Exhibit 10.6

 

 

 

 

 

 

 

 

 

**SIERRA HEALTH SERVICES, INC.

 

DEFERRED COMPENSATION PLAN

 

Effective May 1, 1996, as Amended

and Restated January 1, 2001 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TABLE OF CONTENTS

Page
Purpose 1

ARTICLE 1 Definitions 1

ARTICLE 2 Selection, Enrollment, Eligibility 6

2.1 Selection by Committee 6

2.2 Enrollment Requirements 7

2.3 Eligibility; Commencement of Participation 7

2.4 Termination of Participation and/or Deferrals 7

ARTICLE 3 Deferral Commitments/Company Matching/Crediting/Taxes 7

3.1 Minimum Deferral 7

3.2 Maximum Deferral 8

3.3 Election to Defer; Effect of Election Form 8

3.4 Withholding of Annual Deferral Amounts 9

3.5 Annual Company Matching Amount 9

3.6 Annual Company Restoration Amount 9

3.7 Vested Company Matching Account, Vested Company

Restoration Account, and Deferral Account 10

3.8 Crediting/Debiting of Account Balances 10

3.9 FICA, Withholding and Other Taxes 12

3.10 Rollovers From Prior Deferred Compensation Plan 13

ARTICLE 4 Short-Term Payout; Unforeseeable Financial Emergencies;

Withdrawal Election 13

4.1 Short-Term Payout 13

4.2 Other Benefits Take Precedence Over Short-Term Payout 13

4.3 Withdrawal Payout/Suspensions for Unforeseeable Financial Emergencies14

4.4 Withdrawal Election 14

ARTICLE 5 Retirement Benefit 14

5.1 Retirement Benefit 14

5.2 Payment of Retirement Benefit 14

5.3 Death Prior to Completion of Retirement Benefit 15

ARTICLE 6 Pre-Retirement Survivor Benefit 15

6.1 Pre-Retirement Survivor Benefit 15

6.2 Payment of Pre-Retirement Survivor Benefit 15

ARTICLE 7 Termination Benefit 15

7.1 Termination Benefit 15

7.2 Payment of Termination Benefit 15

ARTICLE 8 Disability Waiver and Benefit 16

8.1 Disability Waiver 16

8.2 Continued Eligibility; Disability Benefit 16

ARTICLE 9 Beneficiary Designation 17

9.1 Beneficiary 17

9.2 Beneficiary Designation; Change; Spousal Consent 17

9.3 Acknowledgment 18

9.4 No Beneficiary Designation 18

9.5 Doubt as to Beneficiary 18

9.6 Discharge of Obligations 18

ARTICLE 10 Leave of Absence; Consulting 18

10.1 Paid Leave of Absence 18

10.2 Unpaid Leave of Absence 18

10.3 Consulting Arrangements 18

ARTICLE 11 Termination, Amendment or Modification 19

11.1 Termination 19

11.2 Amendment 19

11.3 Plan Agreement 20

11.4 Effect of Payment 20

ARTICLE 12 Administration 20

12.1 Committee Duties 20

12.2 Agents 20

12.3 Binding Effect of Decisions 20

12.4 Indemnity of Committee 21

12.5 Employer Information 21

ARTICLE 13 Other Benefits and Agreements 21

13.1 Coordination with Other Benefits 21

ARTICLE 14 Claims Procedures 21

14.1 Presentation of Claim 21

14.2 Notification of Decision 21

14.3 Review of a Denied Claim 22

14.4 Decision on Review 22

14.5 Legal Action 22

ARTICLE 15 Trust 23

15.1 Establishment of the Trust 23

15.2 Interrelationship of the Plan and the Trust 23

15.3 Distributions From the Trust 23

ARTICLE 16 Miscellaneous 23

16.1 Unsecured General Creditor 23

16.2 Employer's Liability 23

16.3 Nonassignability 24

16.4 Not a Contract of Employment 24

16.5 Furnishing Information 24

16.6 Terms 24

16.7 Captions 24

16.8 Governing Law 24

16.9 Notice 24

16.10 Successors 25

16.11 Spouse's Interest 25

16.12 Validity 25

16.13 Incompetent 25

16.14 Court Order 25

16.15 Distribution in the Event of Taxation 26

16.16 Legal Fees To Enforce Rights After Change in Control 27

 

 

 

**SIERRA HEALTH SERVICES, INC.

DEFERRED COMPENSATION PLAN

Effective May 1, 1996, as Amended

and Restated January 1, 2001

 

Purpose

The purpose of this Plan is to provide specified benefits to a select groupof management or highly compensated Employees who contribute materially to thecontinued growth, development and future business success of the Sierra HealthServices, Inc., a Nevada corporation, and its subsidiaries (including lower-tiersubsidiaries), if any, that sponsor this Plan. This Plan shall be unfunded fortax purposes and for purposes of Title I of ERISA.

ARTICLE 1

Definitions

For purposes hereof, unless otherwise clearly apparent from the context, thefollowing phrases or terms shall have the following indicated meanings:

1.1 "Account Balance" shall mean, with respect to a Participant, the sum of(i) the Deferral Account plus (ii) the Vested Company Matching Account plus(iii) the Vested Company Restoration Account. This account shall be abookkeeping entry only and shall be utilized solely as a device for themeasurement and determination of the amounts to be paid to a Participantpursuant to this Plan.

1.2 "Annual Bonus" shall mean any annual cash compensation in addition toBase Annual Salary relating to services performed during any calendar year,whether or not paid in such calendar year or included on the Federal Income TaxForm W-2 for such calendar year, payable to a Participant as an Employee underany Employer's annual bonus and incentive plans, including any such bonusespayable to physician employees.

1.3 "Annual Company Matching Amount" for any one Plan Year shall be theamount determined in accordance with Section 3.5.

1.4 "Annual Company Restoration Amount" for any one Plan Year shall be theamount determined in accordance with Section 3.6.

1.5 "Annual Deferral Amount" shall mean that portion of a Participant's BaseAnnual Salary and/or Annual Bonus that a Participant elects to have, and is,deferred in accordance with Article 3, for any one Plan Year. In the event of aParticipant's Retirement, Disability (if deferrals cease in accordance withSection 8.1), death or a Termination of Employment prior to the end of a PlanYear, such year's Annual Deferral Amount shall be the actual amount withheldprior to such event.

1.6 "Base Annual Salary" shall mean the annual cash compensation relating toservices performed during any calendar year, whether or not paid in suchcalendar year or included on the Federal Income Tax Form W-2 for such calendaryear including bonuses (other than the Annual Bonus), commissions, and overtime,but excluding relocation expenses, incentive payments, non-monetary awards,fringe benefits, retainers, directors fees and other fees, severance allowances,pay in lieu of vacations, insurance premiums paid by an Employer, insurancebenefits paid to the Participant or his or her beneficiary, Employercontributions to qualified or nonqualified plans and automobile and otherallowances paid to a Participant for employment services rendered (whether ornot such allowances are included in the Employee's gross income). Base AnnualSalary shall be calculated before reduction for compensation voluntarilydeferred or contributed by the Participant pursuant to all qualified ornon-qualified plans and shall be calculated to include amounts not otherwiseincluded in the Participant's gross income under Code Sections 125, 402(e)(3),or 402(h) pursuant to plans established by any Employer; provided however thatall such amounts will be included in compensation only to the extent that, hadthere been no such plan, the amount would have been payable in cash to theEmployee.

1.7 "Beneficiary" shall mean one or more persons, trusts, estates or otherentities, designated in accordance with Article 9, that are entitled to receivebenefits under this Plan upon the death of a Participant.

1.8 "Beneficiary Designation Form" shall mean the form, established from timeto time by the Committee, that a Participant completes, signs and returns to theCommittee to designate one or more Beneficiaries.

1.9 "Board" shall mean the board of directors of the Company.

1.10 "Change in Control" shall mean a transaction or event in which, afterthe effective date of the Plan, (i) the Company shall merge or consolidate withany other corporation and shall not be the surviving corporation; (ii) theCompany shall transfer all or substantially all of its assets to any otherperson; or (iii) any person shall have become the beneficial owner of more than50% of the voting power of outstanding voting securities of the Company.

1.11 "Claimant" shall have the meaning set forth in Section 14.1.

1.12 "Code" shall mean the Internal Revenue Code of 1986, as it may beamended from time to time.

1.13 "Committee" shall mean the committee described in Article12.

1.14 "Company" shall mean Sierra Health Services, Inc., a Nevadacorporation.

