Registration No. 333-_______________.
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM S-8
REGISTRATION STATEMENT
under the Securities Act of 1933
Mylan Laboratories Inc.
-------------------------------
(Exact Name of Issuer as specified in its charter)
Pennsylvania 25-1211621
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
1030 Century Building, 130 Seventh Street
Pittsburgh, Pennsylvania 15222
(Address of principal executive offices) (Zip Code)
Mylan Profit Sharing 401(k) Plan
(Full Title of Plan)
Milan Puskar
Chief Executive Officer
1030 Century Building, 130 Seventh Street
Pittsburgh, Pennsylvania 15222
(Name and address of agent for service)
(412) 232-0100
(Telephone number, including area code, of agent for service)
Copy to:
David G. Edwards, Esquire
Doepken Keevican & Weiss
58th Floor, USX Tower, 600 Grant Street
Pittsburgh, Pennsylvania 15219
CALCULATION OF REGISTRATION FEE
- ------------------------------ ----------------------- --------------------------- -------------------------- ----------------------
Proposed Maximum Proposed Maximum
Title of Securities Amount to be Offering Price Aggregate Amount of
to be Registered Registered per Share Offering Price Registration Fee
- ------------------------------ ----------------------- --------------------------- -------------------------- ----------------------
- ------------------------------ ----------------------- --------------------------- -------------------------- ----------------------
Common Stock $.01 par value 1,000,000 $20.25 (1) $20,250,000 (1) $5,346(1)
- ------------------------------ ----------------------- --------------------------- -------------------------- ----------------------
- ------------------------------ ----------------------- --------------------------- -------------------------- ----------------------
Common stock purchase rights
1,000,000 (2) (2) (2)
- ------------------------------ ----------------------- --------------------------- -------------------------- ----------------------
- --------------------------------------
(1) Estimated for the purpose of calculating the registration fee pursuant to
Rule 457(c) for the shares registered hereunder, being the average of the high
and low prices for the Registrant's Common Stock on the New York Stock Exchange
on July 19, 2000.
(2) Rights to purchase Common Stock (the "Rights") initially are attached
to and trade with the shares of Common Stock being registered hereby. Value
attributable to such Rights, if any, is reflected in the market price of the
Common Stock.
PART II. INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The Registrant has incorporated by reference in this Registration
Statement the documents listed below. These documents have been filed with the
Securities and Exchange Commission under the Securities Exchange Act of 1934.
1. The Registrant's Annual Report on Form 10-K for the year ended
March 31, 2000.
2. The description of the Registrant's Common Stock included in
the Registration Statement on Form 8-A filed April 3, 1986,
including any subsequent amendment or any report filed for the
purpose of updating such description.
3. The description of the Rights included in Registration
Statement on Form 8-A filed September 3, 1996, as amended by
Amendment No. 1 to Registration Statement on Form 8-A/A filed
December 5, 1996, and as further amended by Amendment No. 2 to
Registration Statement on Form 8-A/A filed March 31, 2000,
including any subsequent amendment or any report filed for the
purpose of updating such description.
4. The Registrant's Form 8-K filed on July 13, 2000.
All documents filed by the Registrant pursuant to Sections 13(a),
13(c), 14 and 15(d) of the Exchange Act, after the date of this Registration
Statement and prior to the filing of a post-effective amendment which indicates
that all securities offered hereby have been sold or which deregisters all
securities then remaining unsold, shall be deemed to be incorporated by
reference into this Registration Statement and to be a part hereof from the
respective dates of filing of such documents.
Item 4. Description of Securities.
Not Applicable.
Item 5. Interests of Named Experts and Counsel.
Doepken Keevican &Weiss Professional Corporation, Pittsburgh,
Pennsylvania has given its opinion as to the legality of the Common Stock being
offered. Robert W. Smiley, who is of counsel to Doepken Keevican & Weiss, also
serves as the Registrant's Secretary.
Item 6. Indemnification of Directors and Officers.
In accordance with the Pennsylvania Business Corporation Law, the
Registrant's By-Laws provide that none of its directors will be personally
liable for monetary damages for taking or failing to take any action unless the
director has breached or failed to perform the duties required under
Pennsylvania law and this breach or failure to perform constitutes self-dealing,
willful misconduct or recklessness.
5
As permitted under Pennsylvania law, the Registrant's By-Laws provide
that the Registrant will indemnify its directors and officers under certain
circumstances for expenses, judgments, fines or settlements incurred in
connection with suits and other legal proceedings. Pennsylvania law allows
indemnification in cases where the person "acted in good faith and in a manner
he reasonably believed to be in, or not opposed to the best interests of the
corporation and, with respect to any criminal proceeding, had no reasonable
cause to believe his conduct was unlawful."
Item 7. Exemption from Registration Claimed.
Not applicable.
Item 8. Exhibits.
The exhibits accompanying this Registration Statement are listed on the
accompanying Exhibit Index.
Item 9. Undertakings.
The Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of this registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in this registration
statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in this registration statement or
any material change to such information in this registration statement.
Provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if
the information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the Registrant pursuant to section 13 or section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in the
registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) That, for purposes of determining any liability under the
Securities Act of 1933, each filing of the Registrant's annual report pursuant
to section 13(a) or section 15(d) of the Securities Exchange Act of 1934 (and,
where applicable, each filing of an employee benefit plan's annual report
pursuant to section 15(d) of the Securities Exchange Act of 1934) that is
incorporated by reference in the registration statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(4) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
(5) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
the registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized in the City of Pittsburgh, Commonwealth of Pennsylvania, on July
14, 2000.
Mylan Laboratories Inc.
(Registrant)
By: /s/ Milan Puskar
Milan Puskar, Chairman and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933,
the undersigned, being the members of the Compensation Committee, have duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of Pittsburgh, Commonwealth
of Pennsylvania, on July 14, 2000.
Mylan Laboratories Inc. Compensation Committee
By: /s/ Laurence S. DeLynn
Laurence S. DeLynn , Committee Member
/s/ John C. Gaisford
John C. Gaisford, M.D., Committee Member
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Milan Puskar and Patricia A. Sunseri and
each of them, with full power to act without the other, his true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him and in his name, place and stead, in any and all capacities to sign any
or all amendments to this Registration Statement, including post-effective
amendments, and to file the same with all exhibits thereto, and other documents
in connection therewith, with the Securities and Exchange Commission, granting
unto said attorneys-in-fact and agents, and each of them, full power and
authority to do and perform each and every act and thing requisite and necessary
to be done in connection therewith, as fully to all intents and purposes as he
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents of any of them, or any substitute or substitutes,
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
SIGNATURE TITLE DATE
- ------------------------------- ------------------ ------------------------
/s/ Milan Puskar Chairman, Chief Executive
- ------------------------ (principal executive officer)
Milan Puskar and Director July 14, 2000
/s/ Dana G. Barnett Executive Vice President
- ------------------------ and Director
Dana G. Barnett July 14, 2000
/s/ Patricia A. Sunseri Vice President
- ------------------------ and Director
Patricia A. Sunseri July 14, 2000
/s/ Donald C. Schilling Vice President of Finance
- ----------------------- (principal financial and
Donald C. Schilling accounting officer) July 14, 2000
/s/ Laurence S. DeLynn Director July 14, 2000
- ----------------------
Laurence S. DeLynn
/s/ Douglas J. Leech Director July 14, 2000
- ----------------------
Douglas J. Leech
/s/ John C. Gaisford Director July 14, 2000
- ----------------------
John C. Gaisford, M.D.
C.B. Todd Director July 14, 2000
- ----------------------
C.B. Todd
Index to Exhibits
4.1* Form of Mylan Profit Sharing 401(k) Plan.
4.2 Amended and Restated Articles of Incorporation of the Registrant (included
as an exhibit in the Form S-8 of the Registrant filed with the Commission
on December 23, 1997, Registration No. 333-43081 and incorporated herein by
reference).
4.3 Bylaws of the Registrant, as amended to date (included as an exhibit in the
Form S-8 of the Registrant filed with the Commission on December 23, 1997,
Registration No. 333-43081 and incorporated herein by reference).
5.1* Opinion of Doepken Keevican & Weiss Professional Corporation.
23.1 Consent of Doepken Keevican & Weiss Professional Corporation (included in
the opinion filed as Exhibit 5.1 to this Registration Statement).
23.2*Consent of Deloitte & Touche LLP relating to its report regarding Mylan
Laboratories Inc.
23.3*Consent of Deloitte & Touche LLP relating to its report regarding Somerset
Pharmaceuticals, Inc.
24.1 Powers of Attorney (included on signature page of the Registration
Statement).
- -------------------------
* Filed herewith.
7
Exhibit 4.1
MYLAN
PROFIT SHARING 401(K) PLAN
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
ARTICLE II
ADMINISTRATION
2.1 POWERS AND RESPONSIBILITIES OF THE EMPLOYER.........................16
2.2 DESIGNATION OF ADMINISTRATIVE AUTHORITY.............................17
2.3 POWERS AND DUTIES OF THE ADMINISTRATOR..............................17
2.4 RECORDS AND REPORTS.................................................19
2.5 APPOINTMENT OF ADVISERS.............................................19
2.6 PAYMENT OF EXPENSES.................................................19
2.7 CLAIMS PROCEDURE....................................................20
2.8 CLAIMS REVIEW PROCEDURE.............................................20
ARTICLE III
ELIGIBILITY
3.1 CONDITIONS OF ELIGIBILITY...........................................21
3.2 EFFECTIVE DATE OF PARTICIPATION.....................................21
3.3 DETERMINATION OF ELIGIBILITY........................................21
3.4 TERMINATION OF ELIGIBILITY..........................................21
3.5 OMISSION OF ELIGIBLE EMPLOYEE.......................................21
3.6 INCLUSION OF INELIGIBLE EMPLOYEE....................................22
ARTICLE IV
CONTRIBUTION AND ALLOCATION
4.1 FORMULA FOR DETERMINING EMPLOYER CONTRIBUTION.......................22
4.2 PARTICIPANT'S SALARY REDUCTION ELECTION.............................23
4.3 TIME OF PAYMENT OF EMPLOYER CONTRIBUTION............................27
4.4 ALLOCATION OF CONTRIBUTION, FORFEITURES AND EARNINGS................28
4.5 ACTUAL DEFERRAL PERCENTAGE TESTS....................................31
4.6 ADJUSTMENT TO ACTUAL DEFERRAL PERCENTAGE TESTS......................35
4.7 ACTUAL CONTRIBUTION PERCENTAGE TESTS................................37
4.8 ADJUSTMENT TO ACTUAL CONTRIBUTION PERCENTAGE TESTS..................41
4.9 MAXIMUM ANNUAL ADDITIONS............................................43
4.10 ADJUSTMENT FOR EXCESSIVE ANNUAL ADDITIONS...........................45
4.11 TRANSFERS FROM QUALIFIED PLANS......................................46
4.12 VOLUNTARY CONTRIBUTIONS.............................................48
4.13 DIRECTED INVESTMENT ACCOUNT.........................................48
ARTICLE V
VALUATIONS
5.1 VALUATION OF THE TRUST FUND.........................................50
5.2 METHOD OF VALUATION.................................................50
ARTICLE VI
DETERMINATION AND DISTRIBUTION OF BENEFITS
6.1 DETERMINATION OF BENEFITS UPON RETIREMENT...........................51
6.2 DETERMINATION OF BENEFITS UPON DEATH................................51
6.3 DETERMINATION OF BENEFITS IN EVENT OF DISABILITY....................53
6.4 DETERMINATION OF BENEFITS UPON TERMINATION..........................53
6.5 DISTRIBUTION OF BENEFITS............................................58
6.6 DISTRIBUTION OF BENEFITS UPON DEATH.................................64
6.7 TIME OF SEGREGATION OR DISTRIBUTION.................................68
6.8 DISTRIBUTION FOR MINOR BENEFICIARY..................................68
6.9 LOCATION OF PARTICIPANT OR BENEFICIARY UNKNOWN......................68
6.10 PRE-RETIREMENT DISTRIBUTION.........................................69
6.11 ADVANCE DISTRIBUTION FOR HARDSHIP...................................70
6.12 QUALIFIED DOMESTIC RELATIONS ORDER DISTRIBUTION.....................73
6.13 DIRECT ROLLOVER.....................................................73
ARTICLE VII
AMENDMENT, TERMINATION, MERGERS AND LOANS
7.1 AMENDMENT...........................................................74
7.2 TERMINATION.........................................................75
7.3 MERGER OR CONSOLIDATION.............................................75
7.4 LOANS TO PARTICIPANTS...............................................76
ARTICLE VIII
TOP HEAVY
8.1 TOP HEAVY PLAN REQUIREMENTS.........................................77
8.2 DETERMINATION OF TOP HEAVY STATUS...................................77
ARTICLE IX
MISCELLANEOUS
9.1 PARTICIPANT'S RIGHTS................................................80
9.2 ALIENATION..........................................................81
9.3 CONSTRUCTION OF PLAN................................................82
9.4 GENDER AND NUMBER...................................................82
9.5 LEGAL ACTION........................................................82
9.6 PROHIBITION AGAINST DIVERSION OF FUNDS..............................82
9.7 BONDING.............................................................83
9.8 EMPLOYER'S AND TRUSTEE'S PROTECTIVE CLAUSE..........................83
9.9 INSURER'S PROTECTIVE CLAUSE.........................................83
9.10 RECEIPT AND RELEASE FOR PAYMENTS....................................84
9.11 ACTION BY THE EMPLOYER..............................................84
9.12 NAMED FIDUCIARIES AND ALLOCATION OF RESPONSIBILITY..................84
9.13 HEADINGS............................................................85
9.14 APPROVAL BY INTERNAL REVENUE SERVICE................................85
9.15 UNIFORMITY..........................................................85
ARTICLE X
PARTICIPATING EMPLOYERS
10.1 ADOPTION BY OTHER EMPLOYERS.........................................86
10.2 REQUIREMENTS OF PARTICIPATING EMPLOYERS.............................86
10.3 DESIGNATION OF AGENT................................................86
10.4 EMPLOYEE TRANSFERS..................................................87
10.5 PARTICIPATING EMPLOYER CONTRIBUTION.................................87
10.6 AMENDMENT...........................................................87
10.7 DISCONTINUANCE OF PARTICIPATION.....................................87
10.8 ADMINISTRATOR'S AUTHORITY...........................................88
SCHEDULES
SCHEDULE 6.2 PROTECTED OPTIONAL FORMS OF DEATH BENEFIT
SCHEDULE 6.5 PROTECTED OPTIONAL FORMS OF BENEFIT DISTRIBUTION
SCHEDULE 7.4 PARTICIPANT LOAN PROGRAM
SCHEDULE 10.1 PARTICIPATING EMPLOYERS
MYLAN
PROFIT SHARING 401(K) PLAN
THIS PLAN, hereby adopted this 29th day of March, 2000, by Mylan
Laboratories Inc. (herein referred to as the "Employer").
W I T N E S S E T H:
WHEREAS, the Employer heretofore established a Profit Sharing
Plan effective April 1, 1979, (hereinafter called the "Effective Date") known as
Mylan Laboratories Inc. Employees Profit Sharing Plan and which plan shall
hereinafter be known as Mylan Profit Sharing 401(k) Plan (herein referred to as
the "Plan") in recognition of the contribution made to its successful operation
by its employees and for the exclusive benefit of its eligible employees; and
WHEREAS, under the terms of the Plan, the Employer has the
ability to amend the Plan, provided the Trustee joins in such amendment if the
provisions of the Plan affecting the Trustee are amended;
NOW, THEREFORE, generally effective April 1, 1997, except as
otherwise provided, and in particular the salary deferral and matching
contributions provisions are effective April 1, 2000, the Employer in accordance
with the provisions of the Plan pertaining to amendments thereof, hereby amends
the Plan in its entirety and restates the Plan to provide as follows:
ARTICLE I
DEFINITIONS
1.1 "Act" means the Employee Retirement Income Security Act of 1974, as
it may be amended from time to time.
1.2 "Administrator" means the Employer unless another person or entity
has been designated by the Employer pursuant to Section 2.2 to administer the
Plan on behalf of the Employer.
1.3 "Affiliated Employer" means any corporation which is a member of a
controlled group of corporations (as defined in Code Section 414(b)) which
includes the Employer; any trade or business (whether or not incorporated) which
is under common control (as defined in Code Section 414(c)) with the Employer;
any organization (whether or not incorporated) which is a member of an
affiliated service group (as defined in Code Section 414(m)) which includes the
Employer; and any other entity required to be aggregated with the Employer
pursuant to Regulations under Code Section 414(o).
1.4 "Aggregate Account" means, with respect to each Participant, the
value of all accounts maintained on behalf of a Participant, whether
attributable to Employer or Employee contributions, subject to the provisions of
Section 8.2.
1
1.5 "Anniversary Date" means December 31st.
1.6 "Annuity Starting Date" means, with respect to any Participant, the
first day of the first period for which an amount is paid as an annuity or any
other form.
1.7 "Beneficiary" means the person to whom the share of a deceased
Participant's total account is payable, subject to the restrictions of Sections
6.2 and 6.6.
1.8 "Code" means the Internal Revenue Code of 1986, as amended or
replaced from time to time.
1.9 "Compensation" with respect to any Participant means such
Participant's wages, salaries, fees for professional services and other amounts
received (without regard to whether or not an amount is paid in cash) for
personal services actually rendered in the course of employment with the
Employer maintaining the Plan to the extent that the amounts are includible in
gross income (including, but not limited to, commissions paid salesmen,
compensation for services on the basis of a percentage of profits, commissions
on insurance premiums, tips, bonuses, fringe benefits, and reimbursements or
other expense allowances under a nonaccountable plan (as described in Regulation
1.62-2(c)) for a Plan Year.
Compensation shall exclude (a)(1) contributions made by the
Employer to a plan of deferred compensation to the extent that, the
contributions are not includible in the gross income of the Participant for the
taxable year in which contributed, (2) Employer contributions made on behalf of
an Employee to a simplified employee pension plan described in Code Section
408(k) to the extent such contributions are excludable from the Employee's gross
income, (3) any distributions from a plan of deferred compensation; (b) amounts
realized from the exercise of a non-qualified stock option, or when restricted
stock (or property) held by an Employee either becomes freely transferable or is
no longer subject to a substantial risk of forfeiture; (c) amounts realized from
the sale, exchange or other disposition of stock acquired under a qualified
stock option; and (d) other amounts which receive special tax benefits, or
contributions made by the Employer (whether or not under a salary reduction
agreement) towards the purchase of any annuity contract described in Code
Section 403(b) (whether or not the contributions are actually excludable from
the gross income of the Employee).
For purposes of this Section, the determination of
Compensation shall be made by:
(a) excluding (even if includible in gross income)
reimbursements or other expense allowances, fringe benefits
(cash or noncash), moving expenses, deferred compensation, and
welfare benefits.
(b) including amounts which are contributed by the
Employer pursuant to a salary reduction agreement and which
are not includible in the gross income of the Participant
under Code Sections 125, 402(e)(3), 402(h)(1)(B), 403(b) or
457(b),
2
and Employee contributions described in Code Section 414(h)(2)
that are treated as Employer contributions.
For a Participant's initial year of participation,
Compensation shall be recognized as of such Employee's effective date of
participation pursuant to Section 3.2.
Compensation in excess of $150,000 shall be disregarded. Such
amount shall be adjusted for increases in the cost of living in accordance with
Code Section 401(a)(17), except that the dollar increase in effect on January 1
of any calendar year shall be effective for the Plan Year beginning with or
within such calendar year. For any short Plan Year the Compensation limit shall
be an amount equal to the Compensation limit for the calendar year in which the
Plan Year begins multiplied by the ratio obtained by dividing the number of full
months in the short Plan Year by twelve (12).
For purposes of this Section, if the Plan is a plan described
in Code Section 413(c) or 414(f) (a plan maintained by more than one Employer),
the limitation applies separately with respect to the Compensation of any
Participant from each Employer maintaining the Plan.
If, in connection with the adoption of this amendment and
restatement, the definition of Compensation has been modified, then, for Plan
Years prior to the Plan Year which includes the adoption date of this amendment
and restatement, Compensation means compensation determined pursuant to the Plan
then in effect.
1.10 "Contract" or "Policy" means any life insurance policy, retirement
income or annuity policy or annuity contract (group or individual) issued
pursuant to the terms of the Plan.
1.11 "Deferred Compensation" with respect to any Participant means the
amount of the Participant's total Compensation which has been contributed to the
Plan in accordance with the Participant's deferral election pursuant to Section
4.2 excluding any such amounts distributed as excess "annual additions" pursuant
to Section 4.10(a).
1.12 "Designated Investment Alternative" means a specific investment
identified by name by a Fiduciary as an available investment under the Plan
which may be acquired or disposed of by the Trustee pursuant to the investment
direction by a Participant.
1.13 "Directed Investment Option" means one or more of the
following:
(a) a Designated Investment Alternative.
(b) any other investment permitted by the Plan and
the Participant Direction Procedures and acquired or disposed
of by the Trustee pursuant to the investment direction of a
Participant.
3
1.14 "Early Retirement Date" means, except as otherwise reduced for a
particular Participant group as provided below in this Section 1.14, the first
day of the month (prior to the Normal Retirement Date) coinciding with or
following the date on which a Participant or Former Participant attains age 55,
and has completed at least 7 whole years of his Period of Service with the
Employer (Early Retirement Age). A Participant shall become fully Vested upon
satisfying this requirement if still employed at his Early Retirement Age.
A Former Participant who terminates employment after
satisfying the service requirement for Early Retirement and who thereafter
reaches the age requirement contained herein shall be entitled to receive his
benefits under this Plan.
For a Participant who had an account under the former Penederm
Incorporated 401(k) Plan, last maintained by Bertek Pharmaceuticals Inc., which
account was merged with and into, or transferred (other than by a direct or
indirect rollover transfer) to, this Plan on April 1, 2000, "Early Retirement
Date" means the first day of the month (prior to the Normal Retirement Date)
coinciding with or following the date on which a Participant or Former
Participant attains age 55, and has completed at least 5 whole years of his
Period of Service with the Employer (Early Retirement Age).
1.15 "Elective Contribution" means the Employer contributions to the
Plan of Deferred Compensation excluding any such amounts distributed as excess
"annual additions" pursuant to Section 4.10(a). In addition, the Employer
contribution made pursuant to Section 4.1(b) which is used to satisfy the safe
harbor methods permitted by Code Sections 401(k)(12) and 401(m)(11) and the
Employer matching contribution made pursuant to Section 4.1(c) which is used to
satisfy the "Actual Deferral Percentage" tests and any Employer Qualified
Non-Elective Contribution made pursuant to Section 4.1(d) and Section 4.6(b)
which is used to satisfy the "Actual Deferral Percentage" tests shall be
considered an Elective Contribution for purposes of the Plan. Any contributions
deemed to be Elective Contributions (whether or not used to satisfy the "Actual
Deferral Percentage" tests) shall be subject to the requirements of Sections
4.2(b) and 4.2(c) and shall further be required to satisfy the nondiscrimination
requirements of Regulation 1.401(k)-l(b)(5), the provisions of which are
specifically incorporated herein by reference.
1.16 "Eligible Employee" means any Employee, except for those groups of
employees identified in this Section as not eligible to participate in the Plan.
Employees who are Leased Employees within the meaning of Code
Sections 414(n)(2) and 414(o)(2) shall not be eligible to participate in this
Plan.
Employees whose employment is governed by the terms of a
collective bargaining agreement between Employee representatives (within the
meaning of Code Section 7701(a)(46)) and the Employer under which retirement
benefits were the subject of good faith bargaining between the parties will not
be eligible to participate in this Plan unless such agreement expressly provides
for coverage in this Plan.
4
Interns shall not be eligible to participate in this Plan.
Employees who are nonresident aliens (within the meaning of
Code Section 7701(b)(1)(B)) and who receive no earned income (within the meaning
of Code Section 911(d)(2)) from the Employer which constitutes income from
sources within the United States (within the meaning of Code Section 861(a)(3))
shall not be eligible to participate in this Plan.
Employees of an Affiliated Employer shall not be eligible to
participate in this Plan unless such Affiliated Employer has specifically
adopted this Plan in writing.
1.17 "Employee" means any person who is employed by the Employer or
Affiliated Employer. Employee shall include Leased Employees within the meaning
of Code Sections 414(n)(2) and 414(o)(2) unless such Leased Employees are
covered by a plan described in Code Section 414(n)(5) and such Leased Employees
do not constitute more than 20% of the recipient's non-highly compensated work
force.
1.18 "Employer" means Mylan Laboratories Inc. and any successor which
shall maintain this Plan; and any predecessor which has maintained this Plan.
The Employer is a corporation, with principal offices in the Commonwealth of
Pennsylvania. In addition, where appropriate, the term Employer shall include
any Participating Employer (as defined in Section 10.1) which shall adopt this
Plan.
1.19 "Excess Aggregate Contributions" means, with respect to any Plan
Year, the excess of the aggregate amount of the Employer matching contributions
made pursuant to Section 4.1(b) (to the extent such matching contributions are
not used to satisfy the safe harbor methods permitted by Code Sections
401(k)(12) and 401(m)(11)), Employer matching contributions made pursuant to
Section 4.1(c) (to the extent such matching contributions are not used to
satisfy the "Actual Deferral Percentage" tests) and any qualified non-elective
contributions or elective deferrals taken into account pursuant to Section
4.7(c) on behalf of Highly Compensated Participants for such Plan Year, over the
maximum amount of such contributions permitted under the limitations of Section
4.7(a) (determined by reducing contributions made on behalf of Highly
Compensated Participants in order of the actual contribution ratios beginning
with the highest of such ratios).
1.20 "Excess Contributions" means, with respect to a Plan Year, the
excess of Elective Contributions used to satisfy the "Actual Deferral
Percentage" tests made on behalf of Highly Compensated Participants for the Plan
Year over the maximum amount of such contributions permitted under Section
4.5(a) (determined by reducing contributions made on behalf of Highly
Compensated Participants in order of the actual deferral ratios beginning with
the highest of such ratios). Excess Contributions shall be treated as an "annual
addition" pursuant to Section 4.9(b).
1.21 "Excess Deferred Compensation" means, with respect to any taxable
year of a Participant, the excess of the aggregate amount of such Participant's
Deferred Compensation and the elective deferrals pursuant to Section 4.2(f)
actually made on behalf of such Participant for such
5
taxable year, over the dollar limitation provided for in Code Section 402(g),
which is incorporated herein by reference. Excess Deferred Compensation shall be
treated as an "annual addition" pursuant to Section 4.9(b) when contributed to
the Plan unless distributed to the affected Participant not later than the first
April 15th following the close of the Participant's taxable year. Additionally,
for purposes of Sections 8.2 and 4.4(g), Excess Deferred Compensation shall
continue to be treated as Employer contributions even if distributed pursuant to
Section 4.2(f). However, Excess Deferred Compensation of Non-Highly Compensated
Participants is not taken into account for purposes of Section 4.5(a) to the
extent such Excess Deferred Compensation occurs pursuant to Section 4.2(d).
1.22 "Fiduciary" means any person who (a) exercises any discretionary
authority or discretionary control respecting management of the Plan or
exercises any authority or control respecting management or disposition of its
assets, (b) renders investment advice for a fee or other compensation, direct or
indirect, with respect to any monies or other property of the Plan or has any
authority or responsibility to do so, or (c) has any discretionary authority or
discretionary responsibility in the administration of the Plan, including, but
not limited to, the Trustee, the Employer and its representative body, and the
Administrator.
