Exhibit 99.03
CARDINAL HEALTH 401(k) SAVINGS PLAN
Amended and Restated Effective as of January 1, 2005
2005
TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS......................................................... 2
Section 1.01 Account...................................................... 2
Section 1.02 Accounting Date.............................................. 2
Section 1.03 Administrative Committee..................................... 2
Section 1.04 Beneficiary.................................................. 2
Section 1.05 Benefits Group............................................... 2
Section 1.06 Board........................................................ 2
Section 1.07 Catch-Up Account............................................. 2
Section 1.08 Code......................................................... 2
Section 1.09 Company...................................................... 2
Section 1.10 Compensation................................................. 2
Section 1.11 Compensation Deferral Account................................ 4
Section 1.12 Disability................................................... 4
Section 1.13 Effective Date............................................... 5
Section 1.14 Eligible Employee............................................ 5
Section 1.15 Employee..................................................... 5
Section 1.16 Employer(s).................................................. 5
Section 1.17 Employer Contribution Account................................ 5
Section 1.18 ERISA........................................................ 5
Section 1.19 Former Participant........................................... 6
Section 1.20 Highly Compensated Employee.................................. 6
Section 1.21 Income....................................................... 6
Section 1.22 Investment Manager........................................... 6
Section 1.23 Leased Employee.............................................. 6
Section 1.24 Matching Account............................................. 7
Section 1.25 Nonforfeitable............................................... 7
Section 1.26 Nonforfeitable Account Balance............................... 7
Section 1.27 Non-highly Compensated Employee.............................. 7
Section 1.28 Normal Retirement Age........................................ 7
Section 1.29 Participant.................................................. 7
Section 1.30 Plan......................................................... 7
Section 1.31 Plan Administrator........................................... 7
Section 1.32 Plan Year.................................................... 8
Section 1.33 Policy Committee............................................. 8
Section 1.34 Qualified Matching Contribution Account...................... 8
Section 1.35 Qualified Non-elective Contribution Account.................. 8
Section 1.36 Related Employers............................................ 8
Section 1.37 Required Beginning Date...................................... 8
Section 1.38 Rollover Account............................................. 8
Section 1.39 Service and Break in Service Definitions..................... 8
Section 1.40 Shares....................................................... 12
Section 1.41 Spouse....................................................... 12
Section 1.42 Transition Account........................................... 12
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Section 1.43 Transfer Account............................................. 12
Section 1.44 Treasury Regulations......................................... 12
Section 1.45 Trust........................................................ 12
Section 1.46 Trust Fund................................................... 12
Section 1.47 Trustee...................................................... 13
Section 1.48 Valuation Date............................................... 13
Section 1.49 Terms Defined Elsewhere...................................... 13
ARTICLE II ELIGIBILITY AND PARTICIPATION....................................... 15
Section 2.01 ELIGIBILITY.................................................. 15
Section 2.02 PARTICIPATION UPON RE-EMPLOYMENT............................. 15
Section 2.03 ENROLLMENT................................................... 15
Section 2.04 TRANSFERS BETWEEN PARTICIPATING EMPLOYERS.................... 15
Section 2.05 TRANSFERS BETWEEN CLASSES OF EMPLOYEES....................... 15
ARTICLE III CONTRIBUTIONS....................................................... 16
Section 3.01 INDIVIDUAL ACCOUNTS.......................................... 16
Section 3.02 EMPLOYER CONTRIBUTIONS....................................... 16
Section 3.03 EMPLOYER AND SPECIAL CONTRIBUTION ALLOCATION AND
ACCRUAL OF BENEFIT........................................... 16
Section 3.04 PARTICIPANT CONTRIBUTIONS.................................... 18
Section 3.05 CHANGES AND SUSPENSIONS OF COMPENSATION DEFERRAL
CONTRIBUTIONS AND CATCH-UP CONTRIBUTIONS..................... 19
Section 3.06 MATCHING AND QUALIFIED MATCHING CONTRIBUTIONS................ 20
Section 3.07 MATCHING CONTRIBUTION ALLOCATION AND ACCRUAL OF
BENEFIT...................................................... 21
Section 3.08 VOLUNTARY EMPLOYEE NONDEDUCTIBLE CONTRIBUTIONS............... 21
Section 3.09 QUALIFIED NON-ELECTIVE CONTRIBUTIONS......................... 21
Section 3.10 TIME OF PAYMENT OF CONTRIBUTION.............................. 22
Section 3.11 ALLOCATION OF FORFEITURES.................................... 22
Section 3.12 ROLLOVER AND TRANSFER CONTRIBUTIONS.......................... 22
Section 3.13 TRANSITION CONTRIBUTIONS..................................... 23
Section 3.14 RETURN OF CONTRIBUTIONS...................................... 23
Section 3.15 FURTHER REDUCTIONS OF CONTRIBUTIONS.......................... 23
ARTICLE IV TERMINATION OF SERVICE; PARTICIPANT VESTING......................... 24
Section 4.01 VESTING...................................................... 24
Section 4.02 INCLUDED YEARS OF SERVICE - VESTING.......................... 24
Section 4.03 FORFEITURE OCCURS............................................ 24
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TABLE OF CONTENTS
(continued)
PAGE
Section 4.04 CASH-OUT DISTRIBUTIONS TO PARTIALLY-VESTED
PARTICIPANTS................................................. 25
Section 4.05 RESTORATION OF FORFEITED PORTION OF ACCOUNT.................. 25
Section 4.06 TRANSFER BETWEEN CLASSES OF EMPLOYEES........................ 27
Section 4.07 TRANSFERS BETWEEN PARTICIPATING EMPLOYERS.................... 27
ARTICLE V TIME AND METHOD OF PAYMENT OF BENEFITS.............................. 29
Section 5.01 RETIREMENT................................................... 29
Section 5.02 DISTRIBUTION UPON SEPARATION FROM SERVICE PRIOR TO
NORMAL RETIREMENT AGE........................................ 29
Section 5.03 OTHER RULES GOVERNING THE TIME OF PAYMENT OF BENEFITS........ 31
Section 5.04 FORM OF BENEFIT PAYMENTS..................................... 31
Section 5.05 MINIMUM DISTRIBUTION REQUIREMENTS............................ 31
Section 5.06 DISTRIBUTIONS UPON DEATH..................................... 32
Section 5.07 REVISED REQUIRED MINIMUM DISTRIBUTIONS....................... 33
Section 5.08 DESIGNATION OF BENEFICIARY................................... 37
Section 5.09 FAILURE OF BENEFICIARY DESIGNATION........................... 37
Section 5.10 SPECIAL RULES FOR TRANSFER ACCOUNTS.......................... 38
Section 5.11 DISTRIBUTIONS UNDER DOMESTIC RELATIONS ORDERS................ 38
Section 5.12 RE-EMPLOYMENT OF PARTICIPANTS RECEIVING PAYMENTS............. 39
Section 5.13 FORM OF PAYMENTS............................................. 39
Section 5.14 LOST PARTICIPANT OR BENEFICIARY.............................. 39
Section 5.15 FACILITY OF PAYMENT.......................................... 40
Section 5.16 NO DISTRIBUTION PRIOR TO SEPARATION FROM SERVICE,
DEATH OR DISABILITY.......................................... 40
Section 5.17 DISTRIBUTION OF ASSETS TRANSFERRED FROM MONEY
PURCHASE PENSION PLAN........................................ 40
Section 5.18 WRITTEN INSTRUCTION NOT REQUIRED............................. 41
ARTICLE VI WITHDRAWALS; DIRECT ROLLOVERS AND WITHHOLDING; LOANS................ 42
Section 6.01 HARDSHIP WITHDRAWALS......................................... 42
Section 6.02 SPECIAL WITHDRAWAL RULES APPLICABLE TO ROLLOVER
CONTRIBUTIONS................................................ 43
Section 6.03 SPECIAL WITHDRAWAL RULES APPLICABLE TO TRANSFER
ACCOUNTS..................................................... 43
Section 6.04 WITHDRAWALS UPON ATTAINMENT OF AGE 59 1/2.................... 43
Section 6.05 DIRECT ROLLOVER AND WITHHOLDING RULES........................ 44
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TABLE OF CONTENTS
(continued)
PAGE
Section 6.06 LOANS TO PARTICIPANTS........................................ 45
ARTICLE VII EMPLOYER ADMINISTRATIVE PROVISIONS.................................. 48
Section 7.01 ESTABLISHMENT OF TRUST....................................... 48
Section 7.02 INFORMATION TO COMMITTEE..................................... 48
Section 7.03 NO LIABILITY................................................. 48
Section 7.04 INDEMNITY OF COMMITTEE....................................... 48
Section 7.05 INVESTMENT FUNDS............................................. 48
ARTICLE VIII PARTICIPANT ADMINISTRATIVE PROVISIONS............................... 50
Section 8.01 PERSONAL DATA TO BENEFITS GROUP.............................. 50
Section 8.02 ADDRESS FOR NOTIFICATION..................................... 50
Section 8.03 ASSIGNMENT OR ALIENATION..................................... 50
Section 8.04 NOTICE OF CHANGE IN TERMS.................................... 50
Section 8.05 PARTICIPANT DIRECTION OF INVESTMENT.......................... 50
Section 8.06 CHANGE OF INVESTMENT DESIGNATIONS............................ 51
Section 8.07 LITIGATION AGAINST THE TRUST................................. 51
Section 8.08 INFORMATION AVAILABLE........................................ 52
Section 8.09 APPEAL PROCEDURE FOR DENIAL OF BENEFITS...................... 52
Section 8.10 CLAIMS INVOLVING BENEFITS RELATED TO DISABILITY.............. 53
Section 8.11 USE OF ALTERNATIVE MEDIA..................................... 53
ARTICLE IX ADMINISTRATION OF THE PLAN.......................................... 54
Section 9.01 ALLOCATION OF RESPONSIBILITY AMONG FIDUCIARIES FOR
PLAN AND TRUST ADMINISTRATION................................ 54
Section 9.02 APPOINTMENT OF COMMITTEE..................................... 54
Section 9.03 COMMITTEE PROCEDURES......................................... 54
Section 9.04 RECORDS AND REPORTS.......................................... 55
Section 9.05 OTHER COMMITTEE POWERS AND DUTIES............................ 55
Section 9.06 RULES AND DECISIONS.......................................... 56
Section 9.07 APPLICATION AND FORMS FOR BENEFITS........................... 56
Section 9.08 AUTHORIZATION OF BENEFIT PAYMENTS............................ 56
Section 9.09 FUNDING POLICY............................................... 56
Section 9.10 FIDUCIARY DUTIES............................................. 56
Section 9.11 ALLOCATION OR DELEGATION OF DUTIES AND
RESPONSIBILITIES............................................. 57
Section 9.12 PROCEDURE FOR THE ALLOCATION OR DELEGATION OF
FIDUCIARY DUTIES............................................. 57
Section 9.13 SEPARATE ACCOUNTING.......................................... 57
Section 9.14 VALUE OF PARTICIPANT'S ACCOUNT............................... 58
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(continued)
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Section 9.15 REGISTRATION AND VOTING OF EMPLOYER COMMON STOCK............. 58
Section 9.16 INDIVIDUAL STATEMENT......................................... 58
Section 9.17 FEES AND EXPENSES FROM FUND.................................. 58
ARTICLE X TOP HEAVY RULES..................................................... 60
Section 10.01 MINIMUM EMPLOYER CONTRIBUTION................................ 60
Section 10.02 ADDITIONAL CONTRIBUTION...................................... 60
Section 10.03 DETERMINATION OF TOP HEAVY STATUS............................ 61
Section 10.04 TOP HEAVY VESTING SCHEDULE................................... 62
Section 10.05 DEFINITIONS.................................................. 62
ARTICLE XI MISCELLANEOUS....................................................... 64
Section 11.01 EVIDENCE..................................................... 64
Section 11.02 NO RESPONSIBILITY FOR EMPLOYER ACTION........................ 64
Section 11.03 FIDUCIARIES NOT INSURERS..................................... 64
Section 11.04 WAIVER OF NOTICE............................................. 64
Section 11.05 SUCCESSORS................................................... 64
Section 11.06 WORD USAGE................................................... 64
Section 11.07 HEADINGS..................................................... 64
Section 11.08 STATE LAW.................................................... 64
Section 11.09 EMPLOYMENT NOT GUARANTEED.................................... 65
ARTICLE XII EXCLUSIVE BENEFIT, AMENDMENT, TERMINATION........................... 66
Section 12.01 EXCLUSIVE BENEFIT............................................ 66
Section 12.02 AMENDMENT BY EMPLOYER........................................ 66
Section 12.03 AMENDMENT TO VESTING PROVISIONS.............................. 66
Section 12.04 DISCONTINUANCE............................................... 67
Section 12.05 FULL VESTING ON TERMINATION.................................. 67
Section 12.06 MERGER, DIRECT TRANSFER AND ELECTIVE TRANSFER................ 67
Section 12.07 TERMINATION.................................................. 68
SCHEDULE I PARTICIPATING EMPLOYERS
SCHEDULE II MERGING PLANS
SCHEDULE III ANNUITY DISTRIBUTIONS TO CERTAIN PARTICIPANTS
SCHEDULE IV LIMITATIONS ON CONTRIBUTIONS AND ALLOCATIONS
SCHEDULE V SPECIAL PROVISIONS FOR PRIOR MERGED PLANS
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CARDINAL HEALTH 401(k) SAVINGS PLAN
Cardinal Health, Inc., an Ohio corporation, hereby amends and restates in
its entirety the Cardinal Health Profit Sharing, Retirement and Savings Plan,
generally effective as of January 1, 2005, unless otherwise stated herein and
renames the plan as the Cardinal Health 401(k) Savings Plan. Special effective
dates are included with respect to a number of provisions as necessary to
conform to amendments to the Code enacted by the General Agreement on Tariffs
and Trade, Uniformed Services Employment and Reemployment Rights Act of 1994,
the Small Business Job Protection Act of 1996, the Taxpayer Relief Act of 1997,
the IRS Restructuring and Reform Act of 1998, the Community Renewal Tax Relief
Act of 2000 and the Economic Growth and Tax Relief Reconciliation Act of 2002
(by incorporation of the previously adopted "good faith" amendments herein). In
this amendment and restatement, the Employer intends to implement various design
changes, including the adoption of a safe harbor 401(k) plan, and to provide for
the merger of certain plans (the "Merging Plans") previously maintained as
separate plans, effective as of the dates specified in Schedule II to the Plan.
The Employer intends that the Plan be qualified under Section 401(a) of
the Code, with a cash or deferred arrangement qualified under Section 401(k) of
the Code and a trust exempt from taxation under Section 501(a) of the Code.
Pursuant to the requirements of Code Section 401(a)(27), the Employer intends
that the Plan be a profit sharing plan. In addition, pursuant to Sections
401(k)(12) and 401(m)(11), the Employer intends that the Plan be a safe harbor
401(k) plan. The provisions of this amended and restated Plan shall apply solely
to an Employee whose employment with the Employer terminates on or after the
Effective Date. An Employee whose employment with the Employer terminates prior
to the Effective Date shall be entitled to a benefit, if any, as determined
under the provisions of the Plan or the appropriate Merging Plan in effect on
the date his employment terminated.
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ARTICLE I
DEFINITIONS
Each word and phrase defined in this Article I shall have the following
meaning whenever such word or phrase is capitalized and used herein unless a
different meaning is clearly required by the context of this agreement.
Section 1.01 Account. The separate bookkeeping account that the
Administrative Committee or the Trustee shall maintain for a Participant
pursuant to Section 9.13 of this Plan.
Section 1.02 Accounting Date. The last day of the Plan Year.
Section 1.03 Administrative Committee. The Financial Benefit Plans
Committee or such other committee of at least three (3) persons appointed
pursuant to Article IX to assist the Company in the administration of the Plan.
Section 1.04 Beneficiary. A person, including any individual, legal
representative, estate or other entity, designated by a Participant who is or
may become entitled to a benefit under the Plan. A Beneficiary who becomes
entitled to a benefit under the Plan shall remain a Beneficiary under the Plan
until the Trustee has fully distributed his benefit to him. A Beneficiary's
right to (and the Plan Administrator's, the Administrative Committee's, or a
Trustee's duty to provide to the Beneficiary) information or data concerning the
Plan shall not arise until he first becomes entitled to receive a benefit under
the Plan.
Section 1.05 Benefits Group. The group of employees of the Company
reporting to the Vice President, Benefits or comparable position responsible for
day-to-day administration of the Plan.
Section 1.06 Board. The board of directors of Cardinal Health, Inc. or a
committee thereof acting on its behalf.
Section 1.07 Catch-Up Account. That portion of a Participant's Account
credited with Catch-Up Contributions under Section 3.04.B., and adjustments
relating thereto.
Section 1.08 Code. The Internal Revenue Code of 1986, as it may be amended
from time to time.
Section 1.09 Company. Cardinal Health, Inc., an Ohio corporation.
Section 1.10 Compensation.
A. Compensation. Except as otherwise provided on Schedule V to the
Plan, the Participant's wages, salaries, fees for professional
service and other amounts received for personal services actually
rendered in the course of employment with the Employer maintaining
the Plan (including, but not limited to, commissions paid salesmen,
compensation for services on the basis of a percentage of profits,
commissions on insurance premiums, tips and bonuses).
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Compensation also includes "Elective Contributions" made by the
Employer on the Employee's behalf. Elective Contributions are
amounts excludible from the Employee's gross income under Code
Section 402(e)(3) (relating to a Code Section 401(k) arrangement),
Code Section 402(h) (relating to a Simplified Employee Pension),
Code Section 125 (relating to a cafeteria plan), Code Section 403(b)
(relating to a tax-sheltered annuity), Code Section 132(f)(4)
(relating to a qualified transportation fringe benefit plan) and,
effective July 1, 2002, "deemed compensation" under Code Section 125
pursuant to Revenue Ruling 2002-27. Compensation includes
compensation paid by the Employer to an Employee through another
person under the common paymaster provisions of Code Sections
3121(s) and 3306(p). The term "Compensation" does not include:
(i) Employer contributions (other than Elective Contributions) to
a plan of deferred compensation to the extent the
contributions are not included in the gross income of the
Employee for the taxable year in which contributed, on behalf
of an Employee to a simplified employee pension plan to the
extent such contributions are excludible from the Employee's
gross income, and any distributions from a plan of deferred
compensation, regardless of whether such amounts are
includible in the gross income of the Employee when
distributed.
(ii) Amounts realized from the exercise of a non-qualified stock
option, 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.
(iii) Amounts realized from the sale, exchange, or other disposition
of stock acquired under a qualified stock option.
(iv) Moving allowances, automobile allowances, tuition
reimbursement, financial/tax planning reimbursement, other
extraordinary compensation (including, but not limited to, tax
"gross-up" payments and stay-for-pay payments) and imputed
income from other employer-provided benefits.
(v) Amounts paid under a self-insured short-term disability plan
or amounts attributable to accrued but unused sick pay hours
attributable to a prior calendar year used when commencing
short-term disability or other absence if includible in the
gross income of the Employee.
(vi) Other amounts that receive special tax benefits, such as
premiums for group term life insurance or contributions made
by an Employer (whether or not under salary reduction
agreement) towards the purchase of an annuity contract
described in Code Section 403(b) (whether or not the
contributions are excludible from the gross income of the
Employee), other than Elective Contributions.
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Any reference in this Plan to Compensation is a reference to the
definition in this Section 1.10, unless the Plan reference specifies a
modification to this definition. The Administrative Committee will take
into account only Compensation actually paid for the relevant period.
B. Compensation Limit. In addition to other applicable limitations set
forth in the Plan, and notwithstanding any other provisions of the
Plan to the contrary, the annual Compensation of each Employee taken
into account under the Plan shall not exceed the "Compensation
Limitation" under Code Section 401(a)(17) in effect for the
applicable Determination Period as defined herein. Effective January
1, 2005, the Compensation Limitation is $210,000, and is subject to
cost of living adjustments in future years in accordance with Code
Section 401(a)(17)(B) and applicable statutory changes. Any such
cost of living adjustment or statutory change in effect for a
calendar year applies to any period, not exceeding 12 months, over
which Compensation is determined (the "Determination Period")
beginning in such calendar year. If a Determination Period consists
of fewer than 12 months, the Compensation Limitation will be
multiplied by a fraction, the numerator of which is the number of
months in the Determination Period, and the denominator of which is
12. Any reference in this Plan to the limitation under Section
401(a)(17) of the Code shall mean the Compensation Limitation set
forth in this provision.
C. Compensation - Special Rules. For purposes of determining whether
the Plan discriminates in favor of Highly Compensated Employees, the
Employer may elect to use an alternate nondiscriminatory definition
of Compensation, in accordance with the requirements of Code Section
414(s) and the Treasury Regulations promulgated thereunder. In
determining Compensation (for purposes of determining whether the
Plan discriminates in favor of Highly Compensated Employees), the
Employer may elect to include as Compensation all Elective
Contributions made by the Employer on behalf of Employees. The
Employer's election to include Elective Contributions must be
consistent and uniform with respect to Employees and all plans of
the Employer for any particular Plan Year. The Employer may make
this election to include Elective Contributions for
nondiscrimination testing purposes, irrespective of whether
Subsection A includes Elective Contributions in the general
definition of Compensation applicable to the Plan.
Section 1.11 Compensation Deferral Account. That portion of a
Participant's Account credited with Compensation Deferral Contributions under
Section 3.04.A., and adjustments relating thereto.
Section 1.12 Disability. A physical or mental condition that has qualified
the Employee for benefits under the Employer's long-term disability plan and
will prevent the Employee from satisfactorily performing his usual duties for
the Employer or the duties of such other position or job that the Employer makes
available to him and for which such Employee is qualified by reason of his
training, education or experience, for an indefinite period which the
Administrative Committee considers will be of long-continued duration.
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The Plan considers a Participant disabled on the date that the Participant has
satisfied the requirements for disability benefits under the applicable
long-term disability plan. If the Participant is not eligible for long-term
disability benefits, the Participant shall be considered disabled upon
qualifying for Social Security disability benefits.
Section 1.13 Effective Date. January 1, 2005, the date on which the
provisions of this amended and restated Plan become effective, except as
otherwise provided herein. In addition, some provisions of Schedule V to the
Plan may be subject to a different Effective Date, as specified therein.
Section 1.14 Eligible Employee. Any Employee other than (a) an Employee
who may be excluded from participation pursuant to Code Section 410(b)(3) as a
nonresident alien or as an Employee covered by a collective bargaining agreement
recognized as such under applicable federal labor law and which does not
expressly provide for participation in the Plan by Employees covered thereunder,
(b) an Employee who is (i) a resident of Puerto Rico, (ii) working in Puerto
Rico, (iii) paid on the payroll of a Puerto Rico location of the Company or a
Related Employer, and (iv) eligible to participate in the Cardinal Health 401(k)
Savings Plan for Employees of Puerto Rico, (c) an Employee of an Employer
(including, but not limited to, Owen Healthcare, Inc.) classified as a
non-regular "PRN" or on-call Employee, (d) an Employee of Mediqual Systems, Inc.
classified as an On-Demand Data Extractor or On-Demand Data Entry employee, or
(e) an Employee hired on a short-term basis as an intern. An Eligible Employee
may become a Participant in the Plan pursuant to the requirements of Article II.
Section 1.15 Employee. Any person who, on or after the Effective Date, is
receiving remuneration for personal services rendered to the Employer (or any
other employer required to be aggregated with the Employer under Sections
414(b), (c), (m) or (o) of the Code) as a common law employee (or who would be
receiving such remuneration except for an authorized leave of absence). The term
shall not include any individual providing services to an Employer as a
consultant, independent contractor or Leased Employee deemed to be an employee
of any employer described in the previous sentence, as provided in Sections
414(n) and (o) of the Code, nor any person employed by the Employer solely as a
Director. An individual excluded from participation by reason of independent
contractor or Leased Employee status, if determined by the Company or in
accordance with law to be a common law employee, shall be recharacterized as an
Employee under the Plan as of the date of such determination, unless an earlier
date is necessary to preserve the tax qualified status of the Plan.
Notwithstanding such general recharacterization, such person shall not be
considered an Eligible Employee for purposes of Plan participation, except and
to the extent necessary to preserve the tax qualified status of the Plan.
Section 1.16 Employer(s). The Company and any Related Employer which shall
ratify and adopt this Plan in a manner satisfactory to, and with the consent of,
Cardinal Health, Inc., and which has adopted this Plan as listed on the attached
Schedule I. Whenever the terms of this Plan authorize the Employer or the
Company to take any action, such action shall be considered properly authorized
if taken by the Board, the Chairman of the Board, any committee of the Board, or
by the Administrative Committee for the Plan in accordance with its procedures
under Section 9.03 hereof.
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Section 1.17 Employer Contribution Account. That portion of a
Participant's Account credited with Employer Contributions under Sections 3.02
and 3.03, and adjustments relating thereto.
Section 1.18 ERISA. The Employee Retirement Income Security Act of 1974,
as amended, or as it may be amended from time to time.
Section 1.19 Former Participant. A Participant who has transferred to a
classification of Employees ineligible to participate in the Plan, or a
Participant whose employment with the Employer has terminated but who has a
vested Account balance under the Plan that has not been paid in full and,
therefore, is continuing to participate in the allocation of Trust Fund Income.
Section 1.20 Highly Compensated Employee. Any Employee who:
A. at any time during the current Plan Year or the preceding Plan Year
was a five percent owner of the Employer as defined in Code Section
416(i); or
B. for the preceding Plan Year:
(i) received more than $80,000 in annual Compensation from the
Employer (or such higher amount as adjusted pursuant to
Section 414(q)(1) of the Code); and
(ii) was in the top 20% of Employees when ranked on the basis of
Compensation for the prior Plan Year.
Highly Compensated Employees include highly compensated former Employees.
A former Employee will be treated as a Highly Compensated Employee if such
Employee separated from Service (or was deemed to have separated) prior to the
current or preceding Plan Year, performs no Service during such Plan Year, and
was a Highly Compensated Employee for either the separation year or any Plan
Year ending on or after the Employee's 55th birthday, in accordance with the
rules for determining Highly Compensated Employee status in effect for that
determination year and in accordance with applicable Treasury Regulations and
IRS Notice 97-45.
For purposes of this Section, "Compensation" means Compensation as defined
in Section 1.10; and Related Employers to the Employer shall be treated as a
single employer with the Employer. The determination of who is Highly
Compensated shall be made in accordance with Code Section 414(q) and applicable
Treasury Regulations promulgated thereunder.
Section 1.21 Income. The net gain or loss of the Trust Fund from
investments, as reflected by interest payments, dividends, realized and
unrealized gains and losses on securities, other investment transactions and
expenses paid from the Trust Fund. In determining the Income of the Trust Fund
as of any date, assets shall be valued on the basis of their then fair market
value.
Section 1.22 Investment Manager. A person or organization who is appointed
under Section 9.05 to direct the investment of all or part of the Trust Fund,
and who is either
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(a) registered in good standing as an Investment Adviser under the Investment
Advisers Act of 1940, (b) a bank, as defined in that Act, or (c) an insurance
company qualified to perform investment management services under the laws of
more than one state of the United States, and who has acknowledged in writing
that he is a fiduciary with respect to the Plan.
Section 1.23 Leased Employee. Any person (other than an Employee of the
Employer) who, pursuant to an agreement between the Employer and any other
person ("Leasing Organization"), has performed services for the Employer (or for
the Employer and related persons determined in accordance with Section 414(n)(6)
of the Code) on a substantially full time basis for a period of at least one
year, which services are performed under the primary direction or control of the
Employer. Contributions or benefits provided to a Leased Employee by the Leasing
Organization that are attributable to services performed for the Employer shall
be treated as provided by the Employer. If applicable, Compensation under
Section 1.10 includes compensation from the Leasing Organization which is
attributable to services performed for the Employer.
A Leased Employee shall not be considered an Employee of the Employer if
(a) such employee is covered by a money purchase pension plan providing: (i) a
nonintegrated employer contribution rate of at least ten percent of
compensation, as defined in Section 415(c)(3) of the Code, but including amounts
contributed pursuant to a salary reduction agreement that are excludible from
the employee's gross income under Section 125, Section 132(f)(4), Section
402(e)(3), Section 402(h) or Section 403(b) of the Code, (ii) immediate
participation, and (iii) full and immediate vesting; and (b) leased employees do
not constitute more than 20% of the Employer's nonhighly compensated workforce.
Section 1.24 Matching Account. That portion of a Participant's Account
credited with Matching Contributions pursuant to Section 3.06, and adjustments
relating thereto. A Participant's Matching Account may include one or more
subaccounts, including a Non-Safe Harbor Matching Account and a Safe Harbor
Matching Account.
