<PAGE> 1
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
FPA Medical Management, Inc.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
Delaware 33-0604264
(STATE OR OTHER JURISDICTION OF INCORPORATION (I.R.S. EMPLOYER
OR ORGANIZATION) IDENTIFICATION NO.)
2878 Camino Del Rio South
Suite 301
San Diego, California 92108
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
FPA Medical Management, Inc.
401(k) Savings Plan
(FULL TITLE OF THE PLAN)
Dr. Sol Lizerbram, President
FPA Medical Management, Inc.
2878 Camino Del Rio South, Suite 301
San Diego, California 92108
(NAME AND ADDRESS OF AGENT FOR SERVICE)
(619) 295-7005
(TELEPHONE NUMBER, INCLUDING AREA CODE, OF AGENT FOR SERVICE)
with copies to:
Rhonda R. Cohen, Esquire James A. Lebovitz, Esquire
Ballard Spahr Andrews & Ingersoll Senior Vice President, General
1735 Market Street Counsel and Secretary
Philadelphia, Pennsylvania 19103-7599 FPA Medical Management, Inc.
(215) 665-8500 2878 Camino Del Rio South, Suite 301
San Diego, California 92108
(619) 295-7005
<PAGE> 2
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
================================================================================================
Title of Proposed Maximum Proposed Maximum
Securities to be Amount to be Offering Price Per Aggregate Offering Amount of
Registered(1) Registered Share(2) Price(2) Registration Fee
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock,
par value $.002 350,000
per share shares $ 17.5625 $ 6,146,875 $ 1,863
================================================================================================
</TABLE>
(1) Pursuant to Rule 416(c), this registration statement also covers an
indeterminate amount of interests to be offered or sold pursuant to the
employee benefit plan described herein.
(2) Estimated solely for the purpose of calculating the registration fee.
In accordance with Rule 457(c), the price shown is based upon the
average of the high and low sales price of FPA Medical Management, Inc.
Common Stock on November 21, 1996, $ 17.5625, as reported on the Nasdaq
National Market System.
<PAGE> 3
PART I - INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
The documents containing the information required to be included in
Part I of this Registration Statement will be given or sent to all employees who
participate in the FPA Medical Management, Inc. 401(k) Savings Plan (the
"Plan"), as specified by Rule 428.
PART II - INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 3. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE.
The following documents filed with the Securities and Exchange
Commission (the "Commission") pursuant to the Securities Exchange Act of 1934
(the "Exchange Act") by FPA Medical Management, Inc. (the "Company") (File No.
0-24276) are incorporated herein by reference:
(1) the Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1995, as amended by the Company's Form
10-K/A filed with the Commission on March 26, 1996 and as
amended by Form 10- K/A filed with the Commission on October
3, 1996;
(2) the Company's Quarterly Reports on Form 10-Q for the quarters
ended March 31, 1996 (as amended by Form 10-Q/A filed with the
Commission on July 24, 1996); June 30, 1996; and September 30,
1996 (as amended by Form 10-Q/A filed with the Commission on
November 12, 1996);
(3) the Company's Current Reports on Form 8-K dated April 12,
1996, May 19, 1996, June 21, 1996, October 31, 1996 and
November 8, 1996; and
(4) the description of the Company's common stock contained in the
Company's Form 8-A dated October 24, 1994, including any
amendment or report filed for the purpose of updating such
description.
Each document filed by the Company or the Plan pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Exchange Act, after the date of this
Registration Statement and prior to the filing of a post-effective amendment
which indicates that all securities offered hereby have been sold or which
deregisters all securities remaining unsold, shall be deemed to be incorporated
by reference in this Registration Statement and shall be part hereof from the
date of filing of such document. Any statement contained in a document
incorporated by reference herein shall be deemed to be modified or superseded
for purposes hereof to the extent that a statement contained herein (or any
other subsequently filed document which also is incorporated
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by reference herein) modifies or supersedes such statement. Any statement so
modified or superseded shall not be deemed to constitute a part hereof except as
so modified or superseded.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the General Corporation Law of the State of Delaware
provides that a corporation may indemnify its officers, directors, employees and
agents (or persons who have served, at the corporation's request, as officers,
directors, employees or agents of another corporation) against the expenses,
including attorneys' fees, actually and reasonably incurred by them in
connection with the defense of any action by reason of being or having been
directors, officers, employees or agents, if such person shall have acted in
good faith and in a manner he reasonably believed to be in or not opposed to the
best interests of the corporation, and with respect to any criminal action or
proceedings, had no reason to believe his conduct was unlawful, except that if
such action shall be in the right of the corporation, no such indemnification
shall be provided as to any claim, issue or matter as to which such person shall
have been adjudged to have been liable to the corporation unless and only to the
extent that the Court of Chancery of the State of Delaware, or any other court
in which the suit was brought, shall determine upon application that, in view of
all the circumstances of the case, such person is fairly and reasonably entitled
to indemnity for such expenses which the Court of Chancery or such other court
shall deem proper.
The Company's Certificate of Incorporation has the following
indemnification provisions:
"SEVENTH. A. Each person who was or is a party or is threatened to
be made a party to or is involved in any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative (hereinafter a "proceeding"), by reason of the fact that he or
she, or a person of whom he or she is the legal representative, is or was a
director or officer of the Corporation or is or was serving at the request of
the Corporation as a director, officer, employee or agent of another corporation
or of a partnership, joint venture, trust or other enterprise, including service
with respect to employee benefit plans, whether the basis of such proceeding is
alleged action in an official capacity as a director, officer, employee or agent
or in any other capacity while serving as a director, officer, employee
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or agent, shall be indemnified and held harmless by the Corporation to the
fullest extent authorized by the Delaware General Corporation Law, as the same
exists or may hereafter be amended (but, in the case of any such amendment, only
to the extent that such amendment permits the Corporation to provide broader
indemnification rights than said law permitted the Corporation to provide prior
to such amendment), against all expense, liability and loss (including
attorneys' fees, judgments, fines, ERISA excise taxes or penalties and amounts
paid or to be paid in settlement) actually and reasonably incurred or suffered
by such person in connection therewith, and such indemnification shall continue
as to a person who has ceased to be a director, officer, employee or agent and
shall inure to the benefit of his or her heirs, executors and administrators;
provided, however, that, except as provided in Paragraph B hereof, the
Corporation shall indemnify any such person seeking indemnification in
connection with a proceeding (or part thereof) initiated by such person only if
such proceeding (or part thereof) was authorized by the Board of Directors of
the Corporation. The right to indemnification conferred in this Article SEVENTH
shall be a contract right and shall include the right to be paid by the
Corporation the expenses incurred in defending any such proceeding in advance of
its final disposition; provided, however, that, if the Delaware General
Corporation Law requires, the payment of such expenses incurred by a director or
officer in his or her capacity as a director or officer (and not in any other
capacity in which service was or is rendered by such person while a director or
officer, including, without limitation, service to an employee benefit plan) in
advance of the final disposition of a proceeding, shall be made only upon
delivery to the Corporation of an undertaking, by or on behalf of such director
or officer, to repay all amounts so advanced if it shall ultimately be
determined that such director or officer is not entitled to be indemnified under
this Article SEVENTH or otherwise. The Corporation may, by action of its Board
of Directors, provide indemnification to employees and agents of the Corporation
with the same scope and effect as the foregoing indemnification of directors and
officers.
B. If a claim under Paragraph A of this Article SEVENTH is not paid
in full by the Corporation within thirty days after a written claim has been
received by the Corporation, the claimant may at any time thereafter bring suit
against the Corporation to recover the unpaid amount of the claim and, if
successful in whole or in part, the claimant shall be entitled to be paid also
the expense of prosecuting such claim. It shall be a defense to any such action
(other than an action brought to enforce a claim for expenses incurred in
defending any proceeding in advance of its final disposition where the required
undertaking, if any is required, has been tendered to the Corporation) that the
claimant has not met the standards of conduct which make it permissible under
the Delaware General Corporation Law for the Corporation to indemnify the
claimant for the amount claimed, but the burden of providing such defense shall
be on the Corporation. Neither the failure of the Corporation (including its
Board of Directors, independent legal counsel, or its stockholders) to have made
a determination prior to the commencement of such action that indemnification of
the claimant is proper in the circumstances because he or she has met the
applicable standard of conduct set forth in the Delaware General Corporation
Law, nor an actual determination by the Corporation (including its Board of
Directors, independent legal counsel, or its stockholders) that the claimant has
not met such
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applicable standard of conduct, shall be a defense to the action or create a
presumption that the claimant has not met the applicable standard of conduct.
C. The right to indemnification and the payment of expenses incurred
in defending a proceeding in advance of its final disposition conferred in this
Article SEVENTH shall not be exclusive of any other right which any person may
have or hereafter acquire under any statute, provision of the Certificate of
Incorporation, by-law, agreement, vote of stockholders or disinterested
directors or otherwise.
D. The Corporation may maintain insurance, at its expense, to
protect itself and any person who is or was a director, officer, employee or
agent of the Corporation or is or was serving at the request of the Corporation
as a director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise against any such expense, liability or
loss, whether or not the Corporation would have the power to indemnify such
person against such expense, liability or loss under the Delaware General
Corporation Law.
The Company's By-laws similarly provide that the Company shall
indemnify its officers and directors to the fullest extent permitted by the
Delaware Law.
In addition, the Company has entered into individual indemnification
agreements (the "Indemnification Agreements") with each of the directors. The
general effect on directors' liabilities is set forth in the provisions of the
Indemnification Agreements summarized below:
Proceedings Other Than Proceedings by or in the Right of the
Company. A director shall be entitled to the rights of indemnification if, by
reason of his position with the Company, he is, or is threatened to be made, a
party to any threatened, pending, or completed proceeding, other than a
proceeding by or in the right of the Company. In such case, such director shall
be indemnified against all expenses, judgments, penalties, fines and amounts
paid in settlement actually and reasonably incurred by him or on his behalf in
connection with such proceeding or any claim, issue or matter therein, if he
acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the Company and, with respect to any criminal
proceeding, had no reasonable cause to believe his conduct was unlawful.
Proceedings by or in the Right of Company. Generally, a director
shall be entitled to the rights of indemnification if, by reason of his position
with the Company, he is, or is threatened to be made, a party to any threatened,
pending or completed proceeding brought by or in the right of the Company to
procure a judgment in its favor. In such case, the director shall be indemnified
against all expenses actually and reasonably incurred by him or on his behalf in
connection with such proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
Company; provided, however, that if applicable law so provides, no
indemnification against such expenses shall be made in respect of any claim,
issue or matter in such proceeding as to which the director shall have been
adjudged to be liable to the Company unless and to the extent that the Court of
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<PAGE> 7
Chancery of the State of Delaware, or the court in which such proceeding shall
have been brought or is pending, shall determine that such indemnification may
be made.
Indemnification for Expenses of a Party Who is Wholly or Partly
Successful. Notwithstanding any other provision of the Indemnification
Agreements, to the extent that the director is, by reason of his position with
the Company, a party to and is successful, on the merits or otherwise, in any
proceeding, he shall be indemnified against all expenses actually and reasonably
incurred by him or on his behalf in connection therewith. If the director is not
wholly successful in such proceeding but is successful, on the merits or
otherwise, as to one or more but less than all claims, issues or matters in such
proceeding, the Company shall indemnify the director against all expenses
actually and reasonably incurred by him or on his behalf in connection with each
successfully resolved claim, issue or matter.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
5 Opinion of Ballard Spahr Andrews & Ingersoll
23.1 Consent of Deloitte & Touche LLP
23.2 Consent of Deloitte & Touche LLP
23.3 Consent of Stevenson, Jones & Holmaas, P.C.
23.4 Consent of KPMG Peat Marwick LLP
23.5 Consent of Coopers & Lybrand L.L.P.
23.6 Consent of Ballard Spahr Andrews & Ingersoll (included in Exhibit 5)
24 Power of Attorney (included on signature page)
99 FPA Medical Management, Inc. 401(k) Savings Plan
ITEM 9. UNDERTAKINGS.
A. The Company hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement: (i) to include
any prospectus required by Section 10(a)(3) of the Securities Act of 1933; (ii)
to reflect in the prospectus any facts or events arising after the effective
date of the registration statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate, represent a fundamental change
in the information set forth in the registration statement. Notwithstanding the
foregoing, any increase or decrease in volume of securities offered (if the
total dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end
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<PAGE> 8
of the estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if, in the
aggregate, the changes in volume and price represent no more than a 20% change
in the maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement; and (iii) to
include any material information with respect to the plan of distribution not
previously disclosed in the registration statement or any material change to
such information in the registration statement; provided, however, that clauses
(i) and (ii) above do not apply if the registration statement is on Form S-3 or
Form S-8, and the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed by the
Company pursuant to Section 13 or Section 15(d) of the Exchange Act that are
incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment, any of the securities being registered which remain unsold at the
termination of the offering.
B. The Company hereby undertakes that, for purposes of determining any
liability under the Securities Act of 1933, each filing of the Company's annual
report pursuant to Section 13(a) or Section 15(d) of the Exchange Act (and,
where applicable, each filing of an employee benefit plan's annual report
pursuant to Section 15(d) of the Exchange Act) that is incorporated by reference
in the registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
C. Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Company pursuant to the foregoing provisions, or otherwise, the
Company 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 Company of expenses
incurred or paid by a director, officer or controlling person of the Company 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 Company 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.
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<PAGE> 9
SIGNATURES
The Registrant. Pursuant to the requirements of the Securities Act
of 1933, the registrant certifies that it has reasonable grounds to believe that
it meets all of the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in San Diego, California, on November 22, 1996.
FPA MEDICAL MANAGEMENT, INC.
By: /s/ James A. Lebovitz
----------------------------------
James A. Lebovitz
Senior Vice President
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
REGISTRATION STATEMENT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS IN THE
CAPACITIES AND ON THE DATES INDICATED.
Each person whose signature appears below in so signing also makes,
constitutes and appoints Dr. Sol Lizerbram, Dr. Seth Flam and Steven M. Lash,
and each of them, his or her true and lawful attorney-in-fact, with full power
of substitution, for him in any and all capacities, to execute and cause to be
filed with the Securities and Exchange Commission any and all amendments and
post-effective amendments to this Registration Statement, with exhibits thereto
and other documents in connection therewith, and hereby ratifies and confirms
all that said attorney-in-fact or his substitute or substitutes may do or cause
to be done by virtue hereof.
Signature Title Date
--------- ----- ----
/s/ Sol Lizerbram Chairman of the Board November 22, 1996
- ---------------------- and Director
Sol Lizerbram
/s/ Seth Flam Chief Executive Officer November 22, 1996
- ---------------------- and Director (Principal
Seth Flam Executive Officer)
/s/ Steven M. Lash Executive Vice President, November 22, 1996
- ---------------------- Chief Financial Officer
Steven M. Lash and Treasurer (Principal
Financial Officer)
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<PAGE> 10
/s/ Cheryl A. Moore Vice President - Finance November 22, 1996
- ---------------------- and Chief Accounting Officer
Cheryl A. Moore (Principal Accounting Officer)
/s/ Stephen J. Dresnick Vice Chairman of the Board November 22, 1996
- ----------------------- of Directors and President,
Stephen J. Dresnick Sterling Healthcare Group, Inc.
/s/ Howard Hassman Executive Vice President - November 22, 1996
- ---------------------- Corporate Development and
Howard Hassman Director
/s/ Kevin Ellis Chief Medical Officer and November 22, 1996
- ---------------------- Director
Kevin Ellis
/s/ Michael Feinstein Director of Special Projects November 22, 1996
- ---------------------- and Director
Michael Feinstein
Director November __, 1996
- ----------------------
Harvey Wilson
Director November __, 1996
- ----------------------
Sheldon Derezin
Director November __, 1996
- ----------------------
Herbert A. Wertheim
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<PAGE> 11
SIGNATURES
THE PLAN. Pursuant to the requirements of the Securities Act of
1933, the FPA Medical Management, Inc. Savings Plan Committee has duly caused
this Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in San Diego, California, on November 22, 1996.
FPA Medical Management, Inc. 401(k) Savings Plan
By: /s/ James A. Lebovitz
--------------------------------------------
James A. Lebovitz
Chairman, Savings Plan Committee
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<PAGE> 12
EXHIBIT INDEX
Number Exhibit
------ -------
5 Opinion of Ballard Spahr Andrews & Ingersoll
23.1 Consent of Deloitte & Touche LLP
23.2 Consent of Deloitte & Touche LLP
23.3 Consent of Stevenson, Jones & Holmaas, P.C.
23.4 Consent of KPMG Peat Marwick LLP
23.5 Consent of Coopers & Lybrand L.L.P.
23.6 Consent of Ballard Spahr Andrews & Ingersoll (included in Exhibit 5)
24 Power of Attorney (included on signature page)
99 FPA Medical Management, Inc. 401(k) Savings Plan
<PAGE> 1
EXHIBIT 5
[LETTERHEAD OF BALLARD SPAHR ANDREWS & INGERSOLL
APPEARS HERE]
November 22, 1996
FPA Medical Management, Inc.
2878 Camino Del Rio South, Suite 301
San Diego, CA 92108
Re: FPA MEDICAL MANAGEMENT, INC. 401(k) SAVINGS PLAN
REGISTRATION STATEMENT ON FORM S-8
Gentlemen:
We have acted as counsel to FPA Medical Management, Inc. (the
"Company") in connection with the registration under the Securities Act of 1933,
as amended, of interests in the FPA Medical Management, Inc. 401(k) Savings Plan
(the "Plan") and 350,000 shares of common stock of the Company, par value $.002
per share (the "Shares"), issuable thereunder.
The opinion expressed below is based on the assumption that the
Registration Statement on Form S-8 with respect to the Shares issuable upon the
exercise of the options will have been filed by the Company with the Securities
and Exchange Commission and will have become effective before any of the Shares
are issued and that the persons acquiring the Shares will receive a prospectus
containing all of the information required by Part I of Form S-8 before
acquiring such Shares.
In rendering our opinion, we have reviewed the Plan and such
certificates, documents, corporate records and other instruments as in our
judgment are necessary or appropriate to enable us to render the opinion
expressed below. In giving this opinion, we are assuming the authenticity of all
instruments presented to us as originals, the conformity with the originals of
all instruments presented to us as copies and the genuineness of all signatures.
<PAGE> 2
FPA Medical Management, Inc.
November 21, 1996
Page Two
Based upon the foregoing, we are of the opinion that the Shares,
when issued in accordance with the terms of the Plan, will be legally issued,
fully paid and non-assessable.
We consent to the filing of this opinion as Exhibit 5 to the
Registration Statement.
Very truly yours,
/s/ Ballard Spahr Andrews & Ingersoll
<PAGE> 1
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
FPA Medical Management, Inc. on Form S-8 of our report dated March 8, 1996,
appearing in the Annual Report on Form 10-K/A of FPA Medical Management, Inc.
for the year ended December 31, 1995.
/s/ Deloitte & Touche LLP
San Diego, California
November 21, 1996
<PAGE> 1
EXHIBIT 23.2
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
FPA Medical Management, Inc. ("FPA") on Form S-8 of (1) our report dated
September 30, 1996 on the combined financial statements of Foundation Health
Medical Services (a wholly-owned subsidiary of Foundation Health Corporation)
and affiliates as of June 30, 1995 and 1996 and for each of the three years in
the period ended June 30, 1996, and (2) our report dated February 23, 1996 on
the financial statements of Foundation Health IPA as of December 31, 1995 and
1994 and for the year ended December 31, 1995 and for the period from June 7,
1994 (date of inception) to December 31, 1994; such reports were incorporated
by reference in a previously filed Form 8-K of FPA dated November 8, 1996 which
has also been incorporated by reference in this Form S-8. Such reports express
unqualified opinions and include explanatory paragraphs referring to
significant related party transactions.
/s/ Deloitte & Touche LLP
Sacramento, California
November 22, 1996
<PAGE> 1
EXHIBIT 23.3
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
FPA Medical Management, Inc. ("FPA") on Form S-8 of our report dated April 27,
1994 on the financial statements of Thomas-Davis Medical Centers, P.C. for the
year ended December 31, 1993 which was incorporated by reference in a
previously filed Form 8-K of FPA dated November 8, 1996, which has also been
incorporated by reference in this Form S-8.
