EXHIBIT 10.2
VENCOR RETIREMENT SAVINGS PLAN
Amended and Restated Effective
as of
January 1, 1997
TABLE OF CONTENTS
Page No.
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INTRODUCTION 1
DEFINITIONS............................................................. 2
Section 1.1 ADJUSTMENT......................................... 2
Section 1.2 ANNUAL ADDITIONS................................... 2
Section 1.3 BENEFICIARY........................................ 2
Section 1.4 BOARD.............................................. 2
Section 1.5 BREAK(S)........................................... 2
Section 1.6 CODE............................................... 3
Section 1.7 COMMITTEE.......................................... 3
Section 1.8 COMPANY............................................ 3
Section 1.9 COMPANY STOCK FUND................................. 3
Section 1.10 COMPENSATION....................................... 3
Section 1.11 CONSTRUCTION....................................... 3
Section 1.12 DEFINED BENEFIT PLAN............................... 3
Section 1.13 DEFINED CONTRIBUTION PLAN.......................... 4
Section 1.14 EFFECTIVE DATE..................................... 4
Section 1.15 EMPLOYEE........................................... 4
Section 1.16 EMPLOYER........................................... 4
Section 1.17 EMPLOYER CONTRIBUTIONS............................. 5
Section 1.18 ENTRY DATE......................................... 5
Section 1.19 ERISA.............................................. 5
Section 1.20 FIDUCIARY.......................................... 5
Section 1.21 FORMER PARTICIPANT................................. 5
Section 1.22 HIGHLY COMPENSATED EMPLOYEE........................ 5
Section 1.23 HOUR OF SERVICE.................................... 5
Section 1.24 INDIVIDUAL ACCOUNT................................. 8
Section 1.25 INVESTMENT FUND.................................... 8
Section 1.26 KEY EMPLOYEE....................................... 8
Section 1.27 LIMITATION YEAR.................................... 9
Section 1.28 MATCHING CONTRIBUTION ACCOUNT...................... 9
Section 1.29 MATCHING CONTRIBUTIONS............................. 9
Section 1.30 NON-HIGHLY COMPENSATED EMPLOYEE.................... 9
Section 1.31 NORMAL RETIREMENT DATE............................. 9
Section 1.32 PARTICIPANT........................................ 9
Section 1.33 PERMISSIVE AGGREGATION GROUP....................... 9
Section 1.34 PLAN............................................... 9
Section 1.35 PLAN YEAR.......................................... 9
Section 1.36 PRIOR PLAN......................................... 9
Section 1.37 PRIOR PLAN EMPLOYER CONTRIBUTION ACCOUNT........... 9
Section 1.38 PRIOR PLAN SALARY REDIRECTION ACCOUNT.............. 10
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Section 1.39 PROFIT SHARING CONTRIBUTION ACCOUNT................ 10
Section 1.40 PROFIT SHARING CONTRIBUTIONS....................... 10
Section 1.41 REQUIRED AGGREGATION GROUP......................... 10
Section 1.42 SALARY REDIRECTION................................. 10
Section 1.43 SALARY REDIRECTION ACCOUNT......................... 10
Section 1.44 SERVICE............................................ 10
Section 1.45 TOP HEAVY PLAN..................................... 11
Section 1.46 TOTAL AND PERMANENT DISABILITY OR TOTALLY AND
PERMANENTLY DISABLED............................... 12
Section 1.47 TRUST AGREEMENT.................................... 13
Section 1.48 TRUST FUND......................................... 13
Section 1.49 TRUSTEE............................................ 13
Section 1.50 VALUATION DATE..................................... 13
PARTICIPATION........................................................... 14
Section 2.1 ELIGIBILITY REQUIREMENTS........................... 14
Section 2.2 PLAN BINDING....................................... 15
Section 2.3 REEMPLOYMENT AND TRANSFERS......................... 15
Section 2.4 BENEFICIARY DESIGNATION............................ 16
Section 2.5 NOTIFICATION OF INDIVIDUAL ACCOUNT BALANCE......... 16
CONTRIBUTIONS........................................................... 17
Section 3.1 SALARY REDIRECTION................................. 17
Section 3.2 MATCHING CONTRIBUTIONS............................. 17
Section 3.3 PROFIT SHARING CONTRIBUTIONS....................... 18
Section 3.4 NONDISCRIMINATION TEST FOR SALARY REDIRECTION...... 18
Section 3.5 NONDISCRIMINATION TEST FOR OTHER CONTRIBUTIONS..... 21
Section 3.6 MAXIMUM INDIVIDUAL DEFERRAL........................ 24
Section 3.7 MISTAKE OF FACT.................................... 25
Section 3.8 QUALIFIED NONELECTIVE CONTRIBUTIONS................ 25
Section 3.9 UNIFORMED SERVICES EMPLOYMENT AND REEMPLOYMENT
RIGHTS ACT OF 1994 ("USERRA")...................... 25
ALLOCATION TO INDIVIDUAL ACCOUNTS....................................... 27
Section 4.1 INDIVIDUAL ACCOUNTS................................ 27
Section 4.2 INVESTMENT OF ACCOUNTS............................. 27
Section 4.3 VALUATION OF ACCOUNTS.............................. 28
Section 4.4 TRUSTEE AND COMMITTEE JUDGMENT CONTROLS............ 31
Section 4.5 MAXIMUM ADDITIONS.................................. 31
Section 4.6 CORRECTIVE ADJUSTMENTS............................. 31
Section 4.7 DEFINED CONTRIBUTION AND DEFINED BENEFIT PLAN
FRACTION........................................... 32
DISTRIBUTIONS........................................................... 34
Section 5.1 NORMAL RETIREMENT.................................. 34
Section 5.2 LATE RETIREMENT.................................... 34
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Section 5.3 DEATH.............................................. 34
Section 5.4 DISABILITY......................................... 34
Section 5.5 TERMINATION OF EMPLOYMENT.......................... 34
Section 5.6 COMMENCEMENT OF BENEFITS........................... 37
Section 5.7 METHODS OF PAYMENT................................. 38
Section 5.8 BENEFITS TO MINORS AND INCOMPETENTS................ 39
Section 5.9 UNCLAIMED BENEFITS................................. 40
Section 5.10 PARTICIPANT DIRECTED ROLLOVERS..................... 40
Section 5.11 JOINT AND SURVIVOR OPTIONS......................... 41
WITHDRAWALS............................................................. 45
Section 6.1 HARDSHIP WITHDRAWAL................................ 45
Section 6.2 PRIOR PLAN EMPLOYER CONTRIBUTION ACCOUNT
WITHDRAWALS........................................ 46
Section 6.3 PARTICIPANT LOANS.................................. 47
FUNDING................................................................. 48
Section 7.1 CONTRIBUTIONS...................................... 48
Section 7.2 TRUSTEE............................................ 48
FIDUCIARIES............................................................. 49
Section 8.1 GENERAL............................................ 49
Section 8.2 EMPLOYER........................................... 49
Section 8.3 TRUSTEE............................................ 50
Section 8.4 RETIREMENT COMMITTEE............................... 50
Section 8.5 CLAIMS PROCEDURES.................................. 51
Section 8.6 RECORDS............................................ 52
AMENDMENT AND TERMINATION OF THE PLAN................................... 54
Section 9.1 AMENDMENT OF THE PLAN.............................. 54
Section 9.2 TERMINATION OF THE PLAN............................ 54
Section 9.3 RETURN OF CONTRIBUTIONS............................ 54
MISCELLANEOUS........................................................... 55
Section 10.1 GOVERNING LAW...................................... 55
Section 10.2 CONSTRUCTION....................................... 55
Section 10.3 ADMINISTRATION EXPENSES............................ 55
Section 10.4 PARTICIPANT'S RIGHTS............................... 55
Section 10.5 NONASSIGNABILITY................................... 55
Section 10.6 MERGER, CONSOLIDATION OR TRANSFER.................. 56
Section 10.7 COUNTERPARTS....................................... 56
Section 10.8 ADMINISTRATIVE MISTAKE............................. 56
TOP HEAVY PLAN PROVISIONS............................................... 57
Section 11.1 GENERAL............................................ 57
Section 11.2 MINIMUM CONTRIBUTION............................... 57
Section 11.3 SUPER TOP HEAVY PLAN............................... 57
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Section 11.4 MINIMUM VESTING.................................... 58
Section 11.5 COMPENSATION....................................... 58
PROVISIONS RELATED TO EMPLOYERS INCLUDED IN THE PLAN.................... 59
Section 12.1 GENERAL............................................ 59
Section 12.2 SINGLE PLAN........................................ 59
Section 12.3 SPONSORING EMPLOYER AS AGENT....................... 59
Section 12.4 WITHDRAWAL OF EMPLOYER............................. 60
Section 12.5 TERMINATION OF PARTICIPATION....................... 60
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INTRODUCTION
Effective January 1, 1986, the Board of Directors of Vencor, Inc. (the
"Sponsoring Employer"), formerly Vencare, Inc., adopted the Vencare, Inc.
Retirement Plan, which was later amended and restated effective January 1, 1989
and further amended various times ("Original Plan").
Effective January 1, 1997, except as otherwise provided, the Employer
desires to amend and restate the Prior Plan in its entirety as the Vencor
Retirement Savings Plan ("Plan"), as hereinafter set forth, in order to provide
benefits for certain of its eligible employees.
Also effective January 1, 1997, or as soon as practicable thereafter, the
Plan and Trust shall accept assets in a spinoff from The Hillhaven Corporation
Deferred Savings and Retirement Savings Plans and Employer desires to make
provision for how to account for assets transferred from those plans.
It is intended that this Plan, together with the Trust Agreement, meet all
the pertinent requirements of the Internal Revenue Code of 1986, as amended
("Code") and the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), and shall be interpreted, wherever possible, to comply with the terms
of said laws, as amended, and all regulations and rulings issued thereunder. It
is also intended that this Plan shall be a profit sharing plan under Code
Section 401(a).
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ARTICLE 1
DEFINITIONS
Section 1.1 ADJUSTMENT means the net increases and decreases in the market
value of the Trust Fund during a Plan Year or other period
exclusive of any contribution or distribution during such year
or other period. Such increases and decreases shall include such
items as realized or unrealized investment gains and losses and
investment income, and may include expenses of administering the
Trust Fund and the Plan.
Section 1.2 ANNUAL ADDITIONS means for any Employee in any Plan Year, the
sum of Employer Contributions, Salary Redirection and
forfeitures allocated to the Employee's Individual Account.
Amounts allocated to an individual medical account, as defined
in Section 415(1) of the Code, which is part of a pension or
annuity plan maintained by the Company are treated as Annual
Additions to a Defined Contribution Plan. Also, amounts derived
from contributions paid or accrued which are attributable to
post-retirement medical benefits allocated to the separate
account of a Key Employee as required by Section 419(d) of the
Code, maintained by the Company, are treated as Annual Additions
to a Defined Contribution Plan.
Section 1.3 BENEFICIARY means any person designated by a Participant to
receive such benefits as may become payable hereunder after the
death of such Participant, provided, however, that a married
Participant may not name as a Beneficiary someone other than the
Participant's spouse unless the spouse consents in writing to
such designation, which consent shall be acknowledged by a Plan
representative or by a notary public.
Section 1.4 BOARD means the Board of Directors of the Sponsoring Employer,
except as otherwise provided.
Section 1.5 BREAK(S) IN SERVICE means a Plan Year during which an Employee
has been credited with fewer than 501 Hours of Service due to
termination of employment. Solely to determine whether a Break
in Service has occurred, an Employee who is absent from work for
maternity or paternity reasons or on a military or Family and
Medical Leave Act leave of absence shall receive credit for the
Hours of Service which would otherwise have been credited to
such Employee but for such absence, or in any case in which
Hours of Service cannot be determined, eight Hours of Service
per day of such absence. In no event will the number of Hours of
Service credited to an Employee pursuant to the immediately
preceding sentence exceed 501. For purposes of this Section, an
absence from work for maternity or paternity reasons means an
absence (1) by reason of the pregnancy of the Employee, (2) by
reason of the birth of a child of the Employee, (3) by reason of
the placement of a child with the Employee in connection with
the adoption of such child by the Employee, or (4) for purposes
of caring for such
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child for a period beginning immediately following such birth or
placement. The Hours of Service credited under this paragraph
shall be credited (1) in the Plan Year or other applicable
computation period in which the absence begins if the crediting
is necessary to prevent a Break in Service in that period, or
(2) in all other cases, in the next following Plan Year or other
applicable computation period.
Section 1.6 CODE means the Internal Revenue Code of 1986, as amended.
Section 1.7 COMMITTEE means the Retirement Committee provided for in Article
8.
Section 1.8 COMPANY means Vencor, Inc. and all of the legal entities which
are part of the controlled group or affiliated service group
with Vencor, Inc. pursuant to the provisions of Code Sections
414(b), (c), (m) or (o).
Section 1.9 COMPANY STOCK FUND means the Investment Fund defined in Section
4.2(a)(5).
Section 1.10 COMPENSATION means, for any Plan Year or portion thereof during
which an Employee is eligible to participate in this Plan (which
shall not include compensation payable for periods after
employment terminates, such as severance pay, but shall include
vacation time earned but not yet paid as of that last date at
work), total compensation paid to an Employee by the Employer
that is includable in the Participant's gross income, including
bonuses, commissions and overtime, but excluding (i)
reimbursements or other expense allowances, (ii) fringe benefits
(cash and noncash), (iii) moving expenses, (iv) deferred
compensation, (v) welfare benefits, and (vi) amounts realized
from the exercise of a nonqualified stock option (or the lifting
of restrictions on restricted stock) or the sale or exchange of
stock acquired under a qualified stock option. Despite the
exclusions in the preceding sentence, Compensation shall include
any amounts deducted pursuant to Code Sections 125 (flexible
benefit plans), 402(a)(8) (salary redirection), 402(h)(1)(B)
(simplified employee plans) and 403(b). Effective for Plan Years
beginning on or after January 1, 1989, Compensation shall be
limited to such amount as determined pursuant to Code Section
401(a)(17).
Section 1.11 CONSTRUCTION. The words and phrases defined in this Article when
used in this Plan with an initial capital letter shall have the
meanings specified in this Article, unless a different meaning
is clearly required by the context. Any words herein used in the
masculine shall be read and construed in the feminine where they
would so apply. Words in the singular shall be read and
construed as though used in the plural in all cases where they
would so apply.
Section 1.12 DEFINED BENEFIT PLAN means a plan established and qualified
under Section 401 of the Code, except to the extent it is, or is
treated as, a Defined Contribution Plan.
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Section 1.13 DEFINED CONTRIBUTION PLAN means a plan which is established and
qualified under Section 401 of the Code, which provides for an
individual account for each participant therein and for benefits
based solely on the amount contributed to each participant's
account and any income, expenses, gains or losses (both realized
and unrealized) which may be allocated to such account.
Section 1.14 EFFECTIVE DATE means January 1, 1986, the original effective
date of the Plan. The effective date of this amended and
restated Plan is January 1, 1997, except as otherwise provided.
Section 1.15 EMPLOYEE means any person whom the Employer classifies as a
common law employee of the Employer and who is paid though the
normal payroll system of the Employer, subject to the following:
(a) The term "Employee" shall exclude any person who is a
leased Employee.
(b) The term "Employee" shall exclude any employee who is a
part of a collective bargaining unit for which benefits
have been subject of good faith negotiation unless and
until the Employer and the collective bargaining unit
representative for that unit through the process of good
faith bargaining agree in writing for coverage hereunder.
(c) The term "Employee" shall exclude any employee who is
classified on the payroll records of the Employer as "on
call" or as a per diem employee.
(d) The term "Employee" shall exclude any employee, even if a
common law employee of the Company or an Employer, who
works in a facility which is owned by a partnership, or a
facility that is managed by the Company pursuant to a
management agreement, unless that management agreement
provides that certain employees, such as the facility
administrator and director of nursing, are to be employed
by and report to the Employer, in which case only those
employees shall be eligible Employees hereunder.
For purposes of this Section the term "leased employee" shall
mean any person who is not an employee of the Company and who
provides services to the Employer if (i) such services are
provided pursuant to an agreement between the Employer and any
other person ("leasing organization"); (ii) such person has
performed such services for the Company on a substantially full-
time basis for a period of at least one year; and (iii) such
services are performed under the primary direction and control
of the Company.
