EXHIBIT 4
HCR MANOR CARE
STOCK PURCHASE AND RETIREMENT SAVINGS 401(K) PLAN
Effective Date: January 1, 1986
Restated as of: January 1, 2003
HCR MANOR CARE
STOCK PURCHASE AND RETIREMENT SAVINGS 401(K) PLAN
INDEX
Page
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ADOPTION AGREEMENT.............................................................................................. vi
ARTICLE I DEFINITIONS.......................................................................... 1
1.01 Account.............................................................................. 1
1.02 Accounting Date...................................................................... 1
1.03 Aggregation Group.................................................................... 1
1.04 Annual Compensation.................................................................. 1
1.05 Break in Service..................................................................... 2
1.06 Code................................................................................. 2
1.07 Committee........................................................................... 2
1.08 Company.............................................................................. 2
1.09 Company Matching Contributions....................................................... 2
1.10 Company Discretionary Contributions.................................................. 2
1.11 Compensation.......................................................................... 2
1.12 Covered Employee...................................................................... 2
1.13 Determination Date.................................................................... 2
1.14 Direct Rollover...................................................................... 3
1.15 Distributee.......................................................................... 3
1.16 Effective Date........................................................................ 3
1.17 Eligible Employee.................................................................... 3
1.18 Eligible Retirement Plan............................................................. 3
1.19 Eligible Rollover Distribution........................................................ 3
1.20 Employee............................................................................. 4
1.21 Employee After-Tax Contributions...................................................... 4
1.22 Employee Pre-Tax Contributions........................................................ 4
1.23 Employer............................................................................. 4
1.24 Employment Commencement Date.......................................................... 5
1.25 Employment Recommencement Date........................................................ 5
1.26 Employment Unit....................................................................... 5
1.27 Entry Date........................................................................... 5
1.28 ERISA................................................................................ 5
1.29 Excess Employee Pre-Tax Contributions................................................ 5
1.30 Excess Employee Pre-Tax Contribution Deferrals....................................... 5
1.31 Fiduciary............................................................................. 5
1.32 Five-Percent Owner .................................................................. 5
1.33 Former Employee....................................................................... 5
1.34 Highly Compensated Employee........................................................... 6
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1.35 Hour of Service....................................................................... 6
1.36 Inactive Participant.................................................................. 7
1.37 Individual Tax Savings Contributions.................................................. 7
1.38 Key Employee.......................................................................... 7
1.39 Leased Employee....................................................................... 7
1.40 Nonhighly Compensated Employee........................................................ 8
1.41 Non-Key Employee...................................................................... 8
1.42 Normal Retirement Age................................................................. 8
1.43 Normal Retirement Date................................................................ 8
1.44 Participant........................................................................... 8
1.45 Period of Service .................................................................... 8
1.46 Period of Severance................................................................... 9
1.47 Plan.................................................................................. 9
1.48 Plan Administrator.................................................................... 9
1.49 Plan Year............................................................................. 9
1.50 Qualified Election.................................................................... 9
1.51 Severance from Service Date........................................................... 9
1.52 Trust................................................................................. 9
1.53 Trust Agreement....................................................................... 9
1.54 Trustee............................................................................... 9
1.55 Trust Fund........................................................................... 10
1.56 Valuation Date....................................................................... 10
1.57 Year of Service...................................................................... 10
ARTICLE II CONTRIBUTIONS........................................................................ 11
2.01 Contributions by Employer............................................................ 11
(a) Employee Pre-Tax Contributions.............................................. 11
(b) Company Matching Contributions (CMC)........................................ 11
(c) Company Discretionary Contributions (CDC)................................... 11
2.02 Employee Pre-Tax Contribution Option................................................. 12
2.03 Employee After-Tax Contribution Option............................................... 13
2.04 Individual Tax Savings Option ....................................................... 13
2.05 Change in Contributions.............................................................. 14
2.06 Contributions from Previous Plans; Rollover Contributions............................ 14
2.07 Time for Payment of Contributions.................................................... 15
2.08 Reversion of Funds to Employer....................................................... 15
2.09 Section 415 Limitations.............................................................. 15
(a) Limits Imposed.............................................................. 15
(b) Adjustments Where Limits Otherwise Exceeded................................. 16
2.10 Military Service..................................................................... 16
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ARTICLE III ELIGIBILITY................................................................................... 17
3.01 Employees on the Effective Date...................................................... 17
3.02 Highly Compensated Employees......................................................... 17
3.03 Other Employees...................................................................... 17
3.04 Transfer of Employment............................................................... 17
3.05 Eligibility Upon Reemployment........................................................ 18
ARTICLE IV PARTICIPANT ACCOUNTS.......................................................................... 19
4.01 Separate Accounts.................................................................... 19
(a) Employee Pre-Tax Contributions Account..................................... 19
(b) Employee After-Tax Contributions Account................................... 19
(c) Company Matching Contributions Account..................................... 19
(d) Rollover Contributions Account............................................. 19
(e) Individual Tax Savings Contributions Account............................... 19
ARTICLE V ALLOCATIONS.......................................................................... 20
5.01 Annual Allocations................................................................... 20
5.02 Nondiscrimination Requirements for Employee Pre-Tax
Contributions........................................................................ 20
5.03 Nondiscrimination Requirements for Employee After-Tax
Contributions, Company Matching Contributions and Company
Discretionary Contributions.......................................................... 21
5.04 Nondiscrimination Requirements - Test for Multiple Use............................... 22
5.05 Annual Report to Participants........................................................ 22
ARTICLE VI INVESTMENT OF THE TRUST FUNDS................................................................. 23
6.01 Investment Funds..................................................................... 23
6.02 Limitations on Investment of the Trust Funds......................................... 23
6.03 Named Fiduciary...................................................................... 24
ARTICLE VII VALUATION OF TRUST FUNDS...................................................................... 25
7.01 Valuation of the Individual Investment Funds......................................... 25
ARTICLE VIII DISTRIBUTIONS AND BENEFITS TO PARTICIPANTS.................................................... 26
8.01 Upon Retirement, Disability or Other Events.......................................... 26
8.02 Notice Requirements.................................................................. 27
8.03 Certification by Committee........................................................... 28
8.04 Method and Medium of Payment......................................................... 28
8.05 Distributions After Death of a Participant........................................... 30
8.06 Right to Have Accounts Transferred................................................... 30
8.07 Withdrawals.......................................................................... 31
8.08 Loans to Participants................................................................ 33
8.09 Distribution of Excess Employee Pre-Tax Contribution Deferrals....................... 35
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8.10 Restrictions on Distributions of Employee Pre-Tax Contributions.......................36
8.11 Eligible Rollover Distributions...................................................... 36
8.12 Vesting.............................................................................. 37
8.13 Military Service..................................................................... 40
8.14 Distributions to Alternate Payees.................................................... 41
ARTICLE IX VOTING OF COMPANY SHARES RESPONSE TO TENDER OR EXCHANGE OFFER................................. 42
9.01 Voting of Company Shares.................................................... 42
9.02 Response to Tender or Exchange Offer........................................ 42
9.03 Furnishing of Notice........................................................ 42
ARTICLE X TRUST......................................................................................... 43
10.01 Trust Agreement...................................................................... 43
ARTICLE XI ADMINISTRATION OF THE PLAN.................................................................... 44
11.01 In General........................................................................... 44
11.02 Members of Committee................................................................. 44
11.03 Absence or Disability of Member...................................................... 44
11.04 Duties of Committee.................................................................. 44
11.05 Authority of Committee............................................................... 44
11.06 Indemnification...................................................................... 45
ARTICLE XII ESTABLISHMENT, AMENDMENT, MODIFICATION AND TERMINATION OF PLAN AND TRUST...................... 46
12.01 In General.................................................................. 46
12.02 Amendment or Modification of Plan........................................... 46
12.03 Termination of the Plan and the Trust....................................... 47
(a) Termination of the Plan..................................................... 47
(b) Termination of the Trust.................................................... 47
ARTICLE XIII TOP HEAVY PROVISIONS.......................................................................... 48
13.01 Determination of Top Heavy Status.................................................... 48
13.02 Minimum Contribution................................................................. 48
ARTICLE XIV MISCELLANEOUS................................................................................. 49
14.01 Participant's Rights................................................................. 49
14.02 Prohibition Against Reversion........................................................ 49
14.03 Assignment or Alienation of Benefits................................................. 49
14.04 Qualified Domestic Relations Order................................................... 49
14.05 Third Party Immunity................................................................. 51
14.06 Delegation of Authority.............................................................. 51
14.07 Construction of Plan................................................................. 51
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14.08 Gender and Number.................................................................... 51
14.09 Claims Procedure..................................................................... 51
14.10 Xxxxxx, Consolidation, or Transfer of Assets......................................... 52
14.11 Allocation of Responsibilities....................................................... 52
14.12 Headings............................................................................. 52
APPENDIX A LIST OF COVERED EMPLOYERS AND EMPLOYEES..............................................A-1
APPENDIX B MERGED PLANS ........................................................................B-1
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HCR MANOR CARE
STOCK PURCHASE AND RETIREMENT SAVINGS 401(K) PLAN
ADOPTION AGREEMENT
In exercise of the powers and authority conferred upon and
reserved to Heartland Employment Services, Inc. (hereinafter called "HES)", an
Ohio corporation, under and by virtue of Article XII of the HCR Manor Care Stock
Purchase and Retirement Savings Plan, HES hereby renames, amends and restates
said Plan, to read as set forth in the document attached hereto and incorporated
herein, entitled "HCR Manor Care Stock Purchase and Retirement Savings 401(k)
Plan", hereinafter called the "Amended and Restated Plan" and in such document
called the "Plan".
In no event shall the adoption of the Amended and Restated
Plan pursuant to this instrument cause any benefit under the Plan that is
accrued or treated as accrued for purposes of section 411(d)(6) of the Internal
Revenue Code ("Code") to be less than such benefit immediately before the
adoption of this Amended and Restated Plan.
The Amended and Restated Plan shall be subject to a written
favorable determination of the Internal Revenue Service and such further
amendments as shall be necessary to maintain the continued qualification of the
Plan under section 401 of the Internal Revenue Code and the continued tax exempt
status of the Trust under section 501 of said Code. Upon receipt of such
determination, the Amended and Restated Plan shall be effective January 1, 2003,
except as otherwise provided herein.
The primary purpose of the Plan is to encourage Employee
savings, and to provide benefits during an Employee's participation in the Plan
and upon retirement, death, disability or termination of employment.
IN WITNESS WHEREOF, HES has caused the Amended and Restated
Plan to be executed by its duly authorized officers and its corporate seal to be
hereunto affixed this 20 day of December, 2002.
HEARTLAND EMPLOYMENT SERVICES, INC.
by /s/ Xxxx X. O'Xxxxx
---------------------------------
Xxxx X. O'Xxxxx,
Vice President, Director of Human Resources
and Labor Relations
ATTEST:
/s/ Xxxxxxx X. Xxxxxxx
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ARTICLE I
DEFINITIONS
1.01 "ACCOUNT." Account(s) means, when used individually or
collectively, the Company Contributions Account, Employee
After-Tax Contributions Account, Employee Pre-Tax
Contributions Account, Individual Tax Savings Contributions
Account, and Rollover Contributions Account [as set forth
respectively in Section 4.01 hereof (Separate Accounts)], as
the case may be.
1.02 "ACCOUNTING DATE." Accounting Date means the date on which
each investment fund is valued pursuant to Article VII hereof
(Valuation of Trust Funds).
1.03 "AGGREGATION GROUP." Aggregation Group means the following:
(a) Each plan of the Employer (including a terminated
plan if it was maintained within the last five years
ending on the Determination Date for the Plan Year
being tested for top heavy status) in which a Key
Employee is a Participant in the Plan Year containing
the Determination Date or any of the four preceding
Plan Years;
(b) Each other plan of the Employer that, during the
period described in (a) above, that allows a plan
covering a Key Employee to meet qualification
requirements under the coverage rules of section 410
or the anti-discrimination rules of section 401(a)(4)
of the Code;
(c) At the option of the Employer, any other Plan
maintained by the Employer as long as the expanded
Aggregation Group including such plan or plans
continues to satisfy the coverage rules of section
410 and the anti-discrimination rules of section
401(a)(4) of the Code.
1.04 "ANNUAL COMPENSATION." Annual Compensation means Compensation
paid to an Employee by the Employer during the Plan Year
including base salary, overtime and shift differentials and
any Employer Contributions made pursuant to Section 2.01(a)
hereof (Employee Pre-Tax Contributions), but excluding any
bonuses and gain-sharing payments. In addition to other
applicable limitations set forth in the Plan, and
notwithstanding any other provision of the Plan to the
contrary, for Plan Years beginning on or after January 1,
2002, the Annual Compensation of each Participant taken into
account under the Plan shall not exceed $200,000, as adjusted
for increases in the cost of living in accordance with section
401(a)(17)(B) of the Code. The cost of living adjustment in
effect for a calendar year applies to any period, not
exceeding twelve months, over which Annual Compensation is
determined beginning in such calendar year.
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1.05 "BREAK IN SERVICE." Break in Service means a twelve
consecutive-month period measured from an Employee's Severance
from Service Date during which the employee does not perform
an Hour of Service for the Company. An Employee shall not
incur the first twelve month Period of Severance that would
otherwise be counted if the Employee is absent by reason of
pregnancy or birth of a child of the individual, adoption of a
child by such individual or caring for such child for a period
beginning immediately following such birth or placement.
1.06 "CODE." Code means the Internal Revenue Code of 1986, as
amended from time to time.