Section 1.25 Nonforfeitable. A Participant's or Beneficiary's
unconditional claim, legally enforceable against the Plan, to all or a portion
of the Participant's Account.
Section 1.26 Nonforfeitable Account Balance. The aggregate value of the
Participant's vested Account balances derived from Employer and Employee
contributions (including Transfer Contributions), whether vested before or upon
death.
Section 1.27 Non-highly Compensated Employee. Any Eligible Employee who is
not a Highly Compensated Employee.
Section 1.28 Normal Retirement Age. Except as provided in Schedule V, the
attainment of age 65. "Normal Retirement" means a Participant's Separation from
Service following his attainment of Normal Retirement Age.
Section 1.29 Participant. An Employee who is eligible to be and becomes a
Participant in accordance with the provisions of Section 2.01. An Employee who
becomes a Participant shall remain a Participant or Former Participant under the
Plan until the Trustee has fully distributed the vested amount in his Account to
him.
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Section 1.30 Plan. The plan designated as the Cardinal Health 401(k)
Savings Plan as set forth herein or in any amendments hereto. Prior to January
1, 2005, the Plan was known as the Cardinal Health Profit Sharing, Retirement
and Savings Plan.
Section 1.31 Plan Administrator. Cardinal Health, Inc., or the person(s)
or entity appointed by Cardinal Health, Inc. to serve as Plan Administrator.
Section 1.32 Plan Year. The calendar year commencing on January 1 and
ending on December 31.
Section 1.33 Policy Committee. . The Cardinal Health, Inc. Benefits Policy
Committee.
Section 1.34 Qualified Matching Contribution Account. That portion of a
Participant's Account credited with Qualified Matching Contributions under
Section 3.06, and adjustments relating thereto.
Section 1.35 Qualified Non-elective Contribution Account. That portion of
a Participant's Account credited with Qualified Non-elective Contributions under
Section 3.09, and adjustments relating thereto.
Section 1.36 Related Employers. A controlled group of corporations (as
defined in Code Section 414(b)), trades or business (whether or not
incorporated) which are under common control (as defined in Code Section
414(c)), or an affiliated service group (as defined in Code Sections 414(m) and
(o)). If the Employer is a member of a group of Related Employers, the term
"Employer" includes the Related Employers for purposes of crediting Hours of
Service, applying the coverage test of Code Section 410(b) (except to the extent
that the Plan employs the qualified separate line of business rules of Code
Section 414(r)), determining Years of Service and Breaks in Service under
Article IV, applying the limitations described in Schedule IV, applying the Top
Heavy rules and the minimum benefit requirements of Article X, the definitions
of Employee, Highly Compensated Employee, Compensation, Leased Employee, and
Service contained in this Article I, and for any other purpose as required by
the Code or by the Plan. However, only an Employer described in Section 1.15 may
contribute to the Plan, and only an Employee employed by an Employer described
in Section 1.15 is eligible to participate in this Plan.
Section 1.37 Required Beginning Date. For purposes of Article V, for any
Participant who is not a Five-percent Owner (as defined in Code Section 416(i)),
the Required Beginning Date is the April 1 of the calendar year following the
later of the calendar year in which the Participant attains age 70 1/2, or the
calendar year in which the Participant retires. For any Participant who is at
least a Five-percent Owner (as defined in Code Section 416(i)), the Required
Beginning Date is the April 1 immediately following the calendar year in which
the Participant attains age 70 1/2, regardless of whether the Participant has
retired.
Section 1.38 Rollover Account. That portion of a Participant's Account
credited with Rollover Contributions under Section 3.12, and adjustments
relating thereto.
Section 1.39 Service and Break in Service Definitions.
-8-
A. Absence from Service. A severance or absence from service for any
reason other than a quit, discharge, retirement or death, such as
vacation, holiday, sickness, or layoff. Notwithstanding the
foregoing, an absence due to an "Authorized Leave of Absence," or
qualified military service in accordance with Code Section 414(u)
shall not constitute an Absence from Service.
B. Authorized Leave of Absence. An Authorized Leave of Absence shall
mean:
(i) a leave of absence, with or without pay, granted by the
Employer in writing under a uniform, nondiscriminatory policy
applicable to all Employees; however, such absence shall
constitute an Authorized Leave of Absence only to the extent
that applicable federal laws and regulations permit service
credit to be given for such leave of absence;
(ii) a leave of absence due to service in the Armed Forces of the
United States to the extent required by Code Section 414(u);
or
(iii) a leave of absence authorized under the Family and Medical
Leave Act, but only to the extent that such Act requires that
service credit be given for such period.
C. Break in Service. Each 12 consecutive months in the period
commencing on the earlier of (i) the date on which the Employee
quits, is discharged, retires or dies, or (ii) the first anniversary
of the first day of any Absence from Service, and ending on the date
the Employee is again credited with an Hour of Service for the
performance of duties for the Employer. If an Employee is on
maternity or paternity leave, and the absence continues beyond the
first anniversary of such absence, the Employee's Break in Service
will commence no earlier than the second anniversary of such
absence. The period between the first and second anniversaries of
the first date of a maternity or paternity leave is not part of
either a Period of Service or a Break in Service. The Administrative
Committee shall consider an Employee on maternity or paternity leave
if the Employee's absence is due to the Employee's pregnancy, the
birth of the Employee's child, the placement with the Employee of an
adopted child, or the care of the Employee's child immediately
following the child's birth or placement. Notwithstanding the
foregoing, if such maternity or paternity leave constitutes an
Authorized Leave of Absence, such leave shall not be considered part
of a Break in Service.
D. Employment Commencement Date. The date upon which an Employee first
performs an Hour of Service for the Employer.
E. Hour of Service. Hour of Service shall mean:
(i) Each Hour of Service for which the Employer, either directly
or indirectly, pays an Employee, or for which the Employee is
entitled to payment, for the performance of duties during the
Plan Year. The Administrative Committee shall credit Hours of
Service under this
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subparagraph (i) to the Employee for the Plan Year in which
the Employee performs the duties, irrespective of when paid;
(ii) Each Hour of Service for back pay, irrespective of mitigation
of damages, to which the Employer has agreed or for which the
Employee has received an award. The Administrative Committee
shall credit Hours of Service under this subparagraph (ii) to
the Employee for the Plan Year(s) to which the award or the
agreement pertains rather than for the Plan Year in which the
award, agreement or payment is made; and
(iii) Each Hour of Service for which the Employer, either directly
or indirectly, pays an Employee, or for which the Employee is
entitled to payment (irrespective of whether the employment
relationship is terminated), for reasons other than for the
performance of duties during a Plan Year, such as leave of
absence, vacation, holiday, sick leave, illness, incapacity
(including disability), layoff, jury duty or military duty.
The Administrative Committee shall not credit more than 501
Hours of Service under this subparagraph (iii) to an Employee
on account of any single continuous period during which the
Employee does not perform any duties (whether or not such
period occurs during a single Plan Year). The Administrative
Committee shall credit Hours of Service under this
subparagraph (iii) in accordance with the rules of paragraphs
(b) and (c) of Labor Reg. Section 2530.200b-2, which the Plan
by this reference specifically incorporates in full within
this subparagraph (iii).
The Administrative Committee shall not credit an Hour of
Service under more than one of the subparagraphs. Furthermore, if
the Administrative Committee is to credit Hours of Service to an
Employee for the 12-month period beginning with the Employee's
Employment Commencement Date or with an anniversary of such date,
then the 12-month period shall be substituted for the term "Plan
Year" wherever the latter term appears in this Section. The
Administrative Committee shall resolve any ambiguity with respect to
the crediting of an Hour of Service in favor of the Employee.
Hours of Service will be credited for employment with other
members of an affiliated service group (under Code Section 414(m)),
a controlled group of corporations (under Code Section 414(b)), or a
group of trades or businesses under common control (under Code
Section 414(c)) of which the adopting Employer is a member, and any
other entity required to be aggregated with the Employer pursuant to
Code Section 414(o) and the regulations thereunder. Hours of Service
will also be credited for any individual considered an Employee for
purposes of this Plan under Code Section 414(n) or Code Section
414(o) and the regulations thereunder.
Solely for purposes of determining whether an Employee whose
Service is determined under the Hours of Service method incurs a
Break in
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Service under any provision of this Plan, the Administrative
Committee shall credit Hours of Service during an Employee's unpaid
absence period due to maternity or paternity leave. The
Administrative Committee shall consider an Employee on maternity or
paternity leave if the Employee's absence is due to the Employee's
pregnancy, the birth of the Employee's child, the placement with the
Employee of an adopted child, or the care of the Employee's child
immediately following the child's birth or placement. The
Administrative Committee shall credit Hours of Service that the
Employee would receive if he were paid during the absence period, or
if the Administrative Committee cannot determine the number of Hours
of Service the Employee would receive, on the basis of eight hours
per pay during the absence period. The Administrative Committee
shall credit only the number of Hours of Service (up to 501 Hours of
Service) necessary to prevent a Break in Service. The Administrative
Committee shall credit all Hours of Service described in this
paragraph to the computation period in which the absence period
begins or, if the Part-time Employee does not need these Hours of
Service to prevent a Break in Service in the computation period in
which his or her absence period begins, the Administrative Committee
shall credit these Hours of Service to immediately following
computation period.
F. Period of Service. The period of Service commencing on an Employee's
Employment Commencement Date or Re-employment
Commencement Date, whichever is applicable, and ending on the
Employee's Severance from Service Date. Notwithstanding anything
else to the contrary, a Period of Service will include (i) any
Period of Severance resulting from a quit, discharge, or retirement
if within 12 months of his Severance from Service Date, the Employee
is credited with an Hour of Service for the performance of duties
for the Employer, (ii) any Period of Severance if the Employee
quits, is discharged, or retires during an Absence from Service of
less than 12 months and is then credited with an Hour of Service
within 12 months of the date on which the Absence from Service
began, and (iii) any other period of Service as defined in
subsection J below.
G. Period of Severance. The period commencing on any Severance from
Service Date and ending on the date an Employee is again credited
with an Hour of Service for the performance of duties for the
Employer.
H. Re-employment Commencement Date. The date upon which an Employee
first performs an Hour of Service for the Employer following a Break
in Service.
I. Separation from Service. A separation from Service with the Employer
maintaining this Plan and any Related Employers such that the
Employee no longer has an employment relationship with the Employer
or any Related Employers that maintain the Plan.
J. Service. Any period of time the Employee is in the employ of the
Employer, whether before or after adoption of the Plan, determined
in accordance with reasonable and uniform standards and policies
adopted by the Plan
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Administrator, which standards and policies shall be consistently
observed. For purposes of counting an Employee's Service, the Plan
shall treat an Employee's Service with employers who are part of a
group of Related Employers of which the Employer is a member as
Service with the Employer for the period during which the employers
are Related Employers. Service for purposes of determining
eligibility to participate and vesting may also be granted for an
Employee's Period of Service prior to the date his employer became a
Related Employer if such Service is granted in accordance with the
requirements of Code Section 401(a)(4) and the regulations
thereunder. In addition, Service for purposes of eligibility and
vesting shall be granted to Eligible Employees of Owen Healthcare,
Inc. for the period of time such Employees were employed by a
hospital contracting with Owen Healthcare, Inc. for pharmacy
services immediately before such contract and employment by Owen
Healthcare, Inc. went into effect. For all Plan purposes, the Plan
shall treat the following periods as Service:
(i) any Authorized Leave of Absence, subject to the service
crediting limitations set forth in Section 1.39B;
(ii) any qualified military service in accordance with Section
414(u) of the Code; and
(iii) any other absence during which the Participant continues to
receive his regular Compensation.
K. Severance from Service Date. The earlier of (i) the date on which an
Employee quits, is discharged, retires, or dies, or (ii) the first
anniversary of the first date of any Absence from Service.
L. Year of Service. Each one-year Period of Service. Unless otherwise
provided in this Plan, Periods of Service which are less than a year
shall be aggregated on the basis that 12 months (30 days are deemed
to be a month in the case of aggregation of fractional months) or
365 days equal a whole year.
Section 1.40 Shares. The no par value common shares of Cardinal Health,
Inc., an Ohio corporation.
Section 1.41 Spouse. The lawful spouse of the Participant as determined
under the law of the state where the Participant resides at the date of
determination.
Section 1.42 Transition Account. That portion of a Participant's Account
credited with Transition Contributions under Section 3.13, and adjustments
relating thereto.
Section 1.43 Transfer Account. That portion of a Participant's Account
credited with Transfer Contributions under Section 3.12, and adjustments
relating thereto.
Section 1.44 Treasury Regulations. Regulations promulgated under the
Internal Revenue Code by the Secretary of the Treasury.
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Section 1.45 Trust. The Trust known as the Cardinal Health, Inc. U.S.
Qualified Plans Master Trust and maintained in accordance with the terms of the
trust agreement, as from time to time amended, between Cardinal Health, Inc. and
the Trustee.
Section 1.46 Trust Fund. All property of every kind held or acquired by
the Trustee under the Trust agreement other than incidental benefit insurance
contracts.
Section 1.47 Trustee. Effective December 16, 2004, Fidelity Management
Trust Company, a Massachusetts Trust Company, or such other entity or person(s)
that subsequently may be appointed by Cardinal Health, Inc.
Section 1.48 Valuation Date. Each day on which the New York Stock Exchange
is open for trading.
Section 1.49 Terms Defined Elsewhere.
Actual Contribution Percentage............................Schedule IV
Actual Deferral Percentage................................Schedule IV
Aggregate Limit...........................................Schedule IV
Annual Additions..........................................Schedule IV
Annuity Starting Date.......................Sections 5.02(B) and 5.04
Cash-out Distribution.......................Sections 4.04 and 5.02(A)
Catch-Up Contribution.................................Section 3.04(B)
Claimant.................................................Section 8.09
Compensation................................Schedule IV. and 10.06(C)
Compensation Deferral Contribution....................Section 3.04(A)
Contribution Percentage...................................Schedule IV
Contribution Percentage Amounts...........................Schedule IV
Determination Date...................................Section 10.06(G)
Direct Rollover...................................Section 6.05(B)(iv)
Distributee......................................Section 6.05(B)(iii)
Elective Deferrals........................................Schedule IV
Eligible Retirement Plan..........................Section 6.05(B)(ii)
Eligible Rollover Distribution.....................Section 6.05(B)(i)
Employer Common Stock Fund...............................Section 7.05
ESOP Shares..............................................Section 8.06
Excess Aggregate Contributions............................Schedule IV
Excess Compensation.......................................Schedule IV
Excess Compensation Deferrals.............................Schedule IV
Excess Elective Deferrals.................................Schedule IV
Forfeiture Break in Service..............................Section 4.02
Gap Period................................................Schedule IV
Investment Funds.........................................Section 7.05
Key Employee.........................................Section 10.06(A)
Limitation Year...........................................Schedule IV
Matching Contribution....................................Section 3.06
Maximum Permissible Amount................................Schedule IV
Non-Key Employee.....................................Section 10.06(B)
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Permissive Aggregation Group.........................Section 10.06(E)
Preretirement Survivor Annuity...........................Schedule III
Projected Annual Benefit..................................Schedule IV
Qualified Joint and Survivor Annuity......................Schedule IV
Qualified Matching Contributions.........................Section 3.06
Qualified Non-elective Contributions.....................Section 3.09
Required Aggregation Group...........................Section 10.06(D)
Required Beginning Date...............................Section 5.03(B)
Rollover Contributions...................................Section 3.12
Tender Offer.............................................Section 7.05
Top Heavy...............................................Section 10.03
Transfer Contributions...................................Section 3.12
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ARTICLE II
ELIGIBILITY AND PARTICIPATION
Section 2.01 ELIGIBILITY. Each Eligible Employee shall be eligible to
become a Participant in the Plan. Each Eligible Employee who was a Participant
in the Plan on the day before the Effective Date of this restated Plan shall
continue as a Participant in this Plan as restated. Each Eligible Employee who
was a participant in one of the Merging Plans on the day before the Effective
Date of the merger of such plan with this Plan shall also become a Participant
in this restated Plan as of the effective date of participation set forth in
Schedule I. Any other Eligible Employee who is employed by the Employer on and
after January 1, 2005, shall become a Participant upon such Employee's date of
hire.
Section 2.02 PARTICIPATION UPON RE-EMPLOYMENT. An Eligible Employee who
was a Participant shall again become a Participant on the date he is re-employed
by the Employer.
Section 2.03 ENROLLMENT. As soon as administratively practicable, the
Administrative Committee shall notify each Employee who is eligible to open a
Compensation Deferral Account and shall explain the rights, privileges and
duties of a Participant in the Plan. Each Eligible Employee may enroll as a
Participant in the Compensation Deferral portion of the Plan at any time and as
soon as administratively practicable on or after his date of hire, by properly
completing the enrollment procedures established at the time by the
Administrative Committee, or by following such other reasonable procedures as
the Administrative Committee may implement. The Administrative Committee may
establish rules and procedures governing the time and manner in which
enrollments shall be processed.
Section 2.04 TRANSFERS BETWEEN PARTICIPATING EMPLOYERS. For eligibility
purposes, a Participant who transfers employment from one Participating Employer
to another Participating Employer shall continue to be eligible to participate
in the Plan if the Participant has previously met the requirements of Section
2.01. In accordance with the Plan and the Code, an Employee who is an Eligible
Employee shall continue to be an Eligible Employee following a transfer between
Participating Employers as if the Eligible Employee had performed all Service
during the Plan Year for the Participating Employer to which the Eligible
Employee is transferred.
Section 2.05 TRANSFERS BETWEEN CLASSES OF EMPLOYEES. For purposes of
eligibility, in the case of an Employee who transfers from a class of Employees
whose employment status is ineligible for participation in the Plan (e.g.,
On-demand and non-regular PRN employees) to an eligible class of employment,
such Employee shall become an Eligible Employee immediately eligible to
participate in the Plan. In the case of an Eligible Employee who transfers to an
ineligible employment status, such Employee shall cease to be an Eligible
Employee under this Plan but shall remain a Former Participant under the Plan
until such time as participation is terminated.
-15-
ARTICLE III
CONTRIBUTIONS
Section 3.01 INDIVIDUAL ACCOUNTS. An Account for each Participant and
Former Participant having an amount to his credit in the Trust Fund. Each
Account shall be divided into separate subaccounts for "Compensation Deferral
Contributions," "Catch-Up Contributions," "Non-Safe Harbor Matching
Contributions," "Safe Harbor Matching Contributions," "Employer Contributions,"
"Special Contributions," and "Transition Contributions," as defined below and
any other types of contributions, as identified in Schedule V hereto. If a
Participant has made a "Rollover Contribution" or "Transfer Contribution," as
defined below, or if the Employer elects to make "Qualified Non-elective
Contributions" or "Qualified Matching Contributions," as defined below, separate
subaccounts shall be established for such contributions. Furthermore, if a
Participant re-enters the Plan subsequent to a "Forfeiture Break in Service" (as
defined in Section 4.02), a separate Account shall be maintained for the
Participant's pre-Forfeiture Break in Service Account and a separate Account for
his post-Forfeiture Break in Service Account, unless the Participant's entire
Account under the Plan is 100% Nonforfeitable. Allocations shall be made to the
Accounts of the Participants in accordance with the provisions of Section 9.13.
The Administrative Committee may direct the Trustee to maintain a temporary
segregated investment Account in the name of a Participant to prevent a
distortion of income, gain, or loss allocations under Section 9.13. The
Administrative Committee shall ensure that records are maintained for all
Account allocations and related recordkeeping activities.
Section 3.02 EMPLOYER CONTRIBUTIONS. For each Plan Year, the Employer may
contribute to the Trust amounts determined in its discretion based on
profitability or other relevant factors. Such contributions will be in the form
of "Employer Contributions," "Special Contributions," and/or other
contributions, as identified in Schedule V hereto. Subject to the provisions of
Schedule V, the amount contributed in any year may vary, in the Employer's
discretion. The Employer shall not make a contribution to the Trust for any
taxable year to the extent the contribution would exceed the maximum deduction
limitations under Code Section 404. All contributions are conditioned on their
deductibility under the Code.
Section 3.03 EMPLOYER AND SPECIAL CONTRIBUTION ALLOCATION AND ACCRUAL OF
BENEFIT.
A. Method of Allocation.
(i) Employer Contributions. Subject to Article X and any
restoration allocation required under Section 4.05, a
percentage of the annual Employer Contribution made pursuant
to Section 3.02 shall be allocated and credited to the Account
of each Participant who satisfies the conditions of Section
3.03B to be determined as follows:
Step One: Any Employer Contributions made during the Plan Year
will be allocated among each eligible Participant's Account,
in the group of Participants for whom the Employer
Contribution was made,
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in the ratio that the sum of the Participant's total
Compensation and Excess Compensation (as hereinafter defined)
for the Plan Year bears to the sum of all such Participants'
total Compensation and Excess Compensation for the Plan Year.
However, if the amount allocated to Participants' Accounts
under this Step One, as a percentage of the sum of their total
Compensation and Excess Compensation, exceeds 5.7%, (or the
percentage equal to the old-age insurance portion of the tax
rate under Code Section 3111(a) in effect for the Plan Year,
if greater), then the amount of contributions allocated under
this Step One shall be reduced to an amount that results in an
allocation, as a percentage of the sum of each Participant's
total Compensation and Excess Compensation for the Plan Year,
of no more than 5.7% (or the percentage equal to the old-age
insurance portion of the tax rate under Code Section 3111(a)
in effect for the Plan Year, if greater).
Step Two: Any Employer Contributions remaining after the
allocation in Step One will be allocated among each eligible
Participant's Account, in the group of Participants for whom
the Employer Contribution was made, in the ratio that each
such Participant's total Compensation for the Plan Year bears
to the total Compensation of all such Participants for that
Plan Year.
"Excess Compensation" means Compensation in excess of the
taxable wage base, as determined under Section 230 of the
Social Security Act, in effect on the first day of the Plan
Year.
(ii) Special Contributions. As an alternative or in addition to
making Employer Contributions and allocating them in the
manner described above, and subject to Article X and any
restoration allocation described in Section 4.05, a portion of
the annual Special Contribution made pursuant to Section 3.02
shall be allocated and credited to the Account of each
Participant who satisfies the conditions of Section 3.03B.
Special Contributions, if any, shall be allocated among the
Accounts of the group of eligible Participants for whom the
contribution was made in the ratio that each such
Participant's Compensation bears to the total Compensation of
all such Participants.
B. Accrual of Benefit. The Administrative Committee shall determine the
accrual of a Participant's benefit on the basis of the Plan Year. In
allocating an Employer Contribution to a Participant's Account, the
Administrative Committee, subject to Section 10.01, shall take into
account only Compensation paid to the Employee during the portion of
the Plan Year during which the Employee was a Participant.
Notwithstanding any other provision to the contrary, an Employer or
Special Contribution shall not be allocated to a Participant's
Account to the extent the contribution would exceed the
Participant's "Maximum Permissible Amount" as described in Schedule
IV.
-17-
Section 3.04 PARTICIPANT CONTRIBUTIONS.
A. Compensation Deferral Contributions.
(i) Contribution Limits. For any Plan Year, each Participant may
have allocated to his Account an amount of his Compensation
for such Plan Year, which amount shall be a whole percentage,
rounded to the nearest dollar, of not less than one percent
but not more than the lesser of $14,000 in 2005 (or such
larger dollar amount as the Commissioner of the Internal
Revenue may prescribe in accordance with Code Section
402(g)(5)) or 50% of his Compensation for such Plan Year. Such
amount shall be known as the Participant's "Compensation
Deferral Contribution."
(ii) Amount of Compensation Deferral Contribution. A Participant's
Compensation for a Plan Year shall be reduced by: (i) the
amount of the deferral affirmatively elected by the
Participant for such Plan Year; or (ii) if applicable, the
amount of deferral designated as the "Automatic Election
Contribution," as described below.
B. Catch-Up Contributions. For any Plan Year, each Participant who has
or will attain at least age 50 by the end of such Plan Year may
defer an additional amount of his Compensation for such Plan Year,
which amount shall not exceed $4,000 in 2005 (or such larger dollar
amount as prescribed in Code Section 414(v)). Such amount shall be
known as the Participant's "Catch-Up Contributions". Such Catch-Up
Contributions shall not be taken into account for purposes of Code
Sections 402(g) and 415.
C. Automatic Election Contributions.
(i) In General. The Employer may elect to implement an "Automatic
Election Percentage" with respect to a group of employees. The
term Automatic Election Percentage shall mean the amount by
which an Employer shall elect to reduce a Participant's
Compensation for the sole purpose of making "Automatic
Election Contributions" to the Participant's Compensation
Deferral Account on his behalf. The Automatic Election
Percentage shall be determined before the beginning of the
applicable Plan Year, and announced in advance of the Plan
Year to Participants and at the time of hire for new
Employees. If the Employer so elects, a Participant who
participates in the Plan at a deferral percentage level that
does not equal or exceed the Automatic Contribution Percentage
(as described below), shall have his Compensation Deferral
Contributions increased to the Automatic Contribution
Percentage in accordance with the provisions for continuing
Participants set forth in this Section. An Eligible Employee
may opt out of the Automatic Election Percentage prior to its
application and an affected Participant may suspend or change
the
-18-
amount of Automatic Election Contributions at any time, but
only on a prospective basis for the remainder of the Plan
Year.
(ii) Administrative and Notice Requirements. The Administrative
Committee shall administer the Employer's election to
implement an Automatic Election Percentage in a uniform and
nondiscriminatory manner with respect to newly eligible
Participants (including rehired Participants) and continuing
Participants whose Compensation Deferral Contribution
percentage does not equal or exceed the Automatic Election
Percentage selected by the Employer.
The time at which the Automatic Election Percentage shall be
effective shall be (i) with respect to newly eligible
Participants, a date following the lapse of a reasonable
period of time after the Administrative Committee has provided
such individual with a notice described below; or (ii) with
respect to a continuing Participant, as of the initial
effective date of the implementation of the Automatic Election
Percentage and the first day of each Plan Year thereafter. The
Administrative Committee shall provide to newly eligible
Participants at the time of hire or in advance of the
effective date of the Automatic Election Percentage a notice
explaining their right not to make an Automatic Election
Contribution or to alter the amount of such contributions, an
explanation of the procedure for exercising that right and the
timing for implementation of any such election, and the effect
of not revoking the Automatic Election Percentage. Thereafter,
continuing Participants will be notified periodically of their
Automatic Election Percentage and an explanation of such a
Participant's right to change the percentage of Compensation
Deferral Contributions, including the procedure for exercising
that right and the timing for implementation of any such
election.
The provision of the notice shall be governed according to
uniform and nondiscriminatory procedures established by the
Administrative Committee. The content of the notice and
procedures related to the Employer's implementation of
Automatic Elections shall be consistent with Revenue Ruling
98-30, as amplified and superceded by Revenue Ruling 2000-8,
or other guidance of general application issued by the
Internal Revenue Service.
Section 3.05 CHANGES AND SUSPENSIONS OF COMPENSATION DEFERRAL
CONTRIBUTIONS AND CATCH-UP CONTRIBUTIONS. A Participant may change the rate of
Compensation Deferral Contributions and/or Catch-Up Contributions to his Account
at any time during each Plan Year, effective for the first payroll period for
which it is administratively feasible to change the rate of such Participant's
Compensation Deferral Contributions and/or Catch-Up Contributions, by
communicating such rate change in accordance with uniform rules and procedures
established by the Administrative Committee regarding the timing and manner of
making such elections. In addition, a Participant may at any time elect to
suspend all contributions to his Account by giving advance notice in any
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manner specified by the Administrative Committee in accordance with its uniform
rules and procedures. An election to recommence contributions shall be effective
for the first payroll period in which it is administratively feasible to begin
deferral withholdings. All suspensions and recommencements of Compensation
Deferral Contributions and/or Catch-Up Contributions shall be made in the manner
and at the times specified in uniform rules and procedures established by the
Administrative Committee, which rules and procedures may be changed from time to
time.
Section 3.06 MATCHING AND QUALIFIED MATCHING CONTRIBUTIONS.
A. In General. For each Plan Year, the Employer may contribute to each
eligible Participant's Account a "Matching Contribution" in an
amount determined by the Employer from time to time in its
discretion. The amount or rate of the Matching Contribution shall be
announced to Participants and other Eligible Employees, and
suspended or changed on a prospective basis only. The Employer shall
not make a Matching Contribution to the Trust for any Participant to
the extent that the contribution would exceed the Participant's
"Maximum Permissible Amount" as described in Schedule IV.
