EXHIBIT 10(ss)
Amendment to National Medical Enterprises, Inc.
Supplemental Executive Retirement Plan
Dated November 1, 1984
As Amended May 21, 1986
THIS AMENDMENT TO NATIONAL MEDICAL ENTERPRISES, INC. SUPPLEMENTAL
RETIREMENT PLAN (the "Amendment") is made, entered into and effective as of the
25th day of April, 1994.
R E C I T A L S :
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WHEREAS, National Medical Enterprises, Inc., a Nevada corporation
("NME") adopted the Supplemental Executive Retirement Plan (the "Plan"),
pursuant to a document dated November 1, 1984 and amended May 21, 1986;
WHEREAS, Section 5.4 provides that NME reserves the right, in its sole
discretion, to amend the Plan; and
WHEREAS, NME now desires to amend the Plan.
NOW, THEREFORE, intending to be legally bound, NME hereby agrees to
amend the Plan as follows:
A M E N D M E N T :
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1. Section 2.5 of the Plan is hereby amended by deleting such Section
in its entirety and replacing it with the following:
"2.5 Change of Control. "Change of Control" shall be deemed to have
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occurred if (a) any person as such term is used in Sections 13(c) and
14(d)(2) of the Securities Exchange Act of 1934, as amended, is or
becomes the beneficial owner directly or indirectly of securities of
NME representing 30% or more of the combined voting power of NME's
then outstanding securities or (b) during any two year period
commencing after April 1, 1994, individuals who at the beginning of
such period constitute the Board of Directors of NME cease for any
reason other than death or disability to constitute a majority of the
Board."
2. Section 2.14 of the Plan is hereby amended by deleting such Section
in its entirety and replacing it with the following:
"2.14 Existing Retirement Benefit Plans Adjustment Factor. "Existing
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Retirement Benefit Plans Adjustment Factor or Factors" means the
assumed benefit the Participant would be eligible for under Social
Security and all retirement plans of NME and its Subsidiaries whether
or not he participates in such plans. This Factor will be used for
calculating all benefits under the Plan and is a projection of the
benefits payable under the Social Security regulations in effect June
1, 1984, and retirement plans of NME in effect on June 1, 1984, or the
participant's Date of Enrollment in the Plan, if later. Once
established for a Participant this Factor will not thereafter be
altered to reflect any reduction in benefits under Social Security.
This Factor will be adjusted to reflect changes in
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benefits under NME retirement plans if a Participant is transferred to
different retirement plans or the Company contribution to a retirement
plan is increased or decreased from the percentage used for original
calculation of the Participant's Factor or the Participant becomes
eligible for other retirement plans adopted by the Company which would
provide benefits greater or less than the Plan considered in
calculating the Participant's original Factor, except that such Factor
for Participant's who are regular full time employees actively at work
with the Company on April 1, 1994, with the corporate office or a
division or subsidiary that is not announced as a discontinued
operation shall be revised based upon the Participant's actual base
salary as of April 1, 1994, but no Factor will be increased as a
result of revision of the Factor to use the base salary as of April 1,
1994."
3. Section 2.19 of the Plan is hereby amended by deleting such Section
in its entirety and replacing it with the following:
"2.19 Projected Earnings. "Projected Earnings means the (a) actual
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Earnings of the Participant on the Date of Enrollment plus an assumed
increase of eight percent per annum, or (b) for Participants who are
regular full time employees actively at work on April 1, 1994, with
the corporate office or a division or a subsidiary that has not been
declared to be a discontinued operation, the actual Earnings of the
Participant on April 1, 1994 plus an assumed increase of eight percent
per annum."
