EXHIBIT 4.6
RESOLUTIONS DULY ADOPTED BY
THE BOARD OF DIRECTORS OF
FHP INTERNATIONAL CORPORATION (THE "COMPANY")
ON FEBRUARY 14, 1997
EMPLOYEE STOCK OWNERSHIP PLAN
WHEREAS, the Company and certain employers affiliated with
the Company maintain the FHP International Corporation Employee
Stock Ownership Plan (the "ESOP");
WHEREAS, the ESOP consists of three separate, but
complimentary parts, each of which is designated to satisfy the
specific provisions of the Internal Revenue Code of 1986, as
amended (the "Code"), applicable to such part;
WHEREAS, the first part is an employee stock ownership plan
intended to qualify under Code Sections 401 and 4975(c)(7);
WHEREAS, the second part is a stock bonus plan intended to
qualify under Code Section 401, which includes a "cash or
deferred arrangement" intended to qualify under Code Section
401(k);
WHEREAS, the third part is a payroll-based tax credit
employee stock ownership plan intended to qualify under Code
Sections 41, 401, 409 and 4975(e)(7), and contributions to the
third part were discontinued as of December 31, 1986;
WHEREAS, the assets of the ESOP are invested, in part, in
shares of FHP International Corporation Common Stock, $.05 par
value ("FHP Common Stock");
WHEREAS, in accordance with the Reorganization Agreement,
Tree Acquisition Corp. will merge into the Company effective as
of the Closing, and the Company will be the surviving corporation
following such merger;
WHEREAS, upon the Closing, the ESOP will receive cash,
shares of N-T Holdings Class A Common Stock, $.01 par value ("N-T
Holdings A Common Stock"), shares of N-T Holdings Class B Common
Stock, $.01 par value ("N-T Holdings B Common Stock"), and rights
to purchase Talbert Medical Management Holdings Corporation
Common Stock ("Talbert Rights"), in exchange for the shares of
FHP Common Stock held by the ESOP;
WHEREAS, upon the Closing, the Company will become a wholly-
owned subsidiary of N-T Holdings, and shares of FHP Common Stock
will cease to be readily tradable;
WHEREAS, the Company finds it desirable to "spin off" the
third part of the ESOP upon the Closing;
WHEREAS, the Company also finds it desirable to amend the
plan established by such "spinoff" to eliminate the right to
receive distributions in shares of FHP Common Stock, and to
eliminate the right to invest in shares of FHP Common Stock,
following the Closing;
WHEREAS, the Company also finds it desirable to terminate
the plan established by such "spinoff";
WHEREAS, the Company also finds it desirable to continue the
first and second parts of the ESOP as a profit sharing plan
following the Closing; and
WHEREAS, the Company also finds it desirable to amend the
ESOP to eliminate the right to receive distributions in shares of
FHP Common Stock, and to eliminate the right to invest in shares
of FHP Common Stock, following the Closing.
"SPIN-OFF" AMENDMENT AND TERMINATION OF THE PAYSOP
WHEREAS, the third part of the ESOP consists of the "PAYSOP"
Subaccounts" in the "Employer Contribution Accounts" in the ESOP.
WHEREAS, under the terms of the ESOP applicable to the
"PAYSOP" Subaccounts, the "PAYSOP Subaccounts" will be invested
primarily in shares of FHP Common Stock prior to the Closing;
WHEREAS, under the terms of the ESOP applicable to the
"PAYSOP" Subaccounts," a participant or beneficiary may receive a
withdrawal or distribution in a single sum consisting of the
whole shares of "Stock" held in his or her "PAYSOP Subaccounts"
as of his or her "Distribution Date";
WHEREAS, under the terms of the ESOP applicable to the
"PAYSOP" Subaccounts," "Stock" is defined as shares of FHP Common
Stock which are readily tradable on an established securities
market;
WHEREAS, the right to receive a withdrawal or distribution
in whole shares of FHP Common Stock held in the "PAYSOP
Subaccounts" is an "optional form of benefit" under Code Section
411(d)(6), Treas. Reg. Section 1.411(d)-4 and Section 204(g) of
the Employee Retirement Income Security Act of 1974, as amended
("ERISA");
WHEREAS, immediately prior to the Closing, the "PAYSOP"
Subaccounts in the ESOP will be subject to Code Section 409(h);
WHEREAS, upon the Closing, shares of FHP Common Stock will
cease to be readily available, and will no longer be held in the
"PAYSOP Subaccounts" in the ESOP, and
WHEREAS, the right to receive a withdrawal or distribution
of whole shares of FHP Common Stock may be eliminated in
accordance with Code Section 411(d)(6)(C), Treas. Reg. Section
1.411(d)-4 A-2(d)(1)(iv) and ERISA Section 204(g)(3).
