SECOND AMENDMENT TO THE MORRISON HEALTH CARE, INC.
SALARY DEFERRAL PLAN
THIS SECOND AMENDMENT is made on this 28th day of
February, 1997, by MORRISON HEALTH CARE, INC., a corporation
duly organized and existing under the laws of the State of
Georgia (the "Primary Sponsor").
W I T N E S S E T H:
WHEREAS, the Primary Sponsor established by indenture
dated March 7, 1996 the Morrison Health Care, Inc. Salary
Deferral Plan (the "Plan"); and
WHEREAS, the Primary Sponsor desires to amend the Plan
primarily to allow participation by highly compensated
employees and to reflect the changes required by the Small
Business Job Protection Act of 1996;
NOW, THEREFORE, the Primary Sponsor does hereby amend
the Plan, effective as of January 1, 1997, except as
otherwise provided herein, as follows:
1. By substituting the phrase"Supplemental Contribution
Account" for the phrase"Supplemental Matching Account" each time
the latter phrase appears in the Plan and by deleting the existing
Subsections (e) and (g) of Section 1.1 and substituting therefor the
following:
"(e) `Pre-Spinoff Matching Account' which shall reflect a Member's
interest in matching contributions made under the Plan through the
date of the first Acquisition Loan.
(g) `Supplemental Contributions Account' which
shall reflect a Member's interest in supplemental
allocations under Plan Section 4.2(b)(3)."
2. By adding new Subsections (j) and (k) to Section 1.1, as follows:
"(j) `Qualified Contributions Account' which shall
reflect a Member's interest in `Qualified Nonelective
Contributions' and `Qualified Matching Contributions', as
those terms are defined in Section 1 of Appendix A as well
as supplemental allocations under Plan Sections 4.2(b)(1)
and (2).
(k) `Unallocated Contributions and Dividends
Account' which shall consist of any Company Stock and cash a
Plan Sponsor contributes during a Plan Year and cash
dividends paid on shares of Company Stock held in the Loan
Suspense Account during a Plan Year until allocated for that
Plan Year pursuant to Plan Section 4."
3. By deleting Subsection (b) of Section 1.5 in its entirety
and substituting therefor the
following:
"(b) [Reserved];"
4. By deleting, effective April 1, 1997, Section 1.19 in its
entirety and substituting therefor the following:
"1.19 `Eligible Employee' means any Employee
of a Plan Sponsor other than an Employee who is (a) an
Employee covered by a collective bargaining agreement
between a union and a Plan Sponsor, provided that retirement
benefits were the subject to good faith bargaining, unless
the bargaining agreement provides for participation in the
Plan; or (b) a leased employee within the meaning of Code
Section 414(n)(2), or deemed to be an Employee of a Plan
Sponsor pursuant to regulations under Code Section 414(o)."
5. By deleting the last sentence of Section 1.25 and
substituting therefor the following:
"The ESOP shall consist of the Supplemental
Contributions Accounts, Company Matching Accounts, Qualified
Contributions Accounts, the Loan Suspense Account, the
Suspense Account and the Unallocated Contributions and
Dividends Account."
6. By replacing the existing Section 1.31 with new Section
1.31, as follows:
"1.31 `Highly Compensated Employee' shall
mean, with respect to a Plan Year, each Employee who:
(a) was at any time during the Plan Year or
the immediately preceding Plan Year an owner of more than
five percent (5%) of the outstanding stock of a Plan Sponsor
or Affiliate or more than five percent (5%) of the total
combined voting power of all stock of a Plan Sponsor or
Affiliate; or
(b) received Annual Compensation in excess
of $80,000 (as adjusted for changes in the cost of living
from time to time by the Secretary of the Treasury) during
the immediately preceding Plan Year.
For purposes of this Section, (1) Annual
Compensation shall include amounts paid by Affiliates and
shall be determined without regard to Annual Compensation
Limit; (2) a former Employee shall be treated as a Highly
Compensated Employee if the former Employee was a Highly
Compensated Employee at the time the former Employee
separated from service with the Plan Sponsor or Affiliate or
the former Employee was a Highly Compensated Employee at any
time after the former Employee attained age 55; and (3)
Employees who are nonresident aliens and who receive no
earned income from a Plan Sponsor or Affiliate from sources
within the United States shall not be treated as Employees.
Notwithstanding the foregoing, the Primary Sponsor
may elect to determine each Highly Compensated Employee
using the snapshot day of December 31, in a manner
consistent with Section 4 of Revenue Procedure 93-42."
