Exhibit 10.6
NONQUALIFIED DEFERRED COMPENSATION PROGRAM
INCLUDING Section 401(k) TRANSFER
ADOPTION AGREEMENT
The Company named below hereby establishes a Nonqualified
Deferred Compensation Program for eligible Employees as provided
in this Adoption Agreement and the Basic Program Document.
Note: This document contains a feature allowing Participants to
elect to have their Deferrals and Company matching contributions
cashed out or transferred into the Company's Cash or Deferred
Plan annually at the end of each calendar year. In this
connection, the plan year for the Cash or Deferred Plan must be
the calendar year or this document may not be used.
I Company Information
(a) Name and Address:
RightCHOICE Managed Care, Inc.
0000 Xxxxxxxx Xxxxxx
St. Louis, Missouri 63103-2275
(b) Telephone Number: 3 1 4 - 9 2 3 - 4 4 4 4.
(c) Tax ID Number: 4 3 - 1 6 7 4 0 5 2 .
(d) Program Name: RightCHOICE Managed Care, Inc.
Executive Deferred Compensation Plan
II Definitions
(a) Benefit Distribution Date:
[x] During January of the Program Year following
a Distributable Event.
[ ] ________ days (not more than 30) following a
Distributable Event.
(b) Distributable Event:
The following Distributable Events are in addition
to those listed at paragraph 6.2 of the Basic
Program Document.
[ ] Upon completion of _______ Years of Service
determined with reference to the Employee's
date of hire.
[x] Other as follows: A distribution year
elected by the Participant which is not
earlier than the fifth year after the
year of the deferral; provided, however,
that the same distribution year shall
apply for all types of contributions for
which this option is selected on the
Participant's election for the applicable
calendar year.
Unforeseeable financial emergency which is
defined as an unexpected need for cash
arising from an illness, casualty loss,
sudden financial reversal, or other such
unforeseeable occurrence. The amount of the
benefit distributed shall be limited to the
amount necessary to meet the emergency not in
excess of the termination benefit which the
Participant would have been entitled to if he
had a termination of employment on the date
of the determination.
(c) Effective Date:
New Program: The Program shall be effective as
of__________.
Amended Program: The amended provisions of the
Program shall be effective as of
February 1, 1998; provided, however,
that Deferral Contributions and
Company matching and discretionary
contributions attributable to periods
prior to January 1, 1998, and
earnings and losses thereon will be
distributed in accordance with a
Participant's elections under the
provisions of the Plan as in effect
on December 31, 1997. A copy of the
Plan as in effect on December 31,
1997 is attached hereto as Exhibit A
and incorporated by reference herein.
(d) Entry Date:
[x] The Effective Date of the Program. This
option applies only to those Employees who
satisfy the eligibility requirements of
Article II of the Basic Program Document on
the Effective Date of the Amended Program.
If this option is chosen, the period of
service upon which deferrals are based shall
commence with the first payroll period
subsequent to the deferral election and the
Effective Date of the Amended Program.
[x] First day of the month following the date on
which the Employee satisfies the Program's
eligibility requirements.
[ ] First day of the calendar quarter following
the date on which the Employee satisfies the
Program's eligibility requirements.
(e) Retirement:
[x] Termination of employment on or after age 65
[x] Termination of employment on or after age 55 and
5 years of service
(f) Salary
[x] A Participant's annual base salary, any
payments for overtime hours, vacation pay,
compensation paid in lieu of vacation, and
holiday pay, but excluding any severance
allowances, Incentive awards and other forms
of incentive compensation, Savings Plan or
other qualified plan contributions
made by the Company, Retirement Plan or other qualified
plan or supplemental pension plan benefits,
retainers, insurance premiums or benefits,
reimbursements, income from stock options and
stock appreciation rights, and all other
payments.
(g) Valuation Date (select one):
[x] Daily
[ ] As of the last day of each Month.
[ ] As of the last day of each calendar Quarter
[ ] As of June 30 and December 31
[ ] December 31
III Eligibility Requirements (select one)
(a) Nomination By Board:
[x] An Employee shall be eligible to participate
upon being named an eligible Employee or
class of employee by resolution of the Board
of Directors of the Company.
