EXHIBIT 4.5
1996-1 AMENDMENT TO THE FHP INTERNATIONAL
CORPORATION EMPLOYEE STOCK OWNERSHIP PLAN
AMENDMENT 1996-1
FHP INTERNATIONAL CORPORATION
EMPLOYEE STOCK OWNERSHIP PLAN
WHEREAS, FHP International Corporation (the "Company")
maintains the FHP International Corporation Employee Stock
Ownership Plan (the "Plan"); and
WHEREAS, the Company has the right to amend the Plan in
accordance with Section 13.01 of the Plan; and
WHEREAS, the Company desires to amend the Plan in order
to (i) merge the TakeCare Savings and Retirement Plan into the
Plan, (ii) add an employer stock bonus contribution feature to
the Plan which is separate from the Plan's existing ESOP feature,
(iii) modify the Plan's matching contribution formula, (iv)
decouple the Plan's matching contribution feature from its
leveraged ESOP feature, (v) prohibit employees of certain
professional medical and dental corporations which are
"Affiliates" (as defined in Section 1.02 of the Plan) from being
eligible to receive an allocation under the Plan's ESOP feature,
(vi) allow participants to elect to change the rate of their
401(k) deferrals and to switch the investment funds in which
their accounts are invested on a monthly basis, and (vii) make
certain other clarifying and conforming changes to the Plan.
NOW, THEREFORE, the Plan is hereby amended, effective
January 1, 1996, except as otherwise provided below, as follows:
1. The Introduction to the Plan is amended by adding
the following at the end thereof:
"Effective January 1, 1996, the TakeCare Savings
and Retirement Plan was merged into this Plan, with
this Plan the survivor of such merger. In addition,
effective as of January 1, 1996, this Plan was amended
to add an employer stock bonus contribution feature
(within the meaning of Treasury Regulation Section
1.401-1(b)(1)(iii)) which is separate from the existing
part of the Plan intended to qualify as an employee
stock ownership plan under Code Section 4975(e)(7)."
2. Section 1.01 of the Plan is amended to read as
follows:
"1.01 ACCOUNTS
'Accounts' means a Participant's Employer
Contribution Account, Pretax Deferral Account, Employer
Stock Bonus Account, New Matching Contributions
Account, TakeCare Account, and Rollover Account. These
Accounts are described in Section 4.01 of the Plan."
3. Section 1.13 of the Plan is amended to read as
follows:
"1.13 EMPLOYER CONTRIBUTION
'Employer Contribution' means contributions to the
Plan made by an Employer pursuant to Sections 3.03,
3.04 and 3.10. It includes the Employer Matching
Contribution described in Section 3.03, the Employer
ESOF Contribution described in Section 3.04, and the
Employer Stock Bonus Contribution described in Section
3.10."
4. Section 1.23 of the Plan is amended, effective
January 1, 1995, to read as follows:
"1.23 LIMITATION YEAR
'Limitation Year' shall mean effective January l,
1995, the 12-month period beginning on January 1 and
ending on December 31. Consistent with the foregoing,
the period from July 1, 1994 through December 31, 1994
shall be a "limitation period" (within the meaning of
Treasury Regulation Section 1.415-2(b)(4)) with respect
to the Plan."
5. Section 1.38 of the Plan is amended, effective
January 1, 1995, to read as follows:
"1.38 VALUATION DATE
'Valuation Date' means the last day of each month.
Valuation Date may also mean any date selected by the
Committee in the event the Committee, in its sole
discretion, determines that events affecting the market
value of the Trust Fund require an interim Valuation
Date."
6. Section 3.01(b) of the Plan is amended to read as
follows:
"(b) CHANGE IN PERCENTAGE OR SUSPENSION OF DEFERRALS.
A Participant's Pretax Deferral percentage rate
will remain in effect, notwithstanding any change in
his Compensation, until he terminates employment or
elects to change the percentage. A Participant may
elect to change his deferral percentage as of the first
day of any month provided the election is delivered to
the Committee on or before the last day of the month
prior to the effective date of the change.
A Participant may suspend his Pretax Deferrals at any
time. The suspension will be effective as soon as
administratively possible following receipt of an election form
from the Participant. A Participant may resume making Pretax
Deferrals on the first day of any month after the effective date
of his election to suspend Pretax Deferrals. To resume Pretax
Deferrals the Participant must make an election on or before the
last day of the month prior to the effective date of the change."