/s/ Stevenson, Jones & Holmaas, P.C.
STEVENSON, JONES & HOLMAAS, P.C.
Tucson, Arizona
November 22, 1996
<PAGE> 1
EXHIBIT 23.4
The Board of Directors
Physicians First, Inc.
We consent to the incorporation by reference in the registration statement on
Form S-8 of FPA Medical Management, Inc. filed on November 25, 1996 of our
report dated March 29, 1996, relating to the consolidated balance sheets of
Physicians First, Inc. and subsidiaries as of December 31, 1995 and 1994, and
the related consolidated statements of operations, stockholder's equity, and
cash flows for each of the years in the two-year period ended December 31, 1995
which report is incorporated by reference in a report on Form 8-K of FPA Medical
Management, Inc. dated November 12, 1996.
/s/ KPMG Peat Marwick LLP
Miami, Florida
November 25, 1996
<PAGE> 1
Exhibit 23.5
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this Form S-8 of FPA Medical
Management, Inc. of our report dated March 15, 1996, on our audit of the
consolidated financial statements and schedules of Sterling Healthcare Group,
Inc. as of December 31, 1994 and 1995, and for the year ended December 31, 1995,
and for the period from June 1, 1994 to December 31, 1994, and on our audits of
the financial statements and schedules of Sterling Health Care Group, Inc. and
Sterling Healthcare, Inc. for the five months ended May 31, 1994, and for the
year ended December 31, 1993, which report is included in the Annual Report on
Form 10-K/A.
/s/ Coopers & Lybrand L.L.P.
Miami, Florida
November 22, 1996
<PAGE> 1
EXHIBIT 99
FPA MEDICAL MANAGEMENT, INC.
401(K) SAVINGS PLAN
AMENDED AND RESTATED
EFFECTIVE JANUARY 1, 1997
<PAGE> 2
TABLE OF CONTENTS
PAGE
----
ARTICLE I
DEFINITIONS
"Account"............................................................ 2
"Matching Contribution Account"................................... 2
"Profit Sharing Account".......................................... 2
"Rollover Account"................................................ 2
"Salary Reduction Account"........................................ 2
"Transfer Account"................................................ 2
"Actual Deferral Percentage"......................................... 2
"Affiliated Company"................................................. 3
"Age"................................................................ 3
"Alternate Payee".................................................... 3
"Average Actual Deferral Percentage"................................. 4
"Average Contribution Percentage".................................... 4
"Benefit Commencement Date".......................................... 4
"Board of Directors"................................................. 4
"Code"............................................................... 4
"Committee" or "Savings Plan Committee".............................. 4
"Company"............................................................ 4
"Compensation"....................................................... 4
"Contribution Percentage"............................................ 6
"Covered Employee"................................................... 6
"Effective Date"..................................................... 6
"Eligible Employee".................................................. 6
"Employee"........................................................... 6
"Employment Commencement Date"....................................... 7
"ERISA".............................................................. 7
"FPA Common Stock"................................................... 7
"Fund"............................................................... 7
"Highly Compensated Eligible Employee"............................... 7
"Highly Compensated Employee"........................................ 7
"Hour of Service".................................................... 8
"Investment Medium".................................................. 9
"Limitation Year".................................................... 9
"Matching Contributions"............................................. 9
"Normal Retirement Age".............................................. 9
"Normal Retirement Date"............................................. 9
"One-Year Period of Severance"....................................... 9
"Participant"........................................................ 9
"Participating Company".............................................. 9
"Payroll Period"..................................................... 10
"Period of Service".................................................. 10
"Period of Severance"................................................ 10
"Plan"............................................................... 10
"Plan Year".......................................................... 10
"Predecessor Plan"................................................... 10
"Profit Sharing Contributions"....................................... 10
"Profit Sharing Participant"......................................... 10
"Qualified Domestic Relations Order"................................. 10
"Reemployment Commencement Date"..................................... 11
"Required Beginning Date"............................................ 11
"Rollover Contributions"............................................. 11
"Salary Reduction Contributions"..................................... 11
- i -
<PAGE> 3
PAGE
----
"Separation from Service"............................................ 11
"Severance from Service Date"........................................ 11
"Spouse"............................................................. 12
"Total Disability"................................................... 12
"Trust Agreement".................................................... 12
"Trustee"............................................................ 12
"Valuation Date"..................................................... 12
ARTICLE II
TRANSITION AND ELIGIBILITY TO PARTICIPATE
2.1 Rights Affected and Preservation of Accrued
Benefit.......................................................... 13
2.2 Eligibility to Participate - Salary Reduction
Contributions.................................................... 13
2.3 Election to Make Salary Reduction Contributions.................. 13
2.4 Participation in Matching Contributions.......................... 14
2.5 Eligibility to Participate - Profit Sharing
Contributions.................................................... 14
2.6 Participation in Profit Sharing Contributions.................... 14
2.7 Data............................................................. 14
ARTICLE III
CONTRIBUTIONS TO THE PLAN
3.1 Salary Reduction Contributions................................... 15
3.2 Change of Percentage Rate........................................ 15
3.3 Discontinuance of Salary Reduction Contributions................. 16
3.4 Matching Contribution............................................ 16
3.5 Profit Sharing Contribution...................................... 16
3.6 Timing and Deductibility of Contributions........................ 17
3.7 Fund............................................................. 17
3.8 Limitation on Salary Reduction Contributions and
Matching Contributions........................................... 18
3.9 Prevention of Violation of Limitation on Salary
Reduction Contributions and Matching
Contributions.................................................... 20
3.10 Maximum Allocation.............................................. 23
ARTICLE IV
PARTICIPANTS' ACCOUNTS
4.1 Accounts......................................................... 27
4.2 Valuation........................................................ 27
4.3 Apportionment of Gain or Loss.................................... 27
4.4 Accounting for Allocations....................................... 27
ARTICLE V
DISTRIBUTION
5.1 General.......................................................... 28
5.2 Separation from Service.......................................... 28
5.3 Death............................................................ 28
5.4 Total Disability................................................. 28
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PAGE
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5.5 Valuation for Distribution....................................... 28
5.6 Timing of Distribution........................................... 29
5.7 Mode of Distribution............................................. 30
5.8 Beneficiary Designation.......................................... 31
5.9 Recalculation of Life Expectancy................................. 32
5.10 Transfer of Account to Other Plan............................... 32
5.11 Transfers from Certain Plans.................................... 34
5.12 Other Distributions............................................. 39
ARTICLE VI
VESTING
6.1 Nonforfeitable Amounts........................................... 40
6.2 Years of Service for Vesting..................................... 40
6.3 Breaks in Service and Loss of Service............................ 41
6.4 Restoration of Service........................................... 41
6.5 Forfeitures and Restoration of Forfeited Amounts
upon Reemployment................................................ 41
ARTICLE VII
ROLLOVER CONTRIBUTIONS
7.1 Rollover Contributions........................................... 44
7.2 Vesting and Distribution of Rollover and Transfer
Accounts......................................................... 45
ARTICLE VIII
WITHDRAWALS
8.1 Withdrawals Not Subject to Section 401(k)
Restrictions..................................................... 46
8.2 Withdrawals Subject to Section 401(k)
Restrictions..................................................... 46
8.3 Withdrawals On and After Attainment of Age 59-1/2................ 48
8.4 Amount and Payment of Withdrawals................................ 48
8.5 Withdrawals Not Subject to Replacement........................... 49
8.6 Pledged Amounts.................................................. 49
8.7 Investment Medium to be Charged with Withdrawal.................. 49
ARTICLE IX
LOANS TO PARTICIPANTS
9.1 Loan Application................................................. 50
9.2 Loan Rejection................................................... 50
9.3 Amount of Loan................................................... 50
9.4 Terms of Loan.................................................... 51
9.5 Enforcement...................................................... 53
9.6 Additional Rules................................................. 53
ARTICLE X
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PAGE
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ADMINISTRATION
10.1 Committee................................................... 54
10.2 Duties and Powers of Committee.............................. 54
10.3 Functioning of Committee.................................... 55
10.4 Disputes.................................................... 55
10.5 Indemnification............................................. 56
ARTICLE XI
THE FUND
11.1 Designation of Trustee...................................... 57
11.2 Exclusive Benefit........................................... 57
11.3 No Interest in Fund......................................... 57
11.4 Trustee..................................................... 57
11.5 Investments and Voting FPA Common Stock..................... 57
ARTICLE XII
AMENDMENT OR TERMINATION OF THE PLAN
12.1 Power of Amendment and Termination.......................... 60
12.2 Merger...................................................... 60
ARTICLE XIII
TOP-HEAVY PROVISIONS
13.1 General..................................................... 61
13.2 Definitions................................................. 61
13.3 Minimum Contribution for Non-Key Employees.................. 64
13.4 Vesting..................................................... 65
13.5 Social Security............................................. 66
13.6 Adjustment to Maximum Benefit Limitation.................... 66
ARTICLE XIV
GENERAL PROVISIONS
14.1 No Employment Rights........................................ 67
14.2 Governing Law............................................... 67
14.3 Severability of Provisions.................................. 67
14.4 No Interest in Fund......................................... 67
14.5 Spendthrift Clause.......................................... 67
14.6 Incapacity.................................................. 67
14.7 Withholding................................................. 68
14.8 Missing Persons............................................. 68
ARTICLE XV
RIGHTS OF ALTERNATE PAYEES
15.1 General..................................................... 69
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15.2 Distribution................................................ 69
15.3 Withdrawals................................................. 69
15.4 Death Benefits.............................................. 69
15.5 Investment Direction........................................ 70
SCHEDULE A MINIMUM DISTRIBUTION INCIDENTAL BENEFIT TABLE
APPENDIX A PREDECESSOR PLANS
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<PAGE> 7
FPA MEDICAL MANAGEMENT, INC. 401(k) SAVINGS PLAN
BACKGROUND
WHEREAS, FPA Medical Management, Inc. (the "Company") adopted the
FPA Medical Management, Inc. 401(k) Salary Savings Plan, effective January 1,
1994, for certain of its employees; and
WHEREAS, beginning in 1995 the Company has acquired and will be
acquiring in the future corporations which are maintaining section 401(k) plans
for their eligible employees; and
WHEREAS, the Company desires to consolidate its various section
401(k) plans with the FPA Medical Management, Inc. 401(k) Salary Savings Plan so
that a single section 401(k) plan will cover its eligible employees and certain
of the eligible employees of its affiliates; and
WHEREAS, the Company desires to amend and restate the FPA Medical
Management, Inc. 401(k) Salary Savings Plan to accomplish its goal of having a
single company-wide section 401(k) plan which covers a substantial portion of
its employees and that such amended and restated plan shall be known as the FPA
Medical Management, Inc. 401(k) Savings Plan to; and
NOW, THEREFORE, effective January 1, 1997, the FPA Medical
Management, Inc. 401(k) Savings Plan is continued, amended and restated as
hereinafter set forth:
<PAGE> 8
ARTICLE I
DEFINITIONS
Except where otherwise clearly indicated by context, the masculine
shall include the feminine and the singular shall include the plural, and
vice-versa. Any term used herein without an initial capital letter that is used
in a provision of the Code with which this Plan must comply to meet the
requirements of section 401(a) of the Code shall be interpreted as having the
meaning used in such provision of the Code, if necessary for the Plan to comply
with such provision.
"Account" means the entries maintained in the records of the
Committee which represent Participant's interest in the Fund. The term "Account"
shall refer, as the context indicates, to any or all of the following:
"Matching Contribution Account" -- the Account to
which are credited Matching Contributions, if any, allocated to a Participant,
adjustments for withdrawals and distributions, and the earnings, losses and
expenses attributable thereto.
"Profit Sharing Account" -- the Account to which
are credited Profit Sharing Contributions, if any, allocated to a Participant,
adjustments for withdrawals and distributions, and the earnings, losses and
expenses attributable thereto.
"Rollover Account" -- the Account to which are credited a
Participant's Rollover Contributions, if any, that are not subject to the joint
and survivor annuity requirements of sections 401(a)(11) and 417 of the Code,
adjustments for withdrawals and distributions, and the earnings, losses and
expenses attributable thereto.
"Salary Reduction Account" -- the Account to
which are credited a Participant's Salary Reduction Contributions, adjustments
for withdrawals and distributions, and the earnings, losses and expenses
attributable thereto.
"Transfer Account" -- the Account to which are credited a
Participant's Rollover Contributions, if any, that are subject to the joint and
survivor annuity requirements of sections 401(a)(11) and 417 of the Code,
adjustments for withdrawals and distributions, and the earnings, losses and
expenses attributable thereto.
"Actual Deferral Percentage" means, for any Eligible Employee for a
given Plan Year, the ratio of:
(a) the sum of:
2
<PAGE> 9
(1) such Eligible Employee's Salary Reduction
Contributions for the Plan Year, plus
(2) in the case of any Highly Compensated Eligible
Employee, his elective deferrals for the year under any other qualified
retirement plan, other than an employee stock ownership plan as defined in
section 4975(e)(7) of the Code or a tax credit employee stock ownership plan as
defined in section 409(a) of the Code, maintained by a Participating Company or
any Affiliated Company, plus
(3) at the election of the Committee, any portion of the
Eligible Employee's Matching Contributions contributed pursuant to Section 3.4
hereof required or permitted to be taken into account under section 401(k) of
the Code and the regulations issued thereunder, plus
(4) at the election of the Committee, any portion of the
Eligible Employee's Profit Sharing Contributions contributed pursuant to Section
3.5 hereof required or permitted to be taken into account under section 401(k)
of the Code and the regulations issued thereunder; to
(b) the Eligible Employee's Compensation for the Plan
Year.
"Affiliated Company" means, with respect to any Participating
Company, (a) any corporation that is a member of a controlled group of
corporations, as determined under section 414(b) of the Code, which includes
such Participating Company; (b) any member of an affiliated service group, as
determined under section 414(m) of the Code, of which such Participating Company
is a member; (c) any trade or business (whether or not incorporated) that is
under common control with such Participating Company, as determined under
section 414(c) of the Code; and (d) any other organization or entity which is
required to be aggregated with the Participating Company under section 414(o) of
the Code. "50% Affiliated Company" means an Affiliated Company, but determined
with "more than 50%" substituted for the phrase "at least 80%" in section
1563(a) of the Code, when applying sections 414(b) and (c) of the Code.
"Age" means, for any individual, his age on his last birthday,
except that an individual attains Age 59-1/2 or Age 70-1/2 on the corresponding
date in the sixth calendar month following the month in which his 59th or 70th
(respectively) birthday falls (or the last day of such sixth month if there is
no such corresponding date therein).
"Alternate Payee" means any Spouse, former Spouse, child or other
dependent of a Participant who is recognized by a domestic relations order
(within the meaning of section 414(p)(1)(B) of the
3
<PAGE> 10
Code) as having a right to receive all, or a portion of, the benefits payable
under the Plan with respect to such Participant.
"Average Actual Deferral Percentage" means, for a specified group of
Eligible Employees for a Plan Year, the average of the Actual Deferral
Percentages for such Eligible Employees for the Plan Year.
"Average Contribution Percentage" means, for a specified group of
Eligible Employees for a Plan Year, the average of the Contribution Percentages
for such Eligible Employees for the Plan Year.
"Benefit Commencement Date" means, for any Participant or
beneficiary, the date as of which the first benefit payment, including a single
sum, from the Participant's Account is due, other than pursuant to a withdrawal
under Article VIII hereof.
"Board of Directors" means, unless otherwise specified, the board of
directors of the Company or a committee of the Board of Directors to which the
Board of Directors has delegated some or all of its responsibilities hereunder.
"Code" means the Internal Revenue Code of 1986, as it is presently
constituted, as it may be amended or any successor statute of similar purpose
and any regulations issued thereunder.
"Committee" or "Savings Plan Committee" means the individuals
appointed by the Board of Directors to supervise the administration of the Plan,
as provided in Article X hereof, or, if no such Committee is appointed, it shall
mean the Company.
"Company" means FPA Medical Management, Inc. and its successors.
"Compensation" means, for any Eligible Employee, for any Plan Year
or Limitation Year, as the case may be:
(a) For purposes of Sections 3.1, 3.4, and 3.5 hereof,
subject to the limitations set forth in Subsection (e) of this definition, an
Eligible Employee's total wages as reported in the box titled "Wages, tips,
other compensation" of Form W-2 (i.e., wages as defined in section 3401(a) of
the Code and all other payments of compensation for which the Participating
Company is required to furnish the employee a written statement under sections
6041(d) and 6051(a)(3) of the Code) from a Participating Company for such Plan
Year, reduced by any reimbursements or other expense allowances, fringe benefits
(cash and noncash), moving expenses, deferred compensation, and welfare
benefits, but including Salary Reduction Contributions and elective
contributions that are not includible in
4
<PAGE> 11
gross income under section 125, 402(e)(3), 402(h) or 403(b) of the Code.
(b) For the purposes of Article XIII and Section 3.10
hereof, subject to the limitations set forth in Subsection (e) of this
definition, total wages as reported in the box titled "Wages, tips, other
compensation" of Form W-2 (i.e., wages as defined in section 3401(a) of the Code
and all other payments of compensation for which the Participating Company is
required to furnish the employee a written statement under sections 6041(d) and
6051(a)(3) of the Code).
(c) For the purposes of the definitions of "Actual
Deferral Percentage" and "Contribution Percentage" in this Article (except as
otherwise provided in such definitions), and subject to the limitations set
forth in Subsection (e) of this definition, total wages as reported in the box
titled "Wages, tips, other compensation" of Form W-2 (i.e., wages as defined in
section 3401(a) of the Code and all other payments of compensation for which the
Participating Company is required to furnish the employee a written statement
under sections 6041(d) and 6051(a)(3) of the Code).
For the purpose of this Subsection (c), the Company may elect to
consider only compensation as defined above for that portion of the Plan Year
during which the Employee was an Eligible Employee, provided that this election
is applied uniformly to all Eligible Employees for the Plan Year.
(d) For the purpose of the definition of "Highly
Compensated Employee" in this Article (except as otherwise provided in such
definition), the Employee's total wages as reported in the box titled "Wages,
tips, other compensation" of Form W-2 (i.e., wages as defined in section 3401(a)
of the Code and all other payments of compensation for which the Participating
Company is required to furnish the employee a written statement under sections
6041(d) and 6051(a)(3) of the Code), but including amounts that are excluded
from gross income under section 125 (relating to cafeteria plans), 402(e)(3)
(relating to section 401(k) cash or deferred plans), 402(h)(1)(B) (relating to
simplified employee pensions) or 403(b) (relating to tax-deferred annuities) of
the Code, or a reasonable approximation thereof.
(e) With respect to any Plan Year, only compensation not
in excess of the amount to which the $200,000 (for Plan Years beginning before
January 1, 1994) or the $150,000 (for Plan Years beginning on or after January
1, 1994) limit of Code section 401(a)(17) has been indexed shall be taken into
account for purposes of Subsections (a), (b) and (c) of this definition, except
that this Subsection (e) shall not apply for purposes of Sections 3.10 and
13.2(c) hereof.
5
<PAGE> 12
"Contribution Percentage" means for any Eligible Employee for a
given Plan Year, the ratio of:
(a) the sum of
(1) such Eligible Employee's Matching Contributions for
the Plan Year (to the extent not included in such Eligible Employee's Actual
Deferral Percentage for such Plan Year), plus
(2) in the case of any Highly Compensated Eligible
Employee, any employee contributions and employer matching contributions,
including any elective deferrals recharacterized as employee contributions,
under any other qualified retirement plan, other than an employee stock
ownership plan as defined in section 4975(e)(7) of the Code or a tax credit
employee stock ownership plan, as defined in section 409(a) of the Code,
maintained by a Participating Company or any Affiliated Company.
(3) at the election of the Committee, any portion of the
Eligible Employee's Salary Reduction Contributions for the Plan Year or elective
deferrals under any other qualified retirement plan maintained by a
Participating Company or any Affiliated Company that may be disregarded without
causing this Plan or such other qualified retirement plan to fail to satisfy the
requirements of section 401(k)(3) of the Code; to
(b) the Eligible Employee's Compensation for the Plan
Year.