1.15 "Company Matching Account" shall mean the sum of all of a Participant'sAnnual Company Matching Amounts plus amounts credited and debited in accordancewith all the applicable crediting provisions of this Plan, less alldistributions made to the Participant or his or her Beneficiary pursuant to thisPlan that relate to his or her Company Matching Account. This account shall be abookkeeping entry only and shall be utilized solely as a device for themeasurement and determination of the amounts to be paid to the Participantpursuant to this Plan.

1.16 "Company Restoration Account" shall mean the sum of all of aParticipant's Annual Company Restoration Amounts plus amounts credited anddebited in accordance with all the applicable provisions of the Plan, less alldistributions made to the Participant or his or her Beneficiary pursuant to thePlan that relate to his or her Company Restoration Account. This account shallbe a bookkeeping entry only and shall be utilized solely as a device for themeasurement and determination of the amounts to be paid to the Participantpursuant to this Plan.

1.17 "Deferral Account" shall mean the sum of all of a Participant's AnnualDeferral Amounts, plus amounts credited and debited in accordance with all theapplicable provisions of the Plan, less all distributions made to theParticipant or his or her Beneficiary pursuant to the Plan that relate to his orher Deferral Account. This account shall be a bookkeeping entry only and shallbe utilized solely as a device for the measurement and determination of theamounts to be paid to the Participant pursuant to this Plan.

1.18 "Deduction Limitation" shall mean the following described limitation ona benefit that may otherwise be distributable pursuant to the provisions of thisPlan. Except as otherwise provided, this limitation shall be applied to alldistributions that are "subject to the Deduction Limitation" under this Plan. Ifan Employer determines in good faith prior to a Change in Control that there isa reasonable likelihood that any compensation paid to a Participant for ataxable year of the Employer would not be deductible by the Employer solely byreason of the limitation under Code Section 162(m), then to the extent deemednecessary by the Employer to ensure that the entire amount of any distributionto the Participant pursuant to this Plan prior to the Change in Control isdeductible, the Employer may defer all or any portion of a distribution underthis Plan. Any amounts deferred pursuant to this limitation shall be creditedand debited with additional amounts in accordance with Section 3.8 below, evenif such amount is being paid out in installments. The amounts so deferredadjusted to reflect amounts credited and debited thereon shall be distributed tothe Participant or his or her Beneficiary (in the event of the Participant'sdeath) at the earliest possible date, as determined by the Employer in goodfaith, on which the deductibility of compensation paid or payable to theParticipant for the taxable year of the Employer during which the distributionis made will not be limited by Section 162(m), or if earlier, the effective dateof a Change in Control. Notwithstanding anything to the contrary in this Plan,the Deduction Limitation shall not apply to any distributions made after aChange in Control.

1.19 "Disability" shall mean a period of disability during which aParticipant qualifies for disability benefits under the Participant's Employer'slong-term disability plan, or, if a Participant does not participate in such aplan, a period of disability during which the Participant would have qualifiedfor disability benefits under such a plan had the Participant been a participantin such a plan, as determined in the sole discretion of the Committee. If theParticipant's Employer does not sponsor such a plan, or discontinues to sponsorsuch a plan, Disability shall be determined by the Committee in its solediscretion.

1.20 "Disability Benefit" shall mean the benefit set forth in Article 8.

1.21 "Election Form" shall mean the form established from time to time by theCommittee that a Participant completes, signs and returns to the Committee tomake an election under the Plan.

1.22 "Employee" shall mean a person who is an employee of any Employer.

1.23 "Employer(s)" shall mean the Company and/or any of its subsidiaries (nowin existence or hereafter formed or acquired) that have been selected by theBoard to participate in the Plan and have adopted the Plan.

1.24 "ERISA" shall mean the Employee Retirement Income Security Act of 1974,as amended from time to time.

1.25 "401(k) Plan" shall be that certain Sierra Health Services, Inc. ProfitSharing/401(k) Plan & Trust, dated January 1, 1989 and adopted by theCompany.

1.26 "Monthly Installment Method" shall be an installment payment method overthe duration selected by the Participant in accordance with this Plan,calculated as follows: The Participant's Account Balance, as of the date of theParticipant's Retirement, death, Disability or Termination of Employment, shallbe multiplied by a fraction, the numerator of which is 1 and the denominator ofwhich is the number of periods over which the installment payments shall bepaid. The result of this multiplication shall be the amount of each installmentpayment for the Plan Year in which the Participant Retired, died, suffered aDisability or experienced a Termination of Employment and this amount shall bepaid starting on the first day of the month following the Participant'sRetirement, Death, Disability or Termination of Employment and shall continue tobe paid on the first day of each month thereafter during that Plan Year. Foreach subsequent Plan Year during the installment payment period, theParticipant's Account Balance shall be determined as of January 1 of that PlanYear, in accordance with Section 3.8, after taking into account all previousinstallment payments, and such balance shall be multiplied by the fractiondescribed above, except that the denominator shall be the number of remainingperiods over which the installment payments are to be paid. The resulting amountshall be the amount of each installment payment for the Plan Year, which amountshall be paid on the first day of each month during the Plan Year. If aParticipant has a positive Account Balance after the end of the electedinstallment payment period, the remaining Account Balance shall be paid in alump sum on the first day of the month following the month in which theinstallment period ends. If any installment, if paid, would reduce theParticipant's Account Balance to zero or below, that installment payment shallbe reduced so that the Participant's Account Balance does not go below zero andall future installment payments shall cease.

1.27 "Participant" shall mean any person (i) who, as an Employee, is selectedto participate in the Plan, (ii) who elects to participate in the Plan, (iii)who signs a Plan Agreement, an Election Form and a Beneficiary Designation Form,(iv) whose signed Plan Agreement, Election Form and Beneficiary Designation Formare accepted by the Committee, (v) who commences participation in the Plan, and(vi) whose Plan Agreement has not terminated. A spouse or former spouse of aParticipant shall not be treated as a Participant in the Plan, even if he or shehas an interest in the Participant's benefits under the Plan under applicablelaw or as a result of property settlements resulting from legal separation ordivorce.

1.28 "Plan" shall mean the Company's Deferred Compensation Plan, which shallbe evidenced by this instrument and by each Plan Agreement, as they may beamended from time to time.

1.29 "Plan Agreement" shall mean a written agreement, as may be amended fromtime to time, which is entered into by and between an Employer and aParticipant. The terms of any Plan Agreement may vary any of the terms set forthin this Plan and such changes shall be binding on the Employer and theParticipant if the Plan Agreement is signed by the Participant and accepted bythe Employer. The Plan Agreement executed by a Participant and accepted by theEmployer shall provide for the entire benefit to which such Participant isentitled under the Plan; should there be more than one Plan Agreement, the PlanAgreement bearing the latest date of acceptance by the Employer shall supersedeall previous Plan Agreements in their entirety and shall govern the agreementbetween the parties.

1.30 "Plan Year" shall, for the first Plan Year, begin on May 1, 1996 and endon December 31, 1996. For each Plan Year thereafter, the Plan Year shall beginon January 1 of each year and continue through December 31.

1.31 "Pre-Retirement Survivor Benefit" shall mean the benefit set forth inArticle 6.

1.32 "Retirement," "Retire(s)" or "Retired" shall mean, with respect to anEmployee, severance from employment from all Employers for any reason other thana leave of absence, death or Disability on or after age sixty-five (65) or on orafter age fifty-five (55) with ten (10) Years of Service, subject to Section10.3.

1.33 "Retirement Benefit" shall mean the benefit set forth in Article5.

1.34 "Short-Term Payout" shall mean the payout set forth in Section 4.1.

1.35 "Termination Benefit" shall mean the benefit set forth in Article 7.

1.36 "Termination of Employment" shall mean the ceasing of employment withall Employers, voluntarily or involuntarily, for any reason other thanRetirement, Disability, death or an authorized leave of absence, subject toSection 10.3.

1.37 "Trust" shall mean the trust established pursuant to that certain MasterTrust Agreement, dated as of May 1, 1996 between the Company and the trusteenamed therein, as amended from time to time.

1.38 "Unforeseeable Financial Emergency" shall mean an unanticipatedemergency that is caused by an event beyond the control of the Participant thatwould result in severe financial hardship to the Participant resulting from (i)a sudden and unexpected illness or accident of the Participant or a dependent ofthe Participant, (ii) a loss of the Participant's property due to casualty, or(iii) such other extraordinary and unforeseeable circumstances arising as aresult of events beyond the control of the Participant, all as determined in thesole discretion of the Committee.

1.39 "Unvested Accrued Amounts" shall mean the part of a Participant'sCompany Matching Account and Company Restoration Account which is not vestedunder Section 3.7.

1.40 "Vested Company Matching Account" shall have the meaning set forth inSection 3.7.

