Document:

EX-10.31

 

EXHIBIT 10.31

(Contract Period May 1, 2005 to December 31, 2005)

Contract With Eligible Medicare+Choice (M+C) Organization Pursuant to

sections 1851 through 1859 of the Social Security Act for the operation

of a Medicare+Choice coordinated care plan(s)

Contract (P01307)

Between

Centers for Medicare & Medicaid Services (hereinafter referred to as CMS)

and

Leon
Medical Centers Health Plans, Inc.

(hereinafter referred to as the M+C Organization)

CMS and the M+C Organization, an entity which has been determined to be an eligible Medicare+Choice
Organization by the Administrator of the Centers for Medicare & Medicaid Services under 42 CFR
422.501, agree to the following for the purposes of sections 1851 through 1859 of the Social
Security Act (hereinafter referred to as the Act):

(NOTE: Citations indicated in brackets are placed in the text of this contract to note the
authority for certain contract provisions in the regulations promulgated pursuant to the Balanced
Budget Act of 1997, as amended. All references to part 422 are to 42 CFR part 422.)

Article I

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Term of Contract

The term of this contract shall be from May 1,2005 through December 31, 2005, after which the
contract may be renewed for successive one-year periods in accordance with 42 CFR 422.504(c).

          [422.504]

This contract governs the respective rights and obligations of the parties as of the effective
date set forth above, and supercedes any prior agreements between the M+C Organization and CMS as
of such date.

Article II

Coordinated Care Plan

The Medicare+Choice Organization agrees to operate coordinated care plans (as defined in 42 CFR
422.4(a)(1)), as described in its Adjusted Community Rate (ACR) proposal as approved annually by
CMS, in compliance with the requirements of this contract and applicable Federal statutes,
regulations, and policies. This contract is deemed to incorporate any changes that are required by
statute to be implemented during the term of the contract and any regulations or policies
implementing or interpreting such statutory provisions. However, CMS agrees that any regulation or
policy statement it issues later than 30 days prior to the date by which M+C Organizations are
required to submit ACR proposals to CMS, and which creates significant new operational costs of
which the M+C Organization did not have reasonable notice prior to such date, shall not take effect
in the next calendar year unless implementation during the next calendar year is required by
statute or in connection with litigation challenging CMS’ policies. CMS retains the authority to
issue, with an effective date during the term of this contract, policies to implement the statutory
requirement that M+C Organizations provide their enrollees those items and services for which
benefits are available under Medicare Parts A and B. Clarifications or explanations of M+C
operational requirements issued prior to 30 days prior to the date by which M+C Organizations are
required to submit ACR proposals are not considered to create new operational costs of which the
M+C organization did not have notice.

Article III

Functions To Be Performed By Medicare+Choice Organization

A. PROVISION OF BENEFITS

The M+C Organization agrees to provide enrollees in each of its M+C plans the basic benefits as
required under §422.101 and, to the extent applicable, supplemental benefits under §422.102 and as
established in the M+C Organization’s adjusted community rate (ACR) proposal as approved by CMS.
The M+C Organization agrees to provide access to such benefits as required under subpart C in a
manner consistent with professionally recognized standards of health care and according to the
access standards stated in § 422.112. The M+C Organization agrees to provide post-hospital extended
care services, should an M+C enrollee elect such coverage, through a

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home skilled nursing facility according to the requirements of section 1852(1) of the Act. A home
skilled nursing facility is a facility in which an M+C enrollee resided at the time of admission
to the hospital, a facility that provides services through a continuing care retirement community,
or a facility in which the spouse of the enrollee is residing at the time of the enrollee’s
discharge from the hospital. [422.502(a)(3)]

B. ENROLLMENT REQUIREMENTS

1. The M+C Organization agrees to accept new enrollments, make enrollments effective, process
voluntary disenrollments, and limit involuntary disenrollments, as provided in subpart B of part
422.

2. The M+C Organization shall comply with the provisions of § 422.110 concerning
prohibitions against discrimination in beneficiary enrollment.

            [422.502(a)(2)]

C. BENEFICIARY PROTECTIONS

1. The Medicare+Choice Organization agrees to comply with all requirements in subpart M of part
422 governing coverage determinations, grievances, and appeals. [422.502(a)(7)]

2. The Medicare+Choice Organization agrees to comply with the enrollee notice and appeal
procedures for the termination of provider services in § 422.624 and § 422.626.

3. The Medicare+Choice Organization agrees to comply with the confidentiality and enrollee record
accuracy requirements in § 422.118.

4. Beneficiary Financial Protection. The M+C Organization agrees to comply with the
following requirements:

          (a) Each M+C Organization must adopt and maintain arrangements satisfactory to CMS
to protect its enrollees from incurring liability for payment of any fees that are the legal
obligation of the M+C Organization. To meet this requirement the M+C Organization must—

          (i) Ensure that all contractual or other written arrangements with providers prohibit the
Organization’s providers from holding any beneficiary enrollee liable for payment of any fees
that are the legal obligation of the M+C Organization; and

          (ii) Indemnify the beneficiary enrollee for payment of any fees that are the legal
obligation of the M+C Organization for services furnished by providers that do not contract, or
that have not otherwise entered into an agreement with the M+C Organization, to provide
services to the organization’s beneficiary enrollees. [422.502(g)(1)]

          (b) The M+C Organization must provide for continuation of enrollee health care benefits-

          (i) For all enrollees, for the duration of the contract period for which CMS payments have
been made; and

          (ii) For enrollees who are hospitalized on the date its contract with CMS terminates, or, in
the event of an insolvency, through the date of discharge. [422.502(g)(2)]

          (c) In meeting the requirements of this section (C), other than the provider contract
requirements specified in paragraph (C)(3)(a) of this Article, the
M+C Organization may use —

          (i) Contractual arrangements;

          (ii) Insurance acceptable to CMS;

          (iii) Financial reserves acceptable to CMS; or

          (iv) Any other arrangement acceptable to CMS. [422.502(g)(3)]

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D. PROVIDER PROTECTIONS

1. The M+C Organization agrees to comply with all applicable provider requirements in subpart E of
part 422, including provider certification requirements, anti-discrimination requirements, provider
participation and consultation requirements, the prohibition on interference with provider advice,
limits on provider indemnification, rules governing payments to providers, and limits on physician
incentive plans. [422.502(a)(6)]

2. Prompt Payment.

          (a) The M+C Organization must pay 95 percent of the “clean claims” within 30 days of
receipt if they are claims for covered services that are not furnished under a written
agreement between the organization and the provider.

          (i) The M+C Organization must pay interest on clean claims that are not paid within 30 days
in accordance with sections 1816(c)(2)(B) and 1842(c)(2)(B) of the Act.

          (ii) All other claims must be paid or denied within 60 calendar days from the date of the
request. [422.520(a)]

          (b) Contracts or other written agreements between the M+C Organization and its providers
must contain a prompt payment provision, the terms of which are developed and agreed to by
both the M+C Organization and the relevant provider. [422.520(b)]

          (c) If CMS determines, after giving notice and opportunity for hearing, that the M+C
Organization has failed to make payments in accordance with paragraph (2)(a) of this section, CMS
may provide—

          (i) For direct payment of the sums owed to providers; and

          (ii) For appropriate reduction in the amounts that would otherwise be paid to the M+C
Organization, to reflect the amounts of the direct payments and the cost of making those payments.
[422.520(c)]

E. QUALITY ASSESSMENT AND PERFORMANCE IMPROVEMENT PROGRAM

1. The M+C Organization agrees to operate an ongoing quality assessment and performance improvement
program (as stated in 422.152 of subpart D).