"Covered Employee" means any Employee who (a) is employed by a
Participating Company, (b) is not covered by a collective bargaining agreement,
unless such agreement specifically provides for participation hereunder, (c) is
not a nonresident alien who receives no compensation from sources within the
United States (within the meaning of section 861(a)(3) of the Code), (d) is not
covered by another tax-qualified profit sharing plan maintained by a
Participating Company, and (e) is not an independent contractor. An Employee who
is such solely by reason of being a leased employee shall not be a Covered
Employee.
"Effective Date" means for the Plan in effect prior to this
amendment and restatement January 1, 1994, and for this amended and restated
Plan "Effective Date" means January 1, 1997.
"Eligible Employee" means an Employee who has become an Eligible
Employee as set forth in Section 2.2 hereof, and who has remained a Covered
Employee at all times thereafter.
"Employee" means an individual who is employed by a Participating
Company or an Affiliated Company, except that any individual who is classified
by a Participating Company or an
6
<PAGE> 13
Affiliated Company as an independent contractor shall not be an Employee,
regardless of whether such individual qualifies as an "employee" under
employment tax laws, common-law or any other law; provided that in the event an
individual is recharacterized as qualifying as a common-law "employee," such
individual will have no entitlement to any accrued benefits under this Plan, but
shall be eligible to be credited with a Period of Service for vesting purposes
to the extent that such individual has been employed as a common-law "employee."
An individual who is not otherwise employed by a Participating Company or
Affiliated Company shall be deemed to be employed by such company if he is a
leased employee with respect to whose services such Participating Company or
Affiliated Company is the recipient within the meaning of section 414(n) or
414(o) of the Code, but to whom section 414(n)(5) of the Code does not apply.
"Employment Commencement Date" means, for any Employee, the date on
which he is first entitled to be credited with an "Hour of Service" described in
Paragraph (a)(1) of the definition of Hour of Service in this Article.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended, and any regulations issued thereunder.
"FPA Common Stock" means the common stock, $.002 par value per
share, of the Company or such other stock of the Company, which is "employer
securities" as defined in section 409(l) of the Code.
"Fund" means the fund established for this Plan, administered under
the Trust Agreement, out of which benefits payable under this Plan shall be
paid.
"Highly Compensated Eligible Employee" means an Eligible Employee
who is (or is treated as) a Highly Compensated Employee.
"Highly Compensated Employee" means an Employee who:
(a) is a 5-percent owner, as defined in section 416(i)
of the Code, at any time during the current or preceding Plan Year; or
(b) received more than $80,000 (as indexed) in
Compensation from a Participating Company or an Affiliated Company during the
preceding Plan Year. If elected by the Committee, a Highly Compensated Employee,
as determined pursuant to this Subsection (b), must also be among the top 20% of
Employees of all Participating Companies and Affiliated Companies ranked by
Compensation in the preceding Plan Year (excluding Employees described in
section 414(q)(8) of the Code to the extent (1) permitted under the Code and (2)
elected by the Committee, for purposes of identifying the number of Employees in
the top 20%).
7
<PAGE> 14
"Hour of Service" means, for any Employee, a credit awarded with
respect to:
(a) except as provided in Subsection (b) or (c),
(1) each hour for which he is directly or indirectly
paid or entitled to payment by a Participating Company or an Affiliated Company
for the performance of employment duties; or
(2) each hour for which he is entitled, either by award
or agreement, to back pay from a Participating Company or an Affiliated Company,
irrespective of mitigation of damages; or
(3) each hour for which he is directly or indirectly
paid or entitled to payment by a Participating Company or an Affiliated Company
on account of a period of time during which no duties are performed due to
vacation, holiday, illness, incapacity (including disability), jury duty,
layoff, leave of absence, or military duty.
(b) For any period that includes any hours for which an
Hour of Service would otherwise be credited to an Employee under Subsection (a),
above, the Committee may, in accordance with rules applied in a uniform and
non-discriminatory manner, elect instead to credit Hours of Service using one or
more of the following equivalencies:
Basis Upon Which Records Credit Granted to Individual
Are Maintained For Period
- ------------------------ ----------------------------
shift actual hours for full shift
day 10 Hours of Service
week 45 Hours of Service
semi-monthly period 95 Hours of Service
month 190 Hours of Service
(c) Anything to the contrary in Subsection (a) or (b)
notwithstanding:
(1) No Hours of Service shall be credited to an Employee
for any period merely because, during such period, payments are made or due him
under a plan maintained solely for the purpose of complying with applicable
workers' compensation, unemployment compensation, or disability insurance laws.
(2) No more than 501 Hours of Service shall be credited
to an Employee under Paragraph (a)(3) of this definition on account of any
single continuous period during which no duties are performed by him, except to
the extent otherwise provided in the Plan.
8
<PAGE> 15
(3) No Hours of Service shall be credited to an Employee
with respect to payments solely to reimburse for medical or medically related
expenses.
(4) No Hours of Service shall be credited twice.
(5) Hours of Service shall be credited at least as
liberally as required by the rules set forth in U.S. Department of Labor Reg.
Section 2530.200b-2(b) and (c).
(6) In the case of an Employee who is such solely by
reason of service as a leased employee within the meaning of section 414(n) or
414(o) of the Code, Hours of Service shall be credited as if such Employee were
employed and paid with respect to such service (or with respect to any related
absences or entitlements) by the Participating Company or Affiliated Company
that is the recipient thereof.
"Investment Medium" means any fund, contract, obligation, or other
mode of investment, including FPA Common Stock, to which a Participant may
direct the investment of the assets in his Account.
"Limitation Year" means the Plan Year.
"Matching Contributions" means the amounts, if any, contributed by
the Company pursuant to Section 3.4 hereof.
"Normal Retirement Age" means, for any Participant, the date on
which he attains Age 65.
"Normal Retirement Date" means, for any Participant, the first day
of the month coincident with or next following his attainment of Normal
Retirement Age.
"One-Year Period of Severance" means a 12-consecutive- month period
beginning on the date of the Employee's Separation from Service during which the
former Employee is credited with no Hours of Service.
"Participant" means an individual for whom one or more
Accounts are maintained under the Plan.
"Participating Company" means the Company and each other
organization which is authorized by the Board of Directors to adopt this Plan by
action of its board of directors or other governing body and any successor by
merger or any business organization that acquires a Participating Company's
business and adopts this Plan with the approval of the Board of Directors. Each
reference to the singular shall be deemed a reference to each such Participating
Company individually.
9
<PAGE> 16
"Payroll Period" means a weekly, bi-weekly, semi-monthly, or monthly
pay period or such other standard pay period of the Participating Company
applicable to the class of Employees of which the Eligible Employee is a part.
"Period of Service" means, with respect to any Employee, the period
of time commencing on the Employee's Employment Commencement Date and ending on
the date of the Employee's Separation from Service and, if applicable, the
period of time commencing on an Employee's Reemployment Commencement Date and
ending on the date of the Employee's subsequent Separation from Service.
"Period of Severance" means the period of time commencing on the
date of an Employee's Separation from Service and ending on the date on which
the Employee is again entitled to be credited with an Hour of Service.
"Plan" means the amended and restated FPA Medical Management, Inc.
401(k) Savings Plan, a profit sharing plan with a cash or deferred arrangement,
as set forth herein and as it may be further amended from time to time.
"Plan Year" means each 12-consecutive month period that begins on
each January 1st and ends on the next following December 31st.
"Predecessor Plan" means each of the tax-qualified defined
contribution plans identified on Appendix A, attached at the end hereof, which
have had their assets transferred to this Plan. Appendix A also contains special
provisions applicable to Participants who participated in such Predecessor
Plans.
"Profit Sharing Contributions" means the amounts, if any,
contributed by the Company pursuant to Section 3.5 hereof.
"Profit Sharing Participant" means an individual who has become a
Profit Sharing Participant as provided in Article II hereof and remained a
Covered Employee at all times thereafter.
"Qualified Domestic Relations Order" means a domestic relations
order (within the meaning of section 414(p)(1)(B) of the Code) which creates or
recognizes the existence of an Alternate Payee's rights to, or assigns to an
Alternate Payee the right to, receive all or a portion of the benefits payable
with respect to a Participant under the Plan, and is determined by the Committee
to satisfy the requirements of section 414(p) of the Code.
"Reemployment Commencement Date" means the first day following a
One-Year Period of Severance on which an Employee is entitled to be credited
with an Hour of Service described in
10
<PAGE> 17
Paragraph (a)(1) of the definition of "Hour of Service" in this Article.
"Required Beginning Date" means, for any Participant:
(a) if he is not a 5-percent owner (within the
meaning of section 416 of the Code) of a Participating Company at any time
during the five-Plan-Year period ending in the calendar year in which he
attained Age 70-1/2, or thereafter, April 1 of the calendar year following the
later of the calendar year in which he has a Separation from Service or the
calendar year in which he attained Age 70-1/2; or
(b) if he is a 5-percent owner (within the
meaning of section 416 of the Code) of a Participating Company at any time
during the five-Plan-Year period ending in the calendar year in which he
attained Age 70-1/2, or thereafter, the later of (1) April 1 of the calendar
year following the calendar year in which he attained Age 70-1/2 or (2) April 1
of the calendar year in which he becomes a 5-percent owner.
"Rollover Contributions" means, for any Participant, his rollover
contributions as provided in Section 7.1 hereof.
"Salary Reduction Contributions" means, for any Participant,
contributions on his behalf as provided in Section 3.1(a) hereof.
"Separation from Service" means, for any Employee, his death,
retirement, resignation, discharge or any absence that causes him to cease to be
an Employee.
"Severance from Service Date" means the date, as recorded on the
records of a Participating Company or an Affiliated Company, on which an
Employee of such company quits, retires, is discharged, or dies, or, if earlier,
the first anniversary of the first day of a period during which the Employee
remains absent from service with all Participating Companies and Affiliated
Companies (with or without pay) for any other reason, except:
(a) Solely for purposes of determining whether a One-Year
Period of Severance has occurred, if the Employee is absent from work beyond the
first anniversary of the first day on which he is absent by reason of pregnancy,
childbirth, or placement in connection with adoption, or for purposes of the
care of such Employee's child immediately after birth or placement in connection
with adoption, such Employee's Severance from Service Date shall be the second
anniversary of the first day of such absence; or
(b) If the Employee is absent for military service under
leave granted by the Participating Company or
11
<PAGE> 18
Affiliated Company or required by law, the Employee shall not be considered to
have a Separation from Service, provided the absent Employee returns to service
with the Participating Company or Affiliated Company within 90 days of his
release from active military duty or any longer period during which his right to
reemployment is protected by law.
"Spouse" means the person to whom a Participant is legally married
on any date of reference.
"Total Disability" means, with respect to any Participant, a
disability with respect to which he is eligible for and receiving benefits under
a long-term disability program sponsored by a Participating Company or an
Affiliated Company. If no such program is in effect for any Participant, then as
to him "Total Disability" means a disability of a potentially permanent
character that prevents a Participant from engaging in the occupation or
fulfilling the duties which he performed at the time of the occurrence of such
disability, excluding, in either case, disability resulting from:
(a) service in the Armed Forces or Merchant Marine of the
United States or any other country;
(b) warfare;
(c) willful participation in any criminal act;
(d) intentionally self-inflicted or self-incurred injury;
or
(e) use of drugs or narcotics contrary to law.
"Trust Agreement" means any agreement and declaration of trust
executed under this Plan.
"Trustee" means the corporate trustee or one or more individuals
collectively appointed and acting under the Trust Agreement.
"Valuation Date" means the date investments are valued and shall
occur on each business day on which the New York Stock Exchange is open for
business.
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ARTICLE II
TRANSITION AND ELIGIBILITY TO PARTICIPATE
2.1 Rights Affected and Preservation of Accrued Benefit. Except as
provided to the contrary herein, the provisions of this amended and restated
Plan shall apply only to Employees who complete an Hour of Service on or after
the Effective Date. The rights of any former Employee on the Effective Date
shall be governed by the Plan or any Predecessor Plan as in effect upon his
Severance from Service Date.
2.2 Eligibility to Participate - Salary Reduction Contributions.
(a) Each Covered Employee as of the Effective Date who was
eligible to participate in the Plan or in one of the Predecessor Plans
immediately prior to the Effective Date shall continue to be an Eligible
Employee as of the Effective Date.
(b) Each Covered Employee who was not eligible to
participate immediately prior to the Effective Date shall become an Eligible
Employee upon the first day of the Payroll Period coincident with or next
following the date he has completed thirty (30) days of service or the date he
would have become eligible to participate in a Predecessor Plan, if earlier.
(c) If an individual is not a Covered Employee on the date
he would otherwise become an Eligible Employee pursuant to Subsection (b) of
this Section , he shall become an Eligible Employee as of the first date
thereafter on which he is a Covered Employee.
(d) An Eligible Employee who ceases to be a Covered
Employee, by Separation from Service or otherwise, and who later becomes a
Covered Employee, shall become an Eligible Employee as of the date on which he
first again completes an Hour of Service as a Covered Employee.
2.3 Election to Make Salary Reduction Contributions. Each Eligible
Employee may elect to make Salary Reduction Contributions and become an active
Participant by providing notice of such election with the Committee in the form
and manner which the Committee determines to be appropriate for that purpose.
Such notice shall authorize the Participating Company to reduce such Eligible
Employee's Compensation by an amount determined in accordance with Section 3.1
and to make Salary Reduction Contributions on such Eligible Employee's behalf in
the amount of such reduction. Such election shall be effective as soon as
practicable following receipt of his election by the Committee.
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2.4 Participation in Matching Contributions.
(a) An Eligible Employee shall share in Matching
Contributions, if any, provided for under Section 3.4(a) hereof for any Plan
Year if Salary Reduction Contributions are made on his behalf in such Plan Year.
(b) An Eligible Employee shall share in Matching
Contributions, if any, provided for under Section 3.4(b) hereof for any Plan
Year if Salary Reduction Contributions are made on his behalf in such Plan Year
and he has completed 1,000 Hours of Service during the Plan Year and is a
Covered Employee on the last day of such Plan Year; provided, however, that no
Matching Contributions made pursuant to Section 3.4(b) hereof shall be allocated
to any Eligible Employee who (1) has had a Separation from Service during the
Plan Year, (2) has completed not more than 500 Hours of Service during such Plan
Year, and (3) is not an Employee on the last day of such Plan Year.
Notwithstanding the foregoing, an Eligible Employee who has had Salary Reduction
Contributions made on his behalf in any Plan Year shall share in Matching
Contributions, if any, under Section 3.4(b) hereof for such Plan Year, if,
during such Plan Year, he retires under Article V hereof, or dies, or suffers a
Total Disability.
2.5 Eligibility to Participate - Profit Sharing Contributions. Each
Covered Employee shall become a Profit Sharing Participant if and when he
becomes an Eligible Employee.
2.6 Participation in Profit Sharing Contributions. A Profit Sharing
Participant shall share in Profit Sharing Contributions, if any, under Section
3.5 hereof for any Plan Year during which he (a) completes at least 1,000 Hours
of Service, and (b) is a Covered Employee actively employed by a Participating
Company on the last day of the Plan Year. Notwithstanding the foregoing, a
Profit Sharing Participant shall share in Profit Sharing Contributions under
Section 3.5 hereof for any Plan Year in which he receives Compensation if,
during such Plan Year, he retires under Article V hereof, or dies, or suffers a
Total Disability.
2.7 Data. Each Eligible Employee shall furnish to the Committee such
data as the Committee may consider necessary for the determination of the
Eligible Employee's rights and benefits under the Plan and shall otherwise
cooperate fully with the Committee in the administration of the Plan.
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<PAGE> 21
ARTICLE III
CONTRIBUTIONS TO THE PLAN
3.1 Salary Reduction Contributions.
(a) When an Eligible Employee files an election under
Section 2.4 hereof to have Salary Reduction Contributions made on his behalf, he
shall elect the percentage by which his Compensation shall be reduced on account
of such Salary Reduction Contributions. Subject to Section 3.8 hereof, this
percentage may be between one percent (1%) and fifteen percent (15%) of such
Compensation, rounded to the nearer whole percent. The Participating Company
shall contribute an amount equal to such percentage of the Eligible Employee's
Compensation to the Fund for credit to the Eligible Employee's Salary Reduction
Account provided that such contributions may be prospectively limited as
provided in Section 3.9 hereof.
(b) Salary Reduction Contributions made on behalf of an
Eligible Employee under this Plan together with elective deferrals under any
other plan or arrangement maintained by any Participating Company or Affiliated
Company shall not exceed $9,500 (as adjusted in accordance with section 402(g)
of the Code) for any calendar year. To the extent necessary to satisfy this
limitation for any year:
(1) elections under Subsection (a) of this Section shall
be prospectively restricted; and,
(2) after application of Subparagraph (1), the excess
Salary Reduction Contributions and excess elective deferrals under any other
plan or arrangement maintained by any Participating Company or Affiliated
Company (with earnings thereon, but reduced by any amounts previously
distributed under Section 3.9 hereof for the year) shall be paid to the
Participant on or before the April 15 first following the calendar year in which
such contributions were made.
If the Salary Reduction Contributions plus elective deferrals described above do
not exceed such limitation, but Salary Reduction Contributions, plus the
elective deferrals, as defined in section 402(g)(3) of the Code, under any other
plan for any Participant exceed such limitation for any calendar year, upon the
written request of the Participant made on or before the March 1 first following
such calendar year, the excess, including any earnings attributable thereto,
designated by the Participant to be distributed from the Plan shall be paid to
the Participant on or before the April 15 first following such calendar year.
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3.2 Change of Percentage Rate. A Participant may without penalty
change the percentage of Compensation designated by him as his contribution rate
under Section 3.1(a) hereof, to any percentage permitted by that Section, and
such percentage shall remain in effect until so changed. Any such change shall
become effective as of the first day of the Payroll Period next following
receipt of the change by the Committee.
3.3 Discontinuance of Salary Reduction Contributions. A Participant
may discontinue his Salary Reduction Contributions at any time. Such
discontinuance shall become effective as of the first day of the Payroll Period
next following receipt of the discontinuance by the Committee. A Participant who
discontinues his Salary Reduction Contributions may resume his Salary
Reduction Contributions as of the first day of the Payroll Period next following
receipt by the Committee of a new election pursuant to Section 3.1 hereof.
3.4 Matching Contribution.
(a) Subject to Sections 3.8 and 3.10 hereof and within
thirty (30) days prior to the beginning of a Plan Year, the Company may
contribute to the Fund for such Plan Year a percentage from 0% to 100% of each
Participant's Salary Deferral Contributions as the Company shall determine in
its sole discretion, as a Matching Contribution, provided that such
contributions may be prospectively limited as provided in Section 3.9 hereof and
provided further that the Matching Contribution under this Subsection for any
Plan Year shall not cause the total contributions by the Company to exceed the
maximum allowable current deduction under the applicable provisions of the Code.
Matching Contributions made pursuant to this Subsection shall be credited to the
Matching Contribution Accounts of Participants determined in accordance with
Section 2.4(a) hereof in proportion to their Salary Reduction Contributions for
the Plan Year not in excess five percent (5%) of each such Participant's
Compensation.
(b) Within no more than thirty (30) days after the end of
a Plan Year and subject to Sections 3.8 and 3.10 hereof, the Company may
contribute to the Fund for such Plan Year such amount as the Company shall
determine, in its sole discretion, as a Matching Contribution, provided that
such Matching Contribution under this Subsection for any Plan Year shall not
cause the total contribution by the Company to exceed the maximum allowable
current deduction under the applicable provisions of the Code. Matching
Contributions made pursuant to this Subsection shall be credited to the Matching
Contribution Accounts of the Participants determined in accordance with Section
2.4(b) hereof in proportion to their Salary Reduction Contributions for the Plan
Year.
