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EXHIBIT 99(a)
▇▇▇▇ HEALTHCARE, INC.
401(k) SAVINGS PLAN
As Amended and Restated Effective
January 1, 1995
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▇▇▇▇ HEALTHCARE, INC.
401(k) SAVINGS PLAN
THIS AGREEMENT AND DECLARATION OF TRUST is by and between ▇▇▇▇
HEALTHCARE, INC., a Texas corporation, hereinafter referred to as the
"COMPANY," and TEXAS COMMERCE BANK, N.A., Houston, Texas, a national banking
association, hereinafter referred to as "TRUSTEE."
W I T N E S S E T H :
WHEREAS, the Company has heretofore adopted the ▇▇▇▇ HEALTHCARE, INC.
401(k) SAVINGS PLAN, hereinafter referred to as the "PLAN," for the benefit of
its employees; and
WHEREAS, the Company desires to restate the Plan and to amend the Plan
in several respects, intending thereby to provide an uninterrupted and
continuing program of benefits;
NOW THEREFORE, the Plan is hereby restated in its entirety as follows
with no interruption in time, effective as of January 1, 1995, except as
otherwise indicated herein:
(i)
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TABLE OF CONTENTS
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PAGE
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ARTICLE I DEFINITIONS AND CONSTRUCTION .................................................. I-1
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ARTICLE II PARTICIPATION.................................................................. II-1
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ARTICLE III CONTRIBUTIONS.................................................................. III-1
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ARTICLE IV ALLOCATIONS.................................................................... IV-1
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ARTICLE V INVESTMENT FUNDS............................................................... V-1
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ARTICLE VI RETIREMENT BENEFITS............................................................ VI-1
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ARTICLE VII DISABILITY BENEFITS............................................................ VII-1
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ARTICLE VIII SEVERANCE BENEFITS AND DETERMINATION
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OF VESTED INTEREST............................................................. VIII-1
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ARTICLE IX DEATH BENEFITS................................................................. IX-1
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ARTICLE X TIME AND FORM OF PAYMENT OF BENEFITS........................................... X-1
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ARTICLE XI IN-SERVICE WITHDRAWALS......................................................... XI-1
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ARTICLE XII LOANS.......................................................................... XII-1
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ARTICLE XIII ADMINISTRATION OF THE PLAN..................................................... XIII-1
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ARTICLE XIV TRUSTEE AND ADMINISTRATION OF TRUST FUND....................................... XIV-1
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ARTICLE XV FIDUCIARY PROVISIONS........................................................... XV-1
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ARTICLE XVI AMENDMENTS..................................................................... XVI-1
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ARTICLE XVII DISCONTINUANCE OF CONTRIBUTIONS,
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TERMINATION, PARTIAL TERMINATION,
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AND MERGER OR CONSOLIDATION.................................................... XVII-1
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ARTICLE XVIII ADOPTING EMPLOYERS............................................................. XVIII-1
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ARTICLE XIX MISCELLANEOUS PROVISIONS....................................................... XIX-1
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ARTICLE XX TOP-HEAVY STATUS............................................................... XX-1
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(ii)
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I.
DEFINITIONS AND CONSTRUCTION
1.1 DEFINITIONS. Where the following words and phrases appear in the Plan,
they shall have the respective meanings set forth below, unless their context
clearly indicates to the contrary.
(1) ACCOUNT(S): A Member's 401(k) Account, Employee Savings Account, Member
▇▇▇ Account, Company Matching Contribution Account, Company Discretionary
Contribution Account, and/or Rollover Account, including the amounts
credited thereto.
(2) ACT: The Employee Retirement Income Security Act of 1974, as amended.
(3) BENEFIT COMMENCEMENT DATE: With respect to each Member or beneficiary, the
first day of the first period for which such Member's or beneficiary's
benefit is payable to him from the Trust Fund.
(4) CASH OR DEFERRED CONTRIBUTIONS: Contributions made to the Plan by the
Employer on a Member's behalf in accordance with the Member's elections to
defer Compensation under the Plan's qualified cash or deferred arrangement
as described in Section 3.1.
(5) CODE: The Internal Revenue Code of 1986, as amended.
(6) COMMITTEE: The administrative committee appointed by the Directors to
administer the Plan.
(7) COMPANY: ▇▇▇▇ Healthcare, Inc.
(8) COMPANY DISCRETIONARY CONTRIBUTION ACCOUNT: An individual account for each
Member, which is credited with the Employer Discretionary Contributions,
if any, made on such Member's behalf pursuant to Section 3.3 plus such
Member's allocation of forfeitures and which is credited with (or debited
for) such account's allocation of net income (or net loss) and changes in
value of the Trust Fund.
(9) COMPANY MATCHING CONTRIBUTION ACCOUNT: An individual account for each
Member, which is credited with the sum of (A) the Employer Matching
Contributions made on such Member's behalf, and (B) the Employer Safe
Harbor Contributions, if any, made on such Member's behalf pursuant to
Section 3.4 to satisfy the restrictions set forth in Section 3.5 and which
is credited with (or debited for) such account's allocation of net income
(or net loss) and changes in value of the Trust Fund. As of the Effective
Date, a Member's Company Matching Contribution Account shall also be
credited with the amount, if any, credited to his "Company Contribution
Account" as of December 31, 1994 under the Plan as in effect immediately
prior to this restatement.
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(10) COMPENSATION: The total of all amounts paid by the Employer to or for the
benefit of a Member for services rendered or labor performed for the
Employer while a Member, which are required to be reported on the Member's
federal income tax withholding statement or statements (Form W-2 or its
subsequent equivalent), subject to the following adjustments and
limitations:
(A) The following shall be included:
(i) elective contributions made on a Member's behalf by the Employer
that are not includable in income under section 125, section
402(e)(3), section 402(h) or section 403(b) of the Code;
(ii) compensation deferred under an eligible deferred compensation
plan within the meaning of section 457(b) of the Code; and
(iii) employee contributions described in section 414(h) of the Code
that are picked up by the employing unit and are treated as
employer contributions.
(B) The Compensation of any Member taken into account for purposes of the
Plan shall be limited to $150,000 for any Plan Year with such
limitation to be:
(i) adjusted automatically to reflect any amendments to section
401(a)(17) of the Code and any cost-of-living increases
authorized by section 401(a)(17) of the Code;
(ii) prorated for a Plan Year of less than twelve months and to the
extent otherwise required by applicable law; and
(iii) in the case of a Member who is either a five-percent owner of
the Employer (within the meaning of section 416(i)(1)(A)(iii) of
the Code) or is one of the ten most Highly Compensated Employees
for the Plan Year and who has a spouse and/or lineal descendants
who are under the age of nineteen as of the end of a Plan Year
who receive Compensation during such Plan Year, prorated and
allocated among such Member, his spouse, and/or lineal
descendants under the age of nineteen based on the Compensation
for such Plan Year of each such individual.
(11) CONTROLLED ENTITY: Each corporation that is a member of a controlled group
of corporations, within the meaning of section 1563(a) (determined without
regard to sections 1563(a)(4) and 1563(e)(3)(C)) of the Code, of which the
Employer is a member, each trade or business (whether or not incorporated)
with which the Employer is under common control, and each member of an
affiliated service group, within the meaning of section 414(m) of the
Code, of which the Employer is a member.
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(12) DIRECT ROLLOVER: A payment by the Plan to an Eligible Retirement Plan
designated by a Distributee.
(13) DIRECTORS: The Board of Directors of the Company.
(14) DISTRIBUTEE: Each (A) Member entitled to an Eligible Rollover
Distribution, (B) Member's surviving spouse with respect to the interest
of such surviving spouse in an Eligible Rollover Distribution, and (C)
former spouse of a Member who is an alternate payee under a qualified
domestic relations order, as defined in section 414(p) of the Code, with
regard to the interest of such former spouse in an Eligible Rollover
Distribution.
(15) EFFECTIVE DATE: January 1, 1995, as to this restatement of the Plan,
except (A) as otherwise indicated in specific provisions of the Plan, (B)
that provisions of the Plan required to have an earlier effective date by
the Tax Reform Act of 1986, the Technical and Miscellaneous Revenue Act of
1988, technical corrections to the Retirement Equity Act of 1984, or the
Deficit Reduction Act of 1984, or by regulations issued pursuant to such
Acts, shall be effective as of the required effective date in such Acts
and/or regulations, and (C) that provisions hereof affecting the duties of
the Trustee shall be effective as of the date of execution of this
restatement of the Plan by the Trustee.
(16) ELIGIBLE EMPLOYEE: Each Employee other than (A) an Employee whose terms
and conditions of employment are governed by a collective bargaining
agreement, unless such agreement provides for his coverage under the Plan,
(B) a nonresident alien who has no United States source income, and (C) an
Employee who is a Leased Employee. Notwithstanding any provision of the
Plan to the contrary, no individual who is designated, compensated, or
otherwise classified or treated by the Employer as an independent
contractor shall be eligible to become a Member of the Plan.
(17) ELIGIBLE RETIREMENT PLAN: (A) With respect to a Distributee other than a
surviving spouse, an individual retirement account described in section
408(a) of the Code, an individual retirement annuity described in section
408(b) of the Code, an annuity plan described in section 403(a) of the
Code, or a qualified plan described in section 401(a) of the Code, which
under its provisions accepts such Distributee's Eligible Rollover
Distribution and (B) with respect to a Distributee who is a surviving
spouse, an individual retirement account described in section 408(a) of
the Code or an individual retirement annuity described in section 408(b)
of the Code.
(18) ELIGIBLE ROLLOVER DISTRIBUTION: Any distribution of all or any portion of
the Accounts of a Distributee other than (A) a distribution that is one of
a series of substantially equal periodic payments (not less frequently
than annually) made for the life (or life expectancy) of the Distributee
or the joint lives (or joint life expectancies) of the Distributee and the
Distributee's designated beneficiary or for a specified period of ten
years or more, (B) a distribution to the extent such distribution is
required under section 401(a)(9) of the Code,
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(C) the portion of a distribution that is not includable in gross income
(determined without regard to the exclusion for net unrealized
appreciation with respect to employer securities), (D) a loan treated as a
distribution under section 72(p) of the Code and not excepted by section
72(p)(2), (E) a loan in default that is a deemed distribution, (F) any
corrective distribution provided in Sections 3.7 and 4.4(b), and (G) any
other distribution so designated by the Internal Revenue Service in
revenue rulings, notices, and other guidance of general applicability.
(19) EMPLOYEE: Each (A) individual employed by the Employer and (B) Leased
Employee.
(20) EMPLOYEE SAVINGS ACCOUNT: An individual account for each Member, which was
credited with his after-tax "Member Contributions" made prior to July 1,
1992, and which is credited with (or debited for) such account's
allocation of net income (or net loss) and changes in value of the Trust
Fund.
(21) EMPLOYER: The Company and each entity that has adopted the Plan pursuant
to the provisions of Article XVIII.
(22) EMPLOYER CONTRIBUTIONS: The total of Employer Matching Contributions,
Employer Discretionary Contributions, and Employer Safe Harbor
Contributions.
(23) EMPLOYER DISCRETIONARY CONTRIBUTIONS: Contributions made to the Plan by
the Employer pursuant to Section 3.3.
(24) EMPLOYER MATCHING CONTRIBUTIONS: Contributions made to the Plan by the
Employer pursuant to Section 3.2.
(25) EMPLOYER SAFE HARBOR CONTRIBUTIONS: Contributions made to the Plan by the
Employer pursuant to Section 3.4.
(26) EMPLOYMENT COMMENCEMENT DATE: The date on which an individual first
performs an Hour of Service.
(27) 401(k) ACCOUNT: An individual account for each Member, which is credited
with the Cash or Deferred Contributions made by the Employer on such
Member's behalf and the Employer Safe Harbor Contributions, if any, made
on such Member's behalf pursuant to Section 3.4 to satisfy the
restrictions set forth in Section 3.1(e) and which is credited with (or
debited for) such account's allocation of net income (or net loss) and
changes in value of the Trust Fund.
(28) HIGHLY COMPENSATED EMPLOYEE: Each Employee who performs services during
the Plan Year for which the determination of who is highly compensated is
being made (the "Determination Year") and who:
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(A) is a five-percent owner of the Employer (within the meaning of section
416(i)(1)(A)(iii) of the Code) at any time during the Determination
Year or the twelve-month period immediately preceding the
Determination Year (the "Look-Back Year"); or
(B) receives compensation (within the meaning of section 415(c)(3) of the
Code, including elective or salary reduction contributions to a
cafeteria plan, cash or deferred arrangement, or tax-sheltered
annuity; "compensation" for purposes of this Paragraph) in excess of
$75,000 (with such amount to be adjusted automatically to reflect any
cost-of-living adjustments authorized by section 414(q)(1) of the
Code) during the Look-Back Year; or
(C) receives compensation in excess of $50,000 (with such amount to be
adjusted automatically to reflect any cost-of-living adjustments
authorized by section 414(q)(1) of the Code) during the Look-Back Year
and is a member of the top 20% of Employees for the Look-Back Year
(other than Employees described in section 414(q)(8) of the Code)
ranked on the basis of compensation received during the year; or
(D) is an officer (within the meaning of section 416(i) of the Code)
during the Look-Back Year and receives compensation in the Look-Back
Year greater than 50% of the amount in effect under section
415(b)(1)(A) of the Code for the calendar year in which the Look-Back
Year begins; or
(E) is described in clauses (B), (C), or (D) above (after modifying such
clauses to substitute the Determination Year for the Look-Back Year)
and is one of the 100 Employees who receives the most compensation
from the Employer or a Controlled Entity during the Determination
Year.
For purposes of the preceding sentence, (i) no more than 50 Employees (or,
if lesser, the greater of three Employees or 10% of the Employees) shall
be treated as officers, (ii) if no officer has compensation in excess of
50% of the amount in effect under section 415(b)(1)(A) of the Code, then
the highest-paid officer shall be deemed to be a Highly Compensated
Employee, (iii) all employers aggregated with the Employer under section
414(b), (c), (m), or (o) of the Code shall be treated as a single
employer, (iv) a former Employee who had a separation year (generally, the
Determination Year such Employee separates from service) prior to the
Determination Year and who was an active Highly Compensated Employee for
either such separation year or any Determination Year ending on or after
such Employee's fifty-fifth birthday shall be deemed to be a Highly
Compensated Employee, and (v) the Committee may elect, in accordance with
the provisions of applicable Treasury regulations, rulings and notices, to
make the Look-Back Year calculation for a Determination Year on the basis
of the calendar year ending with or within the applicable Determination
Year (or, in the case of a Determination Year that is shorter than twelve
months, the calendar year ending with or within the twelve-month
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period ending with the end of the applicable Determination Year). Further,
if any individual is a member of the family of a five-percent owner or of
a Highly Compensated Employee in the group consisting of the ten Highly
Compensated Employees paid the greatest compensation during the year, then
such individual shall not be considered a separate employee and any
compensation paid to such individual (and any applicable contribution or
benefit on behalf of such individual) shall be treated as if it were paid
to (or on behalf of) the five-percent owner or Highly Compensated
Employee. For purposes of the preceding sentence, the term "family"
means, with respect to any active or former Employee, such Employee's
spouse and lineal ascendants and descendants and the spouses of such
lineal ascendants and descendants. To the extent that the provisions of
this Paragraph are inconsistent or conflict with the definition of a
"highly compensated employee" set forth in section 414(q) of the Code and
the Treasury regulations thereunder, the relevant terms and provisions of
section 414(q) of the Code and the Treasury regulations thereunder shall
govern and control.
(29) HOUR OF SERVICE: Each hour for which an individual is directly or
indirectly paid, or entitled to payment, by the Employer or a Controlled
Entity for the performance of duties or for reasons other than the
performance of duties; provided, however, that no more than 501 Hours of
Service shall be credited to an individual on account of any continuous
period during which he performs no duties. Such Hours of Service shall be
credited to the individual for the computation period in which such duties
were performed or in which occurred the period during which no duties were
performed. An Hour of Service also includes each hour, not credited above,
for which back pay, irrespective of mitigation of damages, has been either
awarded or agreed to by the Employer or a Controlled Entity. These Hours
of Service shall be credited to the individual for the computation period
to which the award or agreement pertains rather than the computation
period in which the award, agreement, or payment is made. Solely for
purposes of determining whether a One-Year Break-in-Service has occurred,
an Hour of Service is also each normal work hour, not otherwise credited
above, during which an individual is absent from work by reason of the
individual's pregnancy, the birth of a child of the individual, the
placement of a child with the individual in connection with the adoption
of such child by the individual, or for purposes of caring for such child
for the period immediately following such birth or placement. The
Committee may in its discretion require, as a condition to the crediting
of Hours of Service under this provision, that the individual furnish
appropriate and timely information to the Committee establishing the
reason for any such absence. Such Hours of Service shall be credited to
the individual for the computation period in which the absence from work
begins if such crediting is necessary to prevent the occurrence of a
One-Year Break-in-Service in such computation period; otherwise such Hours
of Service shall be credited to the individual in the next following
computation period. The number of Hours of Service to be credited to an
individual for any computation period shall be governed by 29 CFR ▇▇.▇▇.
2530.200b-2(b) and (c). Hours of Service shall also include any hours
required to be credited by federal law other than the Act or the Code, but
only under the conditions and to the extent so required by such federal
law.
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(30) INVESTMENT FUND: A portion of the Trust Fund that is invested in a
specified manner as described in Article V.
(31) LEASED EMPLOYEE: Each person who is not an employee of the Employer or a
Controlled Entity but who performs services for the Employer or a
Controlled Entity pursuant to an agreement (oral or written) between the
Employer or a Controlled Entity and any leasing organization, provided
that such person has performed such services for the Employer or a
Controlled Entity or for related persons (within the meaning of section
144(a)(3) of the Code) on a substantially full-time basis for a period of
at least one year and such services are of a type historically performed
by the Employer's or Controlled Entity's employees in the Employer's or
Controlled Entity's field of business.
(32) MEMBER: Each individual who (A) has met the eligibility requirements for
participation in the Plan pursuant to Article II or (B) has made a
Rollover Contribution in accordance with Section 3.8, but only to the
extent provided in Section 3.8.
(33) MEMBER ▇▇▇ ACCOUNT: An individual account for each Member which was
credited with the deductible contributions made by such Member prior to
January 1, 1987, and which is credited with (or debited for) such
account's allocation of net income (or net loss) and changes in value of
the Trust Fund.
(34) NORMAL RETIREMENT DATE: The date a Member attains the age of sixty-five.
(35) ONE-YEAR BREAK-IN-SERVICE: Any Plan Year during which an individual has no
more than 500 Hours of Service.
(36) PARTICIPATION SERVICE: The measure of service used in determining an
Employee's eligibility to participate in the Plan as determined pursuant
to Section 2.2.
(37) PLAN: The ▇▇▇▇ Healthcare, Inc. 401(k) Savings Plan, as amended from time
to time.
