GROUP HEALTH, INC. DEFINED BENEFIT RESTORATION PLAN

Transcription

1 Exhibit E GROUP HEALTH, INC. DEFINED BENEFIT RESTORATION PLAN Artide 1 lbepbn 1.1 Establishment. GROUP HEALTH, INC. (the "Company") hereby establishes. effective as of February I, 1994, a supplemental compensation plan for the benefit of eligible executives. This plan shall be known as the Defined Benefit Restoration Plan (the "Plan"). 1.2 Purpose. The purpose of the Plan is to restore Qualified Defined Benefit Retirement Plan benefits that are lost due to legislative limits on compensation considered under such plans. 1.3 Adoption bv Affiliates. With the consent of the Company, this Plan may be adopted by an Affiliate (defined below) for the benefit of such of its employees as the Affiliate shall designate. Article 2 Definitions 2.1 Definitions.' Whenever used in the Plan, the following words and phrases shall have the meanings set forth below unless the context. plainly requires a different meaning. When the defined meaning is intended. the term is capitalized: "Affiliate" means an entity that is related to the Company and adopts this Plan with the Company's consent. In such a case, the term "Company," as used in this Plan, shall mean such Affiliate, unless the context clearly indicates otherwise "Code" means the Internal Revenue Code of 1986, as amended. References to a Code section shall be deemed to be to that section as it now exists and to any successor provision "Comoetition" means engaging in one or more of the activities described on Attachment 1. 03J02194 CONADENT1Al P

2 2.1.4 "Participant" means only an executive employee of the Company who is specifically designated as a Participant by or under the direction of the Company's Board of Directors "Oualified Plan" means the Company's Qualified Defined Benefit Retirement Plan as amended from time to time "Reasonable Cause" means any of the following, with respect to the Participant's position of employment with the Company: position; Loss of any professional license required to perform the duties of the Gross negligence, fraud or willful violation of any law -or significant Company policy, committed in connection with the position and resulting in a material adverse effect on the Company; or Failure to substantially perform (for reasons other than medically detenninable disability) the duties reasonably assigned or appropriate to the position, in a manner reasonably consistent with prior practice; provided. however, that the term "Reasonable Cause" shall not include ordill3l)' negligence or failure to act, whether due to an error in judgment or otherwise, if the Participant has exercised substantial efforts in good faith to perform the duties reasonably assigned or appropriate to the position "Restoration Benefit" means the benefit described in Article "Statutory Limit" means any limit imposed by the Code on compensation taken into account in calculating benefits under qualified plans "Termination of Employment" means the Participant's ceasing to be employed by the Company for any reason whatsoever, voluntary or involuntary. including by reason of death or disability. 2 CONFIDENTIAl P011987

3 2.2 Gender and Number. Except as otherwise indicated by context, masculine terminology used herein also includes the feminine and neuter~ and terms used in the singular may also include the plural. Article 3 Participation To participate in and receive benefits under this PIan, each Participant agrees to observe all rules and regulations established by the Company for administering the Plan and shaij abide by all decisions of the Company in the construction and administration of the Plan. Article 4 Restonation Benefit 4. ] Benefit Calculation. A Participant's Restoration Benefit is the actuarialjy determined..present value of the normal retirement benefit that would be payable to the Participant at age 65 (or the Participant's actual age. if over age 65) under the Qualified Plan ignoring the operation of the Statutory Limit, less the actuarially determined present value of such Qualified Plan benefit taking into account the Statutory Limit 4.2 Actuarial Assumptions. Actuarial present values shall be calculated using the assumptions employed by the actuaries for the Qualified Plan in the most recent Qualified Plan Actuarial Report, and such other reasonable assumptions detennined by the Company as may be required. 43 Entitlement to Benefit. 4.3.] General Rule. The Participant shall be entitled to receive his or her Restoration Benefit upon the earlier of attaiiunent of age 65 or Tennination of Employment for any reason other than (i) Reasonable Cause or (ii) voluntary Termination of Employment Forfeiture for Competing. A Participant whose Termination of Employment (a) occurs prior to age 65 and (b) is due to either Reasonable Cause or his or her voluntary Termination of Employment shall be entitled to receive Restoration Benefits only if the Participant does not enter into Competition with the Company during the twenty-four (24) month period following the Participant's Termination of EmploymenL If the Participant 3 CONADENTIAl P

