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EXHIBIT 10.29
THE MEDAPHIS EMPLOYEES' RETIREMENT SAVINGS PLAN
THIS INDENTURE made on the ____ day of ______________, 1995, by
MEDAPHIS CORPORATION, a corporation duly organized and existing under the laws
of the State of Delaware hereinafter called the "Primary Sponsor");
W I T N E S S E T H:
WHEREAS, the Primary Sponsor established by indenture dated June 30,
1991, the Medaphis Corporation Employees' Retirement Savings Plan which was last
amended and restated by indenture dated December 22, 1993 (the "Plan"); and
WHEREAS, the Primary Sponsor wishes to amend and restate the Plan to
provide participants an opportunity to invest matching contributions in common
stock of the Primary Sponsor and to make certain other changes in the provisions
of the Plan; and
WHEREAS, the Board of Directors of the Primary Sponsor has approved and
authorized the amendment and restatement of the Plan; and
WHEREAS, the Plan is intended to be a profit sharing plan within the
meaning of Treasury Regulations Section 1.401-1(b)(1)(ii) and also contains a
cash or deferred arrangement as described in Section 401(k) of the Internal
Revenue Code of 1986; and
NOW, THEREFORE, the Primary Sponsor does hereby amend and restate the
Plan, in its entirety, generally effective July 1, 1995, to read as follows:
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THE MEDAPHIS EMPLOYEES' RETIREMENT SAVINGS PLAN
SECTION 1 DEFINITIONS ........................................... -1-
SECTION 2 ELIGIBILITY ........................................... -13-
SECTION 3 CONTRIBUTIONS ......................................... -14-
SECTION 4 ALLOCATIONS ........................................... -16-
SECTION 5 INDIVIDUAL FUNDS AND INVESTMENTS OF TRUST ASSETS ...... -17-
SECTION 6 PLAN LOANS ............................................ -18-
SECTION 7 WITHDRAWALS DURING EMPLOYMENT ......................... -20-
SECTION 8 DEATH BENEFITS ........................................ -22-
SECTION 9 PAYMENT OF BENEFITS ON RETIREMENT OR DEATH ............ -23-
SECTION 10 PAYMENT OF BENEFITS ON TERMINATION OF EMPLOYMENT ...... -26-
SECTION 11 ADMINISTRATION OF THE PLAN ............................ -28-
SECTION 12 CLAIM REVIEW PROCEDURE ................................ -30-
SECTION 13 LIMITATION OF ASSIGNMENT, PAYMENTS TO LEGALLY
INCOMPETENT DISTRIBUTEE AND UNCLAIMED PAYMENTS ........ -31-
SECTION 14 PROHIBITION AGAINST DIVERSION ......................... -32-
SECTION 15 LIMITATION OF RIGHTS .................................. -33-
SECTION 16 AMENDMENT TO OR TERMINATION OF THE PLAN AND THE
TRUST ................................................. -33-
SECTION 17 ADOPTION OF PLAN BY AFFILIATES ........................ -34-
SECTION 18 QUALIFICATION AND RETURN OF CONTRIBUTIONS ............. -35-
SECTION 19 INCORPORATION OF SPECIAL LIMITATIONS .................. -35-
APPENDIX A SPECIAL NONDISCRIMINATION RULES ....................... A-1
APPENDIX B LIMITATION ON ALLOCATIONS ............................. B-1
APPENDIX C TOP-HEAVY PROVISIONS .................................. C-1
APPENDIX D SPECIAL RULES ......................................... D-1
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SECTION 1
DEFINITIONS
Wherever used herein, the masculine pronoun shall be deemed to include
the feminine, and the singular to include the plural, unless the context clearly
indicates otherwise and the following words and phrases shall, when used herein,
have the meanings set forth below:
1.1 "Account" means the account established and maintained by the Plan
Administrator to reflect the interest of a Member in the Fund. In addition to
any other accounts as the Plan Administrator may establish and maintain, the
Plan Administrator shall establish and maintain separate accounts (each of which
shall be adjusted pursuant to the Plan to reflect income, gains, losses and
other credits or charges attributable thereto) for each Member to be designated
as follows:
(a) "Employee Deferral Account" which shall reflect a Member's
interest in contributions made by a Plan Sponsor under Plan Sections
3.1 and 3.4.
(b) "Matching Account" which shall reflect a Member's interest
in matching contributions made by a Plan Sponsor under Plan Section
3.2.
(c) "Company Account" which shall reflect a Member's interest
in contributions made by a Plan Sponsor under Plan Section 3.3.
(d) "Voluntary Contribution Account" which shall reflect a
Member's interest in Voluntary Contributions made by a Member to the
Fund pursuant to Plan Section 3.5.
(e) "Rollover Account" which shall reflect a Member's interest
in Rollover Amounts.
In addition, the Plan Administrator shall allocate the interest of a Member in
any funds transferred to the Plan in a trust-to-trust transfer (other than
Rollover Amounts) or pursuant to the merger of another tax-qualified retirement
plan with the Plan among the Member's Accounts as the Plan Administrator
determines best reflects the interest of the Member.
1.2 "Accrued Benefit" means the balance of a Member's Account.
1.3 "Affiliate" means (a) any corporation which is a member of the same
controlled group of corporations (within the meaning of Code Section 414(b)) as
is a Plan Sponsor, (b) any other trade or business (whether or not incorporated)
under common control (within the meaning of Code Section 414(c)) with a Plan
Sponsor, (c) any other corporation, partnership or other organization which is a
member of an affiliated service group (within the meaning of Code Section
414(m)) with a Plan Sponsor, and (d) any other entity required to be aggregated
with a Plan Sponsor pursuant to regulations under Code Section 414(o).
1.4 "Anniversary Date" means the first day of each Plan Year.
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1.5 "Annual Compensation" means the amount paid to an Employee by a
Plan Sponsor (and Affiliates for purposes of Appendix B hereto) during a Plan
Year as compensation that would be subject to income tax withholding under Code
Section 3401(a), (but without regard to any rules that limit the remuneration
included in wages based on the nature or location of the employment or the
services performed, such as the exception for agricultural labor in Code Section
3401(a)(2)), to the extent not in excess of $150,000 (for the Plan Year
beginning in 1994), which amount shall be adjusted for changes in the cost of
living as provided in regulations issued by the Secretary of the Treasury.
Notwithstanding the above, Annual Compensation shall be determined as follows:
(a) in determining the amount of contributions under Plan
Section 3 and allocations under Plan Section 4 made by or on behalf of
an Employee and for purposes of applying the provisions of Appendix A
hereto for such Plan Years as the Secretary of the Treasury may allow,
Annual Compensation shall only include amounts received for the portion
of the Plan Year during which the Employee was a Member and shall
exclude income from sources outside the United States whether or not
excludable under Code Section 911;
(b) in determining the amount of contributions under Plan
Section 3 and allocations under Plan Section 4 made by or on behalf of
an Employee, Annual Compensation shall not include reimbursements or
other expense allowances, taxable fringe benefits, amounts realized
from the exercise of non-qualified stock options or when restricted
stock (or property) held by an employee either becomes freely
transferable or is no longer subject to a substantial risk of
forfeiture, moving expense allowances, deferred compensation (except as
provided in Subsection (d) below), and welfare benefits. Further, only
for purposes of Plan Sections 3.1, 3.2, and 3.3, Annual Compensation
shall not include any short-term disability pay and, for the period
beginning April 1, 1994 and ending September 30, 1994 only, any "on
call" income;
(c) for purposes of applying the $150,000 limit, as adjusted,
with respect to Plan Sections 3 and 4 and Appendix A, the rules
contained in Subsection (b) of the Plan Section containing the
definition of the term "Highly Compensated Employee" shall apply,
except that in applying such rules, the term "family" shall include
only the spouse of the Member and any lineal descendants of the Member
who have not attained age 19 before the close of the Plan Year; and
(d) for all purposes under the Plan except Appendix B hereto,
Annual Compensation shall include any amount contributed by a Plan
Sponsor on behalf of an Employee pursuant to a salary reduction
agreement which is not includable in the gross income of the Employee
under Section 125, 402(e)(3), or 402(h) of the Code.
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(e) in determining the amount of contributions under Plan
Sections 3.1 and 3.2 made by or on behalf of an Employee, Annual
Compensation shall include amounts accrued with respect to services
performed in the Plan Year and, but for the Employee's election to
defer such amounts (under this Plan or any other plan of deferred
compensation maintained by the Primary Sponsor or an Affiliate), would
have been received by the Employee in the Plan Year.
1.6 "Beneficiary" means the person or trust that a Member designated
most recently in writing to the Plan Administrator; provided, however, that if
the Member has failed to make a designation, no person designated is alive, no
trust has been established, or no successor Beneficiary has been designated who
is alive, the term "Beneficiary" means (a) the Member's spouse or (b) if no
spouse is alive, the Member's surviving children, or (c) if no children are
alive, the Member's parent or parents, or (d) if no parent is alive, the legal
representative of the deceased Member's estate. Notwithstanding the preceding
sentence, the spouse of a married Member shall be his Beneficiary unless that
spouse has consented in writing to the designation by the Member of some other
person or trust and the spouse's consent acknowledges the effect of the
designation and is witnessed by a notary public or a Plan representative. A
Member may change his designation at any time. However, a Member may not change
his designation without further consent of his spouse under the terms of the
preceding sentence unless the spouse's consent permits designation of another
person or trust without further spousal consent and acknowledges that the spouse
has the right to limit consent to a specific beneficiary and that the spouse
voluntarily relinquishes this right. Notwithstanding the above, the spouse's
consent shall not be required if the Member establishes to the satisfaction of
the Plan Administrator that the spouse cannot be located, if the Member has a
court order indicating that he is legally separated or has been abandoned
(within the meaning of local law) unless a "qualified domestic relations order"
(as defined in Code Section 414(p)) provides otherwise, or if there are other
circumstances as the Secretary of the Treasury prescribes. If the spouse is
legally incompetent to give consent, consent by the spouse's legal guardian
shall be deemed to be consent by the spouse.
1.7 "Board of Directors" means the Board of Directors of the Primary
Sponsor.
1.8 "Break in Service" means the failure of an Employee to perform an
Hour of Service during the twelve consecutive month period commencing on a
Severance Date.
1.9 "Code" means the Internal Revenue Code of 1986, as amended.
1.10 "Company Stock" means a share or shares of any class of stock
issued by the Primary Sponsor (or any of its Affiliates) which constitutes
employer securities within the meaning of Code Section 4978(e)(5).
1.11 "Company Stock Fund" means an Individual Fund that is primarily
invested in Company Stock.
1.12 "CompMed Employee" means an individual who was an Employee of
CompMed, Inc. immediately before January 1, 1994.
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1.13 "CompMed Plan" means the CompMed, Inc. 401(k) Savings Plan.
1.14 "Deferral Amount" means a contribution of a Plan Sponsor on behalf
of a Member pursuant to Plan Section 3.1.
1.15 "Direct Rollover" means a payment by the Plan to the Eligible
Retirement Plan specified by the Distributee."
1.16 "Disability" means a disability of a Member within the meaning of
Code Section 72(m)(7), to the extent that the Member is, or would be, entitled
to disability retirement benefits under the federal Social Security Act or to
the extent that the Member is entitled to recover benefits under any long term
disability plan or policy maintained by the Plan Sponsor. The determination of
whether or not a Disability exists shall be determined by the Plan Administrator
and shall be substantiated by competent medical evidence.
1.17 "Distributee" means 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 Code Section 414(p), are
Distributees with regard to the interest of the spouse or former spouse."
1.18 "Early Retirement Age" means age 55.
1.19 "Effective Date" means July 1, 1995.
1.20 "Elective Deferrals" means, with respect to any taxable year of
the Member, the sum of:
(a) any Deferral Amounts;
(b) any contributions made by or on behalf of a Member under
any other qualified cash or deferred arrangement as defined in Code
Section 401(k), whether or not maintained by a Plan Sponsor, to the
extent such contributions are not or would not, but for Code Section
402(g)(1) be included in the Member's gross income for the taxable
year; and
(c) any other contributions made by or on behalf of a Member
pursuant to Code Section 402(g)(3).
1.21 "Eligibility Service" means the completion by an Employee of a
twelve-consecutive-month period beginning on the date on which the Employee
first performs or performed an Hour of Service upon his employment or
reemployment or any anniversary thereof, without reaching a Severance Date;
provided, however:
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(a) if an Employee quits, retires or is discharged and then
performs an Hour of Service within twelve months of his Severance Date,
then such period of severance shall be taken into account in
calculating Eligibility Service;
(b) if an Employee quits, is discharged, or retires during an
absence from service of twelve months or less for any reason other than
quit, discharge or attainment of a Retirement Date and the Employee
then performs an Hour of Service within twelve months of the date the
Employee was first absent from service, then such period of absence
shall be taken into account in calculating Eligibility Service;
(c) in the case of an Employee who remains absent from service
beyond the first anniversary of the commencement of a period of 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 the child by
the Employee, or (4) for purposes of caring for such child for a period
immediately following its birth or placement, the period between the
first and second anniversaries of such period of absence shall not be
counted as Eligibility Service.
Eligibility Service shall not include, in the case of a rehired
Employee who did not have any vested right at his Severance Date and then incurs
five consecutive Breaks in Service, all periods which would otherwise constitute
Eligibility Service before the first of the five consecutive Breaks in Service
commenced.
1.22 "Eligible Employee" means any Employee of a Plan Sponsor other
than an Employee who is (a) covered by a collective bargaining agreement between
a union and a Plan Sponsor, provided that retirement benefits were the subject
of good faith bargaining, unless the collective bargaining agreement provides
for participation in the Plan, (b) a leased employee within the meaning of Code
Section 414(n)(2), (c) considered a "leased employee" within the meaning of Code
Section 414(n)(2) with respect to a client of a Plan Sponsor and is an active
participant in the tax-qualified retirement plan of the client during any part
of the Plan Year, (d) a participant in another tax-qualified retirement plan
maintained by the Plan Sponsor or Affiliate thereof and who is eligible to
receive benefits under such plan during any part of the Plan Year if he
otherwise satisfies the requirement to either perform a requisite number of
Hours of Service or be employed as of a particular date, or (e) deemed to be an
Employee of a Plan Sponsor pursuant to regulations under Code Section 414(o).
1.23 "Eligible Retirement Plan" means an individual retirement account
described in Code Section 408(a), an individual retirement annuity described in
Code Section 408(b), an annuity plan described in Code Section 403(a) or a
qualified trust described in Code Section 401(a) 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.
1.24 "Eligible Rollover Distribution" means 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
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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 ten
years or more; any distribution to the extent such distribution is required
under Code Section 401(a)(9); 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).
