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MAGELLAN HEALTH SERVICES, INC. SUPPLEMENTAL ACCUMULATION PLAN

Employee Benefits Plan Agreement

MAGELLAN HEALTH SERVICES, INC.

 

                         SUPPLEMENTAL ACCUMULATION PLAN
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MAGELLAN HEALTH SERVICES, INC.

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Title: MAGELLAN HEALTH SERVICES, INC. SUPPLEMENTAL ACCUMULATION PLAN
Date: 3/17/2005
Industry: Healthcare Facilities     Sector: Healthcare

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                                                                  Exhibit 10.10

 

                                TABLE OF CONTENTS

 

<TABLE>

<S>           <C>                                                                                 <C>

 

                                                                                                        PAGE

 

 

ARTICLE 1              DEFINITIONS........................................................................1

 

   1.1         ACCOUNT....................................................................................1

 

   1.2         ADMINISTRATOR..............................................................................1

 

   1.3         BENEFICIARY................................................................................1

 

   1.4         CAUSE......................................................................................1

 

   1.5         CHANGE OF CONTROL..........................................................................2

 

   1.6         CODE.......................................................................................2

 

   1.7         COMPANY....................................................................................2

 

   1.8         COMPENSATION...............................................................................2

 

   1.9         COMPENSATION DEFERRAL ACCOUNT..............................................................2

 

   1.10        COMPENSATION DEFERRALS.....................................................................2

 

   1.11        COMPETITION................................................................................2

 

   1.12        DESIGNATION DATE...........................................................................3

 

   1.13        DISCRETIONARY CONTRIBUTIONS................................................................3

 

   1.14        DISCRETIONARY CONTRIBUTIONS ACCOUNT........................................................3

 

   1.15        EFFECTIVE DATE.............................................................................3

 

   1.16        ELIGIBLE EMPLOYEE..........................................................................3

 

   1.17        EMPLOYER...................................................................................3

 

   1.18        ENTRY DATE.................................................................................4

 

   1.19        401(K) PLAN................................................................................4

 

   1.20        MATCHING CONTRIBUTIONS.....................................................................4

 

   1.21        MATCHING CONTRIBUTIONS ACCOUNT.............................................................4

 

 

                                       i

<PAGE>

                               TABLE OF CONTENTS

                                  (CONTINUED)

 

                                                                                                        PAGE

 

  1.22        MAXIMUM 401(K) CONTRIBUTION.................................................................4

 

   1.23        PARTICIPANT................................................................................4

 

   1.24        PAYMENT DATE...............................................................................4

 

   1.25        PLAN.......................................................................................5

 

   1.26        PLAN YEAR..................................................................................5

 

   1.27        TRUST......................................................................................5

 

   1.28        TRUSTEE....................................................................................5

 

   1.29        VALUATION DATE.............................................................................5

 

ARTICLE 2              ELIGIBILITY AND PARTICIPATION......................................................5

 

   2.1         REQUIREMENTS...............................................................................5

 

   2.2         RE-EMPLOYMENT..............................................................................5

 

   2.3         CHANGE OF EMPLOYMENT CATEGORY..............................................................5

 

ARTICLE 3              CONTRIBUTIONS AND CREDITS..........................................................5

 

   3.1         EMPLOYER CONTRIBUTIONS.....................................................................5

 

   3.2         PARTICIPANT COMPENSATION DEFERRALS.........................................................6

 

   3.3         CONTRIBUTIONS TO THE TRUST.................................................................9

 

   3.4         MAXIMUM 401(K) CONTRIBUTIONS...............................................................9

 

ARTICLE 4              ALLOCATION OF FUNDS................................................................9

 

   4.1         ALLOCATION OF EARNINGS OR LOSSES ON ACCOUNTS...............................................9

 

   4.2         ACCOUNTING FOR DISTRIBUTIONS..............................................................10

 

   4.3         SEPARATE ACCOUNTS.........................................................................10

 

   4.4         INTERIM VALUATIONS........................................................................10

 

   4.5         DEEMED INVESTMENT DIRECTIONS OF PARTICIPANTS..............................................10

 

   4.6         EXPENSES..................................................................................11

 

 

                                       ii

<PAGE>

                                TABLE OF CONTENTS

                                  (CONTINUED)

