EXHIBIT 10.16B
FIRST AMENDMENT
TO THE
PHYSICIAN SALES & SERVICE, INC.
EMPLOYEE STOCK OWNERSHIP AND SAVINGS PLAN
This First Amendment to the Physician Sales & Service, Inc. Employee Stock
Ownership and Savings Plan is adopted this 8th day of July, 1997, by Physician
Sales & Service, Inc. (the "Company"), and is effective as of January 1, 1997,
except as otherwise set forth below.
W I T N E S S E T H:
-------------------
WHEREAS, the Company has previously adopted the Amendment and Restatement
of the Physician Sales & Service, Inc. Employee Stock Ownership and Savings Plan
(the "Plan"), effective as of January 1, 1997; and
WHEREAS, the Company is authorized and empowered to further amend the Plan;
and
WHEREAS, the Company deems it advisable and in the best interests of the
Participants to amend the Plan to provide for the merger of the Y-Laboratories &
Supplies, Inc. 401(k) Retirement Plan into this Plan effective as of October 1,
1997 (or as soon as practicable thereafter), to modify the timing of changes to
certain contributions and investment elections under the Plan, to clarify the
earnings allocation and antidiscrimination provisions of the Plan, and to
include other changes required in order to comply with applicable federal laws.
NOW, THEREFORE, the Plan is hereby amended as follows:
I.
Paragraph (b) of Article I is hereby deleted, in its entirety, and the
following is substituted in lieu thereof:
(b) "ACTUAL CONTRIBUTION PERCENTAGE" shall mean, with respect to any Plan
------------------------------
Year beginning on or after January 1, 1997 and with respect to a group of
Participants for the Plan Year, the average of the Actual Contribution Ratios
(calculated separately for each member of the group) of each Participant who is
a member of such group.
II.
Paragraph (d) of Article I is hereby deleted, in its entirety, and the
following is substituted in lieu thereof:
(d) "ACTUAL DEFERRAL PERCENTAGE" shall mean, with respect to any Plan Year
--------------------------
beginning on or after January 1, 1997 and with respect to a group of
Participants for the Plan Year, the average of the Actual Deferral Ratios
(calculated separately for each member of the group) of each Participant who is
a member of such group.
III.
Subparagraphs (m)(2) and (m)(3) of Article I are hereby deleted, in their
entireties, and the following is substituted in lieu thereof:
(2) For purposes of determining a Participant's Actual Deferral Ratio
with respect to any Plan Year beginning on or after January 1, 1997, an
Employer may limit the period for which Compensation is taken into account
to that portion of the Plan Year in which the Employee was a Participant so
long as this limit is applied uniformly to all eligible Employees under the
Plan for the Plan Year. For all other purposes of the Plan, no
Compensation paid or accrued by an Employer with respect to an Employee
prior to the Employee's first day of participation shall be taken into
account.
(3) Effective for Plan Years beginning on or after January 1, 1997, no
Compensation in excess of $160,000 (adjusted by the Commissioner of the
Internal Revenue Service in accordance with Section 401(a)(17)(B) of the
Code) shall be taken into account for any Employee. For Plan Years
beginning before January 1, 1997, the provisions of subparagraph (m)(3) of
Article I of this Plan prior to its most recent amendment and restatement
shall be in effect.
IV.
Paragraph (s) of Article I is hereby deleted, in its entirety, and the
following is substituted in lieu thereof:
(s) "ELIGIBILITY DATE" shall mean the first day of each Plan Year and the
----------------
first day of each calendar month within the Plan Year.
V.
Subparagraph (w)(3) of Article I is hereby deleted, in its entirety, and
the following is substituted in lieu thereof:
-2-
(3) For Plan Years beginning on or after January 1, 1997, the term
"leased employee," as used in this paragraph (w), means any person (other
than an employee of the Employer) who, pursuant to an agreement between the
Employer and any other person ("leasing organization"), has performed
services for the Employer (or for the Employer and one or more Affiliates)
on a substantially full time basis for a period of at least one year and
the individual's services are performed under the primary direction or
control of such Employer.
VI.