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<PAGE> 23
3.5 Profit Sharing Contribution.
(a) Each Participating Company shall contribute to the
Fund for each Plan Year such amount as it shall determine in its sole discretion
as of the close of the Participating Company's fiscal year, provided that the
contribution under this Subsection for any Plan Year shall not cause the total
contributions by the Company to exceed the maximum allowable current deduction
under the applicable provisions of the Code. Such contributions shall be
allocated to the Profit Sharing Accounts of Profit Sharing Participants eligible
to share in Profit Sharing Contributions in accordance with Section 2.6 hereof
in proportion to their Compensation for the Plan Year.
(c) Except with respect to tax deductibility, the Profit
Sharing Contribution for any Plan Year shall include both the amount contributed
by the Company for such Plan Year and the amount of Profit Sharing Contributions
forfeited during such Plan Year.
3.6 Timing and Deductibility of Contributions. Profit Sharing and
Matching Contributions for any Plan Year under this Article shall be made no
later than the last date on which amounts so paid may be deducted for Federal
income tax purposes for the taxable year of the employer in which the Plan Year
ends. All contributions to the Plan are expressly conditioned upon their
deductibility for Federal income tax purposes. Amounts contributed as Salary
Reduction Contributions, or Rollover Contributions, will be remitted to the
Trustee as soon as practicable, but no later than the 15th business day
following the end of the month in which such contributions were received or
withheld from the Participant's Compensation.
3.7 Fund. The contributions deposited by the Company in the Fund in
accordance with this Article shall constitute a fund held for the benefit of
Participants and their eligible beneficiaries under and in accordance with this
Plan. No part of the principal or income of the Fund shall be used for, or
diverted to, purposes other than for the exclusive benefit of Participants and
their eligible beneficiaries (including necessary administrative costs);
provided, that (a) in the case of a contribution made by the Company as a
mistake of fact, or for which a tax deduction is disallowed, in whole or in
part, by the Internal Revenue Service, the Company shall be entitled to a refund
of said contributions, which must be made within one year after payment of a
contribution made as a mistake of fact, or within one year after disallowance of
the tax deduction, to the extent of such disallowance, and (b) in the case of
contributions made by the Company which are conditioned on the initial
qualification of the Plan under section 401 of the Code, if the Plan is the
subject of an adverse determination with respect to its initial qualification,
then the Company shall be entitled to a refund of said contributions, but only
if the application for the determination is
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<PAGE> 24
made by the time prescribed by law for filing the Company's federal income tax
return for the taxable year in which the Plan is adopted or such later date as
may be permitted by applicable Treasury regulation or other applicable
administrative pronouncements.
3.8 Limitation on Salary Reduction Contributions and Matching
Contributions.
(a) For any Plan Year, the Average Actual Deferral
Percentage for the Highly Compensated Eligible Employees shall not exceed the
greater of:
(1) one hundred twenty-five percent (125%) of the
Average Actual Deferral Percentage for all other Eligible Employees in the
immediately prior Plan Year; or
(2) the lesser of:
(A) two hundred percent (200%) of the Average
Actual Deferral Percentage for all other Eligible Employees in the immediately
prior Plan Year; or
(B) two percent (2%) plus the Average Actual
Deferral Percentage for all other Eligible Employees for the immediately prior
Plan Year.
(3) At the election of the Company, the Average Actual
Deferral Percentage for Eligible Employees other than Highly Compensated
Eligible can be determined for the current Plan Year rather than the immediately
prior Plan Year. Once this election is made, it can be changed only with the
approval of the Internal Revenue Service.
(b) For any Plan Year, the Average Contribution Percentage
for the Highly Compensated Eligible Employees shall not exceed the greater of:
(1) one hundred twenty-five (125%) of the Average
Contribution Percentage for all other Eligible Employees for the immediately
prior Plan Year; or
(2) the lesser of:
(A) two hundred percent (200%) of the Average
Contribution Percentage for all other Eligible Employees the immediately prior
Plan Year; or
(B) two percent (2%) plus the Average Contribution
Percentage for all other Eligible Employees the immediately prior Plan Year.
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<PAGE> 25
(3) At the election of the Company, the Average
Contribution Percentage for Eligible Employees other than Highly Compensated
Eligible can be determined for the current Plan Year rather than the immediately
prior Plan Year. Once this election is made, it can be changed only with the
approval of the Internal Revenue Service.
(c) For any Plan Year, the sum of the Average Actual
Deferral Percentage and the Average Contribution Percentage for the Highly
Compensated Eligible Employees shall not exceed the greater of:
(1) the sum of:
(A) one hundred twenty-five percent (125%) of the
greater of the Average Actual Deferral Percentage or the Average Contribution
Percentage for all other Eligible Employees for the immediately prior Plan Year;
plus
(B) the lesser of:
(i) two hundred percent (200%) of the lesser
of the Average Actual Deferral Percentage or the Average Contribution Percentage
for all other Eligible Employees for the immediately prior Plan Year; or
(ii) two percent (2%) plus the lesser of the
Average Actual Deferral Percentage or the Average Contribution Percentage for
all other Eligible Employees for the immediately prior Plan Year; or
(2) the sum of:
(A) one hundred twenty-five percent (125%) of the
lesser of the Average Actual Deferral Percentage or the Average Contribution
Percentage for all other Eligible Employees for the immediately prior Plan Year;
plus
(B) the lesser of:
(i) two hundred percent (200%) of the
greater of the Average Actual Deferral Percentage or the Average Contribution
Percentage for all other Eligible Employees for the immediately prior Plan Year;
or
(ii) two percent (2%) plus the greater of
the Average Actual Deferral Percentage or the Average Contribution Percentage
for all other Eligible Employees for the immediately prior Plan Year.
(b) If the Plan and any other plan(s) maintained by a
Participating Company or an Affiliated Company are
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<PAGE> 26
treated as a single plan for purposes of section 401(a)(4) or section 410(b) of
the Code, the limitations in Subsections (a) through (d) of this Section shall
be applied by treating the Plan and such other plan(s) as a single plan.
(c) The application of this Section shall satisfy sections
401(k) and 401(m) of the Code and such other requirements as may be prescribed
by the Secretary of the Treasury.
3.9 Prevention of Violation of Limitation on Salary Reduction
Contributions and Matching Contributions. The Committee shall monitor the level
of Participants' Salary Reduction Contributions and Matching Contributions and
elective deferrals, employee contributions, and employer matching contributions
under any other qualified retirement plan maintained by a Participating Company
or any Affiliated Company to insure against exceeding the limits of Section 3.8
hereof. To the extent practicable, the Committee may prospectively limit (i)
some or all of the Highly Compensated Eligible Employees' Salary Reduction
Contributions to reduce the Average Actual Deferral Percentage of the Highly
Compensated Eligible Employees to the extent necessary to satisfy Section 3.8(a)
hereof, and/or (ii) some or all of the Highly Compensated Eligible Employees'
Matching Contributions to reduce the Average Contribution Percentage of the
Highly Compensated Eligible Employees to the extent necessary to satisfy Section
3.8(b) hereof, and/or (iii) some or all of the Highly Compensated Eligible
Employees' Salary Reduction Contributions, and Matching Contributions to the
extent necessary to satisfy Section 3.8(c) hereof. If the Committee determines
after the end of the Plan Year that the limits of Section 3.8 hereof may be or
have been exceeded, it shall take the appropriate following action for such Plan
Year:
(a) (1) (A) The Average Actual Deferral Percentage for the
Highly Compensated Eligible Employees shall be reduced to the extent necessary
to satisfy Section 3.8(a) hereof.
(B) The reduction shall be accomplished by
reducing the maximum Salary Reduction Contribution for any Highly Compensated
Eligible Employee to an adjusted maximum Salary Reduction Contribution, which
shall be the highest Salary Reduction Contribution that would cause one of the
tests in section 3.8(a) hereof to be satisfied, if each Highly Compensated
Eligible Employee with a higher Salary Reduction Contribution had instead made
the adjusted maximum Salary Reduction Contribution, reducing the Highly
Compensated Eligible Employee's Salary Reduction Contributions and elective
deferrals under any other qualified retirement plan maintained by a
Participating Company or any Affiliated Company (less any amounts previously
distributed under Section 3.1 hereof for the year) in order, beginning with the
Highly Compensated Eligible Employee(s) with the greatest Salary Reduction
Contributions.
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(C) Not later than the end of the Plan Year
following the close of the Plan Year for which the Salary Reduction
Contributions were made, the difference between a Highly Compensated Eligible
Employee's actual Salary Reduction Contribution and the Highly Compensated
Eligible Employee's adjusted maximum Salary Reduction Contribution shall be paid
to the Highly Compensated Eligible Employee, with earnings attributable thereto
(as determined in accordance with applicable Treasury Regulations); provided,
however, that for any Participant who is also a participant in any other
qualified retirement plan maintained by a Participating Company or any
Affiliated Company under which the Participant makes elective deferrals for such
year, the Committee shall coordinate corrective actions under this Plan and such
other plan for the year.
(3) In lieu of or in addition to the action described in
Section 3.9(a)(1) hereof, the Company may, in its sole discretion, make:
(A) a Profit Sharing Contribution under Section
3.8 hereof, which contribution shall be allocated pro rata based on Compensation
among the Profit Sharing Accounts of only those Profit Sharing Participants who
are not Highly Compensated Eligible Employees; and/or
(B) a Matching Contribution under Section 3.4
hereof, which contribution shall be allocated pro rata based on Salary Reduction
Contributions among the Matching Contribution Accounts of only those Eligible
Employees who are not Highly Compensated Eligible Employees,
in an amount necessary to satisfy at least one of the tests in Section 3.8(a)
hereof. Profit Sharing and Matching Contributions made pursuant to this
Subsection (a)(3) shall be accounted for separately, shall be 100%
nonforfeitable and shall not be eligible for withdrawal under Article VIII
hereof prior to the Participant's attainment of Age 59-1/2.
(b) (1) (A) The Average Contribution Percentage for the
Highly Compensated Eligible Employees shall be reduced to the extent necessary
to satisfy at least one of the tests in Section 3.8(b) hereof.
(B) The reduction shall be accomplished by
reducing the maximum Matching Contribution for any Highly Compensated Eligible
Employee to an adjusted maximum Matching Contribution, which shall be the
highest Matching Contribution that would cause one of the tests in Section
3.8(b) hereof to be satisfied, if each Highly Compensated Eligible Employee with
a higher Matching Contribution had instead the adjusted maximum Matching
Contribution, reducing, in the following order of
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priority, the Highly Compensated Eligible Employees' Matching Contributions and
employee contributions and employer matching contributions under any other
qualified retirement plan maintained by a Participating Company or an Affiliated
Company, in order beginning with the Highly Compensated Eligible Employee(s)
with the highest Matching Contribution.
(C) Not later than the end of the Plan Year
following the close of the Plan Year for which such contributions were made, the
difference between a Highly Compensated Eligible Employee's Matching
Contribution and the Highly Compensated Eligible Employee's adjusted maximum
Matching Contribution, with earnings attributable thereto (as determined in
accordance with applicable Treasury Regulations), at the Committee's direction,
shall be treated as a forfeiture of the Highly Compensated Eligible Employee's
Matching Contribution for the Plan Year to the extent such contributions are
forfeitable (which forfeiture shall be used to reduce future Matching
Contributions), or paid to the Highly Compensated Eligible Employee to the
extent such contributions are nonforfeitable; provided, however, that, for any
Participant who is also a participant in any other qualified retirement plan
maintained by a Participating Company or any Affiliated Company under which the
Participant makes employee contributions or is credited with employer matching
contributions for the year, the Committee shall coordinate corrective actions
under this Plan and such other plan for the year.
(2) In lieu of or in addition to the action described in
this Section 3.9(b)(1), the Company may, in its sole discretion, make:
(A) a Profit Sharing Contribution under Section
3.5 hereof which contribution shall be allocated pro rata based on Compensation
among the Profit Sharing Accounts of only those Profit Sharing Participants who
are not Highly Compensated Eligible Employees; and/or
(B) a Matching Contribution under Section 3.4
hereof, which contribution shall be allocated pro rata based on Salary Reduction
Contributions among the Matching Contribution Accounts of only those Eligible
Employees who are not Highly Compensated Eligible Employees, in an amount
necessary to satisfy at least one of the tests in Section 3.8(b) hereof. Profit
Sharing and Matching Contributions made pursuant to this Subsection (b)(2) shall
be accounted for separately, shall be 100% nonforfeitable, and
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<PAGE> 29
shall not be eligible for withdrawal under Article VIII hereof prior to the
Participant's attainment of Age 59-1/2.
(c) (1) The Average Contribution Percentage and/or the
Average Actual Deferral Percentage (as determined under Subsection (2) below)
for the Highly Compensated Eligible Employees shall be reduced to satisfy the
test in Section 3.8(c), in a manner and to the extent determined by the
Committee.
(2) The reduction(s) shall be accomplished in the same
manner as is set forth in Subsections (a) and (b) of Section 3.8, whichever is
appropriate. A reduction to the Average Actual Deferral Percentage shall be
charged against the appropriate Highly Compensated Eligible Employees' Salary
Reduction Accounts. A reduction to the Average Contribution Percentage shall be
charged against the appropriate Highly Compensated Eligible Employees' Matching
Contribution Accounts. Notwithstanding the foregoing, for any Participant who is
also a participant in any other qualified retirement plan maintained by a
Participating Company or any Affiliated Company under which the Participant
makes employee contributions or elective deferrals or is credited with employer
matching contributions for such year, the Committee shall coordinate corrective
actions under this Plan and such other plan for the year.
(d) If the corrective payment to a Highly Compensated
Eligible Employee of his Salary Reduction Contributions pursuant to Subparagraph
(a)(1)(C) or Subsection (c) of this Section causes Matching Contributions made
on his behalf for the Plan Year (excluding such Matching Contributions that were
forfeited or paid to the Participant pursuant to Subsection (b)(2) or Subsection
(c) of this Section ) to exceed one hundred percent (100%) of his remaining
Salary Reduction Contributions for the Plan Year, the Matching Contributions in
excess of one hundred percent (100%) of his Salary Reduction Contributions for
the Plan Year that were not distributed to him shall be forfeited, and used to
offset future Matching Contributions.
(e) If the Plan and any other plan maintained by a
Participating Company or an Affiliated Company are treated as a single plan
pursuant to Section 3.8 hereof, the Committee shall coordinate corrective
actions under the Plan and such other plan for the year.
3.10 Maximum Allocation. The provisions of this Section 3.10 shall
be construed to comply with section 415 of the Code.
(a) Notwithstanding anything in this Plan to the contrary,
in no event shall the sum of:
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(1) any Matching Contributions, Profit Sharing
Contributions, Salary Reduction Contributions and other employer contributions;
any forfeitures, and any employee contributions allocated for any Limitation
Year to any Participant (including any such amounts distributed pursuant to
Section 3.9 hereof, but not amounts distributed pursuant to Section 3.1(b)
hereof under this and any other defined contribution plan maintained by the
Participating Company or any 50% Affiliated Company; and
(2) all amounts allocated to any Participant after March
31, 1984, to an individual medical account (within the meaning of Code section
415(l)(2)) which is part of a pension or annuity plan maintained by a
Participating Company or any 50% Affiliated Company; and
(3) all 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 a 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 maintained by a Participating Company
or any 50% Affiliated Company;
exceed the lesser of $30,000, (or such other dollar limitation in effect for the
Limitation Year under section 415(c)(1)(A) of the Code) or twenty-five percent
(25%) of such Participant's Compensation for the Limitation Year. The 25%
Compensation limitation shall not apply to any contribution for medical benefits
(within the meaning of section 401(h) or 419A(f)(2) of the Code) which is
otherwise treated as an annual addition under section 415(l)(1) or 419A(d)(2) of
the Code.
(b) If the amount otherwise allocable to the Account of a
Participant would exceed the amount described in Subsection (a) of this Section
as a result of the reallocation of forfeitures, a reasonable error in estimating
the Participant's Compensation, a reasonable error in determining the amount of
Salary Reduction Contributions that may be made with respect to a Participant
under the limits of this Section, or such other circumstances as permitted by
law, the Committee shall determine which portion, if any, of such excess amount
is attributable to the Participant's Salary Reduction Contributions, Matching
Contributions, if any, and/or Profit Sharing Contributions, if any, until such
amount has been exhausted, and shall take the following appropriate steps to
correct such violation:
(1) Excess Salary Reduction Contributions and earnings
thereon shall be paid to the Participant as soon as is administratively
feasible.
(2) (A) While the Participant remains a Covered
Employee, his excess Matching Contributions and Profit
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Sharing Contributions shall be held in a suspense account (which shall share in
investment gains and losses of the Fund) by the Trustee until the following Plan
Year (or any succeeding Plan Years), at which time such amounts shall be
allocated to the Participant's Account before any Matching Contributions or
Profit Sharing Contributions, as appropriate, are made on his behalf for such
Plan Year; and
(B) When the Participant ceases to be a Covered
Employee, his excess Matching Contributions and Profit Sharing Contributions,
along with earnings thereon, held in the suspense account shall be allocated in
the following Plan Year (or any succeeding Plan Years) to the Accounts of other
Participants in the Plan.
(c) If, in any Limitation Year, a Participant in this Plan
is also a participant in one or more defined benefit plans maintained by the
Participating Company or any 50% Affiliated Company, the projected annual
benefit referred to in Subsection (c)(1) shall be reduced, if necessary, so that
the sum of the fractions described in (1) and (2) does not exceed 1.0 for such
Limitation Year.
(1) Defined Benefit Fraction - a fraction, the numerator
of which is the Participant's projected annual benefit under all such defined
benefit pension plans determined as of the close of the limitation years of such
plans, and the denominator of which is the lesser of:
(A) 1.25 x $90,000 (or such other dollar
limitation determined for the Limitation Year under section 415(b)(1)(A) of the
Code); or
(B) one hundred forty percent (140%) of the
Participant's highest average Compensation over any three consecutive calendar
years;
provided, however, that the denominator of the defined benefit fraction shall be
determined after taking into account any adjustments to the dollar limit
described in Subparagraph (A) or to the compensation limit described in
Subparagraph (B) prescribed by section 415(b) or 415(d) of the Code, as
appropriate. For the purpose of this Subsection (c)(1), "projected annual
benefit" means the annual benefit to which a Participant would be entitled under
the terms of a defined benefit plan if he had continued employment until his
normal retirement date under such plan and if his compensation counted for the
purpose of such plan had continued at the same rate.
(2) Defined Contribution Fraction - a fraction, the
numerator of which is the sum of the annual additions to the Participant's
accounts under all defined contribution plans
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<PAGE> 32
sponsored by the Participating Company or any 50% Affiliated Company for all
limitation years, and the denominator of which is the sum of the lesser of the
following amounts, determined for each of such limitation years and for each
prior limitation year of service with the Participating Company or 50%
Affiliated Company:
(A) 1.25 x $30,000 (or such other dollar
limitation in effect for the Limitation Year under section 415(c)(1)(A) of the
Code); or
(B) thirty-five percent (35%) of the Participant's
Compensation for such limitation year.
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ARTICLE IV
PARTICIPANTS' ACCOUNTS
4.1 Accounts. All contributions and earnings thereon may be invested
in one commingled Fund for the benefit of all Participants. However, in order
that the interest of each Participant may be accurately determined and computed,
separate Accounts shall be maintained for each Participant and each
Participant's Accounts shall be made up of subaccounts reflecting his investment
elections pursuant to Section 11.5 hereof. These Accounts shall represent the
Participant's individual interest in the Fund. All contributions shall be
credited to Participants' Accounts as set forth in Article III hereof.
4.2 Valuation. The value of each Investment Medium in the Fund shall
be computed by the Trustee as of the close of business on each Valuation Date on
the basis of the fair market value of the assets of the Fund.
4.3 Apportionment of Gain or Loss. The value of each Investment
Medium in the Fund, as computed pursuant to Section 4.2 hereof, shall be
compared with the value of such Investment Medium in the Fund as of the
preceding Valuation Date. Any difference in the value, not including
contributions or distributions made since the preceding Valuation Date, shall be
the net increase or decrease of such Investment Medium in the Fund, and such
amount shall be ratably apportioned by the Trustee on its books, among the
Participants' Accounts which are invested in such Investment Medium at the
current Valuation Date.
