Bio-Rad Laboratories Inc. Contracts
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Employees' Deferred Profit Sharing Retirement Plan - Bio-Rad Laboratories Inc.
Bio-Rad Laboratories, Inc.
Employees' Deferred Profit Sharing Retirement Plan
(As Amended and Restated Effective January 1, 1989, and Including
Additional Amendments Adopted Through December 31, 1994)
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Bio-Rad Laboratories, Inc.
Employees' Deferred Profit Sharing Retirement Plan
TABLE OF CONTENTS
Page
ARTICLE 1. NAME, EFFECTIVE DATE, PURPOSE AND CONSTRUCTION 1
1.01 Plan Name 1
1.02 Effective Date 1
1.03 Purpose and History 1
1.04 Construction 2
1.05 Employment Relationship Not Affected 3
1.06 Terminated Participants Not Affected 3
ARTICLE 2. DEFINITIONS 4
2.01 Account 4
2.02 Affiliated Employer 4
2.03 Allowable Compensation 4
2.04 Alternate Payee 5
2.05 Beneficiary 5
2.06 Break in Service 5
2.07 Code 5
2.08 Committee 5
2.09 Date of Hire 5
2.10 Deferred Retirement Date 5
2.11 Determination Date 5
2.12 Direct Rollover 5
2.13 Disability 5
2.14 Distributee 5
2.15 Eligible Employee 6
2.16 Eligible Participant 6
2.17 Eligible Retirement Plan 6
2.18 Eligible Rollover Distribution 6
2.19 Employee 6
2.20 Employer 6
2.21 Entry Date 6
2.22 ERISA 6
2.23 General Trust Fund 6
2.24 Highly Compensated Employee 7
2.25 Hour of Service 8
2.26 Inactive Participant 8
2.27 Key Employee 8
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2.28 Leased Employee 9
2.29 Non-Highly Compensated Employee 9
2.30 Non-Key Employee 9
2.31 Normal Retirement Date 9
2.32 Owner 9
2.33 Participant 10
2.34 Plan 10
2.35 Plan Administrator 10
2.36 Plan Compensation 10
2.37 Plan Year 10
2.38 Profit Sharing Account 10
2.39 Qualified Domestic Relations Order (QDRO) 10
2.40 Service 10
2.41 Spousal Consent 11
2.42 Suspense Account 11
2.43 TEFRA 11
2.44 Testing Compensation 11
2.45 Top-Heavy Plan 12
2.46 Trust 13
2.47 Trust Agreement 13
2.48 Trust Fund 13
2.49 Trustee 13
2.50 Valuation Date 13
2.51 List of Terms Defined Elsewhere 13
ARTICLE 3. ELIGIBILITY, PARTICIPATION AND BENEFICIARY DESIGNATION 14
3.01 Definitions 14
3.02 Participation 14
3.03 Beneficiary Designation 15
3.04 Change from Ineligible to Eligible Employee 15
3.05 Former Employee Rehired 15
3.06 Committee Determines Eligibility 16
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ARTICLE 4. CONTRIBUTIONS 17
4.01 Employer Contributions 17
4.02 Timing of, Limitations on and Return of Employer
Contributions 18
ARTICLE 5. ALLOCATION OF CONTRIBUTIONS 19
5.01 Definitions 19
5.02 Allocation Methods 19
5.03 Limitations on Annual Allocations 19
5.04 Restoration Procedures 20
ARTICLE 6. VESTING OF ACCOUNTS 22
6.01 Automatic Vesting 22
6.02 Vesting Based of Service 22
6.03 Top-Heavy Vesting 23
6.04 Years of Service for Vesting 24
6.05 Forfeitures and Restorations 24
6.06 No Divestment 26
6.07 Amendment to Vesting 26
6.08 Failure to Locate Recipient 26
ARTICLE 7. ALLOCATION OF TRUST INCOME OR LOSS 27
7.01 Determination of Net Income 27
7.02 Valuation 27
7.03 Valuation Dates 27
7.04 Special Valuation Dates at Committee Discretion 27
ARTICLE 8. PARTICIPANTS' ACCOUNTS 28
8.01 Separate Accounts 28
8.02 Statement of Accounts 28
8.03 Valuation of Account When Payment Due 28
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ARTICLE 9. DISTRIBUTIONS AND WITHDRAWALS 29
9.01 General 29
9.02 Administrative Rules 29
9.03 Timing of Distributions 29
9.04 Treatment of Deferred Amounts 31
9.05 Methods of Distribution 31
9.06 Distribution in Periodic Payments 32
9.07 Distribution Upon Death of Participant 32
9.08 Distributions to Minors or Legally Incompetent
Persons 33
9.09 Direct Rollover of Eligible Rollover Distributions 33
9.10 Withholding on Distributions 33
9.11 Tax Information To Be Provided 34
ARTICLE 10. SERVICE 35
10.01 Definitions 35
10.02 Crediting of Hours Subject to DOL Regulation 37
10.03 Hours of Service Equivalency 37
ARTICLE 11. FIDUCIARY RESPONSIBILITY 38
11.01 Named Fiduciaries 38
11.02 Fiduciary Standards 38
11.03 Fiduciaries Liable for Breach of Duty 38
11.04 Fiduciary May Employ Agents 38
11.05 Authority Outlined 39
11.06 Fiduciaries Not to Engage in Prohibited Transactions 40
ARTICLE 12. ADMINISTRATIVE COMMITTEE 41
12.01 Appointment of Administrative Committee 41
12.02 Committee Operating Rules 41
12.03 Duties of Plan Administrator 41
12.04 Recordkeeping Duties of the Committee 41
12.05 Committee Powers 42
12.06 Committee to Establish Funding Policy 42
12.07 Committee May Retain Advisors 42
12.08 Claims Procedure 43
12.09 Committee Indemnification 44
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ARTICLE 13. INVESTMENTS AND LOANS 45
13.01 Investment Authority 45
13.02 Use of Mutual or Commingled Funds Permitted 45
13.03 Trustees May Hold Necessary Cash 45
13.04 Trustees to Act Upon Committee Instruction 45
13.05 Appointment of Investment Manager 46
13.06 No Loans Permitted 46
ARTICLE 14. TRUSTEE 47
14.01 Trustees Duties 47
14.02 Indicia of Ownership Must Be in United States 47
14.03 Permissible Trustees Action 47
14.04 Trustee's Fees For Services and Advisors Retained 48
14.05 Annual Accounting and Asset Valuation 48
14.06 Trustee Removal or Resignation 48
14.07 Approval of Trustees Accounting 49
14.08 Trust Not Terminated Upon Trustees Removal or
Resignation 49
14.09 Trustees May Consult With Legal Counsel 49
14.10 Trustees Not Required to Verify Identification or
Addresses 49
14.11 Individual Trustee Rules 50
14.12 Indemnification of Trustee and Insurance 50
14.13 Income Tax Withholding 50
ARTICLE 15. AMENDMENT, TERMINATION AND MERGER 51
15.01 Trust is Irrevocable 51
15.02 Employer May Amend Trust Agreement 51
15.03 Employer May Terminate Plan or Discontinue Profit
Sharing Contributions 51
15.04 Timing of Plan Termination 52
15.05 Action Required Upon Plan Termination 52
15.06 Nonreversion of Assets 52
15.07 Merger or Consolidation Cannot Reduce Benefits 52
ARTICLE 16. ASSIGNMENTS 53
16.01 No Assignment 53
16.02 Qualified Domestic Relations Order Permitted 53
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ARTICLE 17. ADOPTION OF THE PLAN BY AFFILIATED EMPLOYERS 54
17.01 General 54
17.02 Written Consent Required 54
17.03 Rights of Member Employer 54
17.04 Member Employer May Terminate Participation 55
17.05 Member Employer Liability 55
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Bio-Rad Laboratories, Inc.
Employees' Deferred Profit Sharing Retirement Plan
THIS TRUST AGREEMENT is made and entered into by and between BIO-
RAD LABORATORIES, INC. (the "Employer") and DAVID SCHWARTZ and
JAMES VIGLIENZONE (the "Trustees").
ARTICLE 1. NAME, EFFECTIVE DATE, PURPOSE AND CONSTRUCTION
1.01 Plan Name
The Plan set forth in this Trust Agreement shall be known as
the Bio-Rad Laboratories, Inc. Employees' Deferred Profit
Sharing Retirement Plan.
1.02 Effective Date
The general effective date of this amended and restated Plan
and Trust Agreement is January 1, 1989; however, certain
Articles and Sections are effective as of the earlier or
later dates specified therein. Sections 2.24, 2.28, 2.29
and 5.01 became effective on January 1, 1987.
1.03 Purpose and History
(a) Purpose
The Plan is intended to qualify as a profit
sharing plan under section 401(a) and related
provisions of the Code, and the Trust is intended to be
tax-exempt under section 501(a) of the Code. The Plan
and Trust shall be maintained for the exclusive purpose
of providing retirement and survivor benefits to
Eligible Employees and their Beneficiaries.
(b) History
This Trust Agreement and the Plan contained herein
constitute an amendment and complete restatement of the
Plan and Trust Agreement, which first became effective
on January 1, 1973, and which has been amended from
time to time since that date.
(c) Purposes of Restatement
The principal purpose of this amendment and
restatement is to comply with the requirements of the
Tax Reform Act of 1986 and subsequent legislation and
regulations that became effective prior to January 1,
1995.
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1.04 Construction
The following miscellaneous provisions shall apply in the
construction of the Plan and Trust Agreement:
(a) State Jurisdiction
All matters relating to the validity, effect,
interpretation and administration of this Plan and
Trust Agreement shall be determined in accordance with
ERISA and, to the extent not preempted by ERISA, with
the laws of the State of Delaware.
(b) Gender
Wherever appropriate, words used in the singular
may include the plural or the plural may be read as the
singular, the masculine may include the feminine, and
the neuter may include both the masculine and the
feminine.
(c) Application of ERISA and Code References
All references to sections of ERISA or the Code,
or any regulations or rulings thereunder, shall be
deemed to refer to such sections as they may
subsequently be modified, amended, replaced or
amplified by any federal statutes, regulations or
rulings.
(d) Enforceable Provisions Remain Effective
If any provision of this Plan and Trust are held
by a court of competent jurisdiction to be invalid or
unenforceable, the remaining provisions of the Plan and
Trust Agreement shall continue to be fully effective.
(e) Headings
Headings are inserted for reference only and
constitute no part of the construction of this Plan and
Trust Agreement.
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1.05 Employment Relationship Not Affected
Nothing in the Plan or Trust shall be deemed a contract
between the Employer and any Employee, nor shall the rights
or obligations of the Employer or any Employee to continue
or terminate employment at any time be affected hereby.
1.06 Terminated Participants Not Affected
Notwithstanding anything to the contrary contained herein,
any person who was a Participant in the Plan prior to the
effective date of this amendment and restatement and who is
not both a Participant and an Eligible Employee under the
amended and restated Plan document, as it is made effective,
will have his rights and remedies, if any, determined by the
terms and conditions of the Plan in effect as of the date
his participation ceased or the date he ceased to be an
Eligible Employee, whichever occurred first.
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ARTICLE 2. DEFINITIONS
Terms that are used only in a single Article (beginning with
Article 3) are generally defined at the beginning of that
Article. Section 2.52 lists the terms so defined. The following
words and phrases are used throughout this Trust Agreement and
are defined below:
2.01 "Account" means the aggregate of all records maintained by
the Committee for purposes of determining a Participant's or
Beneficiary's interest in the Trust Fund and shall include
the Profit Sharing Account, as adjusted by such other
amounts properly credited or debited to such Account.
2.02 "Affiliated Employer" means any corporation which is a
member of a controlled group of corporations (as defined in
section 414(b)) of the Code which includes the Employer, any
trade of business (whether or not incorporated) which is
under common control (as defined in section 414(c) of the
Code) with the Employer, any organization (whether or not
incorporated) which is a member of an affiliated service
group (as defined in section 414(m) of the Code which
includes the Employer, and any other entity required to be
aggregated with the Employer pursuant to regulations under
section 414(o) of the Code.