1.07 "COMMITTEE." The Committee means the Heartland Employment
Services, Inc. Employee Benefits Committee as appointed by the
Chief Executive Officer of HES or another appropriate officer
or officers of HES as that Officer's delegate.
1.08 "COMPANY." Company means the Employer and any other entity
which is a member of the same controlled group of corporations
as defined in section 1563(a) of the Code.
1.09 "COMPANY MATCHING CONTRIBUTIONS." Company Matching
Contributions (CMC) means those contributions contributed by
an Employer to a Participant's Company Matching Contributions
Account in accordance with Section 2.01(b) hereof (Company
Matching Contributions).
1.10 "COMPANY DISCRETIONARY CONTRIBUTIONS." Company Discretionary
Contributions (CDC) means those contributions contributed by
an Employer to a Participant's Company Matching Contributions
Account in accordance with Section 2.01(c) hereof (Company
Discretionary Contributions).
1.11 "COMPENSATION." Compensation means compensation within the
meaning of section 414(s) of the Code. Except for purposes of
Section 2.09 hereof (Section 415 Limitations), Compensation
shall include any amount which is contributed by the Employer
pursuant to a salary reduction agreement which is not
includible in the gross income of the Employee under sections
125, 402(a)(8), 402(h) or 403(b) of the Code.
1.12 "COVERED EMPLOYEE." Covered Employee means an Employee of an
Employer who is working in a position which is classified by
the Employer for benefit coverage as shown on Appendix A
hereof (List of Covered Employers and Employees).
1.13 "DETERMINATION DATE." Determination Date means for any Plan
Year subsequent to the first Plan Year, the last day of the
preceding Plan Year. For the first Plan Year of the Plan, the
Determination Date means the last day of that year.
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1.14 "DIRECT ROLLOVER." Direct Rollover means a payment by the Plan
to an Eligible Retirement Plan specified by the Distributee.
1.15 "DISTRIBUTEE." Distributee means an Employee or Former
Employee who receives a distribution from the Plan. A
Distributee shall also include a spouse, child, parent or
other beneficiary of an Employee or Former Employee who
receives a distribution from the Plan as a beneficiary of the
Employee's or Former Employee's. In addition, the Employee's
or Former Employee's spouse or former spouse who is the
alternate payee under a qualified domestic relations order, as
defined in section 414(p) of the Code, are Distributees with
regard to the interest of the spouse or former spouse.
1.16 "EFFECTIVE DATE." Effective Date means the date elected by the
Employer as the effective date of the Plan. The Effective Date
of the HCR Manor Care Stock Purchase and Retirement Savings
401(k) Plan is January 1, 2003. The original Effective Date of
the Plan is January 1, 1986.
1.17 "ELIGIBLE EMPLOYEE." Eligible Employee means any Employee,
excluding any person who is a Leased Employee, who meets the
eligibility requirements of Article III hereof (Eligibility).
1.18 "ELIGIBLE RETIREMENT PLAN." Eligible Retirement Plan means:
(a) an individual retirement account described in section
408(a) of the Code,
(b) an individual retirement annuity described in section
408(b) of the Code,
(c) an annuity plan described in section 403(a) of the
Code, or
(d) a qualified trust described in section 401(a) of the
Code,
that accepts the Distributee's Eligible Rollover Distribution.
However, in the case of an Eligible Rollover Distribution to
the surviving spouse, an Eligible Retirement Plan is an
individual retirement account or individual retirement
annuity.
1.19 "ELIGIBLE ROLLOVER DISTRIBUTION." Eligible Rollover
Distribution means any distribution of all or any portion of
the balance to the credit of the Distributee, except that an
Eligible Rollover Distribution does not include:
(a) any distribution that is one of a series of
substantially equal periodic payments (not less
frequently than annually) made for the life (or life
expectancy) of the Distributee or the joint lives (or
joint life expectancies) of the Distributee and the
Distributee's designated beneficiary, or for a
specified period of ten years or more;
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(b) any distribution to the extent such distribution is
required under section 401(a)(9) of the Code; and
(c) any distribution on account of a financial hardship
(see the definition of a "financial hardship" in
Section 8.07 hereof (Withdrawals)).
1.20 "EMPLOYEE." Employee means a common law employee of an
Employer, including a Leased Employee. Notwithstanding the
foregoing, if such Leased Employees constitute less than 20%
of the Employer's Nonhighly Compensated Employees, the term
"Employee" shall not include those Leased Employees covered by
a plan described in section 414(n)(5) of the Code unless
otherwise provided by the terms of the Plan.
1.21 "EMPLOYEE AFTER-TAX CONTRIBUTION CONTRIBUTIONS" Employee
After-Tax Contribution means those contributions contributed
by a Participant to the Participant's Accounts in accordance
with Section 2.03 hereof (Employee After-Tax Contribution
Option) which do not reduce the Participant's Compensation.
1.22 "EMPLOYEE PRE-TAX CONTRIBUTIONS." Employee Pre-Tax
Contributions (Employee Pre-Tax Contributions) means those
amounts which the Participant has elected to defer pursuant to
Section 2.02 hereof (Employee Pre-Tax Contribution Option)
which result in a reduction in the Participant's Compensation
and which are contributed by the Employer pursuant to Section
2.01(a) hereof (Employee Pre-Tax Contributions).
1.23 "EMPLOYER." Employer means Heartland Employment Services,
Inc., an Ohio corporation, which is sometimes referred to as
"HES", and its successors. Employer shall also mean each
Affiliated Employer, other corporation or business
organization, whether or not incorporated, which with the
written approval of HES adopts the Plan and maintains it for
the benefit of some or all of its employees at one or more of
its divisions, plants, departments or offices; provided,
however, that solely HES shall act as the "Employer" in
respect of any powers, duties or responsibilities assigned to
the "Employer" under the Plan. Any such corporation or other
business organization may terminate its participation in the
Plan at any time by giving written notice of its action to HES
and the Trustee, provided that on any such termination of
participation the employees of such corporation or other
business organization shall become Inactive Participants under
the Plan, whereby they shall have no further right to make or
receive contributions to their Accounts under the Plan
following such termination, and that such termination of
participation shall not constitute a termination of the Plan.
A list of the Employers which have adopted this Plan and the
related Eligible Employee groups together with effective
eligibility dates is as shown on Appendix A hereof (List of
Covered Employers and Employees).
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1.24 "EMPLOYMENT COMMENCEMENT DATE." Employment Commencement Date
means the date an Employee first was credited with an Hour of
Service for performing duties for either the Company or the
Employer."
1.25 "EMPLOYMENT RECOMMENCEMENT DATE" Employment Recommencement
Date means the date an Employee first was credited with an
Hour of Service for performing duties for the Company or an
Affiliate after a Break in Service.
1.26 "EMPLOYMENT UNIT." Employment Unit means the division,
department, office or group of the Employer.
1.27 "ENTRY DATE." Entry Date means the date an Eligible Employee
becomes a Participant hereunder, pursuant to the eligibility
requirements of Article III hereof (Eligibility).
1.28 "ERISA." ERISA means Employee Retirement Income Security Act
of 1974, as amended from time to time.
1.29 "EXCESS EMPLOYEE PRE-TAX CONTRIBUTIONS." Excess Employee
Pre-Tax Contributions means the amount necessary with respect
to a Participant to bring the Plan in compliance with the
nondiscrimination regulations of section 401(k) of the Code,
pursuant to the procedures outlined in Section 5.02 hereof
(Nondiscrimination Requirements for Employee Pre-Tax
Contributions).
1.30 "EXCESS EMPLOYEE PRE-TAX CONTRIBUTION DEFERRALS." Excess
Employee Pre-Tax Contribution Deferrals means the amount of a
Participant's Employee Pre-Tax Contributions to this Plan
which the Participant claims or the Committee determines,
pursuant to the procedure outlined in Section 8.09 hereof
(Distribution of Excess Employee Pre-Tax Contribution
Deferrals), are in excess of the amount allowable under
section 402(g) of the Code.
1.31 "FIDUCIARY." Fiduciary (or Named Fiduciary) means the person
having responsibility for the administration of the Plan.
1.32 "FIVE-PERCENT OWNER." Five-Percent Owner refers to a
Participant if such Participant is treated as a five-percent
owner as defined in section 416(i) of the Code (determined in
accordance with section 416 of the Code, but without regard to
whether the Plan is top-heavy).
1.33 "FORMER EMPLOYEE." Former Employee means any Employee who
terminated employment with the Employers.
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1.34 "HIGHLY COMPENSATED EMPLOYEE." Highly Compensated Employee"
means any Employee who:
(a) is a Five-Percent Owner during the current Plan Year
or was a Five-Percent Owner during the preceding Plan
Year, or
(b) performs service for the Employer during the current
Plan Year and who, during the preceding Plan Year
received Compensation from the Employer in excess of
$90,000 (as adjusted pursuant to section 415(d) of
the Code).
1.35 "HOUR OF SERVICE." Hour of Service means:
(a) Each hour for which an Employee is directly or
indirectly paid or entitled to payment, by either the
Company or the Employer for the performance of
duties; and
(b) Each hour for which an Employee is directly or
indirectly paid, or entitled to payment, by either
the Company or the Employer for reasons (such as
vacation, sickness, disability, or similar leave of
absence) other than for the performance of duties,
and for military leaves, or leaves for jury duty; and
(c) Each hour for which back pay, irrespective of
mitigation of damages, has been either awarded or
agreed to by either the Company or the Employer
provided that the same Hours of Service shall not be
credited under this subsection (c) and subsections
(a) or (b) above, as the case may be.
Hours of Service computed hereunder shall be computed in
accordance with Department of Labor Regulations, section
2530.200b-2(b) and (c), which is hereby incorporated herein by
reference thereto. In no event shall more than 501 Hours of
Service be credited for any one continuous period of absence
during or for which the Employee receives payment for
nonperformance of duties whether or not such period occurs in
a single computation period. An Employee who is absent from
work for maternity or paternity reasons shall receive credit
for the Hours of Service which would otherwise have been
credited to such Employee but for such absence, or in the case
in which such hours cannot be determined, eight Hours of
Service per day of such absence. For this purpose, an absence
from work for maternity or paternity reasons means an absence:
(a) by reason of the pregnancy of the Employee,
(b) by reason of a birth of a child of the Employee,
(c) by reason of the placement of a child with the
Employee in connection with
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the adoption of such child by such Employee, or
(d) for purposes of caring for such child for a period
beginning immediately following such birth or
placement.
Hours of Service credited under this paragraph shall be
credited:
(a) in the computation period in which the absence begins
if the crediting is necessary in order to give the
Participant 501 Hours of Service, or
(b) in all other cases, in the following computation
period.
1.36 "INACTIVE PARTICIPANT." Inactive Participant means a Former
Employee or an Employee who transfers to another unit of the
Company pursuant to Section 3.04 hereof (Transfer of
Employment), who is ineligible to make current contributions
and who has an Account balance in the Plan. Inactive
Participant also means an Employee who prior to the Employee's
Entry Date in the Plan maintains a Rollover Contributions
Account pursuant to Section 2.06 hereof (Contributions from
Previous Plans; Rollover Contributions).
1.37 "INDIVIDUAL TAX SAVINGS CONTRIBUTIONS." Individual Tax Savings
Contributions means those contributions made by the
Participant to the Plan or any predecessor plan prior to 1987
which were deductible from the Participant's Federal gross
income under section 219 of the Internal Revenue Code of 1954
but which are no longer deductible under the Code, and which
are referred to in Section 2.04 hereof (Individual Tax Savings
Option).
1.38 "KEY EMPLOYEE." Key Employee means any Employee or Former
Employee (and the beneficiaries of such Employee) who at any
time during the determination period was an officer of the
Employer if such individual's Annual Compensation exceeds 50%
of the dollar limitation set forth in section 415(b)(1)(A) of
the Code, an owner (or considered an owner under section 318
of the Code) or one of the ten largest interests in the
Employer (determined in accordance with section 416(i) of the
Code) if such individual's Annual Compensation exceeds 100% of
the dollar limitation set forth in section 415(c)(1)(A) of the
Code, a Five-Percent Owner of the Employer, or a one percent
owner of the Employer who has Annual Compensation of more than
$200,000 (as adjusted pursuant to section 415(d) of the Code).
1.39 "LEASED EMPLOYEE." Leased Employee means any person who is
treated as a leased employee pursuant to section 414(n) of the
Code. Contributions or benefits provided to a Leased Employee
by the leasing organization which are attributable to services
performed for the Affiliated Employer shall be treated as
provided by the Affiliated Employer.
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A Leased Employee shall not include any person if:
(a) such person is covered by a money purchase pension
plan maintained by the leasing organization
providing:
(1) a nonintegrated employer contribution rate
of at least 10% of compensation,
(2) immediate participation, and
(3) full and immediate vesting; and
(b) Leased Employees do not constitute more than 20% of
the Affiliated Employers' Nonhighly Compensated
Employees.
This definition of a Leased Employee is intended to satisfy
the requirements imposed by section 414(n)(6) of the Code and
shall be construed in a manner that will effect this intent.
This definition shall not be construed in a manner that would
impose requirements that are more stringent than those imposed
by section 414(n)(6) of the Code.
1.40 "NONHIGHLY COMPENSATED EMPLOYEE." Nonhighly Compensated
Employee means any Employee or Former Employee who at any time
during the determination period was not a Highly Compensated
Employee.
1.41 "NON-KEY EMPLOYEE." Non-Key Employee means any Employee or
Former Employee (and the designated beneficiaries of such
Employee) who at any time during the determination period was
not a Key Employee.
1.42 "NORMAL RETIREMENT AGE." Normal Retirement Age means the date
a Participant attains age 65.