(38) PLAN YEAR: The twelve-consecutive month period commencing January 1 of
each year.
(39) ROLLOVER ACCOUNT: An individual account for an Eligible Employee, which is
credited with the Rollover Contributions of such Employee and which is
credited with (or debited for) such account's allocation of net income (or
net loss) and changes in value of the Trust Fund.
(40) ROLLOVER CONTRIBUTIONS: Contributions made by an Eligible Employee
pursuant to Section 3.8.
(41) TRUST: The trust established herein to hold and invest contributions made
under the Plan, and income thereon, and from which the Plan benefits are
distributed.
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(42) TRUST FUND: The funds and properties held pursuant to the provisions
hereof for the use and benefit of the Members, together with all income,
profits, and increments thereto.
(43) TRUSTEE: The trustee or trustees qualified and acting hereunder at any
time.
(44) VALUATION DATES: The last day of March, June, September, and December of
each Plan Year and any other interim Valuation Date designated by the
Committee on a nondiscriminatory basis.
(45) VESTED INTEREST: The portion of a Member's Accounts which, pursuant to the
Plan, is nonforfeitable.
(46) VESTING SERVICE: The measure of service used in determining a Member's
Vested Interest as determined pursuant to Section 8.4.
1.2 NUMBER AND GENDER. Wherever appropriate herein, words used in the
singular shall be considered to include the plural and words used in the plural
shall be considered to include the singular. The masculine gender, where
appearing in the Plan, shall be deemed to include the feminine gender.
1.3 HEADINGS. The headings of Articles and Sections herein are included
solely for convenience, and if there is any conflict between such headings and
the text of the Plan, the text shall control.
1.4 CONSTRUCTION. It is intended that the Plan be qualified within the
meaning of section 401(a) of the Code and that the Trust be tax exempt under
section 501(a) of the Code, and all provisions herein shall be construed in
accordance with such intent.
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II.
PARTICIPATION
2.1 ELIGIBILITY. On or after the Effective Date, each Eligible
Employee shall become a Member upon the January 1, April 1, July 1, or October
1 coincident with or next following the later of the date on which such
Eligible Employee completes one year of Participation Service or the date on
which such Eligible Employee attains the age of twenty-one. Notwithstanding the
foregoing:
(a) An Eligible Employee who was a Member of the Plan on the day
prior to the Effective Date shall remain a Member of this restatement
thereof as of the Effective Date;
(b) An Eligible Employee who was a Member of the Plan, or who was
eligible to become a Member of the Plan, prior to a termination of
employment shall remain or become a Member immediately upon his
reemployment as an Eligible Employee;
(c) An Employee who has completed one year of Participation
Service and has attained the age of twenty-one but who has not become
a Member of the Plan because he was not an Eligible Employee shall
become a Member of the Plan immediately upon becoming an Eligible
Employee as a result of a change in his employment status;
(d) An Eligible Employee who had completed one year of
Participation Service but who had not attained the age of twenty-one
prior to a termination of his employment shall become a Member
immediately upon his reemployment or his attainment of age twenty-one,
whichever is later;
(e) An Eligible Employee who had met the requirements of this
Section to become a Member of the Plan but who terminated employment
prior to the date upon which he would have become a Member shall
become a Member immediately upon his reemployment; and
(f) A Member who ceases to be an Eligible Employee but remains an
Employee shall continue to be a Member but, on and after the date he
ceases to be an Eligible Employee, he shall no longer be entitled to
defer Compensation hereunder or, except to the extent expressly
provided in the Plan, share in allocations of Employer Contributions
and forfeitures unless and until he shall again become an Eligible
Employee.
2.2 PARTICIPATION SERVICE. The completion of 1,000 or more Hours of
Service during the twelve-consecutive month period beginning with the
individual's Employment Commencement Date or during any Plan Year commencing
after such individual's Employment Commencement Date shall constitute one year
of Participation Service.
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III.
CONTRIBUTIONS
3.1 CASH OR DEFERRED CONTRIBUTIONS.
(a) A Member may elect to defer (in 1/10% increments) from 2% to
15% (or, with respect to a Member who is a Highly Compensated Employee, such
lesser percentage as may be prescribed from time to time by the Committee) of
his Compensation for a Plan Year by having the Employer contribute the amount
so deferred to the Plan. Compensation for a Plan Year not so deferred by such
election shall be received by such Member in cash. A Member's election to defer
an amount of his Compensation pursuant to this Section shall be made by
executing a Compensation reduction agreement pursuant to which the Member
authorizes the Employer to reduce his Compensation in the elected amount and
the Employer, in consideration thereof, agrees to contribute an equal amount to
the Plan. The reduction in a Member's Compensation for a Plan Year pursuant to
his election under a Compensation reduction agreement shall be effected by
Compensation reductions as of each payroll period within such Plan Year
following the effective date of such agreement. The amount of Compensation
elected to be deferred by a Member for a Plan Year pursuant to this Section
shall become a part of the Employer's Cash or Deferred Contributions for such
Plan Year.
(b) A Member's Compensation reduction agreement shall remain in
force and effect for all periods following the date of its execution until
modified or terminated or until such Member terminates his employment. A Member
who has elected to defer a portion of his Compensation may change his deferral
election percentage (within the percentage limits set forth in Paragraph (a)
above), effective as of the first day of any subsequent payroll period, by
executing and delivering to the Committee a new Compensation reduction
agreement within the time period prescribed by the Committee. No more than one
such change may be made in any Plan Year.
(c) A Member may cancel his Compensation reduction agreement,
effective as of the first day of any payroll period, by executing and
delivering to the Committee a Compensation reduction cancellation agreement in
the form prescribed by the Committee within the time period prescribed by the
Committee. A Member who so cancels his Compensation reduction agreement may
resume Compensation deferrals, effective as of the first day of any subsequent
payroll period but no more often than once in any Plan Year, by executing and
delivering to the Committee a new Compensation reduction agreement within the
time period prescribed by the Committee.
(d) In restriction of the Members' elections provided in
Paragraphs (a), (b), and (c) above, the Cash or Deferred Contributions and the
elective deferrals (within the meaning of section 402(g)(3) of the Code) under
all other plans, contracts, and arrangements of the Employer on behalf of any
Member for any calendar year shall not exceed $7,000 (with such amount to be
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adjusted automatically to reflect any cost-of-living adjustments authorized by
section 402(g)(5) of the Code).
(e) In further restriction of the Members' elections provided in
Paragraphs (a), (b), and (c) above, it is specifically provided that one of the
"actual deferral percentage" tests set forth in section 401(k)(3) of the Code
and the Treasury regulations thereunder must be met in each Plan Year. The
Committee may elect, in accordance with applicable Treasury regulations, to
treat Employer Matching Contributions to the Plan as Cash or Deferred
Contributions for the purposes of meeting these requirements. If multiple use of
the alternative limitation (within the meaning of section 401(m)(9) of the Code
and Treasury regulation Section 1.401(m)-2(b)) occurs during a Plan Year, such
multiple use shall be corrected in accordance with the provisions of Treasury
regulation Section 1.401(m)-2(c); provided, however, that if such multiple use
is not eliminated by making Employer Safe Harbor Contributions, then the "actual
contribution percentages" of all Highly Compensated Employees participating in
the Plan shall be reduced, and the excess contributions distributed, in
accordance with the provisions of Section 3.7(c) and applicable Treasury
regulations so that there is no such multiple use.
(f) If the restrictions set forth in Paragraph (d) or (e) above
would not otherwise be met for any Plan Year, the Compensation deferral
elections made pursuant to Paragraphs (a), (b), and (c) above of Members who
are Highly Compensated Employees may be reduced by the Committee on a temporary
and prospective basis in such manner as the Committee shall determine.
(g) As soon as administratively feasible following the end of each
month, the Employer shall contribute to the Trust, as Cash or Deferred
Contributions with respect to each Member, an amount equal to the amount of
Compensation elected to be deferred, pursuant to Paragraphs (a) and (b) above
(as adjusted pursuant to Paragraph (f) above), by such Member during such
month. Such contributions, as well as the contributions made pursuant to
Sections 3.2, 3.3, and 3.4, shall be made without regard to current or
accumulated profits of the Employer. Notwithstanding the foregoing, the Plan is
intended to qualify as a profit sharing plan for purposes of sections 401(a),
402, 412, and 417 of the Code.
3.2 EMPLOYER MATCHING CONTRIBUTIONS. For each Plan Year, the Employer
may contribute to the Trust as an Employer Matching Contribution on behalf of
each Member who was an Employee on the last day of such Plan Year or terminated
employment during such Plan Year on or after his Normal Retirement Date or by
reason of total and permanent disability (as defined in Section 7.2) or death,
an amount determined in the discretion of the Directors equal to a specified
percentage (which shall be a uniform percentage for all such Members) of Cash
or Deferred Contributions made on such Member's behalf for such Plan Year.
3.3 EMPLOYER DISCRETIONARY CONTRIBUTIONS. For each Plan Year, the
Employer may contribute to the Trust, as an Employer Discretionary
Contribution, an additional amount as determined in its discretion.
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15
3.4 EMPLOYER SAFE HARBOR CONTRIBUTIONS. In addition to the Employer
Matching Contributions made pursuant to Section 3.2 and the Employer
Discretionary Contribution made pursuant to Section 3.3, for each Plan Year,
the Employer, in its discretion, may contribute to the Trust as a "safe harbor
contribution" for such Plan Year the amounts necessary to cause the Plan to
satisfy the restrictions set forth in Section 3.1(e) (with respect to certain
restrictions on Cash or Deferred Contributions) and Section 3.5 (with respect
to certain restrictions on Employer Matching Contributions). Amounts
contributed in order to satisfy the restrictions set forth in Section 3.1(e)
shall be considered "qualified matching contributions" (within the meaning of
Treasury regulation Section 1.401(k)-1(g)(13)) for purposes of such Section,
and amounts contributed in order to satisfy the restrictions set forth in
Section 3.5 shall be considered Employer Matching Contributions for purposes
of such Section. Any amounts contributed pursuant to this Paragraph shall
be allocated in accordance with the provisions of Sections 4.2(d) and (e).
3.5 RESTRICTIONS ON EMPLOYER CONTRIBUTIONS. In restriction of the
Employer Contributions hereunder, it is specifically provided that one of the
"actual contribution percentage" tests set forth in section 401(m) of the Code
and the Treasury regulations thereunder must be met in each Plan Year. The
Committee may elect, in accordance with applicable Treasury regulations, to
treat Cash or Deferred Contributions to the Plan as Employer Matching
Contributions for purposes of meeting this requirement.
3.6 RETURN OF CONTRIBUTIONS. Anything to the contrary herein
notwithstanding, the Employer's contributions to the Plan are contingent upon
the deductibility of such contributions under section 404 of the Code. To the
extent that a deduction for contributions is disallowed, such contributions
shall, upon the written demand of the Employer, be returned to the Employer by
the Trustee within one year after the date of disallowance, reduced by any net
losses of the Trust Fund attributable thereto but not increased by any net
earnings of the Trust Fund attributable thereto. Moreover, if Employer
contributions are made under a mistake of fact, such contributions shall, upon
the written demand of the Employer, be returned to the Employer by the Trustee
within one year after the payment thereof, reduced by any net losses of the
Trust Fund attributable thereto but not increased by any net earnings of the
Trust Fund attributable thereto.
3.7 DISPOSITION OF EXCESS DEFERRALS AND EXCESS CONTRIBUTIONS.
(a) Anything to the contrary herein notwithstanding, any Cash or
Deferred Contributions to the Plan for a calendar year on behalf of a Member in
excess of the limitations set forth in Section 3.1(d) and any "excess
deferrals" from other plans allocated to the Plan by such Member no later than
March 1 of the next following calendar year within the meaning of, and pursuant
to the provisions of, section 402(g)(2) of the Code, shall be distributed to
such Member not later than April 15 of the next following calendar year.
(b) Anything to the contrary herein notwithstanding, if, for any
Plan Year, the aggregate Cash or Deferred Contributions made by the Employer on
behalf of Highly Compensated Employees exceeds the maximum amount of Cash or
Deferred Contributions permitted on behalf of such Highly Compensated Employees
pursuant to Section 3.1(e)
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16
(determined by reducing Cash or Deferred Contributions on behalf of Highly
Compensated Employees in order of the "actual deferral percentages" (as that
term is defined in section 401(k)(3)(B) of the Code and the Treasury
regulations thereunder) beginning with the highest of such percentages), such
excess shall be distributed to the Highly Compensated Employees on whose behalf
such excess was contributed before the end of the next following Plan Year. For
purposes of this Paragraph, the determination and correction of excess Cash or
Deferred Contributions of a Member whose actual deferral percentage is
determined under the family aggregation rules of sections 401(k) and 414(q) of
the Code shall be made in accordance with the provisions of such sections and
the Treasury regulations thereunder.
(c) Anything to the contrary herein notwithstanding, if, for any
Plan Year, the aggregate Employer Contributions allocated to the Accounts of
Highly Compensated Employees exceeds the maximum amount of such Employer
Contributions permitted on behalf of such Highly Compensated Employees pursuant
to Section 3.5 (determined by reducing Employer Contributions made on behalf of
Highly Compensated Employees in order of the "contribution percentages" (as
that term is defined in section 401(m)(3) of the Code and Treasury regulations
thereunder) beginning with the highest of such percentages), such excess shall
be distributed to the Highly Compensated Employees on whose behalf such excess
contributions were made before the end of the next following Plan Year. For
purposes of this Paragraph, the determination and correction of excess Employer
Contributions allocated to the Account of a Member whose contribution
percentage is determined under the family aggregation rules of sections 401(m)
and 414(q) of the Code shall be made in accordance with the provisions of such
sections and the Treasury regulations thereunder.
(d) In coordinating the disposition of excess deferrals and excess
contributions pursuant to this Section, such excess deferrals and excess
contributions shall be disposed of in the following order:
(1) First, Cash or Deferred Contributions which constitute
excess deferrals described in Paragraph (a) above that are not
considered in determining the amount of Employer Matching
Contributions pursuant to Section 3.2 shall be distributed;
(2) Next, excess Cash or Deferred Contributions which
constitute excess deferrals described in Paragraph (a) above that are
considered in determining the amount of Employer Matching
Contributions pursuant to Section 3.2 shall be distributed, and the
Employer Matching Contributions with respect to such Cash or Deferred
Contributions shall be forfeited;
(3) Next, excess Cash or Deferred Contributions described in
Paragraph (b) above that are not considered in determining the amount
of Employer Matching Contributions pursuant to Section 3.2 shall be
distributed;
(4) Next, excess Cash or Deferred Contributions described in
Paragraph (b) above that are considered in determining the amount of
Employer Matching
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Contributions pursuant to Section 3.2 shall be distributed, and the
Employer Matching Contributions with respect to such Cash or Deferred
Contributions shall be forfeited; and
(5) Finally, excess Employer Contributions described in
Paragraph (c) above shall be distributed.
(e) Any distribution or forfeiture of excess deferrals or excess
contributions pursuant to the provisions of this Section shall be adjusted for
income or loss allocated thereto in accordance with the provisions of Section
4.3 through the Valuation Date next preceding the date of the distribution or
forfeiture. Any forfeiture pursuant to the provisions of this Section shall be
considered to have occurred on the date which is 2-1/2 months after the end of
the Plan Year.
3.8 ROLLOVER CONTRIBUTIONS.
(a) Qualified Rollover Contributions may be made to the Plan by
any Eligible Employee of amounts received by such Eligible Employee from an
individual retirement account or annuity or from an employees' trust described
in section 401(a) of the Code, which is exempt from tax under section 501(a) of
the Code, but only if any such Rollover Contribution is made pursuant to and in
accordance with applicable provisions of the Code and Treasury regulations
promulgated thereunder. A Rollover Contribution of amounts that are "eligible
rollover distributions" within the meaning of section 402(f)(2)(A) of the Code
may be made to the Plan irrespective of whether such eligible rollover
distribution was paid to the Eligible Employee or paid to the Plan as a
"direct" Rollover Contribution. A direct Rollover Contribution to the Plan may
be effectuated only by wire transfer directed to the Trustee or by issuance of
a check made payable to the Trustee, which is negotiable only by the Trustee
and which identifies the Eligible Employee for whose benefit the Rollover
Contribution is being made. Any Eligible Employee desiring to effect a Rollover
Contribution to the Plan must execute and file with the Committee the form
prescribed by the Committee for such purpose. The Committee may require as a
condition to accepting any Rollover Contribution that such Eligible Employee
furnish any evidence that the Committee in its discretion deems satisfactory to
establish that the proposed Rollover Contribution is in fact eligible for
rollover to the Plan and is made pursuant to and in accordance with applicable
provisions of the Code and Treasury regulations. All Rollover Contributions to
the Plan must be made in cash. A Rollover Contribution shall be credited to the
Rollover Account of the Eligible Employee for whose benefit such Rollover
Contribution is being made as of the last day of the month in which such
Rollover Contribution is made.
(b) An Eligible Employee who has made a Rollover Contribution in
accordance with this Section, but who has not otherwise become a Member of the
Plan in accordance with Article II, shall become a Member coincident with such
Rollover Contribution; provided, however, that such Member shall not have a
right to defer Compensation or have Employer Contributions made on his behalf
until he has otherwise satisfied the requirements imposed by Article II.
(c) Notwithstanding the preceding Paragraphs, this Section shall
not be effective unless and until the Committee, by appropriate resolution or
unanimous written consent, elects to make this Section effective.
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18
IV.
ALLOCATIONS
4.1 SUSPENDED AMOUNTS. All contributions, forfeitures, and the net
income (or net loss) of the Trust Fund shall be held in suspense until
allocated to the Accounts of the Members as provided herein.
4.2 ALLOCATION OF CONTRIBUTIONS AND FORFEITURES.
(a) Cash or Deferred Contributions made by the Employer on a
Member's behalf for each month pursuant to Section 3.1 shall be allocated to
such Member's 401(k) Account as of the last day of such month.
(b) The Employer Matching Contributions made on a Member's behalf
pursuant to Section 3.2 for each Plan Year shall be allocated as of the last
day of such Plan Year to the Company Matching Contribution Account of such
Member.
(c) For purposes of this Paragraph, the following terms and
phrases shall have these respective meanings:
(1) ALLOCATION PERCENTAGE: For each Plan Year, the percentage
obtained by dividing (A) 100 times the aggregate amount of the
Employer Discretionary Contributions to the Plan for such Plan Year,
by (B) the sum of (i) the aggregate amount of Compensation for all
Eligible Members for such Plan Year, and (ii) the aggregate amount of
Excess Compensation for all Eligible Members for such Plan Year.
(2) ELIGIBLE MEMBER: For each Plan Year, each Member who
completed at least 1,000 Hours of Service during such Plan Year and
who (A) was an Employee on the last day of such Plan Year, or (B)
terminated his employment during such Plan Year on or after his Normal
Retirement Date or by reason of total and permanent disability (as
defined in Section 7.2) or death.