2. Quality Assessment and Performance Improvement Projects: The M+C Organization agrees to:

          (a) conduct quality assessment and performance improvement (QAPI) projects as directed
annually by CMS. These projects must be outcomes-oriented and targeted at achieving demonstrable,
sustained improvement in significant aspects of specified clinical and non-clinical areas which can
be expected to have a favorable effect on enrollees’ health outcomes and satisfaction. CMS shall
establish the obligations of the M+C Organization for the number and distribution of projects among
the required clinical and non-clinical areas.

          (b) In those years when CMS establishes a national improvement project for the Medicare+Choice
program, the M+C Organization shall participate in the CMS-sponsored national QAPI initiative,
unless the M+C Organization meets the requirements for an exemption from the initiative.

3. Performance Measurement and Reporting: The M+C Organization shall measure
performance under its M+C plans using standard measures required by CMS, and report (at the
organization level) its performance to CMS. The standard measures required by CMS during the
term of this contract will be uniform data collection and reporting instruments, to include the
Health Plan and Employer Data Information Set (HEDIS), Consumer Assessment of Health Plan

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Satisfaction (CAHPS) survey, and Health Outcomes Survey (HOS). These measures will address clinical
areas, including effectiveness of care, enrollee perception of care and use of services; and
non-clinical areas including access to and availability of services, appeals and grievances, and
organizational characteristics. [422.152(c) (1)&(2)].

4. Utilization Review: If the M+C Organization uses written protocols for utilization
review, those policies and procedures must reflect current standards of medical practice in
processing requests for initial or continued authorization of
services. [422.152(b)(3)]. The M+C
Organization must also have in effect mechanisms to detect both underutilization and
overutilization of services. [422.152(b)(4)].

5. Information Systems:

          (a) The M+C Organization must make available to CMS information on quality and
outcomes measures that will enable beneficiaries to compare health coverage options and select
among them, as provided in § 422.64(c)(10). [422.152(b)(5)].

          (b) The M+C Organization must maintain a health information system that:

          (i) collects, analyzes and integrates the data necessary to implement its quality
assessment and performance improvement program, and

          (ii) assures that the information entered into the system (particularly that received from
providers) is reliable and complete.

          (c) The M+C Organization must make all collected data, including information on quality
and outcome measures, available to CMS to enable beneficiaries to compare health coverage
options and select among them, as provided in § 422.64(c)(10). [422.152(b)(5)]

6. External Review: The M+C Organization will have an agreement with an independent
quality review and improvement organization (review organization) approved by CMS.
[422.154(a)]

          (a) The agreement will be consistent with CMS guidelines and will:

          (i) Require that the M+C Organization allocate adequate space for use of the review
organization whenever it is conducting review activities and provide all pertinent data, including
patient care data, at the time the review organization needs the data to carry out the reviews and
make its determinations, and

          (ii) Except in the case of complaints about quality, exclude review activities that CMS
determines would duplicate review activities conducted as part of an accreditation process or as
part of CMS monitoring. [422.154(b)]

F. COMPLIANCE PLAN

The M+C Organization agrees to implement a compliance plan in accordance with the
requirements of § 422.501(b)(3)(vi). 
          [422.501(b)(3)(vi)]

G. COMPLIANCE DEEMED ON THE BASIS OF ACCREDITATION: CMS may deem the
M+C Organization to have met the quality assessment and performance improvement
requirements of § 422.152, the confidentiality and accuracy of enrollee records requirements of §
422.118, the anti-discrimination requirements of § 1852(b) of the Act, the access to services
requirements of § 1852(d) of the Act, the advance directives requirements of § 422.128, and/or
the provider participation requirements of § 1852(j) of the Act if the M+C Organization is fully
accredited (and periodically reaccredited) by a private, national accreditation organization

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approved by CMS and the accreditation organization used the standards approved by CMS for the
purposes of assessing the M+C Organization’s compliance with Medicare requirements. The provisions
of § 422.156 shall govern the M+C Organization’s use of deemed status to meet M+C program
requirements.

Article IV

CMS Payment to M+C Organization

A. The M+C Organization agrees to develop its annual adjusted community rate (ACR)
proposal and submit to CMS all required information on premiums, benefits, and cost sharing, as
required under 42 CFR 422, subpart G. [422.502(a)(10)]

B.
Methodology. CMS agrees to pay the M+C Organization under this contract in accordance
with the provisions of section 1853 of the Act and subpart F of part 422. [422.502(a)(9)]

C. Attestation of payment data (Attachments A, B, and C).

1. As a condition for receiving a monthly payment under paragraph B of this article, subpart F of
part 422, the M+C Organization agrees that its chief executive officer (CEO), chief financial
officer (CFO), or an individual delegated with the authority to sign on behalf of one of these
officers, and who reports directly to such officer, must request payment under the contract on the
forms attached as Attachment A (enrollment attestation), Attachment B (risk adjustment data), and
Attachment C (adjusted community rate (ACR) proposal information attestation), hereto which attest
to (based on best knowledge, information and belief, as of the date specified on the attestation
form) the accuracy, completeness, and truthfulness of the data identified on these attachments.
Attachment A requires attestation based on best knowledge, information, and belief, that each
enrollee for whom the M+C Organization is requesting payment is validly enrolled, or was validly
enrolled during the period for which payment is requested, in an M+C plan offered by the M+C
Organization. The M+C Organization shall submit completed enrollment attestation forms to CMS, or
its contractor, on a monthly basis. (NOTE: The forms included as attachments to this contract are
for reference only. CMS will provide instructions for the completion and submission of the forms in
separate documents. M+C Organizations should not take any action on the forms until appropriate CMS
instructions become available.)

2. Attachment B requires that the CEO, CFO, or an individual delegated with the authority to sign
on behalf of one of these officers, and who reports directly to such officer, must attest to (based
on best knowledge, information and belief, as of the date specified on the attestation form) that
the risk adjustment data it submits to CMS under § 422.257 are accurate, complete, and truthful.
The M+C Organization shall make annual attestations of risk adjustment data on Attachment B and
according to a schedule to be published by CMS. If such risk adjustment data are generated by a
related entity, contractor, or subcontractor of an M+CO, such entity, contractor, or subcontractor
must similarly attest to (based on best knowledge, information, and belief, as of the date specified
on the attestation form) the accuracy, completeness, and truthfulness of the data.
[422.502(1)]

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3. The CEO, CFO, or an individual delegated with the authority to sign on behalf of one of these
officers, and who reports directly to such officer, must attest (based on best knowledge,
information and belief, as of the date specified on the attestation form) that the information and
documentation comprising the ACR proposal is accurate, complete, and truthful and fully conforms to
the ACRP requirements; and that the benefits described in the CMS-approved ACR proposal agree with
the benefit package the M+C Organization will offer during the period covered by the ACR proposal.
[422.502(1)]

Article V

     M+C Organization Relationship with Related Entities, Contractors, and
Subcontractors

A. Notwithstanding any relationship(s) that the M+C Organization may have with related entities,
contractors, or subcontractors, the M+C Organization maintains full responsibility for adhering to
and otherwise fully complying with all terms and conditions of its contract with CMS.
[422.502(i)(1)]

B. The M+C Organization agrees to require all related entities,
contractors, or subcontractors to agree that—

     (1) HHS, the Comptroller General, or their designees have the right to inspect, evaluate,
and audit any pertinent contracts, books, documents, papers, and records of the related
entity(s), contractor(s), or subcontractor(s) involving transactions related to the contract; and

     (2) HHS’s, the Comptroller General’s, or their designee’s right to inspect, evaluate, and
audit any pertinent information for any particular contract period will exist through 6 years from
the final date of the contract period or from the date of completion of any audit, whichever is
later. [422.502(i)(2)]

C. The M+C Organization agrees that all contracts or written arrangements into which the
M+C Organization enters with providers, related entities, contractors, or subcontractors shall
contain the following elements:

     (1) Enrollee protection provisions that provide—

     (a) Consistent with Article III(C), arrangements that prohibit providers from holding an
enrollee liable for payment of any fees that are the legal obligation of the M+C Organization; and

     (b) Consistent with Article III(C), provision for the continuation of benefits.