Section 1.16 EMPLOYER means Vencor, Inc. and each of the legal entities, or
any successor thereto, which is a part of the Company as of
January 1, 1997, with the exception
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of the following partnership which was part of the Company on
that date but which is instead a participating employer in the
Retirement Savings Plan for Certain Employees of Vencor and its
Affiliates (RSP), also maintained by the Company: San Marcos
Nursing Home Partnership. Any entity which becomes part of the
Company after January 1, 1997 shall become a participating
employer in accordance with the procedure in Article 12.
Section 1.17 EMPLOYER CONTRIBUTIONS means Matching Contributions and Profit
Sharing Contributions made to the Trust Fund by the Employer.
Salary Redirection shall not be included in the term Employer
Contribution when used in this Plan.
Section 1.18 ENTRY DATE means the first day of each calendar month.
Section 1.19 ERISA means the Employee Retirement Income Security Act of 1974,
as amended.
Section 1.20 FIDUCIARY means the Employer, the Trustee, the Committee and any
individual, corporation, firm or other entity which assumes, in
accordance with Article 8, responsibilities of the Employer, the
Trustee or the Committee respecting management of the Plan or
the disposition of its assets.
Section 1.21 FORMER PARTICIPANT means a Participant whose participation in
the Plan has terminated but who has not received payment in full
of the balance in his Individual Account to which he is
entitled.
Section 1.22 HIGHLY COMPENSATED EMPLOYEE means any Employee of the Employer
who (i) was a five percent owner of the Company during the
current Plan Year or the preceding Plan Year, or (ii) during the
preceding Plan Year, received Compensation from the Company in
excess of $80,000 (as such amount may be adjusted from time to
time by the Secretary of the Treasury) and, if the Sponsoring
Employer elects, was in the top-paid group of employees for such
Plan Year.
The determination of who is a Highly Compensated Employee,
including the determinations of the number and identity of
employees in the top-paid group and the Compensation that is
considered, shall be made in accordance with section 414(q) of
the Code and the regulations thereunder, taking into account,
when appropriate, Code Section 410(b)(6)(C)'s acquisition
transition rule which allows exclusion of certain Employees from
consideration.. The determination of Highly Compensated
Employees shall be determined on a Company-wide basis and shall
not be determined on an Employer by Employer or plan by plan
basis.
Section 1.23 HOUR OF SERVICE means any hour for which an Employee is paid or
entitled to payment by the Company during the Plan Year or other
applicable computation period (1) for the performance of duties
for the Company; (2) on account of a period of time during which
no duties are performed (irrespective of whether the employment
relationship has terminated); and (3) as a result of a back pay
award
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which has been agreed to or made by the Company, irrespective of
mitigation of damages, to the extent that such hour has not been
previously credited under item (1) or item (2) preceding.
(a) The number of Hours of Service to be credited on account of
a period of time during which no duties are performed
(including hours resulting form a back pay award) shall be
determined as follows. If the payment which is made or due
is calculated on the basis of units of time, the number of
Hours of Service to be credited shall be the number of
regularly scheduled working hours included in the units of
time on the basis of which the payment is calculated; if an
Employee does not have a regular work schedule, the number
of Hours of Service to be credited shall be calculated on
the basis of an eight hour work day. If the payment which
is made or due is not calculated on the basis of units of
time, the number of Hours of Service to be credited shall
be calculated by dividing the amount of the payment by the
Employee's most recent hourly rate of compensation before
the period during which no duties were performed,
determined as follows:
(1) If the Employee's compensation is determined on the
basis of an hourly rate, such hourly rate shall be the
Employee's most recent hourly rate of compensation.
(2) If the Employee's compensation is determined on the
basis of a fixed rate for a specified period of time
other than hours, his hourly rate of compensation
shall be his most recent rate of compensation for the
specified period of time, divided by the number of
hours regularly scheduled for the performance of
duties during such period of time; if an Employee does
not have a regular work schedule, his hourly rate of
compensation shall be calculated on the basis of an
eight hour work day.
(3) If the Employee's compensation is not determined on
the basis of a fixed rate for a specified period of
time, his hourly rate of compensation shall be the
lowest hourly rate of compensation paid to Employees
in his job classification, or, if no Employees in his
job classification have an hourly rate of
compensation, the minimum wage in effect under Section
6(a)(1) of the Fair Labor Standard Act of 1938, as
amended.
(b) In no event shall the application of the terms of Section
1.23(a) result in crediting an Employee with a number of
Hours of Service during the period which is greater than
the number of hours regularly scheduled for the performance
of duties. If an Employee has no regular work schedule, the
number of Hours of Service to be credited to him shall not
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exceed the number which would be credited calculated on the
basis of an eight hour work day.
(c) No Employee shall be credited with more than 501 Hours of
Service as a result of the application of Section 1.23(a)
for any single continuous period during which he performs
no duties, regardless of whether such period extends beyond
one Plan Year or other applicable computation period.
(d) The Plan Year or other applicable computation period to
which Hours of Service shall be credited shall be
determined as follows:
(1) Except as hereinafter provided, Hours of Service
credited in accordance with item (1) of the first
paragraph of this Section shall be credited in the
Plan Year or other applicable computation period in
which the duties were performed.
(2) Except as hereinafter provided, Hours of Service
credited in accordance with item (2) of the first
paragraph of this Section shall be credited: if
calculated on the basis of units of time, to the Plan
Year or Plan Years or other applicable computation
periods in which the period during which no duties are
performed occurs, beginning with the first unit of
time to which the payment relates; otherwise to the
Plan Year or other applicable computation period in
which the period during which no duties are performed
occurs, provided that if the period during which no
duties are performed extends beyond one (1) Plan Year
or other applicable computation period, such Hours of
Service shall be allocated between not more than the
first two (2) Plan Years or other applicable
computation periods on any reasonable basis
consistently applied.
(3) Except as hereinafter provided, Hours of Service
credited in accordance with item (3) of the first
paragraph of this Section shall be credited to the
Plan Year or other applicable computation period to
which the award or agreement for back pay pertains
rather than to the Plan Year or other applicable
computation period in which the award, agreement, or
payment is made.
(4) Hours of Service to be credited to an Employee in
connection with a period of no more than 31 days which
extends beyond one Plan Year or other applicable
computation period may be credited to the first or the
second Plan Year or other applicable computation
period, provided that such crediting is done on a
reasonable and nondiscriminatory basis.
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(e) Nothing in this Section shall be construed to alter, amend,
modify, invalidate, impair or supersede any law of the
United States or any rule or regulation issued under any
such law, including but not limited to laws regarding
eligibility and benefit accrual during and after a military
leave of absence. The nature and extent of any credit for
Hours of Service under this Section shall be determined
under such law including Department of Labor regulation
Section 2530.200b-2.
Section 1.24 INDIVIDUAL ACCOUNT means the detailed record kept of the amounts
credited or charged to each Participant in accordance with the
terms hereof. Such Individual Account is comprised of the
following accounts: a Profit Sharing Contribution Account, a
Salary Redirection Account, a Matching Contribution Account, a
Prior Plan Salary Redirection Account, if applicable, and a
Prior Plan Employer Contribution Account, if applicable.
Section 1.25 INVESTMENT FUND means an investment fund established pursuant to
Section 4.2.
Section 1.26 KEY EMPLOYEE shall mean any Employee, former Employee or
beneficiary thereof in an Internal Revenue Service qualified
plan adopted by the Company who at any time during the Plan Year
or any of the four preceding Plan Years is
(a) an officer of the Company having an annual compensation
from the Company during the Plan Year greater than 50% of
the amount in effect under Code Section 415(b)(1)(A) for
the calendar year in which such Plan Year ends;
(b) one of the 10 Employees having an annual compensation from
the Company for a Plan Year of more than the limitation in
effect under Code Section 415(c)(1)(A) for the calendar
year in which such Plan Year ends and owning (or considered
as owning within the meaning of Code Section 318) both more
than a 1/2% interest, and the largest interest in the
Company;
(c) a five percent owner of the Company; or
(d) a one percent owner of the Company having an annual
compensation from the Company for a Plan Year of more than
$150,000.
(e) For purposes of this Section, compensation mean
compensation as defined in Code Section 415.
(f) This definition shall be interpreted consistent with Code
Section 415 and rules and regulations issued thereunder.
Further, such law and regulations shall be controlling in
all determinations under this definition, inclusive of any
provisions and requirements stated thereunder but
hereinabove absent.
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Section 1.27 LIMITATION YEAR means the 12 month period beginning on January 1
and ending on December 31.
Section 1.28 MATCHING CONTRIBUTION ACCOUNT means that portion of a
Participant's Individual Account attributable to (i) Matching
Contributions allocated to such Participant pursuant to Section
3.2 and (ii) the Participant's proportionate share, attributable
to his Matching Contribution Account, of the Adjustments,
reduced by any distributions from such Account.
Section 1.29 MATCHING CONTRIBUTIONS means contributions made to the Trust
Fund by the Employer pursuant to Section 3.2
Section 1.30 NON-HIGHLY COMPENSATED EMPLOYEE means, for any Plan Year, a
Participant who is not a Highly Compensated Employee.
Section 1.31 NORMAL RETIREMENT DATE means the first day of the month
coincident with or next following the Participant's 65th
birthday. The Normal Retirement Age shall be age 65, except with
respect to any Prior Plan Employer Contribution Account
transferred to this Plan from The Hillhaven Corporation
Retirement or Deferred Savings Plans, for which the Normal
Retirement Age shall be age 60.
Section 1.32 PARTICIPANT means any Employee who becomes a Participant as
provided in Article 2 hereof.
Section 1.33 PERMISSIVE AGGREGATION GROUP means the Required Aggregation
Group and each other plan or plans of the Company that are not
required to be included in the Required Aggregation Group, and
which, if treated as being part of such group, would not cause
such group to fail to meet the requirements of Code Sections
401(a) and 410.
Section 1.34 PLAN means the Vencor Retirement Savings Plan.
Section 1.35 PLAN YEAR means the 12 month period beginning on January 1 and
ending on December 31.
Section 1.36 PRIOR PLAN means the plan of any Employer, the assets of which
are merged, in whole or in part, with the Trust Fund.
Section 1.37 PRIOR PLAN EMPLOYER CONTRIBUTION ACCOUNT means that portion of a
Participant's Individual Account attributable to (i) any
employer contributions and accumulated earnings allocated to
such Participant under the terms of a plan which has been merged
into this Plan, and (ii) the Participant's proportionate share
attributable to his Prior Plan Employer Contribution Account, of
the Adjustments, reduced by any distributions from such Account.
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Section 1.38 PRIOR PLAN SALARY REDIRECTION ACCOUNT means that portion of a
Participant's Individual Account attributable to (i) any pretax
deferrals and accumulated earnings allocated to such Participant
under the terms of a plan which has been merged into this Plan
and (ii) the Participant's proportionate share attributable to
his Prior Plan Salary Redirection Account, of the Adjustments,
reduced by any distributions from such Account.
Section 1.39 PROFIT SHARING CONTRIBUTION ACCOUNT means that portion of a
Participant's Individual Account attributable to (i) Profit
Sharing Contributions allocated to such Participant pursuant to
Section 3.3, and (ii) the Participant's proportionate share
attributable to his Profit Sharing Contribution Account, of the
Adjustments, reduced by any distributions from such account.
Section 1.40 PROFIT SHARING CONTRIBUTIONS mean contributions made to the
Trust Fund by the Employer pursuant to Section 3.3.
Section 1.41 REQUIRED AGGREGATION GROUP means
(1) each plan of the Company in which a Key Employee is a
participant; and
(2) each other plan of the Company which enables any plan in
subsection (1) to meet the requirements of Code Sections
401(a)(4) or 410, and
(3) each terminated plan maintained by the Company within the
last five years ending on the determination date for the
Plan Year in question and which, but for the fact that it
terminated, would be part of a Required Aggregation Group
for such Plan Year.
Section 1.42 SALARY REDIRECTION means contributions made to the Trust Fund by
the Employer pursuant to Section 3.1.
Section 1.43 SALARY REDIRECTION ACCOUNT means that portion of a Participant's
Individual Account attributable to (i) Salary Redirection
amounts made on his behalf pursuant to Section 3.1, and (ii) the
Participant's proportionate share, attributable to his Salary
Redirection Account, of the Adjustments, reduced by any
distributions or withdrawals from such Account.
Section 1.44 SERVICE means each Plan Year during which a Participant has been
credited with 1000 or more Hours of Service for the Company or
for another employer during a period that employer participates
in the Retirement Savings Plan for Certain Employees of Vencor
and Affiliates or its predecessor plans (whether before or after
participation begins) subject to the following:
(a) Years of Service prior to the date an Employee attains age
18 shall not be taken into account in determining that a
Participant's vesting percentage pursuant to Section 5.5.
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(b) Years of Service prior to the January 1, 1986, shall not be
taken into account in determining a Participant's vesting
percentage pursuant to Section 5., except as provided in
Subsections (c) and (g) below.
(c) Service shall include periods of employment with any entity
acquired by the Company or any entity which operates a
facility acquired by the Company, provided that no Employee
shall receive credit for more than seven years of Service
as a result of periods of employment with said entity and
provided that said entity is either listed on Appendix "A"
or maintained a plan that has been merged with this Plan.
If the entity's records are inadequate to determine Hours
of Service for years of employment with the entity, Service
will be credited (subject to the seven year limitation)
from the Employee's most recent date of hire with the
acquired entity, rounded to the nearest whole year.
(d) Years of Service prior to a Break in Service shall not be
taken into account until such time as the Employee has
completed a year of Service after he returns to the employ
of the Company.
(e) If the Employee does not have a nonforfeitable interest in
his Employer-provided benefit, and the Employee incurs
consecutive Breaks in Service, the Employee's Service prior
to the Breaks in Service will be disregarded if the
consecutive Breaks in Service equal or exceed the greater
of (i) five, or (ii) the Employee's Service prior to the
Break in Service.
(f) Years of Service after five or more consecutive Breaks in
Service shall not be taken into account in determining the
vesting percentage of a Participant pursuant to Section 5.5
derived from Employer Contributions subject to said vesting
schedule made before such five consecutive Breaks in
Service.
(g) Service with a predecessor employer will be credited to an
employee as Service for the Employer as required pursuant
to Code Section 414(a). For purposes of this Subsection, a
predecessor employer is an employer who sponsored a plan
qualified under Code Section 401(a) which is maintained by
the Company.
Section 1.45 TOP HEAVY PLAN means any plan under which, as of any
determination date (the last day of the preceding Plan Year),
the present value of the cumulative accrued benefits under the
plan for Key Employees exceeds 60% of the present value of
cumulative accrued benefits under the Plan for all Employees.
For purposes of this definition the following provisions shall
apply:
(a) If such plan is a Defined Contribution Plan, the present
value of cumulative accrued benefits shall be deemed to be
the market value of all Employee accounts under the plan,
other than voluntary deductible
-11-
Employee contributions. If such plan is a Defined Benefit
Plan, the present value of cumulative accrued benefits
shall be the lump sum present value determined pursuant to
the plan. Moreover, the present value of the cumulative
accrued benefits shall be increased by the amount of all
Plan distributions made with respect to a current or former
employee during the five year period ending on the
determination date, including distributions under a
terminated plan which, if it had not been terminated, would
have been required to be included in a Required Aggregation
Group.
(b) A plan shall be considered to be a Top Heavy Plan for any
Plan Year if, on the last day of the preceding Plan Year,
the above rules were met. For the first Plan Year that the
Plan shall be in effect, the determination of whether the
Plan is a Top Heavy Plan shall be made as of the last day
of such Plan Year.
(c) Each plan of the Company required to be included in a
Required Aggregation Group shall be treated as a Top Heavy
Plan if such group is a top heavy group.
(d) With regard to a Participant or former Participant who (i)
has not performed any service for the Company at any time
during the five year period ending on the determination
date, or (ii) was formerly a Key Employee, but who is not a
Key Employee on the determination date, the present value
of the cumulative Accrued Benefit for such Participant or
former Participant shall not be taken into account for the
purposes of determining whether this Plan is a Top Heavy
Plan.