IV Employee Deferrals
(a) Salary Deferral
[x] A dollar amount specified by a Participant
from a minimum of $1,000.00 to a maximum of
90% of base Salary in increments
of $1,000.00, with respect to each Program
Year.
(b) Incentive Award Deferral
[x] A percent from a minimum of 10% to a
maximum of 100% with respect to incentive
earnings paid during the calendar year.
(c) Care Contribution Deferral
[x] The portion of the Deferral Amount
elected by the Participant under the Savings
Plan which exceed the statutory maximum
contribution allowable under the Savings Plan
for the Plan Year on behalf of the
Participant.
V Company Match
Note: The matching contribution provisions of this
Program must be the same or more liberal than those
contained in the Cash or Deferred Plan to coordinate
with the cashout/transfer provisions of this Program.
(a) Restoration Match
[x] The Company shall contribute 60% of the first
5% of compensation deferred to this plan, to
a maximum of 3% of participant's compensation
for the Plan Year, reduced by the matching
contribution made on behalf of the
Participant for the Plan Year under the
Savings Plan. If there is a change in the
formula for making matching contributions
under the Savings Plan, the matching
contribution formula under this Plan will
automatically change to correspond to the new
matching contribution formula under the
Savings Plan.
(b) Deferral Based Match
[x] The Company shall make an additional
contribution to restore any Company matching
or discretionary contributions which a
Participant loses under the Savings Plan on
account of the Participant's deferrals under
this Plan, which are not restored under the
Restoration Match described above.
(c) Limitations (select one or more):
[ ] The matching contribution shall not
exceed $____________ for any Participant.
[x] The Company shall not match any Deferral
in excess of 5% of the Participant's
Compensation.
(d) Eligibility For Match (select one or more):
[x] All Participants who have made deferrals
under this Program for the Program Year.
[ ] Participants employed on the last day of a
Program Year for which a matching
contribution is made.
(e) Cashout Amount (select one):
If a Participant elects to cash out his or her
Deferrals for a Program Year, the Administrator
shall take the following action with respect to
any Company matching contribution attributable to
such Deferral:
[ ] The Company matching contribution shall be
distributed to the Participant along with the
Deferral.
[ ] The Company matching contribution shall be
retained in the Program as part of the
Participant's account and shall be
administered as provided by the Program.
VI Company Discretionary Contributions
(a) Amount (select one or more):
[x] An amount determined in the discretion of the Company.
[ ] An amount determined by the following formula:
______________________________________________________
______________________________________________________
(b) Allocation Formula (select one):
[ ] Contributions are allocated in proportion to
each eligible Participant's Compensation.
[x] Other as follows: Discretionary contributions are
allocated to each Participant to the
extent necessary to restore any
Company discretionary contributions
which can not be allocated to a
Participant's account under the
Savings Plan due to limitations
imposed under Sections 401(a)(17)
and/or 415(c) and (e) of the
Internal Revenue Code which are
not restored under Section V(a)
or (b) above.
(c) Eligibility For Allocation (select one or more):
[ ] All Participants employed at any time during
a Program Year for which a contribution is
made.
[ ] Participants employed on the last day of a
Program Year for which a contribution is
made.
[x] Participants eligible to receive a
discretionary contribution for the Plan Year
under the Savings Plan.
VII Vesting
Participants shall always have a fully vested and
nonforfeitable right to benefits attributable to Deferrals
made under the Program. Participants shall acquire a vested
interest in benefits attributable to Company discretionary
and matching contributions as follows:
[ ] Participants shall be fully vested in [ ] Company
[ ] Discretionary and [ ] Matching contributions.
[x] A Participant's vested benefit shall be determined
from the following schedule:
Percentage Vested
Credited Service Discretionary Matching
Less than one year 0% 0%
One year 0% 0%
Two years 0% 0%
Three years 33 1/3% 33 1/3%
Four years 66 2/3% 66 2/3%
Five years 100% 100%
Six years _____% _____%
Seven or more years _____% _____%
[x] 100% vesting upon termination of employment as a
result of death, disability or retirement on or
after age 65.
VIII Supplemental Retirement Benefits
[x] Benefits accrued under the Blue Cross and Blue
Shield of Missouri Supplemental Retirement Plan have
been merged into this Plan.