     (2) Accountability provisions that indicate that—

     (a) The M+C Organization oversees and is accountable to CMS for any functions or
responsibilities that are described in these standards; and

     (b) The M+C Organization may only delegate activities or functions to a provider, related
entity, contractor, or subcontractor in a manner consistent with requirements set forth at
paragraph D of this article.

     (3) A provision requiring that any services or other activity performed by a related
entity, contractor or subcontractor in accordance with a contract or written agreement between the

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related entity, contractor, or subcontractor and the M+C Organization will be consistent and
comply with the M+C Organization’s contractual obligations to CMS. [422.502(i)(3)]

D. If any of the M+C Organization’s activities or responsibilities under this contract with
CMS are delegated to other parties, the following requirements apply to any related entity,
contractor, subcontractor, or provider:

     (1) Written arrangements must specify delegated activities and reporting responsibilities.

     (2) Written arrangements must either provide for revocation of the delegation activities and
reporting requirements or specify other remedies in instances where CMS or the M+C Organization
determine that such parties have not performed satisfactorily.

     (3) Written arrangements must specify that the performance of the parties is monitored by the
M+C Organization on an ongoing basis.

     (4) Written arrangements must specify that either—

     (a) The credentials of medical professionals affiliated with the party or parties will be
either reviewed by the M+C Organization; or

     (b) The credentialing process will be reviewed and approved by the M+C Organization and the
M+C Organization must audit the credentialing process on an ongoing basis.

     
(5) All contracts or written arrangements must specify that the related entity, contractor, or
subcontractor must comply with all applicable Medicare laws, regulations, and CMS instructions.
[422.502(i)(4)]

E. If the M+C Organization delegates selection of the
providers, contractors, or subcontractors to
another organization, the M+C Organization’s written arrangements with that organization must state
that the M+C Organization retains the right to approve, suspend, or terminate any such arrangement.
[422.502(i)(5)]

Article VI

Records Requirements

A. MAINTENANCE OF RECORDS

1. The M+C Organization agrees to maintain for 6 years books, records, documents, and other
evidence of accounting procedures and practices that—

     (a) Are sufficient to do the following:

     (i) Accommodate periodic auditing of the financial records (including data related to Medicare
utilization, costs, and computation of the ACR) of the M+C Organization.

     (ii) Enable CMS to inspect or otherwise evaluate the quality, appropriateness and timeliness
of services performed under the contract, and the facilities of the M+C Organization.

     (iii) Enable CMS to audit and inspect any books and records of the M+C Organization that
pertain to the ability of the organization to bear the risk of potential financial losses, or
to services performed or determinations of amounts payable under the contract.

     (iv) Properly reflect all direct and indirect costs claimed to have been incurred and used
in the preparation of the ACR proposal.

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     (v) Establish component rates of the ACR for determining additional and supplementary
benefits.

     (vi) Determine the rates utilized in setting premiums for State insurance agency purposes
and for other government and private purchasers; and

     (b) Include at least records of the following:

     (i) Ownership and operation of the M+C Organization’s financial, medical, and other record
keeping systems.

     (ii) Financial statements for the current contract period and six prior periods.

     (iii) Federal income tax or informational returns for the current contract period and six
prior periods.

     (iv) Asset acquisition, lease, sale, or other action.

     (v) Agreements, contracts, and subcontracts.

     (vi) Franchise, marketing, and management agreements.

     (vii) Schedules of charges for the M+C Organization’s fee-for-service patients.

     (viii) Matters pertaining to costs of operations.

     (ix) Amounts of income received, by source and payment.

     (x) Cash flow statements.

     (xi) Any financial reports filed with other Federal programs or State authorities.
[422.502(d)]

2. Access to facilities and records. The M+C Organization
agrees to the following:

     
(a) The Department of Health and Human Services (HHS), the Comptroller General, or their
designee may evaluate, through inspection or other means—

     (i) The quality, appropriateness, and timeliness of services furnished to Medicare
enrollees under the contract;

     (ii) The facilities of the M+C Organization; and

     (iii) The enrollment and disenrollment records for the current contract period and six prior
periods.

     (b) HHS, the Comptroller General, or their designees may audit, evaluate, or inspect any
books, contracts, medical records, documents, papers, patient care documentation, and other records
of the M+C Organization, related entity, contractor, subcontractor, or its transferee that pertain
to any aspect of services performed, reconciliation of benefit liabilities, and determination of
amounts payable under the contract, or as the Secretary may deem necessary to enforce the contract.

     (c) The M+C Organization agrees to make available, for the purposes specified in section (A)
of this article, its premises, physical facilities and equipment, records relating to its Medicare
enrollees, and any additional relevant information that CMS may require, in a manner that meets CMS
record maintenance requirements.

     (d) HHS, the Comptroller General, or their designee’s right to inspect, evaluate, and audit
extends through 6 years from the final date of the contract period or completion of audit,
whichever is later unless-

     (i) CMS determines there is a special need to retain a particular record or group of records
for a longer period and notifies the M+C Organization at least 30 days before the normal
disposition date;

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     (ii) There has been a termination, dispute, or fraud or similar fault by the M+C
Organization, in which case the retention may be extended to 6 years from the date of any
resulting final resolution of the termination, dispute, or fraud or similar fault; or

     (iii) HHS, the Comptroller General, or their designee determine that there is a reasonable
possibility of fraud, in which case they may inspect, evaluate, and audit the M+C Organization at
any time. [422.502(e)]

B. REPORTING REQUIREMENTS

1. The M+C Organization shall have an effective procedure to develop, compile, evaluate, and report
to CMS, to its enrollees, and to the general public, at the times and in the manner that CMS
requires, and while safeguarding the confidentiality of the doctor-patient relationship, statistics
and other information as described in the remainder of this section (B). [422.516(a)]

2. The M+C Organization agrees to submit to CMS certified financial information that must
include the following:

     (a) Such information as CMS may require demonstrating that the organization has a fiscally
sound operation, including:

     (i) The cost of its operations;

     (ii) A description, submitted to CMS annually and within 120 days of the end of the fiscal
year, of significant business transactions (as defined in § 422.500) between the M+C Organization
and a party in interest showing that the costs of the transactions listed in paragraph (2)(a)(v) of
this section do not exceed the costs that would be incurred if these transactions were with someone
who is not a party in interest; or

     (iii) If they do exceed, a justification that the higher costs are consistent with prudent
management and fiscal soundness requirements.

     (iv) A combined financial statement for the M+C Organization and a party in interest if
either of the following conditions is met:

     (aa) Thirty-five percent or more of the costs of operation of the M+C Organization go to a
party in interest.

     (bb) Thirty-five percent or more of the revenue of a party in interest is from the M+C
Organization. [422.516(b)]

     (v) Requirements for combined financial statements.

     (aa) The combined financial statements required by paragraph (2)(a)(iv) must display in
separate columns the financial information for the M+C Organization and each of the parties in
interest.

     (bb) Inter-entity transactions must be eliminated in the consolidated column.

     (cc) The statements must have been examined by an independent auditor in accordance with
generally accepted accounting principles and must include appropriate opinions and notes.

     (dd) Upon written request from the M+C Organization showing good cause, CMS may waive the
requirement that the organization’s combined financial statement include the financial information
required in paragraph (2)(a)(v) with respect to a particular entity. [422.516(c)]

     (vi) A description of any loans or other special financial arrangements the M+C
Organization makes with contractors, subcontractors, and related entities.

     (b) Such information as CMS may require pertaining to the disclosure of ownership and
control of the M+C Organization. [422.502 (f)(1)(ii)]

     (c) Patterns of utilization of the M+C Organization’s services.