(e) This definition shall be interpreted consistent with Code
Section 416 and rules and regulations issued thereunder.
Further, such law and regulation shall be controlling in
all determinations under this definition inclusive of any
provisions and requirements stated thereunder but
hereinabove absent.
Section 1.46 TOTAL AND PERMANENT DISABILITY OR TOTALLY AND PERMANENTLY
DISABLED means a physical or mental condition arising after the
original date of employment of the Participant which is expected
to totally and permanently prevent him from substantially
performing his usual duties with the Employer or from performing
like duties for which he is reasonably qualified based upon
education, experience and abilities. The determination by the
Committee as to whether a Participant is totally and permanently
disabled shall be made (i) on medical evidence by a licensed
physician designated by the Committee, (ii) on evidence that the
Participant is eligible for disability benefits under any long-
term disability plan sponsored by the Employer, or (iii) on
evidence that the Participant is eligible for disability
benefits under the Social Security Act in effect at the date of
disability.
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Section 1.47 TRUST AGREEMENT means the agreement entered into between the
Sponsoring Employer and the Trustee pursuant to Article 7
hereof.
Section 1.48 TRUST FUND means the trust fund created in accordance with
Article 7 hereof.
Section 1.49 TRUSTEE means such individual or corporation as shall be
designated in the Trust Agreement to hold in trust any assets of
the plan for the purpose of providing benefits under the Plan,
and shall include any successor trustee designated thereunder.
Section 1.50 VALUATION DATE means each date on which the U.S. securities
trading markets are open on or after January 1, 1997. As of each
Valuation Date the Trust Fund shall be valued at fair market
value.
-13-
ARTICLE 2
PARTICIPATION
Section 2.1 ELIGIBILITY REQUIREMENTS
(a) Effective January 1, 1997, any Employee who has attained
the age of 21 and has remained an Employee until 12 months
following the first date on which the Employee logged an
Hour of Service, shall be eligible as of that Entry Date,
provided, however, that an Employee who does not meet these
rules shall nonetheless be eligible no later than the Entry
Date coincident with or next following the [1] completion
of 1000 Hours of Service in a 12 consecutive month period
and [2] attainment the age of 21. Thereafter, the period
shall be the Plan Year in which occurs the anniversary of
the date the Employee completes his first Hour of Service.
(b) Any employee who was in a class of employees eligible to
participate in The Hillhaven Corporation Retirement Saving
Plan or The Hillhaven Corporation Deferred Saving Plan
("Affiliate Plans") prior to January 1, 1997 shall be
eligible to participate in this Plan on January 1, 1997 if,
at that date, that employee is employed in a capacity
defined as an Employee in this Plan. Any other Employee
hired prior to January 1, 1997 shall become eligible for
the Plan at the next Entry Date coincident with or
following the date they meet the eligibility rule
applicable to them at their hire date under the Affiliate
Plan for which they would have become eligible on their
hire date (i.e. immediately for Deferred Savings Plan
participants, and one year for Retirement Saving Plan
participants), except that the 500 Hour of Service
requirement previously applicable under this Plan, for
persons not previously in a class of employment that would
have been eligible to participate in an Affiliate Plan,
shall be waived: those Employees shall be eligible to
participate as of the next Entry Date coincident with or
next following the completion of a six consecutive month
period of employment as an Employee after the attainment of
age 21.
(c) In the case of any person actively employed on January 6,
1990 at Vencor Hospital/Ft. Worth or Mansfield Community
Hospital, said person shall be deemed to have completed his
first Hour of Service on January 1, 1990.
(d) For purposes of this Section, in the event that an employee
of the Company that is not a Participating or Sponsoring
Employer in this Plan, or an employee of any company which
participates in the Retirement Savings Plan for Certain
Vencor Employees and Affiliates ("RSP") also maintained by
the Company, becomes an Employee as defined in Section 1.15
(either because of a change in employment status or
adoption of this
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Plan by the entity by which he is employed), all periods of
service while an employee of the Company or of a company
which participates in the RSP, shall be counted for
purposes of determining eligibility to participate in the
Plan. In all events, this Plan and the RSP shall be
construed so that, at no point in time, does any one
Participant have a right to participate in both this Plan
and the RSP.
Section 2.2 PLAN BINDING
Upon becoming a Participant, a Participant shall be bound then
and thereafter by the terms of this Plan and the Trust
Agreement, including all amendments to the Plan and the Trust
Agreement made in the manner herein authorized.
Section 2.3 REEMPLOYMENT AND TRANSFERS
Solely for purposes of this Section 2.3, the following rules
shall apply:
(a) Termination of employment shall be deemed to occur when an
Employee has an interruption in continuity of his
employment by the Employer. Such termination may have
resulted from retirement, death, voluntary or involuntary
termination of employment, unauthorized absence, or by
failure to return to active employment with the Employer or
to retire by the date on which an authorized leave of
absence expired.
(b) If an Employee who was not eligible to become a Participant
in the Plan during his prior period of employment is
reemployed, he shall be eligible to participate in the Plan
after he has met the requirements of Section 2.1(a),
calculated from his original date of hire, unless he has
had a one-year Break in Service, in which case Service
before such Break in Service shall not be taken into
account for purposes of this Section until the Employee has
met the requirements of Section 2.1(a) calculated from his
date of rehire.
(c) If an Employee who was a Participant in the Plan during his
prior period of employment (or who had met the age and
service requirements of Section 2.1(a) or (b) but did not
remain employed until the applicable Entry Date) is
reemployed, he shall be eligible to again become a
Participant as of the Entry Date first following his date
of rehire.
(d) If an Employee transfers employment from a non-adopting
employer which is a part of the Company or which
participates in the RSP (as defined in Section 2.1(d)) to
the Employer (for purposes of this Section, an
"Affiliate"), the Employee shall become a Participant under
this Plan as of the date of transfer of employment to the
Employer, provided he has been employed by the Affiliate,
as of the date of transfer of employment, for the period
required in Section 2.1(a) or (b), calculated
-15-
from his original date of hire with the Affiliate. If the
Employee who transfers employment from an Affiliate to the
Employer has not been employed, as of the date of transfer
of employment, for the period required in Section 2.1(a) or
(b), he shall become a Participant under this Plan upon
meeting the eligibility requirements of Section 2.1(a) or
(b), counting all past Service with the Affiliate for that
purpose.
(e) The Individual Account in this Plan of an Employee who
transfers to or from an Affiliate shall remain in this Plan
and be eligible for the same Investment Funds as an active
Participant. No distribution shall be made of an Individual
Account (other than on account of hardship or after age 70
1/2) until and unless the former Employee has terminated
service with all Affiliates.
Section 2.4 BENEFICIARY DESIGNATION
Upon commencing participation, each Participant shall designate
a Beneficiary on forms furnished by the Committee. Such
Participant may then from time to time change his Beneficiary
designation by written notice to the Committee and, upon such
change, the rights of all previously designated Beneficiaries to
receive any benefits under this Plan shall cease. A married
Participant may not name as a Beneficiary someone other than the
Participant's spouse unless the spouse consents in writing to
such other designation, which consent shall be acknowledged by a
Plan representative or by a notary public. The consent of the
spouse must be limited to a specific Beneficiary and must be
obtained each time the Beneficiary is changed. If, at the time
of a Participant's death while benefits are still outstanding,
his named Beneficiary does not survive him, the benefits shall
be paid to his named contingent Beneficiary. If a deceased
Participant is not survived by either a named Beneficiary or
contingent Beneficiary (or if no Beneficiary was effectively
named), the benefits shall be paid in a single sum to the person
or in equal parts to the persons in the first of the following
classes of successive preference beneficiaries then surviving:
the Participant's (i) surviving spouse, unless the spouse
disclaims the benefit, (ii) natural and adopted children, (iii)
parents, (iv) brothers and sisters, (v) estate. If the
Beneficiary or contingent Beneficiary is living at the death of
the Participant, but such person dies prior to receiving the
entire death benefit, the remaining portion of such death
benefits shall be paid in a single sum to the estate of such
deceased Beneficiary or contingent Beneficiary.
Section 2.5 NOTIFICATION OF INDIVIDUAL ACCOUNT BALANCE
After the end of each calendar quarter, or more frequently as
determined by the Committee, the Committee shall notify each
Participant of the amount of his share in the Adjustments and
Contributions for the period just completed, and the new balance
of his Individual Account.
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ARTICLE 3
CONTRIBUTIONS
Section 3.1 SALARY REDIRECTION
Each Participant may elect to have Salary Redirection made on
his behalf by agreeing to salary reduction contributions from
cash wages payable via an identity-secure telephonic enrollment
system (or in writing, if the telephonic system is
impracticable) ("IVR"). A new Participant in this Plan who was,
immediately prior to becoming an Employee, a Participant in the
Hillhaven Retirement or Deferred Savings Plans, shall be deemed
to have made a salary reduction agreement for this Plan in the
same amount as was in effect for the that other plan, unless and
until the Participant changes his salary reduction agreement by
the IVR.
(a) Salary Redirection each payroll period must equal an whole
percentage from 1% to 16% of a Participant's Compensation.
Salary Redirection shall begin, be increased or revoked
effective with the first pay date processed in the month
after a Participant has entered into or changed his salary
reduction agreement via IVR, provided that such enrollment
is concluded before 11:59 p.m. Central Standard Time on the
15th day of the month (the "enrollment deadline"). In the
event a Participant does not so elect when initially
eligible, he may subsequently elect to have Salary
Redirection made on his behalf at any time effective for
the first pay date in the month after the Participant has
entered into a salary reduction agreement via IVR, subject
to the enrollment deadline.
(b) The Employer shall pay to the Trustee any Salary
Redirection made on behalf of any Participant as soon as
practicable following the end of each regular pay period.
(c) The Employer may amend, to the extent it deems appropriate,
a Participant's salary reduction Agreement for any Plan
Year or portion thereof if the Employer determines that
such amendment is necessary to ensure that a Participant's
Annual Additions for any Plan Year might exceed the
limitations of Sections 3.4, 3.5, 3.6 or 4.5 the
requirements of Code Sections 401(k) or (m) or such other
requirements prescribed by law.
Section 3.2 MATCHING CONTRIBUTIONS
As of the end of each calendar quarter, the Employer may make a
Matching Contribution to the Trust Fund on behalf of eligible
Participants. If Matching Contributions (in cash or in
sponsoring Employee Stock) are made prior to the end of a
calendar quarter, they shall nonetheless be left unallocated
until the
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quarter ends. The Employer shall determine annually the rate at
which the Employer will match net eligible Salary Redirection of
eligible Participants contributed pursuant to Section 3.1. Net
eligible Salary Redirection means Salary Redirection not to
exceed 3% of Compensation, during the period since the last
preceding calendar-quarter end, which Salary Redirection has not
been withdrawn since the preceding calendar-quarter end. For
purposes of calculating net eligible Salary Redirection,
withdrawals shall be deemed to have been made from the earliest
Salary Redirection not yet withdrawn. Any Matching Contribution
shall be allocated to the Matching Contribution Account of each
eligible Participant. For purposes of this Section, the term
"eligible Participant" shall mean a Participant who is either
(i) actively employed by the Company or an employer which
participates in the Retirement Savings Plan for Certain
Employees of Vencor and Affiliates (even if not still an
"Employee") as of the end of each calendar quarter, or (ii) died
since the end of the preceding calendar quarter, or (iii)
retired or became disabled pursuant to Section 5.1, 5.2, or 5.4
since end of the preceding calendar quarter, or (iv) on a Family
and Medical Leave Act leave of absence at the end of the
calendar quarter.
Section 3.3 PROFIT SHARING CONTRIBUTIONS
As of the last day of each Plan Year, the Employer may make a
Profit Sharing Contribution to the Trust Fund. Any such Profit
Sharing Contribution shall be allocated to the Profit Sharing
Contribution Account of each Participant who (i) has satisfied
the eligibility requirements of Section 2.1 (without regard to
whether the Participant has made an election pursuant to Section
3.1), (ii) is actively employed by the Company on said date and
in a class which is included in the definition of "Employee,"
and (iii) has been credited with at least 1000 Hours of Service
during the Plan Year. Any such Profit Sharing Contribution shall
also be allocated to the Profit Sharing Account of each Former
Participant (i) who died since the end of the preceding Plan
Year, or (ii) who retired or became disabled pursuant to Section
5.1, 5.2, or 5.4 since the end of the preceding Plan Year, (iii)
who is on a Family and Medical Leave Act leave of absence on the
last day of the Plan Year. Any such Profit Sharing Contributions
shall be allocated to the Profit Sharing Contribution Accounts
of the Participants described in the two immediately preceding
sentences in the proportion that each such Participant's
Compensation during the Plan Year bears to the total
Compensation of all such Participants and Former Participants
during such Plan Year.
Section 3.4 NONDISCRIMINATION TEST FOR SALARY REDIRECTION
(a) Periodically as determined by the Committee, the Employer
shall check the actual deferral percentages against the
tests identified below.
(b) The term "eligible Participants," for purposes of this
Section shall mean all Participants under this Plan who are
eligible to make Salary
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Redirection contributions during the Plan Year for which the
tests are being made.
(c) The term "actual deferral percentage," means the average of
the percentages (calculated separately for each eligible
Participant) of Salary Redirection and Qualified Nonelective
Contributions on behalf of each eligible Participant divided
by the compensation of the eligible Participant.
(d) The term "compensation" for purposes of this Section shall
include Compensation is defined in Treasury Regulations
(S)1.414(s)-1T(c)(1) and (2) as modified by Treasury
Regulation (S)1.414(s)-1T(c)(4), applied uniformly to all
employees for any Plan Year or portion thereof during which
they are eligible to participate. Compensation for purposes
of this Section shall be limited pursuant to Code Section
401(a)(17).
(e) Only one of the following two tests need be satisfied not to
have a reduction in Salary Redirection.
Test I - The actual deferral percentage for the current
Plan Year of the group of Highly Compensated
Employees is not more than the actual deferral
percentage for the preceding Plan Year of all Non-
Highly Compensated Employees, multiplied by 1.25.
Test II - The excess of the actual deferral percentage for
the current Plan Year of the group of Highly
Compensate Employees over the actual deferral
percentage for the preceding Plan Year of all Non-
Highly Compensated Employees is not more than two
percentage points, and the actual deferral
percentage for the current Plan Year of the group
of Highly Compensated Employees is not more than
the actual deferral percentage for the preceding
Plan Year of all Non-Highly Compensated Employees,
multiplied by two. If Test II in Subsection 3.5(e)
is used in testing other contributions pursuant to
that Section, Test II under this Section shall be
limited as provided for in Code Section 401(m)(9)
and the regulations issued by the Secretary of the
Treasury of notices issued by the Internal Revenue
Service. If a multiple use of Test II occurs, such
multiple use shall be corrected by reducing either
the actual deferral percentage or actual
contribution percentage of the Highly Compensated
Employee in an amount calculated in the manner
provided in Section 3.4(f) or Section 3.5(f).
-19-
Notwithstanding the above, the Sponsoring Employer may elect
to perform the tests using the Average Actual Deferral
Percentage for the current Plan Year for Participants who
are Non-Highly Compensated Employees for the current Plan
Year rather than using prior Plan Year data, provided that
if such election is made for the 1998 or a later Plan Year,
the test must continue to be performed based on current Plan
Year data until the election is changed in a manner
prescribed by the Secretary of the Treasury. Unless the
Sponsoring Employer elects to use current Plan Year data,
the Participants taken into account in determining the prior
Plan Year's Average Actual Deferral Percentage for Non-
Highly Compensated Employees are those individuals who were
Non-Highly Compensated Employees during the preceding Plan
Year, without regard to the Participants' status during the
current Plan Year (i.e., a Participant who was a Non-Highly
Compensated Employee for the preceding Plan Year is included
in the calculation as a Non-Highly Compensated Employee even
if the Participant is no longer employed by the Employer or
has become a Highly Compensated Employee for the current
Plan Year). For the 1997 Plan Year, the determination of who
was a Non-Highly Compensated Employee for the 1996 Plan Year
shall be made using the definition of Non-Highly Compensated
Employee in effect prior to this restatement.