 

                                                                                                        PAGE

 

   4.7         TAXES.....................................................................................12

 

ARTICLE 5              ENTITLEMENT TO BENEFITS...........................................................12

 

   5.1         FIXED PAYMENT DATES; TERMINATION OF EMPLOYMENT............................................12

 

   5.2         VESTING...................................................................................13

 

   5.3         TERMINATION OF EMPLOYMENT UPON DISPOSITION OF ASSETS OR SUBSIDIARIES......................13

 

   5.4         HARDSHIP DISTRIBUTIONS....................................................................13

 

   5.5         NONSCHEDULED WITHDRAWALS..................................................................14

 

   5.6         APPLICATION TO TRUSTEE....................................................................14

 

   5.7         TREATMENT OF FORFEITURES..................................................................15

 

   5.8         RE-EMPLOYMENT OF RECIPIENT................................................................15

 

ARTICLE 6              DISTRIBUTION OF BENEFITS..........................................................15

 

   6.1         DISTRIBUTABLE AMOUNT......................................................................15

 

   6.2         METHOD OF PAYMENT.........................................................................15

 

   6.3         DEATH BENEFITS............................................................................16

 

ARTICLE 7              BENEFICIARIES; PARTICIPANT DATA...................................................16

 

   7.1         DESIGNATION OF BENEFICIARIES..............................................................16

 

   7.2         INFORMATION TO BE FURNISHED BY PARTICIPANTS AND

              BENEFICIARIES; INABILITY TO LOCATE PARTICIPANTS OR

              BENEFICIARIES.............................................................................17

 

ARTICLE 8              ADMINISTRATION....................................................................17

 

   8.1         ADMINISTRATIVE AUTHORITY..................................................................17

 

   8.2         UNIFORMITY OF DISCRETIONARY ACTS..........................................................19

 

   8.3         LITIGATION................................................................................19

 

   8.4         CLAIMS PROCEDURE..........................................................................19

 

 

                                       iii

<PAGE>

                               TABLE OF CONTENTS

                                   (CONTINUED)

 

                                                                                                        PAGE

 

 

   8.5         ACTION BY THE ADMINISTRATOR...............................................................20

 

   8.6         PARTICIPATION BY ADMINISTRATORS...........................................................20

 

   8.7         ALLOCATION OF DUTIES......................................................................20

 

ARTICLE 9              AMENDMENT.........................................................................20

 

   9.1         RIGHT TO AMEND............................................................................20

 

   9.2         AMENDMENTS TO ENSURE PROPER CHARACTERIZATION OF PLAN......................................21

 

ARTICLE 10             TERMINATION.......................................................................21

 

   10.1        TERMINATION OF SUSPENSION OF PLAN.........................................................21

 

   10.2        AUTOMATIC TERMINATION OF PLAN.............................................................21

 

   10.3        SUSPENSION OF DEFERRALS...................................................................21

 

   10.4        ALLOCATION AND DISTRIBUTION...............................................................21

 

   10.5        SUCCESSOR TO EMPLOYER.....................................................................21

 

ARTICLE 11             THE TRUST.........................................................................22

 

   11.1        ESTABLISHMENT OF TRUST....................................................................22

 

   11.2        UNFUNDED STATUS OF PLAN...................................................................22

 

ARTICLE 12             MISCELLANEOUS.....................................................................22

 

   12.1        LIMITATIONS ON LIABILITY OF EMPLOYER......................................................22

 

   12.2        CONSTRUCTION..............................................................................22

 

   12.3        SPENDTHRIFT PROVISION.....................................................................23

 

   12.4        NO EMPLOYMENT CONTRACT....................................................................24

 

   12.5        NOTICES...................................................................................24

 

   12.6        CONSENT TO PLAN...........................................................................24

 

   12.7        BINDING ON SUCCESSORS.....................................................................24

 

</TABLE>

 

                                       iv

<PAGE>

                         MAGELLAN HEALTH SERVICES, INC.

 

                         SUPPLEMENTAL ACCUMULATION PLAN

 

                          Effective as of January 1, 2000

 

                                    RECITALS

 

         This Magellan Health Services, Inc. Supplemental Accumulation Plan (the

"Plan") is adopted by Magellan Health Services, Inc. (the "Company") for the

benefit of the directors, officers and certain executive, management and other

highly compensated employees of the Company and its subsidiaries and affiliates.