1.23 "Fiscal Year" means the Employer's accounting year of 12 months
commencing on April 1st of each year and ending the following March 31st.
1.24 "Forfeiture" means that portion of a Participant's Account
that is not Vested, and occurs on the earlier of:
(a) the distribution of the entire Vested
portion of a Terminated Participant's Account, or
(b) the last day of the Plan Year in which the
Participant incurs five (5) consecutive 1-Year Breaks in Service.
Furthermore, for purposes of paragraph (a) above, in the case
of a Terminated Participant whose Vested benefit is zero, such Terminated
Participant shall be deemed to have received a distribution of his Vested
benefit upon his termination of employment with the Employer and any Affiliated
Employer. Restoration of such amounts shall occur pursuant to Section 6.4(i)(2).
In addition, the term Forfeiture shall also include amounts deemed to be
Forfeitures pursuant to any other provision of this Plan.
1.25 "Former Participant" means a person who has been a Participant,
but who has ceased to be a Participant for any reason.
1.26 "415 Compensation" with respect to any Participant means such
Participant's wages, salaries, fees for professional services and other amounts
received (without regard to whether or not an amount is paid in cash) for
personal services actually rendered in the course of employment with the
Employer maintaining the Plan to the extent that the amounts are includible in
gross income
6
(including, but not limited to, commissions paid salesmen, compensation for
services on the basis of a percentage of profits, commissions on insurance
premiums, tips, bonuses, fringe benefits, and reimbursements or other expense
allowances under a nonaccountable plan (as described in Regulation 1.62-2(c))
for a Plan Year.
"415 Compensation" shall exclude (a)(1) contributions made by
the Employer to a plan of deferred compensation to the extent that, the
contributions are not includible in the gross income of the Participant for the
taxable year in which contributed, (2) Employer contributions made on behalf of
an Employee to a simplified employee pension plan described in Code Section
408(k) to the extent such contributions are excludable from the Employee's gross
income, (3) any distributions from a plan of deferred compensation; (b) amounts
realized from the exercise of a non- qualified stock option, or when restricted
stock (or property) held by an Employee either becomes freely transferable or is
no longer subject to a substantial risk of forfeiture; (c) amounts realized from
the sale, exchange or other disposition of stock acquired under a qualified
stock option; and (d) other amounts which receive special tax benefits, or
contributions made by the Employer (whether or not under a salary reduction
agreement) towards the purchase of any annuity contract described in Code
Section 403(b) (whether or not the contributions are actually excludable from
the gross income of the Employee).
For Plan Years beginning after December 31, 1997, for purposes
of this Section, the determination of "415 Compensation" shall include any
elective deferral (as defined in Code Section 402(g)(3)), and any amount which
is contributed or deferred by the Employer at the election of the Participant
and which is not includible in the gross income of the Participant by reason of
Code Sections 125 or 457.
If, in connection with the adoption of this amendment and
restatement, the definition of "415 Compensation" has been modified, then, for
Plan Years prior to the Plan Year which includes the adoption date of this
amendment and restatement, "415 Compensation" means compensation determined
pursuant to the Plan then in effect.
1.27 414(s) Compensation" with respect to any Participant means the
Participant's "415 Compensation" paid during a Plan Year. The amount of "414(s)
Compensation" with respect to any Participant shall include 414(s) Compensation"
for the entire twelve (12) month period ending on the last day of such Plan
Year, except that "414(s) Compensation" shall only be recognized for that
portion of the Plan Year during which an Employee was a Participant in the Plan.
For purposes of this Section, the determination of "414(s)
Compensation" shall be made by excluding amounts which are contributed by the
Employer pursuant to a salary reduction agreement and which are not includible
in the gross income of the Participant under Code Sections 125, 402 (e) (3) ,
402 (h) (1) (B) , 403(b) or 457(b), and Employee contributions described in Code
Section 414(h)(2)that are treated as Employer contributions.
7
"414(s)Compensation" in excess of $150,000 shall be
disregarded. Such amount shall be adjusted for increases in the cost of living
in accordance with Code Section 401(a)(17), except that the dollar increase in
effect on January 1 of any calendar year shall be effective for the Plan Year
beginning with or within such calendar year. For any short Plan Year the "414(s)
Compensation" limit shall be an amount equal to the "414(s) Compensation" limit
for the calendar year in which the Plan Year begins multiplied by the ratio
obtained by dividing the number of full months in the short Plan Year by twelve
(12).
If, in connection with the adoption of this amendment and
restatement, the definition of "414(s) Compensation" has been modified, then,
for Plan Years prior to the Plan Year which includes the adoption date of this
amendment and restatement, "414(s) Compensation" means compensation determined
pursuant to the Plan then in effect.
1.28 "Highly Compensated Employee" means, for Plan Years beginning
after December 31, 1996, an Employee described in Code Section 414(q) and the
Regulations thereunder, and generally means an Employee who performed services
for the Employer during the "determination year" and is in one or more of the
following groups:
(a) Employees who at any time during the
"determination year" or "look- back year" were "five percent
owners" as defined in Section 1.34(c).
(b) Employees who received "415 Compensation"
during the "look-back year" from the Employer in excess of $80,000.
The "determination year" shall be the Plan Year for which
testing is being performed, and the "look-back year" shall be the immediately
preceding twelve-month period. However, for purposes of (b) above, the
"look-back year" shall be the calendar year beginning within the twelve- month
period immediately preceding the "determination year."
Notwithstanding the above, for the first Plan Year beginning
after December 31, 1996, the "look-back year" shall be the calendar year ending
with or within the Plan Year for which testing is being performed, and the
"determination year" (if applicable) shall be the period of time, if any, which
extends beyond the "look-back year" and ends on the last day of the Plan Year
for which testing is being performed (the "lag period").
For purposes of this Section, the determination of "415
Compensation" shall be made by including amounts which are contributed by the
Employer pursuant to a salary reduction agreement and which are not includible
in the gross income of the Participant under Code Sections 125, 402(e)(3),
402(h)(1)(B), 403(b) or 457(b), and Employee contributions described in Code
Section 414(h)(2) that are treated as Employer contributions. Additionally, the
dollar threshold amount specified in (b) above shall be adjusted at such time
and in the same manner as under Code Section 415(d), except that the base period
shall be the calendar quarter ending September 30, 1996.
8
In the case of such an adjustment, the dollar limit which shall be applied is
the limit for the calendar year in which the "look-back year" begins.
In determining who is a Highly Compensated Employee, Employees
who are non- resident aliens and who received no earned income (within the
meaning of Code Section 911(d)(2)) from the Employer constituting United States
source income within the meaning of Code Section 861(a)(3) shall not be treated
as Employees. Additionally, all Affiliated Employers shall be taken into account
as a single employer and Leased Employees within the meaning of Code Sections
414(n)(2) and 414(o)(2) shall be considered Employees unless such Leased
Employees are covered by a plan described in Code Section 414(n)(5) and are not
covered in any qualified plan maintained by the Employer. The exclusion of
Leased Employees for this purpose shall be applied on a uniform and consistent
basis for all of the Employer's retirement plans. Highly Compensated Former
Employees shall be treated as Highly Compensated Employees without regard to
whether they performed services during the "determination year."
1.29 "Highly Compensated Former Employee" means a former Employee who
had a separation year prior to the "determination year" and was a Highly
Compensated Employee in the year of separation from service or in any
"determination year" after attaining age 55. Notwithstanding the foregoing, an
Employee who separated from service prior to 1987 will be treated as a Highly
Compensated Former Employee only if during the separation year (or year
preceding the separation year) or any year after the Employee attains age 55 (or
the last year ending before the Employee's 55th birthday), the Employee either
received "415 Compensation" in excess of $50,000 or was a "five percent owner."
For purposes of this Section, "determination year," "415 Compensation" and "five
percent owner" shall be determined in accordance with Section 1.28. Highly
Compensated Former Employees shall be treated as Highly Compensated Employees.
The method set forth in this Section for determining who is a "Highly
Compensated Former Employee" shall be applied on a uniform and consistent basis
for all purposes for which the Code Section 414(q) definition is applicable.
1.30 "Highly Compensated Participant" means any Highly Compensated
Employee who is eligible to participate in the Plan.
1.31 "Hour of Service" means each hour for which an Employee is paid or
entitled to payment for the performance of duties for the Employer.
1.32 "Income" means the income or losses allocable to Excess Deferred
Compensation, Excess Contributions or Excess Aggregate Contributions which
amount shall be allocated in the same manner as income or losses are allocated
pursuant to Section 4.4(f).
1.33 "Investment Manager" means an entity that (a) has the power to
manage, acquire, or dispose of Plan assets and (b) acknowledges fiduciary
responsibility to the Plan in writing. Such entity must be a person, firm, or
corporation registered as an investment adviser under the Investment Advisers
Act of 1940, a bank, or an insurance company.
9
1.34 "Key Employee" means an Employee as defined in Code Section 416(i)
and the Regulations thereunder. Generally, any Employee or former Employee (as
well as each of his Beneficiaries) is considered a Key Employee if he, at any
time during the Plan Year that contains the "Determination Date" or any of the
preceding four (4) Plan Years, has been included in one of the following
categories:
(a) an officer of the Employer (as that term is
defined within the meaning of the Regulations under Code
Section 416) having annual "415 Compensation" greater than 50
percent of the amount in effect under Code Section
415(b)(1)(A) for any such Plan Year.
(b) one of the ten employees having annual "415
Compensation" from the Employer for a Plan Year greater than
the dollar limitation in effect under Code Section
415(c)(1)(A) for the calendar year in which such Plan Year
ends and owning (or considered as owning within the meaning of
Code Section 318) both more than one-half percent interest and
the largest interests in the Employer.
(c) a "five percent owner" of the Employer. "Five
percent owner" means any person who owns (or is considered as
owning within the meaning of Code Section 318) more than five
percent (5%) of the outstanding stock of the Employer or stock
possessing more than five percent (5%) of the total combined
voting power of all stock of the Employer or, in the case of
an unincorporated business any person who owns more than five
percent (5%) of the capital or profits interest in the
Employer. In determining percentage ownership hereunder,
employers that would otherwise be aggregated under Code
Sections 414(b), (c), (m) and (o) shall be treated as separate
employers.
(d) a "one percent owner" of the Employer having an
annual "415 Compensation" from the Employer of more than
$150,000. "One percent owner" means any person who owns (or is
considered as owning within the meaning of Code Section 318)
more than one percent (1%) of the outstanding stock of the
Employer or stock possessing more than one percent (1%) of the
total combined voting power of all stock of the Employer or,
in the case of an unincorporated business, any person who owns
more than one percent (1%) of the capital or profits interest
in the Employer. In determining percentage ownership
hereunder, employers that would otherwise be aggregated under
Code Sections 414(b), (c), (m) and (o) shall be treated as
separate employers. However, in determining whether an
individual has "415 Compensation" of more than $150,000, "415
Compensation" from each employer required to be aggregated
under Code Sections 414(b), (c), (m) and (o) shall be taken
into account.
For purposes of this Section, the determination of "415
Compensation" shall be made by including amounts which are contributed by the
Employer pursuant to a salary reduction
10
agreement and which are not includible in the gross income of the Participant
under Code Sections 125, 402(e)(3), 402(h)(1)(B), 403(b) or 457(b), and Employee
contributions described in Code Section 414(h)(2) that are treated as Employer
contributions.
1.35 "Late Retirement Date" means the first day of the month coinciding
with or next following a Participant's actual Retirement Date after having
reached his Normal Retirement Date.
1.36 "Leased Employee, means, for Plan Years beginning after December
31, 1996, any person (other than an Employee of the recipient) who pursuant to
an agreement between the recipient and any other person ("leasing organization")
has performed services for the recipient (or for the recipient and related
persons determined in accordance with Code Section 414(n)(6)) on a substantially
full time basis for a period of at least one year, and such services are
performed under primary direction or control by the recipient employer.
Contributions or benefits provided a Leased Employee by the leasing organization
which are attributable to services performed for the recipient employer shall be
treated as provided by the recipient employer. A Leased Employee shall not be
considered an Employee of the recipient:
(a) if such employee is covered by a money
purchase pension plan providing:
(1) a non-integrated employer contribution rate of at
least 10% of compensation, as defined in Code Section
415(c)(3), but including amounts which are
contributed by the Employer pursuant to a salary
reduction agreement and which are not includible in
the gross income of the Participant under Code
Sections 125, 402(e)(3), 402(h)(1)(B), 403(b) or
457(b), and Employee contributions described in Code
Section 414(h)(2) that are treated as Employer
contributions.
(2) immediate participation; and
(3) full and immediate vesting; and
(b) if Leased Employees do not constitute more
than 20% of the recipient's non-highly compensated work force.
1.37 "Non-Elective Contribution" means the Employer contributions to
the Plan excluding, however, contributions made pursuant to the Participant's
deferral election provided for in Section 4.2, matching contributions or
nonelective contributions (which are used to satisfy the safe harbor methods
permitted by Code Sections 401(k)(12) and 401(m)(11)) made pursuant to Section
4.1(b), matching contributions (which are used in the "Actual Deferral
Percentage" tests) made pursuant to Section 4.1(c) and any Qualified
Non-Elective Contribution used in the "Actual Deferral Percentage" tests.
11
1.38 "Non-Highly Compensated Participant" means any Participant who is
not a Highly Compensated Employee. However, for the Plan Year prior to the first
Plan Year of this amendment and restatement, for the purposes of Section 4.5(a)
and Section 4.6, if the prior year testing method is used, a Non-Highly
Compensated Participant shall be determined using the definition of highly
compensated employee in effect for the preceding Plan Year.
1.39 "Non-Key Employee" means any Employee or former Employee (and
his Beneficiaries) who is not a Key Employee.
1.40 "Normal Retirement Age" means, except as otherwise reduced for a
particular Participant group as provided below in this Section 1.40, the
Participant's 65th birthday. A Participant shall become fully Vested in his
Participant's Account upon attaining his Normal Retirement Age.
For a Participant who had an account under the former Penederm
Incorporated 401(k) Plan, last maintained by Bertek Pharmaceuticals Inc., which
account was merged with and into, or transferred (other than by a direct or
indirect rollover transfer) to, this Plan on April 1, 2000, "Normal Retirement
Age" means the Participant's 62nd birthday.
1.41 "Normal Retirement Date" means the first day of the month
coinciding with or next following the Participant's Normal Retirement Age.
1.42 "1-Year Break in Service" means a Period of Severance of at
least 12 consecutive months.
1.43 "Participant" means any Eligible Employee who participates in the
Plan and has not for any reason become ineligible to participate further in the
Plan.
1.44 "Participant Direction Procedures" means such instructions,
guidelines or policies, the terms of which are incorporated herein, as shall be
established pursuant to Section 4.13 and observed by the Administrator and
applied and provided to Participants who have Participant Directed Accounts.
1.45 "Participant's Account" means the account established and
maintained by the Administrator for each Participant with respect to his total
interest in the Plan and Trust resulting from the Employer Non-Elective
Contributions.
A separate accounting shall be maintained with respect to that
portion of the Participant's Account attributable to Employer matching
contributions and nonelective contributions made pursuant to Section 4.1(b),
Employer matching contributions made pursuant to Section 4.1(c), Employer
discretionary contributions made pursuant to Section 4.1(e) and any Employer
Qualified Non-Elective Contributions.
12
1.46 "Participant's Combined Account" means the total aggregate amount
of each Participant's Elective Account and Participant's Account.
1.47 "Participant's Directed Account" means that portion of a
Participant's interest in the Plan with respect to which the Participant has
directed the investment in accordance with the Participant Direction Procedure.
1.48 "Participant's Elective Account" means the account established and
maintained by the Administrator for each Participant with respect to his total
interest in the Plan and Trust resulting from the Employer Elective
Contributions used to satisfy the "Actual Deferral Percentage" tests. A separate
accounting shall be maintained with respect to that portion of the Participant's
Elective Account attributable to such Elective Contributions pursuant to Section
4.2, Employer matching contributions and nonelective contributions made pursuant
to Section 4.1(b), Employer matching contributions made pursuant to Section
4.1(c) and any Employer Qualified Non-Elective Contributions.
1.49 "Period of Service" means the aggregate of all periods commencing
with the Employee's first day of employment or reemployment with the Employer or
Affiliated Employer and ending on the date a 1-Year Break in Service begins. The
first day of employment or reemployment is the first day the Employee performs
an Hour of Service. An Employee will also receive partial credit for any Period
of Severance of less than 12 consecutive months. Fractional periods of a year
will be expressed in terms of days.
If the Employer acquires a business, the Administrator will
determine if any Period of Service will be credited and recognized for service
with the acquired business for periods prior to the acquisition. The
Administrator's determination will be uniform among employees as to any business
acquisition but may be different for each business acquisition.
For vesting purposes, Periods of Service prior to the original
effective date of the Plan shall be recognized. Also, for vesting purposes,
Periods of Service with the Employer, each Participating Employer, each
Affiliated Employer, and all Periods of Service recognized by a plan at the time
of its merger with and into this Plan shall be recognized.
Prior to April 1, 2000, the Plan used a twelve (12)
consecutive month computation period and Years of Service method for measuring a
Participant's eligibility, vesting and participation for benefit accrual
purposes. In addition, certain plans which are, or may be, merged with and into,
or transferred (other than by a direct or indirect rollover transfer) to, this
Plan, have used the twelve (12) consecutive month computation period and Years
of Service method for similar purposes. In these cases, the Plan will credit
service in compliance with Regulation 1.410(a)-7(f) and (g). Therefore, each
employee whose service was determined on the basis of computation periods and
then changes to the elapsed time method shall receive credit for a period of
service consisting of:
13
(a) A number of years equal to the number of years of
service credited to the employee before the computation period
during which the change to the elapsed time method occurs; and
(b) The greater of (1) the period of service that
would be credited to the employee under the elapsed time
method for his service during the entire computation period in
which the change to the elapsed time method occurs or (2) the
service taken into account under the computation periods
method as of the date of the change to the elapsed time
method; and
(c) The period of service for service subsequent to
the change to the elapsed time commencing on the day after the
last day of the computation period in which the change to the
elapsed time method occurs.
Notwithstanding the above, employees, determined as of April 1, 2000,
of Mylan Laboratories Inc., Mylan Pharmaceuticals Inc., Mylan Technologies Inc.,
UDL Laboratories, Inc. (an Illinois corporation with facilities in Illinois),
UDL Laboratories, Inc. (a Florida corporation with facilities in Florida) and
Bertek Pharmaceuticals Inc. (a Texas corporation with facilities in Texas) shall
be given credit for whichever Period of Service is greater, determined (i) as
provided above or (ii) under the elapsed time method applied as if that method
had been effective as of the employee's first date of employment with the
Employer or Affiliated Employer.
1.50 "Period of Severance" means a continuous period of time during
which the Employee is not employed by the Employer. Such period begins on the
date the Employee retires, quits or is discharged, or if earlier, the 12 month
anniversary of the date on which the Employee was otherwise first absent from
service.
In the case of an individual who is absent from work for
maternity or paternity reasons, the 12-consecutive month period beginning on the
first anniversary of the first day of such absence shall not constitute a 1-Year
Break in Service. For purposes of this paragraph, an absence from work for
maternity or paternity reasons means an absence (a) by reason of the pregnancy
of the individual, (b) by reason of the birth of a child of the individual, (c)
by reason of the placement of a child with the individual in connection with the
adoption of such child by such individual, or (d) for purposes of caring for
such child for a period beginning immediately following such birth or placement.
1.51 "Plan" means this instrument, including all amendments thereto.
1.52 "Plan Year" means the Plan's accounting year of twelve (12) months
commencing on January lst of each year and ending the following December 31st,
except for the first Plan Year which commenced April lst.
14
1.53 "Pre-Retirement Survivor Annuity" means a death benefit which is
an immediate annuity for the life of the Participant's spouse the payments under
which must be equal to the amount of benefit which can be purchased with 100% of
the accounts of a Participant.
1.54 "Qualified Non-Elective Contribution" means any Employer
contributions made pursuant to Section 4.1(d) and Section 4.6(b) and Section
4.8(f). Such contributions shall be considered an Elective Contribution for the
purposes of the Plan and may be used to satisfy the "Actual Deferral Percentage"
tests or the "Actual Contribution Percentage" tests.
1.55 "Regulation" means the Income Tax Regulations as promulgated by
the Secretary of the Treasury or his delegate, and as amended from time to time.
1.56 "Retired Participant" means a person who has been a Participant,
but who has become entitled to retirement benefits under the Plan.
1.57 "Retirement Date" means the date as of which a Participant retires
from active service with the Employer and any Affiliated Employer for reasons
other than Total and Permanent Disability, whether such retirement occurs on a
Participant's Normal Retirement Date, Early or Late Retirement Date (see Section
6.1).
1.58 "Super Top Heavy Plan" means a plan described in Section 8.2(b).
1.59 "Terminated Participant" means a person who has been a
Participant, but whose employment has been terminated other than by death, Total
and Permanent Disability or retirement.
1.60 "Top Heavy Plan" means a plan described in Section 8.2(a).
1.61 "Top Heavy Plan Year" means a Plan Year during which the Plan
is a Top Heavy Plan.
1.62 "Total and Permanent Disability" means a physical or mental
condition of a Participant resulting from bodily injury, disease, or mental
disorder which renders him incapable of continuing his usual and customary
employment with the Employer. The disability of a Participant shall be
determined by a licensed physician chosen by the Administrator. The
determination shall be applied uniformly to all Participants.
1.63 "Trustee" means the person or entity named as trustee herein or in
any separate trust forming a part of this Plan, and any successors.
1.64 "Trust Fund" means the assets of the Plan and Trust as the same
shall exist from time to time.
15
1.65 "USERRA" means the Uniformed Services Employment and Reemployment
Rights Act of 1994. Notwithstanding any provision of this Plan to the contrary,
effective December 12, 1994, contributions, benefits and service credit with
respect to qualified military service will be provided in accordance with Code
Section 414(u).
1.66 "Valuation Date" means any day that the New York Stock Exchange is
open for business or any other date or dates deemed appropriate by the
Administrator.
1.67 "Vested" means the nonforfeitable portion of any account
maintained on behalf of a Participant.
1.68 "Voluntary Contribution Account" means the account established and
maintained by the Administrator for each Participant with respect to his total
interest in the Plan resulting from the Participant's nondeductible voluntary
contributions made pursuant to Section 4.12.
ARTICLE II
ADMINISTRATION
2.1 POWERS AND RESPONSIBILITIES OF THE EMPLOYER
(a) In addition to the general powers and
responsibilities otherwise provided for in this Plan, the
Employer shall be empowered to appoint and remove the Trustee
and the Administrator from time to time as it deems necessary
for the proper administration of the Plan to ensure that the
Plan is being operated for the exclusive benefit of the
Participants and their Beneficiaries in accordance with the
terms of the Plan, the Code, and the Act. The Employer may
appoint counsel, specialists, advisers, agents (including any
nonfiduciary agent) and other persons as the Employer deems
necessary or desirable in connection with the exercise of its
fiduciary duties under this Plan. The Employer may compensate
such agents or advisers from the assets of the Plan as
fiduciary expenses (but not including any business (settlor)
expenses of the Employer), to the extent not paid by the
Employer.
(b) The Employer may, by written agreement or
designation, appoint at its option an Investment Manager
(qualified under the Investment Company Act of 1940 as
amended), investment adviser, or other agent to provide
direction to the Trustee with respect to any or all of the
Plan assets. Such appointment shall be given by the Employer
in writing in a form acceptable to the Trustee and shall
specifically identify the Plan assets with respect to which
the Investment Manager or other agent shall have authority to
direct the investment.
(c) The Employer shall establish a "funding
policy and method," i.e., it shall determine whether the Plan
has a short run need for liquidity (e.g., to pay
16
benefits) or whether liquidity is a long run goal and
investment growth (and stability of same) is a more current
need, or shall appoint a qualified person to do so. The
Employer or its delegate shall communicate such needs and
goals to the Trustee, who shall coordinate such Plan needs
with its investment policy. The communication of such a
"funding policy and method" shall not, however, constitute a
directive to the Trustee as to investment of the Trust Funds.
Such "funding policy and method" shall be consistent with the
objectives of this Plan and with the requirements of Title I
of the Act.
(d) The Employer shall periodically review the
performance of any Fiduciary or other person to whom duties
have been delegated or allocated by it under the provisions of
this Plan or pursuant to procedures established hereunder.
This requirement may be satisfied by formal periodic review by
the Employer or by a qualified person specifically designated
by the Employer, through day-to-day conduct and evaluation, or
through other appropriate ways.
2.2 DESIGNATION OF ADMINISTRATIVE AUTHORITY
The Employer shall be the Administrator. The Employer may
appoint any person, including, but not limited to, the Employees of the
Employer, to perform the duties of the Administrator. Any person so appointed
shall signify his acceptance by filing written acceptance with the Employer.
Upon the resignation or removal of any individual performing the duties of the
Administrator, the Employer may designate a successor.
2.3 POWERS AND DUTIES OF THE ADMINISTRATOR
The primary responsibility of the Administrator is to
administer the Plan for the exclusive benefit of the Participants and their
Beneficiaries, subject to the specific terms of the Plan. The Administrator
shall administer the Plan in accordance with its terms and shall have the power
and discretion to construe the terms of the Plan and to determine all questions
arising in connection with the administration, interpretation, and application
of the Plan. Any such determination by the Administrator shall be conclusive and
binding upon all persons. The Administrator may establish procedures, correct
any defect, supply any information, or reconcile any inconsistency in such
manner and to such extent as shall be deemed necessary or advisable to carry out
the purpose of the Plan; provided, however, that any procedure, discretionary
act, interpretation or construction shall be done in a nondiscriminatory manner
based upon uniform principles consistently applied and shall be consistent with
the intent that the Plan shall continue to be deemed a qualified plan under the
terms of Code Section 401(a), and shall comply with the terms of the Act and all
regulations issued pursuant thereto. The Administrator shall have all powers
necessary or appropriate to accomplish his duties under this Plan.
The Administrator may authorize or direct the establishment of
one or more Pooled Investment Accounts. For the purposes of this Section,
"Pooled Investment Account" means an
17
account established pursuant to an administrative services agreement between the
Employer and the Trustee.
The Administrator shall be charged with the duties of the
general administration of the Plan, including, but not limited to, the
following:
(a) the discretion to determine all questions
relating to the eligibility of Employees to participate or
remain a Participant hereunder and to receive benefits under
the Plan;
(b) to compute, certify, and direct the Trustee
with respect to the amount and the kind of benefits to which
any Participant shall be entitled hereunder;
(c) to authorize and direct the Trustee with
respect to all nondiscretionary or otherwise directed
disbursements from the Trust;
(d) to maintain all necessary records for the
administration of the Plan;
(e) to interpret the provisions of the Plan and
to make and publish such rules for regulation of the Plan as
are consistent with the terms hereof;
(f) to determine the size and type of any
Contract to be purchased from any insurer, and to designate
the insurer from which such Contract shall be purchased;
(g) to compute and certify to the Employer and
to the Trustee from time to time the sums of money necessary
or desirable to be contributed to the Plan;
(h) to consult with the Employer and the Trustee
regarding the short and long-term liquidity needs of the Plan
in order that the Trustee can exercise any investment
discretion in a manner designed to accomplish specific
objectives;
(i) to prepare and distribute to Employees a
procedure for notifying Participants and Beneficiaries of
their rights to elect joint and survivor annuities and
Pre-Retirement Survivor Annuities as required by the Act and
regulations thereunder;
(j) to prepare and implement a procedure to notify
Eligible Employees that they may elect to have a portion of
their Compensation deferred or paid to them in cash;
(k) to act as the named Fiduciary responsible for
communications with Participants as needed to maintain Plan
compliance with ERISA Section 404(c), including but not
limited to the receipt and transmitting of Participant's
directions as
18
to the investment of their account(s) under the Plan and the
formulation of policies, rules, and procedures pursuant to
which Participants may give investment instructions with
respect to the investment of their accounts;
(l) to assist any Participant regarding his
rights, benefits, or elections available under the Plan.
