<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------------------
FORM 10-Q
(Mark One)
[X] Quarterly report under Section 13 or 15(d) of the Securities
Exchange Act of 1934. For the quarterly period ended
September 30, 1998, or
[ ] Transition report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934. For the transition period
from __________ to __________.
Commission File Number: 0-4791
PAUL MUELLER COMPANY
- ----------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Missouri
- ----------------------------------------------------------------------
(State or other jurisdiction of incorporation or organization)
44-0520907
- ----------------------------------------------------------------------
(I.R.S. Employer Identification No.)
1600 W. Phelps Street, P.O. Box 828, Springfield, Missouri 65801-0828
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (417) 831-3000
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(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the Registrant (1) has filed all re-
ports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such
shorter period that the Registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90
days. Yes [X] No [ ]
Indicate the number of shares outstanding of the issuer's Common Stock
as of November 2, 1998: 1,168,021
<PAGE> 2
PART I - FINANCIAL INFORMATION
The condensed financial statements included herein have been prepared
by the Company without audit, pursuant to the rules and regulations
of the Securities and Exchange Commission. Certain information and
footnote disclosures normally included in the financial statements,
prepared in accordance with generally accepted accounting principles,
have been condensed or omitted pursuant to such rules and regulations,
although the Company believes that the disclosures are adequate to
make the information presented not misleading. It is suggested that
these condensed financial statements be read in connection with the
financial statements and the notes thereto included in the Company's
latest annual report on Form 10-K. This report reflects all adjust-
ments of a normal recurring nature which are, in the opinion of man-
agement, necessary for a fair statement of the results for the interim
period.
2
<PAGE> 3
PAUL MUELLER COMPANY AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
(Dollars in Thousands)
(Unaudited)
<TABLE>
<CAPTION>
Sept. 30 Dec. 31
1998 1997
-------- --------
<S> <C> <C>
ASSETS
Current Assets:
Cash $ 2,537 $ 3,402
Available-for-sale investments, at market 8,248 8,347
Accounts and notes receivable, less reserve
of $736 at September 30, 1998, and $559
at December 31, 1997, for doubtful accounts 12,989 16,113
Inventories (Note 2) -
Raw materials and components $ 6,126 $ 5,101
Work-in-process 3,343 1,728
Finished goods 2,864 1,203
-------- --------
$ 12,333 $ 8,032
Prepayments 1,042 475
-------- --------
Total Current Assets $ 37,149 $ 36,369
Other Assets 3,377 3,523
Property, Plant & Equipment, at cost $ 58,041 $ 54,313
Less - Accumulated depreciation 39,279 37,658
-------- --------
$ 18,762 $ 16,655
-------- --------
$ 59,288 $ 56,547
======== ========
LIABILITIES AND SHAREHOLDERS' INVESTMENT
Current Liabilities:
Accounts payable $ 4,026 $ 4,296
Accrued expenses 7,744 6,249
Advance billings 5,507 5,225
-------- --------
Total Current Liabilities $ 17,277 $ 15,770
Other Long-Term Liabilities 935 1,100
Contingencies (Note 4)
Shareholders' Investment:
Common Stock, par value $1 per share --
Authorized 20,000,000 shares --
Issued 1,342,325 shares $ 1,342 $ 1,342
Preferred Stock, par value $1 per share --
Authorized 1,000,000 shares --
No shares issued - -
Paid-in surplus 4,307 4,307
Retained earnings 37,981 36,582
-------- --------
$ 43,630 $ 42,231
Less - Treasury stock, 174,304 shares at
September 30, 1998, and December 31, 1997,
at cost 2,554 2,554
-------- --------
$ 41,076 $ 39,677
-------- --------
$ 59,288 $ 56,547
======== ========
</TABLE>
The accompanying notes are an integral part of these balance sheets.
3
<PAGE> 4
PAUL MUELLER COMPANY AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(Dollars in Thousands Except Per Share Amounts)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30 September 30
------------------ ------------------
1998 1997 1998 1997
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Net Sales $ 25,126 $ 23,404 $ 67,360 $ 62,480
Cost of Sales 19,156 18,418 49,722 47,864
-------- -------- -------- --------
Gross Profit $ 5,970 $ 4,986 $ 17,638 $ 14,616
Selling, General and
Administrative Expenses 4,453 4,217 12,973 12,351
-------- -------- -------- --------
Operating Income $ 1,517 $ 769 $ 4,665 $ 2,265
Other Income (Expense):
Interest income $ 103 $ 172 $ 297 $ 548
Interest expense (2) (2) (12) (7)
Other, net 7 (529) 169 (205)
-------- -------- -------- --------
$ 108 $ (359) $ 454 $ 336
-------- -------- -------- --------
Income from Operations before
Provision for Income Taxes $ 1,625 $ 410 $ 5,119 $ 2,601
Provision for Income Taxes 508 50 1,617 758
-------- -------- -------- --------
Net Income $ 1,117 $ 360 $ 3,502 $ 1,843
======== ======== ======== ========
Earnings per
Common Share (Note 3) $ 0.96 $ 0.31 $ 3.00 $ 1.58
====== ====== ====== ======
</TABLE>
The accompanying notes are an integral part of these statements.
4
<PAGE> 5
PAUL MUELLER COMPANY AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(Dollars in Thousands)
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended
September 30
--------------------
1998 1997
-------- --------
<S> <C> <C>
Cash Flows from Operating Activities:
Net income $ 3,502 $ 1,843
Adjustments to reconcile net income to net
cash provided by operating activities:
Bad debt (recovery) (5) (24)
Depreciation and amortization 1,932 1,692
(Gain) on sales of fixed assets (7) (9)
Changes in assets and liabilities -
Decrease in interest receivable 83 57
Decrease (increase) in accounts
and notes receivable 3,129 (1,578)
(Increase) in inventory (4,301) (5,423)
(Increase) in prepayments (567) (143)
Decrease (increase) in other assets 103 (57)
(Decrease) increase in accounts payable (270) 1,859
Increase in accrued expenses 1,495 869
Increase in advance billings 282 2,504
(Decrease) in long-term liabilities (165) (224)
-------- --------
Net Cash Provided by Operations $ 5,211 $ 1,366
Cash Flows Provided (Requirements) from
Investing Activities:
Proceeds from maturities of investments $ 10,485 $ 12,990
Purchases of investments (10,469) (10,305)
Proceeds from sale of equipment 9 12
Additions to property, plant and equipment (3,999) (2,719)
-------- --------
Net Cash (Required) from
Investing Activities $ (3,974) $ (22)
Cash Flows (Requirements) from
Financing Activities:
Dividends paid $ (2,102) $ (2,102)
-------- --------
Net Cash (Required) by
Financing Activities $ (2,102) $ (2,102)
-------- --------
Net (Decrease) in Cash $ (865) $ (758)
Cash at Beginning of Period 3,402 2,221
-------- --------
Cash at End of Period $ 2,537 $ 1,463
======== ========
Supplemental Disclosures of Cash Flow Information:
Cash paid during the period for:
Interest $ 14 $ 9
Income taxes 1,372 1,534
</TABLE>
The accompanying notes are an integral part of these statements.
5
<PAGE> 6
PAUL MUELLER COMPANY AND SUBSIDIARIES
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 1998 AND 1997
(Unaudited)
1. The condensed financial statements include the accounts of Paul
Mueller Company (Company) and its wholly owned subsidiaries,
Mueller International Sales Corporation, Mueller Transportation,
Inc., and Mueller Field Operations, Inc. A summary of the signi-
ficant accounting policies is included in Note 1 to the consoli-
dated financial statements included in the Company's annual report
on Form 10-K for the year ended December 31, 1997.
2. Inventory is recorded at the lower of cost, last-in, first-out
(LIFO), or market.
Because the inventory determination under the LIFO method can only
be made at the end of each fiscal year based on the inventory
levels and costs at that time, interim LIFO determinations, in-
cluding those at September 30, 1998, must necessarily be based on
management's estimate of expected year-end inventory levels and
costs. Since estimates of future inventory levels and prices are
subject to many factors beyond the control of management, interim
financial results are subject to final year-end LIFO inventory
amounts. Accordingly, inventory components reported for the
period ending September 30, 1998, are estimates based on manage-
ment's knowledge of the Company's production cycle, the costs
associated with this cycle, and the sales and purchasing volume
of the Company.
3. The net income per share of common stock has been computed on
the basis of weighted average shares outstanding: 1,168,021 for
periods ended September 30, 1998, and September 30, 1997. There
are no dilutive securities.
4. The Company was the defendant in a breach-of-contract/breach-
of-warranty lawsuit concerning reactor vessels sold in 1992
in Tarrant County, Texas (Alcon Laboratories, Inc. versus Paul
Mueller Company). As a result of a trial that ended September 19,
1997, the Company received an adverse decision, and the final
judgment awarded damages, interest, and attorney's fees totaling
$1,700,000 to the plaintiff. Management believes the decision
was incorrect and, based on the advice of legal counsel, has
appealed the decision. As a result of the decision, a provision
of $775,000 was made during the third quarter of 1997 for the ul-
timate resolution of the matter; the related reserve is included
as accrued expenses on the Consolidated Condensed Balance Sheets.
If the decision is upheld on appeal, the Company's liability will
exceed the reserve.
The Company is a defendant in another lawsuit pending at Septem-
ber 30, 1998. In the opinion of management, after consultation
with legal counsel, the outcome of this lawsuit will not have a
material adverse effect on the Company's consolidated financial
statements.
The Company currently employs approximately 880 people, of which
nearly 400 are represented by the Sheet Metal Workers Union. The
International Union called a strike beginning July 25, 1995, and
currently 20 employees are participating.
6
<PAGE> 7
PAUL MUELLER COMPANY AND SUBSIDIARIES
MANAGEMENT'S ANALYSIS OF OPERATING RESULTS
AND FINANCIAL CONDITION
The following is Management's Discussion and Analysis of the signifi-
cant factors which have affected the Companies' earnings during the
periods included in the accompanying Consolidated Condensed State-
ments of Income.
The information discussed below in Management's Discussion and Analy-
sis of Operating Results and Financial Condition contains statements
regarding matters that are not historical facts, but rather are
forward-looking statements. These statements are based on current
financial and economic conditions and current expectations, and
involve risk and uncertainties. Actual future results may differ
materially depending on a variety of factors. These factors, some
of which are identified in the discussion accompanying such forward-
looking statements, include, but are not limited to, milk prices
paid to dairy farmers, feed prices, weather conditions, dairy farm
consolidation and other factors affecting the profitability of dairy
farmers, the price of stainless steel, actions of competitors, labor
strife, the Company's execution of internal performance plans and
plans to become Year 2000 compliant, economic conditions in key ex-
port markets, the level of capital expenditures in the U.S. economy,
and other changes to business conditions.
OPERATING RESULTS
Net sales for the three months ended September 30, 1998, were
$25,126,000 versus $23,404,000 for the three months ended September
30, 1997. Both Processing Equipment and Dairy Farm Equipment sales
were higher during the third quarter of 1998 compared to the third
quarter of 1997, with 80% of the improvement attributable to Pro-
cessing Equipment. The improvement in Processing Equipment was
primarily attributable to shipments of custom-fabricated Beverage
Equipment to an international customer. Higher sales of Dairy Farm
Equipment were related to the domestic market, as export shipments
declined approximately 20% from the third quarter of 1997. Domes-
tically, higher milk prices and lower feed costs contributed to the
improvement in Dairy Farm Equipment sales, while export shipments
lagged due principally to the continuing effects of a strong dollar
in key markets, coupled with economic problems in Asia and other
foreign markets.
The gross profit rate for the quarter ended September 30, 1998, was
23.8% versus 21.3% for the comparable quarter of the prior year. The
higher gross profit rate was due to increased sales volume, coupled
with higher gross margins principally in custom-fabricated Processing
Equipment. Gross margins were higher due to a higher-quality backlog
and better labor efficiency in the factory as a result of a favorable
workload level and improvements in the manufacturing processes.
Selling, general, and administrative expenses were $236,000 higher
for the third quarter of 1998 versus the third quarter of 1997.
Costs were higher for personnel, incentives, advertising, sales pro-
motions, and product development.
With respect to Other Income (Expense) for the third quarter ended
September 30, 1998, interest income decreased due to a lower level
of investable funds available and a lower overall average interest
rate during the third quarter of 1998 versus the comparable period
in 1997. During the third quarter of 1997, a provision of $775,000
was recorded as the result of an adverse legal decision, which is on
7
<PAGE> 8
appeal and is discussed below and in Note 4 to the Condensed Finan-
cial Statements. This is the primary reason for the significant
change in Other, net when comparing 1998 to 1997.
The effective tax rate for the third quarter of 1998 and 1997 varied
from the statutory tax rate (34%) primarily as a result of tax-exempt
interest and the lower effective rate for the Foreign Sales Corpora-
tion.
Net sales for the nine months ended September 30, 1998, were
$67,360,000 versus $62,480,000 for the comparable period in 1997.
Processing Equipment sales were higher by $6,282,000, while Dairy
Farm Equipment sales were lower by $1,402,000. The increase in sales
of Processing Equipment was exclusively due to custom-fabricated
Processing Equipment, as the backlog was 30% higher at the beginning
of 1998 than at the beginning of 1997. Also, order entry for all
Processing Equipment products for the first nine months of 1998 was
$2,100,000 higher than during the first nine months of 1997. Lower
sales were recorded for Dairy Farm Equipment for the nine months
ended September 30, 1998, as compared to the same period of a year
ago, with about 90% of the variance occurring in export sales. The
decline in domestic sales of Dairy Farm Equipment occurred in the
first half of 1998 and was the result of a lower backlog at December
31, 1997, compared to December 31, 1996, coupled with soft market
conditions due to relatively low milk prices, unfavorable weather
conditions, and concerns about feed costs and the government's in-
volvement in the domestic milk market. Lower export sales of Dairy
Farm Equipment are attributable to a lower backlog going into 1998
and the continuing effects of a strong U.S. dollar in key markets,
coupled with economic problems in Asia and other foreign markets.
The gross profit rate for the nine months ended September 30, 1998,
was 26.2% compared to 23.4% for the same period of a year ago. Im-
rovement in the gross profit rate was a result of the higher volume
of shipments coupled with higher gross margins. The higher gross
margins related to custom-fabricated Processing Equipment, as the
quality of the backlog was higher and factory labor efficiency
improved due to a favorable workload level and improvements in the
manufacturing process.
Selling, general, and administrative expenses were higher for the
first nine months ended September 30, 1998, over the comparable
period of a year ago by $622,000. The increase was due to person-
nel costs, incentives, sales meeting expense, travel, and product
development activities.
With respect to Other Income (Expense), interest income was lower for
the first nine months of 1998 compared to the first nine months of
1997, as the level of investable funds and the average interest rate
were both lower. Other, net was $169,000 for the first nine months
of 1998 versus an expense of $205,000 for the first nine months of
1997. The significant difference was the provision of $775,000 made
during the third quarter of 1997 as the result of an adverse legal
decision discussed below.
The effective tax rate for the nine months ended September 30, 1998
and 1997, varied from the statutory tax rate (34%) primarily as a
result of tax-exempt interest and the lower effective rate for the
Foreign Sales Corporation.
As previously reported, the labor contract with the Sheet Metal
Workers Union (which covers a portion of the employees at the Spring-
field, Missouri, plant) expired on June 11, 1994. Negotiations with
union representatives continued until an impasse was reached, and the
Company implemented specific provisions of its final offer effective
September 19, 1994. In November 1994, the Regional Director of the
National Labor Relations Board (NLRB) also concluded that a lawful
impasse had been reached in negotiations prior to the Company's im-
plementation of its offer.
8
<PAGE> 9
However, on December 22, 1994, the Regional Director of the NLRB
issued an unfair labor practice complaint against the Company for
refusing to supply information to union representatives about the
personal health insurance claims of individual employees and their
dependents and reversed his previous decision regarding the imple-
mentation of changes in wages and benefits. A hearing on these and
other unfair labor practice issues was held during August 1996 by an
administrative law judge of the NLRB, who ruled against the Company
on some unfair labor practice issues, and the Company and the union
have both appealed the decision to the NLRB. A decision by the NLRB
is not expected for several months, and there can be an appeal from
any NLRB decision, either by the Company or by the union. An addi-
tional hearing was held before an administrative law judge of the
NLRB in November 1997, and the judge ruled against the Company on the
unfair labor practice issues involved. The Company has appealed the
decision to the NLRB. A final determination of all charges pending
may take up to two years; however, management believes, based on an
evaluation by counsel, that there is no material financial exposure
to the Company.
The Company currently employs approximately 880 people, of which
nearly 400 at the Springfield, Missouri, facility are represented
by the Sheet Metal Workers Union. The International Union called a
strike which began on July 25, 1995, and the largest number of em-
ployees participating was approximately 185 during the fourth quarter
of 1995. A substantial number of employees returned to work during
1996, and currently there are only 20 employees participating. No
action has been taken by the union to prevent nonstriking employees
from working.
The Company has implemented the provisions of its revised and final
offer effective April 1, 1996, which remains open for the union's
acceptance, and no further negotiations are scheduled.
The Company has facilities located in Springfield, Missouri, and
Osceola, Iowa. There are approximately 780 employees assigned to
the Springfield facility, and there are an additional 100 employees
at the Osceola facility, none of which are represented by a labor
union.
The Company was the defendant in a breach-of-contract/breach-of-
warranty lawsuit concerning reactor vessels sold in 1992 in Tarrant
County, Texas (Alcon Laboratories, Inc. versus Paul Mueller Company).
As a result of a trial that ended September 19, 1997, the Company
received an adverse decision, and the final judgment awarded damages,
interest, and attorney's fees totaling $1,700,000 to the plaintiff.
Management believes the decision was incorrect and, based on the
advice of legal counsel, has appealed the decision. As a result of
the decision, a provision of $775,000 was made during the third quar-
ter of 1997 for the ultimate resolution of the matter; the related
reserve is included as accrued expenses on the Consolidated Condensed
Balance Sheets. If the decision is upheld on appeal, the Company's
liability will exceed the reserve that has been established.
The Year 2000 issue exists because many computer systems and applica-
tions, including those imbedded in equipment and facilities, use two-
digit rather than four-digit date fields to designate an applicable
year. Any of the Company's computer systems or plant equipment sys-
tems that have time-sensitive software may recognize a date using "00"
as the year 1900 rather than the year 2000. This could result in a
system failure or miscalculation causing a disruption of operations.
Management began the process of assessing the Year 2000 issues in
July of 1997. The AS/400 computer operating system was upgraded in
November 1997 as a result of the need for enhanced functionality,
and it is Year 2000 compliant. The financial software system and
the design engineering system are both Year 2000 compatible, but
the manufacturing software and certain internally developed software
must be modified to make them Year 2000 compliant. The manufacturing
software and certain internally developed software systems have all
9
<PAGE> 10
been examined, and approximately 350 files have been identified that
will require remediation. Fifty-five percent of the files identi-
fied have been remediated, and testing has been performed to verify
that the files are Year 2000 compliant. The files and associated
code are tested in isolation to verify proper performance. After
successful testing, the remediated files are placed into production
with all other files to insure that they perform properly. The reme-
diation and testing of the balance of the files should be completed
by June 30, 1999.
The cost associated with the remediation and testing effort will con-
sist primarily of personnel costs that are expensed as incurred and
funded through operating cash flows. Personnel costs incurred in
1997 for the project were approximately $27,000, and these costs are
estimated to be about $200,000 and $82,000 in 1998 and 1999, respec-
tively. Management has also purchased approximately $30,000 of
software and hardware for the project, which have been capitalized
and are being amortized and depreciated in accordance with Company
policy.
Management is in the process of surveying companies with which it
has important commercial relationships (major vendors and customers)
to insure that their systems are Year 2000 compliant and that there
will be no disruption in the supply of goods or services or disrup-
tion of sales and payments. Management is in the process of asses-
sing its noninformation technology systems within its facilities.
All equipment has been identified and their manufacturers surveyed.
To date, about 75% have confirmed that their equipment is Year 2000
compliant, and follow-up continues on the balance of the manufac-
turers. Management is also monitoring the progress of its outside
suppliers of utilities and phone service to insure that they will be
Year 2000 compliant. The Company's products are Year 2000 compliant,
or Year 2000 compliance is not an issue.
Management does not believe that there is a significant risk of non-
compliant internal systems. Based on internal assessments and the
work completed to date, management believes that the Year 2000 issue
should not pose significant operational problems or have a material
impact on the Company's consolidated financial position, results of
operations, or cash flow. Files that are being remediated are being
put into production, which provides the opportunity to determine any
noncompliance problems. Additionally, a more comprehensive system
test will be performed after all remediation has been completed.
Management believes that any noncompliance from internal systems
would be isolated and could be remedied without a major disruption
of operations.
Management believes that the key risk factors associated with the
Year 2000 are those they cannot directly control, primarily the read-
iness of key suppliers. The failure of a critical third-party vendor
to be Year 2000 compliant could significantly disrupt operations.
Management intends to closely monitor the progress of key vendors as
to their Year 2000 compliance and to assess the potential impact on
the Company. Essential raw materials used in production are normally
stocked, and stocking levels could be increased if there are indica-
tions of potential problems. Additionally, management will identify
alternate sources of supply to insure that there is no disruption in
the flow of materials used in production.
The forecast of cost and the date on which management believes it
will complete its Year 2000 modifications are based on its best es-
timate which, in turn, were based on numerous assumptions of future
events, including continued availability of resources and other
factors. Management cannot be sure that these estimates will be
achieved, and actual results could differ from those anticipated.
Looking to the balance of 1998, there are factors that could affect
the results of operations. If there is expanded employee participa-
tion for an extended period of time in the strike mentioned above,
10
<PAGE> 11
this could have an adverse effect on the level of production and the
ability to secure orders. With respect to international sales, the
effect of the strong dollar, the Asian financial crisis, and economic
problems in other foreign markets may have an adverse effect on order
entry and sales of Dairy Farm Equipment and Processing Equipment.
The price of stainless steel is projected to remain relatively stable
for the balance of 1998, but expectations are for price increases in
1999.
