an Employer Salary Reduction Contribution
Account or Employer Matching Contribution Account, each such
sub-account shall be considered a separate Account for the purpose of
crediting investment results pursuant to this section.
(b) Contract Values and Dividends. Proceeds and
changes in cash surrender values of Contracts and dividends payable
with respect to Contracts shall be allocated directly to the Accounts
of the individual Participants on whose lives the respective Contracts
are maintained.
(c) Segregated Accounts. To the extent that the
Trustee maintains segregated accounts on behalf of any Participant or
Beneficiary, there shall be credited to the Account of such Participant
or Beneficiary all earnings and accretions generated by that segregated
account since the immediately preceding Valuation Date, and there shall
be deducted from such account all identifiable separate expenses
incurred in the operation and maintenance of such account.
(d) Amounts to be Distributed. If a distribution is
to be made as of a particular Valuation Date, there shall be no
adjustment in the amount to be
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distributed by reason of the passage of time or investment experience
of the Fund between the Valuation Date as of which the amount of such
distribution is determined and the Benefit Commencement Date. In
particular, the balance in the Account of any Participant shall not be
adjusted to reflect interest, dividends, investment gains or losses or
general expenses of the Fund relating to the period prior to the
Benefit Commencement Date and subsequent to the immediately preceding
Valuation Date.
Sec. 6.05 Loans to Participants and Beneficiaries.
(a) Permissibility. Loans to parties in interest, as
defined in Section 3(14) of ERISA, who are Participants or
Beneficiaries shall be allowed if, and only if, the Plan Administrator
determines that such loans are to be made. The determination as to
whether or not Participant loans are to be allowed shall be completely
within the discretion of the Plan Administrator. Notwithstanding the
foregoing, in no event shall loans be permitted to be made to any
Participant who is an Owner-Employee or a shareholder-employee (as
that term was defined in Section 1379 of the Code prior to its
amendment by the Subchapter S Revision Act of 1982). The Plan
Administrator shall have the right to require any applicant for a
Participant loan to secure the written consent of (1) any party for
whose benefit there exists a QDRO in respect to the Participant's
interest under the Plan and (2) the Participant's spouse before making
any loan to such Participant.
(b) Application. Subject to such uniform and
nondiscriminatory rules as may from time to time be adopted by the Plan
Administrator after it has been determined that loans to Participants
or Beneficiary shall be allowed, the Trustee, upon application by a
Participant or Beneficiary on forms approved by the Plan Administrator,
may make a loan or loans to such Participant or Beneficiary.
(c) Limitation on Amount. No Participant or
Beneficiary shall, under any circumstance, be entitled to loans
aggregating in excess of the lesser of (1) $50,000, reduced by the
excess (if any) of (A) the highest outstanding balance of loans to such
individual from the Plan during the 1-year period ending on the day
before the date on which such loan was made, over (B) the outstanding
balance of loans from the Plan on
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the date on which such loan was made or (2) one-half (1/2) of the value
of his/her adjusted vested interest in his/her Account as of the
Valuation Date coincident with or immediately preceding the date on
which the loan is made. For this purpose, the value of a Participant's
or Beneficiary's adjusted vested interest in his/her Account shall be
the value of such vested interest as of the Valuation Date coincident
with or immediately preceding the date on which the loan is made
reduced by any amounts withdrawn from such Account since the Valuation
Date of reference. Any amount withdrawn by a Participant or Beneficiary
from his/her Account while a loan is outstanding, and any amount
distributed to a Participant or Beneficiary while a loan is outstanding
against the Account from which such distribution is to be made, shall
be immediately applied to reduce the amount of the loan and accrued
interest. Loans under any other qualified plan sponsored by the
Employer shall be aggregated with loans under the Plan in determining
whether or not the limitation stated herein has been exceeded.
(d) Equality of Borrowing Opportunity. Loans shall be
available to all Participants and Beneficiaries on a reasonably
equivalent basis, provided, however, that the Trustee may make
reasonable distinctions among prospective borrowers on the basis of
credit worthiness. Loans shall not be made available to Participants or
Beneficiaries, who are Highly Compensated Employees, in an amount
greater than the amount available to other Participants or
Beneficiaries. Thus, the same percentage of a Participant's or
Beneficiary's vested Account balance may be loaned to Participants or
Beneficiaries with large and small amounts of vested benefits, if such
vested benefit is security (or partial security) for repayment of the
loan.
Sec. 6.06 Participant Loans as Trust Fund Investment. Except as
provided in Section 6.08, each loan to a Participant or Beneficiary shall be
considered a fixed income investment of the Participant's Account from which it
was made. The following conditions shall prevail with respect to each such loan:
(a) Each loan to a Participant or Beneficiary made by
the Trustee shall be secured by the pledge of no more than fifty
percent (50%) of the Participant's or Beneficiary's vested interest in
the Trust Fund and by the pledge of such further collateral as the
Trustee, in its discretion, deems necessary to assure repayment of the
borrowed amount and all
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interest to be accrued thereon in accordance with the terms of the
loan. If the Plan is a Transferee Plan, no portion of a Participant's
or Beneficiary's Account attributable to transferred assets may be used
as security for such loan unless the Participant's spouse, if any,
consents in writing to such use during the 90-day period ending on the
date on which the loan is to be so secured, and such consent
acknowledges its effect and is witnessed by a Plan representative or a
notary public.
(b) Interest Rate. Interest shall be charged at a
commercially reasonable rate, designed to provide the Plan with a
return commensurate with interest rates charged by persons in the
business of lending money under similar circumstances.
(c) Loan Term. Loans shall be for terms not to exceed
five (5) years, except that loans taken for the purpose of acquiring
any dwelling unit which is to be used as a principal residence of the
Participant may be for periods longer than five (5) years. To the
extent that a Participant or Beneficiary becomes entitled to payments
of benefits or withdraws all or a portion of the borrower's Account,
the payment or withdrawals, as the case may be, shall be immediately
applied against the balance outstanding, including interest on the
loan, and such amount shall then be deemed immediately due and payable.
Loans shall be non-renewable and non-extendable.
(d) Amortization. Loans shall provide for
substantially level amortization of principal and interest and payments
no less frequently than quarterly.
(e) Defaults and Remedies. If not paid as and when
due, any such outstanding loan or loans may be deducted from any
benefit which is or becomes payable to the borrower or his/her
Beneficiary, and any other security pledged shall be sold by the
Trustee at public or private sale as soon as is practicable after such
default. The proceeds of any sale shall first be applied to pay the
expenses of conducting the sale, including reasonable attorneys' fees,
and then to pay any sums due from the borrower to the Trust Fund, with
such payment to be applied first to accrued interest and then to
principal. The Participant or Beneficiary shall remain liable for any
deficiency, and any surplus remaining shall be paid to the Participant
or Beneficiary.
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Sec. 6.07 Purchase of Life Insurance.
(a) Authorization and Limitations. The Trustee, if so
instructed by the Plan Administrator, shall invest an amount less than
fifty percent (50%) of the Employer contribution allocated to each
Participant to be insured for the year in which such instruction is
first given to the purchase of an ordinary whole life insurance
Contract for such Participant's Account, provided, however, that:
(1) The aggregate premiums for life
insurance in the case of each Participant shall be less than
one-half of the aggregate of the Employer contributions
allocated to him/her at any particular time.
(2) No instruction for the purchase of life
insurance shall be given by the Plan Administrator with
respect to any Participant unless such request has been made
by that Participant that such insurance be purchased or an
application for such insurance has been completed and executed
by that Participant. The Plan Administrator may thereafter
give, or refrain from giving, such instruction to the Trustee
and shall have sole discretion in regard thereto.
(3) Upon termination of the Participant's
period as an Active Participant (or at any earlier date
selected by the Plan Administrator), the Trustee shall:
(i) convert the entire value of any life
insurance held for the Account of the Participant
into cash, or
(ii) if the Plan provides for the payment
of benefits in the form of an annuity, purchase an
annuity Contract which is not assignable or
commutable in the hands of the Participant to provide
periodic income so that no portion of the value of
the life insurance Contract may be used to continue
life insurance protection beyond retirement, or
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(iii) distribute the life insurance
Contract or Contracts to the Participant, provided
that the Contract does not offer modes of settlement
other than those generally provided under this Plan.
(b) Maintenance of Insurance Contracts. In the event
that the Employer's contribution allocable to any Participant's Account
for any Plan Year is not sufficient to pay the premium on all life
insurance Contracts held by the Trustee for such Participant, the
Trustee shall apply the Employer's contribution as allocated to the
Participant's Account, to the extent permissible and available, to the
payment of such premium. Additional funds required shall, insofar as
possible, be paid by the Trustee from other assets in the Trustee's
possession to the extent of the Participant's interest in those other
assets and by borrowing on such life insurance Contracts for the
benefit of the insured thereunder to the extent of the available cash
value where necessary. In any following year in which the Employer's
contributions as allocated to each Account exceed the amount necessary
to pay the premiums on the life insurance held for such Accounts, the
Trustee shall repay outstanding loans against each Participant's life
insurance to the extent of such excess funds in the Participant's
Account. The provisions of this paragraph shall not be construed to
impair the Trustee's right to borrow available cash surrender values
for the purposes of investing the proceeds of policy loans for the
benefit of the respective Accounts of the Participants whose policies
are so borrowed against.
(c) Ownership and Beneficiary Designation under Life
Insurance Contracts. Each life insurance Contract purchased by the
Trustee shall designate the Trustee as sole owner and Beneficiary
thereof subject to the terms and provisions of the Trust Agreement. All
dividends on life insurance purchased by the Trustee shall be allocated
to the Account of the Participant for whose benefit the life insurance
was issued, and all proceeds payable by reason of the Participant's
death shall be considered to be part of the Participant's Account as of
the date of his/her death.
(d) General Trust Investment in Insurance.
Notwithstanding the provisions of the preceding paragraph of this
section, the Trustee shall have the right to purchase life insurance on
the life of any Participant as a general investment of the Trust Fund,
provided the Participant consents to such purchase. If such insurance
is purchased, it may be retained by the Trustee in force as an
investment of the Trust Fund, even if the insured individual ceases to
be a Participant or revokes his/her authorization to purchase
additional insurance.
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The values and proceeds of such Contracts shall be general assets of
the Fund, shall be payable to the Trustee and shall be included
proportionately in the Accounts of all Participants on the same basis
as are other assets of the Fund.
Sec. 6.08 Investment Direction By Participants.
(a) Rights of Participants. Effective as of the Plan
Year beginning on January 1, 1995, to the extent that the Plan
Administrator has established investment categories for Participant
investment direction, every Participant shall have the right to
designate the investment category or categories in which the Trustee is
to invest amounts allocated to such Participant's Employer Salary
Reduction Contribution Account, Employer Matching Contribution and
Employer Profit-Sharing Contribution Account (excluding any portion of
such Account which consists of stock of the Employer) from
contributions made by the Participant and by the Employer.
(b) Changes in Investment Directions. Any designation
or change in the designation of investment categories by a Participant
shall be made in writing on forms provided by the Plan Administrator
and shall be made in such manner and at such reasonable times as shall
be determined by the Plan Administrator.
(c) Available Investment Categories. There shall be
offered such investment categories as shall be determined in accordance
with uniform nondiscriminatory rules prescribed by the Plan
Administrator from time to time. The Trustee, in its sole discretion,
may offer to all Participants additional investment categories and may
at any time or times cease to offer such investment categories as it
deems appropriate.
(d) Limitations on Division of Investments. Any
Participant may instruct the Trustee as to the allocation among
investment categories for the investment of future contributions in
such percentages and at such time as shall be determined in accordance
with uniform nondiscriminatory rules prescribed by the Plan
Administrator.
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(e) Failure to Elect Investment Categories. In the
absence of any written designation of investment category preference,
the Trustee shall invest all funds received on account of any
Participant in the investment category selected by the Trustee. Any
designation of investment category by any Participant shall, on its
effective date, cancel any prior designation by that Participant with
respect to investment of future contributions.
(f) Liquidation and Reinvestment. A Participant may
instruct the Trustee, in writing on forms provided by the Plan
Administrator, to liquidate the entire value of the assets held on
his/her behalf in any investment category or categories and to reinvest
the sum obtained in any other category or categories in such manner and
at such reasonable times in such uniform nondiscriminatory rules as
shall be prescribed by the Plan Administrator. The expenses of
liquidation and reinvestment of any assets on behalf of any Participant
shall be chargeable to the Account of the Participant and shall not be
general expenses of the Fund.
(g) Rights of the Trustee. Notwithstanding any
instruction from any Participant, the Trustee shall have the right to
hold uninvested or invested in short term fixed income investment any
funds intended for investment or reinvestment or any funds the
distribution of which is contemplated in the reasonably foreseeable
future. In the event that the Participant giving investment
instructions to the Trustee is a borrower from the Fund, the Trustee
shall have the right to exercise the Participant's investment direction
by causing the investment of so much of the Participant's Account in
any one or more investment categories as the Trustee, in its sole
discretion, deems necessary or advisable to secure the Participant's
indebtedness to the Fund. To the extent that the Trustee's exercise of
this investment discretion is inconsistent with the investment
instructions of the Participant, the Trustee's investment instructions
shall supersede that of the Participant.
(h) Participants with Outstanding Participant Loan
Balances. Notwithstanding any other provision of this section, if a
Participant has an unrepaid balance outstanding under a Participant
loan, which unrepaid balance is secured in part by a pledge of the
Participant's interest in this Plan, the Participant shall be deemed to
have directed that so much of his/her Account as equals the balance
outstanding (including any unpaid interest thereon) be invested in
his/her Participant loan. In addition, to further secure repayment of
the Participant loan, the Trustee may require that all or part of the
remainder of the Participant's Account (i.e., that portion of his/her
Account not represented by the Participant loan) be invested in assets
of a type which involve little or no risk of loss.
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Sec. 6.09 Domestic Relations Orders.
(a) Determination of QDRO Status. Upon receipt of
notification of any judgment, decree or order (including approval of a
property settlement agreement) which relates to the provision of child
support, alimony payments, or marital property rights of a spouse,
former spouse, child, or other dependent of a Participant and which is
made pursuant to a state domestic relations law (including a community
property law) (hereinafter referred to as a "domestic relations
order"), the Plan Administrator shall (1) notify the Participant and
any prospective Alternate Payee named in the order of the receipt of
such domestic relations order and of the Plan's procedures for
determining the status of the domestic relations order as a QDRO, and
(2) within a reasonable period after receipt of such order, determine
whether it constitutes a QDRO. The Plan's procedures for the
determination of QDRO status of a domestic relations order shall be set
forth by the Plan Administrator in writing, shall provide for the
notification of each person specified in that order as entitled to
payment of benefits under the Plan (at the address included in the
domestic relations order) of such procedures promptly upon receipt by
the Plan Administrator of such domestic relations order, and shall
permit the prospective Alternate Payee to designate a representative
for receipt of copies of notices that are sent to the prospective
Alternate Payee with respect to a domestic relations order.
(b) Determination Period. During any period in which
the issue of whether a domestic relations order is a QDRO is being
determined (by the Plan Administrator, by a court of competent
jurisdiction, or otherwise), the Plan Administrator shall segregate in
a separate account in the Plan or in an escrow account held by a
Trustee the amounts which would have been payable to the Alternate
Payee during such period if the order had been determined to constitute
a QDRO. If a domestic relations order is determined to be a QDRO within
eighteen (18) months of the date thereof (or of any subsequent
modification thereof), the Plan Administrator shall cause to be paid to
the persons entitled thereto the amounts, if any, held in the separate
or escrow account referred to above. If a domestic relations order is
determined not to be a QDRO or if the status of the domestic relations
order as a QDRO is not finally resolved within such eighteen month
period, the Plan Administrator shall cause the separate account or
escrow account balance to be paid, with interest thereon, to the person
or persons to whom such amount would have been paid if there had been
no such domestic relations order. Any subsequent determination that
such domestic relations order is a QDRO shall be retrospective in
effect only.
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(c) Provisions Relating to Alternate Payees.