The purpose of the Plan is to offer those directors and employees an opportunity

to elect to defer the receipt of compensation in order to provide deferred

compensation benefits taxable pursuant to section 451 of the Internal Revenue

Code of 1986, as amended (the "Code"). The Plan is intended to be a "top-hat"

plan (i.e., an unfunded deferred compensation plan maintained for a select group

of management or highly-compensated employees) under sections 201(2), 301(a)(3)

and 401(a)(1) of the Employee Retirement Income Security Act of 1974 ("ERISA").

 

         Accordingly, the following Plan is adopted.

 

 

 

                                     ARTICLE 1

 

                                   DEFINITIONS

                                   -----------

 

         1.1 ACCOUNT means the balance credited to a Participant's or

Beneficiary's Plan account, including contribution credits and income, gains and

losses (as determined by the Administrator, in its discretion) credited thereto.

A Participant's or Beneficiary's Account shall be determined as of the date of

reference.

 

         1.2 ADMINISTRATOR means the committee described in Article 8, which is

responsible for the administration of this Plan.

 

         1.3 BENEFICIARY means any person or persons so designated in accordance

with the provisions of Article 7.

 

         1.4 CAUSE means any of the following with respect to the Participant's

position of employment with an Employer: (a) loss of any professional license

required to perform the duties of the position; (b) gross negligence, fraud or

willful violation of any law or significant policy of the Company or another

Employer, committed in connection with the position and resulting in a material

adverse effect on the Employer; (c) failure to substantially perform (for

reasons other than Disability) the duties reasonably assigned or appropriate to

the position, in a manner reasonably consistent with prior practice; provided,

however, that the term "Cause" shall not include ordinary negligence or failure

to act, whether due to an error in judgment or otherwise, if the Participant has

exercised substantial good faith in performing the duties reasonably assigned or

appropriate to the position.

 

 

<PAGE>

         1.5 CHANGE OF CONTROL of the Company will take place upon the

occurrence of any of the following events: (a) the acquisition after the

beginning of the term in one or more transactions of beneficial ownership

(within the meaning of Rule 13-d3(a)(1) under the Securities Exchange Act of

1934, as amended (the "Exchange Act")) by any person or entity (other than a

wholly owned subsidiary of Magellan Health Services, Inc. ("Magellan")), or any

group of persons or entities who constitute a group (within the meaning of Rule

13d-5 of the Exchange Act), of any securities of the Company such that as a

result of such acquisition such person or entity or group beneficially owns

(within the meaning of Rule 13d-3(a)(1) under the Exchange Act) more than 50% of

the Company's then outstanding voting securities entitled to vote on a regular

basis for a majority of the Board of Directors of the Company; or (b) the sale

of all or substantially all of the assets of the Company (including, without

limitation, by way of merger, consolidation, lease or transfer) in a transaction

where Magellan does not receive (i) voting securities representing a majority of

the voting power entitled to vote on a regular basis for the Board of Directors

of the acquiring entity or of an Affiliate which controls the acquiring entity,

or (ii) securities representing a majority of the equity interest in the

acquiring entity or of an affiliate that controls the acquiring entity, if other

than a corporation.

 

         1.6 CODE means the Internal Revenue Code of 1986 and the regulations

thereunder, as amended from time to time.

 

         1.7 COMPANY means Magellan Health Services, Inc. and its successors and

assigns.

 

          1.8 COMPENSATION means the total current cash remuneration that would

be payable by the Employer to an Eligible Employee with respect to his or her

service for the Employer as an employee, ignoring any election to make

Compensation Deferrals under this Plan. In the case of a director,

"Compensation" means the compensation which would otherwise have been payable

currently for services as a member of the Board of Directors of the Company or

any other Employer, including fees payable for services as a member of a

committee of the Board.