4 enters into Competition with the Company during such period. the Participant shall forfeil his or her entire right to receive any benefits under this Plan Tune and Method ofpavrnent of Account Benefits. The Restoration Benefit shall be payable in a Jump sum as follows: Payment WIthout Restrictions. Upon the occurrence of the earlier of (a) the Participant's attaining age 65 while employed by the Company, or (b) his or her Termination of Employment for any reason other than Reasonable Cause or his or her voluntary Termination of Employment, the Company shall distnoute the Restoration Benefit in a lump sum not later than sixty (60) days after the Participant's 65th birthday or Termination of Employmen~ whichever applies Delayed Payment Subject to Restrictions. If the restrictions under Section apply. the Company shall distribute the Participant's Restoration Benefit in a lump sum not later than sixty (60) days after the end of the noncompetitionperiod under Section provided the Participant does not enter into Competition with the Company during the applicable twenty-four (24) month period. 4.5 Survivor Benefits. If the Participant's Termination of Employment occurs due to his or her death, or if the Paiticipant dies during the noncompetition period described in Section 4.3~2 and before violating the covenants in such Section. the Company shall pay the Participant's Restoration Benefit (calculated as of the date of the Participant's death) to the Participant's beneficiary in a lump sum within sixty (60) days after the Participant's death. If a beneficiary dies before receiving the payment due to such beneficiary pursuant to this Plan. the remaining payments shall be paid to the legal representatives of the beneficiary's estate I Beneficiary Designations. The Participant shall designate a beneficiary by filing a written notice of such designation with the Company. The Participant may revoke or modify the designation at any time by a further written designation. However, no such designation, revocation or modification shall be effective unless executed by the Participant and accepted by the Company during the Participant's lifetime. The Participant's beneficiary designation shall be deemed automatically revoked in the event of (i) the death of the beneficiary prior to the Participant's death, or (ii) if the beneficiary is the Participant's spouse. in the event of dissolution of marriage. If the Participant dies without a valid beneficiary designation, all payments shall be made to the Participant's surviving spouse, if 4 CONFlDENTlAl P011989

5 any. and if none. to the Participant's surviving children and the descendants of any deceased child. by right of representatio~ and if no children or descendants survive, to the Participant's estate FaCIlity of Pavrnent. If a benefit is payable to a minor or person declared incompetent or to a person incapable of handling the disposition of his or her property, the Company may pay such benefit to the guardian. legal representative or person having the care or custody of such minor. incompetent or person. The Company may.require proof of incompetency. minority or guardianship as it may deem appropriate prior to distribution of the benefit. Such distnbution shall completely discharge the Company from all liability with respect to such benefit. 4.6 Employment Beyond Age 65. For each year that the Participant remains employed by the Company after attaining age 65. the Company shall pay to the Participant the excess of the Restoration Benefit calculated at the end of each such additional year over th-e sum of the Restoration Benefits previously paid to the Participant. Article 5 Oaims and Review Procedures 5.1 Claims Procedure. The Company shall notify a Participant or beneficiary ("claimant") in writing, within ninety (90) days of his or her written application for benefits, of his or her eligibility or non-eligjbility for benefits under the Plan. If the Company determines that a claimant is not eligjole for benefits or full benefits. the notice shall set forth (1) the specific reasons for such denial, (2) a specific reference to the provisions of the Plan on which the denial is based. (3) a description of any additional information or material necessary for the claimant to perfect his or her claim. and a description of why it is needed. and (4) an explanation of the Plan's claims review procedure and other appropriate information as to the steps to be taken if the claimant wishes to have the claim reviewed. If the Company determines that there are special circumstances requiring additional time to make a decision. the Company shall notify the claimant of the special circumstances and the date by which a decision is expected to be made, and may extend the time for up to an additional ninety-day period. 5.2 Review Procedure. H a claimant is determined by the Company to be ineligjole for benefits. or if the claimant believes that he or she is entitled to greater or different benefits. the claimant shall have the opportunity to have such claim reviewed by the Company by filing a 5 CONADE~ P