For purposes of these tests, the actual deferral percentage
for any Participant who is a Highly Compensated Employee for
the Plan Year and who is eligible to have Salary Redirection
allocated to his accounts under two or more arrangements
described in Code Section 401(k) that are maintained by the
Company, shall be determined as if such Salary Redirection
were made under a single arrangement.
(f) If neither Test I nor Test II is initially satisfied for any
Plan Year, the Plan shall nevertheless be deemed to comply
with the requirements of Section 401(k)(3)(A)(ii) of the
Code for such Plan Year if, before the last day of the
following Plan Year, the amount of any excess contribution
(and any income thereon) is distributed to Participants who
are Highly Compensated Employees. The amount to be returned
shall be determined as follows:
[i] Calculate the dollar amount that would be returned to
each Highly Compensated Employee if the Average
Deferral Percentage of Highly Compensated Employees
were reduced by returning Salary Redirection
contributions to such Participants, beginning with
those Highly Compensated Employees' with the highest
Actual Deferral Percentage and only to the extent
necessary to meet either test above.
-20-
[ii] Determine the total of the dollar amounts calculated
in Step [i], and return that amount to Highly
Compensated Employees in accordance with Steps [iii]
and [iv] below by distributing Salary Redirection
contributions as Excess Contributions. Excess
Contributions, adjusted for any income or loss
allocable thereto, may be distributed before the end
of the following Plan Year to Participants on whose
behalf such Excess Contributions were made for such
preceding Plan Year. Excess Contributions shall be
adjusted for income or loss, and the income or loss
allocable to Excess Contributions shall be
determined by multiplying the income or loss
allocable to the Participant's Salary Redirection
contributions for the Plan Year by a fraction, the
numerator of which is the Excess Contribution on
behalf of the Participant for the preceding Plan
Year and the denominator of which is the value of
the Participant's Salary Redirection Account on the
last day of the preceding Plan Year.
[iii] Reduce the Salary Redirection contributions of the
Highly Compensated Employee with the highest dollar
amount of Salary Redirection contributions by the
amount required to cause that Highly Compensated
Employee's Salary Redirection contributions to equal
the dollar amount of the Salary Redirection
contributions of the Highly Compensated Employee
with the next highest dollar amount of Salary
Redirection Contributions. However, if a lesser
reduction would equal the total remaining excess
contributions to be distributed, the lesser
reduction amount is distributed.
[iv] If the total amount distributed is less than the
total excess contributions from Step [ii], Step
[iii] is repeated.
If it is necessary to reduce the matched Salary
Redirection, the Participant shall nevertheless receive
from the Plan a distribution equal to the vested portion of
the Employer Matching Contribution plus any income thereon
that would have been allocated to him had such reduction in
contribution not been necessary. Any remaining portion of
the Matching Contribution shall be forfeited in accordance
with the provisions of Section 5.5.
Section 3.5 NONDISCRIMINATION TEST FOR OTHER CONTRIBUTIONS
(a) Periodically as determined by the Committee, the Employer
shall check the actual contribution percentages against the
tests identified below.
(b) The term "eligible Participants," for purposes of this
Section, shall mean all Participants under this Plan who
are eligible to make Salary
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Redirection contributions, and receive Matching
Contributions during the Plan Year for which the tests are
being made.
(c) The term "actual contribution percentage," means the
average of the following percentages (calculated separately
for each eligible Participant): Matching Contributions (and
Salary Redirection to the extent elected by the Employer
and permitted by Regulations under Code Section 401(m)) on
behalf of each eligible Participant divided by compensation
of the eligible Participant.
(d) The term "compensation" for purposes of this Section shall
include compensation as defined in Treasury Regulations
(S)1.414(s)-1T(c)(1) and (2) as modified by Treasury
Regulation (S)1.414(s)-1T(c)(4), applied uniformly to all
employees for any plan year or portion thereof during which
they are eligible to participate. Compensation for purposes
of this Section shall be limited pursuant to Code Section
401(a)(17).
(e) Only one of the following two test need be satisfied not to
have a reduction in contribution tested pursuant to this
Section.
Test I - The actual contribution percentage for the
current Plan Year of the group of Highly
Compensated Employees is not more than the
actual contribution percentage for the preceding
Plan Year of all Non-Highly Compensated
Employees, multiplied by 1.25.
Test II - The excess of the actual contribution percentage
for the current Plan Year of the group of Highly
Compensated Employees over the actual
contribution percentage for the preceding Plan
Year of all Non-Highly Compensated Employees is
not more than two percentage points, and the
actual contribution percentage for the current
Plan Year of the group of Highly Compensated
Employees is not more than the actual
contribution percentage for the preceding Plan
Year of all Non-Highly Compensated Employees,
multiplied by two. If Test II in Subsection
3.4(e) is used in testing Salary Redirection
pursuant to that Section, Test II under this
Section shall be limited as provided for in Code
Section 401(m)(9) and the regulations issued by
the Secretary of the Treasury of notices issued
by the Internal Revenue Service. If a multiple
use of Test II occurs, such multiple use shall
be corrected by reducing either the actual
deferral percentage or actual contribution
percentage of the Highly Compensated Employee in
an amount calculated in the manner provided in
Section 3.4(f) or Section 3.5(f).
-22-
Notwithstanding the above, the Sponsoring Employer may
elect to perform the tests using the Average Contribution
Percentage for the current Plan Year for Participants who
are Non-Highly Compensated Employees for the current Plan
Year rather than using prior Plan Year data, provided that
if such election is made for the 1998 or a later Plan Year,
the test must continue to be performed based on current
Plan Year data until the election is changed in a manner
prescribed by the Secretary of the Treasury. Unless the
Sponsoring Employer elects to use current Plan Year data,
the Participants taken into account in determining the
prior Plan Year's Average Contribution Percentage for Non-
Highly Compensated Employees are those individuals who were
Non-Highly Compensated Employees during the preceding Plan
Year, without regard to the Participants' status during the
current Plan Year (i.e., a Participant who was a Non-Highly
Compensated Employee for the preceding Plan Year is
included in the calculation as a Non-Highly Compensated
Employee even if the Participant is no longer employed by
the Employer or has become a Highly Compensated Employee
for the current Plan Year). For the 1997 Plan Year, the
determination of who was a Non-Highly Compensated Employee
for the 1996 Plan Year shall be made using the definition
of Non-Highly Compensated Employee in effect prior to this
restatement.
For purposes of these tests, the actual contribution
percentage for any Participant who is a Highly Compensated
Employee for the Plan Year and who is eligible to have
Matching Contributions allocated to his accounts under two
or more arrangements described in Code Section 401(k) that
are maintained by the Company, shall be determined as if
such Matching Contributions were made under a single
arrangement.
(f) If neither Test I nor Test II is initially satisfied for
any Plan Year, the Plan shall nevertheless be deemed to
comply with the requirements of Section 401(m) of the Code
for such Plan Year if, before the last day of the following
Plan Year, the amount of any excess contribution (and any
income thereon) is distributed to Participants who are
Highly Compensated Employees or if forfeitable, is
forfeited. The amount to be reduced shall be determined as
follows:
[i] Calculate the dollar amount by which each Highly
Compensated Employee's Employer Matching contributions
must be reduced to pass wither test, beginning with
those Highly Compensated Employees with the highest
Contribution Percentage and only to the extent
necessary to meet either test above.
[ii] Determine the total of the dollar amounts calculated
in Step [i], and reduce Highly Compensated Employees'
Employer Matching contributions in accordance with
Steps [iii] and [iv] below.
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[iii] Reduce the Employer Matching contributions of the
Highly Compensated Employee with the highest dollar
amount of Employer Matching contributions by the
amount required to cause that Highly Compensated
Employee's Employer Matching contributions to equal
the dollar amount of the Employer Matching
contributions of the Highly Compensated Employee with
the next highest dollar amount of Employer Matching
contributions. However, if a lesser reduction would
equal the total remaining excess contributions to be
distributed, the lesser reduction amount is
distributed.
[iv] If the total amount distributed is less than the
total excess contributions from Step [ii], Step [iii]
is repeated.
If it is necessary to reduce the Employer Matching
Contribution, the Participant shall nevertheless receive
from the Plan a distribution equal to the vested portion of
the Employer Matching Contribution plus any income thereon
that would have been allocated to him had such reduction in
contribution not been necessary. Any remaining portion of
the Matching Contribution shall be forfeited in accordance
with the provisions of Section 5.5.
(g) This Section shall be governed by Code Section 401(m) and
any rules or regulations issued pursuant thereto, which may
include coordination and/or combination with allocations
subject to Section 401(k) in accordance with Treasury
Regulation Section 1.401(m)-2.
Section 3.6 MAXIMUM INDIVIDUAL DEFERRAL
A Participant shall not be permitted to have his Employer
redirect an amount in excess of $9,500 in any calendar year
pursuant to the provisions of Section 3.1, including
contributions to any other plan of the Company which are made
pursuant to Code Section 402(a)(8). The $9,500 limitation shall
be adjusted in accordance with cost-of-living adjustments made
by the Secretary of the Treasury pursuant to Code Section
402(g)(5). If any amount is redirected pursuant to Section 3.1
in excess of this limit (as adjusted), or if a Participant
notifies the Committee, in writing, by March 1 following the
close of the taxable year of the amount contributed in excess of
this limit (as adjusted) to all plans pursuant to Code Section
402(a)(8), such amount shall be deemed an "excess deferral" and
the Committee shall direct the Trustee to distribute to the
Participant (not later than the April 15 following the calendar
year in which the excess deferral was made) the amount of the
excess deferral plus any income allocable to such amount.
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Section 3.7 MISTAKE OF FACT
If due to a mistake of fact, Employer Contributions to the Trust
Fund for any Plan Year exceed the amount intended to be
contributed, notwithstanding any provision to the contrary, the
Employer, as soon as such mistake of fact is discovered, shall
notify the Trustee. The Employer shall direct that the Trustee
return such excess to the Employer, provided such return is made
within one year of the date on which the Employer made the
contribution.
Section 3.8 QUALIFIED NONELECTIVE CONTRIBUTIONS
The Employer may, as of the end of any calendar quarter, make a
Qualified Nonelective Contribution to the Trust Fund on behalf
of any Participant with a Prior Plan Employer Contribution
Account or Prior Plan Salary Redirection Account in an amount
equal to the surrender charges assessed by the insurer which
held the assets in those accounts in the plan which was merged
into this Plan. Such Qualified Nonelective Contributions shall
be added to the Salary Redirection Accounts of those
Participants in amounts equal to the allocation of the surrender
charges to the Participant's combined Prior Plan Employer and
Prior Plan Salary Redirection Accounts, shall be 100% vested
when made, subject to the same distribution rules as Salary
Redirection Contribution, and shall be tested for
nondiscrimination as Salary Redirection Contributions in
accordance with the provisions of Section 3.4.
Section 3.9 UNIFORMED SERVICES EMPLOYMENT AND REEMPLOYMENT RIGHTS ACT OF
1994 ("USERRA")
Effective December 12, 1994, notwithstanding any provision of
this Plan to the contrary, contributions, benefits and service
credit with respect to qualified military service will be
provided in accordance with Section 414(u) of the Code.
Section 414(u) generally provides that an employer maintaining a
plan shall be treated as meeting the requirements of USERRA only
if an employee reemployed under USERRA is treated as not having
incurred a break in service because of the period of military
service, the employee's military service is treated as service
with the employer for vesting and benefit accrual purposes, the
employee is permitted to make additional elective deferrals and
employee contributions in an amount not exceeding the maximum
amount the employee would have been permitted or required to
contribute during the period of military service if the employee
had actually been employed by the employer during that period
("make-up contributions"), and the employee is entitled to any
accrued benefits that are contingent on employee contributions
or elective deferrals to the extent the employee pays the
contributions or elective deferrals to the plan. Make-up
contributions must be permitted during the period that begins on
the date of reemployment and continues for five years or, if
less, three times the period of military service. With respect
to make-up contributions, the employer must make
-25-
matching contributions that would have been required if the
make-up contributions had actually been made during the period
of military service.
Section 414(u) provides that an employee is treated as receiving
compensation from the employer during the period of military
service equal to the compensation the employee otherwise would
have received from the employer during that period, or, if the
compensation the employee otherwise would have received is not
reasonably certain, the employee's average compensation from the
employer during the period immediately preceding the period of
military service. For purpose of (S) 414(u), USERRA is not
treated as requiring the crediting of earnings to an employee
with respect to any contribution before the contribution is
actually made or requiring any allocation of forfeitures to the
employee for the period of military service.
Section 414(u) generally provides that a contribution that is
made by an employer or employee to an individual account plan or
by an employee to a contributory defined benefit plan, and that
is required under USERRA, is taken into account for purposes of
the limitations of Section 402(g), 402(h), 403(b), 404(a),
404(h), 408, 415 or 457 in the year to which the contribution
relates, not the year in which the contribution is made. In
addition, Section 414(u) provides that a plan is not treated
as failing to meet the requirements of Section 401(a)(4),
401(a)(26), 401(k)(3), 401(k)(11), 401(k)(12), 401(m),
403(b)(12), 408(k)(3), 408(k)(6), 408(p), 410(b), or 416 because
of the contribution (or the right to make the contribution).
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ARTICLE 4
ALLOCATION TO INDIVIDUAL ACCOUNTS
Section 4.1 INDIVIDUAL ACCOUNTS
The Committee shall establish and maintain an Individual Account
in the name of each Participant to which the Committee shall
credit all amounts allocated to each such Participant pursuant
to Article 3 and the following Sections of this Article.
Section 4.2 INVESTMENT OF ACCOUNTS
(a) There shall be established the following Investment Funds
within the Trust Fund:
(1) INTEREST INCOME - A fund generally invested in
investment contracts with banks and insurance
companies to generate interest income returns above
the rates earned by money market funds, while
generally maintaining a stable principal value. This
fund may also be referred to as the Stable Value Fund.
(2) BALANCED FUND - A fund consisting of both fixed income
obligations of the United States Government and its
agencies and of companies other than the Sponsoring
Employer to provide protection of principal consistent
with an attractive rate of return, and equity
investments other than the common stock of the
sponsoring employer.
(3) GROWTH FUND - A fund consisting primarily of common
stocks with an objective of capital growth over both
the intermediate and long-term.
(4) AGGRESSIVE GROWTH FUND - a fund consisting primarily
of common stocks of companies that are early in their
life cycle and which have the potential to grow
significantly, with the objective to provide long term
capital appreciation without regard to current income.
(5) COMPANY STOCK FUND - a fund consisting primarily of
shares of common stock of the Sponsoring Employer and
dividends and distributions attributable to said
common stock, plus temporary investments held pending
purchase of additional shares of common stock of the
Sponsoring Employer.
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(b) Each Participant shall have the right to direct the
Committee to invest the cumulative balance in his
Individual Account attributable to Salary Redirection,
Prior Plan Salary Redirection Contributions, Prior Plan
Employer Contributions and current Salary Redirection in
increments of 10% (25% if elections made prior to January
1, 1997, in which case they continue until a change is made
by the Participant) in the Investment Funds provided in
Section 4.2(a). Such direction shall be effected as soon as
practicable after the end of the month, provided the
Participant gives the direction by identity-secured
telephonic instructions (or in writing if telephonic
instructions are impracticable) no later than the 15th day
of the month. Neither the Trustee nor any other Fiduciary
shall be responsible for investment losses resulting from a
Participant's exercise of investment discretion, in
accordance with ERISA Section 404(c).
(c) A Participant who does not make any election under this
Section shall have the Individual Account attributable to
Salary Redirection, Prior Plan Salary Redirection
Contributions, Prior Plan Employer Contributions and
current Salary Redirection made on his behalf invested in
the Stable Value Fund. A Participant who began
participation in the Plan prior to January 1, 1997 shall
have investments formerly in the Equity Fund transferred to
the Growth Fund and those formerly in the Fixed Income Fund
transferred to the Stable Value Fund, subject to further
redirection by the Participant in accordance with the Plan.
A Participant who has funds transferred to this Plan from
The Hillhaven Retirement or Deferred Savings Plan shall
have assets formerly invested in the Short-Term Investment
or Bond Fund transferred to the Stable Value Fund, those
formerly in the U.S. Balanced Fund to the Balanced Fund,
those formerly in the Large Stock or International Fund to
the Growth Fund, and those formerly in the Small Stock Fund
to the Aggressive Growth Fund.