1.41 "Vested Company Restoration Account" shall have the meaning set forth inSection 3.7.

1.42 "Years of Service" shall mean the total number of full years in which aParticipant has been employed by one or more Employers. For purposes of thisdefinition, a year of employment shall be a 365 day period (or 366 day period inthe case of a leap year) that, for the first year of employment, commences onthe Employee's date of hiring and that, for any subsequent year, commences on ananniversary of that hiring date. Any partial year of employment shall not becounted.

 

ARTICLE 2 

Selection, Enrollment, Eligibility

2.1 Selection by Committee. Participation in the Plan shall be limitedto a select group of management or highly compensated Employees of theEmployers, as determined by the Committee in its sole discretion. From thatgroup, the Committee shall select, in its sole discretion, Employees toparticipate in the Plan. For this purpose, the term "highly compensated" shallbe interpreted in a manner consistent with regulations and other guidance underthe Code.

2.2 Enrollment Requirements. As a condition to participation, eachselected Employee shall complete, execute and return to the Committee, within 30days of selection, a Plan Agreement, an Election Form and a BeneficiaryDesignation Form. In addition, the Committee shall establish from time to timesuch other enrollment requirements as it determines in its sole discretion arenecessary.

2.3 Eligibility; Commencement of Participation. Provided an Employeeselected to participate in the Plan has met all enrollment requirements setforth in this Plan and required by the Committee, including returning allrequired documents to the Committee within 30 days of selection, that Employeeshall commence participation in the Plan on the first day of the next monthwhich begins following the date the Employee completes all enrollmentrequirements. If an Employee fails to meet all such requirements within therequired 30 day period, that Employee shall not be eligible to participate inthe Plan until the first day of a month during the Plan Year following thedelivery to and acceptance by the Committee of the required documents.

2.4 Termination of Participation and/or Deferrals. If the Committeedetermines in good faith that a Participant no longer qualifies as a member of aselect group of management or highly compensated employees, as membership insuch group is determined in accordance with Section 2.1 or otherwise underSections 201(2), 301(a)(3) and 401(a)(1) of ERISA, the Committee shall have theright, in its sole discretion, to (i) terminate any deferral election theParticipant has made for the Plan Year in which the Participant's membershipstatus changes, (ii) prevent the Participant from making future deferralelections and/or (iii) immediately distribute the Participant's then AccountBalance, determined as if there has occurred a Termination of Employment andterminate the Participant's participation in the Plan. If the Committee choosesto terminate the Participant's participation in the Plan, the Committee may, inits sole discretion, reinstate the Participant to full Plan participation atsuch time in the future as the Participant again becomes a member of the selectgroup described above. The foregoing notwithstanding, if the Participant ceasesto qualify as "highly compensated" under Section 2.1, the Committee may permitthe Participant to continue participation for a reasonable period thereafter inorder to permit the Participant an opportunity to reattain "highly compensated"status.

 

ARTICLE 3

Deferral Commitments/Company Matching/Crediting/Taxes

3.1 Minimum Deferral.

(a) Minimum. For each Plan Year, a Participant may elect to defer, ashis or her Annual Deferral Amount, a minimum of $2,000 from either his or herBase Annual Salary or Annual Bonus. If an election is made for less than thestated minimum amount, or if no election is made, the amount deferred shall bezero.

(b) Short Plan Year. If a Participant first becomes a Participantafter the first day of a Plan Year, or in the case of the first Plan Year of thePlan itself, the minimum deferral shall be an amount equal to the minimum setforth above, multiplied by a fraction, the numerator of which is the number ofcomplete months remaining in the Plan Year and the denominator of which is12.

3.2 Maximum Deferral.

(a) Maximum. For each Plan Year, a Participant may elect to defer, ashis or her Annual Deferral Amount, Base Annual Salary and/or Annual Bonus up tothe following maximum percentages for each deferralelected:

 

Deferral

Maximum

Amount

Base Annual Salary 

90%

Annual Bonus 

90%
    
(b) Short Plan Year. If a Participant first becomes a Participantafter the first day of a Plan Year, or in the case of the first Plan Yearitself, for such Plan Year only, a Participant may elect to defer, as his or herAnnual Deferral Amount, Base Annual Salary and/or Annual Bonus that accrue afterthe date of entry into the Plan, a dollar amount up to an amount equal to thelimits set forth in Section 3.2(a) above multiplied by such Participant's totalamount of Base Annual Salary and/or Annual Bonus for the entire PlanYear.

3.3 Election to Defer; Effect of Election Form.

(a) First Plan Year. In connection with a Participant's commencementof participation in the Plan, the Participant shall make an irrevocable deferralelection for the Plan Year in which the Participant commences participation inthe Plan, along with such other elections as the Committee deems necessary ordesirable under the Plan. For these elections to be valid, the Election Formmust be completed and signed by the Participant, timely delivered to theCommittee (in accordance with Section 2.3 above), and accepted by theCommittee.
Subsequent Plan Years
. For each succeeding Plan Year, an irrevocable    deferral election for that Plan Year, and such other elections as the    Committee deems necessary or desirable under the Plan, shall be made by    timely delivering to the Committee, in accordance with its rules and    procedures, before the end of the Plan Year preceding the Plan Year for    which the election is made, a new Election Form. If no such Election Form is    timely delivered for a Plan Year, no Annual Deferral Amount shall be    withheld for that Plan Year.

A Participant may amend his or her Election Form for a particular Plan Yearto increase the amount of deferral, one time during the Plan Year, only asprovided in this paragraph. For the amended Election Form to be valid, theamended Election Form must be completed and signed by the Participant, deliveredto the Committee, and accepted by the Committee. The Committee has solediscretion to accept, reject, or otherwise rule on the amended Election Form.The deferral amount or percentage that the Participant includes on his or herreused Election Form, shall be limited to the portion of such Participant's BaseAnnual Salary not yet earned by the Participant as of the date the Participantsubmits the revised Election Form to the Committee foracceptance.

3.4 Withholding of Annual Deferral Amounts. For each Plan Year, theBase Annual Salary portion of the Annual Deferral Amount shall be withheld inequal amounts from each regularly scheduled Base Annual Salary payroll,commencing at the earliest practicable payroll after participation begins. TheAnnual Bonus portion of the Annual Deferral Amount shall be withheld at the timethe Annual Bonus is or otherwise would be paid to the Participant, whether ornot this occurs during the Plan Year itself.

3.5 Annual Company Matching Amount. With respect to Plan Years priorto and including the 1999 Plan Year, if, and only if, a Participant participatesin the 401(k) Plan to the maximum extent possible under the limits applicable tothe Plan for the Plan Year, the Participant's Annual Company Matching Amount forsuch Plan Year shall be equal to 50% of the Participant's Annual Deferral Amountfor such Plan Year, up to an amount that does not exceed the lesser of 5% of theParticipant's Base Annual Salary or 50% of the IRC 402(g)(i) limit in the effectfor the Plan Year, reduced by the amount of any Company matching contributionsmade to the 401(k) Plan on his or her behalf for the plan year of the 401(k)Plan that corresponds to the Plan Year. The Annual Company Matching Amount shallbe credited to the Participant's Company Matching Account as of the first day ofFebruary of the Plan Year following the Plan Year to which it relates.Notwithstanding the above, if a Participant is not employed by an Employer as ofthe last day of a Plan Year other than by reason of his or her Retirement,Disability or death, the Annual Company Matching Amount for such Plan Year shallbe zero. In the event of Retirement, Disability or death, a Participant shall becredited with the Annual Company Matching Amount for the Plan Year in which heor she Retires, dies or becomes disabled. The foregoing notwithstanding, for anyPlan Year beginning after 1999, no Annual Company Matching Amount shall becredited to the Participant's Company Matching Account, although prior AnnualCompany Matching Amounts credited to such Account shall remain subject to thePlan. 