1.25 "Employee" means any person who is employed by a Plan Sponsor or
an Affiliate for purposes of the Federal Insurance Contributions Act, who is a
leased employee within the meaning of Code Section 414(n)(2) with respect to a
Plan Sponsor, or who is deemed to be an employee of a Plan Sponsor pursuant to
regulations under Code Section 414(o).
1.26 "Employment Date" means that date on which an Employee first
performs an Hour of Service with a Plan Sponsor or, in the alternative, on which
an Employee again performs an Hour of Service following any period of severance
which is not required to be taken into account in determining the Employee's
period of Service.
1.27 "Entry Date" means the first day of January, April, July, and
October. Effective October 1, 1995, "Entry Date" means the first day of each
calendar month.
1.28 "ERISA" means the Employee Retirement Income Security Act of 1974,
as amended.
1.29 "Fiduciary" means each Named Fiduciary and any other person who
exercises or has any discretionary authority or control regarding management or
administration of the Plan, any other person who renders investment advice for a
fee or has any authority or responsibility to do so with respect to any assets
of the Plan or any other person who exercises, or has any authority or control
respecting management or disposition of assets of the Plan.
1.30 "Fund" means the amount at any given time of cash and other
property held by the Trustee pursuant to the Plan.
1.31 "Gottlieb Plan" means the GFS 401(K) Savings Plan.
1.32 "Highly Compensated Employee" means an Employee who is described
in Subsection (a), unless the Plan Sponsor makes an election pursuant to
Subsection (b).
(a) (1) The Employee during the Plan Year immediately
preceding the Plan Year in question:
(A) was at any time an owner of more than
five percent (5%) of the outstanding stock of a Plan
Sponsor or Affiliate or more than five percent (5%)
of the total combined voting power of all stock of a
Plan Sponsor or Affiliate; or
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(B) received Annual Compensation in excess
of $100,000 (for the Plan Year beginning in 1995)
which amount shall be adjusted for changes in the
cost of living as provided in regulations issued by
the Secretary of the Treasury; or
(C) received Annual Compensation in excess
of $66,000 (for the Plan Year beginning in 1995)
which amount shall be adjusted for changes in the
cost of living as provided in regulations issued by
the Secretary of the Treasury, and who was in the
group consisting of the most highly compensated
twenty percent (20%) of the Employees; or
(D) was at any time an officer of the Plan
Sponsor or of any Affiliate whose Annual Compensation
was greater than fifty percent (50%) of the amount in
effect under Code Section 415(b)(1)(A) for the
calendar year in which the Plan Year ends, where the
term "officer" means an administrative executive in
regular and continual service to the Plan Sponsor or
Affiliate; provided, however, that in no event shall
the number of officers exceed the lesser of Clause
(i) or (ii) of this Subparagraph (D), where:
(i) equals fifty (50) Employees;
and
(ii) equals the greater of (I)
three (3) Employees or (II) ten percent
(10%) of the number of Employees during the
Plan Year, with any non- integer being
increased to the next integer.
If for any year no officer of the Plan Sponsor meets
the requirements of this Subparagraph (D), the
highest paid officer of the Plan Sponsor for the Plan
Year shall be considered an officer for purposes of
this Subparagraph (D).
(2) The Employee during the Plan Year in question (A)
is described in Subsection (a)(1)(A), or (B) is both (i)
described in Subsection (a)(1)(B), (a)(1)(C), or (a)(1)(D),
and (ii) one of the 100 Employees who received the most Annual
Compensation during that Plan Year.
The Plan Administrator may make an election to
substitute $66,000 (as adjusted) for $100,000 (as adjusted) in
Paragraph (2) of this Subparagraph (B) of Subsection (a)(1)
provided that at all times during the Plan Year the Plan
Sponsor and its Affiliates maintain significant business
activities and have Employees in at least two significantly
separate geographic areas and satisfy such other conditions as
the Secretary of the Treasury prescribes.
For purposes of Subparagraphs (C) and (D) of this
Subsection (a)(1), the following shall be excluded when
determining the number of Employees in the
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most highly compensated twenty percent (20%) of the Employees
and the number of officers:
(i) Employees who have not completed six (6)
months of service,
(ii) Employees who normally work less than
17 1/2 hours per week,
(iii) Employees who normally work during not
more than six (6) months during any Plan Year,
(iv) Employees who have not attained age 21,
(v) Employees who are included in a unit of
employees covered by an agreement which the Secretary
of Labor finds to be a collective bargaining
agreement between employee representatives and the
Plan Sponsor or its Affiliates, provided 90% or more
of the Employees are covered under collective
bargaining agreements and the Plan only covers
Employees who are not covered under the collective
bargaining agreements.
(b) Notwithstanding the provisions of Subsection (a), the
Primary Sponsor may elect to determine each Highly Compensated Employee
to be each Employee who during the Plan Year in question is described
in Subsection (a), pursuant to the provisions of Treas. Reg. Section
1.414(q)-1T, Q&A-14(b).
(c) For purposes of this Section, if any Employee is a member
of the family of a five percent (5%) owner as defined in Subsection
(a)(1) of this Section or of a Highly Compensated Employee whose Annual
Compensation is such that he is among the ten (10) Highly Compensated
Employees receiving the greatest amount of Annual Compensation during
the Plan Year, then (1) the Employee shall not be considered a separate
Employee, and (2) any Annual Compensation paid to the Employee, and any
applicable contribution or benefit on behalf of the Employee, shall be
treated as if it were paid to, or on behalf of, the five percent (5%)
owner or the Employee who is among the ten (10) Highly Compensated
Employees receiving the greatest amount of Annual Compensation during
the Plan Year. For purposes of this Subsection (c), the term "family"
means with respect to any Employee, the Employee's spouse and lineal
descendants or ascendants and the spouses of lineal descendants or
ascendants.
(d) For purposes of this Section, a former Employee shall be
treated as a Highly Compensated Employee if (1) the former Employee was
a Highly Compensated Employee at the time the former Employee separated
from service with the Plan Sponsor or Affiliate or (2) the former
Employee was a Highly Compensated Employee at any time after the former
Employee attained age 55.
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(e) For purposes of this Section, Employees who are
nonresident aliens and who receive no earned income from the Plan
Sponsor or an Affiliate from sources within the United States shall not
be treated as Employees.
(f) For purposes of this Section, Annual Compensation shall be
determined without regard to the $150,000 limitation, as adjusted.
1.33 "Hour of Service" means:
(a) Each hour for which an Employee is paid, or
entitled to payment, for the performance of duties for a Plan
Sponsor or any Affiliate during the applicable computation
period, and such hours shall be credited to the computation
period in which the duties are performed;
(b) Each hour for which an Employee is paid, or
entitled to payment, by a Plan Sponsor or any Affiliate on
account of a period of time during which no duties are
performed (irrespective of whether the employment relationship
has terminated) due to vacation, holiday, illness, incapacity
(including disability), layoff, jury duty, military duty or
leave of absence;
(c) Each hour for which back pay, irrespective of
mitigation of damages, is either awarded or agreed to by a
Plan Sponsor or any Affiliate, and such hours shall be
credited to the computation period or periods to which the
award or agreement for back pay pertains rather than to the
computation period in which the award, agreement or payment is
made; provided, that the crediting of Hours of Service for
back pay awarded or agreed to with respect to periods
described in Subsection (b) of this Section shall be subject
to the limitations set forth in Subsection (e);
(d) Solely for purposes of determining whether a
Break in Service has occurred, each hour during any period
that the Employee is absent from work (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 the
child by the Employee, or (4) for purposes of caring for such
child for a period immediately following its birth or
placement. The hours described in this Subsection (d) shall be
credited (A) only in the computation period in which the
absence from work begins, if the Employee would be prevented
from incurring a Break in Service in that year solely because
of that credit, or (B), in any other case, in the next
following computation period; and
(e) The Plan Administrator shall credit Hours of
Service in accordance with the provisions of Section
2530.200b-2(b) and (c) of the
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U.S. Department of Labor Regulations or such other federal
regulations as may from time to time be applicable and
determine Hours of Service from the employment records of a
Plan Sponsor or in any other manner consistent with
regulations promulgated by the Secretary of Labor, and shall
construe any ambiguities in favor of crediting Employees with
Hours of Service. Notwithstanding any other provision of this
Section, in no event shall an Employee be credited with more
than 501 Hours of Service during any single continuous period
during which he performs no duties for the Plan Sponsor or
Affiliate.
(f) In the event that a Plan Sponsor or an Affiliate
acquires substantially all of the assets of another
corporation or entity or a controlling interest of the stock
of another corporation or merges with another corporation or
entity and is the surviving entity, then service of an
Employee who was employed by the prior corporation or entity
and who is employed by the Plan Sponsor or an Affiliate at the
time of the acquisition or merger shall be counted in the
manner provided, with the consent of the Primary Sponsor, in
resolutions adopted by the Plan Sponsor authorizing the
counting of such service.
(g) Notwithstanding the foregoing, for purposes of
determining whether a Break in Service occurs and whether an
Employee satisfies his Eligibility Period of Service, Hours of
Service shall be calculated on an equivalency based on
earnings, as permitted by Section 2530.200b-3(a) and (f) of
the U.S. Department of Labor Regulations, as follows:
(1) The Employee shall be credited with
hours equal to the Employee's total earnings for the
performance of duties during the applicable
computation period divided by the Employee's lowest
hourly rate of compensation during that computation
period.
(2) 870 hours credited under Subsection (1)
above shall be treated as the equivalent of 1,000
Hours of Service. 435 hours credited under Subsection
(1) above shall be treated as the equivalent of 500
Hours of Service.
1.34 "Individual Funds" means two or more individual subfunds of the
Fund (other than the Loan Fund) as may be established by the Plan Administrator
from time to time for the investment of the Fund.
1.35 "Investment Committee" means a committee which may be established
to direct the Trustee with respect to investments of the Fund.
1.36 "Investment Manager" means a Fiduciary, other than the Trustee,
the Plan Administrator, or a Plan Sponsor, who may be appointed by the Primary
Sponsor:
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(a) who has the power to manage, acquire, or dispose of any
assets of the Fund or a portion thereof; and
(b) who (1) is registered as an investment adviser under the
Investment Advisers Act of 1940; (2) is a bank as defined in that Act;
or (3) is an insurance company qualified to perform services described
in Subsection (a) above under the laws of more than one state; and
(c) who has acknowledged in writing that he is a Fiduciary
with respect to the Plan.
1.37 "Loan Fund" means the separate subfund of the Fund for the
investment of a Member's Account in a note made by the Member evidencing a loan
to the Member from the Fund.
1.38 "Member" means any Employee or former Employee who has become a
participant in the Plan for so long as his vested Accrued Benefit has not been
fully distributed pursuant to the Plan.
1.39 "MMNE Plan" means the Medical Management of New England, Inc.
401(k) Salary Savings Retirement Plan.
1.40 "Named Fiduciary" means only the following:
(a) The Plan Administrator;
(b) The Trustee;
(c) The Board of Directors;
(d) The Investment Committee; and
(e) The Investment Manager.
1.41 "Normal Retirement Age" means age 65.
1.42 "Plan Administrator" means the organization or person designated
to administer the Plan.
1.43 "Plan Sponsor" means individually the Primary Sponsor and any
Affiliate or other entity which has adopted the Plan and Trust.
1.44 "Plan Year" means the calendar year.
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1.45 "Qualified Member" means any Member who (i) is not a Highly
Compensated Employee, (ii) was a participant in the CompMed, Inc. Profit Sharing
Plan and Trust as of December 31, 1993 and (iii) is a remote-site non-exempt
Employee.
1.46 "Records Center Plan" means the Records Center, Inc. Profit
Sharing Retirement Plan.
1.47 "Retirement Date" means the date on which the Member retires on or
after attaining Normal Retirement Age or becoming subject to a Disability.
1.48 "Rollover Amount" means any amount transferred to the Fund by a
Member, which amount qualifies as an Eligible Rollover Distribution under Code
Section 402(c)(4), 403(a)(4), or 408(d)(3)(A)(ii) and any regulations issued
thereunder.
1.49 "Service" means a period commencing on an Employee's Employment
Date and ending on his Severance Date thereafter. The following rules shall
apply:
(a) Notwithstanding the foregoing, if an Employee performs one
Hour of Service within twelve (12) months of (a) a Severance Date
described in Subsection (a) of Plan Section 1.50, or (b) the date the
Employee was first absent from service for any other reason, any period
of severance which would otherwise occur shall be ignored and be
required to be taken into account in computing the Employee's period of
Service.
(b) The period between the first anniversary and second
anniversary of an absence from service for the reasons specified in
Plan Section 1.50(b)(2) shall be neither a period of severance or a
period of Service.
(c) In the event that a Plan Sponsor or an Affiliate acquires
a substantial part of the assets of another corporation, or merges with
another corporation and is the surviving entity, then the Service
performed for such prior corporation or entity by an Employee who
becomes employed by the Plan Sponsor or an Affiliate as a result of the
acquisition or merger shall be credited as service in the manner
provided, with the consent of the Primary Sponsor, in resolutions
adopted by the Plan Sponsor.
1.50 "Severance Date" means the earlier of:
(a) the date on which an Employee quits, is discharged,
retires or dies; or
(b) (1) the first anniversary of the first date of a period in
which an Employee remains absent from service (with or without pay)
with the Plan Sponsor for any other reason, such as vacation, layoff,
or leave of absence; or (2) in the case of an Employee who remains
absent from service beyond the first anniversary of the first day of
absence by reason of the Employee's pregnancy, the birth of the
Employee's child, the placement of a child in the Employee's home or
adoption by the Employee, or the caring for the child for the period
immediately following its birth or adoption, the second anniversary of
the first day of absence from service.
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1.51 "Termination Completion Date" means the last day of the fifth
consecutive Break in Service computation period, determined under the Plan
Section which defines Break in Service, in which a Member completes a Break in
Service.
1.52 "Trust" means the trust established under an agreement between the
Primary Sponsor and the Trustee to hold the Fund or any successor agreement.
1.53 "Trustee" means the trustee under the Trust.
1.54 "Valuation Date" means the last day of March, June, September, and
December or any other date which the Plan Administrator declares to be a
Valuation Date; provided, however, that the Plan Administrator may in its sole
discretion provide for more frequent Valuation Dates with respect to the
Individual Funds.
1.55 "Voluntary Contribution" means a non-deductible contribution to
the Fund made by the Member.
1.56 "Years of Service" means, with respect to each Employee, the
number of years and fractions of a year of Service credited to that Employee.
The following rules shall apply:
(a) In the case of an Employee who incurs a Break in Service,
Years of Service completed prior to the Break in Service shall not be
considered in calculating the Employee's nonforfeitable percentage of
his Accrued Benefit under Plan Section 10.3 until the Employee has
completed a one-year period of Service after such Break in Service.