(3) EXCESS COMPENSATION: The portion, if any, of each Eligible
Member's Compensation which is in excess of the Integration Level.
(4) INTEGRATION LEVEL: With respect to each Plan Year, the
contribution and benefit base in effect under section 230 of the
Social Security Act at the beginning of such Plan Year.
Notwithstanding the foregoing, the Integration Level determined in
accordance with the preceding sentence shall be prorated for a Plan
Year of less than twelve months to the extent required by applicable
law.
(5) MAXIMUM EXCESS PERCENTAGE: For each Plan Year, the greater
of
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(A) 5.7% or (B) the percentage equal to the portion of the rate of tax
under section 3111(a) of the Code (in effect as of the beginning of
such Plan Year) which is attributable to old-age insurance.
As of the last day of each Plan Year, the Employer Discretionary Contributions
for such Plan Year plus any amounts which are forfeited under any provisions
hereof during such Plan Year (and which are not required for restoration of
amounts previously forfeited pursuant to the provisions of Section 8.5(b))
shall be allocated (as provided below) to the Company Discretionary
Contribution Accounts of the Eligible Members for such Plan Year. If the
Allocation Percentage for such Plan Year is less than or equal to the Maximum
Excess Percentage for such Plan Year, then each such Member's Company
Discretionary Contribution Account shall be allocated an amount of such
contributions and forfeitures equal to the sum of (i) the Allocation Percentage
multiplied by such Member's Compensation for such Plan Year, and (ii) the
Allocation Percentage multiplied by such Member's Excess Compensation for such
Plan Year, if any. If the Allocation Percentage for such Plan Year is greater
than the Maximum Excess Percentage for such Plan Year, then (1) an amount of
such contributions and forfeitures equal to the Maximum Excess Percentage for
such Plan Year multiplied by the total of all such Members' Excess Compensation
for such Plan Year shall be allocated to each such Member's Company
Discretionary Contribution Account in the same proportion that such Member's
Excess Compensation for such Plan Year, if any, bears to the total of all such
Members' Excess Compensation for such Plan Year, and (2) the balance of such
contributions and forfeitures shall be allocated to each such Member's Company
Discretionary Contribution Account in the same proportion that each such
Member's Compensation for such Plan Year bears to the total of all such
Members' Compensation for such Plan Year.
(d) The Employer Safe Harbor Contribution, if any, made pursuant
to Section 3.4 for a Plan Year in order to satisfy the restrictions set forth
in Section 3.1(e) shall be allocated as of the last day of such Plan Year to
the 401(k) Accounts of Members who (1) were eligible to elect to have had Cash
or Deferred Contributions made on their behalf for such Plan Year and (2) were
not Highly Compensated Employees for such Plan Year (each such Member
individually referred to as an "Eligible Member" for purposes of this
Paragraph). Such allocation shall be made, first, to the 401(k) Account of the
Eligible Member who received the least amount of Compensation for such Plan
Year until the limitation set forth in Section 4.4 has been reached as to such
Eligible Member, then to the 401(k) Account of the Eligible Member who received
the next smallest amount of Compensation for such Plan Year until the
limitation set forth in Section 4.4 has been reached as to such Eligible
Member, and continuing in such manner until the Employer Safe Harbor
Contribution for such Plan Year has been completely allocated or the limitation
set forth in Section 4.4 has been reached as to all Eligible Members. Any
remaining Employer Safe Harbor Contribution for such Plan Year shall be
allocated among the 401(k) Accounts of all Members who were Eligible Employees
during such Plan Year, with the allocation to each such Member's 401(k) Account
being the portion of such remaining Employer Safe Harbor Contribution which is
in the same proportion that such Member's Compensation for such Plan Year bears
to the total of all such Members' Compensation for such Plan Year.
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20
(e) The Employer Safe Harbor Contribution, if any, made pursuant
to Section 3.4 for a Plan Year in order to satisfy the restrictions set forth
in Section 3.5 shall be allocated as of the last day of such Plan Year to the
Company Matching Contribution Accounts of Members who (1) were eligible to
elect to have had Cash or Deferred Contributions made on their behalf for such
Plan Year and (2) were not Highly Compensated Employees for such Plan Year
(each such Member individually referred to as an "Eligible Member" for purposes
of this Paragraph). Such allocation shall be made, first, to the Company
Matching Contribution Account of the Eligible Member who received the least
amount of Compensation for such Plan Year until the limitation set forth in
Section 4.4 has been reached as to such Eligible Member, then to the Company
Matching Contribution Account of the Eligible Member who received the next
smallest amount of Compensation for such Plan Year until the limitation set
forth in Section 4.4 has been reached as to such Eligible Member, and
continuing in such manner until the Employer Safe Harbor Contribution for such
Plan Year has been completely allocated or the limitation set forth in Section
4.4 has been reached as to all Eligible Members. Any remaining Employer Safe
Harbor Contribution for such Plan Year shall be allocated among the Company
Matching Contribution Accounts of all Members who were Eligible Employees
during such Plan Year, with the allocation to each such Member's Company
Matching Contribution Account being the portion of such remaining Employer Safe
Harbor Contribution which is in the same proportion that such Member's
Compensation for such Plan Year bears to the total of all such Members'
Compensation for such Plan Year.
(f) If an Employer Safe Harbor Contribution is made in order to
satisfy the restrictions set forth in both Section 3.1(e) and Section 3.5 for
the same Plan Year, the Employer Safe Harbor Contribution made in order to
satisfy the restrictions set forth in Section 3.1(e) shall be allocated
pursuant to Paragraph (d) above prior to allocating the Employer Safe Harbor
Contribution made in order to satisfy the restrictions set forth in Section
3.5.
4.3 ALLOCATION OF NET INCOME OR LOSS AND CHANGES IN VALUE AMONG
ACCOUNTS.
(a) As of each Valuation Date, the Trustee shall determine the
fair market value of the Trust Fund assets and the net income (or net loss) of
the Trust Fund. The net income (or net loss) of each Investment Fund within the
Trust Fund since the next preceding Valuation Date shall be ascertained by the
Trustee, including any net increase or net decrease in the value of the assets
of each such Investment Fund since the next preceding Valuation Date. As soon
as practicable after each Valuation Date, the Trustee shall deliver to the
Committee a written statement of such determination.
(b) For purposes of allocations of net income (or net loss) of the
Trust Fund, each Member's Accounts (or subaccounts) shall be divided into
subaccounts to reflect such Member's investment designation in a particular
Investment Fund or Investment Funds pursuant to Article V. As of each Valuation
Date, the net income (or net loss) of each Investment Fund, separately and
respectively, shall be allocated among the corresponding subaccounts of the
Members who had such corresponding subaccounts on the next preceding Valuation
Date, and each such corresponding subaccount shall be credited with (or debited
for) that portion of such
IV-3
21
net income (or net loss) that the value of each such corresponding subaccount
on such next preceding Valuation Date was of the value of all such
corresponding subaccounts on such date; provided, however, that the value of
such subaccounts as of the next preceding Valuation Date shall be (1) reduced
by the amount of any withdrawals or distributions made therefrom since the next
preceding Valuation Date, (2) increased by one-half of the Cash or Deferred
Contributions credited to such subaccounts since the next preceding Valuation
Date, (3) increased by two-thirds of the Rollover Contributions credited to
such subaccounts as of the last day of the month next following the next
preceding Valuation Date, and (4) increased by one-third of the Rollover
Contributions credited to such subaccounts as of the last day of the second
month following the next preceding Valuation Date.
(c) So long as there is any balance in any Account (including an
Account payable to a designated beneficiary of a Member or an alternate payee
under a qualified domestic relations order, as defined in section 414(p)(8) of
the Code), such Account shall continue to receive allocations pursuant to this
Section.
4.4 LIMITATIONS AND CORRECTIONS.
(a) For purposes of this Section, the following terms and phrases
shall have these respective meanings:
(1) "Annual Additions" of a Member for any Limitation Year
shall mean the total of (A) the Employer Contributions, Cash or
Deferred Contributions, and forfeitures, if any, allocated to such
Member's Accounts for such year, (B) Member's contributions, if any,
(excluding any Rollover Contributions) for such year, and (C) amounts
referred to in sections 415(l)(1) and 419A(d)(2) of the Code.
(2) "ESOP" shall mean the ▇▇▇▇ Healthcare, Inc. Employee Stock
Ownership Plan.
(3) "Limitation Year" shall mean the Plan Year.
(4) "Maximum Annual Additions" of a Member for any Limitation
Year shall mean the lesser of (A) $30,000 (or, if greater, one-fourth
of the defined benefit dollar limitation in effect under section
415(b)(1)(A) of the Code for such Limitation Year) or (B) 25% of such
Member's compensation, within the meaning of section 415(c)(3) of the
Code and applicable Treasury regulations thereunder, during such year
except that the limitation in this Clause (B) shall not apply to any
contribution for medical benefits (within the meaning of section
419A(f)(2) of the Code) after separation from service with the
Employer or a Controlled Entity which is otherwise treated as an
Annual Addition or to any amount otherwise treated as an Annual
Addition under section 415(l)(1) of the Code.
(b) Contrary Plan provisions notwithstanding, in no event shall
the Annual
IV-4
22
Additions credited to a Member's Accounts for any Limitation Year exceed the
Maximum Annual Additions for such Member for such year. If as a result of
allocation of forfeitures, a reasonable error in estimating a Member's
compensation, a reasonable error in determining the amount of elective
deferrals (within the meaning of section 402(g)(3) of the Code) that may be
made with respect to any individual under the limits of section 415 of the
Code, or because of other limited facts and circumstances, the Annual Additions
that would be credited to a Member's Accounts for a Limitation Year would
nonetheless exceed the Maximum Annual Additions for such Member for such year,
the excess Annual Additions which, but for this Section, would have been
allocated to such Member's Accounts shall be disposed of as follows:
(1) First, any such excess Annual Additions in the form of
Cash or Deferred Contributions on behalf of such Member that would not
have been considered in determining the amount of Employer
Contributions allocated to such Member's Accounts pursuant to Section
4.2 shall be distributed to such Member, adjusted for income or loss
allocated thereto;
(2) Next, any such excess Annual Additions in the form of Cash
or Deferred Contributions on behalf of such Member that would have
been considered in determining the amount of Employer Contributions
allocated to such Member's Accounts pursuant to Section 4.2 shall be
distributed to such Member, adjusted for income or loss allocated
thereto, and the Employer Contributions that would have been allocated
to such Member's Accounts based upon such distributed Cash or Deferred
Contributions shall, to the extent such amounts would have otherwise
been allocated to such Member's Accounts, be allocated to a suspense
account and shall be held there until allocated to Member's Company
Discretionary Contribution Accounts in the same manner as a
forfeiture;
(3) Finally, any such excess Annual Additions in the form of
Employer Discretionary Contributions and forfeitures shall, to the
extent such amounts would otherwise have been allocated to such
Member's Accounts, be allocated to a suspense account and shall be
held therein until allocated to Members' Company Discretionary
Contribution Accounts in the same manner as a forfeiture.
(c) If a suspense account is in existence at any time during a
Limitation Year pursuant to this Section, it will not participate in
allocations of the net income (or net loss) of the Trust Fund.
(d) For purposes of determining whether the Annual Additions under
this Plan exceed the limitations herein provided, all defined contribution
plans of the Employer are to be treated as one defined contribution plan. In
addition, all defined contribution plans of Controlled Entities shall be
aggregated for this purpose. For purposes of this Section only, a "Controlled
Entity" (other than an affiliated service group member within the meaning of
section 414(m) of the Code) shall be determined by application of a more than
50% control standard in lieu of an 80% control standard. If the Annual
Additions credited to a Member's Accounts for any
IV-5
23
Limitation Year under this Plan plus the additions credited on his behalf under
other defined contribution plans required to be aggregated pursuant to this
Paragraph would exceed the Maximum Annual Additions for such Member for such
Limitation Year, then, first, the additions, if any, credited to such Member's
account under the ESOP for such Limitation Year shall be reduced pursuant to
the applicable provisions of the ESOP to the extent necessary to prevent such
limitation from being exceeded, and, second, to the extent further reductions
must be made, the Annual Additions under this Plan and the additions under such
other plans (other than the ESOP) shall be reduced on a pro rata basis and
allocated, reallocated, or returned in accordance with applicable plan
provisions regarding Annual Additions in excess of Maximum Annual Additions.
(e) In the case of a Member who also participated in a defined
benefit plan of the Employer or a Controlled Entity (as defined in Paragraph
(d) above), the Employer shall reduce the Annual Additions credited to the
Accounts of such Member under this Plan pursuant to the provisions of Paragraph
(b) to the extent necessary to prevent the limitation set forth in section
415(e) of the Code from being exceeded. Notwithstanding the foregoing, the
provisions of this Paragraph shall apply only if such defined benefit plan does
not provide for a reduction of benefits thereunder to ensure that the
limitation set forth in section 415(e) of the Code is not exceeded.
(f) If the limitations set forth in this Section would not
otherwise be met for any Limitation Year, the Compensation deferral elections
pursuant to Section 3.1 of affected Members may be reduced by the Committee on
a temporary and prospective basis in such manner as the Committee shall
determine.
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V.
INVESTMENT FUNDS
On the form prescribed by the Committee, each Member shall designate
the manner in which the amounts allocated to his Accounts shall be invested
from among the Investment Funds made available from time to time by the
Committee. Such Investment Funds shall be made available to all Members in a
uniform and nondiscriminatory manner. Further, the amounts invested under such
Investment Funds may be invested directly in investments specified by the
Committee or indirectly through investment in shares of commingled, collective
or common investment trust funds specified by the Committee, including such
trust funds which have been or may hereafter be established and maintained by
the Trustee. A Member may designate one of such Investment Funds for all of the
contributions to his Accounts or he may split the investment of the
contributions to his Accounts between such Investment Funds in such increments
as the Committee may prescribe. No other type of designation will be permitted.
If a Member fails to make a designation, contributions to his Accounts shall be
invested in the Investment Fund or Funds designated by the Committee from time
to time in a uniform and nondiscriminatory manner.
A Member may elect, in the manner and on the form prescribed by the
Committee, to change his investment designation; provided, however, that (a)
only one such change may be made in any calendar quarter, (b) such change shall
apply to both the investment of future contributions and to amounts already
allocated to the Member's Accounts and (c) such change shall be implemented as
soon as administratively feasible after the last day of the calendar quarter in
which the Member's election to make such change is timely received by the
Committee.
Notwithstanding any provision in this Article to the contrary, as soon
as administratively feasible after the last day of the calendar quarter in
which a Member's employment terminates, such Member's Accounts shall be
invested in the Investment Fund or Funds designated by the Committee from time
to time in a uniform and nondiscriminatory manner.
V-1
25
VI.
RETIREMENT BENEFITS
A Member who terminates his employment on or after his Normal
Retirement Date shall be entitled to a retirement benefit, payable at the time
and in the form provided in Article X, equal in value to the sum of:
(b) The amount in his Accounts as of the Valuation Date next
preceding his Benefit Commencement Date; and
(c) If the Valuation Date next preceding such Member's Benefit
Commencement Date occurs prior to the close of the Plan Year during
which his termination of employment occurred, the amount of such
Member's allocation of Cash or Deferred Contributions, Employer
Contributions, and forfeitures for such Plan Year.
VI-1
26
VII.
DISABILITY BENEFITS
7.1 DISABILITY BENEFITS. In the event a Member's employment is
terminated due to total and permanent disability, as of the Committee's
determination thereof as provided in Section 7.2, such Member shall be entitled
to a disability benefit, payable at the time and in the form provided in
Article X, equal in value to the sum of:
(a) The amount in his Accounts as of the Valuation Date next
preceding his Benefit Commencement Date; and
(b) If the Valuation Date next preceding such Member's Benefit
Commencement Date occurs prior to the close of the Plan Year during
which such disability was determined, the amount of such Member's
allocation of Cash or Deferred Contributions, Employer Contributions,
and forfeitures for such Plan Year.
7.2 TOTAL AND PERMANENT DISABILITY DETERMINED. The Committee shall
determine whether a Member has become totally and permanently disabled and
shall so notify such Member within sixty days thereafter. A Member shall be
considered totally and permanently disabled if the Committee determines, based
on a written medical opinion (unless waived by the Committee as unnecessary),
that such Member is permanently incapable of performing his job for physical or
mental reasons.
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27
VIII.
SEVERANCE BENEFITS AND DETERMINATION OF VESTED INTEREST
8.1 NO BENEFITS UNLESS HEREIN SET FORTH. Except as set forth in this
Article, upon termination of employment of a Member prior to his Normal
Retirement Date for any reason other than total and permanent disability or
death, such Member shall acquire no right to any benefit from the Plan or the
Trust Fund.
8.2 SEVERANCE BENEFIT. Each Member whose employment is terminated
prior to his Normal Retirement Date for any reason other than total and
permanent disability or death shall be entitled to a severance benefit, payable
at the time and in the form provided in Article X, equal in value to the sum
of:
(a) His Vested Interest in the amount in his Accounts as of the
Valuation Date next preceding his Benefit Commencement Date; and
(b) If the Valuation Date next preceding such Member's Benefit
Commencement Date occurs prior to the close of the Plan Year during
which his termination of employment occurred, the amount of such
Member's Vested Interest in his allocation of Cash or Deferred
Contributions and Employer Safe Harbor Contributions for such Plan
Year
8.3 DETERMINATION OF VESTED INTEREST.
(a) A Member shall have a 100% Vested Interest in his 401(k)
Account, Member ▇▇▇ Account, Employee Savings Account, Company Matching
Contribution Account, and Rollover Account at all times.
(b) A Member's Vested Interest in his Company Discretionary
Contribution Account shall be determined by such Member's years of Vesting
Service in accordance with the following schedule:
YEARS OF VESTING SERVICE VESTED INTEREST
------------------------ ---------------
Less than 1 year 0%
1 year 10%
2 years 20%
3 years 30%
4 years 40%
5 years 60%
6 years 80%
7 years or more 100%
(c) Paragraph (b) above notwithstanding, a Member shall have
a 100% Vested Interest in his Company Discretionary Contribution Account upon
attainment of his Normal
VIII-1
28
Retirement Date.
8.4 VESTING SERVICE.
(a) For the period preceding the Effective Date, subject to the
provisions of Paragraphs (c), (d), and (e) below, an individual shall be
credited with Vesting Service in an amount equal to all service credited to him
for vesting purposes under the ▇▇▇▇ Healthcare, Inc. Employee Stock Ownership
Plan as of the day prior to the Effective Date.
(b) For the Plan Year beginning with the Effective Date and all
Plan Years thereafter, subject to the provisions of Paragraphs (c), (d), and
(e) below, 1,000 or more Hours of Service during any Plan Year shall constitute
one year of Vesting Service.