(1) Except as otherwise specifically
provided in the QDRO, all benefits (other than any portion
attributable to assets in a Transferee Plan) payable to an
Alternate Payee shall commence no later than 60 days following
the close of the Plan Year in which the Plan Administrator
determines that a domestic relations order is a QDRO, and
shall be paid in the form of a single-sum distribution. If the
QDRO specifies an alternate method of distribution, or
alternate Benefit Commencement Date, all benefits payable to
the Alternate Payee shall be paid in accordance with the
provisions of Article X and shall commence no earlier than the
later of the Participant's earliest retirement age as defined
in Section 414(p)(4) of the Code, or 60 days following the
close of the Plan Year in which the Plan Administrator
determines the domestic relations order to be a QDRO.
(2) None of the payments, benefits or rights
of any Alternate Payee shall be subject to any claim of any
creditor, and, in particular, to the fullest extent permitted
by law, all such payments, benefits and rights shall be free
from attachment, garnishment, trustee's process, or any other
legal or equitable process available to any creditor of such
Alternate Payee. No Alternate Payee shall have the right to
alienate, anticipate, commute, pledge, encumber or assign any
of the benefits or payments which he/she may expect to
receive, contingently or otherwise, under the Plan.
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(3) Alternate Payees shall not have any
right to (i) borrow money under any Participant loan
provisions under the Plan, (ii) exercise any Participant
investment direction rights or privileges under the Plan,
(iii) exercise any other election, privilege, option or
direction rights of the Participant under the Plan except as
specifically provided in the QDRO, or (iv) receive
communications with respect to the Plan except as specifically
provided by law, regulation or the QDRO.
(4) Each Alternate Payee shall advise the
Plan Administrator in writing of each change of his/her name,
address or marital status, and of each change in the
provisions of the QDRO or of any circumstance set forth
therein which may be material to the Alternate Payee's
entitlement to benefits thereunder or the amount thereof.
Until such written notice has been provided to the Plan
Administrator, the Plan Administrator shall be (i) fully
protected in not complying with, and in conducting the affairs
of the Plan in a manner inconsistent with, the information set
forth in notice, and (ii) required to act with respect to such
notice prospectively only, and then only to the extent
provided for in the QDRO. The Plan Administrator shall not be
required to modify or reverse any payment, transaction or
application of funds occurring before the receipt of any
notice that would have affected such payment, transaction or
application of funds, nor shall the Plan Administrator or any
other party be liable for any such payment, transaction or
application of funds.
(5) Except as specifically provided for in
the QDRO, an Alternate Payee shall have no right to interfere
with the exercise by the Participant or by any Beneficiary of
their respective rights, privileges and obligations under the
Plan.
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ARTICLE VII
RETIREMENT AND DISABILITY BENEFITS
Sec. 7.01 Normal Retirement Benefit. The Normal Retirement Benefit
payable with respect to any Participant retiring at his/her Normal Retirement
Age shall be equal to one hundred percent (100%) of his/her Account as of the
appropriate Valuation Date coincident with or following the Participant's Normal
Retirement Age.
Sec. 7.02 Deferred Retirement Benefit. The Deferred Retirement Benefit
shall be payable with respect to any Participant who retires after his/her
Normal Retirement Age, and shall be equal to one hundred percent (100%) of
his/her Account as of the appropriate Valuation Date coincident with or
following the Participant's actual retirement.
Sec. 7.03 Disability Benefits. The Disability Benefit shall be payable
with respect to any Participant who has suffered Total Disability and who is
separated from service of the Employer by reason of such Total Disability. The
Disability Benefit shall be equal to the Participant's vested interest in
his/her Account as of the appropriate Valuation Date coincident with or
following the Participant's disability separation date. To the extent that
disability benefit payments are made to a Participant who experiences Total
Disability, the provisions of this Plan relating to the disability benefits may
operate as an accident or health plan described by Section 105(e) of the Code.
Sec. 7.04 Effect of QDRO. All benefits provided under this Article VII
are subject to the provisions of any QDRO in effect with respect to the
Participant at the Participant's Benefit Commencement Date, and are subject to
diminution thereby.
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ARTICLE VIII
DEATH BENEFITS
Sec. 8.01 Payment of Death Benefits. Unless the Plan is a Transferee
Plan with respect to any Participant who is married at the time of his/her
death, there shall be paid to the Participant's Beneficiary a death benefit
equal to the balance of the Participant's vested interest in his/her Account.
Sec. 8.02 Transferee Plans.
(a) If this Plan is a Transferee Plan with respect to
any Participant, and such Participant is married at the time of his/her
own death, death benefits with respect to the transferred amounts and
earnings thereon shall be payable as follows:
(1) If the Participant's death occurred
after his/her Benefit Commencement Date, there shall first be
honored the provisions of any annuity arrangement or
installment payout arrangement in force with respect to the
Participant.
(2) If the Participant's vested interest in
his/her Account at the time of his/her death exceeds the
amount referred to in (1) above, there shall then be paid any
amount payable pursuant to a QDRO, but not more than the
remaining undistributed balance of the Participant's vested
interest.
(3) If the Participant's vested interest in
his/her Account at the time of his/her death exceeds the
amounts referred to in (1) and (2) above, there shall be paid
to the Spouse of the Participant a benefit in the form of a
Qualified Preretirement Benefit Survivor Annuity, with
benefits commencing as of the date of the Participant's death.
The Qualified Preretirement Benefit Survivor Annuity shall
have a present value, as of the date of the Participant's
death, equal to the balance of the Participant's vested
interest in his/her Account remaining after satisfying the
requirements of Subparagraphs (a)(1) and (a)(2) of this
section, determined as of the Valuation Date of the Plan
coincident with or next following, the date of the
Participant's death.
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(4) A Participant may elect, in accordance
with the provisions of Section 8.03, to have the provisions of
Paragraph (a)(3) of this section be inapplicable. Such
election must be accompanied by a Spouse's consent satisfying
the requirements of Section 8.06.
(b) Special Rule. If the Spouse of a Participant dies
subsequent to the death of the Participant but prior to the Benefit
Commencement Date of any benefit payable under Section 8.02(a)(3)
(after giving full effect to any election by the Participant to negate
such benefit with the Spouse's consent as described in Section
8.02(a)(4)), there shall be paid to the estate of such deceased Spouse
only the amount that such Spouse would have received under the Plan to
the date of his/her death had there been placed in force at the date of
the Participant's death, a single life annuity for the benefit of such
Spouse, applying to the purchase thereof so much of the Participant's
Account as would have been applied under the Plan to the purchase for
the benefit of such Spouse of a Qualified Preretirement Benefit
Survivor Annuity. Any vested balance remaining in the Account of the
Participant after the payment to the estate of the deceased Spouse of
the benefit described above in this Paragraph (b), after the payment of
premiums for any annuity purchased before the death of such Spouse, and
after giving effect to any applicable QDRO shall be payable to the
Participant's Beneficiary.
(c) Explanation of the Qualified Preretirement
Benefit Survivor Annuity. A written explanation of the Qualified
Preretirement Benefit Survivor Annuity is to be provided to each
married Participant in a Transferee Plan within the following
period which ends last:
(1) the period beginning with 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;
(2) the period beginning one year before and
ending one year after the individual becomes a Participant;
(3) the period beginning one year before and
ending one year after notice is required because of the
cessation of a benefit subsidy; or
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(4) the period beginning one year before and
ending one year after notice is required because the survivor
benefit requirements apply to a Participant.
Notwithstanding the foregoing, the written explanation of the Qualified
Preretirement Benefit Survivor Annuity shall be provided to each
married Participant who has separated from service prior to attaining
35 within the one year
period after separation.
Sec. 8.03 Unmarried Participants; Electing Married Participants.
(a) Pre-Distribution Death Benefit. If the death of
the Participant occurs prior to his/her Benefit Commencement Date, to
the extent that benefits are not payable pursuant to the provisions of
Section 8.01 or 8.02, there shall be paid a benefit having a value
equal to the Participant's vested Account balance, determined as of the
Valuation Date of the Plan coincident with or next following, the date
of his/her death. The benefit shall be payable as follows:
(1) Benefit Payable to Others. If the
Participant (i) is not survived by a spouse, (ii) is survived
by a Spouse who has consented, in accordance with the
provisions of Section 8.06, to the designation of a
Beneficiary or Beneficiaries other than such Spouse (but only
to the extent of the portion of the Participant's Account
subject to such consent), or (iii) is subject to a QDRO at the
time of his/her death (but only to the extent of the QDRO),
the benefit hereunder shall be paid to the Participant's
Beneficiary, subject however, to the provisions of any QDRO
then in force as to the Participant.
(2) Death of Surviving Spouse Prior to
Benefit Commencement. If the Spouse of a Participant dies
subsequent to the death of the Participant but prior to the
Benefit Commencement Date, there shall be paid to the estate
of such deceased Spouse only the amount, if any, that such
Spouse would have received under the Plan to the date of
his/her death had there been placed in force at the date of
the Participant's death, a single life annuity for the Benefit
of such Spouse, applying to the purchase thereof one hundred
percent (100%) of the balance standing to the credit of the
Participant under the Plan at date of death, after such
balance was reduced to reflect the applicable provisions of
any QDRO in force as to the Participant at the time of his/her
death. Any balance remaining in the Account of the Participant
after the payment (if any be due) to the estate of the
deceased Spouse of the benefit described above in this
Paragraph (a)(2), after the payment of premiums for any
annuity purchased before the death of such Spouse, and after
giving effect to any applicable QDRO, shall be payable to the
Participant's Beneficiary.
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(b) Post Distribution Commencement Death Benefit. In
the event of the death of a Participant whose benefits are in a "pay
status" (i.e., after his/her Benefit Commencement Date), the death
benefit shall be determined by the provisions of any annuity or
installment payout provisions in force at the time of his/her death. If
there be no such provisions in force, the death benefit shall be the
undistributed vested balance of his Account, which undistributed vested
balance shall be treated in the same manner as a Pre-Distribution Death
Benefit under Paragraph (a) of this section.
Sec. 8.04 Participant Elections; Spousal Consents. A married
Participant covered by the provisions of Section 8.02 may file a written
election with the Plan Administrator declining coverage under the Qualified
Preretirement Benefit Survivor Annuity provisions. Any such written election
shall be in a form satisfactory to the Plan Administrator, shall be filed during
the election period, shall be revocable by the Participant at any time prior to
death by a written instrument filed with the Plan Administrator, and shall be
subject to the provisions of any QDRO in force with respect to the Participant.
No election by a Participant to decline coverage under a Qualified Preretirement
Benefit Survivor Annuity shall be effective unless consented to in writing by
the Participant's spouse in accordance with the provisions of Section 8.06 of
the Plan, nor shall any such election remain effective after subsequent
remarriage of the Participant. For purposes of this section, the election period
shall mean the period beginning on the later of (a) the first day
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of the Plan Year in which the Participant attains Age 35, or (b) the date on
which the individual became a Participant, ending on the date of the
Participant's death. However, the applicable election period referred to in (a)
above shall begin not later than the date of the Participant's separation from
service, even if such separation occurs prior to attainment of Age 35.
Sec. 8.05 Beneficiary Designation.
(a) Spouse as Beneficiary. The primary Beneficiary of
each married Participant shall be his/her Spouse except to the extent
that there is in force a consent, executed by such Spouse and complying
with the provisions of Section 8.06, to the designation of one or more
Beneficiaries other than or in addition to such Spouse.
(b) Beneficiary Designation Right. Each unmarried
Participant and each married Participant whose spouse has consented to
designation of persons or entities other than or in addition to such
spouse as Beneficiaries in accordance with the provisions of Section
8.06, shall have the right to designate one or more primary and one or
more contingent Beneficiaries to receive any benefit becoming payable
pursuant to this Article VIII. All Beneficiary designations shall be in
writing in a form satisfactory to the Plan Administrator. Each
Participant shall be entitled to change his/her Beneficiaries at any
time and from time to time with the consent of his/her spouse as
provided in Section 8.06.
(c) Termination of Beneficiary Designation. Any
designation of Beneficiary by a Participant pursuant to Paragraph (b)
of this section shall become null and void upon the marriage of the
Participant subsequent to the date on which such designation was made.
(d) Failure to be Survived by Designated Beneficiary.
In the event that the Participant fails to designate a Beneficiary to
receive a benefit that becomes payable pursuant to the provisions of
this Article VIII, or in the event that the Participant is predeceased
by all designated primary and contingent Beneficiaries, the death
benefit shall be payable to the following classes of takers, each class
to take to the exclusion of all subsequent classes, with all members of
each class sharing equally: (1) Spouse; (2) Lineal descendants
(including adopted and step-children), per stirpes; (3) Surviving
parents (equally); and (4) the Participant's estate.
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(e) Miscellaneous. Changes in beneficiary
designations shall become effective only upon receipt of the form by
the Plan Administrator, but upon such receipt the change shall relate
back to and take effect as of the date the Participant signed the
request (which shall be presumed to be the date appearing on such form,
or, if there be none, then the date of the Participant's death) whether
or not the Participant is living at the time of such receipt. Neither
the Plan Administrator (nor its appointed delegate) nor the Trustee
shall be liable by reason of any payment of the Participant's death
benefit made before the receipt of any acceptable form designating or
changing the designation of the Beneficiary.
Any change of beneficiary designation filed in proper form
with the Plan Administrator shall revoke all prior beneficiary
designations. The Plan Administrator shall be the sole determinant of
the acceptability of a beneficiary designation or change of beneficiary
designation.
Sec. 8.06 Spousal Consent to Waiver of Qualified Preretirement Benefit
Survivor Annuity and/or Designation of Alternative Beneficiary. A spouse must
consent to the waiver of the Qualified Preretirement Benefit Survivor Annuity
and/or the designation by the Participant of one or more Beneficiaries other
than or in addition to such spouse to receive benefits in the event of the death
of the Participant. Any such consent shall be in writing, and shall:
(a) acknowledge the effect of such consent;
(b) be witnessed by a representative of the Plan or
by a notary public;
(c) be subject to any QDRO applicable to the
Participant at the time of his/her death or at the Benefit Commencement
Date;
(d) be subject to limitations expressed therein by
the spouse as to the portion of the Participant's Account (expressed as
a percentage or in dollar terms) to which it applies;
(e) acknowledge and consent to the alternative or
additional Beneficiary or Beneficiaries which may be designated by the
Participant;
(f) not be subject to revocation by such spouse, but
shall be automatically revoked upon the
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revocation of the Participant's election under Section 8.04 or a change
of beneficiary designation under Section 8.05(b);
(g) to the extent that the Participant waives payment
in the form of a Qualified Preretirement Benefit Survivor Annuity, be
accompanied by (unless there has been previously filed with the Plan
Administrator and there remains in force) a consent to the waiver by
the Participant of the payment of the benefits in the form of a
Qualified Preretirement Benefit Survivor Annuity; and
(h) become null and void upon (1) the termination of
the marriage between the Participant and such spouse, or (2) revocation
by the Participant of the election referred to in Section 8.04.
A consent to designation of a Beneficiary other than a Spouse shall not
constitute a waiver of the Qualified Preretirement Benefit Survivor Annuity or
of the Qualified Joint and Survivor Annuity, and to the extent that either such
annuity applies, any such consent shall be of no effect.
Sec. 8.07 Effect of QDRO. Notwithstanding any other provision of this
Article VIII, the Plan Administrator and the Trustee shall give full effect to
any QDRO applicable at the time of death of the Participant, even to the extent
that giving effect to such QDRO defeats or diminishes the interest of any Spouse
or other Beneficiary hereunder.
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ARTICLE IX
VESTING PROVISIONS
Sec. 9.01 Full and Immediate Vested Interests. All Participants shall
at all times be fully vested in their respective Employer Salary Reduction
Contribution Accounts, if any. All Participants shall also at all times be fully
vested in so much of their respective Employer Contribution Accounts as are
attributable to "restoration contributions" made pursuant to Article IV, and the
earnings and accretions, if any, attributable thereto. All Participants shall
also at all times be fully vested in so much of their respective Employer
Contribution Accounts as are attributable to accounts transferred from the
Magnolia Gardens Nursing Home Employees' Money Purchase Pension Plan and the
Total Care Systems, Inc. Money Purchase Pension Plan and the earnings and
accretions, if any, attributable thereto.
