EXHIBIT 4.2
AMENDMENT NO. 1
TO THE
TLC VISION (USA) CORPORATION 401(k) PLAN
AS AMENED AND RESTATED AS OF JANUARY 1, 2004
Pursuant to Section 10.01 of the TLC Vision (USA) Corporation 401(k) Plan
("Plan"), and in accordance with authority granted by its Board of Directors,
TLC Vision (USA) Corporation hereby adopts this Amendment to the Plan to reflect
certain provisions of the Economic Growth and Tax Relief Reconciliation Act of
2001 ("EGTRRA") and Revenue Ruling 2002-27. This amendment is identical to the
Amendment No. 1 executed on September 2, 2003 that was intended as good faith
compliance with the requirements of EGTRRA and, like that amendment is to be
construed in accordance with EGTRRA and guidance issued thereunder. Except as
otherwise provided, this amendment shall be effective on and after January 1,
2004. This amendment shall supersede the provisions of the Plan to the extent
those provisions are consistent with the provisions of this amendment. The Plan
was mostly recently amended and restated effective January 1, 2004.
1. PLAN LOANS FOR OWNER-EMPLOYEES AND SHAREHOLDER EMPLOYEES
Effective for plan loans made after December 31, 2001, plan provisions
prohibiting loans to any owner-employee or shareholder-employee shall cease to
apply.
2. LIMITATIONS ON CONTRIBUTIONS
(a) EFFECTIVE DATE. This section shall be effective for limitation years
beginning after December 31, 2001.
(b) MAXIMUM ANNUAL ADDITION. The annual addition that may be contributed
or allocated to a Participant's Account under the Plan for any limitation
year shall not exceed the lesser of:
(1) $40,000, as adjusted for increases in the cost-of-living under
Code Section 415(d), or
(2) 100 percent of the Participant's compensation, within the
meaning of Code Section 415(c)(3), for the limitation year.
The compensation limit referred to in (b) shall not apply to any
contribution for medical benefits after separation from service (within
the meaning of Code Sections 401(h) or 419A(f)(2)) which is otherwise
treated as an annual addition.
3. INCREASE IN COMPENSATION LIMIT
The annual compensation of each Participant taken into account in determining
allocations for any Plan Year beginning after December 31, 2001 shall not exceed
$200,000, as adjusted for cost-of-living increases in accordance with Code
Section 401(a)(17)(B). Annual compensation
means compensation during the Plan Year or such other consecutive 12-month
period over which compensation is otherwise determined under the Plan (the
determination period). The cost-of-living adjustment in effect for a calendar
year applies to annual compensation for the determination period that begins
with or within such calendar year.
4. MODIFICATION OF TOP-HEAVY RULES
(a) EFFECTIVE DATE. This section shall apply for purposes of determining
whether the Plan is a top-heavy plan under Code Section 416(g) for Plan
Years beginning after December 31, 2001, and whether the Plan satisfies
the minimum benefits requirements of Code Section 416(c) for such years.
This section amends Section 7.04 of the Plan.
(b) DETERMINATION OF TOP-HEAVY STATUS.
(1) KEY EMPLOYEE. Key employee means any employee or former employee
(including any deceased employee) who at any time during the Plan
Year that includes the determination date was an officer of the
Employer having annual compensation greater than $130,000 (as
adjusted under Code Section 416(i)(1) for Plan Years beginning after
December 31, 2002), a 5-percent owner of the Employer, or a
1-percent owner of the Employer having annual compensation of more
than $150,000. For this purpose, annual compensation means
compensation within the meaning of Code Section 415(c)(3). The
determination of who is a key employee will be made in accordance
with Code Section 416(i)(1) and the applicable regulations and other
guidance of general applicability issued thereunder.
(2) DETERMINATION OF PRESENT VALUES AND AMOUNTS. This section
4(b)(2) shall apply for purposes of determining the present values
of accrued benefits and the amounts of account balances of employees
as of the determination date.
(i) DISTRIBUTIONS DURING YEAR ENDING ON THE DETERMINATION
DATE. The present values of accrued benefits and the amounts
of account balances of an employee as of the determination
date shall be increased by the distributions made with respect
to the employee under the Plan and any plan aggregated with
the Plan under Code Section 416(g)(2) during the 1-year period
ending on the determination date. The preceding sentence also
shall apply to distributions under a terminated plan which,
had it not been terminated, would have been aggregated with
the Plan under Code Section 416(g)(2)(A)(i). In the case of a
distribution made for a reason other than separation from
service, death, or disability, this provision shall be applied
by substituting "5-year period" for "1-year period."
(ii) EMPLOYEES NOT PERFORMING SERVICES DURING YEAR ENDING ON
THE DETERMINATION DATE. The accrued benefits and accounts of
any individual who has not performed services for the Employer
during the 1-year period ending on the determination date
shall not be taken into account.