(c) Paragraphs (a) and (b) above to the contrary notwithstanding,
an individual shall not be credited with Vesting Service for any service
completed prior to the first day of the Plan Year in which he attained the age
of 18.
(d) In the case of an individual who terminates employment at a
time when he does not have any Vested Interest in his Company Discretionary
Contribution Account and who then incurs a number of consecutive One-Year
Breaks-in-Service that equals or exceeds the greater of (1) five years or (2)
his years of Vesting Service prior to such One-Year Breaks-in-Service, such
individual's years of Vesting Service completed before such One-Year
Breaks-in-Service shall be disregarded in determining his years of Vesting
Service.
(e) In the case of a Member who incurs five consecutive One-Year
Breaks-in-Service, such Member's years of Vesting Service completed after such
One-Year Breaks-in-Service shall be disregarded in determining such Member's
Vested Interest in any Plan benefits derived from Employer Discretionary
Contributions on his behalf prior to such One-Year Breaks-in-Service.
8.5 FORFEITURES.
(a) With respect to a Member who terminates employment with the
Employer with a Vested Interest in his Company Discretionary Contribution
Account that is less than 100% and either is not entitled to a distribution
from the Plan or receives a distribution from the Plan of the balance of his
Vested Interest in his Accounts in the form of a lump sum distribution by the
close of the second Plan Year following the Plan Year in which his employment
is terminated, the forfeitable amount credited to the terminated Member's
Company Discretionary Contribution Account as of the Valuation Date next
preceding his Benefit Commencement Date shall become a forfeiture as of his
Benefit Commencement Date (or as of his date of termination of employment if no
amount is payable from the Trust Fund on behalf of such Member with such Member
being considered to have received a distribution of zero dollars on his date of
termination of employment).
(b) In the event that an amount credited to a terminated Member's
Company Discretionary Contribution Account becomes a forfeiture pursuant to
Paragraph (a) above, the
VIII-2
29
terminated Member shall, upon subsequent reemployment with the Employer prior
to incurring five consecutive One-Year Breaks-in-Service, have the forfeited
amount restored to such Member's Company Discretionary Contribution Account,
unadjusted by any subsequent gains or losses of the Trust Fund; provided,
however, that such restoration shall be made only if such Member repays in cash
an amount equal to the amount so distributed to him pursuant to Paragraph (a)
above within five years from the date the Member is reemployed. A reemployed
Member who was not entitled to a distribution from the Plan on his date of
termination of employment shall be considered to have repaid a distribution of
zero dollars on the date of his reemployment. Any such restoration shall be
made as of the Valuation Date coincident with or next succeeding the date of
repayment. Notwithstanding anything to the contrary in the Plan, forfeited
amounts to be restored by the Employer pursuant to this Paragraph shall be
charged against and deducted from forfeitures for the Plan Year in which such
amounts are restored that would otherwise be available for allocation to other
Members in accordance with Section 4.2(c). If such forfeitures otherwise
available are not sufficient to provide such restoration, the portion of such
restoration not provided by forfeitures shall be charged against and deducted
from Employer Contributions otherwise available for allocation to other Members
in accordance with Section 4.2(c), and any additional amount needed to restore
such forfeited amounts shall be a minimum required Employer Contribution
(without regard to current or accumulated earnings and profits).
(c) With respect to a Member whose Vested Interest in his Company
Discretionary Contribution Account is less than 100% and who receives a
termination distribution from his Company Discretionary Contribution Account
other than a lump sum distribution by the close of the second Plan Year
following the Plan Year in which his employment is terminated, any amount
remaining in his Company Discretionary Contribution Account shall continue to
be maintained as a separate account. At any relevant time, such Member's
nonforfeitable portion of his separate account shall be determined in
accordance with the following formula:
X=P(AB + (R X D)) - (R X D)
For purposes of applying the formula: X is the nonforfeitable portion of such
separate account at the relevant time; P is the Member's Vested Interest in his
Company Discretionary Contribution Account at the relevant time; AB is the
balance of such separate account at the relevant time; R is the ratio of the
balance of such separate account at the relevant time to the balance of such
separate account after the distribution; and D is the amount of the
distribution. For all other purposes of the Plan, a Member's separate account
shall be treated as a Company Discretionary Contribution Account. Upon his
incurring five consecutive One-Year Breaks-in-Service, the forfeitable portion
of a terminated Member's separate account and Company Discretionary
Contribution Account shall be forfeited as of the end of the Plan Year during
which the terminated Member incurred his fifth such consecutive One-Year
Break-in-Service.
(d) With respect to a Member who terminates employment with the
Employer with a Vested Interest in his Company Discretionary Contribution
Account greater than 0% but less than 100% and who is not otherwise subject to
the forfeiture provisions of Paragraph (a) or Paragraph (c) above, the
forfeitable portion of his Company Discretionary Contribution Account shall be
forfeited as of the end of the Plan Year during which the terminated Member
incurs his
VIII-3
30
fifth consecutive One-Year Break-in-Service.
(e) Any forfeitures occurring pursuant to Paragraphs (a), (c), or
(d) above shall be held in a suspense account and shall be available for
allocation to the Accounts of the eligible Members pursuant to Section 4.2(c),
as of the end of the Plan Year in which such forfeitures occurred. For all
Valuation Dates prior to such allocation, forfeited amounts held in the
suspense account shall not receive allocations of net income (or net loss)
pursuant to Section 4.3.
(f) Distributions of benefits described in this Section shall be
subject to the time of payment requirements of Section 10.1.
VIII-4
31
IX.
DEATH BENEFITS
9.1 DEATH BENEFITS. Upon the death of a Member while an Employee, the
Member's designated beneficiary shall be entitled to a death benefit payable at
the time and in the form provided in Article X, equal in value to the sum of:
(a) The amount in his Accounts as of the Valuation Date next
preceding his Benefit Commencement Date; and
(b) If the Valuation Date next preceding such Member's Benefit
Commencement Date occurs prior to the close of the Plan Year during
which his death occurred, the amount of such Member's allocation of
Cash or Deferred Contributions, Employer Contributions, and
forfeitures for such Plan Year.
9.2 DESIGNATION OF BENEFICIARIES.
(a) Each Member shall have the right to designate the beneficiary
or beneficiaries to receive payment of his benefit in the event of his death.
Each such designation shall be made by executing the beneficiary designation
form prescribed by the Committee and filing such form with the Committee. Any
such designation may be changed at any time by such Member by execution of a new
designation in accordance with this Section. Notwithstanding the foregoing, if a
Member who is married on the date of his death designates an individual or
entity other than his surviving spouse as his beneficiary, such designation
shall not be effective unless (1) such spouse has consented thereto in writing
and such consent (A) acknowledges the effect of such specific designation, (B)
either consents to the specific designated beneficiary (which designation may
not subsequently be changed by the Member without spousal consent) or expressly
permits such designation by the Member without the requirement of further
consent by the spouse, and (C) is witnessed by a Plan representative (other than
the Member) or a notary public or (2) the consent of such spouse cannot be
obtained because such spouse cannot be located or because of other circumstances
described by applicable Treasury regulations. Any such consent by such surviving
spouse shall be irrevocable.
(b) If no beneficiary designation is on file with the Committee
at the time of the death of the Member or if such designation is not effective
for any reason as determined by the Committee, the designated beneficiary or
beneficiaries to receive such death benefit shall be as follows:
(1) If a Member leaves a surviving spouse, his death benefit
shall be paid to such surviving spouse;
(2) If a Member leaves no surviving spouse, his death benefit
shall be
IX-1
32
paid to such Member's executor or administrator or to his heirs at law if there
is no administration of such Member's estate.
IX-2
33
X.
TIME AND FORM OF PAYMENT OF BENEFITS
10.1 TIME OF PAYMENT.
(a) Subject to the provisions of the remaining Paragraphs of this
Section, a Member's Benefit Commencement Date shall be as soon as
administratively feasible after the Valuation Date coincident with or next
succeeding the date the Member or his beneficiary becomes entitled to a benefit
pursuant to Article VI, VII, VIII, or IX.
(b) Unless a Member (1) has attained age sixty-five or died or
(2) consents to a distribution pursuant to Paragraph (a) within the ninety-day
period ending on the date payment of his benefit hereunder is to commence
pursuant to Paragraph (a), his Benefit Commencement Date shall be deferred to
the date which is as soon as administratively feasible after the Valuation Date
coincident with or next succeeding the earlier of the date the Member attains
age sixty-five or the Member's date of death, or such earlier Valuation Date as
the Member may elect by written notice to the Committee prior to such Valuation
Date. The Committee shall furnish information pertinent to his consent to each
Member no less than thirty days and no more than ninety days before his Benefit
Commencement Date, and the furnished information shall include a general
description of the material features of, and an explanation of the relative
values of, the alternative forms of benefit available under the Plan and must
inform the Member of his right to defer his Benefit Commencement Date and of his
Direct Rollover right pursuant to Section 10.5 below, if applicable.
(c) A Member's Benefit Commencement Date shall in no event be
later than the sixtieth day following the close of the Plan Year during which
such Member attains, or would have attained, his Normal Retirement Date or, if
later, terminates his employment with the Employer or a Controlled Entity.
(d) A Member's Benefit Commencement Date shall be in compliance
with the provisions of section 401(a)(9) of the Code and applicable Treasury
regulations thereunder and shall in no event be later than:
(1) In the case of a Member who attains the age of seventy and
one-half prior to January 1, 1988 and is not a "five-percent
owner" (within the meaning of section 416(i) of the Code) at any
time during the five Plan Year period ending in the calendar year
in which such Member attains the age of seventy and one-half,
April 1 following the later of (A) the calendar year in which such
Member attains the age of seventy and one-half or (B) the calendar
year in which such Member terminates his employment with the
Employer, or if such Member becomes a "five-percent owner"
following the end of such five Plan Year period, April 1 of the
calendar year following the calendar year in which such Member
becomes a "five-percent owner";
X-1
34
(2) In the case of a Member who does not attain the age of
seventy and one-half prior to January 1, 1988 or is a
"five-percent owner" (within the meaning of section 416(i) of the
Code) at any time during the five Plan Year period ending in the
calendar year in which such Member attains the age of seventy and
one-half, April 1 of the calendar year following the calendar year
in which such Member attains the age of seventy and one-half; and
(3) In the case of a benefit payable pursuant to Article IX,
(A) if payable to other than the Member's spouse, the last day of
the one-year period following the death of such Member or (B) if
payable to the Member's spouse, after the date upon which such
Member would have attained the age of seventy and one-half, unless
such surviving spouse dies before payments commence, in which case
the Benefit Commencement Date may not be deferred beyond the last
day of the one-year period following the death of such surviving
spouse.
For purposes of Paragraph (d)(2) above, a Member who attains the age of seventy
and one-half in 1988, is not a "five-percent owner" (within the meaning of
section 416(i) of the Code) at any time during the five Plan Year period ending
in 1988 and does not terminate employment with the Employer prior to January 1,
1989, shall be considered to attain the age of seventy and one-half in 1989.
Further, the preceding provisions of this Section notwithstanding, a Member may
not elect to defer the receipt of his benefit hereunder to the extent that such
deferral creates a death benefit that is more than incidental within the
meaning of section 401(a)(9)(G) of the Code and applicable Treasury regulations
thereunder.
(e) Subject to the provisions of Paragraphs (c) and (d) above, a
Member's Benefit Commencement Date shall not occur before the expiration of
the latest to end of the following periods:
(1) A period during which the Member is employed by the
Employer or any Controlled Entity; or
(2) A period during which the Member is employed by a
purchaser of assets from the Employer or a Controlled Entity if
such Member transfers to employment with such purchaser in
connection with such purchase.
(f) Paragraphs (a), (b), and (c) above notwithstanding, a Member
whose Vested Interest in his Accounts is $3,500 or more may elect to defer his
Benefit Commencement Date beyond the date specified in such Paragraphs, subject
to the provisions of Paragraph (d), by submitting to the Committee a written
statement, signed by the Member, which describes the benefit and designates the
date on which the payment of such benefit shall commence.
10.2 ALTERNATIVE FORMS OF BENEFIT FOR MEMBERS.
X-2
35
(a) For purposes of Article VI, VII, or VIII, the benefit of any
Member shall be paid in one of the following alternative forms to be
selected by the Member or, in the absence of such selection, by the
Committee; provided, however, that the period and method of payment of
any such form shall be in compliance with the provisions of section
401(a)(9) of the Code and applicable Treasury regulations thereunder:
(1) A lump sum.
(2) Periodic installment payments for any term certain to such
Member or, in the event of such Member's death before the end of
such term certain, to his designated beneficiary as provided in
Section 9.2. Upon the death of a beneficiary who is receiving
installment payments under this Paragraph, the remaining balance
in the Member's Accounts shall be paid as soon as administratively
feasible, in one lump sum cash payment, to the beneficiary's
executor or administrator or to his heirs at law if there is no
administration of such beneficiary's estate.
(b) If a Member, who terminated his employment under
circumstances such that he was entitled to a benefit pursuant to
Article VI, VII, or VIII, dies prior to the time that any funds from
his Accounts have been paid, or irrevocably committed to be paid, to
provide a benefit pursuant to this Section, the amount of the benefit
to which he was entitled shall be paid pursuant to Section 10.3 just
as if such Member had died while employed by the Employer except that
his Vested Interest shall be determined pursuant to Article VI, VII,
or VIII, as applicable to such Member.
10.3 ALTERNATIVE FORMS OF DEATH BENEFIT. For purposes of Article IX,
the death benefit for a deceased Member shall be paid to his beneficiary
designated in accordance with the provisions of Section 9.2 in one of the
following alternative forms to be selected by the Member (or the Member's
designated beneficiary if authorized by the Member) or, in the absence of such
selection, by the Committee; provided, however, that the period and method of
payment of any such form shall be in compliance with the provisions of section
401(a)(9) of the Code and applicable Treasury regulations thereunder:
(a) A lump sum.
(b) Periodic installment payments for any term certain; provided,
however, the term certain shall not exceed the life expectancy of the
beneficiary. Upon the death of a beneficiary who is receiving
installment payments under this Paragraph, the remaining balance in
the Member's Accounts shall be paid as soon as administratively
feasible, in one lump sum cash payment, to the beneficiary's executor
or administrator or to his heirs at law if there is no administration
of such beneficiary's estate.
10.4 CASH-OUT OF BENEFIT. If a Member terminates his employment and
his Vested Interest in his Accounts is not in excess of $3,500, such Member's
benefit shall be paid in one lump sum payment in lieu of any other form of
benefit herein provided. Any such payment shall
X-3
36
be made at the time specified in Section 10.1(a) without regard to the consent
restrictions of Section 10.1(b). The provisions of this Section shall not be
applicable to a Member following his Benefit Commencement Date.
10.5 DIRECT ROLLOVER ELECTION.
(a) Notwithstanding any provision of the Plan to the contrary
that would otherwise limit a Distributee's election under this Section, a
Distributee may elect, at the time and in the manner prescribed by the
Committee, to have all or any portion of an Eligible Rollover Distribution
(other than any portion attributable to the offset of an outstanding loan
balance of such Member pursuant to the Plan's loan procedure) paid directly to
an Eligible Retirement Plan specified by the Distributee in a Direct Rollover.
The preceding sentence notwithstanding, a Distributee may elect a Direct
Rollover pursuant to this Section only if such Distributee's Eligible Rollover
Distributions during the Plan Year are reasonably expected to total $200 or
more. Furthermore, if less than 100% of the Member's Eligible Rollover
Distribution is to be a Direct Rollover, the amount of the Direct Rollover must
be $500 or more. Prior to any Direct Rollover pursuant to this Section, the
Distributee shall furnish the Committee with a statement from the plan,
account, or annuity to which the benefit is to be transferred verifying that
such plan, account, or annuity is, or is intended to be, an Eligible Retirement
Plan.
(b) No less than thirty days and no more than ninety days before
his Benefit Commencement Date, the Committee shall inform the Distributee of
his Direct Rollover right pursuant to this Section. A distribution or Direct
Rollover of the Distributee's benefit may commence less than thirty days after
such notice is given, provided that (1) the Committee clearly informs the
Distributee that the Distributee has a right to a period of at least thirty
days after receiving the notice to consider the decision of whether or not to
elect a Direct Rollover and (2) the Distributee, after receiving the notice,
affirmatively elects either a distribution or a Direct Rollover or a
combination thereof.
10.6 BENEFITS FROM ACCOUNT BALANCES. With respect to any benefit
payable in any form pursuant to the Plan, such benefit shall be provided from
the Account balance(s) to which the particular Member or beneficiary is
entitled.
10.7 COMMERCIAL ANNUITIES. At the direction of the Committee, the
Trustee may pay any form of benefit provided hereunder other than a lump sum
payment or a Direct Rollover pursuant to Section 10.5 by the purchase of a
commercial annuity contract and the distribution of such contract to the Member
or beneficiary. Thereupon, the Plan shall have no further liability with
respect to the amount used to purchase the annuity contract and such Member or
beneficiary shall look solely to the company issuing such contract for such
annuity payments. All certificates for commercial annuity benefits shall be
nontransferable, except for surrender to the issuing company, and no benefit
thereunder may be sold, assigned, discounted, or pledged (other than as
collateral for a loan from the company issuing same). Notwithstanding the
foregoing, the terms of any such commercial annuity contract shall conform with
the time of payment, form of payment and consent provisions of Sections 10.1,
10.2, and 10.3.
X-4
37
10.8 UNCLAIMED BENEFITS. In the case of a benefit payable on behalf of
a Member, if the Committee is unable to locate the Member or beneficiary to
whom such benefit is payable, upon the Committee's determination thereof, such
benefit shall be forfeited, held in a suspense account, and available for
allocation to the Accounts of the eligible Members pursuant to Section 4.2(c)
as of the end of the Plan Year in which the forfeiture occurred. For all
Valuation Dates prior to such allocation, forfeited amounts held in the
suspense account shall not participate in allocations of the net income (or net
loss) of the Trust Fund. Notwithstanding the foregoing, if subsequent to any
such forfeiture the Member or beneficiary to whom such benefit is payable makes
a valid claim for such benefit, such forfeited benefit shall be restored to the
Plan in the manner provided in Section 8.5(b).
10.9 CLAIMS REVIEW. In any case in which a claim for Plan benefits of
a Member or beneficiary is denied or modified, the Committee shall furnish
written notice to the claimant within ninety days (or within 180 days if
additional information requested by the Committee necessitates an extension of
the ninety-day period), which notice shall:
(a) State the specific reason or reasons for the denial or
modification;
(b) Provide specific reference to pertinent Plan provisions on
which the denial or modification is based;
(c) Provide a description of any additional material or
information necessary for the Member, his beneficiary, or
representative to perfect the claim and an explanation of why such
material or information is necessary; and
(d) Explain the Plan's claim review procedure as contained
herein.