B. Safe Harbor Matching Contributions.
(i) Amount. On and after January 1, 2005, Matching Contributions
sufficient to meet the "safe harbor" requirements of Section
401(k)(12) of the Code shall be made to each eligible
Participant's Account. Specifically, the Employer shall match
100% of each Participant's Compensation Deferral Contributions
that do not exceed 3% of the Participant's Compensation and
50% of each Participant's Compensation Deferral Contributions
that exceed 3% of the Participant's Compensation but that do
not exceed 5% of the Participant's Compensation. In addition,
Safe Harbor Matching Contributions may not be made in an
amount which would cause the Plan to fail to satisfy the
requirements of Code Section 401(m)(11). Pursuant to Internal
Revenue Service Notice 98-52, effective for Plan Years
beginning on and after January 1, 2005, the limitation on
Matching Contributions made at the Employer's discretion on
behalf of a Participant is an amount which, in the aggregate,
does not exceed four percent (4%) of the Participant's
Compensation. The limitation under Notice 98-52 shall be
observed only to the extent required by law to meet the
requirements for the safe harbors under Code Section
401(k)(12) and 401(m)(11).
(ii) Notice Requirements. Effective for the Plan Year commencing
January 1, 2005 at least 30 days, but not more than 90 days,
before the beginning of the Plan Year, the Employer will
provide each Eligible Employee a comprehensive notice of the
employee's rights and obligations under the Plan, in
compliance with the notice requirements
-20-
set forth in IRS Notices 98-52 and 2000-3 and any additional
guidance that may be set forth by the IRS in the future.
(iii) Election Periods. In addition to any other election periods
provided under the Plan, each Eligible Employee may make or
modify a Compensation Deferral Contribution election during
the 30-day period immediately following the receipt of the
notice described in subsection (ii) above.
C. Qualified Matching Contributions. If the Employer so elects, the
Employer may also make Matching Contributions to the Plan which are
"Qualified Matching Contributions." Qualified Matching Contributions
shall mean Matching Contributions that are at all times
Nonforfeitable and subject to the distribution requirements of
Section 401(k) of the Code when made to the Plan. Additional
contributions subject to these rules may be made by the Employer, or
some or all of the existing Matching Contributions can be designated
as fully vested and subject to the distribution restrictions, in
order to satisfy these rules.
Section 3.07 MATCHING CONTRIBUTION ALLOCATION AND ACCRUAL OF BENEFIT. Only
Participants who have made Compensation Deferral Contributions during the Plan
Year shall be eligible to share in the allocation of the Matching Contribution
as set forth in Section 3.06. Catch-Up Contributions under this Plan shall not
be eligible for Matching Contributions. In all cases, the allocation of Matching
Contributions or Qualified Matching Contributions shall be based on the amount
or rate established in advance for such contributions relative to the
Compensation Deferral Contributions being matched. Although Matching
Contributions may be contributed periodically throughout the Plan Year, the
allocation applicable to any Participant shall be adjusted as necessary to
attain the appropriate allocation rate for the Plan Year as a whole. No Matching
Contributions shall be made, however, with respect to "Catch-Up Contributions"
or "Excess Compensation Deferrals."
Matching Contributions shall become Nonforfeitable in accordance with
Section 4.01 of the Plan. In any event, Matching Contributions shall be fully
vested and Nonforfeitable at Normal Retirement Age, upon the complete or partial
termination of the Plan, or upon the complete discontinuance of Employer
contributions. Matching Contributions that are designated as Safe Harbor
Matching Contributions shall be 100% vested at all times. Forfeitures of
Matching Contributions, other than Excess Aggregate Contributions, shall be made
in accordance with Section 5.03 of the Plan.
Section 3.08 VOLUNTARY EMPLOYEE NONDEDUCTIBLE CONTRIBUTIONS. Participants
shall not be permitted to make voluntary employee nondeductible contributions.
Section 3.09 QUALIFIED NON-ELECTIVE CONTRIBUTIONS. If it so elects, the
Employer may make "Qualified Non-elective Contributions" under the Plan on
behalf of all Participants or all Participants who are Non-highly Compensated
Employees in order to satisfy either the Actual Deferral Percentage test or the
Actual Contribution Percentage test.
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For purposes of this Article III, Qualified Non-elective Contributions shall
mean contributions (other than Matching Contributions or Qualified Matching
Contributions) made by the Employer and allocated to Participants' Accounts that
the Participants may not elect to receive in cash until distributed from the
Plan; that are Nonforfeitable when made; and that are distributable only in
accordance with the distribution provisions that are applicable to Compensation
Deferral Contributions and Qualified Matching Contributions. Qualified
Non-elective Contributions shall be allocated to Participants' Accounts in the
same proportion that each Participant's Compensation for the Plan Year for which
the Employer makes the contribution bears to the total Compensation of all
Participants for the Plan Year (or of all Non-highly Compensated Participants,
as applicable).
Section 3.10 TIME OF PAYMENT OF CONTRIBUTION. The Employer may pay its
contribution for each Plan Year in one or more installments of cash without
interest. The Employer must make its contribution which Participants have
elected to defer under Section 3.04 as soon as such amounts may reasonably be
segregated from the Employer's general assets, but in no event later than 15
business days after the end of the calendar month in which such amounts were
withheld from the Participant's Compensation, or such later time as may be
permitted by regulations under ERISA and Section 401(k) of the Code. The
Employer must make the balance, if any, of its contribution to the Trustee
within the time prescribed (including extensions) for filing its tax return for
the taxable year for which it claims a deduction for its contribution, in
accordance with Code Section 404(a)(6).
Section 3.11 ALLOCATION OF FORFEITURES. Subject to any restoration
allocation required under Section 4.05, the Administrative Committee shall
allocate and use all or a portion of the amount of a Participant's benefit
forfeited under the Plan either to pay reasonable expenses of the Plan (to the
extent not paid by the Employer) or to reduce its Employer Contributions,
Special Contributions, Matching Contributions and/or other contributions payable
under the Plan, for the Plan Year in which the forfeiture occurs or any prior or
future Plan Year, as determined by the Administrative Committee.
Section 3.12 ROLLOVER AND TRANSFER CONTRIBUTIONS. The Trustee is
authorized to accept on behalf of an Employee, and hold as part of the Trust
Fund, assets from (A) another plan qualified under Sections 401(a), 403(a),
403(b) or 457(b) of the Code or (B) a conduit individual retirement account,
provided that such transfer satisfies any procedures or other requirements
established by the Administrative Committee. The Trustee shall also accept and
hold as part of the Trust Fund assets transferred from any other plan qualified
under either Section 401(a) or 403(a) of the Code in connection with a merger or
consolidation of such plan with or into the Plan pursuant to Section 12.06
hereof and as may be approved by the Administrative Committee. In addition, the
Trustee shall also accept "rollover" amounts contributed directly by or on
behalf of an Employee in accordance with procedures and rules established by the
Administrative Committee in respect of a distribution made to or on behalf of
such Employee from another plan qualified under either Code Section 401(a) or
403(a) pursuant to Section 12.06 hereof. All amounts so transferred to the Trust
Fund shall be held in segregated subaccounts and shall be referred to as
"Transfer Contributions" if such amounts are subject to the special distribution
rules described on Schedule III and as "Rollover Contributions" if not subject
to such rules.
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Rollover Contributions must conform to rules and procedures established by
the Administrative Committee, including rules designed to assure the
Administrative Committee that the funds so transferred qualify as a Rollover
Contribution under the Code. An Employee, prior to satisfying the Plan's
eligibility conditions, may make a Rollover Contribution to the Trust to the
same extent and in the same manner as a Participant. If an Employee makes a
Rollover Contribution to the Trust prior to satisfying the Plan's eligibility
conditions, the Administrative Committee and Trustee must treat the Employee as
a Participant for all purposes of the Plan, except that the Employee is not a
Participant for purposes of making Compensation Deferral Contributions or
sharing in Employer contributions or Participant forfeitures under the Plan
until he actually becomes a Participant in the Plan. If the Employee has a
Separation from Service prior to becoming a Participant, the Trustee will
distribute his Rollover Contribution Account to him as if it were an Employer
Contribution Account.
Section 3.13 TRANSITION CONTRIBUTIONS. Pursuant to the terms set forth in
Schedule V, an Employer may make a "Transition Contribution" to the Account of
selected Participants in the amount set forth in Schedule V. The Employer shall
not make a Transition Contribution to the Trust for any Participant to the
extent that the contribution would exceed the Participant's "Maximum Permissible
Amount" described in Schedule IV.
Section 3.14 RETURN OF CONTRIBUTIONS. All contributions to the Plan are
conditioned upon their deductibility under the Code. The Trustee, upon written
request from the Employer, shall return to the Employer the amount of the
Employer's contribution made by the Employer by mistake of fact or the amount of
the Employer's contribution disallowed as a deduction under Code Section 404.
The Trustee shall not return any portion of the Employer's contribution under
this provision more than one year after.
A. The Employer made the contribution by mistake of fact; or
B. The disallowance of the contribution as a deduction, and then, only
to the extent of the disallowance.
The Trustee shall not increase the amount of the Employer contribution
returnable under this Section 3.14 for any earnings attributable to the
contribution, but the Trustee shall decrease the Employer contribution
returnable for any losses attributable to it. The Trustee may require the
Employer to furnish it whatever evidence the Trustee deems necessary to enable
the Trustee to confirm the amount the Employer has requested be returned is
properly returnable under ERISA.
Section 3.15 FURTHER REDUCTIONS OF CONTRIBUTIONS. In addition to the
reductions and recharacterizations provided for under Schedule IV, in any Plan
Year in which the Administrative Committee deems it necessary to do so to meet
the requirements of the Code and the Treasury Regulations thereunder, the
Administrative Committee may further reduce the amount of Compensation Deferral
Contributions that may be made to a Participant's Account, or refund such
amounts previously contributed.
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ARTICLE IV
TERMINATION OF SERVICE; PARTICIPANT VESTING
Section 4.01 VESTING.
A. Vesting -- In General. A Participant's interest in his Compensation
Deferral Account, Catch-Up Account, Safe Harbor Matching Account,
Rollover Account, Transfer Account, and his Qualified Matching
Contribution Account or Qualified Non-elective Contribution Account,
if any, shall at all times be fully vested and Nonforfeitable. A
Participant's interest in his Employer Contribution Account, Special
Contribution Account and Non-Safe Harbor Matching Account shall be
fully vested and Nonforfeitable upon and after his attaining Normal
Retirement Age (if employed by the Employer on or after that date),
or if his employment terminates as a result of death or Disability.
Except as otherwise provided in Schedule V, if a Participant's
employment terminates prior to Normal Retirement Age for any reason
other than death or Disability, then for each Year of Service, he
shall receive a Nonforfeitable percentage of his Employer
Contribution Account, Special Contribution Account and Non-Safe
Harbor Matching Account (forfeiting the balance) equal to the
following:
Years of Service Percent Nonforfeitable
-------------------------- ----------------------
Less than three (3) 0%
At least three (3) or more 100%
B. Vesting -- Transition Contributions. If a Participant's Account is
credited with Transition Contributions set forth in Schedule V, such
Transition Contribution shall be subject to the vesting schedule set
forth in Schedule V.
Section 4.02 INCLUDED YEARS OF SERVICE - VESTING. For purposes of
determining Years of Service under Section 4.01, the Plan shall take into
account all Years of Service an Employee completes except any Year of Service
after the Participant first incurs a "Forfeiture Break in Service." The
Participant incurs a Forfeiture Break in Service when he incurs five consecutive
Breaks in Service. This exception excluding Years of Service after a Forfeiture
Break in Service shall apply for the sole purpose of determining the
nonforfeitable percentage of a Participant's Employer Contribution Account,
Special Contribution Account, Non-Safe Harbor Matching Account and Transition
Account which accrued for his benefit prior to the Forfeiture Break in Service.
Section 4.03 FORFEITURE OCCURS. A Participant's forfeiture, if any, of his
Employer Contribution Account, Special Contribution Account, Non-Safe Harbor
Matching Account and any Transition Accounts as provided in Schedule V subject
to a vesting schedule shall occur under the Plan:
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A. As of the Accounting Date of the Plan Year in which the Participant
first incurs a Forfeiture Break in Service, or, if earlier and if
applicable,
B. On the date the Participant receives (or is deemed to receive) a
"Cash-out Distribution," as defined in Section 4.04, of the
Nonforfeitable percentage of his Employer Contribution Account,
Special Contribution Account, Non-Safe Harbor Matching Account and
Transition Account as a result of his termination of participation
in the Plan in accordance with Section 4.04 below.
The Administrative Committee shall determine the percentage of a
Participant's Employer Contribution Account, Special Contribution Account,
Non-Safe Harbor Matching Account and Transition Account forfeiture, if any,
under this Section 4.03 solely by reference to the vesting schedule of Section
4.01 or as provided in Schedule V, if applicable. A Participant shall not
forfeit any portion of his Employer Contribution Account, Special Contribution
Account or Non-Safe Harbor Matching Account for any other reason or cause except
as expressly provided by this Section 4.03.
Section 4.04 CASH-OUT DISTRIBUTIONS TO PARTIALLY-VESTED PARTICIPANTS. If,
pursuant to Article V, a partially-vested Participant receives a "Cash-out
Distribution" before he incurs a Forfeiture Break in Service, the Cash-out
Distribution will result in an immediate forfeiture of the nonvested portion of
the Participant's Account Balance derived from Employer contributions. A
partially-vested Participant is a Participant whose Nonforfeitable Percentage
determined under Section 4.01 is less than 100%. A Cash-out Distribution is a
distribution of the entire present value of the Participant's Nonforfeitable
Account Balance.
A "deemed" Cash-out Distribution rule applies to a 0% vested Participant.
A 0% vested Participant is a Participant whose Account Balance is entirely
forfeitable at the time of his Separation from Service. If the Participant's
Account is not entitled to an allocation of Employer contributions or
Participant forfeitures for the Plan Year in which he has a Separation from
Service, the Administrative Committee will apply the deemed Cash-out
Distribution rule as if the 0% vested Participant received a Cash-out
Distribution on the date of the Participant's Separation from Service. If the
Participant's Account is entitled to an allocation of Employer contributions or
Participant forfeitures for the Plan Year in which he has a Separation from
Service, the Administrative Committee will apply the deemed Cash-out
Distribution rule as if the 0% vested Participant received a Cash-out
Distribution on the first day of the first Plan Year beginning after his
Separation from Service. For purposes of applying the restoration provisions of
Section 5.05, the Administrative Committee will treat the 0% vested Participant
as repaying his Cash-out Distribution on the first date of his re-employment
with the Employer.
Section 4.05 RESTORATION OF FORFEITED PORTION OF ACCOUNT. A Participant
who is re-employed after receiving a Cash-out Distribution (or deemed Cash-out
Distribution) of the Nonforfeitable percentage of his Account shall have the
right to repay the Trustee in cash the entire amount of the Cash-out
Distribution he received, if the Administrative Committee must restore his
Account under the requirements of this Section 4.05.
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A. Restoration and Conditions upon Restoration. Subject to the
conditions of this subsection, if the Participant makes the Cash-out
Distribution repayment, the Administrative Committee shall restore
his Account attributable to Employer contributions to the same
dollar amount as the dollar amount of such portion of his Account on
the Accounting Date, or other Valuation Date, immediately preceding
the date of the Cash-out Distribution (or deemed Cash-out
Distribution), unadjusted for any gains or losses occurring
subsequent to that Accounting Date, or other Valuation Date.
Notwithstanding such repayment, the Administrative Committee shall
not restore a re-employed Participant's Account under the
immediately preceding sentence if:
(i) The Participant's Account was 100% Nonforfeitable at the time
of the Cash-out Distribution; or
(ii) The Participant incurred a Forfeiture Break in Service. This
condition shall apply only if repayment is not made before the
earlier of five years after the first date on which the
Participant is re-employed by the Employer, or the close of
the first period of five consecutive Breaks in Service
commencing after the Cash-out Distribution.
B. Time and Method of Restoration. If neither of the two conditions
preventing restoration of the Participant's Account applies, the
Administrative Committee shall restore the Participant's Account as
of the Plan Year Accounting Date coincident with or immediately
following the repayment. To restore the Participant's Account, the
Administrative Committee, to the extent necessary, shall allocate to
the Participant's Account:
(i) First, the amount, if any, of Participant forfeitures the
Administrative Committee would otherwise allocate under
Section 3.11; and
(ii) Second, the Employer contribution for the Plan Year to the
extent made under a discretionary formula.
To the extent the amount(s) available for restoration for a
particular Plan Year are insufficient to enable the Administrative
Committee to make the required restoration, the Employer shall
contribute, without regard to any requirement or condition of
Section 3.03, such additional amount as is necessary to enable the
Administrative Committee to make the required restoration. If, for a
particular Plan Year, the Administrative Committee must restore the
Account of more than one re-employed Participant, then the
Administrative Committee shall make the restoration allocation(s) to
each such Participant's Account in the same proportion that a
Participant's restored amount for the Plan Year bears to the
restored amount for the Plan Year of all re-employed Participants.
The Administrative Committee shall not take into account the
allocation(s) under this Section 4.05 in applying the limitation on
allocations described in Schedule IV.
C. Segregated Account for Repaid Amount. Until the Administrative
Committee restores the Participant's Account, the Trustee shall, at
the direction of the
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Company or the Administrative Committee, invest the amount the
Participant has repaid in a segregated Account maintained solely for
that Participant. The Trustee shall invest the amount in the
Participant's segregated Account in federally insured
interest-bearing savings account(s), time deposit(s), or similar
investments, including a money market or similar fund currently
offered as an investment option under the Trust. Until commingled
with the balance of the Trust Fund on the date the Administrative
Committee restores the Participant's Account, the Participant's
segregated Account shall remain a part of the Trust, but it alone
shall share in any income it earns and it alone shall bear any
expense or loss it incurs. The Company or the Administrative
Committee shall direct the Trustee to repay to the Participant, as
soon as is administratively practicable, the full amount of the
Participant's segregated Account, if the Administrative Committee
determines that one or more of the conditions of Subsection A of
this Section 4.05 prevents restoration as of the applicable
Accounting Date, notwithstanding the Participant's repayment.
Section 4.06 TRANSFER BETWEEN CLASSES OF EMPLOYEES. For purposes of
vesting, in the case of an Employee who transferred from a class of Employees
whose Service was determined on an Hours of Service basis to a class of
Employees whose Service is determined on an elapsed time basis, such Employee
received credit for a Period of Service consisting of (a) a number of years
equal to the number of Years of Service credited to the Employee before the Plan
Year during which the transfer occurs, and (b) the greater of (i) the Period of
Service that would be credited to the Employee under the elapsed time method for
his Service during the entire Plan Year in which the transfer occurs or (ii) the
Service taken into account under the hours counting method as of the date of the
transfer. In addition, the Employee received credit for Service subsequent to
the transfer commencing on the day after the last day of the Plan Year in which
the transfer occurs.
In the case of an Employee who transferred from a class of Employees whose
Service is determined on an elapsed time basis to a class of Employees whose
Service was determined on an Hours of Service basis, such Employee received
credit, as of the date of transfer, for a number of Years of Service equal to
the number of one-year Periods of Service credited to the Employee as of the
date of transfer, and the Employee received credit, in the Plan Year which
includes the date of the transfer, for a number of Hours of Service determined
by applying the equivalency set forth in Labor Reg. Section 2530.200b-3(e)(1)(i)
(which credits ten Hours of Service) to any fractional part of a year credited
to the Employee under this Section as of the date of the transfer.
Section 4.07 TRANSFERS BETWEEN PARTICIPATING EMPLOYERS. For purposes of
vesting, in the case of an Employee who transfers between Participating
Employers with different vesting schedules, the Employee's Nonforfeitable
percentage shall be determined in accordance with the vesting schedule
applicable to the Participating Employer at which the Employee first commenced
employment. Notwithstanding the foregoing, if the vesting schedule at the
Participating Employer to which the Employee is transferred is more advantageous
in all respects than the Employee's vesting schedule at his original
Participating Employer, such Employee's Nonforfeitable percentage shall be
determined in accordance with the vesting schedule of the subsequent
Participating Employer. If the vesting schedule may be more advantageous
depending on an Employee's
-27-
Years of Service and the Employee has performed three or more Years of Service
for an Employer at the time of the transfer, the Employee may elect between the
vesting schedule of his prior Participating Employer and his current
Participating Employer in accordance with the procedures set forth in Section
12.03.
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ARTICLE V
TIME AND METHOD OF PAYMENT OF BENEFITS
Section 5.01 RETIREMENT. Upon termination of a Participant's
employment for any reason after attaining Normal Retirement Age, payment of the
Participant's Account shall commence to him (or to his Beneficiary if the
Participant is deceased), in accordance with the provisions of this Article V,
as soon as administratively practicable but not later than 60 days after the
close of the Plan Year in which the Participant's employment terminates. The
form of payment shall be the same as for other Separation from Service
distributions, as set forth in Sections 5.02 and 5.04 and Schedule III, as
applicable. A Participant who remains in the employ of the Employer after
attaining Normal Retirement Age shall continue to participate in Employer
contributions.
Section 5.02 DISTRIBUTION UPON SEPARATION FROM SERVICE PRIOR TO NORMAL
RETIREMENT AGE. Upon a Participant's Separation from Service prior to attaining
Normal Retirement Age (for any reason other than death), payment shall commence
to the Participant of the value of his Nonforfeitable Account Balance as
provided in this Section 5.02. The following rules and definitions shall apply
to any such distribution:
A. "Cash-out Distribution." A Cash-out Distribution is a lump sum
distribution of the Participant's Nonforfeitable Account Balance.
B. Consent. The Participant must consent in writing to the
Administrative Committee's direction to the Trustee to make a
distribution to the Participant and to the form of the distribution
if: (i) the Participant's Nonforfeitable Account Balance on the date
the distribution commences exceeds $5,000, and (ii) the
Administrative Committee directs the Trustee to make a distribution
to the Participant prior to his attaining the later of Normal
Retirement Age or age 62. Furthermore, the Participant's Spouse must
consent in writing to the distribution if: (i) the Administrative
Committee must obtain the Participant's consent; and (ii) the
qualified joint and survivor annuity provisions of Code Section
401(a)(11) (as set forth in Schedule III of the Plan) apply to the
distribution.
The consent of the Participant, and the Participant's Spouse, if
applicable, shall be obtained in writing within the 90-day period ending
on the "Annuity Starting Date." The Annuity Starting Date is the first day
of the first period for which an amount is paid as an annuity or in any
other form. The Plan Administrator shall notify the Participant and the
Participant's Spouse of the right to defer any distribution until the
Participant's Nonforfeitable Account Balance is no longer immediately
distributable. Such notification shall include a general description of
the material features, and an explanation of the relative values of, the
optional forms of benefit available under the Plan in a manner that would
satisfy the notice requirements of Code Section 417(a)(3), and shall be
provided no less than 30 days and no more than 90 days prior to the
Annuity Starting Date. However, if the Participant, after having received
this notice, affirmatively elects a distribution, such distribution may
commence less than 30 days after the notice was provided.
-29-
Notwithstanding the foregoing, only the Participant need consent to the
commencement of a distribution in the form of a qualified joint and
survivor annuity while the Account balance is immediately distributable.
(Furthermore, if payment in the form of a qualified joint and survivor
annuity is not required with respect to the Participant pursuant to Code
Section 417, only the Participant need consent to the distribution of an
Account balance that is immediately distributable.) Neither the consent of
the Participant nor the Participant's Spouse shall be required to the
extent that a distribution is required to satisfy Section 401(a)(9) or
Section 415 of the Code. An Account balance is immediately distributable
if any part of the Account balance could be distributed to the Participant
(or the surviving Spouse) before the Participant attains, or would have
attained if not deceased, the later of Normal Retirement Age or age 62.
C. Time of Distribution of Account Balance. Upon Separation from
Service, other than for death, before Normal Retirement Age, and
subject to the consent requirements set forth in Schedule III to the
Plan, distribute the Participant's Account balance shall be
distributed as follows:
(i) If the Participant's Nonforfeitable Account Balance on the
date the distribution commences is $1,000 or less ($5,000 or
less prior to March 28, 2005), the Trustee shall pay such
Nonforfeitable Account Balance to the Participant in the form
of a single, lump sum Cash-out Distribution as soon as
administratively practicable after the Participant's
Separation from Service, unless the Participant consents to
the distribution.
(ii) If the Participant's Nonforfeitable Account Balance on the
date the distribution commences is greater than $1,000 ($5,000
prior to March 28, 2005), the Trustee shall pay such
Nonforfeitable Account Balance in the form of a single, lump
sum distribution as soon as administratively practicable after
the Participant's Separation from Service unless the
Participant (and his Spouse, if applicable) does not consent
to such immediate distribution. Distributions in the form of a
qualified joint and survivor annuity continue to apply to (a)
Participants who previously participated in the Packaging
Coordinators, Inc. Money Purchase Pension Plan, and (b)
certain other individuals as may be identified on Schedule V.
D. Deferral of Distribution of Account Balance until Normal Retirement
Age. If the Participant (and, if applicable, the Participant's
Spouse) does not file his written consent (if required) with the
Trustee within the reasonable period of time stated in the consent
form, the Trustee shall continue to hold the Participant's Account
in trust until the close of the Plan Year in which the Participant
attains Normal Retirement Age. At that time, the Trustee shall
commence payment of the Participant's Nonforfeitable value of his
Account in accordance with the provisions of this Article V;
provided, however, if the Participant dies after terminating
employment but prior to attaining Normal Retirement Age, the
Committee, upon notice of the death, shall direct the
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Trustee to commence payment of the Participant's Nonforfeitable
value of his Account to his Beneficiary in accordance with the
provisions of Section 5.06.
A Participant who has elected to delay receiving a distribution of his
Account may elect to receive a distribution of his Nonforfeitable Account
Balance as soon as administratively practicable by properly completing the
appropriate distribution election forms or procedures. If no such election
is made, the Participant's Nonforfeitable Account Balance shall be paid as
provided in Section 5.01.
Section 5.03 OTHER RULES GOVERNING THE TIME OF PAYMENT OF BENEFITS.
A. Minimum Legal Distribution Requirements. Unless the Participant
elects otherwise in writing, the Participant's Nonforfeitable
Account Balance shall be distributed not later than 60 days after
the close of the Plan Year in which the later of the following
events occurs:
(i) The date the Participant attains Normal Retirement Age; or
(ii) The date the Participant dies, becomes disabled, or otherwise
terminates Service (employment) with the Employer.
In no event shall the distribution commence nor shall the
Participant elect to have distribution commence, later than the
Required Beginning Date. Furthermore, once distributions have begun
to a Five-percent Owner, they must continue to be distributed, even
if the Participant ceases to be a Five-percent Owner in a subsequent
year.
B. In no event shall the payment commence later than the time
prescribed by this Article V or in a form not permitted under
Article VI. The Administrative Committee shall make its
determinations under this Article V in a nondiscriminatory,
consistent and uniform manner. The Participant (and, if applicable,
the Participant's Spouse) shall be provided with the appropriate
form to consent to the distribution direction, if required.
Section 5.04 FORM OF BENEFIT PAYMENTS. Subject to Schedule III, if
applicable, a Participant shall receive payment of his Nonforfeitable Account
Balance in a single lump sum in cash (and, where applicable, in Shares) based
upon the value of the Account on the Valuation Date coinciding with or
immediately preceding the date the distribution is requested.
Section 5.05 MINIMUM DISTRIBUTION REQUIREMENTS. The Participant's
Nonforfeitable Account Balance shall be distributed, as of the Required
Beginning Date, in accordance with the the minimum distribution requirements
established by Code Section 401(a)(9) and the applicable Treasury Regulations
thereunder.
A. If a Participant's benefit is to be distributed over (i) a period
not extending beyond the life expectancy of the Participant or the
joint life and last survivor expectancy of the Participant and the
Participant's Beneficiary, or (ii) a period
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not extending beyond the life expectancy of the Beneficiary, the
amount required to be distributed for each calendar year, beginning
with distributions for the first distribution calendar year, must at
least equal the quotient obtained by dividing the Participant's
Account balance as of the last Valuation Date preceding the
distribution calendar year by the applicable life expectancy.