3.6 Annual Company Restoration Amount. The Participant's AnnualCompany Restoration Amount for each Plan Year beginning on or after January 1,1997 shall be equal to the amount of employer contributions other than matchingcontributions under the 401(k) Plan which would have been made on theParticipant's behalf and allocated to the Participant's account on or after July1, 1997 for such Plan Year but for one or more limitations imposed by the 401(k)Plan pursuant to the Code, including but not limited to any such amountsresulting from the application of the compensation limitations contained in CodeSection 401(a)(17) or the limitations contained in Code Section 415. Forpurposes of this Section 3.6, employer contributions under the 401(k) Planexclude contributions resulting from the cash or deferred arrangement under the401(k) Plan but include contributions resulting from the reallocation of prioremployer contributions (other than matching contributions) forfeited by other401(k) Plan participants. The Annual Company Restoration Amount shall becredited to the Participant's Company Restoration Account as of the date ordates such amounts would have been allocated to the Participant's account(s)under the 401(k) Plan if such amounts had in fact been allocated under the401(k) Plan. The foregoing notwithstanding the above, if a Participant is notemployed by an Employer as of the last day of a Plan Year other than by reasonof his or her Retirement, Disability or death, the Annual Company RestorationAmount for such Plan Year shall be zero. In the event of Retirement, Disabilityor death, a Participant shall be credited with the Annual Company RestorationAmount for the Plan Year in which he or she Retires, dies or becomes disabled.The Participant's Annual Company Restoration Amount for each Plan Year prior tothe Plan Year beginning January 1, 1997 shall be zero. It is understood that theCompany will discontinue employer contributions other than matchingcontributions under the 401(k) Plan in Plan Years after 1999, so that no amountwill be credited as an Annual Company Restoration Amounts in respect of suchPlan Years.

3.7 Vested Company Matching Account, Vested Company Restoration Accountand Deferral Account. With respect to all benefits under this Plan otherthan the Termination Benefit, a Participant's Vested Company Matching Accountshall equal 100% of such Participant's Company Matching Account and aParticipant's Vested Company Restoration Account shall equal 100% of suchParticipant's Company Restoration Account. With respect to the TerminationBenefit, in the case of a Termination of Employment prior to July 1, 1999, thevesting of a Participant's Company Matching Account and Company RestorationAccount shall be governed by the terms of this Plan as in effect at the time ofsuch Termination of Employment. With respect to the Termination Benefit, in thecase of a Termination of Employment on or after July 1, 1999, a Participant'sCompany Matching Account and Company Restoration Account shall vest on the basisof the Participant's Years of Service at the time the Participant experiences aTermination of Employment, in accordance with the following schedule forbalances resulting from Company Matching Amounts and Company Restoration Amountsfor the Plan Year after 1999:

 

Years of Service at Date of

Termination of Employment

Vested Percentage of

Company Matching Account and

Company Restoration Account
  
Less than 1 year

0%

1 year or more, but less than 2

33%

2 years or more, but less than 3

66%

3 years or more 

100%

The foregoing notwithstanding, after a Change in Control, a Participant'sVested Company Matching Account shall equal 100% of such Participant's CompanyMatching Account and a Participant's Vested Company Restoration Account shallequal 100% of such Participant's Company Restoration Account. A Participant'sDeferral Account shall always be 100% vested.

3.8 Crediting/Debiting of Account Balances. In accordance with, andsubject to, the rules and procedures that are established from time to time bythe Committee, in its sole discretion, amounts shall be credited or debited to aParticipant's Account Balance (and to the Participant's Unvested AccruedAmounts) in accordance with the following rules:

(a) Election of Measurement Funds. A Participant, in connection withhis or her initial deferral election in accordance with Section 3.3(a) above,shall elect, on the Election Form, one or more Measurement Fund(s) (as describedin Section 3.8(c) below) to be used to determine the additional amounts to becredited or debited to his or her Account Balance (and Unvested Accrued Amounts)from the date on which the Participant commences participation in the Plan andcontinuing thereafter, unless changed in accordance with the next sentence.Commencing with the January 1 or July 1 ("Investment Election Date") thatfollows the Participant's commencement of participation in the Plan and on eachsubsequent Investment Election Date during which the Participant participates inthe Plan, no later than the day before an Investment Election Date, theParticipant may (but is not required to) elect, by submitting an Election Formto the Committee that is accepted by the Committee, to add or delete one or moreMeasurement Fund(s) to be used to determine the amounts to be credited ordebited to his or her Account Balance (and Unvested Accrued Amounts), or tochange the portion of his or her Account Balance (and Unvested Accrued Amounts)allocated to each previously or newly elected Measurement Fund. If an electionis made in accordance with the previous sentence, it shall apply to the nextInvestment Election Date and continue thereafter, unless changed in accordancewith the previous sentence. Notwithstanding the foregoing, the maximum transferthat may be made from the Declared Rate Measurement Fund to another MeasurementFund in any one Plan Year cannot exceed 20% of the maximum balance in theParticipant's account in the Declared Rate Measurement Fund in the current PlanYear and the four prior Plan Years, provided that this restriction shall nolonger apply upon termination of the Declared Rate Measurement Fund inaccordance with Section 3.8(c).

(b) Proportionate Allocation. In making any election described inSection 3.8(a) above, the Participant shall specify on the Election Form, inwhole percentage points (1%), the percentage of his or her Account Balance (andUnvested Accrued Amounts) to be allocated to a Measurement Fund (as if theParticipant was making an investment in that Measurement Fund with that portionof his or her Account Balance and Unvested AccruedAmounts).

(c) Measurement Funds. The Participant may elect one or moremeasurement funds, based on certain mutual funds (the "Measurement Funds"), forthe purpose of crediting or debiting amounts to his or her Account Balance (andUnvested Accrued Amounts). The Committee shall select the mutual funds that areto be used as Measurement Funds. As necessary, the Committee may, in its solediscretion, discontinue, substitute or add a Measurement Fund at any time. Eachsuch action will take effect as of the first day of the calendar quarter thatfollows by thirty (30) days the day on which the Committee gives Participantsadvance written notice of such change. In addition, a Declared Rate MeasurementFund shall be maintained until December 31, 1999, under which interest shall becredited at a rate as specified by the Company on the November 1 of the yearprior to the Plan Year for which the amount of interest is being determined;provided, however, that as of January 1, 2000, the Declared Rate MeasurementFund will be terminated and all balances therein shall be transferred to suchother Measurement Funds as may have been elected by the Participant or, in theabsence of any election, to a Measurement Fund consisting of one or moreGuaranteed Interest Contracts.

(d) Crediting or Debiting Method. The performance of each selectedMeasurement Fund (either positive or negative) will be determined by theCommittee in its sole discretion based on the performance of the MeasurementFunds themselves or, in the case of the Declared Rate Measurement Fund (prior toits termination), based on the amount of accrued interest credited to the fund.A Participant's Account Balance (and Unvested Accrued Amounts) shall be creditedor debited based on such performance of the Measurement Funds as determined bythe Committee in its sole discretion. As of each Investment Election Date, theCommittee shall distribute to the Participants a statement of their respectiveAccount Balances (and Unvested Accrued Amounts). Furthermore, in the event of aParticipant's termination of employment or any other event requiring adetermination of the Participant's Benefit or the value of a Participant'sAccount Balance, the Account Balance shall be determined based on theperformance of the relevant Measurement Fund(s) through the last date of the payperiod during which the event occurs and shall not be further adjustedthereafter.

(e) No Actual Investment. Notwithstanding any other provision of thisPlan that may be interpreted to the contrary, the Measurement Funds are to beused for measurement purposes only, and a Participant's election of any suchMeasurement Fund, the allocation to his or her Account Balance (and UnvestedAccrued Amounts) thereto, the calculation of additional amounts and thecrediting or debiting of such amounts to a Participant's Account Balance (andUnvested Accrued Amounts) shall not be considered or construed in any manner asan actual investment of his or her Account Balance (or Unvested Accrued Amounts)in any such Measurement Fund. In the event that the Company or the Trustee (asthat term is defined in the Trust), in its own discretion, decides to investfunds in any or all of the Measurement Funds, no Participant shall have anyrights in or to such investments themselves. Without limiting the foregoing, aParticipant's Account Balance (and Unvested Accrued Amounts) shall at all timesbe a bookkeeping entry only and shall not represent any investment made on hisor her behalf by the Company or the Trust; the Participant shall at all timesremain an unsecured creditor of the Company.

3.9 FICA, Withholding and Other Taxes. For each Plan Year in which anAnnual Deferral Amount is being withheld or an Annual Company Matching Amount orAnnual Company Restoration Amount is credited to a Participant, theParticipant's Employer(s) shall withhold from that portion of the Participant'sBase Annual Salary and/or Annual Bonus that is not being deferred, in a mannerdetermined by the Employer(s), the Participant's share of FICA and otheremployment taxes. If necessary, the Committee shall reduce the Annual DeferralAmount in order to comply with this Section 3.9. In addition, the Participant'sEmployer(s) or the Trust, shall withhold from any payments made to a Participantunder this Plan all federal, state and local income, employment and other taxesrequired to be withheld in connection with such payments, in amounts and in amanner to be determined in the sole discretion of the Employer(s) or theTrust.