In the event a claim for Plan benefits is denied or modified, if the Member,
his beneficiary, or a representative of such Member or beneficiary desires to
have such denial or modification reviewed, he must, within sixty days following
receipt of the notice of such denial or modification, submit a written request
for review by the Committee of its initial decision. In connection with such
request, the Member, his beneficiary, or the representative of such Member or
beneficiary may review any pertinent documents upon which such denial or
modification was based and may submit issues and comments in writing. Within
sixty days following such request for review the Committee shall, after
providing a full and fair review, render its final decision in writing to the
Member, his beneficiary or the representative of such Member or beneficiary
stating specific reasons for such decision and making specific references to
pertinent Plan provisions upon which the decision is based. If special
circumstances require an extension of such sixty-day period, the Committee's
decision shall be rendered as soon as possible, but not later than 120 days
after receipt of the request for review. If an extension of time for review is
required, written notice of the extension shall be furnished to the Member,
beneficiary, or the representative of such Member or beneficiary prior to the
commencement of the extension period.
X-5
38
XI.
IN-SERVICE WITHDRAWALS
11.1 IN-SERVICE WITHDRAWALS.
(a) A Member may withdraw from his Employee Savings Account any
or all amounts held in such Account; provided, however, that a partial
withdrawal from such Account shall be permitted only if at least a $100 balance
remains in such Account after such withdrawal.
(b) A Member may withdraw from his Member ▇▇▇ Account an amount
equal to all, but not less than all, of the amounts held in such Account.
(c) A Member may withdraw from his Rollover Account an amount
equal to all, but not less than all, of the amounts held in such Account.
(d) A Member who has attained age fifty-nine and one-half may
withdraw from his 401(k) Account an amount not exceeding the then value of such
Account.
(e) A Member who has a financial hardship, as determined by the
Committee, and who has made all available withdrawals pursuant to the
Paragraphs above and pursuant to the provisions of any other plans of the
Employer and any Controlled Entities of which he is a member and who has
obtained all available loans pursuant to Article XII and pursuant to the
provisions of any other plans of the Employer and any Controlled Entities of
which he is a member may withdraw from his 401(k) Account an amount not to
exceed the lesser of (1) the then value of such Account or (2) the amount
determined by the Committee as being available for withdrawal pursuant to this
Paragraph. For purposes of this Paragraph, financial hardship shall mean the
immediate and heavy financial needs of the Member. A withdrawal based upon
financial hardship pursuant to this Paragraph shall not exceed the amount
required to meet the immediate financial need created by the hardship and not
reasonably available from other resources of the Member. The amount required to
meet the immediate financial need may include any amounts necessary to pay any
federal, state, or local income taxes or penalties reasonably anticipated to
result from the distribution. The determination of the existence of a Member's
financial hardship and the amount required to be distributed to meet the need
created by the hardship shall be made by the Committee. The decision of the
Committee shall be final and binding, provided that all Members similarly
situated shall be treated in a uniform and nondiscriminatory manner. A
withdrawal shall be deemed to be made on account of an immediate and heavy
financial need of a Member if the withdrawal is for:
(1) Expenses for medical care described in section 213(d) of the
Code previously incurred by the Member, the Member's spouse, or any
dependents of the Member (as defined in section 152 of the Code) or
necessary for those persons to obtain medical care described in
section 213(d) of the Code and not reimbursed or reimbursable
XI-1
39
by insurance;
(2) Costs directly related to the purchase of a principal
residence of the Member (excluding mortgage payments);
(3) Payment of tuition and related educational fees for the next
twelve months of post-secondary education for the Member or the
Member's spouse, children, or dependents (as defined in section 152 of
the Code);
(4) Payments necessary to prevent the eviction of the Member from
his principal residence or foreclosure on the mortgage of the Member's
principal residence; or
(5) Such other financial needs that the Commissioner of Internal
Revenue may deem to be immediate and heavy financial needs through the
publication of revenue rulings, notices, and other documents of
general applicability.
The above notwithstanding, (1) withdrawals under this Paragraph from a Member's
401(k) Account shall be limited to the sum of the Member's Cash or Deferred
Contributions to the Plan, plus income allocable thereto and credited to the
Member's 401(k) Account as of the Valuation Date coincident with or next
preceding December 31, 1988, less any previous withdrawals of such amounts, and
(2) amounts allocated to a Member's 401(k) Account pursuant to the provisions
of Section 4.2(d) shall not be subject to withdrawal.
11.2 RESTRICTION ON IN-SERVICE WITHDRAWALS.
(a) All withdrawals pursuant to this Article shall be made only
as of any Valuation Date by executing and filing with the Committee the form
prescribed by the Committee at least 30 days prior to the proposed date of
withdrawal.
(b) Notwithstanding the provisions of this Article, not more than
one withdrawal pursuant to Section 11.1 may be made in any one Plan Year and no
withdrawal shall be made from an Account to the extent such Account has been
pledged to secure a loan under Article XII.
(c) If a Member's Account from which a withdrawal is made is
invested in more than one Investment Fund, the withdrawal shall be made pro
rata from each Investment Fund in which such Account is invested.
(d) All withdrawals under this Article shall be paid in cash.
(e) Any withdrawal under this Article shall be subject to the
Direct Rollover election described in Section 10.5.
(f) This Article shall not be applicable to a Member following
termination of
XI-2
40
employment and the amounts in such Member's Accounts shall be distributable in
accordance with the provisions of Article X.
XI-3
41
XII.
LOANS
12.1 ELIGIBILITY FOR LOAN.
(a) Upon application by (1) any Member who is an Employee or (2)
any Member no longer employed by the Employer, a beneficiary of a deceased
Member, or an alternate payee under a qualified domestic relations order, as
that term is defined in section 414(p)(8) of the Code, who retains an Account
balance under the Plan and who is a party-in-interest, as that term is defined
in section 3(14) of the Act, as to the Plan (an individual who is eligible to
apply for a loan under this Article being hereinafter referred to as a "Member"
for purposes of this Article) and subject to such uniform and nondiscriminatory
rules and regulations as the Committee may establish, the Committee may in its
discretion direct the Trustee to make a loan or loans to such Member.
(b) No loan shall be made to a Member who owes any amount on an
outstanding loan previously made to him from the Plan.
12.2 MAXIMUM LOAN.
(a) A loan to a Member may not exceed 50% of the then value of
such Member's 401(k) Account.
(b) Paragraph (a) above to the contrary notwithstanding, the
amount of a loan made to a Member under this Article shall not exceed an amount
equal to the difference between:
(1) The lesser of $50,000 (reduced by the excess, if any, of (A)
the highest outstanding balance of loans from the Plan during the
one-year period ending on the day before the date on which the loan is
made over (B) the outstanding balance of loans from the Plan on the
date on which the loan is made) or one-half of the present value of
the Member's total nonforfeitable accrued benefit under all qualified
plans of the Employer or a Controlled Entity; minus
(2) The total outstanding loan balance of the Member under all
other loans from all qualified plans of the Employer or a Controlled
Entity.
12.3 MINIMUM LOAN. A loan to a Member may not be for an amount less
than $1,000.00.
12.4 INTEREST AND SECURITY.
(a) Any loan made pursuant to this Article shall bear interest at
the prime rate
XII-1
42
of interest established by Texas Commerce Bank (Houston) on the date of the
loan.
(b) Any loan shall be made as an investment of a segregated loan
fund to be established in the Trust Fund for the Member to whom the loan is
made. Any loan shall be considered to come from the Member's 401(k) Account.
The Trustee shall fund a Member's segregated loan fund by liquidating such
portion of the assets of the Member's 401(k) Account as is necessary to fund
the loan and transferring the proceeds to such segregated loan fund. If a
Member's 401(k) Account is invested in more than one Investment Fund, the
transfer shall be made pro rata from each such Investment Fund. The loan shall
be secured by a pledge of the Member's segregated loan fund.
12.5 REPAYMENT TERMS OF LOAN.
(a) The Member shall be required, as a condition to receiving a
loan, to enter into an irrevocable agreement authorizing the Employer to make
payroll deductions from his Compensation so long as the Member is an Employee
and to transfer such payroll deduction amounts to the Trustee in payment of
such loan plus interest.
(b) The terms of the loan shall (1) require level amortization
with payments not less frequently than quarterly, (2) require that the loan be
repaid within five years unless the Member certifies in writing to the
Committee that the loan is to be used to acquire any dwelling unit which within
a reasonable time is to be used (determined at the time the loan is made) as a
principal residence of the Member, (3) allow prepayment without penalty,
provided that any prepayment must be for the full outstanding loan balance
(including interest), and (4) require that the balance of the loan (including
interest) shall become due and payable (to the extent not otherwise due and
payable) on the date the Member or, if applicable, the Member's beneficiary, is
first entitled to a distribution pursuant to Article VI, VII, VIII, or IX,
irrespective of whether such Member or beneficiary elects or consents to such
distribution and that such Member's outstanding loan balance (including
interest) shall be repaid by offsetting such balance against the amount in the
Member's segregated loan fund pledged as security for the loan. By agreeing to
the pledge of the segregated loan fund as security for the loan, a Member shall
be deemed to have consented to the distribution of such segregated loan fund
prior to the time specified in section 411(a)(11) of the Code and the
applicable Treasury regulations thereunder.
(c) If the Member fails in any way to comply with the repayment
terms of a loan, such loan shall be repaid by offsetting the Member's
outstanding loan balance (including interest) against the amount in the
Member's segregated loan fund pledged as security for the loan. Any such
outstanding loan balance (including interest) shall be so offset and repaid as
soon as administratively feasible after such failure to comply, and such
repayment shall be prior to any withdrawal or distribution of benefits from the
pledged portion of the Member's Accounts pursuant to the provisions of the
Plan. Notwithstanding the foregoing, amounts in a Member's 401(k) Account may
not be used to satisfy the payment of such loan (including interest) prior to
the time such amounts are otherwise distributable from the Plan.
▇▇▇-▇
▇▇
(▇) The above notwithstanding, a Member who is on an unpaid leave
of absence from the Employer may elect to suspend payments on his loan during
such leave of absence for a period of up to one year. Upon such Member's return
to active employment with the Employer at the conclusion of such leave of
absence or upon the expiration of such one-year period, if earlier, such Member
shall be permitted to refinance his loan, including all accrued and unpaid
interest, over a term that does not extend beyond the expiration of the
original term of the loan.
(e) Amounts tendered to the Trustee by a Member in repayment of a
loan made pursuant to this Article (1) shall initially be credited to the
Member's segregated loan fund, (2) shall then be transferred as soon as
practicable following receipt thereof to the Member's 401(k) Account, and (3)
shall be invested in accordance with the Member's current designation as to the
investment of contributions being allocated to his 401(k) Account pursuant to
Article V.
XII-3
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XIII.
ADMINISTRATION OF THE PLAN
13.1 APPOINTMENT OF COMMITTEE. The general administration of the Plan
shall be vested in the Committee which shall be appointed by the Directors and
shall consist of one or more persons. Any individual, whether or not an
Employee, is eligible to become a member of the Committee. Each member of the
Committee shall, before entering upon the performance of his duties, qualify by
signing a consent to serve as a member of the Committee under and pursuant to
the Plan and by filing such consent with the records of the Committee. For
purposes of the Act, the Committee shall be the Plan "administrator" and shall
be the "named fiduciary" with respect to the general administration of the Plan
(except as to the investment of the assets of the Trust Fund).
13.2 TERM, VACANCIES, RESIGNATION, AND REMOVAL. Each member of the
Committee shall serve until he resigns, dies, or is removed by the Directors.
At any time during his term of office, a member of the Committee may resign by
giving written notice to the Directors and the Committee, such resignation to
become effective upon the appointment of a substitute member or, if earlier,
the lapse of thirty days after such notice is given as herein provided. At any
time during his term of office, and for any reason, a member of the Committee
may be removed by the Directors with or without cause, and the Directors may in
their discretion fill any vacancy that may result therefrom. Any member of the
Committee who is an Employee shall automatically cease to be a member of the
Committee as of the date he ceases to be employed by the Employer or a
Controlled Entity.
13.3 OFFICERS, RECORDS, AND PROCEDURES. The Committee may select
officers and may appoint a secretary who need not be a member of the Committee.
The Committee shall keep appropriate records of its proceedings and the
administration of the Plan and shall make available for examination during
business hours to any Member or beneficiary such records as pertain to that
individual's interest in the Plan. The Committee shall designate the person or
persons who shall be authorized to sign for the Committee and, upon such
designation, the signature of such person or persons shall bind the Committee.
13.4 MEETINGS. The Committee shall hold meetings upon such notice and
at such time and place as it may from time to time determine. Notice to a
member shall not be required if waived in writing by that member. A majority of
the members of the Committee duly appointed shall constitute a quorum for the
transaction of business. All resolutions or other actions taken by the
Committee at any meeting where a quorum is present shall be by vote of a
majority of those present at such meeting and entitled to vote. Resolutions may
be adopted or other action taken without a meeting upon written consent signed
by all of the members of the Committee.
13.5 SELF-INTEREST OF MEMBERS. No member of the Committee shall have
any right to vote or decide upon any matter relating solely to himself under
the Plan or to vote in any case in which his individual right to claim any
benefit under the Plan is particularly involved. In any case
XIII-1
45
in which a Committee member is so disqualified to act and the remaining members
cannot agree, the Directors shall appoint a temporary substitute member to
exercise all the powers of the disqualified member concerning the matter in
which he is disqualified.
13.6 COMPENSATION AND BONDING. The members of the Committee shall not
receive compensation with respect to their services for the Committee. To the
extent required by the Act or other applicable law, or required by the Company,
members of the Committee shall furnish bond or security for the performance of
their duties hereunder.
13.7 COMMITTEE POWERS AND DUTIES. The Committee shall supervise the
administration and enforcement of the Plan according to the terms and
provisions hereof and shall have all powers necessary to accomplish these
purposes, including, but not by way of limitation, the right, power, authority,
and duty:
(a) To make rules, regulations, and bylaws for the administration
of the Plan that are not inconsistent with the terms and provisions
hereof, provided such rules, regulation, and bylaws are evidenced in
writing and copies thereof are delivered to the Trustee and to the
Company, and to enforce the terms of the Plan and the rules and
regulations promulgated thereunder by the Committee;
(b) To construe in its discretion all terms, provisions,
conditions, and limitations of the Plan. In all cases, the
construction necessary for the Plan to qualify under the applicable
provisions of the Code shall control;
(c) To correct any defect or to supply any omission or to
reconcile any inconsistency that may appear in the Plan in such manner
and to such extent as it shall deem in its discretion expedient to
effectuate the purposes of the Plan;
(d) To employ and compensate such accountants, attorneys,
investment advisors, and other agents, employees, and independent
contractors as the Committee may deem necessary or advisable for the
proper and efficient administration of the Plan;
(e) To determine in its discretion all questions relating to
eligibility;
(f) To make a determination in its discretion as to the right of
any person to a benefit under the Plan and to prescribe procedures to
be followed by distributees in obtaining benefits hereunder;
(g) To prepare, file, and distribute, in such manner as the
Committee determines to be appropriate, such information and material
as is required by the reporting and disclosure requirements of the Act
or the Code;
(h) To furnish the Employer any information necessary for the
preparation of such Employer's tax return or other information that
the Committee determines in its discretion is necessary for a
legitimate purpose;
XIII-2
46
(i) To require and obtain from the Employer and the Members any
information or data that the Committee determines is necessary for the
proper administration of the Plan;
(j) To instruct the Trustee as to the loans to Members pursuant
to the provisions of Article XII;
(k) to instruct the Trustee as to the management, investment, and
reinvestment of the Trust Fund;
(l) To appoint investment managers pursuant to Section 15.5;
(m) To receive and review reports from the Trustee and the
Investment Managers as to the financial condition of the Trust Fund,
including its receipts and disbursements; and
(n) To establish or designate Investment Funds as investment
options as provided in Article V.
13.8 EMPLOYER TO SUPPLY INFORMATION. The Employer shall supply full
and timely information to the Committee, including, but not limited to,
information relating to each Member's Compensation, age, retirement, death, or
other cause of termination of employment and such other pertinent facts as the
Committee may require. The Employer shall advise the Trustee of such of the
foregoing facts as are deemed necessary for the Trustee to carry out the
Trustee's duties under the Plan. When making a determination in connection with
the Plan, the Committee shall be entitled to rely upon the aforesaid
information furnished by the Employer.
13.9 INDEMNIFICATION. The Company shall indemnify and hold harmless
each member of the Committee against any and all expenses and liabilities
arising out of his administrative functions or fiduciary responsibilities,
including any expenses and liabilities that are caused by or result from an act
or omission constituting the negligence of such member in the performance of
such functions or responsibilities, but excluding expenses and liabilities that
are caused by or result from such member's own gross negligence or willful
misconduct. Expenses against which such member shall be indemnified hereunder
shall include, without limitation, the amounts of any settlement or judgment,
costs, counsel fees, and related charges reasonably incurred in connection with
a claim asserted or a proceeding brought or settlement thereof.
XIII-3
47
XIV.
TRUSTEE AND ADMINISTRATION OF TRUST FUND
14.1 APPOINTMENT, RESIGNATION, REMOVAL, AND REPLACEMENT OF TRUSTEE.
(a) The Trustee shall be appointed, removed, and replaced by and
in the sole discretion of the Directors. The Trustee shall be the "named
fiduciary" with respect to investment of the Trust Fund's assets; provided,
however, that the Trustee shall serve as a "directed Trustee" and shall be
subject to directions from the Committee.
(b) Any Trustee may resign at any time by giving at least thirty
days written notice of such resignation to the Directors, unless such notice
requirement is waived by the Committee. Any Trustee may be removed, with or
without cause, by the Directors on written notice of such removal to such
Trustee. The Directors may appoint a successor Trustee by written designation,
a copy of which shall be delivered to the Committee and the former Trustee. The
predecessor Trustee shall promptly perform all acts as are necessary to
transfer Plan assets to the successor Trustee. The predecessor Trustee and the
successor Trustee shall not be liable for the acts or omissions of the other
except as required by the Act or other applicable law. The Directors may by
resolution increase or decrease the number of Trustees at any time acting
hereunder.
14.2 ACCEPTANCE OF FUND. The Trustee accepts the Trust Fund hereunder
and agrees to accept and retain, manage, administer and hold the Trust Fund in
accordance with the terms and provisions of this Plan. The Trustee shall
receive any securities or other properties that are tendered to the Trustee
pursuant to the Plan that are acceptable to the Trustee.
14.3 COMMITTEE DISCHARGING DUTY. The Trustee may assume that the
Committee is discharging its duties under the Plan until and unless the Trustee
is notified to the contrary in writing by any person known to be a member of
the Committee or by the Employer. Upon receipt of such notice, the Trustee may,
if the Trustee so desires, apply to a court of competent jurisdiction for
guidance with respect to the disposition of the Trust Fund. The Trustee shall
promptly receive written notification of the names of the Committee members and
specimen signatures and shall be entitled to rely on same without further
inquiry until it receives written notice from the Committee or the Company to
the contrary.