7. Article III of the Plan is amended to add a new
Section 3.10 at the end thereof as follows:
"3.1 EMPLOYER STOCK BONUS CONTRIBUTIONS
The amount of Employer Stock Bonus Contributions,
if any, for each Plan Year will be determined by the
Board in its sole discretion. The Employer Stock Bonus
Contributions may be made in cash and/or shares of
Stock, as determined by the Board in its sole
discretion."
8. Section 4.01 of the Plan is amended in its
entirety to read as follows:
"4.01 PARTICIPANT ACCOUNTS
The Committee will maintain the following Accounts
for each Participant:
(a) An EMPLOYER CONTRIBUTION ACCOUNT which is:
(i) credited with the Participant's
share of Employer Matching Contributions made
under this Plan before January 1, 1996 and
Employer ESOP Contributions;
(ii) credited with the balance of his
PAYSOP Account transferred to this Account as
of July 1, 1994;
(iii) adjusted for investment results
and expenses; and
(iv) charged with distributions.
(b) A PRETAX DEFERRAL ACCOUNT which is:
(i) credited with the Participant's
Pretax Deferrals made under this Plan on and
after July 1, 1987;
(ii) credited with his Pretax Deferral
Account transferred to this Plan from the FHP
Corporation Tax Savings Plan as of July 1,
1987;
(iii) adjusted for investment results
and expenses; and
(iv) charged with withdrawals and
distributions.
(c) An EMPLOYER STOCK BONUS ACCOUNT which is:
(i) credited with the Participant's
share of Employer Stock Bonus Contributions;
(ii) adjusted for investment results and
expenses; and
(iii) charged with distributions.
(d) A NEW MATCHING CONTRIBUTIONS ACCOUNT which
is:
(i) credited with the Participant's
share of Employer Matching Contributions made
under this Plan on or after January 1, 1996;
(ii) adjusted for investment results
and expenses; and
(iii) charged with distributions.
(e) A TAKECARE ACCOUNT which is:
(i) credited with the Participant's
Salary Deferral Account, Matching
Contribution Account, Qualified Nonelective
Contribution Account and Rollover Account
transferred to this Plan from the TakeCare
Savings and Retirement Plan as of January 1,
1996;
(ii) adjusted for investment results and
expenses; and
(iii) charged, with distributions.
(f) A ROLLOVER ACCOUNT which is:
(i) credited with the Participant's
Rollover Contributions made to this Plan on
and after July 1, 1987;
(ii) credited with his Rollover Account
transferred to this Plan from the FHP
Corporation Tax Savings Plan as of July 1,
1987;
(iii) adjustment for investment results
and expenses; and
(iv) charged with withdrawals and
distributions."
9. The first paragraph of Section 4.03(a) of the Plan
is amended to read as follows:
"(a) The Employer Matching Contributions for each
Plan Year beginning on or after January 1, 1996 are
allocated as of the last day of the Plan Year to the
New Matching Contribution Account of each person who
was a Participant during the Plan Year, provided the
Participant:"
10. Subsections 4.03(b) and 4.03(c) of the Plan are
amended to read as follows:
"(b) Each Participant who meets the requirements
of Subsection (a) above is allocated a portion of the
Employer Matching Contributions for a Plan Year as
follows:
(i) if the Participant has completed
less than five years of Service as of the
last day of such Plan Year, the Participant's
portion of the Employer Matching
Contributions for such Plan Year shall equal
50% of the amount of his Pretax Deferrals for
the Plan Year which do not exceed six percent
of his Compensation for the Plan Year; or
(ii) if the Participant has completed at
least five Years of Service as of the last
day of such Plan Year, the Participant's
portion of the Employer Matching
Contributions for such Plan Year shall equal
100% of the amount of his Pretax Deferrals
for the Plan Year which do not exceed six
percent of his Compensation for the Plan
Year.
(c) (Reserved.)
11. Subsections 4.04(c) is amended to read as follows:
"(c) If the Committee determines, in its
discretion, that allocations of Employer Matching
Contributions to Participants' New Matching
Contributions Accounts for a Plan Year do not meet one
of the requirements of Subsection (b), the Committee
will determine, in its discretion, the amount of
Employer Matching Contributions of certain Participants
who are Highly Compensated Employees which must be
reduced in order to meet one of the requirements of
Subsection (b). The reduction will be accomplished by
reducing the allocations to Participants who are Highly
Compensated Employees in order of their Actual
Contribution Percentage rates, beginning with the
Participant with the highest percentage rate and
decreasing in descending order until one of the
requirements of Subsection (b) is met. The reduced
amounts will be added to the Employer Stock Bonus
Contribution for the Plan Year and allocated among all
Participants as provided in Section 4.06."