Sec. 9.02 Deferred Vested Interests. The Participant's vested interest
in his/her Employer Matching Contribution Account and his/her Employer
Profit-Sharing Contribution Account shall be determined from the following table
as of any date of reference during which he/she is a Participant, and as of the
date on which he/she experiences a Break in Service, subject, however, to the
provisions of Sections 9.03 and 9.04 with respect to disregarded periods of
service.
Participant's Years Participant's Vested
of Service Percentage
- ------------------- --------------------
Less than 5.................................. None
5 Years of Service or more................... 100%
Attainment of Normal Retirement Age
regardless of service...................... 100%
Upon the death or Total Disability of a
Participant while in the employ of the
Employer or an Affiliated Company.......... 100%
Notwithstanding the foregoing, a Participant's vested interest in the
portion of his/her Account attributable to amounts transferred to this Plan from
The Meridian Healthcare, Inc. Retirement Savings Plan that consists of amounts
attributable to "Employer Matching Contributions" (as defined under that plan)
shall be determined from the following table as of any date of reference during
which he/she is a Participant, and as of the date on which he/she experiences a
Break in Service, subject, however, to the provisions of Sections 9.03 and 9.04
with respect to disregarded periods of service. In addition, any Participant
shall at all times be fully vested in
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the portion of his/her Account attributable to his/her "Participant Elective
Deferral Account", as defined under The Meridian Healthcare, Inc. Retirement
Plan, that has been transferred to this Plan.
Participant's Years Participant's Vested
of Service Percentage
- ------------------- --------------------
Less than 2 Years of Service................. None
2 Years of Service, but fewer than 3......... 20%
3 Years of Service, but fewer than 4......... 40%
4 Years of Service, but fewer than 5......... 60%
5 Years of Service, but fewer than 6......... 80%
6 Years of Service or more................... 100%
Attainment of Normal Retirement Age
regardless of Service....................... 100%
Upon the death or Total Disability of a
Participant while in the employ of the
Employer or an Affiliated Company........... 100%
Sec. 9.03 Disregarded Service for Vesting Purposes. The following
service shall be disregarded in computing a Participant's vested
(nonforfeitable) interest in his/her Employer Contribution Account pursuant to
the provisions of Section 9.02:
(a) Service prior to the Effective Date of the Plan;
and
(b) Service disregarded pursuant to the provisions of
Section 9.04.
Sec. 9.04 Effect of Breaks in Service/Terminations of Employment.
(a) Service after a period of Disregarded Prior
Service shall not increase the Participant's vested interest in so much
of his/her Account derived from Employer contributions as was accrued
with respect to the period of Disregarded Prior Service, nor shall a
period of Disregarded Prior Service be taken into account in computing
the Participant's vested interest in so much of his/her Account derived
from Employer contributions as is attributable to service subsequent to
such period of Disregarded Prior Service.
(b) Service after a Break in Service or termination
of employment shall not increase the Participant's vested interest in
so much of his/her Account as was accrued with respect to the period
prior to such Break in Service or termination of employment
if the Participant received a distribution of his/her entire vested
interest which was accrued prior to such Break in Service or
termination of employment and thereafter declined to make a restoration
contribution authorized by Article IV of the Plan within the time
prescribed therein.
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Otherwise, service subsequent to one or more Breaks in Service shall be
aggregated with service prior to such Breaks in Service in determining the
Participant's vested interest in accruals to his/her Account attributable to
service both before and after such Breaks in Service.
Sec. 9.05 Amendments to the Vesting Schedule.
(a) If the vesting schedule under this Plan is
amended, each Participant who has completed at least three (3) Years of
Service with the Employer may elect, during the election period
specified in this section, to have the vested percentage of his/her
Account derived from Employer contributions determined without regard
to such amendment.
(b) For the purposes of this section, the election
period shall begin as of the date on which the amendment changing the
vesting schedule is adopted, and shall end on the latest of the
following dates:
(1) the date occurring sixty (60) days after
the Plan amendment is adopted; or
(2) the date which is sixty (60) days after
the day on which the Plan amendment becomes effective; or
(3) the date which is sixty (60) days after
the day the Participant is issued written notice of the Plan
amendment by the Plan Administrator or by the Employer; or
(4) such later date as may be specified by
the Plan Administrator.
The election provided for in this section shall be made in writing and
shall be irrevocable when made.
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ARTICLE X
METHODS AND TIMING OF BENEFIT DISTRIBUTIONS
Sec. 10.01 Forms of Benefit Payments.
(a) Normal Form of Benefits. Benefits shall normally
be paid as a single-sum distribution unless (1) benefits become payable
to a Participant with respect to whom this Plan is a Transferee Plan,
and (2) such Participant has not elected to waive benefit distribution
in the form of a Qualified Joint and Survivor Annuity, or such
Participant has made such an election but his/her spouse has not
consented thereto, and (3) the total value of the Participant's vested
interest in his/her Account at the time of distribution (or at the time
of any prior distribution) is in excess of $3,500. However,
Participants becoming eligible for retirement or disability benefits
and Vested Participants becoming eligible for distributions of their
respective vested interests as single-sum distributions may, within the
ninety (90) day period before the benefit first becomes distributable,
request that, in lieu of single-sum distributions, their interests be
paid in installments over a fixed period if such payments do not
constitute an "annuity" within the meaning of Section 205 of Title I of
ERISA or Section 401(a) of the Code. The following rules shall apply to
any such installment distributions:
(i) The payment period shall not exceed
the life expectancy of the Participant at his/her Benefit
Commencement Date or the joint life and survivorship
expectancy of the Participant and his/her Beneficiary,
provided that if the Beneficiary is not the Participant's
Spouse, the payment period complies with the Minimum
Distribution Incidental Benefit Requirements set forth in
Proposed Income Tax Regulations Section 1.401(a)(9)-2.
(ii) Payments shall be made in installments
which are as nearly equal as possible, and shall be made not
less frequently than annually nor more frequently than
monthly.
(iii) The total amount subject to
installment payments may be segregated and maintained as a
separate account and such separate account shall not
thereafter share in the general investment activity of the
Fund. Such separate account shall be an interest-bearing
account, and all interest thereon shall inure to the benefit
of the Participant on whose behalf such account was
established.
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(iv) At any time during the installment
period, the Plan Administrator, with the written consent of
the Participant, may accelerate the remaining installments by
paying the balance of such account to the distributee.
(v) Should the Participant die during the
benefit payment period prior to the completion of benefit
distributions, the remaining portion of his/her interest will
be distributed to his/her designated Beneficiary at least as
rapidly as under the method of distribution being used as of
the date of his/her death.
If a Participant is subject to a QDRO under the terms of which
a former spouse is entitled to benefits in the form of a survivorship
annuity, such Participant shall not be considered as unmarried for the
purposes of this Paragraph (a) to the extent of the entitlement of such
former spouse under the QDRO.
(b) Certain Married Participants in Transferee Plan.
If a Participant with respect to whom this Plan is a Transferee Plan is
married at his/her Benefit Commencement Date, and if his/her benefit
distribution mode is not governed by the provisions of Paragraph (a) of
this section, that portion of his/her benefit attributable to the
transferred assets and earnings thereon shall be distributed as
follows:
(1) If the total value of the Participant's
vested interest in his/her Account does not exceed (or at the
time of any prior distribution, did not exceed) $3,500, as a
single-sum distribution.
(2) If the total value of the Participant's
vested interest in his/her Account exceeds (or at the time of
any prior distribution exceeded) $3,500, the vested Account
balance shall be applied to the purchase of a Qualified Joint
and Survivor Annuity, with the surviving Spouse's benefit set
at fifty percent (50%) of the monthly benefit payable to the
Participant during his/her lifetime, provided, however, that
the Participant may instruct in writing prior to the purchase
of such an annuity that a larger surviving Spouse's benefit be
provided (up to a maximum of a one hundred percent (100%)
surviving Spouse's benefit).
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(3) All of the benefits described in
Subparagraphs (1) and (2) of this paragraph shall be subject
to reduction to satisfy the provisions of any QDRO in effect
as to the Participant at the time of his/her death or
thereafter placed in effect by a court of competent
jurisdiction.
(c) All Other Unmarried Participants in Transferee
Plan. If a Participant with respect to whom this Plan is a Transferee
Plan is not married at his/her Benefit Commencement Date, and if
his/her benefit distribution mode is not governed by the provisions of
Paragraph (a) of this section, his/her benefit shall be distributed as
follows:
(1) If the total value of the Participant's
vested interest in his/her Account does not exceed (or at the
time of any prior distribution, did not exceed) $3,500, as a
single-sum distribution.
(2) If the total value of the Participant's
vested interest in his/her Account exceeds (or at the time of
any prior distribution exceeded) $3,500, the vested Account
balance attributable to such transferred assets shall be
applied to the purchase of a straight life annuity for the
Participant unless the Participant waives such form of
benefit. The provisions of Section 10.02 shall apply to such
waiver, provided however, that no spousal consent shall be
required with respect thereto.
(3) All benefits described in Subparagraphs
(1) and (2) of this paragraph shall be subject to reduction to
satisfy the provisions of any QDRO in effect as to the
Participant.
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(d) Other Forms of Benefit Preserved in Transferee
Plan. If a Participant with respect to whom this Plan is a Transferee
Plan properly waives an annuity form of benefit described in Paragraph
(b) or (c) of this section, as the case may be, then the Participant
shall be entitled to receive his/her vested Account balance
attributable to the transferred assets in any of the forms available
under the Transferor Plan, in addition to the forms of benefits
provided under Paragraph (a) of this section.
Sec. 10.02 Waiver of Qualified Joint and Survivor Annuity (Transferee
Plans Only).
(a) Notice Requirements. The Plan Administrator shall
provide a written explanation of the Qualified Joint and Survivor
Annuity to each Participant in a Transferee Plan during the period
beginning ninety (90) days prior to the Participant's Benefit
Commencement Date and ending thirty (30) days prior to the
Participant's Benefit Commencement Date. Such explanation shall
describe (1) the terms and conditions of the Qualified Joint and
Survivor Annuity; (2) the Participant's right to make and the effect of
any election to waive the Qualified Joint and Survivor Annuity; (3) the
rights of a Participant's spouse; and (4) the right to make, and the
effect of, a revocation of a previous election to waive the Qualified
Joint and Survivor Annuity.
(b) Participant's Waiver Rights. At any time during
the applicable election period, any Participant covered under the
Qualified Joint and Survivor Annuity may elect to waive such coverage.
No such waiver shall be effective, however, unless consented to by the
Participant's spouse. For the purposes hereof, the applicable election
period shall be the 90-day period ending on the Benefit Commencement
Date.
(c) Effect of Participant's Waiver. If a Participant
executes a waiver which is effective under Paragraph (b) of this
section, such Participant's benefits under the Plan shall be
distributed in one of the forms described in Section 10.01(a) or (d).
(d) Form and Content of Participant's Waiver. A
Participant's waiver under Paragraph (b) of this section shall be in
writing in a form acceptable to the Plan Administrator and shall be
effective only if delivered to the Plan Administrator during the
election period described in Paragraph (b) of this section.
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(e) Revocation of Waivers. Any waiver delivered by
the Participant to the Plan Administrator in accordance with the
provisions of Paragraph (b) of this section may be revoked by the
Participant upon written notice delivered to the Plan Administrator
during the election period identified in Paragraph (b) of this section.
(f) Spouse's Consent. No Participant's waiver under
Paragraph (a) of this section of the Plan shall be effective prior to
receipt by the Plan Administrator of a spouse's consent, as described
in Paragraph (g) of this section.
(g) Form and Content of Spouse's Consent. A spouse
may consent to the receipt by the Participant of benefits in a form
other than as a Qualified Joint and Survivor Annuity, provided that
such consent shall be in writing, and shall:
(1) specify the form of benefit elected by
the Participant and/or the non-spouse Beneficiary designated
by the Participant;
(2) acknowledge the effect of such consent;
(3) be witnessed by a representative of the
Plan or by a notary public;
(4) be subject to any QDRO applicable to the
Participant at the time of his/her death or at the Benefit
Commencement Date;
(5) be subject to limitations expressed
therein by the spouse as to the portion of the Participant's
Account (expressed as a percentage or in dollar terms) to
which it applies; and
(6) not be subject to revocation by such
spouse, but shall be automatically revoked upon the revocation
of the Participant's election under Sections 8.04 or 10.02(e),
or a change of beneficiary designation under Section 8.05(b).
Notwithstanding the foregoing, a Participant's spouse may
expressly waive the
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right to consent to future elections of forms of benefit
distribution and/or designations of Beneficiaries.
(h) Contingent Additional Option of Surviving Spouse.
If a Participant dies prior to his/her Benefit Commencement Date and if
his/her Spouse thereby becomes entitled to benefits in the form of a
Qualified Preretirement Benefit Survivor Annuity, such Spouse may elect
in writing to irrevocably waive the Qualified Preretirement Benefit
Survivor Annuity to which he/she is entitled and to accept in lieu
thereof prompt payment of the value of the Participant's vested
interest in his/her Account. The option extended to a surviving Spouse
pursuant to this paragraph shall not be effective after the date in
which benefits commence under either the Qualified Preretirement
Benefit Survivor Annuity or the Qualified Joint and Survivor Annuity,
nor shall any such option exercise be allowed to operate to defeat or
diminish either (1) the interests of any party under a QDRO applicable
to the Participant at the time of his/her death or (2) any written
instruction delivered by the Participant to the Plan Administrator
prior to the Participant's death in which the Participant requested
that the option otherwise granted hereby be denied to his/her Spouse.
Sec. 10.03 Benefit Commencement Dates.
(a) Retirement Benefits and Disability Benefits.
Benefits payable by reason of a Participant's retirement or Total
Disability shall normally be paid as promptly as practicable following
the Valuation Date of the Plan coincident with or next following the
event entitling the Participant to such distribution. Unless the
Participant elects to defer his/her Benefit Commencement Date,
retirement and disability benefits shall commence not later than the
sixtieth (60th) day after the close of the Plan Year in which occurs
the latest of (1) the date on which the Participant attains the earlier
of age 65 or the Normal Retirement Age (if other than age 65), (2) the
tenth anniversary of the year in which the Participant commenced
participation in the Plan, or (3) the date on which the Participant
terminates service with the Employer. Notwithstanding the foregoing,
the Participant's Benefit Commencement Date shall in no event be later
than his/her Required Beginning Date.
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(b) Death Benefits. Benefits payable by reason of the
death of the Participant shall commence and be paid as follows:
(1) If to the Participant's Spouse under a
Qualified Joint and Survivor Annuity, as of the first day of
the month next following the month in which the Participant's
death occurs, with payments to continue for the life of such
Spouse;
(2) If to the Participant's Spouse under a
Qualified Preretirement Benefit Survivor Annuity, as of the
date of the Participant's death, with payments to continue for
the life of such Spouse;
(3) Should a Participant die while receiving
installment payments under this Plan, the payments shall
continue for the balance of the installment period to the
Participant's Beneficiary. Notwithstanding the foregoing, the
Beneficiary may elect to receive in lieu of such continued
installment payments an amount equal to the present value of
the unpaid future installments; or
(4) If to any Beneficiary other than as set
forth in any of Paragraphs (b)(1) through (b)(3) inclusive,
commencing within one (1) year of the date of the
Participant's death in a single sum, or in installments (not
less frequent than annually and not more frequently than
monthly) over a period not longer than five (5) years from the
date of the Participant's death, in accordance with the
Participant's written election. In the absence of an effective
election as of the date of the Participant's death, such
election shall be made by his/her Beneficiary.