3.10 Rollovers From Prior Deferred Compensation Plan. A Participantwho participated in the Company's prior nonqualified deferred compensation planshall have the right, under such rules and at such times as are prescribed bythe Committee, to roll over the benefit that the Participant is entitled toreceive pursuant to such prior nonqualified deferred compensation plan so thatsuch amount shall be held and administered pursuant to the terms of this Planand shall be received at the same time that benefits are received pursuant tothis Plan.

 

ARTICLE 4

Short-Term Payout; Unforeseeable Financial Emergencies;

Withdrawal Election

4.1 Short-Term Payout. In connection with each election to defer anAnnual Deferral Amount, a Participant may elect to receive a future "Short-TermPayout" from the Plan with respect to that Annual Deferral Amount. Subject tothe Deduction Limitation, the Short-Term Payout shall be a lump sum payment inan amount that is equal to the Annual Deferral Amount plus amounts credited ordebited in the manner provided in Section 3.8 above on that amount, determinedat the time of the Short-Term Payout becomes payable. If the Annual DeferralAmount is deferred in the 1999 Plan Year or an earlier Plan Year, eachShort-Term Payout elected shall be paid, subject to the Deduction Limitation,within 60 days of the first day of the Plan Year that is at least four yearsafter the last day of the Plan Year in which the Annual Deferral Amount isactually deferred, subject to the terms and conditions of this Plan. If theAnnual Deferral Amount is deferred after the 1999 Plan Year, each Short-TermPayout elected shall be paid, subject to the Deduction Limitation, within 60days of the first day of the Plan Year elected by the Participant that is two ormore years after the last day of the Plan Year in which the Annual DeferralAmount is actually deferred, subject to the terms and conditions of this Plan.By way of example, if a Short-Term Payout is elected for amounts that aredeferred in the Plan Year commencing January 1, 1997, the Short-Term Payoutbecomes payable within 60 days after January 1, 2002; if a Short-Term Payout iselected for amounts that are deferred in the Plan Year commencing January 1,2000, the earliest that the Participant could elect to receive such Short-TermPayout would be 60 days after January 1, 2003 (although the Participant would bepermitted to elect a greater number of years of deferral for the Short-TermPayout).

4.2 Other Benefits Take Precedence Over Short-Term Payout. Should anevent occur that triggers a benefit under Articles 5, 6, 7 or 8 or Section16.14, any Annual Deferral Amount, plus amounts credited or debited thereon,that is subject to a Short-Term Payout election under Section 4.1 shall not bepaid in accordance with Section 4.1 but shall be paid in accordance with theother applicable Article or Section.

4.3 Withdrawal Payout/Suspensions for Unforeseeable FinancialEmergencies. If the Participant experiences an Unforeseeable FinancialEmergency, the Participant may petition the Committee to (i) suspend anydeferrals required to be made by a Participant and/or (ii) receive a partial orfull payout from the Plan. The payout shall not exceed the lesser of theParticipant's Account Balance, calculated as if such Participant were receivinga Termination Benefit, or the amount reasonably needed to satisfy theUnforeseeable Financial Emergency. If, subject to the sole discretion of theCommittee, the petition for a suspension and/or payout is approved, suspensionshall take effect upon the date of approval and any payout shall be made within60 days of the date of approval. The payment of any amount under this Section4.3 shall not be subject to the Deduction Limitation.

4.4 Withdrawal Election. A Participant may elect, at any time, towithdraw all of his or her Account Balance, less a withdrawal penalty equal to7% of such amount (the net amount shall be referred to as the "WithdrawalAmount"). This election can be made at any time, before or after Retirement,Disability, death or Termination of Employment, and whether or not theParticipant (or Beneficiary) is in the process of being paid pursuant to aninstallment payment schedule. If made before Retirement, Disability or death, aParticipant's Withdrawal Amount shall be his or her Account Balance calculatedas if there had occurred a Termination of Employment as of the day of theelection. No partial withdrawals of the Withdrawal Amount shall be allowed. TheParticipant shall make this election by giving the Committee advance writtennotice of the election in a form determined from time to time by the Committee.The Participant shall be paid the Withdrawal Amount within 60 days of his or herelection. Once the Withdrawal Amount is paid, the Participant's participation inthe Plan shall terminate, the Participant's Unvested Accrued Amounts will beforfeited and the Participant shall not be eligible to participate in the Planuntil the first month that begins more than one year after his or herparticipation in the Plan terminated, at which time he or she will be eligibleto reenroll on terms similar to those applicable to a newly hired employee. Thepayment of this Withdrawal Amount shall not be subject to the DeductionLimitation.

 

ARTICLE 5

Retirement Benefit

5.1 Retirement Benefit. Subject to the Deduction Limitation, aParticipant who Retires shall receive, as a Retirement Benefit, his or herAccount Balance.

5.2 Payment of Retirement Benefit. A Participant, in connection withhis or her commencement of participation in the Plan, shall elect on an ElectionForm to receive the Retirement Benefit in a lump sum or pursuant to a MonthlyInstallment Method of 60, 120 or 180 months. The Participant may annually changehis or her election to an allowable alternative payout period by submitting anew Election Form to the Committee, provided that any such Election Form issubmitted at least one year prior to the Participant's Retirement and isaccepted by the Committee in its sole discretion. The Election Form mostrecently accepted by the Committee shall govern the payout of the RetirementBenefit. If a Participant does not make any election with respect to the paymentof the Retirement Benefit, such benefit shall be payable in a lump sum. The lumpsum payment shall be made, or installment payments shall commence, no later than60 days after the date the Participant Retires, subject to Section 10.3 (whichdelays commencement of payment of the Retirement Benefit if the Participantenters into a consulting arrangement with the Company following theParticipant's Retirement). Any payment made shall be subject to the DeductionLimitation.

5.3 Death Prior to Completion of Retirement Benefit. If a Participantdies after Retirement but before the Retirement Benefit is paid in full, theParticipant's unpaid Retirement Benefit payments shall continue and shall bepaid to the Participant's Beneficiary (a) over the remaining number of monthsand in the same amounts as that benefit would have been paid to the Participanthad the Participant survived, or (b) in a lump sum, if requested by theBeneficiary and allowed in the sole discretion of the Committee, that is equalto the Participant's unpaid remaining Account Balance.

 

ARTICLE 6

Pre-Retirement Survivor Benefit

6.1 Pre-Retirement Survivor Benefit. Subject to the DeductionLimitation, the Participant's Beneficiary shall receive a Pre-RetirementSurvivor Benefit equal to the Participant's Account Balance if the Participantdies before he or she Retires, experiences a Termination of Employment orsuffers a Disability.

6.2 Payment of Pre-Retirement Survivor Benefit. The Pre-RetirementSurvivor Benefit shall be paid in the same manner and at the same time asspecified in the election made by the Participant pursuant to Section 5.2.

 

ARTICLE 7

Termination Benefit

7.1 Termination Benefit. Subject to the Deduction Limitation, theParticipant shall receive a Termination Benefit, which shall be equal to theParticipant's Account Balance (i.e., determined based on Vested Company MatchingContributions and Vested Company Restoration Contributions) if a Participantexperiences a Termination of Employment prior to his or her Retirement, death orDisability.

7.2 Payment of Termination Benefit. The Termination Benefit shall bepaid in a lump sum within 60 days of the Termination of Employment, subject toSection 10.3. Notwithstanding the foregoing, a Participant may elect either (i)upon his election to participate in the Plan or (ii) at any time at least oneyear prior to Termination of Employment to receive the Termination Benefit inthree, five, or ten annual installments. In such case, the Termination Benefitshall be paid in the applicable number of installments, commencing no later than60 days after the Participant's Termination of Employment, subject to Section10.3 (which delays commencement of payment of the Termination Benefit if theParticipant enters into a consulting arrangement with the Company following theParticipant's Termination of Employment). Any payment made shall be subject tothe Deduction Limitation. The Participant may annually change his or herelection to an allowable alternative payout period by submitting a new ElectionForm to the Committee, provided that any such Election Form is submitted atleast one year prior to the Participant's Termination of Employment and isaccepted by the Committee in its sole discretion. 

 

ARTICLE 8

Disability Waiver and Benefit

8.1 Disability Waiver.

(a) Waiver of Deferral. A Participant who is determined by theCommittee to be suffering from a Disability shall be excused from fulfillingthat portion of the Annual Deferral Amount commitment that would otherwise havebeen withheld from a Participant's Base Annual Salary and/or Annual Bonus forthe Plan Year during which the Participant first suffers a Disability. Duringthe period of Disability, the Participant shall not be allowed to make anyadditional deferral elections, but will continue to be considered a Participantfor all other purposes of this Plan. Notwithstanding the foregoing, if theDisability is determined by the Committee to be expected to be of a short termduration, the Annual Deferral Amount shall continue to be withheld from aParticipant's Base Annual Salary and/or Annual Bonus.