2.03 "Allowable Compensation" for purposes of determining the Top-
Heavy minimum contributions, and for purposes of determining
the limitations on allocations pursuant to Article 5, means
the total of all wages, salaries, fees for professional
services and other amounts paid by the Employer or an
Affiliated Employer during a Limitation Year to a
Participant for services actually rendered in the course of
employment including (but not limited to) bonuses, overtime,
commissions and incentive compensation, but excluding
amounts which are contributed to a retirement plan, deferred
compensation plan or other plan and which are not included
as taxable income for such year, or amounts which are not
deemed to be income for current services rendered such as
amounts realized from the sale, exercise or exchange of
Employer stock or stock options. Allowable Compensation
shall not include amounts which a Participant elected to
have the Employer contribute on his behalf for the Plan Year
as a salary deferral contribution under any plan of the
Employer.
For Plan Years beginning after 1988 and before 1994, the
Allowable Compensation taken into account for a Participant
shall not exceed $200,000, as adjusted pursuant to section
401(a)(17) of the Code. Effective for Plan Years beginning
after 1993, the Allowable Compensation taken into account
for a Participant shall not exceed $150,000, as indexed for
inflation in increments of $10,000, pursuant to section
401(a)(17) of the Code. The applicable annual dollar limit
applies to the aggregate Allowable Compensation paid to a
Highly Compensated Employee who is a five percent Owner
and/or a Highly Compensated Employee in a group consisting
of the 10 most highly compensated employees of the Employer
and such individual's spouse and lineal descendants who have
not attained age 19 before the end of the Plan Year. If, as
a result of the application of the family aggregation rule,
the annual dollar limit is exceeded, then the limit shall be
pro-rated among the affected individuals in proportion to
each such individual's Allowable Compensation as determined
prior to the application of the limit.
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2.04 "Alternate Payee" means any spouse, former spouse, child or
other dependent of a Participant recognized by a Qualified
Domestic Relations Order as having a right to receive all or
a portion of a Participant's benefits under the Plan.
2.05 "Beneficiary" means any person designated by a Participant
to receive benefits upon the death of such Participant,
subject to the limitations of Section 3.03.
2.06 "Break in Service" means an Eligibility Computation Period
(as defined in Section 3.01(b)) in which an Employee is
credited with 500 or fewer Hours of Service.
2.07 "Code" means the Internal Revenue Code of 1986, as it may be
amended from time to time.
2.08 "Committee" means the Administrative Committee designated
under Article 12.
2.09 "Date of Hire" means the date on which an Employee first
performs an Hour of Service for the Employer.
2.10 "Deferred Retirement Date" means the date of actual
retirement from the Employer by a Participant who remains in
the employ of the Employer after attaining his Normal
Retirement Date.
2.11 "Determination Date" means, with respect to any Plan Year,
the last day of the preceding Plan Year.
2.12 "Direct Rollover" means a payment by the Plan to the
Eligible Retirement Plan specified by the Distributee.
2.13 "Disability" means the permanent incapacity of a
Participant, by reason of physical or mental illness, to
perform his usual duties for the Employer, resulting in
termination of his service with the Employer. Disability
shall be determined by the Committee in a uniform and
nondiscriminatory manner after consideration of such
evidence as it may require, which shall include a report of
such physician or physicians as it may designate.
2.14 "Distributee" means an Employee or former Employee to whom a
plan distribution is payable. 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
are Distributees with regard to the interest of the spouse
or former spouse.
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2.15 "Eligible Employee" has the meaning set forth in Section
3.01.
2.16 "Eligible Participant" means an Eligible Employee who
completed at least 1,000 Hours of Service in the relevant
Plan Year, and who was a Participant on the last day of the
Plan Year.
2.17 "Eligible Retirement Plan" means an individual retirement
account described in section 408(a) of the Code, an
individual retirement annuity described in section 408(b) of
the Code, an annuity plan described in section 403(a) of the
Code, or a qualified trust described in section 401(a) of
the Code, that accepts the Distributee's Eligible Rollover
Distribution. However, in the case of an Eligible Rollover
Distribution to the surviving spouse, an Eligible Retirement
Plan is an individual retirement account or an individual
retirement annuity.
2.18 "Eligible Rollover Distribution" means any distribution of
all or any portion of the balance to the credit of the
Distributee, except that an Eligible Rollover Distribution
does not include: (i) 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 10
years or more; (ii) any distribution to the extent such
distribution is required under section 401(a)(9) of the
Code; (iii) the portion of any distribution that is not
includable in gross income; (iv) any aggregate distributions
which total less than $200 within one taxable year; and (v)
in the case of a partial Direct Rollover where the
Distributee elects to received a portion in cash, any
aggregate distributions that total less than $500 in one
taxable year.
2.19 "Employee" means any person in the Service of the Employer,
including Leased Employees, but excluding directors who are
not in the Employer's employ in any other capacity.
2.20 "Employer" means Bio-Rad Laboratories, Inc., and such of its
successors or assigns as may expressly adopt this Plan and
Trust Agreement and agree in writing to continue this Plan
and Trust.
2.21 "Entry Date" means the first day of the month following an
Employee's satisfaction of the Plan's eligibility
requirements.
2.22 "ERISA" means the Employee Retirement Income Security Act of
1974.
2.23 "General Trust Fund" means that portion of the Trust Fund
other than property and income held as or for segregated
Accounts or under separate investment funds under the
provisions of this Trust Agreement.
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2.24 "Highly Compensated Employee" means, with respect to any
Plan Year beginning after December 31, 1986, any Employee of
the Employer or an Affiliated Employer (whether or not
eligible for participation in the Plan) who satisfies the
criteria of Paragraph (a), (b), (c) or (d):
(a) During the Look-Back Year the Employee:
(1) Received Testing Compensation in excess
of $75,000 (as adjusted pursuant to section 414(q)
of the Code);
(2) Received Testing Compensation in excess
of $50,000 (as adjusted pursuant to section 414(q)
of the Code) and was among the highest 20 percent
of Employees for that year when ranked by Testing
Compensation paid for that year excluding, for
purposes of determining the number of such
Employees, such Employees as the Employer may
determines on a consistent basis pursuant to
section 414(q)(8) of the Code; or
(3) Was at any time an officer of the
Employer or an Affiliated Employer and received
Testing Compensation greater than 50 percent of
the dollar limitation on maximum benefits under
section 415(b)(1)(A) of the Code for such Plan
Year. The number of officers is limited to 50
(or, if less, the greater of three Employees or 10
percent of Employees excluding those Employees who
may be excluded in determining the top-paid
group). If no officer has Testing Compensation in
excess of 50 percent of the dollar limit on
maximum benefits under section 415(b)(1)(A) of the
Code, the highest-paid officer shall be treated as
a Highly Compensated Employee.
(b) During the determination year, the Employee
satisfies the criteria under (1), (2) or (3) of (a)
above and is one of the 100 highest paid Employees of
the Employer or an Affiliated Employer.
(c) During the determination year or the look-back
year the Employee was at any time a five percent owner
of the Employer.
(d) Notwithstanding the foregoing, Employees who are
nonresident aliens and who receive no earned income
from the Employer or an Affiliated Employer that
constitutes income from sources within the United
States shall be disregarded for all purposes of this
Section.
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(f) For purposes of this Section, the "determination
year" means the Plan Year, and the "look-back year"
means the 12-month period immediately preceding the
determination year. However, to the extent permitted
under regulations, the Employer may elect to determine
the status of Highly Compensated Employees on a current
calendar year basis. Furthermore, for each Plan Year,
the Employer may elect to determine the status of
Highly Compensated Employees under the simplified
snapshot method described in IRS Revenue Procedure 93-
42.
(g) The provisions of this Section shall be further
subject to such additional requirements as are
described in section 414(q) of the Code and its
applicable regulations, which shall override any
aspects of this Section inconsistent therewith.
2.25 "Hour of Service" has the meaning set forth in Section
10.01(b).
2.26 "Inactive Participant" means a Participant who remains an
Employee, but who ceases to be an Eligible Employee because
of a change in employment status. Accounts of Inactive
Participants shall share in allocations of contributions an
Forfeitures to the extent provided in Article 5, and such
Accounts shall continue to be adjusted by other amounts
properly credited or debited to such Accounts pursuant to
Article 7.
2.27 "Key Employee" means, with respect to a Plan Year, an
Employee or former Employee (including an deceased Employee)
who at any time during the testing period, consisting of the
Plan Year containing the Determination Date and the four
preceding Plan Years, is or was:
(a) Officers:
An officer, or an Employee with the authority of
an officer, of the Employer with Testing Compensation
of more than 50 percent of the applicable dollar limit
under section 415(b)(1)(A) of the Code for the
applicable Plan Year. However, no more than 50
Employees (or if less, the greater of three Employees
or 10 percent of the total number of Employees,
including Leased Employees, who performed services for
the Employer at any time during the testing period
shall be treated as officers. In addition, such
Employees who meet the requirements of this paragraph
and who had the largest annual Testing Compensation
from the Employer in any Plan Year during the testing
period shall first be counted as officers, without
regard to whether the Employee is a Key Employee for
any other reason; or
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(b) Certain Owners:
(1) One of the 10 Employees who (i) are 1/2
percent Owners with the largest interests in the
value of the Employer and (ii) have annual Testing
Compensation from the Employer greater than the
dollar limitation in effect under section
415(c)(1)(A) of the Code for the applicable Plan
Year. However, if two Employees have the same
ownership interest in the Employer during the
testing period, then the Employee with the greater
annual Testing Compensation from the Employer for
the Plan Year during which the ownership interest
existed shall be considered to have a larger
ownership interest in the Employer; or
(2) A five percent Owner; or
(3) A one percent Owner with annual Testing
Compensation from the Employer for the applicable
Plan Year of more than $150,000.
(c) Beneficiaries:
A Beneficiary of a Key Employee shall be
considered to be a Key Employee, and a Beneficiary of a
Non-Key Employee shall be considered a Non-Key
Employee. Notwithstanding the above, the Committee
shall be guided by the Code in determining Key
Employees for any Plan Year and shall maintain records
adequate to determine Key Employees for any Plan Year.
2.28 "Leased Employee" means any individual who would not
otherwise be considered an Employee but who has provided
services to the Employer of a type historically performed by
employees in the Employer's field of business, pursuant to
an agreement between the Employer and any other entity, on a
substantially full-time basis for a period of at least one
year. However, effective January 1, 1987, Leased Employees
will not be considered Employees if they constitute less
than 20 percent of the Employer's Non-Highly Compensated
Employees and if they are covered by a plan described in
section 414(n)(5) of the Code.
2.29 "Non-Highly Compensated Employee" means an Employee who is
not a Highly-Compensated Employee.
2.30 "Non-Key Employee" means any Employee who is not a Key
Employee, including Employees who are former Key Employees.
2.31 "Normal Retirement Date" means the date of a Participant's
65th birthday.
2.32 "Owner" means any person who owns (within the meaning of
sections 318 and 416(i)(1)(B) of the Code), or has owned
within the four Plan Years prior to the Plan Year under
consideration, a portion of the outstanding stock or voting
power of the Employer. The ownership percentage of a five
percent Owner means greater than a five percent interest,
that of a one percent Owner means greater than a one percent
interest and that of a 1/2 percent Owner means greater than
1/2 percent interest.
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2.33 "Participant" means any Employee or former Employee who has
begun participating in the Plan in accordance with Article
3, and whose Account, if any, hereunder has not subsequently
been liquidated.
2.34 "Plan" means the Bio-Rad Laboratories, Inc. Employees'
Deferred Profit Sharing Retirement Plan.
2.35 "Plan Administrator" means the Administrative Committee.
2.36 "Plan Compensation" for any Plan Year, for purposes of
Section 5.02 means all amounts paid by the Employer to an
Eligible Employee while a Participant with respect to
services rendered during such Plan Year, including all
amounts that a Participant elected to have the Employer
contribute on his behalf for the Plan Year as a salary
deferral or salary reduction contribution under a plan
described in section 401(k) or 125 of the Code.