IX Participant Account Expenses
Each Participant Account shall be reduced by its pro
rata share for the relevant period, of:
[ ] Program administrative expenses .
[ ] Income taxes paid by the Company attributable to
the Program.
[x] Investment Management fees.
X Investment Preference
Participants [x] shall [ ] shall not be permitted to
indicate investment preferences for their [x] Deferrals
and [x] Company contributions. If preferences are
permitted, Participants shall be authorized to submit a
nonbinding request to change an existing investment
preference [ ] daily [x] monthly or [ ] quarterly.
XI Form Of Payment for Deferral Contributions, Matching
Contributions and Discretionary Contributions attributable
to periods commencing on or after February 1, 1998: (select
one or more)
(a) Retirement
[x] Lump sum.
[x] Installment payments. The payment period may not
exceed the life expectancy of the Participant and
his or her Beneficiary (provided that the
Beneficiary is an individual).
[ ] monthly installment payments over a
period of ___________ years.
[ ] quarterly installment payments over a
period of ___________ years.
[x] annual installment payments over a
period of 5, 10 or 15 years.
(b) Other Distributable Event
[x] Lump Sum Only.
(c) Automatic Cash-Out
[x] At the discretion of the Committee,
if the balance of a Participant's Accounts
payable to the Participant or the portion of
the Participant's Accounts payable to a
Beneficiary is less than $25,000, the Company
may pay the benefit in a single lump sum.
* Deferral Contributions, Matching Contributions and
Discretionary Contributions attributable to periods
commencing prior to February 1, 1998 will be
distributed in accordance with a Participant's
elections under the provisions of the Plan as in effect
January 31, 1998.
** Supplemental Retirement Benefits will be
distributed in accordance with the provisions of the
Blue Cross and Blue Shield of Missouri Supplemental
Retirement Plan.
Participant's account balance will represent total amount
due Participant at time payment due under this section.
XII Change In Form of Payment
A Participant, subject to the approval of the Company,
may change the form of payment for any of his benefits
under the Plan; provided, however, that no such change
will be effective if made within two (2) years of the date
of a Distributable Event.
XIII Miscellaneous
If a Participant becomes entitled to a distribution of
benefits under the Plan, and if at such time the
Participant has outstanding any debt, obligation, or other
liability representing an amount owing to the Company,
then the Company, in its discretion may offset such amount
owed to it against the amount of benefits otherwise
distributable.
Any dispute between a Participant and the Company as to
the interpretation or application of the provisions of the
Plan or a Deferral Agreement and the amounts payable
hereunder shall be determined by binding arbitration
before a single arbitrator in St. Louis, Missouri in
accordance with the Commercial Arbitration Rules of the
American Arbitration Association then in effect. Judgment
may be entered on the arbitrator's award in any court of
competent jurisdiction.
Each Participant shall cooperate with the Company by
furnishing any and all information requested by the
Company in order to facilitate the payment of benefits
hereunder, taking such physical examinations as the
Company may deem necessary and taking such other relevant
action as may be requested by the Company. If a
Participant refuses to cooperate, the Company shall have
no further obligation to the Participant under the Plan,
other than payment to such Participant of the cumulative
reductions in Salary and Incentive Awards theretofore made
pursuant to this Plan. If a Participant commits suicide
during the two (2) year period beginning on the later of
(a) the first day on which he participates in the Plan or
(b) the first day of the Participant's deferral Account
for any new Unit under the Plan, or if the Participant
makes any material misstatement of information or
nondisclosure of medical history, then no benefits with
respect to any affected Deferral Account will be payable
hereunder to such Participant or his Beneficiary, other
than payment of the cumulative reductions in Salary and
Incentive Awards theretofore made pursuant to this Plan,
provided, that in the Company's sole discretion, benefits
may be payable in an amount reduced to compensate the
Company for any loss, cost, damage or expense suffered or
incurred by the Company.
XIV Signature
This Adoption Agreement and Basic Program Document were
adopted
by the Company the 4th day of Sept. 1998
Signed for the Company by: Xxxx X'Xxxxxx
Title of Individual: CEO
Signature: /s/ Xxxx X'Xxxxxx