2.4 RECORDS AND REPORTS
The Administrator shall keep a record of all actions taken and
shall keep all other books of account, records, policies, and other data that
may be necessary for proper administration of the Plan and shall be responsible
for supplying all information and reports to the Internal Revenue Service,
Department of Labor, Participants, Beneficiaries and others as required by law.
2.5 APPOINTMENT OF ADVISERS
The Administrator, or the Trustee with the consent of the
Administrator, may appoint counsel, specialists, advisers, agents (including
nonfiduciary agents), and other persons as the Administrator or the Trustee
deems necessary or desirable in connection with the administration of this Plan,
including but not limited to agents and advisers to assist with the
administration and management of the Plan, and thereby to provide, among such
other duties as the Administrator may appoint, assistance with maintaining Plan
records and the providing of investment information to the Plan's investment
fiduciaries and to Plan Participants.
The Administrator shall have the authority and discretion to
engage an Administrative Delegate (as defined, below) which shall perform,
without discretionary authority or control, administrative functions within the
framework of policies, interpretations, rules, practices, and procedures made by
the Administrator or other Plan Fiduciary. Any action made or taken by the
Administrative Delegate may be appealed by an affected Participant to the
Administrator in accordance with the claims review procedures provided in
Section 2.8. Any decisions which call for interpretations of Plan provisions not
previously made by the Administrator shall be made only by the Administrator.
The Administrative Delegate shall not be considered a fiduciary with respect to
the services it provides.
For purposes of this Section, "Administrative Delegate" means
one or more persons or institutions to which the Employer or the Administrator
has delegated certain administrative functions pursuant to a written agreement.
2.6 PAYMENT OF EXPENSES
All expenses of administration may be paid out of the Trust
Fund unless paid by the Employer. Such expenses shall include any expenses
incident to the functioning of the Administrator, or any person or persons
retained or appointed by any Named Fiduciary incident to
19
the exercise of their duties under the Plan, including, but not limited to, fees
of the Trustee, accountants, counsel, Investment Managers, recordkeeper, agents
(including nonfiduciary agents) appointed for the purpose of assisting the
Administrator or the Trustee in carrying out the instructions of Participants as
to the directed investment of their accounts and other specialists and their
agents, and other costs of administering the Plan. Until paid, the expenses
shall constitute a liability of the Trust Fund.
2.7 CLAIMS PROCEDURE
Claims for benefits under the Plan may be filed in writing
with the Administrator. Written notice of the disposition of a claim shall be
furnished to the claimant within 90 days (180 days in special cases with notice
to the claimant) after the application is filed. In the event the claim is
denied, the reasons for the denial shall be specifically set forth in the notice
in language calculated to be understood by the claimant, pertinent provisions of
the Plan shall be cited, and, where appropriate, an explanation as to how the
claimant can perfect the claim will be provided. In addition, the claimant shall
be furnished with an explanation of the Plan's claims review procedure.
2.8 CLAIMS REVIEW PROCEDURE
Any Employee, former Employee, or Beneficiary of either, who
has been denied a benefit by a decision of the Administrator pursuant to Section
2.7 shall be entitled to request the Administrator to give further consideration
to his claim by filing with the Administrator (on a form which may be obtained
from the Administrator) a request for a hearing. Such request, together with a
written statement of the reasons why the claimant believes his claim should be
allowed, shall be filed with the Administrator no later than 60 days after
receipt of the written notification provided for in Section 2.7. The
Administrator shall then conduct a hearing within the next 60 days, at which the
claimant may be represented by an attorney or any other representative of his
choosing and at which the claimant shall have an opportunity to submit written
and oral evidence and arguments in support of his claim. At the hearing (or
prior thereto upon 5 business days written notice to the Administrator) the
claimant or his representative shall have an opportunity to review all documents
in the possession of the Administrator which are pertinent to the claim at issue
and its disallowance. Either the claimant or the Administrator may cause a court
reporter to attend the hearing and record the proceedings. In such event, a
complete written transcript of the proceedings shall be furnished to both
parties by the court reporter. The full expense of any such court reporter and
such transcripts shall be borne by the party causing the court reporter to
attend the hearing. A final decision as to the allowance of the claim shall be
made by the Administrator within 60 days of receipt of the appeal (unless there
has been an extension of 60 days due to special circumstances, provided the
delay and the special circumstances occasioning it are communicated to the
claimant within the 60 day period). Such communication shall be written in a
manner calculated to be understood by the claimant and shall include specific
reasons for the decision and specific references to the pertinent Plan
provisions on which the decision is based.
20
ARTICLE III
ELIGIBILITY
3.1 CONDITIONS OF ELIGIBILITY
Any Eligible Employee shall be eligible to participate
hereunder on the date of his employment with the Employer. However, any Employee
who was a Participant in the Plan prior to the effective date of this amendment
and restatement shall continue to participate in the Plan.
3.2 EFFECTIVE DATE OF PARTICIPATION
An Eligible Employee shall become a Participant effective as
of the date on which he satisfies the eligibility requirements of Section 3.1.
In the event an Employee who is not a member of an eligible
class of Employees becomes a member of an eligible class, such Employee will
participate immediately if such Employee would have otherwise previously become
a Participant.
3.3 DETERMINATION OF ELIGIBILITY
The Administrator shall determine the eligibility of each
Employee for participation in the Plan based upon information furnished by the
Employer. Such determination shall be conclusive and binding upon all persons,
as long as the same is made pursuant to the Plan and the Act. Such determination
shall be subject to review per Section 2.8.
3.4 TERMINATION OF ELIGIBILITY
(a) In the event a Participant shall go from a
classification of an Eligible Employee to an ineligible
Employee, such Former Participant shall continue to vest in
his interest in the Plan for each Period of Service completed
while a noneligible Employee, until such time as his
Participant's Account shall be forfeited or distributed
pursuant to the terms of the Plan. Additionally, his interest
in the Plan shall continue to share in the earnings of the
Trust Fund.
(b) In the event a Participant is no longer a member
of an eligible class of Employees and becomes ineligible to
participate, such Employee will participate immediately upon
returning to an eligible class of Employees.
3.5 OMISSION OF ELIGIBLE EMPLOYEE
If, in any Plan Year, any Employee who should be included as a
Participant in the Plan is erroneously omitted and discovery of such omission is
not made until after a contribution by his Employer for the year has been made,
the Employer shall make a subsequent contribution with
21
respect to the omitted Employee in the amount which the said Employer would have
contributed with respect to him had he not been omitted. Such contribution shall
be made regardless of whether or not it is deductible in whole or in part in any
taxable year under applicable provisions of the Code.
3.6 INCLUSION OF INELIGIBLE EMPLOYEE
If, in any Plan Year, any person who should not have been
included as a Participant in the Plan is erroneously included and discovery of
such incorrect inclusion is not made until after a contribution for the year has
been made, the Employer shall not be entitled to recover the contribution made
with respect to the ineligible person regardless of whether or not a deduction
is allowable with respect to such contribution. In such event, the amount
contributed with respect to the ineligible person shall constitute a Forfeiture
(except for Deferred Compensation which shall be distributed to the ineligible
person) for the Plan Year in which the discovery is made.
ARTICLE IV
CONTRIBUTION AND ALLOCATION
4.1 FORMULA FOR DETERMINING EMPLOYER CONTRIBUTION
For each Plan Year, the Employer shall contribute to the Plan,
except as otherwise provided:
(a) Effective April 1, 2000, the amount of the total
salary reduction elections of all Participants made pursuant
to Section 4.2(a), which amount shall be deemed an Employer
Elective Contribution.
(b) Effective April 1, 2000, on behalf of each
Participant who is eligible to share in matching contributions
for the Plan Year, a matching contribution equal to 100% of
each such Participant's Deferred Compensation, which amount
shall be deemed an Employer Elective Contribution.
Except, however, in applying the matching
percentage specified above, only salary reductions up to 4% of
payroll period Compensation shall be considered.
Contributions made to the Plan pursuant to
this Section 4.1(b) are intended to comply with Sections
4.5(a) and 4.7(a) pursuant to the safe harbor methods
permitted by Code Sections 401(k)(12) and 401(m)(11). However,
if matching contributions are made to this Plan or any other
plan maintained by the Employer, and (i) such matching
contributions are made with respect to Deferred Compensation
or voluntary Employee contributions that in the aggregate
exceed 6% of the Employee's Compensation, (ii) the rate of
matching contributions increases as the rate of Deferred
Compensation or voluntary Employee contributions increases,
22
(iii) at any rate of Deferred Compensation or voluntary
Employee contributions, the rate of matching contributions
that would apply with respect to any Highly Compensated
Employee is greater than the rate of matching contributions
that would apply with respect to a Non-Highly Compensated
Participant and who has the same rate of Deferred Compensation
or voluntary Employee contributions, (iv) for Plan Years
beginning after December 31, 1999, any discretionary matching
contribution made to this Plan and any other plan maintained
by the Employer, in the aggregate, exceed 4% of the
Participant's Compensation, then such matching contributions
in the aggregate must satisfy the "Actual Contribution
Percentage" tests of Section 4.7. In this regard, the Employer
may elect to disregard, with respect to all Eligible
Employees, all matching contributions with respect to a
Participant's Deferred Compensation up to 6% of each
Participant's Compensation, or, for Plan Years beginning after
December 31, 1999, matching contributions up to 4% of each
Participant's Compensation. In applying the "Actual
Contribution Percentage" tests, match contributions or
nonelective contributions made pursuant to this Section 4.1(b)
that satisfy the safe harbor methods permitted by Code Section
401(k)(12) may not be treated as matching contributions under
Code Section 401(m)(3) .
The rules that apply for purposes of
aggregating and disaggregating cash or deferred arrangements
and plans under Code Sections 401(k) and 401(m) also apply for
purposes of Code Sections 401(k)(12) and 401(m)(11).
(c) Reserved.
(d) On behalf of each Non-Highly Compensated
Participant who is eligible to share in the Qualified
Non-Elective Contribution for the Plan Year, a discretionary
Qualified Non-Elective Contribution equal to a uniform
percentage of each eligible individuals Compensation, the
exact percentage, if any, to be determined each year by the
Employer. Any Employer Qualified Non-Elective Contribution
shall be deemed an Employer Elective Contribution.
(e) A discretionary amount, which amount, if
any, shall be deemed an Employer Non-Elective Contribution.
(f) Additionally, to the extent necessary, the
Employer shall contribute to the Plan the amount necessary to
provide the top heavy minimum contribution. All contributions
by the Employer shall be made in cash.
4.2 PARTICIPANT'S SALARY REDUCTION ELECTION
(a) Each Participant may elect to defer from 1%
to 15% of his Compensation which would have been received in
the Plan Year, but for the deferral election. A deferral
election (or modification of an earlier election) may not be
made
23
with respect to Compensation which is currently available on
or before the date the Participant executed such election. For
purposes of this Section, Compensation shall be determined as
provided in Section 1.9(b) prior to any reductions made
pursuant to Code Sections 125, 402(e)(3), 402(h)(1)(B) ,
403(b) or 457(b), and Employee contributions described in Code
Section 414(h)(2) that are treated as Employer contributions.
The amount by which Compensation is reduced
shall be that Participant's Deferred Compensation and be
treated as an Employer Elective Contribution and allocated to
that Participant's Elective Account.
(b) The balance in each Participant's Elective
Account shall be fully Vested at all times and shall not be
subject to Forfeiture for any reason.
(c) Notwithstanding anything in the Plan to the
contrary, amounts held in the Participant's Elective Account
may not be distributable (including any offset of loans)
earlier than:
(1) a Participant's separation from service,
Total and Permanent Disability, or death;
(2) a Participant's attainment of age 59 1/2;
(3) the termination of the Plan without the
establishment or existence of a "successor plan," as
that term is described in Regulation
1.401(k)-1(d)(3);
(4) the date of disposition by the Employer to an
entity that is not an Affiliated Employer of
substantially all of the assets (within the meaning
of Code Section 409(d)(2)) used in a trade or
business of such corporation if such corporation
continues to maintain this Plan after the disposition
with respect to a Participant who continues
employment with the corporation acquiring such
assets;
(5) the date of disposition by the Employer or an
Affiliated Employer who maintains the Plan of its
interest in a subsidiary (within the meaning of Code
Section 409(d)(3)) to an entity which is not an
Affiliated Employer but only with respect to a
Participant who continues employment with such
subsidiary; or
(6) the proven financial hardship of a
Participant, subject to the limitations of Section
6.11.
24
(d) For each Plan Year, a Participant's Deferred
Compensation made under this Plan and all other plans,
contracts or arrangements of the Employer maintaining this
Plan shall not exceed, during any taxable year of the
Participant, the limitation imposed by Code Section 402(g), as
in effect at the beginning of such taxable year. If such
dollar limitation is exceeded, a Participant will be deemed to
have notified the Administrator of such excess amount which
shall be distributed in a manner consistent with Section
4.2(f). The dollar limitation shall be adjusted annually
pursuant to the method provided in Code Section 415(d) in
accordance with Regulations.
(e) In the event a Participant has received a
hardship distribution from his Participant's Elective Account
pursuant to Section 6.11(b) or pursuant to Regulation
1.401(k)-l(d)(2)(iv)(B) from any other plan maintained by the
Employer, then such Participant shall not be permitted to
elect to have Deferred Compensation contributed to the Plan on
his behalf for a period of twelve (12) months following the
receipt of the distribution. Furthermore, the dollar
limitation under Code Section 402(g) shall be reduced, with
respect to the Participant's taxable year following the
taxable year in which the hardship distribution was made, by
the amount of such Participant's Deferred Compensation, if
any, pursuant to this Plan (and any other plan maintained by
the Employer) for the taxable year of the hardship
distribution.
(f) If a Participant's Deferred Compensation under
this Plan together with any elective deferrals (as defined in
Regulation 1.402(g)-l(b)) under another qualified cash or
deferred arrangement (as defined in Code Section 401(k)), a
simplified employee pension (as defined in Code Section
408(k)), a salary reduction arrangement (within the meaning of
Code Section 3121(a)(5)(D)), a deferred compensation plan
under Code Section 457(b), or a trust described in Code
Section 501(c)(18) cumulatively exceed the limitation imposed
by Code Section 402(g) (as adjusted annually in accordance
with the method provided in Code Section 415(d) pursuant to
Regulations) for such Participant's taxable year, the
Participant may, not later than March 1 following the close of
the Participant's taxable year, notify the Administrator in
writing of such excess and request that his Deferred
Compensation under this Plan be reduced by an amount specified
by the Participant. In such event, the Administrator may
direct the Trustee to distribute such excess amount (and any
Income allocable to such excess amount) to the Participant not
later than the first April 15th following the close of the
Participant's taxable year. Any distribution of less than the
entire amount of Excess Deferred Compensation and Income shall
be treated as a pro rata distribution of Excess Deferred
Compensation and Income. The amount distributed shall not
exceed the Participant's Deferred Compensation under the Plan
for the taxable year (and any Income allocable to such excess
amount). Any distribution on or before the last day of the
Participant's taxable year must satisfy each of the following
conditions:
25
(1) the distribution must be made after the date
on which the Plan received the Excess Deferred
Compensation;
(2) the Participant shall designate the
distribution as Excess Deferred Compensation; and
(3) the Plan must designate the distribution as
a distribution of Excess Deferred Compensation.
Any distribution made pursuant to this
Section 4.2(f) shall be made first from unmatched Deferred
Compensation and, thereafter, from Deferred Compensation which
is matched. Matching contributions which relate to such
Deferred Compensation shall be forfeited.
(g) Notwithstanding Section 4.2(f) above, a
Participant's Excess Deferred Compensation shall be reduced,
but not below zero, by any distribution of Excess
Contributions pursuant to Section 4.6(a) for the Plan Year
beginning with or within the taxable year of the Participant.
(h) At Normal Retirement Date, or such other date
when the Participant shall be entitled to receive benefits,
the fair market value of the Participant's Elective Account
shall be used to provide additional benefits to the
Participant or his Beneficiary.
(i) Employer Elective Contributions made pursuant to
this Section may be segregated into a separate account for
each Participant in a federally insured savings account,
certificate of deposit in a bank or savings and loan
association, money market certificate, or other short-term
debt security acceptable to the Trustee until such time as the
allocations pursuant to Section 4.4 have been made.
(j) The Employer and the Administrator shall
implement the salary reduction elections provided for herein
in accordance with the following:
(1) A Participant must make his initial salary
deferral election within a reasonable time, not to
exceed thirty (30) days, after entering the Plan
pursuant to Section 3.2. If the Participant fails to
make an initial salary deferral election within such
time, then such Participant may thereafter make an
election in accordance with the rules governing
modifications. The Participant shall make such an
election by entering into a written salary reduction
agreement with the Employer and filing such agreement
with the Administrator. Such election shall initially
be effective beginning with the pay period following
the acceptance of the salary reduction agreement by
the
26
Administrator, shall not have retroactive effect and
shall remain in force until revoked.
(2) A Participant may modify a prior election at any
time during the Plan Year and concurrently make a new
election by filing a written notice with the
Administrator within a reasonable time before the pay
period for which such
27
modification is to be effective. Any modification
shall not have retroactive effect and shall remain in
force until revoked.
(3) A Participant may elect to prospectively revoke
his salary reduction agreement in its entirety at any
time during the Plan Year by providing the
Administrator with thirty (30) days written notice of
such revocation (or upon such shorter notice period
as may be acceptable to the Administrator). Such
revocation shall become effective as of the beginning
of the first pay period coincident with or next
following the expiration of the notice period.
Furthermore, the termination of the Participant's
employment, or the cessation of participation for any
reason, shall be deemed to revoke any salary
reduction agreement then in effect, effective
immediately following the close of the pay period
within which such termination or cessation occurs.
(4) The Employer, at least 30 days, but not more than
90 days, before the beginning of the Plan Year, will
provide each eligible Employee a comprehensive notice
of the provision for Employer matching contributions
under Section 4.1(b) and the Employee's rights and
obligations under the Plan, written in a manner
calculated to be understood by the average Employee.
If an Employee becomes eligible after the 90th day
before the beginning of the Plan Year and does not
receive the notice for that reason, the notice must
be provided no more than 90 days before the Employee
becomes eligible but not later than the date the
Employee becomes eligible. In addition to any other
election periods provided under this Section 4.2,
each eligible Employee may make or modify a salary
reduction election during the 30-day period
immediately following receipt of the notice described
above.
4.3 TIME OF PAYMENT OF EMPLOYER CONTRIBUTION
The Employer shall generally pay to the Trustee its
contribution to the Plan for each Plan Year within the time prescribed by law,
including extensions of time, for the filing of the Employer federal income tax
return for the Fiscal Year.
However, Employer Elective Contributions accumulated through
payroll deductions shall be paid to the Trustee as of the earliest date on which
such contributions can reasonably be segregated from the Employer general
assets, but in any event within ninety (90) days from the date on which such
amounts would otherwise have been payable to the Participant in cash. The
provisions of Department of Labor regulations 2510.3-102 are incorporated herein
by reference. Furthermore, any additional Employer contributions which are
allocable to the Participant's Elective Account for a Plan Year shall be paid to
the Plan no later than the twelve-month period immediately following the close
of such Plan Year.
28
4.4 ALLOCATION OF CONTRIBUTION, FORFEITURES AND EARNINGS
(a) The Administrator shall establish and maintain an
account in the name of each Participant to which the
Administrator shall credit as of each Anniversary Date all
amounts allocated to each such Participant as set forth
herein.
(b) The Employer shall provide the Administrator with
all information required by the Administrator to make a proper
allocation of the Employer contributions for each Plan Year.
Within a reasonable period of time after the date of receipt
by the Administrator of such information, the Administrator
shall allocate such contribution as follows:
(1) With respect to the Employer Elective
Contribution made pursuant to Section 4.1(a), to each
Participant's Elective Account in an amount equal to
each such Participant's Deferred Compensation for the
year.
(2) With respect to the Employer Elective
Contribution made pursuant to Section 4.1(b), to each
Participant's Elective Account when used to satisfy
the "Actual Deferral Percentage" tests, otherwise to
each Participant's Account.
(3) With respect to the Employer Elective
Contribution made pursuant to Section 4.1(c), to each
Participant's Elective Account when used to satisfy
the "Actual Deferral Percentage" tests or
Participant's Account in accordance with Section
4.1(c).
Any Participant actively employed during the Plan
Year shall be eligible to share in the matching
contribution for the Plan Year.
(4) With respect to the Employer Qualified
Non-Elective Contribution made pursuant to Section
4.1(d), to each Participant's Elective Account when
used to satisfy the "Actual Deferral Percentage"
tests or Participant's Account in accordance with
Section 4.1(d).
Any Non-Highly Compensated Participant actively
employed during the Plan Year shall be eligible to
share in the Qualified Non-Elective Contribution for
the Plan Year.
(5) With respect to the Employer Non-Elective
Contribution made on behalf of Participants pursuant
to Section 4.1(e), to each Participant's Account in
the same proportion that each such Participant's
Compensation for the year bears to the total
Compensation of all Participants for such year.
29
Only Participants who have completed a Period of
Service during the Plan Year and are actively
employed on the last day of the Plan Year shall be
eligible to share in the discretionary contribution
for the year.
(c) As of each Anniversary Date any amounts which
became Forfeitures since the last Anniversary Date shall first
be made available to reinstate previously forfeited account
balances of Former Participants, if any, in accordance with
Section 6.4(i)(2). The remaining Forfeitures, if any, shall be
used to reduce the contribution of the Employer hereunder for
the Plan Year in which such Forfeitures occur in the following
manner:
(1) Forfeitures attributable to Employer matching
contributions made pursuant to Section 4.1(c) shall
be used to reduce the Employer contribution for the
Plan Year in which such Forfeitures occur.
(2) Forfeitures attributable to Employer
discretionary contributions made pursuant to Section
4.1(e) shall be used to reduce the Employer
contribution for the Plan Year in which such
Forfeitures occur.
(d) For any Top Heavy Plan Year, Non-Key Employees
not otherwise eligible to share in the allocation of
contributions as provided above, shall receive the minimum
allocation provided for in Section 4.4(g) if eligible pursuant
to the provisions of Section 4.4(i) .
(e) Notwithstanding the foregoing, Participants who
are not actively employed on the last day of the Plan Year due
to Retirement (Early, Normal or Late), Total and Permanent
Disability or death shall share in the allocation of
contributions for that Plan Year.
(f) As of each Valuation Date, before the current
valuation period allocation of Employer contributions, any
earnings or losses (net appreciation or net depreciation) of
the Trust Fund shall be allocated in the same proportion that
each Participant's and Former Participant's nonsegregated
accounts bear to the total of all Participants' and Former
Participants' nonsegregated accounts as of such date. Earnings
or losses with respect to a Participant's Directed Account
shall be allocated in accordance with Section 4.13.
Participants' transfers from other qualified
plans and voluntary contributions deposited in the general
Trust Fund shall share in any earnings and losses (net
appreciation or net depreciation) of the Trust Fund in the
same manner provided above. Each segregated account maintained
on behalf of a Participant shall be credited or charged with
its separate earnings and losses.
30
(g) Minimum Allocations Required for Top Heavy Plan
Years: Notwithstanding the foregoing, for any Top Heavy Plan
Year, the sum of the Employer contributions allocated to the
Participant's Combined Account of each Non-Key Employee shall
be equal to at least three percent (3%) of such Non-Key
Employee's "415 Compensation" (reduced by contributions and
forfeitures, if any, allocated to each Non-Key Employee in any
defined contribution plan included with this plan in a
Required Aggregation Group). However, if (1) the sum of the
Employer contributions allocated to the Participant's Combined
Account of each Key Employee for such Top Heavy Plan Year is
less than three percent (3%) of each Key Employee's "415
Compensation" and (2) this Plan is not required to be included
in an Aggregation Group to enable a defined benefit plan to
meet the requirements of Code Section 401(a)(4) or 410, the
sum of the Employer contributions allocated to the
Participant's Combined Account of each Non-Key Employee shall
be equal to the largest percentage allocated to the
Participant's Combined Account of any Key Employee. However,
in determining whether a Non-Key Employee has received the
required minimum allocation, such Non-Key Employee's Deferred
Compensation and matching contributions needed to satisfy the
"Actual Deferral Percentage" tests pursuant to Section 4.5(a)
or the "Actual Contribution Percentage" tests pursuant to
Section 4.7(a) shall not be taken into account.
However, no such minimum allocation shall be
required in this Plan for any Non-Key Employee who
participates in another defined contribution plan subject to
Code Section 412 included with this Plan in a Required
Aggregation Group.
(h) For purposes of the minimum allocations set forth
above, the percentage allocated to the Participant's Combined
Account of any Key Employee shall be equal to the ratio of the
sum of the Employer contributions allocated on behalf of such
Key Employee divided by the "415 Compensation" for such Key
Employee.
(i) For any Top Heavy Plan Year, the minimum
allocations set forth above shall be allocated to the
Participant's Combined Account of all Non-Key Employees who
are Participants and who are employed by the Employer on the
last day of the Plan Year, including Non-Key Employees who
have (1) failed to complete a Period of Service; and (2)
declined to make mandatory contributions (if required) or, in
the case of a cash or deferred arrangement, elective
contributions to the Plan.
(j) For the purposes of this Section, "415
Compensation" shall be limited to $150,000. Such amount shall
be adjusted for increases in the cost of living in accordance
with Code Section 401(a)(17), except that the dollar increase
in effect on January 1 of any calendar year shall be effective
for the Plan Year beginning with or within such calendar year.
For any short Plan Year the "415 Compensation" limit
31
shall be an amount equal to the "415 Compensation" limit for
the calendar year in which the Plan Year begins multiplied by
the ratio obtained by dividing the number of full months in
the short Plan Year by twelve (12).
(k) Notwithstanding anything herein to the contrary,
Participants who terminated employment for any reason during
the Plan Year shall share in the salary reduction
contributions made by the Employer for the year of termination
without regard to the Hours of Service credited.
(l) If a Former Participant is reemployed after five
(5) consecutive 1-Year Breaks in Service, then separate
accounts shall be maintained as follows:
(1) one account for nonforfeitable benefits
attributable to pre-break service; and
(2) one account representing his status in the
Plan attributable to post-break service.
4.5 ACTUAL DEFERRAL PERCENTAGE TESTS
(a) Maximum Annual Allocation: Except as limited
under Section 4.5(h), for each Plan Year beginning after
December 31, 1996, the annual allocation derived from Employer
Elective Contributions to a Highly Compensated Participant's
Elective Account shall satisfy one of the following tests:
(1) The "Actual Deferral Percentage" for the Highly
Compensated Participant group shall not be more than
the "Actual Deferral Percentage" of the Non-Highly
Compensated Participant group (for the preceding Plan
Year if the prior year testing method is used to
calculate the "Actual Deferral Percentage" for the
Non-Highly Compensated Participant group) multiplied
by 1.25, or
(2) The excess of the "Actual Deferral Percentage"
for the Highly Compensated Participant group over the
"Actual Deferral Percentage" for the Non-Highly
Compensated Participant group (for the preceding Plan
Year if the prior year testing method is used to
calculate the "Actual Deferral Percentage" for the
Non-Highly Compensated Participant group) shall not
be more than two percentage points. Additionally, the
"Actual Deferral Percentage, for the Highly
Compensated Participant group shall not exceed the
"Actual Deferral Percentage" for the Non-Highly
Compensated Participant group (for the preceding Plan
Year if the prior year testing method is used to
calculate the "Actual Deferral Percentage" for the
Non-Highly Compensated Participant group) multiplied
by 2. The provisions of Code
32
Section 401(k)(3) and Regulation 1.401(k)-l(b) are
incorporated herein by reference.