For Plan Years beginning after 1988 and before 1994, the
Plan Compensation taken into account for a Participant shall
not exceed $200,000, as adjusted pursuant to section
401(a)(17) of the Code. Effective for Plan Years beginning
after 1993, the Plan Compensation taken into account for a
Participant shall not exceed $150,000, as indexed for
inflation in increments of $10,000, pursuant to section
401(a)(17) of the Code. The applicable annual dollar limit
applies to the aggregate Plan Compensation paid to a Highly
Compensated Employee who is a five percent Owner and/or a
Highly Compensated Employee in a group consisting of the 10
most highly compensated Employees of the Employer and such
individual's spouse and lineal descendants who have not
attained age 19 before the end of the Plan Year. If, as a
result of the application of the family aggregation rule,
the annual dollar limit is exceeded, then the limit shall be
pro-rated among the affected individuals in proportion to
each such individual's Plan Compensation as determined prior
to the application of the limit.
2.37 "Plan Year" means the accounting year of the Plan and the
Trust, which is the 12 consecutive month period ending each
December 31.
2.38 "Profit Sharing Account" means a Participant's account under
the Plan, to which shall be credited the profit sharing
contributions and Forfeitures allocated thereto, along with
any earnings thereon.
2.39 "Qualified Domestic Relations Order (QDRO)" has the meaning
set forth in section 414(p) of the Code.
2.40 "Service" has the meaning set forth in Article 10.
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2.41 "Spousal Consent" means written consent given by a
Participant's spouse to a designation by the Participant of
a primary Beneficiary other than the surviving spouse. Such
consent shall not be valid unless the Participant's
designation (i) includes the written consent of the
surviving spouse that acknowledges the effect of such
designation and is witnessed by either a Plan representative
or a notary public, and (ii), where appropriate, names a
specific Beneficiary or alternate form of payment that may
not be changed without further Spousal Consent (unless the
consent or a prior consent expressly permits designations by
the Participant without any requirement of further consent
by the spouse). Such consent shall be effective only as to
the spouse who signs the consent and, once given, may not be
revoked by such spouse. Notwithstanding the foregoing, such
Spousal Consent shall not be required if it is established
to the satisfaction of a Plan representative that the
required consent cannot be obtained because there is no
spouse, because the Participant is legally separated from or
has been abandoned by the spouse (and the Participant has a
court order to that effect), because the spouse cannot be
located, or because of other circumstances that are deemed
acceptable under applicable regulations, If a Participant's
spouse is legally incompetent to give consent, the spouse's
legal guardian may do so, even if such guardian is the
Participant. A designation of a Beneficiary made by a
Participant and consented to by his spouse may be revoked by
the Participant in writing without the consent of the spouse
at any time prior to the commencement of benefit payments
under the Plan. Any new election must comply with the
requirements of this Section.
2.42 "Suspense Account" means an account established in
accordance with the provisions of Section 6.05.
2.43 "TEFRA" means the Tax Equity and Fiscal Responsibility Act
of 1982.
2.44 "Testing Compensation" for purposes of determining whether
an Employee is a Key Employee means the total of all wages,
salaries, fees for professional services and other amounts
paid by the Employer or an Affiliated Employer during a
Limitation Year to a Participant for services actually
rendered in the course of employment including (but not
limited to) bonuses, overtime, commissions, incentive
compensation and amounts contributed by the Employer
pursuant to a salary reduction agreement which are not
includable in the Employee's gross income under section 125,
402(a)(8), 402(h) or 403(b) of the Code. Amounts
contributed to a retirement plan other than pursuant to the
Code sections listed above or to a deferred compensation
plan or other plan that are not included as taxable income
for such year shall be excluded, as will amounts that are
not deemed to be income for current services rendered, such
as amounts realized from the sale, exercise or exchange of
Employer stock or stock options.
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For Plan Years beginning after 1988 and before 1994, the
Testing Compensation taken into account for a Participant
shall not exceed $200,000, as adjusted pursuant to section
401(a)(17) of the Code. Effective for Plan Years beginning
after 1993, the Testing Compensation taken into account for
a Participant shall not exceed $150,000, as indexed for
inflation in increments of $10,000, pursuant to section
401(a)(17) of the Code. The applicable annual dollar limit
applies to the aggregate Testing Compensation paid to a
Highly Compensated Employee who is a five percent Owner
and/or a Highly Compensated Employee in a group consisting
of the 10 most highly compensated Employees of the Employer
and such individual's spouse and lineal descendants who have
not attained age 19 before the end of the Plan Year. If, as
a result of the application of the family aggregation rule,
the annual dollar limit is exceeded, then the limit shall be
pro-rated among the affected individuals in proportion to
each such individual's Plan Compensation as determined prior
to the application of the limit.
2.45 "Top-Heavy Plan" means the Plan during a Plan Year in which
the aggregate value of the Accounts of Key Employees exceeds
60 percent of the aggregate value of all Accounts under the
Plan as of the Determination Date for such Plan Year. For
purposes of determining the value of Employees' Accounts in
the Plan, the following shall be excluded: (i) rollover
contributions from a non-related employer; (ii) the Accounts
of Participants who have not performed any services for the
Employer within the five year period ending on the
Determination Date; and (iii) the Account of any individual
who was a Key Employee with respect to the Plan for any
prior Plan Year but is not a Key Employee with respect to
the Plan for the applicable Plan Year. For purposes of
determining the aggregate value of Accounts and/or accrued
benefits under this Article, distributions made within a
five year period ending on the Determination Date shall be
included to the extent required by applicable law and
regulation.
(a) Required Aggregation To Determine Top-Heaviness
If (i) a Key Employee is a Participant in this
Plan for any Plan Year and the Employer maintains or
has maintained any other plans (including terminated
plans) in which a Key Employee is a participant within
the five year period ending on the Determination Date
(or any of the four preceding Plan Years of such
plans), or (ii) the Employer maintains or has
maintained during this period any other plans
(including terminated plans) that must be combined with
this Plan in order to meet the requirements of sections
401(a)(4) or 410 of the Code for any Plan Year, then
this Plan's top-heaviness shall be determined for such
Plan Year by aggregating the Accounts and/or present
value of accrued benefits of participants in this Plan
and all other such plans.
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(b) Permissive Aggregation To Determine Top-Heaviness
If the Employer maintains or has maintained any
plans (including terminated plans) other than one
described in (a) above, the Committee may aggregate the
accounts and/or present value of accrued benefits of
participants in any such plan with those of this Plan
to determine whether this Plan is a Top-Heavy Plan for
any Plan Year, provided that the requirements of
sections 401(a)(4) and 410 of the Code would continue
to be met by treating this Plan, any plan that must be
aggregated with the Plan under (a) above and any other
plan referred to in this sentence as one unit. In
determining top-heaviness and the aggregate value of
Accounts and/or accrued benefits under this Section,
the Committee shall be guided by the provisions of the
Code, including but not limited to section 416(g) of
the Code.
2.46 "Trust" means the legal entity created by this Trust
Agreement as part of the Plan.
2.47 "Trust Agreement" means this Agreement.
2.48 "Trust Fund" means all property and income held by the
Trustee under the Trust Agreement.
2.49 "Trustee" means DAVID SCHWARTZ and James Viglienzone and any
duly appointed successor, as provided in Article 14.
2.50 "Valuation Date" means the last day of each Plan Year and
such other date as may be designated as provided in Article
7 for the revaluation of Participants' Accounts.
2.51 List of Terms Defined Elsewhere: Section
(a) "Annual Addition" 5.01
(b) "Eligibility Computation Period" 3.01
(c) "Limitation Account" 5.01
(d) "Limitation Year" 5.01
(e) "Year of Eligibility Service" 3.01
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ARTICLE 3. ELIGIBILITY, PARTICIPATION AND BENEFICIARY
DESIGNATION
3.01 Definitions
(a) "Eligible Employee" means any Employee,
including any Leased Employee, other than any Employee
who is classified by the Employer as a "casual"
Employee and who has signed an employment agreement
with the Employer, the terms of which specifically
exclude retirement benefits as part of such Employee's
compensation.
(b) "Eligibility Computation Period" means the 12
consecutive month period beginning with the Employee's
Date of Hire and each anniversary thereafter.
(c) "Year of Eligibility Service" means an
Eligibility Computation Period in which an Employee is
credited with 1,000 Hours of Service.
3.02 Participation
(a) Continuing Plan Participation
Each individual who was an Eligible Employee and a
Participant in the Plan immediately preceding the
effective date of this amendment and restatement shall
continue to be an active Participant on such effective
date, provided that he remains an Eligible Employee.
(b) Plan Entry
Each other Eligible Employee shall become a
Participant in the Plan on the Entry Date coinciding
with or next following the later of:
(1) The last day of the first Eligibility
Computation Period in which he completes 1,000
Hours of Service; or
(2) His attainment of age 18.
(c) Break in Service for Participation
If an Employee has a Break in Service before
satisfying the eligibility requirements of this Section
3.02, Service before such break will not be taken into
account.
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3.03 Beneficiary Designation
(a) Designation Procedure
Each Eligible Employee, upon becoming a Participant,
shall designate a Beneficiary or Beneficiaries to
receive benefits under the Plan after his death. A
Participant may change his Beneficiary designation at
any time. Each Beneficiary designation shall be
subject to any applicable requirement for Spousal
Consent, and shall be in a form prescribed by the
Committee. A Participant's Beneficiary designation
shall be effective only when filed with the Committee
during the Participant's lifetime. Each Beneficiary
designation filed with the Committee shall cancel all
previously filed Beneficiary designations.
(b) Lack of Designation
In the absence of a valid designation by an unmarried
Participant or if no designated Beneficiary survives an
unmarried Participant, his interest shall be
distributed to his surviving children, or if there are
no children, to his surviving parents, or if there are
no surviving children or parents, to his estate. In
the absence of a valid designation by a married
Participant or if no designated Beneficiary survives a
married Participant, his interest shall be distributed
to his surviving spouse, or if there is no surviving
spouse, then to his estate.
3.04 Change from Ineligible to Eligible Employee
An Employee who is excluded under Section 3.01 for any
period shall be eligible to participate on the first date he
is no longer excluded, provided that the requirements of
Section 3.02 have been satisfied, but not earlier than the
Entry Date on which he would have entered the Plan had he
not been excluded under Section 3.01.
3.05 Former Employee Rehired
A former Employee who had completed the eligibility
requirements of Section 3.02 with the Employer and who is
reemployed by the Employer shall become a Participant as of
the date of reemployment as an Eligible Employee, but not
earlier than the Entry Date on which he would have entered
the Plan had his employment not terminated.
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3.06 Committee Determines Eligibility
Compliance with the eligibility requirements shall be
determined by the Committee, which shall also inform each
Employee of his becoming a Participant. The Committee shall
provide each Participant with a summary plan description not
later than 90 days following the date he enters the Plan or
within such other period as may be prescribed by applicable
law or regulation.
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ARTICLE 4. CONTRIBUTIONS
4.01 Employer Contributions
(a) Employer Profit Sharing Contributions
As of the last day of each Plan Year, the Employer
may make a profit sharing contribution to the Trust in
such amount as is determined by the Employer. The
profit sharing contribution shall be reduced, if
necessary, by any amounts in Limitation Accounts under
Article 5 attributable to profit sharing contributions.
These contributions will be allocated to Participants'
Profit Sharing Accounts as provided in Section 5.02.
(b) Restoration Contributions
The Employer shall make the contributions required to
restore the Accounts of Participants as described in
Section 5.04 and Article 6. These contributions will
be allocated in accordance with their purpose.
(c) Top-Heavy Minimum Contributions
For any Plan Year during which the Plan is a Top-
Heavy Plan, the sum of:
(1) The Employer's profit sharing
contributions; and
(2) Profit sharing Forfeitures allocated on
behalf of each Participant who is a Non-Key
Employee but is employed by the Employer on the
last day of the Plan Year shall not be less than
the lesser of:
(A) Three percent of the Allowable
Compensation paid or accrued to such Employee
during the Plan Year; or
(B) The highest percentage of
Allowable Compensation that is allocated
during the Plan Year on behalf of any Key
Employee in the aggregate:
(i) To his Profit Sharing
Account under Section 5.02 of this Plan;
and
(ii) From contributions by
the Employer to his account in any other
defined contribution plan; or
(C) Such other amount as may be
prescribed by regulations under section 416
of the Code.