12. Subsection 4.05(a) of the Plan is amended to read
as follows:
"(a) The Employer ESOP Contributions for each Plan
Year are allocated as of the last day of the Plan Year
to the Employer Contribution Account of each
Participant, provided the Participant:
(i) is employed as an Eligible Employee
by the Company or one of its subsidiaries
which is part of the same controlled group of
corporations (within the meaning of Code
Section 414(b)) on the last day of the Plan
Year; or
(ii) terminated employment with the
Company or one of its subsidiaries which is
part of the same controlled group of
corporations (within the meaning of Code
Section 414(b)) during the Plan Year on or
after attaining ape 65 or by reason of death;
or
(iii) become Permanently and Totally
Disabled during the Plan Year while employed
by the Company or one of its subsidiaries
which is part of the same controlled group of
corporations (within the meaning of Code
Section 414(b)) on the last day of the Plan
Year."
13. Article IV of the Plan is amended by adding a new
Section 4.06 at the end thereof to read as follows:
"4.06 ALLOCATION OF EMPLOYER STOCK BONUS
CONTRIBUTIONS
(a) The Employer Stock Bonus Contributions for
each Plan Year are allocated as of the last day of the
Plan Year to the Employer Stock Bonus Account of each
Participant, provided the Participant:
(i) is employed as an Eligible Employee
on the last day of the Plan Year; or
(ii) terminated employment during the
Plan Year on or after attaining age 65; or
(iii) died while employed during the
Plan Year; or
(iv) became Permanently and Totally
Disabled during the Plan Year.
(b) Each Participant who meets the requirements
of Subsection (a) above is allocated a portion of the
Employer Stock Bonus Contributions equal to the total
Employer Stock Bonus Contributions for the Plan Year
times the ratio of his Compensation for the Plan Year
to the total of all such Participants' Compensation for
the Plan Year.
(c) If any portion of the Employer Stock Bonus
Contributions is contributed in shares, the allocation
of such portion to Participants' Employer Stock Bonus
Accounts will be made in shares and fractions of shares
to the nearest thousandth of a share."
14. Section 5.01 of the Plan is amended to read as
follows:
"5.01 ESTABLISHMENT OF ESOP SUSPENSE SUBFUND
Financed Shares acquired by the ESOP Fund with the
proceeds of an Exempt Loan are held in an ESOP Suspense
Subfund. Some or all of the Employer ESOP
Contributions may be applied to repay any outstanding
Exempt Loan."
15. The first paragraph of Section 5.03 as well as
Subsection 5.03(a) of the Plan are amended to read as follows:
"Shares of Stock released from the ESOP Suspense
Subfund for a Plan Year are held in the ESOP Fund on an
unallocated basis until allocated by the Committee.
Shares of Stock released in connection with a payment
on an Exempt Loan from Employer ESOP Contributions are
allocated as described in Subsection (a). Shares of
Stock released in connection with a payment on an
Exempt Loan from cash dividends on Stock are allocated
as described in Subsection (b).
(a) A Participant who received an allocation of
Employer ESOP Contributions for the Plan Year will
receive an allocation of Stock as of the last day of
the Plan Year equal to:
(i) the total shares released in
connection with all payments on an Exempt
Loan during the Plan Year from Employer ESOP
Contributions, times
(ii) the ratio of his allocation of
Employer ESOP Contributions for the Plan Year
to the total Employer Contributions for the
Plan Year. Stock will be allocated in shares
and fractions of shares to the nearest
thousandth of a share.
At the time of such allocation of shares of Stock,
the Participant's Employer Contributions Account will
be debited with its share of the Trust's cash payments
on the Exempt Loan."
16. The first sentence of Section 6.03(d) of the Plan
is amended to read as follows:
"Fourth, the excess allocations of Employer
Matching Contributions and if necessary Employer ESOP
Contributions and Employer Stock Bonus Contributions
will be removed from the Participant's New Matching
Contributions Account, Employer Contribution Account
and Employer Stock Bonus Contribution Account,
respectively, and will be reallocated to other
Participants' New Matching Contributions Account,
Employer Contribution Account and Employer Stock Bonus
Contribution Account, as applicable."