B. The amount to be distributed each year, beginning with distributions
for the first distribution calendar year, shall not be less than the
quotient obtained by dividing the Participant's Account Balance as
of the last Valuation Date preceding the distribution calendar year
by the lesser of (i) the applicable life expectancy, or (ii) if the
Participant's Spouse is not the Beneficiary, the applicable divisor
determined from the table set forth in Q&A-4 of Section
1.401(a)(9)-2 of proposed Treasury Regulations. Distributions after
the death of the Participant shall be distributed using the
applicable life expectancy in subsection A above as the relevant
divisor without regard to Proposed Regulations Section
1.401(a)(9)-2.
C. The minimum distribution required for the Participant's first
distribution calendar year must be made on or before the
Participant's Required Beginning Date. The minimum distribution for
other calendar years, including the minimum distribution for the
distribution calendar year in which the Participant's Required
Beginning Date occurs, must be made on or before December 31 of that
distribution calendar year.
D. The Administrative Committee may compute the minimum distribution
for a calendar year subsequent to the first calendar year for which
the Plan requires a minimum distribution by redetermining the
applicable life expectancy. However, the Administrative Committee
may not redetermine the joint life and last survivor expectancy of
the Participant and a nonspouse Beneficiary in a manner that takes
into account any adjustment to a life expectancy other than the
Participant's life expectancy. The Administrative Committee shall
use the life expectancy multiples under Treasury Regulations Section
1.72-9 for purposes of applying this Section.
Section 5.06 DISTRIBUTIONS UPON DEATH. Upon the death of the Participant,
the Participant's Nonforfeitable Account Balance shall be paid in accordance
with Code Section 401(a)(9) and this Section 5.06.
A. Distribution Beginning Before Death. If the Participant's death
occurs after the Trustee has commenced payment of the Participant's
Nonforfeitable Account Balance, the Company or the Administrative
Committee shall direct the Trustee to complete payment over a period
that does not exceed the payment period that had commenced.
B. Distribution Beginning After Death. Except as provided in Schedule
III, if the Participant's death occurs prior to his Annuity Starting
Date, the distribution
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of the Participant's entire Nonforfeitable Account Balance shall be
made to the Participant's Beneficiary in a single lump sum payment.
C. The Participant's Nonforfeitable Account Balance to the
Participant's Beneficiary shall be distributed as soon as
practicable after notification of the Participant's death. However,
if the Participant's Nonforfeitable Account Balance at the time of
distribution exceeds $1,000 ($5,000 prior to March 28, 2005), the
Account shall not be distributed to the Participant's Beneficiary
prior to the date the Participant would have attained the later of
Normal Retirement Age or age 62, without the written consent of the
Beneficiary if the Beneficiary is the Participant's surviving
Spouse. If the Beneficiary is not the Participant's surviving
Spouse, the Beneficiary must elect to have distribution of the
entire amount payable completed on or before the last day of the
calendar year which contains the fifth anniversary of the date of
the Participant's death.
Section 5.07 REVISED REQUIRED MINIMUM DISTRIBUTIONS.
A. Effective Dates. The provisions of this Section 5.07 will apply for
purposes of determining the required minimum distributions for
calendar years beginning on or after January 1, 2003.
B. Definitions. For purposes of this Section 5.07, the following
definitions shall apply:
(i) "Designated Beneficiary" is the individual who is designated
as the beneficiary under Plan Section 1.04 and is the
Designated Beneficiary under Code Section 401(a)(9) and
Section 1.401(a)(9)-1, Q&A-4 of the Treasury Regulations.
(ii) "Distribution Calendar Year" is a calendar year for which a
minimum distribution is required. For distributions beginning
before the Participant's death, the first Distribution
Calendar Year is the calendar year immediately preceding the
calendar year which contains the participant's Required
Beginning Date. For distributions beginning after the
Participant's death, the first Distribution Calendar Year is
the calendar year in which the distributions are required to
begin. The required minimum distribution for the Participant's
first Distribution Calendar Year will be made on or before the
Participant's Required Beginning Date. The required minimum
distribution for other Distribution Calendar Years, including
the required minimum distribution for the Distribution
Calendar Year in which the Participant's Required Beginning
Date occurs, will be made on or before December 31 of that
Distribution Calendar Year.
(iii) "Life Expectancy" is a beneficiary's life expectancy as
computed by use of the Single Life Table in Section
1.401(a)(9)-9 of the Treasury Regulations.
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(iv) "RMD Account Balance" is the account balance as of the last
valuation date in the calendar year immediately preceding the
Distribution Calendar Year (the "Valuation Calendar Year")
increased by the amount of any contributions made and
allocated or forfeitures allocated to the account balance as
of dates in the Valuation Calendar Year after the valuation
date and decreased by distributions made in the Valuation
Calendar Year after the valuation date. The account balance
for the Valuation Calendar Year includes any amounts rolled
over or transferred to the Plan either in the Valuation
Calendar Year or in the Distribution Calendar Year if
distributed or transferred in the Valuation Calendar Year.
C. Time and Manner of Distribution.
(i) Required Beginning Date. The Participant's entire interest
will be distributed, or begin to be distributed, to the
Participant no later than the Participant's Required Beginning
Date.
(ii) Death of Participant Before Distributions Begin. If the
Participant dies before distributions begin, the Participant's
entire interest will be distributed, or begin to be
distributed, no later than as follows:
1. If the Participant's surviving Spouse is the
Participant's sole Designated Beneficiary, then, except
as provided herein, distributions to the surviving
Spouse will begin by December 31 of the calendar year
immediately following the calendar year in which the
Participant died, or by December 31 of the calendar year
in which the Participant would have attained age 70 1/2,
if later.
2. If the Participant's surviving Spouse is not the
Participant's sole Designated Beneficiary, then, except
as provided herein, distributions to the Designated
Beneficiary will begin by December 31 of the calendar
year immediately following the calendar year in which
the Participant died.
3. If there is no Designated Beneficiary as of September 30
of the year following the year of the Participant's
death, the Participant's entire interest will be
distributed by December 31 of the calendar year
containing the fifth anniversary of the Participant's
death.
4. If the Participant's surviving Spouse is the
Participant's sole Designated Beneficiary and the
surviving Spouse dies after the Participant but before
distributions to the surviving Spouse begin, this
Subsection 4., other than Subsection 1., will apply as
if the surviving Spouse were the Participant.
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For purposes of this Section 5.07.C. and Sections 5.07.G. and H., unless
Subsection 4. above applies, distributions are considered to begin on the
Participant's Required Beginning Date. If Subsection 4. applies, distributions
are considered to begin on the date distributions are required to begin to the
surviving Spouse under Subsection 1. If distributions under an annuity purchased
from an insurance company irrevocably commence to the Participant before the
Participant's Required Beginning Date (or to the Participant's surviving Spouse
before the date distributions are required to begin to the surviving Spouse
under Subsection 1.), the date distributions are considered to begin is the date
distributions actually commence.
D. Forms of Distribution. Unless the Participant's interest is
distributed in the form of an annuity purchased from an insurance
company or in a single sum on or before the Required Beginning Date,
as of the first Distribution Calendar Year distributions will be
made in accordance with Sections 5.07.E., 5.07.F., 5.07.G. and
5.07.H. If the Participant's interest is distributed in the form of
an annuity purchased from an insurance company, distributions
thereunder will be made in accordance with Code Section 401(a)(9)
and the Treasury Regulations.
E. Amount of Required Minimum Distributions for Each Distribution
Calendar Year. During the Participant's lifetime, the minimum amount
that will be distributed for each Distribution Calendar Year is the
lesser of:
(i) the quotient obtained by dividing the RMD Account Balance by
the distribution period in the Uniform Lifetime Table set
forth in Treasury Regulations Section 1.401(a)(9)-9, using the
Participant's age as of the Participant's birthday in the
Distribution Calendar Year; or
(ii) if the Participant's sole Designated Beneficiary for the
Distribution Calendar Year is the Participant's Spouse, the
quotient obtained by dividing the RMD Account Balance by the
number in the Joint and Last Survivor Table set forth in
Treasury Regulations Section 1.401(a)(9)-9, using the
Participant's and the Spouse's attained ages as of the
Participant's and Spouse's birthdays in the Distribution
Calendar Year.
F. Lifetime Required Minimum Distributions Continue Through Year of
Participant's Death. Required minimum distributions will be
determined under this Subsection F. beginning with the first
Distribution Calendar Year and up to and including the Distribution
Calendar Year that includes the Participant's date of death.
G. Death On or After Date Distributions Begin.
(i) Participant Survived by Designated Beneficiary. If the
Participant dies on or after the date distributions begin and
there is a Designated Beneficiary, the minimum amount that
will be distributed for each Distribution Calendar Year after
the year of the Participant's death is the quotient obtained
by dividing the RMD Account Balance by the
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longer of the remaining Life Expectancy of the Participant or
the remaining Life Expectancy of the Participant's Designated
Beneficiary, determined as follows:
1. The Participant's remaining Life Expectancy is
calculated using the age of the Participant in the year
of death, reduced by one for each subsequent year.
2. If the Participant's surviving Spouse is the
Participant's sole Designated Beneficiary, the remaining
Life Expectancy of the surviving Spouse is calculated
for each Distribution Calendar Year after the year of
the Participant's death using the surviving Spouse's age
as of the Spouse's birthday in that year. For
Distribution Calendar Years after the year of the
surviving Spouse's death, the remaining Life Expectancy
of the surviving Spouse is calculated using the age of
the surviving Spouse as of the Spouse's birthday in the
calendar year of the Spouse's death, reduced by one for
each subsequent calendar year.
3. If the Participant's surviving Spouse is not the
Participant's sole Designated Beneficiary, the
Designated Beneficiary's remaining Life Expectancy is
calculated using the age of the Beneficiary in the year
following the year of the Participant's death, reduced
by one for each subsequent year.
(ii) No Designated Beneficiary. If the Participant dies on or after
the date distributions begin and there is no Designated
Beneficiary as of September 30 of the year after the year of
the Participant's death, the minimum amount that will be
distributed for each Distribution Calendar Year after the year
of the Participant's death is the quotient obtained by
dividing the RMD Account Balance by the Participant's
remaining Life Expectancy calculated using the age of the
Participant in the year of death, reduced by one for each
subsequent year.
H. Death Before Date Distributions Begin.
(i) Participant Survived by Designated Beneficiary. Except as
provided herein, if the Participant dies before the date
distributions begin and there is a Designated Beneficiary, the
minimum amount that will be distributed for each Distribution
Calendar Year after the year of the Participant's death is the
quotient obtained by dividing the Participant's Account
Balance by the remaining Life Expectancy of the Participant's
Designated Beneficiary, determined as provided in Subsection
G.
(ii) No Designated Beneficiary. If the Participant dies before the
date distributions begin and there is no Designated
Beneficiary as of September 30 of the year following the year
of the Participant's death,
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distribution of the Participant's entire interest will be
completed by December 31 of the calendar year containing the
fifth anniversary of the Participant's death.
(iii) Death of Surviving Spouse Before Distributions to Surviving
Spouse are Required to Begin. If the Participant dies before
the date distributions begin, the Participant's surviving
Spouse is the Participant's sole Designated Beneficiary, and
the surviving Spouse dies before distributions are required to
being to the surviving Spouse under Section 5.07.C.(ii)(1),
this Section will apply as if the surviving Spouse were the
Participant.
I. General Rules.
(i) Precedence. The requirements of this Section 5.07 will
supersede any contrary provisions of the Plan.
(ii) Requirements of Treasury Regulations Incorporated. All
distributions required under this Section 5.07 will be
determined and made in accordance with the Treasury
Regulations under Code Section 401(a)(9).
(iii) TEFRA Section 242(b)(2) Elections. Notwithstanding the other
provisions of this Section 5.07, distributions may be made
under a designation made before January 1, 1984, in accordance
with section 242(b)(2) of the Tax Equity and Fiscal
Responsibility Act ("TEFRA") and the provisions of the Plan
that relate to TEFRA Section 242(b)(2).
Section 5.08 DESIGNATION OF BENEFICIARY. A Participant may, from time to
time, designate in writing a Beneficiary or Beneficiaries, contingently or
successively, to whom the Trustee shall pay his Account in the event of his
death. A Participant's Beneficiary designation shall not be valid unless the
Participant's Spouse consents (in accordance with the requirements of Code
Section 417) to the Beneficiary designation. A Participant's Beneficiary
designation does not require spousal consent if the Participant's Spouse is the
Participant's designated Beneficiary. The Administrative Committee shall
prescribe the form for the written designation of Beneficiary and, upon the
Participant's filing the form with the Administrative Committee, the Participant
shall effectively revoke all designations filed prior to that date by the same
Participant.
Section 5.09 FAILURE OF BENEFICIARY DESIGNATION. If a Participant fails to
name a Beneficiary in accordance with Section 5.08, or if the Beneficiary named
by a Participant predeceases him, then the Trustee shall pay the Participant's
Account in a single lump sum to the Participant's surviving Spouse, if any, and
if there is no surviving Spouse, to the Participant's estate.
If the Beneficiary survives the Participant but dies before complete
distribution of the Participant's Account, the remaining portion of the
Participant's Account shall be paid in a lump sum to any contingent
Beneficiaries named by the Participant or, if there are none, to the legal
representative of the estate of such deceased Beneficiary. The Company or the
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Administrative shall direct the Trustee as to the method and to whom the Trustee
shall make payment under this Section.
Section 5.10 SPECIAL RULES FOR TRANSFER ACCOUNTS. Notwithstanding any
provision of this Article V to the contrary, with respect to any Participant who
has one or more Transfer Accounts consisting in whole or in part of Transfer
Contributions which, by operation of relevant law and regulation (including, but
not limited to, ERISA and the Code), must be distributed or made available under
the same terms and conditions under which amounts held thereunder were
previously held (prior to their becoming Transfer Contributions) to the extent
that such terms and conditions must be preserved in order to comply with Code
Section 411(d)(6), the Administrative Committee shall, upon the written request
of the Participant (in the case of optional forms of benefit), cause the Trustee
to distribute or make available such Transfer Contributions at such times and in
such manner as may be so required.
Section 5.11 DISTRIBUTIONS UNDER DOMESTIC RELATIONS ORDERS. Nothing
contained in this Plan shall prevent the Trustee from complying with the
provisions of a qualified domestic relations order (as defined in Code Section
414(p)). This Plan specifically permits distribution to an alternate payee under
a qualified domestic relations order at any time, irrespective of whether the
Participant has attained his earliest retirement age (as defined under Code
Section 414(p)) under the Plan. A distribution to an alternate payee prior to
the Participant's attainment of the earliest retirement age is available only if
the order specifies distribution at that time or permits an agreement between
the Plan and the alternate payee to authorize such an earlier distribution. In
addition, if the present value of the alternate payee's benefits under the Plan
exceeds $5,000 and the order requires, the alternate payee must consent to any
distribution occurring prior to the Participant's attainment of the earliest
retirement age. Nothing in this Section gives a Participant the right to receive
a distribution at a time not permitted under the Plan, nor does this Section
5.10 give the alternate payee the right to receive a form of payment not
permitted under the Plan.
The Administrative Committee shall establish reasonable procedures to
determine the qualified status of a domestic relations order. Upon receiving a
domestic relations order, the Administrative Committee promptly shall notify the
Participant and any alternate payee named in the order, in writing, of the
receipt of the order and the Plan's procedures for determining the qualified
status of the order. Within a reasonable period of time after receiving the
domestic relations order, the Administrative Committee shall determine the
qualified status of the order and shall notify the Participant and each
alternate payee, in writing, of its determination. The Administrative Committee
shall provide notice under this paragraph by mailing to the individual's address
specified in the domestic relations order, or in a manner consistent with Labor
Regulations.
If any portion of the Participant's Nonforfeitable Account Balance is
payable during the period the Administrative Committee is making its
determination of the qualified status of the domestic relations order, the
Trustee shall segregate the amounts payable in a separate account and invest the
segregated account solely in fixed income investments or maintain a separate
bookkeeping account of said amounts. If the Administrative Committee determines
the order is a qualified domestic relations order within 18 months of the first
date on which payments were due under the terms of the order, the Trustee shall
distribute the separate
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account in accordance with the order. If the Administrative Committee does not
make its determination of the qualified status of the order within the
above-described 18-month period, the Trustee shall distribute the segregated
account in the manner the Plan would distribute it if the order did not exist,
and shall apply the order prospectively if the Administrative Committee later
determines the order is a qualified domestic relations order.
To the extent it is not inconsistent with the provisions of the qualified
domestic relations order, the Trustee shall invest any partitioned amount in a
segregated subaccount or separate account and invest the account in the money
market investment option or in other fixed income investments. A segregated
subaccount shall remain a part of the Trust, but it alone shall share in any
income it earns, and it alone shall bear any expense or loss it incurs.
The Trustee shall make any payment or distributions required under this
Section by separate benefit checks or other separate distribution to the
alternate payee(s).
Section 5.12 RE-EMPLOYMENT OF PARTICIPANTS RECEIVING PAYMENTS. In the
event that a Participant who is receiving installment payments is re-employed by
the Company, such Participant shall continue to receive payments from his
Account in accordance with the method of payment in effect prior to his
re-employment unless such method is changed. Payments shall be drawn from his
entire Account, including any contributions allocated to his Account after his
re-employment.
Section 5.13 FORM OF PAYMENTS. Lump sum payments may be made in cash or in
Shares, if applicable. A Participant (or Beneficiary or personal representative,
as applicable) making application for distribution of his Account shall be
entitled to elect, in accordance with the Plan's procedures, to have all those
Shares then held in or thereafter credited to his Account distributed to him in
that form. If such an election is made, any Plan distribution made under this
Article V shall consist (in part) of the number of Shares (excluding any
fractional share interest which shall be paid in cash) credited to the
Participant's total Account, but only as part of any lump sum distribution
payable hereunder, and if all such Participant's Shares then being held in the
Trust Fund (fractional interests excepted) are to be distributed. If a
Participant or Beneficiary elects an annuity form of distribution pursuant to
Schedule III, a nontransferable annuity contract shall be purchased from a
commercial insurer with the Participant's Nonforfeitable Account Balance and
distributed to the Participant or Beneficiary.
Section 5.14 LOST PARTICIPANT OR BENEFICIARY. The Account of a Participant
shall be forfeited if the Benefits Group, after reasonable effort, is unable to
locate the Participant or his Beneficiary to whom payment is due. The amount of
the forfeiture shall reduce the Employer's contributions under Sections 3.02 and
3.06, as elected by the Employer. However, any such forfeited Account will be
reinstated and become payable if a claim is made by the Participant or
Beneficiary for such Account. The Administrative Committee may prescribe uniform
and non-discriminatory rules for carrying out this provision.
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Section 5.15 FACILITY OF PAYMENT. If any person entitled to receive any
amount under the provisions of this Plan is determined to be incapable of
receiving or disbursing the same by reason of minority, illness or infirmity,
mental incompetency, or incapacity of any kind, the Administrative Committee
may, in its discretion, direct the Trustee to take any one or more of the
following actions:
A. To apply such amount directly for the comfort, support and
maintenance of such person;
B. To reimburse any person for any such support theretofore supplied to
the person entitled to receive any such payment;
C. To pay such amount to any person selected by the Administrative
Committee to disburse it for such comfort, support and maintenance,
including without limitation, any relative who has undertaken,
wholly or partially, the expense of such person's comfort, care and
maintenance, or any institution in whose care or custody the person
entitled to the amount may be. The Administrative Committee may, in
its discretion, deposit any amount due to a minor to his credit in
any savings or commercial bank of the Administrative Committee's
choice.
Section 5.16 NO DISTRIBUTION PRIOR TO SEPARATION FROM SERVICE, DEATH OR
DISABILITY. Except as provided below, Compensation Deferrals, Safe Harbor
Matching Contributions, Catch-Up Contributions, Qualified Non-elective
Contributions, Qualified Matching Contributions, Transition Contributions and
income allocable to each, are not distributable to a Participant or his
Beneficiary or Beneficiaries, in accordance with such Participant's or
Beneficiary's election, earlier than upon Separation from Service, death or
Disability.
Such amounts may also be distributed upon:
A. Termination of the Plan without the establishment of another defined
contribution plan, as defined in the Code and applicable Treasury
Regulations.
B. The hardship of the Participant, as described in Section 6.01
herein.
C. The attainment by the Participant of age 59-1/2, as described in
Section 6.03 herein.
D. A Participant's Severance from Employment. A "Severance from
Employment" occurs when a Participant ceases to be employed by the
Employer maintaining the Plan. This distributable event shall apply
for distributions on and after January 1, 2002 and regardless of
when the Severance from Employment occurred.
All distributions that may be made pursuant to one or more of the
foregoing distributable events are subject to the spousal and Participant
consent requirements (if applicable) contained in Sections 401(a)(11) and 417 of
the Code.
Section 5.17 DISTRIBUTION OF ASSETS TRANSFERRED FROM MONEY PURCHASE
PENSION PLAN. Notwithstanding any provision of the Plan to the contrary,
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to the extent that any optional form of benefit under the Plan permits a
distribution prior to the employee's retirement, death, Disability, or severance
from employment, and prior to Plan termination, the optional form of benefit is
not available with respect to benefits attributable to assets (including the
post-transfer earnings thereon) and liabilities that are transferred, within the
meaning of Section 414(l) of the Internal Revenue Code, to this Plan from a
money purchase pension plan qualified under Section 401(a) of the Internal
Revenue Code (other than any portion of those assets and liabilities
attributable to voluntary employee contributions). The conversion of a plan from
a money purchase pension plan to a profit sharing plan shall be treated as a
transfer subject to Code Section 414(l) for the purpose of this Section.
Section 5.18 WRITTEN INSTRUCTION NOT REQUIRED. Any elections made or
distributions processed under this Article V may be accomplished through
telephonic, electronic or similar instructions in accordance with the rules and
procedures established by the Administrative Committee, to the extent they are
consistent with the requirements of the Code and ERISA. Notwithstanding the
foregoing, however, spousal consents and waivers, to the extent required, may
only be granted in writing.
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ARTICLE VI
WITHDRAWALS; DIRECT ROLLOVERS AND WITHHOLDING; LOANS
Section 6.01 HARDSHIP WITHDRAWALS. Subject to the restrictions set forth
in Section 5.16, upon the application of any Participant, the Administrative
Committee, in accordance with a uniform, nondiscriminatory policy, may permit
such Participant to withdraw (a) all or a portion of the vested amounts then
credited to his Compensation Deferral Account and Catch-Up Account (excluding
all trust earnings credited thereto) and/or (b) such Participant's interest in
his Rollover Account and/or the portion of his Transfer Account attributable to
Code Section 401(k) compensation deferrals (except with respect to income and
earnings credited thereto) and after-tax contributions, if the withdrawal is
necessary due to the immediate and heavy financial need of the Participant.
A. Only distributions made pursuant to conditions arising under the
following circumstances shall be conclusively considered to be made
on account of immediate and heavy financial need:
(i) Alleviating extraordinary financial hardship arising from
deductible medical expenses (within the meaning of Code
Section 213(d)) previously incurred by the Participant or his
Spouse, children or other dependents, or necessary for such
persons to obtain such care;
(ii) Purchasing real property (excluding mortgage payments) that is
to serve as the principal residence of the Participant;
(iii) Expenditures necessary to prevent eviction from the
Participant's principal residence or foreclosure of a mortgage
on the same;
(iv) Financing the tuition and related educational fees for the
next 12 months of post-secondary education for the
Participant, his Spouse, his children or other dependents; or
(v) Any other reason deemed to be an immediate and heavy financial
need by the Secretary of the Treasury.
B. A distribution will be considered to be necessary to satisfy an
immediate and heavy financial need of the Participant only if:
(i) The Participant has obtained all distributions other than
hardship distributions, and all nontaxable loans, currently
available under all plans maintained by the Employer;
(ii) All plans maintained by the Employer provide that the
Participant's Compensation Deferrals or other Participant
contributions will be suspended for 6 months after the receipt
of the hardship distribution (which this Plan hereby so
provides);
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(iii) The distribution is not in excess of the amount necessary to
satisfy the immediate and heavy financial need, including any
amounts necessary to pay any federal, state, or local income
taxes or penalties reasonably anticipated to result from the
distribution; and
(iv) All plans maintained by the Employer provide that the
Participant may not make Compensation Deferrals for the
Participant's taxable year immediately following the taxable
year of the hardship distribution in excess of the applicable
limit under Section 402(g) of the Code for such taxable year
less the amount of such Participant's Compensation Deferrals
for the taxable year of the hardship distribution (which this
Plan hereby so provides).
A Participant making an application under this Section 6.01 shall have the
burden of presenting to the Administrative Committee evidence of such need, and
the Administrative Committee shall not permit withdrawal under this Section
without first receiving such evidence. If a Participant's application for a
hardship withdrawal is approved, the Trustee shall make payment of the approved
amount of the hardship withdrawal to the Participant.
Section 6.02 SPECIAL WITHDRAWAL RULES APPLICABLE TO ROLLOVER
CONTRIBUTIONS. A Participant who maintains a Rollover Account in the Plan may
elect to make withdrawals (in cash or, if applicable, in Shares) from his
Rollover Account. Any election to begin, change or cease withdrawals shall be
made in accordance with procedures established by the Administrative Committee
or in such other manner as permitted by the Administrative Committee. Payment of
amounts so requested shall be made within an administratively reasonable period
of time after the withdrawal has been requested. The Administrative Committee
may establish other rules of uniform applicability regarding the timing of and
procedures for such withdrawals.
Section 6.03 SPECIAL WITHDRAWAL RULES APPLICABLE TO TRANSFER ACCOUNTS.
Notwithstanding any other Plan provision to the contrary, if the Internal
Revenue Service requires distribution to be made (or offered) with respect to
any or all amounts held on behalf of a Participant with respect to a predecessor
or transferor plan, as a condition of preserving the tax-qualified status of
this Plan or of said predecessor or transferor plan, or if a court of competent
jurisdiction issues an order or decree in respect of the Plan or its fiduciaries
which is determined under relevant federal law to be enforceable, and which
compels the distribution of a Participant's Plan interest, the Administrative
Committee will be entitled to direct the prompt distribution (or offer of
distribution) of such amounts.
Section 6.04 WITHDRAWALS UPON ATTAINMENT OF AGE 59-1/2. Subject to the
consent requirements of Schedule III, if applicable, a Participant who has
attained age 59-1/2 may elect to make withdrawals (in cash or, if applicable, in
Shares) from the Nonforfeitable portion of his Account in the Plan that is not
subject to the restrictions set forth in Section 5.16. Any election to begin,
change or cease withdrawals shall be made in accordance with procedures
established by the Administrative Committee or in such other manner as permitted
by the Administrative Committee. Payment of amounts so requested shall be made
within an administratively reasonable period of time after the withdrawal has
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been requested. The Administrative Committee may establish other rules of
uniform applicability regarding the timing of and procedures for such
withdrawals.
Section 6.05 DIRECT ROLLOVER AND WITHHOLDING RULES.
A. In General. Notwithstanding any provision of the Plan to the
contrary that would otherwise limit a Distributee's election under
this Section, a Distributee may elect, at the time and in the manner
prescribed by the Plan 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.
The Plan Administrator may establish rules and procedures governing
the processing of Direct Rollovers and limiting the amount or number
of such Direct Rollovers in accordance with applicable Treasury
Regulations. Distributions not transferred to an Eligible Retirement
Plan in a Direct Rollover shall be subject to income tax withholding
as provided under the Code and applicable state and local laws, if
any.
B. Definitions
(i) "Eligible Rollover Distribution." An Eligible Rollover
Distribution is any distribution of all or any portion of the
balance to the credit of the Distributee, except that an
Eligible Rollover Distribution does not include: (a) any
distribution that is one of a series of substantially equal
periodic payments (not less frequently than annually) made for
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 of more; (b) any distribution to the
extent such distribution is required under Section 401(a)(9)
of the Code; and (c) any hardship distribution received on and
after January 1, 2002 (limited to hardship amounts described
in Code Sections 401(k)(2)(B)(i)(IV) or 403(b)(11)(B) received
from January 1, 2000 to December 31, 2001). Notwithstanding
the foregoing, any portion of a distribution that consists of
after-tax employee contributions which are not includible in
gross income may be transferred only to an individual
retirement account or annuity described in Code Sections
401(a) or 403(a) that agrees to separately account for amounts
so transferred, including separately accounting for the
portion of such distribution that is includible in gross
income and the portion of such distribution which is not so
includible.
(ii) "Eligible Retirement Plan." An Eligible Retirement Plan is 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), a qualified trust described in Code Section 401(a)
and, effective January 1, 2002, an annuity contract described
in Code Section 403(b) and an eligible plan under Code Section
457(b) which is maintained by a state, political subdivision
of a state, or any agency or instrumentality of a state or
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political subdivision of a state and which agrees to
separately account for amounts transferred into such plan from
this Plan, and which accepts the Distributee's Eligible
Rollover Distribution. This definition of Eligible Retirement
Plan shall also apply in the case of a distribution to a
surviving Spouse, or to a Spouse or former Spouse who is the
alternate payee under a qualified domestic relations order, as
defined in Code Section 414(p).