The backlog of sales at September 30, 1998, was $22,600,000 compared
to $28,300,000 at June 30, 1998, and $27,500,000 at September 30,
1997. The September 30, 1998, backlog represents orders that will
be completed and shipped over the next twelve months.
FINANCIAL CONDITION
The consolidated financial condition and the liquidity of the Company
at September 30, 1998, have not changed significantly since December
31, 1997. There are no significant commitments for capital expendi-
tures at September 30, 1998.
11
<PAGE> 12
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
a. Exhibits
Sequentially
Exhibit Numbered
Number Exhibit Page
------ ------------------------------------ --------
[S] [C] [C]
(10) a. Paul Mueller Company Employee
Benefit Plan, amended and re-
stated effective March 22, 1995,
and adopted by the Trustees on
April 14, 1995, was attached as
Exhibit (10), page 10, of the
Company's Form 10-Q for the quar-
ter ended March 31, 1995, and is
incorporated herein by reference.
The First Amendment, adopted by
the Trustees on October 12, 1995,
was attached as Exhibit (10),
page 25, of the Company's Form
10-Q for the quarter ended Septem-
ber 30, 1995, and is incorporated
herein by reference. The Second
Amendment, effective April 1,
1996, and executed on May 15,
1996, was attached as Exhibit
(10), page 11, of the Company's
Form 10-Q for the quarter ended
June 30, 1996, and is incorpo-
rated herein by reference.
1) The Third Amendment, effective
February 1, 1997, was executed
on June 2, 1997............... 13
2) The Fourth Amendment was exe-
cuted on August 5, 1998....... 14
b. Paul Mueller Company Employee
Benefit Plan, amended and re-
stated effective June 1, 1998,
and adopted by the Trustees on
August 5, 1998................... 33
(27) Financial Data Schedule............. 131
b. Reports on Form 8-K -- There were no reports on Form 8-K
filed for the three months ended September 30, 1998.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
PAUL MUELLER COMPANY
DATE: November 2, 1998 /S/ DONALD E. GOLIK
---------------- ------------------------------------------
Donald E. Golik, Senior Vice President and
Chief Financial Officer
12
<PAGE> 13
THIRD AMENDMENT
TO THE
PAUL MUELLER COMPANY EMPLOYEE BENEFIT PLAN
AMENDED AND RESTATED AS OF MAY 22, 1995
Whereas Article VI of the Paul Mueller Company Employee Benefit Plan
(referred to hereafter as the "Plan") provides that the Plan may be
amended by resolution of the Trustees in accordance with the provi-
sions of the Declaration of Trust, be it resolved that the Plan is
amended,as follows:
The Section entitled MEDICAL LIMITATIONS AND EXCLUSIONS of Article III
is amended with respect to benefits paid on or after February 1, 1997,
as follows:
The following sentence is added to exclusion 20) "Treatment of
conduct or behavioral disorders":
However, such treatment which has been precertified
and approved as medically necessary by the Plan's
employee assistance program is covered subject to all
other Plan provisions.
IN WITNESS WHEREOF, the Trustees of the PAUL MUELLER COMPANY EMPLOYEE
BENEFIT PLAN cause this Third Amendment to be duly executed this 2nd
day of June, 1997.
By: /S/ DONALD E. GOLIK By: /S/ GERALD S. MILLER
-------------------------- --------------------------
Donald E. Golik - Trustee Gerald S. Miller - Trustee
By: /S/ MICHAEL W. YOUNG By: /S/ GAIL HENRICHS
-------------------------- --------------------------
Michael W. Young - Trustee Gail Henrichs - Trustee
<PAGE> 14
FOURTH AMENDMENT TO THE
PAUL MUELLER COMPANY EMPLOYEE BENEFIT PLAN
AMENDED AND RESTATED AS OF MARCH 22, 1995
WHEREAS Article VI of the Paul Mueller Company Employee Benefit
Plan (referred to hereafter as the "Plan") provides that the Plan may
be amended by resolution of the Trustees in accordance with the pro-
visions of the Declaration of Trust, be it resolved that the Plan is
amended as follows:
1. The last sentence of Paragraph E) of the Subsection entitled
MEDICAL COVERED CHARGES of Section C MEDICAL CARE COVERAGE of
Article III Benefits is deleted in its entirety.
2. The second paragraph of the Subsection entitled MAXIMUM AMOUNTS
of Section C MEDICAL CARE COVERAGE of Article III Benefits is
deleted and replaced by the following paragraph.
The amount of benefits payable for treatment of alco-
holism, chemical dependency and drug addiction is
further limited to a maximum of $50,000 lifetime.
Coverage for inpatient treatment of nervous or mental
conditions is limited to thirty (30) days per calendar
year and seventy-five (75) days lifetime (all days,
including those prior to January 1, 1998, are counted
toward the lifetime maximum).
3. The following paragraph is added at the end of the Subsection
entitled MAXIMUM AMOUNTS of Section C MEDICAL CARE COVERAGE of
Article III Benefits.
Refer to Paragraph V) of the section entitled COVERED
MEDICAL CHARGES in this Part C for the $1,500 cardiac
rehabilitation services maximum.
4. The following sentence is added at the end of the fourth para-
graph of the Section entitled CONTINUATION COVERAGE of Article II
Eligibility Provisions.
A child born to or placed for adoption with a Participant
who is a Qualified Beneficiary is also a Qualified Benefi-
ciary.
5. The words "or within the first sixty (60) days of Continuation
Coverage" are inserted between the words "Event" and "and" in the
fourth line of the second sentence of the ninth paragraph of the
Section entitled CONTINUATION COVERAGE of Article II Eligibility
Provisions.
6. The words "for the disabled Qualified Beneficiary as well as for
every other Qualified Beneficiary who lost coverage due to the
same Qualifying Event" are inserted between the words "period"
and "will" in the sixth line of the second sentence of the ninth
paragraph of the Section entitled CONTINUATION COVERAGE of Arti-
cle II Eligibility Provisions.
7. The following definitions are added to the Subsection entitled
1
<PAGE> 15
MEDICAL CARE DEFINITIONS of Section C MEDICAL CARE COVERAGE of
Article III Benefits.
20) "Enrollment Date" means the first day of coverage
under the Plan or, if there is a waiting period for
coverage, the first day of the waiting period.
21) "Prior Creditable Coverage" means continuous cover-
age under any one of the following:
- An insured or self-insured group health plan
- Health insurance coverage
- Medicare
- Medicaid and Title X
- Indian Health Service Program
- State high risk pools
- Public health plans
- Peace Corps benefits
provided (a) the Covered Individual furnishes the
Plan with a Certificate of Creditable Coverage or
other evidence of Prior Creditable Coverage satis-
factory to the Trustees and (b) coverage before a
break in coverage of sixty-three (63) days or more
does not count as continuous coverage.
8. The words "the Covered Individual received any medical care, ser-
vices or supplies within the three (3) month period immediately
before becoming covered under the Plan" in Paragraph 11) of the
Subsection entitled MEDICAL LIMITATIONS AND EXCLUSIONS of Section
C MEDICAL CARE COVERAGE of Article III Benefits are deleted and
replaced by the words "any medical advice, diagnosis, care or
treatment was received within the three (3) month period immedi-
ately prior to the Covered Individual's Enrollment Date".
9. The words "the earlier of (a) the end of a period of three (3)
consecutive months during which the Covered Individual has not
received for or in connection with such Injury or Illness any
medical, surgical, hospital or nursing service or treatment of
any kind or any drugs or medicines lawfully obtainable only upon
prescription of a Physician, or (b) the end of the period of
twelve (12) consecutive months during which the Covered Indivi-
dual has been continuously covered under the Plan, or (c) in the
case of a Participant, a period of six (6) consecutive months
during which the Participant has been so covered and continuously
at Active Work on a Full-Time Basis" in Paragraph 11) of the Sub-
section entitled MEDICAL LIMITATIONS AND EXCLUSIONS of Section C
MEDICAL CARE COVERAGE of Article III Benefits are deleted and
replaced by the words "the earliest of (a) the end of a period
of three (3) consecutive months ending after the Covered Indivi-
dual's Enrollment Date during which the Covered Individual has
not received for or in connection with such Injury or Illness any
medical, surgical, hospital or nursing service or treatment of
2
<PAGE> 16
any kind or any drugs or medicines lawfully obtainable only upon
prescription of a Physician or (b) in the case of a Participant,
a period of six (6) consecutive months during which the Partici-
pant has been continuously covered under the Plan and continu-
ously at Active Work on a Full-Time Basis or (c) the end of the
period of twelve (12) consecutive months following the Covered
Individual's Enrollment Date; provided, however, that this twelve
(12) consecutive month period shall be reduced by the Covered
Individual's aggregate periods of Prior Creditable Coverage;".
10. The words "or (c) to a Child of a Participant who becomes a
Covered Individual upon adoption (or placement awaiting adoption)
by the Participant. In addition, this Paragraph (11) shall not
restrict the coverage under this Plan of any child adopted by a
Participant solely on the basis of a preexisting condition of
such child at the time he would otherwise be eligible for cover-
age, so long as the adoption occurs while the Participant is
eligible for coverage under this Plan. See Paragraph 6 of the
section entitled DEFINITIONS in Article II for a definition of
the term "adopted.")" in Paragraph 11) of the Subsection entitled
MEDICAL LIMITATIONS AND EXCLUSIONS of Section C MEDICAL CARE COV-
ERAGE of Article III Benefits are deleted and replaced by the
words "or (c) pregnancy, subject to other limits and conditions
on pregnancy benefits provided elsewhere in the Plan; further, a
newborn or adopted Child (see Paragraph 6 of the section entitled
DEFINITIONS in Article II for a definition of the term "adop-
tion") of a Participant is deemed to have at least twelve (12)
months of Prior Creditable Coverage, which will normally permit
the Child to avoid the Plan's preexisting conditions restriction;
however, this special rule for Children only applies to a Child
who does not become covered under the Plan immediately upon birth
or adoption if the Child was enrolled under Prior Creditable Cov-
erage within thirty (30) days after the birth or adoption and
ceases to apply after the Child experiences a sixty-three (63)
day or longer break in Prior Creditable Coverage."
11. The words "first eighteen (18) months (or twenty-one (21) months
if the patient has had a kidney transplant)" in the Subsection
entitled EFFECT OF ELIGIBILITY FOR MEDICARE COVERAGE ON PLAN
BENEFITS of Section C MEDICAL CARE COVERAGE of Article III Bene-
fits are deleted and replaced by the words "first thirty (30)
months".
12. The words ", Nurse Practitioner (other than a Nurse Midwife)" are
inserted between the words "Chiropractor" and "Clinical" in Para-
graph 2) of the Subsection entitled MEDICAL CARE DEFINITIONS of
Section C MEDICAL CARE COVERAGE of Article III Benefits.
13. The words "or treated in a Residential Treatment Program or a
Nonresidential Treatment Program" are inserted between the words
"Hospital" and ", and" in Exception (a) of the Subsection en-
titled MEDICAL EXPENSE BENEFIT of Section C MEDICAL CARE COVER-
AGE of Article III Benefits.
14. The portion of the first sentence of the Subsection entitled
MEDICAL EXPENSE BENEFIT of Section C MEDICAL CARE COVERAGE of
Article III Benefits added to the March 22, 1995, amended and
3
<PAGE> 17
restated Plan Document by the Second Amendment is deleted and
replaced by the following.
Subject to the applicable Medical Deductible requirement
and Maximum Amounts, benefits are payable in an amount
equal to:
a. In the case of (i) services rendered by a Preferred
Provider; (ii) radiology, pathology, anesthesiology
and ambulance services rendered by a service provider
who is not a Preferred Provider during an inpatient
or outpatient confinement at a Hospital which is a
Preferred Provider, which confinement is prescribed
by a Physician who is a Preferred Provider; and
(iii) prescription drugs, an amount equal to 90%
of the first $1,500 of Covered Expenses incurred
by a Covered Individual during a calendar year and
100% of Covered Expenses in excess of $1,500.
b. In the case of services other than those described
in (a) above, an amount equal to 80% of the first
$2,500 of Covered Expenses incurred by a Covered
Individual during a calendar year and 100% of
Covered Expenses in excess of $2,500.
Charges payable at 90% under paragraph (a) above count
toward the $2,500 required to be paid at 80% under para-
graph (b) above, and charges payable at 80% under para-
graph (b) above count toward the $1,500 required to be
paid at 90% under paragraph (a) above.
15. The portion of the Subsection entitled MEDICAL DEDUCTIBLE of Sec-
tion C MEDICAL CARE COVERAGE of Article III Benefits added to the
March 22, 1995, amended and restated Plan Document by the Second
Amendment is deleted and replaced by the following.
a. In the case of (i) services rendered by a Preferred
Provider; (ii) radiology, pathology, anesthesiology
and ambulance services rendered by a service provider
who is not a Preferred Provider during an inpatient
or outpatient confinement at a Hospital which is a
Preferred Provider, which confinement is prescribed
by a Physician who is a Preferred Provider; and (iii)
prescription drugs, an amount equal to $100.
b. In the case of services other than those described
in (a) above, an amount equal to $200.
Charges applied to the $100 deductible under paragraph
(a) above count toward the $200 deductible required under
paragraph (b) above, and charges applied to the $200 de-
ductible under paragraph (b) above count toward the $100
deductible required under paragraph (a) above.
4
<PAGE> 18
16. The portion of the Subsection entitled MEDICAL DEDUCTIBLE, item
(2), of Section C MEDICAL CARE COVERAGE of Article III Benefits
added to the March 22, 1995, amended and restated Plan Document
by the Second Amendment is deleted and replaced by the following.
a. In the case of (i) services rendered by a Preferred
Provider; (ii) radiology, pathology, anesthesiology
and ambulance services rendered by a service provider
who is not a Preferred Provider during an inpatient
or outpatient confinement at a Hospital which is a
Preferred Provider, which confinement is prescribed
by a Physician who is a Preferred Provider; and (iii)
prescription drugs, an amount equal to $300.
b. In the case of services other than those described
in (a) above, an amount equal to $600,
Charges applied to the $300 deductible under paragraph
(a) above count toward the $600 deductible required under
paragraph (b) above, and charges applied to the $600 de-
ductible under paragraph (b) above count toward the $300
deductible required under paragraph (a) above.
17. The Room and Board Maximum for Single Bed Accommodations set
forth in Paragraph A) of the Subsection entitled MEDICAL COVERED
CHARGES of Section C MEDICAL CARE COVERAGE of Article III Bene-
fits is deleted and replaced by the following.
Single Bed accommodation...Highest Semiprivate Charge for
the area of the Hospital in
which the patient is confined,
except that no maximum applies
if it is determined by the
Trustees that, and only for
the period of time that, it is
medically necessary that the
Covered Individual be isolated
from other patients because of
Illness that is highly conta-
gious or because the patient's
immunodefense system has been
so compromised that he or she
must be protected from all bac-
teria.
18. The following Paragraph V) is added to the Subsection entitled
MEDICAL COVERED CHARGES of Section C MEDICAL CARE COVERAGE of
Article III Benefits.
5
<PAGE> 19
V) Charges for cardiac rehabilitation services, subject
to a maximum lifetime benefit of $1,500 per Covered
Individual.
19. Paragraph 21) of the Subsection entitled MEDICAL LIMITATIONS AND
EXCLUSIONS of Section C MEDICAL CARE COVERAGE of Article III
Benefits is deleted and replaced by the following.
21) Exercise programs, except cardiac rehabilitation
services to the extent covered under Paragraph V)
of the section entitled MEDICAL COVERED CHARGES
in this Part C.
20. Paragraph 10) of the Section entitled DEFINITIONS of Article II
Eligibility Provisions is deleted and replaced by the following.
10) "Retired Employee" means a person who (a) is sepa-
rated from the active service of the Employer, (b)
is not engaged in active, full-time work, (c) has
attained age fifty-five (55) and (d) has a total
of five (5) years of employment with the Employer.
Retired Employees are eligible for employee Life
Insurance and employee and dependent Medical Care
Benefits only.
21. The words "or following" are inserted between the words "of" and
"the" in the first line of the first sentence of the Section en-
titled LIMITED SELF-PAYMENT PRIVILEGE FOR RETIRED EMPLOYEES AND
SURVIVING DEPENDENTS of Article II Eligibility Provisions.
22. The portion of the Subsection entitled BENEFIT AMOUNT of Section
B WEEKLY DISABILITY INCOME COVERAGE of Article III Benefits added
to the March 22, 1995 amended and restated Plan Document by the
Second Amendment is deleted.
23. The following Paragraph 8) is added to the Subsection entitled
WEEKLY DISABILITY INCOME LIMITATIONS AND EXCLUSIONS of Section B
WEEKLY DISABILITY INCOME COVERAGE of Article III Benefits.
8) of a Participant who is a participant in the Paul
Mueller Company Short-Term Disability Plan and the
Paul Mueller Company Long-Term Disability Plan.
24. The Subsection entitled RECOVERY FROM THIRD PARTIES - SUBROGATION
of Section C MEDICAL CARE COVERAGE of Article III Benefits is de-
leted and replaced by the following.
RECOVERY FROM THIRD PARTIES - SUBROGATION
1) In the event of payment to or on behalf of any
covered person under this Plan, this Plan shall be
subrogated, to the extent of benefits paid under
this Plan, to any and all monies paid or payable
from any other person or plan to or on behalf of
6
<PAGE> 20
the covered person, and shall be subrogated to any
and all claims of or on behalf of the covered person
against any other person or plan, by reason of the
illness or injury which occasioned the payment of
benefits under this Plan ("the Illness or Injury").
This Plan's rights as expressed in the preceding
sentence expressly encompass, but are not limited
to, monies paid or payable to or on behalf of the
covered person by persons or plans other than the
persons (or plans insuring such persons) who are
responsible for the Illness or Injury, as well
as claims of or on behalf of the covered person
against such persons (or plans insuring such per-
sons) responsible for the Illness or Injury.
2) For purposes of these Subrogation and Reimbursement
provisions, the term "person or plan" shall include,
but is not limited to: (a) any person, insurance
company or other entity that is in any way respon-
sible for the Illness or Injury, or is in any way
responsible for providing compensation, indemnifica-
tion, or benefits for the Illness or Injury; (b)
any law or policy of insurance or accidental benefit
plan providing no-fault, uninsured, underinsured or
general group or individual liability coverage; (c)
any medical reimbursement insurance whether or not
purchased by the covered person submitting the claim,
or on whose behalf the claim is submitted; and (d)
any specific risk accident or health coverage or
insurance, including without limitation premises
or homeowners medical reimbursement coverage, and
student, student-athletic or student-team coverage
or insurance. The term "covered person" means the
person to whom or on whose behalf this Plan paid
benefits for treatment of the Illness or Injury.
With respect to the Plan's right to subrogation
to the covered person's rights of recovery against
another person or plan, and whenever else it may be
appropriate, the term also means the covered person's
heirs, guardians, executors or other representatives.
3) This Plan's rights to subrogation apply whether or
not the monies paid or payable from the other per-
son or plan are sufficient to fully compensate the
covered person for his loss occasioned by the Ill-
ness or Injury. Further, the characterization of
any amounts paid or payable to or on behalf of a
covered person, whether under a settlement agree-
ment, judgment, plan as defined herein, or other-
wise, shall not affect the priority given this Plan
under these provisions with respect to such amounts.
4) Notwithstanding any other provision in this Plan to
the contrary, but subject to the Plan's coordination
of benefits rules and the exception set forth below,
this Plan does not pay otherwise covered charges
incurred for treatment of any illness or injury which
is or, in the opinion of the Trustees, likely to be-
come the subject of a claim by or on behalf of the
covered person against any person or plan, whether
by civil lawsuit or otherwise. Benefits may be con-
ditionally covered and paid in this circumstance,
7
<PAGE> 21
solely at the discretion of the Trustees, but in
that case the covered person agrees, by accepting
such payment (whether made to or on behalf of the
covered person) and in consideration of the Plan's
conditional payment, to reimburse the Plan, to the
extent of the Plan's payment, from any monies paid
to or on behalf of the covered person by any other
person or plan as compensation for the Illness or
Injury.
5) In addition to the foregoing the Trustees may, as
a condition of making the payments described in the
preceding paragraph, require the covered person or
his representative to sign a subrogation agreement
reflecting (a) the covered person's obligation to
reimburse the Plan, (b) assignment to the Plan all
rights, claims or causes of action such covered
person (or any person or entity acting on his behalf)
has against any plan or person to the extent of bene-
fits paid or payable under the Plan, (c) authorizing
(but not requiring) the Plan to sue, enforce, com-
promise or settle (in such covered person's name or
otherwise) all such rights, claims or causes of action,
and (d) warranting that such covered person (and any
person or entity acting on his behalf) has not settled,
discharged or released any such right, claim or cause
of action against any person or plan, and shall not
do so. In such event the agreement shall operate to
the same extent as the agreement described in the
preceding subsection. The execution of such a sub-
rogation agreement by or on behalf of the covered
person shall not, however, bind the Plan to make the
conditional payments described in the preceding para-
graph.
6) The covered person (and any person or entity acting
on his behalf) shall hold in trust for the benefit
of the Plan (a) any amounts recovered to the extent
of benefits paid by the Plan and (b) all rights of
recovery against any person or plan by reason of the
Illness or Injury which occasioned the payment of
benefits under the Plan and, upon receipt of amounts
paid by another person or plan the covered person
shall immediately notify the Plan and pay to the Plan
all amounts due the Plan. Failure to make such reim-
bursement shall entitle the Plan to sue the covered
person or, as applicable, his heirs, guardians, exe-
cutor, or other representative in order to recover
the amounts due the Plan under these subrogation and
reimbursement provisions, and where in that case the
Plan is successful in whole or in part the Plan shall
also be entitled to reimbursement from the covered
person of all costs of collection, including reason-
able attorneys fees.