(b) In the case of an Employee who completes five consecutive
Breaks in Service, all Years of Service in Plan Years after his
Termination Completion Date shall be disregarded in determining the
vested portion of his Accrued Benefit derived from Plan Sponsor
contributions which accrued before his Termination Completion Date.
(c) In the case of an Employee who incurs a Break in Service
and at that time does not have any vested right in Plan Sponsor
contributions, any Years of Service completed by him prior to such
Break in Service shall be disregarded for purposes of determining the
vested percentage of his right to such contributions if the consecutive
period of severance equals or exceeds his prior Years of Service,
whether or not consecutive, completed before such Break in Service.
SECTION 2
ELIGIBILITY
2.1 Each individual who was a member of the Plan as of the date
immediately preceding the Effective Date shall become a Member of the Plan as of
the Effective Date.
2.2 Each Eligible Employee shall become a Member as of the Entry Date
coinciding with or next following the date he completes his Eligibility Service.
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2.3 Each former Member who is reemployed by a Plan Sponsor shall become
a Member as of the date of his reemployment as an Eligible Employee.
2.4 Each former Employee who completes his Eligibility Service but
terminates employment with a Plan Sponsor before becoming a Member shall become
a Member as of the latest of the date he (a) is reemployed, (b) would have
become a Member if he had not terminated employment, or (c) becomes an Eligible
Employee.
2.5 Solely for the purpose of contributing a Rollover Amount to the
Plan, an Eligible Employee who has not yet become a Member pursuant to any other
provision of this Section 2 shall become a Member as of the date on which the
Rollover Amount is contributed to the Plan.
2.6 Notwithstanding anything contained in this Section 2 to the
contrary, in the event that an individual becomes an Eligible Employee of a Plan
Sponsor by reason of an acquisition by the Plan Sponsor of a controlling
interest in or a substantial part of all the assets of the individual's prior
employer with a Plan Sponsor, if the Eligible Employee was covered under a plan
of the prior employer meeting the requirements of Code Section 401(a), such
Eligible Employee shall become a Member as of the date of his employment with
the Plan Sponsor as an Eligible Employee.
SECTION 3
CONTRIBUTIONS
3.1 (a) The Plan Sponsor shall make a contribution to the Fund on
behalf of each Eligible Employee who is a Member and who has elected to
defer a portion of Regular Compensation otherwise payable to him for
the Plan Year and to have such portion contributed to the Fund. The
election must be made before the Annual Compensation is payable and may
only be made pursuant to an agreement between the Member and the Plan
Sponsor which shall be in such form and subject to such rules and
limitations as the Plan Administrator may prescribe and shall specify
the percentage of Annual Compensation that the Member desires to defer
and to have contributed to the Fund. Once a Member has made an election
for a Plan Year, the Member may revoke his election at any time,
effective as of the beginning of the payroll period immediately
following the date timely notice is received by the Plan Administrator;
provided, however, the election to revoke may be effective at a later
date as specified by the Member, but in no event later than seven (7)
months after the election is received by the Plan Administrator. A
Member may modify his election by notifying the Plan Administrator in
the manner and pursuant to rules established by the Plan Administrator.
The contribution made by a Plan Sponsor on behalf of an Eligible
Employee who is a Member under this Section 3.1 shall be in an amount
equal to the amount specified in the Member's deferral election, but
not greater than sixteen percent (16%) of the Member's Annual
Compensation. Notwithstanding the foregoing, the Plan Administrator may
reduce the amount that certain Highly Compensated Employees may elect
to defer in their deferral elections to a uniform percentage less than
sixteen percent (16%) of Annual Compensation, in the event the Plan
Administrator deems such reduction necessary for the Plan to comply
with one or more of the following limitations: (a)
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Section 3.1(b) (relating to the annual limit on salary deferrals set
forth in Code Section 402(g)), (b) Section 3.1(a) and Section 4 of
Appendix A (relating to the non-discrimination testing limitations
under Code Sections 401(k)(3) or 401(m)), and (c) Appendix B (relating
to the limit on "annual additions," within the meaning of Code Section
415).
(b) Elective Deferrals shall in no event exceed $9,240 (for
1995) in any one taxable year of the Member, which amount shall be
adjusted for changes in the cost of living as provided by the Secretary
of the Treasury. In the event the amount of Elective Deferrals exceeds
$9,240 (for 1995) as adjusted, in any one taxable year then, (1) not
later than the immediately following March 1, the Member may designate
to the Plan the portion of the Member's Deferral Amount which consists
of excess Elective Deferrals, and (2) not later than the immediately
following April 15, the Plan may distribute the amount designated to it
under Paragraph (1) above, as adjusted to reflect income, gain, or loss
attributable to it through the date of the distribution, and reduced by
any "Excess Deferral Amounts," as defined in Appendix A hereto,
previously distributed or recharacterized with respect to the Member
for the Plan Year beginning with or within that taxable year. The
payment of the excess Elective Deferrals, as adjusted and reduced, from
the Plan shall be made to the Member without regard to any other
provision in the Plan. In the event that a Member's Elective Deferrals
exceed $9,240, as adjusted, in any one taxable year under the Plan and
other plans of the Plan Sponsor and its Affiliates, the Member shall be
deemed to have designated for distribution under the Plan the amount of
excess Elective Deferrals, as adjusted and reduced, by taking into
account only Elective Deferral amounts under the Plan and other plans
of the Plan Sponsor and its Affiliates.
3.2 The Plan Sponsor proposes to make contributions to the Fund with
respect to each Plan Year on behalf of each Member in an amount equal to fifty
percent (50%) of the amount deferred by the Member pursuant to Plan Section 3.1,
not in excess of six percent (6%) of the Member's Annual Compensation. The Board
of Directors may, at its discretion, increase the percentage contribution under
this Section 3.2 for all members, or for any specified unit, division,
subdivision, or location, or for any Members who participated in a specified
prior plan that was merged into the Plan.
3.3 Effective upon resolution by the Board of Directors, a Plan Sponsor
proposes to make contributions to the Fund with respect to each Plan Year in an
amount determined by the Plan Sponsor.
3.4 The Plan Sponsor proposes to make Qualified Nonelective
Contributions to the Fund with respect to the Plan Year ending December 31, 1994
in an amount determined by the Plan Sponsor.
3.5 Effective upon implementation by the Plan Administrator and subject
to such rules and limitations as the Plan Administrator may from time to time
prescribe, each Eligible Employee who is a Member may contribute as a Voluntary
Contribution to the Fund an amount of his Annual Compensation, which when added
to the amount deferred by the Member pursuant
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to Plan Section 3.1 shall not exceed sixteen percent (16%) of the Member's
Annual Compensation. Voluntary Contributions shall be made to the Fund through
regular payroll deductions or in such other manner as shall be agreed upon by
each Member and the Plan Administrator. Once implemented, the Plan Administrator
may, at any time, suspend the making of any further Voluntary Contributions.
3.6 Forfeitures under Plan Section 3.2 shall be used to reduce Plan
Sponsor contributions and not to increase benefits.
3.7 Any Eligible Employee who is a Member may, with the consent of the
Plan Administrator and subject to such rules and conditions as the Plan
Administrator may prescribe, transfer a Rollover Amount to the Fund; provided,
however, that the Plan Administrator shall not administer this provision in a
manner which is discriminatory in favor of Highly Compensated Employees.
3.8 Contributions may be made only in cash or other property which is
acceptable to the Trustee. In no event will the sum of contributions under Plan
Sections 3.1, 3.2 and 3.3 exceed the deductible limits under Code Section 404.
SECTION 4
ALLOCATIONS
4.1 (a) As soon as reasonably practicable following the date of
withholding by the Plan Sponsor, if applicable, and receipt by the
Trustee, Plan Sponsor contributions made on behalf of each Member under
Plan Sections 3.1 and 3.2 (including forfeitures during the Plan Year
used to reduce such contributions), and Voluntary Contributions and
Rollover Amounts contributed by the Member, shall be allocated to the
Employee Deferral Account, Matching Account, Voluntary Contribution
Account and Rollover Account, respectively, of the Member on behalf of
whom the contributions were made.
(b) As of the last day of each Plan Year, Plan Sponsor
contributions made under Plan Section 3.3 and forfeitures from Company
Accounts shall be allocated to the Company Account of each Eligible
Employee who is a Member who is employed by a Plan Sponsor on the last
day of the Plan Year, or whose death or Retirement Date occurred during
the Plan Year, in the proportion that the Member's Annual Compensation
bears to the Annual Compensation of all Members entitled to an
allocation under this Subsection (b) and Subsection (c) hereof.
(c) As of the last day of each Plan Year, if necessary to
satisfy with respect to the Plan Year, the minimum coverage
requirements prescribed in Code Section 410(b) or the minimum
participation requirements under Code Section 401(a)(26) and
regulations issued thereunder, Plan Sponsor contributions made under
Plan Section 3.3 shall be allocated to the Company Account of Eligible
Employees who are Members and who are not Highly Compensated Employees,
beginning with the individual receiving the least Annual Compensation
for the Plan Year who completed more than 500 Hours of Service during
that Plan Year, but who terminated employment before the last day of
the Plan
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Year, in the proportion set forth in Subsection (b), determined without
regard to the last day of the Plan Year rule in that Subsection in the
case of Plan Sponsor contributions under Plan Section 3.3.
(d) As of December 31, 1994, Plan Sponsor contributions made
under Plan Section 3.4 shall be allocated to the Employee Deferral
Account of each Qualified Member in the proportion that the Qualified
Member's Annual Compensation bears to the Annual Compensation of all
Qualified Members entitled to an allocation under this Subsection (d).
4.2 Except as otherwise provided in the Plan and the Trust, as of each
Valuation Date, the Trustee shall determine the net income or net loss of the
Fund and shall allocate such amounts to the Accounts of Members as hereinafter
set forth.
(a) The net income or net loss of the Individual Funds shall
be allocated as of each Valuation Date to the Account of each Member in
the proportion that the value of the Account invested in the Individual
Fund or Loan Fund as of the preceding Valuation Date, increased by
one-half of the total contributions allocated to that Member's Account
since the preceding Valuation Date and reduced by the full amount of
any withdrawals from that Member's Account since that Valuation Date,
bears to the total value of all Accounts invested in the Individual
Fund or Loan Fund, respectively, as of the preceding Valuation Date.
(b) Notwithstanding the foregoing, in the event Valuation
Dates are changed to a daily basis, the net income or net loss of the
Individual Funds shall be allocated as of each Valuation Date to each
Account in the proportion that the value of the Account invested in
that Individual Fund as of that Valuation Date bears to the value of
all Accounts invested in that Individual Fund as of that Valuation
Date.
SECTION 5
INDIVIDUAL FUNDS AND INVESTMENTS OF TRUST ASSETS
5.1 Until such time as the Plan Administrator may direct otherwise,
each Member may direct the Plan Administrator to invest contributions to his
Account in two or more Individual Funds as the Member shall designate by
providing notice to the Plan Administrator according to the procedures
established by the Plan Administrator for that purpose. Notwithstanding the
foregoing, Members shall not be able to direct the investment of any Account
other than their Matching Accounts into the Company Stock Fund subject to such
rules as the Plan Administrator shall develop, including the Primary Sponsor's
"stock trading policy."
(a) All investment directions shall be in multiples of 1% of
contributions being made at any time. A Member can change the
investment of contributions to his Account once each calendar quarter.
Effective October 1, 1995, a Member can change the investment of
contributions to his Account once each month. A new investment
direction shall be effective as of the first Entry Date after timely
election is received by the Plan Administrator, provided that the
election is made according to the procedures established
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by the Plan Administrator. Notwithstanding the foregoing, a new
investment election may be effective at a later date as specified by
the Member, but in no event later than seven (7) months after the
election is received by the Plan Administrator.
(b) An investment direction, once given, shall be deemed to be
a continuing direction until changed as otherwise provided herein. If
no direction is effective for the date a contribution is to be made,
all contributions which are to be made for such date shall be invested
in such Individual Fund as the Plan Administrator, the Investment
Manager, the Investment Committee, or the Trustee, as applicable, may
determine. To the extent permissible by law, no Fiduciary shall be
liable for any loss, which results from a Member's exercise or failure
to exercise his investment election.
5.2 A Member may elect, once each calendar quarter, by notice to the
Plan Administrator according to the procedures established by the Plan
Administrator for such purpose, to transfer, in multiples of 1%, his Account
between Individual Funds provided that such election is made by the deadline
established by the Plan Administrator for such transfers. Effective October 1,
1995, a Member may elect to transfer the investment of his Account once each
month, subject to the foregoing procedures. An election under this Section 5.2
shall be effective as of the first Entry Date after timely election is received
by the Plan Administrator, provided that the election is made according to the
procedures established by the Plan Administrator. Notwithstanding the foregoing,
an election under this Section 5.2 may be effective at a later date as specified
by the Member, but in no event later than seven (7) months after the election is
received by the Plan Administrator.
5.3 A Member who makes an election pursuant to Plan Section 5.1 or Plan
Section 5.2 may apply the new investment direction to his current Account, all
future contributions, or both his current Account and all future contributions.
5.4 A Loan Fund shall be established by the Trustee on behalf of each
Member for whom a loan is made pursuant to Plan Section 6. The Loan Fund shall
be credited with the amount of any loan made by the Plan to the Member and shall
be debited with all principal and interest repayments of any such loans. Under
rules established by the Plan Administrator, a Member's interest in the
Individual Funds shall be debited by the amount credited to the Member's Loan
Fund. All principal and interest repayments debited to the Loan Fund shall be
invested as contributions to the Member's Account pursuant to Plan Section 5.1.
Each Loan Fund shall be invested in a note or notes made by the Member
evidencing the promised repayment of monies loaned to the Member from the Fund.
SECTION 6
PLAN LOANS
6.1 All loans under the Plan will be subject to the requirements of
this Section and such other rules as the Plan Administrator may from time to
time prescribe, including without limitation any rules restricting the purpose
for which loans will be approved (the "Loan Procedures"). The Loan Procedures
shall be set forth in a separate written document, which shall form a part of
the Plan and is incorporated herein by reference.
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6.2 Subject to the provisions of the Plan and the Trust, each Member
who is an Employee shall have the right, subject to prior approval by the Plan
Administrator, to borrow from the Fund. In addition, each "party in interest,"
as defined in ERISA Section 3(14), who is (a) a Member but no longer an
Employee, (b) the Beneficiary of a deceased Member, or (c) an alternate payee of
a Member pursuant to the provisions of a "qualified domestic relations order,"
as defined in Code Section 414(p), shall also have the right, subject to prior
approval by the Plan Administrator, to borrow from the Fund; provided, however,
that loans to such parties in interest may not discriminate in favor of Highly
Compensated Employees.