(d) All cumulative and current contributions attributable to
Employer Contributions (other than contributions in a Prior
Plan Employer Contribution Account) and the Profit Sharing
Contribution Account shall either be made (i) in kind in
Company Stock (in an amount determined based on the per-
share market value on the date as of which the contribution
is to be allocated) or (ii) in cash which is invested in
the Company Stock Fund.
Section 4.3 VALUATION OF ACCOUNTS
(a) INDIVIDUAL ACCOUNT. As of each Valuation Date, the
Committee shall determine the fair market value of the
Individual Account of each Participant for each Investment
Fund in which the Individual Account is invested as
follows:
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(1) The value of the Individual Account of each
Participant as of the last Valuation Date;
(2) Minus the amount of any withdrawals and distributions
made from such account since the last Valuation Date;
(3) Plus any contributions to the Participant's Salary
Redirection Account since the last Valuation Date;
(4) Plus any allocation to the Participant's Matching
Contribution Account since the last Valuation Date;
(5) Plus any allocation to the Participant's Profit
Sharing Account since the last Valuation Date;
(6) Plus the Individual Account's proportionate share of
any investment earnings allocated to each Investment
Fund held within the Individual Account since the last
Valuation Date;
(7) Minus the Individual Account's proportionate share of
any investment losses allocated to each Investment
Fund held within the Individual Account since the last
Valuation Date.
(b) INVESTMENT EARNINGS OR LOSSES. The investment earnings (or
losses, if such computation is negative) from the
Investment Funds shall mean the difference between the unit
price of any Investment Fund (other than the Company Stock
Fund) from one business day to the next, and any net gain
or loss on non-mutual fund investments in an Investment
Fund, as reflected by interest payments, dividends,
realized and unrealized gains and losses on securities,
other investment transactions and expenses paid from the
fund.
(c) ALLOCATION OF INVESTMENT EARNINGS OR LOSSES. Except as
provided in Section 4.3(e), the investment earnings or
losses from the Trust Fund shall be allocated to the
Individual Account of each Participant invested in the
respective Investment Fund in the ratio of "A" divided by
"B" where "A" is an amount determined pursuant to Section
4.3(d) for the portion of the Individual Account of each
Participant invested in the respective Investment Fund and
"B" is an amount determined pursuant to Section 4.3(d) for
the portion of the Individual Account of all Participants
invested in the respective Investment Fund.
(d) DETERMINATION OF RATIO. For purposes of determining the
ratio is Section 4.3(c), the amounts shall be determined as
follows:
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(1) the value of the portion of such Individual Account(s)
in the Investment Fund as of the last Valuation Date;
(2) Minus withdrawals and benefit payments to or on behalf
of Participants from the portion of such Individual
Account(s) in the Investment Fund since the last
Valuation Date.
(e) COMPANY STOCK FUND. As of each Valuation Date with respect
to the portion of a Participant's Individual Account
invested in the Company Stock Fund: (i) dividends paid
since the preceding Valuation Date on the number of shares
of Sponsoring Employer common stock held in the
Participant's Individual Account invested in the Company
Stock Fund as of the preceding Valuation Date (as adjusted
for any distributions or withdrawals since that date) shall
be added to the portion of the Participant's Individual
Account invested in the Company Stock Fund in the ratio
that the number of said shares of stock held in each
Participant's Individual Accounts as of the preceding
Valuation Date (as adjusted for any distributions or
withdrawals since that date) bears to the total number of
said shares of stock held in all Participants' Individual
Accounts as of the preceding Valuation Date as so adjusted;
(ii) any remaining dividends and other earnings of the
Company Stock Fund since the preceding Valuation Date shall
be added to the Individual Accounts of each Participant in
the Company Stock Fund in the ratio that the non-stock
balance held in each Participant's Individual Account in
the Company Stock Fund as of the preceding Valuation Date
(as adjusted for any distributions or withdrawals since
that date, one-half of the Matching Contributions and one-
half of any Salary Redirection contributions added to such
Individual Accounts in the Company Stock Fund since the
preceding Valuation Date) bears to the total non-stock
balance in all Participant's Individual Accounts in the
Company Stock Fund as of the preceding Valuation Date as so
adjusted; and (iii) the shares of Sponsoring Employer
common stock acquired with cash attributable to the Company
Stock Fund since the preceding Valuation Date shall be
added to each Participant's Individual Account in the
Company Stock Fund in the ratio that the non-stock balance
held in each Participant's Individual Account in the
Company Stock Fund as of the preceding Valuation Date (as
adjusted for any distributions, withdrawals, Matching
Contributions, Salary Redirection contributions and
earnings and dividends as of the current Valuation Date)
bears to the total non-stock balance of all Participant's
Individual Accounts in the Company Stock Fund as so
adjusted and the cost of the shares so added shall be
subtracted from the non-stock portion of the Participant's
Individual Account held in the Company Stock Fund.
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Section 4.4 TRUSTEE AND COMMITTEE JUDGMENT CONTROLS
In determining the fair market value of the Trust Fund and of
Individual Accounts, the Trustee shall exercise its best
judgment, and all such determinations of value (in the absence
of bad faith) shall be binding upon all Participants and their
beneficiaries.
Section 4.5 MAXIMUM ADDITIONS
Anything herein to the contrary notwithstanding, the total
Annual Additions of a Participant for any Limitation Year when
combined with any similar annual additions credited to the
Participant for the same period from another qualified Defined
Contribution Plan maintained by the Company, shall not exceed
the lesser of the amounts determined pursuant to Section 4.5(a)
or (b).
(a) $30,000 or, if larger, 25% of the dollar limitation in
effect under Code Section 415(b)(1)(A) determined by the
Commissioner of Internal Revenue as of January 1 of each
year to apply to the Limitation Year ending with or within
that calendar year; or
(b) 25% of the Participant's compensation received from the
Company for such Limitation Year, as determined pursuant to
Section 415 of the Code.
(c) In the event a Participant is covered by one or more
Defined Contribution Plans maintained by the Company, the
maximum annual additions as noted above shall be decreased
in the last Defined Contribution Plan maintained by the
Company in which he participated to ensure that all such
plans will remain qualified under the Code.
Section 4.6 CORRECTIVE ADJUSTMENTS
In the event that corrective adjustments in the Annual Addition
to any Participant's Individual Account are required as the
result of a reasonable error in estimating a Participant's
compensation, the corrective adjustments shall be made pursuant
to and in the order of the subsections in this Section.
(a) The portion of the Participant's unmatched Salary
Redirection made pursuant to Subsection 3.1(a) shall be
returned by distribution to the Participant, with earnings
thereon. Any amount so returned shall be disregarded for
purposes of the tests in Sections 3.4 and 3.5.
(b) The portion of the Participant's matched Salary Redirection
made pursuant to Subsection 3.1(a) and his Matching
Contributions shall be proportionally reduced to insure
compliance with Section 4.5. Any affected Salary
Redirection will be distributed to the Participant and
shall not be considered for purposes of the tests in
Sections 3.4 and 3.5. Any
-31-
affected Matching Contributions shall be used to reduce
future Matching Contributions.
(c) The Participant's Profit Sharing Contribution shall be
reduced to insure compliance with Section 4.5. Any such
amount reduced shall be allocated as of the end of the next
Plan Year among the Profit Sharing Contribution Accounts of
all other Participants in the same manner as is indicated
in Section 3.3.
Section 4.7 DEFINED CONTRIBUTION AND DEFINED BENEFIT PLAN FRACTION
If a Participant is a participant in a Defined Benefit Plan
maintained by the Company, the sum of his defined benefit plan
fraction and his defined contribution plan fraction for any
Limitation Year may not exceed 1.0.
(a) For purposes of this Section, the term "defined
contribution plan fraction" shall mean a fraction the
numerator of which is the sum of all of the Annual
Additions of the Participant under this Plan and any other
Defined Contribution Plan maintained by the Company as of
the close of the Limitation Year and the denominator of
which is the sum of the lesser of the following amounts
determined for such Limitation Year and for each prior
Limitation Year of employment with the Company:
(1) the product of 1.25 multiplied by the dollar
limitation in effect under Section 415(c)(1)(A) of the
Code; or
(2) the product of 1.4 multiplied by the amount which may
be taken into account under Code Section 415(c)(1)(B)
with respect to each individual under the Plan for
such Limitation Year.
(b) For purposes of this Section, the term "defined benefit
plan fraction" shall mean a fraction, the numerator of
which is the Participant's projected annual benefit (as
defined in the Defined Benefit Plan) determined as of the
close of the Limitation Year and the denominator of which
is the lesser of:
(1) the product of 1.25 multiplied by the dollar
limitation in effect pursuant to Section 415(b)(1)(A)
of the Code for such Limitation year; or
(2) the product of 1.4 multiplied by the amount which may
be taken into account pursuant to Section 415(b)(1)(B)
of the Code with respect to each individual under the
Plan for such Limitation year.
(c) The limitation on aggregate benefits from a Defined Benefit
Plan and a Defined Contribution Plan which is contained in
Section 2004 of ERISA,
-32-
as amended, shall be complied with by a reduction (if
necessary) in the Participant's benefits under the Defined
Benefit Plan.
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ARTICLE 5
DISTRIBUTIONS
Section 5.1 NORMAL RETIREMENT
When a Participant lives to his Normal Retirement Date and
retires, he shall become entitled to the full value of his
Individual Account as soon as practicable after the distribution
forms are completed (or their time for completion has elapsed),
at a value determined as of the date the distribution check is
prepared.
Section 5.2 LATE RETIREMENT
A Participant may continue his employment past his Normal
Retirement Date on a year to year basis. He shall continue to be
an active Participant under the Plan. Upon his actual
retirement, he shall become entitled to the full value of his
Individual Account as soon as practicable after the distribution
forms are completed (or their time for completion has elapsed),
at a value determined as of the date of distribution check is
prepared.
Section 5.3 DEATH
If a Participant dies while an active Participant under the
Plan, his Beneficiary shall be entitled to the full value of his
Individual Account as soon as practicable after the distribution
forms are completed (or their time for completion has elapsed),
at a value determined as of the date of distribution check is
prepared.
Section 5.4 DISABILITY
When it is determined that a Participant is Totally and
Permanently Disabled, the Committee shall certify such fact to
the Trustee and such Disabled Participant shall be entitled to
receive the full value of his Individual Account as soon as
practicable after the distribution forms are completed, at a
value determined as of the date of distribution check is
prepared.
Section 5.5 TERMINATION OF EMPLOYMENT
(a) Subject to Section 5.5(l) below, upon termination of
employment for any reason (other than Normal Retirement,
Late Retirement, Disability Retirement or Death), a
Participant shall be entitled to a benefit equal to the
vested portion (as determined in this Section) of the
balance of his Individual Account as soon as practicable
after the distribution forms are completed, at a value
determined as of the date of distribution check is
prepared.
-34-
(b) A Participant shall always be 100% vested in the balance of
his Salary Redirection Account, and Prior Plan Salary
Redirection Account.
(c) Effective for Participants who terminate employment on or
after July 1, 1990, a Participant shall be vested in the
balance attributable to his Prior Plan Employer
Contribution Account, Matching Contribution Account and
Profit Sharing Contribution Account based on years of
Service as of his date of termination, in accordance with
the following schedule:
Years of Service Vested Percentage
---------------- -----------------
Less than 1 year 0%
1 but less than 2 25%
2 but less than 3 50%
3 but less than 4 75%
4 years or more 100%
(d) Notwithstanding the above, a Participant who has a Prior
Plan Employer Contribution Account from The Hillhaven
Corporation Retirement Savings Plans, shall be vested in
the balance attributable to such account based on years of
Service as of his date of termination, in accordance with
the following schedule:
Years of Service Vested Percentage
---------------- -----------------
Less than 3 years 0%
3 but less than 4 20%
4 but less than 5 40%
5 but less than 6 60%
6 but less than 7 80%
7 years or more 100%
(e) Notwithstanding the above, a Participant who has a Prior
Plan Employer Contribution Account from The Hillhaven
Corporation Deferred Savings Plans, shall be vested in the
balance attributable to such account based on years of
Service as of his date of termination, in accordance with
the following schedule:
Years of Service Vested Percentage
---------------- -----------------
Less than 3 years 0%
3 but less than 4 30%
4 but less than 5 40%
5 but less than 6 60%
6 but less than 7 80%
7 years or more 100%
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(f) For purposes of calculating years of Service for purposes
of vesting in the Prior Plan accounts from The Hillhaven
Corporation Retirement Savings and Deferred Savings Plans
as provided in subsections 5.5(d) and (e) above, in which
plans elapsed time was used to determine years of Service,
Participants in this Plan shall be credited with one year
of Service if they remain employed by the Company, or a
Company which participates in the RSP (as defined in
Section 2.1(d)), until the anniversary of their employment
commencement date in 1997, and shall receive another year
of Service if the Participant logs 1000 Hours of Service
for the Company or a company which participates in the RSP
during the Plan year ending on December 31, 1997.
(g) Notwithstanding the above, a Participant who attains Normal
Retirement Age or dies or becomes Totally and Permanently
Disabled, while employed by the Company, shall be fully
vested in his Individual Account under the Plan.
(h) A Participant who terminates employment pursuant to this
Section with a zero percent vested percentage shall be
deemed to have received a distribution on the date he
terminates employment. If a Former Participant receives a
distribution of the vested portion of his Individual
Account prior to incurring five consecutive Breaks in
Service or said Former Participant is zero percent vested
in his Individual Account, the non-vested balance of such
terminated Participant's Individual Account shall be
forfeited as of the date he receives or is deemed to
receive said distribution. If a Participant who has
received a distribution (or deemed distribution) is later
rehired before the period described in subsection 5.5(j)
below, the Participant need not repay the distributed
amount, but his Account shall automatically have the
forfeited amount restored to it at the earlier of (1) the
last day of the Plan Year in which rehired, or (2) the date
of a subsequent termination of employment. Restoration of a
forfeiture will come from forfeitures in the year in which
he is reemployed and, to the extent such forfeitures are
not sufficient, from a special Employer Contribution. Upon
a subsequent termination of employment prior the
Participant becoming 100% vested, the gross distribution
shall be determined by multiplying the vested percentage at
the subsequent termination by the account balance then
actually restored to the Plan, plus the distribution
previously received. The amount to be distributed to the
Participant shall be the vested percentage of the adjusted
account, minus the amount previously distributed.
(i) The non-vested balance of the Individual Account of a
terminated Participant shall be forfeited as of the last
day of the Plan Year in which such terminated Participant
incurs five consecutive Breaks in Service if the
Participant is vested in any portion of his Individual
Account and does not receive a distribution prior to
incurring five consecutive Breaks in Service.
-36-
(j) A terminated Participant who is reemployed and again
becomes a Participant after incurring five or more
consecutive Breaks in Service shall not have any amount
forfeited pursuant to this Section restored to his
Individual Account.
(k) Any Matching Contributions and Profit Sharing Contributions
forfeited will be first used to reduce Matching
Contributions pursuant to Section 3.2.
(l) Notwithstanding anything to the contrary in this Section
5.5 or in Section 5.6(a), no portion of a Participant's
Individual Account shall be distributed to him until the
participant has separated from service within the meaning
of Code Section 401(k)(2)(B), unless the distribution is in
connection with an event described in Code Section
401(k)(10) and the Treasury Regulations under that Section.
Section 5.6 COMMENCEMENT OF BENEFITS
(a) Any benefits payable under this Article shall be paid as
soon as reasonably possible following the actual date of
severance, at the value determined as of the Valuation Date
coincident with or immediately preceding receipt of
properly completed distribution forms from the Participant,
subject to the Participant's consent if his actual date of
severance is prior to Normal Retirement Age and subject to
Subsection 5.7(a). In no event, however, shall payment
begin beyond 60 days after the last day of the Plan Year in
which occurs the latest of (i) the Participant's reaching
Normal Retirement Age; (ii) the 10th anniversary of the
date the Employee became a Participant; or (iii)
termination of the Participant's employment.