However, in order to prevent the multiple use of the
alternative method described in (2) above and in Code
Section 401(m)(9)(A), any Highly Compensated
Participant eligible to make elective deferrals
pursuant to Section 4.2 and to make Employee
contributions or to receive matching contributions
under this Plan or under any other plan maintained by
the Employer or an Affiliated Employer shall have a
combination of his Elective Contributions and
Employer matching contributions and his Employee
contributions reduced pursuant to Section 4.6(a) and
Regulation 1.401(m)-2, the provisions of which are
incorporated herein by reference.
(b) For the purposes of this Section "Actual Deferral
Percentage" means, with respect to the Highly Compensated
Participant group and Non-Highly Compensated Participant group
for a Plan Year, the average of the ratios, calculated
separately for each Participant in such group, of the amount
of Employer Elective Contributions allocated to each
Participant's Elective Account for such Plan Year, to such
Participant's "414(s) Compensation" for such Plan Year. The
actual deferral ratio for each Participant and the "Actual
Deferral Percentage" for each group shall be calculated to the
nearest one-hundredth of one percent. Employer Elective
Contributions allocated to each Non-Highly Compensated
Participant's Elective Account shall be reduced by Excess
Deferred Compensation to the extent such excess amounts are
made under this Plan or any other plan maintained by the
Employer and by any matching contributions which relate to
such Excess Deferred Compensation.
Notwithstanding the above, if the prior year
test method is used to calculate the "Actual Deferral
Percentage" for the Non-Highly Compensated Participant group
for the first Plan Year of this amendment and restatement, the
"Actual Deferral Percentage" for the Non-Highly Compensated
Participant group for the preceding Plan Year shall be
calculated pursuant to the provisions of the Plan then in
effect.
(c) For the purposes of Sections 4.5(a) and 4.6, a
Highly Compensated Participant and a Non-Highly Compensated
Participant shall include any Employee eligible to make a
deferral election pursuant to Section 4.2, whether or not such
deferral election was made or suspended pursuant to Section
4.2.
Notwithstanding the above, if the prior year
testing method is used to calculate the "Actual Deferral
Percentage" for the Non-Highly Compensated Participant group
for the first Plan Year of this amendment and restatement, for
purposes of Section 4.5(a) and 4.6, a Non-Highly Compensated
Participant shall
33
include any such Employee eligible to make a deferral
election, whether or not such deferral election was made or
suspended, pursuant to the provisions of the Plan in effect
for the preceding Plan Year.
(d) If the Plan uses the prior year testing method,
the "Actual Deferral Percentage" for the Non-Highly
Compensated Participant group is determined without regard to
changes in the group of Non-Highly Compensated Participants
who are eligible under the Plan in the testing year. However,
if the Plan results from, or is otherwise affected by, a "Plan
Coverage Change" that becomes effective during the testing
year, then the "Actual Deferral Percentage" for the Non-Highly
Compensated Participant group for the prior year is the
"Weighted Average Of The Actual Deferral Percentages For The
Prior Year Subgroups." Notwithstanding the above, if ninety
(90) percent or more of the total number of Non-Highly
Compensated Participants from all "Prior Year Subgroups" are
from a single "Prior Year Subgroup," then in determining the
"Actual Deferral Percentage" for the Non-Highly Compensated
Participants for the prior year, the Employer may elect to use
the "Actual Deferral Percentage" for Non-Highly Compensated
Participants for the prior year under which that single "Prior
Year Subgroup" was eligible, in lieu of using the weighted
averages. For purposes of this Section the following
definitions shall apply:
(1) "Plan Coverage Change" means a change in the
group or groups of eligible Participants on account
of (i) the establishment or amendment of a plan, (ii)
a plan merger, consolidation, or spinoff under Code
Section 414(l), (iii) a change in the way plans
within the meaning of Code Section 414(l) are
combined or separated for purposes of Regulation
1.401(k)-l(g)(11), or (iv) a combination of any of
the foregoing.
(2) "Prior Year Subgroup" means all Non-Highly
Compensated Participants for the prior year who, in
the prior year, were eligible Participants under a
specific Code Section 401(k) plan maintained by the
Employer and who would have been eligible
Participants in the prior year under the plan tested
if the plan coverage change had first been effective
as of the first day of the prior year instead of
first being effective during the testing year.
(3) "Weighted Average Of The Actual Deferral
Percentages For The Prior Year Subgroups" means the
sum, for all prior year subgroups, of the "Adjusted
Actual Deferral Percentages."
(4) "Adjusted Actual Deferral Percentage" with
respect to a prior year subgroup means the Actual
Deferral Percentage for Non-Highly Compensated
Participants for the prior year of the specific plan
under which the members of the prior year subgroup
were eligible Participants, multiplied
34
by a fraction, the numerator of which is the number
of Non-Highly Compensated Participants in the prior
year subgroup and the denominator of which is the
total number of Non-Highly Compensated Participants
in all prior year subgroups.
(e) For the purposes of this Section and Code
Sections 401(a)(4), 410(b) and 401(k), if two or more plans
which include cash or deferred arrangements are considered one
plan for the purposes of Code Section 401(a)(4) or 410(b)
(other than Code Section 410(b)(2)(A)(ii)), the cash or
deferred arrangements included in such plans shall be treated
as one arrangement. In addition, two or more cash or deferred
arrangements may be considered as a single arrangement for
purposes of determining whether or not such arrangements
satisfy Code Sections 401(a)(4), 410(b) and 401(k). In such a
case, the cash or deferred arrangements included in such plans
and the plans including such arrangements shall be treated as
one arrangement and as one plan for purposes of this Section
and Code Sections 401(a)(4), 410(b) and 401(k). Any adjustment
to the Non-Highly Compensated Participant actual deferral
ratio for the prior year shall be made in accordance with
Internal Revenue Service Notice 98-1 and any superseding
guidance. Plans may be aggregated under this paragraph (e)
only if they have the same plan year. Notwithstanding the
above, for Plan Years beginning after December 31, 1996, if
two or more plans which include cash or deferred arrangements
are permissively aggregated under Regulation 1.410(b)-7(d),
all plans permissively aggregated must use either the current
year testing method or the prior year testing method for the
testing year.
Notwithstanding the above, an employee stock
ownership plan described in Code Section 4975(e)(7) or 409 may
not be combined with this Plan for purposes of determining
whether the employee stock ownership plan or this Plan
satisfies this Section and Code Sections 401(a)(4), 410(b) and
401(k) .
(f) For the purposes of this Section, if a Highly
Compensated Participant is a Participant under two or more
cash or deferred arrangements (other than a cash or deferred
arrangement which is part of an employee stock ownership plan
as defined in Code Section 4975(e)(7) or 409) of the Employer
or an Affiliated Employer, all such cash or deferred
arrangements shall be treated as one cash or deferred
arrangement for the purpose of determining the actual deferral
ratio with respect to such Highly Compensated Participant.
However, if the cash or deferred arrangements have different
plan years, this paragraph shall be applied by treating all
cash or deferred arrangements ending with or within the same
calendar year as a single arrangement.
(g) For the purpose of this Section, when calculating
the "Actual Deferral Percentage" for the Non-Highly
Compensated Participant group, the prior year testing method
shall be used. Any change from the current year testing method
to the prior
35
year testing method shall be made pursuant to Internal Revenue
Service Notice 98-1, Section VII (or superseding guidance),
the provisions of which are incorporated herein by reference.
(h) Contributions made pursuant to Section 4.1(b) are
intended to comply with this Section 4.5 pursuant to the
alternative methods permitted by Code Section 401(k)(12).
Therefore, for Plan Years in which the Plan satisfies an
alternative method under Code Section 401(k)(12), the
limitations and requirements imposed under Sections 4.5(a)
through (g) shall be inapplicable.
4.6 ADJUSTMENT TO ACTUAL DEFERRAL PERCENTAGE TESTS
In the event (or if it is anticipated) that the initial
allocations of the Employer Elective Contributions made pursuant to Section 4.4
do (or might) not satisfy one of the tests set forth in Section 4.5(a) for Plan
Years beginning after December 31, 1996, the Administrator shall adjust Excess
Contributions pursuant to the options set forth below:
(a) on or before the fifteenth day of the third month
following the end of each Plan Year, the Highly Compensated
Participant having the largest amount of Elective
Contributions shall have a portion of his Elective
Contributions distributed to him until the total amount of
Excess Contributions has been distributed or until the amount
of his Elective Contributions equals the Elective
Contributions of the Highly Compensated Participant having the
second largest amount of Elective Contributions. This process
shall continue until the total amount of Excess Contributions
has been distributed. In determining the amount of Excess
Contributions to be distributed with respect to an affected
Highly Compensated Participant as determined herein, such
amount shall be reduced pursuant to Section 4.2(f) by any
Excess Deferred Compensation previously distributed to such
affected Highly Compensated Participant for his taxable year
ending with or within such Plan Year and any forfeited
matching contributions which relate to such Excess Deferred
Compensation.
(1) With respect to the distribution of Excess
Contributions pursuant to (a) above, such
distribution:
(i) may be postponed but not later than
the close of the Plan Year following the
Plan Year to which they are allocable;
(ii) shall be made first from unmatched
Deferred Compensation and, thereafter,
proportionately from Deferred Compensation
which is matched and matching contributions
which relate to such Deferred Compensation,
if used in the "Actual Deferral Percentage"
tests pursuant to Section 4.5;
36
(iii) shall be adjusted for Income; and
(iv) shall be designated by the Employer
as a distribution of Excess Contributions
(and Income).
(2) Any distribution of less than the entire amount
of Excess Contributions shall be treated as a pro
rata distribution of Excess Contributions and Income.
(3) Matching contributions which relate to Excess
Contributions shall be forfeited unless the related
matching contribution is distributed as an Excess
Contribution pursuant to (1) above or as an Excess
Aggregate Contribution pursuant to Section 4.8.
(b) Within twelve (12) months after the end of the
Plan Year, the Employer may make a special Qualified
Non-Elective Contribution on behalf of certain Non-Highly
Compensated Participants in an amount sufficient to satisfy
(or to prevent an anticipated failure of) one of the tests set
forth in Section 4.5(a). Such contribution shall be allocated
to the Participant's Elective Account of the Non- Highly
Compensated Participant having the lowest Compensation, until
one of the tests set forth in Section 4.5(a) is satisfied, or
until such Non-Highly Compensated Participant has received his
maximum "annual addition" pursuant to Section 4.9(a). If one
of the tests set forth in Section 4.5(a) has not been
satisfied, the Non-Highly Compensated Participant having the
second lowest Compensation shall receive the special Qualified
Non-Elective Contribution until one of the tests set forth in
Section 4.5(a) is satisfied, or until such Non-Highly
Compensated Participant has received his maximum "annual
addition" pursuant to Section 4.9(a). This process shall
continue until one of the tests set forth in Section 4.5(a)
has been satisfied.
However, if the prior year testing method is
used, the special Qualified Non-Elective Contribution shall be
allocated in the prior Plan Year to the Participant's Elective
Account on behalf of the Non-Highly Compensated Participant
who was employed by the Employer on the last day of the prior
Plan Year having the lowest Compensation for the prior Plan
Year, until one of the tests set forth in Section 4.5(a) is
satisfied, or until such Non-Highly Compensated Participant
has received his maximum "annual addition" pursuant to Section
4.9(a). If one of the tests set forth in Section 4.5(a) has
not been satisfied, the Non-Highly Compensated Participant
having the second lowest Compensation for the prior Plan Year
shall receive the special Qualified Non-Elective Contribution
until one of the tests set forth in Section 4.5(a) is
satisfied, or until such Non-Highly Compensated Participant
has received his maximum "annual addition" pursuant to Section
4.9(a). This process shall continue until one of the tests set
forth in Section 4.5(a) has been satisfied.
37
Such contribution shall be made by the Employer prior to the
end of the current Plan Year.
Notwithstanding the above, for Plan Years
beginning after December 31, 1998, if the testing method
changes from the current year testing method to the prior year
testing method, then for purposes of preventing the double
counting of Qualified Non-Elective Contributions for the first
testing year for which the change is effective any special
Qualified Non-Elective Contribution on behalf of Non-Highly
Compensated Participants used to satisfy the "Actual Deferral
Percentage" or "Actual Contribution Percentage" test under the
current year testing method for the prior year testing year
shall be disregarded.
(c) If during a Plan Year the projected aggregate
amount of Elective Contributions to be allocated to all Highly
Compensated Participants under this Plan would, by virtue of
the tests set forth in Section 4.5(a), cause the Plan to fail
such tests, then the Administrator may automatically reduce
proportionately or in the order provided in Section 4.6(a)
each affected Highly Compensated Participant's deferral
election made pursuant to Section 4.2 by an amount necessary
to satisfy one of the tests set forth in Section 4.5(a).
4.7 ACTUAL CONTRIBUTION PERCENTAGE TESTS
(a) Except as limited under Section 4.6(i), the
"Actual Contribution Percentage" for Plan Years beginning
after December 31, 1996 for the Highly Compensated Participant
group shall not exceed the greater of:
(1) 125 percent of such percentage for the Non-Highly
Compensated Participant group (for the preceding Plan
Year if the prior year testing method is used to
calculate the "Actual Contribution Percentage" for
the Non-Highly Compensated Participant group); or
(2) the lesser of 200 percent of such percentage for
the Non-Highly Compensated Participant group (for the
preceding Plan Year if the prior year testing method
is used to calculate the "Actual Contribution
Percentage" for the Non-Highly Compensated
Participant group), or such percentage for the
Non-Highly Compensated Participant group (for the
preceding Plan Year if the prior year testing method
is used to calculate the "Actual Contribution
Percentage" for the Non-Highly Compensated
Participant group) plus 2 percentage points. However,
to prevent the multiple use of the alternative method
described in this paragraph and Code Section
401(m)(9)(A), any Highly Compensated Participant
eligible to make elective deferrals pursuant to
Section 4.2 or any other cash or deferred arrangement
maintained by the Employer or an Affiliated Employer
and to make Employee contributions or
38
to receive matching contributions under this Plan or
under any plan maintained by the Employer or an
Affiliated Employer shall have a combination of his
Elective Contributions and Employer matching
contributions and his Employee contributions reduced
pursuant to Regulation 1.401(m)-2 and Section 4.8(a).
The provisions of Code Section 401(m) and Regulations
1.401(m)-l(b) and 1.401(m)-2 are incorporated herein
by reference.
(b) For the purposes of this Section and Section 4.8,
"Actual Contribution Percentage" for a Plan Year means, with
respect to the Highly Compensated Participant group and
Non-Highly Compensated Participant group (for the preceding
Plan Year if the prior year testing method is used to
calculate the "Actual Contribution Percentage" for the
Non-Highly Compensated Participant group), the average of the
ratios (calculated separately for each Participant in each
group rounded to the nearest one-hundredth of one percent) of:
(1) the sum of Employer matching contributions made
pursuant to Section 4.1(b) (to the extent such
matching contributions are not used to satisfy the
safe harbor methods permitted by Code Sections
401(k)(12) and 401(m)(11) and Employer matching
contributions made pursuant to Section 4.1(c) (to the
extent such matching contributions are not used to
satisfy the "Actual Deferral Percentage" tests) on
behalf of each such Participant for such Plan Year;
to
(2) the Participant's "414(s) Compensation" for
such Plan Year.
Notwithstanding the above, if the prior year
testing method is used to calculate the "Actual Contribution
Percentage" for the Non-Highly Compensated Participant group
for the first Plan Year of this amendment and restatement, for
purposes of Section 4.7(a), the "Actual Contribution
Percentage" for the Non-Highly Compensated Participant group
for the preceding Plan Year shall be determined pursuant to
the provisions of the Plan then in effect.
(c) For purposes of determining the "Actual
Contribution Percentage", only Employer matching contributions
contributed to the Plan prior to the end of the succeeding
Plan Year shall be considered. In addition, the Administrator
may elect to take into account, with respect to Employees
eligible to have Employer matching contributions pursuant to
Section 4.1(b) (to the extent such matching contributions are
not used to satisfy the safe harbor methods permitted by Code
Sections 401(k)(12) and 401(m)(11), Employer matching
contributions pursuant to Section 4.1(c) (to the extent such
matching contributions are not used to satisfy the "Actual
Deferral Percentage" tests) allocated to their accounts,
nonelective contributions (as described in Code Section
401(k)(12)(C)) (to the extent such nonelective
39
contributions are not used to satisfy the safe harbor methods
permitted by Code Section 401(k)(12) and 401(m)), elective
deferrals (as defined in Regulation 1.402(g)-l(b)) and
qualified non-elective contributions (as defined in Code
Section 401(m)(4)(C)) contributed to any plan maintained by
the Employer. Such Nonelective Contributions, elective
deferrals and qualified non-elective contributions shall be
treated as Employer matching contributions subject to
Regulation 1.401(m)- l(b)(5) which is incorporated herein by
reference. However, the Plan Year must be the same as the plan
year of the plan to which the elective deferrals and the
qualified non-elective contributions are made.
(d) For purposes of this Section and Code Sections
401(a)(4), 410(b) and 401(m), if two or more plans of the
Employer to which matching contributions, Employee
contributions, or both, are made are treated as one plan for
purposes of Code Sections 401(a)(4) or 410(b) (other than the
average benefits test under Code Section 410(b)(2)(A)(ii)),
such plans shall be treated as one plan. In addition, two or
more plans of the Employer to which matching contributions,
Employee contributions, or both, are made may be considered as
a single plan for purposes of determining whether or not such
plans satisfy Code Sections 401(a)(4), 410(b) and 401(m). In
such a case, the aggregated plans must satisfy this Section
and Code Sections 401(a)(4), 410(b) and 401(m) as though such
aggregated plans were a single plan. Any adjustment to the
Non-Highly Compensated Participant actual contribution ratio
for the prior year shall be made in accordance with Internal
Revenue Service Notice 98-1 and any superseding guidance.
Plans may be aggregated under this paragraph (e) only if they
have the same plan year. Notwithstanding the above, for Plan
Years beginning after December 31, 1996, if two or more plans
which include cash or deferred arrangements are permissively
aggregated under Regulation 1.410(b)-7(d), all plans
permissively aggregated must use either the current year
testing method or the prior year testing method for the
testing year.
Notwithstanding the above, an employee stock
ownership plan described in Code Section 4975(e)(7) or 409 may
not be aggregated with this Plan for purposes of determining
whether the employee stock ownership plan or this Plan
satisfies this Section and Code Sections 401(a)(4), 410(b) and
401(m).
(e) If a Highly Compensated Participant is a
Participant under two or more plans (other than an employee
stock ownership plan as defined in Code Section 4975(e)(7) or
409) which are maintained by the Employer or an Affiliated
Employer to which matching contributions, Employee
contributions, or both, are made, all such contributions on
behalf of such Highly Compensated Participant shall be
aggregated for purposes of determining such Highly Compensated
Participant's actual contribution ratio. However, if the plans
have different plan years, this paragraph
40
shall be applied by treating all plans ending with or within
the same calendar year as a single plan.
(f) For purposes of Sections 4.7(a) and 4.8, a Highly
Compensated Participant and Non-Highly Compensated Participant
shall include any Employee eligible to have Employer matching
contributions (whether or not a deferral election was made or
suspended) allocated to his account for the Plan Year.
Notwithstanding the above, if the prior year testing
method is used to calculate the "Actual Contribution
Percentage" for the Non-Highly Compensated Participant group
for the first Plan Year of this amendment and restatement, for
the purposes of Section 4.7(a), a Non-Highly Compensated
Participant shall include any such Employee eligible to have
Employer matching contributions (whether or not a deferral
election was made or suspended) allocated to his account for
the preceding Plan Year pursuant to the provisions of the Plan
then in effect.
(g) If the Plan uses the prior year testing method,
the "Actual Contribution Percentage" for the Non-Highly
Compensated Participant group is determined without regard to
changes in the group of Non-Highly Compensated Participants
who are eligible under the Plan in the testing year. However,
if the Plan results from, or is otherwise affected by, a "Plan
Coverage Change" that becomes effective during the testing
year, then the "Actual Contribution Percentage" for the
Non-Highly Compensated Participant group for the prior year is
the "Weighted Average Of The Actual Contribution Percentages
For The Prior Year Subgroups." Notwithstanding the above, if
ninety (90) percent or more of the total number of Non-Highly
Compensated Participants from all "Prior Year Subgroups" are
from a single "Prior Year Subgroup," then in determining the
"Actual Contribution Percentage" for the Non-Highly
Compensated Participants for the prior year, the Employer may
elect to use the "Actual Contribution Percentage" for
Non-Highly Compensated Participants for the prior year under
which that single "Prior Year Subgroup" was eligible, in lieu
of using the weighted averages. For purposes of this Section
the following definitions shall apply:
(1) "Plan Coverage Change" means a change in the
group or groups of eligible Participants on account
of (i) the establishment or amendment of a plan, (ii)
a plan merger, consolidation, or spinoff under Code
Section 414(l), (iii) a change in the way plans
within the meaning of Code Section 414(l) are
combined or separated for purposes of Regulation
1.401(k)-l(g)(11), or (iv) a combination of any of
the foregoing.
(2) "Prior Year Subgroup" means all Non-Highly
Compensated Participants for the prior year who, in
the prior year, were eligible Participants under a
specific Code Section 401(m) plan maintained by the
41
Employer and who would have been eligible
Participants in the prior year under the plan tested
if the plan coverage change had first been effective
as of the first day of the prior year instead of
first being effective during the testing year.
(3) "Weighted Average Of The Actual Contribution
Percentages For The Prior Year Subgroups" means the
sum, for all prior year subgroups, of the "Adjusted
Actual Contribution Percentages."
(4) "Adjusted Actual Contribution Percentage" with
respect to a prior year subgroup means the Actual
Contribution Percentage for Non-Highly Compensated
Participants for the prior year of the specific plan
under which the members of the prior year subgroup
were eligible Participants, multiplied by a fraction,
the numerator of which is the number of Non-Highly
Compensated Participants in the prior year subgroup
and the denominator of which is the total number of
Non-Highly Compensated Participants in all prior year
subgroups.
(h) For the purpose of this Section, when calculating
the "Actual Contribution Percentage" for the Non-Highly
Compensated Participant group, the prior year testing method
shall be used. Any change from the current year testing method
to the prior year testing method shall be made pursuant to
Internal Revenue Service Notice 98-1, Section VII (or
superseding guidance), the provisions of which are
incorporated herein by reference.
(i) Contributions made pursuant to Section 4.1(b) are
intended to comply with this Section 4.7 pursuant to the
alternative methods permitted by Code Section 401(m)(11).
Therefore, for Plan Years in which the Plan satisfies an
alternative method under Code Section 401(m)(11), the
limitations and requirements imposed under Sections 4.7(a)
through (h) shall be inapplicable.
4.8 ADJUSTMENT TO ACTUAL CONTRIBUTION PERCENTAGE TESTS
(a) In the event (or if it is anticipated) that, for
Plan Years beginning after December 31, 1996, the "Actual
Contribution Percentage" for the Highly Compensated
Participant group exceeds (or might exceed) the "Actual
Contribution Percentage" for the Non-Highly Compensated
Participant group pursuant to Section 4.7(a), the
Administrator (on or before the fifteenth day of the third
month following the end of the Plan Year, but in no event
later than the close of the following Plan Year) shall direct
the Trustee to distribute to the Highly Compensated
Participant having the largest amount of contributions
determined pursuant to Section 4.7(b)(2), his portion of such
contributions (and Income allocable to such contributions)
until the total amount of Excess Aggregate Contributions has
been distributed, or until his
42
remaining amount equals the amount of contributions determined
pursuant to Section 4.7(b)(2) of the Highly Compensated
Participant having the second largest amount of contributions.
This process shall continue until the total amount of Excess
Aggregate Contributions has been distributed. The distribution
of Excess Aggregate Contributions shall be made from Employer
matching contributions.
(b) Any distribution of less than the entire amount
of Excess Aggregate Contributions (and Income) shall be
treated as a pro rata distribution of Excess Aggregate
Contributions and Income. Distribution of Excess Aggregate
Contributions shall be designated by the Employer as a
distribution of Excess Aggregate Contributions (and Income).
(c) Excess Aggregate Contributions shall be treated
as Employer contributions for purposes of Code Sections 404
and 415 even if distributed from the Plan.
(d) The determination of the amount of Excess
Aggregate Contributions with respect to any Plan Year shall be
made after first determining the Excess Contributions, if any,
to be treated as voluntary Employee contributions due to
recharacterization for the plan year of any other qualified
cash or deferred arrangement (as defined in Code Section
401(k)) maintained by the Employer that ends with or within
the Plan Year.
(e) If during a Plan Year the projected aggregate
amount of Employer matching contributions to be allocated to
all Highly Compensated Participants under this Plan would, by
virtue of the tests set forth in Section 4.7(a), cause the
Plan to fail such tests, then the Administrator may
automatically reduce proportionately or in the order provided
in Section 4.8(a) each affected Highly Compensated
Participant's projected share of such contributions by an
amount necessary to satisfy one of the tests set forth in
Section 4.7(a).
(f) Notwithstanding the above, within twelve (12)
months after the end of the Plan Year, the Employer may make a
special Qualified Non-Elective Contribution on behalf of
certain Non-Highly Compensated Participants in an amount
sufficient to satisfy (or to prevent an anticipated failure
of) one of the tests set forth in Section 4.7(a). Such
contribution shall be allocated to the Participant's Account
of the Non-Highly Compensated Participant having the lowest
Compensation, until one of the tests set forth in Section 4.7
is satisfied, or until such Non-Highly Compensated Participant
has received his maximum "annual addition" pursuant to Section
4.9(a). If one of the tests set forth in Section 4.7 has not
been satisfied, the Non-Highly Compensated Participant having
the second lowest Compensation shall receive the special
Qualified Non-Elective Contribution until one of the tests set
forth in Section 4.7 is satisfied, or until such Non-Highly
43
Compensated Participant has received his maximum "annual
addition" pursuant to Section 4.9(a). This process shall
continue until one of the tests set forth in Section 4.7 has
been satisfied. A separate accounting of any special Qualified
Non-Elective Contribution shall be maintained in the
Participant's Account.
However, if the prior year testing method is
used, the special Qualified Non-Elective Contribution shall be
allocated in the prior Plan Year to the Participant's Account
on behalf of each Non-Highly Compensated Participant who was
employed by the Employer on the last day of the prior Plan
Year having the lowest Compensation for the prior Plan Year,
until one of the tests set forth in Section 4.7 is satisfied,
or until such Non-Highly Compensated Participant has received
his maximum "annual addition" pursuant to Section 4.9(a). If
one of the tests set forth in Section 4.7 has not been
satisfied, the Non-Highly Compensated Participant having the
second lowest Compensation for the prior Plan Year shall
receive the special Qualified Non-Elective Contribution until
one of the tests set forth in Section 4.7 is satisfied, or
until such Non-Highly Compensated Participant has received his
maximum "annual addition" pursuant to Section 4.9(a). This
process shall continue until one of the tests set forth in
Section 4.7 has been satisfied. Such contribution shall be
made by the Employer prior to the end of the current Plan
Year. A separate accounting of any special Qualified
Non-Elective Contributions shall be maintained in the
Participant's Account.