If any portion of the Account of a Participant is payable after the death of the
Participant's Spouse, if the Participant's Spouse was the sole primary
Beneficiary with respect to such portion, and if the Participant did not
designate a contingent Beneficiary who survives the Participant's Spouse to
receive such portion, the Participant's Spouse shall have the right to act on
behalf of the deceased Participant to designate one or more Beneficiaries to
receive such portion upon the death of such Spouse. Failure on the part of the
Spouse to exercise this power of beneficiary designation and failure of the
Participant's
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designated contingent Beneficiaries to survive the Spouse shall result in
payment to the estate of the deceased Spouse of the amount subject to the
Spouse's power of beneficiary designation. All amounts payable after the death
of the Spouse shall be paid as promptly as practicable after the death of the
Spouse, with all such payments commencing within one (1) year of such death and
being completed within five (5) years of such death.
(c) Deferred Vested Benefits. Benefits payable to a
Participant by reason of a separation from service (other than due to
retirement, death or Total Disability) or a Break in Service
experienced by that Participant prior to his/her retirement shall
normally be payable as of the date that would have been the
Participant's Normal Retirement Age in accordance with Section 10.03(a)
and shall not, in any event, be deferred beyond the Participant's
Required Beginning Date. Notwithstanding the foregoing, a Vested
Participant shall have the right to request a distribution of any
benefit to which he/she is entitled pursuant to Article IX as of any
earlier Valuation Date coincident with or next following the date of
such request, and the Plan Administrator shall have the right to pay
any such benefit, if (1) the Participant (and if the Plan is a
Transferee Plan with respect to such Participant, his/her spouse, if
any) consents to such benefit distribution in writing; or (2) the total
value of the Participant's vested interest in his/her Account (at the
time of any present or prior distribution) is less than (A) $3,500, or
(B) such smaller sum as may be prescribed by the Secretary of the
Treasury as the maximum amount that may be distributed without the
Participant's consent. If a Participant has no vested interest in
his/her Account as of the date he/she separates from service with the
Employer, such Participant shall be deemed to have: (i) received a
complete distribution of his/her Account in the amount of zero dollars
($0.00); and (ii) forfeited the non-vested portion of his/her Account.
No distribution of such benefit shall occur prior to the occurrence of
a Break in Service or termination of employment.
Sec. 10.04 Post-Distribution Credits. In the event that, after the
payment of a single-sum distribution under this Plan, there shall remain in the
Participant's Account any funds, or any funds shall be subsequently credited to
such Account, such additional funds, to the extent vested, shall be paid to the
Participant (or to the Beneficiary) in cash as promptly as practicable. In the
event that after an installment payout has commenced there shall be additional
funds credited to the Account
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of a Participant, the Plan Administrator shall direct adjustment of the
remaining installment payments so as to include all such credited amounts, as
nearly evenly as possible, in the remaining installment payments.
Sec. 10.05 Delayed and Extended Benefit Payments. Notwithstanding
anything herein to the contrary, if a Participant or Beneficiary has made an
effective election or designation in accordance with (and which satisfies the
requirements of) Section 242(b) of the Tax Equity and Fiscal Responsibility Act
of 1982 and such election or designation provides for a benefit distribution
which does not conflict with the provisions of this Plan, as in effect on the
date of such election or designation, the distribution of benefits shall be made
in accordance with the provisions of such election or designation unless it is
revoked in writing or superseded by law.
Sec. 10.06 Effect of QDRO. All benefits provided under this Article X
are subject to the provisions of any QDRO in effect with respect to the
Participant at the Participant's Benefit Commencement Date, and are subject to
diminution thereby.
Sec. 10.07 Direct Rollover
(a) In General. This section applies to distributions
made on or after January 1, 1993. Notwithstanding any provision of the
Plan to the contrary that would otherwise limit a Distributee's
election under this section, 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.
(b) Definitions.
(1) 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 joint life expectancies) of
the Distributee and the Distributee's designated beneficiary,
or for a specified period of ten years or more; any
distributions 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).
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(2) 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 individual retirement annuity.
(3) Distributee. A Distributee includes an
Employee or former Employee. In addition, the Employee's or
former Employee's surviving spouse and the Employee's or
former Employee's spouse or former spouse who is the
Alternative 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.
(4) Direct Rollover. A Direct Roll-over is a
payment by the Plan to the Eligible Retirement Plan specified
by the Distributee.
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ARTICLE XI
PLAN ADMINISTRATION
Sec. 11.01 Appointment and Tenure. The Plan Administrator shall consist
of a committee of one (1) or more persons who shall serve at the pleasure of the
Board. Any committee member may resign by delivering his/her written resignation
to the Employer. Vacancies arising by the death, resignation or removal of a
committee member shall be filled by the Board. If the Board fails to act, and in
any event, until the Board so acts, the remaining members of the committee may
appoint an interim committee member to fill any vacancy occurring on the
committee. If no person has been appointed to the committee, or if no person
remains on the committee, the Employer shall be deemed to be the Plan
Administrator.
Sec. 11.02 Meetings; Majority Rule. Any and all acts of the Plan
Administrator taken at a meeting shall be by a majority of all members of the
committee. The Plan Administrator may act by vote taken in a meeting (at which a
majority of members shall constitute a quorum) if all members of the committee
have been given at least ten (10) days' written notice of such meeting or have
waived notice. The Plan Administrator may also act by unanimous consent in
writing without the formality of convening a meeting.
Sec. 11.03 Delegation. The Plan Administrator may, by written majority
decision, delegate to each or any one of its number, or to its Secretary,
authority to sign any documents on its behalf, or to perform ministerial acts,
but no person to whom such authority is delegated shall perform any act
involving the exercise of any discretion without first obtaining the concurrence
of a majority of the members of the committee, even though he/she alone may sign
any document required by third parties.
The Plan Administrator shall elect one of its number to serve as
Chairperson. The Chairperson shall preside at all meetings of the committee or
shall delegate such responsibility to another committee member. The committee
shall elect one person to serve as Secretary to the committee. All third parties
may rely on any communication signed by the Secretary, acting as such, as an
official communication from the Plan Administrator.
Sec. 11.04 Authority and Responsibility of the Plan Administrator. The
Plan Administrator shall have the following duties and responsibilities:
(a) to maintain and preserve records relating to Plan
Participants, former Participants, and their beneficiaries;
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(b) to prepare and furnish to Participants all
information required under Federal law or the provisions of this Plan;
(c) to prepare and furnish to the Trustee sufficient
employee data and the amount of funds received from all sources so that
the Trustee may maintain separate Accounts for Participants and make
required payments of benefits;
(d) to prepare and file or publish with the Secretary
of Labor, the Secretary of the Treasury, their delegates and all other
appropriate government officials all reports and other information
required under law to be so filed or published;
(e) to provide directions to the Trustee with respect
to the purchase of life insurance, methods of benefit payment,
valuations at dates other than Annual Valuation Dates and on all other
matters if called for in the Plan or requested by the Trustee;
(f) to construe the provisions of the Plan, to
correct defects therein and to supply omissions thereto;
(g) to engage assistants and professional advisers;
(h) to arrange for bonding, if required by law;
(i) to provide procedures for determination of claims
for benefits;
(j) to determine whether any domestic relations order
constitutes a QDRO and to take such action as the Plan Administrator
deems appropriate in light of such domestic relations order; and
(k) to retain records on elections and waivers by
Participants, their spouses and their Beneficiaries, as further set
forth herein.
Sec. 11.05 Reporting and Disclosure. The Plan Administrator shall keep
all individual and group records relating to Plan Participants, and
Beneficiaries, and all other records necessary for the proper operation of the
Plan. Such records shall be made available to the Employer and to each
Participant and Beneficiary for examination during business hours except that a
Participant or Beneficiary shall examine only such
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records as pertain exclusively to the examining Participant or Beneficiary and
those records and documents relating to all Participants generally. The Plan
Administrator shall prepare and shall file as required by law or regulation all
reports, forms, documents and other items required by ERISA, the Code, and every
other relevant statute, each as amended, and all regulations thereunder. This
provision shall not be construed as imposing upon the Plan Administrator the
responsibility or authority for the preparation, preservation, publication or
filing of any document required to be prepared, preserved or filed by the
Trustee or by any other Named Fiduciary to whom such responsibilities are
delegated by law or by this Plan.
Sec. 11.06 Construction of the Plan. The Plan Administrator shall take
such steps as are considered necessary and appropriate to remedy any inequity
that results from incorrect information received or communicated in good faith
or as the consequence of an administrative error. The Plan Administrator shall
have the sole and absolute discretion to interpret the Plan and shall resolve
all questions arising in the administration, interpretation and application of
the Plan. It shall endeavor to act, whether by general rules or by particular
decisions, so as not to discriminate in favor of, or against, any person and so
as to treat all persons in similar circumstances uniformly. The Plan
Administrator shall correct any defect, reconcile any inconsistency, or supply
any omission with respect to this Plan. All such corrections, reconciliations,
interpretations and completions of Plan provisions shall be final and binding
upon the parties.
Sec. 11.07 Engagement of Assistants and Advisers; Plan Expenses. The
Plan Administrator shall have the right to hire such professional assistants and
consultants as it, in its sole discretion, deems necessary or advisable,
including, but not limited to:
(a) investment managers and/or advisers;
(b) accountants;
(c) actuaries;
(d) attorneys;
(e) consultants;
(f) clerical and office personnel; and
(g) medical practitioners.
The expenses incurred by the Plan Administrator in connection with the operation
of the Plan, including, but not limited to, the expenses incurred by reason of
the engagement of professional assistants and consultants, shall be expenses of
the Plan and shall be payable from the Fund at the direction of the Plan
Administrator. The Employer shall have the option, but not the obligation, to
pay any such expenses, in whole or in part, and by so doing, to relieve the Fund
from the obligation of bearing such expenses. Payment of any such expenses by
the Employer on any occasion shall not bind the Employer to thereafter pay any
similar expenses.
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Sec. 11.08 Bonding. The Plan Administrator shall arrange for such
bonding as is required by law, but no bonding in excess of the amount required
by law shall be considered required by this Plan.
Sec. 11.09 Compensation of the Plan Administrator. The Plan
Administrator shall serve without compensation for its services as such, but all
expenses of the Plan Administrator shall be paid or reimbursed by the Employer,
and if not so paid or reimbursed, shall be proper charges to the Trust Fund and
shall be paid therefrom.
Sec. 11.10 Indemnification of the Plan Administrator. Each member of
the committee constituting the Plan Administrator shall be indemnified by the
Employer against costs, expenses and liabilities (other than amounts paid in
settlement to which the Employer does not consent) reasonably incurred by
him/her in connection with any action to which he/she may be a party by reason
of his/her service as Plan Administrator except in relation to matters as to
which he/she shall be adjudged in such action to be personally liable for
negligence or willful misconduct in the performance of his/her duties. The
foregoing right to indemnification shall be in addition to such other rights as
the committee member may enjoy as a matter of law or by reason of insurance
coverage of any kind, but shall not extend to costs, expenses and/or liabilities
otherwise covered by insurance or that would be so covered by any insurance then
in force if such insurance contained a waiver of subrogation. Rights granted
hereunder shall be in addition to and not in lieu of any right to
indemnification to which the committee member may be entitled pursuant to the
by-laws of the Employer. Service on the committee as a Plan Administrator shall
be deemed in partial fulfillment of the committee member's function as an
employee, officer and/or director of the Employer, if he/she serves in that
capacity as well as in the role of committee member.
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ARTICLE XII
ALLOCATION AND DELEGATION OF
AUTHORITY AND RESPONSIBILITY
Sec. 12.01 Authority and Responsibilities of Employer. The Employer, as
Plan sponsor, shall serve as a "Named Fiduciary" having the following (and only
the following) authority and responsibility:
(a) to establish and communicate to the Trustee a
funding policy for the Plan;
(b) to appoint the Trustee and the Plan Administrator
and to monitor each of their performances;
(c) to appoint an Investment Manager (or to refrain
from such appointment), to monitor the performance of the Investment
Manager so appointed, and to terminate such appointment (more than one
Investment Manager may be appointed and in office at any time pursuant
hereto);
(d) to communicate such information to the Plan
Administrator and to the Trustee as each needs for proper performance
of its duties; and
(e) to provide channels and mechanisms through which
the Plan Administrator and/or the Trustee can communicate with
Participants and their Beneficiaries.
In addition, the Employer shall perform such duties as are imposed by
law or by regulation and shall serve as Plan Administrator in the absence of an
appointed Plan Administrator.
Sec. 12.02 Authority and Responsibilities of the Plan Administrator.
The Plan Administrator shall have the authority and responsibilities imposed by
Article XI hereof. With respect to the said authority and responsibility, the
Plan Administrator shall be a "Named Fiduciary," and as such, shall have no
authority and responsibility other than as granted in this Plan, or as imposed
by law.
Sec. 12.03 Authority and Responsibilities of the Trustee. The Trustee
shall be the "Named Fiduciary" with respect to investment of the Fund assets and
shall have the powers and duties set forth in the Trust Agreement.
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Sec. 12.04 Limitations on Obligations of Named Fiduciaries. No Named
Fiduciary shall have authority or responsibility to deal with matters other than
as delegated to it under this Plan, under the Trust Agreement, or by operation
of law. A Named Fiduciary shall not in any event be liable for breach of
fiduciary responsibility or obligation by another fiduciary (including Named
Fiduciaries) if the responsibility or authority of the act or omission deemed to
be a breach was not within the scope of the said Named Fiduciary's authority or
delegated responsibility.
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ARTICLE XIII
APPLICATION FOR BENEFITS AND CLAIMS PROCEDURES
Sec. 13.01 Application for Benefits. Each Participant and/or
Beneficiary who believes that he/she is eligible for benefits under this Plan
may apply for such benefits by completing and filing with the Plan Administrator
an application for benefits on a form supplied by the Plan Administrator. Before
the date on which benefit payments commence, each such application must be
supported by such information and data as the Plan Administrator deems relevant
and appropriate. Evidence of age, marital status (and, in the appropriate
instances, health, death or disability), and location of residence shall be
required of all applicants for benefits. Written notice of the disposition of a
claim shall be furnished to the applicant within 90 days after the application
for benefits is filed with the Plan Administrator, unless special circumstances
require an extension of time for processing the claim. If such an extension of
time for processing is required, written notice of the extension shall be
furnished to the claimant prior to the termination of the initial 90-day period.
In no event shall such extension exceed a period of 90 days from the end of such
initial period. The extension notice shall indicate the special circumstances
requiring an extension of time and the date by which the Plan Administrator
expects to render the final decision.
Sec. 13.02 Appeals of Denied Claims for Benefits. In the event that any
claim for benefits is denied in whole or in part, the Participant or Beneficiary
whose claim has been so denied shall be notified of such denial in writing by
the Plan Administrator. The notice advising of the denial shall specify the
reason or reasons for denial, make specific reference to pertinent Plan
provisions, describe any additional material or information necessary for the
claimant to perfect the claim (explaining why such material or information is
needed), and shall advise the Participant or Beneficiary, as the case may be, of
the procedure for the appeal of such denial. All appeals shall be made by the
following procedure:
(a) The Participant or Beneficiary whose claim has
been denied shall file with the Plan Administrator a notice of desire
to appeal the denial. Such notice shall be filed within sixty (60) days
of notification by the Plan Administrator of claim denial, shall be
made in writing, and shall set forth all of the facts upon which the
appeal is based. Appeals not timely filed shall be barred.
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(b) The Plan Administrator shall, within thirty (30)
days of receipt of the Participant's or Beneficiary's notice of appeal,
establish a hearing date on which the Participant or Beneficiary (or
his/her attorney or other authorized representative) may make an oral
presentation to the Named Appeals Fiduciary in support of his/her
appeal. The Participant or Beneficiary (or representative) shall have
the right to submit written or oral evidence and argument in support of
his claim at such hearing. The Participant or Beneficiary shall be
given not less than ten (10) days' notice of the date set for the
hearing. At the hearing (or prior thereto upon five (5) business days'
written notice to the Plan Administrator), the Participant or
Beneficiary (or representative) shall have an opportunity to review all
documents which are pertinent to the claim at issue.