NOW THEREFORE, BE IT RESOLVED, that, effective upon the
Closing, the payroll-based tax credit employee stock ownership
plan that consists of the "PAYSOP Subaccounts" in the "Employer
Contribution Accounts" in the ESOP be, and the same hereby is,
"spun off" into a separate plan (the "PAYSOP").
RESOLVED FURTHER, that such "Spinoff" shall satisfy the
requirements of Code Sections 401(a)(12) and 414(1), Treas. Reg.
section 1.414(1)-1 and ERISA Section 208.
RESOLVED FURTHER, that, effective upon the Closing, the name
of the PAYSOP shall the "The FHP International Corporation
PAYSOP".
RESOLVED FURTHER, that, effective upon the Closing, Coy
Baugh, Wanda Lee, Judy Ehrenreich and Jeffrey Kuehn be, and
hereby are, appointed members of the "Committee" under the PAYSOP
responsible for the administration of the PAYSOP.
RESOLVED FURTHER that Wells Fargo Bank, N.A. be, and hereby
is, appointed as the trustee of the trust established pursuant to
the PAYSOP.
RESOLVED FURTHER, that the officers of the Company be, and
each hereby is, authorized and directed to file Form 5310-As with
respect to such "spinoff", notifying the Commission of the
Internal Revenue of such "spinoff", to the extent required by the
Code.
RESOLVED FURTHER, that, effective upon the Closing and
immediately following such "spinoff," the PAYSOP be, and hereby
is, amended to eliminate the right of a participant or
beneficiary to invest such participant's or beneficiary's "PAYSOP
Subaccount" in shares of FHP Common Stock.
RESOLVED FURTHER, that, effective upon the Closing and such
immediately following "spinoff," the PAYSOP be, and hereby is,
amended to eliminate the right of a participant or beneficiary to
receive withdrawals and distributions of such participant's or
beneficiary's "PAYSOP Subaccount" in whole shares of FHP Common
Stock.
RESOLVED FURTHER, that the officers of the Company be, and
each hereby is, authorized and directed to notify the
participants in the PAYSOP of the elimination of the right to
invest in shares of FHP Common Stock, and the elimination of the
right to receive withdrawals and distributions of whole shares of
FHP Common Stock.
RESOLVED FURTHER, that said officers be, and each hereby is,
authorized and directed to prepare and execute a plan document
setting forth the terms of the PAYSOP, as established by such
"spinoff".
RESOLVED FURTHER, that the PAYSOP be, and hereby is,
terminated effective upon the Closing and immediately following
such "spinoff."
RESOLVED FURTHER, that the distributions of the "PAYSOP
Subaccounts" upon the termination of the PAYSOP shall be made as
soon as administratively feasible following the termination of
the PAYSOP and the issuance of a favorable determination letter
by the Commissioner of Internal Revenue relative to the PAYSOP
and the termination of the PAYSOP.
RESOLVED FURTHER, that a participant or beneficiary shall
have the right to receive the distribution of such participant's
or beneficiary's "PAYSOP Subaccounts" in the form of the cash,
shares of N-T Holdings A Common Stock, shares of N-T Holdings B
Common Stock and Talbert Rights received in exchange for the
shares of FHP Common Stock held by the PAYSOP on the Closing, in
accordance with Code Section 409(h).
RESOLVED FURTHER, that the officers of the Company be, and
each hereby is, authorized and directed to notify the
participants in the PAYSOP of the termination of the PAYSOP.
RESOLVED FURTHER, that said officers be, and each hereby is,
authorized and directed to request a favorable determination from
the Commission of Internal Revenue relative to the PAYSOP holding
that the PAYSOP, as amended, and the trust established pursuant
thereto are qualified and tax-exempt under the applicable
provisions of the Code, and that the termination of the PAYSOP
will not adversely affect the qualified and tax-exempt status of
the PAYSOP and such trust.
RESOLVED FURTHER, that said officers be, and each hereby is,
authorized and directed to prepare and execute any further
documents necessary in conjunction with obtaining the approval of
the PAYSOP and the trust established pursuant to the PAYSOP from
the Commission of the Internal Revenue as qualified and tax-
exempt, including any amendments which may be required as a
condition of said rulings.