Notwithstanding the above, for Plan Years
beginning after December 31, 1998, if the testing method
changes from the current year testing method to the prior year
testing method, then for purposes of preventing the double
counting of Qualified Non-Elective Contributions for the first
testing year for which the change is effective, any special
Qualified Non-Elective Contribution on behalf of Non-Highly
Compensated Participants used to satisfy the "Actual Deferral
Percentage" or "Actual Contribution Percentage" test under the
current year testing method for the prior year testing year
shall be disregarded.
4.9 MAXIMUM ANNUAL ADDITIONS
(a) Notwithstanding the foregoing, the maximum
"annual additions" credited to a Participant's accounts for
any "limitation year" shall equal the lesser of: (1) $30,000
adjusted annually as provided in Code Section 415(d) pursuant
to the Regulations, or (2) twenty-five percent (25%) of the
Participant's "415 Compensation" for such "limitation year."
For any short "limitation year," the dollar limitation in (1)
above shall be reduced by a fraction, the numerator of which
is the number of full months in the short "limitation year"
and the denominator of which is twelve (12).
44
(b) For purposes of applying the limitations of Code
Section 415, "annual additions" means the sum credited to a
Participant's accounts for any "limitation year" of (1)
Employer contributions, (2)Employee contributions, (3)
forfeitures, (4) amounts allocated, after March 31, 1984, to
an individual medical account, as defined in Code Section
415(l)(2) which is part of a pension or annuity plan
maintained by the Employer and (5) amounts derived from
contributions paid or accrued after December 31, 1985, in
taxable years ending after such date, which are attributable
to post-retirement medical benefits allocated to the separate
account of a key employee (as defined in Code Section
419A(d)(3)) under a welfare benefit plan (as defined in Code
Section 419(e)) maintained by the Employer. Except, however,
the "415 Compensation" percentage limitation referred to in
paragraph (a)(2) above shall not apply to: (1) any
contribution for medical benefits (within the meaning of Code
Section 419A(f)(2)) after separation from service which is
otherwise treated as an "annual addition," or (2) any amount
otherwise treated as an "annual addition" under Code Section
415(l)(1).
(c) For purposes of applying the limitations of Code
Section 415, the transfer of funds from one qualified plan to
another is not an "annual addition." In addition, the
following are not Employee contributions for the purposes of
Section 4.9(b)(2): (1) rollover contributions (as defined in
Code Sections 402(e)(6), 403(a)(4), 403(b)(8) and 408(d)(3));
(2) repayments of loans made to a Participant from the Plan;
(3) repayments of distributions received by an Employee
pursuant to Code Section 411(a)(7)(B) (cash-outs); (4)
repayments of distributions received by an Employee pursuant
to Code Section 411(a)(3)(D) (mandatory contributions); and
(5) Employee contributions to a simplified employee pension
excludable from gross income under Code Section 408(k)(6).
(d) For purposes of applying the limitations of
Code Section 415, the "limitation year" shall be the Plan
Year.
(e) For the purpose of this Section, all qualified
defined contribution plans (whether terminated or not) ever
maintained by the Employer shall be treated as one defined
contribution plan.
(f) For the purpose of this Section, if the Employer
is a member of a controlled group of corporations, trades or
businesses under common control (as defined by Code Section
1563(a) or Code Section 414(b) and (c) as modified by Code
Section 415(h), is a member of an affiliated service group (as
defined by Code Section 414(m), or is a member of a group of
entities required to be aggregated pursuant to Regulations
under Code Section 414(o), all Employees of such Employers
shall be considered to be employed by a single Employer.
45
(g) For the purpose of this Section, if this Plan is
a Code Section 413(c) plan, each Employer who maintains this
Plan will be considered to be a separate Employer.
(h) (l) If a Participant participates in more than
one defined contribution plan maintained by the
Employer which have different Anniversary Dates, the
maximum "annual additions" under this Plan shall
equal the maximum "annual additions" for the
"limitation year" minus any "annual additions"
previously credited to such Participant's accounts
during the "limitation year."
(2) If a Participant participates in both a defined
contribution plan subject to Code Section 412 and a
defined contribution plan not subject to Code Section
412 maintained by the Employer which have the same
Anniversary Date, "annual additions" will be credited
to the Participant's accounts under the defined
contribution plan subject to Code Section 412 prior
to crediting "annual additions" to the Participant's
accounts under the defined contribution plan not
subject to Code Section 412.
(3) If a Participant participates in more than one
defined contribution plan not subject to Code Section
412 maintained by the Employer which have the same
Anniversary Date, the maximum "annual additions"
under this Plan shall equal the product of (A) the
maximum "annual additions" for the "limitation year"
minus any "annual additions" previously credited
under subparagraphs (1) or (2) above, multiplied by
(B) a fraction (i) the numerator of which is the
"annual additions" which would be credited to such
Participant's accounts under this Plan without regard
to the limitations of Code Section 415 and (ii) the
denominator of which is such "annual additions" for
all plans described in this subparagraph.
(i) Notwithstanding anything contained in this
Section to the contrary, the limitations, adjustments and
other requirements prescribed in this Section shall at all
times comply with the provisions of Code Section 415 and the
Regulations thereunder, the terms of which are specifically
incorporated herein by reference.
4.10 ADJUSTMENT FOR EXCESSIVE ANNUAL ADDITIONS
(a) If, as a result of a reasonable error in
estimating a Participant's Compensation, a reasonable error in
determining the amount of elective deferrals (within the
meaning of Code Section 402(g)(3)) that may be made with
respect to any Participant under the limits of Section 4.9 or
other facts and circumstances to which Regulation
1.415-6(b)(6) shall be applicable, the "annual additions"
under this Plan would cause the maximum "annual additions" to
be exceeded for any Participant, the Administrator shall (1)
distribute any elective deferrals (within the meaning of Code
46
Section 402(g)(3)) or return any Employee contributions
(whether voluntary or mandatory), and for the distribution of
gains attributable to those elective deferrals and Employee
contributions, to the extent that the distribution or return
would reduce the "excess amount" in the Participant's accounts
(2) hold any "excess amount" remaining after the return of any
elective deferrals or voluntary Employee contributions in a
"Section 415 suspense account" (3) use the "Section 415
suspense account" in the next "limitation year" (and
succeeding "limitation years" if necessary) to reduce Employer
contributions for that Participant if that Participant is
covered by the Plan as of the end of the "limitation year," or
if the Participant is not so covered, allocate and reallocate
the "Section 415 suspense account" in the next "limitation
year" (and succeeding "limitation years" if necessary) to all
Participants in the Plan before any Employer or Employee
contributions which would constitute "annual additions" are
made to the Plan for such "limitation year" (4) reduce
Employer contributions to the Plan for such "limitation year"
by the amount of the "Section 415 suspense account" allocated
and reallocated during such "limitation year."
(b) For purposes of this Article, "excess amount" for
any Participant for a "limitation year" shall mean the excess,
if any, of (1) the "annual additions" which would be credited
to his account under the terms of the Plan without regard to
the limitations of Code Section 415 over (2) the maximum
"annual additions" determined pursuant to Section 4.9.
(c) For purposes of this Section, "Section 415
suspense account" shall mean an unallocated account equal to
the sum of "excess amounts" for all Participants in the Plan
during the "limitation year." The "Section 415 suspense
account" shall not share in any earnings or losses of the
Trust Fund.
4.11 TRANSFERS FROM QUALIFIED PLANS
(a) Effective April 1, 2000, this Plan does not
permit direct or indirect rollover transfers from other
qualified plans by employees. However, this Section 4.11
applies to (1) rollover transfers to this Plan that were
permitted prior to that date and (2) the rollover account
portion of a Participant's account which is merged with and
into, or transferred (other than by a direct or indirect
rollover transfer) to, this Plan from another qualified
defined contribution plan. Those amounts compose a
"Participant's Rollover Account." Any such account shall be
fully Vested at all times and shall not be subject to
Forfeiture for any reason.
(b) Amounts in a Participant's Rollover Account shall
be held by the Trustee pursuant to the provisions of this Plan
and may not be withdrawn by, or distributed to the
Participant, in whole or in part, except as provided in
Section 6.10 and paragraphs (c) and (d) of this Section.
47
(c) Except as permitted by Regulations (including
Regulation 1.411(d)-4), amounts attributable to elective
contributions (as defined in Regulation 1.401(k)- l(g)(3)),
including amounts treated as elective contributions, which are
transferred from another qualified plan in a plan-to-plan
transfer shall be subject to the distribution limitations
provided for in Regulation 1.401(k)-l(d).
(d) At Normal Retirement Date, or such other date
when the Participant or his Beneficiary shall be entitled to
receive benefits, the fair market value of the Participant's
Rollover Account shall be used to provide additional benefits
to the Participant or his Beneficiary. Any distributions of
amounts held in a Participant's Rollover Account shall be made
in a manner which is consistent with and satisfies the
provisions of Section 6.5, including, but not limited to, all
notice and consent requirements of Code Sections 417 and
411(a)(11) and the Regulations thereunder. Furthermore, such
amounts shall be considered as part of a Participant's benefit
in determining whether an involuntary cash-out of benefits
without Participant consent may be made.
(e) The Administrator may direct that employee
transfers made after a Valuation Date be segregated into a
separate account for each Participant in a federally insured
savings account, certificate of deposit in a bank or savings
and loan association, money market certificate, or other short
term debt security acceptable to the Trustee until such time
as the allocations pursuant to this Plan have been made, at
which time they may remain segregated or be invested as part
of the general Trust Fund, to be determined by the
Administrator.
(f) For purposes of this Section, the term "qualified
plan" shall mean any tax qualified plan under Code Section
401(a). The term "amounts transferred from other qualified
plans" shall mean: (i) amounts transferred to this Plan
directly from another qualified plan; (ii) distributions from
another qualified plan which are eligible rollover
distributions and which are either transferred by the Employee
to this Plan within sixty (60) days following his receipt
thereof or are transferred pursuant to a direct rollover;
(iii) amounts transferred to this Plan from a conduit
individual retirement account provided that the conduit
individual retirement account has no assets other than assets
which (A) were previously distributed to the Employee by
another qualified plan as a lump-sum distribution (B) were
eligible for tax-free rollover to a qualified plan and (C)
were deposited in such conduit individual retirement account
within sixty (60) days of receipt thereof and other than
earnings on said assets; and (iv) amounts distributed to the
Employee from a conduit individual retirement account meeting
the requirements of clause (iii) above, and transferred by the
Employee to this Plan within sixty (60) days of his receipt
thereof from such conduit individual retirement account.
48
(g) Prior to accepting any transfers to which this
Section applies, the Administrator may require the Employee to
establish that the amounts to be transferred to this Plan meet
the requirements of this Section and may also require the
Employee to provide an opinion of counsel satisfactory to the
Employer that the amounts to be transferred meet the
requirements of this Section.
(h) Notwithstanding anything herein to the contrary,
a transfer directly to this Plan from another qualified plan
(or a transaction having the effect of such a transfer) shall
only be permitted if it will not result in the elimination or
reduction of any "Section 411(d)(6) protected benefit" as
described in Section 7.1.
4.12 VOLUNTARY CONTRIBUTIONS
(a) This Plan does not permit voluntary contributions
by Participants. However, this Section 4.12 applies to any
Participant account that is merged with and into, or
transferred (other than by a direct or indirect rollover
transfer) to, this Plan from another qualified defined
contribution plan and which includes amounts attributable to
voluntary contributions. Those amounts compose a Participants
Voluntary Contributions Account. The balance in each
Participant's Voluntary Contribution Account, resulting from
mergers or direct transfers shall be fully Vested at all times
and shall not be subject to Forfeiture for any reason.
(b) A Participant may elect to withdraw his voluntary
contributions from his Voluntary Contribution Account and the
actual earnings thereon in a manner which is consistent with
and satisfies the provisions of Section 6.5, including, but
not limited to, all notice and consent requirements of Code
Sections 417 and 411(a)(11) and the Regulations thereunder. If
the Administrator maintains sub-accounts with respect to
voluntary contributions (and earnings thereon) which were made
on or before a specified date, a Participant shall be
permitted to designate which sub- account shall be the source
for his withdrawal.
(c) At Normal Retirement Date, or such other date
when the Participant or his Beneficiary shall be entitled to
receive benefits, the fair market value of the Voluntary
Contribution Account shall be used to provide additional
benefits to the Participant or his Beneficiary.
4.13 DIRECTED INVESTMENT ACCOUNT
(a) Participants may, subject to a procedure
established by the Administrator (the Participant Direction
Procedures) and applied in a uniform nondiscriminatory manner,
direct the Trustee to invest all of their accounts in specific
assets, specific funds or other investments permitted under
the Plan and the
49
Participant Direction Procedures. That portion of the interest
of any Participant so directing will thereupon be considered a
Participant's Directed Account.
(b) As of each Valuation Date, all Participant
Directed Accounts shall be charged or credited with the net
earnings, gains, losses and expenses as well as any
appreciation or depreciation in the market value using
publicly listed fair market values when available or
appropriate.
(1) To the extent that the assets in a Participant's
Directed Account are accounted for as pooled assets
or investments, the allocation of earnings, gains and
losses of each Participant's Directed Account shall
be based upon the total amount of funds so invested,
in a manner proportionate to the Participant's share
of such pooled investment.
(2) To the extent that the assets in the
Participant's Directed Account are accounted for as
segregated assets, the allocation of earnings, gains
and losses from such assets shall be made on a
separate and distinct basis.
(c) The Participant Direction Procedures shall
provide an explanation of the circumstances under which
Participants and their Beneficiaries may give investment
instructions, including, but need not be limited to, the
following:
(1) the conveyance of instructions by the
Participants and their Beneficiaries to invest
Participant Directed Accounts in Directed
Investments;
(2) the name, address and phone number of the
Fiduciary (and, if applicable, the person or persons
designated by the Fiduciary to act on its behalf)
responsible for providing information to the
Participant or a Beneficiary upon request relating to
the investments in Directed Investments;
(3) applicable restrictions on transfers to and
from any Designated Investment Alternative;
(4) any restrictions on the exercise of voting,
tender and similar rights related to a Directed
Investment by the Participants or their
Beneficiaries;
(5) a description of any transaction fees and
expenses which affect the balances in Participant
Directed Accounts in connection with the purchase or
sale of Directed Investments; and
(6) general procedures for the dissemination of
investment and other information relating to the
Designated Investment Alternatives as deemed
50
necessary or appropriate, including but not limited
to a description of the following:
(i) the investment vehicles available
under the Plan, including specific
information regarding any Designated
Investment Alternative;
(ii) any designated Investment Managers;
and
(iii) a description of the additional
information which may be obtained upon
request from the Fiduciary designated to
provide such information.
(d) Any information regarding investments available
under the Plan, to the extent not required to be described in
the Participant Direction Procedures, may be provided to the
Participant in one or more written documents which are
separate from the Participant Direction Procedures and are not
thereby incorporated by reference into this Plan.
(e) The Administrator may, at its discretion,
include in or exclude by amendment or other action from the
Participant Direction Procedures such instructions, guidelines
or policies as it deems necessary or appropriate to ensure
proper administration of the Plan, and may interpret the same
accordingly.
ARTICLE V
VALUATIONS
5.1 VALUATION OF THE TRUST FUND
The Administrator shall direct the Trustee, as of each
Valuation Date, to determine the net worth of the assets comprising the Trust
Fund as it exists on the Valuation Date. In determining such net worth, the
Trustee shall value the assets comprising the Trust Fund at their fair market
value as of the Valuation Date and shall deduct all expenses for which the
Trustee has not yet obtained reimbursement from the Employer or the Trust Fund.
The Trustee may update the value of any shares held in the Participant Directed
Account by reference to the number of shares held by that Participant, priced at
the market value as of the Valuation Date.
5.2 METHOD OF VALUATION
In determining the fair market value of securities held in the
Trust Fund which are listed on a registered stock exchange, the Administrator
shall direct the Trustee to value the same at the prices they were last traded
on such exchange preceding the close of business on the Valuation Date. If such
securities were not traded on the Valuation Date, or if the exchange on which
they are
51
traded was not open for business on the Valuation Date, then the securities
shall be valued at the prices at which they were last traded prior to the
Valuation Date. Any unlisted security held in the Trust Fund shall be valued at
its bid price next preceding the close of business on the Valuation Date, which
bid price shall be obtained from a registered broker or an investment banker. In
determining the fair market value of assets other than securities for which
trading or bid prices can be obtained, the Trustee may appraise such assets
itself, or in its discretion, employ one or more appraisers for that purpose and
rely on the values established by such appraiser or appraisers.
For administrative purposes, the Administrator may establish,
or cause to be established, unit values for one or more investment funds (or any
portion thereof) and maintain the accounts setting forth each Participant's
interest in the investment fund (or any portion thereof) in terms of the units,
all in accordance with rules and procedures as the Administrators shall deem to
be fair, equitable and administratively practicable. In the event that unit
accounting is thus established for any investment fund (or any portion thereof)
the value of a Participant's interest in that investment fund (or any portion
thereof) at any time shall be an amount equal to the then value of a unit in the
investment fund (or any portion thereof) multiplied by the number of units then
credited to the Participant.
ARTICLE VI
DETERMINATION AND DISTRIBUTION OF BENEFITS
6.1 DETERMINATION OF BENEFITS UPON RETIREMENT
Every Participant may terminate his employment with the
Employer and retire for the purposes hereof on his Normal Retirement Date or
Early Retirement Date. However, a Participant may postpone the termination of
his employment with the Employer to a later date, in which event the
participation of such Participant in the Plan, including the right to receive
allocations pursuant to Section 4.4, shall continue until his Late Retirement
Date. Upon a Participant's Retirement Date or attainment of his Normal
Retirement Date without termination of employment with the Employer, or as soon
thereafter as is practicable, the Trustee shall distribute, at the election of
the Participant, all amounts credited to such Participant's Combined Account in
accordance with Section 6.5.
6.2 DETERMINATION OF BENEFITS UPON DEATH
Unless modified under Schedule 6.2, Protected Optional Forms
of Death Benefit, which is attached hereto and hereby incorporated by reference
and made a part of the Plan, for any portion of a Participant's Combined Account
attributable to a plan merged with and into, or transferred (other than by a
direct or indirect rollover transfer) to, this Plan, this Section 6.2 describes
the determination of benefits upon a Participant's death.
(a) Upon the death of a Participant before his
Retirement Date or other termination of his employment, all
amounts credited to such Participant's Combined Account shall
become fully Vested. The Administrator shall direct the
Trustee, in
52
accordance with the provisions of Sections 6.6 and 6.7, to
distribute the value of the deceased Participant's accounts to
the Participant's Beneficiary.
(b) Upon the death of a Former Participant, the
Administrator shall direct the Trustee, in accordance with the
provisions of Sections 6.6 and 6.7, to distribute any
remaining Vested amounts credited to the accounts of a
deceased Former Participant to such Former Participant's
Beneficiary.
(c) Any security interest held by the Plan by
reason of an outstanding loan to the Participant or Former
Participant shall be taken into account in determining the
amount of the Pre-Retirement Survivor Annuity.
(d) The Administrator may require such proper proof
of death and such evidence of the right of any person to
receive payment of the value of the account of a deceased
Participant or Former Participant as the Administrator may
deem desirable. The Administrator's determination of death and
of the right of any person to receive payment shall be
conclusive.
(e) Unless otherwise elected in the manner
prescribed in Section 6.6, the Participant's spouse shall
receive a death benefit equal to the Pre-Retirement Survivor
Annuity. The Participant may designate a Beneficiary other
than his spouse to receive that portion of his death benefit
which is not payable as a Pre-Retirement Survivor Annuity. The
Participant may also designate a Beneficiary other than his
spouse to receive the Pre-Retirement Survivor Annuity but only
if:
(1) the Participant and his spouse have validly
waived the Pre- Retirement Survivor Annuity in the
manner prescribed in Section 6.6, and the spouse
has waived his or her right to be the Participant's
Beneficiary, or
(2) the Participant is legally separated or has
been abandoned (within the meaning of local law)
and the Participant has a court order to such
effect (and there is no "qualified domestic
relations order" as defined in Code Section 414(p)
which provides otherwise), or
(3) the Participant has no spouse, or
(4) the spouse cannot be located.
In such event, the designation of a
Beneficiary shall be made on a form satisfactory to the
Administrator. A Participant may at any time revoke his
53
designation of a Beneficiary or change his Beneficiary by
filing written notice of such revocation or change with the
Administrator. However, the Participant's spouse must again
consent in writing to any change in Beneficiary of that
portion of the death benefit that would otherwise be paid as a
Pre-Retirement Survivor Annuity unless the original consent
acknowledged that the spouse had the right to limit consent
only to a specific Beneficiary and that the spouse voluntarily
elected to relinquish such right. The Participant's may, at
any time, designate a Beneficiary to receive death benefits
that are in excess of the Pre-Retirement Survivor Annuity. In
the event no valid designation of Beneficiary exists at the
time of the Participant's death, the death benefit shall be
payable to his spouse.
6.3 DETERMINATION OF BENEFITS IN EVENT OF DISABILITY
In the event of a Participant's Total and Permanent Disability
prior to his Retirement Date or other termination of his employment, all amounts
credited to such Participant's Combined Account shall become fully Vested. In
the event of a Participant's Total and Permanent Disability, the Trustee, in
accordance with the provisions of Sections 6.5 and 6.7, shall distribute to such
Participant all amounts credited to such Participant's Combined Account as
though he had retired.
6.4 DETERMINATION OF BENEFITS UPON TERMINATION
(a) If a Participant's employment with the Employer
is terminated for any reason other than death, Total and
Permanent Disability or retirement, such Participant shall be
entitled to such benefits as are provided hereinafter pursuant
to this Section 6.4.
Distribution of the funds due to a
Terminated Participant shall be made on the occurrence of an
event which would result in the distribution had the
Terminated Participant remained in the employ of the Employer
(upon the Participant's death, Total and Permanent Disability,
Early or Normal Retirement). However, at the election of the
Participant, the Administrator shall direct the Trustee to
cause the entire Vested portion of the Terminated
Participant's Combined Account to be payable to such
Terminated Participant. Any distribution under this paragraph
shall be made in a manner which is consistent with and
satisfies the provisions of Section 6.5, including, but not
limited to, all notice and consent requirements of Code
Sections 417 and 411(a)(11) and the Regulations thereunder.
The Administrator shall direct the Trustee
to cause the entire Vested benefit to be paid to such
Participant in a single lump sum, effective for distributions
on or after March 22, 1999, if the value of a Terminated
Participant's Vested benefit derived from Employer and
Employee contributions does not exceed $5,000 ($3,500 for Plan
Years beginning prior to August 6, 1997) and the Participant
has not
54
commenced a periodic distribution form for which at least one
scheduled periodic distribution is yet to be made.
.
(b) A Participant shall become fully Vested in his
Participant's Account attributable to Employer matching
contributions made pursuant to Section 4.1(c) immediately upon
entry into the Plan.
(c) The Vested portion of any Participant's Account
attributable to Employer discretionary contributions made
pursuant to Section 4.1(e) shall be a percentage of the total
of such amount credited to his Participant's Account
determined on the basis of the Participant's number of whole
years of his Period of Service according to the following
schedule:
Vesting Schedule
Employer Discretionary Contributions
Periods of Service Percentage
Less than 3 0%
3 20%
4 40%
5 60%
6 80%
7 100%
(d) Notwithstanding the vesting attributable to
Employer discretionary contributions provided for in paragraph
6.4(c) above, for any Top Heavy Plan Year, the Vested portion
of the Participant's Account attributable to Employer
discretionary contributions of any Participant who has an Hour
of Service after the Plan becomes top heavy shall be a
percentage of the amount credited to his Participant's Account
attributable to Employer discretionary contributions
determined on the basis of the Participant's number of whole
years of his Period of Service according to the following
schedule:
55
Vesting Schedule
Employer Discretionary Contributions
Periods of Service Percentage
Less than 2 0%
2 20%
3 40%
4 60%
5 80%
6 100%
If in any subsequent Plan Year, the Plan
ceases to be a Top Heavy Plan, the Administrator shall revert
to the vesting schedule in effect before this Plan became a
Top Heavy Plan. Any such reversion shall be treated as a Plan
amendment pursuant to the terms of the Plan.
(e) Notwithstanding the vesting schedule above, the
Vested percentage of a Participant's Account shall not be less
than the Vested percentage attained as of the later of the
effective date or adoption date of this amendment and
restatement.
(f) Notwithstanding the vesting schedule above, upon
the complete discontinuance of the Employer contributions to
the Plan or upon any full or partial termination of the Plan,
all amounts credited to the account of any affected
Participant shall become 100% Vested and shall not thereafter
be subject to Forfeiture.
(g) Except as otherwise provided in this Section
6.4(g), a Participant with a Period of Service of at least
three (3) whole years as of the expiration date of the
election period may elect to have his nonforfeitable
percentage computed under the Plan without regard to such
amendment and restatement. If a Participant fails to make such
election, then such Participant shall be subject to the new
vesting schedule. The Participant's election period shall
commence on the adoption date of the amendment and shall end
60 days after the latest of:
(1) the adoption date of the amendment,
(2) the effective date of the amendment, or
(3) the date the Participant receives written
notice of the amendment from the Employer or
Administrator.
56
Except, however, any Employee who was a
Participant as of April 1, 2000, and who had completed a
Period of Service of at least three (3) whole years at that
time shall be subject to the following pre-amendment vesting
schedules or additional vesting provision, to the extent
applicable to the Participant, provided the schedule or
additional vesting provision is more liberal than the new
vesting schedule.
Pre-Amendment Vesting Schedule for Participants in this Plan
(participation determined as of March 31, 2000)
100% vested upon attainment of age 62
Pre-Amendment Vesting Schedule for Participants in the
Bertek Pharmaceuticals Inc. 401(k) Savings Plan and Trust
(participation determined as of March 31, 2000)
Periods of Service Percentage
less than 3 0%
3 50%
4 75%
5 100%
Pre-Amendment Vesting Schedule for Participants in the
Penederm Incorporated 401(k) Plan
(participation determined as of March 31,
2000)
Periods of Service Percentage
less than 2 0%
2 25%
3 50%
4 75%
5 100%
(h) The computation of a Participant's nonforfeitable
percentage of his interest in the Plan shall not be reduced as
the result of any direct or indirect amendment to this Plan.
For this purpose, the Plan shall be treated as having been
amended if the Plan provides for an automatic change in
vesting due to a change in top heavy status. In the event that
the Plan is amended to change or modify any vesting schedule,
a Participant with at least three (3) whole years of his
Period of Service as of the expiration date of the election
period may elect to have his nonforfeitable percentage
computed under the Plan without regard to such amendment. If a
Participant fails to make such election, then such Participant
shall
57
be subject to the new vesting schedule. The Participant's
election period shall commence on the adoption date of the
amendment and shall end 60 days after the latest of:
(1) the adoption date of the amendment,
(2) the effective date of the amendment, or
(3) the date the Participant receives written
notice of the amendment from the Employer or
Administrator.
(i) (1) If any Former Participant shall be reemployed
by the Employer before a 1-Year Break in Service
occurs, he shall continue to participate in the Plan
in the same manner as if such termination had not
occurred.