For any Plan Year in which the Plan is Top-
Heavy, the Employer shall make a minimum
contribution in an amount that is determined to
meet the requirements of this Section 4.01(c),
which shall be allocated to the Accounts of
Participants who are Non-Key Employees to carry
out the purpose of this Article.
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4.02 Timing of, Limitations on and Return of Employer
Contributions
(a) Amount and Timing of Contributions
Employer contributions shall not exceed an amount
that constitutes an allowable deduction under section
404(a) of the Code. Employer contributions shall be
paid to the Trustee on or prior to the last day for
filing the Employer's federal income tax return for
such year, including any extensions of time granted for
such filing. Contributions shall be made in cash.
(b) Return of Employer Contributions
If an amount is contributed by the Employer due to a
mistake of fact, the Employer shall be entitled to
recover such amount within one year of the date such
contribution is made. If an amount is contributed by
the Employer which is disallowed as a deduction under
section 404 of the Code, the Employer shall be entitled
to recover such amount within one year of the date such
deduction is disallowed. Trust income attributable to
the amount to be recovered shall not be paid to the
Employer, but any Trust losses attributable thereto
shall reduce such amount.
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ARTICLE 5. ALLOCATION OF CONTRIBUTIONS
5.01 Definitions
(a) "Annual Addition" means the sum for the
Limitation Year to which the allocation pertains
(whether or not allocated in such year) of all Employer
and Employee contributions allocated to the
Participant's Account for such year under this Plan,
and any other similar contributions to any other
defined contribution plan maintained by the Employer,
including any excess deferrals under any qualified cash
or deferred arrangement sponsored by the Employer or an
Affiliated Employer.
(b) "Limitation Account" means an account expressly
set up and maintained to hold excess Annual Addition
amounts contributed in error pursuant to Section
5.03(b).
(c) "Limitation Year" means the Plan Year.
5.02 Allocation Methods
(a) Top-Heavy Minimum and Restoration Contributions
Top-heavy minimum and restoration contributions are
allocated as provided in Article 4.
(b) Profit Sharing Allocation
Employer profit sharing contributions, Forfeitures,
and amounts in Limitation Accounts attributable to
Profit Sharing Accounts for any Plan Year shall be
allocated as of the last day of such Plan Year to the
Profit Sharing Account of each Eligible Participant in
the ratio that each such Eligible Participant's Plan
Compensation bears to the aggregate Plan Compensation
of all Eligible Participants.
5.03 Limitations on Annual Allocations
(a) Limitation Amount
Notwithstanding any other provision of this Plan to
the contrary, the Annual Addition to a Participant's
Account for any Limitation Year shall not exceed the
lesser of 25 percent of the Employee's Allowable
Compensation or $30,000 (or, if greater, 1/4 of the
dollar limitation in effect under section 415(b)(1)(A)
of the Code), or such other amount for the Limitation
Year as may be established by regulations under section
415(d) of the Code.
19
<PAGE>
(b) Treatment of Excess Annual Addition Made in
Error
In the event that (as a result of the allocation of
Forfeitures, a reasonable error in estimating a
Participant's compensation or other limited facts and
circumstances that the Internal Revenue Service finds
to be acceptable) an amount would otherwise be
allocated that would result in the Annual Addition
limitation being exceeded with respect to any
Participant, the excess amount shall be eliminated:
(1) First, by returning to such Participant, to
the extent necessary any salary deferral
contributions made on his behalf under any other
defined contribution plan of the Employer, along
with investment gains attributable to such salary
deferral contributions, to the extent permitted by
current law and regulations;
(2) Second, by holding any excess profit
sharing amounts in a Limitation Account and if the
limitation is still exceeded with respect to the
Participant, a separate Limitation Account shall
be maintained with respect to the profit sharing
portions of any remaining excess. Any amounts in
the Limitation Accounts shall be reallocated among
the appropriate Accounts of Eligible Participants
pursuant to Section 5.02 as of the last day of
each succeeding Plan Year until the excess is
exhausted, provided that the Annual Addition
limitation with respect to any Participant may not
be exceeded in any Limitation Year. No allocation
of Employer or Employee contributions may be
credited to the Accounts of Eligible Participants
in succeeding years until such excess has been
exhausted.
5.04 Restoration Procedures
(a) Computing Amounts
In the event that a Participant's Account was
improperly excluded in any year from an allocation of
Employer contributions and Forfeitures pursuant to
Section 5.02, such Participant's Account shall be
restored to its correct status by the addition of
amounts that are determined as follows:
(1) First, an amount will be computed on the
same basis as Employer contributions and
Forfeitures that were allocated to the Accounts of
other Eligible Participants under Section 5.02 in
each year for which restoration is necessary; and
20
<PAGE>
(2) Second, Trust Fund income, gain or loss
attributable to amounts that should have been
allocated under (1) above will be computed on the
same basis as Trust Fund income, gain or loss was
allocated to other Participants' Accounts under
Section 7.01 in each year for which restoration is
necessary.
(b) Income, Gain or Loss
In the event that a Participant's Account was
improperly excluded in any year from an allocation of
Trust Fund income, gain or loss pursuant to Section
7.02, such Participant's Account shall be restored to
its correct status by the addition or subtraction of
amounts that should have been allocated under Section
7.02 in each year for which restoration is necessary.
(c) Source of Amounts
Such amounts shall be restored first from
Forfeitures, if any; and then, if necessary, the
Employer shall contribute an amount that is necessary
to fully restore each improperly excluded Account. No
Employer contributions or Forfeitures shall be
allocated pursuant to Section 5.02 to the Account of
any Participant until each improperly excluded Account
has been fully restored.
21
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ARTICLE 6. VESTING OF ACCOUNTS
6.01 Automatic Vesting
(a) Retirement or Death
The value of a Participant's Employer Account shall
become fully vested when the Participant attains his
Normal Retirement Date while an Employee, or upon his
termination of employment by reason of death.
(b) Accident and Sickness Benefit
The value of a Participant's Account shall become
fully vested upon his termination of employment by
Disability, and shall become payable under Article 9 as
an accident and/or sickness benefit as permitted by the
applicable sections of the Code and regulations.
6.02 Vesting Based of Service
Except as otherwise provided in Section 6.03 or Section
6.05, a Participant's Employer Account shall become vested
in accordance with the following schedule:
(a) Effective January 1, 1989:
Years of Service Vesting Percentage
Less than 1 year 0%
1 year 0%
2 years 0%
3 years 0%
4 years 0%
5 years 100%
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(b) Prior to January 1, 1989:
Years of Service Vested Percentage
1 year 0%
2 years 6%
3 years 12%
4 years 18%
5 years 27%
6 years 36%
7 years 45%
Years of Service Vested Percentage
8 years 57%
9 years 69%
10 years 81%
11 years or more 100%
Notwithstanding the foregoing, a Participant with at
least three Years of Service as of the adoption date of
the vesting schedule shown in Section 6.03(a), may
elect to have his nonforfeitable percentage calculated
pursuant to the vesting schedule shown in Section
6.03(b). Such election shall be made within the period
prescribed by Internal Revenue regulations.
6.03 Top-Heavy Vesting
(a) Vesting Changes if Plan Becomes Top-
Heavy
Except as otherwise provided in this Article 6, for
any Plan Year in which the Plan is a Top-Heavy Plan, a
Participant's Employer Account shall be vested in
accordance with the following vesting schedule if such
schedule results in a greater vested percentage than
the percentage otherwise applicable under Section 6.02
at any relevant time:
Years of Service Vesting Percentage
Less than 2 years 0%
2 years 20%
3 years 40%
4 years 60%
5 years 80%
6 years or more 100%
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<PAGE>
(b) Top-Heavy Vesting Schedule Continues
for Plan
In the event that the Plan ceases to be a Top-Heavy
Plan in any subsequent Plan Year, the vesting schedule
in Section 6.03(a) shall continue to apply, except that
a Participant who has completed three Years of Service
may elect to have the vesting schedule set forth in
Section 6.02(a) apply.
6.04 Years of Service for Vesting
(a) Year of Service
An Employee shall be credited with one year of
Service for each 12 consecutive month period ending on
the last day of the Eligibility Computation Period in
which he has at least 1,000 Hours of Service.
(b) Termination Prior to Vesting
If an Employee's Service terminates prior to his
earning any vested percentage, his Service prior to
such termination shall be disregarded for vesting
purposes if he is reemployed after he has incurred five
consecutive Breaks in Service.
(c) Service Prior to Break in Service
If an Employee is reemployed by the Employer after a
Break in Service, Service prior to a Break in Service
that is eligible to be credited to the Employee upon
reemployment shall not be credited for purposes of
vesting until he has completed one year of Service
after such reemployment.
6.05 Forfeitures and Restorations
(a) Suspense Accounts
Any remainder of a terminating Participant's Account
that is not vested shall be transferred to a Suspense
Account.
(b) Profit Sharing Forfeitures Reallocated
Forfeitures attributable to Profit Sharing Accounts
during a Plan Year that are not used to restore
Participant's Accounts as of the last day of such Plan
Year shall be added to the profit sharing contribution
for such year and allocated as of such date to the
Profit Sharing Accounts of Eligible Participants as
provided in Article 5.
24
<PAGE>
(c) No Income or Loss on Suspense Accounts
Suspense Accounts shall not share in the allocation
of Trust income or loss on any Valuation Date.
(d) Reemployment
If the Participant is reemployed before incurring
five consecutive Breaks in Service, the following rules
shall apply:
(1) Restoration If No Distribution.
In the event the Participant did not receive a
distribution of his vested interest, his Account
shall be fully restored as provided in (3) below
and shall be re-credited as of his reemployment
date.
(2) Special Account Required If
Distribution Made. In the event a distribution
was made to the Participant, his Suspense Account
shall be re-credited to his Account as of his
reemployment date and shall be maintained,
together with any undistributed vested interest in
the event of a partial distribution, as a separate
Account. A Participant's vested interest in such
separate Account as of any date of determination
shall be determined by applying the following
formula:
Vested interest = P(AB) + (R x
D)) minus (R x D)
For purposes of applying the
formula, P is the vested percentage at the date of
determination; AB is the Account balance at the
date of determination; D is the amount of the
distribution previously made; and R is the ratio
of the account balance at the date of
determination to the Account balance immediately
following the preceding distribution.
(3) Source of Restored Amounts
(A) If the Suspense Account
established for a Participant has not yet
been forfeited, such Suspense Account shall
be used to restore the Participant's Account.
(B) Otherwise, amounts to be
restored for any Plan Year may come from
forfeitures as of the last day of the Plan
Year, from additional Employer contributions
for such Plan Year, from Trust income, or
from a combination of these methods, as
determined by the Committee.
25
<PAGE>
(e) No Restoration After Five Consecutive Breaks in
Service
If a Participant is reemployed after incurring five
consecutive Breaks in Service, no portion of his non-
vested Account shall be restored, and any undistributed
vested interest shall be maintained as a separate fully
vested Account.
6.06 No Divestment
Except as provided under Sections 4.02 and 6.08, or in
accordance with a Qualified Domestic Relations Order, a
Participant's vested rights shall not be subject to
divestment for any reason.
6.07 Amendment to Vesting
Notwithstanding any other provision of this Article 6, an
individual who was a Participant immediately preceding the
effective date of any amendment to the Plan shall have his
vested percentage determined in accordance with the
provisions of the Plan as in effect immediately prior to
such amendment, if such provisions provide a greater vested
percentage at any relevant time.
6.08 Failure to Locate Recipient
In the event that the Committee is unable to locate a
Participant or Beneficiary who is entitled to payment under
the Plan within five years from the date such payment was to
have been made, the amount to which such Participant or
Beneficiary was entitled shall be declared a forfeiture and
shall be reallocated in accordance with Articles 4 and 5.
If the Participant or Beneficiary is later located, the
benefit that was previously forfeited hereunder (without
adjustment for gains or losses) shall be restored through
forfeitures or by means of an additional Employer
contribution to the Plan.