 

         1.9 COMPENSATION DEFERRAL ACCOUNT is defined in Section 3.2.

 

         1.10 COMPENSATION DEFERRALS is defined in Section 3.2.

 

         1.11 COMPETITION means the Participant's engaging in any of the

following activities, directly or indirectly, whether as partner, officer,

director, employee, manager, consultant or otherwise, within a 50-mile radius of

any Employer location or facility: (a) the performance of services for any

organization (a "Similar Organization"), if any purpose or activity of that

organization is substantially similar to that of an Employer; (b) for any

 

 

                                       2

<PAGE>

Similar Organization, the performance, the assistance in the performance, or

consultation with respect to the performance of services substantially similar

to the services performed at any time for an Employer, or similar to services

performed by any person over whom the Participant, at any time, had supervision

of, or responsibility for, while employed by an Employer; or (c) the operation,

assistance in the operation or consultation with respect to the operation of any

entity or any part of any entity, the purpose of which and/or the activities of

which are similar in any way to the operation of any part of an Employer over

which the Participant had direct or indirect responsibility while employed by

any Employer.

 

         1.12 DESIGNATION DATE means the date or dates as of which a designation

of deemed investment directions by an individual pursuant to Section 4.5, or any

change in a prior designation of deemed investment directions by an individual

pursuant to Section 4.5, shall become effective. The Designation Dates in any

Plan Year shall be the first day of each calendar quarter or such other dates as

may be designated by the Administrator.

 

         1.13 DISCRETIONARY CONTRIBUTIONS means the contributions made by an

Employer, as described in Section 3.1(a).

 

         1.14 DISCRETIONARY CONTRIBUTIONS ACCOUNT means the account established

to record the Discretionary Contributions credited to a Participant each Plan

Year and the earnings, losses and expenses attributable thereto, as described in

Section 3.1.

 

         1.15 EFFECTIVE DATE means the effective date of the Plan, which,

notwithstanding the date of execution hereof, shall be January 1, 2000.

 

         1.16 ELIGIBLE EMPLOYEE means, for any Plan Year (or applicable portion

thereof), a director of the Company or another Employer or a person employed by

an Employer, who is paid through a U.S. payroll system, and who is determined by

the Employer to be a member of a select group of management or highly

compensated employees and who is designated by the Company's Board of Directors

or the Company's Chief Executive Officer to be an Eligible Employee under the

Plan. By each October 1 (or before the Effective Date for the Plan's first Plan

Year), the Company shall notify those individuals, if any, who will be Eligible

Employees for the next Plan Year. If the Company determines that an individual

first becomes an Eligible Employee during a Plan Year, the Company shall notify

such individual of its determination and of the date during the Plan Year on

which the individual shall first become an Eligible Employee. Solely for the

purposes of this Plan, a director of the Company or another Employer shall be

deemed to be in the employment of the Company or any other Employer so long as

he or she serves in the capacity of a director by the Company or any other

Employer.

 

         1.17 EMPLOYER means Magellan Health Services, Inc. and its successors

unless otherwise herein provided or any subsidiary of Magellan Health Services,

Inc. (or its successors) which, with the consent of Magellan Health Services,

Inc. or its successors, assumes the obligations of an Employer hereunder.

 

 

                                       3

<PAGE>

         1.18 ENTRY DATE with respect to an individual means the first day of

the first pay period following the date on which the individual first becomes an

Eligible Employee.

 

         1.19 401(K) PLAN means the retirement plan maintained by the Company on

the Effective Date and that is intended to qualify under Code ss. ss. 401(a) and

401(k) and any successor or replacement plan.

 

         1.20 MATCHING CONTRIBUTIONS means the contributions made by an Employer

for a Plan Year for the benefit of a Participant who makes Compensation

Deferrals for that Plan Year, as described in Section 3.1(b).

 

         1.21 MATCHING CONTRIBUTIONS ACCOUNT means the account established to

record the Matching Contributions credited to a Participant in a Plan Year,

along with the earnings, losses and expenses attributable thereto, as described

in Section 3.1.