6.3 In order to apply for a loan, a borrower must complete and submit
an application to the Plan Administrator in such form and subject to such rules
as the Plan Administrator may prescribe for this purpose.
6.4 Loans shall be available to all eligible borrowers on a reasonably
equivalent basis which shall take into account the borrower's credit worthiness,
ability to repay, and ability to provide adequate security. Loans shall not be
made available to Highly Compensated Employees, officers or shareholders of a
Plan Sponsor in an amount greater than the amount made available to other
borrowers. This provision shall be deemed to be satisfied if all borrowers have
the right to borrow the same percentage of their interest in the Member's vested
Accrued Benefit, notwithstanding that the dollar amount of such loans may differ
as a result of differing values of Members' vested Accrued Benefit.
6.5 Each loan shall bear a "reasonable rate of interest" and provide
that the loan be amortized in substantially level payments, made no less
frequently than quarterly, over a specified period of time. A "reasonable rate
of interest" shall be that rate that provides the Plan with a return
commensurate with the interest rates charged by persons in the business of
lending money for loans which would be made under similar circumstances.
6.6 Each loan shall be adequately secured, with the security for the
outstanding balance of all loans to the borrower to consist of one-half (1/2) of
the borrower's interest in the Member's vested Accrued Benefit, or such other
security as the Plan Administrator deems acceptable.
6.7 Each loan, when added to the outstanding balance of all other loans
to the borrower from all retirement plans of the Plan Sponsor and its Affiliates
which are qualified under Section 401 of the Code, shall not exceed the lesser
of:
(a) $50,000, reduced by the excess, if any, of
(1) the highest outstanding balance of loans made to
the borrower from all retirement plans qualified under Code
Section 401 of the Plan Sponsor and its Affiliates during the
one (1) year period immediately preceding the day prior to the
date on which such loan was made, over
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(2) the outstanding balance of loans made to the
borrower from all retirement plans qualified under Code
Section 401 of the Plan Sponsor and its Affiliates on the date
on which such loan was made, or
(b) one-half (1/2) of the value of the borrower's interest in
the vested Accrued Benefit attributable to the Member's Account.
For purposes of this Section, the value of the vested Accrued Benefit
attributable to a Member's Account shall be established as of the latest
preceding Valuation Date, or any later date on which an available valuation was
made, and shall be adjusted for any distributions or contributions made through
the date of the origination of the loan.
6.8 The entire unpaid principal sum and accrued interest shall, at the
option of the Plan Administrator, become due and payable if (a) a borrower fails
to make any loan payment when due, (b) a borrower ceases to be a "party in
interest", as defined in ERISA Section 3(14), (c) the vested Accrued Benefit
held as security under the Plan for the borrower will, as a result of an
impending distribution or withdrawal, be reduced to an amount less than the
amount of all unpaid principal and accrued interest then outstanding under the
loan, or (d) a borrower makes any untrue representations or warranties in
connection with the obtaining of the loan. In that event, the Plan Administrator
may take such steps as it deems necessary to preserve the assets of the Plan,
including, but not limited to, the following: (1) direct the Trustee to deduct
the unpaid principal sum, accrued interest, and any other applicable charge
under the note evidencing the loan from any benefits that may become payable out
of the Plan to the borrower, (2) direct the Plan Sponsor to deduct and transfer
to the Trustee the unpaid principal balance, accrued interest, and any other
applicable charge under the note evidencing the loan from any amounts owed by
the Plan Sponsor to the borrower, or (3) liquidate the security given by the
borrower, other than amounts attributable to a Member's Employee Deferral
Account, and deduct from the proceeds the unpaid principal balance, accrued
interest, and any other applicable charge under the note evidencing the loan. If
any part of the indebtedness under the note evidencing the loan is collected by
law or through an attorney, the borrower shall be liable for attorneys' fees in
an amount equal to ten percent of the amount then due and all costs of
collection.
6.9 Each loan shall be made only in accordance with regulations and
rulings of the Internal Revenue Service or the Department of Labor. The Plan
Administrator shall be authorized to administer the loan program of this Section
and shall act in his sole discretion to ascertain whether the requirements of
such regulations and rulings and this Section have been met.
6.10 Loans will be made last from amounts invested in the Company Stock
Fund.
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SECTION 7
WITHDRAWALS DURING EMPLOYMENT
7.1 A Member who has attained age 59 1/2 may withdraw all or any
portion of the balance in his Employee Deferral Account, his Rollover Account,
and the vested portion of his Matching Account. A Member who makes a withdrawal
under this Plan Section 7.1 will not be eligible to receive contributions
pursuant to Plan Section 3.2 or any contributions on behalf of the Member to his
Employee Deferral Account with respect to the three month period following the
date of the withdrawal. Any withdrawal under this Plan Section 7.1 shall be made
last from amounts invested in the Company Stock Fund.
7.2 A withdrawal pursuant to this Section 7.2 is designated a "Hardship
Withdrawal" and is subject to the following rules: The Trustee shall, upon the
direction of the Plan Administrator, distribute all or a portion of a Member's
Rollover Account and Employee Deferral Account consisting of Deferral Amounts
(but not earnings thereon) prior to the time such account is otherwise
distributable in accordance with the other provisions of the Plan; provided,
however, that any such distribution shall be made only if the Member is an
Employee and demonstrates that he is suffering from "hardship" as determined
herein. For purposes of this Section, a distribution will be deemed to be an
account of hardship if the distribution is on account of:
(a) medical expenses described in Section 213(d) of the Code
incurred by the Member, his spouse, or any dependents of the Member (as
defined in Section 152 of the Code) or necessary for these persons to
obtain medical care described in Section 213(d) of the Code;
(b) costs directly related to the purchase (excluding mortgage
payments) of a principal residence for the Member;
(c) payment of tuition, related educational fees, and room and
board expenses for the next 12 months of post-secondary education for
the Member, his spouse, children, or dependents;
(d) the need to prevent the eviction of the Member from his
principal residence or foreclosure on the mortgage of the Member's
principal residence; or
(e) any other contingency determined by the Internal Revenue
Service to constitute an "immediate and heavy financial need" within
the meaning of Regulations Section 1.401(k)-1(d).
7.3 In addition to the requirements set forth in Plan Section 7.2, any
distribution pursuant to Plan Section 7.2 shall not be in excess of the amount
necessary to satisfy the need determined under Section 7.2 and shall also be
subject to the requirements of Subsection (a) or (b) of this Section.
-21-
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(a) (1) the Member shall first obtain all
distributions, other than hardship distributions, and all
nontaxable loans currently available under all plans
maintained by the Plan Sponsor;
(2) the Plan Sponsor shall not permit Elective
Deferrals or after-tax employee contributions to be made to
the Plan or any other plan maintained by the Plan Sponsor, for
a period of twelve (12) months after the Member receives the
distribution pursuant to this Section; and
(3) the Plan Sponsor shall not permit Elective
Deferrals to be made to the Plan or any other plan maintained
by the Plan Sponsor for the Member's taxable year immediately
following the taxable year of the hardship distribution in
excess of the limit under Plan Section 3.1(b) for the taxable
year, less the amount of the Elective Deferrals made to the
Plan or any other plan maintained by the Plan Sponsor for the
taxable year in which the distribution under this Section
occurs.
(b) The Plan Administrator determines that it can rely on the
Member's written representation, unless the Plan Administrator
has actual knowledge to the contrary, that the need determined
under Plan Section 7.2 cannot reasonably be relieved --
(1) through reimbursement or compensation by
insurance or otherwise,
(2) by reasonable liquidation of the assets of the
Member, his spouse and minor children, to the extent
that the liquidation would not itself cause an
immediate and heavy financial need and to the extent
that the assets of the spouse and minor children are
reasonably available to the Member,
(3) by cessation of Elective Deferrals, or
(4) by other distributions or nontaxable (at the time
of the distribution) loans from plans maintained by
the Plan Sponsor or any other employer, or by
borrowing from commercial sources on reasonable
commercial terms.
Such distribution shall be made only in accordance with such rules,
policies, procedures, restrictions, and conditions as the Plan Administrator may
from time to time adopt. Any determination of the existence of hardship and the
amount to be distributed on account thereof shall be made by the Plan
Administrator (or such other person as may be required to make such decisions)
in accordance with the foregoing rules as applied in a uniform and
nondiscriminatory manner, provided that, unless the Member requests otherwise,
any such withdrawal shall include the amount necessary to pay any federal, state
or local income taxes and penalties reasonably anticipated to result from such
withdrawal. A distribution under this Section shall be made in a lump sum to the
Member, and shall be subject to the Eligible Rollover Distribution requirements
of Section 9.5.
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SECTION 8
DEATH BENEFITS
8.1 Upon the death of a Member who is an Employee at the time of his
death, his Beneficiary shall be entitled to the full value of his Accrued
Benefit.
8.2 Upon the death of a Member who is not an Employee at the time of
his death, prior to the distribution of his vested Accrued Benefit, his
Beneficiary shall be entitled to his vested Accrued Benefit.
8.3 If, subsequent to the death of a Member, the Member's Beneficiary
dies while entitled to receive benefits under the Plan, the successor
Beneficiary, if any, or the Beneficiary listed under Subsection (a), (b) or (c)
of the Plan Section containing the definition of the term "Beneficiary" shall
generally be entitled to receive benefits under the Plan. However, if the
deceased Beneficiary was the Member's spouse at the time of the Member's death,
or if no successor Beneficiary shall have been designated by the Member and be
alive and no Beneficiary listed under Subsection (a), (b) or (c) of the Plan
Section containing the definition of the term "Beneficiary" shall be alive, the
Member's unpaid vested Accrued Benefit shall be paid to the personal
representative of the deceased Beneficiary's estate.
8.4 Any benefit payable under this Section 8 shall be paid in
accordance with and subject to the provisions of Plan Section 9 or Section 10,
whichever is applicable, after receipt by the Trustee from the Plan
Administrator of due notice of the death of the Member.
SECTION 9
PAYMENT OF BENEFITS ON RETIREMENT OR DEATH
9.1 The Accrued Benefit of a Member who has attained a Retirement Date
or has attained Normal Retirement Age or died while an Employee shall be fully
vested and nonforfeitable. As of a Member's Retirement Date or death while an
Employee, he or his Beneficiary shall be entitled to his Accrued Benefit to be
paid in accordance with this Section 9. A Member may elect to delay distribution
until he reaches age 70 1/2. The Accrued Benefit of a Member which is to be paid
under this Section 9 shall be determined as of the Valuation Date coinciding
with or next following the Member's Retirement Date or death, or, if the Member
elects to delay distribution until age 70 1/2, as of the Valuation Date
coinciding with or next following the date the Member reaches age 70 1/2. Such
amount shall be decreased by the amount necessary to satisfy the unpaid
principal, accrued interest and penalties on any loan made to the Member from
the Plan (which loan shall be deemed to be satisfied as a result of such
reduction) and adjusted for a pro rata share of any income, gains, and losses
attributable thereto through the Valuation Date coinciding with or immediately
preceding the date the Accrued Benefit is paid. Payment shall be made as soon as
administratively feasible after the Valuation Date. If the amount of the payment
required to commence on a date cannot be ascertained by that date, payment shall
commence retroactively to that date and shall commence no later than sixty (60)
days after the earliest date on which the amount of payment can be ascertained.
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9.2 Payment to a Member shall be in the form of one lump sum payment in
cash, unless the Accrued Benefit of the Member exceeds $3,500, in which event
the Member or the Beneficiary by written instrument delivered to the Plan
Administrator may elect to have his or her Account distributed in one of the
forms of distribution listed below, as chosen by the Member or Beneficiary:
(a) one lump sum payment in cash;
(c) a combination of one lump sum payment in cash for a
portion of his Account designated by the Member and annual, semiannual,
quarterly, or monthly installments in cash for the remaining portion of
the Member's Account; or
(d) annual, semiannual, quarterly or monthly installments in
cash.
If the Member elects annual, semiannual, quarterly, or monthly installments for
some or all of his Account, such distributions shall be made over a period
specified by the Member not exceeding the life expectancy of the Member or the
joint life expectancies of the Member and his Beneficiary.
9.3 Notwithstanding any provision of the Plan to the contrary,
(a) if a Member's vested Accrued Benefit exceeds $3,500, it
shall not be distributed before the Member's Normal Retirement Age or
death without the consent of the Member; and
(b) the payments to be made to a Member, shall satisfy the
incidental death benefit requirements under Code Section 401(a)(9)(G)
and the regulations thereunder.
9.4 Notwithstanding any other provisions of the Plan,
(a) Prior to the death of a Member, all retirement payments
hereunder shall --
(1) be distributed to the Member not later than the
required beginning date (as defined below) or,
(2) be distributed, commencing not later than the
required beginning date (as defined below)--
(A) in accordance with regulations
prescribed by the Secretary of the Treasury, over the
life of the Member or over the lives of the Member
and his designated individual Beneficiary, if any, or
(B) in accordance with regulations
prescribed by the Secretary of the Treasury, over a
period not extending beyond the life expectancy of
the Member or the joint life and last survivor
expectancy of the Member and his designated
individual Beneficiary, if any.
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(b) (1) If --
(A) the distribution of a Member's
retirement payments have begun in accordance with
Subsection (a)(2) of this Section, and
(B) the Member dies before his entire vested
Accrued Benefit has been distributed to him,
then the remaining portion of his vested Accrued Benefit shall
be distributed at least as rapidly as under the method of
distribution being used under Subsection (a)(2) of this
Section as of the date of his death.
(2) If a Member dies before the commencement of
retirement payments hereunder, the entire interest of the
Member shall be distributed within five (5) years after his
death.
(3) If --
(A) any portion of a Member's vested Accrued
Benefit is payable to or for the benefit of the
Member's designated individual Beneficiary, if any,
(B) that portion is to be distributed, in
accordance with regulations prescribed by the
Secretary of the Treasury, over the life of the
designated individual Beneficiary or over a period
not extending beyond the life expectancy of the
designated individual Beneficiary, and
(C) the distributions begin not later than
one (1) year after the date of the Member's death or
such later date as the Secretary of the Treasury may
by regulations prescribe,
then, for purposes of Paragraph (2) of this Subsection (b),
the portion referred to in Subparagraph (A) of this Paragraph
(3) shall be treated as distributed on the date on which the
distributions to the designated individual Beneficiary begin.