26
<PAGE>
ARTICLE 7. ALLOCATION OF TRUST INCOME OR LOSS
7.01 Determination of Net Income
As of each Valuation Date, the Committee shall determine the
net income or loss of the General Trust Fund based on a
statement from the Trustee of the receipts and disbursements
of the Trust Fund since the immediately preceding Valuation
Date and of the fair market value of the Fund as of the
Valuation Date. If one or more separate investment funds
have been established as provided in Article 13, each fund
shall be valued separately on each Valuation Date, and a
proportionate share of the net income or loss of each fund
shall be allocated to each Account invested in such
investment fund.
7.02 Valuation
As of each Valuation Date and prior to any allocation of
contributions to be made as of such date, the net income or
loss of the General Trust Fund since the immediately
preceding Valuation Date, including net appreciation or
depreciation and any expenses paid by the Trust, shall be
allocated to each Account in the ratio that the value, as of
the immediately preceding Valuation Date, of each such
Account invested in the General Trust Fund bears to the
value, as of the immediately preceding Valuation Date, of
all Accounts invested in the General Trust Fund. The
Committee shall adopt equitable procedures to establish a
proportionate crediting of Trust income or loss to those
portions of Participants' Accounts in the case of
contributions that have occurred in the interim period since
the immediately preceding Valuation Date. Amounts held in
Limitation or Suspense Accounts established pursuant to
Section 5.03 shall not share in Trust Fund income or loss.
7.03 Valuation Dates
The General Trust Fund shall be valued as of the last day of
each Plan Year and as of any other date the Committee
directs the Trustees to value the Trust Fund, as provided in
Section 7.04.
7.04 Special Valuation Dates at Committee Discretion
The Committee may direct the Trustees to determine the fair
market value of the Trust Fund and may make a determination
of Trust income or loss as of any date other than the last
day of a Plan Year. If the allocation of such Trust income
or loss will produce a significant change in the value of
Participants' Accounts, and if such valuation shall affect a
distribution, then such date shall thereupon be deemed a
Valuation Date, and Trust income or loss shall be allocated
to Participant's Accounts in accordance with the provisions
of Section 7.02.
27
<PAGE>
ARTICLE 8. PARTICIPANTS' ACCOUNTS
8.01 Separate Accounts
The Committee shall maintain a separate Account for each
Participant. Each Participant's Account shall reflect the
amounts allocated thereto and distributed therefrom and such
other information as affects the value of such Account
pursuant to this Agreement. The Committee may maintain
records of Accounts to the nearest whole dollar.
8.02 Statement of Accounts
As soon as practicable after the end of each Plan Year, the
Committee shall furnish to each Participant a statement of
his Account, determined as of the end of such Plan Year.
Upon the discovery of any error or miscalculation in an
Account, the Committee shall correct it, to the extent
correction is practically feasible. Statements to
Participants are for reporting purposes only, and no
allocation, valuation or statement shall vest any right or
title in any part of the Trust Fund, nor require any
segregation of Trust assets, except as is specifically
provided in this Agreement.
8.03 Valuation of Account When Payment Due
The amount of the payment made to a Participant or
Beneficiary shall be based on the value of the Participant's
Account as of the Valuation Date immediately preceding his
termination date, plus any contributions and/or earnings
subsequently credited to such Account, and minus any
distributions and/or losses subsequently deducted from the
Account.
28
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ARTICLE 9. DISTRIBUTIONS AND WITHDRAWALS
9.01 General
Benefits under the Plan shall be distributed solely from the
Trust. The Employer has no liability or responsibility for
Plan benefits or for the Trust. No distribution shall be
made or commenced prior to the Participant's termination of
employment, except as required under Sections 9.03 and
16.02. Distributions can also be made upon termination of
the Plan.
9.02 Administrative Rules
(a) Authority
Distributions shall be made by the Trustees only in
accordance with the directions of the Committee. The
Committee has the authority to direct the distributions
in accordance with the terms and conditions of the
Plan, but the Committee shall have no power of
discretion or consent with regard to a Participant's or
Beneficiary's choice of the form or timing of a
distribution, except as specifically stated herein or
to the extent that the Committee is constrained by the
options available under the Plan or by the requirements
of law or regulation.
(b) Claims
A Participant, Beneficiary or Alternate Payee has the
right to file a claim for benefits as set forth in
Section 12.08.
9.03 Timing of Distributions
(a) Amounts Under $3,500
If, upon termination of Service, a Participant's
vested Account does not exceed $3,500, distribution
shall be made in a lump sum as soon as practicable
after the amount can be determined in accordance with
Section 8.03.
29
<PAGE>
(b) Amounts Over $3,500
If, upon termination of Service, a Participant's
vested Account exceeds $3,500, the Participant may
elect to:
(1) Commence distributions as soon as
practicable after the amount can be determined;
(2) Defer receipt of payments until his
Normal Retirement Date or his 65th birthday,
whichever is later; or
(3) Defer receipt of payments as provided
in (c) below. Notwithstanding the foregoing, no
payments may be made to a Participant prior to his
Normal Retirement Date or his 65th birthday,
whichever is later, if his vested Account exceeds
$3,500, unless the written consent of the
Participant is obtained by the Committee within
the 90-day period prior to commencement of the
distribution.
(c) Deferring Distributions
A Participant who meets the requirements of Section
9.03(b) may defer the commencement of a distribution by
providing the Committee with a written, signed notice
specifying the date on which the distribution is to
commence and the distribution method to be used,
provided that:
(1) No distribution method chosen by the
Participant shall provide any payment in an amount
less than that required under Section 9.06; and
(2) In no event shall the provisions of
this Section operate so as to allow the
distribution of a Participant's Accounts to begin
later than the April 1 following the end of the
calendar year in which the Employee attained age
70-1/2. However, an Employee who attained age 70-
1/2 by January 1, 1988 and did not at any time
after he attained age 66-1/2 own a five percent or
more interest in the Employer or an Affiliated
Employer may delay distribution of benefits until
actual retirement. Notwithstanding the foregoing,
this requirement shall not apply in the case of a
Participant who made a written designation, prior
to January 1, 1984, to defer commencement of his
distribution in a manner consistent with the
requirements of applicable law, regulation and
guidelines as then existed prior to the enactment
of TEFRA.
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9.04 Treatment of Deferred Amounts
The vested portion of a Participant's Account shall continue
to be held and invested as an unsegregated Account of the
Trust subject to revaluation as provided in Article 7.
However, at the written request of a Participant or his
Beneficiary, such Account shall be transferred to an insured
savings account, to a certificate of deposit or to other
similar instrument, which shall be part of this Trust and
shall be subject to all the provisions hereof. Interest
earned by any such insured savings account, certificate of
deposit or similar instrument shall be credited to such
Participant's Account.
9.05 Methods of Distribution
(a) Methods
Distribution to any Participant or Beneficiary shall
be made, in whole or in part:
(1) In a lump sum;
(2) In cash installments, payable at least
annually, over a period of years meeting the
requirements of Section 9.06;
(3) In any combination of the foregoing
methods of distribution.
(b) Participant Choice
The Participant may choose any of the methods
described in (a); provided that in the event that the
Participant's vested Account does not exceed $3,500,
payment shall be made in a lump sum.
(c) Equal Value
All methods of distribution with respect to a
Participant or Beneficiary shall be of equal value as
of the date payments are to commence.
(d) Timing
If the amount of a distribution cannot be determined
by the date specified under Section 9.03, payment of
benefits, retroactive to such date, shall be made or
shall begin no later than 60 days after the earliest
date on which the amount of the distribution can be
determined.
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9.06 Distribution in Periodic Payments
(a) Minimum Distributions
If the distribution to a Participant includes
periodic payments, the amounts shall be calculated in
accordance with the life expectancy of the Participant
or life expectancies of the Participant and his
Beneficiary, except as provided in (b) below. The
requirements of current law or subsequent superseding
law shall govern the amount of minimum distributions
payable. For purposes of the computation of minimum
distributions, the life expectancy of a Participant and
his spouse may be redetermined annually, to the extent
permitted by applicable law and regulation.
(b) Pre-TEFRA Designation
The provisions of (a) above shall not apply in the
case of a Participant who has made a written
designation, prior to January 1, 1984, to receive
distributions in periodic payments in a manner
consistent with the requirements of applicable law,
regulations and guidelines as they existed prior to the
enactment of TEFRA.
9.07 Distribution Upon Death of Participant
(a) Distribution Made to Participant's Beneficiary
The portion of any Participant's Account that remains
undistributed at his death shall be distributed to the
Participant's Beneficiary in accordance with the
provisions of this Section 9.07.
(b) General Rules
(1) If distribution to the Participant has
commenced as periodic payments and such
Participant dies before receiving his entire
vested interest, then the remaining undistributed
vested interest shall continue to be distributed
at least as rapidly as the schedule being used at
the Participant's date of death; and
(2) If a Participant dies before
distributions have commenced, his Account shall be
distributed within five years after the death of
the Participant. However, the prior sentence
shall not apply with respect to such portion of
the Participant's Account as is payable to his
designated Beneficiary over a period not exceeding
the life or life expectancy of such Beneficiary
beginning not later than one year after the
Participant's death (or such later date as
prescribed by applicable regulations). In
addition:
(A) If the Beneficiary is the
deceased Participant's surviving spouse,
distributions may be deferred until the date
on which the Participant would have attained
age 70-1/2; and
(B) If such surviving spouse
dies before receiving any distributions, the
provisions of this Section 9.07 shall be
applied as if such spouse were the
Participant.
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9.08 Distributions to Minors or Legally Incompetent Persons
If the Committee determines that a Participant or other
person entitled to a Plan benefit is unable to care for his
affairs because of illness or accident or is a minor, then,
unless claim has been made for his benefit by a duly
appointed legal representative, the Committee may direct
that any benefit due him be paid to his spouse, a child, a
parent or other blood relative, or to a person with whom he
resides. Any payment so made shall be a complete discharge
of the liabilities of the Plan for that benefit, and neither
the Committee nor the Trustee shall be required to oversee
the application, by any third party, of any distributions
made pursuant to this Section 9.08.
9.09 Direct Rollover of Eligible Rollover Distributions
This Section shall apply to all distributions made on or
after January 1, 1993. Notwithstanding any provision of the
Plan to the contrary that would otherwise limit a
Distributee's election under this Section, a Distributee may
elect, at the time and in the manner prescribed by the
Employer, to have any portion of an Eligible Rollover
Distribution paid directly to an Eligible Retirement Plan
specified by the Distributee in a Direct Rollover.
If a distribution is one to which sections 401(a)(11) and
417 of the Code do not apply, such distribution may commence
less than 30 days after the notice required under Treasury
Regulation section 1.411(a)-11(c) is given, provided that:
(a) The Employer clearly informs the Participant that
the Participant has a right to a period of at least 30
days after receiving the notice to consider the
decision of whether or not to elect a distribution
(and, if applicable, a particular distribution option);
and
(b) The Participant, after receiving the notice,
affirmatively elects a distribution.
9.10 Withholding on Distributions
Distributions under the Plan shall be subject to Federal
income tax withholding to the extent prescribed by section
3405 of the Code.
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9.11 Tax Information To Be Provided
The Committee shall provide to each Participant, Beneficiary
or Alternate Payee who receives an Eligible Rollover
Distribution, at the time such distribution is made, a
written explanation of the (i) provisions under which the
distribution will not be subject to tax if timely
transferred to an eligible retirement plan and (ii) if
applicable, provisions regarding the availability of capital
gains and 10-year averaging or five-year averaging tax
treatment of the distribution.
34
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ARTICLE 10. SERVICE
10.01 Definitions
(a) "Service" means an Employee's total period of
employment with the Employer, including service with a
predecessor entity. Service with Digilab will be
credited from the later of January 1, 1978 or the
Employee's actual date of hire. Service with
Nanoquest, Inc. will be credited from the later of
January 20, 1988 or the Employee's actual date of hire.
Service with Occulab will be credited from the later of
December 1, 1988 or the Employee's actual date of hire.
(b) "Hour of Service" means:
(1) Each hour for which an Employee is paid, or
entitled to payment, for the performance of duties
for the Employer.