RESOLVED FURTHER, that said officers be, and each hereby is,
authorized and directed to prepare and execute any further
documents and take any further actions as may be necessary to
carry out the purposes of these resolutions.
CONVERSION OF THE ESOP TO A PROFIT SHARING PLAN
WHEREAS, the first part of the ESOP consists of the "Pre-
1/1/96 Employer Matching Contributions Subaccounts" and "Employer
ESOP Contributions Subaccounts" in the "Employer Contributions
Accounts" in the ESOP.
WHEREAS, the second part of the ESOP consists of the "Pretax
Deferral Accounts," "Rollover Accounts" "TakeCare Accounts"
"Employer Stock Bonus Accounts" and the "New Matching
Contributions Accounts" in the ESOP;
WHEREAS, the first and second parts of the ESOP shall
constitute the ESOP following the "spinoff" of the PAYSOP; and
WHEREAS, the Company intends to continue the ESOP following
the Closing.
NOW THEREFORE, BE IT RESOLVED, that, effective upon the
Closing and following the "spinoff" of the PAYSOP, the ESOP be,
and hereby is, converted to a profit sharing plan intended to
qualify under Code Section 401, which includes a "cash or
deferred arrangement" that is intended to qualify under Code
Section 404(k) (the "401(k) Plan").
RESOLVED FURTHER, that, effective upon the Closing and the
conversion of the ESOP to the 401(k) Plan, the name of the 401(k)
shall be changed to "The FHP International Corporation 401(k)
Savings Plan."
RESOLVED FURTHER, that, effective upon the conversion of the
ESOP to the 401(k) Plan, the 401(k) Plan be, and hereby is,
amended to eliminate those provisions contained in the ESOP prior
to such conversion that were necessary in order for the ESOP to
qualify as a stock bonus plan or an employee stock ownership
plan.
RESOLVED FURTHER, that the officers of the Company be, and
each hereby is, authorized and directed to notify the
participants in the 401(k) Plan of the conversion of the ESOP to
a profit sharing plan and the terms of the 401(k) Plan.
RESOLVED FURTHER, that said officers be, and each hereby is,
authorized and directed to prepare and execute an amendment and
restatement of the 401(k) Plan setting forth the terms of the
401(k) Plan, as so amended.
RESOLVED FURTHER, that said officers be, and each hereby is,
authorized and directed to prepare and execute any further
documents and take any further actions as may be necessary to
carry out the purposes of these resolutions.
AMENDMENT OF THE 401(K) PLAN
WHEREAS, immediately prior to the Closing, all or a portion
of the "Accounts" in the ESOP will be invested in shares of FHP
Common Stock;
WHEREAS, under the terms of the ESOP, a participant or
beneficiary is entitled to invest all or a portion of the
"Accounts" in the ESOP in shares of the FHP Common Stock;
WHEREAS, under the terms of the ESOP, a participant or
beneficiary may receive a withdrawal or distribution in a single
sum consisting of the whole shares of "Stock" held in his or her
"Accounts" as of his or her "Distribution Date",
WHEREAS, under the terms of the ESOP, "Stock" is defined as
shares of FHP Common Stock which are readily tradable on an
established securities market;
WHEREAS, the right to receive a withdrawal or distribution
in whole shares of FHP Common Stock held in the "Accounts" is an
"optional form of benefit" under Code Section 411(d)(6), Treas.
Reg. Section 1.411(d)-4 and ERISA Section 204(g),
RESOLVED FURTHER, that, upon the Closing and the conversion
of the ESOP to the 401(k) Plan, the 401(k) Plan be, and hereby
is, amended to eliminate the right of a participant or
beneficiary to receive distributions of such participant's or
beneficiary's "Accounts" in whole shares of FHP Common Stock.
WHEREAS, the right to receive a withdrawal or distribution
of whole shares of FHP Common Stock may be eliminated in
accordance with Code Section 411(d)(6)(C), Treas. Reg. Section
1.411(d)-4A-2(d)(1)(iv) and ERISA Section 204(g)(3).
NOW, THEREFORE BE IT RESOLVED, that, effective upon the
Closing and the conversion of the ESOP to the 401(k) Plan, the
401(k) Plan be, and hereby is, amended to eliminate the right of
a participant or beneficiary to invest such participant's or
beneficiary's "Accounts" in shares of FHP Common Stock.