 

         1.22 MAXIMUM 401(K) CONTRIBUTION means, for a given Plan Year, the

lesser of: (1) the Participant's total Compensation Deferrals (excluding

investment earnings and reduced by investment losses and expenses) attributable

to salary earned and any bonus that was payable in that Plan Year; (2) the

maximum elective deferrals that the Participant can make to the 401(k) Plan

under the limitations in Code ss. ss. 402(g) and 415 for that Plan Year,

determined by the Administrator at the end of that Plan Year after taking into

account all contributions actually made by or on behalf of the Participant to

the 401(k) Plan for that Plan Year; or (3) the maximum elective deferrals that

the Administrator determines pursuant to Section 3.4 may be made by the

Participant for that Plan Year based on the Company's preliminary testing of the

401(k) Plan's compliance with the actual deferral percentage and actual

contribution percentage discrimination testing for that Plan Year described in

Code ss. ss. 401(k)(3) and 401(m) and the limitations under Code ss. 402(g),

after taking into account all elective deferrals actually made by the

Participant to the 401(k) Plan for that Plan Year.

 

         1.23 PARTICIPANT means any person so designated in accordance with the

provisions of Article 2, including, where appropriate according to the context

of the Plan, any former employee or director who is or may become (or whose

Beneficiaries may become) eligible to receive a benefit under the Plan.

 

         1.24 PAYMENT DATE means the fixed date as of which a portion of all or

a Participant's Plan benefits is to be paid or commence to be paid to the

Participant. If no other date has been designated by the Participant pursuant to

the Plan's terms as the Payment Date for a specific portion or all of the

Participant's Account, then the Payment Date for that purpose shall be a date,

as selected by the Administrator, in the first calendar month beginning

immediately after the calendar quarter in which the Participant's employment by

all Employers terminates or, if later, the January 1 that is two years after the

last such Compensation Deferrals were made.

 

 

                                       4

<PAGE>

         1.25 PLAN means this Magellan Health Services, Inc. Supplemental

Accumulation Plan, as amended from time to time.

 

         1.26 PLAN YEAR means the period commencing on the Effective Date and

ending on December 31, 2000, and thereafter each twelve (12) month period ending

on the December 31 of each year which the Plan is in effect.

 

         1.27 TRUST means the Trust established pursuant to Article 11.

 

         1.28 TRUSTEE means the trustee of the Trust established pursuant to

Article 11.

 

         1.29 VALUATION DATE means the last day of each calendar month or any

other date that the Administrator, in its sole discretion, designates as a

Valuation Date.

 

                                     ARTICLE 2

 

                          ELIGIBILITY AND PARTICIPATION

                          -----------------------------

 

         2.1 REQUIREMENTS. Every Eligible Employee on the Effective Date shall

be eligible to become a Participant on the Effective Date. Every other Eligible

Employee shall be eligible to become a Participant on the first Entry Date

occurring on or after the date on which he or she becomes an Eligible Employee.

No individual shall become a Participant, however, if he or she is not an

Eligible Employee on the date his or her participation is to begin.

 

         Participation in the Plan is voluntary. In order to participate in the

Plan, an otherwise Eligible Employee must make written application in such

manner as may be required by Section 3.2 and by the Company.

 

         2.2 RE-EMPLOYMENT. If a Participant whose employment with the Employer

is terminated is subsequently re-employed, he or she shall become a Participant

in accordance with the provisions of Section 2.1, provided he or she then

qualifies as an Eligible Employee.

 

         2.3 CHANGE OF EMPLOYMENT CATEGORY. During any period in which a

Participant remains in the employ of the Employer, but ceases to be an Eligible

Employee, he or she shall not be eligible to make Compensation Deferrals

hereunder.

 

                                    ARTICLE 3

 

                            CONTRIBUTIONS AND CREDITS

                            -------------------------

 

         3.1 EMPLOYER CONTRIBUTIONS. The following contributions shall be made

by each Employer each Plan Year:

 

              (a) Discretionary Contributions: The Discretionary Contributions

credited to a Participant for each Plan Year shall be an amount (if any)

determined by the Employer, in its sole and absolute discretion, and contributed

by the Employer to the Plan as a Discretionary Contribution on the Participant's

 

 

                                       5

<PAGE>

behalf. The Employer may make Discretionary Contributions for any Plan Year in a

different amount for each Participant or for any group of Participants and may

choose to make no Discretionary Contributions for any Participant or for any

group of Participants, in its absolute discretion. The Discretionary

Contributions credited to a Participant for each Plan year and the subsequent

earnings, losses and expenses attributable to those contributions shall be

separately accounted for in a Discretionary Contribution Account in the

Participant's name.