(c) The Named Appeals Fiduciary shall consider the
merits of the claimant's written and oral presentations, the merits of
any facts or evidence in support of the denial of benefits, and such
other facts and circumstances as the Named Appeals Fiduciary shall deem
relevant. If the claimant elects not to make an oral presentation, such
election shall not be deemed adverse to his/her interest, and the Named
Appeals Fiduciary shall proceed as set forth below as though an oral
presentation of the contents of the claimant's written presentation had
been made.
(d) The Named Appeals Fiduciary shall render a
determination within sixty (60) days of the receipt of the appeal
(unless there has been an extension of no more than sixty (60) days due
to special circumstances, provided that the delay and the special
circumstances occasioning it are communicated to the claimant in
writing within the first sixty (60) day period). That determination
shall be accompanied by a written statement presented in a manner
calculated to be understood by the Participant or Beneficiary and shall
include specific reasons for the determination and specific references
to the pertinent Plan provisions on which the determination is based.
The determination so rendered shall be binding upon all parties.
Sec. 13.03 Appointment of the Named Appeals Fiduciary. The Named
Appeals Fiduciary shall be the person or persons named as such by the Board, or,
if no such person or persons be named, then the person or persons named by the
Plan Administrator as the Named Appeals Fiduciary. Named Appeals Fiduciaries may
at any
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time be removed by the Board, and any Named Appeals Fiduciary named by the Plan
Administrator may be removed by the Plan Administrator. All such removals may be
with or without cause and shall be effective on the date stated in the notice of
removal. The Named Appeals Fiduciary shall be a "Named Fiduciary" within the
meaning of ERISA, and, unless appointed to other fiduciary responsibilities,
shall have no authority, responsibility, or liability with respect to any matter
other than the proper discharge of the functions of the Named Appeals Fiduciary
as set forth herein.
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ARTICLE XIV
AMENDMENT AND TERMINATION
Sec. 14.01 Amendment. The provisions of this Plan may be amended at any
time and from time to time by Genesis Health Ventures, Inc., provided, however,
that:
(a) No amendment shall increase the duties or
liabilities of the Plan Administrator or of the Trustee without the
consent of that party;
(b) No amendment shall deprive any Participant or
Beneficiary of any of the benefits to which he/she is entitled under
this Plan with respect to contributions previously made, nor shall any
amendment decrease a Participant's vested interest in his/her Account
or eliminate an optional form of benefit; and
(c) No amendment shall provide for the use of funds
or assets held to provide benefits under this Plan other than for the
benefit of Participants and their Beneficiaries or to meet the
administrative expenses of this Plan, except as may be specifically
authorized by statute or regulation.
Each amendment shall be approved by the Board of Genesis Health
Ventures, Inc. by resolution. Notwithstanding the foregoing, any amendment
necessary to qualify this Plan under Section 401(a) of the Code may be made
without the further approval of the Board of Genesis Health Ventures, Inc. if
signed by the proper officers of Genesis Health Ventures, Inc.
Sec. 14.02 Plan Termination.
(a) Right Reserved. While it is the Employer's
intention to continue the Plan indefinitely in operation, the right is,
nevertheless, reserved to completely or partially terminate the Plan.
Complete or partial termination of the Plan shall result in full and
immediate vesting in each affected Participant of the entire amount
credited to his/her Account, and there shall not thereafter be any
forfeitures with respect to any such affected Participant for any
reason. Plan termination shall be effective as of the date specified by
resolution of the Board, subject, however, to the provisions of Section
14.04 hereof.
(b) Effect on Retired Persons, Etc. Termination of
the Plan shall have no effect upon payment of installments and benefits
to former Participants, their beneficiaries and their estates, whose
benefit payments commenced prior to Plan termination. The Trustee shall
retain sufficient assets to complete any such payments, and shall have
the right, upon direction by the Employer, to purchase annuity
contracts to assure the completion of such payments or to pay the value
of the remaining payments in a single-sum distribution.
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(c) Effect on Remaining Participants. The Employer
shall instruct the Trustee either (1) to continue to manage and
administer the assets of the Trust for the benefit of the Participants
and their beneficiaries pursuant to the terms and provisions of the
Trust Agreement, or (2) to pay over to each Participant (and former
Participant), or his/her Beneficiary, the value of his/her vested
interest, and to thereupon dissolve the Trust.
(d) Effect on Other Entities Constituting Employer.
Termination, in whole or in part, of the Plan by an entity which is
included in the term Employer shall have no effect on the continued
operation of the Plan with respect to other entities constituting
Employer.
Sec. 14.03 Complete Discontinuance of Employer Contributions. While it
is the Employer's intention to make substantial and recurrent contributions to
the Trust Fund pursuant to the provisions of this Plan, the right is,
nevertheless, reserved to at any time completely discontinue Employer
contributions. Such complete discontinuance shall be established by resolution
of the Board and shall have the effect of a termination of the Plan, as set
forth in Section 14.02, except that the Trustee shall not have the authority to
dissolve the Trust Fund except upon adoption of a further resolution by the
Board to the effect that the Plan is terminated and upon receipt from the
Employer of instructions to dissolve the Trust Fund pursuant to Section 14.02(c)
hereof.
Sec. 14.04 Suspension of Employer Contributions. The Employer shall
have the right at any time, and from time to time, to suspend Employer
contributions to the Trust Fund pursuant to this Plan. Such suspension shall
have no effect on the operation of the Plan except as set forth below:
(a) If the Board determines by resolution that such
suspension shall be permanent, a complete discontinuance of
contributions shall be deemed to have occurred as of the date of such
resolution or such earlier date as is therein specified.
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<PAGE>
(b) If such suspension becomes a plan termination, a
complete discontinuance of contributions will be imputed. In such case,
the complete discontinuance, with resultant full vesting for all
affected Participants, shall be deemed to have occurred on the earlier
of:
(1) the date specified by resolution of the
Board or established as a matter of equity by the Plan
Administrator, or
(2) the last day of the first Plan Year
which meets both of the following criteria: (A) no Employer
contributions were made for that, or for any subsequent, Plan
Year, and (B) there existed for such Plan Year Net Income out
of which Employer contributions could have been made, and the
existence of such Net Income was known to the Board in time to
make deductible contributions for such Plan Year.
Sec. 14.05 Mergers and Consolidations of Plans. In the event of any
merger or consolidation with, or transfer of assets or liabilities to, any other
plan, each Participant shall have a benefit in the surviving or transferee plan
(determined as if such plan were then terminated immediately after such merger,
consolidation or transfer) that is equal to or greater than the benefit he/she
would have been entitled to receive immediately before such merger,
consolidation or transfer in the Plan in which he/she was then a Participant
(had such Plan been terminated at that time). For the purposes hereof, former
Participants and Beneficiaries shall be considered Participants.
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ARTICLE XV
MISCELLANEOUS PROVISIONS
Sec. 15.01 Nonalienation of Benefits. None of the payments, benefits or
rights of any Participant or Beneficiary shall be subject to any claim of any
creditor, and, in particular, to the fullest extent permitted by law, all such
payments, benefits and rights shall be free from attachment, garnishment,
trustee's process, or any other legal or equitable process available to any
creditor of such Participant or Beneficiary. No Participant or Beneficiary shall
have the right to alienate, anticipate, commute, pledge, encumber or assign any
of the benefits or payments which he/she may expect to receive, contingently or
otherwise, under this Plan, except the right to designate a Beneficiary or
Beneficiaries as hereinabove provided. Compliance with the provisions and
conditions of any QDRO shall not be considered a violation of this provision.
Sec. 15.02 No Contract of Employment. Neither the establishment of the
Plan, nor any modification thereof, nor the creation of any fund, trust or
account, nor the payment of any benefits shall be construed as giving any
Participant or Employee, or any person whomsoever, the right to be retained in
the service of the Employer, and all Participants and other Employees shall
remain subject to discharge to the same extent as if the Plan had never been
adopted.
Sec. 15.03 Severability of Provisions. If any provision of this Plan
shall be held invalid or unenforceable, such invalidity or unenforceability
shall not affect any other provisions hereof, and this Plan shall be construed
and enforced as if such provisions had not been included.
Sec. 15.04 Heirs, Assigns and Personal Representatives. This Plan shall
be binding upon the heirs, executors, administrators, successors and assigns of
the parties, including each Participant and beneficiary, present and future, and
all persons for whose benefit there exists any QDRO with respect to any
Participant (except that no successor to the Employer shall be considered a Plan
sponsor unless that successor adopts this Plan).
Sec. 15.05 Headings and Captions. The headings and captions herein are
provided for reference and convenience only, shall not be considered part of the
Plan, and shall not be employed in the construction of the Plan.
Sec. 15.06 Gender and Number. Except where otherwise clearly indicated
by context, the masculine and the neuter shall include the feminine and the
neuter, the singular shall include the plural, and vice-versa.
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<PAGE>
Sec. 15.07 Controlling Law. This Plan shall be construed and enforced
according to the laws of the Commonwealth of Pennsylvania to the extent not
preempted by Federal law, which shall otherwise control.
Sec. 15.08 Funding Policy. The Plan Administrator, in consultation with
the Employer, shall establish and communicate to the Trustee a funding policy
consistent with the objectives of this Plan and of the corresponding Trust. Such
policy will be in writing and shall have due regard for the emerging liquidity
needs of the Fund. Such funding policy shall also state the general investment
objectives of the Trust and the philosophy upon which maintenance of the Plan is
based.
Sec. 15.09 Title to Assets. No Participant or Beneficiary shall have
any right to, or interest in, any assets of the Trust Fund upon termination of
his/her employment or otherwise, except as provided from time to time under this
Plan, and then only to the extent of the benefits payable under the Plan to such
Participant or out of the assets of the Trust Fund. All payments of benefits as
provided for in this Plan shall be made from the assets of the Trust Fund, and
neither the Employer nor any other person shall be liable therefor in any
manner.
Sec. 15.10 Payments to Minors, Etc. Any benefit payable to or for the
benefit of a minor, an incompetent person or other person incapable of
receipting therefor shall be deemed paid when paid to such person's guardian or
to the party providing or reasonably appearing to provide for the care of such
person, and such payment shall fully discharge the Trustee, the Plan
Administrator, the Employer and all other parties with respect thereto.
Sec. 15.11 Lost Payees. A benefit shall be deemed forfeited if the Plan
Administrator is unable to locate a Participant or beneficiary to whom payment
is due, provided, however, that such benefit shall be reinstated if a claim is
made by the Participant or beneficiary for the forfeited benefit.
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<PAGE>
Sec. 15.12 Reliance on Data and Consents. The Employer, the Trustee,
the Plan Administrator, all fiduciaries with respect to the Plan, and all other
persons or entities associated with the operation of the Plan, the management of
its assets, and the provision of benefits thereunder, may reasonably rely on the
truth, accuracy and completeness of all data provided by the Participant and
his/her Beneficiaries, including, without limitation, data with respect to age,
health and marital status. Furthermore, the Employer, the Trustee, the Plan
Administrator and all fiduciaries with respect to the Plan may reasonably rely
on all consents, elections and designations filed with the Plan or those
associated with the operation of the Plan and its corresponding Trust by any
Participant, the spouse of any Participant, any Beneficiary of any Participant,
or the representatives of such persons without duty to inquire into the
genuineness of any such consent, election or designation. None of the
aforementioned persons or entities associated with the operation of the Plan,
its assets and the benefits provided under the Plan shall have any duty to
inquire into any such data, and all may rely on such data being current to the
date of reference, it being the duty of the Participants, spouses of
Participants and Beneficiaries to advise the appropriate parties of any change
in such data.
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<PAGE>
IN WITNESS WHEREOF, and as evidence of the adoption of the
foregoing as an amendment and restatement of the Plan set forth herein, the
Employer has caused the same to be executed by its duly authorized officers this
day of 30th day of December, 1994.
ATTEST: GENESIS HEALTH VENTURES, INC.
/s/ xxxxxx By: /s/ George V. Hager, Jr.
- ------------------------------ -------------------------------
Secretary President
ATTEST: GENESIS MANAGEMENT RESOURCES, INC.
(formerly known as Total Care
Systems, Inc.)
/s/ xxxxxx By: /s/ George V. Hager, Jr.
- ------------------------------ -------------------------------
Secretary President
ATTEST: CRYSTAL CITY NURSING CENTER, INC.
/s/ xxxxxx By: /s/ George V. Hager, Jr.
- ------------------------------ -------------------------------
Secretary President
ATTEST: DOVER HEALTHCARE ASSOCIATES, INC.
/s/ xxxxxx By: /s/ George V. Hager, Jr.
- ------------------------------ -------------------------------
Secretary President
[Signatures continued on next page]
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<PAGE>
ATTEST: GENESIS HEALTH VENTURES OF
AGAWAM, INC.
/s/ xxxxxx By: /s/ George V. Hager, Jr.
- ------------------------------ -------------------------------
Secretary President
ATTEST: GENESIS HEALTH VENTURES OF
ARLINGTON, INC.
/s/ xxxxxx By: /s/ George V. Hager, Jr.
- ------------------------------ -------------------------------
Secretary President
ATTEST: GENESIS HEALTH VENTURES OF
BLOOMFIELD, INC.
/s/ xxxxxx By: /s/ George V. Hager, Jr.
- ------------------------------ -------------------------------
Secretary President
ATTEST: GENESIS HEALTH VENTURES OF
BRACKENRIDGE, INC.
/s/ xxxxxx By: /s/ George V. Hager, Jr.
- ------------------------------ -------------------------------
Secretary President
ATTEST: GENESIS HEALTH VENTURES OF
CLARKS SUMMIT, INC.
/s/ xxxxxx By: /s/ George V. Hager, Jr.
- ------------------------------ -------------------------------
Secretary President
ATTEST: GENESIS HEALTH VENTURES OF
LANHAM, INC.
/s/ xxxxxx By: /s/ George V. Hager, Jr.
- ------------------------------ -------------------------------
Secretary President
[Signatures continued on next page]
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<PAGE>
ATTEST: GENESIS HEALTH VENTURES OF
NAUGATUCK, INC.
/s/ xxxxxx By: /s/ George V. Hager, Jr.
- ------------------------------ -------------------------------
Secretary President
ATTEST: GENESIS HEALTH VENTURES OF
NEW GARDEN, INC.
/s/ xxxxxx By: /s/ George V. Hager, Jr.
- ------------------------------ -------------------------------
Secretary President
ATTEST: GENESIS HEALTH VENTURES OF
POINT PLEASANT, INC.
/s/ xxxxxx By: /s/ George V. Hager, Jr.
- ------------------------------ -------------------------------
Secretary President
ATTEST: GENESIS HEALTH VENTURES OF
SALISBURY, INC.
/s/ xxxxxx By: /s/ George V. Hager, Jr.
- ------------------------------ -------------------------------
Secretary President
ATTEST: GENESIS HEALTH VENTURES OF
SPRINGFIELD, INC.
/s/ xxxxxx By: /s/ George V. Hager, Jr.
- ------------------------------ -------------------------------
Secretary President
ATTEST: GENESIS HEALTH VENTURES OF
WAYNE, INC.
/s/ xxxxxx By: /s/ George V. Hager, Jr.
- ------------------------------ -------------------------------
Secretary President
[Signatures continued on next page]
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<PAGE>
ATTEST: GENESIS HEALTH VENTURES OF
WILKES-BARRE, INC.
/s/ xxxxxx By: /s/ George V. Hager, Jr.
- ------------------------------ -------------------------------
Secretary President
ATTEST: GENESIS HEALTH VENTURES OF
WILLAMANSETTE, INC.
/s/ xxxxxx By: /s/ George V. Hager, Jr.
- ------------------------------ -------------------------------
Secretary President
ATTEST: GENESIS HEALTH VENTURES OF
WINDSOR, INC.
/s/ xxxxxx By: /s/ George V. Hager, Jr.
- ------------------------------ -------------------------------
Secretary President
ATTEST: GENESIS HEALTH VENTURES OF
LINEN SERVICES, INC.