4. Section 3.8 of the Plan is hereby amended by designating the first
paragraph of Section 3.8 as subparagraph (a) and by adding the
following as a new subparagraph 3.8(b):
"3.8(b) For a Participant who is a regular full time employee actively
at work on April 1, 1994, with the corporate office or a division or a
subsidiary which has not been declared to be a discontinued operation,
who has not yet begun to receive benefit payments under the Plan and
whose employment is Terminated without cause or who voluntarily
Terminates Employment following (a) a material downward change in the
functions, duties, or responsibilities which reduce the rank or
position of the Participant, (b) (i) a reduction in the Participant's
annual base salary, or (ii) a material reduction in the Participant's
annual incentive plan bonus payment other than for financial
performance as it broadly applies to all similarly situated active
Participants in the same plan, or (iii) a material reduction in the
Participant's retirement or supplemental retirement benefits that does
not broadly apply to all active Participant's in the same plan or; (c)
transfer of a Participant's office to a location that is more than
fifty (50) miles from the Participant's current principal office
location, if such Termination of Employment occurs within two years
following a Change of Control of NME while this Plan remains in
effect, the provisions of Section 3.8a above shall not apply and (i) a
Participant's Early or Normal Retirement Benefits under this Plan (a)
will be determined on the basis of (I) receiving full Prior Service
Credit under Sections 3.1 and 3.2 for all Years of Service prior to
his or her Date of Enrollment and (II) being credited with three
additional years to his or her Years of Service (with total Years of
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Service not to exceed twenty years) and (b) will be fully vested in
the Participant without regard to his or her Years of Service with NME
and its Subsidiaries, (ii) will be determined by replacing the
definition of "Earnings" under Section 2.10 hereof with the following
"the base salary and the annual cash bonus paid to a Participant by
NME or a Subsidiary, excluding (A) any cash bonus paid under the LTIP,
(B) any car and other allowances and (C) other cash and non-cash
compensation" and (iii) notwithstanding any other provision of this
Plan to the contrary, a Participant will be entitled to receive the
Normal Retirement Benefit on or after the age of sixty, without
reduction, and after the age of fifty-five with a reduction of 0.42%
per month for each month for which the benefit commences to be paid
prior to the Participant's attaining the age of sixty and after the
age of fifty with the foregoing reduction from age sixty to age fifty-
five and with a reduction to 0.56% per month for each month for which
the benefit commences to be paid prior to the Participant's attaining
the age of fifty-five. No other reductions set forth in Sections
3.2a(iii) and 3.2b will apply."
5. The following language shall be added as a new Paragraph 3.9:
"3.9 Golden Parachute Cap. Notwithstanding any provision in this Plan
to the contrary, in no event shall the total present value of all
payments under this Plan that are payable to a Participant and are
contingent upon a Change of Control in accordance with the rules set
forth in Section 280G of the Internal Revenue Service Code of 1986, as
amended (the "Code") and the Treasury Regulations thereunder, when
added to the present value of all other payments, other than payments
that are made pursuant to this Plan, that are payable to a Participant
and are contingent upon a Change of Control, exceed an amount equal to
two hundred and ninety-nine percent (299%) of the Participant's "base
amount" as that term is defined in Section 280G of the Code."
6. The following language shall be added as new Section 4.5 to the
Plan:
"4.5 Lump Sum Distributions. At any time following a Termination of
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Employment which occurs within two (2) years after a Change of Control
or following an Early Retirement or a Normal Retirement, a
Participant, or the Surviving Spouse of a Participant, who has a
vested interest in the Plan may elect to receive a lump sum payment,
in an amount determined below, sixty (60) days after giving notice to
the Committee of the Participant's, or the Participant's Surviving
Spouse's, desire to receive such lump sum benefit. The date of the
notice shall be the "Commencement Date." The lump sum payment shall be
determined in accordance with the following provisions of this Section
4.5, and then shall be reduced by a penalty equal to ten percent (10%)
of such payment which shall be forfeited to NME. However, the penalty
shall not apply if the Committee determines, based on the advice of
counsel or a final determination by the Internal Revenue Service or
any court of competent jurisdiction, that by reason of the foregoing
elective provisions of this Section 4.5 any Participant, Surviving
Spouse or Eligible Children has recognized or will recognize gross
income for federal income tax purposes under this Plan in advance of
payment to him or her of Plan benefits. NME shall notify all
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Participants (and Surviving Spouses or Eligible Children of deceased
Participants) of any such determination. Wherever any such
determination is made, NME shall refund all penalties which were
imposed hereunder on account of making lump sum payments at any time
during or after the first year to which such determination applies
(i.e., the first year when gross income is recognized for federal
income tax purposes). Interest shall be paid on any such refunds based
on an interest factor determined under Section 4.5(b) hereof. The
Committee may also reduce or eliminate the penalty if it determines
that this action will not cause any Participant to recognize gross
income for federal income tax purposes under this Plan in advance of
payment to him or her of Plan benefits.