17. The first two paragraphs of Section 7.01 of the
Plan are amended to read as follows:
"Each Participant's Accounts are invested in the
Trust Fund. The Participant's Employer Contribution
Account and Employer Stock Bonus Account are invested
primarily in Stock. Except as provided in Section
7.16, the Participant has no right to direct the
investments of such Accounts. Each Participant has the
right to direct the investment of his existing and
future Pretax Deferrals Account and New Matching
Contributions Account, his TakeCare Account, and his
Rollover Account in any of the Plan's Investment Funds.
Any investment direction by the Participant with
respect to his existing and future Pretax Deferrals
Account shall be applied in the same manner to the
investment of his New Matching Contributions Account,
TakeCare Account, and Rollover Account. The
Committee will select the Investment Funds available
under the Plan. Upon enrollment, reenrollment, and as
of the first day of any month, the Participant may
designate the Investment Fund(s) in which his existing
and future Pretax Deferrals and Employer Matching
Contributions, if any, are invested. A Rollover
Contribution must be accompanied by a written notice to
the Committee designating the Investment Funds in which
the contribution will be invested. The Committee will
establish uniform nondiscriminatory rules regarding the
designation of Investment Funds."
18. The first sentence of the fifth paragraph of
Section 7.01 of the Plan is amended to read as follows:
"With respect to Stock held in a Participant's
Pretax Deferrals Account, New Matching Contributions
Account, TakeCare Account and Rollover Account, the
Committee shall take such actions and establish such
procedures as it deems necessary to ensure the
confidentiality of information relating to the
purchase, sale, and holding of such Stock, and the
exercise of voting, tender and similar rights with
respect to Stock by a Participant or his or her
Beneficiary."
19. The first sentence of Section 7.02 of the Plan is
amended to read as follows:
"Each Participant has the right as of the first
day of any month to have all or part of his Pretax
Deferrals Account, New Matching Contributions Account,
TakeCare Account and Rollover Account transferred
between the Investment Funds."
20. Subsections 7.12(a) and 7.12(b) are amended to
read as follows:
"(a) Stock received by the Trust as a result of a
Stock split or Stock dividend on Stock held in
Participant's Employer Contribution Account, New
Matching Contributions Account, and Employer Stock
Bonus Account, as applicable, will be allocated as of
the Valuation Date coincident with or following the
date of such split or dividend, to each Participant who
has an Employer Contribution account, New Matching
Contributions Account and/or Employer Stock Bonus
allocated will bear substantially the same proportion
to the total number of shares received as the number of
shares in such Account of the Participants immediately
before the allocation. The shares will be allocated to
the nearest one thousandth of a share.
(b) Stock received by the Trust as a result of a
Stock split or Stock dividend on Stock held in
Participant's Pretax Deferral Account, TakeCare Account
and Rollover coincident with or following the date of
such split or dividend, to each Participant who has a
Pretax Deferral, TakeCare Account and/or Rollover
Account, as applicable. The amount allocated will bear
substantially the same proportion to the total number
of shares received as the number of shares in such
Account bears to the total number of shares allocated
to such Accounts of all Participants immediately before
the allocation. The shares will be allocated to the
nearest one thousandth of a share."
21. Subsections 7.14(a) and 7.14(c) are amended to
read as follows:
"(a) Stock purchased with dividends on Stock held
in Participants' Employer Contributions Accounts and
Employer Stock Bonus Accounts will be allocated to each
Participant's Employer Contributions Account, New
Matching Contributions Account and Employer Stock Bonus
Account."
"(c) Stock purchased with dividends on Stock held
in Participants' Pretax Deferral Accounts, TakeCare
Accounts and Rollover Accounts will be allocated to
each Participant's Pretax Deferral Account, TakeCare
Account and Rollover Account."
22. Section 8.01 of the Plan is amended to read as
follows:
"8.01 POST AGE 59-1/2 WITHDRAWALS
A Participant who has attained age 59-1/2 may
withdraw up to one hundred percent of the value of his
Pretax Deferral Account, the TakeCare Account and the
Rollover Account, determined as of the most recent
Valuation Date (a) which precedes the date the
withdrawal request is received by the Committee on a
written form prescribed by the Committee, and (b) for
which the allocation process described in Section 7.03
has been completed. A Participant may not withdraw
from his Employer Contribution Account, New Matching
Contributions Account or Employer Stock Bonus Account
except as provided in Articles IX, X, and XI."