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3. The M+C Organization agrees to participate in surveys required by CMS and to submit to CMS all
information that is necessary for CMS to administer and evaluate the program and to simultaneously
establish and facilitate a process for current and prospective beneficiaries to exercise choice in
obtaining Medicare services. This information includes, but is not limited to:

     (a) The benefits covered under the M+C plan;

     (b) The M+C monthly basic beneficiary premium and M+C monthly supplemental beneficiary
premium, if any, for the plan.

     (c) The service area and continuation area, if any, of each plan and the enrollment
capacity of each plan;

     (d) Plan quality and performance indicators for the benefits under the plan including —

     (i)
Disenrollment rates for Medicare enrollees electing to receive benefits through the
plan for the previous 2 years;

     (ii) Information on Medicare enrollee satisfaction;

     (iii) The patterns of utilization of plan services;

     (iv) The availability, accessibility, and acceptability of the plan’s services;

     (v) Information on health outcomes and other performance measures required by CMS;

     (vi) The recent record regarding compliance of the plan with requirements of this part, as
determined by CMS; and

     (vii) Other information determined by CMS to be necessary to assist beneficiaries in
making an informed choice among M+C plans and traditional Medicare;

     (e) Information about beneficiary appeals and their disposition;

     (f) Information regarding all formal actions, reviews, findings, or other similar actions by
States, other regulatory bodies, or any other certifying or accrediting organization;

     (g) Any other information deemed necessary by CMS for the administration or evaluation of the
Medicare program. [422.502(f)(2)]

4. The M+C Organization agrees to provide to its enrollees and upon request, to any individual
eligible to elect an M+C plan, all informational requirements under § 422.64 and, upon an
enrollee’s, request, the financial disclosure information required under § 422.516. [422.502(f)(3)]

5. Reporting and disclosure under ERISA.

     (a) For any employees’ health benefits plan that includes an M+C Organization in its
offerings, the M+C Organization must furnish, upon request, the information the plan needs to
fulfill its reporting and disclosure obligations (with respect to the M+C Organization) under the
Employee Retirement Income Security Act of 1974 (ERISA).

     (b) The M+C Organization must furnish the information to the employer or the employer’s
designee, or to the plan administrator, as the term “administrator” is defined in ERISA.
[422.516(d)]

6. Electronic communication. The M+C Organization must have the capacity to communicate
with CMS electronically. [422.502(b)]

7. Risk Adjustment data. The M+C Organization agrees to comply with the requirements in § 422.257
for submitting risk adjustment data to CMS. [422.502(a)(8)]

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Article VII

Renewal of the M+C Contract

A. Renewal of contract: In accordance with § 422.506, the contract is renewable annually
only if-

     (1) CMS informs the M+C Organization that it authorizes a renewal; and

     (2) The M+C Organization has not provided CMS with a notice of intention not to renew.
[422.504(c)]

B. Nonrenewal of contract:

     (1) Nonrenewal by the Organization.

     (a) In accordance with § 422.506, the M+C Organization may elect not to renew its contract with
CMS as of the end of the term of the contract for any reason, provided it meets the time frames for
doing so set forth in paragraphs (b) and (c) of this paragraph.

     (b) If the M+C Organization does not intend to renew its contract, it must notify —

     (i)
CMS in writing, by the date established pursuant to § 422.506 or by the date
established through statute.

     (ii) Each Medicare enrollee, at least 90 days before the date on which the nonrenewal is
effective. This notice must include a written description of all alternatives available for
obtaining Medicare services within the service area of the M+C plans that the M+C Organization
offers, including alternative M+C plans, original Medicare, and Medigap options and must receive
CMS approval.

     (iii) The general public, at least 90 days before the end of the current calendar year, by
publishing a CMS-approved notice in one or more newspapers of general circulation in each community
located in the M+C Organization’s service area.

     (c) CMS may accept a non-renewal notice submitted after the applicable annual nonrenewal
notice deadline if —

     (i) The M+C Organization notifies its Medicare enrollees and the public in accordance with
paragraph (l)(b)(ii) and (l)(b)(iii) of this section; and

     (ii) Acceptance is not inconsistent with the effective and efficient administration of the
Medicare program.

     (d) If the M+C Organization does not renew a contract under this paragraph (1), CMS will not
enter into a contract with the Organization for 2 years from the date of contract separation unless
there are special circumstances that warrant special consideration, as determined by CMS. This
provision shall not apply when statutory or regulatory changes are made to the M+C program within
six (6) months of the M+C Organization’s notice of withdrawal that would increase payments for the
service area from which the M+C Organization had withdrawn. [422.506(a)]

     (2) CMS decision not to renew.

     (a) CMS may elect not to authorize renewal of a contract for any of the following
reasons:

     (i) The M+C Organization has not fully implemented or shown discernable progress in
implementing quality assessment and performance improvement projects as defined in Article III,
section (E)(2) of this contract.

12

 

     (ii) For any of the reasons listed in § 422.510(a) [Article VIII, section (B)(1)(a) of
this contract], which would also permit CMS to terminate the contract.

     (iii) The M+C Organization has committed any of the acts in § 422.752(a) that would
support the imposition of intermediate sanctions or civil money penalties under subpart O of
part 422.

     (b) Notice, CMS shall provide notice of its decision whether to authorize renewal of the
contract as follows:

     (i) To the M+C Organization by May 1 of the contract year.

     (ii) To the M+C Organization’s Medicare enrollees by mail at least 90 days before the end of
the current calendar year.

     (iii) To the general public at least 90 days before the end of the current calendar year, by
publishing a notice in one or more newspapers of general circulation in each community or county
located in the M+C Organization’s service area.

     (c) Notice of appeal rights. CMS shall give the M+C Organization written notice of
its right to reconsideration of the decision not to renew in accordance with § 422.644.

     [422.506(b)]

Article VIII

Modification or Termination of the Contract

A. Modification or Termination of Contract by Mutual Consent

1. This contract may be modified or terminated at any time by written mutual consent.

     (a) If the contract is terminated by mutual consent, except as provided in section (B)(1)(c)
of this article, the M+C Organization must provide notice to its Medicare enrollees and the general
public as provided in § 422.512(b)(2) and (b)(3) [Article VIII, section B(2)(b) of this contract].

     (b) If the contract is modified by mutual consent, the M+C Organization must notify its
Medicare enrollees of any changes that CMS determines are appropriate for notification within
time frames specified by CMS.

2. If this contract is terminated by mutual consent and replaced the day following such
termination by a new M+C contract, the M+C Organization is not required to provide the notice
specified in section B of this article.

     [422.508]

B. Termination of the Contract by CMS or the M+C Organization

1. Termination by CMS.

     (a) CMS may terminate a contract for any of the following reasons:

     (i) The M+C Organization has failed substantially to carry out the terms of its contract
with CMS.

     (ii) The M+C Organization is carrying out its contract with CMS in a manner that is
inconsistent with the effective and efficient implementation of 42 CFR part 422.

     (iii) CMS determines that the M+C Organization no longer meets the requirements of this part
for being a contracting organization.

13

 

     (iv) The M+C Organization commits or participates in fraudulent or abusive activities
affecting the Medicare program, including submission of fraudulent data.

     (v) The M+C Organization experiences financial difficulties so severe that its ability to make
necessary health services available is impaired to the point of posing an imminent and serious risk
to the health of its enrollees, or otherwise fails to make services available to the extent that
such a risk to health exists.

     (vi) The M+C Organization substantially fails to comply with the requirements in subpart M of
this part relating to grievances and appeals.

     (vii) The M+C Organization fails to provide CMS with valid risk adjustment data as
required under § 422.257.

     (viii) The M+C Organization fails to implement an acceptable quality assessment and
performance improvement program as required under subpart D of part 422.

     (ix) The M+C Organization substantially fails to comply with the prompt payment
requirements in § 422.520.

     (x) The M+C Organization substantially fails to comply with the service access
requirements in § 422.112 or § 422.114.