1.43 "NORMAL RETIREMENT DATE." Normal Retirement Date means the
first day of the month immediately following the date a
Participant first attains Normal Retirement Age.
1.44 "PARTICIPANT." Participant means an Eligible Employee who is
making contributions or maintains account balances in the Plan
or under another defined contribution pension plan of the
Company meeting the requirements of section 401(a) of the
Code.
1.45 "PERIOD OF SERVICE." Period of Service means the period
between an Employee's Employment Commencement Date and
Severance from Service Date.
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1.46 "PERIOD OF SEVERANCE." Period of Severance means the period
between an Employee's Employment Commencement Date and
Severance from Service Date.
1.47 "PLAN." Plan means the HCR Manor Care Stock Purchase and
Retirement Savings 401(k) Plan, as set forth herein and as
amended from time to time and formerly known as the HCR Manor
Care Stock Purchase and Retirement Savings Plan.
1.48 "PLAN ADMINISTRATOR." Plan Administrator means the Fiduciary
or Named Fiduciary of the Plan, with respect to the specific
responsibilities and duties described in Section 11.04 hereof
(Duties of Committee).
1.49 "PLAN YEAR." Plan Year means the calendar year.
1.50 "QUALIFIED ELECTION." Qualified Election means the spouse's
consent to an alternative form of benefit and/or an
alternative beneficiary as provided in Section 8.04 hereof
(Method and Medium of Payment). Such consent must be in
writing and must be witnessed by a Plan representative or by a
notary public. Notwithstanding this consent requirement, if
the Participant establishes to the satisfaction of a Plan
representative that such written consent may not be obtained
because there is no spouse or the spouse cannot be located, or
for such other reasons as may be allowed by the Secretary of
the Treasury, a waiver will be deemed a Qualified Election.
Any consent necessary under this provision will be valid only
with respect to the spouse who signs the consent, or in the
event of a deemed Qualified Election, the designated spouse.
Additionally, a revocation of a prior waiver may be made by a
Participant without the consent of the spouse at any time
before the commencement of benefits. The number of revocations
shall not be limited.
1.51 "SEVERANCE FROM SERVICE DATE." Severance from Service Date
means the Participant terminates employment with the
Affiliated Employers or the Participant continues employment
with the Affiliated Employers but receives credit for less
than 501 Hours of Service for one or more consecutive Plan
Years.
1.52 "TRUST". Trust means the legal entity resulting from an
agreement between HCR Manor Care, Inc. and any amendments
thereto, by which Employer contributions shall be received,
held, invested and distributed to or for the benefit of
Participants, former Participants and designated
beneficiaries.
1.53 "TRUST AGREEMENT". Trust Agreement" means, with respect to
each Trust, the agreement between HCR Manor Care, Inc. and a
Trustee establishing such Trust, and any amendments thereto.
1.54 "TRUSTEE." Trustee means, with respect to each Trust, the
bank, trust company, individual or individuals which shall
accept the appointment to execute the duties of
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the Trustee of such Trust as set forth in a Trust Agreement.
1.55 "TRUST FUND." Trust Fund means, with respect to each Trust,
any property, real or personal, received by the Trustee of
such Trust, plus all income and gains and losses, expenses and
distributions chargeable thereto.
1.56 "VALUATION DATE." Valuation Date means the date occurring in
each Plan Year on which assets are valued and plan costs
computed. It shall either be the first or last day of the Plan
Year.
1.57 "YEAR OF SERVICE." Year of Service means a Plan Year during
which an Employee completes 1,000 or more Hours of Service.
Year of Service shall also include all Years of Service earned
by a Participant under provisions of this Plan as of December
31, 2002.
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ARTICLE II
CONTRIBUTIONS
2.01 CONTRIBUTIONS BY EMPLOYER
(a) EMPLOYEE PRE-TAX CONTRIBUTIONS. The Employer shall
contribute to the Trust Fund on behalf of each
Participant the full amount of Employee Pre-Tax
Contributions authorized by Participants.
(b) COMPANY MATCHING CONTRIBUTIONS (CMC). The Employer
shall contribute to the Trust Fund an amount equal to
50% of a Participant's Employee Pre-Tax
Contributions, not to exceed 3% of the Participant's
Annual Compensation on behalf of each Participant:
(1) who was employed on December 31 of the Plan
Year and had accumulated 1,000 or more Hours
of Service during the Plan Year,
(2) who retired during the Plan Year on or after
the Participant's Normal Retirement Date,
(3) who was involuntarily terminated during the
Plan Year on account of a layoff,
reduction-in-force or outsourcing of the
Participant's position, or
(4) who was terminated during the Plan Year on
account of a permanent and total disability
or death. For this purpose, the "total and
permanent disability" of any Participant
shall be determined by the Committee, in
accordance with uniform principles
consistently applied, upon the basis of such
evidence as the Committee deems necessary or
advisable.
For purposes of this Section 2.01(b), a Participant's
Employee Pre-Tax Contributions shall include Employee
Pre-Tax Contributions which are discontinued and
recharacterized as Employee After-Tax Contributions
by the Employer pursuant to Section 2.03 hereof
(Employee After-Tax Contribution Option).
CMC shall not be contributed on behalf of any
Participant who is classified by the Employer for
benefit coverage as a 'Benefit Level #14 Employee'.
(c) COMPANY DISCRETIONARY CONTRIBUTIONS (CDC). An
Employer may, but is under no obligation to do so,
contribute to the Trust Fund on behalf of each
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Eligible Employee or each Participant, as the case
may be, or a subsection of Eligible Employees or
Participants, as the case may be, a discretionary
amount. CDC shall not be contributed on behalf of any
Participant who is classified by the Employer for
benefit coverage as a 'Benefit Level #14 Employee'.
CMC and CDC, if applicable, shall be contributed on an annual
basis after the end of the Plan Year on or before the last day the Company is
required to file its federal income tax return, with extensions, for the
previous calendar year on behalf of each Participant:
CMC shall be invested in the Manor Care, Inc. Stock Fund. Such
contributions may be made in cash or at Manor Care, Inc.'s discretion, in the
form of treasury or authorized but unissued Manor Care, Inc. common shares,
valued at the mean between the highest and lowest prices at which said shares
are traded on the New York Stock Exchange on the date of such contribution. CDC
may be made in Manor Care, Inc. common share or in cash. If in common shares,
CDC contributions shall be invested in the Manor Care, Inc. Stock Fund. If in
cash, CDC contributions shall follow Participant investment elections.
CMC and CDC must meet the nondiscrimination requirements of
sections 401(a)(4) and 401(m) of the Code as described in Section 5.03 hereof
(Nondiscrimination Requirements for Employee After-Tax Contributions, CMC and
CDC Contributions). CMC shall not be reduced or refunded in the event Employee
Pre-Tax Contributions with respect to which CMC were made are distributed or
recharacterized pursuant to Section 5.02 hereof (Nondiscrimination Requirements
for Employee Pre-Tax Contributions), except as described in Section 5.03 hereof
(Nondiscrimination Requirements for Employee After-Tax Contributions, CMC and
CDC Contributions).
This Plan is designed to qualify as a profit-sharing plan for
purposes of sections 401(a), 401(k), 401(m), 402, 412 and 417 of the Code,
however, the Employer may make contributions to this Plan without regard to
current or accumulated earnings and profits for any taxable year or years ending
with or within such Plan Year.
2.02 EMPLOYEE PRE-TAX CONTRIBUTION OPTION
Each eligible Participant may elect to defer a percentage of
the Participant's Annual Compensation, in 1% increments up to 18% of Annual
Compensation, for each pay period that the Participant remains a Participant in
the Plan in accordance with procedures established by the Committee. The
Participant's election shall be made at such time and in such manner as the
Committee shall determine. Said election shall remain in effect until revoked or
superseded by a subsequent election pursuant to procedures established by the
Committee.
Except as provided herein, the Employer shall contribute to the Plan on
behalf of the Participant the full amount of the Employee Pre-Tax Contributions
authorized by the Participant. In no event, however, shall a Participant's
Employee Pre-Tax Contributions to this Plan, plus any
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amounts deferred under any plans or arrangements that are maintained by the
Company and are described in sections 401(k), 403(b) or 408(k) of the Code,
exceed $11,000 for calendar year 2002, $12,000 for calendar year 2003, $13,000
for calendar year 2004, $14,000 for calendar year 2005, and $15,000 for calendar
year 2006 and thereafter or such other amount as may be allowable pursuant to
section 402(g) of the Code. The Employer shall automatically discontinue a
Participant's Employee Pre-Tax Contributions for the remainder of the calendar
year in the event the Participant reaches the section 402(g) limitation.
Further, a Participant may request a distribution of the amount of any Excess
Employee Pre-Tax Contribution Deferrals in accordance with the provisions of
Section 8.09 hereof (Distribution of Excess Employee Pre-Tax Contribution
Deferrals).
It is intended that contributions made pursuant to this
Section 2.02 shall not be considered income to the Participant for purposes of
section 61 of the Code. Such contributions shall be deemed as those made by the
Employer for all purposes, subject to the limitations of Sections 2.09 and 5.02
hereof (Section 415 Limitations and Nondiscrimination Requirements for Employee
Pre-Tax Contributions).
2.03 EMPLOYEE AFTER-TAX CONTRIBUTION OPTION
If the sum of the contributions to a Participant's Employee
Pre-Tax Contributions Account reaches the section 402(g) of the Code limitation
during the calendar year, the Employer shall discontinue making such
contributions to the Participant's Employee Pre-Tax Contributions Account and
shall commence making such contributions on an after-tax basis to the
Participant's Employee After-Tax Contributions Account for the remainder of the
calendar year. Employee After-Tax Contributions shall continue unless the
Participant advises the Employer to discontinue making contributions to the
Participant's Employee After-Tax Contributions Account or changes the amount of
the Employee After-Tax Contributions Contribution pursuant to procedures
established by the Committee.
Employee Pre-Tax Contributions which are recharacterized
pursuant to Section 5.02 hereof (Nondiscrimination Requirements for Employee
Pre-Tax Contributions) shall be contributed to Participants' Employee After-Tax
Contributions Accounts.
Employee After-Tax Contributions are limited to 10% of base
pay per paycheck Participants' and shall be at all times nonforfeitable.
Contributions to a Participant's Employee After-Tax
Contributions Account must meet the nondiscrimination requirements of section
401(m) of the Code as described in Section 5.03 hereof (Nondiscrimination
Requirements for Employee After-Tax Contributions, CMC and CDC Contributions).
2.04 INDIVIDUAL TAX SAVINGS OPTION
Under a predecessor plan and prior to 1987, a Participant may
have elected to
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contribute under this option contributions which were deductible from the
Participant's Federal gross income under section 219 of the Internal Revenue
Code of 1954, but which are no longer deductible under the Code.
2.05 CHANGE IN CONTRIBUTIONS
A Participant may elect to change the percentage of the
Participant's Annual Compensation which shall be contributed as Employee Pre-Tax
Contributions or Employee After-Tax Contributions, subject to Sections 2.02 and
2.03 hereof (Employee Pre-Tax Contribution Option and Employee After-Tax
Contribution Option), at such time or with such frequency as specified under
procedures established by the Committee. Any change shall be effective on the
next available pay day following receipt of notification from the Participant.
2.06 CONTRIBUTIONS FROM PREVIOUS PLANS; ROLLOVER CONTRIBUTIONS
The Trustee, upon authorization from the Committee, may accept
transfers on behalf of a Participant from:
(a) an Eligible Rollover Distribution from a qualified
pension or profit-sharing plan maintained by a former
employer of the Participant;
(b) a qualified profit-sharing plan maintained,
previously or currently, by the Employer;
(c) a "rollover" individual retirement account as that
term is defined in section 408(d)(3)(A)(ii) of the
Code; or
(d) a plan in which assets are held on behalf of an
Owner-Employee as defined in section 401(c)(3) of the
Code, which satisfies the applicable requirements of
sections 401(a) and 401(d) of said Code and with
respect thereto:
(1) the transferred fund shall be maintained in
separate accounts in the name of the
respective Participants;
(2) a Participant's interest in the separate
account shall be nonforfeitable; and
(3) the Trustee may not lend any portion of such
separate account to any Participant.
The Trustee, upon authorization from the Committee, may also
accept transfers on behalf of a Covered Employee prior to such Covered
Employee's Entry Date in the Plan from an
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Eligible Rollover Distribution from a qualified pension or profit-sharing plan
maintained by a former employer of the Covered Employee.
Contributions made pursuant to this Section 2.06 shall be
credited to the Participant's Rollover Contributions Account and shall be at all
times nonforfeitable.
2.07 TIME FOR PAYMENT OF CONTRIBUTIONS
Contributions to be made to the Plan pursuant to Section 2.01,
2.03 and 2.06 hereof (Contributions by Employer, Employee After-Tax Contribution
Option and Contributions from Previous Plans; Rollover Contributions) shall be
periodically contributed by the Employer to the Plan in accordance with
procedures established by the Committee.
2.08 REVERSION OF FUNDS TO EMPLOYER
All Employer contributions are conditioned upon their
deductibility for the year for which they are made pursuant to section 404 of
the Code. The Employer shall not directly or indirectly receive any refund on
contributions made to the Trust Fund except in the following circumstances:
(a) The contribution was made by reason of a mistake of
fact, or
(b) The deduction for such contribution is disallowed for
the year for which it was made.
Earnings attributable to any contribution subject to refund
shall not be refunded. The amount subject to refund shall be reduced by any loss
attributable thereto, and by any amount which would cause the Account of any
Participant to be reduced to less than the balance which would have been in the
Account had the contribution subject to refund not been made. The return of the
contribution shall be returned to the Employer within one year of the mistaken
payment or the disallowance of the current deduction, as the case may be.