14.4 TAXES. If, pursuant to the provisions of any law now or hereafter
enacted, any tax shall be imposed upon the Trustee with respect to the assets
or income of the Trust Fund, the Trustee (without the necessity of any
direction or approval by the Committee) may pay such tax from the Trust Fund,
provided such payment is not otherwise prohibited by law. The Trustee, however,
shall not be obligated to pay any such tax as long as the validity thereof is
contested in good faith. In determining whether or not to pay any such tax, the
Trustee may obtain the advice of counsel (including, but not limited to,
counsel for the Employer or the Committee).
XIV-1
48
14.5 POWERS OF THE TRUSTEE. Subject to any limitations stated
elsewhere herein, in addition to the authority, rights, privileges, powers, and
duties elsewhere herein vested in the Trustee and those now or hereafter
conferred by law, the Trustee shall also have the following authority, rights,
privileges, powers, and duties:
(a) To hold, manage, control, collect, and use the Trust Fund in
accordance with the terms of this instrument;
(b) To sell (for cash or on credit, or both), exchange, or
otherwise dispose of, the whole or any part of the Trust Fund, at
public or private sale; to lease (including, but not limited to, oil,
gas, or mineral leases), rent, mortgage (including purchase money
mortgages), pledge, or otherwise encumber the whole or any part of the
Trust Fund; and to loan or borrow money in any manner, including by
joint and several obligations, all upon such terms, regardless of the
duration of the Trust, as the Trustee may deem advisable (provided
that neither the Employer nor any Member may borrow from the Trust
Fund except as otherwise permitted herein);
(c) To invest or reinvest the Trust Fund in property of any
description whatsoever (including, but not limited to, oil, gas, or
mineral interests; common or preferred stock; shares of investment
trusts or companies; bills, notes (whether secured or unsecured), and
other evidences of indebtedness; non-income producing property; and
property outside of Texas);
(d) To make or hold investments of any part of the Trust Fund in
common or undivided interest with other persons or entities, including
an undivided interest in any property in which any Trustee,
individually or otherwise, may hold an undivided interest; to buy from
or sell to any person or entity to the extent not otherwise prohibited
herein;
(e) To make commingled, collective, or common investments and to
invest and reinvest all or any portion of the Trust Fund collectively
with funds of other pension and profit sharing trusts exempt from tax
under section 501(a) of the Code by reason of qualifying under section
401(a) of said Code, including, without limitation, power to invest
collectively with such other funds through the medium of one or more
of the common, collective, or commingled trust funds, which has been
or may hereafter be established and maintained by the Trustee or its
affiliates. To the extent of the interest of the Trust Fund in any
such collective trust, the agreement or declaration of trust
establishing such collective trust shall be deemed to be adopted and
made a part of the Plan and Trust as if set forth in full herein;
(f) To deposit or invest all or a part of the Trust Fund in
savings accounts, certificates of deposit, or other deposits that bear
a reasonable rate of interest in a bank or similar financial
institution, including the commercial department of the Trustee, if
such bank or other institution is supervised by any agency of a state
or the federal government.
XIV-2
49
(g) To employ and compensate from the Trust Fund such attorneys,
counsel, brokers, banks, investment advisors, or other agents,
employees, or independent contractors and to delegate to them such of
the duties, rights, and powers of the Trustee as may be deemed
advisable in handling and administering the Plan;
(h) To partition any property or interest held as a part of the
Trust Fund and, in any and all such partitions, to pay or receive such
money or property as may be necessary or advisable to equalize
differences; to make any distribution from the Trust Fund, as directed
by the Committee in cash or other property (including an undivided
interest in any property) or both, in any manner whatsoever (including
composing shares differently); and to evaluate any property belonging
to the Trust Fund;
(i) To institute, join in, maintain, defend, compromise, submit
to arbitration, or settle any litigation, claim, obligation, or
controversy with respect to any matter affecting the Trust Fund,
regardless of the manner in which such matter may have arisen, all in
the name of the Trustee and without the joinder of any Member;
(j) To hold uninvested at any time, without liability for
interest thereon for a reasonable period of time, any amount of money
received by the Trustee or raised by the Trustee from the sale of
investments or otherwise until same can be reinvested or disbursed;
(k) Except when prohibited by applicable law which cannot be
waived, to keep any securities or other property in the name of some
other person or entity, with a power of attorney for their transfer
attached, in bearer or Federal Reserve Book-entry form, or in the name
of the Trustee, without disclosing the fiduciary capacity of the
Trustee; and
(l) The Trustee shall not be required to take any legal action to
collect, preserve or maintain any Trust Fund property unless the
Trustee has been indemnified either by the Trust itself, with the
approval of the Committee, or by the Company, with respect to any
expenses or losses to which the Trustee may be subjected by taking
such action. Any property acquired by the Trustee through the
enforcement or compromise of any claim the Trustee has will become
part of the Trust Fund. The Trustee shall be responsible only for the
property actually received by it hereunder. It shall have no duty or
authority to compute any amount to be paid to it by the Employer or a
Member, or to bring any action or proceeding to enforce the collection
of any contribution to the Trust Fund.
The Trustee is also authorized to exercise all the rights, powers, options, and
privileges now or hereafter granted to, provided for, or vested in trustees
under the Texas Trust Code, except as such may conflict with the terms of this
instrument or applicable law. As far as possible, no subsequent legislation or
regulation shall be in limitation of the rights, powers, or privileges
XIV-3
50
granted the Trustee hereunder or set forth in the Texas Trust Code as it exists
at the time of the execution hereof. Generally, the Trustee shall have, hold,
manage, control, use, invest and reinvest, disburse, and dispose of the Trust
Fund under all circumstances to the same extent as if the Trustee were the
owner thereof in fee simple, subject only to such limitations as are contained
herein and such applicable laws as cannot be waived. This instrument shall
always be construed in favor of the validity of any act or omission by or of
the Trustee. Notwithstanding the foregoing, the Trustee may not invest the
Trust Fund assets in any Company security that is not a "qualifying Company
security" or in any Company real property that is not "qualifying Company real
property." The Trustee may, however, as directed by the Committee, acquire or
hold "qualifying Company securities" or "qualifying Company real property" as
an investment, provided that any such acquisition or investment will not result
in the Trust Fund's holding more than 50% of the then fair market value of the
assets of the Trust Fund in "qualifying Company securities" and "qualifying
Company real property." The term "qualifying Company securities" means stock or
marketable obligations of the Company or an affiliate. The term "qualifying
Company real property" means parcels of real property leased to the Company or
an affiliate if a substantial number of the parcels are dispersed
geographically and if each such parcel is suitable for, or adaptable to, more
than one use.
14.6 COMPENSATION, EXPENSES, AND BOND OF TRUSTEE. Unless prohibited by
Section 14.10, the Trustee shall receive such compensation for services as
Trustee hereunder as may be agreed upon from time to time by the Company and
the Trustee. The Trustee shall be reimbursed for its compensation and all
reasonable expenses incurred while acting as Trustee as provided in Section
14.10. No bond or other security shall be required of the Trustee unless
otherwise required by law or by the Company.
14.7 RELIANCE. The Trustee shall be fully protected in relying upon a
resolution of the Directors as to the membership of the Committee as it then
exists and in continuing to rely upon such resolution until a subsequent
resolution is filed with the Trustee by the Directors. The Trustee may accept
as true all papers, certificates, statements, and representations of fact that
are presented to the Trustee by the Committee without investigation,
questioning, or verification if the Trustee believes same to be true and
authentic, and the Trustee may rely solely on the written advice of the
Committee with respect to any question of fact.
14.8 ACCOUNTING. Within 90 days or as soon as possible after the end
of each Plan Year, the Trustee shall render a written accounting of the
administration of the Trust Fund showing all receipts and disbursements during
the year and the then value of the assets of the Trust Fund. This accounting
shall be transmitted to the Committee and to the Company. The Committee and/or
the Company may approve such accounting by a written notice of approval
delivered to the Trustee or by failure to express objection to such accounting
in writing within 90 days from the date upon which the accounting was delivered
to the Committee and to the Company. Upon the receipt of such written approval
of the accounting or upon passage of such 90-day period without such objection
being delivered in writing to the Trustee, such accounting shall be deemed
approved and the Trustee shall be released and discharged as to all items set
forth in such accounting as if such accounting had been settled by a final
decree of a court of competent
XIV-4
51
jurisdiction.
14.9 JUDICIAL PROTECTION. In any court of competent jurisdiction, the
Trustee may seek judicial protection by any action or proceeding deemed
necessary to settle the accounts of the Trustee or may obtain a judicial
determination or a declaratory judgment as to a question of construction of the
Plan. The Trustee must join as parties defendant in any such action only the
Committee and the Company, although the Trustee may join other parties if the
Trustee deems it advisable to do so.
14.10 PAYMENT OF EXPENSES. All expenses incident to the administration
of the Plan and Trust, including but not limited to, legal, accounting, Trustee
fees, expenses of the Committee, and the cost of furnishing any bond or
security required of the Committee shall be paid by the Trustee from the Trust
Fund, and, until paid, shall constitute a claim against the Trust Fund which is
paramount to the claims of Members and beneficiaries; provided, however, that
(a) the obligation of the Trustee to pay such expenses from the Trust Fund
shall cease to exist to the extent such expenses are paid by the Employer and
(b) in the event the Trustee's compensation is to be paid, pursuant to this
Section, from the Trust Fund, any individual serving as Trustee who already
receives full-time pay from an employer or an association of employers whose
employees are participants in the Plan, or from an employee organization whose
members are participants in the Plan, shall not receive any additional
compensation for serving as Trustee. This Section shall be deemed to be a part
of any contract to provide for expenses of Plan and Trust administration,
whether or not the signatory to such contract is, as a matter of convenience,
the Employer.
14.11 TRUST FUND PROPERTY. All income, profits, recoveries,
contributions, forfeitures, and any and all moneys, securities, and properties
of any kind at any time received or held by the Trustee hereunder shall be held
for investment purposes as a commingled Trust Fund. The Committee shall
maintain Accounts in the name of each Member, but the maintenance of an Account
designated as the Account of a Member shall not mean that such Member shall
have a greater or lesser interest than that due him by operation of the Plan
and shall not be considered as segregating any funds or property from any other
funds or property contained in the commingled fund. No Member shall have any
title to any specific asset in the Trust Fund.
14.12 DISTRIBUTIONS FROM MEMBERS' ACCOUNTS. Distributions from a
Member's Accounts shall be made by the Trustee only if, when, and in the amount
and manner directed in writing by the Committee. Any distribution made to a
Member or for his benefit shall be debited to such Member's Account or
Accounts. All distributions hereunder shall be made in cash except as
otherwise specifically provided herein.
14.13 PAYMENTS SOLELY FROM TRUST FUND. All benefits payable under the
Plan shall be paid or provided for solely from the Trust Fund, and neither the
Employer nor the Trustee assumes any liability or responsibility for the
adequacy thereof. The Committee or the Trustee may require execution and
delivery of such instruments as are deemed necessary to assure proper payment
of any benefits.
XIV-5
52
14.14 NO BENEFITS TO THE EMPLOYER. No part of the corpus or income of
the Trust Fund shall be used for any purpose other than the exclusive purpose
of providing benefits for the Members and their beneficiaries and of defraying
reasonable expenses of administering the Plan. Anything to the contrary herein
notwithstanding, the Plan shall not be construed to vest any rights in the
Employer other than those specifically given hereunder.
14.15 INDEMNIFICATION. The Company shall indemnify the Trustee against
any and all claims, liabilities, costs or expenses, including reasonable
attorneys' fees, incurred by the Trustee resulting from the acts, omissions, or
breach or an alleged breach of a fiduciary duty owed to the Plan, by a party
other than the Trustee, including, but not limited to, any acts, omissions or
fiduciary duty or responsibility owed to the Plan by an investment manager
appointed pursuant to Section 15.5, any predecessor trustee or the Committee;
provided, however, that nothing herein shall be construed as an indemnification
of the Trustee for any claims, liabilities, costs and expenses resulting from
the breach by the Trustee of the Trustee's own fiduciary duties with respect to
the Plan or the Trust or the Trustee's own negligence or willful misconduct.
XIV-6
53
XV.
FIDUCIARY PROVISIONS
15.1 ARTICLE CONTROLS. This Article shall control over any contrary,
inconsistent or ambiguous provisions contained in the Plan.
15.2 GENERAL ALLOCATION OF FIDUCIARY DUTIES. Each fiduciary with
respect to the Plan shall have only those specific powers, duties,
responsibilities and obligations as are specifically given him under the Plan.
The Directors shall have the sole authority to appoint and remove the Trustee
and members of the Committee. Except as otherwise specifically provided herein,
the Committee shall have the sole responsibility for the administration of the
Plan, which responsibility is specifically described herein. Except as
otherwise specifically provided herein, the Trustee shall have the sole
responsibility for the administration, investment, and management of the assets
held under the Plan. However, if the Committee, as a co-fiduciary, shall
exercise its power given hereunder at any time, and from time to time, by
written notice to the Trustee, to direct the Trustee in the management,
investment, and reinvestment of the Trust Fund, then in such event the Trustee
shall be subject to all proper directions of the Committee that are made in
accordance with the terms of the Plan and the Act. It is intended under the
Plan that each fiduciary shall be responsible for the proper exercise of his
own powers, duties, responsibilities, and obligations hereunder and shall not
be responsible for any act or failure to act of another fiduciary except to the
extent provided by law or as specifically provided herein. A fiduciary is
authorized to operate in more than one capacity except that the Trustee shall
not be a fiduciary except in its role as Trustee.
15.3 FIDUCIARY DUTY. Each fiduciary under the Plan, including, but not
limited to, the Committee and the Trustee as "named fiduciaries," shall
discharge his duties and responsibilities with respect to the Plan:
(a) Solely in the interest of the Members, for the exclusive purpose
of providing benefits to Members and their beneficiaries and of
defraying reasonable expenses of administering the Plan;
(b) With the care, skill, prudence, and diligence under the
circumstances then prevailing that a prudent man acting in a like
capacity and familiar with such matters would use in the conduct of an
enterprise of a like character and with like aims;
(c) Subject to Articles V and XIV, by diversifying the investments
of the Plan so as to minimize the risk of large losses, unless under
the circumstances it is prudent not to do so; and
(d) In accordance with the documents and instruments governing the
Plan
XV-1
54
insofar as such documents and instruments are consistent with
applicable law.
No fiduciary shall cause the Plan or Trust Fund to enter into a "prohibited
transaction" as provided in section 4975 of the Code or section 406 of the Act.
15.4 DELEGATION AND ALLOCATION OF FIDUCIARY DUTIES. The Committee may
appoint subcommittees, individuals or any other agents as it deems advisable
and may delegate to any of such appointees any or all of the powers and duties
of the Committee. Such appointment and delegation must be in writing,
specifying the powers or duties being delegated, and must be accepted in
writing by the delegatee. Upon such appointment, delegation and acceptance, the
delegating Committee members shall have no liability for the acts or omissions
of any such delegatee, as long as the delegating Committee members do not
violate any fiduciary responsibility in making or continuing such delegation.
15.5 INVESTMENT MANAGER. The Committee may, in its sole discretion,
appoint an "investment manager," with power to manage, acquire or dispose of
any asset of the Plan and to direct the Trustee in this regard, so long as:
(a) The investment manager is (1) registered as an investment
adviser under the Investment Advisers Act of 1940, (2) a bank, as
defined in the Investment Advisers Act of 1940, or (3) an insurance
company qualified to do business under the laws of more than one
state; and
(b) Such investment manager acknowledges in writing that he is a
fiduciary with respect to the Plan.
Upon such appointment, the Committee shall not be liable for the acts of the
investment manager, as long as the Committee members do not violate any
fiduciary responsibility in making or continuing such appointment. The Trustee
shall follow the directions of such investment manager without inquiry and
shall not be liable for the acts or omissions of such investment manager. The
investment manager may be removed by the Committee at any time and within its
sole discretion.
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XVI.
AMENDMENTS
16.1 RIGHT TO AMEND. Subject to Section 16.2 and any other limitations
contained in the Act or the Code, the Directors may from time to time amend, in
whole or in part, any or all of the provisions of the Plan on behalf of the
Company and all Employers. Specifically, but not by way of limitation, the
Directors may make any amendment necessary to acquire and maintain a qualified
status for the Plan under the Code, whether or not retroactive.
16.2 LIMITATION ON AMENDMENTS. No amendment of the Plan shall be made
that would vest in the Employer, directly or indirectly, any interest in or
control of the Trust Fund. No amendment shall be made that would vary the
Plan's exclusive purpose of providing benefits to Members and their
beneficiaries and of defraying reasonable expenses of administering the Plan or
that would permit the diversion of any part of the Trust Fund from that
exclusive purpose. No amendment shall be made that would reduce any then
nonforfeitable interest of a Member. No amendment shall increase the duties or
responsibilities of the Trustee unless the Trustee consents thereto in writing.
XVI-1
56
XVII.
DISCONTINUANCE OF CONTRIBUTIONS,
TERMINATION, PARTIAL TERMINATION, AND MERGER OR CONSOLIDATION
17.1 RIGHT TO DISCONTINUE CONTRIBUTIONS, TERMINATE, OR PARTIALLY
TERMINATE. The Employer has established the Plan with the bona fide intention
and expectation that from year to year it will be able to, and will deem it
advisable to, make its contributions as herein provided. However, the Directors
realize that circumstances not now foreseen, or circumstances beyond its
control, may make it either impossible or inadvisable to continue to make its
contributions to the Plan. Therefore, the Directors shall have the power to
discontinue contributions to the Plan, terminate the Plan, or partially
terminate the Plan at any time hereafter. Each member of the Committee and the
Trustee shall be notified of such discontinuance, termination, or partial
termination.
17.2 PROCEDURE IN THE EVENT OF DISCONTINUANCE OF CONTRIBUTION,
TERMINATION, OR PARTIAL TERMINATION.
(a) If the Plan is amended so as to permanently discontinue Employer
contributions, or if Employer contributions are in fact permanently
discontinued, the Vested Interest of each affected Member shall be 100%,
effective as of the date of discontinuance. In case of such discontinuance, the
Committee shall remain in existence and all other provisions of the Plan that
are necessary, in the opinion of the Committee, for equitable operation of the
Plan shall remain in force.
(b) If the Plan is terminated or partially terminated, the Vested
Interest of each affected Member shall be 100%, effective as of the termination
date or partial termination date, as applicable. Unless the Plan is otherwise
amended prior to dissolution of the Company, the Plan shall terminate as of the
date of dissolution of the Company.