Notwithstanding anything in the Plan to the contrary and
notwithstanding the Participant's lack of consent, benefits
under this Plan shall be paid as soon as reasonably
possible following the later of the Participant's actual
date of severance or his Normal Retirement Date.
(b) Except as required in this Section for a Participant who
has an Individual Account to which Section 5.7(b) or
Section 5.6(c) applies, a Participant may defer
distribution to a subsequent date. If the Participant does
not consent to a distribution as provided above, such
distribution shall be made based on the value of the
Individual Account as of the date the check for the
distribution is prepared and shall be delivered as soon as
reasonably practical after notice to the Committee of the
election to receive a distribution.
(c) Notwithstanding any other provisions of the Plan, the
payment of a Participant's benefits hereunder shall begin
by payment of a lump sum of the entire Accounts of the
Participant no later than the April 1 following the
calendar year in which the Participant has both attained
age 70 1/2 and
-37-
has retired, provided that for 5% owners as defined in
Section 416 of the Code, distribution must begin by April 1
following the calendar year in which the Participant
attains age 70 1/2, regardless of whether the Participant
has retired; and further provided that, if the Internal
Revenue Service in regulations or other pronouncements
provides that eliminating the automatic distribution from
this Plan beginning after age 70 1/2 for a non-5% owner who
has not yet separated from service is a prohibited cut-back
of benefits, then a Participant shall have the option to
take a lump sum distribution even while employed, at the
April 1 following attainment of age 70 1/2, if the
Participant so elects in writing, and, if so elected, shall
receive a distribution on or before December 31 of the year
after attainment of age 70 1/2, and again each year
thereafter while still employed, shall receive a similar
distribution of all amounts accrued in Accounts of the
Participant since the last such distribution.
(d) Notwithstanding anything in the Plan to the contrary, any
benefit payable to an alternate payee pursuant to a
qualified domestic relations order, as defined in Section
414(p) of the Code, shall be paid as soon as
administratively possible following the determination that
the order meets the requirements of Section 414(p) of the
Code.
(e) Notwithstanding anything in the Plan to the contrary, in
the event a Participant terminates employment for any
reason and recommences employment prior to distribution of
his entire vested account in the Plan, the undistributed
portion of his vested account shall remain in the Plan
until his account again becomes distributable due to a
subsequent termination.
Section 5.7 METHODS OF PAYMENT
(a) A Participant or Beneficiary shall elect a distribution of
the Individual Account in a single lump sum payment in cash
as provided hereinafter. Notwithstanding the preceding
sentence, a Participant may request that the Company Stock
Fund be distributed in kind provided that the Participant
has at least 100 shares of Sponsoring Employer common stock
in his Individual Account at the date of distribution. Any
non-stock balance in his Company Stock Fund will be paid in
cash and fractional shares will be paid in cash based on
the fair market value of such fractional shares as of the
day those shares liquidated or valued for distribution. In
the event a Participant elects to receive his Company Stock
Fund in cash, the shares of Sponsoring Employer stock as of
the date of the distribution check is prepared will be
converted to cash based on the fair market value of such
shares as of such date. Except as provided in Section
5.7(c) or Section 5.11, no other manner of distribution
shall be provided. The request by the Participant or the
Beneficiary shall be in writing and shall be filed with the
Committee. The Committee may not require a distribution
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without the consent of the Participant prior to his
reaching Normal Retirement Age or, if the Participant is
deceased, without the consent of his spouse, if the spouse
is living and if the spouse is his Beneficiary, unless the
vested value of the Individual Account is $3,500 or less.
If the vested value of the Participant's Individual Account
is $3,500 or less, the benefits payable will be paid as
soon as reasonably possible following the actual date of
severance, notwithstanding lack of consent. If the vested
value of the Participant's Individual Account has been more
than $3,500 at the time of any distribution, the value the
Participant's Individual Account will be deemed to be more
than $3,500 at the time of any subsequent distribution for
purposes of the consent requirements of this Section.
(b) If the Participant dies before distribution occurs, the
Participant's entire interest will be distributed no later
than five years after the Participant's death, except, if
the designated Beneficiary is the Participant's surviving
spouse, the distribution must be made no later than the
date on which the Participant would have attained age 65.
(c) Notwithstanding anything in this Section to the contrary,
in the case of a Participant who has a Prior Plan Salary
Redirection Account or a Prior Plan Employer Contribution
Account, the Participant may take distribution of his Prior
Plan Salary Redirection Account or Prior Plan Employer
Contribution Account at such time or in such other form as
was provided in the plan (as in effect as of the date of
transfer) from which the Prior Plan Salary Redirection
Account or Prior Plan Employer Contribution Account was
transferred.
Section 5.8 BENEFITS TO MINORS AND INCOMPETENTS
If any person entitled to receive payment under the Plan shall
be a minor, the Committee, in its discretion, may dispose of
such amount in any one or more of the ways specified in
Subsections (a) through (c) of this Section.
(a) By payment thereof directly to such minor;
(b) By application thereof for benefit of such minor;
(c) By payment thereof to either parent of such minor or to any
adult person with whom such minor may at the time be living
or to any person who shall be legally qualified and shall
be acting as guardian of the person or the property of such
minor; provided only that the parent or adult person to
whom any amount shall be paid shall have advised the
Committee in writing that he will hold or use such amount
for the benefit of such minor.
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In the event that it shall be found that person entitled to
receive payment under the Plan is physically or mentally
incapable of personally receiving and giving a valid receipt for
any payment due (unless prior claim therefor shall have been
made by a duly qualified committee or other legal
representative), such payment may be made to the spouse, son,
daughter, parent, brother, sister or other person deemed by the
Committee to have incurred expense for such person otherwise
entitled to payment.
Section 5.9 UNCLAIMED BENEFITS
(a) The Plan does not require either the Trustee or the
Committee to search for, or ascertain the whereabouts of,
any Participant or Beneficiary. The Committee, by certified
mail addressed to his last known address of record with the
Committee or the Employer, shall notify any Participant, or
Beneficiary, that he is entitled to a distribution under
this Plan. If the Participant, or Beneficiary, fails to
claim his distributive share or make his whereabouts known
in writing to the Committee within six months from the date
of mailing of the notice, or before the termination or
discontinuance of this Plan, whichever should first occur,
the Committee shall thereafter treat the Participant's or
Beneficiary's unclaimed payable Account as a Forfeiture. A
Forfeiture under this Section shall occur when the
Committee determines that the Participant or Beneficiary
cannot be located, but not earlier than the end of the
notice period, or if later, the earliest date applicable
Treasury regulations would permit the Forfeiture.
(b) If a Participant or Beneficiary who has incurred a
forfeiture of his Account under this Section makes a claim,
at any time, for his forfeited Account, the Committee shall
restore the Participant's or Beneficiary's forfeited
Account to the same dollar amount as the dollar amount of
the Account forfeited, unadjusted for any gains or losses
occurring subsequent to the date of the forfeiture. The
Committee shall make the restoration during the Plan Year
in which the Participant or Beneficiary makes the claim,
first from the amount, if any, of forfeitures the
Administrator otherwise would allocate for the Plan Year,
then from the amount, if any, of the Trust net income or
gain for the Plan Year and then from the amount, or
additional amount, the Employer shall contribute to enable
the Committee to make the required restoration. The
Committee shall direct the Trustee to distribute the
Participant's or Beneficiary's restored Account to him not
later than 60 days after the close of the Plan Year in
which the Committee restores the forfeited Account. The
forfeiture provisions of this Section shall apply solely to
the Participant's or to the Beneficiary's Account derived
from Employer contributions.
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Section 5.10 PARTICIPANT DIRECTED ROLLOVERS
(a) This Section applies to distributions made on or after
January 1, 1993. Notwithstanding any provision of the plan
to the contrary that would otherwise limit a distributee's
election under this Section, a distributee may elect, at
the time and in the manner prescribed by the Committee, to
have any portion of an eligible rollover distribution paid
directly to an eligible retirement plan specified by the
distributee in a direct rollover.
(b) For purposes of this Section, an eligible rollover
distribution is any distribution of all or any portion of
the balance to the credit of the distributee, except that
an eligible rollover distribution does not include: any
distribution that is one of a series of substantially equal
periodic payments (not less frequently than annually) made
for the life (or life expectancy) of the distributee or the
joint lives (or joint life expectancies) of the distributee
and the distributee's designated beneficiary, or for a
specified period of 10 years or more; any distribution to
the extent such distribution is required under Section
401(a)(9) of the Code; and the portion of any distribution
that is not includible in gross income (determined without
regard to the exclusion for net unrealized appreciation
with respect to employer securities).
(c) For purposes of this Section, an eligible retirement plan
is an individual retirement account described in Section
408(a) of the Code, an individual retirement annuity
described in Section 408(b) of the Code, an annuity plan
described in Section 403(a) of the Code, or a qualified
trust described in Section 401(a) of the Code, that accepts
the distributee's eligible rollover distribution. However,
in the case of an eligible rollover distribution to the
surviving spouse, an eligible retirement plan is an
individual retirement account or individual retirement
annuity.
For purposes of this Section, a distributee includes an Employee
or former Employee. In addition, the Employee's or former
Employee's surviving spouse and the Employee's or former
Employee's spouse or former spouse who is the alternate payee
under a qualified domestic relations order, as defined in
Section 414(p) of the Code, are distributees with regard to the
interest of the spouse or former spouse.
(d) A direct rollover is a payment by the plan to the eligible
retirement plan specified by the distributee.
Section 5.11 JOINT AND SURVIVOR OPTIONS
(a) This Section shall only apply to a Participant who has a
Prior Plan Employer Contribution Account and/or a Prior
Plan Salary Redirection
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Account that was transferred as a result of a plan merger
from a plan that provided for an annuity form of
distribution.
(b) QUALIFIED JOINT AND SURVIVOR ANNUITY. Except as otherwise
provided below, unless an optional form of benefit is
selected pursuant to a qualified election within the 90 day
period ending on the date benefit payments would commence,
a Participant's vested Prior Plan Employer Contribution
Account and Prior Plan Salary Redirection Account will be
paid in the form of a qualified joint and survivor annuity,
and an unmarried Participant's benefit shall be paid in the
form of a life annuity unless otherwise elected by the
Participant. A qualified joint survivor annuity will not be
applicable and this Section shall not apply if the
following conditions are met:
(1) The Participant's vested Individual Account is payable
in full, on the death of the Participant, to the
Participant's surviving spouse, or if there is no
surviving spouse, or if the surviving spouse has
previously consented to the designation of a non-
spouse Beneficiary in the manner prescribed under this
Section, and
(2) Such Participant does not elect a payment of benefits
in the form of a life annuity, and
(3) With respect to such Participant, such Plan is not a
direct or indirect transfer of a Plan which is
described in clause (i) or (ii) of Code Section
401(a)(11)(B), or
(4) If the distribution is subject to the terms and
conditions contained in Section 5.7 concerning the
distribution of vested Individual Accounts of $3,500
or less.
(b) QUALIFIED PRERETIREMENT SURVIVOR ANNUITY. Except as
otherwise provided in this Subsection, unless an optional
form of benefit has been selected within the election
period pursuant to a qualified election, if a Participant
dies before benefits have commenced, then the Participant's
vested Prior Plan Employer Contribution Account and Prior
Plan Salary Redirection Account shall be applied toward the
purchase of an annuity for the life of the surviving
spouse. Benefits will not be required to be paid in the
form of a preretirement survivor annuity if the following
conditions are met:
(1) The Participant's vested Individual Account is payable
in full, on the death of the Participant, to the
Participant's surviving spouse, or if there is no
surviving spouse, or if the surviving spouse has
previously consented to the designation of a non-
spouse Beneficiary in the manner prescribed under this
Section, and
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(2) Such Participant does not elect a payment of benefits
in the form of a life annuity, and
(3) With respect to such Participant, such Plan is not a
direct or indirect transfer of a Plan which is
described in clause (i) or (ii) of Section
401(a)(11)(b) of the Code, and
(4) If the distribution is subject to the terms and
conditions contained in Section 5.7 concerning the
distribution of vested Individual Accounts of $3,500
or less.
(c) ELECTION PERIOD shall mean, for purposes of this Section,
the period which begins on the first day of the Plan Year
in which the Participant attains age 35 and ends on the
date of the Participant's death. If a Participant separates
from service prior to the first day of the Plan Year in
which age 35 is attained, with respect to the Individual
Account Balance as of the date of separation, the election
period shall begin on the date of separation.
(d) EARLY RETIREMENT AGE shall mean, for purposes of this
Section, the earliest date on which, under the Plan, the
Participant could elect to receive retirement benefits.
(e) QUALIFIED ELECTION shall mean, for purposes of this
Section, an election pursuant to this Subsection. A waiver
of a qualified joint and survivor annuity or a qualified
preretirement survivor annuity is permitted. The waiver
must be in writing, must be executed by the Participant,
must specify the Beneficiary and the optional form of
benefit and must be consented to by the Participant's
spouse. The spouse's consent to a waiver must be witnessed
by a Plan representative or a notary public.
Notwithstanding this consent requirement, if the
Participant establishes to the satisfaction of a Plan
representative that such written consent may not be
obtained because there is no spouse or the spouse cannot be
located, a waiver will be deemed a qualified election. Any
consent necessary under this provision will be valid only
with respect to the spouse who signs the consent, or in the
event of a deemed qualified election, the designated
spouse. Additionally a revocation of a prior waiver may be
made by a Participant without the consent of the spouse at
any time before the commencement of benefits. The number of
revocations shall not be limited.
(f) QUALIFIED JOINT AND SURVIVOR ANNUITY shall mean, for
purposes of this Section, an annuity for the life of the
Participant with a survivor annuity for the life of the
spouse which is not less than 50% and not more than 100% of
the amount of the annuity which is payable during the joint
lives of the Participant and the spouse and which is the
amount of benefit
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which can be purchased with the Participant's vested Prior Plan
Employer Contribution Account and Prior Plan Salary Redirection
Account.
(g) QUALIFIED PRERETIREMENT SURVIVOR ANNUITY shall mean, for purposes
of this Section, a survivor annuity for the life of the surviving
spouse, the actuarial equivalent of which is not less than 50% of
the vested Prior Plan Employer Contribution Account and Prior Plan
Salary Redirection Account of the Participant as of the date of
death, which may become payable as a result of the Participant's
death prior to his Normal Retirement Date.
(h) NOTICE REQUIREMENTS.
(1) In the case of a qualified joint and survivor annuity the
Committee shall provide each Participant no less than 30 days
and no more than 90 day prior to the annuity starting date
(or such other time as provided by regulations or other
pronouncements), a written explanation of (i) the terms and
conditions of a qualified joint and survivor annuity; (ii)
the Participant's right to make and the effect of an election
to waive the qualified joint and survivor annuity form of
benefit; (iii) the rights of a Participant's spouse; and (iv)
the right to make and the effect of a revocation of a
previous election to waive the qualified joint and survivor
annuity.
(2) In the case of a qualified preretirement survivor annuity the
Committee shall provide each Participant within the period
beginning on the first day of the Plan Year in which the
Participant attains age 32 and ending with the close of the
Plan Year preceding the Plan Year in which the Participant
attains age 35, a written explanation of the qualified
preretirement survivor annuity in such terms and in such
manner as would be comparable to the explanation provided for
meeting the requirement of a qualified joint and survivor
annuity. If a Participant enters the Plan after the first day
of the Plan Year in which the Participant attained age 32,
the Committee shall provide notice no later than the close of
the third Plan Year succeeding the entry of the Participant
in the Plan.
(3) Notwithstanding the other requirements of this Section, the
respective notices prescribed by this Section need not be
given to a Participant if the Plan "fully subsidizes" the
costs of a qualified joint and survivor annuity or qualified
preretirement survivor annuity, and the Participant cannot
elect another form of benefit. For purposes of this Section,
the Plan fully subsidizes the costs of a benefit if under the
Plan the failure to waive such benefit by a Participant would
not result in a decrease in any plan benefits with
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respect to such Participant and would not result in increased
contributions from the Participant.