Paragraph (pp) of Article I is hereby modified by renumbering subparagraph
(3) as subparagraph (4) and adding a new subparagraph (3), immediately before
renumbered subparagraph (4), as follows:
(3) The provisions of subparagraphs (1) and (2) shall be effective for
Plan Years beginning on or after January 1, 1997. For Plan Years beginning
before January 1, 1997, the provisions of paragraph (pp) of Article I of
this Plan prior to its most recent amendment and restatement shall be in
effect.
VII.
Effective October 1, 1997, paragraph (uu) of Article I is hereby deleted,
in its entirety, and the following is substituted in lieu thereof:
(uu) "MERGER ACCOUNTS" shall mean the account or accounts established
---------------
pursuant to paragraph (b) of Article VII with respect to contributions to the
Brown's Medical Supply Co. Retirement Savings Plan and the Y-Laboratories &
Supplies, Inc. 401(k) Retirement Plan on behalf of a Participant prior to the
merger of the Brown's Medical Supply Co. Retirement Savings Plan and the Y-
Laboratories & Supplies, Inc. 401(k) Retirement Plan with this Plan effective as
of January 1, 1997 and October 1, 1997, respectively, or as soon thereafter as
administratively feasible, together with accounts established with respect to
contributions to other tax-qualified retirement plans merged with this Plan from
time to time.
VIII.
Paragraph (nnn) of Article I is hereby deleted, in its entirety, and the
following is substituted in lieu thereof:
(nnn) "VALUATION DATE" shall mean the last day of each Plan Year and each
--------------
business day, or such other dates as may be selected by the Plan Administrator.
For purposes of this paragraph, the term "business day" shall mean a day on
which the New York Stock Exchange and the home office of any third-party
administrator that contracts with the Plan Administrator to provide services to
the Plan are open for business.
-3-
IX.
Article I is hereby modified by adding new paragraphs (qqq), (rrr) and
(sss), immediately following existing paragraph (ppp), as follows:
(qqq) "EARNINGS" attributable to any Pooled Investment Fund (other than
--------
any pooled Employer Securities Accounts, Other Investments Accounts, or the
Company Stock Fund) shall mean, with respect to a Valuation Period, the
aggregate of the unrealized appreciation or depreciation accruing to the Pooled
Investment Fund during such a period; and the income earned or the loss
sustained by the Pooled Investment Fund during such period, whether from
investments or from the sale or exchange of assets. The Earnings attributable
to a separate portion of a Segregated Investment Fund (other than any segregated
Employer Securities Accounts, Other Investments Accounts, or Company Stock Fund)
credited to a Participant's Account for any Valuation Period shall be determined
by multiplying the number of shares of the Segregated Investment Fund credited
to the Participant's Account by the difference between the value of each share
for the current Valuation Date and the value of each share as of the most recent
preceding Valuation Date. The Earnings attributable to any portion of the
Company Stock Fund invested in assets other than Employer Securities shall mean,
with respect to a Valuation Period, (i) cash dividends received on shares of
Employer Securities allocated to Participants' investments in the Company Stock
Fund and (ii) the aggregate of the unrealized appreciation or depreciation
occurring in the value of, and that portion of the income earned or the loss
sustained by, such portion of the Company Stock Fund during such period. The
Earnings attributable to any Other Investments Account shall mean, with respect
to a Valuation Period, (i) cash dividends received on shares of Employer
Securities allocated to Participants' Employer Securities Accounts (to the
extent such cash dividends are not used, pursuant to paragraph (f), to repay a
loan), (ii) cash dividends received on Employer Securities not allocated to any
Participant's Employer Securities Account or any Fund described in Article XI
(to the extent such cash dividends are not used, pursuant to paragraph (f), to
repay a loan), and (iii) the aggregate of the unrealized appreciation or
depreciation occurring in the value of, and that portion of the income earned or
the loss sustained by, the Other Investments Account during such period.
(rrr) "POOLED INVESTMENT FUND" shall mean a Fund established under Article
----------------------
XI, the combined assets of which shall consist of the common investments of all
Participants selecting the Fund.