(4) If the designated individual Beneficiary referred
to in Paragraph (3)(A) of this Subsection (b) is the surviving
spouse of the Member, then --
(A) the date on which the distributions are
required to begin under Paragraph (3)(C) of this
Subsection (b) shall not be earlier than the date on
which the Member would have attained age 70 1/2, and
(B) if the surviving spouse dies before the
distributions to such spouse begin, this Subsection
(b) shall be applied as if the surviving spouse were
the Member.
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(c) For purposes of this Section, the term "required beginning
date" means April 1 of the calendar year following the calendar year in
which the Member attains age 70 1/2. Notwithstanding the foregoing, in
the case of a Member who is not described in Section 1(b)(3) of
Appendix C hereto and who has attained age 70 1/2 before January 1,
1988, the term "required beginning date" means April 1 of the calendar
year following the calendar year in which the Member retires or
otherwise terminates employment.
9.5 Notwithstanding any provisions of the Plan to the contrary that
would otherwise limit a Distributee's election under this Section 9, a
Distributee may elect, at the time and in the manner prescribed by the
Administrator, to have any portion of an Eligible Rollover Distribution paid
directly to an Eligible Retirement Plan specified by the Distributee in a direct
rollover. If the Eligible Rollover Distribution is one to which Code Sections
401(a)(11) and 417 do not apply, such Eligible Rollover Distribution may
commence less than 30 days after the notice required under section
1.411(a)-11(c) of the Income Tax Regulations is give, provided that:
(1) The Plan Administrator clearly informs the
Distributee that the Distributee has a right to a period of at
least 30 days after receiving the notice to consider the
decisions of whether or not to elect a distribution (and, if
applicable, a particular distribution option), and
(2) the Distributee, after receiving the notice,
affirmatively elects a distribution.
SECTION 10
PAYMENT OF BENEFITS ON TERMINATION OF EMPLOYMENT
10.1 Transfer of a Member from one Plan Sponsor to another Plan Sponsor
or to an Affiliate shall not be deemed for any purpose under the Plan to be a
termination of employment of the Member.
10.2 In the event of the termination of employment of a Member for
reasons other than death or attainment of a Retirement Date, the Member's
Accrued Benefit shall be determined as of the Valuation Date coinciding with or
immediately preceding the Member's termination of employment, increased by any
amounts allocated to the Account of the Member since that Valuation Date,
decreased by any distributions made since that Valuation Date from the Mem-
ber's Account, decreased by the amount necessary to satisfy, as of the Member's
termination of employment, the unpaid principal, accrued interest and penalties
on any loan made to the Member from the Plan (which loan shall be deemed to be
satisfied as a result of such reduction) and adjusted for a pro rata share of
any income, gains, and losses attributable thereto through the Valuation Date
coinciding with or immediately preceding the date the Accrued Benefit is paid.
10.3 That portion of a Member's Accrued Benefit in which he is vested
shall be:
(a) his Employee Deferral Account, Voluntary Contribution
Account, and Rollover Account, which shall be fully vested and
nonforfeitable at all times; and
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(b) that portion of the value of his Matching Account and
Company Account computed according to the following vesting schedule
taking into account any Years of Service subsequent to such Valuation
Date until the date of his termination of employment:
Full Years of Percentage
Service Vested
------- ------
Less than 2 0%
2 50%
3 100%
10.4 The Member shall be entitled to payment in the form specified in
Plan Section 9.2. Payment shall be made as soon as administratively feasible
after the Valuation Date coinciding with or immediately following the Member's
termination of employment; provided, however, if the Member's vested Accrued
Benefit exceeds $3,500 it will not be distributed before the Member's Normal
Retirement Age or death without the Member's consent. A Member may, however,
elect to have payment of his Accrued Benefit delayed until he attains age 70
1/2. Unless a Member elects to delay commencement of payment of his Accrued
Benefit, in no event shall payment be made later than sixty (60) days after the
end of the Plan Year in which the Normal Retirement Age of the Member occurs.
Payment shall be subject to the minimum distribution requirements set forth in
Plan Section 9. Any distribution under this Section shall be subject to the
Eligible Rollover Distribution requirements of Section 9.5.
10.5 (a) If any portion of a Member's vested Accrued Benefit derived
from Plan Sponsor contributions is paid prior to his Termination
Completion Date, a portion of his Accrued Benefit equal to his total
non-vested Accrued Benefit derived from Plan Sponsor contributions
multiplied by a fraction, the numerator of which is the amount of the
distribution attributable to Plan Sponsor contributions and the
denominator of which is the total vested Accrued Benefit attributable
to Plan Sponsor contributions, shall be immediately forfeited. The
amount forfeited shall not exceed the Members non-vested Accrued
Benefit. Upon the termination of employment of a Member who is not
vested in any part of his Accrued Benefit, the Member shall be deemed
to have received a distribution and his Accrued Benefit shall be
immediately forfeited.
(b) If the Member is reemployed by a Plan Sponsor or an
Affiliate prior to his Termination Completion Date and (a) if the
Member's Accrued Benefit was partially vested and the Member repays to
the Fund no later than the earlier of his Termination Completion Date
or the fifth anniversary of the Member's reemployment all of that
portion of his vested Accrued Benefit which was paid to him or (b) if
the Member's Accrued Benefit was not vested upon his termination of
employment, then any portion of his Accrued Benefit which was forfeited
shall be restored effective on the Valuation Date coinciding with or
next following the repayment or the Member's reemployment,
respectively. The restoration on any Valuation Date of the forfeited
portion of the Accrued Benefit of a Member pursuant to the preceding
sentence shall be made first from forfeitures available for allocation
on that Valuation Date, to the extent available, and
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secondly from additional employer contributions. Only after
restorations have been made shall the remaining net income be available
for allocation under Plan Section 4.
(c) If a Member who is partially vested in his Accrued Benefit
does not receive, prior to his Termination Completion Date, a
distribution of any portion of his vested Accrued Benefit, then no
forfeiture of that Member's non-vested portion of his Accrued Benefit
shall occur until that Member's Termination Completion Date.
10.6 In the event that a Plan amendment directly or indirectly changes
the vesting schedule, the vesting percentage for each Member in his Accrued
Benefit accumulated to the date when the amendment is adopted shall not be
reduced as a result of the amendment. In addition, any Member with at least
three (3) Years of Service may irrevocably elect to remain under the
pre-amendment vesting schedule with respect to all of his benefits accrued both
before and after the amendment.
SECTION 11
ADMINISTRATION OF THE PLAN
11.1 Trust Agreement. The Primary Sponsor shall establish a Trust with
the Trustee designated by the Board of Directors for the management of the Fund,
which Trust shall form a part of the Plan and is incorporated herein by
reference.
11.2 Operation of the Plan Administrator. The Primary Sponsor shall
appoint a Plan Administrator. If an organization is appointed to serve as the
Plan Administrator, then the Plan Administrator may designate in writing a
person who may act on behalf of the Plan Administrator. The Primary Sponsor
shall have the right to remove the Plan Administrator at any time by notice in
writing. The Plan Administrator may resign at any time by written notice of
resignation to the Trustee and the Primary Sponsor. Upon removal or resignation,
or in the event of the dissolution of the Plan Administrator, the Primary
Sponsor shall appoint a successor.
11.3 Fiduciary Responsibility.
(a) The Plan Administrator, as a Named Fiduciary, may allocate
its fiduciary responsibilities among Fiduciaries other than the
Trustee, designated in writing by the Plan Administrator and may
designate in writing other persons (other than the Trustee) to carry
out its fiduciary responsibilities under the Plan. The Plan
Administrator may at any time and from time to time remove any such
person designated to carry out its fiduciary responsibilities under the
Plan by notice in writing to such person.
(b) The Plan Administrator and each other Fiduciary may employ
persons to perform services and to render advice with regard to any of
the Fiduciary's responsibilities under the Plan. Charges for all such
services performed and advice rendered may be directly paid by each
Plan Sponsor but until paid shall constitute a charge against the Fund.
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(c) Each Plan Sponsor shall indemnify and hold harmless each
person constituting the Plan Administrator or the Investment Committee,
if any, from and against any and all claims, losses, costs, expenses
(including, without limitation, attorney's fees and court costs),
damages, actions or causes of action arising from, on account of or in
connection with the performance by such person of his duties in such
capacity, other than such of the foregoing arising from, on account of
or in connection with the willful neglect or willful misconduct of such
person so acting.
11.4 Duties of the Plan Administrator.
(a) The Plan Administrator shall advise the Trustee with
respect to all payments under the terms of the Plan and shall direct
the Trustee in writing to make such payments from the Fund; provided,
however, in no event shall the Trustee be required to make such
payments if the Trustee has actual knowledge that such payments are
contrary to the terms of the Plan and the Trust.
(b) The Plan Administrator shall from time to time establish
rules, not contrary to the provisions of the Plan and the Trust, for
the administration of the Plan and the transaction of its business. All
elections and designations under the Plan by a Participant or
Beneficiary shall be made on forms prescribed by the Plan
Administrator. The Plan Administrator shall have discretionary
authority to construe the terms of the Plan and shall determine all
questions arising in the administration, interpretation and application
of the Plan, including, but not limited to, those concerning
eligibility for benefits and it shall not act so as to discriminate in
favor of any person. All determinations of the Plan Administrator shall
be conclusive and binding on all Employees, Members, Beneficiaries and
Fiduciaries, subject to the provisions of the Plan and the Trust and
subject to applicable law.
(c) The Plan Administrator shall furnish Members and
Beneficiaries with all disclosures now or hereafter required by ERISA
or the Code. The Plan Administrator shall file, as required, the
various reports and disclosures concerning the Plan and its operations
as required by ERISA and by the Code, and shall be solely responsible
for establishing and maintaining all records of the Plan and the Trust.
(d) The statement of specific duties for a Plan Administrator
in this Section is not in derogation of any other duties which a Plan
Administrator has under the provisions of the Plan or the Trust or
under applicable law.
11.5 Investment Manager. The Primary Sponsor may, by action in writing
certified by notice to the Trustee, appoint an Investment Manager. Any
Investment Manager may be removed in the same manner in which appointed, and in
the event of any removal, the Investment Manager shall, as soon as possible, but
in no event more than thirty (30) days after notice of removal, turn over all
assets managed by it to the Trustee or to any successor Investment Manager
appointed, and shall make a full accounting to the Primary Sponsor with respect
to all assets managed by it since its appointment as an Investment Manager.
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11.6 Investment Committee. The Primary Sponsor may, by action in
writing certified by notice to the Trustee, appoint an Investment Committee. The
Primary Sponsor shall have the right to remove any person on the Investment
Committee at any time by notice in writing to such person. A person on the
Investment Committee may resign at any time by written notice of resignation to
the Primary Sponsor. Upon such removal or resignation, or in the event of the
death of a person on the Investment Committee, the Primary Sponsor may appoint a
successor. Until a successor has been appointed, the remaining persons on the
Investment Committee may continue to act as the Investment Committee.
11.7 Action by the Primary Sponsor or a Plan Sponsor. Any action to be
taken by the Primary Sponsor or a Plan Sponsor shall be taken by resolution or
written direction duly adopted by its board of directors or appropriate
governing body, as the case may be; provided, however, that by such resolution
or written direction, the board of directors or appropriate governing body, as
the case may be, may delegate to any officer or other appropriate person of a
Plan Sponsor the authority to take any such actions as may be specified in such
resolution or written direction, other than the power to amend, modify or
terminate the Plan or the Trust or to determine the basis of any Plan Sponsor
contributions.
SECTION 12
CLAIM REVIEW PROCEDURE
12.1 If a Member or Beneficiary is denied a claim for benefits under a
Plan, the Plan Administrator shall provide to the claimant written notice of the
denial within 90 days after the Plan Administrator receives the claim, unless
special circumstances require an extension of time for processing the claim. If
such an extension of time for processing is required, written notice of the
extension shall be furnished to the claimant prior to the termination of the
initial 90-day period. In no event shall the extension exceed a period of 90
days from the end of such initial period. The extension notice shall indicate
the special circumstances requiring an extension of time and the date by which
the Plan Administrator expects to render the final decision.
12.2 If the claimant is denied a claim for benefits, the Plan
Administrator shall provide, within the time frame set forth in Plan Section
12.1, written notice of the denial which shall set forth:
(a) the specific reasons for the denial;
(b) specific references to the pertinent provisions of the
Plan on which the denial is based;
(c) a description of any additional material or information
necessary for the claimant to perfect the claim and an explanation of
why the material or information is necessary; and
(d) an explanation of the Plan's claim review procedure.
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12.3 After receiving written notice of the denial of a claim, a
claimant or his representative may:
(a) request a full and fair review of the denial by written
application to the Plan Administrator;
(b) review pertinent documents; and
(c) submit issues and comments in writing to the Plan
Administrator.
12.4 If the claimant wishes a review of the decision denying his claim
to benefits under the Plan, he must submit the written application to the Plan
Administrator within sixty (60) days after receiving written notice of the
denial.
12.5 Upon receiving the written application for review, the Plan
Administrator may schedule a hearing for purposes of reviewing the claimant's
claim, which hearing shall take place not more than thirty (30) days from the
date on which the Plan Administrator received the written application for
review.
12.6 At least ten (10) days prior to the scheduled hearing, the
claimant and his representative designated in writing by him, if any, shall
receive written notice of the date, time, and place of the scheduled hearing.
The claimant or his representative may request that the hearing be rescheduled
for his convenience on another reasonable date or at another reasonable time or
place.
12.7 All claimants requesting a review of the decision denying their
claim for benefits may employ counsel for purposes of the hearing.
12.8 No later than sixty (60) days following the receipt of the written
application for review, the Plan Administrator shall submit its decision on the
review in writing to the claimant involved and to his representative, if any;
provided, however, a decision on the written application for review may be
extended, in the event special circumstances such as the need to hold a hearing
require an extension of time, to a day no later than one hundred twenty (120)
days after the date of receipt of the written application for review. The
decision shall include specific reasons for the decision and specific references
to the pertinent provisions of the Plan on which the decision is based.
SECTION 13
LIMITATION OF ASSIGNMENT, PAYMENTS TO LEGALLY
INCOMPETENT DISTRIBUTEE AND UNCLAIMED PAYMENTS
13.1 No benefit which shall be payable under the Plan to any person
shall be subject in any manner to anticipation, alienation, sale, transfer,
assignment, pledge, encumbrance or charge, and any attempt to anticipate,
alienate, sell, transfer, assign, pledge, encumber or charge the same shall be
void; and no such benefit shall in any manner be liable for, or subject to, the
debts, contracts, liabilities, engagements or torts of any person, nor shall it
be subject to
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attachment or legal process for, or against, such person, and the same shall not
be recognized under the Plan, except to such extent as may be required by law.