(2) Each hour for which an Employee is paid, or
entitled to payment, by the Employer on account of
a period of time during which no duties are
performed (regardless of whether the employment
relationship has terminated) due to vacation,
holiday, illness, incapacity (including
disability), layoff, jury duty, military duty or
leave of absence; provided that no Hours of
Service shall be credited to an Employee:
(A) For a period during which no
duties are performed if payment is made or
due under a plan maintained solely for the
purpose of complying with applicable worker's
compensation, unemployment compensation, or
disability insurance laws;
(B) On account of any payment made or
due an Employee solely as reimbursement for
medical or medically related expenses
incurred by the Employee.
(3) Each hour not otherwise credited under the
Plan for which back pay, irrespective of
mitigation of damages, has either been awarded or
agreed to by the Employer. Such hours are to be
credited to the period or periods to which the
award or agreement pertains. If this provision
results in an Employee becoming an Eligible
Participant for a Plan Year in which he was not
otherwise an Eligible Participant under Article 5,
or if this provision results in an increase in the
vested percentage applicable to a Participant's
Suspense Account which has been forfeited under
Article 6, the Committee shall establish equitable
procedures for determining and allocating any
resulting amounts to such Employee's Account.
35
<PAGE>
(4) Solely for purposes of determining whether
a Break in Service has occurred, each hour not
otherwise credited under the Plan that would have
been credited if the Employee had not been absent:
(A) By reason of pregnancy or the
birth of a child of the Employee;
(B) By reason of the placement of a
child with the Employee in connection with
his adoption of such child; or
(C) For purposes of caring for any
such child for a period beginning immediately
following such birth or placement;
In any case in which the Employer is unable
to determine the number of hours that would
otherwise normally have been credited to such
Employee (but for such absence), such individual
shall be credited with eight Hours of Service for
each day of such absence. The hours described in
this Section 10.01(b)(4) shall be treated as Hours
of Service only in the Eligibility Computation
Period in which the absence from work begins if
the Employee would thereby be prevented from
incurring a Break in Service in such Eligibility
Computation Period or, in any other case, in the
next following Eligibility Computation Period.
(5) Each hour for any period during which an
Employee is not paid but is on an approved leave
of absence, military duty or is temporarily laid
off, provided that the Employee:
(A) Returns to the employ of the
Employer immediately after the expiration of
the leave or layoff, or in the case of
military duty, within 120 days or such
longer period as may be prescribed by
applicable law, after first becoming eligible
for military discharge, and
(B) Remains in the employ of the
Employer for at least 30 days after such
return, or
(C) Fails to return or remain
employed as provided above by reason of his
death, Disability or Normal Retirement.
Hours credited for such periods shall be
based on a 40-hour week or, if different, on the
Employee's normally scheduled hours per week.
However, if the Employee fails to return to the
employ of the Employer for at least 30 days after
his return for reasons other than his death,
Disability or Normal Retirement, then his original
leave date shall be deemed to be his termination
date.
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<PAGE>
(6) No more than 501 Hours of Service shall be
credited under Sections 10.01(b)(2), (3), (4) or
(5) to an Employee on account of any single
continuous period of time during which the
Employee performs no duties for the Employer.
10.02 Crediting of Hours Subject to DOL Regulation
The calculation of the number of Hours of Service to be
credited under Sections 10.01(b)(2) and (3) for periods
during which no duties are performed, and the crediting of
such Hours of Service to periods of time for purposes of
computations under the Plan, shall be determined by the
Committee in accordance with the rules set forth in section
2530.200b-2, paragraphs (b) and (c), of the Department of
Labor regulations, which rules shall be consistently applied
with respect to all employees within the same job
classifications.
10.03 Hours of Service Equivalency
Hours of Service for Employees under Sections 10.01(b)(1),
(2) and (3) shall be determined by crediting each Employee
with 190 Hours of Service for each month in which the
Employee would have been credited with at least one Hour of
Service under Sections 10.01(b)(1), (2) or (3). However,
for classes of Employees paid on an hourly basis and for
Employees for whom records of hours are maintained, Hours of
Service under Sections 10.01(b)(1), (2) and (3) shall be
determined on the basis of hours for which Plan Compensation
is paid or due.
37
<PAGE>
ARTICLE 11. FIDUCIARY RESPONSIBILITY
11.01 Named Fiduciaries
The authority to control and manage the operation and
administration of the Plan shall be allocated as provided in
this Trust Agreement between the Employer, the Committee and
the Trustees, all of whom are named fiduciaries under ERISA.
In addition, procedures for the appointment of another
fiduciary, an investment manager, are set forth in Section
13.05.
11.02 Fiduciary Standards
Each fiduciary shall discharge its duties with respect to
the Plan solely in the interest of the Participants and
Beneficiaries as follows:
(a) For the exclusive purpose of providing benefits
to Participants and their Beneficiaries;
(b) With the care, skill, prudence and diligence
under the circumstances then prevailing that a prudent
person acting in a like capacity and familiar with such
matters would use in the conduct of an enterprise of a
like character and with like aims;
(c) By diversifying the investments of the Trust
Fund so as to minimize the risk of large losses, unless
under the circumstances it is clearly prudent not to do
so; and
(d) In accordance with this Plan and Trust
Agreement.
11.03 Fiduciaries Liable for Breach of Duty
A fiduciary shall be liable, as provided in ERISA, for any
breach of his fiduciary responsibilities. In addition, a
fiduciary under this Plan shall be liable for a breach of
fiduciary responsibility of another fiduciary under this
Plan as provided under ERISA Section 405.
11.04 Fiduciary May Employ Agents
Any person or group of persons may serve in more than one
fiduciary capacity with regard to the Plan. A fiduciary
other than the Trustees may, with the consent of the
Employer, employ one or more persons to render advice and
assistance with regard to any function such fiduciary has
under the Plan. The expenses of such persons shall be paid
by the Trust, if not paid by the Employer.
38
<PAGE>
11.05 Authority Outlined
(a) Employer Authority
The Employer has the authority to amend and terminate
the Plan, to appoint and remove members of the
Committee and to appoint and remove one or more
Trustees.
(b) Committee Authority
The Committee has the authority to:
(1) Determine eligibility for participation
under the Plan;
(2) Determine any individual's entitlement to
benefits hereunder;
(3) Allocate the Employer's contributions;
(4) Determine the amount and allocation of the
Trust income or loss;
(5) Direct the Trustee with respect to
additional valuations;
(6) Maintain separate Accounts for
Participants;
(7) Furnish, and correct errors in, statements
of Accounts;
(8) Direct the Trustee with respect to the
method, timing and media of distributions pursuant
to Article 9;
(9) Direct the segregation of assets;
(10) Direct distribution of the interests of
incompetent persons and minors;
(11) Construe the Trust Agreement and determine
questions thereunder;
(12) Establish a funding policy;
(13) Appoint and delegate duties to an
investment manager;
(14) Employ advisors and assistants; and
(15) Direct the Trustees with respect to their
duties and investments.
39
<PAGE>
(c) Trustee Authority
The Trustees have the authority to establish the fair
market value of the Trust Fund, to value segregated
Accounts, to employ advisors, agents and counsel, to
hold the Trust assets and to render accounts of its
administration of the Trust.
11.06 Fiduciaries Not to Engage in Prohibited Transactions
A fiduciary shall not cause the Plan to engage in a
transaction if he knows or should know that such transaction
constitutes a prohibited transaction under section 406 of
ERISA or section 4975 of the Code, unless such transaction
is exempted under section 408 of ERISA or section 4975 of
the Code.
40
<PAGE>
ARTICLE 12. ADMINISTRATIVE COMMITTEE
12.01 Appointment of Administrative Committee
The Employer shall appoint an Administrative Committee to
manage and administer this Plan in accordance with the
provisions hereof, with each member to serve for such term
as the Employer may designate, or until a successor member
has been appointed, or until removed by the Employer.
Vacancies due to resignation, death, removal or other cause
shall be filled by the Employer. Members shall serve
without compensation for Committee service. All reasonable
expenses of the Committee shall be paid by the Trust Fund.
12.02 Committee Operating Rules
The Committee shall act by agreement of a majority of its
members, either by vote at a meeting or in writing without a
meeting. By such action, the Committee may authorize one or
more members to execute documents on its behalf and direct
the Trustees in the performance of their duties hereunder.
The Trustees, upon written notification of such
authorization, shall accept and rely upon such documents
until notified in writing that the authorization has been
revoked by the Committee. The Trustees shall not be deemed
to be on notice of any change in the membership of the
Committee unless notified in writing. A member of the
Committee, who is also a Participant hereunder, shall not
vote or act upon any matter relating solely to himself. In
the event of a deadlock or other situation that prevents
agreement of a majority of the Committee members, the matter
shall be decided by the Employer.
12.03 Duties of Plan Administrator
The Committee is the Plan Administrator under ERISA and
shall have the duty and authority to comply with those
reporting and disclosure requirements of ERISA that are
specifically required of the Plan Administrator. The Plan
Administrator is the agent for the service of legal process.
12.04 Recordkeeping Duties of the Committee
The Committee shall keep on file a copy of this Plan and
Trust Agreement, including any subsequent amendments, all
annual and interim reports of the Trustee and the latest
annual report required under Title I of ERISA for
examination by Participants during business hours.
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<PAGE>
12.05 Committee Powers
The Committee has the power and duty to do all things
necessary or convenient to effect the intent and purpose of
this Plan, whether or not such powers and duties are
specifically set forth herein. Not in limitation but in
amplification of the foregoing, the Committee shall have the
power to construe the Trust Agreement and to determine all
questions that shall arise hereunder, including,
particularly, directions to and questions submitted by the
Trustees on all matters necessary for it to discharge its
power and duties properly. The Committee shall have the
sole and complete discretion to interpret and administer the
terms of the Plan and to determine eligibility for benefits
and the amount of any such benefits pursuant to the terms of
the Plan, and in so doing, the Committee may correct
defects, supply omissions and reconcile inconsistencies to
the extent necessary to effectuate the Plan, and such
actions shall be conclusive. The Committee shall prescribe
such forms, make such rules, regulations, interpretations
and computations and shall take such other action to
administer the Plan as it may deem appropriate. In
administering the Plan, the Committee shall act in a
nondiscriminatory manner to the extent required by section
401 and related sections of the Code and shall at all times
discharge its duties with respect to the Plan in accordance
with the standards set forth in section 404(a)(1) of ERISA.
12.06 Committee to Establish Funding Policy
The Committee shall establish a funding policy for the Trust
Fund bearing in mind both the short-run and long-run needs
and goals of the Plan. The Committee shall review such
policy prior to the end of each Plan Year for its
appropriateness under the circumstances then prevailing.
The funding policy shall be communicated to the investment
manager of the Trust Fund, if one has been appointed, so
that the investment policy of the Trust Fund can be
coordinated with Plan needs.
12.07 Committee May Retain Advisors
With the approval of the Employer, the Committee my from
time to time or on a continuing basis, retain such agents
and advisors including, specifically, attorneys,
accountants, actuaries, investment counsel, consultants and
administrative assistants, as it considers necessary to
assist it in the proper performance of its duties. The
expenses of such agents or advisors shall be paid by the
Trust Fund.
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<PAGE>
12.08 Claims Procedure
(a) Claim Must Be Submitted Within 60 Days
The Committee shall determine Participants',
Alternate Payees' and Beneficiaries' rights to benefits
under the Plan. In the event of a dispute over
benefits, a Participant, Beneficiary or Alternate Payee
may file a written claim for benefits with the
Committee, provided that such claim is filed within 60
days of the date the Participant, Beneficiary or
Alternate Payee receives notification of the
Committee's determination.
(b) Requirements For Notice of Denial
If a claim is wholly or partially denied, the
Committee shall provide the claimant with a notice of
denial, written in a manner calculated to be understood
by the claimant, setting forth:
(1) The specific reason for such denial;
(2) Specific references to the pertinent
provisions of the Plan on which the denial is
based;
(3) A description of any additional material or
information necessary for the claimant to perfect
the claim with an explanation of why such material
or information is necessary; and
(4) Appropriate information as to the steps to
be taken if the claimant wishes to submit his or
her claim for review.