RESOLVED FURTHER, that, upon the Closing and the conversion
of the ESOP to the 401(k) Plan, the 401(k) Plan be, and hereby
is, amended to eliminate the right of a participant or
beneficiary to receive distributions of such participant's or
beneficiary's "Accounts" in whole shares of FHP Common Stock.
RESOLVED FURTHER, that, upon the Closing and the conversion
of the ESOP to the 401(k) Plan, the 401(k) Plan be, and hereby
is, amended to provide that all withdrawals and distributions to
participants and beneficiaries shall be made in the form of cash.
RESOLVED FURTHER, that the officers of the Company be, and
each hereby is, authorized and directed to notify the
participants in the 401(k) Plan of the elimination of the right
to invest in shares of FHP Common Stock, and the elimination of
the right to receive withdrawals and distributions of whole
shares of FHP Common Stock.
RESOLVED FURTHER, that the amendment and restatement of the
401(k) Plan to be prepared and executed by the officers of the
Company shall reflect the elimination of such rights.
RESOLVED FURTHER, that the officers of the Company be, and
each hereby is, authorized and directed to request a favorable
determination from the Commissioner of the Internal Revenue
relative to the 401(k) Plan holding that the 401(k) Plan and the
trust established pursuant thereto are qualified and tax-exempt
under the applicable provisions of the Code.
RESOLVED FURTHER, that the officers of the Company be, and
each hereby is, authorized and directed to prepare and execute
any further documents necessary in conjunction with obtaining the
approval of the 401(k) Plan and the trust established pursuant
thereto from the Commission of the Internal Revenue as qualified
and tax-exempt, including any amendments which may be required as
a condition of said rulings.
RESOLVED FURTHER, that the officers of the Company be, and
each hereby is, authorized and directed to prepare and execute
any further documents and to take any further actions as may be
necessary to carry out the purposes of these resolutions.
APPOINTMENT OF 401(K) PLAN COMMITTEE
WHEREAS, the "Committee" under the 401(k) Plan is
responsible for the administration of the 401(k) Plan, and
WHEREAS, the Company finds it desirable to remove the
present members of the "Committee" and to appoint new members of
the "Committee."
NOW THEREFORE BE IT RESOLVED, that, effective upon the
Closing and the conversion of the ESOP to the 401(k) Plan, the
members of the "Committee" under the 401(k) Plan be, and hereby
is, removed.
RESOLVED FURTHER, that, effective upon the Closing and the
conversion of the ESOP to the 401(k) Plan, Coy Baugh, Wanda Lee,
Judy Ehrenreich and Jeffrey Kuehn be, and hereby are, appointed
members of the "Committee" under the 401(k) Plan.
RESOLVED FURTHER, that officers of the Company be, and each
hereby is, authorized and directed to prepare and execute any
documents and to take any actions as may be necessary to carry
out the purposes of these resolutions.
FHP MONEY PURCHASE PENSION PLAN
WHEREAS, the Company and certain employers affiliated with
the Company maintain the FHP Money Purchase Pension Plan;
WHEREAS, the Pension Plan is a money purchase pension plan
intended to qualify under Code Section 401;
WHEREAS, the "Committee", under the Pension Plan is
responsible for the administration of the Pension Plan; and
WHEREAS, the Company finds it desirable to remove the
present members of the "Committee" and to appoint new members of
the "Committee".
NOW, THEREFORE, BE IT RESOLVED, that, effective upon the
Closing, the members of the "Committee" under the Pension Plan
be, and hereby is, removed.
RESOLVED FURTHER, that, effective upon the Closing, Coy
Baugh, Wanda Lee, Judy Ehrenreich and Jeffrey Kuehn be, and
hereby are, appointed members of the Committee under the Pension
Plan.
RESOLVED FURTHER, that officers of the Company be, and each
hereby is, authorized and directed to prepare and execute any
documents and to take any actions as may be necessary to carry
out the purposes of these resolutions.
I, Joseph S. Konowiecki, certify that I am the duly elected
Secretary of the Company and that, as such, I do hereby further
certify that the resolutions set forth above are a true and
correct representation of resolutions duly adopted by the Board
of Directors of FHP International Corporation on February 14,
1997 and that said resolutions have not been amended, modified or
rescinded and remain in full force and effect on the date hereof.
Dated: April 15, 1997 /s/ Joseph S. Konowiecki
Joseph S. Konowiecki
Secretary