Notwithstanding the above, this Section shall not apply to a "qualified domestic
relations order" (as defined in Code Section 414(p)), and benefits may be paid
pursuant to the provisions of such an order. The Plan Administrator shall
develop procedures (in accordance with applicable federal regulations) to
determine whether a domestic relations order is qualified, and, if so, the
method and the procedures for complying therewith.
13.2 If any person who shall be entitled to any benefit under the Plan
shall become bankrupt or shall attempt to anticipate, alienate, sell, transfer,
assign, pledge, encumber or charge such benefit under the Plan, then the payment
of any such benefit in the event a Member or Beneficiary is entitled to payment
shall, in the discretion of the Plan Administrator, cease and terminate and in
that event the Trustee shall hold or apply the same for the benefit of such
person, his spouse, children, other dependents or any of them in such manner and
in such proportion as the Plan Administrator shall determine.
13.3 Whenever any benefit which shall be payable under the Plan is to
be paid to or for the benefit of any person who is then a minor or determined to
be incompetent by qualified medical advice, the Plan Administrator need not
require the appointment of a guardian or custodian, but shall be authorized to
cause the same to be paid over to the person having custody of such minor or
incompetent, or to cause the same to be paid to such minor or incompetent
without the intervention of a guardian or custodian, or to cause the same to be
paid to a legal guardian or custodian of such minor or incompetent if one has
been appointed or to cause the same to be used for the benefit of such minor or
incompetent.
13.4 If the Plan Administrator cannot ascertain the whereabouts of any
Member to whom a payment is due under the Plan, the Plan administrator may
direct that the payment and all remaining payments otherwise due to the Member
be cancelled on the records of the Plan and the amount thereof applied as a
forfeiture in accordance with Plan Section 3.6, except that, in the event the
Member later notifies the Plan Administrator of his whereabouts and requests the
payments due to him under the Plan, the Plan Sponsor shall contribute to the
Plan an amount equal to the payment to be paid to him as soon as
administratively feasible.
SECTION 14
PROHIBITION AGAINST DIVERSION
At no time shall any part of the Fund be used for or diverted to
purposes other than the exclusive benefit of the Members or their Beneficiaries,
subject, however, to the payment of all taxes and administrative expenses and
subject to the provisions of the Plan with respect to returns of contributions.
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SECTION 15
LIMITATION OF RIGHTS
Membership in the Plan shall not give any Employee any right or claim
except to the extent that such right is specifically fixed under the terms of
the Plan. The adoption of the Plan and the Trust by any Plan Sponsor shall not
be construed to give any Employee a right to be continued in the employ of a
Plan Sponsor or as interfering with the right of a Plan Sponsor to terminate the
employment of any Employee at any time.
SECTION 16
AMENDMENT TO OR TERMINATION OF THE
PLAN AND THE TRUST
16.1 The Primary Sponsor reserves the right at any time to modify or
amend or terminate the Plan or the Trust in whole or in part by notice thereof
in writing delivered to the Trustee; provided, however, that the Primary Sponsor
shall have no power to modify or amend the Plan in such manner as would cause or
permit any portion of the funds held under a Plan to be used for, or diverted
to, purposes other than for the exclusive benefit of Members or their
Beneficiaries, or as would cause or permit any portion of a fund held under the
Plan to become the property of a Plan Sponsor; and provided further, that the
duties or liabilities of the Trustee shall not be increased without its written
consent; and provided further, that the Plan Administrator may amend the Loan
Procedures from time to time without the need for further consent of the Primary
Sponsor. No such modifications or amendments shall have the effect of
retroactively changing or depriving Members or Beneficiaries of rights already
accrued under the Plan. No Plan Sponsor other than the Primary Sponsor shall
have the right to so modify, amend or terminate the Plan or the Trust.
Notwithstanding the foregoing, each Plan Sponsor may terminate its own
participation in the Plan and Trust pursuant to the Plan.
16.2 Each Plan Sponsor other than the Primary Sponsor shall have the
right to terminate its participation in the Plan and Trust by resolution of its
board of directors or other appropriate governing body and notice in writing to
the Primary Sponsor and the Trustee unless such termination would result in the
disqualification of the Plan or the Trust or would adversely affect the exempt
status of the Plan or the Trust as to any other Plan Sponsor. If contributions
by or on behalf of a Plan Sponsor are completely terminated, the Plan and Trust
shall be deemed terminated as to such Plan Sponsor. Any termination by a Plan
Sponsor, shall not be a termination as to any other Plan Sponsor.
16.3 (a) If the Plan is terminated by the Primary Sponsor or if
contributions to the Trust should be permanently discontinued, it shall
terminate as to all Plan Sponsors and the Fund shall be used, subject
to the payment of expenses and taxes, for the benefit of Members and
Beneficiaries, and for no other purposes, and the Account of each
affected Member shall be fully vested and nonforfeitable,
notwithstanding the provisions of the Section of the Plan which sets
forth the vesting schedule.
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(b) In the event of the partial termination of the Plan, each
affected Member's Account shall be fully vested and nonforfeitable,
notwithstanding the provisions of the Section of the Plan which sets
forth the vesting schedule.
16.4 In the event of the termination of the Plan or the Trust with
respect to a Plan Sponsor, the Accounts of the Members with respect to the Plan
as adopted by such Plan Sponsor shall be held subject to the instructions of the
Plan Administrator; provided that the Trustee shall not be required to make any
distribution until it receives a copy of an Internal Revenue Service
determination letter to the effect that the termination does not affect the
qualified status of the Plan or the exempt status of the Trust or, in the event
that such letter is applied for and is not issued, until the Trustee is
reasonably satisfied that adequate provision has been made for the payment of
all taxes which may be due and owing by the Trust.
16.5 In the case of any merger or consolidation of the Plan with, or
any transfer of the assets or liabilities of the Plan to, any other plan
qualified under Code Section 401, the terms of the merger, consolidation or
transfer shall be such that each Member would receive (in the event of
termination of the Plan or its successor immediately thereafter) a benefit which
is no less than the benefit which the Member would have received in the event of
termination of the Plan immediately before the merger, consolidation or
transfer.
16.6 Notwithstanding any other provision of the Plan, an
amendment to the Plan --
(a) which eliminates or reduces an early retirement benefit,
if any, or which eliminates or reduces a retirement-type subsidy (as
defined in regulations issued by the Department of the Treasury), if
any, or
(b) which eliminates an optional form of benefit
shall not be effective with respect to benefits attributable to service before
the amendment is adopted. In the case of a retirement-type subsidy described in
Subsection (a) above, this Section shall be applicable only to a Member who
satisfies, either before or after the amendment, the pre-amendment conditions
for the subsidy.
SECTION 17
ADOPTION OF PLAN BY AFFILIATES
Any corporation or other business entity related to the Primary Sponsor
by function or operation and any Affiliate, if the corporation, business entity
or Affiliate is authorized to do so by written direction adopted by the Board of
Directors, may adopt the Plan and the related Trust by action of the board of
directors or other appropriate governing body of such corporation, business
entity or Affiliate. Any adoption shall be evidenced by certified copies of the
resolutions of the foregoing board of directors or governing body indicating the
adoption and by the execution of the Trust by the adopting corporation, or
business entity or Affiliate. The resolution shall state and define the
effective date of the adoption of the Plan by the Plan Sponsor and, for the
purpose of Code Section 415, the "limitation year" as to such Plan Sponsor.
Notwithstanding the foregoing, however, if the Plan and Trust as adopted by an
Affiliate
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or other corporation or business entity under the foregoing provisions shall
fail to receive the initial approval of the Internal Revenue Service as a
qualified Plan and Trust under Code Sections 401(a) and 501(a), any
contributions by the Affiliate or other corporation or business entity after
payment of all expenses will be returned to such Plan Sponsor free of any trust,
and the Plan and Trust shall terminate, as to the adopting Affiliate or other
corporation or business entity.
SECTION 18
QUALIFICATION AND RETURN OF CONTRIBUTIONS
18.1 If the Plan and the related Trust fail to receive the initial
approval of the Internal Revenue Service as a qualified plan and trust within
one (1) year after the date of denial of qualification (a) the contribution of a
Plan Sponsor after payment of all expenses will be returned to a Plan Sponsor
free of the Plan and Trust, (b) contributions made by a Member shall be returned
to the Member who made the contributions, and (c) the Plan and Trust shall
thereupon terminate.
18.2 If and to the extent permitted by the Code and other applicable
laws and regulations thereunder, upon a Plan Sponsor's request, a contribution
which was made by reason of a mistake of fact or upon the deductibility of the
contribution under Code Section 404, shall be returned to a Plan Sponsor within
one (1) year after the payment of the contribution, or the disallowance of the
deduction (to the extent disallowed), whichever is applicable.
In the event of a contribution which was made by reason of a mistake of
fact or which was conditioned upon the deductibility of the contribution, the
amount to be returned to the Plan Sponsor shall be the excess of the
contribution above the amount that would have been contributed had the mistake
of fact or the mistake in determining the deduction not occurred, less any net
loss attributable to the excess. Any net income attributable to the excess shall
not be returned to the Plan Sponsor. No return of any portion of the excess
shall be made to the Plan Sponsor if the return would cause the balance in a
Member's Account to be less than the balance would have been had the mistaken
contribution not been made.
SECTION 19
INCORPORATION OF SPECIAL LIMITATIONS
Appendices A, B, C, and D to the Plan, attached hereto, are
incorporated by reference and the provisions of the same shall apply
notwithstanding anything to the contrary contained herein.
-35-
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IN WITNESS WHEREOF, the Primary Sponsor has caused this indenture to be
executed as of the date first above written.
MEDAPHIS CORPORATION
By: /s/ Michael R. Cote
--------------------
Title:
-----------------
ATTEST:
/s/ Peggy Sherman
- --------------------------
Title:
--------------------
[CORPORATE SEAL]
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39
APPENDIX A
SPECIAL NONDISCRIMINATION RULES
SECTION 1
As used in this Appendix, the following words shall have the following
meanings:
(a) "Eligible Member" means a Member who is an Employee during
any particular Plan Year.
(b) "Highly Compensated Eligible Member" means any Eligible
Member who is a Highly Compensated Employee.
(c) "Matching Contribution" means any contribution made by a
Plan Sponsor to a Matching Account and any other contribution made to a
plan by a Plan Sponsor or an Affiliate on behalf of an Employee on
account of a contribution made by an Employee or on account of an
Elective Deferral.
(d) "Qualified Matching Contributions" means Matching
Contributions which are immediately nonforfeitable when made, and which
would be nonforfeitable, regardless of the age or service of the
Employee or whether the Employee is employed on a certain date, and
which may not be distributed, except upon one of the events described
under Section 401(k)(2)(B) of the Code and the regulations thereunder.
(e) "Qualified Nonelective Contributions" means contributions
of the Plan Sponsor or an Affiliate, other than Matching Contributions
or Elective Deferrals, which are nonforfeitable when made, and which
would be nonforfeitable regardless of the age or service of the
Employee or whether the Employee is employed on a certain date, and
which may not be distributed, except upon one of the events described
under Code Section 401(k)(2)(B) and the regulations thereunder.
SECTION 2
In addition to any other limitations set forth in the Plan, for each
Plan Year one of the following tests must be satisfied:
(a) the actual deferral percentage for the Highly Compensated
Eligible Members must not be more than the actual deferral percentage
of all other Eligible Members multiplied by 1.25; or
(b) the excess of the actual deferral percentage for the
Highly Compensated Eligible Members over that of all other Eligible
Members must not be more than two (2) percentage points, and the actual
deferral percentage for the Highly Compensated Eligible
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Members must not be more than the actual deferral percentage of all
other Eligible Members multiplied by two (2).
The "actual deferral percentage" for the Highly Compensated Eligible Members and
all other Eligible Members for a Plan Year is the average in each group of the
ratios, calculated separately for each Employee, of the Deferral Amounts
contributed by the Plan Sponsor on behalf of an Employee for the Plan Year to
the Annual Compensation of the Employee in the Plan Year. In addition, for
purposes of calculating the "actual deferral percentage" as described above,
Deferral Amounts of Employees who are not Highly Compensated Employees which are
prohibited by Code Section 401(a)(30) shall not be taken into consideration.
Except to the extent limited by Treasury Regulation section 1.401(k)-1(b)(5) and
any other applicable regulations promulgated by the Secretary of the Treasury,
all or part of the Qualified Matching Contributions and Qualified Nonelective
Contributions made pursuant to the Plan may be treated as Deferral Amounts for
purposes of determining the "actual deferral percentage."
SECTION 3
If the Deferral Amounts contributed on behalf of any Highly Compensated
Eligible Member exceeds the amount permitted under the "actual deferral
percentage" test described in Section 2 of this Appendix A for any given Plan
Year, then before the end of the Plan Year following the Plan Year for which the
Excess Deferral Amount was contributed, (a) the amount of the Excess Deferral
Amount for the Plan Year, as adjusted to reflect income, gain, or loss
attributable to it through the date the Excess Deferral Amount is distributed to
the Member and reduced by any excess Elective Deferrals as determined pursuant
to Plan Section 3.1 previously distributed to the Member for the Member's
taxable year ending with or within the Plan Year, may be distributed to the
Highly Compensated Eligible Member. The income allocable to such Excess Deferral
Amount shall be determined in a similar manner as described in Section 4.2 of
the Plan. The Excess Deferral Amount to be distributed shall be reduced by
Deferral Amounts previously distributed for the taxable year ending in the same
Plan Year, and shall also be reduced by Deferral Amounts previously distributed
for the Plan Year beginning in such taxable year. For all other purposes under
the Plan other than this Appendix A recharacterized amounts shall continue to be
treated as Deferral Amounts. In the event the multiple use of limitations
contained in Sections 2(b) and 5(b) of this Appendix, pursuant to Treasury
Regulations section 1.401(m)-2 as promulgated by the Secretary of the Treasury,
requires a corrective distribution, such distribution shall be made pursuant to
this Section 3, and not Section 6 of Appendix A.
For purposes of this Section 3, "Excess Deferral Amount" means, with respect to
a Plan Year, the excess of:
(a) the aggregate amount of Deferral Amounts contributed by a
Plan Sponsor on behalf of Highly Compensated Eligible Members for the
Plan Year, over
(b) the maximum amount of Deferral Amounts permitted under
Section 2 of this Appendix A for the Plan Year, which shall be
determined by reducing the Deferral
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Amounts contributed on behalf of Highly Compensated Eligible Members in
order of the actual deferral percentages beginning with the highest of
such percentages.
Distribution of the Excess Deferral Amounts for any Plan Year shall be made to
the Highly Compensated Eligible Members on the basis of the respective portions
of the Excess Deferral Amount attributable to each Highly Compensated Eligible
Member. As to any Highly Compensated Employee who is subject to the family
aggregation rules of subsection (b) of the Plan Section containing the
definition of the term "Highly Compensated Employee," any distribution of such
Highly Compensated Employee's allocable portion of the Excess Deferral Amount
for a Plan Year shall be allocated among the family members of such Highly
Compensated Employee who are combined to determine the actual deferral
percentage in proportion to the Deferral Amounts taken into account under this
Section 3.