The notice of denial shall be given within a
reasonable time period but no later than 90 days after
the claim is filed, unless special circumstances
require an extension of time for processing the claim.
If such extension is required, written notice shall be
furnished to the claimant within 90 days of the date
the claim was filed stating the special circumstances
requiring an extension of time and the date by which a
decision on the claim can be expected, which shall be
no more than 180 days from the date the claim was
filed. If no notice of denial is provided as herein
described, the claimant may appeal the claim as though
the claim had been denied.
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<PAGE>
(c) Claimant's Rights if Claim Denied
The claimant and/or his representative may appeal the
denied claim and may:
(1) Request a review upon written application
to the Committee;
(2) Review pertinent documents; and
(3) Submit issues and comments in writing;
provided that such appeal is made within 60 days
of the date the claimant receives notification of
the denied claim.
(d) Time Limit on Review of Denied Claim
Upon receipt of a request for review, the Committee
shall provide written notification of its decision to
the claimant stating the specific reasons and
referencing specific plan provisions on which its
decision is based, within a reasonable time period, but
not later than 60 days after receiving the request,
unless special circumstances require an extension for
processing the review. If such an extension is
required, the Committee shall notify the claimant of
such special circumstances and of the date, no later
than 120 days after the original date the review was
requested, on which the Committee will notify the
claimant of its decision.
(e) No Legal Recourse Until Claims Procedure
Exhausted
In the event of any dispute over benefits under this
Plan, all remedies available to the disputing
individual under this Section 12.08 must be exhausted
before legal recourse of any type is sought.
12.09 Committee Indemnification
To the fullest extent permitted by law, the Employer agrees
to indemnify, to defend, and hold harmless the members of
the Committee, individually and collectively, against any
liability whatsoever for any (i) action taken or omitted by
them in good faith in connection with this Plan and Trust or
their duties hereunder, and (ii) expenses or losses for
which they may become liable as a result of any such actions
or non-actions, unless resultant from their own willful
misconduct. The Employer may purchase insurance for the
Committee to cover any of their potential liabilities with
regard to the Plan and Trust.
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<PAGE>
ARTICLE 13. INVESTMENTS AND LOANS
13.01 Investment Authority
The Committee is hereby granted full power and authority to
direct the Trustee to invest and reinvest the Trust Fund or
any part thereof in accordance with the standards set forth
in Article 11. Without limiting the generality of the
foregoing, the Committee may direct the Trustee to invest in
bonds, notes, mortgages, commercial or federal paper,
preferred stock, common stock, or other securities, rights,
obligations or property, real or personal, including shares
and certificates of participation issued by investment
companies or investment trusts. The Committee may direct
the Trustee to acquire and hold common or preferred stock
issued by the Employer if such stock, at the time of
acquisition by the Trustee, constitutes no more than 25
percent of the fair market value of the Trust assets.
13.02 Use of Mutual or Commingled Funds Permitted
The Committee may direct the Trustee to cause any part or
all of the assets of this Trust to be invested in mutual
funds; or commingled with the assets of similar Trusts
qualified under sections 401(a) and 501(a) of the Code, by
causing such assets to be invested as part of a common fund
of the Trustee or other fiduciary. To the extent that Trust
assets are invested in any collective investment fund
established and maintained by the Trustee for which the
Trust is eligible, the declaration of trust establishing
such funds is hereby adopted, and it is incorporated herein
by this reference. Any assets of the Trust that are
invested in any such fund will be held and administered by
the Trustee under the terms of the fund's governing
instrument.
13.03 Trustees May Hold Necessary Cash
The Committee may authorize the Trustees to hold in a cash
or in a cash equivalent account such portion of the Trust
Fund as may be deemed necessary for the ordinary
administration of the Trust and disbursement of funds. Such
funds may be deposited in any bank or savings and loan
institution, subject to the rules and regulations governing
such deposits.
13.04 Trustees to Act Upon Committee Instruction
The Trustees shall make investments promptly upon receiving
instructions from the Committee, and shall retain such
investment until instructed differently by the Committee.
The Trustees shall comply promptly with instructions from
the Committee to sell, convey, exchange, transfer, pledge,
mortgage or otherwise dispose of or encumber any real or
personal property held by it. To the extent permitted by
law, the Trustees shall not be liable for the making of any
investment at the direction of the Committee, for the
retention of any such investment in the absence of
directions from the Committee to dispose of it, or for the
disposal or encumbrance of any investment at the direction
of the Committee.
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<PAGE>
13.05 Appointment of Investment Manager
The power of the Committee to direct, control or manage the
investment of the Trust Fund may be delegated to an
investment manager appointed by the Committee. Such
investment manager, if appointed, must acknowledge in
writing that he is a fiduciary with respect to the Trust
Fund and shall then have the power to manage, acquire, or
dispose of any asset of the Trust Fund. An investment
manager must be a person who is (i) registered as an
investment advisor under the Investment Advisors Act of
1940; (ii) a bank, as defined in that Act; or (iii) an
insurance company qualified to perform such services under
the laws of more than one state. If an investment manager
has been appointed, the Trustee shall neither be liable for
acts or omissions of such investment manager nor be under
any obligation to invest or otherwise manage any asset of
the Trust Fund. The Committee shall not be liable for any
act or omission of the investment manager in carrying out
such responsibility, except to the extent that the Committee
violated Section 11.02 of this Trust Agreement with respect
to:
(a) Such designation;
(b) The establishment or implementation of the
procedures for the designation of an investment
manager; or
(c) Continuing the designation, in which case the
Committee would be liable in accordance with Section
11.03.
13.06 No Loans Permitted
No loans to a Participant or Beneficiary from any portion of
the Participant's Account shall be permitted.
46
<PAGE>
ARTICLE 14. TRUSTEE
14.01 Trustees Duties
The duties of the Trustees shall be confined to receiving
and paying funds of the Trust, safeguarding and valuing
Trust assets, investing and reinvesting the Trust Funds as
provided in Article 13, and carrying out the directions of
the Committee or of the investment manager if one has been
appointed pursuant to Section 13.05. The directions of the
Committee shall be in writing and bear the signature of one
or more members designated as its authorized signator or
signators, as provided in Section 12.02. The directions of
an investment manager shall be in writing or in such other
form as is acceptable to the Trustee. The Employer may,
however, by resolution, authorize the Trustees to act with
respect to any specific matter or class of matters without
direction of the Committee and, in that event, delivery to
the Trustees of a certified copy of such resolution shall
authorize the Trustee so to act. The signature of one
Trustee shall be binding upon all co-Trustees.
14.02 Indicia of Ownership Must Be in United States
The Trustees shall not maintain the indicia of ownership of
any Trust assets outside the jurisdiction of the district
courts of the United States, except as authorized by
regulations issued by the Department of Labor.
14.03 Permissible Trustees Action
In the discharge of its duties, the Trustees have all the
powers, authority, rights and privileges of an absolute
owner of the Trust Fund and, not in limitation of but in
amplification of the foregoing, may (i) receive, hold,
manage, invest and reinvest, sell, exchange, dispose of,
encumber, hypothecate, pledge, mortgage, lease, grant
options respecting, repair, alter, insure, or distribute any
and all property in the Trust Fund; (ii) borrow money,
participate in reorganizations, pay calls and assessments,
vote or execute proxies, exercise subscription or conversion
privileges and register in the name of a nominee any
securities in the Trust Fund; (iii) renew, extend the due
date, compromise, arbitrate, adjust, settle, enforce or
foreclose by judicial proceedings or otherwise or defend
against the same, any obligations or claims in favor of or
against the Trust Fund; (iv) exercise options, employ
agents; and, (v) whether herein specifically referred to or
not, do all such acts, take all such actions and proceedings
and exercise all such rights and privileges as if the
Trustee were the absolute owner of any and all property in
the Trust Fund. The Trustees have no authority or duty to
determine the amount of the Employer contribution or to
enforce the payment of any Employer contribution to it.
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14.04 Trustee's Fees For Services and Advisors Retained
The Trustee's fees for its services as Trustee shall be an
amount mutually agreed upon by the Employer and the Trustee,
and such fees shall be paid by the Trust Fund, with the
exception that individual Trustees shall serve without
compensation for their service as such. However, with the
approval of the Employer, the Trustees may from time to time
or on a continuing basis, retain such agents or advisors,
including specifically accountants, attorneys, investment
counsel and administrators, as they consider necessary to
assist them in the proper performance of their duties. The
expenses of such agents or advisors and all other expenses
of the Trustees shall be paid by the Trust, to the extent
not paid by the Employer.
14.05 Annual Accounting and Asset Valuation
Within a reasonable period following the close of each Plan
Year, the Trustees shall render to the Employer an
accounting of its administration of the Trust during the
preceding year. The Trustees shall also report to the
Committee regarding determinations of the value of the Trust
Fund, as provided in Sections 7.01 and 7.02.
Notwithstanding any other provisions of this Agreement, if
the Trustees finds that the Trust Fund consists, in whole or
in part, of property not traded freely on a recognized
market or that information necessary to ascertain the fair
market value thereof is not readily available to the
Trustees, the Trustees shall request the Committee to
instruct the Trustees as to the fair market value of such
property for all purposes under the Plan and Trust
Agreement. In such event, the fair market value placed upon
such property by the Committee in its instructions to the
Trustees shall be conclusive and binding. If the Committee
fails or refuses to instruct the Trustees as to the fair
market value of such property within a reasonable time after
receipt of the Trustee's request so to do, the Trustees
shall take such action as is required to ascertain the fair
market value of such property including the retention of
such counsel and independent appraisers as it considers
necessary; and in such event the fair market value so
determined shall be conclusive and binding.
14.06 Trustee Removal or Resignation
The Trustees may resign at any time upon 30 days written
notice to the Employer and the Committee or such shorter
period as may be agreeable to the Employer. Upon receipt of
instructions or directions from the Employer or the
Committee with which the Trustees are unable or unwilling to
comply, the Trustees may resign upon written notice to the
Employer and the Committee, given within a reasonable time
under the circumstances then prevailing. After its
resignation, the Trustees have no liability to the Employer,
the Committee, or any person interested herein for failure
to comply with any instructions or directions. The Employer
may remove the Trustees without cause at any time upon 30
days written notice. In case of resignation or removal of
the Trustees, the said Trustees shall have the right of a
settlement of its accounts, which may be made at the option
of the Trustees, either by judicial settlement in an action
in a court of competent jurisdiction or by agreement of
settlement between the Trustees and the Employer. The
Trustees shall not be required to transfer assets of the
Trust Fund to a successor Trustee under Section 14.08, or
otherwise until its accounts have been settled.
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14.07 Approval of Trustees Accounting
The written approval of any Trustees accounting by the
Employer or Committee shall be final as to all matters and
transactions stated or shown therein and binding upon the
Employer, Committee, and all persons who then shall be or
thereafter shall become interested in this Trust. Failure
of the Employer or Committee to notify the Trustees within
90 days after receipt of any accounting of its disapproval
of such accounting shall be the equivalent of written
approval.
14.08 Trust Not Terminated Upon Trustees Removal or Resignation
Resignation or removal of the Trustees shall not terminate
the Trust. In the event of a vacancy in the trusteeship of
this Trust occurring at any time, the Employer shall appoint
a successor Trustee to take the place of any Trustee who has
died, resigned or been removed. In the event of the death,
resignation or removal of a Trustee and the failure of the
Employer to appoint a successor within 30 days as herein
provided, the remaining Trustees may, by unanimous vote,
either select a successor Trustee or choose to function
without filling such vacancy. Any such successor Trustee
has all the powers and duties herein conferred upon the
original Trustee. The title to all Trust property shall
automatically vest in a successor Trustee without the
execution or filing of any instrument or the doing of any
act, but the resigning or removed Trustee shall,
nevertheless, execute all instruments and do all acts that
would otherwise be necessary to vest such title in any
successor. The appointment of a successor Trustee may be
effected by amendment to this Trust Agreement or by a board
resolution of the Employer, with the agreement of the
successor Trustee to act as such being evidenced by its
execution of such amendment or acceptance of such board
resolution.