2.09 SECTION 415 LIMITATIONS.
(a) LIMITS IMPOSED. In addition to any other limits set
forth in the Plan, and notwithstanding any other
provision of the Plan, in no event shall the annual
addition with respect to a Participant's Account
exceed the maximum annual amount permitted by section
415 of the Code. The determination in the preceding
sentence shall be made after taking into account the
annual additions with respect to the Participant
under all other defined contribution plans required
to be aggregated with this Plan under section
415(f)(1)(B) of the Code.
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(b) ADJUSTMENTS WHERE LIMITS OTHERWISE EXCEEDED. If the
limits imposed by Section 2.09(a) hereof (Limits
Imposed) with respect to a Participant would
otherwise be exceeded, the annual additions with
respect to the Participant's accounts under the plans
described in Section 2.09(a) hereof (Limits Imposed)
shall be reduced until those limits are satisfied.
For purposes of applying the preceding sentence, the
annual addition to a Participant's Account under this
Plan shall not be reduced until the annual additions
with respect to such Participant under all other
defined contribution plans have first been reduced.
2.10 MILITARY SERVICE.
Notwithstanding any provision of this Plan to the contrary,
contributions, benefits and service credit with respect to qualified military
service will be provided in accordance with section 414(u) of the Code.
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ARTICLE III
ELIGIBILITY
3.01 EMPLOYEES ON THE EFFECTIVE DATE
Each Covered Employee, who on the Effective Date is an
Employee of the Employer in an Employment Unit to which the Plan is in effect
and who is a Participant in the Plan or who is eligible to participate in the
Plan, shall continue to participate or be eligible to participate in the Plan as
of the Effective Date.
3.02 HIGHLY COMPENSATED EMPLOYEES
Highly Compensated Employees shall not be eligible to be
active Participants in the Plan and shall have the status of Inactive
Participants to the extent they maintain Account balances in the Plan.
3.03 OTHER EMPLOYEES
Each Covered Employee who shall not qualify for participation
under Section 3.01 hereof (Employees on the Effective Date) who has attained age
21 shall be eligible to participate in the Plan after completing a Period of
Service with an Employer of six consecutive months during which the Employee has
accumulated 500 Hours of Service. The earliest Entry Date an Eligible Employee
may become a Participant in the Plan would be the first day of the month
following the month the Eligible Employee enrolled in the Plan.
3.04 TRANSFER OF EMPLOYMENT
In the event that a Participant transfers employment to
another unit of the Employer or the Company to which this Plan is not in effect,
such transfer shall not constitute a separation from service, and the
Participant shall be considered an Inactive Participant. The balance in such
Inactive Participant's Accounts shall be held and invested pursuant to Article
VI hereof (Investment of the Trust Funds) until such time as it may be
distributed or transferred in accordance with Article VIII hereof (Distributions
and Benefits to Participants).
In the event that an Employee transfers from another unit of
the Employer or the Company for which this Plan is not in effect to a unit of
the Employer or the Company for which this Plan is in effect, the Employee shall
be eligible to participate as of the first day of the month following the
Employee meeting the eligibility requirements of Section 3.03 hereof (Other
Employees) or, if later, the first day of the month following enrollment.
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3.05 ELIGIBILITY UPON REEMPLOYMENT
A former Participant or Former Employee who met the
eligibility requirements for participation in the Plan at the time the Employee
terminated employment and who is subsequently rehired, or transfers employment
to a unit of the Employer or the Company to which this Plan is in effect, shall
be entitled to participate in the Plan on the first day following the date the
Employee resumes being a Covered Employee, provided the Employee notifies the
Plan Administrator of his or her intent to participate in the Plan.
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ARTICLE IV
PARTICIPANT ACCOUNTS
4.01 SEPARATE ACCOUNTS
Separate accounts shall be maintained by the Trustee for each
Participant as follows:
(a) EMPLOYEE PRE-TAX CONTRIBUTIONS ACCOUNT. Employee
Pre-Tax Contributions made by each Participant
pursuant to Section 2.01(a) hereof (Employee Pre-Tax
Contributions), together with such Participant's
share of all income, gains or losses, and
accumulations, shall be credited to each
Participant's Employee Pre-Tax Contributions Account.
(b) EMPLOYEE AFTER-TAX CONTRIBUTIONS ACCOUNT. Employee
After-Tax Contributions made by each Participant
pursuant to Section 2.03 hereof (Employee After-Tax
Contribution Option), together with its share of all
income, gains or losses, and accumulations, shall be
credited to each Participant's Employee After-Tax
Contributions Account.
(c) COMPANY CONTRIBUTIONS ACCOUNT. CMC and CDC
Contributions made by the Employer pursuant to
Sections 2.01(b) and 2.01(c) hereof (Company Matching
Contributions and Company Discretionary
Contributions) together with their share of all
income, gains or losses, and accumulations, shall be
credited to each Participant's CMC Contributions
Account.
(d) ROLLOVER CONTRIBUTIONS ACCOUNT. Rollover
Contributions made by a Participant pursuant to
Section 2.06 hereof (Contributions from Previous
Plans; Rollover Contributions), together with its
share of income, gains or losses, and accumulations,
shall be credited to each Participant's Rollover
Contributions Account. A Rollover Contributions
Account shall not include loan accounts from the
Participant's previous plan.
(e) INDIVIDUAL TAX SAVINGS CONTRIBUTIONS ACCOUNT.
Individual Tax Savings Contributions made by a
Participant to a predecessor plan prior to 1987
pursuant to Section 2.04 hereof (Individual Tax
Savings Option) shall be maintained and accounted for
separately, and shall be credited with its share of
all income, gains or losses, and accumulations.
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ARTICLE V
ALLOCATIONS
5.01 ANNUAL ALLOCATIONS
Employer contributions shall be allocated to each
Participant's Accounts in accordance with Article II hereof (Contributions). A
Participant shall be entitled, once the Participant becomes eligible, to an
allocation of Employee Pre-Tax Contributions, CMC and CDC Contributions in any
Plan Year in which the Participant made an election under the Employee Pre-Tax
Contribution Option pursuant to Section 2.02 hereof (Employee Pre-Tax
Contribution Option).
5.02 NONDISCRIMINATION REQUIREMENTS FOR EMPLOYEE PRE-TAX
CONTRIBUTIONS
Contributions made under this Plan to a Participant's Employee
Pre-Tax Contributions Account must meet the nondiscrimination requirements of
section 401(k) of the Code. To meet such requirements the actual deferral
percentage test will be applied as set forth in section 401(k)(3) of the Code
and Treasury Regulations section 1.401(k)-1(b).
To the extent that it is necessary in order to comply with the
nondiscrimination requirements of section 401(a) or section 401(k) of the Code,
the Employer shall first recharacterize to the extent possible and then shall
distribute the amount of the Excess Employee Pre-Tax Contributions, as well as
income attributable thereto, to Participants who are Highly Compensated
Employees no later than 2 1/2 months after the close of the Plan Year for which
said excess contributions were authorized. Employee Pre-Tax Contributions of
Participants who are Highly Compensated Employees shall be reduced, and excess
contributions distributed, in accordance with the following:
(a) Highly Compensated Participants' Employee Pre-Tax
Contributions shall be reduced and distributed on the
basis of the amount of Employee Pre-Tax Contributions
made by or on behalf of each such Highly Compensated
Employee beginning with those Highly Compensated
Participant who have the largest Employee Pre-Tax
Contributions Contribution until the Employee Pre-Tax
Contributions Contribution of each such Highly
Compensated Participant is equal to the Employee
Pre-Tax Contributions Contribution of the next
highest Employee Pre-Tax Contributions Contribution.
(b) If any excess contributions remain after the above
reduction, then Employee Pre-Tax Contributions made
on behalf of all Participants who are Highly
Compensated Employees shall be similarly reduced
until no more Employee Pre-Tax Contributions remain
or the Plan is in compliance.
Income or loss attributable to said excess contributions shall
be determined in the
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same proportion that each Highly Compensated Employee's excess contributions
bear to the Participant's Employee Pre-Tax Contributions Account.
The distribution of said excess contributions and income or
loss may be made without the consent of the Participant, or the Participant's
spouse, and shall be considered as income to the Participant for purposes of
section 61 of the Code.
5.03 NONDISCRIMINATION REQUIREMENTS FOR EMPLOYEE AFTER-TAX
CONTRIBUTIONS, CMC AND CDC CONTRIBUTIONS
Contributions made under this Plan to a Participant's Employee
After-Tax Contributions Account and the Participant's CMC Contributions Account
must meet the nondiscrimination requirements of sections 401(a)(4) and 401(m) of
the Code. In determining whether such requirements are met the actual
contribution percentage test will be applied as set forth in section 401(m)(2)
of the Code and section 1.401(m)-1(b) of the Treasury Regulations.
To the extent that it is necessary in order to comply with the
nondiscrimination requirements of section 401(m) of the Code, the Employer shall
distribute the amount of the Excess Aggregate Contributions, taking into account
income or loss attributable thereto, to Participants who are Highly Compensated
Employees no later than 2 1/2 months after the close of the Plan Year for which
said Excess Aggregate Contributions were authorized. "Excess Aggregate
Contributions" means the amount described in section 401(m)(6)(B) of the Code.
To the extent that it is necessary to comply with section
401(a)(4) of the Code, matching contributions attributable to Employee Pre-Tax
Contributions that are recharacterized or distributed pursuant to Section 5.02
hereof (Nondiscrimination Requirements for Employee Pre-Tax Contributions) or
Section 8.09 hereof (Distributions of Excess Employee Pre-Tax Contribution
Deferrals) shall be forfeited.
Excess Aggregate Contributions of Participants who are Highly
Compensated Participants shall be reduced and distributed, in accordance with
the following:
(a) Highly Compensated Participants' Employee After-Tax
Contributions, CMC and CDC Contributions shall be
reduced and distributed on the basis of the amount of
Employee After-Tax Contributions, CMC and CDC
Contributions made by or on behalf of each such
Highly Compensated Employee beginning with those
Highly Compensated Participants who have the largest
Employee After-Tax Contributions, CMC and CDC
Contributions (combined) until the Employee After-Tax
Contributions, CMC and CDC Contributions of each such
Highly Compensated Participant is equal to the
Employee After-Tax Contributions, CMC and CDC
Contributions of the next highest Employee After-Tax
Contributions, CMC and CDC Contributions.
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(b) If any Excess Aggregate Contribution remains after
the preceding reduction, then next all remaining
Employee After-Tax Contributions, CMC and CDC
Contributions shall be similarly reduced until no
more Employee After-Tax Contributions, CMC and CDC
Contributions remain or the Plan is in compliance.
The determination of the income or loss attributable to the
Excess Aggregate Contributions shall be in accordance with the following:
(a) If Employee After-Tax Contributions are distributed,
the attributable income or loss shall be in the same
proportion that the Highly Compensated Participant's
distributed Employee After-Tax Contributions
Contribution bears to the Participant's Employee
After-Tax Contributions Account.
(b) If CMC and CDC Contributions are distributed, the
attributable income or loss shall be in the same
proportion that the Highly Compensated Participant's
distributed CMC and CDC Contributions bears to the
Participant's CMC Contributions Account.
The distribution of Excess Aggregate Contributions and income
or loss may be made without the consent of the Participant, or the Participant's
spouse, and shall be considered as income to the Participant, except to the
extent of Employee After-Tax Contributions distributed, for purposes of section
61 of the Code.
5.04 NONDISCRIMINATION REQUIREMENTS - TEST FOR MULTIPLE USE
For purposes of meeting the nondiscrimination requirements of
sections 401(k) and 401(m) of the Code, the Plan Administrator may apply the
test for multiple use of the alternative limitation as set forth in section
1.401(m)-2(b) of the Treasury Regulations. In applying the multiple use test, if
the sum of the actual deferral percentage and the actual contribution percentage
(determined after applications of Sections 5.02 and 5.03 hereof
(Nondiscrimination Requirements for Employee Pre-Tax Contributions and
Nondiscrimination Requirements for Employee After-Tax Contributions, CMC and CDC
Contributions)) for Eligible Employees exceeds the aggregate limit as set forth
in 1.401(m)-2(b)(3) of the Treasury Regulations, Excess Aggregate Contributions
shall be reduced and distributed in the manner described in Section 5.03 hereof
(Nondiscrimination Requirements for Employee After-Tax Contributions, CMC and
CDC Contributions) until such sum no longer exceeds the aggregate limit.
5.05 ANNUAL REPORT TO PARTICIPANTS
The Committee shall notify each Participant in writing of the
financial status of the Participant's Accounts as of the last day of each
calendar quarter and additionally at such other times as it deems appropriate.
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ARTICLE VI
INVESTMENT OF THE TRUST FUNDS
6.01 INVESTMENT FUNDS
The Trust Fund shall consist of separate Investment Funds as
determined by the Committee. The Committee may from time to time, in its
discretion, modify, add or eliminate one or more funds.
6.02 LIMITATIONS ON INVESTMENT OF THE TRUST FUNDS
In accordance with procedures established by the Committee
which are uniformly applied, each Participant shall designate how current and
past contributions shall be invested among the funds. The procedures to be
established shall include the frequency of changes of contributions among
investments; the frequency and restrictions on transfers among the investments;
and the minimum percentage of contribution to any investment or transfer among
investments.
Participants may redirect investments in the Manor Care, Inc.
Stock Fund in accordance with rules and procedures established by the Committee.
With respect to contributions invested in the Manor Care, Inc.