7) Where this Plan is entitled to reimbursement pursuant
to these subrogation provisions and the covered person
fails or refuses to provide complete reimbursement,
in addition to any other remedies the Plan may have
under the plan or otherwise the Plan may terminate
coverage of the covered person with respect to pending
and future claims, and may set-off the reimbursement
8
<PAGE> 22
due the Plan against claims, whether related or unre-
lated to the injury or illness giving rise to this
Plan's reimbursement rights, payable by the Plan to
or on behalf of the covered person and any covered
member of the covered person's family.
8) This Plan shall not be responsible for any costs or
expenses, including but not limited to attorneys fees,
incurred by or on behalf of a covered person in con-
nection with any recovery from any other person or
plan unless this Plan so agrees in writing to pay a
part of these expenses.
9) Upon written notification to such covered person,
the Plan may (but shall not be required to) directly
collect any claim the covered person (or any person
or entity acting on his behalf) may have against
any person or plan relating to the Illness or Injury
which occasioned the payment of benefits under the
Plan in any manner decided by the Trustees and with-
out such covered person's consent or the consent of
any person or entity acting on behalf of such person;
any monies so recovered shall first be applied to
the Plan's reasonable collection costs and expenses
(including attorneys' fees), then to payments made
under this Plan, with any remaining balance to be
paid to or on behalf of the covered person as soon
as administratively practicable.
10) In any collection effort by the Plan under Paragraph
9) above, or with respect to any claim for reimburse-
ment from the covered person or any person acting on
his behalf, the Trustees may agree to recover less
than the full amount of reimbursement if the Trustees
determine in their discretion that the Plan has made,
or caused to be made, such reasonable collection ef-
forts as are appropriate under the circumstances and
the terms of such agreement are reasonable under the
circumstances, based upon the likelihood of collec-
ting such amounts in full or the approximate expenses
the Plan would incur in an attempt to collect such
amounts. The Trustees within their sole discretion
shall determine which of the Plan's rights and reme-
dies is in the Plan's best interests and may take
such action against any person or plan as they deter-
mine to be appropriate under the circumstances, fur-
ther provided that any failure by the Plan, its
Trustees or its agents to exercise any right under
these subrogation provisions, and the reimbursement
and recovery provisions which follow hereafter, shall
not constitute a waiver of such right or affect the
parties' rights and obligations hereunder unless ex-
pressly agreed thereto in writing by the Trustees.
11) A covered person (and anyone acting on behalf of the
covered person) has a duty to cooperate with this
Plan and, at the request of the Trustees or their
designee, to take any action, give information and
assistance, and execute such documents as are deemed
by the Trustees necessary to enforce the Plan's rights
9
<PAGE> 23
under these subrogation provisions and the reimburse-
ment and recovery provisions which follow hereafter.
The Plan will make no payments to a covered person
or on a covered person's behalf until the Trustees
are satisfied that the covered person has complied
with the requirements of this subsection. The Trus-
tees or their designee, without the consent of or
notice to any person, may release to or obtain from
any person any information, with respect to any per-
son, which the Trustees or their designee deem neces-
sary to implement these provisions.
12) The covered person, or anyone acting on his behalf,
shall take no action to prejudice the subrogation
or reimbursement rights of this Plan, and shall not
settle or compromise any claim against any person or
plan, where this Plan is subrogated with respect to
monies payable to or on behalf of the covered person
by such person or plan, without the express, written
consent of the Trustees or their designee. Where
the Trustees determine that the covered person, or
anyone acting on behalf of the covered person, has
in the opinion of the Trustees so prejudiced the
Plan's rights, the provisions of Paragraphs 6) and
7) above shall apply as though the covered person
had received payment of amounts up to the extent
of the Plan's subrogation interest.
REIMBURSEMENT AND RECOVERY
1) Whenever this Plan makes payments which, together
with the payments the covered person has received or
is entitled to receive from any other plan or person,
(a) exceed the maximum amount necessary to satisfy
the intent of this Plan's subrogation and reim-
bursement rules or the Plan's coordination of
benefits provisions; or
(b) exceed, under the terms of the Plan, the bene-
fits properly payable to the person or plan to
or for or with respect to whom the payments
were made,
the Trustees shall have the right to recover such
payments, to the extent of such excess, from among
one or more of the following, as the Trustees shall
determine: any person to whom or on whose behalf
such payments were made, any other covered person
who is a member of the family of the person to whom
or on whose behalf the Plan made payment, any insur-
ance companies, or any other organizations. Alter-
natively, the Trustees may set-off the amount of
such payments, to the extent of such excess, against
any amount owing, at that time or in the future, to
one or more of the following, as the Trustees shall
determine: any person to whom or on whose behalf
10
<PAGE> 24
such payments were made, any other covered person
who is a member of the family of the person to whom
or on whose behalf the Plan made payment, any insur-
ance companies, or any other organizations.
2) For example, but not by way of limitation, if this
Plan pays a claim submitted by a covered person or
a health care provider who treated the covered person,
and the Trustees later determine that the claim was
for an expense not covered under this Plan, then the
Trustees are entitled to recover the payment from
the covered person, a covered member of the person's
family, or the provider, or to recover part of the
payment from the covered person (or a covered member
of his family) and part from the provider, or the
Trustees may set-off the amount of the payment from
amounts the Plan owes in the future to the covered
person (or a covered member of the person's family)
or the provider, or both. This same rule applies if
the Plan makes payment to or on behalf of a covered
person or a provider of an expense which is a covered
expense, but the amount paid exceeds the amount re-
quired to be paid under the Plan.
3) These reimbursement provisions also apply where this
Plan makes payment of an allowable expense incurred
for treatment of an illness or injury for which
another person or plan is or may be liable, and where
the Plan's subrogation provisions do not provide the
Plan with a right to recover the amounts the Plan
pays for treatment of the illness or injury. If the
other person or plan makes payment to the covered
person or on the covered person's behalf as compen-
sation for the illness or injury, and this Plan is
not subrogated with respect to the payment, this
Plan is entitled to reimbursement from the covered
person (or the person who received such payment on
behalf of the covered person) in an amount equal
to the lesser of the benefits paid by this Plan for
treatment of the injury or illness, or the amount
paid to the covered person or on the covered per-
son's behalf by the other person or its insurer.
This provision shall not apply where the other per-
son or its insurer is a medical plan with respect
to which this Plan, pursuant to its coordination
of benefits provisions, is the primary payer of the
covered person's allowable expenses. Paragraphs 6)
and 7) of the Plan's subrogation provisions above,
regarding the covered person's duty to make reim-
bursement, and the Plan's rights and remedies if he
does not, are incorporated by reference herein.
4) In addition, where another person or plan pays
compensation to or on behalf of a covered person
for an illness or injury, and the covered person
incurs (either before or after payment of such com-
pensation) otherwise covered charges for treatment
of the illness or injury, a special rule applies.
In that case, such otherwise covered charges which
were incurred after the date on which the compensa-
tion was paid, or which were incurred prior to such
11
<PAGE> 25
date but not paid by this Plan as of such date,
shall be excluded to the extent of the excess (if
any) of the compensation paid to or on behalf of
the covered person over the covered charges which
the Plan has already paid for treatment of the ill-
ness or injury.
5) This Plan shall not be responsible for any costs or
expenses incurred by or on behalf of a covered person
in connection with any recovery or reimbursement from
any other plan or person unless this Plan agrees in
writing to pay a part of those expenses. The charac-
terization of any amounts paid to or on behalf of a
covered person, whether under a settlement agreement,
judgment, "plan" as defined in Paragraph 2 of the
Plan's subrogation provisions above, or otherwise,
shall not affect this Plan's right to reimbursement
and to characterize otherwise covered charges as ex-
cludable charges pursuant to the provisions of these
reimbursement and recovery provisions.
CONDITIONAL PAYMENTS IN CASE OF WRONGFUL DEATH
1) Where a covered person dies as a result of the Injury
or Illness, and another covered person, in the judg-
ment of the Trustees, has as a result of such death
a cause of action for the deceased person's wrongful
death, the otherwise covered expenses incurred by or
on behalf of the deceased person prior to his death
shall not be considered covered expenses under this
Plan. However, such expenses may nevertheless be
treated as conditionally covered expenses and be
paid in this circumstance, solely at the discretion
of the Trustees, but in that case the covered person
with the cause of action agrees, in consideration
of the Plan's payment of such expenses, to reimburse
the Plan, to the extent of the Plan's payment, from
any monies paid to such covered person by any other
person or plan as compensation for the deceased per-
son's death. Failure to make such reimbursement shall
entitle the Plan to sue the covered person or, as
applicable, his heirs, guardians, executor, or other
representative in order to recover the amounts due
the Plan under this provision, and where in that case
the Plan is successful in whole or in part the Plan
shall also be entitled to reimbursement from the
covered person of all costs of collection, including
reasonable attorneys fees.
2) In addition to the foregoing the Trustees may, as a
condition of making the conditional payments des-
cribed in the preceding paragraph, require the covered
person with the cause of action to sign a subrogation
or reimbursement agreement reflecting the covered
person's obligation to reimburse the Plan, and in such
event the agreement shall operate to the same extent
as the agreement described in the preceding subsection.
The execution of such a subrogation agreement by such
covered person shall not, however, bind the Plan to
make the conditional payments described in the prece-
ding paragraph.
12
<PAGE> 26
3) Where this Plan makes the conditional payments des-
cribed above and the covered person with the cause of
action elects not to pursue the cause of action, but
some other person related to the deceased person pur-
sues the cause of action and recovers monies from the
person or plan who is or may be responsible for the
deceased person's wrongful death, this Plan is never-
theless entitled to reimbursement from the covered
person. If the covered person fails or refuses to
provide complete reimbursement, in addition to any
other remedies the Plan may have, under the Plan or
otherwise, the Plan may terminate coverage of the
covered person with respect to pending and future
claims, or may set-off the reimbursement due the
Plan against claims, whether related or unrelated
to the injury or illness giving rise to this Plan's
reimbursement rights, payable by the Plan to or on
behalf of the covered person and any covered member
of the covered person's family, or the Plan may do
both of these things.
DETERMINATION OF BENEFITS UNDER SUBROGATION AND REIMBURSE-
MENT PROVISIONS
The amount of benefits, if any, payable under the Plan
pursuant to the preceding provisions concerning subroga-
tion and reimbursement shall be determined in accordance
with the provisions of paragraph (1) and (2) of the Sec-
tion entitled BENEFIT DETERMINATION of the COORDINATION
OF BENEFITS AND EXCESS COVERAGE PROVISION of the Plan as
if the proceeds of the settlement, judgment or Insurance
Policy were benefits payable under another Plan (that is,
the sum of the benefits payable under this Plan and the
proceeds of the settlement or judgment shall not exceed
the Allowable Expenses incurred by the covered individual
during the Benefit Determination Period).
25. Subparagraph (c) of Paragraph 23) of the Subsection entitled MED-
ICAL LIMITATIONS AND EXCLUSIONS of Section C MEDICAL CARE COVE-
AGE of Article III Benefits is deleted and replaced by the fol-
lowing.
(c) if the drug, device, medical treatment or procedure
is the subject of an ongoing Phase I or Phase II
clinical trial, is the research, experimental, study
or investigational arm of ongoing Phase III clinical
trials, or is otherwise under study to determine its
maximum tolerated dose, its toxicity, its safety,
its efficacy or how any of these factors compares
with standard means of treatment or diagnosis; or
26. The words "on account of" in the parenthetical expression in the
third sentence of the Section entitled BENEFIT AMOUNT of Section
B WEEKLY DISABILITY INCOME COVERAGE of Article III Benefits are
deleted and replaced by the words "attributable to".
13
<PAGE> 27
27. Paragraph 8) of the Subsection entitled MEDICAL LIMITATIONS AND
EXCLUSIONS of Section C MEDICAL CARE COVERAGE of Article III
Benefits is deleted and replaced by the following:
8) Cosmetic surgery or other medical care for cosmetic
purposes, except for (a) medical care and treatment
for Injuries sustained in an accident, (b) medical
care and treatment for the correction of an abnormal
congenital condition, and (c) reconstructive surgery
to correct a defect caused by prior surgery performed
for treatment of an Illness;
28. The following sentences are added at the end of paragraph 1. IN-
PATIENT HOSPITALIZATION of the Subsection entitled UTILIZATION
REVIEW REQUIREMENT of Section C MEDICAL CARE COVERAGE of Article
III Benefits.
However, the Plan will not restrict benefits for any Hos-
pital stay in connection with childbirth for the mother
or newborn Child following a normal vaginal delivery to
less than forty-eight (48) hours, or to less than ninety-
six (96) hours in the case of a Cesarean section. In
addition, the Plan will not require a provider to obtain
authorization or precertification for prescribing the
minimum lengths of stay described above.
29. Paragraph 1) of the Section entitled DEFINITIONS of Article II
Eligibility Provisions is deleted and replaced by the following.
1) "Employer" means Paul Mueller Company and any member
of Paul Mueller Company's controlled group (as de-
fined by the Internal Revenue Code) that adopts the
Plan with the consent of the Trustees.
30. Paragraph 2) of the Section entitled DEFINITIONS of Article II
Eligibility Provisions is deleted and replaced by the following.
2) "Eligible Employee" means a permanent employee of
the Employer who is performing Active Work on a Full-
Time Basis, except that bargaining unit employees
of Mueller Field Operations, Inc. are not Eligible
Employees unless so provided in a collective bargain-
ing agreement between Mueller Field Operations, Inc.
and a collective bargaining representative.
31. The second paragraph of Article IV Named Fiduciaries is deleted
and replaced by the following:
Paul Mueller Company shall serve as Administrator of
the Plan for purposes of ERISA. As Administrator, Paul
Mueller Company shall perform the following duties:
14
<PAGE> 28
32. The second sentence of Article VI Amendment and Termination of
Plan is deleted and replaced by the following:
The Plan may be terminated by action of the Board of
Directors of Paul Mueller Company in accordance with the
provisions of the Declaration of Trust.
33. The words "or through an administrative process having the force
and effect of law" are inserted between the words "jurisdiction"
and "for" in the fourth line of paragraph 7) of the Section en-
titled DEFINITIONS of Article II Eligibility Provisions.
34. The last sentence of the Subsection entitled MEDICAL EXPENSE
BENEFITS of Section C MEDICAL CARE COVERAGE of Article III Bene-
fits is deleted and replaced by the following:
If (a) the Plan has entered into a contract with a Pre-
ferred Provider Organization (PPO) and (b) the charges
negotiated by the PPO exceed the provider's usual charges
and (c) the Covered Individual is responsible for payment
of that excess, the Plan will pay the benefits described
in the preceding sentence plus 100% of the amount by which
the negotiated charge exceeds the provider's usual charge.
35. The words "(for example, because the pregnancy is a preexisting
condition)" are deleted from the Subsection entitled FLAT RATE
MATERNITY of Section C MEDICAL CARE COVERAGE of Article III Bene-
fits.
36. The first sentence of the last paragraph of item U) of the Sub-
section entitled MEDICAL COVERED CHARGES of Section C MEDICAL
CARE COVERAGE of Article III Benefits is deleted and replaced by
the following:
Covered Individuals must contact the Administrative Mana-
ger before undergoing any organ transplant procedure.
37. The words "occurring while covered under the Plan" are deleted
from Paragraph 13 of the Subsection entitled MEDICAL LIMITATIONS
AND EXCLUSIONS of Section C MEDICAL CARE COVERAGE of Article III
Benefits.
38. The words "or Participant" are inserted between the words "Bene-
ficiary" and "must" in the first line of the fifth paragraph of
the Section entitled CONTINUATION COVERAGE of Article II Eligi-
bility Provisions.
39. The words "although the term "Physician" does not include Social
Workers or Licensed Professional Counselors, services rendered by
such practitioners are covered under the Plan when they are an
integral part of, rendered at and billed by a mental illness or
chemical dependency treatment program of a Hospital, a Residen-
tial Treatment Program or a Nonresidential Treatment Program" in
15
<PAGE> 29
Paragraph 2) of the Subsection entitled MEDICAL CARE DEFINITIONS
of Section C MEDICAL CARE COVERAGE of Article III Benefits are
deleted and replaced by the words "although the term "Physician"
does not ordinarily include social workers or licensed profes-
sional counselors, services rendered by Licensed Clinical Social
Workers and Licensed Professional Counselors are covered under
the Plan when they are (a) an integral part of, rendered at, and
billed by a mental illness or chemical dependency treatment pro-
gram of a Hospital, a Residential Treatment Program, or a Nonre-
sidential Treatment Program, (b) an integral part of a treatment
program approved by the Plan's Employee Assistance Program, or
(c) rendered pursuant to and within the scope of a referral made
by the Plan's Employee Assistance Program."
40. The following paragraphs 22) and 23) are added to the Subsection
entitled MEDICAL CARE DEFINITIONS of Section C MEDICAL CARE COV-
ERAGE of Article III Benefits.
22) "Licensed Clinical Social Worker" means a person who
(a) is trained and experienced as a clinical social
worker and who holds a current, valid license to
practice as a clinical social worker in the state
in which he practices or (b) is a graduate of an
accredited school of social work and meets all re-
quirements for licensure as a clinical social worker.
23) "Licensed Professional Counselor" means a person who
(a) is registered, certified or licensed as a profes-
sional counselor by the state in which he practices
or (b) is a graduate of an accredited educational
institution with at least a master's degree with a
major in counseling or its equivalent, meets all
requirements for certification or licensure as a pro-
fessional counselor other than the requirement of
supervised counseling experience and who is supervised
by a person who meets the requirements of (a) above.
41. The following Subsection is added following the Subsection enti-
tled HIGH RISK PREGNANCY BENEFIT of Section C MEDICAL CARE COVER-
AGE of Article III Benefits.
EMPLOYEE ASSISTANCE PROGRAM
The Trustees may contract with an Employee Assistance
Program (EAP) to provide short-term counseling to assist
employees and dependents with personal problems, including:
- Family Problems
- Marital Problems
- Emotional Difficulties
- Stress and Anxiety
- Alcoholism
- Drug Abuse
- Legal Problems
- Financial Problems
16
<PAGE> 30
The EAP shall provide an assessment interview and up to
five (5) counseling sessions at no cost to Covered Indi-
viduals. In addition, the EAP may refer Covered Indivi-
duals to outside Psychiatrists, Clinical Psychologists,
Licensed Clinical Social Workers and Licensed Professional
Counselors. A portion of the fees charged by these pro-
fessionals may be covered under other provisions of the
Plan. The EAP may also refer Covered Individuals to other
community resources which charge no fees or reduced fees
based on the Covered Individual's ability to pay.
Use of the EAP shall be confidential. Information shall
not be released to the Employer without the Covered Indi-
vidual's permission.
42. The following Paragraph W) is added to the Subsection entitled
MEDICAL COVERED CHARGES of Section C MEDICAL CARE COVERAGE of Ar-
ticle III Benefits.
W) Charges for the following services and supplies for
smoking cessation, up to a lifetime maximum of $200
per Covered Individual.
- Group or individual counseling provided by medi-
cal professionals;
- Hypnotherapy provided by a licensed hypnothera-
pist;
- Pharmaceutical aids, including prescription anti-
depressants (Zyban and Wellbutrin), nicotine
patches (Nicoderm CQ or Nicotrol), nicotine gum
(Nicorette) and nicotine nasal sprays.
43. The words "described in Paragraphs P, Q and T" in exception (b)
of the Subsection entitled MEDICAL EXPENSE BENEFIT of Section C
MEDICAL CARE COVERAGE of Article III Benefits are deleted and
replaced by the words "described in Paragraphs P, Q, T and W".
44. The following paragraph is added at the end of the Subsection
entitled MAXIMUM AMOUNTS of Section C MEDICAL CARE COVERAGE of
Article III Benefits.
Refer to Paragraph W) of the section entitled COVERED
MEDICAL CHARGES in this Part C for the $200 smoking ces-
sation maximum.
45. Paragraph 16) of the Subsection entitled MEDICAL LIMITATIONS AND
EXCLUSIONS of Section C MEDICAL CARE COVERAGE of Article III
Benefits is deleted and replaced by the following.
16) Treatment of tobacco dependency, except smoking ces-
sation services to the extent covered under Paragraph
W) of the section entitled MEDICAL COVERED CHARGES in
this Part C.
46. The last subparagraph of Paragraph P) of the Subsection entitled
17
<PAGE> 31
MEDICAL COVERED CHARGES of Section C MEDICAL CARE COVERAGE of Ar-
ticle III Benefits is deleted and replaced by the following.
The foregoing frequency limits are not applicable (a) to
persons with a family history of breast cancer or (b) to
mammograms recommended by a Physician following a prior
mammogram which showed tissue changes.
47. The last sentence of Paragraph 4)d) of the Section entitled DEFI-
NITIONS of Article II Eligibility Provisions is deleted and re-
placed by the following.
See paragraph 7 of this section for a definition of the
phrase "medical child support order."
48. The words "Treatment of alcoholism" in Paragraph M) of the Sub-
section entitled MEDICAL COVERED CHARGES of Section C MEDICAL
CARE COVERAGE of Article III Benefits are changed to "Charges for
treatment of alcoholism".
49. The words "Cardiac rehabilitation services" in Paragraph V) of
the Subsection entitled MEDICAL COVERED CHARGES of Section C
MEDICAL CARE COVERAGE of Article III Benefits are changed to
"Charges for cardiac rehabilitation services".
50. The words "Routine Prostate Specific Antigen (PSA) tests" in Pa-
ragraph T) of the Subsection entitled MEDICAL COVERED CHARGES
of Section C MEDICAL CARE COVERAGE of Article III Benefits are
changed to "Charges for Routine Prostate Specific Antigen (PSA)
tests".
51. Paragraph O) of the Subsection entitled MEDICAL COVERED CHARGES
of Section C MEDICAL CARE COVERAGE of Article III Benefits is
deleted and replaced by the following.
Charges for services rendered by a chiropractor practicing
within the scope of his profession. Covered Expense for
chiropractic services is limited to $500 for each Covered
Individual each calendar year.
52. The following Paragraph 27) is added to the Subsection entitled
MEDICAL LIMITATIONS AND EXCLUSIONS of Section C MEDICAL CARE COV-
ERAGE of Article III Benefits.
27) Medication used to treat erectile dysfunction or im-
potency in excess of six (6) doses in any one month.