4.4 Accounting for Allocations. The Committee shall establish or
provide for the establishment of accounting procedures for the purpose of making
the allocations, valuations and adjustments to Participants' Accounts provided
for in this Article. From time to time such procedures may be modified for the
purpose of achieving equitable and non-discriminatory allocations among the
Accounts of Participants in accordance with the general concepts of the Plan and
the provisions of this Article.
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ARTICLE V
DISTRIBUTION
5.1 General. The interest of each Participant in the Fund shall be
distributed in the manner, in the amount, and at the time provided in this
Article, except as provided in Article VIII hereof and except in the event of
the termination of the Plan. The provisions of this Article shall be construed
in accordance with section 401(a)(9) of the Code, including the incidental death
benefit requirements of section 401(a)(9)(G) of the Code.
5.2 Separation from Service. A Participant who attains a Severance
from Service Date for reasons other than death or Total Disability shall have
his nonforfeitable interest in his Account paid to him or applied for his
benefit in accordance with the provisions of this Article.
5.3 Death. If a Participant dies before his entire nonforfeitable
interest in his Account has been paid to him, his remaining nonforfeitable
interest shall be paid to, or applied for the benefit of, his beneficiary in
accordance with the provisions of this Article.
5.4 Total Disability.
(a) If a Participant who is an Employee suffers a Total
Disability and attains a Severance from Service Date due to his Total
Disability, his Account shall be paid to him or applied for his benefit in
accordance with the provisions of this Article following the determination of
his Total Disability and his Separation from Service.
(b) Total Disability shall be determined by the Committee,
which may consult with a medical examiner selected by it. The medical examiner
shall have the right to make such physical examinations and other investigations
as may be reasonably required to determine Total Disability.
5.5 Valuation for Distribution. For the purposes of paying the
amounts to be distributed to a Participant or his beneficiaries under the
provisions of this Article, the value of the Fund and the amount of the
Participant's nonforfeitable interest shall be determined in accordance with the
provisions of Article IV hereof as of the Valuation Date immediately preceding
the date of any payment under this Article. Such amount shall be adjusted to
take into account any additional contributions and forfeitures, if any, which
have been or are to be allocated to the Participant's Account since that
Valuation Date, and any distributions or withdrawals made since that date.
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Notwithstanding the above, the Participant's Account shall be reduced by the
amount necessary to repay any outstanding loan from the Plan and interest
thereon to the date the Committee declares such loan satisfied, unless such loan
is repaid as provided in Section 9.4(e) hereof.
5.6 Timing of Distribution.
(a) Any Participant who attains a Severance from Service
Date for any reason other than death shall be entitled to receive his
nonforfeitable interest in his Account, pursuant to the following rules:
(1) Except as provided in Subsection (a)(2) hereof, if
the Participant's nonforfeitable interest in his Account is $3,500 or less, or
the Participant has attained Normal Retirement Age, the Participant's Benefit
Commencement Date shall be the earliest practicable Valuation Date following his
Severance from Service Date.
(2) If the Participant has not attained Normal
Retirement Age and his nonforfeitable interest exceeds, or has ever exceeded at
the time of any prior distribution, $3,500, his Benefit Commencement Date shall
be the earliest practicable Valuation Date following his Severance from Service
Date, except that, if the Participant does not consent to such distribution,
distribution of his benefits shall commence on any later date elected by the
Participant, that is not later than his Normal Retirement Date, at which time
his nonforfeitable interest shall be automatically paid to him. A Participant's
election to receive payment prior to his Normal Retirement Date may be made no
earlier than 90 days prior to the Benefit Commencement Date elected by the
Participant.
(3) The Committee shall inform each Participant who is
subject to Subsection (a)(2) of his right to defer distribution. Such notice
shall be furnished not less than 30 days nor more than 90 days prior to the date
of any distribution that occurs prior to his Normal Retirement Date, except that
such notice may be furnished less than 30 days prior to the date of distribution
if (1) the Committee informs the Participant that the Participant has the right
to a period of at least 30 days after receiving such notice to consider the
decision whether to elect a distribution and if applicable, the mode in which he
desires such distribution to be made, and (2) the Participant, after receiving
such notice, affirmatively elects a distribution.
(4) Notwithstanding the foregoing, the Participant's
Benefit Commencement Date shall be no later than the 60th day following the
close of the Plan Year in which the Participant attains his Normal Retirement
Age or has a Separation from Service, whichever occurs last. In no event,
however, shall a Participant's Benefit Commencement Date be later than his
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<PAGE> 36
Required Beginning Date. In the event the Participant defaults on an outstanding
loan such that the unpaid balance becomes due and payable pursuant to Article IX
hereof and the Participant fails to repay the loan in accordance with Section
9.4(e) hereof, that portion of the Participant's Account pledged as security for
the loan shall be applied to repay the loan and shall be deemed distributed to
the Participant within 60 days of the default; in which case, the Participant
may defer commencement of the balance of his Account as described above.
(b) If a Participant dies before his entire nonforfeitable
interest in his Account has been paid to him, his remaining nonforfeitable
interest shall be distributed to his beneficiary commencing as soon as
practicable following the Participant's death, unless the beneficiary is the
Participant's spouse, in which case not beyond December 31 of the later of (1)
the calendar year containing the fifth anniversary of the Participant's death or
(2) the calendar year in which the Participant would have attained Age 70-1/2.
5.7 Mode of Distribution.
(a) Except as provided to the contrary in Section 5.11
hereof a Participant shall have his Account paid to him, and benefits payable
under Section 5.3 hereof upon the death of a Participant shall be distributed,
in a single sum payment in cash, in kind, or part in cash and part in kind.
(b) If a Participant has not attained a Severance from
Service Date as of his Required Beginning Date, he may elect to receive
distribution of his Account while he remains employed, commencing not later than
his Required Beginning Date, over a period certain not extending beyond the life
expectancy of the Participant or the life expectancy of the Participant and his
spouse. Notwithstanding the Participant's election to receive distribution as
described above, the portion of the Participant's nonforfeitable interest
remaining upon his actual Severance from Service Date will be distributed to him
in a single sum on the earliest practicable date following the Valuation Date
coincident with or next following his Severance from Service Date, but not later
than the 60th day after the close of the Plan Year in which his Severance from
Service Date occurs.
(c) Benefits payable under Section 5.3 hereof upon the
death of a Participant shall be distributed in a single sum payment.
Notwithstanding the foregoing, in the event that the Participant's death
constitutes a default on an outstanding loan such that the unpaid balance
becomes due and payable pursuant to Article IX hereof and the beneficiary fails
to repay the loan in accordance with Section 9.4(e) hereof, that portion of the
Participant's Account pledged as security for the loan shall be applied to repay
the loan; in which case, the beneficiary may elect
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<PAGE> 37
to receive the balance of the Participant's Account in accordance with this
Subsection.
5.8 Beneficiary Designation.
(a) Except as provided in this Section and in Section 5.11
hereof, a Participant may designate the beneficiary or beneficiaries who shall
receive, on or after his death, his interest in the Fund. Such designation shall
be made by executing and filing with the Committee a written instrument in such
form as may be prescribed by the Committee for that purpose. Except as provided
in this Section and Section 5.11 hereof, the Participant may also revoke or
change, at any time and from time to time, any beneficiary designations
previously made. Such revocations and/or changes shall be made by executing and
filing with the Committee a written instrument in such form as may be prescribed
by the Committee for that purpose. If a Participant names a trust as
beneficiary, a change in the identity of the trustees or in the instrument
governing such trust shall not be deemed a change in beneficiary.
(b) No designation, revocation, or change of beneficiaries
shall be valid and effective unless and until filed with the Committee.
(c) A Participant who does not establish to the
satisfaction of the Committee that he has no spouse may not designate someone
other than his spouse to be his beneficiary unless:
(1) (A) such spouse (or the spouse's legal guardian if
the spouse is legally incompetent) executes a written instrument whereby such
spouse consents not to receive such benefit and consents either:
(i) to the specific beneficiary or
beneficiaries designated by the Participant; or
(ii) to the Participant's right to designate
any beneficiary without further consent by the spouse;
(B) such instrument acknowledges the effect of the
election to which the spouse's consent is being given; and
(C) such instrument is witnessed by a Plan
representative or notary public;
(2) the Participant:
(A) establishes to the satisfaction of the
Committee that his spouse cannot be located; or
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<PAGE> 38
(B) furnishes a court order to the Committee
establishing that the Participant is legally separated or has been abandoned
(within the meaning of local law), unless a qualified domestic relations order
pertaining to such Participant provides that the spouse's consent must be
obtained; or
(3) the spouse has previously given consent in
accordance with this Subsection and consented to the Participant's right to
designate any beneficiary without further consent by the spouse.
The consent of a spouse in accordance with this Subsection (c) shall not be
effective with respect to other spouses of the Participant prior to the
Participant's Benefit Commencement Date, and an election to which Subsection
(c)(2) applies shall become void if the circumstances causing the consent of the
spouse not to be required no longer exist prior to the Participant's Benefit
Commencement Date.
(d) If a Participant has no beneficiary under Subsection
(a) of this Section, if the Participant's beneficiary(ies) predecease the
Participant, or if the beneficiary(ies) cannot be located by the Committee, the
interest of the deceased Participant shall be paid to the Participant's estate.
5.9 Recalculation of Life Expectancy. If pursuant to Section 5.11
hereof, a Participant's Account is payable over the life expectancy of the
Participant and/or his spouse and/or another beneficiary, the applicable life
expectancy shall not be recalculated after the Benefit Commencement Date.
5.10 Transfer of Account to Other Plan.
(a) If (1) a Participant entitled to receive a
distribution from the Plan, either pursuant to this Article or pursuant to
Article VIII hereof, or (2) the spouse or former spouse of a Participant who is
entitled to receive a distribution from the Plan pursuant to a qualified
domestic relations order, directs the Committee to have the Trustee transfer all
or a portion (not less than $500) of the amount to be distributed directly to:
(1) an individual retirement account described in
section 408(a) of the Code,
(2) an individual retirement annuity described in
section 408(b) of the Code (other than an endowment contract),
(3) a qualified defined contribution retirement plan
described in section 401(a) of the Code the terms of which permit the acceptance
of rollover contributions, or
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(4) an annuity plan described in section 403(a),
all or a portion (not less than $500) of the amount to be distributed shall be
so transferred.
(b) In addition, if a Participant's surviving spouse is
entitled to receive a distribution from the Plan under Section 5.3 hereof, and
such surviving spouse directs the Committee to have the Trustee transfer all or
a portion (not less than $500) of the amount to be distributed directly to:
(1) an individual retirement account described in
section 408(a) of the Code, or
(2) an individual retirement annuity described in
section 408(b) of the Code (other than an endowment contract),
all or a portion (not less than $500) of the amount to be distributed shall be
so transferred.
(c) The Participant, spouse or former spouse must specify
the name of the plan to which the Participant, spouse or former spouse wishes to
have the amount transferred, plus such other information as may be requested by
the Committee, on a form and in a manner prescribed by the Committee.
(d) Subsections (a) and (b) hereof shall not apply to the
following distributions:
(1) any distribution which is one of a series of
substantially equal payments (not less frequently than annually) over either (1)
a period of 10 years or more, or (2) a period equal to the life or life
expectancy of the Participant or the joint lives or joint life expectancy of the
Participant and his beneficiary, or
(2) any distribution if the total distributions paid or
payable from the Plan to the same individual during the same calendar year are
reasonably expected by the Committee to be less than $200,
(3) that portion of any distribution after the
Participant's Required Beginning Date that is required to be distributed to the
Participant by the minimum distribution rules of section 401(a)(9) of the Code,
or
(4) such other distributions as may be exempted by
applicable statute or regulation from the requirements of section 401(a)(31) of
the Code.
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5.11 Transfers from Certain Plans. With respect to the Transfer
Account of any Participant to whom the Plan is a transferee from a defined
benefit or defined contribution plan, other than a Predecessor Plan, with modes
of distribution other than a single sum payment, the provisions of this Section
shall supersede the prior provisions of this Article.
(a) (1) The normal mode of payment for a Participant whose
nonforfeitable interest in his Account exceeds (or has exceeded at the time of
any prior distribution) $3,500 and who does not establish to the satisfaction of
the Committee that he has no spouse as of his Benefit Commencement Date shall be
a joint and survivor annuity that is the actuarial equivalent of the
Participant's Transfer Account, with monthly installments payable after the
death of the retired Participant to his surviving spouse, if he leaves one, for
the life of such surviving spouse in an amount equal to fifty percent (50%) of
the benefit paid to the retired Participant during his life.
(2) The normal mode of payment for a Participant whose
nonforfeitable interest in his Account exceeds (or has exceeded at the time of
any prior distribution) $3,500 and who establishes to the satisfaction of the
Committee that he has no spouse as of his Benefit Commencement Date shall be a
single life annuity that is the Actuarial Equivalent of his Transfer Account
with equal monthly installments payable to the retired Participant for his
lifetime.
(3) Except as provided in Subsections (1) and (2) above,
the normal mode of payment to a Participant whose nonforfeitable interest in his
Account does not exceed $3,500 as of his Benefit Commencement Date shall be a
single sum payment of his entire interest in his Transfer Account.
(b) A Participant whose nonforfeitable interest in his
Account exceeds (or has exceeded at the time of any prior distribution) $3,500
and who does not establish to the satisfaction of the Committee that he has no
spouse on his Benefit Commencement Date may elect to receive an optional mode of
payment under Section 5.7 hereof:
(1) (A) his spouse (or the spouse's legal guardian if
the spouse is legally incompetent) executes a written instrument whereby such
spouse:
(i) consents not to receive the normal mode
of payment described in Section 5.11(a)(1) hereof;
(ii) consents to the specific optional mode
elected by the Participant or to the Participant's right to choose any optional
mode without any further consent by the spouse; and
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(iii) if applicable, consents either:
(I) to the specific beneficiary or
beneficiaries designated by the Participant pursuant to his election; or
(II) to the Participant's right to
designate any beneficiary or beneficiaries without further consent by the
spouse; and
(B) such instrument acknowledges the effect of the
election to which the spouse's consent is being given and is witnessed by a Plan
representative or a notary public;
(2) the Participant:
(A) establishes to the satisfaction of the
Committee that his spouse cannot be located; or
(B) furnishes a court order to the Committee
establishing that the Participant is legally separated or has been abandoned
(within the meaning of local law), unless a qualified domestic relations order
pertaining to such Participant provides that the spouse's consent must be
obtained; or
(3) the spouse has previously given consent in
accordance with this Subsection and consented to the Participant's right to
choose any optional mode and to designate any beneficiary without further
consent by the spouse. The consent of a spouse in accordance with this
Subsection (b) shall not be effective with respect to other spouses of the
Participant prior to the Participant's Benefit Commencement Date and an election
to which this Subsection (b) applies shall become void if the circumstances
causing the consent of the spouse not to be required no longer exist prior to
the Participant's Benefit Commencement Date.
(c) A Participant may revoke an election under Subsection
(b) hereof. Such revocation may be made at any time during the election period
in which such election can be made. Such revocation shall not void any
prospectively effective consent given by his spouse in connection with the
revoked election.
(d) The Committee shall provide to each Participant no
less than 30 days and no more than 90 days before his Benefit Commencement Date
a written explanation of:
(1) the terms and conditions of the normal mode of
payment under Subsection 5.11(a) and of each optional mode of payment, including
information explaining the relative values of each mode of payment, in
accordance with applicable governmental regulations under section 401(a)(11) of
the Code;
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(2) the Participant's right to waive the normal mode of
payment and to elect an optional mode of payment and the effect of such waiver
and election;
(3) the rights of the Participant's spouse with respect
to such waiver and election; and
(4) the Participant's right to revoke an election to
receive an optional mode of payment and the effect of such revocation.
(e) (1) If such a Participant dies before his Benefit
Commencement Date and has a surviving spouse, the Participant's spouse shall
receive an annuity for the life of the spouse that is the Actuarial Equivalent
of the Participant's nonforfeitable interest in his Account as of the date of
his death. Such annuity may commence at any time following the date of the
Participant's death, as elected in writing by the spouse, but not later than
December 31 of the calendar year in which the Participant would have attained
Age 70 1/2.
(2) A Participant may elect to waive the spouse's
annuity described in Paragraph (1) of this Subsection and have his Transfer
Account be payable in a single sum to his spouse or to have his Transfer Account
be payable in a single sum to a beneficiary other than his spouse, in the event
of his death prior to his Benefit Commencement Date.
(3) Such election shall not be valid if the
Participant's nonforfeitable interest in his Account exceeds (or has exceeded at
the time of any prior distribution) $3,500 unless:
(A) (i) his spouse (or the spouse's legal guardian
if the spouse is legally incompetent) executes a written instrument whereby such
spouse:
(I) consents not to receive the
spouse's annuity described in Paragraph (1) of this Subsection; and
(II) if applicable, consents either:
(a) to the specific beneficiary
or beneficiaries designated by the Participant pursuant to his waiver of the
spouse's annuity; or
(b) to the Participant's right
to designate any beneficiary or beneficiaries without further consent by the
spouse; and
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<PAGE> 43
(ii) such instrument acknowledges the effect
of the election to which the spouse's consent is being given and is witnessed by
a notary public; or
(B) the Participant:
(i) establishes to the satisfaction of the
Committee that his spouse cannot be located; or
(ii) furnishes a court order to the
Committee establishing that the Participant is legally separated or has been
abandoned (within the meaning of local law), unless a qualified domestic
relations order pertaining to such Participant provides that the spouse's
consent must be obtained; or
(C) the spouse has previously given consent in
accordance with this Subsection and consented to the Participant's right to
choose any optional mode of payment and to designate any beneficiary without
further consent by the spouse. The consent of a spouse in accordance with this
Paragraph (3) shall not be effective with respect to other spouses of the
Participant prior to the Participant's Benefit Commencement Date, and an
election to which Subparagraph (B) of this Paragraph (3) applies shall become
void if the circumstances causing the consent of the spouse not to be required
no longer exist prior to the Participant's Benefit Commencement Date.
(4) Such election may be made at any time during the
period beginning on the first day of the Plan Year in which the Participant
attains Age 35 and ending on the earlier of the date of his death or his Benefit
Commencement Date. In the case of a Participant who has a Separation from
Service prior to his attainment of Age 35, the period during which such election
may be made with respect to benefits accrued as of his Separation from Service
shall begin no later than the date of his Separation from Service.
(5) The spouse of a deceased Participant who did not
make the election described in Paragraph (2) of this Subsection who is eligible
to receive the annuity described in Paragraph (1) of this Subsection may elect
to receive the Participant's nonforfeitable interest in his Account in a single
sum in lieu of such annuity.
(6) The Committee shall provide to each Participant a
written explanation of:
(A) the terms and conditions of the spouse's
annuity under Subsection (1) of this Subsection;
(B) the Participant's and the spouse's rights to
waive the spouse's annuity and the effect of such waiver;
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<PAGE> 44
(C) the rights of the Participant's spouse with
respect to the Participant's waiver of such annuity; and
(D) the Participant's right to revoke a waiver of
the spouse's annuity and the effect of such revocation.
(7) The written explanation described in Subsection (6)
hereof shall be provided once during the three-year period that begins on the
first day of the Plan Year in which the Participant attains Age 32. In the case
of an Employee who first becomes a Participant after he has attained Age 35,
such written notice shall be provided no later than one year after the date the
Employee first becomes a Participant. With regard to a Participant who has a
Separation from Service before attaining Age 35, such written notice shall be
provided no earlier than one year before and no later than one year after the
Participant's Separation from Service.
(f) Annuity forms of payment shall be provided through the
purchase of annuity contracts from an insurance company.