/s/ xxxxxx By: /s/ George V. Hager, Jr.
- ------------------------------ -------------------------------
Secretary President
ATTEST: GENESIS HOLDINGS, INC.
/s/ xxxxxx By: /s/ George V. Hager, Jr.
- ------------------------------ -------------------------------
Secretary President
ATTEST: GENESIS PHARMACY, INC.
/s/ xxxxxx By: /s/ George V. Hager, Jr.
- ------------------------------ -------------------------------
Secretary President
[Signatures continued on next page]
-111-
<PAGE>
ATTEST: HEALTHCARE RESOURCES CORP.
/s/ xxxxxx By: /s/ George V. Hager, Jr.
- ------------------------------ -------------------------------
Secretary President
ATTEST: MANOR MANAGEMENT CORP. OF
GEORGIAN MANOR, INC.
/s/ xxxxxx By: /s/ George V. Hager, Jr.
- ------------------------------ -------------------------------
Secretary President
ATTEST: PHILADELPHIA AVENUE CORPORATION
/s/ xxxxxx By: /s/ George V. Hager, Jr.
- ------------------------------ -------------------------------
Secretary President
ATTEST: TEAM REHABILITATION, INC.
/s/ xxxxxx By: /s/ George V. Hager, Jr.
- ------------------------------ -------------------------------
Secretary President
ATTEST: EDELLA STREET ASSOCIATES
Genesis Health Ventures of Clarks
Summit, Inc., General Partner
/s/ xxxxxx By: /s/ George V. Hager, Jr.
- ------------------------------ -------------------------------
Secretary President
ATTEST: GENESIS PROPERTIES LIMITED
PARTNERSHIP
Genesis Health Ventures of
Arlington, Inc., General Partner
/s/ xxxxxx By: /s/ George V. Hager, Jr.
- ------------------------------ -------------------------------
Secretary President
[Signatures continued on next page]
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<PAGE>
ATTEST: RIVER STREET ASSOCIATES
Genesis Health Ventures of
Wilkes-Barre, Inc., General Partner
/s/ xxxxxx By: /s/ George V. Hager, Jr.
- ------------------------------ -------------------------------
Secretary President
ATTEST: PHILADELPHIA AVENUE ASSOCIATES
Philadelphia Avenue Corporation,
General Partner
/s/ xxxxxx By: /s/ George V. Hager, Jr.
- ------------------------------ -------------------------------
Secretary President
ATTEST: ROBINDALE MEDICAL SERVICES, INC.
/s/ xxxxxx By: /s/ George V. Hager, Jr.
- ------------------------------ -------------------------------
Secretary President
ATTEST: GENESIS HEALTHCARE CENTERS
HOLDINGS, INC.
/s/ xxxxxx By: /s/ George V. Hager, Jr.
- ------------------------------ -------------------------------
Secretary President
ATTEST: MERIDIAN HEALTH, INC.
/s/ xxxxxx By: /s/ George V. Hager, Jr.
- ------------------------------ -------------------------------
Secretary President
ATTEST: MERIDIAN HEALTHCARE, INC.
/s/ xxxxxx By: /s/ George V. Hager, Jr.
- ------------------------------ -------------------------------
Secretary President
[Signatures continued on next page]
-113-
<PAGE>
ATTEST: MERIDIAN HEALTHCARE INVESTMENTS,
INC.
/s/ xxxxxx By: /s/ George V. Hager, Jr.
- ------------------------------ -------------------------------
Secretary President
ATTEST: TIDEWATER HEALTHCARE SHARED
SERVICES GROUP, INC.
/s/ xxxxxx By: /s/ George V. Hager, Jr.
- ------------------------------ -------------------------------
Secretary President
ATTEST: PHARMACY EQUITIES, INC.
/s/ xxxxxx By: /s/ George V. Hager, Jr.
- ------------------------------ -------------------------------
Secretary President
ATTEST: STAFF REPLACEMENT SERVICES, INC.
/s/ xxxxxx By: /s/ George V. Hager, Jr.
- ------------------------------ -------------------------------
Secretary President
ATTEST: GENESIS HEALTH VENTURES OF INDIANA,
INC.
/s/ xxxxxx By: /s/ George V. Hager, Jr.
- ------------------------------ -------------------------------
Secretary President
ATTEST: GENESIS HEALTH VENTURES OF WEST
VIRGINIA, INC.
/s/ xxxxxx By: /s/ George V. Hager, Jr.
- ------------------------------ -------------------------------
Secretary President
[Signatures continued on next page]
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<PAGE>
ATTEST: ASCO HEALTHCARE OF NEW ENGLAND,
INC.
/s/ xxxxxx By: /s/ George V. Hager, Jr.
- ------------------------------ -------------------------------
Secretary President
ATTEST: KNOLLWOOD MANOR, INC.
/s/ xxxxxx By: /s/ George V. Hager, Jr.
- ------------------------------ -------------------------------
Secretary President
ATTEST: GENESIS PROPERTIES OF DELAWARE LTD.
PARTNERSHIP, L.P.
Genesis Properties of Delaware
Corporation, General Partner
/s/ xxxxxx By: /s/ George V. Hager, Jr.
- ------------------------------ -------------------------------
Secretary President
ATTEST: BRINTON MANOR, INC.
/s/ xxxxxx By: /s/ George V. Hager, Jr.
- ------------------------------ -------------------------------
Secretary President
ATTEST: CONCORD HEALTHCARE CORPORATION
/s/ xxxxxx By: /s/ George V. Hager, Jr.
- ------------------------------ -------------------------------
Secretary President
ATTEST: HEALTHCARE SERVICES NETWORK, INC.
/s/ xxxxxx By: /s/ George V. Hager, Jr.
- ------------------------------ -------------------------------
Secretary President
[Signatures continued on next page]
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<PAGE>
ATTEST: ASCO HEALTHCARE INC.
/s/ xxxxxx By: /s/ George V. Hager, Jr.
- ------------------------------ -------------------------------
Secretary President
ATTEST: HEALTH CONCEPTS & SERVICES, INC.
/s/ xxxxxx By: /s/ George V. Hager, Jr.
- ------------------------------ -------------------------------
Secretary President
ATTEST: GENESIS PHYSICIAN SERVICES, INC.
/s/ xxxxxx By: /s/ George V. Hager, Jr.
- ------------------------------ -------------------------------
Secretary President
ATTEST: GENESIS INTERMEDIATE MED
CENTER, INC.
/s/ xxxxxx By: /s/ George V. Hager, Jr.
- ------------------------------ -------------------------------
Secretary President
ATTEST: SUBURBAN MEDICAL SERVICES, INC.
/s/ xxxxxx By: /s/ George V. Hager, Jr.
- ------------------------------ -------------------------------
Secretary President
ATTEST: GENESIS PROPERTIES OF DELAWARE
CORPORATION
/s/ xxxxxx By: /s/ George V. Hager, Jr.
- ------------------------------ -------------------------------
Secretary President
[Signatures continued on next page]
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<PAGE>
ATTEST: GENESIS HEALTH VENTURES OF
MASSACHUSETTS, INC.
/s/ xxxxxx By: /s/ George V. Hager, Jr.
- ------------------------------ -------------------------------
Secretary President
ATTEST: GOVERNOR'S HOUSE NURSING HOME, INC
/s/ xxxxxx By: /s/ George V. Hager, Jr.
- ------------------------------ -------------------------------
Secretary President
ATTEST: HILLTOP HEALTH CARE CENTERS, INC.
/s/ xxxxxx By: /s/ George V. Hager, Jr.
- ------------------------------ -------------------------------
Secretary President
ATTEST: KEYSTONE NURSING HOME, INC.
/s/ xxxxxx By: /s/ George V. Hager, Jr.
- ------------------------------ -------------------------------
Secretary President
ATTEST: LINCOLN NURSING HOME, INC.
/s/ xxxxxx By: /s/ George V. Hager, Jr.
- ------------------------------ -------------------------------
Secretary President
ATTEST: WAYSIDE NURSING HOME, INC.
/s/ xxxxxx By: /s/ George V. Hager, Jr.
- ------------------------------ -------------------------------
Secretary President
-117-
<PAGE>
GENESIS HEALTH VENTURES, INC.
RETIREMENT PLAN
(Restated, Effective January 1, 1989)
AMENDMENT NO. 1
---------------
Genesis Health Ventures, a Pennsylvania corporation, hereby adopts this
amendment to the Genesis Health Ventures, Inc. Retirement Plan ("Plan"). This
amendment is adopted pursuant to Section 14.01 of the Plan.
1. Section 5.03(c) is amended by deleting the parenthetical phrase in
the first sentence and inserting in lieu thereof the following:
"(together with earnings attributable thereto)"
2. The last sentence of Section 5.03(c) is amended by deleting the word
"immediately" and inserting in lieu thereof the following:
"(together with earnings attributable thereto)"
3. This amendment shall be effective for Plan Years beginning in 1996
and thereafter.
IN WITNESS WHEREOF, and as evidence of the adoption of this amendment,
the Employer has caused the same to be executed by its duly authorized officers
this day of , 19 .
ATTEST: GENESIS HEALTH VENTURES, INC.
- -------------------- By: -------------------------
Secretary President
<PAGE>
GENESIS HEALTH VENTURES, INC.
RETIREMENT PLAN
(Restated, Effective January 1, 1989)
AMENDMENT NO. 2
---------------
Genesis Health Ventures, Inc., a Pennsylvania corporation, hereby
adopts this amendment to the Genesis Health Ventures, Inc. Retirement Plan
("Plan"). This amendment is adopted pursuant to Section 14.01 of the Plan.
1. Section 1.01 of the Plan is hereby amended by deleting the phrase
"and (c) Employer Matching Contribution Account" and inserting in lieu thereof
the phrase "(c) Employer Matching Contribution Account; and (d) Company Stock
Account".
2. Section 1.34 of the Plan is hereby amended by adding the following
provisions immediately following the second paragraph:
"Any individual who is an Employee as of February 1, 1996 and was
employed by Franklin Nursing Home, Inc. immediately prior to becoming
an Employee shall receive credit for hours of service performed for
Franklin Nursing Home, Inc. for purposes of determining Hours of
Service with regard to the eligibility provisions of this Plan. Such
service shall be credited effective February 1, 1996.
Any individual who is an Employee as of January 1, 1996 and was
employed by Eastern Medical Supplies, Inc. or Eastern Rehab Services,
Inc. immediately prior to becoming an Employee shall receive credit for
hours of service performed for such entities for purposes of
determining Hours of Service with regard to the eligibility provisions
of this Plan. Such service shall be credited effective January 1, 1996.
Any individual who is an Employee as of January 1, 1996 and was
employed by McKerley Health Care Centers, Inc., McKerley Health Care
Center Concord Limited Partnership, McKerley Health Facilities or
McKerley Health Care Concord, Inc. shall receive credit for hours of
service performed for such entities for purposes of determining Hours
of Service with regard to the eligibility provisions of this Plan.
Such service shall be credited effective January 1, 1996.
Any individual who is an Employee as of June 1, 1996 and was employed
by Delta Drug, Inc. immediately prior to becoming an Employee, shall
receive credit for hours of service performed for Delta Drug, Inc. for
purposes of determining Hours of Service with regard to the eligibility
provisions of this Plan. Such service shall be credited effective June
1, 1996.
Any individual who is an Employee as of March 1, 1996 and was an
employee of Accumed, Inc. immediately prior to becoming an Employee
shall receive credit for hours of service performed for Accumed, Inc.
for purposes of determining Hours of Service with regard to the
eligibility and vesting provisions of this Plan. Such service shall be
credited effective March 1, 1996.
Any individual who is an Employee as of July 1, 1995 and was employed
by Therapy Care, Inc. or Therapy Care System Limited Partnership
immediately prior to becoming an Employee shall receive credit for
hours of service performed for such entities for purposes of
determining Hours of Service under the eligibility, vesting, and
benefit accrual provisions of this Plan. Such service shall be credited
effective July 1, 1995.
<PAGE>
Any individual who is an Employee as of February 1, 1996 and was an
employee of Medical Rehab Support Services, Inc., Medical
Rehabilitation Network, Inc. or Healthcare Rehab Services, Inc.
immediately prior to becoming an Employee shall receive credit for
hours of service performed for such entities for purposes of
determining Hours of Service with regard to the eligibility provisions
of this Plan. Such services shall be credited effective February 1,
1996.
Any individual who is an Employee as of January 1, 1997 and was an
employee of Geriatric & Medical Services, Inc. immediately prior to
becoming an Employee shall receive credit for hours of service
performed for Geriatric & Medical Services, Inc. for purposes of
determining Hours of Service with regard to the eligibility provisions
of this Plan. Such service shall be credited effective January 1, 1997.
Any individual who is an Employee as of January 1, 1997 and was an
employee of Diane Morgan & Associates immediately prior to becoming an
Employee shall receive credit for hours of service performed for Diane
Morgan & Associates for purposes of determining Hours of Service with
regard to the eligibility provisions of this Plan. Such services shall
be credited effective January 1, 1997.
Any individual who is an Employee as of January 1, 1997 and was an
employee of NeighborCare Pharmacies, Inc. Professional Pharmacy
Services, Inc., Medical Services Group, Inc. CareCard, Inc. and
Transport Services, Inc. immediately prior to becoming an Employee
shall receive credit for hours of service performed for such entities
for purposes of determining Hours of Service with regard to the
eligibility and vesting provisions of this Plan. Such service shall be
credited effective January 1, 1997.
Any individual who is an Employee as of January 1, 1997 and was an
employee of National Health Care Affiliates, Inc., Oak Hill Health Care
Center, Inc., Derby Nursing Center Corporation, EIDOS, Inc. or
VersaLink, Inc. immediately prior to becoming an Employee shall receive
credit for hours of service performed for such entities for purposes of
determining Hours of Service with regard to the eligibility provisions
of this Plan. Such service shall be credited effective January 1,
1997."
-2-
<PAGE>
3. Section 1.44 is hereby amended and restated to read as follows:
"Sec. 1.44 'Plan' shall mean the Genesis Health Ventures, Inc.
Retirement Plan as set forth herein, and as the same may from time to
time hereafter be amended. This Plan is intended to satisfy the
requirements of Section 401(k) of the Code and to constitute a
qualified cash or deferred arrangement within the meaning of that
section. Effective January 1, 1995, this Plan constitutes the merger of
the Meridian Healthcare, Inc. Retirement Savings Plan and the McKerley
Health Care Centers, Inc. Profit-Sharing 401(k) Plan into this Plan.
Effective January 1, 1996, this Plan constitutes the merger of the
Health Concepts and Services, Inc. 401(k) Profit-Sharing Plan into this
Plan. Effective March 1, 1996, this Plan constitutes the merger of the
Accumed, Inc. 401(k) Plan into this Plan. Effective January 1, 1997,
this Plan constitutes the merger of the Eastern Medical Supplies 401(k)
Salary Reduction Plan into this Plan. Effective January 1, 1997, this
Plan constitutes the merger of the NeighborCare Pharmacies, Inc.
Retirement Savings Plan into this Plan. Effective January 1, 1997, this
Plan constitutes the merger of the Gerri-Med 401(k) Plan for Union
Professional Nurses of New Jersey and the Geriatric and Medical
Companies, Inc. 401(k) Profit Sharing Plan into this Plan."
4. Section 1.62 of the Plan is hereby deleted.
5. Section 1.63 of the Plan is hereby redesignated as Section 1.62.
6. Article I of the Plan is hereby amended by adding the following new
sections:
"Sec. 1.63 'Company Stock' shall mean the securities issued by the
Employer.
Sec. 1.64 'Company Stock Account' shall mean that portion of a
Participant's Account which consists of Company Stock contributed to
the Plan by the Employer, Company Stock purchased with cash contributed
by the Employer, and earnings and accretions thereon.
Sec. 165 'Prior Plan' shall mean any qualified retirement Plan that
is merged into this Plan.