This includes all dosage forms of such medication.
Medications for which coverage is limited by this
paragraph include, but are not limited to, Viagra,
Caverject and Muse.
Item 41 above is effective October 1, 1996. Items 4, 5, 6 and 34
above are effective with respect to charges incurred on or after Janu-
ary 1, 1997. Items 3, 12, 13, 14, 15, 16, 17, 18, 19 and 25 above are
effective with respect to charges incurred on or after July 1, 1997.
18
<PAGE> 32
Item 11 above is effective with respect to (a) Covered Individuals
whose Medicare entitlement commences after August 5, 1997 and (b)
Covered Individuals whose Medicare entitlement commenced on or before
August 5, 1997 and with respect to whom the Plan was still the primary
payer on August 5, 1997. Items 1, 2, 7, 8, 9, 10, 24, 27, 28, 35, 36,
37, 39, 40, 42, 43, 44, 45, 46, 47, 48, 49, 50 and 51 above are effec-
tive with respect to charges incurred on and after January 1, 1998.
Items 22, 23 and 26 above are effective with respect to disabilities
commencing on or after October 1, 1997. Items 20 and 21 above are
effective with respect to persons retiring on or after October 1,
1997. Items 29, 30, 31, 32, 33 and 38 above are effective January 1,
1998. Item 52 above is effective with respect to charges incurred on
and after July 1, 1998.
IN WITNESS WHEREOF, the Trustees of the PAUL MUELLER COMPANY EM-
PLOYEE BENEFIT PLAN have caused this Fourth Amendment to be duly exe-
cuted this 5th day of June, 1998.
By: /S/ DONALD E. GOLIK By: /S/ GERALD S. MILLER
-------------------------- --------------------------
Donald E. Golik - Trustee Gerald S. Miller - Trustee
By: /S/ MICHAEL W. YOUNG By: /S/ GAIL HENRICHS
-------------------------- --------------------------
Michael W. Young - Trustee Gail Hendichs - Trustee
19
<PAGE> 33
PAUL MUELLER COMPANY EMPLOYEE BENEFIT PLAN
AMENDED AND RESTATED AS OF
JULY 1, 1998
<PAGE> 34
TABLE OF CONTENTS
Page
ARTICLE I - Plan.................................................. 1
ARTICLE II - Eligibility Provisions............................... 1
Definitions............................................... 1
Participation............................................. 5
Dependent Coverage........................................ 6
Termination of Participant Coverage....................... 7
Reinstatement of Participant Coverage..................... 9
Termination of Dependent Coverage......................... 10
Family and Medical Leave Act Coverage..................... 11
Continuation Coverage..................................... 14
Limited Self-Payment Privilege for Retired Employees
and Surviving Dependents............................. 18
ARTICLE III - Benefits............................................ 20
Group Life Insurance and Accidental Death
and Dismemberment Insurance.......................... 20
Weekly Disability Income Coverage......................... 20
Benefit Amount....................................... 20
Commencement and Duration of Weekly
Disability Income Benefits...................... 21
Weekly Disability Income Definitions................. 21
Weekly Disability Income Limitations and Exclusions.. 23
Medical Care Coverage..................................... 24
Medical Care Definitions............................. 24
Medical Expense Benefit.............................. 31
Utilization Review Requirement....................... 32
Second Surgical Opinion Benefit...................... 35
Flat Rate Maternity.................................. 35
Audits by Participants............................... 36
High Risk Pregnancy Benefit.......................... 36
i
<PAGE> 35
Page
Employee Assistance Program.......................... 37
Medical Covered Charges.............................. 38
Medical Deductible................................... 45
Maximum Amounts...................................... 47
Evidence Reinstatement............................... 48
Extended Medical Expense Benefits on
Termination of Coverage......................... 49
Recovery From Third Parties -- Subrogation........... 49
Effect Of Eligibility For Medicare
Coverage On Plan Benefits....................... 58
Coordination Of Benefits And
Excess Coverage Provision....................... 59
Medical Limitations and Exclusions................... 65
Dental Care Coverage...................................... 72
Dental Care Definitions.............................. 72
Dental Expense Benefit............................... 73
Covered Dental Expenses.............................. 73
Dental Limitations and Exclusions.................... 73
Coordination Of Benefits And
Excess Coverage Provision....................... 75
ARTICLE IV - Named Fiduciaries.................................... 82
ARTICLE V - Funding Policy and Basis of Payments to and from Plan. 84
ARTICLE VI - Amendment and Termination of Plan.................... 84
ARTICLE VII - Exclusive Benefit of Participants................... 84
ARTICLE VIII - Claims Procedures.................................. 85
Insured Benefits.......................................... 85
Self-Insured Benefits..................................... 87
Other Matters............................................. 92
ARTICLE IX - General Provisions................................... 93
Physical Examination and Autopsy.......................... 93
Legal Actions............................................. 93
Not Workers' Compensation Insurance....................... 93
Plan Replaces Former Plan................................. 93
ii
<PAGE> 36
Page
Applicable Law............................................ 94
Effective Date............................................ 94
Effective Date of Amendment............................... 94
Plan Year................................................. 94
iii
<PAGE> 37
PAUL MUELLER COMPANY EMPLOYEE BENEFIT PLAN
WHEREAS, the Paul Mueller Company (hereinafter referred to as the
"Employer") and Michael W. Young, William H. Stewart, Jr., Donald E.
Golik and Sharron L. Rotty (they and their replacements hereinafter
collectively referred to as the "Trustees") have heretofore entered
into an Agreement and Declaration of Trust (hereinafter referred to
as the "Trust") establishing the Paul Mueller Company Employee Bene-
fit Plan (hereinafter referred to as the "Plan") for the benefit of
certain employees of the Paul Mueller Company; and
WHEREAS, the Plan may be amended by resolution of the Trustees.
NOW, THEREFORE, be it resolved that the Paul Mueller Company Employee
Benefit Plan be amended and restated pursuant to the terms and condi-
tions provided herein.
ARTICLE I
PLAN
The Plan is evidenced by the Trust as effective May 2, 1988 and as may
be amended from time to time. The terms and provisions of the Trust
and any future amendments thereto shall form a part of the Plan in the
same manner as if all the terms and provisions thereof were copied
here in detail; the terms and provisions of the Plan and any future
amendments hereto shall form a part of the Trust, as amended from time
to time, in the same manner as if the same were copied in the Trust in
detail.
ARTICLE II
ELIGIBILITY PROVISIONS
DEFINITIONS
For purposes of the Plan, the following terms, whether or not capi-
talized, shall have the meanings indicated below. Words used herein
1
<PAGE> 38
in the masculine gender shall be deemed to include the feminine and
vice versa.
1) "Employer" means Paul Mueller Company and any member of Paul
Mueller Company's controlled group (as defined by the Internal
Revenue Code) that adopts the Plan with the consent of the
Trustees.
2) "Eligible Employee" means a permanent employee of the Employer who
is performing Active Work on a Full-Time Basis, except that bar-
gaining unit employees of Mueller Field Operations, Inc. are not
Eligible Employees unless so provided in a collective bargaining
agreement between Mueller Field Operations, Inc. and a collective
bargaining representative.
3) "Participant" means an Eligible Employee covered under the Plan in
accordance with this Article II.
4) "Eligible Dependent" means only the following persons not other-
wise eligible for coverage under the Plan as a Participant:
a) the lawful spouse of the Participant except a spouse who is
legally separated from the Participant;
b) each unmarried Child of the Participant who has attained the
age of seven (7) days but has not attained the age of nineteen
(19) years, except that, under the Medical Care Coverage, a
newborn child shall be considered an Eligible Dependent from
and after the moment of birth as to i) Covered Expenses which
result from Injury or Illness, premature birth, or congenital
abnormalities; and ii) the first $200 of Hospital charges of
a well baby if the requirements of the section entitled HIGH
RISK PREGNANCY BENEFIT below are complied with;
c) each unmarried Child of the Participant who has attained age
nineteen (19) years but has not attained age twenty-three (23)
2
<PAGE> 39
years, is a full-time student in an accredited school, and is
dependent upon the Participant for his principal support and
maintenance.
i) If an unmarried Child between age 19 and age 23 completes
the spring semester as a full-time student in an accre-
dited school and does not graduate, he will continue to be
considered an Eligible Dependent through the summer. If he
does not resume full-time student status in the fall, his
coverage will be discontinued on the date the fall semes-
ter commences at the institution at which the Child was
enrolled.
ii) If such a Child completes the spring semester and does
graduate, he will be covered through the summer only if
the Participant furnishes the Trustees with documentation
that the Child is pre-enrolled as a full-time student for
the fall semester. If coverage is continued based on pre-
enrollment and the Child does not actually resume full-
time student status in the fall, coverage will be discon-
tinued on the date the fall semester commences at the
institution at which the Child was enrolled.
iii) If such a Child completes the spring semester, does gradu-
ate and is not pre-enrolled as a full-time student for
the fall semester, his coverage will be discontinued at
the end of the spring semester. If he resumes full-time
student status in the fall, any premiums for continuation
coverage that were paid for the summer will be refunded
and coverage will be reinstated retroactive to the end of
the spring semester; and
d) the Child of a Participant to the extent required by a quali-
fied medical child support order. See paragraph 7 of this
section for a definition of the phrase "medical child support
order."
No person may be simultaneously covered as a Participant and a de-
pendent or as a dependent of more than one Participant.
3
<PAGE> 40
5) "FMLA Leave" means leave granted to a participant by the Employer
under the Family and Medical Leave Act of 1993.
6) "Child" includes, in addition to a natural child of the Partici-
pant, the following persons dependent upon the Participant for
principal support and maintenance: an adopted child, a stepchild,
and a foster child. A child is considered "adopted" only when he
is adopted or placed for adoption, and only if the adoption or
placement occurs before the child reached his eighteenth (18th)
birthday. A child is placed for adoption when a Participant
assumes and retains a legal obligation for total or partial sup-
port of the child in anticipation of adoption. The child's place-
ment with a Participant terminates upon the termination of such
legal obligation. "Foster Child" means a child of whom the Par-
ticipant is the legal guardian, who resides in the Participant's
household and for whom the Participant provides parental care,
including health care.
7) "Medical Child Support Order" means an order, typically issued in
divorce proceedings, which may create or recognize the right of a
child of a Participant to be covered under this Plan. Such an
order must be qualified and issued by a court of competent juris-
diction or through an administrative process having the force and
effect of law for this Plan to be bound by it. The Administrative
Manager will provide to Participants on request guidelines used to
determine whether a medical child support order is qualified.
8) "Covered Individual" means only a Participant or a Participant's
Eligible Dependent who is covered under the Plan in accordance
with this Article II.
9) "Active Work on a Full-Time Basis" means the performance of work
by an employee for the Employer either at his customary place of
employment or such other place or places as required by the Em-
ployer in the course of such work for the full number of hours and
full rate of pay in accordance with the established employment
practices
4
<PAGE> 41
of the Employer, as determined by the Employer. An employee shall
be deemed to be performing Active Work on a Full-Time Basis during
excused absences (other than due to disability in excess of five
(5) working days), as determined by the Employer.
10) "Retired Employee" means a person who a) is separated from the
active service of the Employer, b) is not engaged in active, full-
time work, c) has attained age fifty-five (55) and d) has a total
of five (5) years of employment with the Employer. Retired Em-
ployees are eligible for employee Life Insurance and employee and
dependent Medical Care Benefits only.
11) "Group Insurance Contract" means the group insurance policy or
any replacement thereof referred to in Section A of Article III
hereof.
PARTICIPATION
Coverage of an Eligible Employee will become effective on the later of
a) the effective date of the Plan or b) the day immediately following
the end of a ninety (90) day period commencing on or after his date of
employment during which he has worked three hundred sixty (360) hours
for the Employer provided that some of the hours must have been worked
in each of the three (3) successive thirty (30) day periods comprising
the ninety (90) day period and further provided that the Eligible Em-
ployee must still be performing Active Work on a Full-Time Basis on
this date of participation in order to become covered.
The effective date of participation shall be subject to the following
conditions:
1) with respect to Weekly Disability Income Coverage -- if, at 12:01
a.m. on the date coverage (or increase in amount of coverage) of
an employee would otherwise become effective, he is by reason of
Injury or Illness unable to perform Active Work on a Full-Time
Basis, whether or not he was scheduled to work on such day, such
coverage
5
<PAGE> 42
(or increase in the amount of coverage) shall not become effective
until such time on or after the date that such coverage would
otherwise become effective that he is available to perform Active
Work on a Full-Time Basis.
2) with respect to Medical Care Coverage -- if, at 12:01 a.m. on the
date coverage (or increase in amount of coverage) of an employee
would otherwise become effective, he is confined in a hospital or
other medical facility, such coverage (or increase in the amount
of coverage) shall not become effective until the day of his final
medical discharge from the hospital or facility.
3) with respect to Life and Accidental Death and Dismemberment In-
surance -- as provided in the Group Insurance Contract.
A Participant may have a right to continue coverage for himself and
his Eligible Dependents during a period when the Participant is on a
leave of absence authorized by the Employer pursuant to the Family and
Medical Leave Act of 1993 (FMLA Leave). The Participant's right to
continue coverage during a period of FMLA Leave, and the manner in
which that coverage is continued, is described in the section below
entitled FAMILY AND MEDICAL LEAVE ACT COVERAGE.
DEPENDENT COVERAGE
Coverage of a Participant's existing Eligible Dependents shall become
effective on the same date as the Participant's coverage, and coverage
of newly acquired dependents shall become effective automatically on
the date they become Eligible Dependents, subject in both cases to the
following conditions:
1) if an Eligible Dependent is confined in a hospital or other medi-
cal facility on the date he would otherwise become covered, his
coverage shall not become effective until the day of his final
medical discharge from the hospital or facility, except that this
provision shall not apply to a newborn child otherwise eligible
for coverage
6
<PAGE> 43
at or seven (7) days following birth in accordance with the terms,
conditions and limitations of the Plan.
2) if an Eligible Dependent is confined in a hospital or other medi-
cal facility on the date an increase in amount of coverage would
otherwise become effective due to an amendment of the Plan, such
increase shall not become effective until the day of his final
medical discharge from the hospital or facility.
TERMINATION OF PARTICIPANT COVERAGE
Coverage of a Participant shall terminate as follows: a) in the case
of a Participant who does not cease work because of retirement or FMLA
Leave, coverage shall terminate on the day he ceases Active Work on a
Full-Time Basis, b) in the case of a Participant who ceases Active
Work on a Full-Time Basis because of retirement, coverage shall ter-
minate on the last day for which he receives wages from the Employer
prior to retirement, and c) in the case of a Participant who ceases
Active Work on a Full-Time Basis while on a period of FMLA Leave,
coverage shall terminate, if at all, in accordance with the provisions
of the section entitled FAMILY AND MEDICAL LEAVE ACT COVERAGE.
However, if a Participant:
1) has been continuously employed by the Employer for at least four
(4) months but less than one (1) year immediately prior to the date
his coverage would otherwise terminate in accordance with this
provision, his Life and Accidental Death and Dismemberment In-
surance and Medical Care and Dental Care Coverage and that of his
Eligible Dependents, but not his Weekly Disability Income Cover-
age, will be extended for fourteen (14) days, or
2) has been continuously employed by the Employer for at least one
(1) year immediately prior to the date his coverage would otherwise
terminate in accordance with this provision, his Life and Acci-
dental Death and Dismemberment Insurance and his Medical Care and
Dental Care Coverage, but not his Weekly Disability Income Cover-
age for a disability commencing after cessation of Active Work on
7
<PAGE> 44
a Full-Time Basis for reasons other than disability, and that of
his Eligible Dependents will be extended for
a) ninety (90) days, or
b) one hundred eighty (180) days if he ceases work due to Injury
or bodily or mental infirmity and to the extent he remains
continuously unable to perform his regular work by reason of
such Injury or bodily or mental infirmity, or
3) a) ceases work due to Injury or bodily or mental infirmity and to
the extent he remains continuously unable to perform his regular
work by reason of such Injury or bodily or mental infirmity, b)
has been employed by the Employer for at least ten (10) years
prior to cessation of work, and c) applies for and receives Social
Security Disability Income benefits, his Medical Care and Dental
Care Coverage and that of his Eligible Dependents, but not his
Life and Accidental Death and Dismemberment Insurance or his
Weekly Disability Income Coverage, will be extended until the
expiration of thirty (30) months from the date his disability
commenced.
Notwithstanding the foregoing, in no event will the coverage of a
Participant be continued beyond the earliest of the following dates:
1) With respect to Weekly Disability Income Coverage and Accidental
Death and Dismemberment Insurance, the date he retires;
2) The date he becomes covered under another group benefit plan
(whether insured or uninsured) as a result of employment with
another employer;
3) The day he enters active military service;
8
<PAGE> 45
4) The date the Plan terminates or is amended to exclude the class of
employees to which the Participant belongs.
5) With respect to continuation of Medical Care Coverage under the
ninety (90) day extension referred to in Paragraph 2)a) of the
section entitled TERMINATION OF PARTICIPANT COVERAGE, the date a
Retired Employee becomes entitled to Medicare.
If a Participant becomes a Retired Employee, his Life Insurance will
be continued after retirement (in a reduced amount in accordance with
the provisions of the Group Insurance Contract); provided, however,
the Trustees reserve the right to alter or terminate such coverage if
they deem necessary or appropriate.
The coverage to which a Participant is entitled under this section
after he ceases Active Work on a Full-Time Basis shall be reduced to
the extent necessary to avoid duplicating the coverage to which the
Participant is entitled, if any, under the section entitled FAMILY AND
MEDICAL LEAVE ACT COVERAGE.
REINSTATEMENT OF PARTICIPANT COVERAGE
Except as provided in the section entitled FAMILY AND MEDICAL LEAVE
ACT COVERAGE, the coverage of each Participant whose coverage is ter-
minated (or would have been terminated were it not for his election
of Continuation Coverage) and who resumes Active Work on a Full-Time
Basis will be reinstated as follows:
1) If such person's employment has not been terminated -- on the day
immediately following completion of one hundred sixty (160) hours
of work in a period not exceeding sixty (60) days; or
2) If such person's employment has been terminated -- on the day
immediately following the end of the ninety (90) day period com-
mencing on or after his date of employment during which he has
worked three hundred sixty (360) hours for the Employer provided
9
<PAGE> 46
that some of the hours must have been worked in each of the three
(3) successive thirty (30) day periods comprising the ninety (90)
day period.
If the termination of coverage is due to the employee being unable to
perform his regular work by reason of accidental bodily injury or
bodily or mental infirmity and if such employee resumes Active Work
on a Full-Time Basis, the "one hundred sixty (160) hours of work"
requirement will not apply and the coverage of such employee will be
reinstated on the date he resumes Active Work on a Full-Time Basis,
provided that he was continuously unable to perform his regular work
by reason of accidental bodily injury or bodily or mental infirmity
from the time his coverage terminated until the time he resumes Active
Work on a Full-Time Basis.
Reinstatement of employee coverage is subject to conditions 1), 2) and
3) under the section entitled PARTICIPATION above; reinstatement of
dependent coverage is subject to conditions 1) and 2) under the sec-
tion entitled DEPENDENT COVERAGE above.
TERMINATION OF DEPENDENT COVERAGE
Coverage of a Participant's Eligible Dependents shall automatically
terminate on the earlier of the following dates:
1) the date the Participant's coverage terminates; except that if the
Participant's coverage terminates due to his death and the Parti-
cipant had been continuously employed in Active Work on a Full-
Time Basis by the Employer for a period of at least
a) four (4) months but less than one (1) year, medical care
coverage of his Eligible Dependents shall be extended for
fourteen 14) days, or
b) one (1) year, medical care coverage of his Eligible Dependents
shall be extended for ninety (90) days.
10
<PAGE> 47
2) as to a particular dependent, the date such dependent ceases to
qualify as an Eligible Dependent.
However, a covered unmarried child who a) before the date he would
otherwise cease to be eligible solely due to attained age becomes in-
capable of self-sustaining employment by reason of mental or physical
handicap and b) is dependent upon the Participant for his principal
support and maintenance, shall not cease to qualify as an Eligible
Dependent solely because of attained age while a) he remains so inca-
pacitated and dependent and b) the Participant through whom he derived
eligibility remains covered under the Plan, provided the initial due
proof of such dependent's incapacity and dependency status is sub-
mitted to the Trustees, at no expense to the Trustees, not more than
thirty-one (31) days after the date such dependent would otherwise
cease to be an Eligible Dependent by reason of attained age, and from
time to time thereafter as requested by the Trustees.
FAMILY AND MEDICAL LEAVE ACT COVERAGE
1) CONTINUATION OF COVERAGE. A Participant may continue Medical Care
and Dental Care coverage but not Life and Accidental Death and
Dismemberment Insurance or Weekly Disability Income coverage for
himself and his Eligible Dependents during a period of FMLA Leave
as if he had not taken FMLA Leave, but had instead continued his
employment and his participation in the Plan.
A Participant will not have the right to continue coverage during
a period of FMLA Leave, however, if he informs the Employer before
beginning his leave that he does not intend to return to work for
the Employer at the conclusion of his leave. In that event, the
Participant may have a right to continue coverage under the pro-
visions described below in the section entitled CONTINUATION
COVERAGE.
2) TERMINATION OF COVERAGE. If the Participant elects to continue
11
<PAGE> 48
coverage during a period of FMLA Leave, his coverage (and that of
his Eligible Dependents) will continue until the earliest of:
a) the date the Participant notifies the Employer that he does
not intend to return to work for the Employer after the con-
clusion of the FMLA Leave;
b) the date the Participant's employment is terminated because he
fails to return to work for the Employer after the period of
FMLA Leave; or
c) the date the Employer's participation in the Plan terminates.
3) RESTORATION OF COVERAGE. Any coverage the Participant does not
continue while on FMLA Leave will be reinstated upon his return
from FMLA Leave. The Participant and his Eligible Dependents will
receive the same coverage they had prior to the commencement of
the FMLA Leave. Neither the Participant nor his Eligible Depen-
dents, if they were covered under the Plan at the time the FMLA
Leave commenced, will be subject to any new preexisting condition
limitation. If they had been subject to the preexisting condition
limitation previously, however, that limitation will remain in
effect, applied as if coverage under the Plan had been in effect
during the period of FMLA Leave.