     (xi) The
M+C Organization fails to comply with the requirements of § 422.208 regarding
physician incentive plans.

     (xii) The M+CO substantially fails to comply with the marketing requirements in 422.80.

     (b) Notice. If CMS decides to terminate a contract for reasons other than the grounds
specified in section (B)(1)(a) above, it will give notice of the termination as follows:

     (i) CMS will notify the M+C Organization in writing 90 days before the intended date of the
termination.

     (ii) The M+C Organization will notify its Medicare enrollees of the termination by mail at
least 30 days before the effective date of the termination.

     (iii) The M+C Organization will notify the general public of the termination at least 30 days
before the effective date of the termination by publishing a notice in one or more newspapers of
general circulation in each community or county located in the M+C Organization’s service area.

     (c) Immediate termination of contract by CMS.

     (i) For terminations based on violations prescribed in paragraph (B)(l)(a)(v) of this article,
CMS will notify the M+C Organization in writing that its contract has been terminated effective the
date of notice of the termination decision by CMS. If termination is effective in the middle of a
month, CMS has the right to recover the prorated share of the capitation payments made to the M+C
Organization covering the period of the month following the contract termination.

     (ii) CMS will notify the M+C Organization’s Medicare enrollees in writing of CMS’ decision to
terminate the M+C Organization’s contract. This notice will occur no later than 30 days after CMS
notifies the plan of its decision to terminate this contract. CMS will simultaneously inform the
Medicare enrollees of alternative options for obtaining Medicare services, including alternative
M+C Organizations in a similar geographic area and original Medicare.

     (iii) CMS
will notify the general public of the termination no later than 30 days after
notifying the M+C Organization of CMS’ decision to terminate this contract. This notice will be

14

 

published in one or more newspapers of general circulation in each community or county located in
the M+C Organization’s service area.

     (d) Corrective action plan

     (i) General. Before terminating a contract for reasons other than the grounds
specified in section (B)(l)(a)(v) of this article, CMS will provide the M+C Organization with
reasonable opportunity, not to exceed time frames specified at subpart N of part 422, to develop
and receive CMS approval of a corrective action plan to correct the deficiencies that are the basis
of the proposed termination.

     (ii) Exception. If a contract is terminated under section (B)(l)(a)(v) of this
article, the M+C Organization will not have the opportunity to submit a corrective action plan.

     (e) Appeal rights. If CMS decides to terminate this contract, it will send written
notice to the M+C Organization informing it of its termination appeal rights in accordance with
subpart N of part 422.

     [422.510]

2. Termination by the M+C Organization

     (a) Cause for termination. The M+C Organization may terminate this contract if CMS
fails to substantially carry out the terms of the contract.

     (b) Notice. The M+C Organization must give advance notice as follows:

     (i) To CMS, at least 90 days before the intended date of termination. This notice must specify
the reasons why the M+C Organization is requesting contract termination.

     (ii) To its Medicare enrollees, at least 60 days before the termination effective date. This
notice must include a written description of alternatives available for obtaining Medicare services
within the service area, including alternative M+C plans, Medigap options, and original Medicare
and must receive CMS approval.

     (iii) To the general public at least 60 days before the termination effective date by
publishing a CMS-approved notice in one or more newspapers of general circulation in each community
or county located in the M+C Organization’s geographic area.

     (c) Effective date of termination. The effective date of the termination
will be determined by CMS and will be at least 90 days after the date CMS receives the
M+C Organization’s notice of intent to terminate.

     (d) CMS’ liability. CMS’ liability for payment to the M+C Organization ends as of the
first day of the month after the last month for which the contract is in effect, but CMS shall make
payments for amounts owed prior to termination but not yet paid.

     (e) Effect of termination by the organization. CMS will not enter into an agreement
with the M+C Organization for a period of two years from the date the Organization has terminated
this contract, unless there are circumstances that warrant special consideration, as determined by
CMS. [422.512]

Article IX

Requirements of Other Laws and Regulations

A. The M+C Organization agrees to comply with—

15

 

     (1) Title VI of the Civil Rights Act of 1964 as implemented by regulations at 45 CFR part 84;

     (2) The Age Discrimination Act of 1975 as implemented by regulations at 45 CFR part 91;

     (3) The Americans With Disabilities Act;

     (4) The Rehabilitation Act of 1973 ;

     (5) The Health Insurance Portability and Accountability Act;

     (6) Other
laws applicable to recipients of Federal funds; and

     (7) All other applicable laws, regulations, and rules.

     [422.502(h)(1)]

B. The M+C Organization is receiving Federal payments under this contract, and related entities,
contractors, and subcontractors paid by the M+C Organization to fulfill its obligations under this
contract are subject to certain laws that are applicable to individuals and entities receiving
Federal funds. The M+C Organization agrees to inform all related entities, contractors and
subcontractors that payments that they receive are, in whole or in part, from Federal funds.

     [422.502(h)(2)]

C. In the event that any provision of this contract conflicts with the provisions of any statute or
regulation applicable to an M+C Organization, the provisions of the statute or regulation shall
have full force and effect.

Article X

Severability

The M+C Organization agrees that, upon CMS’ request, this contract will be amended to exclude any
M+C plan or State-licensed entity specified by CMS, and a separate contract for any such excluded
plan or entity will be deemed to be in place when such a request is made.

     [422.502(k)]

16

 

In witness whereof, the parties hereby execute this contract.

	 	 	 	 	 
	FOR THE MA ORGANIZATION

	 	 
	 	 
	 
	 	 	 	 
	Benjamin Leon, Jr.

	 	President & CEO	 	 
	Printed Name

	 	Title	 	 
	 
	 	 	 	 
	/s/ Benjamin Leon, Jr.

	 	3/08/05	 	 
	 

Signature

	 	 Date
	 	 
	 
	 	 	 	 
	Leon Medical Centers Health Plans, Inc.

	 	101 SW 27 Avenue	 	 
	Organization

	 	Miami, Florida 33135	 	 
	 

	 	Address	 	 

FOR THE CENTERS FOR MEDICARE & MEDICAID SERVICES

	 	 	 	 	 
	/s/ Patricia P. Smith

	 	3.31.05
	 	 
	 

Patricia P. Smith

	 	 Date
	 	 
	Director
	 	 	 	 
	Medicare Advantage Group

Center for Beneficiary Choices
	 	 	 	 

17EX-10.11 AMENDED/RESTATED DEFERRED COMP. PLAN

 

Exhibit 10.11

TOTAL SYSTEM SERVICES, INC.

DEFERRED COMPENSATION PLAN

PLAN DOCUMENT

 

 

I.  INTRODUCTION

	 	A.	 	Purpose of Plan. The Employer has adopted the Plan set forth herein to
provide benefits in excess of those that may be accrued under the Employer’s qualified
retirement plans as a result of the limitations of Code section 401(a)(17) and 415 as a
means by which certain designated employees may elect to defer designated portions of
their Compensation, or in the discretion of the Employer, receive additional amounts of
deferred compensation in the form of Discretionary Credits.
	 
	 	B.	 	Status of Plan. To the extent the Plan provides benefits in excess of
the limitations of Code section 415, the Plan is intended to be an “excess benefit
plan” within the meaning of sections 3(36) and 4(6) of ERISA, and to the extent the
Plan provides other benefits, the Plan is intended to be “a plan which is unfunded and
is maintained by an employer primarily for the purpose of providing deferred
compensation for a select group of management or highly compensated employees” within
the meaning of sections 201(2), 301(a)(3), 401(a)(1), and 4021(b)(6) of ERISA, and
shall be interpreted and administered to the extent possible in a manner consistent
with that intent.
	 