(sss) "SEGREGATED INVESTMENT FUND" shall mean a Fund established under
--------------------------
Article XI, in which the assets of each Participant selecting the Fund shall be
separately invested, and for which the earnings attributable to such assets
shall be separately accounted.
-4-
X.
Effective April 1, 1997, subparagraph (a)(4) of Article VI is hereby
deleted, in its entirety, and the following is substituted in lieu thereof:
(4) Any salary reduction agreement with respect to 401(k) Elective
Contributions shall be executed and in effect prior to the date selected by
the Administrator for the first pay period to which it applies. Any such
agreement may be revised by the Participant monthly with the approval of,
and as of such date as determined by, the Administrator (or as of any
additional dates selected by the Administrator), for pay periods beginning
after the date such revision is executed and made effective.
XI.
Effective April 1, 1997, subparagraphs (a)(6) and (a)(7) of Article VI are
hereby deleted, in their entireties, and the following is substituted in lieu
thereof:
(6) A Participant may suspend further 401(k) Elective Contributions to
the Plan at any time, provided the request for such suspension is received
by the Plan Administrator prior to the date selected by the Administrator
for the first pay period to which such suspension applies. Any Participant
who suspends further contributions relating to periodic pay may reinstate
such contributions by providing written notice to the Plan Administrator
for any month thereafter (and as of the date within such month as
determined by the Administrator). Any such notice shall be delivered
within the time period designated by the Plan Administrator.
(7) In the event that a Participant receives a withdrawal of his
401(k) Elective Contributions pursuant to paragraph (a) of Article X, such
Participant shall not be permitted to make any further 401(k) Elective
Contributions pursuant to paragraph (a)(1) of this Article VI for a period
of 12 months following the date of such withdrawal. After the completion
of the 12-month period, the Participant may reinstate 401(k) Elective
Contributions in accordance with the provisions of paragraph (a)(6).
XII.
Sections (a)(8)(A), (a)(8)(B) and (a)(8)(C) of Article VI are hereby
deleted, in their entireties, and the following is substituted in lieu thereof:
(8) (A) In the event that the 401(k) Elective Contributions of
Highly Compensated Employees exceed the limitations set forth in
paragraph (g), the aggregate excess 401(k) Elective Contributions
(plus the earnings thereon for the Plan Year to which the excess
-5-
contributions relate), determined as set forth in paragraph (a)(8)(B)
below, shall be distributed to the Highly Compensated Employees as
provided in paragraph (a)(8)(C) below on or before the 15th day of the
third month after the close of the Plan Year to which the excess
contributions relate. Notwithstanding the preceding sentence, the
Plan Administrator may delay the distribution of any excess 401(k)
Elective Contributions (plus the earnings thereon for the Plan Year to
which the excess contributions relate) attributable to an Employer
beyond the 15th day of the third month of such Plan Year, if the
Employer consents to such delay and the Administrator refunds all such
excess amounts not later than 12 months after the close of the Plan
Year to which the excess contributions relate.
(B) For purposes of paragraph (a)(8)(A), the amount of the
aggregate excess 401(k) Elective Contributions for the Plan Year shall
be equal to the sum of the amounts of such excess contributions
attributable to each Highly Compensated Employee for the Plan Year.
(i) In order to determine the amount of the excess 401(k)
Elective Contributions attributable to each Highly Compensated
Employee, the Plan Administrator shall first reduce the Actual
Deferral Ratio of the Highly Compensated Employee with the
highest Actual Deferral Ratio for the Plan Year to the extent
required to:
a. enable the arrangement to satisfy the limitations
set forth in paragraph (g), or
b. cause such Highly Compensated Employee's Actual
Deferral Ratio to equal the Actual Deferral Ratio of the
Highly Compensated Employee with the next highest Actual
Deferral Ratio.
Then, if necessary, the Plan Administrator shall reduce the
Actual Deferral Ratios of the Highly Compensated Employees with
the next highest Actual Deferral Ratio for the Plan Year
(including the Actual Deferral Ratio(s) of the Highly Compensated
Employee(s) whose Actual Deferral Ratio the Plan Administrator
already has reduced) to the extent required to comply with
paragraph (a)(8)(B)(i)a. or (a)(8)(B)(i)b. This process shall
then be repeated until the Actual Deferral Percentage for the
Highly Compensated Employees satisfies the limitations set forth
in paragraph (g).