(g) A Participant whose nonforfeitable interest in his
Account exceeds (or has exceeded at the time of any prior distribution) $3,500
and who does not establish to the satisfaction of the Committee that he has no
spouse may use his Transfer Account as security for a loan under Article IX
hereof only if:
(1) (A) his spouse (or the spouse's legal guardian if
the spouse is legally incompetent) executes a written instrument whereby such
spouse consents to the use of the Participant's Transfer Account as security for
the loan within the 90 day period ending on the date the Participant receives
the loan; and
(B) such instrument acknowledges the effect of the
election to which the spouse's consent is being given and is witnessed by a
notary public; or
(2) the Participant:
(A) establishes to the satisfaction of the
Committee that his spouse cannot be located; or
(B) furnishes a court order to the Committee
establishing that the Participant is legally separated or has been abandoned
(within the meaning of local law), unless a qualified domestic relations order
pertaining to such Participant provides that the spouse's consent must be
obtained.
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The consent of a spouse to a loan in accordance with this Section 5.11(g) shall
remain effective with respect to other spouses of the Participant.
5.12 Other Distributions.
(a) Upon the sale to an entity, that is not an Affiliated
Company, of substantially all the assets used by a Participating Company in the
trade or business of such Participating Company, a Participant who continues
employment with the corporation acquiring such assets shall be entitled to have
his Account paid to him.
(b) Upon the sale by a Participating Company to an entity,
that is not an Affiliated Company, of such Participating Company's interest in a
subsidiary, a Participant who continues employment with such subsidiary shall be
entitled to have his Account paid to him. Distributions to Participants
described in sections 5.12(a) and (b) hereof shall be made pursuant to the
provisions of this Article as if the Participant's Separation from Service had
occurred on the closing date of the sale; provided, however that no distribution
shall be made under this Section unless:
(1) it is a lump sum distribution as defined by section
402(d)(4) of the Code, without regard to clauses (i), (ii), (iii) and (iv) of
subparagraph (A), subparagraph (B), or subparagraph (H); and
(2) the Participating Company continues to maintain the
Plan.
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ARTICLE VI
VESTING
6.1 Nonforfeitable Amounts.
(a) A Participant shall have a 100% nonforfeitable
interest at all times in his Salary Reduction, Rollover, and Transfer Accounts.
(b) (1) A Participant who is credited with one or more
Hours of Service as an Employee on or after the Effective Date shall have a
nonforfeitable interest in his Matching Contribution and Profit Sharing Accounts
determined in accordance with the following schedule:
Years of Service Nonforfeitable Interest
---------------- -----------------------
less than 1 year 0 percent
1 year 20 percent
2 years 40 percent
3 years 60 percent
4 years 80 percent
5 years or more 100 percent
(2) Notwithstanding the foregoing, a Participant shall
have a 100% nonforfeitable interest in his Matching Contribution and Profit
Sharing Accounts upon his attainment of Normal Retirement Age while an Employee,
his death while an Employee, or his suffering a Total Disability while an
Employee.
6.2 Years of Service for Vesting.
(a) For the purposes of this Article, an Employee shall be
credited with Years of Service equal to the number of whole years in all of the
Employee's Periods of Service. To determine the number of whole years in all of
an Employee's Periods of Service, non-contiguous periods shall be aggregated.
(b) Years of Service shall be calculated on the basis that
30 days equals a completed month or one-twelfth (1/12) of a year and twelve
completed months equal one year.
(c) If a former Employee is reemployed by a Participating
Company or an Affiliated Company before he incurs a One-Year Period of Severance
and if such Employee's Period of Severance commenced with a quit, discharge or
retirement, the Employee shall be credited with Years of Service for the Period
of Severance.
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(d) If an Employee severs from service by reason of a
quit, discharge, or retirement during an absence from service for 12 months or
less for any reason other than a quit, discharge or retirement, and if he then
performs an Hour of Service within 12 months of the date on which he was first
absent from service, he shall be credited with Years of Service for his Period
of Severance.
(e) Notwithstanding any provision of the Plan to the
contrary, an Employee shall not be credited with Years of Service for the same
period twice.
6.3 Breaks in Service and Loss of Service. An Employee's Years of
Service shall be cancelled if he incurs a One-Year Period of Severance before
his Normal Retirement Date and at a time when (a) he has no nonforfeitable
interest in any of his Accounts other than his Rollover or Transfer Account(s)
or (b) he has no Accounts under the Plan.
6.4 Restoration of Service. The Years of Service of an Employee
whose Years of Service have been cancelled pursuant to Section 6.3 hereof shall
be restored to his credit if he thereafter completes an Hour of Service at a
time when the number of his consecutive One-Year Periods of Severance is less
than the greater of (a) the number of Years of Service to his credit when the
first such One-Year Period of Severance occurred, or (b) five.
6.5 Forfeitures and Restoration of Forfeited Amounts upon
Reemployment.
(a) If a Participant who has had a Separation from Service
does not thereafter complete an Hour of Service before the end of the Plan Year
in which occurs the earlier of:
(1) the date on which he receives or is deemed to
receive a distribution of his entire nonforfeitable interest in his Account,
which is less than 100%; or
(2) the date on which he incurs his fifth consecutive
One-Year Period of Severance, his Profit Sharing Account and Matching
Contribution Account, if any, shall be closed, and the forfeitable amount held
therein shall be forfeited. For purposes of this Subsection (a), a Participant
who has a Separation from Service at a time when his nonforfeitable interest in
the Plan is zero shall be deemed to have received a distribution described in
Paragraph (1) of this Subsection on the date of such Separation from Service.
(b) Amounts forfeited from a Participant's Profit Sharing
Account under Section 6.5(a) hereof shall be reallocated to the Profit Sharing
Accounts of Profit Sharing Participants as of the end of the Plan Year during
which the
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forfeiture occurs pursuant to Section 3.5 hereof. Amounts forfeited from a
Participant's Matching Contribution Account under Section 6.5(a) hereof shall be
used to reduce future Matching Contributions.
(c) If a Participant who has received (or is deemed to
have received) a distribution described in Section 6.5(a)(1) hereof, whereby any
part of his Account has been forfeited, again becomes a Covered Employee prior
to incurring five consecutive One-Year Periods of Severance, the amount so
forfeited shall be restored to his new Profit Sharing Account and Matching
Contribution Account, if, and only if, he repays the full amount of such
distribution (if any) prior to the earlier of (1) the fifth anniversary of the
date on which he subsequently becomes a Covered Employee or (2) the first date
the Participant incurs five consecutive One-Year Periods of Severance following
the date of the distribution; provided, however, that a Participant described in
the preceding sentence who is deemed to receive a distribution of his entire
nonforfeitable interest shall be deemed to repay such distribution on the date
he again becomes a Covered Employee. Amounts restored under this Subsection
shall be charged against the following amounts in the following order of
priority: (A) forfeitures for the Plan Year, (B) income or gains to the Plan,
and (C) Company contributions for the Plan Year. If the foregoing amounts are
insufficient, the Participating Company by whom such Participant is reemployed
shall make any additional contribution necessary to accomplish the restoration.
(d) If a Participant has received a distribution under the
Plan, other than a distribution of his entire nonforfeitable interest in his
Account upon his Separation from Service, at a time when he has less than a 100%
nonforfeitable interest in his entire Account and prior to the date on which he
incurs his fifth consecutive One-Year Period of Severance, his nonforfeitable
interest in his Account at all times prior to the date on which he incurs his
fifth consecutive One-Year Period of Severance, shall be the difference between:
(1) the amount his nonforfeitable interest would have
been if he had not received the distribution; and
(2) the amount to which the distribution would have
increased or decreased if it had remained in the Fund. Immediately after the
Participant has five consecutive One-Year Periods of Severance, his
nonforfeitable interest determined under this Subsection, if in excess of zero,
shall be established as a separate account, and he shall at all times have a
nonforfeitable interest therein. If the Participant is later reemployed as a
Covered Employee, any allocations to him shall be credited to a new account, and
his nonforfeitable interest therein shall be determined under Section 6.1
hereof.
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(e) If a Participant has had five consecutive One-Year
Periods of Severance and again becomes a Covered Employee, the amount forfeited
under Section 6.5(a) hereof shall not be restored to his new Profit Sharing
Account and Matching Contribution Account under any circumstances.
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ARTICLE VII
ROLLOVER CONTRIBUTIONS
7.1 Rollover Contributions.
(a) Subject to the restrictions set forth in Subsection
(b), a Covered Employee may transfer or have transferred directly to the Fund,
from any qualified retirement plan of a former employer, all or a portion of his
interest in the distributing plan. In addition, a Covered Employee who has
established an individual retirement account to hold distributions received from
qualified retirement plans of former employers may transfer all of the assets of
such individual retirement account to the Fund. Such individual retirement
account shall not contain nondeductible contributions made by the Employee while
he was a participant in such plans.
(b) The Trustee shall not accept a distribution from any
other qualified retirement plan or from an individual retirement account unless
the following conditions are met:
(1) (A) the distribution being transferred must come
directly from the fiduciary of the plan of the former employer, or
(B) it must come from the Employee within 60 days
after the Employee receives a distribution from such other qualified retirement
plan or individual retirement account and must comply with the provisions of
section 402(c), 403(a)(4), or 408(d)(3) of the Code, whichever applies;
(2) distributions from a plan for a self-employed person
shall not be transferred to this Plan, unless the transfer is directly to the
Fund from the funding agent of the distributing plan;
(3) the interest being transferred shall not include
assets from any plan to the extent that the Committee determines that the
transfer of such interest (A) would impose upon this Plan requirements as to
form of distribution that would not otherwise apply hereunder, or (B) would
otherwise result in the elimination of Code section 411(d)(6) protected
benefits; and
(4) the interest being transferred shall not contain
nondeductible contributions made to the distributing plan by the Employee unless
the transfer to the Fund is directly from the funding agent of the distributing
plan.
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7.2 Vesting and Distribution of Rollover and Transfer Accounts.
(a) The distributions transferred by or for a Covered
Employee from another qualified retirement plan or from an individual retirement
account shall be credited to the Employee's Rollover Account, unless it is
credited to his Transfer Account, in accordance with Subsection (b). An Employee
shall be fully vested at all times in his Rollover Account and his Transfer
Account.
(b) Any distribution, transferred by or for an Employee
that will cause the plan to be a direct or indirect transferee of a plan to
which the joint and survivor annuity requirements of sections 401(a)(11) and 417
of the Code apply, will be credited to the Employee's Transfer Account.
(c) An Employee's Rollover Account and Transfer Account
shall be distributed as otherwise provided under the Plan.
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ARTICLE VIII
WITHDRAWALS
8.1 Withdrawals Not Subject to Section 401(k) Restrictions.
(a) A Participant may withdraw, not more than once during
any Plan Year, up to the total value of the amount in the following Accounts:
(1) his Rollover Account; and
(2) his Transfer Account, to the extent not attributable
to elective deferrals, qualified nonelective contributions and/or qualified
matching contributions received from the transferor plan; and
(b) Withdrawals under this Section 8.1 shall be charged
against a Participant's Accounts in the following order of priority:
(1) the portion of the Participant's Rollover and
Transfer Account, if any, that consists of the Participant's employee
contributions made before January 1, 1987, if any, less any amounts previously
withdrawn therefrom; and
(2) the balance of the Participant's Rollover and
Transfer Account after the application of Subsection (b)(1), if any, less any
amounts previously withdrawn therefrom.
8.2 Withdrawals Subject to Section 401(k) Restrictions.
(a) In addition to the withdrawals permitted under Section
8.1 hereof, a Participant may withdraw, under the rules set forth in Sections
8.2(b) through 8.2(e) hereof, the following amounts:
(1) the sum of his Salary Reduction Contributions made
after the Effective Date;
(2) the portion of his Transfer Account that is not
eligible for withdrawal under Section 8.1 hereof and is attributable to elective
deferrals and investment earnings thereon credited to the Participant on or
before December 31, 1988, less amounts previously withdrawn therefrom, by
submitting his written request to the Committee.
(b) A withdrawal under Section 8.2(a) hereof shall be
permitted only if the Committee finds that:
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(1) it is made on account of immediate and heavy
financial need (as defined in Section 8.2(c) hereof) of the Participant; and
(2) it is necessary (as defined in Subsection (d) of
this Section ) to satisfy such immediate and heavy financial need.
(c) A withdrawal under Subsection 8.2(a) hereof will be
deemed to be on account of an immediate and heavy financial need if the
Participant requests such withdrawal on account of:
(1) expenses for medical care described in section
213(d) of the Code and previously incurred by the Participant, his spouse, or
any of the Participant's dependents (as defined in section 152 of the Code) or
necessary for such individuals to obtain such medical care;
(2) costs directly related to the purchase (excluding
mortgage payments) of a principal residence of the Participant;
(3) the payment of tuition, related educational fees,
and room and board expenses, for the next 12 months of post-secondary education
for the Participant, his spouse, children, or dependents (as defined in section
152 of the Code);
(4) the need to prevent the eviction of the Participant
from his principal residence or foreclosure on the mortgage of his principal
residence; or
(5) such other circumstances or events as may be
prescribed by the Secretary of the Treasury or his delegate.
(d) A withdrawal under Subsection (a) shall be deemed to
be necessary if:
(1) the amount of the withdrawal does not exceed the
amount of the Participant's immediate and heavy financial need, including any
amounts necessary to pay any federal, state or local income taxes or penalties
reasonably anticipated to result from the withdrawal;
(2) the Participant has obtained all currently
permissible distributions (other than hardship distributions) and non-taxable
loans, if any, under this and all other plans maintained by the Participating
Company and all Affiliated Companies; and
(3) the Participant agrees in writing to be bound by the
rules of Subsection (e).
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(e) If a Participant withdraws any amount from his Salary
Reduction Account pursuant to Subsection (a), or withdraws any elective
deferrals under any other qualified retirement plan maintained by the
Participating Company or any Affiliated Company, which other plan conditions
such withdrawal upon the Participant's being subject to rules similar to those
stated in this Subsection and Subsection (d), such Participant:
(1) may not make Salary Reduction Contributions under
this Plan or employee contributions (other than mandatory contributions under a
defined benefit plan) or elective deferrals under any other qualified or
non-qualified plan of deferred compensation (which does not include any health
or welfare plan, including a health or welfare plan that is part of a cafeteria
plan described in section 125 of the Code) maintained by the Participating
Company or an Affiliated Company for a period of 12 months commencing on the
date of his receipt of the withdrawal; and
(2) in the calendar year next following the calendar
year of such withdrawal, may not make Salary Reduction Contributions or elective
deferrals under any other qualified retirement plan maintained by the
Participating Company or an Affiliated Company in excess of:
(A) the dollar amount described in Section 3.1(b)
hereof for such year, minus
(B) the total Salary Reduction Contributions under
this Plan and elective deferrals under any other qualified plan made by the
Participant during the calendar year of the withdrawal.
8.3 Withdrawals On and After Attainment of Age 59-1/2. Upon his
attainment of Age 59-1/2, a Participant who has a nonforfeitable interest in his
Account may withdraw, not more than once during any Plan Year, up to the vested
portion in his Account, less amounts previously withdrawn therefrom, by
submitting his written request to the Committee.
8.4 Amount and Payment of Withdrawals. The amount of any withdrawal
will be determined on the basis of the value of the Participant's Account and
the sum of the Participant's Salary Reduction Contributions valued as of the
Valuation Date coincident with or immediately preceding the date of the
withdrawal. Payment will be made in a single sum; provided, however, that if the
value of the nonforfeitable portion of the Participant's Account exceeds (or has
exceeded at the time of any prior distribution) $3,500, a withdrawal of all or
any portion of the Participant's Transfer Account under this Article VIII shall
be paid in the normal mode of payment described in Section 5.11(a) hereof, as
applicable, unless the Participant elects to receive a single sum payment. No
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election to receive a single sum payment of any amount from the Participant's
Transfer Account shall be valid (if the value of the nonforfeitable portion of
the Participant's Account exceeds (or has exceeded at the time of any prior
distribution) $3,500), if it would not constitute a valid election under Section
5.11(b) hereof. Any withdrawal requested under this Section shall be paid as
soon as practicable following the Committee's determination that the requested
withdrawal complies with the terms and conditions set forth in this Section .
8.5 Withdrawals Not Subject to Replacement. A Participant may not
replace any portion of his Accounts withdrawn under this Plan.
8.6 Pledged Amounts. No amount that has been pledged as security for
a loan under Article IX hereof may be withdrawn under this Article.
8.7 Investment Medium to be Charged with Withdrawal. A Participant
may specify to which Investment Medium or Investment Media any withdrawal under
this Article is to be charged. Unless so specified, distribution will be made
out of the Participant's interest in the various Investment Media in proportion
to the Participant's share in such Investment Media.
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ARTICLE IX
LOANS TO PARTICIPANTS
9.1 Loan Application. Each Participant who is an Employee of a
Participating Company and any other Participant or beneficiary who is a party in
interest as defined in ERISA may apply for a loan from the Plan. All
applications shall be made to the Committee on forms which it prescribes, and
the Committee shall rule upon such applications in a uniform and
nondiscriminatory manner in accordance with the rules and guidelines established
in this Article IX.
9.2 Loan Rejection. The Committee shall have the right to reject a
loan application if the Participant has the present intention to take a personal
leave of absence during the period of loan repayment or on the basis of a
Participant's credit worthiness and financial need or such other factors as
would be considered in a normal commercial setting by an entity in the business
of making loans and as the Committee determines necessary to safeguard the Fund.
9.3 Amount of Loan.
(a) In no event shall a Participant be permitted to have
more than one loan outstanding at any time from this Plan.
(b) The amount of any loan, when added to the amount of a
Participant's outstanding loans under the Plan and all other plans qualified
under section 401(a) of the Code which are sponsored by a Participating Company
or any Affiliated Company shall not exceed the lesser of:
(1) $50,000, reduced by the excess (if any) of:
(A) the Participant's highest outstanding balance
of loans during the one-year period ending on the day before the date on which
such loan is made to the Participant, over
(B) the outstanding balance of any loan made to
the Participant on the date such loan is made to the Participant; or
(2) fifty percent (50%) of the value of the
Participant's nonforfeitable Account, provided that the application of this
Section 9.3(b)(2) shall not reduce the amount that may be borrowed below
$10,000.
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9.4 Terms of Loan.
(a) The interest rate on loans shall be one percent (1%)
over the prime rate that is in effect on the last of the month before the loan
is approved, as such prime rate is reported in the Wall Street Journal. Security
for each loan granted pursuant to this Article IX shall be, to the extent
necessary, the currently unpledged portion of the Participant's Rollover
Account, next, the Participant's Transfer Account, next, the vested portion of
the Participant's Matching Contribution Account and Profit Sharing Account, and
finally the Participant's Salary Reduction Account. In no event shall more than
fifty percent (50%) of the Participant's vested Account as of the date the loan
is made be used as security for the loan. In its sole discretion, the Committee
may require such additional security as it deems necessary. If the Participant's
Transfer Account contains amounts that are subject to the joint and survivor
annuity requirements of sections 401(a)(11) and 417 of the Code, the
Participant's Transfer Account may not be used as security for a loan unless:
(1) (A) the Participant's spouse consents in writing to
the use of the Participant's Transfer Account as security for the loan within
the 90 day period ending on the date the Participant receives the loan;
(B) such consent acknowledges its own effect; and
(C) such consent is witnessed by a notary public;
or
(2) the Participant establishes to the satisfaction of
the Committee that he has no spouse or that his spouse's consent is not required
because of such circumstances as are prescribed in applicable governmental
regulations.
(b) Each loan shall be evidenced by the Participant's
execution of a personal installment note on such form as shall be supplied by
the Committee. Each such note shall specify that, to the extent repayment is not
required sooner by the terms of Section 9.4(d) hereof of this Section ,
repayment shall be included in installments not to exceed 60 months from the
date on which the loan is distributed; however, if the purpose of the loan is to
acquire any dwelling unit which is to be used within a reasonable period of time
as the principal residence of the Participant, the period of repayment may be as
long as, but shall not exceed 180 months. All loans from the Plan shall be
non-renewable. Each note shall also specify the interest rate as determined by
the Committee at the time the loan is approved.
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(c) All loans shall be repaid in approximately equal
installments (not less frequently than quarterly) through payroll deductions or
in such other manner as the Committee may determine. A Participant may repay the
outstanding balance of any loan in one lump sum at any time by notifying the
Committee of his intent to do so and by forwarding to the Committee payment in
full of the then outstanding balance, plus interest accrued to the date of
payment. The amount of principal and interest repaid by a Participant shall be
credited to a Participant's Account as each repayment is made.