	 	C.	 	Establishment of Plan. The Plan is established as of the Effective
Date upon the transfer of certain assets and liabilities of the Synovus Financial
Corp./Total System Services, Inc. Deferred Compensation Plan (“Prior Plan”) in
connection with the spin-off of the Company from Synovus Financial Corp. All elections
under the provisions of the Prior Plan (including deferral, investment and distribution
elections and beneficiary designations) shall be recognized as valid elections under
this Plan with respect to Accounts transferred from the Prior Plan to this Plan. In
addition, any Participant employed by the Employer on December 31, 2007, and any
Eligible Employee who transfers from Synovus Financial Corp. or any Affiliate of
Synovus Financial Corp. to the Company or any Affiliate of the Company from January 1,
2008 to December 31, 2008, shall receive credit for service under this Plan to the same
extent such service was recognized under the provisions of the Prior Plan.

II. DEFINITIONS

Wherever used herein, the following terms have the meanings set forth below, unless a
different meaning is clearly required by the context:

	 	A.	 	“Account” means, for each Participant, the account established for his or her
benefit under the Plan.
	 
	 	B.	 	“Cause” means:

	 	1.	 	the Participant’s conviction of, or plea of nolo contendere to,
a felony or other crime involving moral turpitude;

 

 

	 	2.	 	the Participant’s dishonesty with respect to the Employer or
any affiliate; or
	 
	 	3.	 	the Participant’s willful failure to perform, or material
negligence in the performance of, the Participant’s duties and responsibilities
with respect to the Employer.

	 	C.	 	“Code” means the Internal Revenue Code of 1986, as amended from time to time.
Reference to any section or subsection of the Code includes reference to any comparable
or succeeding provisions of any legislation that amends, supplements or replaces such
section or subsection.
	 
	 	D.	 	“Compensation” means, with respect to a Participant, his or her base salary,
including any bonuses, overtime, commissions and incentives.
	 
	 	E.	 	“Disability” means the inability of a Participant to engage in any substantial
gainful activity by reason of any medically determinable physical or mental impairment
which can be expected to result in death or which has lasted or can be expected to last
for a continuous period of not less than 12 months, and the permanence and degree of
which shall be supported by medical evidence satisfactory to the Plan Administrator.
	 
	 	F.	 	“Discretionary Credit” means an amount credited to a Participant’s Account by
the Employer in accordance with Section IV.B.
	 
	 	G.	 	“Effective Date” means January 1, 2008.
	 
	 	H.	 	“Elective Deferral” means the portion of Compensation which is deferred by a
Participant under Section IV.A.
	 
	 	I.	 	“Eligible Employee” means each individual selected by the Plan Administrator
for eligibility from among the group of highly compensated or managerial employees of
the Employer.
	 
	 	J.	 	“Employer” means Total System Services, Inc. and any of its affiliates.
	 
	 	K.	 	“ERISA” means the Employee Retirement Income Security Act of 1974, as amended
from time to time. Reference to any section or subsection of ERISA includes reference
to any comparable or succeeding provisions of any legislation that amends, supplements
or replaces such section or subsection.
	 
	 	L.	 	“Participant” means any individual who participates in the Plan in accordance
with Article III.
	 
	 	M.	 	“Plan” means the Total System Services, Inc. Deferred Compensation Plan and as
set forth herein and all subsequent amendments hereto.

2

 

	 	N.	 	“Plan Administrator” means the Employer, or the person, persons or entity
otherwise designated by the Employer to administer the Plan.
	 
	 	O.	 	“Plan Year” means the calendar year, except that the initial plan year may be a
period of less than 12 months’ duration beginning on the Effective Date.
	 
	 	P.	 	“Valuation Date” means the last business day of each quarter.
	 
	 	Q.	 	“Vested” means the nonforfeitable right to a portion of the Participant’s
Account attributable to Discretionary Credits, if any, determined in accordance with
the vesting schedule set forth in Section V.D.

III. PARTICIPATION

	 	A.	 	Commencement of Participation. Any individual who is an Eligible
Employee on or after the Effective Date and who has elected to defer part of his or her
Compensation in accordance with Section IV.A or who has been selected to receive
Discretionary Credits under Section IV.B shall become a Participant on the date such
Elective Deferral election or Discretionary Credit is made, as the case may be.
	 
	 	B.	 	Continued Participation. Subject to Section III.C, an individual who
has become a Participant in the Plan shall continue to be a Participant so long as any
amount remains credited to his or her Account.
	 
	 	C.	 	Termination of Participation. The Plan Administrator may terminate an
employee’s participation in the Plan prospectively or retroactively for any reason,
including but not limited to the Plan Administrator’s determination that such
termination is necessary in order to maintain the Plan as a “plan which is unfunded and
is maintained by an employer primarily for the purpose of providing deferred
compensation for a select group of management or highly compensated employees” within
the meaning of sections 201(2), 301(a)(3), 401(a)(1), and 4021(b)(6) of ERISA. Amounts
credited to a Participant’s Account (regardless of the extent otherwise Vested) shall
be paid out to such Participant in a single lump sum cash payment as soon as reasonably
practical following termination of participation hereunder.

IV. DEFERRALS AND CREDITS

	 	A.	 	Elective Deferrals.

	 	1.	 	In general. An individual who is an Eligible Employee
may elect to defer a designated portion of Compensation to be earned during a
Plan Year, by filing a written election with the Plan Administrator prior to
the first day of the Plan Year in which such Compensation is to be earned. An

3

 

	 	 	 	individual who first becomes an Eligible Employee on or after the first day
of any Plan Year may elect to defer a portion of Compensation to be earned
during the remainder of the Plan Year and after the written election is
filed with the Plan Administrator. The deferred amounts shall be credited
to the Participant’s Account as of the date such Compensation would
otherwise have been paid to the Participant.

	 	2.	 	Nature of Election. Each election under this Section
IV for a Plan Year (or the balance of a Plan Year) shall be made on a form
approved or prescribed by the Plan Administrator and shall apply only to
Compensation earned for the calendar year after the date the election form is
completed and filed with the Plan Administrator. The election form shall apply
to bonuses and shall specify the whole percentage or flat dollar amount that is
to be deferred. A Participant may revoke his or her deferral election as of
the first day of any Plan Year which follows such revocation by giving written
notice to the Plan Administrator before that day (or any such earlier date as
the Plan Administrator may prescribe). Any deferral election made under this
Section IV.A shall continue to be effective until revoked or changed pursuant
to this paragraph.

	 	B.	 	Excess Benefit Credits. The Employer shall credit the Account of each
Participant with the excess of any amount that would have been allocated to the
Participant’s account under the TSYS Money Purchase Pension Plan (the “Money Purchase
Plan”), the TSYS Profit Sharing Plan (the “Profit Sharing Plan”) or the TSYS 401(k)
Savings Plan (the “401(k) Plan”) but for the limitation of Code sections 401(a)(17) and
415 over the amount actually credited to such account; such credits to be made as of
the date or dates that the amounts would have been allocated to the Participant’s
account under the Money Purchase Plan, the Profit Sharing Plan or the 401(k) Plan.

V. ACCOUNTS

	 	A.	 	Accounts. The Plan Administrator shall establish an Account for each
Participant reflecting Elective Deferrals or Discretionary Credits made for the
Participant’s benefit together with any adjustments hereunder. Subject to Sections V.E
and IX.A, the Employer shall deposit the amount of deferrals and credits for a period
as soon as practicable after the date as of which such amounts are credited to the
Accounts. As of each Valuation Date, the Plan Administrator shall provide the
Participant with a statement of his or her Account reflecting the income, gains and
losses (realized and unrealized), amounts of deferrals and credits, and distributions
of such Account since the prior Valuation Date.
	 