4) NEED TO REPAY CONTRIBUTIONS.
a) GENERAL RULE. If the Participant began a period of FMLA Leave
and continued his coverage under the Plan (and that of his
Eligible Dependents), and if the Participant fails to return
to work for the Employer after his FMLA Leave entitlement has
been exhausted or expires, the Employer will have the right
to recover from the Participant the contributions made by it
toward the Participant's (and his Eligible Dependents')
12
<PAGE> 49
coverage under the Plan during the FMLA Leave. The Parti-
cipant will be considered to have returned to work for the
Employer for this purpose only if he returns to work for at
least 30 calendar days.
b) EXCEPTION. The Employer will not have a right to recover its
contributions if the Participant fails to return to work for
the Employer due to:
1) the continuation, recurrence, or onset of a serious health
condition which would otherwise entitle the Participant to
a period of FMLA Leave, or
2) other circumstances beyond the Participant's control.
c) METHOD OF RECOVERY. If the Employer is entitled to recover
its contributions under these rules, it may do so in any
manner permitted by law, including deducting those amounts
from amounts otherwise due the Participant. This might in-
clude, for example, deducting those amounts from accrued but
unpaid wages or vacation pay.
5) SPECIAL RULES FOR KEY EMPLOYEES.
a) KEY EMPLOYEE. Special rules apply to key employees. For this
purpose, a "key employee" is a salaried employee who is among
the highest paid 10 percent of all employees employed by the
Employer within 75 miles of the Employer's worksite, and who
is FMLA-eligible (who, for example, meets the minimum hour
requirements, and works for a large enough facility, to be
covered under the FMLA). Determinations of whether an em-
ployee is a key employee will be made under certain technical
rules set forth in government regulations, found at 29 C.F.R.
Section 825.217.
b) CONTINUATION OF COVERAGE. If a Participant is a key employee,
special rules will apply. In that event, if the Participant
is entitled to FMLA Leave, and the Employer properly notifies
13
<PAGE> 50
the Participant that it does not intend to restore the Parti-
cipant to his job at the end of his leave because doing so
would cause substantial and grievous economic injury to the
Employer's operations, and if the Participant nevertheless
does not within a reasonable time after receiving that notice
terminate his FMLA Leave and return to work for the Employer,
the Participant's coverage (and that of his Eligible Depen-
dents) will continue until the earliest of:
1) the date the Participant gives notice to the Employer that
he no longer wishes to return to work;
2) the date the Employer denies the Participant's reinstate-
ment to employment at the end of the FMLA Leave; or
3) the date the Employer's participation in the Plan termi-
nates.
c) RECOVERY OF CONTRIBUTIONS. If a Participant who is a key
employee continues his coverage (and that of his Eligible
Dependents) under this Plan, and if he is denied employment
reinstatement by the Employer after the period of FMLA Leave,
the Employer is not entitled to recover from the Participant
the contributions made by it toward the Participant's (and his
Eligible Dependents') coverage under the Plan during the FMLA
Leave.
6) CONSTRUCTION IN ACCORDANCE WITH FMLA. The rules in this section
will be interpreted and applied in a manner consistent with the
provisions of the Family and Medical Leave Act of 1993.
CONTINUATION COVERAGE
A Participant may elect Continuation Coverage at his own expense if
his Medical Care and Dental Care coverage under the Plan terminates
14
<PAGE> 51
because of a reduction in hours of employment or termination of em-
ployment (for reasons other than gross misconduct).
The spouse of a Participant may elect Continuation Coverage if his
Medical Care and Dental Care coverage under the Plan terminates for
any of the following reasons:
1. Death of the Participant;
2. Termination of the Participant's employment (for reasons other
than gross misconduct) or reduction in the Participant's hours of
employment;
3. Divorce or legal separation from the Participant; or
4. The Participant becomes entitled to Medicare.
A dependent child of a Participant may elect Continuation Coverage if
his Medical Care and Dental Care coverage under the Plan terminates
for any of the following reasons:
1. Death of the Participant;
2. Termination of the Participant's employment (for reasons other
than gross misconduct) or reduction the Participant's hours of
employment;
3. The Participant's divorce or legal separation;
4. The Participant becomes entitled to Medicare; or
5. The dependent ceases to be an Eligible Dependent under the Plan.
The events described above which may result in eligibility for Contin-
uation Coverage are referred to hereinafter as "Qualifying Events."
The Participant, spouse or child who becomes entitled to Continuation
Coverage as the result of a Qualifying Event is referred to herein-
after as a "Qualified Beneficiary." A child born to or placed for
adoption with a Participant who is a Qualified Beneficiary is also a
Qualified Beneficiary.
The Qualified Beneficiary or Participant must inform the Employer by
written notice to the following address of a divorce, legal separation
or a child ceasing to be an Eligible Dependent under the Plan within
sixty (60) days of such Qualifying Event.
15
<PAGE> 52
Director of Personnel and Employee Relations
Paul Mueller Company
1600 West Phelps Street
Springfield, Missouri 65802
The Administrative Manager will, within fourteen (14) days after re-
ceipt of notification from the Employer that a Qualifying Event has
occurred, notify the Qualified Beneficiary that he has the right to
elect Continuation Coverage. The Qualified Beneficiary must then make
a written election of Continuation Coverage. Such election must be
received by the Administrative Manager within sixty (60) days after
the later of a) the date of the notice of the right to elect Contin-
uation Coverage or b) the date coverage would otherwise terminate as a
result of the Qualifying Event.
If the Qualified Beneficiary does not elect Continuation Coverage
within the time limits described above, his Medical Care and Dental
Care coverage will not be continued.
If the Qualified Beneficiary elects Continuation Coverage, the Plan
will provide him with Medical Care and Dental Care coverage which, as
of the time coverage is being provided, is identical to the Medical
Care and Dental Care coverage provided under the Plan to similarly
situated active Covered Individuals.
Continuation Coverage may be maintained for a maximum of thirty-six
(36) months from the date of the Qualifying Event unless coverage was
lost because of termination of employment or reduction in hours. In
that case, the maximum Continuation Coverage period is eighteen (18)
months from the date of the Qualifying Event; if the Qualified Bene-
ficiary is determined by the Social Security Administration to be
totally disabled as of the date of the Qualifying Event or within
the first sixty (60) days of Continuation Coverage and so notifies
the Administrative Manager within sixty (60) days after the Social
Security Administration's determination and prior to the end of the
eighteen (18) months, the maximum Continuation Coverage period for the
disabled Qualified Beneficiary as well as for every other Qualified
Beneficiary who lost coverage due to the same Qualifying Event will
be extended for an additional eleven (11) months -- for a total of
twenty-nine (29) months -- but not beyond the end of the first month
16
<PAGE> 53
which ends more than thirty (30) days after the Qualified Beneficiary
ceases to be considered totally disabled by the Social Security Admin-
istration. The Qualified Beneficiary must notify the Administrative
Manager within thirty (30) days following a determination by the
Social Security Administration that the Qualified Beneficiary is no
longer totally disabled. The eighteen (18), thirty-six (36) and
twenty-nine (29) month periods referred to in this paragraph include
(i.e., are reduced by) the fourteen (14), ninety (90) and one hundred
eighty (180) day and the thirty (30) month extensions provided in
paragraphs 1, 2 and 3 of the section entitled TERMINATION OF PARTI-
CIPANT COVERAGE above.
If, during the first eighteen (18) or twenty-nine (29) months on
Continuation Coverage another Qualifying Event takes place, coverage
may be extended, but in no case may the total amount of Continuation
Coverage be more than thirty-six (36) months.
In no event will continuation coverage be continued beyond the earli-
est of the following dates:
1. The date the Employer ceases to provide group health coverage to
any of its employees;
2. The date the premium for Continuation Coverage is not paid by
the end of the forty-five (45) or thirty (30) day grace period
described below;
3. The date, after the date of the election of Continuation Coverage,
on which the Qualified Beneficiary becomes covered under another
group health plan which does not limit or exclude coverage for any
preexisting health conditions of such Qualified Beneficiary;
4. The date, after the date of the election of Continuation Coverage,
on which the Qualified Beneficiary becomes entitled to Medicare.
The Trustees will determine annually the monthly premium rates appli-
cable to Qualified Beneficiaries who elect Continuation Coverage.
Premium rates may be higher for the additional eleven (11) months of
Continuation Coverage available to totally disabled Qualified Benefi-
ciaries than during the first eighteen (18) months of Continuation
17
<PAGE> 54
Coverage. A grace period of forty-five (45) days will be allowed for
payment of the premium for Continuation Coverage prior to the date of
election and thirty (30) days for payment of each subsequent Continu-
ation Coverage premium. If the first premium is not received by the
end of the grace period, Continuation Coverage will not take effect
and the right to Continuation Coverage is forfeited. If any subse-
quent premium is not received by the end of the grace period, Continu-
ation Coverage will be terminated as of the end of the period for
which the last timely premium was received and may not be reinstated.
LIMITED SELF-PAYMENT PRIVILEGE FOR RETIRED EMPLOYEES AND SURVIVING
DEPENDENTS
If a Participant becomes a Retired Employee, he may elect, in lieu of
or following the Continuation Coverage described in the preceding
section, to continue his Medical Care Coverage, but not his Life and
Accidental Death and Dismemberment Insurance or his Weekly Disability
Income or Dental Care Coverage, [provided he is not eligible for
Federal Medicare coverage (Part A or Part B)] and/or that of his
Eligible Dependents [provided they are not eligible for Federal
Medicare coverage (Part A or Part B)] beyond the date such coverage
would otherwise terminate by paying the full cost (as determined from
time to time by the Trustees) of such coverage to the Plan.
Self-payment coverage must commence immediately upon termination of
the Participant's (and/or Eligible Dependent's) regular coverage under
the Plan and must be continuous. Payment for such coverage shall be
made periodically as determined by the Trustees and must be received
by the Trustees within ten (10) days following the beginning of the
period for which due.
The Participant's self-payment coverage may not be continued beyond
the earliest of the date he a) dies, b) becomes eligible for Federal
Medicare coverage (Part A or Part B) or c) attains age sixty-five
(65). Coverage of the Participant's Eligible Dependents may not be
continued beyond the earliest of the date a) fifteen (15) years from
the date of the Participant's retirement, b) the Eligible Dependent
18
<PAGE> 55
becomes eligible for Federal Medicare coverage (Part A or Part B), c)
the Eligible Dependent attains age sixty-five (65), d) the dependent
ceases to be an Eligible Dependent or e) the Participant's coverage
ceases; except that in the case of e):
i) If the Participant's coverage ceases due to his death while he
and his Eligible Dependents are covered under the Plan, con-
tinued Medical Care Coverage is available to his surviving
Eligible Dependents at their expense until they become eli-
gible for Federal Medicare coverage (Part A or Part B), attain
age sixty-five (65), remarry (in the case of the surviving
spouse), cease to be Eligible Dependents or until fifteen (15)
years following the date of the Participant's retirement,
whichever occurs first;
ii) If the Participant's coverage ceases because he becomes eli-
gible for Federal Medicare coverage or attains age sixty-five
(65), continued Medical Care Coverage is available to his
Eligible Dependents at their expense until they become eli-
gible for Federal Medicare coverage (Part A or Part B), attain
age sixty-five (65), cease to be Eligible Dependents or until
fifteen (15) years following the date of the Participant's
retirement, whichever occurs first.
If an Eligible Dependent's coverage under this section would terminate
due to the occurrence of a Qualifying Event (as defined in the preced-
ing Section), then notwithstanding the provisions of this section to
the contrary, the Eligible Dependent may elect to continue his cover-
age(as in effect immediately prior to the Qualifying Event) in accor-
dance with the Continuation Coverage provisions of the preceding
section. In that event, except for the type of coverage available to
the Eligible Dependent, his rights with respect to such continued
coverage shall be governed by the preceding section.
Continued Medical Care Coverage on a self-payment basis is also avail-
able in lieu of the Continuation Coverage described in the preceding
19
<PAGE> 56
section to the surviving Eligible Dependents of an active Participant
who dies while eligible for early or normal retirement, to the same
extent and subject to the same requirements and limitations as if the
Participant had been a Retired Participant at the time of his death.
ARTICLE III
BENEFITS
A. GROUP LIFE INSURANCE AND ACCIDENTAL DEATH AND DISMEMBERMENT IN-
SURANCE
Group Life Insurance and Accidental Death and Dismemberment Insur-
ance benefits under the Plan shall be determined in accordance
with the terms of the group insurance policy underwritten by the
insurance company selected by the Trustees to underwrite such
benefits as may be amended or replaced from time to time. All
such benefits are the obligation of the Insurance Company solely.
Beyond payment of premiums due for Participants, the Trustees have
no obligation with respect to such benefits.
B. WEEKLY DISABILITY INCOME COVERAGE
Subject to the provisions and limitations of the Plan, if solely
as a result of an Injury, or an Illness a Participant becomes
disabled while covered under the Plan, the amount of benefits
hereinafter described for each covered day of disability shall be
payable by the Plan in accordance with the Plan's claims proce-
dures.
BENEFIT AMOUNT
The amount of Weekly Disability Income benefits shall be equal to
the lesser of $175 or 66-2/3% of the Participant's weekly rate of
earnings from the Employer in effect immediately preceding com-
mencement of disability. If the number of Covered Days of Dis-
ability is not an exact multiple of five (5), the amount of
benefits for each Covered Day of Disability shall be one-fifth
(1/5) of the weekly benefit amount set forth above. For any week
or portion thereof for which the Participant is entitled to disa-
bility benefits under the Federal Social Security Act, the weekly
disability income benefit amount payable under the Plan, if any,
20
<PAGE> 57
shall be reduced by the amount of such Social Security benefits
to which the Participant is entitled for that weekly period or
portion thereof (including any amounts payable attributable to the
Participant's dependents). A Participant shall be deemed entitled
to Social Security disability benefits (less the Plan's propor-
tionate share of reasonable attorneys' fees associated with the
successful collection of Social Security benefits) if he would be
eligible to receive such benefits were application made. The
weekly disability income benefit amount payable under the Plan
will not be reduced, however, if proof is submitted to the Trus-
tees that application for such Social Security disability benefits
has been made and, after final determination, has been denied.
Any Participant applying for weekly disability income benefits for
a period of disability expected to last more than five (5) months
shall also apply for Social Security Disability benefits. This
includes making timely claim for and fully pursuing all avenues of
appeal provided for under the Social Security Act with respect to
denial of such benefits. As a condition of the payment of weekly
disability income benefits, the Participant shall in writing a)
warrant that he (and any person or entity acting on his behalf)
has not settled, discharged or released any right or claim to
Social Security Disability benefits and b) agree to immediately
notify the Plan and refund to the Plan all amounts due the Plan
upon receipt of such benefits.
COMMENCEMENT AND DURATION OF WEEKLY DISABILITY INCOME BENEFITS
Benefits for disabilities due to Injury shall commence on the
first (1st) working day of disability. Benefits for disabilities
due to Illness shall commence on the earliest of a) the sixth
(6th) working day of continuous disability, b) the first (1st)
working day of inpatient hospital confinement or c) the first
(1st) working day of disability coinciding with or following
performance of major surgery other than as a hospital inpatient.
In no event shall benefits be payable for more than the Maximum
Payment Period of fifty-two (52) weeks for any one Disability
Period.
WEEKLY DISABILITY INCOME DEFINITIONS
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<PAGE> 58
For the purposes of these Weekly Disability Income Provisions, the
following terms, whether or not capitalized, shall have the mean-
ings indicated below. Words used herein in the masculine gender
shall be deemed to include the feminine and vice versa.
1) "Covered Day of Disability" means each working day, which is
not excluded from the payment of benefits by the Weekly Disa-
bility Income Limitations provision, on which the Participant
is disabled, beginning with the applicable day benefits com-
mence for any one Disability Period, as specified above;
2) a Participant shall be deemed to be "disabled" or in a state
of "disability" if by reason of Injury or Illness he is unable
to perform his regular work;
3) "Disability Period" means:
i) any one continuous absence from work because of disability
due to one or more causes;
ii) any two (2) or more absences from work because of disa-
bility due wholly or in part to the same or related cause,
except that any two (2) of such absences which are sepa-
rated by the return or medical release to return of a
Participant to Active Work on a Full-Time Basis for a
continuous period of two (2) weeks shall be considered to
have occurred in separate Disability Periods;
iii) any two (2) or more absences from work because of disa-
bility due to entirely unrelated causes, except that any
two (2) such absences from work which are separated by the
return or medical release to return of the Participant to
Active Work on a Full-Time Basis for at least one (1) full
day shall be considered to have occurred in separate Disa-
bility Periods.
4) "Former Plan" means: the Paul Mueller Company Employees Group
Insurance Plan.
22
<PAGE> 59
5) "Injury" means only an accidental bodily injury caused by a
sudden and unforeseen event, definite as to time and place;
and "Illness" means only a deviation from the normal healthy
state resulting from disease which requires treatment by a
Physician and is not otherwise excluded from coverage under
the Plan, or pregnancy.
6) "Working Day" means Monday through Friday of each week, in-
cluding holidays.
WEEKLY DISABILITY INCOME LIMITATIONS AND EXCLUSIONS
Benefits shall not be payable under the Weekly Disability Income
provisions of the Plan for any day of disability
1) prior to the first day on which the Participant is personally
treated for the Injury or Illness causing his disability by a
legally qualified physician or surgeon;
2) on which the Participant engages in his regular occupation
or in any other occupation or employment for compensation,
profit or gain in which he was not engaged, or was engaged
to a lesser extent, immediately prior to commencement of his
disability;
3) due directly or indirectly to bodily or mental infirmity
covered by Workers' Compensation law, occupational illness
law, or laws of a similar character; or Injury arising out
of or in the course of any occupation or employment for com-
pensation, profit or gain;
4) for which benefits were paid by the Former Plan;
5) due directly or indirectly to any intentionally self-inflicted
injury;
6) due directly or indirectly to an injury or illness resulting
from the Covered Individual's commission of a crime that is a
felony in the jurisdiction in which it is committed. With
23
<PAGE> 60
respect to such a crime, Weekly Disability Income benefits
shall not be payable if there is an investigation or charges
pending against the Covered Individual or if the Covered
Individual is convicted of the crime;
7) due directly or indirectly to an injury or illness resulting
from the Covered Individual's being intoxicated due to alcohol
consumption or under the influence of any illegal drug. For
purposes of this paragraph, "intoxicated" means a substan-
tially impaired mental or physical capacity resulting from the
introduction of a substance into the body.
8) of a Participant who is a participant in the Paul Mueller
Company Short-Term Disability Plan and the Paul Mueller
Company Long-Term Disability Plan.
C. MEDICAL CARE COVERAGE
Subject to the provisions and limitations of the Plan, the amount
of the benefits hereinafter described shall be payable by the Plan
in accordance with the Plan's claims procedures for the Covered
Expenses incurred by an individual while covered by the Plan or
the Former Plan.
MEDICAL CARE DEFINITIONS
Medical Care coverage provisions, the following terms, whether or
not capitalized, shall have the meanings indicated below. Words
used herein in the masculine gender shall be deemed to include the
feminine and vice versa.
1) "Covered Expense" means only the expense incurred, or portion
of such expense, for the medical care, services or supplies
described in the section entitled MEDICAL COVERED CHARGES
below which a) are prescribed by a Physician, b) are necessary
in connection with the diagnosis or therapeutic treatment of
the Injury or Illness involved (in determining whether a ser-
vice or supply, or what portion of a service or supply, is
included in part b) of this definition, a service or supply
must be ordered by a Physician and be commonly and customarily
24
<PAGE> 61
recognized throughout the Physician's profession as appro-
priate treatment of the diagnosed Illness or Injury; and must
not be educational; the length of a hospital confinement and
the hospital's services and supplies will be "necessary" only
to the extent they are, as determined by the Trustees, rea-
sonably related to the treatment of the condition involved),
c) are not excluded from payment of benefits by the MEDICAL
LIMITATIONS AND EXCLUSIONS provision, and d) are not in excess
of the reasonable, usual and customary charges for the same or
similar medical care, services and supplies (in determining
whether an expense, or what portion of an expense, is included
in part d) of this definition, the Plan shall take into
account the fees and prices generally charged for cases of
comparable nature and severity at the time and place where
such medical care, services and supplies are rendered or
received); an expense shall be deemed to be incurred on the
date the medical care, service and supply is rendered or
received; in the event of a Illness or Injury which is ex-
pected to result in Covered Expenses in excess of $10,000,
the Trustees may request a review by a case management organ-
ization designated by the Trustees; if the case management
organization recommends a special treatment program which is
expected to result in less cost to the Plan than if the spe-
cial treatment program were not implemented and is acceptable
to the Trustees, the patient and the patient's Physician, the
expense of such special treatment program shall constitute
Covered Expense under the Plan; if, in the event of any
Illness or Injury (even if Covered Expenses do not exceed
$10,000), a case management organization designated by the
Trustees recommends a treatment program which, in the opinion
of the Trustees, is equally effective and less costly than the
treatment program utilized by the Covered Individual, the Plan
will pay toward the cost of the more costly program only what
it would have paid for the less costly program recommended by
the case management organization.
2) "Physician" means only a legally qualified physician or sur-
geon (Doctor of Medicine or Doctor of Osteopathy); with
respect to certain Covered Expenses under the Plan, the term
"Physician" shall also include a duly licensed Dentist,
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<PAGE> 62
Podiatrist, Chiropractor, Nurse Practitioner (other than a
Nurse Midwife) or Clinical Psychologist practicing within
the scope of his profession; the term "Physician" does not
include Social Workers, Licensed Professional Counselors,
Optometrists, Naturopaths, Nurse Midwives, Speech Therapists,
Christian Science Practitioners, etc.; although the term
"Physician" does not ordinarily include social workers or
licensed professional counselors, services rendered by
Licensed Clinical Social Workers and Licensed Professional
Counselors are covered under the Plan when they are a) an
integral part of, rendered at and billed by a mental illness
or chemical dependency treatment program of a Hospital, a
Residential Treatment Program or a Nonresidential Treatment
Program, b) an integral part of a treatment program approved
by the Plan's Employee Assistance Program or c) rendered pur-
suant to and within the scope of a referral made by the Plan's
Employee Assistance Program.