(2) If any Former Participant shall be reemployed by
the Employer before five (5) consecutive 1-Year
Breaks in Service, and such Former Participant had
received, or was deemed to have received, a
distribution of his entire Vested interest prior to
his reemployment, his forfeited account shall be
reinstated only if he repays the full amount
distributed to him before the earlier of five (5)
years after the first date on which the Participant
is subsequently reemployed by the Employer or the
close of the first period of five (5) consecutive
1-Year Breaks in Service commencing after the
distribution, or in the event of a deemed
distribution, upon the reemployment of such Former
Participant. In the event the Former Participant does
repay the full amount distributed to him, or in the
event of a deemed distribution, the undistributed
portion of the Participant's Account must be restored
in full, unadjusted by any gains or losses occurring
subsequent to the Valuation Date coinciding with or
preceding his termination. The source for such
reinstatement shall first be any Forfeitures
occurring during the year. If such source is
insufficient, then the Employer shall contribute an
amount which is sufficient to restore any such
forfeited Accounts provided, however, that if a
discretionary contribution is made for such year
pursuant to Section 4.1(e), such contribution shall
first be applied to restore any such Accounts and the
remainder shall be allocated in accordance with
Section 4.4.
(3) If any Former Participant is reemployed after a
1-Year Break in Service has occurred, Periods of
Service shall include Periods of Service prior to his
1-Year Break in Service subject to the following
rules:
(i) If a Former Participant has a 1-Year
Break in Service, his pre- break and
post-break service shall be used for
computing Periods of Service for eligibility
and for vesting purposes only after he has
been
58
employed for a Period of Service of one (1)
year following the date of his reemployment
with the Employer;
(ii) Any Former Participant who under the
Plan does not have a nonforfeitable right to
any interest in the Plan resulting from
Employer contributions shall lose credits
otherwise allowable under (i) above if his
consecutive 1-Year Breaks in Service equal
or exceed the greater of (A) five (5) or (B)
the aggregate number of years of his
pre-break Periods of Service;
(iii) After five (5) consecutive 1-Year
Breaks in Service, a Former Participant's
Vested Account balance attributable to
pre-break service shall not be increased as
a result of post-break service;
(iv) If a Former Participant is
reemployed by the Employer, he shall
participate in the Plan immediately on his
date of reemployment;
(v) If a Former Participant (a 1-Year Break
in Service previously occurred, but
employment had not terminated) is credited
with an Hour of Service after the first
eligibility computation period in which he
incurs a 1-Year Break in Service, he shall
participate in the Plan immediately.
6.5 DISTRIBUTION OF BENEFITS
(a)(1) Unless modified under Schedule 6.5, which is
attached hereto and hereby incorporated by reference
and made a part of the Plan, or unless otherwise
elected as provided below, a Participant who is
married on the Annuity Starting Date and who does not
die before the Annuity Starting Date shall receive
the value of all of his benefits in the form of a
joint and survivor annuity. The joint and survivor
annuity is an annuity that commences immediately and
shall be equal in value to a single life annuity.
Such joint and survivor benefits following the
Participant's death shall continue to the spouse
during the spouse's lifetime at a rate equal to 50%
of the rate at which such benefits were payable to
the Participant. This joint and 50% survivor annuity
shall be considered the designated qualified joint
and survivor annuity and automatic form of payment
for the purposes of this Plan. However, the
Participant may elect to receive a smaller annuity
benefit with continuation of payments to the spouse
at a rate of sixty-six and two thirds percent (66
2/3%), seventy-five percent (75%) or one hundred
percent (100%) of the rate payable to a Participant
during his lifetime, which alternative joint and
survivor annuity shall be equal in value to the
automatic joint and 50% survivor annuity. An
unmarried Participant shall receive the
59
value of his benefit in the form of a life annuity.
Such unmarried Participant, however, may elect in
writing to waive the life annuity. The election must
comply with the provisions of this Section as if it
were an election to waive the joint and survivor
annuity by a married Participant, but without the
spousal consent requirement. The Participant may
elect to have any annuity provided for in this
Section distributed upon the attainment of the
"earliest retirement age" under the Plan. The
"earliest retirement age" is the earliest date on
which, under the Plan, the Participant could elect to
receive retirement benefits.
(2) Unless modified under Schedule 6.5, any election
to waive the joint and survivor annuity must be made
by the Participant in writing during the election
period and be consented to by the Participant's
spouse. If the spouse is legally incompetent to give
consent, the spouse's legal guardian, even if such
guardian is the Participant, may give consent. Such
election shall designate a Beneficiary (or a form of
benefits) that may not be changed without spousal
consent (unless the consent of the spouse expressly
permits designations by the Participant without the
requirement of further consent by the spouse). Such
spouse's consent shall be irrevocable and must
acknowledge the effect of such election and be
witnessed by a notary public. Such consent shall not
be required if it is established to the satisfaction
of the Administrator that the required consent cannot
be obtained because there is no spouse, the spouse
cannot be located, or other circumstances that may be
prescribed by Regulations. The election made by the
Participant and consented to by his spouse may be
revoked by the Participant in writing without the
consent of the spouse at any time during the election
period. The number of revocations shall not be
limited. Any new election must comply with the
requirements of this paragraph. A former spouse's
waiver shall not be binding on a new spouse.
(3) The election period to waive the joint and
survivor annuity shall be the 90 day period ending on
the Annuity Starting Date.
(4) With regard to the election, the Administrator
shall provide to the Participant no less than 30 days
and no more than 90 days before the Annuity Starting
Date a written explanation of:
(i) the terms and conditions of the
joint and survivor annuity,
(ii) the Participant's right to make, and
the effect of, an election to waive the
joint and survivor annuity,
60
(iii) the right of the Participant's
spouse to consent to any election
to waive the joint and survivor annuity, and
(iv) the right of the Participant to
revoke such election, and the effect of such
revocation.
(5) The Annuity Starting Date for a distribution in a
form other than a qualified joint and survivor
annuity may be less than 30 days after receipt of the
written explanation described above, provided that:
(i) the Administrator clearly informs the
Participant that the Participant has a right
to a period of 30 days after receiving the
notice to consider whether to waive the
joint and survivor annuity and elect (with
spousal consent) to a form of distribution
other than a joint and survivor annuity,
(ii) the Participant is permitted to revoke
an affirmative distribution election at
least until the Annuity Starting Date, or,
if later, at any time prior to the
expiration of the 7-day period that begins
the day after the explanation of the joint
and survivor annuity is provided to the
Participant, and
(iii) the Annuity Starting Date is a date
after the date that the written explanation
was provided to the Participant.
Notwithstanding the above, the Annuity
Starting Date may be a date prior to the
date the written explanation is provided to
the Participant if the distribution does not
commence until at least 30 days after such
written explanation is provided, subject to
the waiver of the 30-day period as provided
for above.
(b) Unless modified under Schedule 6.5, in the event
a married Participant duly elects pursuant to paragraph (a)(2)
above not to receive his benefit in the form of a joint and
survivor annuity, or if such Participant is not married, in
the form of a life annuity, the Administrator, pursuant to the
election of the Participant, shall direct the Trustee to
distribute to a Participant or his Beneficiary any amount to
which he is entitled under the Plan in one or more of the
following methods:
(1) One lump-sum payment in cash or, to the extent of
any whole units of Employer securities held in the
Participant's account at the time of distribution, in
the form of Employer securities, at the Participant's
election.
61
(2) Payments over a period certain in monthly,
quarterly, semiannual, or annual cash installments.
In order to provide such installment payments, the
Administrator may (A) segregate the aggregate amount
thereof in a separate, federally insured savings
account, certificate of deposit in a bank or savings
and loan association, money market certificate or
other liquid short-term security or (B) purchase a
nontransferable annuity contract for a term certain
(with no life contingencies) providing for such
payment. The period over which such payment is to be
made shall not extend beyond the Participant's life
expectancy (or the life expectancy of the Participant
and his designated Beneficiary).
(3) Purchase of or providing an annuity. However,
such annuity may not be in any form that will provide
for payments over a period extending beyond either
the life of the Participant (or the lives of the
Participant and his designated Beneficiary) or the
life expectancy of the Participant (or the life
expectancy of the Participant and his designated
Beneficiary).
(c) The present value of a Participant's joint and
survivor annuity derived from Employer and Employee
contributions may not be paid without his written consent if
the value exceeds $5,000 ($3,500 for Plan Years beginning
prior to August 6, 1997) or the Participant has previously
commenced a periodic distribution form for which at least one
scheduled periodic distribution is yet to be made. Further,
the spouse of a Participant must consent in writing to any
immediate distribution. Any written consent required by this
Section 6.5(c) must be obtained not more than 90 days before
commencement of the distribution and shall be made in a manner
consistent with Section 6.5(a)(2).
If the value of the Participant's benefit
derived from Employer and Employee contributions does not
exceed $5,000 ($3,500 for Plan Years beginning prior to August
6, 1997) and the Participant has not previously commenced a
periodic distribution form for which at least one scheduled
periodic distribution is yet to be made, the Administrator may
immediately distribute such benefit without such Participant's
consent. No distribution may be made under the preceding
sentence after the Annuity Starting Date unless the
Participant and his spouse consent in writing to such
distribution.
(d) Any distribution to a Participant who has a
benefit which exceeds $5,000 ($3,500 for Plan Years beginning
prior to August 6, 1997) or the Participant has previously
commenced a periodic distribution form for which at least one
scheduled periodic distribution is yet to be mad shall require
such Participant's consent if such distribution commences
prior to the later of his Normal Retirement Age or age 62.
With regard to this required consent:
62
(1) No consent shall be valid unless the Participant
has received a general description of the material
features and an explanation of the relative values of
the optional forms of benefit available under the
Plan that would satisfy the notice requirements of
Code Section 417.
(2) The Participant must be informed of his right to
defer receipt of the distribution. If a Participant
fails to consent, it shall be deemed an election to
defer the commencement of payment of any benefit.
However, any election to defer the receipt of
benefits shall not apply with respect to
distributions which are required under Section
6.5(e).
(3) Notice of the rights specified under this
paragraph shall be provided no less than 30 days and
no more than 90 days before the Annuity Starting
Date.
Notwithstanding the above, the Annuity Starting Date
may be a date prior to the date the explanation is
provided to the Participant if the distribution does
not commence until at least 30 days after such
explanation is provided, subject to the waiver of the
30-day period as provided for in Section 6.5(a)(5).
(4) Consent of the Participant to the distribution
must not be made before the Participant receives the
notice and must not be made more than 90 days before
the Annuity Starting Date.
(5) No consent shall be valid if a significant
detriment is imposed under the Plan on any
Participant who does not consent to the distribution.
Any such distribution may commence less than 30 days,
subject to Section 6.5(a)(5), after the notice required under
Regulation 1.411(a)-11(c) is given, provided that: (1) the
Administrator 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 (2) the Participant, after receiving
the notice, affirmatively elects a distribution.
(e) Notwithstanding any provision in the Plan to the
contrary, for Plan Years beginning after December 31, 1996,
the distribution of a Participant's benefits, whether under
the Plan or through the purchase of an annuity contract, shall
be made in accordance with the following requirements and
shall otherwise comply with Code Section 401(a)(9) and the
Regulations thereunder (including Regulation 1.401(a)(9)- 2),
the provisions of which are incorporated herein by reference:
63
(1) A Participant's benefits shall be distributed or
must begin to be distributed to him not later than
April 1st of the calendar year following the later of
(i) the calendar year in which the Participant
attains age 70 1/2 or (ii) the calendar year in which
the Participant retires from active employment with
the Employer and any Affiliated Employer, provided,
however, that this clause (ii) shall not apply in the
case of a Participant who is a "five (5) percent
owner" at any time during the Plan Year ending with
or within the calendar year in which such owner
attains age 70 1/2. Such distributions shall be equal
to or greater than any required distribution.
Alternatively, distributions to a Participant must
begin no later than the applicable April lst as
determined under the preceding paragraph and must be
made over the life of the Participant (or the lives
of the Participant and the Participant's designated
Beneficiary) or the life expectancy of the
Participant (or the life expectancies of the
Participant and his designated Beneficiary) in
accordance with Regulations.
(2) Distributions to a Participant and his
Beneficiaries shall only be made in accordance with
the incidental death benefit requirements of Code
Section 401(a)(9)(G) and the Regulations thereunder.
(f) For purposes of this Section, the life expectancy
of a Participant and a Participant's spouse (other than in the
case of a life annuity) may, at the election of the
Participant or the Participant's spouse, be redetermined in
accordance with Regulations. The election, once made, shall be
irrevocable. If no election is made by the time distributions
must commence, then the life expectancy of the Participant and
the Participant's spouse shall not be subject to
recalculation. Life expectancy and joint and last survivor
expectancy shall be computed using the return multiples in
Tables V and VI of Regulation 1.72-9.
(g) All annuity Contracts under this Plan shall be
non-transferable when distributed. Furthermore, the terms of
any annuity Contract purchased and distributed to a
Participant or spouse shall comply with all of the
requirements of the Plan.
(h) If a distribution is made at a time when a
Participant is not fully Vested in his Participant's Account
and the Participant may increase the Vested percentage in such
account:
(1) a separate account shall be established for
the Participant's interest in the Plan as of the time
of the distribution; and
64
(2) at any relevant time, the Participant's Vested
portion of the separate account shall be equal to an
amount ("XI") determined by the formula:
X equals P(AB plus (R x D)) - (R x D)
For purposes of applying the formula: P is the Vested
percentage at the relevant time, AB is the account
balance at the relevant time, D is the amount of
distribution, and R is the ratio of the account
balance at the relevant time to the account balance
after distribution.
6.6 DISTRIBUTION OF BENEFITS UPON DEATH
(a) Unless modified under Schedule 6.2 or unless
otherwise elected as provided below, a Vested Participant who
dies before the Annuity Starting Date and who has a surviving
spouse shall have the Pre-Retirement Survivor Annuity paid to
his surviving spouse. The Participant's spouse may direct that
payment of the Pre- Retirement Survivor Annuity commence
within a reasonable period after the Participant's death. If
the spouse does not so direct, payment of such benefit will
commence at the time the Participant would have attained the
later of his Normal Retirement Age or age 62. However, the
spouse may elect a later commencement date. Any distribution
to the Participant's spouse shall be subject to the rules
specified in Section 6.6(g).
(b) Any election to waive the Pre-Retirement Survivor
Annuity before the Participant's death must be made by the
Participant in writing during the election period and shall
require the spouse's irrevocable consent in the same manner
provided for in Section 6.5(a)(2). Further, the spouse's
consent must acknowledge the specific nonspouse Beneficiary.
Notwithstanding the foregoing, the nonspouse Beneficiary need
not be acknowledged, provided the consent of the spouse
acknowledges that the spouse has the right to limit consent
only to a specific Beneficiary and that the spouse voluntarily
elects to relinquish such right.
(c) The election period to waive the Pre-Retirement
Survivor Annuity shall begin on the first day of the Plan Year
in which the Participant attains age 35 and end on the date of
the Participant's death. An earlier waiver (with spousal
consent) may be made provided a written explanation of the
Pre-Retirement Survivor Annuity is given to the Participant
and such waiver becomes invalid at the beginning of the Plan
Year in which the Participant turns age 35. In the event a
Vested Participant separates from service prior to the
beginning of the election period, the election period shall
begin on the date of such separation from service.
(d) With regard to the election, the
Administrator shall provide each Participant within the
applicable period, with respect to such Participant (and
65
consistent with Regulations), a written explanation of the
Pre-Retirement Survivor Annuity containing comparable
information to that required pursuant to Section 6.5(a)(4).
For the purposes of this paragraph, the term "applicable
period" means, with respect to a Participant, whichever of the
following periods ends last:
(1) The period beginning with the first day of the
Plan Year in which the Participant attains age 32 and
ending with the close of the Plan Year preceding the
Plan Year in which the Participant attains age 35;
(2) A reasonable period after the individual
becomes a Participant;
(3) A reasonable period ending after the Plan no
longer fully subsidizes the cost of the
Pre-Retirement Survivor Annuity with respect to the
Participant;
(4) A reasonable period ending after Code
Section 401(a)(11) applies to the Participant; or
(5) A reasonable period after separation from service
in the case of a Participant who separates before
attaining age 35. For this purpose, the Administrator
must provide the explanation beginning one year
before the separation from service and ending one
year after such separation. If such a Participant
thereafter returns to employment with the Employer,
the applicable period for such Participant shall be
redetermined.
For purposes of applying this Section
6.6(d), a reasonable period ending after the enumerated events
described in paragraphs (2), (3) and (4) is the end of the two
year period beginning one year prior to the date the
applicable event occurs, and ending one year after that date.
(e) If the aggregate value of the Participant's
account balance derived from Employer and Employee
contributions does not exceed $5,000 ($3,500 for Plan Years
beginning prior to August 6, 1997) and the Participant has not
previously commenced a periodic distribution form for which at
least one scheduled periodic distribution is yet to be made,
the Administrator shall direct the immediate distribution of
the present value of the Pre-Retirement Survivor Annuity to
the Participant's spouse. No distribution may be made under
the preceding sentence after the Annuity Starting Date unless
the spouse consents in writing. If the value exceeds $5,000
($3,500 for Plan Years beginning prior to August 6, 1997) or
the Participant has previously commenced a periodic
distribution form for which at least one scheduled periodic
distribution is yet to be made, an immediate distribution of
the entire amount of the Pre-Retirement Survivor Annuity may
be made to the surviving spouse, provided such surviving
spouse consents in writing to such distribution. Any
66
written consent required under this paragraph must be obtained
not more than 90 days before commencement of the distribution
and shall be made in a manner consistent with Section
6.5(a)(2).
(f) (1) To the extent the death benefit is not paid
in the form of a Pre- Retirement Survivor Annuity, it
shall be paid to the Participant's Beneficiary by one
of the following methods, as elected by the
Participant (or if no election has been made prior to
the Participant's death, by his Beneficiary), subject
to the rules specified in Section 6.6(g):
(i) One lump-sum payment in cash or, to the
extent of any whole units of Employer
securities held in the Participant's account
at the time of distribution, in the form of
Employer securities.
(ii) Payment in monthly, quarterly,
semi-annual, or annual cash installments
over a period to be determined by the
Participant or his Beneficiary. After
periodic installments commence, the
Beneficiary shall have the right to direct
the Trustee to reduce the period over which
such periodic installments shall be made,
and the Trustee shall adjust the cash amount
of such periodic installments accordingly.
(iii) Purchase of or providing an annuity.
However, the annuity may not be in a form
that will provide for payments over a period
extending beyond the life of the designated
Beneficiary.
(2) In the event the death benefit payable pursuant
to Section 6.2 is payable in installments, then, upon
the death of the Participant, the Administrator may
direct the Trustee to segregate the death benefit
into a separate account, and the Trustee shall invest
such segregated account separately, and the funds
accumulated in such account shall be used for the
payment of the installments.
(g) Notwithstanding any provision in the Plan to the
contrary, distributions upon the death of a Participant shall
be made in accordance with the following requirements and
shall otherwise comply with Code Section 401(a)(9) and the
Regulations thereunder. If the death benefit is paid in the
form of a Pre- Retirement Survivor Annuity, then distributions
to the Participant's surviving spouse must commence on or
before the later of: (1) December 31st of the calendar year
immediately following the calendar year in which the
Participant died; or (2) December 31st of the calendar year in
which the Participant would have attained age 70 1/2. If it is
determined pursuant to Regulations that the distribution of a
Participant's interest has begun and the Participant dies
before his entire interest has been distributed to him, the
remaining portion of such interest shall be distributed at
67
least as rapidly as under the method of distribution selected
pursuant to Section 6.5 as of his date of death. If a
Participant dies before he has begun to receive any
distributions of his interest under the Plan or before
distributions are deemed to have begun pursuant to Regulations
(and distributions are not to be made in the form of a
Pre-Retirement Survivor Annuity), then his death benefit shall
be distributed to his Beneficiaries by December 31st of the
calendar year in which the fifth anniversary of his date of
death occurs.
However, the 5-year distribution requirement
of the preceding paragraph shall not apply to any portion of
the deceased Participant's interest which is payable to or for
the benefit of a designated Beneficiary. In such event, such
portion may, at the election of the Participant (or the
Participant's designated Beneficiary) be distributed over the
life of such designated Beneficiary (or over a period not
extending beyond the life expectancy of such designated
Beneficiary) provided such distribution begins not later than
December 31st of the calendar year immediately following the
calendar year in which the Participant died. However, in the
event the Participant's spouse (determined as of the date of
the Participant's death) is his Beneficiary, the requirement
that distributions commence within one year of a Participant's
death shall not apply. In lieu thereof, distributions must
commence on or before the later of: (1) December 31st of the
calendar year immediately following the calendar year in which
the Participant died; or (2) December 31st of the calendar
year in which the Participant would have attained age 70 1/2.
If the surviving spouse dies before distributions to such
spouse begin, then the 5-year distribution requirement of this
Section shall apply as if the spouse was the Participant.
(h) For purposes of Section 6.6(g), the election by a
designated Beneficiary to be excepted from the 5-year
distribution requirement must be made no later than December
31st of the calendar year following the calendar year of the
Participant's death. Except, however, with respect to a
designated Beneficiary who is the Participant's surviving
spouse, the election must be made by the earlier of: (1)
December 31st of the calendar year immediately following the
calendar year in which the Participant died or, if later, the
calendar year in which the Participant would have attained age
70 1/2; or (2) December 31st of the calendar year which
contains the fifth anniversary of the date of the
Participant's death. An election by a designated Beneficiary
must be in writing and shall be irrevocable as of the last day
of the election period stated herein. In the absence of an
election by the Participant or a designated Beneficiary, the
5-year distribution requirement shall apply.
(i) For purposes of this Section, the life expectancy
of a Participant and a Participant's spouse (other than in the
case of a life annuity) may, at the election of the
Participant or the Participant's spouse, be redetermined in
accordance with Regulations. The election, once made, shall be
irrevocable. If no election is made
68
by the time distributions must commence, then the life
expectancy of the Participant and the Participant's spouse
shall not be subject to recalculation. Life expectancy and
joint and last survivor expectancy shall be computed using the
return multiples in Tables V and VI of Regulation 1.72-9.
6.7 TIME OF SEGREGATION OR DISTRIBUTION
Except as limited by Sections 6.5 and 6.6, whenever the
Trustee is to make a distribution or to commence a series of payments the
distribution may be made or begun as soon as is practicable. However, unless a
Former Participant elects in writing to defer the receipt of benefits (such
election may not result in a death benefit that is more than incidental), the
payment of benefits shall begin not later than the 60th day after the close of
the Plan Year in which the latest of the following events occurs: (a) the date
on which the Participant attains the earlier of age 65 or the Normal Retirement
Age specified herein; (b) the 10th anniversary of the year in which the
Participant commenced participation in the Plan; or (c) the date the Participant
terminates his service with the Employer.
6.8 DISTRIBUTION FOR MINOR BENEFICIARY
In the event a distribution is to be made to a minor, then the
Administrator may direct that such distribution be paid to the legal guardian,
or if none, to a parent of such Beneficiary or a responsible adult with whom the
Beneficiary maintains his residence, or to the custodian for such Beneficiary
under the Uniform Gift to Minors Act or Gift to Minors Act, if such is permitted
by the laws of the state in which said Beneficiary resides. Such a payment to
the legal guardian, custodian or parent of a minor Beneficiary shall fully
discharge the Trustee, Employer, and Plan from further liability on account
thereof.
6.9 LOCATION OF PARTICIPANT OR BENEFICIARY UNKNOWN
If all, or any portion, of the distribution payable to a
Participant or his Beneficiary hereunder shall, at the later of the
Participant's attainment of age 62 or his Normal Retirement Age, remain unpaid
solely by reason of the inability of the Administrator, after sending a
registered letter, return receipt requested, to the last known address, and
after further diligent effort, to ascertain the whereabouts of the Participant
or his Beneficiary, the amount so distributable shall be treated as a Forfeiture
pursuant to the Plan. In the event a Participant or Beneficiary is located
subsequent to his benefit being reallocated, the benefit shall be restored
unadjusted for earnings or losses and shall not count as an Annual Addition
under Section 415 of the Code.
6.10 PRE-RETIREMENT DISTRIBUTION
(a) Prior to termination of employment with the
Employer or Afiliated Employer, if a Participant shall have
attained the age of 59 1/2 years, the Administrator, at the
election of the Participant, shall direct the Trustee to
distribute
69
all or a portion of the amount then credited to the accounts
maintained on behalf of the Participant. However, no
distribution from a Participant's Account shall occur prior to
the Participant attaining 100% vesting. If the Administrator
makes such a distribution, the Participant shall continue to
be eligible to participate in the Plan on the same basis as
any other Employee. Any distribution made pursuant to this
Section shall be made in a manner consistent with Section 6.5,
including, but not limited to, all notice and consent
requirements of Code Sections 417 and 411(a)(11) and the
Regulations thereunder.
Distributions from a Participant's Elective
Account shall not be permitted prior to the Participant's
termination of employment with the Employer and any Affiliated
Employer or the Participant attaining age 59 1/2 except as
otherwise permitted under the terms of the Plan.
(b) In addition to Section 6.10(a), above, prior to
termination of employment with the Employer and any Affiliated
Employer, Participants who had account balances under certain
other qualified plans which were merged with and into, or
transferred (other than by a direct or indirect rollover
transfer) to, this Plan have additional distribution rights
applicable to accrued benefits attributable to the merged or
transferred account as provided under this Section 6.10(b).
(1) A Participant who had an account under the former
Bertek, Inc. Profit Sharing 401(k) Plan, last
maintained by Mylan Technologies Inc., which account
was merged with and into, or transferred (other than
by a direct or indirect rollover transfer) to, this
Plan on April 1, 2000, may elect to withdraw the
following:
(i) at any time, in a lump sum, all or a
portion of the Participant's voluntary
(after-tax) contributions and a prorata
share of the earnings which were transferred
to this Plan as of April 1, 2000;
(ii) after the Participant shall have
attained the age of 59 1/2 years, all or any
portion of the Participant's Combined
Account which is attributable to a rollover
and related earnings previously held under
the Bertek, Inc. Profit Sharing 401(k) Plan
and which were transferred to this Plan as
of April 1, 2000; and
(iii) after the Participant shall have
attained the age of 59 1/2 years, all or any
portion of the Participant's Elective
Account which is attributable to elective
deferrals which were transferred to this
Plan as of April 1, 2000.
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Distributions under this Section 6.10(b)(1) may be
made even if the Participant is less than 100% vested
in any other portion of the Participant's Combined
Account.
(2) A Participant who had an account under the former
UDL Laboratories, Inc. 401(k) & Profit Sharing Plan,
last maintained by UDL Laboratories, Inc., which
account was merged with and into, or transferred
(other than by a direct or indirect rollover
transfer) to, this Plan on April 1, 2000, may elect
to withdraw the following:
.
(i) at any time, in a lump sum, all or any
portion of the Participant's Combined
Account which is attributable to a rollover
and related earnings previously held under
the UDL Laboratories, Inc. 401(k) & Profit
Sharing Plan and which were transferred to
this Plan as of April 1, 2000; and
(ii) after the Participant shall have
attained the age of 59 1/2 years, all or any
portion of the Participant's Combined
Account which is attributable to amounts
which were transferred to this Plan as of
April 1, 2000.
Distributions under this Section 6.10(b)(2) may be
made even if the Participant is less than 100% vested
in any other portion of the Participant's Combined
Account.