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ARTICLE 6
WITHDRAWALS
Section 6.1 HARDSHIP WITHDRAWAL
(a) Except as otherwise provided in this Section, and upon proper
written application of a Participant made at least 30 days in
advance of the withdrawal date, in such form as the Committee
may specify, the Committee in its sole discretion may permit
the Participant to withdraw a portion or all of the balance
of his Salary Redirection Account and Prior Plan Salary
Redirection Account, provided that earnings allocated to said
account may not be withdrawn. Such withdrawal shall be based
on the Valuation Date coincident with or immediately
preceding the date of distribution and may not be less than
$500.00, or if the amount of hardship exceeds $500.00 but the
amount available for distribution is lower, the total amount
available for distribution as a hardship withdrawal.
(b) The reason for a withdrawal pursuant to this Section must be
to enable the Participant to meet unusual or special
situations in his financial affairs resulting in immediate
and heavy financial needs of the Participant. Such situations
shall be limited to:
(1) uninsured medical expenses (described in Code Section
213(d)) incurred by or needed to procure services for the
Participant, the Participant's spouse or any dependents
of the Participant (as defined in Code Section 152);
(2) purchase (excluding mortgage payments) of a principal
residence for the Participant;
(3) payment of tuition for the next 12 months of post-
secondary education for the Participant, his or her
spouse, children, or dependents;
(4) the need to prevent the eviction of the Participant from
his principal residence or foreclosure on the mortgage of
the Participant's principal residence; or
(5) any additional items which may be added to the list of
deemed immediate and heavy financial needs by the
Commissioner of Internal Revenue through the publication
of revenue rulings, notices, and other documents of
general applicability.
Any withdrawal hereunder may not exceed the amount required
to meet the immediate financial need created, and provided
further that such
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amount must not be reasonably available from other resources
of the Participant.
(c) The Committee may shorten the notice period if it finds it is
administratively feasible. In granting or refusing any
request for withdrawal or in shortening the notice period,
the Committee shall apply uniform standards consistently and
such discretionary power shall not be applied so as to
discriminate in favor of Highly Compensated Employees.
(d) The withdrawals under this Section shall in no way affect
said Participant's continued participation in this Plan
except by the reduction in account balances caused by such
withdrawal.
(e) A Participant shall present evidence to the Committee that
the requested withdrawal is not in excess of the amount
necessary to relieve the financial need of the Participant
and that the need can not be satisfied from other resources
that are reasonably available to the Participant. The
determination by the Committee that the distribution will be
necessary to satisfy an immediate and heavy financial need
will be made on the basis of all relevant facts and
circumstances. A distribution generally will be treated as
necessary to satisfy a financial need if the Committee
relies, without actual knowledge to the contrary, on the
Participant's representation that the need cannot be
relieved:
1. through reimbursement of compensation by insurance or
otherwise;
2. by reasonable liquidation of the Participant's assets, to
the extent such liquidation would not itself cause an
immediate and heavy financial need;
3. by cessation of Salary Redirection under the Plan; or
4. by other distributions or non-taxable loans from the plans
maintained by the Employer or by any other employer, or by
borrowing from commercial sources on reasonable commercial
terms.
For purposes of this Subsection, the Participant's resources
shall be deemed to include those of his spouse and minor children
that are reasonably available to the Participant.
Section 6.2 PRIOR PLAN EMPLOYER CONTRIBUTION ACCOUNT WITHDRAWALS
Upon proper written application in such manner and in such form
as the Committee may specify, a Participant shall be permitted to
withdraw a portion or all of the balance of his Prior Plan
Employer Contribution Account and Prior
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Plan Salary Redirection Account while employed, determined as of
the Valuation Date coincident with or immediately preceding the
date of application but only to the extent that he would have been
permitted to withdraw the funds in the account if they had not
been transferred from the prior plan which was merged into this
Plan.
Section 6.3 PARTICIPANT LOANS
No Participant loans are permitted under this Plan. However, to
the extent that a plan that is merged into this Plan has loans
outstanding, the outstanding loan balance and accrued interest may
be transferred to this Plan and segregated in the Participant's
Individual Account until repaid. The loan shall be repaid and
subject to the terms of the loan agreement, including the
provisions of the merged plan.
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ARTICLE 7
FUNDING
Section 7.1 CONTRIBUTIONS
Contributions by the Employer and by the Participants as provided
for in Article 3 shall be paid over to the Trustee. All
contributions by the Employer shall be irrevocable, except as
herein provided, and may be used only for the exclusive benefit of
the Participants, Former Participants and their Beneficiaries.
Section 7.2 TRUSTEE
The Sponsoring Employer has entered into an agreement with the
Trustee whereunder the Trustee will receive, invest and administer
trust fund contributions made under this Plan in accordance with
the Trust Agreement.
Such Trust Agreement is incorporated by reference as a part of the
Plan, and the rights of all persons hereunder are subject to the
terms of the Trust Agreement. The Trust Agreement specifically
provides, among other things, for the investment and reinvestment
of the Fund and the income thereof, the management of the Trust
Fund, the responsibilities and immunities of the Trustee, removal
of the Trustee and appointment of a successor, accounting by the
Trustee and the disbursement of the Trust Fund.
The Trustee shall, in accordance with the terms of such Trust
Agreement, accept and receive all sums of money paid to it from
time to time by the Employer, and shall hold, invest, reinvest,
manage and administer such moneys and the increment, increase,
earnings and income thereof as a trust fund for the exclusive
benefit of the Participants, Former Participants and their
Beneficiaries or the payment of reasonable expenses of
administering the Plan.
In the event that affiliated or subsidiary Employers become
signatory hereto, completely independent records, allocations, and
contributions shall be maintained for each Employer. The Trustee
may invest all funds without segregating assets between or among
signatory Employers.
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ARTICLE 8
FIDUCIARIES
Section 8.1 GENERAL
(a) Each Fiduciary who is allocated specific duties or
responsibilities under the Plan or any Fiduciary who assumes
such a position with the Plan shall discharge his duties
solely in the interest of the Participants, Former
Participants and Beneficiaries and for the exclusive purpose
of providing such benefits as stipulated herein to such
Participants, Former Participants and Beneficiaries, or
defraying reasonable expenses of administering the Plan. Each
Fiduciary, in carrying out such duties and responsibilities,
shall act with the care, skill, prudence, and diligence under
the circumstances then prevailing that a prudent man acting in
a like capacity and familiar with such matters would use in
exercising such authority or duties.
(b) A Fiduciary may serve in more than one Fiduciary capacity and
may employ one or more persons to render advice with regard to
his Fiduciary responsibilities. If the Fiduciary is serving as
such without compensation, all expenses reasonably incurred by
such Fiduciary shall be paid from the Trust Fund or by the
Employer.
(c) A Fiduciary may allocate any of his responsibilities for the
operation and administration of the Plan. In limitation of
this right, a Fiduciary may not allocate any responsibilities
as contained herein relating to the management or control of
the Trust Fund except through the employment of an investment
manager as provided in Section 8.3 of this Article and in the
Trust Agreement relating to the Fund.
Section 8.2 EMPLOYER
(a) The Sponsoring Employer established and maintains the Plan for
the benefit of its Employees and for Employees of
Participating Employers and of necessity retains control of
the operation and administration of the Plan. The Sponsoring
Employer, in accordance with specific provisions of the Plan,
has as herein indicated, delegated certain of these rights and
obligations to the Trustee, and the Committee and these
parties shall be solely responsible for these, and only these,
delegated rights and obligations.
(b) The Employer shall supply such full and timely information for
all matters relating to the Plan as (a) the Committee, (b) the
Trustee, and (c) the accountant engaged on behalf of the Plan
by the Sponsoring Employer may require for the effective
discharge of their respective duties.
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Section 8.3 TRUSTEE
The Trustee, in accordance with the Trust Agreement, shall be a
directed Trustee with respect to Trust Fund, except that the
Committee may in its discretion employ the Trustee any time and
from time to time as an investment manager (as defined in Section
3(38) of ERISA) with respect to all or a designated portion of the
assets comprising the Trust Fund. The committee or an investment
manager so appointed shall have the exclusive authority or
discretion to manage the Trust Fund.
Section 8.4 RETIREMENT COMMITTEE
(a) The Board of the Sponsoring Employer shall appoint a Committee
of one or more persons to hold office at the pleasure of the
Board, such committee to be known as the Retirement Committee
or Committee. No compensation shall be paid members of the
Committee from the Trust Fund for service on such Committee.
The Committee shall choose from among its members a chairman
and a secretary. Any action of the Committee shall be
determined by the vote of a majority of its members. Either
the chairman or the secretary may execute any certificate or
written direction on behalf of the Committee.
(b) Every decision and action of the Committee shall be valid if
concurrence is by a majority of the members then in office,
which concurrence may be had without a formal meeting.
(c) In accordance with the provisions hereof, the Committee has
been delegated certain administrative functions relating to
the Plan with all powers necessary to enable it to properly
carry out such duties. The Committee shall have no power in
any way to modify, alter, add to or subtract from, any
provisions of the Plan. The Committee shall have the power and
authority in its sole, absolute and uncontrolled discretion to
control and manage the operation and administration of the
Plan and its investment and shall have all powers necessary to
accomplish these purposes, and to make factual determinations
regarding Participants and their accounts. The responsibility
and authority of the Committee shall include, but shall not be
limited to, (i) determining all questions relating to the
eligibility of employees to participate; (ii) determining the
amount and kind of benefits payable to any Participant, spouse
or Beneficiary; (iii) establishing and reducing to writing and
distributing to any Participant or Beneficiary a claims
procedure and administering that procedure, including the
processing and determination of all appeals thereunder and
(iv) interpreting the provisions of the Plan including the
publication of rules for the regulation of the Plan as in its
sole, absolute and uncontrolled discretion are deemed
necessary or advisable and which are not inconsistent with the
express terms hereto the Code or ERISA, as
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amended. All disbursements by the Trustee, except for the
ordinary expenses of administration of the Trust Fund or the
reimbursement of reasonable expenses at the direction of the
Sponsoring Employer, as provided herein, shall be made upon,
and in accordance with, the written directions of the
Committee. When the Committee is required in the performance
of its duties hereunder to administer or construe, or to reach
a determination, under any of the provisions of the Plan, it
shall do so on a uniform, equitable and nondiscriminatory
basis.
(d) The Committee shall establish rules and procedures to be
followed by the Participants, Former Participants and
Beneficiaries in filing applications for benefits and for
furnishing and verifying proofs necessary to establish age,
Service, and any other matters required in order to establish
their rights to benefits in accordance with the Plan.
Additionally, the Committee shall establish accounting
procedures for the purpose of making all allocations,
valuations and adjustments to Participants' accounts. Should
the Committee determine that the strict application of its
accounting procedures will not result in an equitable and
nondiscriminatory allocation among the accounts of
Participants, it may modify its procedures for the purpose of
achieving an equitable and non-discriminatory allocation in
accordance with the general concepts of the Plan, provided
however that such adjustments to achieve equity shall not
reduce the vested portion of a Participant's interest.
(e) The Committee may employ such counsel, accountants, and other
agents as it shall deem advisable. The Sponsoring Employer
shall pay, or cause to be paid from the Trust Fund, the
compensation of such counsel, accountants, and other agents
and any other expenses incurred by the Committee in the
administration of the Plan and Trust.
Section 8.5 CLAIMS PROCEDURES
The Committee has delegated to the Human Resources Department (the
"Claims Coordinator") the processing of all applications for
benefits. Upon receipt by the Claims Coordinator of such an
application, it shall determine all facts which are necessary to
establish the right of an applicant to benefits under the
provisions of the Plan and the amount thereof as herein provided.
Upon request, the Claims Coordinator will afford the applicant the
right of a hearing with respect to any finding of fact or
determination. The applicant shall be notified in writing of any
adverse decision with respect to his claim within 90 days after
its submission. The notice shall be written in a manner calculated
to be understood by the applicant and shall include the items
specified in Section 8.5(a) through (d).
(a) The specific reason or reasons for the denial;
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(b) Specific references to the pertinent Plan provisions on which
the denial is based;
(c) A description of any additional material or information
necessary for the applicant to perfect the claim and an
explanation why such material or information is necessary; and
(d) An explanation of the Plan's claim review procedures.
(e) If special circumstances require an extension of time for
processing the initial claim, a written notice of the
extension and the reason therefor shall be furnished to the
claimant before the end of the initial 90 day period. In no
event shall such extension exceed 90 days.
(f) In the event a claim for benefits is denied or if the
applicant has had no response to such claim within 90 days of
its submission (in which case the claim for benefits shall be
deemed to have been denied), the applicant or his duly
authorized representative, at the applicant's sole expense,
may appeal the denial to the Committee within 60 days of the
receipt of written notice of denial or 60 days from the date
such claim is deemed to be denied. In pursuing such appeal the
applicant or his duly authorized representative:
(1) May request in writing that the Committee review the
denial;
(2) May review pertinent documents; and
(3) May submit issues and comments in writing.
(g) The decision on review shall be made within 60 days of receipt
of the request for review, unless special circumstances
require an extension of time for processing, in which case a
decision shall be rendered as soon as possible, but not later
than 120 days after receipt of a request for review. If such
an extension of time is required, written notice of the
extension shall be furnished to the claimant before the end of
the original 60 day period. The decision on review shall be
made in writing, shall be written in a manner calculated to be
understood by the claimant, and shall include specific
references to the provisions of the Plan on which such denial
is based. If the decision on review is not furnished within
the time specified above, the claim shall be deemed denied on
review.
Section 8.6 RECORDS
All acts and determinations of the Claims Coordinator or the
Committee shall be duly recorded by the Claims Coordinator or the
secretary of the Committee thereof and all such records together
with such other documents as may be
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necessary in exercising their duties under the Plan shall be
preserved in the custody of such secretary. Such records and
documents shall at all times be open for inspection and for the
purpose of making copies by any person designated by the
Sponsoring Employer. The Committee shall provide such timely
information, resulting from the application of its
responsibilities under the Plan, as needed by the Trustee and the
accountant engaged on behalf of the Plan by the Sponsoring
Employer, for the effective discharge of their respective duties.
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ARTICLE 9
AMENDMENT AND TERMINATION OF THE PLAN
Section 9.1 AMENDMENT OF THE PLAN
The Sponsoring Employer shall have the right at any time by action
of the Board to modify, alter or amend the Plan in whole or in
part; provided, however, that the duties, powers and liability of
the Trustee hereunder shall not be increased without its written
consent; and provided, further, that the amount of benefits which,
at the time of any such modification, alteration or amendment,
shall have accrued for any Participant, Former Participant or
Beneficiary hereunder shall not be adversely affected thereby; and
provided, further, that no such amendments shall have the effect
of reverting to the Employer any part of the principal or income
of the Trust Fund. No amendment to the Plan shall decrease the
balance of a Participant's Individual Account or eliminate an
optional form of distribution.
Section 9.2 TERMINATION OF THE PLAN
The Sponsoring Employer expects to continue the Plan indefinitely,
but continuance is not assumed as a contractual obligation and the
Sponsoring Employer reserves the right at any time by action of
the Board to terminate its participation in the Plan. If the
Sponsoring Employer terminates or partially terminates its
participation in the Plan or permanently discontinues its
Contributions at any time, each Participant affected thereby shall
be then vested with the amount allocated to his Individual
Account.
In the event of termination or partial termination of the Plan by
the Sponsoring Employer, the Committee shall value the Trust Fund
as of the date of termination. That portion of the Trust Fund for
which the Plan has not been terminated shall be unaffected.
Section 9.3 RETURN OF CONTRIBUTIONS
It is intended that this Plan shall be approved and qualified
under the Code and Regulations issued thereunder with respect to
Employees' Plans and Trusts (1) so as to permit the Employers to
deduct for federal income tax purposes the amounts of
contributions to the Trust; (2) so that contributions so made and
the income of the Trust Fund will not be taxable to Participants
as income until received; (3) so that the income of the Trust Fund
shall be exempt from federal income tax. In the event the
Commissioner of Internal Revenue or his delegate rules that the
deduction for all or a part of any Employer Contribution (or
Salary Redirection) is not allowed, the Employers reserve the
right to recover that portion or all of their contributions for
which no deduction is allowed, provided such recovery is made
within one year of the disallowance.
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ARTICLE 10
MISCELLANEOUS
Section 10.1 GOVERNING LAW
The Plan shall be construed, regulated and administered according
to the laws of the Commonwealth of Kentucky, except in those areas
preempted by the laws of the United States of America.