(c) Upon discontinuance, termination, or partial termination, any
previously unallocated contributions, forfeitures, and net income (or net loss)
shall be allocated among the Accounts of the Members on such date of
discontinuance, termination, or partial termination according to the provisions
of Article IV, as if such date of discontinuance, termination, or partial
termination were a Valuation Date. Thereafter, the net income (or net loss)
shall continue to be allocated to the Accounts of the Members until the balances
of the Accounts are distributed. In the event of termination, the date of the
final distribution shall be treated as a Valuation Date.
(d) In the case of a termination or partial termination of the Plan,
and in the absence of a Plan amendment to the contrary, the Trustee shall pay
the balance of the Accounts of a Member for whom the Plan is so terminated, or
who is affected by such partial termination, to such Member, subject to the time
of payment, form of payment, and consent provisions of Article X.
XVII-1
57
17.3 MERGER, CONSOLIDATION, OR TRANSFER. This Plan and Trust Fund may
not merge or consolidate with, or transfer its assets or liabilities to, any
other plan, unless immediately thereafter each Member would, in the event such
other plan terminated, be entitled to a benefit which is equal to or greater
than the benefit to which he would have been entitled if the Plan were
terminated immediately before the merger, consolidation, or transfer.
XVII-2
58
XVIII.
ADOPTING EMPLOYERS
18.1 ADOPTION BY OTHER EMPLOYERS. It is contemplated that other
corporations, associations, partnerships, or proprietorships may adopt this
Plan and thereby become Employers. By appropriate action of its Board of
Directors or noncorporate counterpart, any such entity, whether or not
presently existing, may become, upon approval of the Directors, a party hereto.
The provisions of the Plan shall apply separately and equally to each Employer
and its Employees in the same manner as is expressly provided for the Company
and its Employees, except that the power to appoint or otherwise affect the
Committee or the Trustee and the power to amend or terminate the Plan shall be
exercised by the Directors alone. Nevertheless, any Employer may, with the
consent of the Directors, incorporate in its adoption agreement or in an
amendment document specific provisions relating to the operation of the Plan,
and such provisions shall become a part of the Plan as to such Employer only.
Transfer of employment among Employers shall not be considered a termination of
employment hereunder, and an Hour of Service with one Employer shall be
considered as an Hour of Service with all others. Any Employer may, by
appropriate action of its Board of Directors or noncorporate counterpart,
terminate its participation in the Plan. Moreover, the Directors may, in their
discretion, terminate an Employer's Plan participation at any time.
18.2 SINGLE PLAN. For purposes of the Code and the Act, the Plan as
adopted by the Employers shall constitute a single plan rather than a separate
plan of each Employer. All assets in the Trust Fund shall be available to pay
benefits to all Members and their beneficiaries.
XVIII-1
59
XIX.
MISCELLANEOUS PROVISIONS
19.1 NOT CONTRACT OF EMPLOYMENT. The adoption and maintenance of the
Plan shall not be deemed to be a contract between the Employer and any person
or to be consideration for the employment of any person. Nothing herein
contained shall be deemed to give any person the right to be retained in the
employ of the Employer or to restrict the right of the Employer to discharge
any person at any time nor shall the Plan be deemed to give the Employer the
right to require any person to remain in the employ of the Employer or to
restrict any person's right to terminate his employment at any time.
19.2 ALIENATION OF INTEREST FORBIDDEN. Except as otherwise provided
with respect to "qualified domestic relations orders" pursuant to section
206(d) of the Act and sections 401(a)(13) and 414(p) of the Code and except as
otherwise provided under other applicable law, no right or interest of any kind
in any benefit shall be transferable or assignable by any Member or any
beneficiary or be subject to anticipation, adjustment, alienation, encumbrance,
garnishment, attachment, execution or levy of any kind. Plan provisions to the
contrary notwithstanding, the Committee shall comply with the terms and
provisions of any "qualified domestic relations order," including an order that
requires distributions to an alternate payee prior to a Member's "earliest
retirement age" as such term is defined in section 206(d)(3)(E)(ii) of the Act
and section 414(p)(4)(B) of the Code, and shall establish appropriate
procedures to effect the same.
19.3 PAYMENTS TO MINORS AND INCOMPETENTS. If a Member or beneficiary
entitled to receive a benefit under the Plan is a minor or is determined by the
Committee in its discretion to be incompetent or is adjudged by a court of
competent jurisdiction to be legally incapable of giving valid receipt and
discharge for a benefit provided under the Plan, the Committee may pay such
benefit to the duly appointed guardian or conservator of such Member or
beneficiary or to any third party who is eligible to receive such benefit for
the account of such Member or beneficiary. Such payment shall operate as a full
discharge of all liabilities and obligations of the Committee, the Trustee, the
Employer, and any fiduciary of the Plan with respect to such benefit.
19.4 MEMBER'S ADDRESS. It shall be the affirmative duty of each Member
to inform the Committee of, and to keep on file with the Committee, his current
mailing address and the current mailing address of his designated beneficiary.
If a Member fails to keep the Committee informed of his current mailing address
and the current mailing address of his designated beneficiary, neither the
Committee, the Trustee, the Employer, nor any fiduciary under the Plan shall be
responsible for any late or lost payment of a benefit or for failure of any
notice to be provided timely under the terms of the Plan.
19.5 SEVERABILITY. If any provision of this Plan shall be held illegal
or invalid for any reason, said illegality or invalidity shall not affect the
remaining provisions hereof; instead, each provision shall be fully severable
and the Plan shall be construed and enforced as if said illegal or
XIX-1
60
invalid provision had never been included herein.
19.6 JURISDICTION. The situs of the Plan and the Trust hereby created
is Texas. All provisions of the Plan shall be construed in accordance with the
laws of Texas except to the extent preempted by federal law.
XIX-2
61
XX.
TOP-HEAVY STATUS
20.1 ARTICLE CONTROLS. Any Plan provisions to the contrary
notwithstanding, the provisions of this Article shall control to the extent
required to cause the Plan to comply with the requirements imposed under
section 416 of the Code.
20.2 DEFINITIONS. For purposes of this Article, the following terms and
phrases shall have these respective meanings:
(a) ACCOUNT BALANCE: As of any Valuation Date, the aggregate amount
credited to an individual's account or accounts under a qualified
defined contribution plan maintained by the Employer or a Controlled
Entity (excluding employee contributions that were deductible within
the meaning of section 219 of the Code and rollover or transfer
contributions made after December 31, 1983, by or on behalf of such
individual to such plan from another qualified plan sponsored by an
entity other than the Employer or a Controlled Entity), increased by
(1) the aggregate distributions made to such individual from such plan
during a five-year period ending on the Determination Date and (2) the
amount of any contributions due as of the Determination Date
immediately following such Valuation Date.
(b) ACCRUED BENEFIT: As of any Valuation Date, the present value
(computed on the basis of the Assumptions) of the cumulative accrued
benefit (excluding the portion thereof that is attributable to employee
contributions which were deductible pursuant to section 219 of the
Code, to rollover or transfer contributions made after December 31,
1983, by or on behalf of such individual to such plan from another
qualified plan sponsored by an entity other than the Employer or a
Controlled Entity, to proportional subsidies or to ancillary benefits)
of an individual under a qualified defined benefit plan maintained by
the Employer or a Controlled Entity increased by (1) the aggregate
distributions made to such individual from such plan during a five-year
period ending on the Determination Date and (2) the estimated benefit
accrued by such individual between such Valuation Date and the
Determination Date immediately following such Valuation Date. Solely
for the purpose of determining top-heavy status, the Accrued Benefit of
an individual shall be determined under (1) the method, if any, that
uniformly applies for accrual purposes under all qualified defined
benefit plans maintained by the Employer and the Controlled Entities or
(2) if there is no such method, as if such benefit accrued not more
rapidly than under the slowest accrual rate permitted under section
411(b)(1)(C) of the Code.
(c) AGGREGATION GROUP: The group of qualified plans maintained by
the Employer and each Controlled Entity consisting of (1) each plan in
which a Key Employee participates and each other plan that enables a
plan in which a Key Employee participates to meet the requirements of
section 401(a)(4) or 410 of the Code or (2) each plan in
62
which a Key Employee participates, each other plan that enables a plan
in which a Key Employee participates to meet the requirements of
section 401(a)(4) or 410 of the Code and any other plan that the
Employer elects to include as a part of such group; provided, however,
that the Employer may elect to include a plan in such group only if the
group will continue to meet the requirements of sections 401(a)(4) and
410 of the Code with such plan being taken into account.
(d) ASSUMPTIONS: The interest rate and mortality assumptions
specified for top-heavy status determination purposes in any defined
benefit plan included in the Aggregation Group which includes the
Plan.
(e) DETERMINATION DATE: For the first Plan Year of any plan, the
last day of such Plan Year and for each subsequent Plan Year of such
plan, the last day of the preceding Plan Year.
(f) KEY EMPLOYEE: A "key employee" as defined in section 416(i) of
the Code and the Treasury regulations thereunder.
(g) PLAN YEAR: With respect to any plan, the annual accounting
period used by such plan for annual reporting purposes.
(h) REMUNERATION: Compensation within the meaning of section
415(c)(3) of the Code, as limited by section 401(a)(17) of the Code.
(i) VALUATION DATE: With respect to any Plan Year of any defined
contribution plan, the most recent date within the twelve-month period
ending on a Determination Date as of which the trust fund established
under such plan was valued and the net income (or loss) thereof
allocated to participants' accounts. With respect to any Plan Year of
any defined benefit plan, the most recent date within a twelve-month
period ending on a Determination Date as of which the plan assets were
valued for purposes of computing plan costs for purposes of the
requirements imposed under section 412 of the Code.
20.3 TOP-HEAVY STATUS.
(a) The Plan shall be deemed to be top-heavy for a Plan Year if, as
of the Determination Date for such Plan Year, (1) the sum of Account Balances of
Members who are Key Employees exceeds 60% of the sum of Account Balances of all
Members unless an Aggregation Group including the Plan is not top-heavy or (2)
an Aggregation Group including the Plan is top-heavy. An Aggregation Group shall
be deemed to be top-heavy as of a Determination Date if the sum (computed in
accordance with section 416(g)(2)(B) of the Code and the Treasury regulations
promulgated thereunder) of (1) the Account Balances of Key Employees under all
defined contribution plans included in the Aggregation Group and (2) the Accrued
Benefits of Key Employees under all defined benefit plans included in the
Aggregation Group exceeds 60% of the sum of the Account Balances and the Accrued
Benefits of all individuals under such plans.
63
Notwithstanding the foregoing, the Account Balances and Accrued Benefits of
individuals who are not Key Employees in any Plan Year but who were Key
Employees in any prior Plan Year shall not be considered in determining the
top-heavy status of the Plan for such Plan Year. Further, notwithstanding the
foregoing, the Account Balances and Accrued Benefits of individuals who have not
performed services for the Employer or any Controlled Entity at any time during
the five-year period ending on the applicable Determination Date shall not be
considered.
(b) If the Plan is determined to be top-heavy for a Plan Year, the
Vested Interest in the Company Discretionary Contribution Account of each Member
who is credited with an Hour of Service during such Plan Year shall be
determined in accordance with the following schedule:
YEARS OF
VESTING SERVICE VESTED INTEREST
--------------- ---------------
Less than 1 year 0%
1 year 10%
2 years 20%
3 years 40%
4 years 60%
5 years 80%
6 years or more 100%
(c) If the Plan is determined to be top-heavy for a Plan Year, the
Employer shall contribute to the Plan for such Plan Year on behalf of each
Member who is not a Key Employee and who has not terminated his employment as of
the last day of such Plan Year an amount equal to:
(1) The lesser of (A) 3% of such Member's Remuneration for such
Plan Year or (B) a percent of such Member's Remuneration for such Plan
Year equal to the greatest percent determined by dividing for each Key
Employee the amounts allocated to such Key Employee's 401(k) Account,
Company Matching Contribution Account, and Company Discretionary
Contribution Account for such Plan Year by such Key Employee's
Remuneration; reduced by
(2) The amount of Employer Discretionary Contributions allocated
to such Member's Accounts for such Plan Year.
The minimum contribution required to be made for a Plan Year pursuant to this
Paragraph for a Member employed on the last day of such Plan Year shall be made
regardless of whether such Member is otherwise ineligible to receive an
allocation of the Employer's contributions for such Plan Year. Notwithstanding
the foregoing, if the Plan is deemed to be top-heavy for a Plan Year, the
Employer's contribution for such Plan Year pursuant to this Paragraph shall be
increased by substituting "4%" in lieu of "3%" in Clause (1) hereof to the
extent that the Directors determine to so increase such contribution to comply
with the provisions of section 416(h)(2) of the Code. Notwithstanding the
foregoing, no contribution shall be made pursuant to this Paragraph for a
64
Plan Year with respect to a Member who is a participant in another defined
contribution plan sponsored by the Employer or a Controlled Entity if such
Member receives under such other defined contribution plan (for the plan year of
such plan ending with or within the Plan Year of the Plan) a contribution which
is equal to or greater than the minimum contribution required by section
416(c)(2) of the Code. Notwithstanding the foregoing, no contribution shall be
made pursuant to this Paragraph for a Plan Year with respect to a Member who is
a participant in a defined benefit plan sponsored by the Employer or a
Controlled Entity if such Member accrues under such defined benefit plan (for
the plan year of such plan ending with or within the Plan Year of this Plan) a
benefit that is at least equal to the benefit described in section 416(c)(1) of
the Code. If the preceding sentence is not applicable, the requirements of this
Paragraph shall be met by providing a minimum benefit under such defined benefit
plan which, when considered with the benefit provided under the Plan as an
offset, is at least equal to the benefit described in section 416(c)(1) of the
Code.
20.4 TERMINATION OF TOP-HEAVY STATUS. If the Plan has been deemed to
be top-heavy for one or more Plan Years and thereafter ceases to be top-heavy,
the provisions of this Article shall cease to apply to the Plan effective as of
the Determination Date on which it is determined no longer to be top-heavy.
Notwithstanding the foregoing, the Vested Interest of each Member as of such
Determination Date shall not be reduced and, with respect to each Member who
has three or more years of Vesting Service on such Determination Date, the
Vested Interest of each such Member shall continue to be determined in
accordance with the schedule set forth in Section 20.3(b).
20.5 EFFECT OF ARTICLE. Notwithstanding anything contained herein to
the contrary, the provisions of this Article shall automatically become
inoperative and of no effect to the extent not required by the Code or the Act.
65
FIRST AMENDMENT TO
▇▇▇▇ HEALTHCARE, INC.
401(k) SAVINGS PLAN
WHEREAS, ▇▇▇▇ HEALTHCARE, INC.(the "Company") and another adopting
employer have heretofore adopted the ▇▇▇▇ HEALTHCARE, INC. 401(k) SAVINGS PLAN
(the "Plan") for the benefit of their eligible employees; and
WHEREAS, the Company desires to amend the Plan on behalf of itself and
such other adopting employer;
NOW, THEREFORE, the Plan shall be amended as follows:
I. Effective as of January 1, 1995, the first sentence of Section
20.3(c) of the Plan shall be deleted and the following shall be
substituted therefor:
"If the Plan is determined to be top-heavy for a Plan Year, the
Employer shall contribute to the Plan for such Plan Year on behalf of
each Member who is not a Key Employee and who has not terminated his
employment as of the last day of such Plan Year an amount equal to:
(1) the lesser of (A) 3% of such Member's Remuneration for such
Plan Year or (B) a percent of such Member's Remuneration for such Plan
Year equal to the greatest percent determined by dividing for each Key
Employee the amount of contributions and forfeitures allocated to such
Key Employee's 401(k) Account, Company Matching Contribution Account,
and Company Discretionary Contribution Account for such Plan Year by
such Key Employee's Remuneration; reduced by
(2) the amount of Employer Discretionary Contributions and
forfeitures allocated to such Member's Accounts for such Plan Year."
II. Effective as of August 31, 1995, the following sentence shall be
added to the end of Section 1.1(44) of the Plan:
"In addition to the foregoing, August 31, 1995 shall be a Valuation
Date."
III. Effective as of September 1, 1995:
1. The following paragraph (9A) shall be added to Section 1.1 of
the Plan:
"(9A) COMPANY STOCK: The common stock of ▇▇▇▇ Healthcare, Inc."
66
2. The following paragraph shall be added to the end of Section
4.3 of the Plan:
"(d) Plan provisions to the contrary notwithstanding, the
provisions of this Paragraph (d) shall be applicable with respect to
allocations and accounting for Company Stock held by the Plan. All
amounts that are allocated to a Member's Accounts (and subaccounts)
under the Plan and which are to be invested in Company Stock shall be
used to purchase shares of Company Stock at such times, in such
quantities, and from such sources as determined by the Committee.
Shares of Company Stock so purchased for a Member's Accounts shall be
earmarked for the benefit of such Member. Any cash dividends received
by the Trustee with respect to Company Stock earmarked for a Member's
Accounts (and subaccounts) shall be invested in additional shares of
Company Stock, which shall be earmarked for the benefit of such Member.
Any such additional Company Stock, plus any other Company Stock
received by the Trustee as a result of a stock split or stock dividend,
shall be allocated pro rata to the Members' Accounts (and subaccounts)
in proportion to the respective balances of Company Stock credited to
such Accounts (and subaccounts) as of the appropriate record date, and
following an allocation of such shares to a Member's Accounts, such
shares shall be earmarked for the benefit of such Member."
3. Article V of the Plan shall be deleted in its entirety and
the following shall be substituted therefor:
V.
INVESTMENT FUNDS
5.1 DESIGNATED INVESTMENT FUNDS.
(a) On the form prescribed by the Committee, each Member shall
designate the manner in which the amounts allocated to his Accounts
shall be invested from among (1) an Investment Fund invested primarily
in Company Stock and (2) one or more additional Investment Funds made
available from time to time by the Committee. Such Investment Funds
shall be made available to all Members in a uniform and
nondiscriminatory manner. Further, the amounts invested under such
Investment Funds may be invested directly in investments specified by
the Committee or indirectly through investment in shares of commingled,
collective or common investment trust funds specified by the Committee,
including such trust funds which have been or may hereafter be
established and maintained by the Trustee. A Member may designate one
of such Investment Funds for all of the contributions to his Accounts
or he may split the investment of the contributions to his Accounts
between such Investment Funds in such increments as the Committee
67
may prescribe. No other type of designation will be permitted. If a
Member fails to make a designation, contributions to his Accounts shall
be invested in the Investment Fund or Funds designated by the Committee
from time to time in a uniform and nondiscriminatory manner.
(b) A Member may elect, in the manner and on the form prescribed
by the Committee, to change his investment designation; provided,
however, that (1) only one such change may be made in any calendar
quarter, (2) such change shall apply to both the investment of future
contributions and to amounts already allocated to the Member's
Accounts, and (3) such change shall be implemented as soon as
administratively feasible after the last day of the calendar quarter in
which the Member's election to make such change is timely received by
the Committee.