(iii) "Distributee." A Distributee includes an Employee or former
Employee. In addition, the Employee's or former Employee's
surviving Spouse and the Employee's or former Employee's
Spouse or former Spouse who is the alternate payee under a
qualified domestic relations order, as defined in Section
414(p) of the Code, are Distributees with regard to the
interest of the Spouse or former Spouse.
(iv) "Direct Rollover." A Direct Rollover is a payment by the Plan
to the Eligible Retirement Plan specified by the Distributee.
Section 6.06 LOANS TO PARTICIPANTS. Loans may be granted to any
Participant under the Plan in accordance with applicable rules under the Code
and ERISA, and the provisions of this Section.
A. General Rules. The Administrative Committee shall establish the
procedures a Participant must follow to request a loan from his
Nonforfeitable Account Balance under the Plan. Loans shall be made
available to all Participants on a reasonably equivalent basis;
provided, however, that loans will not be made available to Former
Participants in any event.
In no event will the total of any outstanding loan balances made to any
Participant, including any interest accrued thereon, when aggregated with
corresponding loan balances of the Participant under any other plans of
the Employer or any Affiliate, exceed the lesser of (i) or (ii), below:
(i) $50,000, reduced by the excess (if any) of the highest
outstanding balance of such loans during the one-year period
ending on the day before the date any such loan is made over
the outstanding balance of such loans on the date any such
loan is made; or
(ii) One-half of the value of the vested portion of the
Participant's Account. For purposes of this Section, the value
of a Participant's Account shall be determined as of the
Valuation Date coinciding with or next preceding the date on
which a properly completed loan request is received by the
Administrative Committee (or its delegate) or the Trustee, as
applicable.
The minimum amount of any loan shall be $1,000.
B. Term of Loan. The term of any loan shall be determined by mutual
agreement between the Administrative Committee or Trustee and the
Participant. Every Participant who is granted a loan shall receive a
statement of the charges and
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interest rates involved in each loan transaction and periodic
statements reflecting the current loan balance and all transactions
with respect to that loan to date. Except for loans used to acquire
any dwelling unit which within a reasonable time (determined at the
time the loan is made) is to be used as the principal residence of
the Participant, the term of any loan shall not exceed five years.
The term of any loan which within a reasonable time (determined at
the time the loan is made) is to be used as the principal residence
of the Participant shall not exceed 15 years. All loans shall be
amortized in level payments made not less frequently than quarterly
over the term of the loan, or in accordance with other procedures
established by the Employer or the Administrative Committee.
C. Security. Each loan made hereunder shall be evidenced by a credit
agreement with, or a note payable to the order of, the Trustee and
shall be secured by adequate collateral. Notwithstanding the
foregoing sentence, no more than one-half of the vested portion of
the Participant's Nonforfeitable Account Balance (determined as of
the Valuation Date coinciding with or next preceding the date on
which the loan is made) shall be used to secure any loan.
D. Interest. Each Participant loan shall be considered an investment of
the Trust, and interest shall be charged thereon at a reasonable
rate established by, or in accordance with procedures approved by,
the Administrative Committee commensurate with the interest rates
then being charged by persons in the business of lending money under
similar circumstances. Participant loans under this Section will be
considered the directed investment of the Participant requesting
such loan, and interest paid on such loan will be allocated to the
Account of the Participant-borrower.
E. Repayment Terms. The terms and conditions of each loan shall be
determined by mutual agreement between the Administrative Committee
or Trustee and the Participant. The Administrative Committee shall
take all necessary actions to ensure that each loan is repaid on
schedule by its maturity date, including requiring repayment of the
loan by payroll deduction whenever possible. Subject to the spousal
consent provisions of subsection F below, in the event a Participant
terminates employment or in the event a Participant (or his
Beneficiary or Spouse) elects to receive a distribution from the
Trust Fund at a time when there is an unpaid balance of a loan
against such Participant's Account, the Trustee shall deduct the
unpaid balance of the principal of such loan or any portion thereof,
and any interest accrued to the date of such deduction, from any
payment or distribution from the Trust Fund to which such
Participant or his Beneficiary or Spouse may be entitled. If the
amount of such payment or distribution is not sufficient to repay
the outstanding balance of such loan and any interest accrued
thereon, the Participant (or his estate, if applicable) shall be
liable for and continue to make payments on any balance still due
from him.
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F. Spousal Consent. Any Participant whose Account is subject to the
annuity provisions set forth in Schedule III must obtain the consent
of his Spouse, if any, within the 90-day period before the time the
Participant's vested Account is used as collateral security for the
loan, unless not otherwise required by law. Such consent must be in
writing, must acknowledge the effect of the loan, and must be
witnessed by a Plan representative or notary public. A new consent
is required if the Account balance is used for any increase in the
amount of security.
G. Restrictions on Loans. No Participant shall have more than two loans
under this Section 6.06 outstanding at the same time. However, if a
Participant who previously participated in one of the Merging Plans
which permitted multiple loans has more than two loans outstanding
or if a Participant in a plan which subsequently merges into this
Plan has more than two loans outstanding under such merging plan at
the date of merger, such Participant may, in accordance with the
terms of such loans, continue to have more than two such loans
without violating this provision.
H. Nondiscrimination. Loans will not be made available to Highly
Compensated Employees in an amount greater than the amount made
available to other Employees.
I. Default. Failure to make a payment within 90 days of the date
payment is due will generally constitute a default, unless loan
procedures and applicable law do not so require. Upon default (or,
to the extent prohibited by law or by the terms of the Plan until a
distributable event occurs, upon such event) the Plan Administrator
will deduct the total unpaid amount of the loan and any unpaid
interest due on the loan from the Participant's Account. The
Administrative Committee may establish additional rules and
procedures for handling loan defaults, including, but not limited
to, restrictions on future borrowing.
J. Procedure. The Administrative Committee will establish
nondiscriminatory policies and procedures to administer Participant
loans.
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ARTICLE VII
EMPLOYER ADMINISTRATIVE PROVISIONS
Section 7.01 ESTABLISHMENT OF TRUST. The Company shall execute a Trust
Agreement with one or more persons or parties who shall serve as the Trustee.
The Trustee so selected shall serve as the Trustee until otherwise replaced or
said Trust Agreement is terminated. The Company may, from time to time, enter
into such further agreements with the Trustee or other parties and make such
amendments to said Trust Agreement as it may deem necessary or desirable to
carry out this Plan. Any and all rights or benefits which may accrue to a person
under this Plan shall be subject to all the terms and provisions of the Trust
Agreement.
Section 7.02 INFORMATION TO COMMITTEE. Each Employer shall supply current
information to the Benefits Group as to the name, date of birth, date of
employment, annual compensation, leaves of absence, Years of Service, and date
of termination of employment of each Employee who is, or who will be eligible to
become, a Participant under the Plan, together with any other information that
the Benefits Group considers necessary. The Employer's records as to the current
information that the Employer furnishes to the Benefits Group shall be
conclusive as to all persons.
Section 7.03 NO LIABILITY. The Employer assumes no obligation or
responsibility to any of its Employees, Participants or Beneficiaries for any
act of, or failure to act, on the part of any Administrative Committee or the
Trustee.
Section 7.04 INDEMNITY OF COMMITTEE. Each Employer indemnifies and saves
harmless the members of each Administrative Committee, and each of them
individually, from and against any and all loss (including reasonable attorneys'
fees and costs of defense) resulting from liability to which a Committee, or the
members of a Committee, may be subjected by reason of any act or conduct (except
willful misconduct or gross negligence) in their official capacities in the
administration of the Trust or this Plan or both, including all expenses
reasonably incurred in their defense, in case the Employer fails to provide such
defense. The indemnification provisions of this Section 7.04 shall not relieve
any Committee member from any liability he may have under ERISA for breach of a
fiduciary duty to the extent such indemnification is prohibited by ERISA.
Furthermore, the Committee members and the Employer may execute a letter
agreement further delineating the indemnification agreement of this Section
7.04, provided the letter agreement must be consistent with and shall not
violate ERISA.
Section 7.05 INVESTMENT FUNDS. The Administrative Committee and the
Trustee shall establish certain investment funds (the "Investment Funds"), rules
governing the administration of the Investment Funds, and procedures for
directing the investment of Participant Accounts among the Investment Funds. The
Trustee shall invest and reinvest the principal and income of each Account in
the Trust Fund as required by ERISA and as directed by Participants. The
Administrative Committee and the Employer reserve the right to change the
investment options available under the Plan and the rules governing investment
designations at any time and from time to time.
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Notwithstanding the foregoing, the Trustee is specifically authorized to
maintain the "Employer Common Stock Fund" as one of the Investment Funds
available to Participants under the Plan. The Employer Common Stock Fund shall
consist of stock of the Company and cash or cash equivalents needed to meet
obligations of such fund or for the purchase of stock of the Company. One of the
purposes of the Plan is to provide Participants with ownership interests in the
Company through the purchase of common shares of the Company. To the extent
practicable, all available assets of the Employer Common Stock Fund shall be
used to purchase Shares, which shall be held by the Trustee and allocated to
Participant Accounts until distribution in kind or sale for distribution of cash
to Participants or Beneficiaries or until disposition is required to implement
changes in investment designations. In addition to the Employer Common Stock
Fund, all or any portion of the remaining Trust Fund may consist of Shares. The
Trustee may acquire or dispose of Shares as necessary to implement Participant
directions and may net transactions within the Trust Fund. In addition, when
acquiring Shares, the Trustee may acquire Shares directly from the Company or on
the open market as necessary to effect Participant directions. In either case,
the price paid for such Shares shall not exceed the fair market value of the
Shares. The fair market value of the Shares acquired directly from the Company
shall mean the mean between the high and low bid and ask prices as reported by
the New York Stock Exchange on the date of such transaction.
Each Investment Fund (other than the Employer Common Stock Fund) shall be
established by the Trustee at the direction or with the concurrence of the
Administrative Committee. Investment Funds may, as so determined, consist of
preferred and common stocks, bonds, debentures, negotiable instruments and
evidences of indebtedness of every kind and form, or in securities and units of
participation issued by companies registered under the Investment Companies Act
of 1940, master limited partnerships or real estate investment trusts, or in any
common or collective fund established or maintained for the collective
investment and reinvestment of assets of pension and profit sharing trusts which
are exempt from federal income taxation under the Code, or any combination of
the foregoing. The Trustee shall hold, manage, administer, invest, reinvest,
account for and otherwise deal with the Trust Fund and each separate Investment
Fund as provided in the Trust Agreement.
Anything in the Plan or Trust Agreement to the contrary notwithstanding,
the Trustee shall not sell, alienate, encumber, pledge, transfer or otherwise
dispose of, or tender or withdraw, any Shares held by it under the Trust
Agreement, except (i) as specifically provided for in the Plan or (ii) in the
case of a "Tender Offer" as directed in writing by a Participant (or
Beneficiary, where applicable) on a form provided or approved by the
Administrative Committee and delivered to the Trustee. For the purposes hereof,
a Tender Offer shall mean any offer for, or request for or invitation for
tenders of, or offer to purchase or acquire, any Shares that is directed
generally to shareholders of the Employer or any transaction which may be
defined as a Tender Offer under rules or regulations promulgated by the
Securities and Exchange Commission. To the extent that any money or other
property is received by the Trustee as a result of a tender of Shares not
prohibited by the preceding sentence, such money or property shall be allocated
to such other Investment Fund(s) as directed by the Participants in whose
Account the Shares so tendered were held.
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ARTICLE VIII
PARTICIPANT ADMINISTRATIVE PROVISIONS
Section 8.01 PERSONAL DATA TO BENEFITS GROUP. Each Participant and each
Beneficiary of a deceased Participant must furnish to the Benefits Group such
evidence, data or information as the Benefits Group considers necessary or
desirable for the purpose of administering the Plan. The provisions of this Plan
are effective for the benefit of each Participant upon the condition precedent
that each Participant will furnish promptly full, true and complete evidence,
data and information when requested by the Benefits Group, provided the Benefits
Group shall advise each Participant of the effect of his failure to comply with
its request.
Section 8.02 ADDRESS FOR NOTIFICATION. Each Participant and each
Beneficiary of a deceased Participant shall file with the Benefits Group, from
time to time, in writing, or otherwise notify the Benefits Group (in accordance
with its rules and procedures) of, his post office address and any change of
post office address. Any communication, statement or notice addressed to a
Participant, or Beneficiary, at his last post office address filed with the
Benefits Group, or as shown on the records of the Employer, shall bind the
Participant, or Beneficiary, for all purposes of this Plan.
Section 8.03 ASSIGNMENT OR ALIENATION. Subject to Code Section 414(p)
relating to qualified domestic relations orders, neither a Participant nor a
Beneficiary shall anticipate, assign or alienate (either at law or in equity)
any benefit provided under the Plan, and the Trustee shall not recognize any
such anticipation, assignment or alienation. Furthermore, a benefit under the
Plan is not subject to attachment, garnishment, levy, execution or other legal
or equitable process.
Section 8.04 NOTICE OF CHANGE IN TERMS. The Employer, within the time
prescribed by ERISA and the applicable regulations, shall furnish all
Participants and Beneficiaries a summary description of any material amendment
to the Plan or notice of discontinuance of the Plan and all other information
required by ERISA to be furnished without charge.
Section 8.05 PARTICIPANT DIRECTION OF INVESTMENT. The Administrative
Committee and the Trustee shall establish rules governing the administration of
Investment Funds and procedures for Participant direction of investment,
including rules governing the timing, frequency and manner of making investment
elections. The Administrative Committee and the Employer reserve the right to
change the investment options available under the Plan and rules governing
investment designations from time to time. Nothing in this or any other
provision of the Plan shall require the Trustee, the Employer or the
Administrative Committee to implement Participant investment directions or
changes in such directions, or to establish any procedures, other than on an
administratively practicable basis, as determined by the Employer in its
discretion.
Each Participant shall, in accordance with procedures established by the
Administrative Committee and the Trustee, direct that his Account and
contributions thereto be invested and reinvested in any one or more of the
Investment Funds. The investment of
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any such monies shall be subject to such restrictions as the Administrative
Committee may determine, in its sole discretion, to be advisable or necessary
under the circumstances. Moreover, in accordance with procedures established by
the Trustee and agreed to by the Administrative Committee or Benefits Group,
Participants may, when administratively practicable, be permitted to change
their current and prospective investment designations through telephone,
"on-line" or similar instructions to the Trustee or its authorized agent on a
frequency established under such procedures, as in effect from time to time.
The exercise of investment direction by a Participant will not cause the
Participant to be a fiduciary solely by reason of such exercise, and neither the
Trustee nor any other fiduciary of this Plan will be liable for any loss or any
breach that results from the exercise of investment direction by the
Participant. The investment designation procedures established under the Plan
shall be and are intended to be in compliance with the requirements of ERISA
Section 404(c) and the regulations thereunder.
In no event shall Participants be permitted to direct that any portion of
their Accounts and/or any additional contributions be invested in the Employer
Common Stock Fund until Cardinal Health, Inc., the Plan, the Trustee and all
other relevant parties have fully complied with such requirements, including,
but not limited to, federal and state securities laws, as the Administrative
Committee has determined to be applicable. The Administrative Committee may
restrict the ability of any person covered under Section 16 of the Securities
Exchange Act of 1934, as amended, or any other corporate insider of the Employer
to direct the investment of his Account in the Employer Common Stock Fund.
Notwithstanding any provision to the contrary, the Administrative Committee and
the Trustee may, in their sole discretion and where the terms of any relevant
investment contracts, regulated investment companies or pooled or group trusts
so require, impose special terms, conditions and restrictions upon a
Participant's right to direct the investment in, or transfer into or out of,
such contracts, companies or trusts, or the timing or terms applicable to such
transaction.
Section 8.06 CHANGE OF INVESTMENT DESIGNATIONS. Each Participant who is
entitled to direct the investment of additional contributions to be allocated to
his Account in accordance with Section 8.05 hereof may select how such
additional contributions are to be invested. Such investment directions shall be
made in accordance with applicable rules or procedures established by the
Trustee and the Benefits Group.
Each Participant may prospectively re-elect how those amounts then held in
his Account are to be reinvested in the various Investment Funds until otherwise
changed or modified. Such investment directions shall be made in accordance with
applicable rules or procedures established by the Trustee and the Benefits
Group.
Notwithstanding the foregoing to the contrary, the Administrative
Committee may, in its sole discretion and where the terms of any relevant
investment contract, regulated investment companies or pooled or group trusts so
require, or where ERISA fiduciary obligations and considerations so merit,
impose special terms, conditions and restrictions upon a Participant's right to
direct the investment in, or transfer into or out of, such contracts, companies
or trusts.
Section 8.07 LITIGATION AGAINST THE TRUST. If any legal action filed
against the Trustee, the Employer as Plan Administrator, or any Committee, or
against any member or members of any Committee, by or on behalf of any
Participant or Beneficiary,
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results adversely to the Participant or to the Beneficiary, the Trustee shall
reimburse itself, the Employer or any Committee, or any member or members of any
Committee, all costs and fees expended by it or them by surcharging all costs
and fees against the sums payable under the Plan to the Participant or to the
Beneficiary, but only to the extent a court of competent jurisdiction
specifically authorizes and directs any such surcharges and only to the extent
Code Section 401(a)(13) does not prohibit any such surcharges.
Section 8.08 INFORMATION AVAILABLE. Any Participant in the Plan or any
Beneficiary may examine copies of the Plan, the Trust, the Plan description, the
latest annual report, any bargaining agreement, contract or any other instrument
under which the Plan was established or is operated. The Company will maintain
all of the items listed in this Section 8.08 in its offices, or in such other
place or places as it may designate from time to time in order to comply with
the regulations issued under ERISA, for examination during reasonable business
hours. Upon the written request of a Participant or Beneficiary, the Employer
shall furnish him with a copy of any item listed in this Section 8.08. The
Employer may make a reasonable charge to the requesting person for the copy so
furnished.
Section 8.09 APPEAL PROCEDURE FOR DENIAL OF BENEFITS. The Employer shall
provide adequate notice in writing to any Participant or to any Beneficiary (the
"Claimant") whose claim for benefits under the Plan has been denied. The
Employer's notice to the Claimant shall set forth:
(i) The specific reason for the denial;
(ii) Specific references to pertinent Plan provisions on which the
denial is based;
(iii) A description of any additional material and information
needed for the Claimant to perfect his claim and an
explanation of why the material or information is needed; and
(iv) That any appeal the Claimant wishes to make of the adverse
determination must be in writing to the Administrative
Committee within 90 days after receipt of the notice of denial
of benefits. The notice must further advise the Claimant that
his failure to appeal the action to the Benefits Group in
writing within the 90-day period will render the determination
final, binding and conclusive.
If the Claimant appeals to the Administrative Committee, he, or his duly
authorized representative, may submit, in writing, whatever issues and comments
he, or his duly authorized representative, feels are pertinent. The Claimant, or
his duly authorized representative, may review pertinent Plan documents. The
Administrative Committee shall re-examine all facts related to the appeal and
make a final determination as to whether the denial of benefits is justified
under the circumstances. The Administrative Committee shall advise the Claimant
of its decision within 60 days of the Claimant's written request for review,
unless special circumstances (such as a hearing) would make the rendering of a
decision within the 60-day limit unfeasible, but in no event shall the
Administrative Committee render a decision respecting a denial for a claim for
benefits later than 120 days after its receipt of a request for review.
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The Employer's notice of denial of benefits shall identify the name of
each member of the Administrative Committee and the name and address of the
Administrative Committee member to whom the Claimant may forward his appeal.
Section 8.10 CLAIMS INVOLVING BENEFITS RELATED TO DISABILITY. The
provisions of this Section 8.10 are effective for Disability claims filed on or
after July 1, 2002. Notwithstanding the provisions of Section 8.10, the Benefits
Group and Administrative Committee shall comply with and follow the applicable
Department of Labor Regulations for claims involving a determination of
Disability or benefits related to Disability, including, but not limited to:
A. The Benefits Group shall advise a Claimant of the Plan's adverse
benefit determination within a reasonable period of time, but not
later than 45 days after receipt of the claim by the Plan. If the
Benefits Group determines that due to matters beyond control of the
Plan, such decision cannot be reached within 45 days, an additional
30 days may be provided and the Benefits Group shall notify the
Claimant of the extension prior to the end of the original 45-day
period. The 30-day extension may be extended for a second 30-day
period, if before the end of the original extension, the
Administrative Committee determines that due to circumstances beyond
the control of the Plan, a decision cannot be rendered within the
extension period.
B. Claimants shall be provided at least 180 days following receipt of
benefit denial in which to appeal such adverse determination.
C. The Administrative Committee shall review the Claimant's appeal and
notify the Claimant of its determination within a reasonable period
of time, but not later than 45 days after receipt of the Claimant's
request for review. Should the Administrative Committee determine
that special circumstances (such as the need to hold a hearing)
require an extension of time for processing the appeal, the
Administrative Committee shall notify the Claimant of the extension
before the end of the initial 45 day period. Such an extension, if
required, shall not exceed 45 days.
Section 8.11 USE OF ALTERNATIVE MEDIA. The Administrative Committee (or,
in the absence of a Committee, the Plan Administrator) may include in any
process or procedure for administering the Plan, the use of alternative media,
including, but not limited to, telephonic, facsimile, computer or other such
electronic means as available. Use of such alternative media shall be deemed to
satisfy any Plan provision requiring a "written" document or an instrument to be
signed "in writing" to the extent permissible under the Code, ERISA and
applicable regulations.
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ARTICLE IX
ADMINISTRATION OF THE PLAN
Section 9.01 ALLOCATION OF RESPONSIBILITY AMONG FIDUCIARIES FOR PLAN AND
TRUST ADMINISTRATION. The fiduciaries shall have only those powers, duties,
responsibilities and obligations as are specifically given to them under this
Plan and the Trust. The Employers shall have the sole responsibility for making
the contributions provided for under Article III. The Company shall have the
sole authority to appoint and remove the Trustee and members of any Committee,
and to amend or terminate, in whole or in part, this Plan or the Trust. The
Company shall have the final responsibility for the administration of the Plan,
which responsibility is specifically described in this Plan and the Trust, and
shall be the "Plan Administrator" and the named fiduciary. The Administrative
and Policy Committees shall have the specific delegated powers and duties
described in the further provisions of this Article X and such further powers
and duties as hereinafter may be delegated to them by the Employer. The Trustee
shall have the sole responsibility for the administration of the Trust and the
management of the assets held under the Trust, all as specifically provided in
the Trust. Each fiduciary warrants that any directions given, information
furnished, or action taken by it shall be in accordance with the provisions of
this Plan and the Trust, authorizing or providing for such direction,
information or action. Furthermore, each fiduciary may rely upon any such
direction, information or action of another fiduciary as being proper under this
Plan and the Trust, and is not required under this Plan or the Trust to inquire
into the propriety of any such direction, information or action. It is intended
under this Plan and the Trust that each fiduciary shall be responsible for the
proper exercise of its own powers, duties, responsibilities and obligations
under this Plan and the Trust and shall not be responsible for any act or
failure to act of another fiduciary. No fiduciary guarantees the Trust Fund in
any manner against investment loss or depreciation in asset value.
Section 9.02 APPOINTMENT OF COMMITTEE. One or more committees consisting
of three or more persons shall be appointed by and serve at the pleasure of the
Human Resources and Compensation Committee of the Board to assist in the
administration of the Plan. In the event of any vacancies on any Committee, the
remaining Committee member(s) then in office shall constitute the Committee and
shall have full power to act and exercise all powers of the Committee as
described in this Article X. All usual and reasonable expenses of a Committee
may be paid in whole or in part by the Employer, and any expenses not paid by
the Employer shall be paid by the Trustee out of the principal or income of the
Trust Fund. Any members of a Committee who are Employees shall not receive
compensation with respect to their services for the Committee. As currently
constituted, two committees have been chartered by the Human Resources and
Compensation Committee of the Board: the Administrative Committee and the Policy
Committee.
Section 9.03 COMMITTEE PROCEDURES. A Committee may act at a meeting or in
writing without a meeting. A Committee may elect one of its members as
chairperson, appoint a secretary, who may or may not be a Committee member, and
advise the Trustee of all relevant actions. The secretary shall keep a record of
all meetings and forward all necessary communications to the Employer, or the
Trustee, as appropriate and each Committee shall report its activities at least
annually to the Human Resources and
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Compensation Committee of the Board. A Committee may adopt such bylaws and
regulations as it deems desirable for the conduct of its affairs. All decisions
of a Committee shall be made by the vote of the majority then in office,
including actions in writing taken without a meeting. A dissenting Committee
member who, within a reasonable time after he has knowledge of any action or
failure to act by the majority, registers his dissent in writing delivered to
the other Committee members, the Employer and the Trustee, shall not be
responsible for any such action or failure to act.
Section 9.04 RECORDS AND REPORTS. The Employer (or the Committee if so
designated by the Employer) shall exercise such authority and responsibility as
it deems appropriate in order to comply with ERISA and governmental regulations
issued thereunder relating to records of Participant's Service, Account balances
and the percentage of such Account balances that are Nonforfeitable under the
Plan; notifications to Participants; annual registration with the Internal
Revenue Service; and annual reports to the Department of Labor.
Section 9.05 OTHER COMMITTEE POWERS AND DUTIES. The Committees shall have
one or more of the following powers and duties, as designated in the applicable
Committee Charter and Table of Authority:
A. To determine the rights of eligibility of an Employee to participate
in the Plan, the value of a Participant's Account, and the
Nonforfeitable percentage of each Participant's Account;
B. To adopt rules of procedure and regulations necessary for the proper
and efficient administration of the Plan, provided the rules are not
inconsistent with the terms of this Plan and the Trust;
C. To construe and enforce the terms of the Plan and the rules and
regulations it adopts, including the discretionary authority to
interpret the Plan documents, documents related to the Plan's
operation, and findings of fact;
D. To direct the Trustee with respect to the crediting and distribution
of the Trust;
E. To review and render decisions respecting a claim for (or denial of
a claim for) a benefit under the Plan;
F. To furnish the Employer with information that the Employer may
require for tax or other purposes;
G. To engage the service of agents whom it may deem advisable to assist
it with the performance of its duties; and
H. To engage the services of an Investment Manager or Investment
Managers (as defined in ERISA Section 3(38)), each of whom shall
have full power and authority to manage, acquire or dispose (or
direct the Trustee with respect to acquisition or disposition) of
any Plan asset under its control.
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I. As permitted by the Employee Plans Compliance Resolution System
("EPCRS") issued by the Internal Revenue Service ("IRS"), as in
effect from time to time, (i) to voluntarily correct any Plan
qualification failure, including, but not limited to, failures
involving Plan operation, impermissible discrimination in favor of
highly compensated employees, the specific terms of the Plan
document, or demographic failures; (ii) implement any correction
methodology permitted under EPCRS; and (iii) negotiate the terms of
a compliance statement or a closing agreement proposed by the IRS
with respect to correction of a plan qualification failure.
Section 9.06 RULES AND DECISIONS. A Committee may adopt such rules as it
deems necessary, desirable or appropriate. All rules and decisions of any
Committee shall be uniformly and consistently applied to all Participants in
similar circumstances. When making a determination or calculation, a Committee
shall be entitled to rely upon information furnished by a Participant or
Beneficiary, the Employer, the legal counsel of the Employer, or the Trustee.
Section 9.07 APPLICATION AND FORMS FOR BENEFITS. The Administrative
Committee may require a Participant or Beneficiary to complete and file with the
Benefits Group and/or the Trustee an application for a benefit and all other
forms approved by the Benefits Group, and to furnish all pertinent information
requested by the Benefits Group and Trustee. The Benefits Group and Trustee may
rely upon all such information so furnished to it, including the Participant's
or Beneficiary's current mailing address.
Section 9.08 AUTHORIZATION OF BENEFIT PAYMENTS. A Committee shall issue
directions to the Trustee concerning all benefits that are to be paid from the
Trust Fund pursuant to the provisions of the Plan, or establish other procedures
on which the Trustee may act, and warrants that all such directions are in
accordance with this Plan.