(ii) The amount of the excess 401(k) Elective Contributions
attributable to each Highly Compensated Employee shall equal the
remainder of
-6-
a. the total 401(k) Elective Contributions (and any
Non-Elective Contributions treated as 401(k) Elective
Contributions) on behalf of the Participant (determined
prior to the application of this paragraph (a)(8)(B)), minus
b. the amount determined by multiplying the
Participant's Actual Deferral Ratio (determined after
application of paragraph (a)(8)(B)(i)) by his Compensation
used in determining such ratio.
(C) In order to determine the dollar amount of the excess 401(k)
Elective Contributions distributable to each Highly Compensated
Employee pursuant to paragraph (a)(8)(A), the Plan Administrator shall
first reduce the 401(k) Elective Contributions of the Highly
Compensated Employee(s) with the highest dollar amount of 401(k)
Elective Contributions for the Plan Year by a dollar amount equal to
the lesser of
(i) the aggregate excess 401(k) Elective Contributions
determined under paragraph (a)(8)(B), or
(ii) the dollar amount necessary to reduce such Highly
Compensated Employee's 401(k) Elective Contributions to a dollar
amount that is equal to the dollar amount of 401(k) Elective
Contributions of the Highly Compensated Employee with the next
highest dollar amount of 401(k) Elective Contributions.
Then, if necessary, the Plan Administrator shall reduce the 401(k)
Elective Contributions of the Highly Compensated Employees with the
next highest dollar amount of 401(k) Elective Contributions for the
Plan Year (including the Highly Compensated Employee(s) whose 401(k)
Elective Contributions the Plan Administrator already has reduced) to
the extent required to comply with paragraph (a)(8)(C)(i) or
(a)(8)(C)(ii). This process shall then be repeated until the
aggregate excess 401(k) Elective Contributions determined under
paragraph (a)(8)(B) have been eliminated. The reduced amounts shall
be distributed in accordance with paragraph (a)(8)(A) to the Highly
Compensated Employees to whom the reductions are attributable under
this paragraph (a)(8)(C). For purposes of this paragraph (a)(8)(C),
401(k) Elective Contributions shall include amounts treated as
elective contributions.
XIII.
Subparagraph (a)(8) of Article VI is hereby modified by adding a new
section (F), immediately following existing section (E), as follows:
-7-
(F) The provisions of this paragraph (a)(8) shall be effective
for Plan Years beginning on or after January 1, 1997. For Plan Years
beginning before January 1, 1997, the provisions of subparagraph
(a)(8) of Article VI of this Plan, prior to its most recent amendment
and restatement, shall be in effect.
XIV.
Sections (b)(4)(A) through (b)(4)(F) of Article VI are hereby deleted, in
their entireties, and the following sections (b)(4)(A) through (b)(4)(D) are
substituted in lieu thereof:
(A) The nonvested portion of such aggregate excess ESOP Matching
Contributions (including earnings thereon for the Plan Year to which
the excess contributions relate), if any, determined as set forth in
paragraph (b)(4)(C) below, shall be forfeited. Unless otherwise
required by paragraph (c)(4)(C) of Article VIII, such forfeiture shall
be allocated as additional ESOP Employer Contributions in accordance
with paragraph (c) of this Article VI; provided, however, that such
forfeiture shall be allocated solely to the accounts of Non-Highly
Compensated Employees.
(B) The vested portion of such aggregate excess ESOP Matching
Contributions (including earnings thereon for the Plan Year to which
the excess contributions relate), if any, determined as set forth in
paragraph (b)(4)(C) below, shall be distributed to the Highly
Compensated Employees as provided in paragraph (b)(4)(D) below on or
before the 15th day of the third month after the close of the Plan
Year to which the ESOP Matching Contributions relate. Notwithstanding
the preceding sentence, the Plan Administrator may delay the
distribution of any excess ESOP Matching Contributions (plus the
earnings thereon for the Plan Year to which the excess contributions
relate) attributable to an Employer beyond the 15th day of the third
month of such Plan Year, if the Employer consents to such delay and
the Administrator refunds all such excess amounts not later than 12
months after the close of the Plan Year to which the excess
contributions relate.