6 petition for review with the Company within sixty (60) days after receipt of the notice issued by the Company. Said petition shall state the specific reasons whicb the claimant believes entitles him or her to benefits or to greater or different benefits. Within sixty (60) days after receipt by the Company of said petition, the Company shall afford the claimant (and counsel if any) an opponunity to present his or her position to the Company o~ or in writing, and the claimant (or counsel) shall have the right to review the pertinent documents. The Company shall notify the Claimant of its decision in writing within the sixty-day period. stating specifically the basis of its decision written in a. manner calculated to be understood by the claimant.. and the specific provisions of the Plan on which the decision is based. It: because of the need for a hearing, the sixty-day period is not sufficient, the decision may be deferred for up to another sixty-day period at the election of the Company, but notice of this deferral shall be given to the claimant. In the event of the death of a claimant, the same procedure shall be applicable to the claimant's beneficiaries. Administration Article 6 and Finances 6. ] Administration. The Plan shall be administered by the Company. The Company shall bear all costs of the Plan. 6.2 Powers of tbe Company. The Company shall have all powers necessary to administer. the Plan, including, without limitation, powers: to interpret the provisions of the Plan; to establish and revise the method of accounting for the Plan and to maintain the accounts; and to establish rules for the administration of the Plan and to prescribe any forms required to administer the Plan. 6.3 Actions of the Company. AJI detenninations. interpretations, rules, and decisions of the Company shan be conclusive and binding upon all persons having or claiming to have any interest or right under the Plan. 6.4 Delegation. The Company shall have tbe power to delegate specific duties and responsibilities to officers or other employees of the Company or other individuals or entities. Any delegation by the Company may allow funher delegations by the individual or entity to whom the 6 CONADENTIAl P

7 delegation is made. Any delegation may be rescinded by the Company at any time. Each person or entity to whom a duty or responsibility has been delegated shall be responsible for the exercise of such duty or responsibility and shad not be responsible for any act or failure to act of any other person or entity. 6.5 RCJ>Ortsand Records. The Company and those to whom the Company has delegated duties under the Plan shall keep records of ad their proceedings and actions and. shall maintain books of account. records. and other data as shad be necessary for the proper administration of the Plan and for compliance with applicable Jaw. Article 7 Amendments and Termination 7.l Amendments. The Company may amend' tbe Plan, in full or in part, at..any time and from time to time. provided that no such amendment shall affect the rights of a Participant or beneficiary to benefits under the Plan accrued prior to the date' of the amendment. unless the Participant or beneficiary consents in writing to such amendment. 7.2 Termination. The Company expects the Plan to be pennanent. but necessarily must. and hereby does. reserve the right to terminate the Plan at any time. provided that no such termination shall affect' the rights of a Participant or beneficiary to benefits under the Plan accrued prior to the date of the amendment. unless the Participant or beneficiary consents in writing to such termination. Article 8 Miscdlaneou5 8.1 No Guaranty of Employment. The adoption and maintenance of the Plan shad not be deemed to be a contract of employment between the Company and any Participant. Nothing contained herein shall give any Participant the right to be retained in the employ of the Company or to interfere with the right of the Company to discharge any Participant at any time. nor shad it give the Company the right to require any Participant to remain in its employ or to interfere with the Participant's right to terminate employment at any time. 8.2 Informal Funding. The Company in its discretion may apply for and procure as owner and for its own benefit insurance on the life of a Participant or other assets as the Company may 7 CONADENTlAL P

8 choose. The Participant shad have DO interest whatsoever in any such policy or assets, but at the request of the Company shad submit to medical e:x.aminations and supply such information and execute such documents as may be required by the insurance company or companies to whom the Company has applied for insurance. The rights of the Participant. or of his or her beneficiary or estate to benefits under the Plan shad be solely those of an unsecured aeditor of the Company~ Any assets acquired by or held by the Company shall not be deemed to be held as security for the performance of the obligations of the Company but shall be. and remain. a general. unpledged, and unrestricted asset of the Company. 8.3 Non-Alienation. No benefit payable at any time under this Plan shall be subject in any manner to alienation. sale, transfer, assignment, pledge, attachment, or encumbrance of any kind. 8.4 Applicable Law. The Plan and all rights hereunder shan be governed by and construed according to the laws.ofminnesota, except to the extent Such laws are preempted by the laws of the United States of America. GROUP HEALTH, INC. By Title ~{}W-u-- (!J~ HEAlTHPARTNERS, Inc. By. ~ Titlel~ 8 COHAOENTIAl P

9 ATTACHMENTl COMPETING ACfIVITIES A Participant shall be in Competition with the Company if he or she, directly or indirectly, whether as partner, officer, director, employee, manager, consultant. or otherwise, within the 7 county MinneapolislSt Paul Metropolitan Area: 1. Performs services for any organization, any purpose or activity of which is substantially similar to that of the Company or an affiliate ("Similar Organization"); 2. For any Similar Organization, performs. assists in the performance, or consults with respect to the performance of services substantially similar to the services now, or at any time, performed by the Participant for the Company or an affiliate, or similar to services performed by any person over whom the Participant, at any time, had supervision of: or responsibility for, while employed by the Company or an affiliate; 3. Operates, assists in operating or consuhs 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 the Company or an affiliate over which the Participant had direct or indirect responsibility while employed by the Company or an affiliate; or 4. Performs services for any health maintenance organization or preferred provider organization. 9 CONADENTIAL P