3) "Hospital" means only an institution which meets all of the
following requirements: a) maintains permanent and full-time
facilities for bed care of resident patients, b) has a Physi-
cian in regular attendance, c) continuously provides twenty-
four (24) hour a day nursing service by Registered Nurses
(R.N.), d) is primarily engaged in providing diagnostic and
therapeutic services and facilities for medical and surgical
care of Injuries or Illnesses on a basis other than a rest
home, nursing home, convalescent home, or a home for the aged,
e) maintains facilities for surgery except that the require-
ment of facilities for surgery shall not apply to a mental
institution or other institution operated primarily for the
therapeutic treatment of the chronically ill, and f) is
operating lawfully as a hospital in the jurisdiction where
it is located;
4) "Ambulatory Surgical Center" means any public or private es-
tablishment with an organized medical staff of Physicians,
permanent facilities that are equipped and operated primarily
for the purpose of performing surgical procedures, continuous
Physician services and registered professional nursing ser-
vices whenever a patient is in the facility, and which does
not provide services or other accommodations for patients who
stay overnight.
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5) "Injury" means only an accidental bodily injury caused by a
sudden and unforeseen event, definite as to time and place,
and "Illness" means only a deviation from the normal healthy
state resulting from disease which requires treatment by a
Physician and is not otherwise excluded from coverage under
the Plan, or pregnancy;
6) "Disability" or "Disabled" means
a) in the case of a Participant, that he is unable to perform
his regular work solely as a result of Injury or Illness;
or
b) in the case of any other Covered Individual, that he is
prevented from engaging in all the normal activities of a
person of like age and sex and in good health solely as a
result of Injury or Illness;
7) "Close Relative" means the Participant, his spouse, and the
children, brothers, sisters, aunts, uncles, and parents of
either the Participant or his spouse.
8) "Highest Semiprivate Charge" means a) the standard charge by
the hospital in which confined for semiprivate room and board
accommodations, or the highest of such charges where the
hospital has more than one established level of such charges,
or b) if the hospital in which confined does not provide any
semiprivate accommodations, the greater of i) 80% of the
highest charge by the hospital in which confined for single-
bed room and board accommodations or ii) the average semi-
private rate of all other hospitals in the community.
9) "Intensive Care Accommodations" means an accommodation segre-
gated from the rest of the hospital's facilities and exclu-
sively reserved for critically and seriously ill or injured
patients requiring constant audiovisual observation, which
provides room and board, specialized Registered Nurse (R.N.)
27
<PAGE> 64
and other nursing care, and special equipment or supplies
immediately available on a standby basis, as prescribed by
the attending Physician.
10) "Convalescent Nursing Home" means only an institution, other
than a hospital, which meets all of the following require-
ments: a) maintains permanent and full-time facilities for bed
care of ten (10) or more resident patients, b) has available
at all times the services of a Physician, c) has a Registered
Nurse (R.N.) or Physician on full-time duty in charge of
patient care and one or more Registered Nurses (R.N.) or
Licensed Practical Nurses (L.P.N.) on duty at all times, d)
maintains a daily medical record for each patient, e) is pri-
marily engaged in providing continuous skilled nursing care
for sick or injured persons during the convalescent stage of
their Illnesses or injuries and is not, other than incident-
ally, a rest home or a home for custodial care or for the
aged, and f) is operating lawfully as a nursing home in the
jurisdiction where it is located; in no event, however, shall
such term include an institution primarily engaged in the care
and treatment of drug addicts or alcoholics;
11) "Covered Convalescent Nursing Home Confinement" means only
confinement, or portion thereof, in a convalescent nursing
home which confinement
a) commences while the individual is covered under the Plan
and within seven (7) days after a covered hospital con-
finement of at least three (3) days duration or a pre-
viously covered convalescent nursing home confinement, as
the case may be, and
b) is necessary for care or treatment of the Injury or Ill-
ness which was the cause of the preceding hospital or
convalescent nursing home confinement;
provided, however, that the Covered Individual must be under
the regular care of a Physician during such confinement, or
portion thereof.
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<PAGE> 65
12) "Nonresidential Treatment Program" means only a nonresidential
accredited treatment program for alcoholism, chemical depen-
dency or drug addiction which is licensed or certified by the
Department of Mental Health or similar department of the State
in which the program is located.
13) "Residential Treatment Program" means only a residential
accredited treatment program for alcoholism, chemical depen-
dency or drug addiction which is licensed or certified by the
Department of Mental Health or similar department of the State
in which the program is located.
14) "Former Plan" means the Paul Mueller Company Employees Group
Insurance Plan.
15) "Hospice" means an organization which is a) accredited as a
hospice by the Joint Commission for Accreditation of Hospitals
or the National Hospice Organization, b) approved as a Hospice
by Medicare or c) certified or accredited as a Hospice under
applicable state law.
16) "Durable Medical Equipment" means equipment which a) can with-
stand repeated use, b) is primarily and customarily used to
serve a medical purpose, c) is generally not useful to a per-
son in the absence of Illness or Injury and d) is appropriate
for use in the home.
17) "Clinical Psychologist" means only a person who specializes in
clinical psychology and fulfills the requirements specified in
item a) or b) below whichever is applicable.
a) A person who is licensed or certified as a psychologist by
the appropriate governmental authority having jurisdiction
over such licensure or certification, as the case may be,
in the jurisdiction where such person renders service to
the Covered Individual.
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<PAGE> 66
b) If there is no licensure or certification in the jurisdic-
tion where such person renders service to the Covered
Individual, a person who is a Member or Fellow of the
American Psychological Association.
18) "Home Health Agency" means only an organization that is
approved by Medicare as a home health agency and has signed
a Medicare home health agency participation agreement.
19) "Preferred Provider" means only a Hospital, Physician or other
provider of medical services or supplies which participates
in a Preferred Provider Organization with which the Plan has
entered into a contract.
20) "Enrollment Date" means the first day of coverage under the
Plan or, if there is a waiting period for coverage, the first
day of the waiting period.
21) "Prior Creditable Coverage" means continuous coverage under
any one of the following:
- An insured or self-insured group health plan
- Health insurance coverage
- Medicare
- Medicaid and Title X
- Indian Health Service Program
- State high risk pools
- Public health plans
- Peace Corps benefits
provided a) the Covered Individual furnishes the Plan with a
Certificate of Creditable Coverage or other evidence of Prior
Creditable Coverage satisfactory to the Trustees and b) cover-
age before a break in coverage of sixty-three (63) days or
more does not count as continuous coverage.
22) "Licensed Clinical Social Worker" means a) a person who is
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<PAGE> 67
trained and experienced as a clinical social worker and who
holds a current, valid license to practice as a clinical
social worker in the state in which he practices and b) a
person who is a graduate of an accredited school of social
work and meets all requirements for licensure as a clinical
social worker.
23) "Licensed Professional Counselor" means a) a person who is
registered, certified or licensed as a professional counselor
by the state in which he practices and b) a person who is a
graduate of an accredited educational institution with at
least a master's degree with a major in counseling or its
equivalent, meets all requirements for certification or licen-
sure as a professional counselor other than the requirement of
supervised counseling experience and who is supervised by a
person who meets the requirements of a) above.
MEDICAL EXPENSE BENEFIT
Subject to the applicable Medical Deductible requirement and Maxi-
mum Amounts, benefits are payable in an amount equal to:
a. In the case of i) services rendered by a Preferred Provider;
ii) radiology, pathology, anesthesiology and ambulance ser-
vices rendered by a service provider who is not a Preferred
Provider during an inpatient or outpatient confinement at a
Hospital which is a Preferred Provider, which confinement is
prescribed by a Physician who is a Preferred Provider; and
iii) prescription drugs, an amount equal to 90% of the first
$1,500 of Covered Expenses incurred by a Covered Individual
during a calendar year and 100% of Covered Expenses in excess
of $1,500.
b. In the case of services other than those described in a)
above, an amount equal to 80% of the first $2,500 of Covered
Expenses incurred by a Covered Individual during a calendar
year and 100% of Covered Expenses in excess of $2,500.
Charges payable at 90% under paragraph a) above count toward the
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<PAGE> 68
$2,500 required to be paid at 80% under paragraph b) above, and
charges payable at 80% under paragraph b) above count toward the
$1,500 required to be paid at 90% under paragraph a) above.
(Exceptions: a) Covered Expenses described in Paragraph E of the
section entitled MEDICAL COVERED EXPENSES below are payable in
an amount equal to 50% of Covered Expenses incurred while not
confined to a Hospital or treated in a Residential Treatment
Program or a Nonresidential Treatment Program, and such charges
will not be considered in determining the requirement for 100%
payment; b) Covered Expenses described in Paragraphs P, Q, T and
W of the section entitled MEDICAL COVERED EXPENSES below are pay-
able in an amount equal to 100% of Covered Expenses incurred; c)
Covered Expenses for Second Surgical Opinion, Flat Rate Maternity
and High Risk Pregnancy are covered as specified in the following
sections rather than as in this paragraph). If a) the Plan has
entered into a contract with a Preferred Provider Organization
(PPO) and b) the charges negotiated by the PPO exceed the pro-
vider's usual charges and c) the Covered Individual is responsi-
ble for payment of that excess, the Plan will pay the benefits
described in the preceding sentence plus 100% of the amount by
which the negotiated charge exceeds the provider's usual charge.
UTILIZATION REVIEW REQUIREMENT
1. Inpatient Hospitalization
Precertification of the medical necessity and appropriateness
of inpatient hospitalization must be obtained from the utili-
zation review organization specified by the Trustees prior to
any nonemergency inpatient hospital admission or within 48
hours following any emergency inpatient hospital admission.
Inpatient hospital admission includes outpatient hospital
treatment that involves observation room services for more
than 23 hours. If such precertification is obtained, the
Plan will consider days of inpatient hospitalization which
are certified as medically necessary and appropriate by the
utilization review organization to meet the medical necessity
requirement of the definition of "Covered Expenses." If such
precertification is not obtained, the Plan will obtain a
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<PAGE> 69
retrospective determination of the medical necessity and
appropriateness of the inpatient hospitalization upon receipt
of the claim for benefits involving the hospitalization.
Coverage of any days of inpatient hospitalization which are
determined by the utilization review organization, either
prospectively or retrospectively, not to be medically neces-
sary and appropriate is limited to what care would have cost
had it been provided on an outpatient basis. However, the
Plan will not restrict benefits for any Hospital stay in
connection with childbirth for the mother or newborn Child
following a normal vaginal delivery to less than forty-eight
(48) hours, or to less than ninety-six (96) hours in the case
of a Caesarean section. In addition, the Plan will not re-
quire a provider to obtain authorization or precertification
for prescribing the minimum lengths of stay described above.
2. Services Requiring Precertification Regardless of Where Per-
formed
Precertification of the medical necessity and appropriateness
of the services listed below must also be obtained from the
utilization review organization specified by the Trustees
prior to any nonemergency services or within 48 hours fol-
lowing any emergency services.
DIAGNOSTIC PROCEDURES REQUIRING PRECERTIFICATION:
A) Magnetic Resonance Imaging (MRI)
B) Computer Assisted Tomography (CT Scan)
C) Polysomnogram (Sleep Apnea Study)
SURGICAL PROCEDURES REQUIRING PRECERTIFICATION:
A) All Breast Surgeries --
- Mastectomy
- Insertion or Removal of Breast Implant
- Breast Reduction or Enlargement or Other Augmentation
(Breast Biopsy Does Not Require Precertification)
B) Back Surgeries, Including --
- Laminectomy
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<PAGE> 70
- Spinal Fusion
- Diskectomy
C) Hysterectomy
D) Hernia Repair
E) Nasal Surgery --
- Septoplasty
- Rhinoplasty
F) Blepharoplasty
G) Cataract Surgery
H) Vein Surgery (Sclerotherapy)
I) Panniculectomy
J) Tonsillectomy
K) Adenoidectomy
L) Gall Bladder Surgery
M) Uvulopalatopharyngoplasty (Excision of Uvula for Sleep
Disorders)
N) All Organ Transplant Procedures
INTRAVENOUS PROCEDURES REQUIRING PRECERTIFICATION
A) IV Antibiotics
B) Human Growth Hormone Therapy
If such precertification is obtained, the Plan will consider
services which are certified as medically necessary and appro-
priate by the utilization review organization to meet the
medical necessity requirement of the definition of "Covered
Expenses." If such pre-certification is not obtained, the
Plan will obtain a retrospective determination of the medical
necessity and appropriateness of the services upon receipt of
the claim for benefits involving the services. Any services
which are determined by the utilization review organization,
either prospectively or retrospectively, not to be medically
necessary and appropriate are not covered under the Plan.
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<PAGE> 71
If, in conjunction with a request for precertification of a
hospitalization or service, a question arises concerning the
medical necessity and appropriateness or the coverage of the
hospitalization or service, the claimant or his duly author-
ized representative may request a review of a denial of
precertification in accordance with the Review Procedure
described in Section 6) of SELF-INSURED BENEFITS in Article
VIII.
SECOND SURGICAL OPINION BENEFIT
Covered Expenses described in Paragraph F under the section en-
titled MEDICAL COVERED EXPENSES below for a second surgical
opinion which meets the following conditions are not subject to
the Medical Deductible, and Benefits will be payable at the rate
of 100% of the first $100 of such Covered Expenses (such Covered
Expenses in excess of $100 will be paid at the rates specified in
the above paragraph entitled MEDICAL EXPENSE BENEFIT):
1) The second opinion must evaluate the need for surgery pre-
viously recommended by the patient's Physician which would
require either confinement in a hospital or treatment in an
ambulatory surgical center.
2) The charges that would be made for the recommended surgery, if
it were performed, must qualify as Covered Expenses.
3) The Physician furnishing the second opinion must not be finan-
cially associated with the Physician who rendered the first
opinion, must agree not to subsequently perform the surgery,
and must be board certified in the appropriate medical spe-
cialty.
4) The second opinion must be set forth in writing by the second
Physician after examination of the patient.
If the first two opinions differ, the Plan will also pay the bene-
fits described above for a third opinion.
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<PAGE> 72
FLAT RATE MATERNITY
If a) the Trustees have negotiated a flat maternity fee with the
Hospital used by the Participant or the Participant's Spouse, b)
the Trustees have designated the flat fee as one which qualifies
for 100% reimbursement, c) the Plan and the Participant or the
Participant's Spouse meet the requirements of the flat maternity
fee agreement and qualify for the flat fee and d) the maternity
expenses are not otherwise excluded by the Plan, the Plan will
pay 100% of the flat fee. The flat fee will ordinarily apply to
normal pregnancies only and will include the mother's Hospital
charges for obstetrical delivery and well newborn nursery care,
but will not include charges for elective items such as private
accommodations. Other charges associated with the pregnancy (such
as Physicians' charges) will be paid at the rates specified in the
above paragraph entitled MEDICAL EXPENSE BENEFIT. The flat fee
will not ordinarily apply to complicated pregnancies, Caesarean
sections, sterilization procedures or premature babies.
AUDITS BY PARTICIPANTS
Subject to the following conditions and limitations, the Plan will
pay directly to the Participant 50% of any reduction in Plan bene-
fits directly resulting from billing error(s) detected by the
Participant and corrected through his efforts. If the Covered
Individual's deductible has not been satisfied, 50% of any such
reduction in Covered Expenses will be credited toward his deduc-
tible.
1) In order to qualify for this payment, the Participant must
furnish to the Plan's Administrative Manager copies of the
original itemized bill and the corrected bill showing the
reduction in Covered Expenses resulting from correction of the
billing error(s).
2) Payment under this provision is limited to a maximum of $1,000
per Covered Individual per calendar year.
HIGH RISK PREGNANCY BENEFIT
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<PAGE> 73
If a pregnant Participant or Spouse complies with all of the fol-
lowing requirements and delivers a well baby, the Plan will pay
$200 of the baby's hospital charges at the rate of 100%.
1) The Participant or Spouse must notify the Administrative
Manager within two (2) weeks following a positive pregnancy
test.
2) The Participant or Spouse must have the high risk pregnancy
questionnaire furnished by the Administrative Manager com-
pleted by her obstetrician.
3) The Participant or Spouse must not smoke during the pregnancy.
4) If the pregnancy is classified as "high risk," the Participant
or Spouse must comply with all the recommendations of the case
management organization selected by the Trustees.
EMPLOYEE ASSISTANCE PROGRAM
The Trustees may contract with an Employee Assistance Program
(EAP) to provide short-term counseling to assist employees and
dependents with personal problems, including:
- Family Problems
- Marital Problems
- Emotional Difficulties
- Stress and Anxiety
- Alcoholism
- Drug Abuse
- Legal Problems
- Financial Problems
The EAP shall provide an assessment interview and up to five (5)
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<PAGE> 74
counseling sessions at no cost to Covered Individuals. In addi-
tion, the EAP may refer Covered Individuals to outside Psychia-
trists, Clinical Psychologists, Licensed Clinical Social Workers
and Licensed Professional Counselors. A portion of the fees
charged by these professionals may be covered under other provi-
sions of the Plan. The EAP may also refer Covered Individuals to
other community resources which charge no fees or reduced fees
based on the Covered Individual's ability to pay.
Use of the EAP shall be confidential. Information shall not be
released to the Employer without the Covered Individual's permis-
sion.
MEDICAL COVERED CHARGES
A) Daily inpatient charges made by a Hospital for room and board
and general nursing services, or special charges in the case
of Intensive Care Accommodations, for each day of confinement
as an inpatient except that the excess, if any, of the amount
charged over the following Room and Board Maximums shall in no
event be included as a Covered Expense under the Plan:
Single-Bed Accommodation...........Highest Semiprivate Charge
for the area of the Hospi-
tal in which the patient is
confined, except that no
maximum applies if it is
determined by the Trustees
that, and only for the
period of time that, it is
medically necessary that
the Covered Individual
be isolated from other
patients because of Illness
that is highly contagious
or because the patient's
immunodefense system has
been so compromised that he
or she must be protected
from all bacteria
Ward or Semiprivate accommodation..No Maximum Applies
Intensive Care accommodation.......No Maximum Applies
B) Special inpatient charges made by a Hospital, in its own be-
half, for medical care, services and supplies rendered or used
during a period of confinement for which a charge as described
in A) above is made, except i) those included in A) above, ii)
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<PAGE> 75
special nursing care and iii) professional services;
C) Charges made by a Hospital or an Ambulatory Surgical Center,
in its own behalf, for medical care, services and supplies
rendered or used on an outpatient basis, except charges for
professional services;
D) Charges made by a Physician for surgical care and charges made
by a Physician or Certified Registered Nurse Anesthetist for
the administration of anesthesia (including anesthesia sup-
plies) not included in B) and C) above;
E) Psychiatric service charges of a Physician for nervous or
mental conditions. Covered Expenses for psychiatric service
charges incurred while confined as an inpatient in a Hospital
are limited to charges for one (1) treatment per day. Covered
Expenses for psychiatric service charges incurred while not so
confined will be limited to charges for one treatment in any
period of seven (7) consecutive days;
F) Professional service charges for medical care and services not
included in B), C), D), and E) above, made by a Physician or
by a laboratory for diagnostic laboratory and X-ray examina-
tions;
G) Nursing charges by a registered nurse (R.N.) in his own behalf
for services in or out of the hospital, or physical therapy by
a physical therapist or occupational therapist in his own
behalf, not included in B), C), and D) above, other than a
registered nurse (R.N.), physical therapist or occupational
therapist who has the same legal residence as the Covered
Individual or is a Close Relative of the Covered Individual;
H) Transportation charges not included in B) and C) above for:
1) transportation of a Covered Individual by a licensed ambu-
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<PAGE> 76
lance (surface or air) to and/or from a Hospital, provided
the trip does not exceed one hundred (100) miles each way;
2) transportation of a Covered Individual within the United
States and Canada by a railroad or by a regularly sche-
duled flight of a commercial aircraft from the place at
which the Covered Individual becomes disabled by an Injury
or Illness to and back from the nearest Hospital equipped
to furnish special treatment incident to such disability;
I) Medical equipment charges for orthopedic or prosthetic ap-
pliances and hospital-type equipment by any person or institu-
tion other than those included in B) and C) above for:
1) artificial limbs or eyes for the initial replacement of
natural limbs or eyes; casts, splints or crutches;
2) purchase of the initial truss, brace or support as a
direct result of an Injury sustained or Illness contracted
while covered under the Plan or for a disabling congenital
condition;
3) oxygen and the rental of equipment for the administration
thereof;
4) rental of a wheelchair or hospital-type bed;
5) rental of an iron lung or other mechanical equipment re-
quired for the treatment of a respiratory paralysis;
6) rental of other Durable Medical Equipment up to a maximum
of $1,000 per item. The Plan will cover the purchase of
equipment when, in the Trustees' opinion, it is less
costly than rental based on the expected duration of use;
J) Charges for drugs which can be obtained only with the written
prescription of a Physician and are required to be dispensed
by a licensed pharmacist (including oral or injectable con-
traceptives prescribed for Participants and their spouses);
charges for insulin and needles and syringes for its admini-
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<PAGE> 77
stration; charges for Norplant contraceptive implants pre-
scribed for Participants and their spouses; and charges for
supplies to test blood and urine sugar levels; other than
those included in B), C), and D) above;
K) Convalescent Nursing Home charges for daily room and board and
general nursing services made by a convalescent nursing home
for each day of Covered Convalescent Nursing Home confinement,
except that no more than sixty (60) days of Convalescent
Nursing Home Services incurred in any one (1) calendar year
will be included as Covered Expenses under the Plan.