(c) MINIMUM BENEFITS. Employer matching contributions shall be taken into
account for purposes of satisfying the minimum contribution requirements
of Code Section 416(c)(2) and the Plan. The preceding sentence shall apply
with respect to matching contributions under the Plan or, if the Plan
provides that the minimum contribution requirement shall be met in another
plan, such other plan. Employer matching contributions that are used to
satisfy the minimum contribution requirements shall be treated as matching
contributions for purposes of the actual contribution percentage test and
other requirements of Code Section 401(m).
5. DIRECT ROLLOVERS OF PLAN DISTRIBUTIONS
(a) EFFECTIVE DATE. This section shall apply to distributions made after
December 31, 2001.
(b) MODIFICATION OF DEFINITION OF ELIGIBLE RETIREMENT PLAN. For purposes
of the direct rollover provisions in Section 6.02 of the Plan, an eligible
retirement plan also shall mean an annuity contract described in Code
Section 403(b) and an eligible plan under Code Section 457(b) which is
maintained by a state, political subdivision of a state, or any agency or
instrumentality of a state or political subdivision of a state and which
agrees to separately account for amounts transferred into such plan from
this Plan. The definition of eligible retirement plan also shall apply in
the case of a distribution to a surviving spouse, or to a spouse or former
spouse who is the alternate payee under a qualified domestic relation
order, as defined in Code Section 414(p).
(c) MODIFICATION OF DEFINITION OF ELIGIBLE ROLLOVER DISTRIBUTION TO
EXCLUDE HARDSHIP DISTRIBUTIONS. For purposes of the direct rollover
provisions in Section 6.02 of the Plan, any amount that is distributed on
account of hardship shall not be an eligible rollover distribution and the
distributee may not elect to have any portion of such a distribution paid
directly to an eligible retirement plan.
6. ROLLOVERS DISREGARDED IN INVOLUNTARY CASH-OUTS
For purposes of Section 6.02(e) of the Plan, but only with respect to
distributions made after December 31, 2002 to a Participant who separated from
service after December 31, 2002, the value of a Participant's nonforfeitable
Account balance shall be determined without regard to that portion of the
Account balance that is attributable to rollover contributions (and earnings
allocable thereto) within the meaning of Code Sections 402(c), 403(a)(4),
403(b)(8), 408(d)(3)(A)(ii), and 457(e)(16). If the value of such a
Participant's nonforfeitable Account balance as so determined is $5,000 or less,
the Plan shall distribute the Participant's entire nonforfeitable Account
balance immediately.
7. REPEAL OF MULTIPLE USE TEST
The multiple use test described in Treasury Regulation section 1.401(m)-2 and
Section 3.03(d) of the Plan shall not apply for Plan Years beginning after
December 31, 2001.
8. SUSPENSION PERIOD FOLLOWING HARDSHIP DISTRIBUTION
A Participant who receives a distribution of elective deferrals after December
31, 2001 on account of hardship shall be prohibited from making elective
deferrals and employee contributions under this and all other plans of the
Employer for six months after receipt of the distribution. A Participant who
receives a distribution of elective deferrals in calendar year 2001 on account
of hardship shall be prohibited from making elective deferrals and employee
contributions under this and all other plans of the Employer for the period
specified in the Plan relating to suspension of elective deferrals that were in
effect prior to this amendment.
9. DISTRIBUTION UPON SEVERANCE FROM EMPLOYMENT
With respect to distributions and severances from employment occurring after
December 31, 2002, a Participant's elective deferrals, qualified nonelective
contributions, qualified matching contributions, and earnings attributable to
these contributions, shall be distributed on account of the Participant's
severance from employment. However, such a distribution shall be subject to the
other provisions of the Plan regarding distributions, other than provisions that
require a separation from service before such amounts may be distributed.
10. INCLUSION OF "DEEMED" CAFETERIA PLAN DEFERRALS IN COMPENSATION DEFINITION.
(a) EFFECTIVE DATE. This section shall apply to plan years and limitation
years beginning on and after January 1, 1998.
(b) COMPENSATION DEFINITION. For purposes of the definition of
compensation under Sections 7.03(b), 7.05(d), and 12.07 of the Plan,
amounts under Section 125 include any amounts not available to a
participant in cash in lieu of group health coverage because the
participant is unable to certify that he or she has other health coverage.
An amount will be treated as an amount under Section 125 only if the
Employer does not request or collect information regarding the
participant's other health coverage as part of the enrollment process for
the health plan
IN WITNESS WHEREOF, TLC Vision (USA) Corporation has caused this Amendment
to be executed on January 26, 2004.
TLC VISION (USA) CORPORATION
/s/ Zindley L. Stahl By: /s/ Robert W. May
____________________________________ _________________________________
Witness Robert W. May
Its: Secretary
/s/ Zindley L. Stahl /s/ Robert W. May
____________________________________ _________________________________
Witness Robert W. May, Trustee
/s/ Zindley L. Stahl /s/ B. Charles Bono III
____________________________________ _________________________________
Witness B. Charles Bono III, Trustee
/s/ Zindley L. Stahl /s/ Stephen Tucker
____________________________________ _________________________________
Witness Stephen Tucker, Trustee