	 	B.	 	Investments. Each Participant’s Account shall be invested in shares of
any open-end registered investment company for which Fidelity Investments or one of its
subsidiaries or affiliates (collectively “Fidelity”) serves as investment advisor or
for which Fidelity is the principal underwriter, or any other investment option

4

 

	 	 	 	selected by the Plan Administrator. If any Participant or beneficiary makes an
investment selection, the Employer (or in the event of the establishment of a trust
hereunder, the trustee of such trust as directed by the Employer) may follow such
investment selection but shall not be legally bound to do so.
	 
	 	C.	 	Payments. Each Participant’s Account shall be reduced by the amount of
any payment made to or on behalf of the Participant under Article VI as of the date
such payment is made.
	 
	 	D.	 	Vesting. A Participant will at all times be 100% Vested in the portion
of his or her Account attributable to Elective Deferrals. A Participant will be vested
in the portion of his or her Account attributable to Excess Benefit Credits from the
Profit Sharing Plan or the Money Purchase Pension Plan according to the following
schedule, based on his or her years of service with the Employer. A Participant’s
years of service for this purpose will be determined by the Administrator pursuant to
uniform rules based on the time elapsed since the Participant’s commencement of
employment with the Employer or its affiliates.

	 	 	 	 	 
	Years of Service	 	% Vested
	less than 1
	 	 	0	 
	2
	 	 	25	 
	3
	 	 	50	 
	4
	 	 	75	 
	5 or more
	 	 	100	 

	 	E.	 	Forfeiture of non-Vested Amounts. To the extent that any amounts
credited to a Participant’s Account are not Vested at the time the Account becomes
distributable under the Plan, such non-Vested amounts shall be forfeited and may be
used by the Employer as future Discretionary Credits for other Participants.
	 
	 	F.	 	Special Elections. From time to time, Employer may offer Participants
the opportunity to exchange all or part of their Accounts to other non-qualified
benefits. Any such election shall be evidenced by a separate written agreement between
Employer and the Participant that sets forth the details of the election. The Account
of each Participant who makes such an election will be adjusted pursuant to the terms
of the separate written agreement.
	 
	 	G.	 	Plan Mergers. From time to time, other non-qualified deferred
compensation plans may be merged into the Plan. All Accounts resulting from such
merged plans will be 100% vested as of the date of merger. A list of merged plans,
together with any special terms and conditions adopted in connection with the merger,
is attached to the Plan as Exhibit “A.”

5

 

VI. PAYMENTS

	 	A.	 	Severe Financial Emergency. A Participant who believes he or she is
suffering a severe financial emergency may apply to the Plan Administrator for a
distribution under the Plan in order to alleviate such emergency. The Plan
Administrator, in its sole discretion (but after taking into account, among other
factors, the nature and foreseeability of the alleged emergency, the Participant’s
other resources, and the effect of making a distribution on the intended tax status of
the deferrals made under the Plan), may direct the Employer to pay to the Participant
an amount which it determines is necessary or appropriate, not to exceed the Vested
portion of the Participant’s Account balance, and the Employer shall pay such amount to
the Participant in a single lump sum cash payment.
	 
	 	B.	 	Timing of Distribution. If a Participant elects to have Elective
Deferrals made on his or her behalf for any Plan Year (or, if Discretionary Credits
will be made on his or her behalf for a Plan Year regardless of whether Elective
Deferrals are being made for the Plan Year), the Participant may elect the timing of
the payment of all vested amounts credited to his or her Account from one of the
following two options:

	 	1.	 	the January 1 following a specified date, which must be at
least two years after the Plan Year for which the Elective Deferrals or
Discretionary Credits are made, or
	 
	 	2.	 	as soon as reasonably practical following termination of
employment for any reason including retirement or death.

	 	 	 	The foregoing election shall be made on a form approved or prescribed by the Plan
Administrator. Each such election may be made or changed in the calendar year prior
to the time when the corresponding amounts in the Participant’s Account are payable
or otherwise made available to the Participant.
	 
	 	 	 	If no new election is made hereunder with respect to any deferrals or credits, the
existing election as to time of payment of such amounts shall remain effective for
all amounts deferred and credited thereafter until a new election is made hereunder
with respect to future deferrals. If no election is in effect with respect to a
portion of a Participant’s Account, payment will be made as soon as reasonably
practical following termination of employment for any reason including retirement or
death.

	 	C.	 	Beneficiary Designation. A Participant shall designate a beneficiary
who shall be entitled to receive any Vested amounts remaining in the Participant’s
Account after his or death. Such designation shall be made in writing on a form
approved or prescribed by the Plan Administrator, and may be changed by the Participant
at any time. If there is no such designation or no designated beneficiary survives the
Participant, payment shall be made to the Participant’s estate.

6

 

D. Form of Payment.

	 	1.	 	If a Participant elects to have Elective Deferrals made on his
or her behalf for any Plan Year (or, if Discretionary Credits will be made on
his or her behalf for a Plan Year regardless of whether Elective Deferrals are
being made for the Plan Year), the Participant may also elect the form of
payment of all Vested amounts credited to his or her Account under one of the
following options:

	 	a)	 	a single lump sum payment; or

	 	b)	 	annual installments over a period elected by
the Participant up to 10 years, the amount of each installment to equal
the balance of his or her Account immediately prior to the installment
divided by the number of installments remaining to be paid.

	 	 	 	The foregoing election shall be made on a form approved or prescribed by the
Plan Administrator. Each such election may be made or changed in the
calendar year prior to the time when the corresponding amounts in the
Participant’s Account are payable or otherwise made available to the
Participant.
	 
	 	 	 	If no new election is made hereunder with respect to any deferrals or
credits, the existing election as to form of payment of such amounts shall
remain effective for all amounts deferred and credited thereafter until a
new election is made hereunder with respect to future deferrals. If no
election is in effect with respect to a portion of a Participant’s Account,
payment will be made in the form of annual installments for a period of 10
years.
	 
	 	 	 	Payments under this Section shall be made in cash. Any such election shall
be made in such form and with such prior notice as the Administrator may
require. Regardless of the Participant’s election, if the Participant’s
vested Account balance is less than or equal to $100,000, the distribution
will be made in a single lump sum payment.

7

 

VII. ADMINISTRATION

	 	A.	 	Plan Administrator; Interpretation. The Plan Administrator shall
oversee the administration of the Plan. The Plan Administrator shall have complete
discretionary control and authority to administer all aspects of the Plan, including
without limitation the power to appoint agents and counsel, and to determine the rights
and benefits and all claims, demands and actions arising out of the provisions of the
Plan of any Participant, beneficiary, deceased Participant, or other person having or
claiming to have any interest under the Plan, in a manner consistent with Section
VII.B. The Plan Administrator shall have the exclusive discretionary power to
interpret the Plan and to decide all matters under the Plan. Such interpretation and
decision shall be final, conclusive and binding on all Participants and any person
claiming under or through any Participant, in the absence of clear and convincing
evidence that the Plan Administrator acted arbitrarily and capriciously. Any
individual serving as Plan Administrator, or on a committee acting as Plan
Administrator, who is a Participant will not vote or act on any matter relating solely
to himself or herself. When making a determination or calculation, the Plan
Administrator shall be entitled to rely on information furnished by a Participant, a
beneficiary, or any other person or entity. The Plan Administrator shall be deemed to
be the plan administrator with responsibility for complying with any reporting and
disclosure requirements of ERISA.
	 
	 	B.	 	Claims Procedure.

	 	1.	 	In General. If any person believes he or she is being
denied any rights or benefits under the Plan, such person may file a claim in
writing with the Plan Administrator. If any such claim is wholly or partially
denied, the Plan Administrator will notify such person of its decision in
writing. Such notification will contain (i) specific reasons for the denial,
(ii) specific reference to pertinent plan provisions, (iii) a description of
any additional material or information necessary for such person to perfect
such claim and an explanation of why such material or information is necessary
and (iv) information as to the steps to be taken if the person wishes to submit
a request for review. Such notification will be given within 90 days after the
claim is received by the Plan Administrator (or within 180 days, if special
circumstances require an extension of time for processing the claim, and if
written notice of such extension and circumstances is given to such person
within the initial 90 day period). If such notification is not given within
such period, the claim will be considered denied as of the last day of such
period and such person may request a review of his or her claim.
	 