Notwithstanding any other provision of this Plan, a penalty shall not
apply if a retired Participant or the Surviving Spouse or Eligible
Children of a deceased Participant receives a lump sum distribution
due to a financial hardship. The Committee shall determine whether a
financial hardship exists in its sole discretion, but in good faith
and on a uniform, nondiscriminatory and reasonable basis. A hardship
distribution shall be a cash payment not to exceed the amount
necessary to relieve the hardship.
(a) When monthly benefit payments have not yet commenced and the
Participant is living on the Commencement Date, the lump sum
payment (prior to the ten percent (10%) reduction) shall equal the
lump sum value of the Participant's Early Retirement Benefit or
Normal Retirement Benefit accrued through the Commencement Date.
The amount described in this Section 4.5(a) shall include, in
addition, in the case of a Participant who has a spouse or Eligible
Children on the Commencement Date, the lump sum value, determined
as of such date, of any benefit payable to a Surviving Spouse or
Eligible Children by reason of the Participant's death on or after
such date assuming such spouse would qualify as a Surviving Spouse
on and after such date. The lump sum amount representing the value
of the benefits described in the preceding two sentences shall be
computed (i) first by reducing the amount of the Participant's
monthly benefit payable under Section 3.2 hereof, if the
Participant's Commencement Date occurs before the Participant's
Normal Retirement date, (ii) then determining the survivor benefit
which would be payable to a Surviving Spouse or Eligible Children
in respect of such monthly benefit under Section 3.1(c) or Section
3.2(c) whichever is applicable, and (iii) next commuting such
benefits to their lump sum equivalent at the Commencement Date by
reference to the factor described in Section 4.5(b). In computing
the Participant's monthly benefit under clause (i) of the preceding
sentence, if the Commencement Date occurs before the earliest date
when the Participant may commence to receive his or her Early
Retirement Benefit, the Participant's Early Retirement Benefit
shall be computed as the annual actuarial equivalent of the Early
Retirement Benefit which would be payable to him or her at the
earliest date when benefits could commence under the Early
Retirement provisions of Section 3.2, in the form of a single life
annuity.
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When annual benefits have previously commenced, the lump sum
payment (prior to the ten percent (10%) reduction) shall be equal
to the difference between (A) minus (B) below, determined as of the
Participant's Commencement Date, accumulated to the date of the
lump sum payment using the same interest rate which is used in
calculating the amounts (A) and (B):
(A) The lump sum value of the monthly benefits payable to the
Participant (including any benefit payable to the Surviving
Spouse or Eligible Children) determined as of the Participant's
Commencement Date in the same manner as described in the
previous paragraph.
(B) The lump sum value of the monthly benefits previously paid
to the Participant discounted to the Participant's Commencement
Date.
When a Surviving Spouse of a deceased Participant elects to receive
a lump sum payment, the amount of the lump sum payment shall be
determined by the Committee in a manner similar to that used for a
Participant, except that the lump sum payment shall only reflect
the benefit which would be payable to a Surviving Spouse and
Eligible Children. All lump sum equivalents hereunder shall be
determined by reference to the factor described in Section 4.5(b).
(b) The factor described in this Section 4.5(b) is the actuarial
equivalence factor of the Pension Benefit Guaranty Corporation
applicable to plans terminating on the Commencement Date."
7. The Plan, as amended by this Amendment, remains in full force and
effect.
IN WITNESS WHEREOF, NME has signed this Amendment on the date set
forth above.
NATIONAL MEDICAL ENTERPRISES, INC.
By: /s/ SCOTT M. BROWN
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Its: Senior Vice President
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