(c) Notwithstanding the preceding provisions of this Section, as
soon as administratively feasible after the last day of the calendar
quarter in which a Member's employment terminates, such Member's
Accounts shall be invested in the Investment Fund or Funds designated
by the Committee from time to time in a uniform and nondiscriminatory
manner; provided, however, that with respect to any portion of such
Member's Accounts which are invested in the Investment Fund invested
primarily in Company Stock, such amounts shall remain invested in such
Investment Fund unless and until such Member otherwise directs in
accordance with the procedures established by the Committee.
5.2 RESTRICTION OF ACQUISITION OF COMPANY STOCK. Notwithstanding any
other provision hereof, it is specifically provided that the Trustee
shall not purchase Company Stock or other Company securities during any
period in which such purchase is, in the opinion of counsel for the
Company or the Committee, restricted by any law or regulation
applicable thereto. During such period, amounts that would otherwise be
invested in Company Stock or other Company securities pursuant to an
investment designation shall be invested in such other assets as the
Committee may in its discretion determine, or the Trustee may hold such
amounts uninvested for a reasonable period pending the purchase of such
stock or securities.
5.3 VOTING, STOCK RIGHTS, STOCK SPLITS, AND STOCK DIVIDENDS. No
Member or beneficiary shall have any right to request, direct, or
demand that the Committee or the Trustee exercise in his behalf rights
or privileges to vote, acquire, convert, or exchange Company Stock or
other securities. The Trustee shall vote the Company Stock and shall
exercise or sell any such rights or privileges in the manner directed
by the Committee. Company Stock received by the Trustee by reason of a
stock split, stock dividend, or recapitalization shall be
68
appropriately allocated to the Accounts of each affected Member or
beneficiary in accordance with Section 4.3(d)."
4. The following clause shall be added to the beginning of the
first sentence in each of Sections 10.2(a) and 10.3 of the Plan:
"Subject to the provisions of Section 10.10,"
5. The following Section 10.10 shall be added to the end of
Article X of the Plan:
"10.10 DISTRIBUTIONS OF COMPANY STOCK. Benefits shall be paid (or
transferred pursuant to Section 10.5) in cash except that a Member (or
his designated beneficiary or legal representative in the case of a
deceased Member) may elect to have the portion of his Accounts invested
in the Investment Fund invested primarily in Company Stock distributed
(or transferred pursuant to Section 10.5) in full shares of Company
Stock to the extent of the Member's pro rata portion of the shares of
Company Stock held in such Investment Fund with any balance of the
Member's interest in such Investment Fund (including fractional shares)
to be paid or transferred in cash."
IV. As amended hereby, the Plan is specifically ratified and reaffirmed.
69
SECOND AMENDMENT TO
▇▇▇▇ HEALTHCARE, INC.
401(k) SAVINGS PLAN
WHEREAS, ▇▇▇▇ HEALTHCARE, INC. (the "Company") and another adopting
employer have heretofore adopted the ▇▇▇▇ HEALTHCARE, INC. 401(k) SAVINGS PLAN
(the "Plan") for the benefit of their eligible employees; and
WHEREAS, the Company desires to amend the Plan on behalf of itself and
such other adopting employer;
NOW, THEREFORE, the Plan shall be amended as follows, effective as of
January 1, 1995:
1. The first sentence of Section 4.2(d) of the Plan shall be deleted and
the following shall be substituted therefor:
"The Employer Safe Harbor Contribution, if any, made pursuant to
Section 3.4 for a Plan Year in order to satisfy the restrictions set
forth in Section 3.1(e) shall be allocated as of the last day of such
Plan Year to the 401(k) Accounts of Members who (1) received an
allocation of Cash or Deferred Contributions for such Plan Year and
(2) were not Highly Compensated Employees for such Plan Year (each
such Member individually referred to as an "Eligible Member" for
purposes of this Paragraph)."
2. The first sentence of Section 4.2(e) of the Plan shall be deleted and
the following shall be substituted therefor:
"The Employer Safe Harbor Contribution, if any, made pursuant to
Section 3.4 for a Plan Year in order to satisfy the restrictions set
forth in Section 3.5 shall be allocated as of the last day of such
Plan Year to the Company Matching Contribution Accounts of Members who
(1) received an allocation of Cash or Deferred Contributions for such
Plan Year and (2) were not Highly Compensated Employees for such Plan
Year (each such Member individually referred to as an "Eligible
Member" for purposes of this Paragraph)."
3. As amended hereby, the Plan is specifically ratified and reaffirmed.
70
THIRD AMENDMENT TO
▇▇▇▇ HEALTHCARE, INC.
401(k) SAVINGS PLAN
WHEREAS, ▇▇▇▇ HEALTHCARE, INC. (the "Company") and another adopting
employer have heretofore adopted the ▇▇▇▇ HEALTHCARE, INC. 401(k) SAVINGS PLAN
(the "Plan") for the benefit of their eligible employees; and
WHEREAS, the Company desires to amend the Plan on behalf of itself and
such other adopting employer;
NOW, THEREFORE, the Plan shall be amended as follows:
I. Effective as of October 7, 1996, Section 5.1(c) of the Plan shall be
deleted in its entirety.
II. Effective as of November 1, 1996:
1. Section 3.8(a) of the Plan shall be deleted and the following
shall be substituted therefor:
71
"(a) Qualified Rollover Contributions may be made to
the Plan by any Eligible Employee of amounts received by such Eligible
Employee from an individual retirement account or annuity or from an
employees' trust described in section 401(a) of the Code, which is
exempt from tax under section 501(a) of the Code, but only if any such
Rollover Contribution is made pursuant to and in accordance with
applicable provisions of the Code and Treasury regulations promulgated
thereunder. A Rollover Contribution of amounts that are "eligible
rollover distributions" within the meaning of section 402(f)(2)(A) of
the Code may be made to the Plan irrespective of whether such eligible
rollover distribution was paid to the Eligible Employee or paid to the
Plan as a "direct" Rollover Contribution. A direct Rollover
Contribution to the Plan may be effectuated only by wire transfer
directed to the Trustee or by issuance of a check made payable to the
Trustee, which is negotiable only by the Trustee and which identifies
the Eligible Employee for whose benefit the Rollover Contribution is
being made. Notwithstanding the foregoing, the Plan will accept a
Rollover Contribution of a promissory note (and related documents) for
a plan loan from an employees' trust described in section 401(a) of
the Code if the Eligible Employee executes such documents and
instruments as the Committee may require as a condition to the
acceptance of such note, including, without limitation, a form
prescribed by the Committee authorizing the Employer to make payroll
deductions from such Eligible Employee's Compensation in order to make
payments on such note. Any Eligible Employee desiring to effect a
Rollover Contribution to the Plan must execute and file with the
Committee the form prescribed by the Committee for such purpose. The
Committee may require as a condition to accepting any Rollover
Contribution that such Eligible Employee furnish any evidence that the
Committee in its discretion deems satisfactory to establish that the
proposed Rollover Contribution is in fact eligible for rollover to the
Plan and is made pursuant to and in accordance with applicable
provisions of the Code and Treasury regulations. Except as provided
above, all Rollover Contributions to the Plan must be made in cash. A
Rollover Contribution shall be credited to the Rollover Account of the
Eligible Employee for whose benefit such Rollover Contribution is
being made as of the last day of the month in which such Rollover
Contribution is made."
2. Section 10.10 of the Plan shall be deleted and the following
shall be substituted therefor:
"10.10 DISTRIBUTIONS OF COMPANY STOCK AND DIRECT ROLLOVERS OF
LOANS. Benefits shall be paid (or transferred pursuant to Section 10.5)
in cash except that:
(a) a Member (or his designated beneficiary or legal
representative in the case of a deceased Member) may elect to
have the portion of his Accounts invested in the Investment
Fund invested primarily in Company Stock distributed (or
transferred pursuant to Section 10.5) in full shares of
Company Stock to the extent of the Member's pro rata portion
of the shares of Company Stock held in such Investment Fund
with any balance of the Member's interest in such Investment
Fund (including fractional shares) to be paid or transferred
in cash; and
(b) a Member may elect to have the promissory note
evidencing an outstanding loan from the Plan to such Member
transferred pursuant to a Direct Rollover to an Eligible
Retirement Plan that is a qualified plan described in section
401(a) of the Code which will accept a Direct Rollover of
such note."
3. Section 12.2(a) of the Plan shall be deleted and the
following shall be substituted therefor:
"(a) A loan to a Member may not exceed 50% of the
then value of such Member's Vested Interest in his Accounts."
72
4. Section 12.4(b) of the Plan shall be deleted and the
following shall be substituted therefor:
"(b) Any loan shall be made as an investment of a
segregated loan fund to be established in the Trust Fund for the
Member to whom the loan is made. Any loan shall be considered to come
from the Vested Interest in the Member's Accounts in the order
designated by the Member. If no such designation is made, then the
loan shall be considered to come pro rata from the Member's Vested
Interest in each of his Accounts. The Trustee shall fund a Member's
segregated loan fund by liquidating such portion of the assets of the
Accounts from which the Member's loan is to be made as is necessary to
fund the loan and transferring the proceeds to such segregated loan
fund. If a Member's Accounts are invested in more than one Investment
Fund, the transfer shall be made pro rata from each such Investment
Fund. The loan shall be secured by a pledge of the Member's segregated
loan fund."
5. The third sentence of Section 12.5(c) of the Plan shall be
deleted and the following shall be substituted therefor:
"Notwithstanding the foregoing, amounts in a Member's 401(k) Account
may not be used to satisfy the payment of such loan (including
interest) prior to the time such amounts are otherwise distributable
from the Plan, and amounts in a Member's other Accounts may not be
offset and used to satisfy the payment of such loan (including
interest) prior to the earliest time such amounts are otherwise
permitted to be distributed under applicable law."
6. Section 12.5(e) of the Plan shall be deleted and the
following shall be substituted therefor:
"(e) Amounts tendered to the Trustee by a Member in
repayment of a loan made pursuant to this Article (1) shall initially
be credited to the Member's segregated loan fund, (2) then shall be
transferred as soon as practicable following receipt thereof to the
Account or Accounts from which the Member's loan was made, and (3)
shall be invested in accordance with such Member's current designation
as to the investment of contributions being allocated to such Accounts
pursuant to Section 5.1."
III. Effective as of January 1, 1997:
1. Section 1.1(10)(B) of the Plan shall be deleted and the
following shall be substituted therefor:
"(B) The Compensation of any Member taken into account for
purposes of the Plan shall be limited to $150,000 for any
Plan Year with such limitation to be:
(i) adjusted automatically to reflect any amendments to
section 401(a)(17) of the Code and any
cost-of-living increases authorized by section
401(a)(17) of the Code; and
(ii) prorated for a Plan Year of less than twelve
months and to the extent otherwise required by
applicable law."
2. Section 1.1(28) of the Plan shall be deleted and the
following shall be substituted therefor:
"(28) HIGHLY COMPENSATED EMPLOYEE: Each Employee who performs
services during the Plan Year for which the determination of
who is highly compensated is being
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73
made (the `Determination Year') and who:
(A) is a five-percent owner of the Employer (within the
meaning of section 416(i)(1)(A)(iii) of the Code) at
any time during the Determination Year or the
twelve-month period immediately preceding the
Determination Year (the `Look-Back Year'); or
(B) for the Look-Back Year:
(i) receives compensation (within the meaning
of section 414(q)(4) of the Code,
`compensation' for purposes of this
Paragraph) in excess of $80,000 (with such
amount to be adjusted automatically to
reflect any cost-of-living adjustments
authorized by section 414(q)(1) of the
Code) during the Look-Back Year; and
(ii) if the Committee elects the application of
this clause for such Look-Back Year, is a
member of the top 20% of Employees for the
Look-Back Year (other than Employees
described in section 414(q)(5) of the Code)
ranked on the basis of compensation
received during the year.
For purposes of the preceding sentence, (i) all employers
aggregated with the Employer under section 414(b), (c), (m),
or (o) of the Code shall be treated as a single employer,
(ii) a former Employee who had a separation year (generally,
the Determination Year such Employee separates from service)
prior to the Determination Year and who was an active Highly
Compensated Employee for either such separation year or any
Determination Year ending on or after such Employee's
fifty-fifth birthday shall be deemed to be a Highly
Compensated Employee, and (iii) the Committee may elect, in
accordance with the provisions of applicable Treasury
regulations, rulings and notices, to make the Look-Back Year
calculation for a Determination Year on the basis of the
calendar year ending with or within the applicable
Determination Year (or, in the case of a Determination Year
that is shorter than twelve months, the calendar year ending
with or within the twelve-month period ending with the end of
the applicable Determination Year). To the extent that the
provisions of this Paragraph are inconsistent or conflict
with the definition of a `highly compensated employee' set
forth in section 414(q) of the Code and the Treasury
regulations thereunder, the relevant terms and provisions of
section 414(q) of the Code and the Treasury regulations
thereunder shall govern and control."
3. Sections 3.7(b) and (c) of the Plan shall be deleted and
the following shall be substituted therefor:
"(b) Anything to the contrary herein
notwithstanding, if, for any Plan Year, the aggregate Cash or Deferred
Contributions made by the Employer on behalf of Highly Compensated
Employees exceeds the maximum amount of Cash or Deferred Contributions
permitted on behalf of such Highly Compensated Employees pursuant to
Section 3.1(e) (determined by reducing Cash or Deferred Contributions
on behalf of Highly Compensated Employees in order of the highest
dollar amounts contributed on behalf of such Highly Compensated
Employees in accordance with section 401(k)(8)(C) of the Code and the
Treasury regulations thereunder), then such excess shall be
distributed to the Highly Compensated Employees on whose behalf such
excess was contributed before
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74
the end of the next following Plan Year.
(c) Anything to the contrary herein notwithstanding,
if, for any Plan Year, the aggregate Employer Contributions allocated
to the Accounts of Highly Compensated Employees exceeds the maximum
amount of such Employer Contributions permitted on behalf of such
Highly Compensated Employees pursuant to Section 3.5 (determined by
reducing Employer Contributions made on behalf of Highly Compensated
Employees in order of the highest dollar amounts contributed on behalf
of such Highly Compensated Employees in accordance with section
401(m)(6)(C) of the Code and Treasury regulations thereunder), then
such excess shall be distributed to the Highly Compensated Employees
on whose behalf such excess contributions were made before the end of
the next following Plan Year."
4. Section 10.1(d) of the Plan shall be deleted and the
following shall be substituted therefor:
" (d) A Member's Benefit Commencement Date shall be
in compliance with the provisions of section 401(a)(9) of the Code and
applicable Treasury regulations thereunder and shall in no event be
later than:
(1) April 1 of the calendar year following
the later of (A) the calendar year in which such Member
attains the age of seventy and one-half or (B) the calendar
year in which such Member terminates his employment with the
Employer (provided, however, that clause (B) of this sentence
shall not apply in the case of a Member who is a
`five-percent owner' (as defined in section 416 of the Code)
with respect to the Plan Year ending in the calendar year in
which such Member attains the age of seventy and one-half);
and
(2) In the case of a benefit payable
pursuant to Article IX, (A) if payable to other than the
Member's spouse, the last day of the one-year period
following the death of such Member or (B) if payable to the
Member's spouse, after the date upon which such Member would
have attained the age of seventy and one-half, unless such
surviving spouse dies before payments commence, in which case
the Benefit Commencement Date may not be deferred beyond the
last day of the one-year period following the death of such
surviving spouse.
The preceding provisions of this Section notwithstanding, a Member may
not elect to defer the receipt of his benefit hereunder to the extent
that such deferral creates a death benefit that is more than
incidental within the meaning of section 401(a)(9)(G) of the Code and
applicable Treasury regulations thereunder."
IV. As amended hereby, the Plan is specifically ratified and reaffirmed.
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75
FOURTH AMENDMENT TO
▇▇▇▇ HEALTHCARE, INC.
401(k) SAVINGS PLAN
WHEREAS, ▇▇▇▇ HEALTHCARE, INC.(the "Company") and another adopting
employer have heretofore adopted the ▇▇▇▇ HEALTHCARE, INC. 401(k) SAVINGS PLAN
(the "Plan") for the benefit of their eligible employees; and
WHEREAS, the Company has heretofore executed that certain instrument
entitled "Third Amendment to ▇▇▇▇ Healthcare, Inc. 401(k) Savings Plan" (the
"Third Amendment") in order to make certain amendments to the Plan; and
WHEREAS, paragraphs 3, 4, 5, and 6 of Part II of the Third Amendment
made certain revisions to the provisions of the Plan governing loans to Plan
members; and
WHEREAS, the Company desires to clarify paragraphs 3 and 4 of Part II
of the Third Amendment to make it clear that Member ▇▇▇ Accounts under the Plan
are disregarded for all Plan loan purposes;
NOW, THEREFORE, effective as of November 1, 1996, the amendments to
the Plan made in paragraphs 3 and 4 of Part II of the Third Amendment shall be
superseded by this Fourth Amendment, and the Plan shall be amended as follows:
1. Section 12.2 of the Plan shall be deleted and the following
shall be substituted therefor:
"12.2 MAXIMUM LOAN.
(a) A loan to a Member may not exceed 50% of the
then value of such Member's Vested Interest in his Accounts (excluding
his Member ▇▇▇ Account).
(b) Paragraph (a) above to the contrary
notwithstanding, the amount of a loan made to a Member under this
Article shall not exceed an amount equal to the difference between:
(1) The lesser of $50,000 (reduced by the excess, if
any, of (A) the highest outstanding balance of loans from the
Plan during the one-year period ending on the day before the
date on which the loan is made over (B) the outstanding
balance of loans from the Plan on the date on which the loan
is made) or one-half of the present value of the Member's
total nonforfeitable accrued benefit (excluding his Member
▇▇▇ Account) under all qualified plans of the Employer or a
Controlled Entity; minus
(2) The total outstanding loan balance of the Member
under all other loans from all qualified plans of the Employer
or a Controlled Entity."
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2. Section 12.4(b) of the Plan shall be deleted and the
following shall be substituted therefor:
"(b) Any loan shall be made as an investment of a
segregated loan fund to be established in the Trust Fund for the
Member to whom the loan is made. Any loan shall be considered to come
from the Vested Interest in the Member's Accounts (excluding his
Member ▇▇▇ Account) in the order designated by the Member. If no such
designation is made, then the loan shall be considered to come pro
rata from the Member's Vested Interest in each of his Accounts (other
than his Member ▇▇▇ Account). The Trustee shall fund a Member's
segregated loan fund by liquidating such portion of the assets of the
Accounts from which the Member's loan is to be made as is necessary to
fund the loan and transferring the proceeds to such segregated loan
fund. If a Member's Accounts are invested in more than one Investment
Fund, the transfer shall be made pro rata from each such Investment
Fund. The loan shall be secured by a pledge of the Member's segregated
loan fund."
3. As amended hereby, the Plan is specifically ratified and
reaffirmed.
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