7. By adding, effective April 1, 1997, a new final sentence
to Section 2.2 as follows:
"Notwithstanding the foregoing, a Highly Compensated Employee
shall become a Member as of the later of the date
described in the immediately preceding sentence or April 1, 1997."
8. By deleting the second sentence of the second paragraph of
Section 3.1(a) and substituting therefor the following:
"The Plan Administrator may adjust, on a prospective
basis, the percentage of Annual Compensation that may be
made as Deferral Amounts by Highly Compensated Employees,
either as a group, any subgrouping or individually, but in
no event shall the aggregate percentage for any Plan Year
exceed ten percent (10%) of Annual Compensation."
9. By deleting the last sentence of Section 3.2 and substituting
therefor the following:
"Any Member who is or becomes a Highly Compensated
Employee shall be ineligible to make further Voluntary
Contributions."
10. By deleting the second to last sentence of Section 3.3
and by adding a new second paragraph thereto, as follows:
"A cash contribution by a Plan Sponsor pursuant to
this Section shall be used first to make any scheduled or
accelerated amortization payments, or prepayments, on an
Acquisition Loan and then, to the extent of any excess,
shall be used to acquire additional shares of Company Stock,
to the extent practicable."
11. By adding the phrase "and, if applicable, Plan Section 4.4(d)"
immediately after the cross-reference to Section 4.4(b) and by substituting,
effective as of the Effective Date, Section 4.2(a)(2) as the cross-
reference in place of Section 4.2(b) in Section 3.4.
12. By adding new Sections 3.4A and 3.4B, as follows:
"3.4A Qualified Contributions. At the sole
discretion of the Primary Sponsor, each Plan Sponsor shall
make `Qualified Nonelective Contributions' and/or `Qualified
Matching Contributions', as those terms are defined in
Section 1 of Appendix A, in an amount together with any
supplemental allocations under Plan Sections 4.2(b)(1) or
(2) as determined by the Primary Sponsor are necessary to
satisfy, as applicable, the testing requirements of Code
Section 401(k)(3)(A)(ii) and Code Section 401(m)(2)(A).
3.4B Contributions Respecting Qualified Military
Service. Notwithstanding any other provision of the Plan to
the contrary, effective December 12, 1994, contributions,
benefits and service credit with respect to qualified
military service will be provided in accordance with Code
Section 414(u)."
13. By adding the following head language to Section 4.2:
"Plan Sponsor contributions and dividends paid on
shares of Company Stock allocated to the Loan Suspense
Account during a Plan Year shall be credited initially to
the Unallocated Contributions and Dividends Account until such
amounts are further allocated pursuant to this Section 4."
14. By deleting Clause (iv) of Section 4.2(a)(1) in its entirety
and substituting therefor the following:
"(iv) notwithstanding any provision to the contrary
in this Section 4.2(a)(1), in the case of a Member who is a
Highly Compensated Employee for the Plan Year, twenty
percent (20%) of the Member's Annual Compensation deferred
by the Member pursuant to Plan Section 3.1, regardless of
the Member's Years of Service."
15. By deleting Subsection (b) of Section 4.2 in its entirety
and substituting therefor the following:
"(b) Supplemental Allocations. As of each
Valuation Date, if the Fair Market Value of Company Stock
released from the Loan Suspense Account in accordance with
Plan Section 4.4(b) exceeds the value of matching
allocations provided for in Plan Section 4.2(a), the excess
shares of Company Stock so released and any contributions
described in Plan Section 3.4A shall be allocated as
follows:
(1) if the Primary Sponsor so elects, to the
Qualified Contributions Account of each Member who is not a
Highly Compensated Employee who is employed by a Plan
Sponsor on the last day of the Plan Year in an amount,
expressed as a percentage of Annual Compensation which, when
combined with contributions made on behalf of the Member
pursuant to Plan Section 3.1, equals the maximum amount that
the Member could have elected to defer under Plan Section
3.1, but only to those Members who are not Highly
Compensated Employees in ascending order of their respective
Annual Compensation amounts for that Plan Year, beginning
with the individual receiving the least Annual Compensation,
until the testing requirements of Code Section 401(k)(3)(A)(ii)
are satisfied;
(2) if the Primary Sponsor so elects, to the
Qualified Contributions Account of each Member who is not a
Highly Compensated Employee who is employed by a Plan
Sponsor on the last day of the Plan Year in an amount,
expressed as a percentage of Annual Compensation which, when
combined with allocations made on behalf of the Member
pursuant to Plan Section 4.2(a), equals the maximum amount,