	 	2.	 	Appeals. Within 60 days after the date on which a
person receives a written notice of a denied claim (or, if applicable, within
60 days after the date on which such denial is considered to have occurred)
such person (or his or her duly authorized representative) may (i) file a
written request

8

 

	 	 	 	with the Plan Administrator for a review of his or her denied claim and of
pertinent documents and (ii) submit written issues and comments to the Plan
Administrator. The Plan Administrator will notify such person of its
decision in writing. Such notification will be written in a manner
calculated to be understood by such person and will contain specific reasons
for the decision as well as specific references to pertinent plan
provisions. The decision on review will be made within 60 days after the
request for review is received by the Plan Administrator (or within 120
days, if special circumstances require an extension of time for processing
the request, such as an election by the Plan Administrator to hold a
hearing, and if written notice of such extension and circumstances is given
to such person within the initial 60 day period). If the decision on review
is not made within such period, the claim will be considered denied.

	 	C.	 	Indemnification of Plan Administrator. The Employer agrees to
indemnify and to defend to the fullest extent permitted by law any director, officer or
employee of the Employer or any affiliated company who serves as the Plan Administrator
or as a member of a committee appointed to serve as Plan Administrator, or who assists
the Plan Administrator in carrying out its duties as part of his or her employment
(including any such individual who formerly served in any such capacity) against all
liabilities, damages, costs and expenses (including attorneys’ fees and amounts paid in
settlement of any claims approved by the Employer) occasioned by any act or omission to
act in connection with the Plan, if such act or omission is in good faith.

VIII. AMENDMENT AND TERMINATION

	 	A.	 	Amendments. The Employer shall have the right to amend the Plan from
time to time, subject to Section VIII.C, by an instrument in writing which has been
executed on the Employer’s behalf by an officer thereof or by vote of its Board of
Directors.
	 
	 	B.	 	Termination of Plan. This Plan is strictly a voluntary undertaking on
the part of the Employer and shall not be deemed to constitute a contract between the
Employer and any Eligible Employee (or any other employee) or a consideration for, or
an inducement or condition of employment for, the performance of the services by any
Eligible Employee (or other employee). The Employer reserves the right to terminate
the Plan at any time, subject to Section VIII.C, by an instrument in writing which has
been executed on said Employer’s behalf by an officer thereof or by vote of its Board
of Directors.
	 
	 	C.	 	Existing Rights. No amendment or termination of the Plan shall
adversely affect the rights of any Participant with respect to amounts credited to his
or her Account that are attributable to Elective Deferrals or Discretionary Credits
credited prior to the date of such amendment or termination. Any termination of

9

 

	 	 	 	the Plan will cause each Participant to be 100% Vested in his or her Account,
notwithstanding Section V.D.

	 	D.	 	Assignment. The rights and obligations of the Employer shall enure to
the benefit of and shall be binding upon its successors and assigns.

IX. MISCELLANEOUS

	 	A.	 	No Funding. The Plan constitutes a mere promise by the Employer to
make benefit payments to such Participants and beneficiaries in the future and
Participants and beneficiaries shall have the status of general unsecured creditors of
the Employer. Any Accounts established pursuant to the Plan shall remain the property
of the Employer until distributed, and nothing in the Plan will otherwise be construed
to create a trust or to obligate the Employer or any other person to segregate a fund,
purchase an insurance contract, or in any other way currently to fund the future
payment of any benefits hereunder, nor will anything herein be construed to give any
employee or any other person rights to any specific assets of the Employer or of any
other person. The Employer may, in its sole discretion, create a grantor trust to pay
its obligations hereunder, but shall have no obligation to do so. In all events, it is
the intent of the Employer that the Plan be treated as unfunded for tax purposes and
for purposes of Title I of ERISA.
	 
	 	B.	 	Nonassignability. None of the benefits, payments, proceeds or claims
of any Participant or beneficiary shall be subject to any claim of any creditor of any
Participant or beneficiary and, in particular, the same shall not be subject to
attachment or garnishment or other legal process by any creditor of such Participant or
beneficiary, nor shall any Participant or beneficiary have any right to alienate,
anticipate, commute, pledge, encumber, sell, transfer or assign any of the benefits or
payments or proceeds which he may expect to receive, contingently or otherwise, under
the Plan.
	 
	 	C.	 	Limitation of Participants’ Rights. Participation in the Plan shall
not give any Eligible Employee the right to be retained in the employ of the Employer
or any right or interest in the Plan other than as herein provided. The Employer
reserves the right to dismiss any Eligible Employee without any liability for any claim
against the Employer, except to the extent provided herein.
	 
	 	D.	 	Receipt and Release. Any payment to any Participant or beneficiary in
accordance with the provisions of the Plan shall, to the extent thereof, be in full
satisfaction of all claims against the Employer and the Plan Administrator under the
Plan, and the Plan Administrator may require such Participant or beneficiary, as a
condition precedent to such payment, to execute a receipt and release to such effect.
If any Participant or beneficiary is determined by the Plan Administrator to be
incompetent by reason of physical or mental disability (including minority) to give a
valid receipt and release, the Plan Administrator may cause the payment or payments
becoming due to such person to be made to another person for his or

10

 

	 	 	 	her benefit without responsibility on the part of the Plan Administrator or the
Employer to follow the application of such funds.
	 
	 	E.	 	Government Regulations. It is intended that this Plan will comply with
all applicable laws and government regulations, and the Employer shall not be obligated
to perform an obligation hereunder in any case where, in the opinion of the Employer’s
counsel, such performance would result in the violation of any law or regulation.
	 
	 	F.	 	Governing Law. The Plan shall be construed, administered, and governed
in all respects under and by the laws of the State of Georgia. If any provision shall
be held by a court of competent jurisdiction to be invalid or unenforceable, the
remaining provisions hereof shall continue to be fully effective.
	 
	 	G.	 	Headings and Subheadings. Headings and subheadings in this Plan are
inserted for convenience only and are not to be considered in the construction of the
provisions hereof.

     IN WITNESS WHEREOF, the Employer has caused the Plan to be executed by its duly authorized
officer this  7th  day of January, 2008.

	 	 	 	 	 
	 	Total System Services, Inc.

 	 
	 	By:  	/s/ Ryland Harrelson
 	 
	 	 	Title:      Executive Vice President 	 
	 	 	 	 

11

 

	 	 	 	 	 

Exhibit “A”

Merged Plans

	 	 	 	 	 
	Plan’s Name	 	Date of Merger	 	Terms and Conditions
	 
	 	 	 	 
	Vital Processing Services, 

LLC Deferred Retention 

Compensation Plan

	 	July 8, 2005
	 	New distribution elections
permitted until 7/31/05
for participants who have
not separated from service
(separated participants
Stephen Swope will be paid
in a lump sum in August of
2005 and Glen Hunter will
be paid in May of 2006).
New distribution elections
may be made for 1-15 years
and on annual or monthly
basis; other distribution
provisions governed by
TSYS Plan. Contribution
elections grandfathered
(including elections for
percentages and specific
dollar amounts) so long as
compliant with Internal
Revenue Code Section 409A.
	 
	 	 	 	 
	Vital Processing Services, 

LLC Long-Term Incentive 

Plan

	 	July 8, 2005
	 	New distribution elections
permitted until 7/31/05
for participants who have
not separated from
service. New distribution
elections may be made for
1-15 years and on annual
or monthly basis; other
distribution provisions
governed by TSYS Plan.
Contribution elections
grandfathered (including
elections for percentages
and specific dollar
amounts) so long as
compliant with Internal
Revenue Code Section 409A.

12

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