(C) For purposes of paragraphs (b)(4)(A) and (b)(4)(B), the
amount of the aggregate excess ESOP Matching Contributions for the
Plan Year shall be equal to the sum of the amounts of such excess
contributions attributable to each Highly Compensated Employee for the
Plan Year.
(i) In order to determine the amount of the excess ESOP
Matching Contributions attributable to each Highly Compensated
Employee, the Plan Administrator shall first reduce the Actual
-8-
Contribution Ratio of the Highly Compensated Employee with the
highest Actual Contribution Ratio for the Plan Year to the extent
required to:
a. enable the arrangement to satisfy the limitations
set forth in paragraph (g), or
b. cause such Highly Compensated Employee's Actual
Contribution Ratio to equal the Actual Contribution Ratio of
the Highly Compensated Employee with the next highest Actual
Contribution Ratio.
Then, if necessary, the Plan Administrator shall reduce the
Actual Contribution Ratios of the Highly Compensated Employees
with the next highest Actual Contribution Ratio for the Plan Year
(including the Actual Contribution Ratio(s) of the Highly
Compensated Employee(s) whose Actual Contribution Ratio the Plan
Administrator already has reduced) to the extent required to
comply with paragraph (b)(4)(C)(i)a. or (b)(4)(C)(i)b. This
process shall then be repeated until the Actual Contribution
Percentage for the Highly Compensated Employees satisfies the
limitations set forth in paragraph (g).
(ii) The amount of the excess ESOP Matching Contributions
attributable to each Highly Compensated Employee shall equal the
remainder of
a. the total ESOP Matching Contributions (and Non-
Elective Contributions treated as ESOP Matching
Contributions) on behalf of the Participant (determined
prior to the application of this paragraph (b)(4)(C)), minus
b. the amount determined by multiplying the
Participant's Actual Contribution Ratio (determined after
application of paragraph (b)(4)(C)(i)) by his Compensation
used in determining such ratio.
(iii) In determining the amount of the excess ESOP Matching
Contributions, Actual Contribution Ratios shall be rounded to the
nearest one-hundredth of one percent of the Employee's
Compensation. In no case shall the amount of such excess with
respect to any Highly Compensated Employee exceed the amount of
ESOP Matching Contributions on behalf of such Highly Compensated
Employee for such Plan Year.
(D) In order to determine the dollar amount of the excess ESOP
Matching Contributions forfeitable with respect to, and distributable
-9-
to, each Highly Compensated Employee pursuant to paragraphs (b)(4)(A)
and (b)(4)(B), the Plan Administrator shall first reduce the ESOP
Matching Contributions of the Highly Compensated Employee(s) with the
highest dollar amount of ESOP Matching Contributions for the Plan Year
by a dollar amount equal to the lesser of
(i) the aggregate excess ESOP Matching Contributions
determined under paragraph (b)(4)(C), or
(ii) the dollar amount necessary to reduce such Highly
Compensated Employee's ESOP Matching Contributions to a dollar
amount that is equal to the dollar amount of ESOP Matching
Contributions of the Highly Compensated Employee with the next
highest dollar amount of ESOP Matching Contributions.
Then, if necessary, the Plan Administrator shall reduce the ESOP
Matching Contributions of the Highly Compensated Employees with the
next highest dollar amount of ESOP Matching Contributions for the Plan
Year (including the Highly Compensated Employee(s) whose ESOP Matching
Contributions the Plan Administrator already has reduced) to the
extent required to comply with paragraph (b)(4)(D)(i) or
(b)(4)(D)(ii). This process shall then be repeated until the
aggregate excess ESOP Matching Contributions determined under
paragraph (b)(4)(C) have been eliminated. The reduced amounts shall
be forfeited and/or distributed in accordance with paragraphs
(b)(4)(A) and (b)(4)(B) to the Highly Compensated Employees to whom
the reductions are attributable under this paragraph (b)(4)(D). For
purposes of this subparagraph, ESOP Matching Contributions shall
include amounts treated as ESOP Matching Contributions.