6.11 ADVANCE DISTRIBUTION FOR HARDSHIP
(a) The Administrator, at the election of the
Participant, shall direct the Trustee to distribute to any
Participant in any one Plan Year up to the lesser of 100% of
the Participants Voluntary Contributions Account,
Participant's Rollover Account and Participant's Elective
Account (excluding amounts attributable to the Employer
contribution made pursuant to Section 4.1(b)) valued as of the
last Valuation Date or the amount necessary to satisfy the
immediate and heavy financial need of the Participant. Any
distribution made pursuant to this Section shall be deemed to
be made as of the first day of the Plan Year or, if later, the
Valuation Date immediately preceding the date of distribution,
and the Participant's Voluntary Contributions Account,
Participant's Rollover Account and Participant's Elective
Account, in that order, shall be reduced accordingly. A
withdrawal under this Section must be in an amount of at least
$1,000 and is deemed to be on account of an immediate and
heavy financial need of the Participant if the withdrawal is
for:
(1) Expenses for medical care described in Code
Section 213(d) previously incurred by the
Participant, his spouse, or any of his dependents
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(as defined in Code Section 152) or necessary for
these persons to obtain medical care;
(2) The costs directly related to the purchase
of a principal residence for the Participant
(excluding mortgage payments);
(3) Payment of tuition, related educational fees, and
room and board expenses for the next twelve (12)
months of post-secondary education for the
Participant, his spouse, children, or dependents; or
(4) Payments necessary to prevent the eviction of the
Participant from his principal residence or
foreclosure on the mortgage of the Participant's
principal residence.
(b) No distribution shall be made pursuant to this
Section unless the Administrator, based upon the Participant's
representation and such other facts as are known to the
Administrator, determines that all of the following conditions
are satisfied:
(1) The distribution is not in excess of the amount
of the immediate and heavy financial need of the
Participant. The amount of the immediate and heavy
financial need may include any amounts necessary to
pay any federal, state, or local income taxes or
penalties reasonably anticipated to result from the
distribution;
(2) The Participant has obtained all distributions,
other than hardship distributions, and all nontaxable
(at the time of the loan) loans currently available
under all plans maintained by the Employer;
(3) The Plan, and all other plans maintained by the
Employer, provide that the Participant's elective
deferrals and voluntary Employee contributions will
be suspended for at least twelve (12) months after
receipt of the hardship distribution or, the
Participant, pursuant to a legally enforceable
agreement, will suspend his elective deferrals and
voluntary Employee contributions to the Plan and all
other plans maintained by the Employer for at least
twelve (12) months after receipt of the hardship
distribution; and
(4) The Plan, and all other plans maintained by the
Employer, provide that the Participant may not make
elective deferrals for the Participant's taxable year
immediately following the taxable year of the
hardship distribution in excess of the applicable
limit under Code Section 402(g) for such next taxable
year less the amount of such Participant's elective
deferrals for the taxable year of the hardship
distribution.
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(c) Notwithstanding the above, distributions from the
Participant's Elective Account pursuant to this Section shall
be limited, as of the date of distribution, to the
Participant's Elective Account as of the end of the last Plan
Year ending before July 1, 1989, plus the total Participant's
Deferred Compensation after such date, reduced by the amount
of any previous distributions from that account pursuant to
this Section and Section 6.10.
(d) Any distribution made pursuant to this Section
shall be made in a manner which is consistent with and
satisfies the provisions of Section 6.5, including, but not
limited to, all notice and consent requirements of Code
Sections 417 and 411(a)(11) and the Regulations thereunder.
(e) If a Participant requests a withdrawal under this
Section, the Participant's Voluntary Contribution Account, if
any, shall be withdrawn in the following sequence:
(1) Part or all of the Participant's voluntary
contributions made before January 1, 1987 not
previously withdrawn, which shall have been allocated
to a subaccount of the Participant's Voluntary
Contribution Account for pre-1987 after-tax
contributions, but not more than the current value
thereof;
(2) Upon the withdrawal of all amounts withdrawn
pursuant to (1), part or all of the Participant's
voluntary contributions made after December 31, 1986
not previously withdrawn, but not more than the
current value thereof together with the share of
accumulated income, gains and losses attributable to
the Participant's voluntary contributions so
distributed (determined at the time of the
distribution); and
(3) Upon the withdrawal of all amounts withdrawable
pursuant to Sections 6.11(e)(1) and (2), a
Participant may withdraw part or all of the
accumulated income, gains and losses on the
Participant's Voluntary Contribution Account not
previously withdrawn.
The amount of accumulated income, gains and losses
attributable to the distribution of the Participant's
voluntary contributions made after December 31, 1986, pursuant
to Section 6.11(e)(2), shall be determined by multiplying the
sum distributed by a fraction, the numerator of which is the
difference, determined immediately before the distribution,
between the value of the post-1986 portion of the
Participant's Voluntary Contribution Account and the post-1986
Participant's voluntary contributions, and the denominator of
which is the value of the post-1986 portion of the
Participant's Voluntary Contribution Account immediately
before the distribution. "Post-1986 portion of the
Participant's voluntary contributions" shall refer to
Participant voluntary contributions made after December 31,
1986, and
73
"post-1986 portion of the Participant's Voluntary Contribution
Account" shall refer to voluntary contributions made after
December 31, 1986 and the accumulated income, gains and losses
thereon.
6.12 QUALIFIED DOMESTIC RELATIONS ORDER DISTRIBUTION
All rights and benefits, including elections, provided to a
Participant in this Plan shall be subject to the rights afforded to any
"alternate payee" under a "qualified domestic relations order." Furthermore, a
distribution to an "alternate payee" shall be permitted if such distribution is
authorized by a "qualified domestic relations order," even if the affected
Participant has not separated from service and has not reached the "earliest
retirement age" under the Plan. For the purposes of this Section, "alternate
payee," "qualified domestic relations order" and "earliest retirement age,"
shall have the meaning set forth under Code Section 414(p).
6.13 DIRECT ROLLOVER
(a) Notwithstanding any provision of the Plan to the
contrary that would otherwise limit a distributee's election
under this Section, a distributes may elect, at the time and
in the manner prescribed by the Administrator, to have any
portion of an eligible rollover distribution that is equal to
at least $500 paid directly to an eligible retirement plan
specified by the distributee in a direct rollover.
(b) For purposes of this Section the following
definitions shall apply:
(1) An eligible rollover distribution is 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: 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; any
distribution to the extent such distribution is
required under Code Section 401(a)(9); the portion of
any other distribution that is not includible in
gross income (determined without regard to the
exclusion for net unrealized appreciation with
respect to employer securities); any hardship
distribution described in Code Section
401(k)(2)(B)(i)(IV); and any other distribution that
is reasonably expected to total less than $200 during
a year.
(2) An eligible retirement plan is an individual
retirement account described in Code Section 408(a),
an individual retirement annuity described in Code
Section 408(b), an annuity plan described in Code
Section 403(a), or a qualified trust described in
Code Section 401(a), that accepts the distributee's
eligible rollover distribution. However, in the case
of an eligible
74
rollover distribution to the surviving spouse, an
eligible retirement plan is an individual retirement
account or individual retirement annuity.
(3) A distributee includes an Employee or former
Employee. In addition, the Employee's or former
Employee's surviving spouse and 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 Code Section 414(p), are
distributees with regard to the interest of the
spouse or former spouse.
(4) A direct rollover is a payment by the Plan
to the eligible retirement plan specified by the
distributee.
ARTICLE VII
AMENDMENT, TERMINATION, MERGERS AND LOANS
7.1 AMENDMENT
(a) The Employer shall have the right at any time to
amend the Plan, subject to the limitations of this Section.
However, any amendment which affects the rights, duties or
responsibilities of the Trustee and Administrator, other than
an amendment to remove the Trustee or Administrator, may only
be made with the Trustee's and Administrator's written
consent. Any such amendment shall become effective as provided
therein upon its execution. The Trustee shall not be required
to execute any such amendment unless the Trust provisions
contained herein are a part of the Plan and the amendment
affects the duties of the Trustee hereunder.
(b) No amendment to the Plan shall be effective if it
authorizes or permits any part of the Trust Fund (other than
such part as is required to pay taxes and administration
expenses) to be used for or diverted to any purpose other than
for the exclusive benefit of the Participants or their
Beneficiaries or estates; or causes any reduction in the
amount credited to the account of any Participant; or causes
or permits any portion of the Trust Fund to revert to or
become property of the Employer.
(c) Except as permitted by Regulations, no Plan
amendment or transaction having the effect of a Plan amendment
(such as a merger, plan transfer or similar transaction) shall
be effective to the extent it eliminates or reduces any
"Section 411(d)(6) protected benefit" or adds or modifies
conditions relating to "Section 411(d)(6) protected benefits"
the result of which is a further restriction on such benefit
unless such protected benefits are preserved with respect to
benefits accrued as of the later of the adoption date or
effective date of the amendment. "Section 411(d)(6) protected
benefits" are benefits described in Code Section
75
411(d)(6)(A), early retirement benefits and retirement-type
subsidies, and optional forms of benefit.
7.2 TERMINATION
(a) The Employer shall have the right at any time to
terminate the Plan by delivering to the Trustee and
Administrator written notice of such termination. Upon any
full or partial termination, all amounts credited to the
affected Participants' Combined Accounts shall become 100%
Vested as provided in Section 6.4 and shall not thereafter be
subject to forfeiture, and all unallocated amounts shall be
allocated to the accounts of all Participants in accordance
with the provisions hereof.
(b) Upon the full termination of the Plan, the
Employer shall direct the distribution of the assets of the
Trust Fund to Participants in a manner which is consistent
with and satisfies the provisions of Section 6.5.
Distributions to a Participant shall be made in cash or, to
the extent of any whole units of Employer securities held in
the Participant's account at the time of distribution, in the
form of Employer securities, or through the purchase of
irrevocable nontransferable deferred commitments from an
insurer. Except as permitted by Regulations, the termination
of the Plan shall not result in the reduction of "Section
411(d)(6) protected benefits" in accordance with Section
7.1(c).
7.3 MERGER OR CONSOLIDATION
This Plan may be merged or consolidated with, or its assets
and/or liabilities may be transferred to any other plan and trust only if the
benefits which would be received by a Participant of this Plan, in the event of
a termination of the plan immediately after such transfer, merger or
consolidation, are at least equal to the benefits the Participant would have
received if the Plan had terminated immediately before the transfer, merger or
consolidation, and such transfer, merger or consolidation does not otherwise
result in the elimination or reduction of any "Section 411(d)(6) protected
benefits" in accordance with Section 7.1(c).
76
7.4 LOANS TO PARTICIPANTS
(a) The Trustee may, in the Trustee's discretion,
make loans to Participants and Beneficiaries under the
following circumstances: (1) loans shall be made available to
all Participants and Beneficiaries on a reasonably equivalent
basis; (2) loans shall not be made available to Highly
Compensated Employees in an amount greater than the amount
made available to other Participants and Beneficiaries; (3)
loans shall bear a reasonable rate of interest; (4) loans
shall be adequately secured; and (5) shall provide for
repayment over a reasonable period of time.
(b) Loans made pursuant to this Section (when added
to the outstanding balance of all other loans made by the Plan
to the Participant) shall be limited to the lesser of:
(1) $50,000 reduced by the excess (if any) of the
highest outstanding balance of loans from the Plan to
the Participant during the one year period ending on
the day before the date on which such loan is made,
over the outstanding balance of loans from the Plan
to the Participant on the date on which such loan was
made, or
(2) one-half (1/2) of the present value of the
non-forfeitable accrued benefit of the Participant
under the Plan.
For purposes of this limit, all plans of the
Employer shall be considered one plan.
(c) Loans shall provide for level amortization with
payments to be made not less frequently than quarterly over a
period not to exceed five (5) years. However, loans used to
acquire any dwelling unit which, within a reasonable time, is
to be used (determined at the time the loan is made) as a
principal residence of the Participant shall provide for
periodic repayment over a reasonable period of time that may
exceed five (5) years. For this purpose, a principal residence
has the same meaning as a principal residence under Code
Section 1034. Loan repayments will be suspended under this
Plan as permitted under Code Section 414(u)(4).
(d) Any loan made pursuant to this Section where the
Vested interest of the Participant is used to secure such loan
shall require the written consent of the Participant's spouse
in a manner consistent with Section 6.5(a)(1). Such written
consent must be obtained within the 90-day period prior to the
date the loan is made. However, no spousal consent shall be
required under this paragraph if the total accrued benefit
subject to the security is not in excess of $5,000 ($3,500 for
Plan Years beginning prior to August 6, 1997).
77
(e) Any loans granted or renewed shall be made
pursuant to a Participant loan program. The Participant loan
program is contained in Schedule 7.4, which is attached hereto
and hereby incorporated by reference and made a part of the
Plan.
ARTICLE VIII
TOP HEAVY
8.1 TOP HEAVY PLAN REQUIREMENTS
For any Top Heavy Plan Year, the Plan shall provide the
special vesting requirements of Code Section 416(b) pursuant to Section 6.4 of
the Plan and the special minimum allocation requirements of Code Section 416(c)
pursuant to Section 4.4 of the Plan.
8.2 DETERMINATION OF TOP HEAVY STATUS
(a) This Plan shall be a Top Heavy Plan for any
Plan Year in which, as of the Determination Date,
(1) the Present Value of Accrued Benefits of Key
Employees and (2) the sum of the Aggregate Accounts
of Key Employees under this Plan and all plans of an
Aggregation Group, exceeds sixty percent (60%) of the
Present Value of Accrued Benefits and the Aggregate
Accounts of all Key and Non- Key Employees under this
Plan and all plans of an Aggregation Group.
If any Participant is a Non-Key Employee for
any Plan Year, but such Participant was a Key Employee for any
prior Plan Year, such Participant's Present Value of Accrued
Benefit and/or Aggregate Account balance shall not be taken
into account for purposes of determining whether this Plan is
a Top Heavy or Super Top Heavy Plan (or whether any
Aggregation Group which includes this Plan is a Top Heavy
Group). In addition, if a Participant or Former Participant
has not performed any services for any Employer maintaining
the Plan at any time during the five year period ending on the
Determination Date, any accrued benefit for such Participant
or Former Participant shall not be taken into account for the
purposes of determining whether this Plan is a Top Heavy or
Super Top Heavy Plan.
(b) This Plan shall be a Super Top Heavy Plan for any
Plan Year in which, as of the Determination Date (1) the
Present Value of Accrued Benefits of Key Employees and (2) the
sum of the Aggregate Accounts of Key Employees under this Plan
and all plans of an Aggregation Group, exceeds ninety percent
(90%) of the Present Value of Accrued Benefits and the
Aggregate Accounts of all Key and Non- Key Employees under
this Plan and all plans of an Aggregation Group.
78
(c) Aggregate Account: A Participant's Aggregate
Account as of the Determination Date is the sum of:
(1) his Participant's Combined Account balance as of
the most recent valuation occurring within a twelve
(12) month period ending on the Determination Date;
(2) an adjustment for any contributions due as of the
Determination Date. Such adjustment shall be the
amount of any contributions actually made after the
Valuation Date but due on or before the Determination
Date, except for the first Plan Year when such
adjustment shall also reflect the amount of any
contributions made after the Determination Date that
are allocated as of a date in that first Plan Year.
(3) any Plan distributions made within the Plan Year
that includes the Determination Date or within the
four (4) preceding Plan Years. However, in the case
of distributions made after the Valuation Date and
prior to the Determination Date, such distributions
are not included as distributions for top heavy
purposes to the extent that such distributions are
already included in the Participant's Aggregate
Account balance as of the Valuation Date.
Notwithstanding anything herein to the contrary, all
distributions, including distributions under a
terminated plan which if it had not been terminated
would have been required to be included in an
Aggregation Group, will be counted. Further,
distributions from the Plan (including the cash value
of life insurance policies) of a Participant's
account balance because of death shall be treated as
a distribution for the purposes of this paragraph.
(4) any Employee contributions, whether voluntary or
mandatory. However, amounts attributable to tax
deductible qualified voluntary employee contributions
shall not be considered to be a part of the
Participant's Aggregate Account balance.
(5) with respect to unrelated rollovers and
plan-to-plan transfers (ones which are both initiated
by the Employee and made from a plan maintained by
one employer to a plan maintained by another
employer), if this Plan provides the rollovers or
plan-to-plan transfers, it shall always consider such
rollovers or plan-to-plan transfers as a distribution
for the purposes of this Section. If this Plan is the
plan accepting such rollovers or plan-to-plan
transfers, it shall not consider such rollovers or
plan-to-plan transfers as part of the Participant's
Aggregate Account balance.
(6) with respect to related rollovers and
plan-to-plan transfers (ones either not initiated by
the Employee or made to a plan maintained by the same
79
employer), if this Plan provides the rollover or
plan-to-plan transfer, it shall not be counted as a
distribution for purposes of this Section. If this
Plan is the plan accepting such rollover or
plan-to-plan transfer, it shall consider such
rollover or plan-to-plan transfer as part of the
Participant's Aggregate Account balance, irrespective
of the date on which such rollover or plan-to- plan
transfer is accepted.
(7) For the purposes of determining whether two
employers are to be treated as the same employer in
(5) and (6) above, all employers aggregated under
Code Section 414(b), (c), (m) and (o) are treated as
the same employer.
(d) "Aggregation Group" means either a Required
Aggregation Group or a Permissive Aggregation Group as
hereinafter determined.
(1) Required Aggregation Group: In determining a
Required Aggregation Group hereunder, each plan of
the Employer in which a Key Employee is a participant
in the Plan Year containing the Determination Date or
any of the four preceding Plan Years, and each other
plan of the Employer which enables any plan in which
a Key Employee participates to meet the requirements
of Code Sections 401(a)(4) or 410, will be required
to be aggregated. Such group shall be known as a
Required Aggregation Group.
In the case of a Required Aggregation Group, each
plan in the group will be considered a Top Heavy Plan
if the Required Aggregation Group is a Top Heavy
Group. No plan in the Required Aggregation Group will
be considered a Top Heavy Plan if the Required
Aggregation Group is not a Top Heavy Group.
(2) Permissive Aggregation Group: The Employer may
also include any other plan not required to be
included in the Required Aggregation Group, provided
the resulting group, taken as a whole, would continue
to satisfy the provisions of Code Sections 401(a)(4)
and 410. Such group shall be known as a Permissive
Aggregation Group.
In the case of a Permissive Aggregation Group, only a
plan that is part of the Required Aggregation Group
will be considered a Top Heavy Plan if the Permissive
Aggregation Group is a Top Heavy Group. No plan in
the Permissive Aggregation Group will be considered a
Top Heavy Plan if the Permissive Aggregation Group is
not a Top Heavy Group.
(3) Only those plans of the Employer in which the
Determination Dates fall within the same calendar
year shall be aggregated in order to determine
whether such plans are Top Heavy Plans.
80
(4) An Aggregation Group shall include any terminated
plan of the Employer if it was maintained within the
last five (5) years ending on the Determination Date.
(e) "Determination Date" means (a) the last day of
the preceding Plan Year, or (b) in the case of the first Plan
Year, the last day of such Plan Year.
(f) Present Value of Accrued Benefit: In the case of
a defined benefit plan, the Present Value of Accrued Benefit
for a Participant other than a Key Employee, shall be as
determined using the single accrual method used for all plans
of the Employer and Affiliated Employers, or if no such single
method exists, using a method which results in benefits
accruing not more rapidly than the slowest accrual rate
permitted under Code Section 411(b)(1)(C). The determination
of the Present Value of Accrued Benefit shall be determined as
of the most recent Valuation Date that falls within or ends
with the 12-month period ending on the Determination Date
except as provided in Code Section 416 and the Regulations
thereunder for the first and second plan years of a defined
benefit plan.
(g) "Top Heavy Group" means an Aggregation Group
in which, as of the Determination Date, the sum of:
(1) the Present Value of Accrued Benefits of Key
Employees under all defined benefit plans included in the
group, and
(2) the Aggregate Accounts of Key Employees under all
defined contribution plans included in the group,
exceeds sixty percent (60%) of a similar sum
determined for all Participants.
ARTICLE IX
MISCELLANEOUS
9.1 PARTICIPANT'S RIGHTS
This Plan shall not be deemed to constitute a contract between
the Employer and any Participant or to be a consideration or an inducement for
the employment of any Participant or Employee. Nothing contained in this Plan
shall be deemed to give any Participant or Employee the right to be retained in
the service of the Employer or to interfere with the right of the Employer to
discharge any Participant or Employee at any time regardless of the effect which
such discharge shall have upon him as a Participant of this Plan.
81
9.2 ALIENATION
(a) Subject to the exceptions provided below, no
benefit which shall be payable out of the Trust Fund to any
person (including a Participant or his Beneficiary) shall be
subject in any manner to anticipation, alienation, sale,
transfer, assignment, pledge, encumbrance, or charge, and any
attempt to anticipate, alienate, sell, transfer, assign,
pledge, encumber, or charge the same shall be void; and no
such benefit shall in any manner be liable for, or subject to,
the debts, contracts, liabilities, engagements, or torts of
any such person, nor shall it be subject to attachment or
legal process for or against such person, and the same shall
not be recognized by the Trustee, except to such extent as may
be required by law.
(b) This provision shall not apply to the extent a
Participant or Beneficiary is indebted to the Plan, as a
result of a loan from the Plan. At the time a distribution is
to be made to or for a Participant's or Beneficiary's benefit,
such proportion of the amount distributed as shall equal such
loan indebtedness shall be paid by the Trustee to the Trustee
or the Administrator, at the direction of the Administrator,
to apply against or discharge such loan indebtedness. Prior to
making a payment, however, the Participant or Beneficiary must
be given written notice by the Administrator that such loan
indebtedness is to be so paid in whole or part from his
Participant's Combined Account. If the Participant or
Beneficiary does not agree that the loan indebtedness is a
valid claim against his Vested Participant's Combined Account,
he shall be entitled to a review of the validity of the claim
in accordance with procedures provided in Sections 2.7 and
2.8.
(c) This provision shall not apply to a "qualified
domestic relations order" defined in Code Section 414(p), and
those other domestic relations orders permitted to be so
treated by the Administrator under the provisions of the
Retirement Equity Act of 1984. The Administrator shall
establish a written procedure to determine the qualified
status of domestic relations orders and to administer
distributions under such qualified orders. Further, to the
extent provided under a "qualified domestic relations order,"
a former spouse of a Participant shall be treated as the
spouse or surviving spouse for all purposes under the Plan.
(d) This provision shall not apply to an offset to a
Participant's accrued benefit against an amount that the
Participant is ordered or required to pay the Plan with
respect to a judgment, order, or decree issued, or a
settlement entered into, on or after August 5, 1997, in
accordance with Code Sections 401(a)(13)(C) and (D). In a case
in which the survivor annuity requirements of Code Section
401(a)(11) apply with respect to distributions from the Plan
to the Participant, if the Participant has a spouse at the
time at which the offset is to be made:
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(1) either such spouse has consented in writing to
such offset and such consent is witnessed by a notary
public (or it is established to the satisfaction of a
Plan representative that such consent may not be
obtained by reason of circumstances described in Code
Section 417(a)(2)(B)), or an election to waive the
right of the spouse to either a qualified joint and
survivor annuity or a qualified pre-retirement
survivor annuity is in effect in accordance with the
requirements of Code Section 417(a),
(2) such spouse is ordered or required in such
judgment, order, decree or settlement to pay an
amount to the Plan in connection with a violation of
fiduciary duties, or
(3) in such judgment, order, decree or settlement,
such spouse retains the right to receive the survivor
annuity under a qualified joint and survivor annuity
provided pursuant to Code Section 401(a)(11)(A)(i)
and under a qualified pre-retirement survivor annuity
provided pursuant to Code Section 401(a)(11)(A)(ii).
9.3 CONSTRUCTION OF PLAN
This Plan shall be construed and enforced according to the Act
and the laws of the Commonwealth of Pennsylvania, other than its laws respecting
choice of law, to the extent not preempted by the Act.
9.4 GENDER AND NUMBER
Wherever any words are used herein in the masculine, feminine
or neuter gender, they shall be construed as though they were also used in
another gender in all cases where they would so apply, and whenever any words
are used herein in the singular or plural form, they shall be construed as
though they were also used in the other form in all cases where they would so
apply.
9.5 LEGAL ACTION
In the event any claim, suit, or proceeding is brought
regarding the Trust and/or Plan established hereunder to which the Trustee, the
Employer or the Administrator may be a party, and such claim, suit, or
proceeding is resolved in favor of the Trustee, the Employer or the
Administrator, they shall be entitled to be reimbursed from the Trust Fund for
any and all costs, attorney's fees, and other expenses pertaining thereto
incurred by them for which they shall have become liable.
9.6 PROHIBITION AGAINST DIVERSION OF FUNDS
(a) Except as provided below and otherwise
specifically permitted by law, it shall be impossible by
operation of the Plan or of the Trust, by termination of
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either, by power of revocation or amendment, by the happening
of any contingency, by collateral arrangement or by any other
means, for any part of the corpus or income of any trust fund
maintained pursuant to the Plan or any funds contributed
thereto to be used for, or diverted to, purposes other than
the exclusive benefit of Participants, Retired Participants,
or their Beneficiaries.
(b) In the event the Employer shall make an excessive
contribution under a mistake of fact pursuant to Act Section
403(c)(2)(A), the Employer may demand repayment of such
excessive contribution at any time within one (1) year
following the time of payment and the Trustees shall return
such amount to the Employer within the one (1) year period.
Earnings of the Plan attributable to the excess contributions
may not be returned to the Employer but any losses
attributable thereto must reduce the amount so returned.
9.7 BONDING
Every Fiduciary, except a bank or an insurance company, unless
exempted by the Act and regulations thereunder, shall be bonded in an amount not
less than 10% of the amount of the funds such Fiduciary handles; provided,
however, that the minimum bond shall be $1,000 and the maximum bond, $500,000.
The amount of funds handled shall be determined at the beginning of each Plan
Year by the amount of funds handled by such person, group, or class to be
covered and their predecessors, if any, during the preceding Plan Year, or if
there is no preceding Plan Year, then by the amount of the funds to be handled
during the then current year. The bond shall provide protection to the Plan
against any loss by reason of acts of fraud or dishonesty by the Fiduciary alone
or in connivance with others. The surety shall be a corporate surety company (as
such term is used in Act Section 412(a)(2)), and the bond shall be in a form
approved by the Secretary of Labor. Notwithstanding anything in the Plan to the
contrary, the cost of such bonds shall be an expense of and may, at the election
of the Administrator, be paid from the Trust Fund or by the Employer.
9.8 EMPLOYER'S AND TRUSTEE'S PROTECTIVE CLAUSE
Neither the Employer, the Administrator, nor the Trustee, nor
their successors shall be responsible for the validity of any Contract issued
hereunder or for the failure on the part of the insurer to make payments
provided by any such Contract, or for the action of any person which may delay
payment or render a Contract null and void or unenforceable in whole or in part.
9.9 INSURER'S PROTECTIVE CLAUSE
Any insurer who shall issue Contracts hereunder shall not have
any responsibility for the validity of this Plan or for the tax or legal aspects
of this Plan. The insurer shall be protected and held harmless in acting in
accordance with any written direction of the Trustee, and shall have no duty to
see to the application of any funds paid to the Trustee, nor be required to
question any actions directed by the Trustee. Regardless of any provision of
this Plan, the insurer shall not be required
84
to take or permit any action or allow any benefit or privilege contrary to the
terms of any Contract which it issues hereunder, or the rules of the insurer.
9.10 RECEIPT AND RELEASE FOR PAYMENTS
Any payment to any Participant, his legal representative,
Beneficiary, or to any guardian or committee appointed for such Participant or
Beneficiary in accordance with the provisions of the Plan, shall, to the extent
thereof, be in full satisfaction of all claims hereunder against the Trustee and
the Employer, either of whom may require such Participant, legal representative,
Beneficiary, guardian or committee, as a condition precedent to such payment, to
execute a receipt and release thereof in such form as shall be determined by the
Trustee or Employer.