SECTION 4
The Plan Administrator shall have the responsibility of monitoring the
Plan's compliance with the limitations of this Appendix A and shall have the
power to take all steps it deems necessary or appropriate to ensure compliance,
including, without limitation, restricting the amount which Highly Compensated
Eligible Members can elect to have contributed pursuant to Plan Section 3.1. Any
actions taken by the Plan Administrator pursuant to this Section 4 shall be
pursuant to non-discriminatory procedures consistently applied.
SECTION 5
In addition to any other limitations set forth in the Plan, Matching
Contributions under the Plan and the amount of nondeductible employee
contributions under the Plan, for each Plan Year must satisfy one of the
following tests:
(a) The contribution percentage for Highly Compensated
Eligible Members must not exceed 125% of the contribution percentage
for all other Eligible Members; or
(b) The contribution percentage for Highly Compensated
Eligible Members must not exceed the lesser of (1) 200% of the
contribution percentage for all other Eligible Members, and (2) the
contribution percentage for all other Eligible Members plus two (2)
percentage points.
Notwithstanding the foregoing, for purposes of this Section 5, the terms Highly
Compensated Eligible Member and Eligible Member shall not include any Member who
is not eligible to receive a Matching Contribution under the provisions of the
Plan, other than as a result of the Member failing to contribute to the Plan or
failing to have an Elective Deferral contributed to the Plan on the Member's
behalf. Notwithstanding the foregoing, if Qualified Matching Contributions are
taken into account for purposes of applying the test contained in Section 2 of
this Appendix A, they shall not be taken into account under this Section 5. In
applying the above tests, the Plan Administrator shall comply with any
regulations promulgated by the Secretary of the Treasury which prevent or
restrict the use of the test contained in Section 2(b)
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of this Appendix A and the test contained in Section 5(b) of this Appendix A.
The "contribution percentage" for Highly Compensated Eligible Members and for
all other Eligible Members for a Plan Year shall be the average of the ratios,
calculated separately for each Member, of (A) to (B), where (A) is the amount of
Matching Contributions under the Plan (excluding Qualified Matching
Contributions which are used to apply the test set forth in Section 2 of this
Appendix A or Matching Contributions which are used to satisfy the minimum
required contributions to the Accounts of Eligible Members who are not Key
Employees pursuant to Section 1 of Appendix C to the Plan) and nondeductible
employee contributions made under the Plan for the Eligible Member for the Plan
Year, and where (B) is the Annual Compensation of the Eligible Member for the
Plan Year. Except to the extent limited by Treasury Regulation Section
1.401(m)-1(b)(5) and any other applicable regulations promulgated by the
Secretary of the Treasury, a Plan Sponsor may elect to treat Deferral Amounts
and Qualified Nonelective Contributions as Matching Contributions for purpose of
determining the "contribution percentage," provided the Deferral Amounts,
excluding those treated as Matching Contributions, satisfy the test set forth in
Section 2 of Appendix A.
SECTION 6
If the Matching Contributions and nondeductible employee contributions
and, if taken into account under Section 5 of this Appendix A, the Deferral
Amounts made by or on behalf of Highly Compensated Eligible Members exceed the
amount permitted under the "contribution percentage test" for any given Plan
Year, then, before the close of the Plan Year following the Plan Year for which
the excess aggregate contributions were made, the amount of the excess aggregate
contributions attributable to the Plan for the Plan Year, as adjusted to reflect
any income, gain or loss attributable to such contributions through the date the
excess aggregate contributions are distributed or forfeited, shall be
distributed or, if the excess aggregate contributions are forfeitable,
forfeited. The income allocable to such contributions shall be determined in a
similar manner as described in Section 4.2 of the Plan. As to any Highly
Compensated Employee, any distribution or forfeiture of his allocable portion of
the excess aggregate contributions for a Plan Year shall first be attributed to
any nondeductible employee contributions made by the Member during the Plan Year
for which no corresponding Plan Sponsor contribution is made and then to any
remaining nondeductible employee contributions made by the Member during the
Plan Year and any Matching Contributions thereon. As between the Plan and any
other plan or plans maintained by the Plan Sponsor in which excess aggregate
contributions for a Plan Year are held, each such plan shall distribute or
forfeit a pro-rata share of each class of contribution based on the respective
amounts of a class of contribution made to each plan during the Plan Year. The
payment of the excess aggregate contributions shall be made without regard to
any other provision in the Plan. In the event the multiple use of limitations
contained in Sections 2(b) and 5(b) of this Appendix, pursuant to Treasury
Regulation section 1.401(m)-2 as promulgated by the Secretary of the Treasury,
requires a corrective distribution, such distribution shall be made pursuant to
Section 3 of Appendix A, and not this Section 6.
For purposes of this Section 6, with respect to any Plan Year, "excess
aggregate contributions" means the excess of:
A-4
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(a) the aggregate amount of the Matching Contributions and
nondeductible employee contributions and, if taken into account under
Section 5 of this Appendix A, the Deferral Amounts actually made on
behalf of Highly Compensated Eligible Members for the Plan Year, over
(b) the maximum amount of the contributions permitted under
the limitations of Section 5 of this Appendix A, determined by reducing
contributions made on behalf of Highly Compensated Eligible Members in
order of their contribution percentages beginning with the highest of
such percentages.
Distribution or forfeiture of nondeductible employee contributions or Matching
Contributions in the amount of the excess aggregate contributions for any Plan
Year shall be made with respect to Highly Compensated Employees on the basis of
the respective portions of the excess aggregate contributions attributable to
each Highly Compensated Employee. Forfeitures of excess aggregate contributions
may not be allocated to Members whose contributions are reduced under this
Section 6. As to any Highly Compensated Employee who is subject to the family
aggregation rules of subsection (b) of the Plan Section containing the
definition of the term "Highly Compensated Employee," any distribution or
forfeiture of such Highly Compensated Employee's allocable portion of the excess
aggregate contributions for a Plan Year shall be allocated among the family
members of such Highly Compensated Employee which are combined to determine the
contribution percentage in proportion to the contributions taken into account
under this Section 6.
The determination of the amount of excess aggregate contributions under this
Section 6 shall be made after (1) first determining the excess Elective
Deferrals under Section 3.1(b) of the Plan, and (2) then determining the Excess
Deferral Amounts under Section 3 of this Appendix A.
SECTION 7
Except to the extent limited by rules promulgated by the Secretary of
the Treasury, if a Highly Compensated Eligible Member is a participant in any
other plan of the Plan Sponsor or any Affiliate which includes Matching
Contributions, deferrals under a cash or deferred arrangement pursuant to Code
Section 401(k), or nondeductible employee contributions, any contributions made
by or on behalf of the Member to the other plan shall be allocated with the same
class of contributions under the Plan for purposes of determining the "actual
deferral percentage" and "contribution percentage" under the Plan; provided,
however, contributions that are made under an "employee stock ownership plan"
(within the meaning of Code Section 4975(e)(7)) shall not be combined with
contributions under any plan which is not an employee stock ownership plan
(within the meaning of Code Section 4975(e)(7)).
Except to the extent limited by rules promulgated by the Secretary of the
Treasury, if the Plan and any other plans which include Matching Contributions,
deferrals under a cash or deferred arrangement pursuant to Code Section 401(k),
or nondeductible employee contributions are considered as one plan for purposes
of Code Section 401(a)(4) and 410(b)(1), any contributions under the other plans
shall be allocated with the same class of contributions under the Plan for
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purposes of determining the "contribution percentage" and "actual deferral
percentage" under the Plan; provided, however, contributions that are made under
an "employee stock ownership plan" (within the meaning of Code Section
4975(e)(7)) shall not be combined with contributions under any plan which is not
an employee stock ownership plan (within the meaning of Code Section
4975(e)(7)).
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APPENDIX B
LIMITATION ON ALLOCATIONS
SECTION 1
The "annual addition" for any Member for any one limitation year may
not exceed the lesser of:
(a) $30,000 (or, if greater, one-quarter of the dollar
limitation in effect under Code Section 415(b)(1)(A)), adjusted for
changes in the cost of living as provided in regulations issued by the
Secretary of the Treasury); or
(b) 25% of the Member's Annual Compensation.
SECTION 2
For the purposes of this Appendix B, the term "annual addition" for any
Member means for any limitation year, the sum of certain Plan Sponsor and Member
contributions, forfeitures, and other amounts as determined in Code Section
415(c)(2) in effect for that limitation year.
SECTION 3
In the event that a Plan Sponsor maintains a defined benefit plan under
which a Member also participates, the sum of the defined benefit plan fraction
and the defined contribution plan fraction for any limitation year for any
Member may not exceed 1.0.
(a) The defined benefit plan fraction for any limitation year
is a fraction:
(1) the numerator of which is the projected annual
benefit of the Member under the defined benefit plan
(determined as of the close of such year); and
(2) the denominator of which is the lesser of
(A) the product of 1.25, multiplied by the
maximum annual benefit allowable under Code Section
415(b)(1)(A), or
(B) the product of
(i) 1.4, multiplied by
(ii) the maximum amount which may
be taken into account under Section
415(b)(1)(B) of the Code with respect to the
Member under the defined benefit plan for
the limitation year (determined as of the
close of the limitation year).
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(b) The defined contribution plan fraction for any limitation
year is a fraction:
(1) the numerator of which is the sum of a Member's
annual additions as of the close of the year; and
(2) the denominator of which is the sum of the lesser
of the following amounts determined for the year and for all
prior limitation years during which the Member was employed by
a Plan Sponsor:
(A) the product of 1.25, multiplied by the
dollar limitation in effect under Code Section
415(c)(1)(A) for the limitation year (determined
without regard to Section 415(c)(6) of the Code); or
(B) the product of
(i) 1.4, multiplied by
(ii) the amount which may be taken
into account under Code Section 415(c)(1)(B)
(or Code Section 415(c)(7), if applicable)
with respect to the Member for the
limitation year.
SECTION 4
For purposes of this Appendix B, the term "limitation year" shall mean
a Plan Year unless a Plan Sponsor elects, by adoption of a written resolution,
to use any other twelve-month period adopted in accordance with regulations
issued by the Secretary of the Treasury. For purposes of applying the
limitations set forth in this Appendix B, the term "Plan Sponsor" shall mean a
Plan Sponsor and any other corporations which are members of the same controlled
group of corporations (as described in Section 414(b) of the Code, as modified
by Code Section 415(h)) as is a Plan Sponsor, any other trades or businesses
(whether or not incorporated) under common control (as described in Code Section
414(c), as modified by Code Section 415(h)) with a Plan Sponsor, any other
corporations, partnerships, or other organizations which are members of an
affiliated service group (as described in Section 414(m) of the Code) with a
Plan Sponsor, and any other entity required to be aggregated with a Plan Sponsor
pursuant to regulations under Code Section 414(o).
SECTION 5
For purposes of applying the limitations of this Appendix B, all
defined contribution plans maintained or deemed to be maintained by a Plan
Sponsor shall be treated as one defined contribution plan, and all defined
benefit plans now or previously maintained or deemed to be maintained by a Plan
Sponsor shall be treated as one defined benefit plan. In the event any of the
actions to be taken pursuant to Section 6 of this Appendix or pursuant to any
language of similar import in another defined contribution plan are required to
be taken as a result of the annual additions of a Member exceeding the
limitations set forth in Section 1 of this Appendix
B-2
47
because of the Member's participation in more than one defined contribution
plan, the actions shall be taken first with regard to this Plan.
SECTION 6
In the event that as a result of either the allocation of forfeitures
to the Account of a Member or a reasonable error in estimating the Member's
Annual Compensation, the annual addition allocated to the Account of a Member
exceeds the limitations set forth in Section 1 of this Appendix B or in the
event that the aggregate contributions made on behalf of a Member under both a
defined benefit plan and a defined contribution plan, subject to the reduction
of allocations in other defined contribution plans required by Section 5 of this
Appendix B, cause the aggregate limitation fraction set forth in Section 3 of
this Appendix B to be exceeded, the Plan Administrator shall, in writing, direct
the Trustee to take such of the following actions as the Plan Administrator
shall deem appropriate, specifying in each case the amount or amounts of
contributions involved:
(a) A Member's annual addition shall be reduced by
distributing to the Member Voluntary Contributions made by the Member
which cause the annual addition to exceed such limitations;
(b) If further reduction is necessary, contributions made by
the Plan Sponsor on behalf of the Member pursuant to Plan Section 3.1
with respect to which no contribution is made under Plan Section 3.2
shall be reduced in the amount of the remaining excess and distributed
to the Member;
(c) If further reduction is necessary, contributions made by
the Plan Sponsor on behalf of the Member pursuant to Plan Section 3.1
and contributions of the Plan Sponsor thereon pursuant to Plan Section
3.2 shall be reduced in the amount of the remaining excess. The amount
of the reduction under Plan Section 3.1 shall be distributed to the
Member. The amount of the reduction under Plan Section 3.2 shall be
reallocated to the Matching Accounts of Members who are not affected by
the limitation in the same proportion as the contribution of the Plan
Sponsor for the year is allocated under Plan Section 4.1 to the
Accounts of such Members;
(d) If further reduction is necessary, contributions made by
the Plan Sponsor on behalf of the Member pursuant to Plan Section 3.3
shall be reduced in the amount of the remaining excess. The amount of
the reduction shall be reallocated to the Accounts of Members who are
not affected by the limitations in the same proportion as the
contribution of the Plan Sponsor for the year is allocated under Plan
Section 4.1 to the Accounts of such Members; and
(e) If further reduction is necessary, contributions made by
the Plan Sponsor on behalf of the Member pursuant to Plan Section 3.4
shall be reduced in the amount of the remaining excess. The amount of
the reduction shall be reallocated to the Accounts of Members who are
not affected by the limitations in the same proportion as the
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contribution of the Plan Sponsor for the year is allocated under Plan
Section 4.1 to the Accounts of such Members; and
(f) If further reduction is necessary, forfeitures allocated
to the Member's Account shall be reduced by the amount of the remaining
excess. The amount of the reduction shall be reallocated to the Company
Accounts of Members who are not affected by the limitations in the same
proportions as the contributions of the Plan Sponsor for the year are
allocated to the Company Accounts of such Members;
(g) If the contribution of the Plan Sponsor and forfeitures
would cause the annual addition to exceed the limitations set forth
herein with respect to all Members under the Plan, the portion of such
contribution in excess of the limitations shall be segregated in a
suspense account. While the suspense account is maintained, (1) no Plan
Sponsor contributions under the Plan shall be made which would be
precluded by this Appendix B, (2) income, gains and loses of the Fund
shall not be allocated to such suspense account and (3) amounts in the
suspense account shall be allocated in the same manner as Plan Sponsor
contributions and forfeitures under the Plan as of each Valuation Date
on which Plan Sponsor contributions may be allocated until the suspense
account is exhausted. In the event of the termination of the Plan, the
amounts in the suspense account shall be returned to the Plan Sponsor
to the extent that such amounts may not then be allocated to the
Members' Accounts.