(d) Notwithstanding the above, in the event a Participant
who has an outstanding loan takes a personal leave of absence for a period of
not more than one year or any periodic loan repayment is not made in full due to
a temporary reduction in the Participant's Compensation that is not expected to
continue for a period of more than one year, the Committee shall waive payment
on the loan during the leave of absence or the period during which the
Participant's Compensation is reduced. In such case, (1) if the loan is for a
period of less than 60 months, the period of repayments shall be extended for
the period necessary to permit repayment, or (2) otherwise, the loan shall be
reamortized over its remaining term; provided, however, that the period of
repayment for any loan shall not exceed a total of 60 months.
(e) If, and only if:
(1) the Participant dies;
(2) the Participant (other than a Participant who
continues to be a party in interest) has a Separation from Service;
(3) the Compensation of a Participant who is an Employee
of a Participating Company is discontinued or decreased below the amount
necessary to amortize the loan and such status continues for more than one year;
(4) the loan is not repaid by the time the note matures
including any extensions pursuant to Subsection (d);
(5) the Participant attempts to revoke any payroll
deduction authorization for repayment of the loan without the consent of the
Committee;
(6) the Participant fails to pay any installment of the
loan when due and the Committee elects to treat such failure as default; or
(7) any other event occurs which the Committee, in its
sole discretion, believes may jeopardize the repayment of the loan;
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before a loan is repaid in full, the unpaid balance thereof, with interest due
thereon, shall become immediately due and payable. The Participant (or his
beneficiary, in the event of the Participant's death) may satisfy the loan by
paying the outstanding balance of the loan within 30 days. If the loan and
interest are not repaid within the time specified, the Committee shall satisfy
the indebtedness from the amount of the Participant's vested interest in his
Account as provided in Section 9.5 hereof before making any payments otherwise
due hereunder to the Participant or his beneficiary.
9.5 Enforcement. The Committee shall give written notice to the
Participant (or his beneficiary in the event of the Participant's death) of an
event of default described in Section 9.4 (d) hereof. If the loan and interest
are not paid within thirty (30) days of the date of the notice, the amount of
the Participant's vested interest in his Account, excluding his Salary Reduction
Account, shall be reduced by the amount of the unpaid balance of the loan, with
interest due thereon, and the Participant's indebtedness shall thereupon be
discharged to the extent of the reduction. In addition, if the value of the
Participant's total vested interest in his Account (exclusive of his Salary
Reduction Account) pledged as security for the loan is insufficient to discharge
fully the Participant's indebtedness, the Participant's Salary Reduction Account
shall be used to reduce the Participant's indebtedness at such time as the
Participant is entitled to a distribution under Article V hereof or a withdrawal
under Article VIII hereof from his Salary Reduction Account, and any remaining
amounts in his Matching Contribution Account and/or Profit Sharing Account shall
be used to reduce the Participant's indebtedness. Such action shall not operate
as a waiver of the rights of the Company, the Committee, the Trustee, or the
Plan under applicable law. The Committee also shall be entitled to take any and
all other actions necessary and appropriate to foreclose upon any property other
than the Participant's Account pledged as security for the loan or to otherwise
enforce collection of the outstanding balance of the loan.
9.6 Additional Rules. The Committee may establish additional rules
relating to Participant loans under the Plan, which rules shall be applied on a
uniform and nondiscriminatory basis.
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ARTICLE X
ADMINISTRATION
10.1 Committee. If the Company designates one or more individuals as
a Savings Plan Committee, the powers and duties of the Committee under the Plan
shall be exercised by the Savings Plan Committee; otherwise all such powers and
duties shall be exercised by the Company. The Savings Plan Committee shall be
the named fiduciary which shall control and manage the operation of the Plan and
shall administer the Plan. The Savings Plan Committee members may, but need not,
be Employees, and they shall serve at the pleasure of the Company. They shall be
entitled to reimbursement of expenses, but those members of the Savings Plan
Committee who are also Employees of a Participating Company shall receive no
compensation for their service on the Savings Plan Committee. Any reimbursement
of expenses of the Committee members shall be paid directly by the Company. The
Savings Plan Committee shall be responsible for the general administration of
the Plan under the policy guidance of the Company.
10.2 Duties and Powers of Committee. In addition to the duties and
powers described elsewhere hereunder, the Committee shall have the following
specific duties and powers:
(a) to retain such consultants, accountants and attorneys
as may be deemed necessary or desirable to render statements, reports, and
advice with respect to the Plan and to assist the Committee in complying with
all applicable rules and regulations affecting the Plan; any consultants,
accountants and attorneys may be the same as those retained by the Company;
(b) to decide appeals under this Article;
(c) to enact uniform and nondiscriminatory rules and
regulations to carry out the provisions of the Plan;
(d) to resolve questions or disputes relating to
eligibility for benefits or the amount of benefits under the Plan;
(e) to construe and interpret and supply omissions with
respect to the provisions of the Plan;
(f) to determine whether any domestic relations order
received by the Plan is a qualified domestic relations order as provided in
section 414(p) of the Code;
(g) to evaluate administrative procedures; and
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(h) to delegate such duties and powers as the Committee
shall determine from time to time to any person or persons. To the extent of any
such delegation, the delegate shall have the duties, powers, authority and
discretion of the Committee. Any decisions and determinations made by the
Committee pursuant to its duties and powers described in the Plan shall be
conclusive and binding upon all parties. The Committee shall have sole
discretion in carrying out its responsibilities. The expenses incurred by the
Committee 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 Committee. The Participating Companies
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 a Participating Company
on one occasion shall not bind that Participating Company to pay any similar
expenses on any subsequent occasion.
10.3 Functioning of Committee. The Committee and those persons or
entities to whom the Committee has delegated responsibilities shall keep
accurate records and minutes of meetings, interpretations, and decisions. The
Committee shall act by majority vote of the members, and such action shall be
evidenced by a written document.
10.4 Disputes.
(a) If the Committee denies, in whole or in part, a claim
for benefits by a Participant or his beneficiary, the Committee shall furnish
notice of the denial to the claimant, setting forth:
(1) the specific reasons for the denial;
(2) specific reference to the pertinent Plan provisions
on which the denial is based;
(3) a description of any additional information
necessary for the claimant to perfect the claim and an explanation of why such
information is necessary; and
(4) appropriate information as to the steps to be taken
if the claimant wishes to submit his claim for review. Such notice shall be
forwarded to the claimant within 90 days of the Committee's receipt of the
claim; provided, however, that in special circumstances the Committee may extend
the response period for up to an additional 90 days, in which event it shall
notify the claimant in writing of the extension, and shall specify the reason or
reasons for the extension.
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(b) Within 60 days of receipt of a notice of claim denial,
a claimant or his duly authorized representative may petition the Committee in
writing for a full and fair review of the denial. The claimant or his duly
authorized representative shall have the opportunity to review pertinent
documents and to submit issues and comments in writing to the Committee. The
Committee shall review the denial and shall communicate its decision and the
reasons therefor to the claimant in writing within 60 days of receipt of the
petition; provided, however, that in special circumstances the Committee may
extend the response period for up to an additional 60 days, in which event it
shall notify the claimant in writing prior to the commencement of the extension.
The appeals procedure set forth in this Subsection (b) shall be the exclusive
means for contesting a decision denying benefits under the Plan.
10.5 Indemnification. Each member of the Committee, and any other
person who is an Employee or director of a Participating Company or an
Affiliated Company shall be indemnified and held harmless by the Company against
and with respect to all damages, losses, obligations, liabilities, liens,
deficiencies, costs and expenses, including without limitation, reasonable
attorney's fees and other costs incident to any suit, action, investigation,
claim or proceedings to which he may be a party by reason of his performance of
administrative functions and duties under the Plan, except in relation to
matters as to which he shall be held liable for an act of willful misconduct in
the performance of his duties. The foregoing right to indemnification shall be
in addition to such other rights as the Committee member or other person may
enjoy as a matter of law or by reason of insurance coverage of any kind. Rights
granted hereunder shall be in addition to and not in lieu of any rights to
indemnification to which the Committee member or other person may be entitled
pursuant to the by-laws of the Participating Company.
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ARTICLE XI
THE FUND
11.1 Designation of Trustee. The Company on behalf of itself and
each other Participating Company, by appropriate resolution of its Board of
Directors, shall name and designate a Trustee and shall enter into a Trust
Agreement. The Company shall have the power, by appropriate resolution of its
Board of Directors, to amend the Trust Agreement, remove the Trustee, and
designate a successor Trustee, as provided in the Trust Agreement. All of the
assets of the Plan shall be held by the Trustee for use in accordance with the
Plan.
11.2 Exclusive Benefit. Prior to the satisfaction of all liabilities
under the Plan in the event of termination of the Plan, no part of the corpus or
income of the Fund shall be used for or diverted to purposes other than for the
exclusive benefit of Participants and their beneficiaries except as expressly
provided in this Plan and in the Trust Agreement.
11.3 No Interest in Fund. No person shall have any interest in or
right to any part of the assets or income of the Fund, except to the extent
expressly provided in this Plan and in the Trust Agreement.
11.4 Trustee. The Trustee shall be the named fiduciary with respect
to management and control of Plan assets held by it and, except as provided in
Section 11.5 hereof, shall have exclusive and sole responsibility for the
custody and investment thereof in accordance with the Trust Agreement.
11.5 Investments and Voting FPA Common Stock.
(a) Except as provided in Section 11.5(e) hereof, the
Trustee shall invest Salary Reduction Contributions, Rollover Contributions,
Matching Contributions and Profit Sharing Contributions paid to it and income
thereon in such Investment Media as each Participant may select in accordance
with this Section 11.5. Such investments acquired in the manner prescribed by
the Plan shall be held by or for the Trustee.
(b) Except as provided in Section 5.11(e), a Participant
shall select one or more of the Investment Media in which his Accounts shall be
invested, and the percentage thereof that shall be invested in each Investment
Medium selected. In the event a Participant fails to make an election pursuant
to this Section , amounts allocated to his Account shall be invested in the most
conservative of the Investment Media as determined by the Committee. A
Participant may amend such selection by prior notice to the Committee, effective
as of such dates determined by the
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Committee, by giving prior notice to the Committee. Such amendments will be
subject to the other requirements of this Section .
(c) A Participant may transfer, effective as of such dates
determined by the Committee, such portion of the value of his interest in any
Investment Medium to another Investment Medium, as may be permitted by the
Committee.
(d) The Trustee shall vote shares of FPA Common Stock
pursuant to instructions from Participants, for which purpose the Trustee shall
aggregate fractional shares and vote them in proportion to instructions from
Participants with respect to whole shares. Shares for which no instructions are
received shall not be voted.
(e) At the time of the mailing to stockholders of the
notice of any stockholders' meeting of the Company, the Company, in conjunction
with the Trustee, shall use its reasonable best efforts to cause to be delivered
to each such Participant, who has shares of FPA Common Stock allocated to his
Account, such notices and informational statements as are furnished to the
Company's stockholders in respect of the exercise of voting rights, together
with forms by which the Participant may confidentially instruct the Trustee, or
revoke such instruction, with respect to the voting of the shares of FPA Common
Stock allocated to his Account. Upon timely receipt of directions, the Trustee
shall vote the FPA Common Stock allocated to a Participant's Account on each
matter as directed by the Participant.
(f) If there is a tender offer for, or a request or
invitation for tenders of, the shares of FPA Common Stock held by the Trustee
for Participants, then
(1) the Committee shall furnish to the Trustee, who
shall then furnish to each Participant, prompt notice of any such tender offer
for, or request or invitation for tenders of, the shares of FPA Common Stock;
and
(2) the Trustee shall request from each Participant
instructions as to the tendering of the shares of FPA Common Stock, if any,
allocated to the Participant's Account. The Trustee shall tender only such
shares of FPA Common Stock for which the Trustee has received (within the time
specified in the notification) tender instructions.
(g) All instructions received by the Trustee from
Participants pursuant to this Section 11.5 shall be held by the Trustee in
strict confidence and shall not be divulged to any person, including employees,
officers and directors of the Company or any Affiliated Company; provided,
however, that to the extent necessary for the operation of the Plan, such
instructions may be
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relayed by the Trustee to a recordkeeper, auditor or other person providing
services to the Plan if such person (1) is not the Company, an affiliate or any
employee, officer or director thereof, and (2) agrees not to divulge such
directions to any other person, including employees, officers and directors of
the Company and any Affiliated Company.
(h) The amounts contributed by all Participants to each
Investment Medium shall be commingled for investment purposes.
(i) The Trustee may hold assets of the Fund and make
distributions therefrom in the form of cash without liability for interest, if
for administrative purposes it becomes necessary or practical to do so.
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ARTICLE XII
AMENDMENT OR TERMINATION OF THE PLAN
12.1 Power of Amendment and Termination.
(a) It is the intention of each Participating Company that
its participation in this Plan will be permanent. However, subject to any
applicable collective bargaining agreement, each Participating Company, other
than the Company, reserves the right to terminate its participation in this Plan
at any time by or pursuant to action of its board of directors or other
governing body. Furthermore, subject to any applicable collective bargaining
agreement, the Company reserves the power to amend or terminate the Plan at any
time by or pursuant to action of the Board of Directors.
(b) Each amendment to the Plan shall be binding on each
Participating Company if such Participating Company, by or pursuant to action by
its board of directors or other governing body, (1) consents to such amendment
at any time; or (2) fails to object thereto within thirty days after receiving
notice thereof.
(c) Any amendment or termination of the Plan shall become
effective as of the date designated by the Board of Directors or its delegate.
Except as expressly provided elsewhere in the Plan, prior to the satisfaction of
all liabilities with respect to the benefits provided under this Plan, no
amendment or termination shall cause any part of the monies contributed
hereunder to revert to the Participating Companies or to be diverted to any
purpose other than for the exclusive benefit of Participants and their
beneficiaries. Upon termination or partial termination of the Plan, or upon
complete discontinuance of contributions, the rights of all affected persons to
benefits accrued to the date of such termination shall be nonforfeitable. Upon
termination of the plan without establishment or maintenance of another defined
contribution plan (other than an employee stock ownership plan as defined in
section 4975(e)(7) of the Code or a simplified employee pension plan as defined
in section 408(k) of the Code), Accounts shall be distributed in accordance with
applicable law.
12.2 Merger. The Plan shall not be merged with or consolidated with,
nor shall its assets be transferred to, any other qualified retirement plan
unless each Participant would receive a benefit after such merger,
consolidation, or transfer (assuming the Plan then terminated) which is of
actuarial value equal to or greater than the benefit he would have received from
his Account if the Plan had been terminated on the day before such merger,
consolidation, or transfer.
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ARTICLE XIII
TOP-HEAVY PROVISIONS
13.1 General. The following provisions shall apply automatically to
the Plan and shall supersede any contrary provisions for each Plan Year in which
the Plan is a Top-Heavy Plan (as defined below). It is intended that this
Article shall be construed in accordance with the provisions of section 416 of
the Code.
13.2 Definitions. The following definitions shall supplement those
set forth in Article I hereof of the Plan:
(a) "Aggregation Group" means this plan and each other
qualified retirement plan (including a frozen plan or a plan which has been
terminated during the 60-month period ending on the Determination Date) of a
Participating Company or an Affiliated Company:
(1) in which a Key Employee is a participant; or
(2) which enables any plan in which a Key Employee
participates to meet the requirements of sections 401(a)(4) or 410 of the Code;
or
(3) without the inclusion of which, the plans in the
Aggregation Group would be Top-Heavy Plans, but, with the inclusion of which,
the plans in the Aggregation Group are not Top-Heavy Plans and, taken together,
meet the requirements of sections 401(a)(4) and 410 of the Code.
(b) "Determination Date" means, for any Plan Year, the
last day of the preceding Plan Year, except that for the first Plan Year it
means the last day thereof.
(c) "Key Employee" means, with respect to any Plan Year:
(1) any Employee or former Employee who at any time
during the 60-month period ending on the Determination Date was:
(A) an officer of a Participating Company having
Compensation for a Plan Year during such period greater than 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; provided, that no more than 50 Employees (or,
if less, the greater of three Employees or ten percent (10%) of the greatest
number of Employees employed by all Participating Companies and all
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Affiliated Companies during such 60-month period, but excluding employees
described in section 414(q)(8) of the Code) shall be treated as officers; or
(B) one of the 10 Employees having Compensation
greater than the amount described in section 415(c)(1)(A) of the Code and owning
(or are considered as owning, within the meaning of section 318 of the Code) the
largest interests in any Participating Company or Affiliated Company, provided
that such interest exceeds one-half of one percent (0.5%) of the total share
ownership of the Participating Company or Affiliated Company, the total number
of individuals described in this Subparagraph (B) being limited to 10 for the
entire 60-month period; or
(C) a five-percent (5%) owner of a Participating
Company; or
(D) a one-percent (1%) owner of a Participating
Company having Compensation in excess of $150,000; or
(2) a beneficiary of an individual described in
Paragraph (1) of this Subsection. For purposes of this Subsection, Compensation
shall include elective deferrals under sections 125, 402(a)(8), 402(h) and
403(b) of the Code. Determinations under this Subsection shall be made in
accordance with section 416(i) of the Code.
(d) "Key Employee Ratio" means, for any Determination
Date, the ratio of the amount described in Paragraph (1) of this Subsection to
the amount described in Paragraph (2) of this Subsection, after deducting from
each such amount any portion thereof described in Paragraph (3) of this
Subsection, where:
(1) the amount described in this Paragraph is the sum
of:
(A) the present value of all accrued benefits of
Key Employees under all qualified defined benefit plans included in the
Aggregation Group;
(B) the balances in all of the accounts of Key
Employees under all qualified defined contribution plans included in the
Aggregation Group; and
(C) the amounts distributed from all plans in such
Aggregation Group to or on behalf of any Key Employee during the period of five
Plan Years ending on the Determination Date, except any benefit paid on account
of death to the extent it exceeds the accrued benefits or account balances
immediately prior to death;
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(2) the amount described in this Paragraph is the sum
of:
(A) the present value of all accrued benefits of
all participants under all qualified defined benefit plans included in the
Aggregation Group;
(B) the balances in all of the accounts of all
participants under all qualified defined contribution plans included in the
Aggregation Group; and
(C) the amounts distributed from all plans in such
Aggregation Group to or on behalf of any participant during the period of five
Plan Years ending on the Determination Date; and
(3) the amount described in this Paragraph is the sum
of:
(A) all rollover contributions (or fund to fund
transfers) to the Plan by an Employee after December 31, 1983 from a plan
sponsored by an employer which is not a Participating Company or an Affiliated
Company;
(B) any amount that is included in Paragraphs (1)
and (2) of this Subsection for a person who is a Non-Key Employee as to the Plan
Year of reference but who was a Key Employee as to any earlier Plan Year; and
(C) for Plan Years beginning after December 31,
1984, any amount that is included in Paragraphs (1) and (2) of this Subsection
for a person who has not performed any services for any Participating Company
during the five-year period ending on the Determination Date. The present value
of accrued benefits under any defined benefit plan shall be determined on the
basis of the actuarial assumptions used by such defined benefit plan under the
method used for accrual purposes for all plans maintained by all Participating
Companies and Affiliated Companies if a single method is used by all such plans,
or, otherwise, the slowest accrual method permitted under section 411(b)(1)(C)
of the Code.
(e) "Non-Key Employee" means, for any Plan Year:
(1) an Employee or former Employee who is not a Key
Employee with respect to such Plan Year; or
(2) a beneficiary of an individual described in
Paragraph (1) of this Subsection.
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(f) "Super Top-Heavy Plan" means, for any Plan Year, each
plan in the Aggregation Group for such Plan Year if, as of the applicable
Determination Date, the Key Employee Ratio exceeds ninety percent (90%).
(g) "Top-Heavy Compensation" means, for any Participant
for any Plan Year, the average of his annual Compensation over the period of
five consecutive Plan Years (or, if shorter, the longest period of consecutive
Plan Years during which the Participant was in the employ of any Participating
Company) yielding the highest average, disregarding:
(1) Compensation for Plan Years ending prior to January
1, 1984; and
(2) Compensation for Plan Years after the close of the
last Plan Year in which the Plan was a Top-Heavy Plan.