L) Home Health Care charges made by a Hospital or by a Home
Health Agency for medical care rendered after or in lieu of
confinement in a hospital or convalescent nursing home, sub-
ject to the following:
1) A Physician must certify no less frequently then every
three (3) months that a) medical care described in 3)
below is necessary in connection with treatment of the
patient's Illness or Injury, b) the patient is totally
disabled and c) in the absence of Home Health Care, the
patient would be confined in a Hospital or a Convalescent
Nursing Home.
2) The medical care must not be custodial in nature.
3) The medical care must consist of care by a registered
professional nurse (R.N.), a licensed practical nurse
(L.P.N.), a home health aide, an occupational therapist,
a physical therapist or a licensed respiratory therapist;
provided the nurse, aide or therapist does not have the
same legal residence as, and is not a Close Relative of,
the Covered Individual and further provided that services
of a licensed respiratory therapist are limited to three
(3) visits to train the patient's caretaker following dis-
charge from a Hospital.
M) Charges for treatment of alcoholism, chemical dependency or
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<PAGE> 78
drug addiction, but not tobacco dependency, by a Nonresiden-
tial Treatment Program or a Residential Treatment Program.
N) Charges by a Hospice for the following services and supplies
to the extent the patient's Physician certifies that the
patient is expected to live for less than six (6) months.
1) Home health care services of the type covered under Para-
graph L above, but not limited to one hundred (100) visits
per twelve (12) months.
2) Palliative care.
3) Nutrition services.
4) Counseling and social support services by a Licensed
Clinical Social Worker.
O) Charges for services rendered by a chiropractor practicing
within the scope of his profession. Covered Expense for
chiropractic services is limited to $500 for each Covered
Individual each calendar year.
P) Charges for routine mammography examinations performed while
the Covered Individual is not a Hospital inpatient, subject
to the following frequency limits.
One baseline mammogram during the five (5) year period begin-
ning on January 1 of the calendar year in which the Covered
Individual attains age 35.
One mammogram during each calendar year beginning with the
calendar year during which the Covered Individual attains
age 40.
The foregoing frequency limits are not applicable a) to per-
sons with a family history of breast cancer or b) to mammo-
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<PAGE> 79
grams recommended by a Physician following a prior mammogram
which showed tissue changes.
Q) Charges for one (1) routine pap smear each calendar year
performed while the Covered Individual is not a Hospital
inpatient and one (1) Physician's office visit associated with
each such pap smear.
R) Even though not medically necessary in connection with the
treatment of an Illness, charges made by a Hospital or a Phy-
sician for voluntary sterilization of a Participant or the
spouse of a Participant.
S) Charges for blood or blood plasma and its administration, in-
cluding charges for directed or autologous blood donation.
T) Charges for routine Prostate Specific Antigen (PSA) tests and
routine digital prostate examinations performed while the
Covered Individual is not a Hospital inpatient and Physicians'
office visits associated with such tests and examinations;
such tests and examinations are covered only with respect to
Covered Individuals who have attained age 40 and are subject
to a limit of one such test and examination per calendar year.
U) Organ Transplant Expenses incurred in conjunction with the
transplant of a human organ or tissue in accordance with the
rules described in the table below. The Plan will not pay
more than $150,000 for Organ Transplant Expenses incurred in
conjunction with any one transplant. Also, the combined Organ
Transplant Expenses payable for an initial transplant and any
subsequent transplantation of the same organ are subject to a
single $150,000 lifetime maximum.
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<PAGE> 70
SITUATION COVERAGE
1. The recipient is a Covered In- The recipient's Expenses,
dividual under the Plan and including the charge for
receives the organ from a the organ, are covered.
cadaver
2. The recipient is a Covered The recipient's Expenses,
Individual under the Plan including the charge for
and receives the organ from the organ, are covered.
a bank.
3. The recipient and the donor The Expenses of both
are Covered Individuals under are covered as two sepa-
the Plan. rate claims with separate
deductibles and co-pay-
ments.
4. The recipient is a Covered The Expenses of both are
Individual under the Plan and covered as two separate
the donor's expenses are not claims with separate de-
covered under any other plan. ductibles and co-payments.
5. The recipient is a Covered Only the recipient's Ex-
Individual under the Plan penses are covered.
and the donor's expenses are
covered under another plan.
6. The donor is a Covered The Expenses of neither
Individual under the Plan are covered.
but the recipient is not.
Organ Transplant Expenses Include: pre-transplant testing
and consultation; all services and supplies incurred for the
transplant procedure; post-operative care in the hospital
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<PAGE> 81
(inpatient or outpatient); extended care in a facility or at
home; pharmaceuticals and their administration, including but
not limited to high-dose chemotherapy or anti-rejection drugs;
durable medical equipment; and to the extent provided above,
the donor's expenses.
Covered Individuals must contact the Administrative Manager
before undergoing any organ transplant procedure. A Covered
Individual who does not contact the Administrative Manager
runs the risk of discovering after expenses have been incurred
that the procedure may not be covered by the Plan.
V) Charges for cardiac rehabilitation services, subject to a
maximum lifetime benefit of $1,500 per Covered Individual.
W) Charges for the following services and supplies for smoking
cessation, up to a lifetime maximum of $200 per Covered Indi-
vidual.
- Group or individual counseling provided by medical profes-
sionals;
- Hypnotherapy provided by a licensed hypnotherapist;
- Pharmaceutical aids, including prescription antidepres-
sants (Zyban and Wellbutrin), nicotine patches (Nicoderm
CQ or Nicotrol), nicotine gum (Nicorette) and nicotine
nasal sprays.
MEDICAL DEDUCTIBLE
The Medical Deductible is applicable each calendar year to the
Covered Expenses incurred by each Covered Individual and is con-
sidered to be satisfied as soon as Covered Expenses are incurred
by the Covered Individual in an amount equal to:
a. In the case of i) services rendered by a Preferred Provider;
ii) radiology, pathology, anesthesiology and ambulance ser-
vices rendered by a service provider who is not a Preferred
Provider during an inpatient or outpatient confinement at a
Hospital which is a Preferred Provider, which confinement is
45
<PAGE> 82
prescribed by a Physician who is a Preferred Provider; and
iii) prescription drugs, an amount equal to $100.
b. In the case of services other than those described in a)
above, an amount equal to $200.
Charges applied to the $100 deductible under paragraph a) above
count toward the $200 deductible required under paragraph b)
above, and charges applied to the $200 deductible under paragraph
b) above count toward the $100 deductible required under paragraph
a) above.
1) Covered Expenses incurred during the last three (3) months
of one calendar year for which Medical benefits were not
payable solely because of being included in the Medical
Deductible may be used toward satisfying the Medical De-
ductible in the next calendar year.
2) If during any one calendar year the total amount of Covered
Expenses incurred by Covered Individuals of any one family
unit, consisting of the Participant and his dependents covered
under the Plan, which are subject to the Medical Deductible
equals:
a. In the case of i) services rendered by a Preferred Pro-
vider; ii) radiology, pathology, anesthesiology and
ambulance services rendered by a service provider who
is not a Preferred Provider during an inpatient or out-
patient confinement at a Hospital which is a Preferred
Provider, which confinement is prescribed by a Physician
who is a Preferred Provider; and iii) prescription drugs,
an amount equal to $300.
b. In the case of services other than those described in
a) above, an amount equal to $600.
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<PAGE> 83
Charges applied to the $300 deductible under paragraph a)
above count toward the $600 deductible required under para-
graph b) above, and charges applied to the $600 deductible
under paragraph b) above count toward the $300 deductible
required under paragraph a) above, then each Covered Indi-
vidual in such family unit who has not previously satisfied
the Medical Deductible for that calendar year shall be auto-
matically deemed to have satisfied the Medical Deductible
for that calendar year on the date the total amount of such
Covered Expenses is incurred.
3) The Medical Deductible shall not apply to the following
Covered Expenses:
i) Routine Prostate Specific Antigen (PSA) tests and routine
digital prostate examinations performed while the Covered
Individual is not a Hospital inpatient and Physicians'
office visits associated with such tests and examinations;
ii) Routine pap smears performed while the Covered Individual
is not a Hospital inpatient and Physicians' office visits
associated with such tests;
iii) Routine mammography examinations performed while the
Covered Individual is not a Hospital inpatient.
iv) Well-baby Hospital charges covered under the High Risk
Pregnancy Benefit.
v) Second surgical opinions which meet the requirements of
the section entitled SECOND SURGICAL OPINION BENEFIT
above.
MAXIMUM AMOUNTS
The amount of benefits payable in the aggregate for all Covered
Expenses incurred while the person is a Covered Individual
(whether or not there is any interruption in his coverage under
the Plan and whether or not there is any change in the status of
47
<PAGE> 84
such person from Participant to dependent and vice versa) shall
not exceed:
a) with respect to benefits paid prior to March 22, 1995,
$250,000 for all Covered Expenses incurred as a result of
the same or related cause; if expenses are incurred as a
result of different and entirely unrelated causes, separate
maximums shall apply;
b) with respect to benefits paid on and after March 22, 1995,
$1,000,000 for all causes combined;
subject, in the case of a) and b) above, to the Evidence Rein-
statement provision.
The amount of benefits payable for treatment of alcoholism, chemi-
cal dependency and drug addiction is further limited to a maximum
of $50,000 lifetime.
Coverage for inpatient treatment of nervous or mental conditions
is limited to thirty (30) days per calendar year and seventy-five
(75) days lifetime (all days, including those prior to January 1,
1998, are counted toward the lifetime maximum).
Refer to the section entitled MEDICAL COVERED CHARGES in this Part
C, for the $150,000 Organ Transplant Expense maximum.
Refer to Paragraph V) of the section entitled COVERED MEDICAL
CHARGES in this Part C for the $1,500 cardiac rehabilitation ser-
vices maximum.
Refer to Paragraph W) of the section entitled COVERED MEDICAL
CHARGES in this Part C for the $200 smoking cessation maximum.
EVIDENCE REINSTATEMENT
A Covered Individual whose overall Maximum Amount is currently re-
48
<PAGE> 85
duced by accrual of at least $1,000 in benefits may submit, at no
expense to the Plan, evidence of insurability and request rein-
statement of his Maximum Amount. If such evidence is satisfactory
to the Trustees, the Trustees will give their written consent to
disregarding benefits previously paid in applying the Maximum
Amount to benefits payable for Covered Expenses incurred with
respect to such individual after the effective date of such
written consent.
EXTENDED MEDICAL EXPENSE BENEFITS ON TERMINATION OF COVERAGE
If an individual is totally disabled on the date his Medical
Expense coverage is terminated, Medical benefits shall be payable
subject to the applicable Maximum Amount and other provisions and
limitations of the Plan for the Covered Expenses incurred solely
as a result of the Injury or Illness causing such disability but
in no event beyond the earliest of the following dates:
1) six (6) months after the date such termination occurs;
2) the date he ceases to be totally disabled from the same Injury
or Illness;
3) the date he becomes covered under any other group insurance
policy or plan (whether insured or uninsured), or under any
group basis Blue Cross, Blue Shield or other service or pre-
payment plan, whereby he is entitled to any benefits under
such other plan with respect to the Injury or Illness causing
such disability.
4) the date he becomes entitled to Medicare;
5) the date of termination of the Plan.
RECOVERY FROM THIRD PARTIES -- SUBROGATION
1) In the event of payment to or on behalf of any covered person
under this Plan, this Plan shall be subrogated, to the extent
of benefits paid under this Plan, to any and all monies paid
or payable from any other person or plan to or on behalf of
49
<PAGE> 86
the covered person, and shall be subrogated to any and all
claims of or on behalf of the covered person against any other
person or plan, by reason of the illness or injury which occa-
sioned the payment of benefits under this Plan ("the Illness
or Injury"). This Plan's rights as expressed in the preceding
sentence expressly encompass, but are not limited to, monies
paid or payable to or on behalf of the covered person by per-
sons or plans other than the persons (or plans insuring such
persons) who are responsible for the Illness or Injury, as
well as claims of or on behalf of the covered person against
such persons (or plans insuring such persons) responsible for
the Illness or Injury.
2) For purposes of these Subrogation and Reimbursement provi-
sions, the term "person or plan" shall include, but is not
limited to: a) any person, insurance company or other entity
that is in any way responsible for the Illness or Injury, or
is in any way responsible for providing compensation, indemni-
fication, or benefits for the Illness or Injury; b) any law
or policy of insurance or accidental benefit plan providing
no-fault, uninsured, underinsured or general group or indivi-
dual liability coverage; c) any medical reimbursement insur-
ance whether or not purchased by the covered person submitting
the claim, or on whose behalf the claim is submitted; and d)
any specific risk accident or health coverage or insurance,
including without limitation premises or homeowners medical
reimbursement coverage, and student, student-athletic or
student-team coverage or insurance. The term "covered person"
means the person to whom or on whose behalf this Plan paid
benefits for treatment of the Illness or Injury. With respect
to the Plan's right to subrogation to the covered person's
rights of recovery against another person or plan, and when-
ever else it may be appropriate, the term also means the
covered person's heirs, guardians, executors or other repre-
sentatives.
3) This Plan's rights to subrogation apply whether or not the
monies paid or payable from the other person or plan are
sufficient to fully compensate the covered person for his loss
50
<PAGE> 87
occasioned by the Illness or Injury. Further, the character-
ization of any amounts paid or payable to or on behalf of a
covered person, whether under a settlement agreement, judg-
ment, plan as defined herein, or otherwise, shall not affect
the priority given this Plan under these provisions with
respect to such amounts.
4) Notwithstanding any other provision in this Plan to the con-
trary, but subject to the Plan's coordination of benefits
rules and the exception set forth below, this Plan does not
pay otherwise covered charges incurred for treatment of any
illness or injury which is or, in the opinion of the Trustees,
likely to become the subject of a claim by or on behalf of the
covered person against any person or plan, whether by civil
lawsuit or otherwise. Benefits may be conditionally covered
and paid in this circumstance, solely at the discretion of
the Trustees, but in that case the covered person agrees, by
accepting such payment (whether made to or on behalf of the
covered person) and in consideration of the Plan's conditional
payment, to reimburse the Plan, to the extent of the Plan's
payment, from any monies paid to or on behalf of the covered
person by any other person or plan as compensation for the
Illness or Injury.
5) In addition to the foregoing the Trustees may, as a condition
of making the payments described in the preceding paragraph,
require the covered person or his representative to sign a
subrogation agreement reflecting a) the covered person's obli-
gation to reimburse the Plan, b) assignment to the Plan all
rights, claims or causes of action such covered person (or any
person or entity acting on his behalf) has against any plan
or person to the extent of benefits paid or payable under the
Plan, c) authorizing (but not requiring) the Plan to sue, en-
force, compromise or settle (in such covered person's name or
otherwise) all such rights, claims or causes of action, and d)
warranting that such covered person (and any person or entity
acting on his behalf) has not settled, discharged or released
any such right, claim or cause of action against any person or
51
<PAGE> 88
plan, and shall not do so. In such event the agreement shall
operate to the same extent as the agreement described in the
preceding subsection. The execution of such a subrogation
agreement by or on behalf of the covered person shall not,
however, bind the Plan to make the conditional payments des-
cribed in the preceding paragraph.
6) The covered person (and any person or entity acting on his be-
half) shall hold in trust for the benefit of the Plan a) any
amounts recovered to the extent of benefits paid by the Plan
and b) all rights of recovery against any person or plan by
reason of the Illness or Injury which occasioned the payment
of benefits under the Plan and, upon receipt of amounts paid
by another person or plan the covered person shall immediately
notify the Plan and pay to the Plan all amounts due the Plan.
Failure to make such reimbursement shall entitle the Plan to
sue the covered person or, as applicable, his heirs, guar-
dians, executor, or other representative in order to recover
the amounts due the Plan under these subrogation and reim-
bursement provisions, and where in that case the Plan is
successful in whole or in part the Plan shall also be entitled
to reimbursement from the covered person of all costs of col-
lection, including reasonable attorneys fees.
7) Where this Plan is entitled to reimbursement pursuant to these
subrogation provisions and the covered person fails or refuses
to provide complete reimbursement, in addition to any other
remedies the Plan may have under the plan or otherwise the
Plan may terminate coverage of the covered person with respect
to pending and future claims, and may set-off the reimburse-
ment due the Plan against claims, whether related or unrelated
to the injury or illness giving rise to this Plan's reimburse-
ment rights, payable by the Plan to or on behalf of the cov-
ered person and any covered member of the covered person's
family.
8) This Plan shall not be responsible for any costs or expenses,
including but not limited to attorneys fees, incurred by or on
behalf of a covered person in connection with any recovery
from any other person or plan unless this Plan so agrees in
52
<PAGE> 89
writing to pay a part of these expenses.
9) Upon written notification to such covered person, the Plan may
(but shall not be required to) directly collect any claim the
covered person (or any person or entity acting on his behalf)
may have against any person or plan relating to the Illness or
Injury which occasioned the payment of benefits under the Plan
in any manner decided by the Trustees and without such covered
person's consent or the consent of any person or entity acting
on behalf of such person; any monies so recovered shall first
be applied to the Plan's reasonable collection costs and ex-
penses (including attorneys' fees), then to payments made
under this Plan, with any remaining balance to be paid to or
on behalf of the covered person as soon as administratively
practicable.
10) In any collection effort by the Plan under Paragraph 9 above,
or with respect to any claim for reimbursement from the
covered person or any person acting on his behalf, the
Trustees may agree to recover less than the full amount of
reimbursement if the Trustees determine in their discretion
that the Plan has made, or caused to be made, such reasonable
collection efforts as are appropriate under the circumstances
and the terms of such agreement are reasonable under the cir-
cumstances, based upon the likelihood of collecting such
amounts in full or the approximate expenses the Plan would
incur in an attempt to collect such amounts. The Trustees
within their sole discretion shall determine which of the
Plan's right and remedies is in the Plan's best interests and
may take such action against any person or plan as they deter-
mine to be appropriate under the circumstances, further pro-
vided that any failure by the Plan, its Trustees or its agents
to exercise any right under these subrogation provisions, and
the reimbursement and recovery provisions where follow here-
after, shall not constitute a waiver of such right or affect
the parties' rights and obligations hereunder unless expressly
agreed thereto in writing by the Trustees.
11) A covered person (and anyone acting on behalf of the covered
53
<PAGE> 90
person) has a duty to cooperate with this Plan and, at the
request of the Trustees or their designee, to take any action,
give information and assistance, and execute such documents as
are deemed by the Trustees necessary to enforce the Plan's
rights under these subrogation provisions and the reimburse-
ment and recovery provisions which follow hereafter. The Plan
will make no payments to a covered person or on a covered per-
son's behalf until the Trustees are satisfied that the covered
person has complied with the requirements of this subsection.
The Trustees or their designee, without the consent of or
notice to any person, may release to or obtain from any person
any information, with respect to any person, which the Trus-
tees or their designee deem necessary to implement these
provisions.
12) The covered person, or anyone acting on his behalf, shall take
no action to prejudice the subrogation or reimbursement rights
of this Plan, and shall not settle or compromise any claim
against any person or plan, where this Plan is subrogated with
respect to monies payable to or on behalf of the covered per-
son by such person or plan, without the express, written con-
sent of the Trustees or their designee. Where the Trustees
determine that the covered person, or anyone acting on behalf
of the covered person, has in the opinion of the Trustees so
prejudiced the Plan's rights, the provisions of Paragraphs 6
and 7 above shall apply as though the covered person had re-
ceived payment of amounts up to the extent of the Plan's
subrogation interest.
REIMBURSEMENT AND RECOVERY
1) Whenever this Plan makes payments which, together with the
payments the covered person has received or is entitled to
receive from any other plan or person,
a) exceed the maximum amount necessary to satisfy the intent
of this Plan's subrogation and reimbursement rules or the
Plan's coordination of benefit provisions; or
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<PAGE> 91
b) exceed, under the terms of the Plan, the benefits properly
payable to the person or plan to or for or with respect to
whom the payments were made,
the Trustees shall have the right to recover such payments, to
the extent of such excess, from among one or more of the fol-
lowing, as the Trustees shall determine: any person to whom
or on whose behalf such payments were made, any other covered
person who is a member of the family of the person to whom or
on whose behalf the Plan made payment, any insurance com-
panies, or any other organizations. Alternatively, the Trus-
tees may set-off the amount of such payments, to the extent
of such excess, against any amount owing, at that time or in
the future, to one or more of the following, as the Trustees
shall determine: any person to whom or on whose behalf such
payments were made, any other covered person who is a member
of the family of the person to whom or on whose behalf the
Plan made payment, any insurance companies, or any other
organizations.
2) For example, but not by way of limitation, if this Plan pays a
claim submitted by a covered person or a health care provider
who treated the covered person, and the Trustees later deter-
mine that the claim was for an expense not covered under this
Plan, then the Trustees are entitled to recover the payment
from the covered person, a covered member of the person's
family, or the provider, or to recover part of the payment
from the covered person (or a covered member of his family)
and part from the provider, or the Trustees may set-off the
amount of the payment from amounts the Plan owes in the future
to the covered person (or a covered member of the person's
family) or the provider, or both. This same rule applies if
the Plan makes payment to or on behalf of a covered person or
a provider of an expense which is a covered expense, but the
amount paid exceeds the amount required to be paid under the
Plan.
3) These reimbursement provisions also apply where this Plan
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<PAGE> 92
makes payment of an allowable expense incurred for treatment
of an illness or injury for which another person or plan is or
may be liable, and where the Plan's subrogation provisions do
not provide the Plan with a right to recover the amounts the
Plan pays for treatment of the illness or injury. If the
other person or plan makes payment to the covered person or
on the covered person's behalf as compensation for the illness
or injury, and this Plan is not subrogated with respect to
the payment, this Plan is entitled to reimbursement from the
covered person (or the person who received such payment on
behalf of the covered person) in an amount equal to the lesser
of the benefits paid by this Plan for treatment of the injury
or illness, or the amount paid to the covered person or on the
covered person's behalf by the other person or its insurer.
This provision shall not apply where the other person or its
insurer is a medical plan with respect to which this Plan,
pursuant to its coordination of benefits provisions, is the
primary payer of the covered person's allowable expenses.