Section 9.09 FUNDING POLICY. A Committee shall, from time to time, review
all pertinent Employee information and Plan data in order to establish the
funding policy of the Plan and to determine the appropriate methods of carrying
out the Plan's objectives. A Committee or its delegate shall communicate
periodically, as it deems appropriate, to the Trustee and to any Plan Investment
Manager, the Plan's short-term and long-term financial needs so that investment
policy can be coordinated with Plan financial requirements.
Section 9.10 FIDUCIARY DUTIES. In performing their duties, all fiduciaries
with respect to the Plan shall act solely in the interest of the Participants
and their Beneficiaries, and:
A. For the exclusive purpose of providing benefits to the Participants
and their Beneficiaries;
B. With the care, skill, prudence and diligence under the circumstances
then prevailing that a prudent man acting in like capacity and
familiar with such matters would use in the conduct of an enterprise
of like character and with like aims;
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C. To the extent a fiduciary possesses and exercises investment
responsibilities, by diversifying the investments of the Trust Fund
so as to minimize the risk of large losses, unless under the
circumstances it is clearly prudent not to do so; and
D. In accordance with the documents and instruments governing the Plan
insofar as such documents and instruments are consistent with the
provisions of Title I of ERISA.
Section 9.11 ALLOCATION OR DELEGATION OF DUTIES AND RESPONSIBILITIES. In
furtherance of their duties and responsibilities under the Plan, the Board, the
Human Resources and Compensation Committee of the Board, or a designated
Committee may, subject always to the requirements of Section 9.10:
A. Employ agents to carry out nonfiduciary responsibilities;
B. Employ agents to carry out fiduciary responsibilities (other than
trustee responsibilities as defined in Section 405(c)(3) of ERISA);
C. Consult with counsel, who may be of counsel to the Company; and
D. Provide for the allocation of fiduciary responsibilities (other than
trustee responsibilities as defined in Section 405(c)(3) of ERISA)
between the members of the Board, in the case of the Board, and
among the members of any Committee, in the case of any Committee.
Section 9.12 PROCEDURE FOR THE ALLOCATION OR DELEGATION OF FIDUCIARY
DUTIES. Any action described in subsections B or D of Section 9.11 may be taken
by a Committee or the Board only in accordance with the following procedure:
A. Such action shall be taken by a majority of the Committee or by the
Board, as the case may be, in a resolution approved by a majority of
such Committee or by a majority of the Board.
B. The vote cast by each member of the Committee or the Board for or
against the adoption of such resolution shall be recorded and made a
part of the written record of the Committee's or the Board's
proceedings.
C. Any delegation of fiduciary responsibilities or any allocation of
fiduciary responsibilities among members of the Committee or the
Board may be modified or rescinded by the Committee or the Board
according to the procedure set forth in subsections A and B of this
Section 9.12.
Section 9.13 SEPARATE ACCOUNTING. The amounts in a Participant's
Compensation Deferral Account, Safe Harbor Matching Account and (if applicable)
his Qualified Matching Contribution Account and Qualified Non-elective
Contribution Account shall at all times be separately accounted for from amounts
in a Participant's Non-Safe Harbor Matching Accounts, Employer Contributions
Account, Special Contributions Account, Rollover Account, Transfer Account(s)
and Transition Contribution Accounts and
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other contribution accounts, if any. Amounts credited to such subaccounts shall
be allocated among the Participant's designated investments on a reasonable pro
rata basis, in accordance with the valuation procedures of the Trustee and the
Investment Funds. The Trustee and the Administrative Committee shall also
establish uniform procedures which they may change from time to time, for the
purpose of adjusting the subaccounts of a Participant's Account for withdrawals,
loans, distributions and contributions. Gains, losses, withdrawals,
distributions, forfeitures and other credits or charges may be separately
allocated among such subaccounts on a reasonable and consistent basis in
accordance with such procedures.
Section 9.14 VALUE OF PARTICIPANT'S ACCOUNT. The value of each
Participant's Account shall be based on its fair market value on the appropriate
Valuation Date. A valuation shall occur at least once every Plan Year, and
otherwise in accordance with the terms of the Trust and administratively
practicable procedures approved by the Administrative Committee. Periodically,
on a frequency determined by the Administrative Committee and the Trustee, the
Participant will receive a statement showing the transaction activity and value
of his Account as of a date set forth in the statement.
Section 9.15 REGISTRATION AND VOTING OF EMPLOYER COMMON STOCK. All Shares
acquired by the Trustee shall be held in the possession of the Trustee until
disposed of pursuant to the provisions of the Plan or the Trust Agreement. Such
Shares may be registered in the name of the Trustee or its nominee. Before each
annual or special meeting of the Employer's shareholders, the Trustee shall send
to each Participant a copy of the proxy solicitation material therefor, together
with a form requesting confidential instructions to the Trustee on how to vote
the Shares credited to his Account. Upon receipt of such instructions the
Trustee shall vote the Shares as instructed. Any Shares held in Participants'
Accounts, as to which the Trustee does not receive instructions, shall be voted
in proportion to the voting instructions the Trustee has actually received in
respect of Shares, unless the Trustee determines that to do so is not prudent,
or the Trust provides otherwise.
Section 9.16 INDIVIDUAL STATEMENT. As soon as practicable after the
Accounting Date of each Plan Year, but within the time prescribed by ERISA and
the regulations under ERISA, and at such other times as determined by the
Administrative Committee in its discretion, a Participant shall be provided a
statement reflecting the condition of the Participant's (or Beneficiary of a
deceased Participant) Account in the Trust as of that date and such other
information ERISA requires be furnished to the Participant or Beneficiary. No
Participant, except a member of an appropriate Committee and its designees,
shall have the right to inspect the records reflecting the Account of any other
Participant.
Section 9.17 FEES AND EXPENSES FROM FUND. The Trustee shall receive
reasonable annual compensation as may be agreed upon from time to time between
the Employer and the Trustee. The Trustee shall pay all expenses reasonably
incurred by it or by the Employer, a Committee, or other professional advisers
or administrators in the administration of the Plan from the Trust Fund unless
the Employer pays the expenses. The Administrative Committee shall not treat any
fee or expense paid, directly or indirectly, by the Employer as an Employer
contribution. No person who is receiving full pay from the Employer shall
receive compensation for services from the Trust Fund. Brokerage commissions,
transfer taxes, and other charges and expenses in connection with the purchase
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and sale of securities shall be charged to each Investment Fund and/or
Participant's Account, as applicable. Fees related to investments subject to
Participant direction, and other fees resulting from or attributable to expenses
incurred in relation to a Participant or Beneficiary or his Account may be
charged to his Account to the extent permitted under the Code and ERISA.
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ARTICLE X
TOP HEAVY RULES
Section 10.01 MINIMUM EMPLOYER CONTRIBUTION. If this Plan is "Top Heavy,"
as defined below, in any Plan Year, the Plan guarantees a minimum contribution
(subject to the provisions of this Article X) of three percent of Compensation
for each "Non-Key Employee," as defined below, who is a Participant employed by
the Employer on the Accounting Date of the Plan Year without regard to Hours of
Service completed during the Plan Year or to whether he has elected to make
Compensation Deferral Contributions under Section 3.04, and who is not a
Participant in a Top Heavy defined benefit plan maintained by the Employer.
Participants who also participate in a Top Heavy defined benefit plan of the
Employer shall receive the required minimum benefit in the defined benefit plan
rather than in this Plan. The Plan satisfies the guaranteed minimum contribution
for the Non-Key Employee if the Non-Key Employee's contribution rate is at least
equal to the minimum contribution. For purposes of this paragraph, a Non-Key
Employee Participant includes any Employee otherwise eligible to participate in
the Plan but who is not a Participant because his Compensation does not exceed a
specified level.
If the contribution rate for the "Key Employee," as defined below, with
the highest contribution rate is less than three percent, the guaranteed minimum
contribution for Non-Key Employees shall equal the highest contribution rate
received by a Key Employee. The contribution rate is the sum of Employer
contributions (not including Employer contributions to Social Security) and
forfeitures allocated to the Participant's Account for the Plan Year divided by
his "Compensation," as defined below, not in excess of the compensation
limitation under Code Section 401(a)(17) for the Plan Year. For purposes of
determining the minimum contribution for a Plan Year, the Administrative
Committee shall consider contributions made to any plan pursuant to a
compensation reduction agreement or similar arrangement as Employer
contributions. To determine the contribution rate, the Administrative Committee
shall consider all qualified Top Heavy defined contribution plans maintained by
the Employer as a single plan.
Notwithstanding the preceding provisions of this Section 10.01, if a
defined benefit plan maintained by the Employer that benefits a Key Employee
depends on this Plan to satisfy the anti-discrimination rules of Code Section
401(a)(4) or the coverage rules of Code Section 410 (or another plan benefiting
the Key Employee so depends on such defined benefit plan), the guaranteed
minimum contribution for a Non-Key Employee is three percent of his Compensation
regardless of the contribution rate for the Key Employees.
The minimum Employer contribution required (to the extent required to be
Nonforfeitable under Section 416(b) of the Code) may not be forfeited under Code
Section 411(a)(3)(B) or 411(a)(3)(D).
Section 10.02 ADDITIONAL CONTRIBUTION. If the contribution rate (excluding
Compensation Deferral Contributions) for the Plan Year with respect to a Non-Key
Employee described in Section 10.01 is less than the minimum contribution, the
Employer will increase its contribution for such Employee to the extent
necessary so his contribution rate for the Plan Year will equal the guaranteed
minimum contribution. Matching Contributions will be taken into account to
satisfy the minimum contribution requirement under the Plan, or if the Plan
provides that the minimum contribution requirement shall be
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met in another plan, such other plan. Matching Contributions that are used to
satisfy the minimum contribution requirements shall be treated as matching
contributions for purposes of the actual contribution percentage test and other
requirements of Code Section 401(m). The additional contribution shall be
allocated to the Account of a Non-Key Employee for whom the Employer makes the
contribution.
Section 10.03 DETERMINATION OF TOP HEAVY STATUS. The Plan is "Top Heavy"
for a Plan Year if the Top Heavy ratio as of the "Determination Date" exceeds
sixty percent (60%). The Top Heavy ratio is a fraction, the numerator of which
is the sum of the present value of the Accounts of all Key Employees as of the
Determination Date, and the denominator of which is a similar sum determined for
all Employees. For purposes of determining the present value of the Accounts for
the foregoing fraction, contributions due as of the Determination Date and
distributions made for any purpose within the one-year period ending on the
Determination Date shall be included. In addition, distributions made within the
five-year period ending on the Determination Date shall be included if such
distributions were made for reasons other than upon Separation from Service,
death or Disability (e.g., in-service withdrawals); provided, however, that no
distribution shall be counted more than once. In addition, the Top Heavy ratio
shall be calculated by disregarding the Account (including distributions, if
any, of the Account balance) of an individual who has not received credit for at
least one Hour of Service with the Employer during the one-year period ending on
the Determination Date in such calculation. The Top Heavy ratio, including the
extent to which it must take into account distributions, rollovers, and
transfers, shall be calculated in accordance with Code Section 416 and the
Treasury Regulations thereunder.
If the Employer maintains other qualified plans (including a simplified
employee pension plan), this Plan is Top Heavy only if it is part of the
Required Aggregation Group, and the Top Heavy ratio for both the Required
Aggregation Group and the Permissive Aggregation Group exceeds 60%. The Top
Heavy ratio shall be calculated in the same manner as required by the first
paragraph of this Section 10.03, taking into account all plans within the
Aggregation Group. To the extent distributions to a Participant must be taken
into account, the Administrative Committee shall include distributions from a
terminated plan that would have been part of the Required Aggregation Group if
it were in existence on the Determination Date. The present value of accrued
benefits and the other amounts the Administrative Committee must take into
account, under defined benefit plans or simplified employee pension plans
included within the group, shall be calculated in accordance with the terms of
those plans, Code Section 416 and the Treasury Regulations thereunder. If an
aggregated plan does not have a valuation date coinciding with the Determination
Date, the accrued benefits or Accounts in the aggregated plan shall be valued as
of the most recent valuation date falling within the 12-month period ending on
the Determination Date. The Top Heavy ratio shall be valued with reference to
the Determination Dates that fall within the same calendar year.
The accrued benefit of a Participant other than a Key Employee shall be
determined under (a) the method, if any, that uniformly applies for accrual
purposes under all defined benefit plans maintained by the Employer, or (b) if
there is no such method, as if such benefit accrued not more rapidly than the
slowest accrual rate permitted under the fractional rule of Section 411(b)(1)(C)
of the Code.
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Section 10.04 TOP HEAVY VESTING SCHEDULE. For any Plan Year for which the
Plan is Top Heavy, as determined in accordance with this Article X, the
Participant's Nonforfeitable percentage of his Employer Contributions, Special
Contributions and Non-Safe Harbor Matching Contributions shall be calculated by
applying the following schedule, to the extent that such schedule provides for
vesting at a rate that is more rapid than the rate otherwise applicable to the
Participant's benefit:
Years of Service Percent Nonforfeitable
-------------------------- ----------------------
Less than three (3) 0%
At least three (3) or more 100%
Section 10.05 DEFINITIONS. For purposes of applying the provisions of this
Article X.
A. "Key Employee" means any Employee or former Employee (including any
deceased Employee) who at any time during the Plan Year that
includes the Determination Date was an officer of the Employer
having annual Compensation greater than $130,000 (as adjusted under
Code Section 416(i)(1) for Plan Years beginning after December 31,
2002), a five-percent owner of the Employer, or a one-percent owner
of the Employer having annual Compensation of more than $150,000.
The constructive ownership rules of Code Section 318 (or the
principles of that section, in the case of an unincorporated
Employer) will apply to determine ownership in the Employer. The
determination of who is a Key Employee shall be made in accordance
with Code Section 416(i)(1) and the Treasury Regulations under that
Code Section.
B. "Non-Key Employee" is an Employee who does not meet the definition
of Key Employee.
C. "Compensation" shall mean the first $200,000 (or such larger amount
as the Commissioner of Internal Revenue may prescribe in accordance
with Code Section 401(a)(17)) of Compensation as defined in Code
Section 415(c)(3), but including amounts contributed by the Employer
pursuant to a salary reduction agreement that are excludible from
the Employee's gross income under Section 125, "deemed compensation"
under Code Section 125 pursuant to Revenue Ruling 2002-27, Section
132(f)(4), Section 402(a)(8), Section 402(h) or Section 403(b) of
the Code.
D. "Required Aggregation Group" means:
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(i) Each qualified plan of the Employer in which at least one Key
Employee participates at any time during the five Plan Year
period ending on the Determination Date; and
(ii) Any other qualified plan of the Employer that enables a plan
described in (i) to meet the requirements of Code Section
401(a)(4) or Code Section 410.
The Required Aggregation Group includes any plan of the Employer which was
maintained within the last five years ending on the Determination Date on
which a top heaviness determination is being made if such plan would
otherwise be part of the Required Aggregation Group for the Plan Year but
for the fact it has been terminated.
E. "Permissive Aggregation Group" is the Required Aggregation Group
plus any other qualified plans maintained by the Employer, but only
if such group would satisfy in the aggregate the requirements of
Code Section 401(a)(4) and Code Section 410. The Administrative
Committee shall determine which plans to take into account in
determining the Permissive Aggregation Group.
F. "Employer" shall mean all the members of a controlled group of
corporations (as defined in Code Section 414(b)), of a commonly
controlled group of trades or businesses (whether or not
incorporated) (as defined in Code Section 414(c)), or an affiliated
service group (as defined in Code Section 414(m)), of which the
Employer is a part. However, ownership interests in more than one
member of a related group shall not be aggregated to determine
whether an individual is a Key Employee because of his ownership
interest in the Employer.
G. "Determination Date" for any Plan Year is the Accounting Date of the
preceding Plan Year or, in the case of the first Plan Year of the
Plan, the Accounting Date of that Plan Year.
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ARTICLE XI
MISCELLANEOUS
Section 11.01 EVIDENCE. Anyone required to give evidence under the terms
of the Plan may do so by certificate, affidavit, document or other information
that the person to act in reliance may consider pertinent, reliable and genuine,
and to have been signed, made or presented by the proper party or parties. Any
Committee, the Benefits Group and the Trustee shall be fully protected in acting
and relying upon any evidence described under the immediately preceding
sentence.
Section 11.02 NO RESPONSIBILITY FOR EMPLOYER ACTION. Neither the Trustee
nor any Administrative Committee shall have any obligation or responsibility
with respect to any action required by the Plan to be taken by the Employer, any
Participant or eligible Employee, nor for the failure of any of the above
persons to act or make any payment or contribution, or otherwise to provide any
benefit contemplated under this Plan, nor shall the Trustee or any Committee be
required to collect any contribution required under the Plan, or determine the
correctness of the amount of any Employer contribution. Neither the Trustee nor
any Committee need inquire into or be responsible for any action or failure to
act on the part of the others. Any action required of a corporate Employer shall
be by its Board, by the Human Resources and Compensation Committee of the Board,
or by its designee.
Section 11.03 FIDUCIARIES NOT INSURERS. The Trustee, the Committee(s), the
Plan Administrator and the Employer in no way guarantee the Trust Fund from loss
or depreciation. The Employer does not guarantee the payment of any money that
may be or becomes due to any person from the Trust Fund. The liability of any
Committee and the Trustee to make any payment from the Trust Fund at any time
and all times is limited to the then available assets of the Trust.
Section 11.04 WAIVER OF NOTICE. Any person entitled to notice under the
Plan may waive the notice, unless the Code or Treasury Regulations require the
notice, or ERISA specifically or impliedly prohibits such a waiver.
Section 11.05 SUCCESSORS. The Plan shall be binding upon all persons
entitled to benefits under the Plan, their respective heirs and legal
representatives, upon the Employer, its successors and assigns, and upon the
Trustee, any Committee, the Plan Administrator and their successors.
Section 11.06 WORD USAGE. Words used in the masculine shall apply to the
feminine where applicable, and wherever the context of the Plan dictates, the
plural shall be read as singular and the singular as the plural.
Section 11.07 HEADINGS. The headings are for reference only. In the event
of a conflict between a heading and the content of a section, the content of the
section shall control.
Section 11.08 STATE LAW. Ohio law shall determine all questions arising
with respect to the provisions of this agreement except to the extent a federal
statute supersedes Ohio law.
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Section 11.09 EMPLOYMENT NOT GUARANTEED. Nothing contained in this Plan,
and nothing with respect to the establishment of the Trust, any modification or
amendment to the Plan or the Trust, the creation of any Account, or the payment
of any benefit, shall give any Employee, Employee-Participant or Beneficiary any
right to continue employment, or any legal or equitable right against the
Employer, or an Employee of the Employer, the Trustee or its agents or
employees, or the Plan Administrator. Nothing in the Plan shall be deemed or
construed to impair or affect in any manner the right of the Employer, in its
discretion, to hire Employees and, with or without cause, to discharge or
terminate the service of Employees.
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ARTICLE XII
EXCLUSIVE BENEFIT, AMENDMENT, TERMINATION
Section 12.01 EXCLUSIVE BENEFIT. Except as provided under Article III, the
Employer shall have no beneficial interest in any asset of the Trust and no part
of any asset in the Trust shall ever revert to or be repaid to the Employer,
either directly or indirectly; nor prior to the satisfaction of all liabilities
with respect to the Participants and their Beneficiaries under the Plan, shall
any part of the corpus or income of the Trust Fund, or any asset of the Trust,
be (at any time) used for, or diverted to, purposes other than the exclusive
benefit of the Participants or their Beneficiaries.
Section 12.02 AMENDMENT BY EMPLOYER. The Company shall have the right at
any time and from time to time:
A. To amend this agreement in any manner it deems necessary or
advisable in order to qualify (or maintain qualification of) this
Plan and the Trust created under it under the appropriate provisions
of the Code; and
B. To amend this agreement in any other manner.
However, no amendment shall authorize or permit any part of the Trust Fund
(other than the part required to pay taxes and administration expenses) to be
used for or diverted to purposes other than for the exclusive benefit of the
Participants or their Beneficiaries or estates. No amendment shall cause or
permit any portion of the Trust Fund to revert to or become a property of the
Employer; and the Company shall not make any amendment that affects the rights,
duties or responsibilities of the Plan Administrator or any Committee without
the written consent of the affected Plan Administrator or the affected member of
such Committee. Furthermore, no amendment shall decrease a Participant's Account
balance or accrued benefit or reduce or eliminate any benefits protected under
Code Section 411(d)(6) with respect to a Participant with an Account balance or
accrued benefit at the date of the amendment, except to the extent permitted
under Code Section 412(c)(8).
The Company shall make all amendments in writing. Amendments shall be
considered properly authorized by the Company if approved or ratified by the
Board, any committee of the Board, by an authorized Committee of the Plan, or by
an authorized officer of the Benefits Group, unless the subject of the amendment
has been reserved to the Board or another authorized party. Each amendment shall
state the date to which it is either retroactively or prospectively effective,
and may be executed by any authorized officer of the Company.
Section 12.03 AMENDMENT TO VESTING PROVISIONS. Although the Company
reserves the right to amend the vesting provisions at any time, an amended
vesting schedule shall not be applied to reduce the Nonforfeitable percentage of
any Participant's Account derived from Employer contributions (determined as of
the later of the date the Company adopts the amendment, or the date the
amendment becomes effective) to a percentage less than the Nonforfeitable
percentage computed under the Plan without regard to the amendment. An amended
vesting schedule will apply to a Participant only if the Participant receives
credit for at least one Hour of Service after the new schedule becomes
effective.
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If the Company makes a permissible amendment to the vesting provisions,
each Participant having at least three Years of Service for vesting purposes
with the Employer may elect to have the percentage of his Nonforfeitable Account
Balance computed under the Plan without regard to the amendment. The Participant
must file his election with the Employer within 60 days of the latest of (a) the
Company's adoption of the amendment; (b) the effective date of the amendment; or
(c) his receipt of a copy of the amendment. The authorized Committee, as soon as
practicable, shall forward a true copy of any amendment to the vesting schedule
to each affected Participant, together with an explanation of the effect of the
amendment, the appropriate form upon which the Participant may make an election
to remain under the vesting schedule provided under the Plan prior to the
amendment and notice of the time within which the Participant must make an
election to remain under the prior vesting schedule. The election described in
this Section 12.03 does not apply to a Participant if the amended vesting
schedule provides for vesting that is at least as rapid at all times as the
vesting schedule in effect prior to the amendment. For purposes of this Section
12.03, an amendment to the vesting schedule includes any amendment that directly
or indirectly affects the computation of the Nonforfeitable percentage of an
Employee's rights to his Employer-derived Account.
Section 12.04 DISCONTINUANCE. The Employer shall have the right, at any
time, to suspend or discontinue its contributions under the Plan, and the
Company (acting through the Human Resources and Compensation Committee of the
Board or the Policy Committee) shall have the right to terminate, at any time,
this Plan and the Trust created under this agreement. The Plan shall terminate
upon the first to occur of the following:
A. The date terminated by action of the Company
B. The date the Employer shall be judicially declared bankrupt or
insolvent.
C. The dissolution, merger, consolidation or reorganization of the
Employer or the sale by the Employer of all or substantially all of
its assets, unless the successor or purchaser makes provision to
continue the Plan, in which event the successor or purchaser shall
substitute itself as the Employer under this Plan.
Section 12.05 FULL VESTING ON TERMINATION. Notwithstanding any other
provision of this Plan to the contrary, upon either full or partial termination
of the Plan, or, if applicable, upon the date of complete discontinuance of
contributions to the Plan, an affected Participant's right to his Account shall
be 100% Nonforfeitable.
Section 12.06 MERGER, DIRECT TRANSFER AND ELECTIVE TRANSFER. The Trustee
shall not consent to, or be a party to, any merger or consolidation with another
plan, or to a transfer of assets or liabilities to another plan, unless
immediately after the merger, consolidation or transfer, the surviving plan
provides each Participant a benefit equal to or greater than the benefit each
Participant would have received had the Plan terminated immediately before the
merger or consolidation or transfer. The Trustee possesses the specific
authority to enter into merger agreements or direct transfer of assets
agreements with the trustees of other retirement plans described in Code Section
401(a) and to accept the
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direct transfer of plan assets, or to transfer plan assets, as a party to any
such agreement, only upon the consent or direction of the Benefits Group or the
Administrative Committee.
If permitted by the Benefits Group or the Administrative Committee in its
discretion, the Trustee may accept a direct transfer of plan assets on behalf of
an Employee prior to the date the Employee satisfies the Plan's eligibility
condition(s). If the Trustee accepts such a direct transfer of plan assets, the
Employee shall be treated as a Participant for all purposes of the Plan except
that the Employee shall not share in Employer contributions or Participant
forfeitures under the Plan until he actually becomes a Participant in the Plan.
The Trustee shall hold, administer and distribute the transferred assets as a
part of the Trust Fund, and the Trustee shall maintain a separate Transfer
Account for the benefit of the Employee on whose behalf the Trustee accepted the
transfer in order to reflect the value of the transferred assets.
The Trustee may not consent to, or be a party to, a merger, consolidation
or transfer of assets with a defined benefit plan, except with respect to an
elective transfer, unless the Administrative Committee consents and so directs,
and the transfer is consistent with the Code and with ERISA. The Trustee will
hold, administer and distribute the transferred assets as a part of the Trust
Fund, and the Trustee shall maintain a separate Transfer Account for the benefit
of the Employee on whose behalf the Trustee accepted the transfer in order to
reflect the value of the transferred assets. Unless a transfer of assets to this
Plan is an elective transfer, the Plan will preserve all Code Section 411(d)(6)
protected benefits with respect to those transferred assets, in the manner
described in Section 12.02.
A transfer is an elective transfer if: (a) the transfer satisfies the
first paragraph of this Section 12.06; (b) the transfer is voluntary, under a
fully informed election by the Participant; (c) the Participant has an
alternative that retains his Code Section 411(d)(6) protected benefits
(including an option to leave his benefit in the transferor plan, if that plan
is not terminating); (d) the transfer satisfies the applicable spousal consent
requirements of the Code; (e) the transferor plan satisfies the joint and
survivor notice requirements of the Code, if the Participant's transferred
benefit is subject to those requirements; (f) the Participant has a right to
immediate distribution from the transferor plan, in lieu of the elective
transfer; (g) the transferred benefit is at least the greater of the single sum
distribution provided by the transferor plan for which the Participant is
eligible or the present value of the Participant's accrued benefit under the
transferor plan payable at that plan's normal retirement age; (h) the
Participant has a 100% Nonforfeitable interest in the transferred benefit; and
(i) the transfer otherwise satisfies applicable Treasury Regulations. An
elective transfer may occur between qualified plans of any type.
If the Plan receives a direct transfer (by merger or otherwise) of
elective contributions (or amounts treated as elective contributions) under a
plan with a Code Section 401(k) arrangement, the distribution restrictions of
Code Sections 401(k)(2) and (10) continue to apply to those transferred elective
contributions.
Section 12.07 TERMINATION. Upon termination of the Plan, the distribution
provisions of Article IV and Article V shall remain operative, except that:
A. If the present value of the Participant's Nonforfeitable Account
does not exceed $1,000 ($5,000 prior to March 28, 2005), the
Administrative Committee will direct the Trustee to distribute the
Participant's Nonforfeitable
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Account to him in a lump sum as soon as administratively practicable
after the Plan terminates; and
B. If the present value of the Participant's Nonforfeitable Account
exceeds $1,000 ($5,000 prior to March 28, 2005), the Participant or
the Beneficiary, in addition to the distribution events permitted
under Articles IV and V, may elect to have the Trustee commence
distribution of his Nonforfeitable Account as soon as
administratively practicable after the Plan terminates.
The Trust shall continue until the Trustee, after written direction from
the Administrative Committee, has distributed all of the benefits under the
Plan. To liquidate the Trust, the Administrative Committee will, to the extent
required, purchase a deferred annuity contract for each Participant which
protects the Participant's distribution rights under the Plan, if the
Participant's Nonforfeitable Account exceeds $1,000 ($5,000 prior to March 28,
2005), and the Participant does not elect an immediate distribution pursuant to
this Section 12.07. Upon termination of the Plan, the amount, if any, in a
suspense account under Article IV shall revert to the Employer, subject to the
conditions of the Treasury Regulations permitting such a reversion.
The Employer has executed this Plan in Dublin, Ohio on the date set forth
below.
CARDINAL HEALTH, INC.
By: /s/ Sue Nelson
--------------------------
Its: Vice President,
Compensation and Benefits
-------------------------
Date: December 22, 2004
------------------------
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SCHEDULE I
PARTICIPATING EMPLOYERS
Abilene Nuclear, LLC
(Effective July 1, 2004)
Alaris Medical Systems, Inc.
(Effective January 1, 2005)
Cardinal Health 200, Inc.