 

              (b) Matching Contributions: For each Plan Year, the Employer shall

make a Matching Contribution for each Participant who makes Compensation

Deferrals for that Plan Year in an amount equal to the matching contributions

that would have been credited to the Participant's account in the 401(k) Plan if

his or her Compensation Deferrals for that Plan Year plus the Participant's

401(k) contributions actually credited to the 401(k) Plan for that Plan Year had

all been contributed to the 401(k) Plan (subject to all of the limitations on

matching contributions under the terms of the 401(k) Plan other than limitations

based on the results of the actual deferral percentage and actual contribution

percentage testing for the 401(k) Plan for that Plan Year in accordance with

Code ss. ss. 401(k)(3) and 401(m)), reduced by the matching contributions that

were actually credited to the Participant's account in the 401(k) Plan for that

Plan Year. The Matching Contributions for each Plan Year shall be determined

after the Participant's Maximum 401(k) Contribution for that Plan Year has been

determined under Section 3.4. The Matching Contributions credited to a

Participant for each Plan Year and the subsequent earnings, losses and expenses

attributable to those contributions shall be separately accounted for in a

Matching Contribution Account in the Participant's name.

 

              (c) Earnings, Losses and Expenses: The Participant's Discretionary

Contributions Account and Matching Contributions Account shall each be credited

or debited, as applicable, as of each Valuation Date, with the deemed earnings

or losses, as applicable, and expenses attributable to that account, as

determined by the Administrator hereunder, in its sole and absolute discretion.

The Administrator shall have the sole and absolute discretion to allocate such

deemed earnings or losses and expenses among the Participants' Discretionary

Contributions Accounts and Matching Contributions Accounts pursuant to such

allocation rules as the Administrator deems to be reasonable and

administratively practicable.

 

               (d) Vesting: A Participant shall be vested in amounts credited to

his or her Discretionary Contributions Account and Matching Contributions

Account as provided in Section 5.2.

 

         3.2 PARTICIPANT COMPENSATION DEFERRALS.

 

              (a) In General. In accordance with rules established by the

Administrator, a Participant may elect to defer Compensation which is due to be

earned and which would otherwise be paid to the Participant; provided, however,

that (1) the Participant's deferrals from his or her base salary shall not

exceed fifty percent (50%) of base salary, (2) the Participant's deferrals from

sales commissions and bonuses and incentive compensation may be up to one

 

 

                                       6

<PAGE>

hundred percent (100%) of those compensation items and (3) the minimum amount to

be deferred pursuant to the Participant's deferral election(s) for any Plan Year

shall be five thousand dollars ($5,000), pro-rated on a monthly basis in any

case where the Participant's period of participation in the Plan for the Plan

Year is less than twelve (12) months. Notwithstanding the foregoing, in no event

shall the Compensation Deferral for any pay period during which a Participant's

deferral election is in effect reduce the Participant's net Compensation

(determined after subtraction of the Compensation Deferral amount) below the

amount necessary to satisfy for that pay period the aggregate employment and

withholding taxes, as well as deductions, withholdings and/or salary reductions

with respect to any employee benefit, that are applicable to the Participant's

Compensation for that pay period. Amounts so deferred will be considered a

Participant's "Compensation Deferrals."

 

              (b) Timing of Election. A Participant shall make such an election

with respect to a coming twelve (12) month Plan Year by no later than December

15 of the prior Plan Year in the case of deferrals from regular salary and sales

bonuses and commissions, and by October 31 of that prior year in the case of

incentive compensation (other than sales bonuses or commissions) or during such

other period prior to the beginning of the coming Plan Year designated by the

Administrator. For the first Plan Year, Eligible Employees must make regular

payroll and sales bonuses and commissions Compensation Deferral elections with

respect to services to be performed subsequent to the election at any time on or

before December 31, 1999 to be effective as of January 1, 2000 and must make

Compensation Deferral elections with respect to incentive compensation (other

than sales bonuses and commissions) to be earned in 1999 and 2000 by December

31, 1999. Thereafter, in the first year in which an individual becomes an

Eligible Employee, any newly Eligible Employee may make a Compensation Deferral

election with respect to services to be performed subsequent to the election

within thirty (30) days after the date the individual becomes eligible.