Stock Fund, if Manor Care, Inc. offers to sell treasury or authorized but
unissued Manor Care, Inc. common shares, the Trustee may purchase said shares on
a no commission basis at a price not in excess of the mean between the highest
and lowest prices at which said shares are traded on the New York Stock Exchange
on the date of purchase by the Trustee.
If a Participant does not elect to receive the value of the
Participant's Accounts upon termination of employment and becomes an Inactive
Participant, such a Participant may maintain the Participant's Accounts under
the same terms and conditions as Participants who have not terminated
employment, until such time as the Account balances are to be distributed to the
Participant in their entirety in accordance with Article VIII hereof
(Distribution and Benefits to Participants).
A Participant transferring to another Company shall retain the
right to direct the investment of the Participant's Accounts until such time as
the Participant otherwise separates from service with the Company.
A Participant transferring funds to a plan qualified by HES or
a domestic corporation whose voting shares are directly or indirectly owned by
Manor Care, Inc., shall maintain each investment fund as constituted just prior
to transfer. Thereafter, the transferred Accounts of the Participant are treated
as contributions under the plan to which the Accounts are transferred.
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6.03 NAMED FIDUCIARY
A Participant shall be a Named Fiduciary with respect to such
Participant's directions made pursuant to this Article VI.
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ARTICLE VII
VALUATION OF TRUST FUNDS
7.01 VALUATION OF THE INDIVIDUAL INVESTMENT FUNDS
The Trustee shall revalue each Fund at its fair market value
as of the last day of the Plan Year and as of such dates as the Committee shall
designate, and shall determine the net income or net loss for each Fund since
the preceding accounting date, including any unrealized appreciation or
depreciation in the value of such Fund as well as any realized income, gain,
expenses and losses. Any such determinations of net income or net loss made by
the Trustee shall be conclusive and binding upon all interested Participants and
their designated beneficiaries. The Accounts of each Participant shall then be
adjusted by apportioning the Fund, including income, as thus revalued, among
Participants' Accounts.
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ARTICLE VIII
DISTRIBUTIONS AND BENEFITS TO PARTICIPANTS
8.01 UPON RETIREMENT, DISABILITY OR OTHER EVENTS
The Participant's Accounts shall become distributable in
accordance with the provisions of Section 8.04 hereof (Method and Medium of
Payment) upon the occurrence of any one of the following events:
(a) the Participant's attainment of the age of 59 1/2
years;
(b) the Participant's separation from service with the
Employer;
(c) the Participant's total and permanent disability;
(d) the Participant's death;
(e) the transfer of the Participant's employment from an
Employment Unit where the Plan is in effect to a
domestic corporation whose voting shares are directly
or indirectly owned by Manor Care, Inc. or an
Employment Unit of the Employer as to which the Plan
is not in effect, provided, the transfer would
constitute a separation from service within the
meaning of section 401(k)(2)(B) of the Code; or
(f) the termination of this Plan in which event the
Participant's Accounts under the Plan shall be 100%
vested in the Participant and shall be distributed to
the Participant in such manner as the Committee shall
direct.
The "total and permanent disability" of any Participant shall
be determined by the Committee, in accordance with uniform principles
consistently applied, upon the basis of such evidence as the Committee deems
necessary or advisable.
Upon occurrence of any of the events described in this Section
8.01, the Committee shall provide the Participant or the Participant's
beneficiary with an election form regarding the method and medium of payment as
provided in Section 8.04 hereof (Method and Medium of Payment) and shall seek to
receive or obtain such completed election form from the Participant or
beneficiary as soon as practicable thereafter.
Upon the occurrence of any of the events described in this
Section 8.01, the entire interest in the Accounts of the Participant shall
include the amount of any additional credit, as finally determined, representing
the Participant's participation and contributions for the Plan Year in which the
event occurs and the committee, in accordance with the provisions of Sections
8.04 and 8.05
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hereof (Method and Medium of Payment and Distribution After Death of a
Participant), shall then direct the trustee to distribute the vested interest in
the Participant's Accounts to the Participant or to such Participant's
designated beneficiary or beneficiaries, or, if none, as provided in this
Article VIII. The Committee may require such proper proof of death and such
evidence of the right of any person to receive payment of the nonforfeitable
interest in the Accounts of such deceased Participant as the Committee deems
desirable and the Committee's determination shall be conclusive.
Each Participant, by written instrument delivered to the
Committee, shall have the unqualified right to designate and from time to time
change the beneficiary or beneficiaries to receive in the event of the
Participant's death the nonforfeitable interest in the Participant's Accounts.
In the event the Participant fails to designate a beneficiary
or beneficiaries, the nonforfeitable interest in the Participant's Accounts
shall be distributed in the following order of priority:
(a) First, to the Participant's spouse if then living;
(b) Second, equally to the Participant's children, if
then living;
(c) Third, equally to the Participant's parents, if then
living; and
(d) Fourth to the Participant's estate.
If the present value of the benefit otherwise payable under
any provision of the Plan to a Participant or the Participant's beneficiary upon
and by reason of the Participant's retirement or other termination of employment
does not currently or at the time of any prior distribution exceed $5,000, such
Participant's benefit shall be paid to the Participant in a lump sum, in an
amount equal to such present value calculated in accordance with the provisions
of Article VII and Section 8.04 hereof (Valuation of Trust Funds and Method and
Medium of Payment) upon the Participant's retirement or other termination of
employment. Upon the adoption of final Treasury Regulations applicable hereto,
if the present value of the benefit otherwise payable under any provision of the
Plan to a Participant or the Participant's beneficiary upon and by reason of the
Participant's retirement or other termination of employment is greater than
$1,000 but does not currently or at the time of any prior distribution exceed
$5,000, such Participant's benefit shall be rolled over to an Individual
Retirement Account or at the election of the Participant paid to the Participant
in a lump sum, in an amount equal to such present value calculated in accordance
with the provisions of Article VII and Section 8.04 hereof (Valuation of Trust
Funds and Method and Medium of Payment) upon the Participant's retirement or
other termination of employment.
8.02 NOTICE REQUIREMENTS
The Committee shall provide the Participant not more than 90
days nor less than 30 days before the first day of the first period for which an
amount is paid as an annuity or any other
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form of benefit as provided in Sections 8.04 and 8.07 hereof (Method and Medium
of Payment and Withdrawals) a written explanation of the optional forms of
benefit available under the Plan. In addition, so long as a benefit is
immediately distributable, a Participant or the Participant's designated
beneficiary must be informed of their right as provided in Section 8.04 hereof
(Method and Medium of Payment) to defer receipt of the distribution. Such
distribution may commence less than 30 days after the notice required under
section 1.411(a)-11(c) of the Treasury Regulations (and this Section 8.02) is
given, provided that:
(a) the Committee clearly informs the Participant that
the Participant has a right to a period of at least
30 days after receiving the notice to consider the
decision of whether or not to elect a distribution
(and, if applicable, a particular distribution
option), and
(b) the Participant, after receiving the notice,
affirmatively elects a distribution.
8.03 CERTIFICATION BY COMMITTEE
The Committee shall certify to the Trustee all pertinent facts
and information required to determine its proper action in connection with
retirement, disability, death, termination of employment and transfer of
employment of Participants, and the Trustee may rely fully upon information so
certified and shall be fully protected in so doing; but in the absence of
appropriate certificates as to any such facts or pertinent related facts, the
Trustee may rely and act upon other information which it reasonably believes to
be true.
8.04 METHOD AND MEDIUM OF PAYMENT
The interest in a Participant's Accounts shall be payable in
cash. Amounts invested in the Manor Care, Inc. Stock Fund shall be distributed
in cash unless an election is made by the Participant to receive shares or any
combination of whole shares and cash from such Stock Fund. Fractional shares
shall be paid in cash on the basis of the market value of a common share in such
Stock Fund on the day of distribution. Any dividend received by the Trustee with
respect to common shares distributed in kind shall be paid in cash if the record
date for such dividend shall be after the first day of the month in which the
Participant's rights to such distribution accrues.
The distribution of a Participant's nonforfeitable interest in
the Participant's Accounts shall be made by the Trustee to such Participant or
the Participant's beneficiaries as soon as practicable upon or after any of the
events described in Section 8.01 hereof (Upon Retirement, Disability or Other
Events) in one or a combination of the following methods as such Participant or
beneficiary, subject to a Qualified Election, may request:
(a) In one lump sum;
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(b) In annual installments, in cash or in shares of Manor
Care, Inc. (to the extent the Participant's Accounts
are invested in the Manor Care, Inc. Stock Fund), of
substantially equal amounts for a period of time not
to exceed the life expectancy of the Participant or
that of the Participant and the Participant's
designated beneficiary. At the election of a
Participant or beneficiary, the payment of any
benefits to the Participant in installments may be
accelerated and the unpaid balance distributed to
such Participant or beneficiary in a single
distribution.
Any other form of benefit that may have been available to a
Participant under a merged plan listed in Appendix B hereof (Merged Plans),
shall not be available to such a Participant under this Plan. Except any form of
benefit that was made available to a Participant under a merged plan that is in
payment status, shall continue for the term of the applicable payment option.
The designated beneficiary of a Participant's Accounts must be
the Participant's spouse unless subject to a Qualified Election.
Except as otherwise provided herein, no distribution of a
Participant's Accounts may be made without the consent of the Participant, or
the designated beneficiary. In accordance with rules and procedures established
by the Committee, a Participant who is retiring or a spouse beneficiary who is
entitled to a distribution due to the Participant's death may elect to defer the
commencement of distribution of the Participant's Accounts to any date. The
Committee in its sole discretion may approve a request for earlier distribution
once election for deferral has been made.
In all events and irrespective of an election to defer,
distributions of benefits of a Participant who is a Five-Percent Owner must
commence by April 1 of the calendar year following the calendar year in which
such Participant attains age 70 1/2 under method (b) above.
If the Participant's nonforfeitable interest is to be
distributed in other than a lump sum, then the amount to be distributed each
year must be at least an amount equal to the quotient obtained by dividing the
Participant's nonforfeitable interest by the life expectancy of the Participant
or joint and last survivor expectancy of the Participant and designated
beneficiary. Life expectancy and joint and last survivor expectancy are computed
by the use of the return multiples contained in section 1.72-9 of the Treasury
Regulations. For purposes of this computation, a Participant's or the
Participant's spouse's life expectancy may be recalculated no more frequently
than annually; however, the life expectancy of a non-spouse beneficiary may not
be recalculated. If the Participant's spouse is not the designated beneficiary,
the method of distribution selected must assure that more than 50% of the
present value of the amount available for distribution is paid within the life
expectancy of the Participant.
As required by section 401(a)(14) of the Code, unless the
Participant elects to defer the commencement of distribution in accordance with
this Section 8.04, distribution of the Participant's Accounts shall commence not
later that the 60th day after the latest of the close of the
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Plan Year in which:
(a) the Participant attains age 65;
(b) occurs the 10th anniversary of the year in which the
Participant commences participation in the Plan; or
(c) the Participant terminates employment with the
Employer.
Once the distribution of a Participant's nonforfeitable
interest has been approved, the amount to be distributed shall be based on the
valuation of the Participant's nonforfeitable interest in the Participant's
Accounts pursuant to Article VII hereof (Valuation of the Trust Funds) on the
day of distribution.
8.05 DISTRIBUTIONS AFTER DEATH OF A PARTICIPANT
If a Participant dies before any of the Participant's interest
in the Plan has been distributed, the Participant's interest shall be
distributed within five years of the Participant's death. Irrespective of the
above, if any portion of the Participant's interest is payable to (or for the
benefit of) a designated beneficiary, subject to a Qualified Election, the
Participant's interest will be distributed over a period not to exceed the life
expectancy of such beneficiary provided payment begins not later than one year
after the date of the Participant's death, or such later date as the Secretary
of the Treasury may prescribe. If the designated beneficiary is the surviving
spouse of the Participant, payment of the Participant's interest must commence
no later than the date on which the Participant would have attained the age of
70 1/2. If the surviving spouse dies before the distributions to such spouse
begin, the payment of the Participant's interest shall be made as if the
surviving spouse were the Participant.
If distribution of the Participant's interest has begun after
the required beginning date under section 401(a)(9) of the Code at the time of
such Participant's death, distribution may be made for a term certain at least
as rapidly as under the method of distribution used prior to the death of the
Participant.
8.06 RIGHT TO HAVE ACCOUNTS TRANSFERRED
By notice to the Committee, a Participant entitled to a
distribution pursuant to Section 8.01 hereof (Upon Retirement, Disability or
Other Events) or who becomes covered by a different savings plan sponsored by
the Company shall have the right to have the nonforfeitable interest in the
Participant's Accounts transferred to another plan and trust which is qualified
under section 401(a) of the Code and is a tax-exempt trust under the provisions
of section 501(a) of the Code or, solely as to a distribution pursuant to
Section 8.01 hereof (Upon Retirement, Disability or Other Events), to an
individual retirement account as provided under section 408 of the Code.
-30-
If such Participant has an outstanding loan pursuant to
Section 8.08 hereof (Loans to Participants), and elects a transfer of the
Participant's Accounts to another qualified plan and trust, the loan will also
be transferred, provided that the plan and trust accepting the Participant's
Accounts are empowered to also accept the loan.
8.07 WITHDRAWALS
A Participant may request a withdrawal from the Participant's
Accounts subject to rules and procedures established by the Committee. Such a
request must be submitted to the Committee in writing. To the extent permitted
by law and provided the withdrawal would not result in an outstanding loan
balance becoming greater than the remaining Account balance, withdrawals from a
Participant's Accounts may be made in the amounts indicated in the following
order:
FIRST, all or a part of the balance of the Participant's
pre-1987 Employee After-Tax Contributions Account, excluding earnings.