Section 10.2 CONSTRUCTION
The headings and subheadings in the Plan have been inserted for
convenience of reference only and shall not affect the
construction of the provisions hereof. In any necessary
construction the masculine shall include the feminine and the
singular the plural, and vice versa.
Section 10.3 ADMINISTRATION EXPENSES
The expenses of administering the Trust Fund and the Plan shall be
paid from the Trust Fund, unless they are paid by the Employer.
Section 10.4 PARTICIPANT'S RIGHTS
No Participant in the Plan shall acquire any right to be retained
in the Employer's employ by virtue of the Plan, nor, upon his
dismissal, or upon his voluntary termination of employment, shall
he have any right or interest in and to the Trust Fund other than
as specifically provided herein. The Employer shall not be liable
for the payment of any benefit provided for herein; all benefits
hereunder shall be payable only from the Trust Fund.
Section 10.5 NONASSIGNABILITY
(a) The benefit or interest under the Plan and Trust of any person
shall not be assignable or alienable by that person and shall
not be subject to alienation by operation of law or legal
process. The preceding sentence shall apply to the creation,
assignment or recognition of any right to any benefit pay able
with respect to a Participant pursuant to a domestic relations
order, unless such order is determined to be a qualified
domestic relations order, as defined in Section 414(p) of the
Code. A domestic relations order entered before January 1,
1985, shall be treated as a qualified domestic relations order
if payment of benefits pursuant to the order has commenced as
of such date, and may be treated as a qualified domestic
relations order if payment of benefits is not commenced as of
such date, even though the order does not satisfy the
requirements of Section 414(p) of the Code.
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(b) This Plan specifically permits a distribution to an alternate
payee under a qualified domestic relations order at any time,
irrespective of whether the Participant has attained his
earliest retirement age (as defined under Code Section 414(p))
under the Plan. A distribution to an alternate payee prior to
the Participant's attainment of earliest retirement age is
available only if: (a) the order specifies distribution at
that time or permits an agreement between the Plan and the
alternate payee to authorize an earlier distribution; and (b)
if the present value of the alternate payee's benefits under
the Plan exceeds $3,500, and the order requires, the alternate
payee consents to any distribution occurring prior to the
Participant's attainment of earliest retirement age. Nothing
in this Section 10.5 gives a Participant a right to receive
distribution at a time otherwise not permitted under the Plan
nor does it permit the alternate payee to receive a form of
payment not permitted under the Plan.
Section 10.6 MERGER, CONSOLIDATION OR TRANSFER
In the event of the merger or consolidation of the Plan with
another plan or transfer of assets or liabilities from the Plan to
another plan, each then Participant, Former Participant or
Beneficiary shall not, as a result of such event, be entitled on
the day following such merger, consolidation or transfer under the
termination of the Plan provisions to a lesser benefit than the
benefit he was entitled to on the date prior to the merger,
consolidation or transfer if the Plan had then terminated.
Section 10.7 COUNTERPARTS
The Plan and the Trust Agreement may be executed in any number of
counterparts, each of which shall constitute but one and the same
instrument and may be sufficiently evidenced by any one
counterpart.
Section 10.8 ADMINISTRATIVE MISTAKE
If the Committee discovers that a mistake has been made in
crediting Salary Redirection Contributions or Employer
Contributions, withholding Salary Redirection Contributions from a
Participant's compensation, or crediting earnings to the account
of any Participant, the Committee shall take any administrative
action which it deems necessary or appropriate to remedy the
mistake in question, and may request the Employer to make a
special contribution to the account of the Participant where
appropriate. If the Committee discovers that a mistake has been
made in calculating the amount of any excess Salary Redirection or
other contribution under Sections 3.4, 3.5 or 4.6, or earnings on
such excess amount, which amount is required to be distributed to
a Participant, the Committee shall take such administrative action
as it deems necessary or appropriate to remedy the mistake in
question.
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ARTICLE 11
TOP HEAVY PLAN PROVISIONS
Section 11.1 GENERAL
Notwithstanding anything in the Plan to the contrary, if this Plan
when combined with all other plans required to be aggregated
pursuant to Code Section 416(g) is deemed to be a top-heavy plan
for any Plan Year, the provisions of this Article shall apply to
such Plan Year.
Section 11.2 MINIMUM CONTRIBUTION
Regardless of hours worked, each active Participant who is not a
Key Employee shall be entitled to a minimum allocation of
contributions and forfeitures equal to the lesser of (i) three
percent (3%) of the Participant's Compensation for the Plan Year;
and (ii) provided that the Plan is not part of a Required
Aggregation Group with a Defined Benefit Plan because the Plan
enables the Defined Benefit Plan to meet the requirements of Code
Section 401(a)(4) or 410, the highest percentage of Compensation
contributed on behalf of, plus forfeitures allocated to, a Key
Employee. In the case of a Participant who is also a participant
in a defined benefit plan maintained by the Employer, the minimum
accrued benefit provided in the defined benefit plan pursuant to
Code Section 416(c)(1) equal to two percent of the Participant's
average monthly compensation for the five consecutive years when
his aggregate compensation was highest multiplied by his years of
credited service up to ten years for each plan year in which the
Plan is top heavy, shall be the only minimum benefit for both that
plan and this Plan, and the minimum allocation described above
shall not apply.
Section 11.3 SUPER TOP HEAVY PLAN
The multiplier of 1.25 in Section 4.7 shall be reduced to 1.0
unless (i) all plans of the Required Aggregation Group or the
Permissive Aggregation Group, when aggregated, are 90% or less top
heavy, and (ii) the minimum accrued benefit referenced in clause
(i) of Section 11.2 is modified by substituting three percent with
four percent. In the case of each Participant who is also a
participant in a defined benefit plan maintained by the Employer,
the minimum accrued benefit provided in the defined benefit plan
pursuant to Code Sections 416(c)(1) and 416(h) equal to three
percent of the Participant's average monthly compensation for the
five highest consecutive years when his aggregate compensation was
highest multiplied by his years of credited service up to ten
years for each plan year in which the Plan is top heavy shall be
the only minimum benefit for both that plan and this Plan, and the
minimum allocation described above shall not apply.
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Section 11.4 MINIMUM VESTING
In the event that the regular vesting schedule in Article 5 is
less liberal than the vesting schedule hereinafter provided, then
such vesting schedule shall be substituted with the following to
the extent that the following schedule is more favorable:
Years of Service Vested Percentage
---------------- -----------------
Less than 2 years 0%
2 but less than 3 20%
3 but less than 4 40%
4 but less than 5 60%
5 but less than 6 80%
6 years or more 100%
Should the Plan cease to be a Top Heavy Plan, the regular vesting
schedule in Article 5 shall be put back into effect. However, the
vested percentage of any Participant cannot be decreased as a
result of the return to the prior vesting schedule and any
Participant with three or more years of Service may elect within
the later of: (1) 60 days after the Plan ceases to be a Top Heavy
Plan or (2) 60 days after the date the Participant is issued
written notification of the change in the vesting schedules, to
remain under the special vesting rules described in this Section.
Section 11.5 COMPENSATION
For purposes of this Article, compensation shall have the same
meaning as assigned to it by Code Section 415 and shall be limited
to such amount as required by Code Section 401(a)(17).
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ARTICLE 12
PROVISIONS RELATED TO EMPLOYERS INCLUDED IN THE PLAN
Section 12.1 GENERAL. Any Employer that, with the Committee's consent, adopts
this Plan and becomes a party to the Trust Agreement shall be a
"Participating Employer." Participating Employers as of January 1,
1997 are listed on Appendix B to the Plan, and any Participating
Employers added in the future shall be so listed as soon as
reasonably practicable after the Committee consents to their
adoption of this Plan. Each Participating Employer shall be
subject to the terms and conditions of this Plan as in effect at
the effective date of adoption by the Participating Employer and
as subsequently amended from time to time by the Vencor, Inc. (For
purposes of this section, the "Sponsoring Employer"), subject to
such modifications as are set forth in the document evidencing the
Participating Employer's adoption of the Plan. Unless the context
of the Plan clearly indicates to the contrary, the terms "Company"
and "Employer" shall be deemed to include each Participating
Employer as relates to its adoption of the Plan. When an entity
ceases to be an "Employer" because it is no longer part of the
Company, the entity shall cease to be a Participating Employer.
Section 12.4 shall not apply to such cessation.
Section 12.2 SINGLE PLAN. This Plan shall be deemed to be a single plan of all
Employers that have adopted this Plan. Employer contributions
shall not be accounted for separately, and all Plan assets shall
be available to pay benefits to all Participants and their
Beneficiaries. Employees may be transferred among Participating
Employer or employed simultaneously by more than one Participating
Employer, and no such transfer or simultaneous employment shall
effect a termination of employment, be deemed retirement or be the
cause of a Forfeiture or a loss of years of Service under this
Plan. For purposes of determining years of Service and the payment
of benefits upon death or other termination of employment, all
Participating Employers shall be deemed one Employer. Any
Participant employed by a Participating Employer during a Plan
Year who receives any Compensation from a Participating Employer
during that Plan Year shall receive an allocation of any Employer
Contributions and Forfeitures for the Plan Year in accordance with
Article 3 based on his Compensation during that Plan Year.
Section 12.3 SPONSORING EMPLOYER AS AGENT. Each Participating Employer shall be
deemed to have designated irrevocably the Sponsoring Employer as
its sole agent (1) for all purposes under Section 8 (including
fixing the number of members of, and the appointment and removal
of, the Committee); (2) with respect to all its relations with the
Trustee (including the Trustee's appointment and removal, and
fixing the number of Trustees); and (3) for the purpose of
amending this Plan. The Committee shall make any and all rules and
regulations which it shall deem necessary or appropriate to
effectuate the purpose of this Article 12, and such rules and
regulations shall be binding upon the Sponsoring Employer, the
Participating Employers, the Participants and Beneficiaries.
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Section 12.4 WITHDRAWAL OF EMPLOYER. Any Participating Employer may withdraw
its participation in the Plan by giving written notice to the
Administrator stating that it has adopted a separate plan. The
notice shall be given at least six months prior to a designated
Valuation Date, unless the Committee shall accept a shorter period
of notification. Upon request of the withdrawing Participating
Employer, the Committee may, but shall not be obligated to,
instruct the Trustee to transfer the withdrawing Participating
Employer's interest in the Fund to the Participating Employer's
separate plan in accordance with the following rules: Promptly
after the Valuation Date as of which the transfer is to occur, the
Committee, shall establish the withdrawing Participating
Employer's interest in the Trust Fund, after a reduction for fees
and other expenses related to the Participating Employer's
withdrawal. The Trustee shall then, in accordance with the
Committee's instructions, transfer the withdrawing Participating
Employer's interest in the Fund to the trustee or other funding
agent of the Participating Employer's separate plan. Neither the
Trustee nor the Committee shall be obligated to transfer or direct
the transfer of assets under this Article until they are satisfied
as to all matters pertain ing to the transfer, including, but not
limited to, the tax qualification of the plan into which the
transfer will be made. The Committee and the Trustee may rely
fully on the representations and instructions of the withdrawing
Participating Employer and shall be fully protected and discharged
with respect to any transfer made in accordance with such
representations or instructions. Any transfer of assets in
accordance with this Article shall constitute a complete discharge
of responsibility of the Sponsoring Employer, the remaining
Participating Employer, their Boards of Directors and officers,
and the Trustee without any responsibility on their part
collectively or individually to see to the application thereof.
The Committee in its sole discretion shall have the right to
transfer the withdrawing Participating Employer's interest in the
Fund to the new plan in the form of installments, in cash, or in
cash and kind and over a period of time not to exceed one year
following the designated Valuation Date as of which the transfer
is to occur. Any assets which are invested in accordance with an
investment contract or agreement which by its terms precludes the
realization upon and distribution of such assets for a stated
period of time shall continue to be held by the Trustee under the
terms and conditions of this Plan until the expiration of such
period, sub ject to the Committee's instructions. The Committee
may in its sole discretion direct the Trustee to segregate the
Accounts of all affected Participants into a separate fund to
facilitate transfer, and the Administrator may in its sole
discretion direct the Trustee to invest the separate fund only in
cash equivalent investments.
Section 12.5 TERMINATION OF PARTICIPATION. The Board of Directors of a
Participating Employer may at any time terminate this Plan with
respect to its Employees by adopting a resolution to that effect
and delivering a certified copy to the Committee. Section 9.2
shall not apply to vest the Individual Accounts of a Participating
Company's Employees upon such termination (unless the termination
results in a partial termination of the entire Plan), and the
continuation of the Plan by the Sponsoring Employer and other
Participating Employers shall not be
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affected. The termination of the Plan with respect to a
Participating Employer's Employees shall not effect a termination
with respect to an Employee of the Sponsoring Employer or another
Participating Employer if such Employee was not employed by the
terminating Participating Employer on the effective date of the
termination, even though he may have been employed by the
terminating Participating Employer at an earlier date, and shall
not entitle a Participant to a distribution until an actual
separation from service with the meaning prescribed under Code
Section 401(k)(2)(B) has occurred, unless the distribution follows
an event in Code Section 401(k)(10) and the Treasury Regulations
thereunder. Any fees and other expenses related to a Participating
Employer's termination shall be charged against the Accounts of
the affected Participants, if not paid by the terminating
Participating Employer.
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SIGNATURES
----------
IN WITNESS WHEREOF, THE SPONSORING EMPLOYER HAS CAUSED THIS PLAN TO BE
EXECUTED THIS 31 DAY OF DECEMBER, 1997, BUT EFFECTIVE JANUARY 1, 1997.
VENCOR, INC.
BY /s/ Cecelia A. Hagan
---------------------------------------
TITLE: Vice-President of Human Resources
-----------------------------------
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APPENDIX "A"
PAST SERVICE PURSUANT TO SECTION 1.44(c)
(FOR COMPANIES ACQUIRED BUT PLANS NOT MERGED)
---
Location Date of Acquisition
-------- -------------------
Vencor Dallas 2/27/89
Vencor Ft. Lauderdale 12/20/89
Vencor Sycamore 10/10/86
Vencor LaGrange 9/4/85
Vencor So. Texas 9/9/88
Vencor Tampa 10/19/88
Vencor So. Louisiana 8/30/88
Nationwide Care, Inc.--Service for all periods from date of hire with this
company Any company for which past service was granted for purposes of the
Hillhaven Retirement or Deferred Savings Plan, as determined by that plan as in
effect prior to January 1, 1997
* * * * * *
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APPENDIX "B"
PARTICIPATING EMPLOYERS
AS OF JANUARY 1, 1997
Advanced Infusion Systems, Inc.
Brim of Massachusetts, Inc.
BORA Acquisition, Inc.
Cornerstone Insurance Company
First Healthcare Corporation
First Rehab, Inc.
Hahnemann Hospital, Inc.
Healthcare Rehabilitation Inc.
Hillhaven Home Care, Inc.
Hillhaven of Central Florida, Inc.
and the partnership which it and First Healthcare own
100% Carrollwood Care Center
LV Acquisition Corp.
Meadowvale Skilled Care Center, Inc.
Medisave of Florida, Inc.
Medisave of Tennessee, Inc.
Nationwide Care, Inc.
and the partnerships which it and First Healthcare own 100% -
Hillhaven/Indiana Partnership, New Pond Village Associates, St. George
Nursing Home Limited Partnership and Stickton Healthcare Center, Ltd.
NFM, Inc.
Northwest Health Care, Inc.
Pasatiempo Development Corp.
Peach Acquisition Corp.
Twenty-Nine Hundred Corporation
VCI Specialty Services, Inc.
Vencare Hospice, Inc.
Vencare, Inc.
Vencor Home Health Services, Inc.
Vencor Hospitals of California, Inc.
Vencor Hospitals East, Inc.
Vencor Hospitals Illinois, Inc.
Vencor Hospitals South, Inc.
Vencor Investments, Inc.
Vencor Kentucky, Inc.
Vencor Properties, Inc.
and the partnership which it and VCI Specialty Services, Inc.
own 100% - Vencor Hospitals Texas, Ltd.
Vencor, Inc.
Ventech Systems, Inc.
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