XV.
Subparagraph (b)(4) Article VI is hereby modified by redesignating section
(G) as section (E) and by adding a new section (F), immediately following
existing (redesignated) section (E), as follows:
(E) The provisions of this subparagraph (b)(4) shall be effective
for Plan Years beginning on or after January 1, 1997. For Plan Years
beginning before January 1, 1997, the prior provisions of subparagraph
(b)(4) of Article VI of this Plan, prior to its most recent amendment
and restatement, shall be in effect.
-10-
XVI.
Section (g)(1)(B) of Article VI is hereby deleted, in its entirety, and the
following is substituted in lieu thereof:
(B) The excess of the Actual Deferral Percentage for the group of
eligible Highly Compensated Employees for a Plan Year over the Actual
Deferral Percentage for the group of all other eligible Employees
shall not exceed two (2) percentage points (or such lesser amount as
may be required by the Secretary of the Treasury, through regulations
or otherwise); and the Actual Deferral Percentage for the group of
eligible Highly Compensated Employees shall not exceed the Actual
Deferral Percentage for the group of all other eligible Employees,
multiplied by 2.0 (or such lesser amount as may be required by the
Secretary of the Treasury, through regulations or otherwise).
XVII.
Paragraph (g) of Article VI is hereby amended by adding a new subparagraph
(6), immediately following existing subparagraph (5), as follows:
(6) The provisions of this paragraph (g) shall be effective for Plan
Years beginning on or after January 1, 1997. For Plan Years beginning
before January 1, 1997, the prior provisions of paragraph (g) of Article VI
of this Plan, prior to its most recent amendment and restatement, shall be
in effect.
XVIII.
Effective October 1, 1997, subparagraph (b)(4) of Article VII is hereby
deleted, in its entirety, and the following is substituted in lieu thereof:
(4) Effective January 1, 1997, or as soon thereafter as is
administratively feasible, the Plan Administrator shall establish and
maintain, with respect to each Participant who was also a participant in
the Brown's Medical Supply Co. Retirement Savings Plan, one or more Merger
Accounts to provide for amounts credited to the Participant and transferred
from the Brown's Medical Supply Co. Retirement Savings Plan upon its merger
with this Plan. Effective October 1, 1997, or as soon thereafter as is
administratively feasible, the Plan Administrator shall establish and
maintain, with respect to each Participant who was also a participant in
the Y-Laboratories & Supplies, Inc. 401(k) Retirement Plan, one or more
Merger Accounts to provide for amounts credited to the Participant and
transferred from the Y-Laboratories & Supplies, Inc. 401(k) Retirement Plan
-11-
upon its merger with this Plan. The Plan Administrator may establish and
maintain additional Merger Accounts from time to time to provide for
amounts credited to Participants and transferred from other tax-qualified
retirement plans merged with this Plan upon the authorization and direction
of the Board of Directors.
XIX.
Paragraph (e)(1) of Article VII is hereby deleted, in its entirety, and the
following is substituted in lieu thereof:
(1) Each Participant's Accounts shall be credited with appreciation or
depreciation, and earnings or losses, as follows:
(A) As of each Valuation Date, the portions of each Participant's
ESOP Employer Contributions Account, ESOP Matching Contributions
Account and ESOP Elective Contributions Account credited to Employer
Securities Accounts shall be credited with any stock dividends (as
well as the aggregate unrealized appreciation or depreciation, if
Employer Securities Accounts are not accounted for in shares) for the
Valuation Period ending with such current Valuation Date that are
received on (or attributable to) shares of Employer Securities
allocated to the Participant's Employer Securities Accounts (and that
are not used, pursuant to paragraph (f) to repay a loan).
(B) As of each Valuation Date, the Administrator shall credit any
stock dividends (as well as the aggregate unrealized appreciation or
depreciation, if Employer Securities Accounts are not accounted for in
shares) for the Valuation Period ending with such date, that are
received on (or attributable to) shares of Employer Securities
allocated to suspense accounts maintained as of such date (and that
are not used, pursuant to paragraph (f) to repay a loan), to such
suspense accounts.