expressed as a percentage of Annual Compensation, that the
Member could have received under Plan Section 4.2(a) had the
Member elected to have deferred on his behalf the maximum
percentage of Annual Compensation permitted under Plan
Section 3.1, but only to those Members who are not Highly
Compensated Employees in ascending order of their respective
Annual Compensation amounts for that Plan Year, beginning
with the individual receiving the least Annual Compensation,
until the testing requirements of Code Section 401(m)(2)(A)
are satisfied; and
(3) any remaining excess, to the
Supplemental Account of each Member who is employed by a
Plan Sponsor on the last day of the Plan Year in the
proportion that the Member's Annual Compensation bears to
the Annual Compensation of all Members entitled to an
allocation pursuant to this Section 4.2(b)(3); provided,
however, if and to the extent necessary to satisfy with
respect to the Plan Year the minimum coverage requirements
prescribed in Code Section 410(b) or the minimum
participation requirements under Code Section 401(a)(26) and
the Treasury regulations issued thereunder, Members who are
not Highly compensated Employees who completed more than 500
Hours of Service during the Plan Year, but who terminated
employment before the last day of the Plan Year, shall be
entitled to share in the allocation described in Plan
Section 4.2(b)(3), beginning with the individual receiving
the least Annual Compensation for the Plan Year."
16. By deleting the existing head language of Section 4.3(b)
and substituting therefor the following:
"As of each Valuation Date, the Trustee shall allocate
to each Account under the ESOP (other than the Unallocated
Contributions and Dividends Account) its share of the net
income or net loss of the ESOP Fund as hereinafter set
forth:".
17. By deleting clause (1) from Section 5.1(b) and substituting
therefor the following:
"(1) the Acquisition Loan provides for payments of
principal and interest no less frequently than annually at a
cumulative rate that is not less rapid at any time than
level annual payments of those amounts for ten years,".
18. By deleting the first sentence of Section 5.1(c) in its entirety
and substituting therefor the following:
"No person entitled to payment under an Acquisition
Loan shall have any right to Fund assets other than (1)
collateral given for the Acquisition Loan; (2) contributions
(other than contributions of Company Stock) that are made to
the ESOP under Plan Section 3.3; and (3) earnings
attributable to such collateral and such contributions."
19. By replacing the term "Plan" with the term "ESOP" the first time
the former appears in Section 7.1.
20. By deleting the second sentence of Sections 8.3 and 9.2 in their
entireties and substituting therefor the following:
"If the Member's interest in Company Stock under the
Plan equals or exceeds the value of one hundred (100) shares
of Company Stock, that interest may be distributed in the
form of whole shares of Company Stock if the Member so
elects in such form as the Plan Administrator may
prescribe."
21. By deleting Subsection (c) of Section 11.3 in its entirety and
by substituting therefor the following:
"(c) For purposes of this Plan Section, the term
`required beginning date' means April 1 of the calendar year
following the later of the calendar year in which the Member
attains age 70.5 or the calendar year in which the Member
retires, except that, in the case of a person described in
Section 1(b)(3) of Appendix C, the `required beginning date'
shall be April 1 of the calendar following the calendar year
in which the Member attains age 70.5."
22. By redesignating Section 22 as Section 23 and by adding new
Section 22 as follows:
"SECTION 22
PLAN LOANS"
22.1 Subject to the provisions of the Plan and the
Trust, on and after the date the provisions of this Section
are activated by express written action of the Plan
Administrator, each Member who is an Employee shall have the
right, subject to prior approval by the Plan Administrator,
to borrow from the Fund an amount equal to the lesser of the
value of the Member's accounts under the Profit Sharing Plan
or fifty percent (50%) of the value of the Member's vested
Account. In addition, each "party in interest," as defined
in ERISA Section 3(14), who is (a) a Member but no longer an
Employee, (b) the Beneficiary of a deceased Member, or
(c) an alternate payee of a Member pursuant to the
provisions of a "qualified domestic relations order," as
defined in Code Section 414(p), shall also have the right,
subject to prior approval by the Plan Administrator, to
borrow from the Fund; provided, however, that loans to such
parties in interest may not discriminate in favor of Highly
Compensated Employees.
22.2 In order to apply for a loan, a borrower must
complete and submit to the Plan Administrator documents
provided by the Plan Administrator for this purpose.