Sec. 1.66 'Year of Benefit Accrual Service' when applied to the
benefit accrual provisions of this Plan, a 'Year of Benefit Accrual
Service' shall mean any Accrual Computation Period in which the person
completes one thousand (1,000) or more Hours of Service provided that
such Hours of Service are credited under Section 1.34 for purposes of
benefit accrual."
7. Section 3.01(c) of the Plan is hereby amended and restated to read
as follows:
"(c) Employer Profit-Sharing Contributions. As of the last day of
each Accrual Computation Period, the Employer shall contribute to the
Trust, such amounts as the Board, in its absolute discretion, shall
timely determine to be the Employer's Profit-Sharing contribution for
the Accrual Computation Period then ending, which contributions shall
be reduced, however, by any amounts forfeited from the accounts of
Participants or former Participants pursuant to the provisions of
Section 5.02. Such amounts may be contributed in cash, Company Stock or
other property as determined by the Board. This provision shall not be
construed as requiring Employer to make contributions in (or with
respect to) any Accrual Computation Period."
8. Section 5.01(b) of the Plan is hereby amended and restated to read
as follows:
-3-
<PAGE>
"(b) Employer Matching Contributions. With respect to Plan Years
beginning on or after January 1, 1994, as of the last day of each
Accrual Computation Period, there shall be allocated to the Employer
Matching Contribution Account of each Active Participant an amount
which shall be equal to the lesser of: (1) a percentage of the
Participant's Salary Reduction Amount for such Accrual Computation
Period; or (2) a percentage of the Participant's Compensation for such
Accrual Computation Period. The respective percentages are determined
under the following schedule:
Percentage of
Participant's Percentage of Salary Accrual Service
Years of Benefit Reduction Amount Compensation
---------------- -------------------- ---------------
Less than 7 Years of
Benefit Accrual Service 50% 1%
7 Years of Benefit Accrual
Service but fewer than 10 75% 3%
10 Years of Benefit Accrual
Service or more 100% 4%
In the event that the Employer Matching contribution for an
Accrual Computation Period is not sufficient to provide for allocations
to all Active Participants as determined pursuant to the schedule
above, each Active Participant shall be allocated a share of such
contribution in the same proportion that the dollar amount of his/her
allocation, as determined pursuant to the schedule above, bears to the
total dollar amount of allocations to all Active Participants, as
determined pursuant to the schedule above.
Prior to January 1, 1994, Employer Matching contributions made
with respect to any Accrual Computation Period shall be allocated among
the Active Participants' Employer Matching Contribution Accounts in the
proportion that the Salary Reduction Amount not in excess of two
percent (2%) of Compensation of each Active Participant with respect to
such Accrual Computation Period bears to the aggregate of the Salary
Reduction Amounts of up to two percent (2%) of Compensation of each
Active Participant with respect to such Accrual Computation Period."
-4-
<PAGE>
9. Section 5.01(c) of the Plan is hereby amended and restated to read
as follows:
"(c) Employer Profit-Sharing Contributions. As of each Anniversary
Date, there shall be allocated to the Employer Profit-Sharing
Contribution Account of each Active Participant an amount determined by
multiplying the Employer's Profit-Sharing contribution (other than that
portion of such contribution made in the form of Company Stock) for the
Accrual Computation Period ending with or immediately prior to such
Anniversary Date by a fraction, the numerator of which is the
Participant's Compensation for such Accrual Computation Period and the
denominator of which is the aggregate Compensation of all Active
Participants for such Accrual Computation Period. There shall also be
allocated to the Company Stock Account of each Active Participant a
number of shares (including fractional shares) of Company Stock
determined by multiplying the total number of shares of Company Stock
in the Employer's Profit-Sharing contribution by a fraction, the
numerator of which is the Participant's Compensation for such Accrual
Computation Period and the denominator of which is the aggregate
Compensation of all Active Participants for such Accrual Computation
Period."
10. Section 5.01(d)(2)(i)(A) of the Plan is hereby amended by deleting
the term "Year of Participation" and by inserting in lieu thereof "Year of
Benefit Accrual Service".
11. Section 6.02 of the Plan is hereby amended and restated to read as
follows:
"Sec. 6.02 Valuations.
(a) Assets other than Company Stock. The Fund (and, if applicable,
each of its sub-funds) shall be valued by the Trustee at fair market
value annually as of the close of business on the Annual Valuation
Date. A similar valuation (or the partial valuation of one or more
sub-funds, if appropriate) may occur at the end of any calendar month
upon the direction of the Plan Administrator.
(b) Company Stock. All shares of Company Stock held in the Trust
shall be valued as of each Valuation Date at their fair market value."
12. Article VI of the Plan is hereby amended to add the following
Section 6.10:
"Sec. 6.10 Compliance With Securities Laws. All provisions contained
herein with respect to any transactions involving Company Stock,
including but not limited to its distribution as a benefit, its
repurchase, sale, delivery or transfer, are subject to and conditioned
upon compliance with any applicable provisions of federal and state
securities laws or regulations. Without limiting the generality of the
foregoing, and notwithstanding anything to the contrary contained in
the Plan or Trust, neither the Trust, the Trustee, the Employer nor the
Plan Administrator shall be legally obligated to issue, transfer or
deliver any certificate for shares of Company Stock or other securities
unless such shares or other securities, at the time of any such
issuance, transfer or delivery (a) are exempt, or are the subject
matter of an exempt transaction or are registered within the meaning of
any applicable federal and state securities laws and regulations; (b)
comply with the rules of any stock exchange on which Company Stock may
be listed; and (c) have been approved by such regulatory bodies as the
Plan Administrator may deem advisable. Any certificate issued to
evidence shares of Company Stock or beneficial interest in such shares
may bear such legends and statements as the Plan Administrator may deem
advisable to assure compliance with this Plan and with federal and
state laws and regulations."
-5-
<PAGE>
13. The second paragraph of Section 9.02 of the Plan is hereby amended
and restated as follows:
"Notwithstanding the foregoing, a Participant's vested interest in
that portion of his/her Account attributable to amounts transferred
from a Prior Plan (including earning and accretions thereon) shall be
determined in accord with the vesting schedule applicable to such
amounts under the Prior Plan. The Participant's vested interest in such
amounts as of any date of reference shall be his/her vested percentage
as of the date on which the Prior Plan was merged into this Plan
increased by Years of Service for vesting purposes which are credited
under this Plan and attributable to service rendered after the date on
which the Prior Plan was merged into this Plan. In addition, a
Participant's vested interest in that portion of his/her Account
attributable to amounts transferred to his/her Plan from the NHCA
Employees Retirement Plan (including earning and accretions thereon),
shall be determined in accordance with the vesting schedule applicable
to such amounts under the NHCA Employees Retirement Plan. The
Participant's vested interest in such amounts as of any date of
reference shall be his/her vested percentage as of the date on which
the amounts were transferred into this Plan increased by Years of
Service for vesting purposes which are credited under this Plan and
attributable to service rendered after the date on which the amounts
were transferred into this Plan."
14. Section 10.01(a) of the Plan is hereby amended and restated to read
as follows:
"(a) Normal Form of Benefits. Benefits shall normally be paid as a
single-sum distribution unless (1) benefits become payable to a
Participant with respect to whom this Plan is a Transferee Plan, and
(2) such Participant has not elected to waive benefit distribution in
the form of a Qualified Joint and Survivor Annuity, or such Participant
has made such an election but his/her spouse has not consented thereto,
and (3) the total value of the Participant's vested interest in his/her
Account at the time of distribution (or at the time of any prior
distribution) is in excess of $3,500. That portion of a Participant's
benefit which consists of amounts to be paid from his/her Company Stock
Account shall be paid in whole shares of Company Stock with the value
of any fractional shares paid in cash. Participants becoming eligible
for retirement or disability benefits and Vested Participants becoming
eligible for distributions of their respective vested interests as
single-sum distributions may, within the ninety (90) day period before
the benefit first becomes distributable, request that, in lieu of
single-sum distributions, their interests be paid in installments over
a fixed period if such payments do not constitute an 'annuity' within
the meaning of Section 205 of Title I of ERISA or Section 401(a) of the
Code. The following rules shall apply to any such installment
distributions:
(i) That portion of a Participant's benefit which consists of
amounts to be paid from his/her Company Stock Account shall be
distributed prior to that portion of his/her benefit which consists of
amounts to be paid from assets other than Company Stock.
(ii) The payment period shall not exceed the life expectancy of
the Participant at his/her Benefit Commencement Date or the joint life
and survivorship expectancy of the Participant and his/her Beneficiary,
provided that if the Beneficiary is not the Participant's Spouse, the
payment period complies with the Minimum Distribution Incidental
Benefit Requirements set forth in Proposed Income Tax Regulations
Section 1.401(a)(9)-2.
(iii) Payments shall be made in installments which are as nearly
equal as possible, and shall be made not less frequently than annually
nor more frequently than monthly.
(iv) The total amount subject to installment payments may be
segregated and maintained as a separate account and such separate
account shall not thereafter share in the general investment activity
of the Fund. Such separate account shall be an interest-bearing
account, and all interest thereon shall inure to the benefit of the
Participant on whose behalf such account was established.
-6-
<PAGE>
(v) At any time during the installment period, the Plan
Administrator, with the written consent of the Participant, may
accelerate the remaining installments by paying the balance of such
account to the distributee.
(vi) Should the Participant die during the benefit payment period
prior to the completion of benefit distributions, the remaining portion
of his/her interest will be distributed to his/her designated
Beneficiary at least as rapidly as under the method of distribution
being used as of the date of his/her death."
15. Except as otherwise noted herein, this amendment shall be effective
as of January 1, 1996 and reflects the manner in which this Plan has operated
since that date.
IN WITNESS WHEREOF, and as evidence of the adoption of this amendment,
the Genesis Health Ventures, Inc. has caused the same to be executed by its duly
authorized officers this day of , 19 .
ATTEST: GENESIS HEALTH VENTURES, INC.
- ------------------------ By: -------------------------
Secretary Senior Vice President
-7-
<PAGE>
GENESIS HEALTH VENTURES, INC.
RETIREMENT PLAN
(Restated, Effective January 1, 1989)
AMENDMENT NO. 3
Genesis Health Ventures, Inc., a Pennsylvania corporation, hereby
adopts this amendment to the Genesis Health Ventures, Inc. Retirement Plan
("Plan"). This amendment is adopted pursuant to Section 14.01 of the Plan.
1. Section 1.33 of the Plan is hereby amended and restated to read as
follows:
"Sec. 1.33 'Highly Compensated Employee' means any
Employee who:
(a) is a Five-Percent Owner at any time during the
Look-Back Year or the Determination Year; or
(b) receives Annual Compensation from the Employer or an
Affiliated Company during the Look-Back Year in excess of $80,000 (or
such higher amount as may be established by the Secretary of the
Treasury to reflect cost of living adjustments) and such Employee is in
the Top-Paid Group of Employees for such year.
For purposes of determining the number of Employees in the Top-Paid
Group, there shall be excluded the employees described in Section
414(q)(5) of the Code, which is hereby incorporated by reference.
For purposes of this section:
'Annual Compensation' shall mean a Participant's annual
compensation (as determined under Article V, increased, however, by
income from services outside the United States excluded from 'gross
income' under Section 911 of the Code and any amount contributed by the
Employer pursuant to a
-1-
<PAGE>
salary reduction agreement and which is not includable in the gross
income of such Employee under Section 125, 402(e)(3), 402(h), 403(b),
414(h)(2) or 457(b) of the Code).
'Determination Year' shall mean the Plan Year for which
a determination is made.
'Look-Back Year' shall mean the twelve (12) month period
immediately preceding the Determination Year.
'Top-Paid Group' shall mean the group consisting of the top
twenty percent (20%) of Employees (excluding former Employees) of the
Employer and all Affiliated Companies, when ranked on the basis of
Annual Compensation received from the Employer and all Affiliated
Companies."
2. Section 1.34 of the Plan is hereby amended by adding the following
provisions at the end thereof:
"Any individual who is an Employee as of July 1, 1995 and was an
employee of Therapy Care, Inc. and/or Therapy Care System Limited
Partnership immediately prior to becoming an Employee shall receive
credit for hours of service performed for such entities for purposes of
determining Hours of Service with regard to the eligibility, vesting
and benefit accrual provisions of this Plan. Such service shall be
credited effective July 1, 1995.
Any individual who is an Employee as of January 1, 1997 and was an
employee of Geriatric & Medical Companies, Inc. and/or any wholly owned
subsidiary thereof, immediately prior to becoming an Employee shall
receive credit for hours of service performed for such entities for
purposes of determining Hours of Service with regard to the eligibility
provisions of this Plan. Such service shall be credited effective
January 1, 1997.
Any individual who is an Employee as of January 1, 1997 and was an
employee of Diane Morgan & Associates immediately prior to becoming an
Employee shall receive credit for hours of service performed for Diane
Morgan & Associates for purposes of determining Hours of Service with
regard to the
-2-
<PAGE>
eligibility provisions of this Plan. Such service shall be
credited effective January 1, 1997.
Any individual who is an Employee as of January 1, 1997 and was an
employee of NeighborCare Pharmacies, Inc., Professional Pharmacy
Services, Inc., Medical Services Group, Inc., CareCard, Inc. and/or
Transport Services, Inc. immediately prior to becoming an Employee
shall receive credit for hours of service performed for such entities
for purposes of determining Hours of Service with regard to the
eligibility and vesting provisions of this Plan. Such service shall be
credited effective January 1, 1997.
Any individual who is an Employee as of January 1, 1997 and was an
employee of National Health Care Affiliates, Inc., Oak Hill Health Care
Center, Inc., Derby Nursing Center Corporation, EIDOS, Inc. and/or
VersaLink, Inc. immediately prior to becoming an Employee shall receive
credit for hours of service performed for such entities for purposes of
determining Hours of Service with regard to the eligibility provisions
of this Plan. Such service shall be credited effective January 1, 1997.
Any individual who is an Employee as of February 7, 1997 and was an
employee of Salisbury Physical Therapy and Sports Medicine, Inc.
immediately prior to becoming an Employee shall receive credit for
hours of service performed for Salisbury Physical Therapy and Sports
Medicine, Inc. for purposes of determining Hours of Service with regard
to the eligibility provisions of this Plan. Such service shall be
credited effective February 7, 1997."
3. Section 1.44 is hereby amended and restated to read as follows:
"Sec. 1.44 'Plan' shall mean the Genesis Health
Ventures, Inc. Retirement Plan as set forth herein, and as
the same may from time to time hereafter be amended. This
Plan is intended to satisfy the requirements of Section
401(k) of the Code and to constitute a qualified cash or
deferred arrangement within the meaning of that section.
Effective January 1, 1995, this Plan constitutes the merger
-3-
<PAGE>
of the Meridian Healthcare, Inc. Retirement Savings Plan into this
Plan. Effective February 1, 1996, this Plan constitutes the merger of
the Meridian Healthcare, Inc. Retirement Savings Plan and the McKerley
Health Care Centers, Inc. Profit-Sharing 401(k) Plan into this Plan.
Effective July 1, 1993, this Plan constitutes the merger of the Health
Concepts and Services, Inc. 401(k) Profit-Sharing Plan into this Plan.
Effective March 1, 1996, this Plan constitutes the merger of the
Accumed, Inc. 401(k) Plan into this Plan. Effective January 1, 1996,
this Plan constitutes the merger of the Eastern Medical Supplies 401(k)
Salary Reduction Plan into this Plan. Effective January 1, 1997, this
Plan constitutes the merger of the NeighborCare Pharmacies, Inc.
Retirement Savings Plan into this Plan. Effective January 1, 1997, this
Plan constitutes the merger of the Geriatric and Medical Companies,
Inc. 401(k) Profit Sharing Plan into this Plan. Notwithstanding any
provision of this Plan to the contrary, in the event that a plan is
merged into this Plan or a plan's assets and/or liabilities are
transferred to this Plan, the amount in each Participant's Account
which is attributable to such merger or transfer shall continue to be
subject to the provisions of the previous plan (as in effect on the
date of such transaction) to the extent necessary to satisfy the
requirements of Section 411 of the Code."