(C) As of each Valuation Date, the portions of the Participant's
ESOP Employer Contributions Account, ESOP Matching Contributions
Account, and ESOP Elective Contributions Account credited to Other
Investments Accounts shall be credited or charged, as the case may be,
with the share of the Earnings for the Valuation Period ending with
such current Valuation Date. Each Participant's share of the Earnings
of his Other Investments Accounts for any Valuation Period shall be
determined by the Plan Administrator on a weighted average basis, so
that each Participant with a balance in such Other Investments
Accounts shall receive a pro rata share of the Earnings of such Other
Investments Accounts, taking into account the period of time that each
-12-
dollar invested in such Other Investments Accounts has been so
invested.
(D) To the extent not otherwise provided for in the preceding
provisions of this paragraph (d), the portions of the Participant's
ESOP Employer Contributions Account, ESOP Matching Contributions
Account, and ESOP Elective Contributions Account credited to Employer
Securities Accounts and Other Investments Accounts shall be further
credited and charged with (i) the proceeds of any short-term interim
investments that may be made by the Trustee during periods prior to
purchase dates for the acquisition of Employer Securities by the
Trustee, and (ii) direct or indirect purchases of the Employer
Securities with assets other than Employer Securities, and purchases
of assets other than the Employer Securities in connection with the
sale of Employer Securities.
(E) (i) As of each Valuation Date, any portion of the
Participant's 401(k) Elective Contributions Account, Participant
Investments - ESOP Elective Contributions Account, Rollover
Contributions Account, and Merger Accounts that is invested in a
Pooled Investment Fund established under paragraph (a) of Article
XI (other than a Company Stock Fund) shall be credited or
charged, as the case may be, with a share of the Earnings of such
Pooled Investment Fund for the Valuation Period ending with such
current Valuation Date. Each Participant's share of the Earnings
of a Pooled Investment Fund for any Valuation Period shall be
determined by the Plan Administrator on a weighted average basis,
so that each Participant with a balance in such Pooled Investment
Fund shall receive a pro rata share of the Earnings of such
Pooled Investment Fund, taking into account the period of time
that each dollar invested in such Pooled Investment Fund has been
so invested.
(ii) As of each Valuation Date, the portion of the
Participant's 401(k) Elective Contributions Account, Participant
Investments - ESOP Elective Contributions Account, Rollover
Contributions Account, and Merger Accounts that is invested in
each Segregated Investment Fund established under paragraph (a)
of Article XI (other than a Company Stock Fund) shall be credited
or charged, as the case may be, with the Earnings attributable to
the Participant's investment in such Segregated Investment Fund
for the Valuation Period ending with such current Valuation Date.
(iii) As of each Valuation Date, any portion of the
Participant's 401(k) Elective Contributions Account, Participant
Investments - ESOP Elective Contributions Account, Rollover
Contributions Account, and Merger Accounts that is invested in
-13-
the Company Stock Fund pursuant to paragraph (a) of Article XI
shall be credited or charged, as the case may be, with the share
of the appreciation or depreciation, and earnings or losses,
attributable to the Participant's investment in the Company Stock
Fund for the Valuation Period ending with such current Valuation
Date as follows:
a. The portions of the Participant's Accounts invested
in Employer Securities shall be credited with the value of
any stock dividends (as well as the aggregate unrealized
appreciation or depreciation, if such investments are not
accounted for in shares) for the Valuation Period ending
with such current Valuation Date that are received on (or
attributable to) shares of Employer Securities allocated to
the Participant's investment.
b. The portions of the Participant's Accounts invested
in other investments shall be credited or charged, as the
case may be, with a share of the Earnings of such other
investments for the Valuation Period ending with such
current Valuation Date. Each Participant's share of the
Earnings of such other investments for any Valuation Period
shall be determined by the Plan Administrator on a weighted
average basis, so that each Participant with a balance in
such other investments shall receive a pro rata share of the
Earnings of such other investments, taking into account the
period of time that each dollar invested has been so
invested.
c. To the extent not otherwise provided for in the
preceding provisions of this paragraph (d)(1)(E)(iii), the
Participant's investments in a Company Stock Fund shall be
further credited and charged with the proceeds of any short-
term interim investments that may be made by the Trustee
during periods prior to purchase dates for the acquisition
of Employer Securities by the Trustee, and with direct or
indirect purchases of the Employer Securities with assets
other than Employer Securities and purchases of assets other
than the Employer Securities in connection with the sale of
Employer Securities.