14.09 Trustees May Consult With Legal Counsel
The Trustees may consult with legal counsel (who may or may
not be counsel to the Employer) concerning any question that
may arise with reference to its duties under this Agreement.
14.10 Trustees Not Required to Verify Identification or
Addresses
The Trustees shall not be required to make any investigation
to determine the identity or mailing address of any person
entitled to benefits under this Agreement and shall be
entitled to withhold making payments until the identity and
mailing address of any person entitled to benefits are
certified by the Committee. In the event that any dispute
arises as to the identity or rights of persons entitled to
benefits hereunder, the Trustees may withhold payment of
benefits until such dispute has been determined by a court
of competent jurisdiction or has been settled by written
stipulation of the parties concerned.
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14.11 Individual Trustee Rules
The action of individual Trustees shall be determined by the
vote or other affirmative expression of the majority
thereof, and they shall designate one of their members to
keep a record of their decision on matters to be determined
hereunder and of all dates, documents and other matters
pertaining to their administration of this Trust. However,
no Trustee who is a Participant shall vote on any action
relating specifically to himself, and in the event the
remaining Trustees by majority vote thereof are unable to
come to a determination of any such question, the matter
shall be decided by the Employer.
14.12 Indemnification of Trustee and Insurance
To the fullest extent permitted by law, the Employer agrees
to indemnify, to defend, and to hold harmless the Trustees,
individually and collectively, against any liability
whatsoever for any action taken or omitted by such Trustees
in good faith in connection with this Plan and Trust or
duties hereunder and for any expenses or losses for which
the Trustees may become liable as a result of any such
actions or non-actions unless resultant from willful
misconduct. The Employer may purchase insurance for the
Trustees to cover any of their potential liabilities with
regard to the Plan and Trust.
14.13 Income Tax Withholding
In making payments from the Trust, the Trustees shall be
liable for federal income tax withholding, and shall
withhold the appropriate amount of tax, if any, as provided
by applicable law and regulation, from any payment made to a
Participant, Beneficiary or Alternate Payee, unless the
Committee does not provide the Trustees with the necessary
information as set forth in regulations, in which case the
Committee shall assume all relevant liability.
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ARTICLE 15. AMENDMENT, TERMINATION AND MERGER
15.01 Trust is Irrevocable
The Trust shall be irrevocable but shall be subject to
amendment and termination as provided in this Article 15.
15.02 Employer May Amend Trust Agreement
The Employer reserves the right to amend this Trust
Agreement to any extent and in any manner that it may deem
advisable by action of the Employer. The Employer, the
Trustee, all Participants, their Beneficiaries and all other
persons having any interest hereunder shall be bound by any
such amendment; provided, however, that no amendment shall:
(a) Cause or permit any part of the principal or
income of the Trust to revert to the Employer or to be
used for, or be diverted to, any purpose other than the
exclusive benefit of Participants or their
Beneficiaries;
(b) Change the duties or liabilities of the Trustee
without its written assent to such amendment;
(c) Adversely affect the then accrued benefits of
any Participants; or
(d) Eliminate an optional form of distribution for
Account balances accrued before such amendment, except
as allowed under the Code.
15.03 Employer May Terminate Plan or Discontinue Profit Sharing
Contributions
The Employer has established the Plan with the bona fide
intention and expectation that the Plan will continue
indefinitely and that it will be able to make its profit
sharing contributions indefinitely, but the Employer shall
be under no obligation to continue to maintain its Profit
Sharing Contributions nor to maintain the Plan for any given
length of time. The Employer may, in its sole discretion,
completely discontinue its contributions or terminate the
Plan at any time without any liability whatsoever. In the
event of the earlier of (i) the termination of the Plan, or
(ii) the complete discontinuance of profit sharing
contributions hereunder, the full value of the applicable
Accounts of all Participants of the terminated Plan shall
become fully vested and nonforfeitable. In the event of
partial termination of the Plan, the full value of the
applicable Accounts of the Participants involved in the
partial termination shall become fully vested and
nonforfeitable.
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15.04 Timing of Plan Termination
The Plan shall terminate (i) upon the date specified in a
written notice of such termination, executed by the Employer
and delivered to the Trustee; or (ii) on the earlier of (A)
the complete accomplishment of all purposes for which the
Plan was created, or (B) the death of the last person
entitled to receive any benefits hereunder who is living at
the date of execution of the Trust Agreement. However, if,
upon the death of such last survivor, the Trust may continue
for a longer period without violation of any law of the
jurisdiction to which the Trust is subject, the Trust shall
not be terminated upon the death of such last survivor but
shall continue until the complete accomplishment of all the
purposes for which the Plan and Trust are created, unless
sooner terminated under the other provisions hereof.
15.05 Action Required Upon Plan Termination
Upon the termination of this Plan and after payment of all
expenses of the Trust, including any compensation then due
the Trustee and agents of the Committee, the Trust assets
and all Participants' Accounts shall be revalued according
to the procedures provided in Article 7. Limitation
Accounts held pursuant to Article 5 shall be allocated as of
the date the Plan is terminated in accordance with Articles
4 and 5. Suspense Accounts shall be allocated to the
Accounts of the Participants for whom they were established,
to the extent permissible under the Code. The Trustee shall
hold and distribute such Accounts as directed by the
Committee in accordance with the provisions of Article 9.
Upon such termination, if the Employer has ceased to exist,
all rights, powers, and duties to be exercised or performed
by the Employer shall thereafter be exercised or performed
by the Committee, including the filling of vacancies on the
Committee and the amending of the Plan. In the event the
Committee is unable to perform, all rights, powers and
duties shall be performed by the Trustee.
15.06 Nonreversion of Assets
Except as provided in Section 4.02(c), in no event shall any
part of the principal or income of the Trust revert to the
Employer or be used for or diverted to any purpose other
than the exclusive benefit of Participants or their
Beneficiaries.
15.07 Merger or Consolidation Cannot Reduce Benefits
In no event shall this Plan be merged or consolidated with
any other plan, nor shall there be any transfer of assets or
liabilities from this Plan to any other plan unless
immediately after such merger, consolidation or transfer,
each Participant's benefits, if such other plan were then to
terminate, are at least equal to or greater than the
benefits which the Participant would have been entitled to
had this Plan been terminated immediately before such
merger, consolidation or transfer.
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ARTICLE 16. ASSIGNMENTS
16.01 No Assignment
Except as provided below, the interest herein of any
Participant, former Participant or Beneficiary, whether
vested or not, shall not be subject to alienation,
assignment, pledging, encumbrance, attachment, garnishment,
execution, sequestration, or other legal or equitable
process, or transferability by operation of law in the event
of bankruptcy, insolvency or otherwise.
16.02 Qualified Domestic Relations Order Permitted
The provisions of Section 16.01 above shall not prevent the
creation, assignment or recognition of any individual's
right to a benefit payable with respect to a Participant
pursuant to a Qualified Domestic Relations Order ("QDRO").
The Committee shall direct that payments under a QDRO be
made by the Trustee pursuant to the QDRO.
(a) Not All Domestic Relations Orders Qualify as
QDROs
The Committee shall establish reasonable, timely
procedures (i) to determine whether a domestic
relations order is a QDRO and (ii) to notify affected
parties as specified in section 414(p)(6) of the Code.
(b) Payments May Occur Before Termination of Service
The Plan may make benefit payments to an Alternate
Payee under a QDRO before the Participant's termination
of Service, and any such payment shall be made no
earlier than the date specified in the QDRO, or in
accordance with sections 414(p)(3), (4) and (5) of the
Code.
(c) Separate Accounting of Alternate Payee's Account
During any period in which the issue of whether a
domestic relations order is a QDRO is being determined
by the Committee, a court of law or otherwise, the
Committee shall separately account for the amounts
(with investment income and loss) that are involved.
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ARTICLE 17. ADOPTION OF THE PLAN BY AFFILIATED EMPLOYERS
17.01 General
The purpose of this Article 17 is to describe the terms and
conditions under which an Affiliated Employer may adopt and
become a Member Employer under this Plan for the benefit of
its Eligible Employees.
17.02 Written Consent Required
Any Affiliated Employer may, with the written consent of the
Employer, become a Member Employer under this Plan by
executing a Subscription Agreement under which it shall
agree:
(a) To be bound by all the provisions of the Plan in
the manner set forth herein;
(b) To pay its share of the expenses of the Plan as
they may be determined from time to time in the manner
specified in this Article 17; and
(c) To provide the Employer and the Committee with
full, complete and timely information on all matters
necessary to them in the operation of this Plan.
17.03 Rights of Member Employer
In the event of the adoption of this Plan by an Affiliated
Employer, the following shall apply with respect to the
participation of such Affiliated Employer as a Member
Employer hereunder:
(a) All the terms and conditions of the Plan as set
forth in the preceding Articles 1 through 16 shall
apply to the participation of such Affiliated Employer
and its Employees in the same manner as set forth for
the Employer and its Employees, except as follows:
(1) The right to designate an Affiliated
Employer is specifically reserved to the Employer.
(2) The right to appoint the Administrative
Committee is specifically reserved to the Employer
so long as the Employer participates under the
Plan; provided that a Member Employer may appoint
an Advisory Committee of such composition and size
as it may determine to advise the Committee on any
matters affecting such member Employer or its
Employees who are Participants under the Plan.
The Committee shall be entitled to rely on any
information furnished it by any such Advisory
Committee in the same manner as if furnished by
the Member Employer appointing such Advisory
Committee, but in no event shall the existence of
any such Advisory Committee modify or otherwise
limit any of the powers of duties of the Committee
under the Plan.
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(3) The right to direct, appoint remove,
approve the Accounts of or otherwise deal with the
Trustee is specifically reserved to the Employer
so long as the Employer participates under the
Plan.
(4) The right to amend the Plan is specifically
reserved to the Employer so long as the Employer
participates under the Plan, and any such
amendment, unless otherwise specified therein,
shall be fully binding with respect to the
participation of any Member Employer, provided
that this reservation shall in no event be
construed to prevent any Member Employer from
terminating at any time its participation as a
Member Employer in this Plan.
(b) In the operation of the Plan with respect to a
Member Employer, the term "effective date" shall mean
the effective date set forth in this Agreement or such
other date as specified in such Member Employer's
Subscription Agreement, as appropriate to the
particular circumstances.
17.04 Member Employer May Terminate Participation
Any Member Employer may at any time elect to terminate its
participation in this Plan, or the Employer or any Member
Employer may elect at any time by appropriate amendment or
action affecting only its own status hereunder to
disassociate itself from this Plan but to continue the Plan
as it pertains to itself and its Employees as an entity
separate and distinct from this Plan if otherwise permitted
by law. Termination of the participation of any Member
Employer and/or the Employer shall not affect the
participation of any other Member Employer and/or the
Employer nor terminate the Plan with respect to them and
their Employees; provided that, if the Employer terminates
its participation, or disassociates itself, then each
remaining Member Employer shall make such arrangement and
take such action as may be necessary to assume the duties of
the Employer in providing for the operation and continued
administration of the Plan and Trust as the same pertains to
the Member Employer.
17.05 Member Employer Liability
Each Member Employer shall be liable for and shall pay at
least annually to the Employer its fair share of the
expenses of operating the Plan. The amount of such charges
to each Member Employer shall be determined by the Committee
in its sole discretion; provided that, except with respect
to charges incurred solely on account of a Member Employer's
segregated transaction, no Member Employer shall be charged
with a greater proportion of any expenses of Plan operation
than the ratio that the number of Participants who are or
were its Employees bears to the total of all Participants.
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EXECUTION OF PLAN AND TRUST AGREEMENT
This amendment and restatement of the Bio-Rad Laboratories, Inc.
Employees' Deferred Profit Sharing Retirement Plan and the Trust
Agreement related thereto, is hereby executed this 21st day
of December, 1994.
TRUSTEES: BIO-RAD LABORATORIES, INC.:
/s/ David Schwartz /s/ David Schwartz
David Schwartz (Signature)
/s/ James Viglienzone President
James Viglienzone (Title)
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