SECOND, all or a part of the balance of the Participant's
post-1986 Employee After-Tax Contributions Account, including all Employee
After-Tax Contributions Account earnings.
THIRD, if the Employer contributions are not aggregated with
salary deferrals to meet nondiscrimination tests pursuant to the Code, and
provided that the Participant is 100% vested in the Participant's CMC
Contribution Account, all or part of the balance of the Participant's pre-1992
CMC Contributions Account, including earnings and notwithstanding the foregoing
all or part of the Participant's company matching contributions from a Merged
Plan, including earnings.
FOURTH, if the Participant can demonstrate the existence of a
financial hardship, and provided that the Participant is 100% vested in the
Participant's CMC Contributions Account, all or a part of the balance of the
Participant's post-1991 CMC Contributions Account, including earnings, but not
in excess of the amount of the financial hardship.
FIFTH, if the Participant can demonstrate the existence of a
financial hardship, the Participant may withdraw all or a portion of the
Participant's Employee Pre-Tax Contributions Account, exclusive of income earned
on such contributions after December 31, 1988, but not in excess of the amount
of the financial hardship.
SIXTH, if the Participant has attained age 59 1/2, the
Participant may withdraw up to 100% of the amount of the Participant's Employee
Pre-Tax Contributions Account, including a pro-rata portion of the earnings
thereon.
SEVENTH, if the Participant has attained age 59 1/2, the
Participant may withdraw all or a part of the Participant's Rollover
Contributions Account.
A Participant may request a withdrawal of up to 100% of the
Participant's Individual
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Tax Savings Contributions Account at any time and irrespective of whether the
Participant has any other funds available in the Plan.
A "financial hardship" is the existence of an immediate and
heavy financial need which cannot reasonably be met by other resources available
to the Participant. A distribution is automatically treated as being made on
account of an immediate and heavy financial need if it is for:
(a) the payment of expenses for medical care that were
either previously incurred by, or are necessary for
the medical care of, the Participant, the
Participant's Spouse, or the Participant's
dependents;
(b) the costs directly related to the purchase, excluding
mortgage payments, of the Participant's principal
residence;
(c) the payment of tuition and related educational fees
for the next twelve months of post-secondary
education for the Participant, the Participant's
Spouse, or the Participant's dependents; or
(d) the payment of amounts necessary to prevent the
eviction of the Participant from the Participant's
principal residence or to prevent foreclosure on the
mortgage on the Participant's principal residence.
Financial hardships shall also include, but are not limited
to, the following:
(a) expenses connected with a death within the
Participant's immediate family,
(b) uninsured expenses due to accident, sickness,
disability or layoff affecting the Participant's
immediate family, or
(c) immediate and heavy financial need as presented to
the Committee which may include the amounts necessary
to pay federal, state and local income taxes or
penalties anticipated to be paid on the hardship
distribution.
A distribution is not treated as necessary to satisfy an
immediate and financial need of a Participant to the extent the amount of the
distribution is in excess of the amount required to relieve the financial need,
or to the extent the need may be relieved from other sources that are reasonably
available to the participant. Other resources available to the Participant shall
include all distributions, other than hardship distributions, and all nontaxable
loans currently available under all other plans maintained by the Employer. For
this purpose all other plans maintained by the Employer include a dependent care
pre-tax reimbursement plan under a section 125 of the Code "cafeteria plan", but
does not include a health care pre-tax reimbursement plan under a section 125
"cafeteria plan". The Committee may rely upon the Participant's written
representation (unless contrary information is known) that the need cannot be
reasonably relieved:
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(a) by reimbursement or compensation from insurance or
otherwise;
(b) by liquidation of the Participant's assets;
(c) by stopping the Participant's contributions to the
Plan; or
(d) by nontaxable loans from the Plan, or by commercial
loans, in an amount sufficient to satisfy the need.
The Committee shall determine the existence of a bona fide
hardship based on nondiscriminatory procedures, taking into account any then
applicable rulings or regulations of the Internal Revenue Service. The standards
established by the Committee for determining the existence of a financial
hardship shall be uniformly applied to all Participants who make application for
such a withdrawal, and the Committee's decision shall be final.
The minimum withdrawal from a Participant's Accounts shall be
$500 or the Participant's Account balance, if less. After making a withdrawal on
account of a financial hardship, a Participant will not be allowed to contribute
Employee Pre-Tax Contributions or Employee After-Tax Contributions to the
Participant's Account for six months following the financial hardship
withdrawal.
Once the Committee has approved the Participant's request for
a withdrawal, the amount to be withdrawn shall be:
(a) based on the valuation of the Participant's
nonforfeitable interest in the Participant's Accounts
pursuant to Article VII hereof (Valuation of Trust
Funds), and
(b) paid to the Participant as soon as practicable after
that Valuation Date.
8.08 LOANS TO PARTICIPANTS
The Committee may grant a loan to a Participant or an Inactive
Participant who is an Employee from the Participant's Accounts, excluding the
Participant's Individual Tax Savings Contributions Account and post-1991 CMC
Contributions Account, upon such terms and conditions as specified in this
Section 8.08 and as established by the Committee. Any loan made shall first be
taken from the Participant's Accounts in the following order:
FIRST, all or a part of the balance of Employee Pre-Tax
Contributions Account, and the Employee After-Tax Contributions Account, pro
rata;
SECOND, all or a part of the balance of the Rollover
Contributions Account; and
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THIRD, all or a part of the pre-1992 CMC Contributions
Account.
A Participant's combined value of the Participant's Employee
Pre-Tax Contributions Account, pre-1992 CMC Contributions Account, Employee
After-Tax Contributions Account, and Rollover Contributions Account shall be the
source of loan funds and hereinafter define the Participant's Loan Fund Pool.
There is an administrative charge each time a Participant
initiates a loan pursuant to this Section 8.08. The amount charged is to be
deducted from the amount of the loan and is to be paid to the Trustee.
Any loan made by the Plan shall be subject to the following
schedule:
If the Balance
in the Participant's The Minimum The Maximum
Loan Fund Pool is: Loan is: Loan is:
------------------ ------------ -----------
$1 - $1,999 $ 0 $ 0
$2,000 - $100,000 $1,000 50% of the
Participant's
Loan Fund Pool
above $100,000 $1,000 $50,000
The $50,000 maximum loan amount shall be further reduced by
the Participant's highest outstanding loan balance during the one year period
ending on the day before such loan is made. In no event may a Participant's
outstanding loan balance under all qualified Plans of the Company exceed
$50,000.
Participants may have only one loan in their Account at a
time. Participants who as of August 1, 2002 have more than one loan, or an
additional loan being processed at that time, will not be forced to pay off any
existing loan prematurely to come within the one loan limit. Participants who
have existing loans as of August 1, 2002 or a loan that is in process as of that
time, may not request an additional loan until all such loans are paid off. Once
a loan is paid off, a Participant cannot make an application for a new loan
until 90 days after the prior loan is paid off. In any event, only one loan can
be requested during a twelve-month period.
The Committee shall establish uniform rules and procedures for
the granting of loans which shall be consistently applied. In addition to such
rules and regulations as the Committee may adopt, all loans shall comply with
the following terms and conditions:
(a) An application for a loan by a Participant shall be
made in writing to the
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Committee whose action thereon shall be final.
(b) Each loan shall be made against such collateral as
the Committee shall require, which may include the
assignment of the borrower's entire right, title and
interest in and to the Trust Fund supported by the
borrower's collateral promissory note for the amount
of the loan, including interest, payable to the order
of the Trustee.
(c) Interest shall be charged at a reasonable rate, to be
fixed by the Committee, from time to time, provided
that such rate does not violate any applicable laws.
(d) Except as provided in subsection (e), all loans shall
provide for payment by payroll deduction of principal
and interest in installments over a period not to
exceed five years.
(e) Home loans may provide for payment over a period not
to exceed ten years. For purposes of this subsection,
"home loan" means any loan, the proceeds of which are
to acquire a dwelling unit which within a reasonable
time is to be used as a principal residence of the
Participant.
(f) Loans shall be amortized with level payments over the
term of the loan, and payments must occur not less
frequently than quarterly.
(g) All reasonable loan requests will be granted,
providing the requested terms comply with the
provisions of this Section 8.08.
(h) Loan repayments during periods of qualified military
service will be suspended under this Plan as
permitted under section 414(u)(4) of the Code.
The Trustee shall maintain a separate account for each
Participant loan as granted pursuant to this Section 8.08. Payments by the
Participant shall be applied first to the payment of interest and then to
principal, and following the above accounting, shall be invested in the various
funds in accordance with the Participant's then current elections.
8.09 DISTRIBUTION OF EXCESS EMPLOYEE PRE-TAX CONTRIBUTION DEFERRALS
Notwithstanding any other provision of this Plan, Excess
Employee Pre-Tax Contribution Deferrals and income attributable thereto shall be
distributed no later than December 31st following the calendar year for which
the Participant claims or the Committee determines that Excess Employee Pre-Tax
Contribution Deferrals have been made. The Participant's claim must be in
writing; must be submitted to the Committee no later than March 1 of the
calendar year following the calendar year of the Excess Employee Pre-Tax
Contribution Deferrals; must specify the amount
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of the Participant's Excess Employee Pre-Tax Contributions for the preceding
calendar year; and must be accompanied by a written statement of the Participant
that if such amounts are not distributed, the Excess Employee Pre-Tax
Contribution Deferrals, when added to amounts deferred by or for the Employee
under other plans or arrangements described in sections 401(k), 408(k) or 403(b)
of the Code, exceed the limit imposed on the Participant by section 402(g) of
the Code for the calendar year in which the contributions were made.
The Excess Employee Pre-Tax Contribution Deferrals distributed
to a Participant with respect to a calendar year shall be adjusted for income or
loss. The amount of the income or loss attributable to the Excess Employee
Pre-Tax Contribution Deferrals shall be determined by multiplying the income or
loss by a fraction, the numerator of which is the Excess Employee Pre-Tax
Contribution Deferrals to be distributed and the denominator of which is the
Participant's Employee Pre-Tax Contributions Account.
8.10 RESTRICTIONS ON DISTRIBUTIONS OF EMPLOYEE PRE-TAX
CONTRIBUTIONS
Employee Pre-Tax Contributions may not be distributed from
this Plan earlier than the earliest of:
(a) retirement, separation from service, death or
disability of the Participant;
(b) attainment of age 59 1/2by the Participant;
(c) termination of the Plan without establishment of a
successor plan, within the meaning of section
401(k)(10)(A)(i) of the Code;
(d) sale of substantially all of the assets of the
Employer to an entity that is not an affiliated
employer and that does maintain the Plan after the
sale, only with respect to Participants who continue
employment with the entity acquiring such assets;
(e) Upon the sale of a subsidiary of the Employer to an
entity that is not an affiliated employer and that
does not maintain the Plan after the sale, only with
respect to Participants who continue employment with
such subsidiary; or
(f) when a hardship withdrawal is requested and approved
pursuant to Section 8.07 hereof (Withdrawals).
8.11 ELIGIBLE ROLLOVER DISTRIBUTIONS
Notwithstanding any provision of the plan to the contrary that
would otherwise limit
-36-
a Distributee's election under this Section 8.11, a Distributee may elect, at
the time and in the manner prescribed by the Plan Administrator, to have any
portion of an Eligible Rollover Distribution paid directly to an Eligible
Retirement Plan specified by the Distributee in a Direct Rollover.
8.12 VESTING
A Participant's Employee After-Tax Contribution Account,
Employee Pre-Tax Contribution Accounts, and Rollover Contribution Account shall
at all times be 100% vested. The following provisions in this Section 8.12 shall
apply with respect to vesting of CMC and CDC Contributions regardless of any
other seemingly contradictory provision of this document.
(a) A Participant who is employed by an Employer before
January 1, 1992 and who is working in a position
which is classified by the Employer for benefit
coverage as "Benefit Level #3" or "Benefit Level #6"
shall be 100% vested in the value of the
Participant's Individual Tax Savings Contribution
Account and CMC Contributions Account.
(b) A Participant who is employed by an Employer between
January 1, 1992 and January 1, 1995 and who is
working in a position which is classified by the
Employer for benefit coverage as "Benefit Level #3"
or "Benefit Level #6" shall be vested in the value of
a percentage of the Participant's CMC Contributions
Account which results in the greater vested benefit
where such percentage is determined under the
following table:
The Participant's
If a Participant vested percentage
has been employed: shall be:
------------------ -----------------
(1) less than 1 Year of Service 20%
(2) at least 1 but less 40%
than 2 Years of Service
(3) at least 2 but less 60%
than 3 Years of Service
(4) at least 3 but less 80%
than 4 Years of Service
(5) 4 Years of Service or more 100%
(c) A Participant who is employed by an Employer between
January 1, 1995 and January 1, 2000 who is a Covered
Employee shall be vested in the value of a percentage
of the Participant's CMC Contributions Account which
results in the greater vested benefit where such
percentage is determined under either of the
following two tables:
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The Participant's
If a Participant vested percentage
has been employed: shall be:
------------------ -----------------
(1) less than 3 Years of Service 0%
(2) 3 Years of Service or more 100%
or
The Participant's
If a Participant vested percentage
has been employed: shall be:
------------------ -----------------
(1) less than 2 Year of Service 0%
(2) at least 2 but less 20%
than 3 Years of Service
(3) at least 3 but less 40%
than 4 Years of Service
(4) at least 4 but less 60%
than 5 Years of Service
(5) at least 5 but less 80%
than 6 Years of Service
(6) 6 Years of Service or more 100%
(d) A Participant who is employed by an Employer after
January 1, 2000 who is a Covered Employee shall be
vested in the value of a percentage of the
Participant's CMC Contributions Account which results
in the greater vested benefit where such percentage
is determined under the following table:
The Participant's
If a Participant vested percentage
has been employed: shall be:
------------------ -----------------
(1) less than 2 Year of Service 0%
(2) at least 2 but less 20%
than 3 Years of Service
(3) at least 3 but less 40%
than 4 Years of Service
(4) at least 4 but less 60%
than 5 Years of Service
(5) at least 5 but less 80%
than 6 Years of Service
(6) 6 Years of Service or more 100%
(e) A Participant whose accounts have been transferred
from the Manor Care, Inc. Retirement Savings and
Investment Plan to this Plan shall be vested in the
value of a percentage of the Participant's CMC
Contributions Account
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according to the above table.