(h) "Top-Heavy Plan" means, for any Plan Year, each plan
in the Aggregation Group for such Plan Year if, as of the applicable
Determination Date, the Key Employee Ratio exceeds sixty percent (60%).
(i) "Year of Top-Heavy Service" means, for any
Participant, a Plan Year in which he completes 1,000 or more Hours of Service,
excluding:
(1) Plan Years commencing prior to January 1, 1984; and
(2) Plan Years in which the Plan is not a Top-Heavy
Plan.
13.3 Minimum Contribution for Non-Key Employees.
(a) In each Plan Year in which the Plan is a Top-Heavy
Plan, each Eligible Employee who is a Non-Key Employee (except an Eligible
Employee who is a Non-Key Employee as to the Plan Year of reference but who was
a Key Employee as to any earlier Plan Year) and who is an Employee on the last
day of such Plan Year will receive a total minimum Participating Company or
Affiliated Company contribution (including forfeitures) under all plans
described in Paragraphs (a)(1) and (a)(2) of Section 13.2 of not less than three
percent (3%) of the Eligible Employee's Compensation for the Plan Year. Elective
deferrals to such plans made on behalf of a Participant in plan years beginning
after December 31, 1984 but before January 1, 1989 shall be deemed to be Company
contributions for the purpose of this Subsection. Elective deferrals and
employer matching contributions to such plans in plan years beginning on or
after January 1, 1989 shall not be used to meet the minimum contribution
requirements of this Subsection.
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(b) The percentage set forth in Subsection (a) shall be
reduced to the percentage at which contributions, including forfeitures, are
made (or are required to be made) for a Plan Year for the Key Employee for whom
such percentage is the highest for that Plan Year. This percentage shall be
determined for each Key Employee by dividing the contribution for such Key
Employee by his Compensation for the Plan Year. All defined contribution plans
required to be included in an Aggregation Group shall be treated as one plan for
the purpose of this Section ; however, this Section shall not apply to any plan
which is required to be included in the Aggregation Group if such plan enables a
defined benefit plan in the group to meet the requirements of section 401(a)(4)
or section 410 of the Code.
(c) If a Non-Key Employee described in Subsection (a)
participates in both a defined benefit plan and a defined contribution plan
described in Paragraphs (a)(1) and (a)(2) of Section 13.2, the Participating
Company is not required to provide such Employee with both the minimum benefit
under the defined benefit plan and the minimum contribution. In such event, the
Non-Key Employee shall receive a total minimum Company contribution (including
forfeitures) under all plans in the Aggregation Group of not less than five
percent (5%) of the Non-Key Employee's Compensation, unless he is entitled to
the contribution described in Subsection 13.6(c).
13.4 Vesting.
(a) The vested interest in his Profit Sharing Account and
Matching Contribution Account of each Participant with one or more Hours of
Service in a Plan Year in which the Plan is a Top-Heavy Plan shall be determined
in accordance with the following schedule unless Section 6.1 provides more rapid
vesting for such Participant:
Years of Service Percent Vested
---------------- --------------
less than 2 years 0 percent
2 years 20 percent
3 years 40 percent
4 years 60 percent
5 years 80 percent
6 years 100 percent
(b) If the Plan ceases to be a Top-Heavy Plan, the vesting
schedule set forth in Section 6.1 shall again apply to all Years of Service,
provided, that:
(1) each Participant described in Subsection (a) of this
Section shall maintain the same vested interest in his Matching Contribution
Account and Profit Sharing Account determined under the schedule in Subsection
(a) as of the
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<PAGE> 72
date on which the Plan ceases to be a Top-Heavy Plan until the Participant's
vested percentage under the schedule in Section 6.1 exceeds the percentage
maintained under the schedule in Subsection (a); and
(2) any Participant described in Subsection (a) of this
Section with at least three Years of Service at the time that the Plan ceases to
be a Top-Heavy Plan shall continue to have his vested percentage computed under
the Plan in accordance with the vesting schedule set forth in Subsection (a).
13.5 Social Security. The Plan, for each Plan Year in which it is a
Top-Heavy Plan, must meet the requirements of this Article without regard to any
Social Security or similar contributions or benefits.
13.6 Adjustment to Maximum Benefit Limitation.
(a) For each Plan Year in which the Plan is (1) a Super
Top-Heavy Plan or (2) a Top-Heavy Plan and the Board of Directors does not make
the election to amend the Plan to provide the minimum contribution described in
Subsection (c), the 1.25 factor in the defined benefit and defined contribution
fractions described in section 415(e) of the Code shall be reduced to 1.0. The
adjustment described in this Subsection shall not apply to a Participant during
any period in which the Participant earns no additional accrued benefit under
any defined benefit plan and has no employer contributions, forfeitures, or
voluntary nondeductible contributions allocated to his accounts under any
defined contribution plan.
(b) In the case of any Top-Heavy Plan to which section
415(e)(6) of the Code applies, "$41,500" shall be substituted for "$51,875" in
the calculation of the numerator of the transition fraction.
(c) If, in any Plan Year in which the Plan is a Top-Heavy
Plan but not a Super Top-Heavy Plan, the Aggregation Group also includes a
defined benefit plan, the Board of Directors may elect to use a factor of 1.25
in computing the denominator of the defined benefit and defined contribution
fractions described in section 415(e)(3) of the Code. In the event of such
election, the minimum contribution described in Section 13.3(a) for each Non-Key
Employee who is not covered under a defined benefit plan shall be increased to
four percent (4%), and the minimum Company contribution described in Section
14.3(c) hereof for each Non-Key Employee who is covered under a defined benefit
plan (but who does not have a minimum benefit under the defined benefit plan
equal to the lesser of (1) three percent (3%) of his Top-Heavy Compensation
multiplied by his Years of Top-Heavy Service or (2) thirty-percent (30%) of his
Top-Heavy Compensation) shall be increased to seven and one-half percent
(7-1/2%).
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ARTICLE XIV
GENERAL PROVISIONS
14.1 No Employment Rights. Neither the action of the Company in
establishing the Plan, nor of any Participating Company in adopting the Plan,
nor any provisions of the Plan, nor any action taken by the Company, any
Participating Company or the Committee shall be construed as giving to any
Employee the right to be retained in the employ of the Company or any
Participating Company, or any right to payment except to the extent of the
benefits provided in the Plan to be paid from the Fund.
14.2 Governing Law. Except to the extent superseded by ERISA, all
questions pertaining to the validity, construction, and operation of the Plan
shall be determined in accordance with the laws of the state in which the
principal place of business of the Company is located.
14.3 Severability of Provisions. If any provision of this Plan is
determined to be void by any court of competent jurisdiction, the Plan shall
continue to operate and, for the purposes of the jurisdiction of that court
only, shall be deemed not to include the provisions determined to be void.
14.4 No Interest in Fund. No person shall have any interest in, or
right to, any part of the principal or income of the Fund, except as and to the
extent expressly provided in this Plan and in the Trust Agreement.
14.5 Spendthrift Clause. No benefit payable at any time under this
Plan and no interest or expectancy herein shall be anticipated, assigned, or
alienated by any Participant or beneficiary, or subject to attachment,
garnishment, levy, execution, or other legal or equitable process, except for
(1) a Federal tax levy made pursuant to section 6331 of the Code and (2) any
benefit payable pursuant to a qualified domestic relations order. Any attempt to
alienate or assign a benefit hereunder, whether currently or hereafter payable,
shall be void.
14.6 Incapacity. If the Committee deems any Participant who is
entitled to receive payments hereunder incapable of receiving or disbursing the
same by reason of Age, illness, infirmity, or incapacity of any kind, the
Committee may direct the Trustee to apply such payments directly for the
comfort, support, and maintenance of such Participant, or to pay the same to any
responsible person caring for the Participant who is determined by the Committee
to be qualified to receive and disburse such payments for the Participant's
benefit; and the receipt of such person shall be a complete acquittance for the
payment of the benefit. Payments pursuant to this Section shall be complete
discharge to the extent
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thereof of any and all liability of the Participating Companies, the Committee,
the Trustee, and the Fund.
14.7 Withholding. The Committee and the Trustee shall have the right
to withhold any and all state, local, and Federal taxes which may be withheld in
accordance with applicable law.
14.8 Missing Persons. Neither the Trustee nor any Participating
Company shall be obliged to search for or ascertain the whereabouts of any
individual entitled to benefits under the Plan. Any individual entitled to
benefits under the Plan who does not file a timely claim for his benefits will
be allowed to file a claim at any later date, and payment of his benefits will
commence after that later date, except that, in the event the Participating
Company is satisfied that a Participant has no spouse or that a Participant's
spouse cannot be located (as described in Section 5.8, and the Participant is in
fact married or the spouse is later located, whichever is applicable, such
spouse shall not be deemed an individual entitled to benefits under the Plan.
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ARTICLE XV
RIGHTS OF ALTERNATE PAYEES
15.1 General. Except as otherwise provided in this Article, an
Alternate Payee shall have no rights to a Participant's benefit and shall have
no rights under this Plan other than those rights specifically granted to the
Alternate Payee pursuant to a Qualified Domestic Relations Order.
Notwithstanding the foregoing, an Alternate Payee shall have the right to appeal
the denial of a claim for any benefits awarded to the Alternate Payee pursuant
to a Qualified Domestic Relations Order, as provided in Section 10.4. Any
interest of an Alternate Payee in the Accounts of a Participant, other than an
interest payable solely upon the Participant's death pursuant to a Qualified
Domestic Relations Order which provides that the Alternate Payee shall be
treated as the Participant's surviving spouse, shall be separately accounted for
by the Trustee in the name and for the benefit of the Alternate Payee.
15.2 Distribution.
(a) Notwithstanding anything in this Plan to the contrary,
a Qualified Domestic Relations Order may provide that any benefits of a
Participant payable to an Alternate Payee shall be distributed immediately or at
any other time specified in the order. If the order does not specify the time at
which benefits shall be payable to the Alternate Payee, the benefits shall be
distributed to the Alternate Payee immediately.
(b) If a Qualified Domestic Relations Order does not
provide the form of distribution of benefits payable to an Alternate Payee, the
Alternate Payee shall have the right to elect distribution in any form provided
under Article V, except that benefits to be paid in installments may not be paid
over a period exceeding the life expectancy of the Alternate Payee, determined
as of the date of the first distribution.
(c) If the Qualified Domestic Relations Order does not
specify the Investment Media from which amounts shall be paid to an Alternate
Payee, such amounts shall be distributed from the Investment Media in which such
Accounts are invested on a pro rata basis.
15.3 Withdrawals. Unless a Qualified Domestic Relations Order
provides to the contrary, an Alternate Payee shall not be permitted to make any
withdrawals under Article VIII.
15.4 Death Benefits. Unless a Qualified Domestic Relations Order
provides to the contrary, an Alternate Payee shall have the right to designate a
beneficiary, in the same manner as
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provided in Section 5.8 with respect to a Participant (except that no spousal
consent shall be required), who shall receive benefits payable to the Alternate
Payee which have not been distributed at the time of the Alternate Payee's
death. If the Alternate Payee does not designate a beneficiary, or if the
beneficiary predeceases the Alternate Payee, benefits payable to the Alternate
Payee which have not been distributed shall be paid to the Alternate Payee's
estate.
15.5 Investment Direction. Unless a Qualified Domestic Relations
Order provides to the contrary, an Alternate Payee shall have the right to
direct the investment of any portion of a Participant's Accounts payable to the
Alternate Payee under such order in the same manner as provided in Article XI
with respect to a Participant, which amounts shall be separately accounted for
by the Trustee in the Alternate Payee's name.
Executed by the duly authorized officers of the Company on behalf of
the Company and each other Participating Company this ____ day of
_________________, 1996.
FPA MEDICAL MANAGEMENT, INC.
By:___________________________
Title:
Attest:________________________
Secretary
[SEAL]
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SCHEDULE A
MINIMUM DISTRIBUTION INCIDENTAL BENEFIT TABLE
TABLE I
Excess of Age of Participant Applicable
over Age of beneficiary percentage
----------------------- ----------
10 years or less.....................100%
11................................... 96%
12................................... 93%
13................................... 90%
14................................... 87%
15................................... 84%
16................................... 82%
17................................... 79%
18................................... 77%
19................................... 75%
20................................... 73%
21................................... 72%
22................................... 70%
23................................... 68%
24................................... 67%
25................................... 66%
26................................... 64%
27................................... 63%
28................................... 62%
29................................... 61%
30................................... 60%
31................................... 59%
32................................... 59%
33................................... 58%
34................................... 57%
35................................... 56%
36................................... 56%
37................................... 55%
38................................... 55%
39................................... 54%
40................................... 54%
41................................... 53%
42................................... 53%
43................................... 53%
44 and greater....................... 52%
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APPENDIX A
PREDECESSOR PLANS
A.1 Predecessor Plans. The following plans have been merged into the Plan
effective January 1, 1997, and have had their assets transferred to the Plan as
soon as practicable thereafter:
(a) Arizona Managed Care Providers, Ltd. 401(k)
Profit Sharing Plan (the "Arizona Plan")
(b) FPA Medical Group of California, An Osteopathic
Medical Corporation, 401(k) Salary Savings Plan
(the "California Plan")
(c) Family Practice Associates of San Diego, Inc.
401(k) Salary Savings Plan (the "San Diego
Plan")
(d) Gonzaba Medical Group 401(k) Plan (the "Gonzaba
Plan")
A.2 Special Provisions Applicable to Participants with Transfer Accounts.
The following provisions shall apply only to the Participants who had
participated in a specified Predecessor Plan and have Transfer Accounts
hereunder. Additionally, the following provisions supplement the provisions of
the Plan, and to the extend there is any discrepancy, the terms of this Appendix
shall control.
(a) Arizona Plan.
(1) Distribution of Transfer Accounts. With respect to a
Participant who has a Transfer Account from the Arizona Plan:
(A) The provisions of Section 5.11 shall apply with
respect to such Transfer Account.
(B) In addition to the modes of distribution provided
under Sections 5.7 and 5.11 of the Plan, the Participant may elect in writing to
have his interest in his Transfer Account paid to him or applied for his benefit
in approximately equal monthly, quarterly, or annual installments over a period
not to exceed the lesser of:
(i) the life expectancy of the Participant or the
joint and survivor life expectancy of the Participant and his beneficiary (with
such life expectancy to be determined in accordance with applicable regulations
under the Code); or
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(ii) unless the sole beneficiary is the Participant's
spouse, the maximum number of years determined under Table I of this Appendix A.
(C) Notwithstanding any Plan provision to the contrary,
each Transfer Account shall be distributed in a manner that permits the Plan to
satisfy the requirements of section 401(a)(9) of the Code and regulations
thereunder, including the incidental death benefit requirements of section
401(a)(9)(G) of the Code.
(b) California Plan.
(1) Distribution of Transfer Account.
(A) A Participant may elect to have the distribution of
his Transfer Account paid in cash, in securities, or other assets in-kind, or in
any combination thereof.
(B) In addition to the normal mode of distribution
provided under Section 5.7 of the Plan, a Participant who has a Transfer Account
from the San Diego Plan may elect in writing to have his interest in his
Transfer Account paid to him or applied for his benefit in approximately equal
installments that are made at least annually over a period not to exceed the
lesser of:
(i) the life expectancy of the Participant or the
joint and survivor life expectancy of the Participant and his beneficiary (with
such life expectancy to be determined in accordance with applicable regulations
under the Code); or
(ii) unless the sole beneficiary is the
Participant's spouse, the maximum number of years determined under Table I of
this Appendix A.
(C) Notwithstanding any Plan provision to the contrary,
each Transfer Account shall be distributed in a manner that permits the Plan to
satisfy the requirements of section 401(a)(9) of the Code and regulations
thereunder, including the incidental death benefit requirements of section
401(a)(9)(G) of the Code.
(c) San Diego Plan.
(1) Normal Retirement Age. For a Participant who
participated in the San Diego Plan prior to January 1, 1997, Normal Retirement
Age shall mean the attainment of Age 55 or, if later, the 10th anniversary of
the date of participation in the Plan; but in no event later than Age 65.
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<PAGE> 80
(2) Nonforfeitable Amounts. Subject to the terms of
Section 6.1(b)(2) of the Plan, a Participant who participated in the San Diego
Plan prior to January 1, 1997, shall have his nonforfeitable interest in his
Transfer Account determined in accordance with the following schedule:
Years of Service Nonforfeitable Interest
---------------- -----------------------
Less than 1 year 0 percent
1 year 25 percent
2 years 50 percent
3 years 75 percent
4 years or more 100 percent
(3) Distribution of Transfer Account.
(A) A Participant may elect to have the distribution of
his Transfer Account paid in cash, in securities, or other assets in-kind, or in
any combination thereof.
(B) In addition to the normal mode of distribution
provided under Section 5.7 of the Plan, a Participant who has a Transfer Account
from the San Diego Plan may elect in writing to have his interest in his
Transfer Account paid to him or applied for his benefit in
(i) approximately equal monthly, quarterly, or
annual installments over a period not to exceed the lesser of:
(I) the life expectancy of the Participant
or the joint and survivor life expectancy of the Participant and his beneficiary
(with such life expectancy to be determined in accordance with applicable
regulations under the Code); or
(II) unless the sole beneficiary is the
Participant's spouse, the maximum number of years determined under Table I of
this Appendix A; or
(ii) a single sum payment; or
(iii) a combination of the above.
(C) Notwithstanding any Plan provision to the contrary,
each Transfer Account shall be distributed in a manner that permits the Plan to
satisfy the requirements of section 401(a)(9) of the Code and regulations
thereunder, including the incidental death benefit requirements of section
401(a)(9)(G) of the Code.
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(d) Gonzaba Plan.
(1) Normal Retirement Date. For a Participant who
participated in the Gonzaba Plan prior to January 1, 1997, Normal Retirement
Date shall mean the first of the month in which the Participant attains Normal
Retirement Age.
(2) Distribution of Transfer Account. In addition to the
normal mode of distribution provided under Section 5.7 of the Plan, a
Participant who has a Transfer Account from the Gonzaba Plan may elect in
writing to have his interest in his Transfer Account paid to him or applied for
his benefit in approximately equal monthly installments over a period not to
exceed the lesser of:
(A) the life expectancy of the Participant or the joint
and survivor life expectancy of the Participant and his beneficiary (with such
life expectancy to be determined in accordance with applicable regulations under
the Code); or
(B) unless the sole beneficiary is the Participant's
spouse, the maximum number of years determined under Table I of this Appendix A.
(3) Notwithstanding any Plan provision to the contrary,
each Transfer Account shall be distributed in a manner that permits the Plan to
satisfy the requirements of section 401(a)(9) of the Code and regulations
thereunder, including the incidental death benefit requirements of section
401(a)(9)(G) of the Code.
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TABLE I TO APPENDIX A
Age of Participant
in calendar year
preceding Required
Beginning Date Maximum Years Remaining
------------------ -----------------------
70..............................................26.2
71..............................................25.3
72..............................................24.4
73..............................................23.5
74..............................................22.7
75..............................................21.8
76..............................................20.9
77..............................................20.1
78..............................................19.2
79..............................................18.4
80..............................................17.6
81..............................................16.8
82..............................................16.0
83..............................................15.3
84..............................................14.5
85..............................................13.8
86..............................................13.1
87..............................................12.4
88..............................................11.8
89..............................................11.1
90..............................................10.5
91..............................................9.9
92..............................................9.4
93..............................................8.8
94..............................................8.3
95..............................................7.8
96..............................................7.3
97..............................................6.9
98..............................................6.5
99..............................................6.1
100..............................................5.7
101..............................................5.3
102..............................................5.0
103..............................................4.7
104..............................................4.4
105..............................................4.1
106..............................................3.8
107..............................................3.6
108..............................................3.4
109..............................................3.2
110..............................................2.8
111..............................................2.6
112..............................................2.4
113..............................................2.2
114..............................................2.0
115 and older....................................1.8
A-5