23. The first sentence of Section 8.02 of the Plan is
amended to read as follows:
"A Participant who has a financial hardship may
withdraw up to one hundred percent of the value of his
Pretax Deferral Account, TakeCare Account and Rollover
Account, determined as of the most recent Valuation
Date (a) which precedes the date the withdrawal request
is received by the Committee on a written form
prescribed by the Committee, and (b) for which the
allocation process described in Section 7.03 has been
completed."
24. Subsection 8.02(a)(iii) of the Plan is amended to
read as follows:
"(iii) The amount to be withdrawn may
not exceed the smaller of (A) the total
value, determined under this Section 8.02, of
the sum of the Participant's Pretax Deferral
Account, TakeCare Account and Rollover
Account or (B) the amount necessary to meet
the Participant's financial hardship.
Effective January 1, 1989, a Participant may not
withdraw any earnings credited to his Pretax Deferral
Account and TakeCare Account on and after such date."
25. The first sentence of Section 8.05 of the Plan is
amended to read as follows:
"A Participant who is actively employed by an
Affiliate may borrow from his Pretax Deferral Account,
TakeCare Account and Rollover Account in accordance
with the terms and conditions for loans established by
the Committee."
26. The first sentence of Subsection 8.05(d)(ii) is
amended to read as follows:
"50% of the vested portion of the Participant's
Pretax Deferral Account, TakeCare Account and Rollover
Account under this Plan valued on the Applicable
Valuation Date immediately before the date the
request for a loan is received."
27. Subsection 8.05 is amended by adding the following
subsection (j) to the end thereof:
"(j) This subsection (j) is effective as of
January 13, 1996 and applies only to Participants who
(i) were employed by FHP Fountain Valley Hospital ("FHP
Hospital") on or before January 13, 1996, (ii) had an
outstanding loan under the Plan as of January 13, 1996
and (iii) became employed by Orange Coast Memorial
Hospital on January 14, 1996. A participant who
satisfies the requirements of the preceding sentence is
referred to herein as a "Qualified Participant."
Notwithstanding anything else contained herein to
the contrary, Qualified Participants may repay loans
under this Plan by payroll deduction in accordance with
paragraph (g) of this Section 8.05 except that Orange
Coast Memorial Hospital shall remit such payroll
deductions to the Trustee. The repayment period with
respect to a loan subject to this Section 8.05(j) shall
be the same as the original repayment period of such
loan, provided that such period of repayment, including
any extensions resulting from the consolidation
of a loan into a subsequent loan, shall not extend
beyond five years from the original date of the loan.
This five year limit shall not apply to any portion of
the loan used to acquire the Participant's principal
residence."
28. Subsection 10.02(a) of the Plan is amended to read
as follows:
"(a) The vested portion of a Participant's Pretax
Deferral Account, TakeCare Account, Rollover Account
and the portion of his Employer Contribution Account
attributable to his former PAYSOP Account is always one
hundred percent."
29. The text of Subsection 10.02(b) preceding the
first colon appearing therein is amended to read as follows:
"The vested portion of a Participant's Employer
Contribution Account, New Matching Contributions
Account and Employer Stock Bonus Account is based on
his Service as of the date his employment terminates,
as follows:"
30. Section 10.03 of the Plan is amended to read as
follows:
"10.03 EFFECT OF TERMINATION OF EMPLOYMENT: PERIOD
OF SEVERANCE AND REEMPLOYMENT
(a) If a Participant terminates employment when
he is not one hundred percent vested in his Employer
Contribution Account, New Matching Contributions
Account and Employer Stock Bonus Account, the
non-vested portion of his Employer Contribution
Account, New Matching Contributions Account and
Employer Stock Bonus Account, is forfeited on the date
of termination. A Participant who ceases to
participate in the Plan and whose nonforfeitable
percentage in his Employer Contribution Account, New
Matching Contributions Account and Employer Stock Bonus
Account is zero, shall be deemed to have received a
complete distribution of the nonforfeitable portion of
his Employer Contributions Account, New Matching
Contributions Account and Employer Stock Bonus Account.
If the Participant is reemployed before the date on
which he incurs a five year Period of Severance, the
portion of his Employer Contribution Account, New
Matching Contributions Account and Employer Stock Bonus
Account, which was forfeited is reinstated as of the
date he is reemployed. If the Participant later
terminates Employment before he is one hundred percent
vested in his Employer Contribution Account, New
Matching Contributions Account and Employer Stock Bonus
Account, the vested portion of such Accounts will not
be determined under Section 10.02(b). Instead, such
vested portion will be determined by multiplying the
appropriate vested portion from Section 10.02(b) times
the sum of (i) plus (ii) and then subtracting (ii) from
the result. For this purpose:
(i) is the value of (and/or the number
of shares in) the Participant's Employer
Contribution Account, New Matching
Contributions Account and Employer Stock
Bonus Account, as of the Valuation Date
coinciding with or immediately following his
most recent termination of employment; and
(ii) is the amount (and/or the number of
shares) previously distributed to the
Participant due to his prior termination of
employment.