(b) Return to Work. If a Participant returns to employment with anEmployer, after a Disability ceases, the Participant may elect to defer anAnnual Deferral Amount for the Plan Year following his or her return toemployment or service and for every Plan Year thereafter while a Participant inthe Plan; provided such deferral elections are otherwise allowed and an ElectionForm is delivered to and accepted by the Committee for each such election inaccordance with Section 3.3 above.

8.2 Continued Eligibility; Disability Benefit. A Participant sufferinga Disability shall, for benefit purposes under this Plan, continue to beconsidered to be employed, and shall be eligible for the benefits provided forin Articles 4, 5, 6 or 7 in accordance with the provisions of those Articles.Notwithstanding the above, the Committee shall have the right to, in its soleand absolute discretion and for purposes of this Plan only, and must in the caseof a Participant who is otherwise eligible to Retire if either clause (i) or(ii) of this sentence applies, deem the Participant to have experienced aTermination of Employment, or in the case of a Participant who is eligible toRetire, to have Retired, at any time (or in the case of a Participant who iseligible to Retire, as soon as practicable) after such Participant (i) isdetermined to be permanently disabled under the Participant Employer's long-termdisability plan (or would have been determined to be permanently disabled had heor she participated in that plan), or (ii), if such a plan does not exist, isdetermined to be permanently disabled by the Committee in its sole discretion,or (iii) is determined by the Committee, in its sole discretion, to havesuffered a partial disability of such a nature that the Participant is unable toperform the material duties of his or her position. In such a case (whetherunder clause (i), (ii) or (iii)), the Participant shall receive a DisabilityBenefit equal to his or her Account Balance at the time the Committee'sdetermination. The Disability Benefit shall be paid in the same manner and atthe same time as specified in the election made by the Participant pursuant toSection 5.2, unless the Committee in its sole discretion elects at any time topay such amount or any remaining amount in a lump sum payment. Any payment madeshall be subject to the Deduction Limitation. If a Participant is deemed to havea Termination of Employment under this Section 8.2, a subsequent event thatwould also constitute a Termination of Employment will be disregarded, and anyresumption of full duties shall result in reinstatement to participation underthe Plan only on such terms, as the Committee may then approve, that avoidduplication of benefits hereunder.

 

ARTICLE 9

Beneficiary Designation

9.1 Beneficiary. Each Participant shall have the right, at any time,to designate his or her Beneficiary(ies) (both primary as well as contingent) toreceive any benefits payable under the Plan to a beneficiary upon the death of aParticipant. The Beneficiary designated under this Plan may be the same as ordifferent from the Beneficiary designation under any other plan of an Employerin which the Participant participates.

9.2 Beneficiary Designation; Change; Spousal Consent. A Participantshall designate his or her Beneficiary by completing and signing the BeneficiaryDesignation Form, and returning it to the Committee or its designated agent. AParticipant shall have the right to change a Beneficiary by completing, signingand otherwise complying with the terms of the Beneficiary Designation Form andthe Committee's rules and procedures, as in effect from time to time. If theParticipant names someone other than his or her spouse as a Beneficiary for morethan 50% of the Participant's benefits, a spousal consent, in the formdesignated by the Committee, must be signed by that Participant's spouse andreturned to the Committee (subject to any procedural requirements as may beimposed by the Committee). Upon the acceptance by the Committee of a newBeneficiary Designation Form, all Beneficiary designations previously filedshall be cancelled. The Committee shall be entitled to rely on the lastBeneficiary Designation Form filed by the Participant and accepted by theCommittee prior to his or her death.

9.3 Acknowledgment. No designation or change in designation of aBeneficiary shall be effective until received, accepted and acknowledged inwriting by the Committee or its designated agent.

9.4 No Beneficiary Designation. If a Participant fails to designate aBeneficiary as provided in Sections 9.1, 9.2 and 9.3 above or, if all designatedBeneficiaries predecease the Participant or die prior to complete distributionof the Participant's benefits, then the Participant's designated Beneficiaryshall be deemed to be his or her surviving spouse. If the Participant has nosurviving spouse, the benefits remaining under the Plan to be paid to aBeneficiary shall be payable to the executor or personal representative of theParticipant's estate.

9.5 Doubt as to Beneficiary. If the Committee has any doubt as to theproper Beneficiary to receive payments pursuant to this Plan, the Committeeshall have the right, exercisable in its discretion, to cause the Participant'sEmployer to withhold such payments until this matter is resolved to theCommittee's satisfaction.

9.6 Discharge of Obligations. The payment of benefits under the Planto a Beneficiary shall fully and completely discharge the Company, all Employersand the Committee from all further obligations under this Plan with respect tothe Participant, and that Participant's Plan Agreement shall terminate upon suchfull payment of benefits.

 

ARTICLE 10

Leave of Absence; Consulting

10.1 Paid Leave of Absence. If a Participant is authorized by theParticipant's Employer for any reason to take a paid leave of absence from theemployment of the Employer, the Participant shall continue to be consideredemployed by the Employer and the Annual Deferral Amount shall continue to bewithheld during such paid leave of absence in accordance with Section 3.3.

10.2 Unpaid Leave of Absence. If a Participant is authorized by theParticipant's Employer for any reason to take an unpaid leave of absence fromthe employment of the Employer, the Participant shall continue to be consideredemployed by the Employer and the Participant shall be excused from makingdeferrals until the earlier of the date the leave of absence expires or theParticipant returns to a paid employment status. Upon such expiration or return,deferrals shall resume for the remaining portion of the Plan Year in which theexpiration or return occurs, based on the deferral election, if any, made forthat Plan Year. If no election was made for that Plan Year, no deferral shall bewithheld.

10.3 Consulting Arrangements. Other provisions of the Plannotwithstanding, if the Company enters into a consulting arrangement with aParticipant effective upon the Participant's Retirement or Termination ofEmployment, the payment of the Retirement Benefit or Termination Benefit shallbe delayed. In this case, the Participant will be treated as though employmentcontinued until the consulting arrangement terminates for purposes ofdetermining the time at which payment of the Retirement Benefit or TerminationBenefit will commence. This provision will not limit the Participant'swithdrawal rights under Section 4.3 or 4.4 during the pendency of the consultingarrangement, but the Participant will not be permitted to defer compensationpayable in connection with such consulting arrangement under the Plan. Anydetermination of whether the Participant's severance from employment constitutesa Retirement or Termination of Employment shall be determined based on his orher circumstances at the time employment terminates, without regard to anycontinued service pursuant to the consulting arrangement. 

 

ARTICLE 11

Termination, Amendment or Modification

11.1 Termination. Each Employer reserves the right to terminate thePlan at any time with respect to any or all of its Participants by the actionsof its board of directors. Upon the termination of the Plan with respect to anyEmployer, the Plan Agreements of the affected Participants who are employed bythat Employer shall terminate and their Account Balance, determined as if theyhad experienced a Termination of Employment on the date of Plan termination or,if Plan termination occurs after the date upon which a Participant was eligibleto Retire, then with respect to that Participant as if he or she had Retired onthe date of Plan termination, shall be paid to the Participants as follows:Prior to a Change in Control, if the Plan is terminated with respect to all ofits Participants, an Employer shall have the right, in its sole discretion, andnotwithstanding any elections made by the Participant, to pay such benefits in alump sum promptly after termination or pursuant to a Monthly Installment Methodof up to 15 years, with amounts credited and debited during the installmentperiod as provided herein, except that, if the Plan is terminated with respectto less than all of its Participants, an Employer shall be required to pay suchbenefits in a lump sum promptly after termination. After a Change in Control,the Employer shall be required to pay such benefits in a lump sum except that,if a Participant has elected, upon his election to participate in the Plan or atleast one year prior to such termination of the Plan, to receive the benefits inthree, five, or ten annual installments under Section 7.2, the Employer shallpay such benefits in the applicable number of annual installments commencingpromptly after such termination. The termination of the Plan shall not adverselyaffect any Participant or Beneficiary who has become entitled to the payment ofany benefits under the Plan prior to such termination; provided however, thatthe Employer shall have the right to accelerate installment payments by payingthe Account Balance in a lump sum or pursuant to a Monthly Installment Methodusing fewer months (except following a Change in Control in the case ofParticipant who has elected under Section 7.2 to receive the benefits in athree, five or ten annual installments).