22.3 Loans shall be available to all eligible
borrowers on a reasonably equivalent basis which may take
into account the borrower's creditworthiness, ability to
repay, and ability to provide adequate security. Loans
shall not be made available to Highly Compensated Employees,
officers or shareholders of a Plan Sponsor in an amount
greater than the amount made available to other borrowers.
This provision shall be deemed to be satisfied if all
borrowers have the right to borrow the same percentage of
their interest in the Member's vested Account, notwith
standing that the dollar amount of such loans may differ as
a result of differing values of Members' vested Accounts.
22.4 Each loan shall bear a `reasonable rate of
interest' and provide that the loan be amortized in
substantially level payments, made no less frequently than
quarterly, over a specified period of time. A `reasonable
rate of interest' shall be that rate that provides the Plan
with a return commensurate with the interest rates charged
by persons in the business of lending money for loans which
would be made under similar circumstances.
22.5 Each loan shall be adequately secured, with
the security for the outstanding balance of all loans to the
borrower to consist of one-half (1/2) of the borrower's
interest in the Member's vested Account, or such other
security as the Plan Administrator deems acceptable. No
portion of the Member's Employee Deferral Account shall be
used as security for any loan hereunder unless and until
such time as the loan amount exceeds the value of the
borrower's interest in the Member's vested Account in all
other Accounts.
22.6 Each loan, when added to the outstanding
balance of all other loans to the borrower from all
retirement plans of the Plan Sponsor and its Affiliates
which are qualified under Section 401 of the Code, shall not
exceed the lesser of:
(a) $50,000, reduced by the excess, if any, of
(1) the highest outstanding balance of loans
made to the borrower from all retirement plans qualified
under Code Section 401 of the Plan Sponsor and its
Affiliates during the one (1) year period immediately
preceding the day prior to the date on which such loan was
made, over
(2) the outstanding balance of loans made to
the borrower from all retirement plans qualified under Code
Section 401 of the Plan Sponsor and its Affiliates on the
date on which such loan was made, or
(b) one-half (1/2) of the value of the borrower's
interest in the vested Account attributable to the Member's
Account.
For purposes of this Section, the value of the vested
Account attributable to a Member's Account shall be
established as of the latest preceding Valuation Date, or
any later date on which an available valuation was made, and
shall be adjusted for any distributions or contributions
made through the date of the origination of the loan.
22.7 Each loan, by its terms, shall be repaid
within five (5) years, except that any loan which is used to
acquire any dwelling unit which within a reasonable time is
to be used (determined at the time the loan is made) as the
principal residence of the borrower may, by its terms, be
repaid within a longer period of time.
22.8 The Plan Administrator may establish limits
on the number of loans outstanding in favor of any single
borrower at any one time and, for any such loan, a minimum
loan amount, which limitations shall be applied in a uniform
and nondiscriminatory manner.
22.9 The entire unpaid principal sum and accrued
interest shall, at the option of the Plan Administrator,
become due and payable if (a) a borrower fails to make any
loan payment when due, (b) a borrower ceases to be a `party
in interest', as defined in ERISA Section 3(14), (c) the
vested Account held as security under the Plan for the
borrower will, as a result of an impending distribution or
withdrawal, be reduced to an amount less than the amount of
all unpaid principal and accrued interest then outstanding
under the loan, or (d) a borrower makes any untrue
representations or warranties in connection with the
obtaining of the loan. In that event, the Plan
Administrator may take such steps as it deems necessary to
preserve the assets of the Plan, including, but not limited
to, the following: (1) direct the Trustee to deduct the
unpaid principal sum, accrued interest, and any other
applicable charge under the note evidencing the loan from
any benefits that may become payable out of the Plan to the
borrower, (2) direct the Plan Sponsor to deduct and transfer
to the Trustee the unpaid principal balance, accrued
interest, and any other applicable charge under the note
evidencing the loan from any amounts owed by the Plan
Sponsor to the borrower, or (3) liquidate the security given
by the borrower, other than amounts attributable to a
Member's Employee Deferral Account, and deduct from the
proceeds the unpaid principal balance, accrued interest, and
any other applicable charge under the note evidencing the
loan. If any part of the indebtedness under the note
evidencing the loan is collected by law or through an
attorney, the borrower shall be liable for attorneys' fees
in an amount equal to ten percent of the amount then due and
all costs of collection.
22.10 Each loan shall be treated as an
investment of that borrower's Account and shall be made only
in accordance with regulations and rulings of the Internal
Revenue Service and the Department of Labor. The Plan
Administrator shall be authorized to administer the loan
program of this Section and shall act in his sole discretion
to ascertain whether the requirements of such regulations
and rulings and this Section have been met."