The Participant's
If a Participant vested percentage
has been employed: shall be:
------------------ -----------------
(1) less than 2 Year of Service 0%
(2) at least 2 but less 20%
than 3 Years of Service
(3) at least 3 but less 40%
than 4 Years of Service
(4) at least 4 but less 60%
than 5 Years of Service
(5) at least 5 but less 80%
than 6 Years of Service
(6) 6 Years of Service or more 100%
(f) A Participant whose accounts have been transferred
from the In Home Health, Inc. Savings Plan to this
Plan shall be vested in the value of a percentage of
the Participant's CMC Contributions Account which
results in the greater vested benefit where such
percentage is determined under the following table:
The Participant's
If a Participant vested percentage
has been employed: shall be:
------------------ -----------------
(1) less than 1 Year of Service 0%
(2) at least 1 but less 25%
than 2 Years of Service
(3) at least 2 but less 50%
than 3 Years of Service
(4) at least 3 but less 75%
than 4 Years of Service
(5) 4 Years of Service or more 100%
(g) For purposes of calculating Years of Service under
the above tables all Periods of Service with an
affiliated Employer shall be recognized.
(h) A Participant shall at all times be 100% vested in
the amount in the Participant's Accounts attributable
to the Participant's contributions and, upon the
Participant's attainment of Normal Retirement Age,
the amount in the Participant's Accounts attributable
to CMC and CDC Contributions on the Participant's
behalf.
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(i) With respect to a Participant who terminated
employment while not being 100% vested in the
Participant's CMC and CDC Contributions Account and
who is re-employed before incurring five consecutive
one-year Periods of Severance, the value of the
Participant's CMC and CDC Contribution Accounts that
was forfeited when employment terminated, will be
restored to the Participant's Account.
(j) With respect to a Participant who terminates
employment while not being 100% vested in the
Participant's CMC and CDC Contribution Accounts and
who is re-employed after incurring five consecutive
one-year Periods of Severance, the Participant's
service subsequent to re-employment will not increase
the vested portion of the amount of the Participant's
CMC and CDC Contribution Accounts as of such previous
termination of employment and any amounts forfeited
will not be restored.
(k) The non-vested portions of a Participant's CMC and
CDC Contribution Accounts will be forfeited upon
termination of employment if a distribution occurs
following the termination of employment or if the
Participant has five consecutive one-year Breaks in
Service following the termination of employment. Any
such forfeiture will be applied to reduce CMC or CDC
Contributions payable under Sections 2.01(b) and
2.01(c) hereof (Company Matching Contributions and
Company Discretionary Contributions).
(l) The non-vested portions of a Participant's CMC and
CDC Contribution Accounts shall be 100% vested upon
the death of the Participant or termination of
employment due to a total and permanent disability of
the Participant. For this purpose, the "total and
permanent disability" of any Participant shall be
determined by the Committee, in accordance with
uniform principles consistently applied, upon the
basis of such evidence as the Committee deems
necessary or advisable.
(m) With respect to Participants who were terminated
effective August 31, 2002 as a result of the Company
terminating its management services agreement with
Retina Vitreous Associates, Inc., the non-vested
portions of such Participants' CMC and CDC
Contributions shall be 100% vested as of such date.
8.13 MILITARY SERVICE.
Notwithstanding any provision of this Plan to the contrary,
contributions, benefits and service credit with respect to qualified military
service will be provided in accordance with section 414(u) of the Code.
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8.14 DISTRIBUTIONS TO ALTERNATE PAYEES.
(a) If pursuant to a Qualified Domestic Relations Order,
as defined in Section 14.04 hereof (Qualified
Domestic Relations Order), all or a portion of a
Participant's Accounts in the Plan have been
transferred to corresponding Accounts in the Plan set
up for a spouse, former spouse, child or other
dependent of a Participant (collectively an
"Alternate Payee" as defined in section 414(p)(8) of
the Code), such Accounts shall be distributable to
the Alternate Payee, unless otherwise limited by the
order, when the Participant is first eligible to take
a distribution of the Participant's Accounts pursuant
to Section 8.01 hereof (Upon Retirement, Disability
or Other Events.)
(b) If pursuant to a Qualified Domestic Relations Order,
the Alternate Payee may take a distribution of the
Alternate Payee's Accounts when the Participant
attains "earliest retirement age" under the Plan, for
purpose of this provision, such Accounts shall be
distributable to the Alternate Payee when the
Participant attains age 50 or anytime thereafter.
(c) If pursuant to a Qualified Domestic Relations Order,
the Alternate Payee may take a distribution of the
Alternate Payee's Account at the time the Alternate
Payee's Accounts are established, such Accounts shall
be immediately or anytime thereafter distributable to
the Alternate Payee.
(d) If the present value of the Alternate Payee's
Accounts does not exceed $5,000 when established or
thereafter, such Alternate Payee's Accounts shall be
paid to the Alternate Payee in a lump sum, in an
amount equal to such present value calculated in
accordance with the provisions of Article VII and
Section 8.04 hereof (Valuation of Trust Funds and
Method and Medium of Payment).
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ARTICLE IX
VOTING OF COMPANY SHARES
RESPONSE TO TENDER OR EXCHANGE OFFER
9.01 VOTING OF COMPANY SHARES
A Participant may instruct the Trustee in writing how to vote
the Participant's shares of Manor Care, Inc. at any meeting of shareholders, and
may revoke any such instruction, to the extent permitted under the terms of such
vote. Such instruction or revocation thereof shall apply to the total number of
shares of Manor Care, Inc. credited to such Participant's Account under the
Manor Care, Inc. Stock Fund as of the Valuation Date coinciding with or
immediately preceding the record date for the shareholders' meeting. All the
shares of Manor Care, Inc. in the Manor Care, Inc. Stock Fund for which no such
instructions are received shall be voted by the Trustee in a uniform manner as a
single block in accordance with the instructions received with respect to a
majority of such shares for which instructions are received. Any such voting
instructions by Participants shall remain in the strict confidence of the
Trustee.
9.02 RESPONSE TO TENDER OR EXCHANGE OFFER
A Participant may instruct the Trustee in writing how to
respond to any tender or exchange offer (or any modification thereof) for shares
of Manor Care, Inc., and may revoke any such instruction, to the extent
permitted under the terms of such tender or exchange offer. Such instruction or
revocation thereof shall apply to the total number of shares of Manor Care, Inc.
to be credited to such Participant's Account under the Manor Care, Inc. Stock
Fund as of the first or second Valuation Date immediately preceding the date of
commencement of such tender or exchange offer, which Valuation Date shall be
selected by the Committee in its sole discretion. The Trustee shall not tender
or exchange any shares of Manor Care, Inc. absent written instruction from a
Participant.
9.03 FURNISHING OF NOTICE
The Committee shall use its reasonable best efforts to furnish
or cause the Trustee to furnish to Participants such notices and informational
statements as are furnished to the shareholders in respect of the exercise or
voting rights or relating to any tender or exchange offer in such form and
pursuant to such regulations as the Committee may prescribe.
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ARTICLE X
TRUST
10.01 TRUST AGREEMENT
As a part of the Plan, the Employer has entered into a Trust
Agreement with the Trustee under which a Trust Fund has been established and a
Trustee appointed to receive Employer contributions and Participant
contributions to the Trust Fund and to hold such funds and invest and reinvest
the same.
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ARTICLE XI
ADMINISTRATION OF THE PLAN
11.01 IN GENERAL
The Committee shall have overall responsibility for the
administration and operation of the Plan and the management and control of its
assets. The Committee shall be the Plan Administrator and a Named Fiduciary for
purposes of ERISA.
11.02 MEMBERS OF COMMITTEE
The Committee shall consist of such number of members and
alternates for members as the Chief Executive Officer of HES shall from time to
time determine, who shall serve at that Officer's pleasure. Vacancies in the
Committee shall be filled by that Officer. The Chief Executive Officer shall
select, from time to time, a Chairman and a Secretary. Any person may be, at the
same time, both a member of the Committee, or an alternate member, and a
Participant.
11.03 ABSENCE OR DISABILITY OF MEMBER
In the event of the absence or disability to act of any member
of the Committee, the alternate of the absent or disabled member shall have all
the rights, powers and duties of the absent or disabled member.
11.04 DUTIES OF COMMITTEE
The Committee shall determine which and when Participants and
their Beneficiaries are entitled to receive benefits hereunder, and shall advise
the Trustees as to whom to make benefit disbursements hereunder, and the amount
of such benefits. The Committee shall keep records, including minutes of their
meetings or other actions, and shall from time to time furnish each Trustee
which is to make a benefit disbursement hereunder, from time to time, with a
written list of the names and addresses of those persons to whom payments of
benefits are to be made by such Trustee.
11.05 AUTHORITY OF COMMITTEE
The Committee shall have full discretionary power and
authority to adopt, modify and rescind any and all regulations necessary or
appropriate for the administration of the Plan, and to make fair, equitable and
nondiscriminatory rulings and decisions on any questions which may arise with
respect to employees, Participants and their Beneficiaries, payments and amounts
of benefits, and on any question concerning the construction or interpretation
of each Trust Agreement and the Plan. All such regulations, rulings and
decisions of the Committee made in good faith shall be final and binding as to
all persons interested and as to all rights and obligations hereunder. Members
of the Committee shall serve as such without compensation but shall be entitled
to reimbursement from
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one or more Trustees, unless paid by the Employer, for all of their expenses of
administering this Plan, including, but not limited to, fees of accountants,
actuaries, counsel, investment advisors and other specialists, and, to the
extent permitted by XXXXX, members of the Committee shall be fully protected in
any action or failure to act taken by them in good faith reliance upon the
advice or opinions of such specialists. Any other expenses of administering this
Plan incurred by any member of the Committee or other Fiduciary with respect to
this Plan in the discharge of fiduciary duties and not paid by an Employer may
also be paid or reimbursed out of the Trust Fund to the extent authorized by the
Committee, except that no person serving as such a Fiduciary who already
receives full-time pay from an Employer shall receive compensation from this
Plan, except for reimbursement of expenses properly and actually incurred.
11.06 INDEMNIFICATION
To the extent permitted by law, HES and each Employer shall
indemnify and hold harmless each member of the Board of Directors of HES, each
member of the Committee and each officer and employee of HES or an Employer to
whom are delegated duties, responsibilities, and authority with respect to the
Plan, from and against all claims, liabilities, fines and penalties, and all
expenses reasonably incurred by or imposed upon such person (including, but not
limited to, reasonable attorney fees) which arise as a result of any actions or
failure to act in connection with the operation and administration of the Plan
to the extent that such claim, liability, fine, penalty, or expense is not paid
for by liability insurance purchased or paid for by an Employer. Notwithstanding
the foregoing, an Employer shall not indemnify any person for any such amount
incurred through any settlement or compromise of any action unless the Employer
consents in writing to such settlement or compromise.
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ARTICLE XII
ESTABLISHMENT, AMENDMENT, MODIFICATION AND
TERMINATION OF PLAN AND TRUST
12.01 IN GENERAL
HES, as Plan sponsor, shall have overall responsibility for
the establishment, amendment and termination, of the Plan. All rights, powers,
duties, authority, and responsibility in connection with this Plan, including
all Trusts hereunder, which are herein or otherwise reserved to or conferred
upon HES as Plan Sponsor or any other Employer as Plan co-sponsor have been
delegated by the Boards of Directors of HES and of each such other Employer to,
and shall be exercised, performed or discharged on behalf of HES and each such
other Employer by the Chief Executive Officer of HES or by another appropriate
officer or officers or committee of HES, as that officer's delegate, pursuant to
the procedure hereinafter provided. Whenever reference is made in this Plan or
in a Trust Agreement to an appropriate officer or officers of HES or of any
other Employer, such reference shall be to the Chief Executive Officer of HES or
to such other officer or officers of HES, to whom said Chief Executive Officer
or, to the extent authorized by said Chief Executive Officer, another officer or
officers of HES may at the time concerned have delegated any one or more of such
rights, powers, duties, authority, or responsibility hereunder. Each such
delegation and any modification or revocation thereof shall be recorded in
writing and kept on file with the Secretary of HES. Any act performed in the
exercise of delegated authority under this Plan shall be deemed the act of HES
or, as the case may be, of such other Employer. The right to revoke or modify
any delegation under this Plan is reserved to the Board of Directors of HES or,
as the case may be, to the board of directors of any such other Employer. If at
any time there is no person duly designated as Chief Executive Officer of HES,
any person who is President of HES shall have the full authority conferred upon
such Chief Executive Officer hereunder for all purposes hereof.