9.11 ACTION BY THE EMPLOYER
Whenever the Employer under the terms of the Plan is permitted
or required to do or perform any act or matter or thing, it shall be done and
performed by a person duly authorized by its legally constituted authority.
9.12 NAMED FIDUCIARIES AND ALLOCATION OF RESPONSIBILITY
The "named Fiduciaries" of this Plan are (1) the Employer, (2)
the Administrator and (3) the Trustee. The named Fiduciaries shall have only
those specific powers, duties, responsibilities, and obligations as are
specifically given them under the Plan or as accepted by or assigned to them
pursuant to any procedure provided under the Plan, including but not limited to
any agreement allocating or delegating their responsibilities, the terms of
which are incorporated herein by reference. In general, unless otherwise
indicated herein or pursuant to such agreements, the Employer shall have the
duties specified in Article II hereof, as the same may be allocated or delegated
thereunder, including but not limited to the responsibility for making the
contributions provided for under Section 4.1; and shall have the authority to
appoint and remove the Trustee and the Administrator; to formulate the Plan's
"funding policy and method"; and to amend or terminate, in whole or in part, the
Plan. The Administrator shall have the responsibility for the administration of
the Plan, including but not limited to the items specified in Article II of the
Plan, as the same may be allocated or delegated thereunder. The Administrator
shall act as the named Fiduciary responsible for communicating with the
Participant according to the Participant Direction Procedures. The Trustee shall
have the responsibility of management and control of the assets held under the
Trust, except to the extent directed pursuant to Article II or with respect to
those assets, the management of which has been assigned to an Investment
Manager, who shall be solely responsible for the management of the assets
assigned to it, all as specifically provided in the Plan and any agreement with
the Trustee. Each named Fiduciary warrants that any directions given,
information furnished, or action taken by it shall be in accordance with the
provisions of the Plan, authorizing or providing for such direction, information
or action. Furthermore, each named Fiduciary may rely upon any such direction,
information or action of another named Fiduciary as being proper under the Plan,
and is not required under the Plan to inquire into the propriety of any such
direction, information or
85
action. It is intended under the Plan that each named Fiduciary shall be
responsible for the proper exercise of its own powers, duties, responsibilities
and obligations under the Plan as specified or allocated herein. No named
Fiduciary shall guarantee the Trust Fund in any manner against investment loss
or depreciation in asset value. Any person or group may serve in more than one
Fiduciary capacity. In the furtherance of their responsibilities hereunder, the
"named Fiduciaries" shall be empowered to interpret the Plan and Trust and to
resolve ambiguities, inconsistencies and omissions, which findings shall be
binding, final and conclusive.
9.13 HEADINGS
The headings and subheadings of this Plan have been inserted
for convenience of reference and are to be ignored in any construction of the
provisions hereof.
9.14 APPROVAL BY INTERNAL REVENUE SERVICE
(a) Notwithstanding anything herein to the contrary,
contributions to this Plan are conditioned upon the initial
qualification of the Plan under Code Section 401. If the Plan
receives an adverse determination with respect to its initial
qualification, then the Plan may return such contributions to
the Employer within one year after such determination,
provided the application for the determination is made by the
time prescribed by law for filing the Employer's return for
the taxable year in which the Plan was adopted, or such later
date as the Secretary of the Treasury may prescribe.
(b) Notwithstanding any provisions to the contrary,
except Sections 3.5, 3.6, and 4.1(f), any contribution by the
Employer to the Trust Fund is conditioned upon the
deductibility of the contribution by the Employer under the
Code and, to the extent any such deduction is disallowed, the
Employer may, within one (1) year following the disallowance
of the deduction, demand repayment of such disallowed
contribution and the Trustee shall return such contribution
within one (1) year following the disallowance. Earnings of
the Plan attributable to the excess contribution may not be
returned to the Employer, but any losses attributable thereto
must reduce the amount so returned.
9.15 UNIFORMITY
All provisions of this Plan shall be interpreted and applied
in a uniform, nondiscriminatory manner. In the event of any conflict between the
terms of this Plan and any Contract purchased hereunder, the Plan provisions
shall control.
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ARTICLE X
PARTICIPATING EMPLOYERS
10.1 ADOPTION BY OTHER EMPLOYERS
Notwithstanding anything herein to the contrary, with the
consent of the Employer and Trustee, any other corporation or entity, whether an
affiliate or subsidiary or not, may adopt this Plan and all of the provisions
hereof, and participate herein and be known as a Participating Employer, by a
properly executed document evidencing said intent and will of such Participating
Employer. A list of Participating Employers is attached hereto as Schedule 10.1.
10.2 REQUIREMENTS OF PARTICIPATING EMPLOYERS
(a) Each such Participating Employer shall be
required to use the same Trustee as provided in this Plan.
(b) The Trustee may, but shall not be required to,
commingle, hold and invest as one Trust Fund all contributions
made by Participating Employers, as well as all increments
thereof. However, the assets of the Plan shall, on an ongoing
basis, he available to pay benefits to all Participants and
Beneficiaries under the Plan without regard to the Employer or
Participating Employer who contributed such assets.
(c) The transfer of any Participant from or to an
Employer participating in this Plan, whether he be an Employee
of the Employer or a Participating Employer, shall not affect
such Participant's rights under the Plan, and all amounts
credited to such Participant's Combined Account as well as his
accumulated service time with the transferor or predecessor,
and his length of participation in the Plan, shall continue to
his credit.
(d) All rights and values forfeited by termination of
employment shall inure only to the benefit of the Participants
of the Employer or Participating Employer by which the
forfeiting Participant was employed.
(e) Any expenses of the Trust which are to be paid by
the Employer or borne by the Trust Fund shall be paid by each
Participating Employer in the same proportion that the total
amount standing to the credit of all Participants employed by
such Employer bears to the total standing to the credit of all
Participants.
10.3 DESIGNATION OF AGENT
Each Participating Employer shall be deemed to be a party to
this Plan; provided, however, that with respect to all of its relations with the
Trustee and Administrator for the purpose
87
of this Plan, each Participating Employer shall be deemed to have designated
irrevocably the Employer as its agent. Unless the context of the Plan clearly
indicates the contrary, the word "Employer" shall be deemed to include each
Participating Employer as related to its adoption of the Plan.
10.4 EMPLOYEE TRANSFERS
It is anticipated that an Employee may be transferred between
Participating Employers, and in the event of any such transfer, the Employee
involved shall carry with him his accumulated service and eligibility. No such
transfer shall effect a termination of employment hereunder, and the
Participating Employer to which the Employee is transferred shall thereupon
become obligated hereunder with respect to such Employee in the same manner as
was the Participating Employer from whom the Employee was transferred.
10.5 PARTICIPATING EMPLOYER CONTRIBUTION
All discretionary contributions made by a Participating
Employer under Section 4.1(e), shall be determined separately by each
Participating Employer, and shall be allocated only among the Participants
eligible to share of the Employer or Participating Employer making the
contribution. On the basis of the information furnished by the Administrator,
the Trustee shall keep separate books and records concerning the affairs of each
Participating Employer hereunder and as to the accounts and credits of the
Employees of each Participating Employer. The Trustee may, but need not,
register Contracts so as to evidence that a particular Participating Employer is
the interested Employer hereunder, but in the event of an Employee transfer from
one Participating Employer to another, the employing Employer shall immediately
notify the Trustee thereof.
10.6 AMENDMENT
Mylan Laboratories Inc. may amend this Plan at any time,
including any time when there shall be a Participating Employer hereunder, with
the consent of the Trustee where such consent is necessary in accordance with
the terms of this Plan. No consent of a Participating Employer shall be
required.
10.7 DISCONTINUANCE OF PARTICIPATION
Any Participating Employer shall be permitted to discontinue
or revoke its participation in the Plan. At the time of any such discontinuance
or revocation, satisfactory evidence thereof and of any applicable conditions
imposed shall be delivered to the Trustee. The Trustee shall thereafter
transfer, deliver and assign Contracts and other Trust Fund assets allocable to
the Participants of such Participating Employer to such new Trustee as shall
have been designated by such Participating Employer, in the event that it has
established a separate pension plan for its Employees, provided however, that no
such transfer shall be made if the result is the elimination or reduction of any
"Section 411(d)(6) protected benefits" in accordance with Section 7.1(c). If no
88
successor is designated, the Trustee shall retain such assets for the Employees
of said Participating Employer pursuant to the provisions of the Trust. In no
such event shall any part of the corpus or income of the Trust as it relates to
such Participating Employer be used for or diverted to purposes other than for
the exclusive benefit of the Employees of such Participating Employer.
10.8 ADMINISTRATOR'S AUTHORITY
The Administrator shall have authority to make any and all
necessary rules or regulations, binding upon all Participating Employers and all
Participants, to effectuate the purpose of this Article.
IN WITNESS WHEREOF, this Plan has been executed the day and
year first above written.
Mylan Laboratories Inc.
By _____________________________
ATTEST ___________________________
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SCHEDULE 6.2
PROTECTED OPTIONAL FORMS OF DEATH BENEFIT
Notwithstanding Plan Section 6.02, Participants who had account
balances under certain other qualified plans which were merged with and into, or
transferred (other than by a direct or indirect rollover transfer) to, this Plan
have modified distribution rights applicable to accrued benefits attributable to
the merged or transferred account as provided under this Schedule.
This Schedule applies to the following Participant's.
A Participant who had an account under the former Bertek, Inc. Profit
Sharing 401(k) Plan, last maintained by Mylan Technologies Inc., which
account was merged with and into, or transferred (other than by a
direct or indirect rollover transfer) to, this Plan on April 1, 2000.
That portion of such a Participant's Combined Account attributable to
the Bertek, Inc. Profit Sharing 401(k) Plan is herein called the "Mylan
Technologies Account."
A Participant who had an account under the former UDL Laboratories,
Inc. 401(k) & Profit Sharing Plan, last maintained by UDL Laboratories,
Inc., an Illinois corporation with facilities in Illinois, which
account was merged with and into, or transferred (other than by a
direct or indirect rollover transfer) to, this Plan on April 1, 2000.
That portion of such a Participant's Combined Account attributable to
the UDL Laboratories, Inc. 401(k) & Profit Sharing Plan is herein
called the "UDL Account."
A Participant who had an account under the former Bertek
Pharmaceuticals Inc. 401(k) Savings Plan and Trust, last maintained by
Bertek Pharmaceuticals Inc., a Texas corporation and having Texas
facilities, which account was merged with and into, or transferred
(other than by a direct or indirect rollover transfer) to, this Plan on
April 1, 2000. That portion of such a Participant's Combined Account
attributable to the Bertek Pharmaceuticals Inc. 401(k) Savings Plan and
Trust is herein called the "Bertek Account."
Collectively, each Mylan Technologies Account, UDL Account, and Bertek
Account is called a "Merged Account."
This Schedule applies only to a Participant's Merged Account. Except as
modified under this Schedule, the Plan shall control.
A. DETERMINATION OF BENEFITS UPON DEATH
(1) Upon the death of a Participant before his Retirement Date
or other termination of his employment, all amounts credited to the
Participant's Merged Account shall become fully Vested. The
Administrator shall direct the Trustee, in accordance with
90
the provisions of Schedule 6.5 and Plan Section 6.7, to distribute the
value of the deceased Participant's accounts to the Participant's
Beneficiary.
(2) Upon the death of a Former Participant, the Administrator
shall direct the Trustee, in accordance with the provisions of Schedule
6.5 and Plan Section 6.7, to distribute any remaining Vested amounts
credited to the accounts of a deceased Former Participant to the Former
Participant's Beneficiary.
(3) The Administrator may require proper proof of death and
evidence of the right of any person to receive payment of the value of
the account of a deceased Participant or Former Participant as the
Administrator may deem desirable. The Administrator's determination of
death and of the right of any person to receive payment shall be
conclusive.
(4) The Beneficiary of the death benefit payable pursuant to
this Section shall be the Participant's spouse. Except, however, the
Participant may designate a Beneficiary other than his spouse if:
(a) the spouse has waived the right to be the
Participant's Beneficiary, or
(b) the Participant is legally separated or has been
abandoned (within the meaning of local law) and the
Participant has a court order to that effect (and there is no
"qualified domestic relations order" as defined in Code
Section 414(p) which provides otherwise), or
(c) the Participant has no spouse, or
(d) the spouse cannot be located.
In that event, the designation of a Beneficiary shall
be made on a form satisfactory to the Administrator. A Participant may
at any time revoke his designation of a Beneficiary or change his
Beneficiary by filing written notice of revocation or change with the
Administrator. However, the Participant's spouse must again consent in
writing to any change in Beneficiary unless the original consent
acknowledged that the spouse had the right to limit consent only to a
specific Beneficiary and that the spouse voluntarily elected to
relinquish that right. In the event no valid designation of Beneficiary
exists at the time of the Participant's death, the death benefit shall
be payable to his estate.
(5) Any consent by the Participant's spouse to waive any
rights to the death benefit must be in writing, must acknowledge the
effect of such waiver, and be witnessed by a notary public. Further,
the spouse's consent must be irrevocable and must acknowledge the
specific nonspouse Beneficiary.
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(6) Any security interest held by the Plan by reason of an
outstanding loan to the Participant or Former Participant shall be
taken into account in determining the amount of the Participant's
benefit from the Merged Account to the extent not taken into account in
determining any other portion of the Participant's benefit.
(7) Unless otherwise elected by the Participant, including
consent of the Participant's spouse in the manner prescribed in
Schedule 6.5 , the Participant's spouse shall receive a death benefit
equal to the Participant's Merged Account.
B. DISTRIBUTION OF BENEFITS UPON DEATH
(1) The death benefit payable pursuant to Plan Section 6.2 and
this Schedule 6.2 shall be paid to the Participant's Beneficiary within
a reasonable time after the Participant's death by one of the following
methods, as elected by the Participant (or if no election has been made
prior to the Participant's death, by his Beneficiary) subject, however,
to the rules specified in Schedule 6.5, including Plan Sections 6.5,
6.6(g) and 6.6(h):
(a) One lump-sum payment in cash or, to the extent of
any whole units of Employer securities held in the
Participant's account at the time of distribution, in the form
of Employer securities.
(b) Payment in monthly, quarterly, semi-annual, or
annual cash installments over a period to be determined by the
Participant or his Beneficiary. After periodic installments
commence, the Beneficiary shall have the right to direct the
Trustee to reduce the period over which the periodic
installments shall be made, and the Trustee shall adjust the
cash amount of the periodic installments accordingly.
(c) Purchase of or providing an annuity. However, the
annuity may not be in a form that will provide for payments
over a period extending beyond the life of the designated
Beneficiary.
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SCHEDULE 6.5
DISTRIBUTION OF BENEFITS
Notwithstanding Plan Section 6.05, Participants who had account
balances under certain other qualified plans which were merged with and into, or
transferred (other than by a direct or indirect rollover transfer) to, this Plan
have modified distribution rights applicable to accrued benefits attributable to
the merged or transferred account as provided under this Schedule.
This Schedule applies to the following Participant's.
A Participant who had an account under the former Bertek, Inc. Profit
Sharing 401(k) Plan, last maintained by Mylan Technologies Inc., which
account was merged with and into, or transferred (other than by a
direct or indirect rollover transfer) to, this Plan on April 1, 2000.
That portion of such a Participant's Combined Account attributable to
the Bertek, Inc. Profit Sharing 401(k) Plan is herein called the "Mylan
Technologies Account."
A Participant who had an account under the former UDL Laboratories,
Inc. 401(k) & Profit Sharing Plan, last maintained by UDL Laboratories,
Inc., an Illinois corporation with facilities in Illinois, which
account was merged with and into, or transferred (other than by a
direct or indirect rollover transfer) to, this Plan on April 1, 2000.
That portion of such a Participant's Combined Account attributable to
the UDL Laboratories, Inc. 401(k) & Profit Sharing Plan is herein
called the "UDL Account."
A Participant who had an account under the former Bertek
Pharmaceuticals Inc. 401(k) Savings Plan and Trust, last maintained by
Bertek Pharmaceuticals Inc., a Texas corporation and having Texas
facilities, which account was merged with and into, or transferred
(other than by a direct or indirect rollover transfer) to, this Plan on
April 1, 2000. That portion of such a Participant's Combined Account
attributable to the Bertek Pharmaceuticals Inc. 401(k) Savings Plan and
Trust is herein called the "Bertek Account."
Collectively, each Mylan Technologies Account, UDL Account, and Bertek
Account is called a "Merged Account."
This Schedule applies only to a Participant's Merged Account. The
normal form of payment of that portion of a Participant's benefit is a lump sum.
Except as modified under this Schedule, Plan Section 6.5 shall control,
excluding provisions related to a life annuity or joint and survivor annuity as
a normal form of benefit.
(1) The Administrator, pursuant to the election of the
Participant, shall direct the Trustee to distribute to a Participant or
his Beneficiary any amount to which he is entitled under the Plan in
one or more of the following methods:
93
(a) One lump-sum payment in cash or, to the extent of
any whole units of Employer securities held in the
Participant's account at the time of distribution, in the form
of Employer securities.
(b) Payments over a period certain in monthly,
quarterly, semiannual, or annual cash installments. In order
to provide the installment payments, the Administrator may (i)
segregate the aggregate amount thereof in a separate,
federally insured savings account, certificate of deposit in a
bank or savings and loan association, money market certificate
or other liquid short-term security or (ii) purchase a
nontransferable annuity contract for a term certain (with no
life contingencies) providing for the payment. The period over
which the payment is to be made shall not extend beyond the
Participant's life expectancy (or the life expectancy of the
Participant and his designated Beneficiary).
(c) Purchase of or providing one of the following
forms of annuity: life annuity for the life of the Participant
(or the lives of the Participant and his designated
Beneficiary), annuity for the life of the Participant (or the
lives of the Participant and his designated Beneficiary) with
a full refund of the excess, if any, of the annuity purchase
amount over the annuity payments made, and an annuity payable
for the life of the Participant (or the lives of the
Participant and his designated Beneficiary) with a guarantee
of payments for a 10 year term. However, the annuity may not
be in any form that will provide for payments over a period
extending beyond either the life of the Participant (or the
lives of the Participant and his designated Beneficiary) or
the life expectancy of the Participant (or the life expectancy
of the Participant and his designated Beneficiary). If a
married participant elects a life annuity form of payment
under this provision, that election is subject to the
provisions of Plan Section 6.5(a)(2) regarding notice and
spouse's waiver of the joint and survivor annuity.
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SCHEDULE 7.4
PARTICIPANT LOAN PROGRAM
(1) American Express Trust Company, as Trustee, is authorized to administer
the Participant Loan Program
(2) A Participant may apply for a loan by contacting Mylan Profit Sharing
401(k) Services at 1-877-585-4015 or by logging on to the Web sit at
www.americanexpress.com401(k). Necessary loan request forms will be
provided. Loans are available only to address immediate and heavy
financial needs as described in the Plan, including the acquisition of
the Participant's principal residence. A Participant must provide the
following documentation with the loan request:
Principal Residence Loan. Copy of signed purchase agreement
for the Participant's primary residence.
Other Hardship Loan. Evidence of hardship, including copies of
(i) medical bills, (ii) eviction notice, or (iii) tuition
bills that are due for the next 12 months.
There is a $50 fee for each loan. The fee will be deducted from the
proceeds of the loan.
If the Participant is married, and the Vested interest of the
Participant is used to secure the loan, the loan shall require the
written consent of the Participant's spouse in a manner consistent with
Section 6.5(a)(1) of the Plan. The written consent must be obtained
within the 90-day period prior to the date the loan is made. However,
no spousal consent shall be required under this paragraph if the total
accrued benefit subject to the security is not in excess of $5,000
($3,500 for Plan Years beginning prior to August 6, 1997). If the
Participant is married, the Participant's spouse must sign a notarized
form agreeing to the loan and acknowledging the effect of the loan
regarding future spousal benefits.
(3) Loans shall be made available to all active Participants on a
reasonably equivalent basis. Certain employees identified as having
potential access information implicating securities laws, however, will
be notified by the Employer and will be subject to additional loan
restrictions which will be provided when the Participant applies. Loans
shall not be made available to Highly Compensated Employees in an
amount greater than the amount made available to other Participants.
Unless additional restrictions apply, loans generally will be limited
to the maximum permitted under section 7.4 of the Plan. That section
provides that loans (when added to the outstanding balance of all other
loans made by the Plan to the Participant) shall be limited to the
lesser of:
(i) $50,000 reduced by the excess (if any) of the highest
outstanding balance of loans from the Plan to the Participant
during the one year period ending on the day
95
before the date on which such loan is made, over the
outstanding balance of loans from the Plan to the Participant
on the date on which such loan was made, or
(ii) one-half (1/2) of the present value of the
non-forfeitable accrued benefit of the Participant under the
Plan.
If a Participant requests the maximum amount available, market changes
may cause the available amount to change, up or down, from the time the
request is sent until it is received and processed.
For purposes of this limit, all plans of the Employer shall be
considered one plan. Loans must be for a minimum of $1,000.
Only active employees will be permitted to obtain a loan from the Plan.
(4) Loans shall bear a reasonable rate of interest. The reasonable rate of
interest, determined at the time of the loan, will be equal to the
prime rate plus 1% as stated in the Wall Street Journal, determined as
of the first business day of the month during which the loan is
requested. The rate may be adjusted for the then current monthly rate
if there is a greater than 30 day interval between the request for loan
forms and the submittal of the loan request forms to American Express
Trust Company.
(5) Loans shall be adequately secured. All loans will be secured solely by
50% of the Participant's vested account balance.
(6) A Participant's loans must be repaid upon the Participant's termination
of employment for any reason including the Participant's death,
retirement or disability. A loan will be deemed in default when the
Participant fails to repay an installment when due. Loan repayments may
stop, however, for up to 12 months while a Participant is on a leave of
absence. A Participant must make arrangements to bring the loan current
upon a return to work. The outstanding loan balance on loan which is in
default will be considered a taxable distribution as provided under
law.
(7) A Participant is limited to one loan for the acquisition of a principal
residence and one other hardship loan at any time.
(8) Loan payments begin the end of the month following the month in which a
Participant requests a loan. Payments continue through after-tax
payroll deductions until the loan is repaid. A Participant may pay off
a loan in full at any time by cashier's check, certified check or money
order. Partial pre-payment is not allowed.
(9) Loans shall provide for repayment over a reasonable period of time.
Loans shall provide for level amortization with payments to be made not
less frequently than quarterly, and for
96
hardship loans, over a period not to exceed five (5) years. However,
loans used to acquire any dwelling unit which, within a reasonable
time, is to be used (determined at the time the loan is made) as a
principal residence of the Participant shall provide for periodic
repayment over a reasonable period of time that may not exceed fifteen
(15) years. For this purpose, a principal residence has the same
meaning as a principal residence under Code Section 1034. Loan
repayments will be suspended under this Plan as permitted under Code
Section 414(u)(4).
(10) You must wait at least 90 days to take loan following payment in full
of a prior loan.
(11) Loans will be funded from a Participant's account in the following
order: (i) rollover account with earnings, (ii) employee pre-tax
contributions and earnings, (iii) after-tax contributions and earnings.
Loans will be funded from the Participant's investments on a pro-rata
basis.
97
SCHEDULE 10.1
PARTICIPATING EMPLOYERS
1. Mylan Pharmaceuticals Inc.
2. Mylan Technologies, Inc., effective April 1, 2000
3. UDL Laboratories, Inc., an Illinois corporation, effective April 1, 2000
4. UDL Laboratories, Inc., a Florida corporation, effective April 1, 2000
5. Bertek Pharmaceuticals Inc., a Texas corporation, effective April 1, 2000
6 Bertek Pharmaceuticals Inc., a Delaware corporation (operating in
California), effective April 1, 2000
98
[ This provision will be adopted to amend the Plan, Section 6.5(b)(3), page 61,
if and when final regulations permit elimination of some optional forms of
annuity. ]
(3) Purchase of or providing one of the following
forms of annuity: life annuity for the life of the
Participant (or the lives of the Participant and his
designated Beneficiary), annuity for the life of the
Participant (or the lives of the Participant and his
designated Beneficiary) with a full refund of the
excess, if any, of the annuity purchase amount over
the annuity payments made, and an annuity payable for
the life of the Participant (or the lives of the
Participant and his designated Beneficiary) with a
guarantee of payments for a 10 year term. However,
the annuity may not be in any form that will provide
for payments over a period extending beyond either
the life of the Participant (or the lives of the
Participant and his designated Beneficiary) or the
life expectancy of the Participant (or the life
expectancy of the Participant and his designated
Beneficiary).
99
EXHIBIT 5.1
DOEPKEN KEEVICAN & WEISS
58th Floor, USX Tower
600 Grant Street
Pittsburgh, Pennsylvania 15219
July 24, 2000
Mylan Laboratories Inc.
1030 Century Building
130 Seventh Street
Pittsburgh, Pennsylvania 15222
RE: Mylan Laboratories Inc.
Registration on Form S-8
Ladies and Gentlemen:
We have acted as counsel for Mylan Laboratories Inc., a Pennsylvania
corporation (the "Company"), in connection with the registration with the
Securities and Exchange Commission (the "SEC") by the Company of 1,000,000
shares of the Company's common stock (the "Common Stock") issuable under the
Mylan Profit Sharing 401(k) Plan (the "Plan") pursuant to the Securities Act of
1933, as amended (the "Act").
In connection with the registration, we have examined the following:
(a) the Articles of Incorporation and By-laws of the Company, each as
amended to date;
(b) the Registration Statement on Form S-8 (the "Registration Statement")
relating to the Common Stock, as filed with the SEC;
(c) the Plan; and
(d) such other documents, records, opinions, certificates and papers as we
have deemed necessary or appropriate in order to give the opinions
hereinafter set forth.
The opinions hereinafter expressed are subject to the following
qualifications and assumptions :
(i) In our examination, we have assumed the genuineness of all
signatures, the authenticity of all documents submitted to us
as originals and the conformity of all documents submitted to
us as copies to the originals thereof.
(ii) As to the accuracy of certain factual matters, we have relied
on the certificates of officers of the Company and
certificates, letters, telegrams or statements of public
officials.
Mylan Laboratories Inc.
July 24, 2000
Page 2
(iii) We express no opinion on the laws of any jurisdiction other
than the United States of America and the Pennsylvania
Business Corporation Law.
Based upon and subject to the foregoing, we are pleased to advise you
that it is our opinion that the shares of Common Stock proposed to be issued
under the Plan have been duly authorized and reserved for issuance and will,
when issued pursuant to the Plan, be legally issued, fully paid and
non-assessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement.
Very truly yours,
/s/ Doepken Keevican & Weiss
DOEPKEN KEEVICAN & WEISS
PROFESSIONAL CORPORATION
EXHIBIT 23.2
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
Mylan Laboratories Inc. on Form S-8 of our report dated May 10, 2000,
incorporated by reference in the Annual Report on Form 10-K of Mylan
Laboratories Inc. for the year ended March 31, 2000.
Deloitte & Touche LLP
/s/ Deloitte & Touche LLP
Pittsburgh, Pennsylvania
July 24, 2000
EXHIBIT 23.3
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
Mylan Laboratories Inc. on Form S-8 of our report dated February 4, 2000
relating to the consolidated financial statements of Somerset Pharmaceuticals,
Inc. and subsidiaries as of December 31, 1999 and 1998 and for each of the three
years in the period ended December 31, 1999, appearing in the Annual Report on
Form 10-K of Mylan Laboratories Inc. for the year ended March 31, 2000.
Deloitte & Touche LLP
/s/ Deloitte & Touche LLP
Pittsburgh, Pennsylvania
July 24, 2000