XX.
Subparagraph (e)(5) of Article VII is hereby deleted, in its entirety, and
the following is substituted in lieu thereof:
-14-
(5) The Plan Administrator may adopt such additional accounting
procedures as are necessary to accurately reflect each Participant's
interests in the Trust Fund or in any Fund. Such accounting procedures
shall include any procedures necessary to appropriately reflect any
earnings and losses that may result from delays that may occur in
completing scheduled transactions. All such procedures shall be applied in
a consistent, nondiscriminatory manner.
XXI.
Effective October 1, 1997, subparagraph (b)(2) of Article IX is hereby
modified by adding a new final sentence thereto, immediately following the
existing final sentence, as follows:
Notwithstanding the foregoing provision of this paragraph (b)(2), any
Participant who is entitled to a distribution of benefits attributable to
one or more Merger Accounts on or after October 1, 1997 and who elects a
manner of payment described in paragraph (c)(2)(A) of this Article IX shall
be paid his Merger Account balances in cash or in the form of a
nontransferable annuity contract (purchased by the Plan Administrator from
a commercial provider), as elected by the Participant (or his beneficiary
or beneficiaries).
XXII.
Paragraph (d) of Article IX is hereby deleted, in its entirety, and the
following is substituted in lieu thereof:
(d) LIQUIDATION OF INVESTMENTS AND PERIODIC ADJUSTMENTS.
---------------------------------------------------
(1) Notwithstanding any other provision of this Plan, whenever a
Participant is entitled to a distribution or withdrawal from the Plan
pursuant to Article IX or X, the Plan Administrator and the Trustee shall
be entitled to liquidate all, or any portion, of the investments
attributable to the Participant's Accounts at any time during the five
business days preceding the date upon which the distribution or withdrawal
is scheduled to occur in order to facilitate the payment of benefits. In
the event that the Plan Administrator and the Trustee elect to liquidate
investments in order to facilitate a distribution or withdrawal, the
liquidated funds may be placed in a money market fund or similar investment
fund (or, when reasonable, may be held in cash, without liability for
interest thereon). The Plan Administrator may adopt such accounting
procedures as are necessary to accurately reflect the Participant's
interest in such liquidated funds.
-15-
(2) Except as otherwise provided in paragraph (d)(1), to the extent
the balance of a Participant's Accounts has not been distributed and
remains in the Plan, the value of such remaining balance shall be subject
to adjustment from time to time pursuant to the provisions of Article VII.
XXIII.
Effective April 1, 1997, subparagraphs (b)(1) and (b)(2) of Article XI are
hereby deleted, in their entireties, and the following is substituted in lieu
thereof:
(1) A Participant shall designate the percentage of his 401(k)
Elective Contributions, Participant Investments - ESOP Elective
Contributions Account, and Rollover Contributions to be allocated to any
Fund. The Administrator shall establish the minimum percentage that each
Participant may select to be allocated to any Fund selected by the
Participant.
(2) A Participant may revise his election monthly, effective as of
such dates as may be selected by the Plan Administrator from time to time.
The Participant's revised election shall be effective for contributions
made to the Plan after the effective date of such revision, and may be
effective for the investment of balances previously allocated and remaining
credited to a Participant's 401(k) Elective Contributions Account,
Participant Investments - ESOP Elective Contributions Account, and Rollover
Contributions Account and Merger Accounts.
IN WITNESS WHEREOF, this First Amendment has been executed this 8th day of
July, 1997, and is effective as of the dates set forth herein.
ATTEST: PHYSICIAN SALES & SERVICE, INC.
(Corporate Seal)
/s/ Fred Elefant By: /s/ David A. Smith
- ------------------------------------- ------------------------------
Secretary Executive Vice President and
Chief Financial Officer
"COMPANY"
-16-