4. Section 1.52 of the Plan is hereby amended to delete the term
"Compensation" and to insert in lieu thereof the term "compensation".
5. Section 1.57 of the Plan is hereby amended and restated to read as
follows:
"Sec. 1.57 'Transferee Plan' shall mean a plan which accepts
an inter-plan transfer, directly or indirectly, from a plan (the
'Transferor Plan') which is required to provide Qualified Joint and
Survivor Annuities and Qualified Preretirement Benefit Survivor
Annuities, or optional forms of benefits not provided hereunder."
-4-
<PAGE>
6. Section 1.62 of the Plan is hereby deleted.
7. Sections 1.63, 1.64 and 1.65 of the Plan are hereby redesignated as
Sections 1.62, 1.63 and 1.64, respectively.
8. Article I is of the Plan is hereby amended by adding the following
new section:
"Sec. 1.65 'Year of Benefit Accrual Service' shall mean any
Accrual Computation Period in which the Participant completes one
thousand (1,000) or more Hours of Service provided that such Hours of
Service are to be credited under Section 1.34 for purposes of benefit
accrual."
9. Section 4.02 of the Plan is hereby amended to delete the term
"Compensation" and to insert in lieu thereof the term "compensation".
10. Section 4.04(a) of the Plan is hereby amended and restated to read
as follows:
"(a) Effective with respect to Plan Years beginning on or
after January 1, 1997, the tentative Salary Reduction Amount of any
Participant who is a Highly Compensated Employee shall be an amount not
less than one percent (1%), nor more than two percent (2%) of such
Participant's compensation; and the tentative Salary Reduction Amount
of any other Participant shall be an amount not less than one percent
(1%), nor more than fifteen percent (15%) of such Participant's
compensation. (Such limitations shall be in increments of full
percentage points.) Effective with respect to Plan Years beginning on
January 1, 1995 and January 1, 1996, the tentative Salary Reduction
Amount of any Participant whose employment classification is Grade
Level 15 or above, shall be an amount not in excess of two percent (2%)
of the Participant's compensation.
-5-
<PAGE>
Effective with respect to the Plan Year beginning on January 1, 1994,
the tentative Salary Reduction Amount set forth in any Salary Reduction
Agreement shall be an amount not less than one percent (1%) of the
Participant's compensation nor more than fifteen percent (15%) of the
Participant's compensation (in increments of full percentage points).
For purposes of this Paragraph (a) the term 'compensation' shall have
the same meaning as set forth in Section 5.03(f). Tentative Salary
Reduction Amounts shall become Salary Reduction Amounts only after the
Employer or the Plan Administrator has made such adjustments thereto as
they (or either of them) deem necessary to maintain the qualified
status of this Plan and/or to maintain the treatment of Salary
Reduction Amounts as a qualified cash or deferred arrangement."
11. Section 5.01(b) of the Plan, as amended by Amendment No. 2, shall
be further amended to delete the phrase "Year of Participation" and to insert in
lieu thereof the phrase "Year of Benefit Accrual Service".
12. Section 6.08 of the Plan is hereby amended and restated to read as
follows:
"(b) Changes in Investment Directions. Any
designation or change in the designation of investment
categories by a Participant shall be made pursuant to
procedures established by the Plan Administrator and
shall be made in such manner and at such reasonable
times as shall be determined by the Plan
Administrator."
13. The phrase "Year of Participation" shall be deleted wherever it
appears in the Plan and replaced with the phrase "Year of Benefit Accrual
Service".
-6-
<PAGE>
14. Except as otherwise noted herein, this amendment shall be effective
as of January 1, 1997 and reflects the manner in which this Plan has operated
since that date.
IN WITNESS WHEREOF, and as evidence of the adoption of this amendment,
the Genesis Health Ventures, Inc. has caused the same to be executed by its duly
authorized officers this 11th day of November, 1998.
ATTEST: GENESIS HEALTH VENTURES, INC.
/s/ By:/s/
- ---------------------------- ---------------------------
Secretary Senior Vice President
-7-
<PAGE>
GENESIS HEALTH VENTURES, INC.
RETIREMENT PLAN
(Restated, Effective January 1, 1989)
AMENDMENT NO. 4
Genesis Health Ventures, Inc., a Pennsylvania corporation, hereby
adopts this amendment to the Genesis Health Ventures, Inc. Retirement Plan
("Plan"). This amendment is adopted pursuant to Section 14.01 of the Plan.
1. Section 1.34 of the Plan is hereby amended by adding the following
provisions at the end thereof:
"Any individual who is an Employee as of November 1, 1997 and was an
employee of William Hill Manor, Inc. immediately prior to becoming an
Employee shall receive credit for hours of service performed for such
entity for purposes of determining Hours of Service with regard to the
eligibility provisions of this Plan. Such service shall be credited
effective January 1, 1998.
Any individual who is an Employee as of January 1, 1998 and was an
employee of Virginia Rehabilitation Management Services, Virginia
Rehabilitation Services, Inc., or Central Virginia Rehabilitation, Inc.
immediately prior to becoming an Employee shall receive credit for
hours of service performed for such entities for purposes of
determining Hours of Service with regard to the eligibility provisions
of this Plan. Such service shall be credited effective January 1, 1998.
Any individual who is an Employee as of January 1, 1998 and was an
employee of Chapel Manor Nursing and Rehabilitation Center, Belvedere
Nursing and Convalescent Center, Pennsburg Nursing and Rehabilitation
Center, Harston Hall Nursing Center, Delco Systems Services, Inc. or
Delco Apothecary, Inc. immediately prior to becoming an Employee shall
receive credit for hours of service performed for such entities for
purposes of determining Hours of Service with
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<PAGE>
regard to the eligibility provisions of this Plan. Such service shall
be credited effective January 1, 1998.
Any individual who is an Employee as of December 1, 1997 and was an
employee of Maryland Homelink immediately prior to becoming an Employee
shall receive credit for hours of service performed for such entity for
purposes of determining Hours of Service with regard to the eligibility
provisions of this Plan. Such service shall be credited effective
January 1, 1998.
Any individual who is an Employee as of April 1, 1998 and was an
employee of Highgate at Paoli Point immediately prior to becoming an
Employee shall receive credit for hours of service performed for such
entities for purposes of determining Hours of Service with regard to
the eligibility provisions of this Plan. Such service shall be credited
effective July 1, 1998.
Any individual who is an Employee as of July 1, 1998 and was an
employee of the MultiCare Companies, Inc. or any wholly-owned
subsidiary thereof, immediately prior to becoming an Employee shall
receive credit for hours of service performed for such entity for
purposes of determining Hours of Service with regard to the benefit
accrual, eligibility and vesting provisions of this Plan. Such service
shall be credited effective July 1, 1998."
2. Section 1.42 of the Plan is hereby amended and restated to read as
follows:
"Sec. 1.42 'Required Beginning Date' shall mean
the April 1 of the calendar year next following the
calendar year in which he/she attains Age 70-1/2, or if
later, the April 1 of the calendar year next following
the calendar year in which he/she retires."
3. Section 2.01 of the Plan is hereby amended to add the following
Paragraph (c):
"(c) Eligibility for Certain Former Employees of the
Multicare Companies, Inc. Notwithstanding the first
sentence of Paragraph (a) above, any Employee who was
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<PAGE>
employed by the Multicare Companies, Inc. or any of its wholly-owned
subsidiaries, and transfers employment directly to the Employer, shall
become a Participant under (1), (2) or (3) below, whichever is
applicable.
(1) If an Employee was employed by the Multicare
Companies, Inc. or any of its wholly owned subsidiaries for a
period of at least thirty (30) consecutive days and transfers
employment to the Employer on or before July 1, 1998, he/she
shall become a Participant on the July 1, 1998 Entry Date.
(2) If an Employee was employed by the Multicare
Companies, Inc. or any of its wholly owned subsidiaries,
transfers employment to the Employer on or before January 1,
1999, and has combined service of at least thirty (30)
consecutive days on or before January 1, 1999, he/she shall
become a Participant on the January 1, 1999 Entry Date.
(3) If an Employee is not described in (1) or (2)
above, he/she shall become a Participant in accordance with
Paragraph (a) above."
4. Sections 10.01, 10.02 and 10.03 of the Plan are hereby amended,
effective as of January 1, 1998, by deleting "$3,500" in each place that it
appears and by inserting in lieu thereof "$5,000".
5. Section 10.03 of the Plan is hereby amended, effective January 1,
1998, to add the following Paragraph (d):
"(d) Required Beginning Date Transition Rule. Any Participant
who attains age 70 1/2 on or after January 1, 1997 but before December
31, 1998 may elect to commence his/her retirement benefits on: (1)
April 1 of the calendar year following the calendar year in which
he/she attains age 70 1/2; or (2) his/her Required Beginning Date."
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<PAGE>
6. Except as otherwise noted herein, this amendment shall be effective
as of January 1, 1997 and reflects the manner in which this Plan has operated
since that date.
IN WITNESS WHEREOF, and as evidence of the adoption of this amendment,
Genesis Health Ventures, Inc. has caused the same to be executed by its duly
authorized officers this 11th day of November, 1998.
ATTEST: GENESIS HEALTH VENTURES, INC.
/s/ By:/s/
- ----------------------------- ------------------------
Secretary Senior Vice President
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<PAGE>
GENESIS HEALTH VENTURES, INC.
RETIREMENT PLAN
(Effective January 1, 1989)
AMENDMENT NO. 5
Genesis Health Ventures, Inc., a Pennsylvania corporation, hereby
adopts this amendment to the Genesis Health Ventures, Inc. Retirement Plan
("Plan"). This amendment is adopted pursuant to Section 14.01 of the Plan.
1. Section 1.34 of the Plan is hereby amended by adding the following
sentence at the end thereof:
"Any individual who is an Employee as of September 1, 1998
and was an employee of Health Care Professionals immediately prior
to becoming an Employee shall receive credit for hours of service
performed for such entity for purposes of determining Hours of
Service with regard to the eligibility provisions of this Plan.
Such service shall be credited effective January 1, 1999."
2. Section 4.04(a) (as last amended in Amendment No. 3) of the Plan is
hereby amended to read as follows:
"Effective with respect to Plan Years beginning on or after
January 1, 1999, the tentative Salary Reduction Amount of any
Participant who is a Highly Compensated Employee shall be an amount
not less than one percent (1%), nor more than four percent (4%) of
such Participant's Compensation; and the tentative Salary Reduction
Amount of any other Participant shall be an amount not less than
one percent (1%), nor more than fifteen percent (15%) of such
Participant's Compensation. Tentative Salary Reduction Amounts
shall become Salary Reduction Amounts only after the Employer or
the Plan Administrator has made such adjustments thereto as they
(or either of them) deem necessary to maintain the qualified status
of this Plan and/or to maintain the treatment of Salary Reduction
Amounts as a qualified cash or deferred arrangement."
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<PAGE>
3. Section 5.01(b) of the Plan (as last amended in Amendment No. 2) is
hereby amended to read as follows:
"(b) Employer Matching Contributions. With respect to Plan
Years beginning on or after January 1, 1999, as of the last day of
each Accrual Computation Period, there shall be allocated to the
Employer Matching Contribution Account of each Active Participant
who is not a Highly Compensated Employee an amount which shall be
equal to the lesser of: (1) a percentage of the Participant's
Salary Reduction Amount for such Accrual Computation Period; or (2)
a percentage of the Participant's Compensation for such Accrual
Computation Period. The respective percentages are determined under
the following schedule:
<TABLE>
<CAPTION>
Participant's Percentage of Salary Percentage of
Years of Participation Reduction Amount Compensation
---------------------- ---------------- ------------
<S> <C> <C> <C>
Less than 7 Years of Service 50% 1%
7 Years of Service, 75% 3%
but fewer than 10
10 Years of Service or more 100% 4%
</TABLE>
In the event that the Employer Matching Contribution is not
sufficient to provide for allocations to all Active Participants
who are not Highly Compensated Employees as determined under the
schedule above, each such Active Participant shall be allocated a
share of such contribution in the same proportion that the dollar
amount of his/her allocation, as determined under the schedule
above, bears to the total dollar amount of allocations to all such
Active Participants, as determined under the schedule above.
As of the last day of each Accrual Computation Period, there shall
be allocated to the Employee Matching Contribution Account of each
Active Participant who is a Highly Compensated Employee an amount
which shall be equal to the lesser of: (1) a percentage of such
Participant's Salary Reduction Amount for such Accrual Computation
Period, or (2) a percentage of such Participant's Compensation for
such Accrual
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<PAGE>
Computation Period. The respective percentages are determined
under the following schedule:
Percentage of Salary Percentage of
Reduction Amount Compensation
-------------------- ------------
50% 1%"
4. The second sentence of Section 6.02 of the Plan is hereby amended
to read as follows:
"A similar valuation (or the partial valuation of one or
more sub- funds, if appropriate) may occur at any other interim
valuation date upon the direction of the Plan Administrator."
5. Section 6.05 of the Plan is hereby amended by adding the following
provisions at the end thereof:
"(e) Minimum Loan. Each loan shall be in the minimum
principal amount of $1,000 upon issuance.
(f) Number of Loans. No Participant or Beneficiary shall
under any circumstances be entitled to have outstanding more than
one (1) loan, at any one time."
6. Section 6.08 (a) is hereby amended by deleting the following:
"(excluding any portion of such Account which consists of stock of
the Employer)".
7. A third paragraph of Section 9.02 of the Plan is hereby added to
the end thereof:
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<PAGE>
"Notwithstanding the foregoing, a Participant's vested
interest in the portion of his/her Account attributable to amounts
transferred to this Plan from the Health Concepts and Services,
Inc. 401(k) Profit- Sharing Plan ("HCS Plan") or the NeighborCare
Pharmacies, Inc. Retirement Savings Plan ("NCP Plan") that consists
of amounts attributable to "Employer Matching Contributions" (as
defined under those plans) shall be determined from the following
table as of any date of reference during which he/she is a
Participant, and as of the date on which he/she experiences a Break
in Service, subject, however, to the provisions of Sections 9.03
and 9.04 with respect to disregarded periods of service. In
addition, any Participant shall at all times be fully vested in the
portion of his/her Account attributable to his/her "Participant
Elective Deferral Account", as defined under such plans, that has
been transferred to this Plan.
<TABLE>
<CAPTION>
Participant's Years Participant's Vested
Of Service Percentage
------------------- --------------------
<S> <C>
Less than 2 Years of Service......................... None
3 Years of Service, but fewer than 4................. 20%
4 Years of Service, but fewer than 5................. 40%
5 Years of Service, but fewer than 6................. 60%
6 Years of Service, but fewer than 7................. 80%
7 Years of Service or more........................... 100%
Attainment of Normal Retirement Age
regardless of Service.............................. 100%
Upon the death or Total Disability of a
Participant while in the employ of the
Employer or an Affiliated Company.................. 100%"
</TABLE>
8. A new section 15.13 is hereby added to the Plan which shall read as
follows:
"Sec. 15.13 USERRA. Notwithstanding any provision of this
Plan to the contrary, contributions, benefits and service credit
with respect to qualified military service will be provided in
accordance with Section 414(u) of the Code. Loan repayments will be
suspended under this Plan as permitted under Section 414(u)(4) of
the Code."
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<PAGE>
9. Except for the provisions of Paragraph 7 of this Amendment, this
Amendment shall be effective as of January 1, 1999. Paragraph 7 of
this Amendment shall apply to the HCS Plan as of the date such plan
was merged into this Plan and to the NCP Plan as of the date such
plan was merged into this Plan and reflects the manner in which
this Plan has operated since those dates.
IN WITNESS WHEREOF, and as evidence of the adoption of this Amendment,
Genesis Health Ventures, Inc. has caused the same to be executed by its duly
authorized officers this 11th day of March, 1999.
ATTEST: GENESIS HEALTH VENTURES, INC.
/s/ By:/s/
- -------------------------- ---------------------------------
Secretary Senior Vice President
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