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APPENDIX C
TOP-HEAVY PROVISIONS
SECTION 1
As used in this Appendix, the following words shall have the following
meanings:
(a) "Determination Date" means, with respect to any Plan Year,
the last day of the preceding Plan Year, or, in the case of the first
Plan Year, means the last day of the first Plan Year.
(b) "Key Employee" means an Employee or former Employee
(including a Beneficiary of a Key Employee or former Key Employee) who
at any time during the Plan Year containing the Determination Date or
any of the four (4) preceding Plan Years is:
(1) An officer described in the Subsection of the
Plan Section containing the definition of the term "Highly
Compensated Employee";
(2) One of the ten (10) Employees owning both (A)
more than one-half percent (1/2%) of the outstanding stock of
the Plan Sponsor or an Affiliate, more than one-half percent
(1/2%) of the total combined voting power of all stock of the
Plan Sponsor or an Affiliate, or more than one-half percent
(1/2%) of the capital or profits interest in the Plan Sponsor
or an Affiliate, and (B) the largest percentage ownership
interests in the Plan Sponsor or any of its Affiliates, and
whose Annual Compensation is equal to or greater than the
amount in effect under Section 1(a) of Appendix B to the Plan
for the calendar year in which the Determination Date falls;
or
(3) An owner of more than five percent (5%) of the
outstanding stock of the Plan Sponsor or an Affiliate or more
than five percent (5%) of the total combined voting power of
all stock of the Plan Sponsor or an Affiliate; or
(4) An owner of more than one percent (1%) of the
outstanding stock of the Plan Sponsor or an Affiliate or more
than one percent (1%) of the total combined voting power of
all stock of the Plan Sponsor or an Affiliate, and who in such
Plan Year had Annual Compensation from the Plan Sponsor and
all of its Affiliates of more than $150,000.
Employees other than Key Employees are sometimes referred to in this
Appendix as "non-key employees."
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50
(c) "Required Aggregation Group" means:
(1) each plan of the Plan Sponsor and its Affiliates
which qualifies under Code Section 401(a) in which a Key
Employee is a participant, and
(2) each other plan of the Plan Sponsor and its
Affiliates which qualifies under Code Section 401 (a) and
which enables any plan described in Subsection (a) of this
Section to meet the requirements of Section 401(a)(4) or 410
of the Code.
(d) (1) "Top-Heavy" means:
(A) if the Plan is not included in a
Required Aggregation Group, the Plan's condition in a
Plan Year for which, as of the Determination Date:
(i) the present value of the
cumulative Accrued Benefits under the Plan
for all Key Employees exceeds 60 percent of
the present value of the cumulative Accrued
Benefits under the Plan for all Members; and
(ii) the Plan, when included in
every potential combination, if any, with
any or all of:
(I) any Required Aggregation
Group, and
(II) any plan of the Plan
Sponsor which is not
part of any Required
Aggregation Group and
which qualifies under
Code Section 401 (a)
is part of a Top-Heavy Group (as defined in
Paragraph (2) of this Subsection); and
(B) if the Plan is included in a Required
Aggregation Group, the Plan's condition in a Plan
Year for which, as of the Determination Date:
(i) the Required Aggregation Group
is a Top-Heavy Group (as defined in
Paragraph (2) of this Subsection); and
(ii) the Required Aggregation Group,
when included in every potential
combination, if any, with any or all of the
plans of the Plan Sponsor and its Affiliates
which are not part of the
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Required Aggregation Group and which qualify
under Code Section 401(a), is part of a
Top-Heavy Group (as defined in Paragraph (2)
of this Subsection).
(C) For purposes of Subparagraphs (A)(ii)
and (B)(ii) of this Paragraph (1), any combination of
plans must satisfy the requirements of Sections
401(a)(4) and 410 of the Code.
(2) A group shall be deemed to be a Top-Heavy Group
if:
(A) the sum, as of the Determination Date,
of the present value of the cumulative accrued
benefits for all Key Employees under all plans
included in such group exceeds
(B) 60 percent of a similar sum determined
for all participants in such plans.
(3) (A) For purposes of this Section, the present
value of the accrued benefit for any participant in a
defined contribution plan as of any Determination
Date or last day of a plan year shall be the sum of:
(i) as to any defined contribution
plan other than a simplified employee
pension, the account balance as of the most
recent valuation date occurring within the
plan year ending on the Determination Date
or last day of a plan year, and
(ii) as to any simplified employee
pension, the aggregate employer
contributions, and
(iii) an adjustment for
contributions due as of the Determination
Date or last day of a plan year.
In the case of a plan that is not subject to the
minimum funding requirements of Code Section 412, the
adjustment in Clause (iii) of this Subparagraph (A)
shall be the amount of any contributions actually
made after the valuation date but on or before the
Determination Date or last day of the plan year to
the extent not included under Clause (i) or (ii) of
this Subparagraph (A); provided, however, that in the
first plan year of the plan, the adjustment in Clause
(iii) of this Subparagraph (A) shall also reflect the
amount of any contributions made thereafter that are
allocated as of a date in such first plan year. In
the case of a plan that is subject to the minimum
funding requirements, the account balance in Clause
(i) and the aggregate contributions in Clause (ii) of
this Subparagraph (A)
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52
shall include contributions that would be allocated
as of a date not later than the Determination Date or
last day of a plan year, even though those amounts
are not yet required to be contributed, and the
adjustment in Clause (iii) of this Subparagraph (A)
shall be the amount of any contribution actually made
(or due to be made) after the valuation date but
before the expiration of the extended payment period
in Code Section 412(c)(10) to the extent not included
under Clause (i) or (ii) of this Subparagraph (A).
(B) For purposes of this Subsection, the
present value of the accrued benefit for any
participant in a defined benefit plan as of any
Determination Date or last day of a plan year must be
determined as of the most recent valuation date which
is within a 12-month period ending on the
Determination Date or last day of a plan year as if
such participant terminated as of such valuation
date; provided, however, that in the first plan year
of a plan, the present value of the accrued benefit
for a current participant must be determined either
(i) as if the participant terminated service as of
the Determination Date or last day of a plan year or
(ii) as if the participant terminated service as of
such valuation date, but taking into account the
estimated accrued benefit as of the Determination
Date or last day of a plan year. For purposes of this
Subparagraph (B), the valuation date must be the same
valuation date used for computing plan costs for
minimum funding, regardless of whether a valuation is
performed that year. The actuarial assumptions
utilized in calculating the present value of the
accrued benefit for any participant in a defined
benefit plan for purposes of this Subparagraph (B)
shall be established by the Plan Administrator after
consultation with the actuary for the plan, and shall
be reasonable in the aggregate and shall comport with
the requirements set forth by the Internal Revenue
Service in Q&A T-26 and T-27 of Regulation Section
1.416-1.
(C) For purposes of determining the present
value of the cumulative accrued benefit under a plan
for any participant in accordance with this
Subsection, the present value shall be increased by
the aggregate distributions made with respect to the
participant (including distributions paid on account
of death to the extent they do not exceed the present
value of the cumulative accrued benefit existing
immediately prior to death) under each plan being
considered, and under any terminated plan which if it
had not been terminated would have been in a Required
Aggregation Group with the Plan, during the 5-year
period ending on the Determination Date or last day
of the plan year that falls within the calendar year
in which the Determination Date falls.
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(D) For purposes of this Paragraph (3),
participant contributions which are deductible as
"qualified retirement contributions" within the
meaning of Code Section 219 or any successor, as
adjusted to reflect income, gains, losses, and other
credits or charges attributable thereto, shall not be
considered to be part of the accrued benefits under
any plan.
(E) For purposes of this Paragraph (3), if
any employee is not a Key Employee with respect to
any plan for any plan year, but such employee was a
Key Employee with respect to such plan for any prior
plan year, any accrued benefit for such employee
shall not be taken into account.
(F) For purposes of this Paragraph (3), if
any employee has not performed any service for any
Plan Sponsor or Affiliate maintaining the plan during
the five-year period ending on the Determination
Date, any accrued benefit for that employee shall not
be taken into account.
(G) (i) In the case of an "unrelated
rollover" (as defined below) between plans
which qualify under Code Section 401(a), (a)
the plan providing the distribution shall
count the distribution as a distribution
under Subparagraph (C) of this Paragraph
(3), and (b) the plan accepting the
distribution shall not consider the
distribution part of the accrued benefit
under this Section; and
(ii) in the case of a "related
rollover" (as defined below) between plans
which qualify under Code Section 401(a), (a)
the plan providing the distribution shall
not count the distribution as a distribution
under Subparagraph (C) of this Paragraph
(3), and (b) the plan accepting the
distribution shall consider the distribution
part of the accrued benefit under this
Section.
For purposes of this Subparagraph (G), an "unrelated rollover" is a rollover as
defined in Code Section 402(c)(4) or 408(d)(3) or a plan-to-plan transfer which
is both initiated by the participant and made from a plan maintained by one
employer to a plan maintained by another employer where the employers are not
Affiliates. For purposes of this Subparagraph (G), a "related rollover" is a
rollover as defined in Code Section 402(c)(4) or 408(d)(3) or a plan-to-plan
transfer which is either not initiated by the participant or made to a plan
maintained by the employer or an Affiliate.
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54
SECTION 2
(a) Notwithstanding anything contained in the Plan to the
contrary, except as otherwise provided in Subsection (b) of this
Section, in any Plan Year during which the Plan is Top-Heavy,
allocations of Plan Sponsor contributions and forfeitures for the Plan
Year for the Account of each Member who is not a Key Employee and who
has not separated from service with the Plan Sponsor prior to the end
of the Plan Year shall not be less than 3 percent of the Member's
Annual Compensation. For purposes of this Subsection, an allocation to
a Member's Account resulting from any Plan Sponsor contribution
attributable to a salary reduction or similar arrangement shall not be
taken into account.
(b) (1) The percentage referred to in Subsection (a) of this
Section for any Plan Year shall not exceed the percentage at
which allocations are made or required to be made under the
Plan for the Plan Year for the Key Employee for whom the
percentage is highest for the Plan Year. For purposes of this
Paragraph, an allocation to the Account of a Key Employee
resulting from any Plan Sponsor contribution attributable to a
salary reduction or similar agreement shall be taken into
account.
(2) For purposes of this Subsection (b), all defined
contribution plans which are members of a Required Aggregation
Group shall be treated as part of the Plan.
(3) This Subsection (b) shall not apply to any plan
which is a member of a Required Aggregation Group if the plan
enables a defined benefit plan which is a member of the
Required Aggregation Group to meet the requirements of Code
Section 401(a)(4) or 410.
(4) If the Plan Sponsor maintains a defined benefit
plan which is qualified under Code Section 401(a) and which
would be Top-Heavy within the meaning of the Plan for its plan
year ending within or coincident with the Plan Year, no
allocation shall be made pursuant to Subsection (a) of this
Section on behalf of any Member who participates in the
defined benefit plan and acquires a year of service within the
meaning of paragraphs (4), (5) and (6) of Code Section 411(a)
under the defined benefit plan for the plan year, if the
defined benefit plan provides generally that the accrued
benefit of the member when expressed as an annual retirement
benefit shall not, when expressed as a percentage of the
Member's compensation, be less than the lesser of (A) 2
percent multiplied by the number of such years of service in
plan years during which such plan was Top-Heavy, or (B) 20
percent.
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SECTION 3
In any limitation year (as defined in Section 4 of Appendix B to the
Plan) which contains any portion of a Plan Year in which the Plan is Top-Heavy,
the number "1.0" shall be substituted for the number "1.25" in Section 3 of
Appendix B to the Plan.
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APPENDIX D
SPECIAL RULES
SECTION 1
SPECIAL RULES FOR GOTTLIEB EMPLOYEES
(a) Any Member who was a participant in the Gottlieb Plan immediately
before January 1, 1994 shall have the same number of Years of Service under the
Plan as he had under the Gottlieb Plan. In addition, for the Plan Year beginning
January 1, 1994, any such Member shall be given credit for the greater of the
period of Service he would have received under the terms of the Gottlieb Plan or
the period of Service he would receive as a participant in the Plan. For the
Plan Year beginning January 1, 1995, and for all subsequent years, the Years of
Service for any such Member will be credited in accordance with the terms of the
Plan.
(b) For any Member who was a participant in the Gottlieb Plan
immediately before January 1, 1994, "Normal Retirement Age" means age 59 1/2.
SECTION 2
SPECIAL RULES FOR COMPMED EMPLOYEES
(a) Any Member who was a participant in the CompMed Plan immediately
before January 1, 1994 shall have the same number of Years of Service under the
Plan as he had under the CompMed Plan. In addition, for the Plan Year beginning
January 1, 1994, any such Member shall be given credit for the greater of the
period of Service he would have received under the terms of the CompMed Plan or
the period of Service he would receive as a participant in the Plan. For the
Plan Year beginning January 1, 1995, and for all subsequent years, the Years of
Service for any such Member will be credited in accordance with the terms of the
Plan.
(b) For any CompMed Employee, "Eligibility Service" shall be as defined
in the CompMed Plan.
SECTION 3
SPECIAL RULES FOR MMNE EMPLOYEES
(a) Any Member who was a participant in the MMNE Plan immediately
before January 1, 1994 shall have the same number of Years of Service under the
Plan as he had under the MMNE Plan. In addition, for the Plan Year beginning
January 1, 1994, any such Member shall be given credit for the greater of the
period of Service he would have received under the terms of the MMNE Plan or the
period of Service he would receive as a participant in the Plan. For the Plan
Year beginning January 1, 1995, and for all subsequent years, the Years of
Service for any such Member will be credited in accordance with the terms of the
Plan.
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57
(b) Any Member who was a participant in the MMNE Plan immediately
before January 1, 1994 shall be 25% vested after the completion of one Year of
Service.
(c) For any Member who was a participant in the MMNE Plan immediately
before January 1, 1994 and who completes 2 Years of Service, such Member may
request a withdrawal of any vested amounts from his Matching Account by
submitting such request to the Plan Administrator according to normal
administrative procedures. Upon receipt of such request, the Plan Administrator
will provide for such distribution at a reasonable time and in a reasonable
manner.
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