(f/k/a Allegiance Healthcare Corporation)
(Effective January 1, 2001)
American Threshold Industries, Inc.
(Effective July 1, 2001)
Assisted Care Partners, Inc.
(Effective May 1, 1994)
BDC Leasing Company, d/b/a Bailey Drug Company
Beckloff Associates, LLC
(Effective July 1, 2004)
Behrens, Inc.
(Effective July 1, 1995)
Cardinal Health 100, Inc.
(f/k/a Bindley Western Industries, Inc.)
(Effective January 1, 2003)
Cardinal Health 401, Inc.
(f/k/a Boron, LePore & Associates, Inc.)
(Effective January 1, 2003)
Brighton Capital
(Effective February 11, 1997)
Cardinal Florida, Inc.
(Effective October 1, 1992)
Cardinal Health, Inc.
Cardinal LDS, Inc., d/b/a Leader Drug Stores, Inc.
(Effective January 1, 1992)
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Cardinal Mississippi, Inc.
(Effective October 1, 1992)
Cardinal Syracuse, Inc.
Cardinal West, Inc.
(Effective October 27, 1992)
CDI Investments
(Effective March 16, 1988)
Cardinal Health 412, Inc.
(f/k/a/ Central Pharmacy Services, Inc.)
(Effective July 1, 2002)
Chapman Drug Company
(Effective January 1, 1992)
Comprehensive Reimbursement Consultants, Inc.
(Effective December 1, 1998)
Cardinal Health 105, Inc.
(f/k/a CORD Logistics)
(Effective November 17, 1995)
Ellicott Drug Company
Griffin Capital
(Effective February 11, 1997)
Griffin Group
(Effective February 11, 1997)
Humiston-Keeling, Inc.
(Effective July 1, 1996)
Cardinal Health 404, Inc.
(f/k/a International Processing Corporation)
(Effective July 1, 2001)
Cardinal Health 106, Inc.
(f/k/a James W. Daly, Inc.)
Cardinal Health 405, Inc.
(f/k/a Magellan Pharmaceutical Development, Inc.)
(Effective January 1, 2003)
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Marmac Distributors, Inc.
Medical Strategies, Inc.
(Effective July 1, 1994)
Medicap Pharmacies Incorporated
(Effective July 1, 2004)
Medicine Shoppe International, Inc.
(Generally effective August 1, 1997)
Employees of Pharmacy Operations, Inc. - Florida
(Effective August 24, 1999)
Employees of Pharmacy Operations, Inc. - Washington
(Effective December 25, 1999)
Cardinal Health 300, Inc.
(f/k/a MediQual Systems, Inc.)
(Effective October 1, 1998)
Cardinal Health 107, Inc.
(f/k/a National PharmPak Services, Inc.)
(Effective January 1, 1992)
Cardinal Health 108, Inc.
(f/k/a National Specialty Services, Inc.)
(Effective January 1, 1992)
Nexus Healthcare, Inc.
(Effective May 1, 1994)
Ohio Valley - Clarksburg, Inc.
(Effective July 1, 1990)
Cardinal Health 109, Inc.
(f/k/a Owen Healthcare, Inc.)
(Effective July 1, 1998)
Pacific Surgical Innovations, Inc.
(January 1, 2001)
PRN Services, Inc.
(Effective April 1, 1994)
Cardinal Health 406, Inc.
(f/k/a Packaging Coordinators, Inc.)
(Generally effective July 1, 1998)
Acquired employees of TriMaras Printing Co.
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(Effective May 1, 2000)
PhR Staffing, Inc.
(Effective July 1, 2002)
Pharmaceutical & Diagnostics, Inc.
(Effective July 1, 2004)
Cardinal Health 301, Inc.
(f/k/a Pyxis Corporation)
(Generally effective July 1, 1998)
Acquired employees of HelpMate
(Effective December 30, 1999)
Cardinal Health 409, Inc.
(f/k/a R. P. Scherer Corporation)
(Effective September 1, 1999)
Ransdell Surgical, Inc.
(Effective January 1, 2001)
Renlar Systems, Inc.
(Effective January 1, 1996)
Snowden Pencer, Inc.
(Effective July 1, 2004)
Solomons Company
(Effective January 1, 1994)
Cardinal Health 414, Inc.
(f/k/a Syncor International Corporation)
(Effective July 1, 2003)
West Texas Nuclear Pharmacy Partners
(Effective July 1, 2004)
Cardinal Health 110, Inc.
(f/k/a Whitmire Distribution Corporation)
(Effective January 1, 1995)
Williams Drug Distributors, Inc.
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SCHEDULE II
MERGING PLANS
NAME OF
ENTITY MERGED PLAN MERGER DATE
------ ----------- -----------
Comprehensive Reimbursement CRC 401(k) Retirement July 1, 1998
Consultants, Inc.("CRC") Plan
Owen Healthcare, Inc. ("Owen") Owen Healthcare, Inc. July 1, 1998
Employee Stock Ownership
Plan
Owen Healthcare, Inc. ("Owen") Owen Healthcare, Inc. July 1, 1998
401(k) Savings Plan
Packaging Coordinators, Inc. ("PCI") Packaging Coordinators, July 1, 1998
Inc. Profit Sharing Plan
Packaging Coordinators, Inc. ("PCI") Packaging Coordinators, July 1, 1998
Inc. Money Purchase Pension
Plan
Pyxis Corporation ("Pyxis") Pyxis Corporation 401(k) July 1, 1998
Plan
R.P. Scherer Corporation R.P. Scherer Corporation September 1, 1999
Retirement Savings Plan
Automatic Liquid Packaging, Inc. Automatic Liquid Packaging, January 1, 2001
Inc. Employees 401(k)
Savings Plan
Pacific Surgical Innovations, Inc. Pacific Surgical January 1, 2001
Innovations, Inc. 401(k)
Plan
Ransdell Surgical, Inc. Ransdell Surgical, Inc. January 1, 2001
401(k) Salary Reduction
Plan and Trust
International Processing Corp. International Processing July 1, 2001
Corp. 401(k) Plan
American Threshold Industries, Inc. American Threshold September 1, 2001
Industries, Inc. 401(k)
Profit Sharing Plan
Cardinal Health, Inc. Cardinal Health, Inc. December 1, 2001
Frozen Retirement Plan
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NAME OF
ENTITY MERGED PLAN MERGER DATE
------ ----------- -----------
Premier Pharmacy Services, P.C. Premier Pharmacy Services, May 1, 2002
P.C. 401(k) Plan
Beckloff Associates, LLC Beckloff Associates, Inc. August 2, 2004
401(k) Profit Sharing Plan
Snowden Pencer, Inc. Snowden Pencer, Inc. 401(k) August 3, 2004
Profit Sharing Plan
Cardinal Health, Inc. Cardinal Health Prior December 16, 2004
Retirement Accounts Plan
Cardinal Health, Inc. Cardinal Health Profit December 16, 2004
Sharing, Retirement and
Savings Plan for PRN
Employees
Alaris Medical Systems, Inc. Alaris Medical Systems January 1, 2005
Retirement Investment Plan
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SCHEDULE III
ANNUITY DISTRIBUTIONS TO CERTAIN PARTICIPANTS
A. APPLICATION OF QUALIFIED JOINT AND SURVIVOR ANNUITY PROVISIONS. The
provisions of Schedule III shall apply only to those Participants who (a)
participated in the Packaging Coordinators, Inc. Money Purchase Pension Plan and
have a portion of their Account derived from said plan, or (b) certain other
individuals as may be identified on Schedule IV hereto. The Trustee shall
distribute the Nonforfeitable Account balance of a Participant to whom this
Section applies in the form of a "Qualified Joint and Survivor Annuity," unless
the Participant makes a valid waiver election (described in B) within the 90-day
period ending on the "Annuity Starting Date." The Annuity Starting Date means
the first day of the first period for which an amount is payable as an annuity
or, in the case of a benefit not payable in the form of an annuity, the first
day on which all events have occurred that entitle the Participant to such
benefit. A Qualified Joint and Survivor Annuity is an immediate annuity that is
purchasable from a commercial insurer with the Participant's Nonforfeitable
Account balance and which is payable for the life of the Participant with, if
the Participant is married on the Annuity Starting Date, a survivor annuity for
the life of the Participant's surviving Spouse equal to 50% of the amount of the
annuity payable during the joint lives of the Participant and his Spouse. The
Trustee shall pay the Participant's Nonforfeitable Account balance in a lump
sum, in lieu of a Qualified Joint and Survivor Annuity, if the Participant's
Nonforfeitable Account balance at the time distribution commences is not greater
than $5,000.
If the Participant has in effect a valid waiver election regarding the
Qualified Joint and Survivor Annuity, the Trustee shall distribute the
Participant's Nonforfeitable Account balance in accordance with Section 5.04 of
the Plan. For purposes of applying this Schedule III, a former Spouse shall be
treated as the Participant's Spouse or surviving Spouse to the extent provided
under a qualified domestic relations order (as defined in Code Section 414(p)).
B. WAIVER ELECTION - QUALIFIED JOINT AND SURVIVOR ANNUITY. With respect
only to those Participants subject to this Schedule III, no less than 30 days
(or seven days, if the 30-day period is waived by the Participant and the
Participant's Spouse, if applicable), nor more than 90 days before the
Participant's Annuity Starting Date, such Participants shall be provided with a
written explanation of the terms and conditions of the Qualified Joint and
Survivor Annuity, the Participant's right to make, and the effect of, an
election to waive the Qualified Joint and Survivor Annuity form of benefit, the
rights of the Participant's Spouse regarding the waiver election, and the
Participant's right to make, and the effect of, a revocation of a waiver
election.
A married Participant's waiver election is not valid unless:
(i) The Participant's Spouse (to whom the survivor annuity is
payable under the Qualified Joint and Survivor Annuity) has
consented in writing to the waiver election, the Spouse's
consent acknowledges the
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effect of the election, and a notary public or a member of the
Benefits Group (or its representative) witnesses the Spouse's
consent; and
(ii) If the Spouse is not the Participant's sole primary
Beneficiary, the Spouse consents to the Participant's
Beneficiary designation or to any change in the Participant's
Beneficiary designation, or the Spouse expressly permits
designations by the Participant without any further spousal
consent.
A Participant's waiver of the Qualified Joint and Survivor Annuity form of
benefit shall not be effective unless the election designates a form of benefit
payment that may not be changed without spousal consent (or the Spouse expressly
permits designations by the Participant without any further spousal consent).
Any consent by a Spouse obtained under this provision or establishment that the
consent of a Spouse may not be obtained shall be effective only with respect to
such Spouse. A consent that permits designations by the Participant without any
requirement of further consent by such Spouse must acknowledge that the Spouse
has the right to limit consent to a specific beneficiary, and a specific form of
benefit where applicable, and that the Spouse voluntarily elects to relinquish
either or both of such rights. A revocation of a prior waiver may be made by a
Participant without the consent of the Spouse at any time before the
commencement of benefits. The number of revocations shall not be limited. No
consent obtained under this provision shall be valid unless the Participant has
received notice as provided in this Schedule III. The Spouse's consent to a
waiver of the Qualified Joint and Survivor Annuity is irrevocable unless the
Participant revokes the waiver election.
The Trustee or Administrative Committee may accept as valid a waiver
election that does not satisfy the spousal consent requirements if the Trustee
or Administrative Committee establishes that the Participant does not have a
Spouse, the Trustee or Administrative Committee is not able to locate the
Participant's Spouse, or other circumstances exist under which the Secretary of
the Treasury will excuse the consent requirement.
C. DISTRIBUTION BEGINNING AFTER DEATH OF CERTAIN EMPLOYEES PARTICIPATING
PRIOR TO JULY 1, 1998. If a married Participant dies prior to his Annuity
Starting Date, the Trustee shall distribute the married Participant's
Nonforfeitable Account balance to the Participant's surviving Spouse as a
"Preretirement Survivor Annuity," unless the Participant has made a valid waiver
election pursuant to Section D. An unmarried Participant's Nonforfeitable
Account Balance shall be payable to his designated Beneficiary.
The Preretirement Survivor Annuity is an annuity payable to the
Participant's surviving Spouse for life. The Participant's Nonforfeitable
Account Balance shall be applied to the purchase of an annuity for the surviving
Spouse's life. The surviving Spouse may elect to have such annuity distributed
within a reasonable period after the Participant's death.
Notwithstanding the foregoing, if the Participant's Nonforfeitable Account
Balance at the time the distribution commences is not greater than $5,000, the
Participant's Nonforfeitable Account balance shall be paid in a single lump sum
to the Participant's
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surviving Spouse or other Beneficiary in lieu of a Preretirement Survivor
Annuity as soon as administratively practicable after his death.
If the Participant is unmarried or has waived the Preretirement Survivor
Annuity in accordance with Section D, and dies before distribution of his
Nonforfeitable Account Balance begins, distribution of the Participant's entire
Nonforfeitable Account Balance shall be made in a single lump sum payment in
cash or in equal or nearly equal quarterly installments over a fixed period not
exceeding (i) if the Beneficiary is the deceased Participant's surviving Spouse,
the Beneficiary's remaining life expectancy at the time installment payments
begin, or (ii) if the Beneficiary is other than the deceased Participant's
surviving Spouse, five years from the Participant's death.
If the designated Beneficiary is the Participant's surviving Spouse, the
date such distributions are required to begin shall not be earlier than the
later of (i) December 31 of the calendar year immediately following the calendar
year in which the Participant died, or (ii) December 31 of the calendar year in
which the Participant would have attained age 70-1/2. If the Beneficiary is not
the Participant's surviving Spouse, distribution of the entire amount payable
must be completed on or before the last day of the calendar year which contains
the fifth anniversary of the date of the Participant's death.
A Participant may also elect the form and timing of payment of his
Nonforfeitable Account balance to his Beneficiaries. If the Participant has not
made an election concerning the manner of payment to his Beneficiary by the time
of his death, the Participant's surviving Spouse or designated Beneficiary must
elect the method of distribution no later than the time when distributions would
be required to begin under this Section C. If the Participant has no surviving
Spouse or designated Beneficiary, or if the designated Beneficiary does not
elect a method of distribution, distribution of the Participant's entire
Nonforfeitable Account Balance must be completed by December 31 of the calendar
year containing the fifth anniversary of the Participant's death.
D. WAIVER ELECTION FOR MARRIED PARTICIPANTS. A written explanation of the
Preretirement Survivor Annuity shall be provided to each married Participant to
whom this subsection applies, within whichever of the following periods ends
last: (i) the period beginning on the first day of the Plan Year in which the
Participant attains age 32 and ending on the last day of the Plan Year in which
the Participant attains age 34; (ii) a reasonable period after an Employee
becomes a Participant; (iii) a reasonable period after the joint and survivor
rules become applicable to the Participant; or (iv) a reasonable period after a
fully subsidized Preretirement Survivor Annuity no longer satisfies the
requirements for a fully subsidized benefit. A reasonable period described in
clauses (ii), (iii) and (iv) is the period beginning one year before and ending
one year after the applicable event. If the Participant separates from Service
before attaining age 35, clauses (i), (ii), (iii) and (iv) do not apply, and the
written explanation shall be provided within the period beginning one year
before and ending one year after the Separation from Service. The written
explanation shall describe, in a manner consistent with Treasury Regulations,
the terms and conditions of the Preretirement Survivor Annuity in a manner which
is comparable to the explanation of the Qualified Joint and Survivor Annuity
required under this Schedule III. The Plan does not
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limit the number of times the Participant may revoke a waiver of the
Preretirement Survivor Annuity or make a new waiver during the election period.
A Participant's waiver election of the Preretirement Survivor Annuity is
not valid unless (a) the Participant makes the waiver election no earlier than
the first day of the Plan Year in which he attains age 35, and (b) the
Participant's Spouse (to whom the Preretirement Survivor Annuity is payable)
satisfies the consent requirements described in this Schedule III, except the
Spouse need not consent to the form of benefit payable to the designated
Beneficiary. The Spouse's consent to the waiver of the Preretirement Survivor
Annuity is irrevocable, unless the Participant revokes the waiver election.
Notwithstanding the time of election requirement of clause (a) above, a
Participant who will not yet attain age 35 as of the end of any current Plan
Year may make a special qualified election to waive the Preretirement Survivor
Annuity for the period beginning on the date of such election and ending on the
first day of the Plan Year in which the Participant will attain age 35. Such
election will not be valid unless the Participant receives a written explanation
of the Preretirement Survivor Annuity in a manner which is comparable to the
explanation required under Section B. Preretirement Survivor Annuity coverage
will be automatically reinstated as of the first day of the Plan Year in which
the Participant attains age 35. Any new waiver on or after such date shall be
subject to the full requirements of this Section D.
E. For purposes of this Section E, any amount paid to a child of the
Participant will be treated as if it had been paid to the surviving Spouse if
the amount becomes payable to the surviving Spouse when the child reaches the
age of majority.
F. The life expectancy multiples under Treasury Regulation Section 1.72-9
shall be used for purposes of applying this Section. The life expectancy of the
Participant's surviving Spouse may be recalculated not more frequently than
annually, but the life expectancy of a nonspouse designated Beneficiary may not
be recalculated after the Trustee commences payment to the designated
Beneficiary.
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SCHEDULE IV
LIMITATIONS ON CONTRIBUTIONS AND ALLOCATIONS
Section IV.01. LIMITATIONS APPLICABLE TO COMPENSATION DEFERRAL
CONTRIBUTIONS. The provisions of this Section are effective for Plan Years
beginning on or after January 1, 1997 and prior to January 1, 2005.
A. Definitions. For purposes of this Schedule, the following
definitions shall apply:
(i) "Actual Deferral Percentage," for each Plan Year, means the
average of the ratios (calculated separately for each
Participant in a specified group) of:
1. the amount of Compensation Deferral Contributions
actually paid over to the Trust Fund on behalf of each
such Participant for such Plan Year, including Excess
Compensation Deferrals, but excluding Compensation
Deferrals that are taken into account in the
Contribution Percentage test (provided the Average
Deferral Percentage test is satisfied both with and
without exclusion of these Compensation Deferrals), to
2. the Participant's Compensation for such Plan Year for
the period during which he was a Participant in the
Plan.
For purposes of computing Actual Deferral Percentages, an
Eligible Employee who would be a Participant but for the
failure to make Compensation Deferrals shall be treated as a
Participant on whose behalf no Compensation Deferrals are
made.
(ii) "Excess Compensation Deferrals," with respect to any Plan
Year, means the excess of:
1. The aggregate amount of Employer contributions actually
taken into account in computing the Actual Deferral
Percentage of Highly Compensated Employees for such Plan
Year, over
2. The maximum amount of such contributions permitted by
the Actual Deferral Percentage test (determined by
reducing contributions made on behalf of Highly
Compensated Employees in order of their Actual Deferral
Percentages, beginning with the highest of such
percentages).
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B. Actual Deferral Percentage Test. In any Plan Year in which the
Actual Deferral Percentage for the group of Highly Compensated
Employees, taking into account Employee elections, would be more
than the greater of:
(i) the Actual Deferral Percentage for the group of Non-highly
Compensated Employees for the current or preceding Plan Year,
as applicable (as set forth on Schedule I to the Plan),
multiplied by 1.25, or
(ii) the lesser of two percent plus the Actual Deferral Percentage
for the group of Non-highly Compensated Employees for the
current or preceding Plan Year (as set forth on Schedule I) or
the Actual Deferral Percentage for the group of Non-highly
Compensated Employees for the current or preceding Plan Year
(as set forth on Schedule I) multiplied by two,
the deferral elections of the Highly Compensated Employees shall be
reduced to the extent necessary so that the Actual Deferral
Percentage for the group of Highly Compensated Employees is not more
than the greater of subparagraphs (i) or (ii) of this subsection B.
Under such reduction, the dollar amount of the Excess Compensation
Deferrals is determined as described in subsection A(ii) above.
Next, the Compensation Deferral Contributions of the Highly
Compensated Employee with the highest dollar amount of Compensation
Deferral Contributions (not necessarily the Highly Compensated
Employee with the highest Actual Deferral Percentage) is reduced to
the extent required to equal the maximum deferral dollar amount for
Highly Compensated Employees permitted by subparagraphs (i) or (ii)
of this subsection B, or to cause such Highly Compensated Employee's
Compensation Deferral Contributions to equal the dollar amount of
the Compensation Deferral Contributions of the Highly Compensated
Employee with the next highest dollar amount of Compensation
Deferral Contributions, whichever is less. This process is repeated
until the aggregate dollar amount of all Highly Compensated Employee
Compensation Deferrals are reduced to an amount that will cause the
dollar amount of the Compensation Deferrals for all Highly
Compensated Employees in the aggregate to equal the dollar amount of
Compensation Deferrals that will cause the average of the Actual
Deferral Percentages for the group of Highly Compensated Employees
to equal the maximum amount permitted under this Section.
Alternatively (or in addition to the reductions set forth above), if
the Employer has made any Qualified Matching or Qualified
Non-elective Contributions for the Plan Year in question, the
Administrative Committee may elect to treat all or any part of any
such contributions meeting the requirements of Treasury Regulations
Section 1.401(k)-1(b)(3) as Compensation Deferral Contributions to
the extent necessary to satisfy the Actual Deferral Percentage test
of this Section. Any Qualified Matching or Qualified Non-elective
Contributions so applied shall not be included in the computation of
the Actual Contribution Percentage test
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requirements of Code Section 401(m) otherwise applicable to such
contributions.
C. Testing Groups. The Actual Deferral Percentage test may be performed
separately with respect to those Participants who have met the
minimum age and service requirements of Code Section 410(a)(1)(A)
from those who have not met such requirements.
D. Code Section 415 Limitation. The Employer shall not make a
contribution to the Trust to the extent the contribution would
exceed the Participant's "Maximum Permissible Amount" described in
this Schedule IV.
E. Multiple Code Section 401(k) Plans. The Actual Deferral Percentage
for any Participant who is a Highly Compensated Employee for the
Plan Year and who is eligible to have Compensation Deferrals (and
Qualified Non-elective Contributions or Qualified Matching
Contributions, or both, if treated as Compensation Deferrals for
purposes of the Actual Deferral Percentage test) allocated to his
Accounts under two or more arrangements described in Section 401(k)
of the Code that are maintained by the Employer, shall be determined
as if such Compensation Deferrals (and, if applicable, such
Qualified Non-elective Contributions or Qualified Matching
Contributions, or both) were made under a single arrangement. If a
Highly Compensated Employee participates in two or more cash or
deferred arrangements that have different Plan Years, all cash or
deferred arrangements ending with or within the same calendar year
shall be treated as a single arrangement.
F. Optional Plan Aggregation. In the event that this Plan satisfies the
requirements of Sections 401(k), 401(a)(4), or 410(b) of the Code
only if aggregated with one or more other plans, or if one or more
other plans satisfy the requirements of such sections of the Code
only if aggregated with this Plan, then this Section shall be
applied by determining the Actual Deferral Percentage of Employees
as if all such plans were a single plan. Plans may be aggregated in
order to satisfy Section 401(k) of the Code only if they have the
same Plan Year.
G. Time for Making Contributions. For purposes of determining the
Actual Deferral Percentage test, Compensation Deferrals, Qualified
Non-elective Contributions and Qualified Matching Contributions must
be made before the last day of the 12-month period immediately
following the Plan Year to which such contributions relate.
Compensation Deferral Contributions must, in any event, be paid over
by the Employer to the Trustee by the earlier of the date on which
they can reasonably be segregated from the Employer's general assets
or within 15 business days after the end of the calendar month in
which the Compensation Deferral Contributions were withheld from the
Participant's Compensation.
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H. Recordkeeping. The Administrative Committee shall maintain records
sufficient to demonstrate satisfaction of the Actual Deferral
Percentage test and the amount of Qualified Non-elective
Contributions or Qualified Matching Contributions, or both, used in
such test.
I. Compliance with the Code. The determination and treatment of the
Actual Deferral Percentage amounts of any Participant shall satisfy
such other requirements as may be prescribed by the Secretary of the
Treasury. In performing the required testing hereunder, any
variations in procedures or methods permitted under the Code and
applicable Treasury Regulations may be employed.
Section IV.02 DISTRIBUTION OF EXCESS COMPENSATION DEFERRALS.
Notwithstanding any other provision of this Plan, Excess Compensation Deferrals,
plus any income and minus any loss allocable thereto, shall be distributed no
later than the last day of each Plan Year to Participants to whose Accounts such
Excess Compensation Deferrals were allocated for the preceding Plan Year.
Whenever possible, however, such distributions shall be made within two and
one-half months after the end of the Plan Year during which the Excess
Compensation Deferrals occurred. Such distributions shall be made to Highly
Compensated Employees on the basis of the respective portions of the Excess
Compensation Deferrals attributable to each of such Employees under the
methodology described above. Excess Compensation Deferrals shall be treated as
Annual Additions under the Plan.
A. Determination of Income or Loss: Excess Compensation Deferrals shall
be adjusted for any income or loss. The Plan Administrator shall
determine whether such adjustments shall include the period from the
end of the Plan Year in which the excess arose up to the date of
corrective distribution (the "Gap Period"). The income or loss
allocable to Excess Compensation Deferrals is the sum of: (i) income
or loss allocable to the Participant's Compensation Deferral Account
(and, if applicable, the Qualified Non-elective Contribution Account
or the Qualified Matching Contribution Account or both) for the Plan
Year multiplied by a fraction, the numerator of which is such
Participant's Excess Compensation Deferrals for the year and the
denominator of which is the Participant's Account balance
attributable to Compensation Deferrals (and Qualified Non-Elective
Contributions or Qualified Matching Contributions, or both, if any
of such contributions are included in the Actual Deferral Percentage
test) without regard to any income or loss occurring during such
Plan Year; and (ii) if the corrective distribution is to be adjusted
for income or loss during the Gap Period, ten percent of the amount
determined under (i) multiplied by the number of whole calendar
months between the end of the Plan Year and the date of
distribution, counting the month of distribution if distribution
occurs after the 15th day of such month. Alternatively, the
Administrative Committee may determine the income or loss allocable
to Excess Compensation Deferrals under any reasonable method which
does not violate the general nondiscrimination rules of Code Section
401(a)(4), is used consistently for all Participants and for all
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such corrective distributions under the Plan for the Plan Year, and
is used by the Plan for allocating income to Participants' Accounts.
B. Accounting for Excess Compensation Deferrals: Excess Compensation
Deferrals shall be distributed from the Participant's Compensation
Deferral Account and Qualified Matching Contribution Account (if
applicable) in proportion to the Participant's Compensation
Deferrals and Qualified Matching Contributions (to the extent used
in the Actual Deferral Percentage test) for the Plan Year. Excess
Compensation Deferrals shall be distributed from the Participant's
Qualified Non-elective Contribution Account only to the extent that
such Excess Compensation Deferrals exceed the balance in the
Participant's Compensation Deferral Account and Qualified Matching
Contribution Account.
Section IV.03. DOLLAR LIMITATIONS ON ELECTIVE DEFERRALS.
A. Definitions:
(i) "Elective Deferrals" shall mean any Employer contributions
made to the Plan at the election of the Participant, in lieu
of cash compensation, and shall include contributions made
pursuant to a compensation reduction agreement or other
deferral mechanism. With respect to any taxable year, a
Participant's Elective Deferral is the sum of all employer
contributions made on behalf of such Participant pursuant to
an election to defer under any qualified cash or deferred
arrangement as described in Section 401(k) of the Code, any
simplified employee pension cash or deferred arrangement as
described in Code Section 402(h)(1)(B), any eligible deferred
compensation plan under Code Section 457, any plan as
described under Code Section 501(c)(18), and any employer
contributions made on the behalf of a Participant for the
purchase of an annuity contract under Code Section 403(b)
pursuant to a compensation reduction agreement.
(ii) "Excess Elective Deferrals" shall mean those Elective
Deferrals that are includible in a Participant's gross income
under Section 402(g) of the Code to the extent such
Participant's Elective Deferrals for a taxable year exceed the
dollar limitation under such Code section. Excess Elective
Deferrals shall be treated as Annual Additions under the Plan,
except to the extent they are distributed pursuant to
subsection C below.
B. Prohibition of Deferrals in Excess of Code Section 402(g) Dollar
Limitations. No Participant shall be permitted to have Elective
Deferrals made under this Plan, or any other qualified plan, during
any taxable year, in excess of the dollar limitation contained in
Section 402(g) of the Code in effect at the beginning of such
taxable year.
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C. Distribution of Excess Elective Deferrals. A Participant may assign
to this Plan any Excess Elective Deferrals made during a taxable
year of the Participant by notifying the Plan Administrator on or
before March 15 of the following taxable year of the amount of the
Excess Elective Deferrals to be assigned to the Plan.