23. By deleting the first sentence of Section 2 of Appendix A
and substituting therefor the following:
"In addition to any other limitations set forth in
the Plan, for each Plan Year one of the following tests must
be satisfied:
(a) the actual deferral percentage for the
Highly Compensated Eligible Members for the Plan Year must
not be more than the actual deferral percentage of all other
Eligible Members for the preceding Plan Year multiplied by
1.25; or
(b) the excess of the actual deferral
percentage for the Highly Compensated Eligible Members for
the Plan Year over that of all other Eligible Members for
the preceding Plan Year must not be more than two (2)
percentage points, and the actual deferral percentage for
the Highly Compensated Eligible Members for the Plan Year
must not be more than the actual deferral percentage of all
other Eligible Members for the preceding Plan Year
multiplied by two (2).
Notwithstanding the foregoing, the Plan
Administrator may utilize any transition rule permitted by
Internal Revenue Service 97-2 or otherwise regarding the use
of current year data for calculating actual deferral
percentages."
24. By deleting Subsection (b) of Section 3 of Appendix A in its
entirety and substituting therefor the following:
"(b) the maximum amount of Deferral Amounts
permitted under Section 2 of this Appendix A for the Plan
Year, which shall be determined by reducing the Deferral
Amounts contributed on behalf of Highly Compensated Eligible
Members in order of the amount of Deferral Amounts
contributed by such Eligible Members beginning with the
greatest of such amounts."
25. By deleting the first sentence of Section 5 of Appendix A and
substituting therefor the following:
"In addition to any other limitations set forth in
the Plan, Matching Contributions under the Plan and the
amount of nondeductible employee contributions under the
Plan, for each Plan Year must satisfy one of the following
tests:
(a) The contribution percentage for the
Highly Compensated Eligible Members for the Plan Year must
not exceed 125% of the contribution percentage for all other
Eligible Members for the preceding Plan Year; or
(b) The contribution percentage for Highly
Compensated Eligible Members for the Plan Year must not
exceed the lesser of (1) 200% of the contribution percentage
for all other Eligible Members for the preceding Plan Year,
and (2) the contribution percentage for all other Eligible
Members for the preceding Plan Year plus two (2) percentage
points.
Notwithstanding the foregoing, the Plan Administrator may
utilize any transition rule permitted by Internal Revenue
Service 97-2 or otherwise regarding the use of current year
data for calculating actual contribution percentages."
26. By deleting Subsection (b) of Section 6 of Appendix A in its
entirety and substituting therefor the following:
"(b) the maximum amount of the contributions
permitted under the limitations of Section 5 of this
Appendix A, determined by reducing contributions made on
behalf of Highly Compensated Eligible Members beginning with
the greatest of such amounts."
27. By deleting the last sentence of the second paragraph of
Section 6 of Appendix A.
28. By substituting Section 4.2(b)(3) as the cross-reference in
place of Section 4.2(b) in Section 6(c) of Appendix B.
29. By deleting Section 1(b)(1) of Appendix C in its entirety and
substituting therefor the following:
"(1) An officer of the Plan Sponsor or any
Affiliate whose Annual Compensation was greater than fifty
percent (50%) of the amount in effect under Code Section
415(b)(1)(A) for the calendar year in which the Plan Year
ends, where the term `officer' means an administrative
executive in regular and continual service to the Plan
Sponsor or Affiliate; provided, however, that in no event
shall the number of officers exceed the lesser of Clause (A)
or (B) of this Subparagraph (1), where:
(A) equals fifty (50) Employees; and
(B) equals the greater of (i) three (3)
Employees or (ii) ten percent (10%) of the number of
Employees during the Plan Year, with any non-integer being
increased to the next higher integer.
If for any Plan Year no officer of the Plan Sponsor
meets the requirements of this Subparagraph (1), the highest
paid officer of the Plan Sponsor for the Plan Year shall be
considered an officer for purposes of this Subparagraph."
Except as specifically amended hereby, the Plan shall
remain in full force and effect prior to this Second Amendment.
IN WITNESS WHEREOF, the Primary Sponsor has caused this
Second Amendment to be executed on the day and year first
above written.
MORRISON HEALTH CARE, INC.
By:/s/ K. Wyatt Engwall
K. Wyatt Engwall
Title: Senior Vice President, Finance
ATTEST:
By:/s/ Henry Page
Henry Page
Title: Director of Finance
[CORPORATE SEAL]