(b) If a Participant terminates employment when
he is not one hundred percent vested in his Employer
Contribution Account, New Matching Contributions
Account and Employer Stock Bonus Account, and is
reemployed after incurring a five year Period of
Severance, the portion of his Employer Contribution
Account, New Matching Contributions Account and
Employer Stock Bonus Account that was forfeited as a
result of his termination of employment will not be
reinstated."
31. Section 10.04 of the Plan is amended to read as
follows:
"10.04 DISPOSITION OF FORFEITURES
All amounts forfeited under any provisions of this
Plan are first applied to reinstate forfeited amounts
of other Participants pursuant to Section 10.03(a).
Any remaining forfeitures are used to reduce the
Employer Contributions required pursuant to Sections
3.03, 3.04 and 3.10 for the Plan Year in which they are
forfeited. Forfeitures are first charged against the
portion of a Participant's Employer Contribution
Account, New Matching Contributions Account and
Employer Stock Bonus Account not invested in Stock,
with any balance charged against the remainder of his
Employer Contribution Account, New Matching
Contributions Account and Employer Stock Bonus
Account at the fair market value of Stock. Financed
Shares are forfeited only after all other amounts in a
Participant's Accounts have been forfeited."
32. Section 11.01 of the Plan is amended by adding the
following at the end thereof:
"Notwithstanding the preceding, to avoid the
elimination of an optional form of benefit in
connection with the merger of the TakeCare Savings and
Retirement Plan into this Plan, amounts credited to a
Participant's TakeCare Account which are distributable
pursuant to Articles IX and X may, at the Participant's
or, if applicable, Beneficiary's election, be
distributed in (i) a single cash lump sum, (ii)
installments in cash over a period of years determined
by the Participant, or (iii) a combination of a partial
lump sum in cash and installments in cash over a period
of years determined by the Participant."
33. Subsection 11.02(c) of the Plan is amended to read
as follows:
"(c) If a Participant terminates employment before
his Normal Retirement Age and elects pursuant to
Section 10.01(c) to have his Distribution Date be the
Valuation Date coinciding with or immediately following
the date he reaches age 65, he shall continue to be
allowed to direct the investment of his Pretax Deferral
Account, TakeCare Account, New Matching Contributions
Account and Rollover Account according to the terms of
this Plan until such Accounts are distributed or
forfeited."
34. The first sentence of Subsection 11.03(c)(i) is
amended to read as follows:
"If the distribution is a total distribution,
payment of the fair market value of a Participant's
Employer Contribution Account and Employer Stock Bonus
Account will be made in five substantially equal annual
payments."
35. The text of Subsection 11.04(a) preceding the
first colon appearing therein as well as Subsections 11.04(a)(i)
and 11.04(a)(ii) of the Plan are amended to read as follows:
"(a) Notwithstanding any other provision of the
Plan, other than the provision requiring the
Participant's consent to a distribution in excess of
$3,500, a Participant may elect to have his Employer
Contribution Account and Employer Stock Bonus Account
distributed as follows:
(i) If the Participant terminates
employment after attaining his Normal
Retirement Age, or on account of his death,
or Permanent and Total Disability, the
distribution of such portion of the
Participant's Employer Contribution Account
and Employer Stock Bonus Account will begin
not later than one year after the close of
the Plan Year in which such event occurs
unless the Participant elects otherwise under
other provisions of this Plan.
(ii) If the Participant separates from
service for any reason other than those
described in clause (i) above, and is not
reemployed by the Employer at the end of the
fifth Plan Year following the Plan Year in
which he terminates employment, distribution
of such portion of the Participant's Employer
Contribution Account and Employer Stock Bonus
Account will begin not later than one year
after the close of the fifth Plan Year
following the Plan Year in which the
Participant terminates employment unless the
Participant elects otherwise under other
provisions of this Plan."
IN WITNESS WHEREOF, the Company has caused its duly
authorized officer to execute this Amendment 1996-1 to the Plan.
FHP INTERNATIONAL CORPORATION
By: __/s/ Burke F. Gumbiner__
Its: SVP