Notwithstanding any other provision of the Plan, Excess Elective
Deferrals, plus any income and minus any loss allocable thereto,
shall be distributed no later than April 15 to any Participant to
whose Account Excess Elective Deferrals were assigned for the
preceding year and who claims Excess Elective Deferrals for such
taxable year.
D. Determination of Income or Loss. Excess Elective Deferrals shall be
adjusted for any income or loss. The Plan Administrator shall
determine whether such adjustments shall include the period from the
end of the taxable year in which the excess arose up to the date of
distribution (the "Gap Period"). The income or loss allocable to
Excess Elective Deferrals is the sum of (i) income or loss allocable
to the Participant's Elective Deferral Account for the taxable year
multiplied by a fraction, the numerator of which is such
Participant's Excess Elective Deferrals for the year and the
denominator of which is the Participant's Account Balance
attributable to Elective Deferrals without regard to any income or
loss occurring during such taxable year; and (ii) if the
distribution is to be adjusted for income or loss during the Gap
Period, ten percent of the amount determined under (i) multiplied by
the number of whole calendar months between the end of the
Participant's taxable year and the date of distribution, counting
the month of distribution if distribution occurs after the 15th day
of such month. Alternatively, the Administrative Committee may
determine the income or loss allocable to Excess Elective Deferrals
under any reasonable method which does not violate the general
nondiscrimination rules of Code Section 401(a)(4), is used
consistently for all Participants and for all such corrective
distributions under the Plan for the Plan Year, and is used by the
Plan for allocating income to Participants' Accounts.
Participants who claim Excess Elective Deferrals for the preceding taxable
year must submit their claims in writing to the Plan Administrator by March 15
of the calendar year following the Plan Year in which such Excess Elective
Deferrals are claimed to have been made.
Section IV.04. LIMITATIONS APPLICABLE TO MATCHING CONTRIBUTIONS. The
provisions of this Section are effective for Plan Years beginning on or after
January 1, 1997 and prior to January 1, 2005.
A. Definitions. For purposes of this Section, the following definitions
shall apply:
(i) "Aggregate Limit" shall mean the greater of (a) the sum of (1)
125% of the greater of the Actual Deferral Percentage of the
Non-highly
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Compensated Employees for the current or preceding Plan Year
(as set forth on Schedule I) or the Actual Contribution
Percentage of Non-highly Compensated Employees under the Plan
subject to Code Section 401(m) for the current or preceding
Plan Year (as set forth on Schedule I) and (2) the lesser of
200% or two plus the lesser of such Actual Deferral Percentage
or Actual Contribution Percentage; or (b) the sum of (1) 125%
of the lesser of the Actual Deferral Percentage of the
Non-highly Compensated Employees for the current or preceding
Plan Year (as set forth on Schedule I) or the Actual
Contribution Percentage of Non-highly Compensated Employees
under the Plan subject to Code Section 401(m) for the current
or preceding Plan Year (as set forth on Schedule I), and (2)
the lesser of 200% or two plus the greater of such Actual
Deferral Percentage or Actual Contribution Percentage.
(ii) "Actual Contribution Percentage" shall mean the average of the
Contribution Percentages of the Eligible Participants in a
group.
(iii) "Contribution Percentage" shall mean the ratio (expressed as a
percentage) of the Participant's Contribution Percentage
Amounts to the Participant's Compensation for the Plan Year
(whether or not the Employee was a Participant for the entire
Plan Year).
(iv) "Contribution Percentage Amounts" shall mean the sum of the
Non-Safe Harbor Matching Contributions and Qualified Matching
Contributions (to the extent not taken into account for
purposes of the Actual Deferral Percentage test) made under
the Plan on behalf of the Participant for the Plan Year. Such
Contribution Percentage Amounts shall not include Safe Harbor
Matching Contributions or Non-Safe Harbor Matching
Contributions that are forfeited either to correct Excess
Aggregate Contributions or because the contributions to which
they relate are Excess Compensation Deferrals, Excess Elective
Deferrals, or Excess Aggregate Contributions. If it so
desires, the Employer may make Qualified Non-elective
Contributions designated for inclusion in the Contribution
Percentage Amounts. The Employer also may elect to use
Compensation Deferrals in the Contribution Percentage Amounts
so long as the Actual Deferral Percentage test is met before
the Compensation Deferrals are used in the Actual Contribution
Percentage test and continues to be met following the
exclusion of those Compensation Deferrals that are used to
meet the Actual Contribution Percentage test.
(v) "Eligible Participant" shall mean any Employee who is eligible
to make an Employee Contribution, or a Compensation Deferral
(if the Employer takes such contributions into account in the
calculation of the Contribution Percentage), or to receive a
Non-Safe Harbor Matching Contribution (including forfeitures)
or a Qualified Matching
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Contribution. If an Employee Contribution is required as a
condition of participation in the Plan, any Employee who would
be a Participant in the Plan if such Employee made such a
contribution shall be treated as an eligible Participant on
behalf of whom no Employee Contributions are made.
(vi) "Employee Contribution" shall mean any voluntary employee
nondeductible contribution made to the Plan by or on behalf of
a Participant that is included in the Participant's gross
income in the year in which made and that is maintained under
a separate account to which earnings and losses are allocated.
(vii) "Excess Aggregate Contributions" shall mean, with respect to
any Plan Year, the excess of:
1. The aggregate Contribution Percentage Amounts taken into
account in computing the numerator of the Actual
Contribution Percentage actually made on behalf of
Highly Compensated Employees for such Plan Year, over
2. The maximum Contribution Amounts permitted by the Actual
Contribution Percentage test (determined by reducing
contributions made on behalf of Highly Compensated
Employees in order of their Contribution Percentages
beginning with the highest of such percentages).
Such determination shall be made after first determining
Excess Compensation Deferrals pursuant to Section IV.01. After
making such determination, the dollar amount of the Excess
Aggregate Contributions shall be determined. The Excess
Aggregate Contributions, on a dollar amount basis, shall be
allocated to the Account(s) of the Highly Compensated
Participant(s) with the highest dollar amount of Contribution
Percentage Amounts allocated to his/their Account(s) in a
reverse leveling process similar to the one described in
Section IV.01 applicable to Compensation Deferral
Contributions.
(viii) "Matching Contribution" shall mean an Employer contribution
(other than a Safe Harbor Matching Contribution) made to this
or any other defined contribution plan on behalf of a
Participant on account of an Employee Contribution made by
such Participant, or on account of a Participant's
Compensation Deferral Contributions under a Plan maintained by
the Employer.
B. Actual Contribution Percentage Test. The Actual Contribution
Percentage for Participants who are Highly Compensated Employees for
each Plan Year and the Actual Contribution Percentage for
Participants who are Non-highly
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Compensated Employees for the current or preceding Plan Year (as set
forth in this Schedule IV) must satisfy one of the following tests:
(i) The Actual Contribution Percentage for Participants who are
Highly Compensated Employees for the Plan Year shall not
exceed the Actual Contribution Percentage for Participants who
are Non-highly Compensated Employees for the current or
preceding Plan Year (as set forth on this Schedule IV)
multiplied by 1.25; or
(ii) The Actual Contribution Percentage for Participants who are
Highly Compensated Employees for the Plan Year shall not
exceed the Actual Contribution Percentage for Participants who
are Non-highly Compensated Employees for the current or
preceding Plan Year (as set forth on this Schedule IV)
multiplied by two, provided that the Actual Contribution
Percentage for Participants who are Highly Compensated
Employees does not exceed such Actual Contribution Percentage
for Participants who are Non-highly Compensated Employees by
more than two percentage points.
C. Testing Groups. The Actual Contribution Percentage test may be
performed separately with respect to those Participants who have met
the minimum age and service requirements of Code Section
410(a)(1)(A) from those who have not met such requirements.
D. Multiple Use. For Plan Years beginning prior to July 1, 2002, if the
sum of the Actual Deferral Percentage and Actual Contribution
Percentage of those Highly Compensated Employees subject to either
or both tests exceeds the Aggregate Limit, then the Actual
Contribution Percentage of those Highly Compensated Employees will
be reduced (beginning with such Highly Compensated Employee whose
Actual Contribution Percentage is the highest) so that the limit is
not exceeded. The amount by which each Highly Compensated Employee's
Contribution Percentage Amount is reduced shall be treated as an
Excess Aggregate Contribution. The Actual Deferral Percentage and
Actual Contribution Percentage of the Highly Compensated Employees
are determined after any corrections required to meet the Actual
Deferral Percentage and Actual Contribution Percentage tests.
Multiple use does not occur if either the Actual Deferral Percentage
or Actual Contribution Percentage of the Highly Compensated
Employees does not exceed 1.25 multiplied by the Actual Deferral
Percentage or Actual Contribution Percentage, as applicable, of the
Non-highly Compensated Employees.
E. Aggregation of Contribution Percentage Amounts. For purposes of this
Section, the Contribution Percentage for any Participant who is a
Highly Compensated Employee and who is eligible to have Contribution
Percentage Amounts allocated to his Account under two or more Plans
described in Section 401(a) of the Code, or arrangements described
in Section 401(k) of the Code that are maintained by the Employer,
shall be determined as if the
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total of such Contribution Percentage Amounts was made under each
plan. If a Highly Compensated Employee participates in two or more
cash or deferred arrangements that have different plan years, all
cash or deferred arrangements ending with or within the same
calendar year shall be treated as a single arrangement.
F. Aggregation of Plans. In the event that this Plan satisfies the
requirements of Sections 401(m), 401(a)(4) or 410(b) of the Code
only if aggregated with one or more other plans, or if one or more
other plans satisfy the requirements of such sections of the Code
only if aggregated with this Plan, then this Section shall be
applied by determining the Contribution Percentage of Employees as
if all such plans were a single plan. Plans may be aggregated in
order to satisfy Section 401(m) of the Code only if they have the
same Plan Year.
G. Allocation of Amounts to Plan Years. For purposes of determining the
Actual Contribution Percentage test, Employee Contributions are
considered to have been made in the Plan Year in which contributed
to the Trust. Matching Contributions and Qualified Non-elective
Contributions shall be considered made for a Plan Year if made no
later than the end of the 12-month period beginning on the day after
the close of the Plan Year.
H. Recordkeeping. The Employer shall maintain records sufficient to
demonstrate satisfaction of the Actual Contribution Percentage test
and the amount of Qualified Non-elective Contributions or Qualified
Matching Contributions, or both, used in such test.
I. Code Requirements. The determination and treatment of the
Contribution Percentage of any Participant shall satisfy such other
requirements as may be prescribed by the Secretary of the Treasury.
In performing the required testing hereunder, any variations in
procedures or methods permitted under the Code and applicable
Treasury Regulations may be employed.
Section IV.05. DISTRIBUTION OF EXCESS AGGREGATE CONTRIBUTIONS. The
provisions of this Section are effective for Plan Years beginning on or after
January 1, 1997 and prior to January 1, 2005. Notwithstanding any other
provision of this Plan, Excess Aggregate Contributions, plus any income and
minus any loss allocable thereto, shall be forfeited, if forfeitable, or if not
forfeitable, distributed no later than the last day of each Plan Year to
Participants to whose Accounts such Excess Aggregate Contributions were
allocated for the preceding Plan Year. Excess Aggregate Contributions shall be
treated as Annual Additions under the Plan.
A. Determination of Income or Loss: Excess Aggregate Contributions
shall be adjusted for any income or loss. The Plan Administrator
shall determine whether such adjustments shall include the period
from the end of the Plan Year in which the excess arose up to the
date of corrective distribution (the "Gap Period"). The income or
loss allocable to Excess Aggregate
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Contributions is the sum of: (i) income or loss allocable to the
Participant's Matching Account and Qualified Matching Contribution
Account (if any, and only to the extent that amounts therein are not
used in the Actual Deferral Percentage test), and Qualified
Non-elective Contribution Account and Compensation Deferral Account
if any such amounts were used in calculating the Actual Contribution
Percentage test, for the Plan Year, multiplied by a fraction, the
numerator of which is such Participant's Excess Aggregate
Contributions for the year and the denominator of which is the
Participant's Account balance(s) attributable to Contribution
Percentage Amounts without regard to any income or loss occurring
during such Plan Year; and (ii) if the corrective distribution is to
be adjusted for income or loss during the Gap Period, ten percent of
the amount determined under (i) multiplied by the number of whole
calendar months between the end of the Plan Year and the date of
distribution, counting the month of distribution if distribution
occurs after the 15th day of such month. Alternatively, the
Administrative Committee may determine the income or loss allocable
to Excess Aggregate Contributions under any reasonable method which
does not violate the general nondiscrimination rules of Code Section
401(a)(4), is used consistently for all Participants and for all
such corrective distributions under the Plan for the Plan Year, and
is used by the Plan for allocating income to Participants' Accounts.
B. Forfeitures of Excess Aggregate Contributions: Forfeitures of Excess
Aggregate Contributions may either be reallocated to the Accounts of
Non-highly Compensated Employees or applied to reduce Employer
contributions, as elected by the Employer.
C. Accounting for Excess Aggregate Contributions: Excess Aggregate
Contributions shall be forfeited, if forfeitable, or distributed on
a pro-rata basis from the Participant's Employee Contribution
Account, Matching Account, and Qualified Matching Contribution
Account (and, if applicable, the Participant's Qualified
Non-elective Contribution Account or Compensation Deferral Account,
or both).
Section IV.06 ALTERNATIVE TO DISTRIBUTION OF EXCESS AMOUNTS. The
provisions of this Section are effective for Plan Years beginning on or after
January 1, 1997 and prior to January 1, 2005. In lieu of distributing Excess
Compensation Deferrals or Excess Aggregate Contributions and to the extent
elected by the Employer, the Employer may make Qualified Non-elective
Contributions on behalf of Non-highly Compensated Employees that are sufficient
to satisfy either the Actual Deferral Percentage test or the Actual Contribution
Percentage test, or both, pursuant to regulations under the Code, and in
accordance this Schedule IV of the Plan.
Section IV.07. ANNUAL ADDITIONS - DEFINITIONS. For purposes of Section
IV.08, the following definitions and rules of interpretation shall apply:
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A. "Annual Additions" are the sum of the following amounts credited to
a Participant's Account for any Limitation Year:
(i) Compensation Deferral Contributions, Matching Contributions,
and Qualified Matching Contributions;
(ii) Profit Sharing Contributions, Special Contributions,
Transition Contributions provided in an applicable Appendix
and Qualified Non-elective Contributions, if any;
(iii) Forfeitures, if any; and
(iv) Excess amounts reapplied to reduce Employer contributions
under Section IV.08.
Except to the extent provided in Treasury Regulations, Annual
Additions include any excess contributions described in Code Section
401(k), excess aggregate contributions described in Code Section
401(m), and excess deferrals described in Code Section 402(g),
irrespective of whether the Plan distributes or forfeits such excess
amounts. Annual Additions also include amounts allocated to an
individual medical account (as defined in Code Section 415(l)(2))
included as part of a pension or annuity plan maintained by the
Employer. Furthermore, Annual Additions include contributions
attributable to post-retirement medical benefits allocated to the
separate account of a Key Employee (as defined in Code Section
419(A)(d)(3)) under a welfare benefit fund (Code Section 419(e))
maintained by the Employer.
B. "Company." Any corporation that is a member of a controlled group of
corporations (as defined in Section 414(b) of the Code as modified
by Section 415(h)) that includes Cardinal Health, Inc., or any
trades or businesses (whether or not incorporated) that are under
common control (as defined in Section 414(c) of the Code as modified
by Section 415(h)) with Cardinal Health, Inc., or a member of an
affiliated service group (as defined in Code Section 414(m)) that
includes Cardinal Health, Inc., or any other entity required to be
aggregated with Cardinal Health, Inc., pursuant to regulations under
Section 414(o) of the Code.
C. "Compensation." With respect to the Limitation Year means
Compensation as defined in Section 1.10 disregarding any exclusions
from Compensation, other than the exclusions described in
subparagraphs (i), (ii), (iii), and (iv) of Section 1.10A. For
purposes of applying the limitations of this Schedule IV,
Compensation for a Limitation Year is the Compensation actually paid
or includible in gross income during such Limitation Year.
D. "Defined Benefit Plan." A retirement plan that does not provide for
individual accounts for Employer contributions. The Administrative
Committee shall
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treat all Defined Benefit Plans (whether or not terminated)
maintained by the Employer as a single plan.
E. "Defined Contribution Plan." A retirement plan that provides for an
individual account for each participant and for benefits based
solely on the amount contributed to the participant's account, and
any income, expenses, gains and losses, and any forfeitures of
accounts of other participants that the Administrative Committee may
allocate to such Participant's account. The Administrative Committee
shall treat as a Defined Contribution Plan an individual medical
account (as defined in Code Section 415(l)(2)) included as part of a
Defined Benefit Plan maintained by the Employer and a welfare
benefit fund under Code Section 419(e) maintained by the Employer to
the extent there are post-retirement medical benefits allocated to
the separate account of a key employee (as defined in Code Section
419A(d)(3)). The Administrative Committee shall treat all Defined
Contribution Plans (whether or not terminated) maintained by the
Employer as a single plan.
F. "Limitation Year." The Plan Year.
G. "Maximum Permissible Amount." For a Limitation Year beginning on or
after July 1, 2002, the maximum permissible amount with respect to
any Participant shall be the lesser of:
(i) $40,000 (as adjusted in accordance with Code Section 415(d)),
or
(ii) 100% of the Participant's Compensation for the Limitation
Year.
If there is a short Limitation Year because of a change in
Limitation Year, the Administrative Committee will multiply the
$40,000 limitation (or larger limitation) by the following fraction:
Number of months in the short Limitation Year
12.
H. "Projected Annual Benefit." The annual retirement benefit (adjusted
to an actuarially equivalent straight life annuity if the plan
expresses such benefit in a form other than a straight life annuity
or qualified joint and survivor annuity) to which a Participant
would be entitled under a Defined Benefit Plan on the assumptions
that he continues employment until the normal retirement age (or
current age, if that is later) thereunder, that his Compensation
continues at the same rate as in effect for the Limitation Year
under consideration until such age, and that all other relevant
factors used to determine benefits under the Defined Benefit Plan
remain constant as of the current Limitation Year for all future
Limitation Years.
I. Required Plan Aggregation. For purposes of applying the limitations
of Code Section 415(b), (c) and (e) applicable to a Participant for
a particular
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Limitation Year, all qualified Defined Benefit Plans (without regard
to whether a plan has been terminated) ever maintained by the
Company will be treated as one Defined Benefit Plan and all
qualified Defined Contribution Plans (without regard to whether a
plan has been terminated) ever maintained by the Company will be
treated as part of this Plan.
Section IV.08. ANNUAL ADDITION -- LIMITATIONS. The amount of the Annual
Addition that may be credited under this Plan to any Participant's Account as of
any allocation date shall not exceed the Maximum Permissible Amount reduced by
the sum of any credits of Annual Additions made to the Participant's Account
under all Defined Contribution Plans as of any preceding allocation date within
the Limitation Year.
If an allocation date of this Plan coincides with an allocation date of
any other qualified Defined Contribution Plan maintained by the Company, the
amount of the Annual Additions that may be credited under this Plan to any
Participant's Account as of such date shall be an amount equal to the product of
the amount to be credited under this Plan without regard to this Article IV
multiplied by the lesser of one or a fraction, the numerator of which is the
amount described in this Section IV.08 during the Limitation Year and the
denominator of which is the amount that would otherwise be credited on this
allocation date under all Defined Contribution Plans without regard to this
Schedule IV.
If contributions to this Plan on behalf of a Participant are to be reduced
prior to their contribution to the Plan as a result of this Schedule IV, such
reduction shall be effected by first reducing the amount of any Compensation
Deferral Contributions (along with any corresponding Non-Safe Harbor Matching
Contributions) on behalf of such Participant, and then, if necessary, by
reducing the Employer Contributions and/or Transition Contributions that would
otherwise have been allocated to a Participant's Account. If, as a result of
either (a) the allocation of forfeitures, or (b) a reasonable error in
estimating a Participant's Compensation, or (c) under the limited facts and
circumstances which the Commissioner of Internal Revenue finds justify the
availability of the rules set forth in subsections A-D of this Section IV.08,
the allocation of Annual Additions under the terms of the Plan for a particular
Participant would cause the limitations of Code Section 415 applicable to that
Participant for the Limitation Year to be exceeded, the excess amounts shall not
be deemed to be Annual Additions in that Limitation Year if they are treated as
follows:
The excess amounts in the Participant's Account consisting of Compensation
Deferral Contributions and any gains attributable thereto shall be paid to the
Participant as soon as administratively feasible. Any amount so distributed
shall be disregarded for purposes of complying with the requirements of Code
Section 402(g), the Actual Deferral Percentage test of Code Section 401(k)(3)
and the Actual Contribution Percentage test of Code Section 401(m)(2).
The excess amounts in the Participant's Account consisting of Employer
Contributions, Non-Safe Harbor Matching Contributions or Transition
Contributions provided in Schedule V shall be used to reduce Employer
Contributions, Matching Contributions or Transition Contributions provided in an
applicable Appendix respectively for the next Limitation Year (and succeeding
Limitation Years, as necessary) for that Participant if that Participant is
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covered by the Plan as of the end of the Limitation Year. However, if that
Participant is not covered by the Plan as of the end of the Limitation Year,
then the excess amounts must be held unallocated in a suspense account for the
Limitation Year and allocated and reallocated in the next Limitation Year to all
of the remaining Participants in the Plan. If a suspense account is in existence
at any time during a particular Limitation Year, other than the first Limitation
Year described in the preceding sentence, all amounts in the suspense account
must be allocated and reallocated to Participants' Accounts (subject to the
limitations of Code Section 415) before any contributions that would constitute
Annual Additions may be made to the Plan for that Limitation Year. Furthermore,
the excess amounts must be used to reduce Employer Contributions, Matching
Contributions and Transition Contributions provided in Schedule V for the next
Limitation Year (and succeeding Limitation Years, as necessary) for all of the
remaining Participants in the Plan. For purposes of this subdivision, except as
provided in Section IV.08.A, excess amounts may not be distributed to
Participants or Former Participants.
In the event of termination of the Plan, the suspense account described above,
shall revert to the Company to the extent it may not then be allocated to any
Participant's Account.
Notwithstanding any other provisions in this Schedule IV, the Company shall not
contribute any amount that would cause an allocation to the suspense account as
of the date the contribution is allocated. If the contribution is made prior to
the date as of which it is to be allocated, then such contribution shall not
exceed an amount that would cause an allocation to the suspense account if the
date of contribution were an allocation date.
If a Participant's Annual Additions would result in an excess amount for a
Limitation Year, the excess amount will be deemed to consist of the Annual
Additions last allocated except that Annual Additions attributable to a welfare
benefit fund will be deemed to have been allocated first regardless of the
actual allocation date.
Section IV.09. ADP/ACP TESTING METHOD. For Plan Years on and after January
1, 1997 but prior to January 1, 2005, the Plan used the current year testing
method to satisfy the Actual Deferral Percentage and Actual Contribution
Percentage Tests.
Section IV.10. QSLOB TESTING PROVISIONS. For any testing year (as defined
in Code Section 414(r)) the Company may elect (by filing with the IRS at the
time and in the manner prescribed by the IRS) to use qualified separate lines of
business ("QSLOB") in order to satisfy nondiscrimination and/or coverage testing
for the Plan.
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SCHEDULE V
SPECIAL PROVISIONS FOR PRIOR MERGED PLANS
A. Special Rules Regarding Participants in the Owen Healthcare, Inc. 401(k)
Savings Plan.
(i) A Participant employed by Owen Healthcare, Inc. ("Owen") on June 30,
1998 shall, to the extent applicable, continue to have a separate
After-tax Contribution Account and a separate Participant IRA
Account under the Plan.
(ii) A Participant employed by Owen on June 30, 1998 shall continue to be
permitted to obtain in-service withdrawals from his after-tax
contributions Account.
(iii) A Participant employed by Owen on June 30, 1998 shall continue to be
permitted to obtain in-service withdrawals from his Participant IRA
Account in an amount equal to all, but not less than all, of the
amounts held in such Participant IRA Account.
B. Special Rules Regarding Participants in the Packaging Coordinators, Inc.
Money Purchase Pension Plan. Participants employed by PCI on June 30, 1998
shall continue to have the option to receive distributions from the Plan
in the form of a 100% Qualified Joint and Survivor Annuity, to the extent
applicable, or in the form of a single life annuity. A single life annuity
shall continue to be the normal form of benefit payable to an unmarried
Participant.
C. Transition Contribution for Participants in the R.P. Scherer Employees'
Retirement Income Plan. The Employer shall make a Transition Contribution
on behalf of an Employee of Cardinal Health 409, Inc. (f/k/a R.P. Scherer
Corporation) who:
(i) was a Participant in the R.P. Scherer Corporation Employees'
Retirement Income Plan (the "Pension Plan") on December 31, 2002;
(ii) completed at least five (5) Years of Service on or before December
31, 2002;
(iii) attained at least age fifty (50) on or before December 31, 2002; and
(iv) are employed by Cardinal Health 409, Inc. on the last day of the
applicable Fiscal Year.
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The amount of the Transition Benefit shall be a percentage of Compensation
based on the Participant's Years of Service in the Pension Plan as of
December 31, 2002:
Transition
Benefit
Years of Service (as of 12/31/02) Percentage
- ---------------- -----------
Less than five (5) 0%
At least five (5) but less than 10 (ten) 1.5%
At least ten (10) but less than fifteen (15) 3.5%
At least fifteen (15) but less than twenty (20) 5.5%
At least twenty (20) but less than twenty-five (25) 7.5%
Twenty-five (25) or more 9.5%
The Transition Benefit shall be contributed to the Participant's Account
for each Fiscal Year in which the Participant satisfies the criteria set
forth in this subsection (b) beginning on January 1, 2003 and ending on
December 31, 2008.
Compensation issued to determine the amount of the Transition Benefit for
an applicable Fiscal Year shall be based on the following periods:
Fiscal Year Period Used to Determine Compensation
- ----------- -------------------------------------
2003 January 1, 2003 to June 30, 2003
2004 July 1, 2003 to June 30, 2004
2005 July 1, 2004 to June 30, 2005
2006 July 1, 2005 to June 30, 2006
2007 July 1, 2006 to June 30, 2007
2008 July 1, 2007 to June 30, 2008
2009 July 1, 2008 to December 31, 2008
D. Special Rules Regarding Active Employees of Medical Products and Services
(f/k/a Allegiance Corporation).
(i) For purposes of Employer Contributions under the Plan, the term
"Compensation" shall mean "Base Pay" until July 1, 2005 defined as
follows:
1. With respect to Employees who are compensated based upon sales
commissions and with greater than 25% of pay at risk, Base Pay
includes 75% of the Employee's regular pay, draw and
commissions for the Plan Year, but excludes shift
differentials, exception pay, Management Incentive
Compensation Plan ("MICP"), lump sum merit pay, expenses,
performance pay and any other payments
2. With respect to Employees who are not compensated based upon
sales commissions or who are paid commissions but with less
than 25% of pay at risk, Base Pay includes regular pay, back
pay, vacation pay,
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holiday pay, sick pay, funeral pay, jury pay, military pay and
other paid absences, but excludes overtime, short-term
disability, shift differential, exception pay, MICP, lump sum
merit pay, performance pay and any other payments.
(ii) A Participant who is fully vested in his Non-Safe Harbor Matching
Contributions and Employer Contributions Accounts and who has
attained his fifth anniversary of participation may elect to
withdraw any or all of his Matching Contributions or amounts held in
his Profit Sharing Account at any time. A Participant who elects to
make such a withdrawal is ineligible to make Compensation Deferral
Contributions for a period of six months commencing on the first day
of the first calendar month following the date on which the accounts
are valued for purposes of making such withdrawal. Such
Participant's Compensation Deferral Contributions shall recommence
at the same rate (unless the Participant elects otherwise) on the
first day of the sixth full calendar month following the date of the
commencement of the suspension.
E. Special Rules Regarding Former Participants in the Alaris Medical Systems
Retirement Investment Plan. A Participants may withdraw all or part of his
interest held in the Alaris Medical Systems Retirement Investment Plan
credited prior to December 31, 1997, excluding earnings credited after
December 31, 1997 and Pre-Tax Contributions, at any time. In addition to
any other rules the Administrative Committee may prescribe, such
withdrawals shall be limited to one withdrawal per Plan Year in a whole
dollar amount of $500 or more.
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