11.2 Amendment. Any Employer may, at any time, amend or modify thePlan in whole or in part with respect to that Employer by the actions of itsboard of directors; provided, however, that no amendment or modification shallbe effective to decrease or restrict the value of a Participant's AccountBalance in existence at the time the amendment or modification is made,calculated as if the Participant had experienced a Termination of Employment asof the effective date of the amendment or modification, or, if the amendment ormodification occurs after the date upon which the Participant was eligible toRetire, the Participant had Retired as of the effective date of the amendment ormodification. The amendment or modification of the Plan shall not affect anyParticipant or Beneficiary who has become entitled to the payment of benefitsunder the Plan as of the date of the amendment or modification; provided,however, that the Employer shall have the right to accelerate installmentpayments by paying the Account Balance in a lump sum or pursuant to a MonthlyInstallment Method using fewer months.

11.3 Plan Agreement. Despite the provisions of Sections 11.1 and 11.2above, if a Participant's Plan Agreement contains benefits or limitations thatare not in this Plan document, the Employer may only amend or terminate suchprovisions with the consent of the Participant.

11.4 Effect of Payment. The full payment of the applicable benefitunder Section 4.4 or Articles 5, 6, 7 or 8 of the Plan shall completelydischarge all obligations to a Participant and his or her designatedBeneficiaries under this Plan and the Participant's Plan Agreement shallterminate.

 

ARTICLE 12

Administration

12.1 Committee Duties. This Plan shall be administered by a Committeewhich shall consist of the Board, or such committee as the Board shall appoint.Members of the Committee may be Participants under this Plan. The Committeeshall also have the discretion and authority to (i) make, amend, interpret, andenforce all appropriate rules and regulations for the administration of thisPlan and (ii) decide or resolve any and all questions including interpretationsof this Plan, as may arise in connection with the Plan. The Committee may, inits sole discretion, waive or modify the length of the advance-election period aParticipant is required to make an election as to the manner and timing ofpayment of Retirement or Termination Benefits under Sections 5.2 or 7.2 or inconnection with the termination of the Plan under Section 11.1.

12.2 Agents. In the administration of this Plan, the Committee may,from time to time, employ agents and delegate to them such administrative dutiesas it sees fit (including acting through a duly appointed representative) andmay from time to time consult with counsel who may be counsel to anyEmployer.

12.3 Binding Effect of Decisions. The decision or action of theCommittee with respect to any question arising out of or in connection with theadministration, interpretation and application of the Plan and the rules andregulations promulgated hereunder shall be final and conclusive and binding uponall persons having any interest in the Plan.

12.4 Indemnity of Committee. All Employers shall indemnify and holdharmless the members of the Committee against any and all claims, losses,damages, expenses or liabilities arising from any action or failure to act withrespect to this Plan, except in the case of willful misconduct by the Committeeor any of its members.

12.5 Employer Information. To enable the Committee to perform itsfunctions, each Employer shall supply full and timely information to theCommittee on all matters relating to the compensation of its Participants, thedate and circumstances of the Retirement, Disability, death or Termination ofEmployment of its Participants, and such other pertinent information as theCommittee may reasonably require.

 

ARTICLE 13

Other Benefits and Agreements

13.1 Coordination with Other Benefits. The benefits provided for aParticipant and Participant's Beneficiary under the Plan are in addition to anyother benefits available to such Participant under any other plan or program foremployees of the Participant's Employer. The Plan shall supplement and shall notsupersede, modify or amend any other such plan or program except as mayotherwise be expressly provided.

 

ARTICLE 14

Claims Procedures

14.1 Presentation of Claim. Any Participant or Beneficiary of adeceased Participant (such Participant or Beneficiary being referred to below asa "Claimant") may deliver to the Committee a written claim for a determinationwith respect to the amounts distributable to such Claimant from the Plan. Ifsuch a claim relates to the contents of a notice received by the Claimant, theclaim must be made within 60 days after such notice was received by theClaimant. All other claims must be made within 180 days of the date on which theevent that caused the claim to arise occurred. The claim must state withparticularity the determination desired by the Claimant.

14.2 Notification of Decision. The Committee shall consider aClaimant's claim within a reasonable time, and shall notify the Claimant inwriting:

(a) that the Claimant's requested determination has been made, and that theclaim has been allowed in full; or

(b) that the Committee has reached a conclusion contrary, in whole or inpart, to the Claimant's requested determination, and such notice must set forthin a manner calculated to be understood by the Claimant:

(i) the specific reason(s) for the denial of the claim, or any part ofit;

(ii) specific reference(s) to pertinent provisions of the Plan upon whichsuch denial was based;

(iii) a description of any additional material or information necessary forthe Claimant to perfect the claim, and an explanation of why such material orinformation is necessary; and (iv) an explanation of the claim review procedureset forth in Section 14.3 below.

14.3 Review of a Denied Claim. Within 60 days after receiving a noticefrom the Committee that a claim has been denied, in whole or in part, a Claimant(or the Claimant's duly authorized representative) may file with the Committee awritten request for a review of the denial of the claim. Thereafter, but notlater than 30 days after the review procedure began, the Claimant (or theClaimant's duly authorized representative):

(a) may review pertinent documents;

(b) may submit written comments or other documents; and/or

(c) may request a hearing, which the Committee, in its sole discretion, maygrant.

14.4 Decision on Review. The Committee shall render its decision onreview promptly, and not later than 60 days after the filing of a writtenrequest for review of the denial, unless a hearing is held or other specialcircumstances require additional time, in which case the Committee's decisionmust be rendered within 120 days after such date. Such decision must be writtenin a manner calculated to be understood by the Claimant, and it mustcontain:

(a) specific reasons for the decision;

(b) specific reference(s) to the pertinent Plan provisions upon which thedecision was based; and

(c) such other matters as the Committee deems relevant.

14.5 Legal Action. A Claimant's compliance with the foregoingprovisions of this Article 14 is a mandatory prerequisite to a Claimant's rightto commence any legal action with respect to any claim for benefits under thisPlan.

 

ARTICLE 15

Trust

15.1 Establishment of the Trust. The Company shall establish theTrust, and each Employer shall at least annually transfer over to the Trust suchassets as the Employer determines are necessary to provide, on a present valuebasis, for its future liabilities created with respect to all Annual DeferralAmounts, Company Matching Amounts and Company Restoration Amounts for suchEmployer's Participants for all periods prior to the transfer, as well as thecredits and debits to the Participants' Account Balance (and Unvested AccruedAmounts) for all periods prior to the transfer, taking into consideration thevalue of the assets in the trust at the time of the transfer.

15.2 Interrelationship of the Plan and the Trust. The provisions ofthe Plan and the Plan Agreement shall govern the rights of a Participant toreceive distributions pursuant to the Plan. The provisions of the Trust shallgovern the rights of the Employers, Participants and the creditors of theEmployers to the assets transferred to the Trust. Each Employer shall at alltimes remain liable to carry out its obligations under the Plan.

15.3 Distributions From the Trust. Each Employer's obligations underthe Plan may be satisfied with Trust assets distributed pursuant to the terms ofthe Trust, and any such distribution shall reduce the Employer's obligationsunder this Plan.

 

ARTICLE 16

Miscellaneous

16.1 Unsecured General Creditor. Participants and their Beneficiaries,heirs, successors and assigns shall have no legal or equitable rights, interestsor claims in any property or assets of an Employer. For purposes of the paymentof benefits under this Plan, any and all of an Employer's assets shall be, andremain, the general, unpledged unrestricted assets of the Employer. AnEmployer's obligation under the Plan shall be merely that of an unfunded andunsecured promise to pay money in the future. If any right of a Participantunder the Plan would cause such Participant to be in constructive receipt orhave the economic benefit of any funds or other assets such that the Participantwould be subject to federal income taxation in respect of such funds or otherassets prior to the Participant's actual receipt thereof as a Termination orRetirement Benefit or other payout of benefits under the Plan, such right of theParticipant shall be restricted to the extent necessary so that the Participantdoes not have such constructive receipt or economic benefit.

16.2 Employer's Liability. An Employer's liability for the payment ofbenefits shall be defined only by the Plan and the Plan Agreement, as enteredinto between the Employer and a Participant. An Employer shall have noobligation to a Participant under the Plan except as expressly provided in thePlan and his or her Plan Agreement.

16.3 Nonassignability. Neither a Participant nor any other personshall have any right to commute, sell, assign, transfer, pledge, anticipate,mortgage or otherwise encumber, transfer, hypothecate, alienate or convey inadvance of actual receipt, the amounts, if any, payable hereunder, or any partthereof, which are, and all rights to which are expressly declared to be,unassignable and non-transferable, except that the foregoing shall not apply toany family support obligations set forth in a court order. No part of theamounts payable shall, prior to actual payment, be subject to seizure,attachment, garnishment or sequestration for the payment of any debts,judgments, alimony or separate maintenance owed by a Participant or any otherperson, nor be transferable by operation of law in the event of a Participant'sor any other person's bankruptcy or insolvency.