12.02 AMENDMENT OR MODIFICATION OF PLAN.
HES, by its appropriate officers on its behalf, shall have the
right, at any time and from time to time, to amend or modify the Plan by a
written instrument executed on behalf of HES by such officers after review by
the Committee; provided, however, that no amendment or modification shall
eliminate or reduce any benefit accrued or treated as accrued under section
411(d)(6) of the Code in violation of said section 411(d)(6) unless the same
shall be required by the Internal Revenue Service, or an officer or agent
thereof, in order to meet the requirements of section 401(a) of the Code, or
unless the same shall be required to comply with ERISA or any other applicable
law or laws; and provided further that, prior to the satisfaction of all
liabilities with respect to employees, Participants or Inactive Participants,
and their Beneficiaries, no part of the Trust Fund, or any benefit that may be
purchased therewith by way of annuity contract or otherwise, shall be paid to,
or be recoverable by, any Employer, or be diverted to any purpose other than for
the exclusive benefit of employees, Participants or Inactive Participants, and
their Beneficiaries. Any such amendment to the Plan shall be effective in
accordance with its terms without the necessity of delivery thereof to any
Trustee, but a copy of each such amendment to the Plan shall be promptly
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furnished to each Trustee following execution.
12.03 TERMINATION OF THE PLAN AND THE TRUST
(a) TERMINATION OF THE PLAN. It is the expectation of HES
that it will continue the Plan indefinitely, but the
continuance of the Plan is not a contractual
obligation of HES or of any Employer, and is not in
consideration of, an inducement to, or condition of
the employment of any person. HES reserves the right,
by written resolution of its Board of Directors, to
terminate the Plan, which action shall be binding
upon all Employers. Upon termination or partial
termination of the Plan, a Participant's or Inactive
Participant's, interest under the Plan as of such
date is nonforfeitable to the extent funded, and the
Committee shall allocate the assets of the Plan in
accordance with section 4044 of ERISA in the order of
priority set forth therein to the extent that the
assets of the Plan are available to provide benefits
to Participants or Inactive Participants, and their
Beneficiaries.
(b) TERMINATION OF THE TRUST. In the event of the
termination of the Plan pursuant to Section 12.03(a)
hereof (Termination of the Plan), and to the extent
permitted by law, HES may, at any time, in its
discretion, by its appropriate officers on its
behalf, determine either to terminate the Trust, in
which event distribution shall be made or provided
for forthwith from the assets as provided in said
Section 12.03(a), or to continue the Trust in which
case distribution shall be made or provided from the
assets as provided for in said Section 12.03(a) at
such time and upon such events as such distributions
would have been made had there been no termination of
the Plan and pursuant to Article VIII hereof
(Distributions and Benefits to Participants).
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ARTICLE XIII
TOP HEAVY PROVISIONS
13.01 DETERMINATION OF TOP HEAVY STATUS
This plan will be considered top heavy if as of the
Determination Date, the present value of cumulative accrued benefits under the
Plan for Key Employees exceeds 60% of the present value of the cumulative
accrued benefits under the Plan for all Employees. In determining the ratio of
accrued benefits for Key Employees to all other Employees, the Committee shall
use the procedure as outlined in section 416(g) of the Code which is
incorporated herein by reference thereto. In determining whether the Plan is
considered top heavy, all plans within the Aggregation Group will be utilized
for the calculation.
The present value of cumulative accrued benefits of a
Participant who has not performed an Hour of Service with the Employer
maintaining the Plan during the five-year period ending on the Determination
Date will be disregarded for purposes of this Article XIII.
For purposes of the top heavy test, the valuation date shall
be the last day of each Plan Year.
13.02 MINIMUM CONTRIBUTION
In the event that this Plan in aggregation with any other
defined contribution plans of the Employer is determined to be top heavy, the
Participants who are Non-Key Employees will be eligible for a minimum
contribution for such Plan Year. This minimum contribution, which shall be
allocated to the CMC Contributions Account of Participants who are Non-Key
Employees, will be contributed to this Plan in an amount equal to 3% of
Compensation or, if less, the largest contribution percentage of Compensation
provided on behalf of any Key Employee including Employee Pre-Tax Contributions
pursuant to Section 2.02 hereof (Employee Pre-Tax Contribution Option). The
minimum contribution required by this Section 13.02 shall be made on behalf of
such Participants who are employed as of the last day of the Plan Year
regardless of the number of hours of service credited to each Participant for
such Plan Years, and regardless of whether such Participant is authorizing
Employee Pre-Tax Contributions pursuant to Section 2.02 hereof (Employee Pre-Tax
Contribution Option). If this minimum contribution is provided by another
defined contribution plan of the Employer, then this Section 13.02 will not
apply to this Plan. If part of this minimum contribution is provided by another
defined contribution plan of the Employer, then the balance of the minimum
contribution shall be provided by this Plan.
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ARTICLE XIV
MISCELLANEOUS
14.01 PARTICIPANT'S RIGHTS
Neither the establishment of this Plan and the Trust hereby
created, nor any modification thereof, nor the creation of any fund or account,
nor any distributions hereunder, shall be construed as giving to any Participant
or other person any legal or equitable right against the Employer, or any
officer or Employee thereof, or the Trustee, or the Committee except as herein
provided. Under no circumstances shall the terms of employment of any
Participant be modified or in any way affected thereby.
14.02 PROHIBITION AGAINST REVERSION
Under no circumstances, except as provided in Section 2.08
hereof (Reversion of Funds to Employer), shall any amount of the principal or
income of the Trust Fund be used for or diverted to the Employer or be used for
or diverted to purposes other than the exclusive benefit of Participants, former
Participants, and their beneficiaries.
14.03 ASSIGNMENT OR ALIENATION OF BENEFITS
No benefit or interest available hereunder will be subject to
assignment or alienation, either voluntarily or involuntarily. The preceding
sentence shall apply to the creation, assignment, or recognition of a right to
any benefit payable with respect to a Participant pursuant to a domestic
relations order, unless such order is determined to be a Qualified Domestic
Relations Order, as defined in Section 14.04 hereof (Qualified Domestic
Relations Order).
14.04 QUALIFIED DOMESTIC RELATIONS ORDER.
Benefits shall be payable to an individual other than a
Participant in accordance with the applicable requirements of a Qualified
Domestic Relations Order pursuant to the following provisions:
(a) The term "Qualified Domestic Relations Order" shall
mean any judgment, decree, or court order (including
approval of a property settlement agreement) which
relates to the provision of child support, alimony
payments, or marital property rights to a spouse,
former spouse, child or other dependent of a
Participant (collectively an "Alternate Payee" as
defined in section 414(p)(8) of the Code), which
creates or recognizes the existence of an Alternative
Payee's right to, or assigns to an Alternate Payee
the right to, receive all or a portion of the
benefits payable with respect to a Participant under
the Plan, and which meets the following requirements:
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(1) Such order shall specify the name and last
known mailing address (if any) of the
Participant and each Alternate Payee covered
by the order;
(2) Such order shall specify the amount or
percentage of the Participant's benefits to
be paid by the Plan to each such Alternate
Payee or the manner in which such amount or
percentage is to be determined, or in the
alternative the amount or percentage
transferred from the Participant's Accounts
to Accounts set up for the Alternate Payee
as of a given date;
(3) Such order shall provide when the Alternate
Payee may first take a distribution of the
Alternate Payee's Accounts, if silent the
Alternate Payee's Accounts would first be
distributable, unless limited by the order,
when the Participant is first eligible to
take a distribution of the Participant's
Accounts pursuant to Section 8.01 hereof
(Upon Retirement, Disability or Other
Events);
(4) If applicable, such order shall specify the
number of payments or period to which the
order applies;
(5) Such order shall identify the Plan by its
official name;
(6) Such order shall not require the Plan to
provide any type or form of benefits or any
option not otherwise provided under the
Plan;
(7) Such order shall not require the Plan to
provide increased benefits (determined on
the basis of actuarial value); and
(8) Such order shall not require the payment of
benefits to an Alternate Payee which are
required to be paid to another Alternate
Payee under another order previously
determined to be a Qualified Domestic
Relations Order.
(b) The Committee shall determine a set of
nondiscriminatory and reasonable procedures to
determine the qualified status of a domestic
relations order and to administer distributions under
such qualified orders in accordance with section
414(p) of the Code.
(c) To the extent that a Qualified Domestic Relations
Order provides that a former spouse is to be treated
as the Participant's spouse for purposes of the death
benefits payable under this Plan, the Participant's
current spouse shall not be treated as the
Participant's spouse for that purpose.
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14.05 THIRD PARTY IMMUNITY
No third party including but not limited to life insurance
companies and regulated investment companies shall be deemed to be a party to
this Plan for any purpose or to be responsible for the validity of this Plan;
nor shall such third party be required to take cognizance of the Trustee or of
the Committee hereunder, nor shall such third party be responsible to see that
any action of the Trustee or the Committee is authorized by the terms of this
Plan. Any such third party shall be fully discharged from any and all liability
for any amount paid to the Trustee or paid in accordance with the direction of
the Trustee or the Committee, as the case may be, or for any change made or
action taken by such third party upon such direction; and no such third party
shall be obligated to see to the distribution or further application of any
monies so paid by such third party.
14.06 DELEGATION OF AUTHORITY
Whenever the Employer, under the terms of this Plan, is
permitted or required to do or perform any act or matter or thing, it shall be
done and performed by any officer duly authorized by its Board of Directors.
Whenever the Committee, under the terms of this Plan, is permitted or required
to do or perform any act or matter or thing, it shall be done and performed by
the Committee or it delegate.
14.07 CONSTRUCTION OF PLAN
To the extent not in conflict with the provisions of ERISA,
all questions of interpretation of this instrument shall be governed by the laws
of the State of Ohio.
14.08 GENDER AND NUMBER
Wherever any words are used herein in the masculine gender,
they shall be construed as though they were also used in the feminine gender.
Wherever any words are used herein in the singular form, they shall be construed
as though they were also used in the plural form in all cases where they would
so apply.
14.09 CLAIMS PROCEDURE
A claim for a Plan benefit shall be deemed filed when a
written communication is made by a Participant or beneficiary, or the authorized
representative of either, which is reasonably calculated to bring the claim to
the attention of the Committee.
If a claim is wholly or partially denied, notice of such
decision shall be furnished to the claimant in writing within 90 days after
receipt of the claim by the Committee. Such notice shall set forth, in a manner
calculated to be understood by the claimant:
(a) the specific reason or reasons for the denial;
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(b) specific reference to pertinent Plan provisions on
which the denial is based;
(c) a description of any additional material or
information necessary to perfect the claim and an
explanation of why such material or information is
necessary; and
(d) an explanation of the Plan's claim review procedure.
Within 60 days from the receipt of the notice of denial, a
claimant may appeal such denial to the Committee for a full and fair review. The
review shall be instituted by the filing of a written request for review by the
claimant or the claimant's authorized representative within the 60 day period
stated above. A request for review shall be deemed filed as of the date of
receipt of such written request by the Committee. The claimant or the claimant's
authorized representative shall have the right to review all pertinent
documents, may submit issues and comments in writing and may do such other
appropriate things as the Committee may allow. The decision of the Committee
shall be made not later than 60 days after the receipt of the request for
review; unless special circumstances, such as the need to hold a hearing,
requires an extension of time, in which case, a decision shall be rendered not
later than 120 days after the receipt of a request for review which decision
shall be final and binding on such claimant.
14.10 MERGER, CONSOLIDATION, OR TRANSFER OF ASSETS
This Plan may be merged or consolidated with, or its assets or
liabilities transferred to any other plan provided each Participant would (if
the plan then terminated) receive a benefit immediately after the merger,
consolidation or transfer which is equal to or greater than the benefit the
Participant would have been entitled to receive immediately before the merger,
consolidation or transfer (if the plan had then terminated), or provided such
alternative requirements as may be imposed by the Treasury Regulations under
section 414(l) of the Code. Appendix B hereof (Merged Plan) lists the plans
which have been merged into this Plan.
14.11 ALLOCATION OF RESPONSIBILITIES
None of the allocated responsibilities or any other
responsibilities shall be shared by any two or more Named Fiduciaries unless
such sharing is provided by a specific provision of this Plan. Whenever one
Named Fiduciary is required to follow the directions of another Named Fiduciary,
the responsibility shall be that of the Named Fiduciary giving the directions.
14.12 HEADINGS
Headings of sections are for general information only, and
this Plan is not to be construed by reference thereto.
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APPENDIX A
HCR-MANOR CARE
STOCK PURCHASE AND RETIREMENT SAVINGS 401(K) PLAN
LIST OF COVERED EMPLOYERS AND EMPLOYEES
AS OF JANUARY 1, 2003
EMPLOYER EIN LOCATIONS ELIGIBLE EMPLOYEES
-------- --- --------- ------------------
Heartland Employment Services, Inc. 00-0000000 All All non-union employees and union
employees who have elected to
participate in the Plan according to
a collective bargaining agreement
Milestone Healthcare, Inc. 00-0000000 All All employees
A-1
APPENDIX B
HCR-MANOR CARE
STOCK PURCHASE AND RETIREMENT SAVINGS 401(K) PLAN
MERGED PLANS
SPONSORING EMPLOYER NAME OF PLAN DATE MERGED
------------------- ------------ -----------
Heartland Rehabilitation Rehabilitation Administrative Corp., Inc. Aug. 30, 1996
Services, Inc. 401(k) Savings Retirement Plan
Heartland Home Care, Inc. Heartland Home Care, Inc. Jul. 31, 1997
401(K) Plan
MileStone Healthcare, Inc. MileStone Healthcare 401(k) Profit Dec. 31, 1997
Sharing Plan
Diversified Rehabilitation Diversified Rehabilitation Services Apr. 30, 1998
Services Inc. Tax Deferred Savings Plan
In Home Health Inc. In Home Health Inc. Savings Plan Nov. 1, 2001
Heartland Employment Manor Care, Inc. Retirement Savings Jan. 1, 2003
Services, Inc. and Investment Plan
As of: January 1, 2003
B-1