 

              (c) 401(k) Election. The provisions of this sub-section will apply

only if the Administrator decides, in its absolute discretion, to permit

transfers of the Maximum 401(k) Contribution to the 401(k) Plan. If the

Administrator so decides, then, as a part of his or her Compensation Deferral

election, the Participant shall make an irrevocable election as to whether the

Maximum 401(k) Contribution for each Plan Year to which the Compensation

Deferral election applies shall be either contributed to the 401(k) Plan or paid

to the Participant after the end of that Plan Year, pursuant to Section 3.4. In

the event that the Participant fails to make such an election with respect to

the Maximum 401(k) Contribution, then he or she shall be deemed to have elected

to receive payment of the Maximum 401(k) Contribution from this Plan at the end

of that Plan Year pursuant to Section 3.4.

 

              (d) Election Procedure. Compensation Deferrals shall be made

through regular payroll deductions from salary and/or through an election by the

Participant to defer the payment of a bonus payment not yet payable to him or

her at the time of the election but payable in the coming Plan Year to which the

election applies. Except in the cost of 1999 bonus payments, a deferral election

 

 

                                       7

<PAGE>

may not be made with respect to a bonus payment that is payable in the year the

deferral election is made. All deferral elections shall be made in writing on a

form provided by or acceptable to the Administrator and filed with the

Administrator by no later than the date designated by the Administrator as the

due date for that election (which date shall, in all cases except 1999, be a

date occurring before the beginning of the Plan Year to which the election

applies or, in the case of a new Participant, a date occurring before his or her

Entry Date). All Compensation elections shall be stated as a whole percentage of

the compensation item to which it applies. The Participant's election for a

given Plan Year may also designate a fixed Payment Date (which date must occur

at least two years after the date the respective contribution is made) for the

commencement of payment to the Participant of the Compensation Deferrals made

pursuant to that deferral election (as increased and decreased by deemed

earnings, losses and expenses), as more particularly described in Section 5.1.

The Participant may not terminate his or her regular payroll deduction

(including sales bonus and commissions payments) Compensation Deferral amount at

any time during the Plan Year to which it applies. In the case of an incentive

compensation deferral (other than sales bonuses and commissions), the

Participant may reduce his or her incentive compensation payment due to be paid

by the Employer by filing a written deferral election with the Employer on or

before October 31 of the Plan Year preceding the Plan Year in which that payment

first becomes payable or, for 1999 incentive compensation to be paid in 2000, by

December 31, 1999. Once made, a Compensation Deferral regular payroll deduction

election shall continue in force indefinitely, except that a deferral election

for regular payroll deductions that designates a fixed Payment Date shall

automatically expire and have no effect on the January 1 that is two years prior

to that designated Payment Date. A Participant may change a Compensation

Deferral regular payroll deduction election effective as of the first day of a

Plan Year in accordance with the procedures specified in this Section 3.2 for

making Compensation Deferral elections. Such change shall be made on a

subsequent election form provided by the Employer. An incentive compensation

payment election shall continue in force only for the Plan Year for which the

election is first effective; a separate incentive compensation payment election

must be made for each Plan Year. Compensation Deferrals shall be deducted by the

Employer from the pay of a deferring Participant and shall be credited to the

Account of the deferring Participant within five (5) days of the date that the

deferral amount would otherwise have been paid to the Participant.

 

              (e) Suspension of Contributions. Notwithstanding anything to the

contrary, in any case where a Participant receives a withdrawal under Section

5.5, all of the Participant's Compensation Deferrals shall be suspended until

the end of the Plan Year following the Plan Year in which that withdrawal was

made.

 

              (f) Compensation Deferral Account. There shall be established and

maintained by the Employer for each Plan Year a separate Compensation Deferral

Account in the name of each Participant to which shall be credited or debited:

(a) amounts equal to the Participant's Compensation Deferrals for that Plan

Year; (b) amounts equal to any deemed earnings or losses (as determined by the

Administrator, in its sole and absolute discretion) attributable or allocable

thereto; and (c) expenses charged to that Account. In the event a Participant

designates a specific Payment Date for certain Compensation Deferrals, those

Compens


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