16.4 Not a Contract of Employment. The terms and conditions of thisPlan shall not be deemed to constitute a contract of employment between theCompany or any Employer and the Participant. Such employment is herebyacknowledged to be an "at will" employment relationship that can be terminatedat any time for any reason, or no reason, with or without cause, and with orwithout notice, unless expressly provided in a written employment agreement.Nothing in this Plan shall be deemed to give a Participant the right to beretained in the service of the Company or any Employer or to interfere with theright of the Company or any Employer to discipline or discharge the Participantat any time.

16.5 Furnishing Information. A Participant or his or her Beneficiarywill cooperate with the Committee by furnishing any and all informationrequested by the Committee and take such other actions as may be requested inorder to facilitate the administration of the Plan and the payments of benefitshereunder, including but not limited to taking such physical examinations as theCommittee may deem necessary.

16.6 Terms. Whenever any words are used herein in the masculine, theyshall be construed as though they were in the feminine in all cases where theywould so apply; and whenever any words are used herein in the singular or in theplural, they shall be construed as though they were used in the plural or thesingular, as the case may be, in all cases where they would so apply.

16.7 Captions. The captions of the articles, sections and paragraphsof this Plan are for convenience only and shall not control or affect themeaning or construction of any of its provisions.

16.8 Governing Law. Subject to ERISA, the provisions of this Planshall be construed and interpreted according to the internal laws of the Stateof Nevada without regard to its conflicts of laws principles.

16.9 Notice. Any notice or filing required or permitted to be given tothe Committee under this Plan shall be sufficient if in writing andhand-delivered, or sent by registered or certified mail, to the addressbelow:

Sierra Health Services Deferred 

Compensation Plan Committee 

P.O. Box 15645 

Las Vegas, Nevada 89114-5645

Such notice shall be deemed given as of the date of delivery or, if deliveryis made by mail, as of the date shown on the postmark on the receipt forregistration or certification.

Any notice or filing required or permitted to be given to a Participant underthis Plan shall be sufficient if in writing and hand-delivered, or sent by mail,to the last known address of the Participant.

16.10 Successors. The provisions of this Plan shall bind and inure tothe benefit of the Participant's Employer and its successors and assigns and theParticipant and the Participant's designated Beneficiaries.

16.11 Spouse's Interest. The interest in the benefits hereunder of aspouse of a Participant who has predeceased the Participant shall automaticallypass to the Participant and shall not be transferable by such spouse in anymanner, including but not limited to such spouse's will, nor shall such interestpass under the laws of intestate succession.

16.12 Validity. In case any provision of this Plan shall be illegal orinvalid for any reason, said illegality or invalidly shall not affect theremaining parts hereof, but this Plan shall be construed and enforced as if suchillegal or invalid provision had never been inserted herein.

16.13 Incompetent. If the Committee determines in its discretion thata benefit under this Plan is to be paid to a minor, a person declaredincompetent or to a person incapable of handling the disposition of thatperson's property, the Committee may direct payment of such benefit to theguardian, legal representative or person having the care and custody of suchminor, incompetent or incapable person. The Committee may require proof ofminority, incompetency, incapacity or guardianship, as it may deem appropriateprior to distribution of the benefit. Any payment of a benefit shall be apayment for the account of the Participant and the Participant's Beneficiary, asthe case may be, and shall be a complete discharge of any liability under thePlan for such payment amount.

16.14 Court Order. The Committee is authorized to make any paymentsdirected by court order in any action in which the Plan or the Committee hasbeen named as a party. In addition, if a court determines that a spouse orformer spouse of a Participant has an interest in the Plan as the result of aproperty settlement or otherwise, the Committee, in its sole discretion, shallhave the right, notwithstanding any election made by a Participant andnotwithstanding the provisions of Section 16.3, to take actions it deemsnecessary or appropriate in order to comply with the order of the court. In suchcase, unless otherwise determined by the Committee, the following rules willapply:

(a) If the court's order directs immediate payment to or for the benefit ofthe spouse or former spouse (or a dependent family member), the Participant'sDeferral Account or portion thereof subject to such order shall be valued as ofthe date of the court order and paid out in accordance therewith as a lump sumwithin 60 days thereafter. 

(b) If the court's order directs payment to or for the benefit of the spouseor former spouse (or a dependent family member) at a future date, theParticipant's Deferral Account shall be segregated, as of the date of the courtorder, into two subaccounts, one representing the portion subject to the court'sorder for payment to the spouse or former spouse (the "Court Order Subaccount")and the other representing the portion that is not or will not thereafter berequired to be paid to such spouse or former spouse (the "Non-Court OrderSubaccount"). Both of these Subaccounts shall be maintained in the name of theParticipant. The Court Order Subaccount shall be reallocated, as of the date ofthe court order, to the Measurement Fund that is a money market or other cashequivalent fund, and shall remain in such Measurement Fund without reallocationuntil such Subaccount is paid out. The Court Order Subaccount shall be paid, toor for the benefit of the spouse or former spouse (or dependent family member)or otherwise in accordance with the court order, at the earlier of the timespecified in the court order or the time that portion of the Deferral Accountotherwise would have been paid under the Plan; provided, however, that if anevent occurs that triggers a payout or benefit under Article 4, 5, 6, 7 or 8,the Court Order Subaccount shall be paid in accordance with the such applicableArticle, and provided further, that the Court Order Subaccount shall remainsubject to any vesting and other restrictions under the Plan. The Non-CourtOrder Subaccount shall remain subject to the terms and conditions of the Planwithout limitation.

(c) The Committee shall send written notice to the Participant explain theactions and rights under this Section 16.14 with respect to the Participant'sDeferral Account, including (i) the reallocation of the Court Order Subaccountto the money market or cash equivalent Measurement Fund, (ii) the federal incometax consequence to the Participant upon payment of the Court Order Subaccount,and (iii) any aspect of the court order with which the Company cannotcomply.
Distribution in the Event of Taxation
.

(a) In General. If, for any reason, all or any portion of aParticipant's benefit under this Plan becomes taxable to the Participant priorto receipt, a Participant may petition the Committee before a Change in Control,or the trustee of the Trust after a Change in Control, for a distribution ofthat portion of his or her benefit that has become taxable. Upon the grant ofsuch a petition, which grant shall not be unreasonably withheld (and, after aChange in Control, shall be granted), a Participant's Employer shall distributeto the Participant immediately available funds in an amount equal to the taxableportion of his or her benefit (which amount shall not exceed a Participant'sAccount Balance under the Plan). If the petition is granted, the tax liabilitydistribution shall be made within 90 days of the date when the Participant'spetition is granted. Such a distribution shall affect and reduce the benefits tobe paid under this Plan.

(b) Trust. If the Trust terminates in accordance with Section 3.7(e)of the Trust and benefits are distributed from the Trust to a Participant inaccordance with that Section, the Participant's benefits under this Plan shallbe reduced to the extent of such distributions.

16.16 Legal Fees To Enforce Rights After Change in Control. TheCompany and each Employer is aware that upon the occurrence of a Change inControl, the Board or the board of directors of the Employer (which might thenbe composed of new members) or a shareholder of the Company or the Employer, orof any successor corporation might then cause or attempt to cause the Company,the Employer or such successor to refuse to comply with its obligations underthe Plan and might cause or attempt to cause the Company or the Employer toinstitute, or may institute, litigation seeking to deny Participants thebenefits intended under the Plan. In these circumstances, the purpose of thePlan could be frustrated. Accordingly, if, following a Change in Control, itshould appear to any Participant that the Company, its Employer or any successorcorporation has failed to comply with any of its obligations under the Plan orany agreement thereunder or, if the Company, such Employer or any other persontakes any action to declare the Plan void or unenforceable or institutes anylitigation or other legal action designed to deny, diminish or to recover fromany Participant the benefits intended to be provided, then the Company and theEmployer irrevocably authorize such Participant to retain counsel of his or herchoice at the expense of the Company and the Employer (who shall be jointly andseverally liable) to represent such Participant in connection with theinitiation or defense of any litigation or other legal action, whether by oragainst the Company, the Employer or any director, officer, shareholder or otherperson affiliated with the Company, the Employer or any successor thereto in anyjurisdiction.

IN WITNESS WHEREOF, the Company has signed this amended and restated Plandocument as of January 1, 2001.

 

 

SIERRA HEALTH SERVICES, INC.,

a Nevada corporation

 

By: __________________________________

Title: _______________________________****