Paragraphs 6 and 7 of the Plan's subrogation provisions above,
regarding the covered person's duty to make reimbursement,
and the Plan's rights and remedies if he does not, are incor-
porated by reference herein.
4) In addition, where another person or plan pays compensation to
or on behalf of a covered person for an illness or injury, and
the covered person incurs (either before or after payment of
such compensation) otherwise covered charges for treatment of
the illness or injury, a special rule applies. In that case,
such otherwise covered charges which were incurred after the
date on which the compensation was paid, or which were in-
curred prior to such date but not paid by this Plan as of such
date, shall be excluded to the extent of the excess (if any)
of the compensation paid to or on behalf of the covered person
over the covered charges which the Plan has already paid for
treatment of the illness or injury.
5) This Plan shall not be responsible for any costs or expenses
incurred by or on behalf of a covered person in connection
with any recovery or reimbursement from any other plan or
person unless this Plan agrees in writing to pay a part of
those expenses. The characterization of any amounts paid to
56
<PAGE> 93
or on behalf of a covered person, whether under a settlement
agreement, judgment, "plan" as defined in Paragraph 2 of the
Plan's subrogation provisions above, or otherwise, shall not
affect this Plan's right to reimbursement and to characterize
otherwise covered charges as excludable charges pursuant to
the provisions of these reimbursement and recovery provisions.
CONDITIONAL PAYMENTS IN CASE OF WRONGFUL DEATH
1) Where a covered person dies as a result of the Injury or Ill-
ness, and another covered person, in the judgment of the
Trustees, has as a result of such death a cause of action for
the deceased person's wrongful death, the otherwise covered
expenses incurred by or on behalf of the deceased person prior
to his death shall not be considered covered expenses under
this Plan. However, such expenses may nevertheless be treated
as conditionally covered expenses and be paid in this circum-
stance, solely at the discretion of the Trustees, but in that
case the covered person with the cause of action agrees, in
consideration of the Plan's payment of such expenses, to reim-
burse the Plan, to the extent of the Plan's payment, from any
monies paid to such covered person by any other person or plan
as compensation for the deceased person's death. Failure to
make such reimbursement shall entitle the Plan to sue the
covered person or, as applicable, his heirs, guardians, execu-
tor, or other representative in order to recover the amounts
due the Plan under this provision, and where in that case the
Plan is successful in whole or in part the Plan shall also be
entitled to reimbursement from the covered person of all costs
of collection, including reasonable attorneys fees.
2) In addition to the foregoing the Trustees may, as a condition
of making the conditional payments described in the preceding
paragraph, require the covered person with the cause of action
to sign a subrogation or reimbursement agreement reflecting
the covered person's obligation to reimburse the Plan, and in
57
<PAGE> 94
such event the agreement shall operate to the same extent as
the agreement described in the preceding subsection. The exe-
cution of such a subrogation agreement by such covered person
shall not, however, bind the Plan to make the conditional pay-
ments described in the preceding paragraph.
3) Where this Plan makes the conditional payments described above
and the covered person with the cause of action elects not to
pursue the cause of action, but some other person related to
the deceased person pursues the cause of action and recovers
monies from the person or plan who is or may be responsible
for the deceased person's wrongful death, this Plan is never-
theless entitled to reimbursement from the covered person.
If the covered person fails or refuses to provide complete
reimbursement, in addition to any other remedies the Plan
may have, under the Plan or otherwise, the Plan may terminate
coverage of the covered person with respect to pending and
future claims, or may set-off the reimbursement due the Plan
against claims, whether related or unrelated to the injury or
illness giving rise to this Plan's reimbursement rights, pay-
able by the Plan to or on behalf of the covered person and any
covered member of the covered person's family, or the Plan may
do both of these things.
DETERMINATION OF BENEFITS UNDER SUBROGATION AND
REIMBURSEMENT PROVISIONS
The amount of benefits, if any, payable under the Plan pursuant to
the preceding provisions concerning subrogation and reimbursement
shall be determined in accordance with the provisions of paragraph
1) and 2) of the Section entitled BENEFIT DETERMINATION of the
COORDINATION OF BENEFITS AND EXCESS COVERAGE PROVISION of the Plan
as if the proceeds of the settlement, judgment or Insurance Policy
were benefits payable under another Plan (that is, the sum of the
benefits payable under this Plan and the proceeds of the settle-
ment or judgment shall not exceed the Allowable Expenses incurred
by the covered individual during the Benefit Determination
Period).
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<PAGE> 95
EFFECT OF ELIGIBILITY FOR MEDICARE COVERAGE ON PLAN BENEFITS
With respect to Covered Individuals who are entitled to coverage
under the Federal Medicare Program (hereinafter referred to as
"Medicare"), solely due to end-stage renal disease, Medical Care
benefits otherwise payable under this Plan after the first thirty
(30) months of Medicare entitlement shall be reduced by the amount
of benefits the Covered Individual receives (or would be eligible
to receive were proper claim made therefor) from Medicare. Such
Covered Individual shall be deemed eligible for coverage under
Medicare if he could have enrolled but failed to do so for any
reason (except that a Covered Individual who is eligible for
Medicare Part A only through "voluntary enrollment" requiring
payment of a premium shall not be deemed eligible for coverage
under Medicare unless he actually enrolls). For purposes of this
provision, all benefits payable under Medicare shall be taken into
account whether or not claim has been duly made therefor. The
Plan shall reimburse such Covered Individuals for the cost of
Medicare coverage upon receipt of written request.
The provisions of the preceding paragraph shall not apply to Re-
tired Employees and Eligible Dependents of Retired Employees.
Their Medical Care benefits terminate upon entitlement to Medi-
care.
If other Covered Individuals who are entitled to Medicare elect to
continue to be covered under this Plan for Medical Care Benefits,
their benefits shall be determined as if they were not covered by
Medicare. The Plan shall not reimburse such Participants for the
cost of Medicare coverage.
COORDINATION OF BENEFITS AND EXCESS COVERAGE PROVISION
If any person covered under this Plan is also covered under any
other plan (as defined below) and is entitled to benefits or ser-
vices as to medical care, services or supplies for which benefits
are payable under this Plan, the benefits otherwise payable under
this Plan shall be adjusted to the extent hereinafter provided if
required by the terms of this provision so as to consider the
benefits or services under such other plan.
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<PAGE> 96
DEFINITIONS
As used in this Coordination of Benefits and Excess Coverage pro-
vision, the following terms, whether or not capitalized, shall
have the meanings indicated:
1) "Plan" means any plan providing benefits for or by reason of
medical care or treatment for which benefits or services are
paid, payable or furnished by any of the types of coverage,
plans or programs listed below or any other group or blanket
type contracts or plans as are not available to the general
public and under which benefits for an individual and his de-
pendents can be obtained and maintained only because of the
covered person's membership in or connection with a particular
organization or group, except as otherwise provided in the
next to last sentence of this item 1):
a) any group or blanket insurance plan, or any other plan
covering individuals or members as a group,
b) any self-insured or non-insured, or any other plan, ar-
ranged through any employer, trustee, union, employer
organization, or employee benefit organization,
c) any hospital service prepayment plan, medical service pre-
payment plan, group practice, health maintenance organi-
zation and any other prepayment coverage,
d) any coverage under governmental programs (except Medi-
care), or any coverage required or provided by any
statute.
In addition, the definition of "plan" shall include group
automobile insurance coverage and individual or family sub-
scriber policies or contracts issued under a group or blanket
type plan, but shall not include 1) hospital indemnity type
contracts, or 2) types of plans covering students for accident
benefits only. The term "plan" shall be construed separately
with respect to each policy, contract or other arrangement for
benefits or services and separately with respect to that por-
60
<PAGE> 97
tion of any such policy, contract, or other arrangement which
reserves the right to take the benefits or services of other
plans into consideration in determining the benefits there-
under and that portion which does not.
2) "Allowable Expense" means any necessary, reasonable, and cus-
tomary item of medical expense which is covered under this
plan.
3) "Benefit Determination Period" means a period from January 1
of each year to December 31 of the same year, both dates
inclusive.
BENEFIT DETERMINATION
The benefits payable under this Plan shall be subject to the fol-
lowing:
1) This Coordination of Benefits and Excess Coverage provision
shall apply in determining the benefits as to a person covered
under this Plan for any Benefit Determination Period if the
sum of
a) the benefits that would otherwise be payable under this
Plan in the absence of this provision, and
b) the benefits that would otherwise be payable under all
other plans in the absence therein of provisions of simi-
lar purpose to this provision,
exceed the Allowable Expenses incurred by or on behalf of such
person during such period.
2) As to any Benefit Determination Period with respect to which
this provision is applicable, the benefits that would other-
wise be payable under this Plan in the absence of this pro-
vision for the Allowable Expenses incurred by or on behalf of
such person during such Benefit Determination Period shall be
reduced, except as provided in item 3) below, to the extent
necessary so that the sum of such reduced benefits and all the
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<PAGE> 98
benefits paid for, payable or furnished in connection with
such Allowable Expenses under all other plans shall not ex-
ceed the total of such Allowable Expenses. For the purposes
of this provision, all benefits payable or furnished under
another plan shall be taken into account whether or not claim
has been duly made therefor.
3) If coverage under another plan is involved, as provided in
item 2) above, and
a) such plan contains a provision coordinating the benefits
thereunder with those of this Plan and according to its
terms and conditions, benefits thereunder would not be
determined until after the benefits of this Plan have been
determined, and
b) the terms and conditions set forth in item 4) below would
require benefits under this Plan to be determined before
benefits are determined under such other plan,
then the benefits otherwise provided under such other plan
will not be taken into account for the purposes of determin-
ing the benefits under this Plan.
4) For the purposes of item 3) above, the basis for establishing
the order of benefit determination shall be as follows:
a) the benefits of the plan which covers the person on whom
claim is based other than as a dependent shall be deter-
mined before the benefits of a plan which covers such
person as a dependent;
b) except for cases of a person for whom claim is made as a
dependent child whose parents are separated or divorced,
the benefits of a plan which covers the person on whom
claim is based as a dependent of a person whose date of
birth, excluding year of birth, occurs earlier in a
calendar year shall be determined before the benefits of
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<PAGE> 99
a plan which covers such person as a dependent of a person
whose date of birth, excluding year of birth, occurs later
in a calendar year;
c) in the case of a person for whom claim is made as a depen-
dent child whose parents are separated or divorced;
i) if the parent with custody of the child has not re-
married, the benefits of a plan which covers the child
as a dependent of the parent with custody of the child
will be determined before the benefits of a plan which
covers the child as a dependent of the parent without
custody;
ii) if the parent with custody has remarried, the benefits
of a plan which covers the child as a dependent of the
parent with custody shall be determined before the
benefits of a plan which covers that child as a depen-
dent of the stepparent, and the benefits of a plan
which covers that child as a dependent of the step-
parent will be determined before the benefits of a
plan which covers that child as a dependent of the
parent without custody;
notwithstanding i) and ii) above, if there is a court
decree which would otherwise establish financial respon-
sibility for the medical, dental or other health care
expenses with respect to the child, the benefits of a
plan which covers the child as a dependent of the parent
with such financial responsibility shall be determined
before the benefits of any other plan which covers the
child as a dependent;
d) when rules a), b) and c) do not establish an order of
benefit determination, the benefits of a plan which has
covered the person on whom claim is based for the longer
period of time shall be determined before the benefits
of a plan which has covered such person for the shorter
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<PAGE> 100
period of time, provided, however, that the benefits of
the plan which covers the person on whose expenses claim
is based as a terminated, laid-off or retired employee,
a dependent of such a person or a former dependent of a
current or former employee shall be determined after the
benefits of any other plan covering such person other than
as a terminated, laid-off or retired employee, a dependent
of such a person or a former dependent of a current or
former employee.
5) When this provision operates to reduce the total amount of
benefits otherwise payable with respect to a person covered
under this Plan during any Benefit Determination Period, each
benefit that would otherwise be payable in the absence of this
provision shall be reduced proportionately and such reduced
amount shall be charged against any applicable benefit limit
of this Plan.
COORDINATION WITH MEDICAID
Eligibility for coverage under this Plan shall not be affected by
the fact that a person is eligible for or is provided medical
assistance under Medicaid, that is, a State plan for medical
assistance approved under Title XIX of the Social Security Act.
In addition, this Plan's coordination of benefits provision will
not apply to benefits a person is entitled to receive under Medi-
caid.
EXCESS COVERAGE
If one or more of the other plans involved (as defined in this
Coordination of Benefits and Excess Coverage provision) provides
benefits on an Excess Insurance or Excess Coverage basis, items 3)
and 4) of the BENEFIT DETERMINATION provisions shall not apply to
such plan(s) and this Plan will pay as excess coverage.
INFORMATION RIGHTS
For the purposes of determining the applicability and implementa-
tion of the terms of this provision of this Plan or any provision
of similar purpose of any other plan, the Trustees may, without
the consent of or notice to any person, release to or obtain from
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<PAGE> 101
any insurance company or other organization or person any informa-
tion which the Trustees deem to be necessary for such purposes.
Any person claiming benefits under this Plan shall as a condition
precedent thereto furnish to the Trustees such information as may
be necessary to implement this provision.
PAYMENT ADJUSTMENTS
Whenever payments which should have been made under this Plan in
accordance with this provision have been made under any other
plan, the Trustees shall have the right, exercisable alone and in
their sole discretion, to pay over to any organization making such
other payments any amounts they shall determine to be warranted in
order to satisfy the intent of this provision, and amounts so paid
shall be deemed to be benefits paid under this Plan and, to the
extent of such payments, the Trustees shall be fully discharged
from liability under this Plan.
RECOVERY RIGHT
Whenever payments have been made by the Trustees with respect to
Allowable Expense in a total amount, at any time, in excess of the
maximum amount of payment necessary at the time to satisfy the
intent of this provision, the Trustees shall have the right to
recover such payments, to the extent of such excess, from among
one or more of the following, as the Trustees shall determine: any
persons to whom, for whom, or with respect to whom such payments
were made, any insurance companies, and any other organizations.
MEDICAL LIMITATIONS AND EXCLUSIONS
Benefits shall not be payable under the Medical Care Coverage pro-
vided by the Plan for or in connection with:
1) Pregnancy and related complications of a dependent other than
the spouse of a Participant; oral or injectable contraceptives
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<PAGE> 102
and Norplant contraceptive implants prescribed for a dependent
other than the spouse of a Participant;
2) Medical care, services and supplies for which no charge is
made or for which the Covered Individual is not, in the ab-
sence of this coverage, legally obligated to pay;
3) Medical care, services and supplies which are furnished by a
Hospital or facility operated by or at the direction of the
United States Government or any authorized agency thereof, or
furnished at the expense of such Government or agency, or by
a Physician employed by such a Hospital or facility, unless
i) the treatment is of an emergency nature and the Covered
Individual is not entitled to such treatment without charge by
reason of his status as a veteran or otherwise or ii) payment
is required by law; in no event, however, shall the Plan be
required to provide greater benefits for care furnished by a
Government Hospital or facility than it would provide for com-
parable care at another Hospital or facility.
4) Medical care, services or supplies to the extent that they
are paid for, payable or furnished a) pursuant to any plan
or program administered by a National Government or agency
thereof or with funds received from taxation or contributions
collected pursuant to legislation by a National Government,
or b) pursuant to any State Cash Illness law or laws of a
similar character, including any group insurance policy or
self-insured fund approved under such law;
5) Eye refractions, eye glasses (including contact lenses) or
the fitting of eye glasses, except that this limitation shall
not apply to the initial lens replacement following cataract
surgery; surgery to correct refractive error; surgery to cor-
rect refractive error;
6) Hearing aids or the fitting of hearing aids;
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<PAGE> 103
7) Blood or blood plasma for which the Hospital or other supplier
makes a refund or allowance to or on behalf of the Covered In-
dividual either as a result of the operation of a group blood
bank or otherwise, but only to the extent of the refund or
allowance;
8) Cosmetic surgery or other medical care for cosmetic purposes,
except for a) medical care and treatment for Injuries sus-
tained in an accident, b) medical care and treatment for the
correction of an abnormal congenital condition and c) recon-
structive surgery to correct a defect caused by prior surgery
performed for treatment of an Illness;
9) Illness covered by Workers' Compensation law, occupational
disease law, or laws of a similar character; or Injury arising
out of or in the course of any occupation or employment for
compensation, profit or gain;
10) In the case of a newborn child, Hospital room and board or
nursery charges, Physician charges for routine care, or
charges for circumcision, incurred by or on behalf of such
child, unless such charges are a) for treatment of Injury or
Illness, premature birth or congenital abnormalities or b) are
covered under the section entitled HIGH RISK PREGNANCY BENEFIT
above;
11) An Injury or Illness for which any medical advice, diagnosis,
care or treatment was received within the three (3) month
period immediately prior to the Covered Individual's Enroll-
ment Date until the earliest of a) the end of a period of
three (3) consecutive months ending after the Covered Indivi-
dual's Enrollment Date during which the Covered Individual has
not received for or in connection with such Injury or Illness
any medical, surgical, hospital or nursing service or treat-
ment of any kind or any drugs or medicines lawfully obtainable
only upon prescription of a Physician or b) in the case of a
Participant, a period of six (6) consecutive months during
which the Participant has been continuously covered under the
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<PAGE> 104
Plan and continuously at Active Work on a Full-Time Basis or
c) the end of the period of twelve (12) consecutive months
following the Covered Individual's Enrollment Date; provided,
however, that this twelve (12) consecutive month period shall
be reduced by the Covered Individual's aggregate periods of
Prior Creditable Coverage;
(This Paragraph 11) shall not apply a) to restrict a Covered
Individual's coverage under the Plan if coverage was termi-
nated during a period of FMLA Leave and then reinstated after
the conclusion of the FMLA Leave, to the extent the require-
ments of this Paragraph 11) were satisfied by the Covered
Individual immediately before the FMLA Leave began; b) to a
Covered Individual whose coverage is terminated and who again
becomes covered within one year of the date of termination
or whose coverage is terminated due to the Participant being
unable to perform his regular work by reason of Injury or
bodily or mental infirmity provided he remains continuously so
unable to perform this regular work from the time coverage was
terminated until the time he resumes Active Work on a Full-
Time Basis, to the extent the requirements of this Paragraph
11) were previously satisfied by the Covered Individual during
his previous period of coverage under the Plan; or c) preg-
nancy, subject to other limits and conditions on pregnancy
benefits provided elsewhere in the Plan; further, a newborn or
adopted Child (see Paragraph 6 of the section entitled DEFINI-
TIONS in Article II for a definition of the term "adoption")
of a Participant is deemed to have at least twelve (12) months
of Prior Creditable Coverage, which will normally permit the
Child to avoid the Plan's pre-existing conditions restriction;
however, this special rule for Children only applies to a
Child who does not become covered under the Plan immediately
upon birth or adoption if the Child was enrolled under Prior
Creditable Coverage within thirty (30) days after the birth
or adoption and ceases to apply after the Child experiences
a sixty-three (63) day or longer break in Prior Creditable
Coverage.
12) Injury or Illness resulting from any act or incident of war,
whether declared or undeclared, insurrection or any atomic
explosion or other release of nuclear energy (except only when
being used solely for medical treatment of an Injury or Ill-
68
<PAGE> 105
ness), whether in peacetime or in wartime and whether intended
or accidental;
13) Repair, removal, extraction, replacement and any other treat-
ment of teeth or nerves connected to teeth, except that this
limitation shall not apply to Covered Expenses incurred for
the following: a) removal of impacted or unerupted teeth or
tissue or bone impacting such teeth, b) medically necessary
care, services and supplies furnished by a hospital or ambu-
latory surgical center during confinement in connection with
dental treatment; c) administration of anesthesia when medi-
cally necessary in connection with a procedure covered under
this Paragraph 13); d) treatment of injuries to natural teeth
sustained in an accident, but only to the extent that such
treatment commences within six (6) months after the accident
and is received within twelve (12) months after the accident;
and e) surgical procedures for incision and drainage of alveo-
lar abscesses, alveolectomy, alveoplasty, apicoectomy, exci-
sion of cysts and tumors, excision of epulis, torus palatinus
and gingivectomy and gingivoplasty;
14) Except as otherwise specifically provided elsewhere in the
Plan, medical examinations for "checkup" purposes when not
incident and necessary to the treatment or diagnosis of an
Illness, including but not limited to routine physical exams,
school physicals, company physicals, well child care, immuni-
zations and vaccinations;
15) Treatment of exogenous obesity (including weight loss pro-
grams);
16) Treatment of tobacco dependency, except smoking cessation ser-
vices to the extent covered under Paragraph W) of the section
entitled MEDICAL COVERED CHARGES in this Part C.
17) Paid by Former Plan. Medical care, services or supplies for
which benefits were paid by the Former Plan.
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<PAGE> 106
18) Incurred While Not Covered. Any expense that is incurred
while an individual is not a Covered Individual, unless a Plan
provision specifically provides otherwise. For this purpose,
an expense is incurred at the time the service or supply is
actually provided.
19) Treatment of alcohol intoxication unless part of an alcoholism
treatment program.
20) Treatment of conduct or behavioral disorders. However, such
treatment which has been precertified and approved as medi-
cally necessary by the Plan's Employee Assistance Program is
covered, subject to all other plan provisions.
21) Exercise programs, except cardiac rehabilitation services to
the extent covered under Paragraph V) of the section entitled
MEDICAL COVERED CHARGES in this Part C.
22) Speech therapy.
23) Any experimental or investigative drug, device, medical treat-
ment or procedure. A drug, device, medical treatment or pro-
cedure is experimental or investigative:
a) in the case of a drug or device, if it cannot be lawfully
marketed without the approval of the U.S. Food and Drug
Administration and if such approval has not been given at
the time the drug or device is provided to the patient; or
b) if the drug, device, medical treatment or procedure, or
the patient informed consent document used with any of
them, was reviewed and approved by the treating facility's
institutional review board or any other body serving a
similar function, or if federal law requires such review
or approval; or
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<PAGE> 107
c) if the drug, device, medical treatment or procedure is the
subject of an ongoing Phase I or Phase II clinical trial,
is the research, experimental, study or investigational
arm of ongoing Phase III clinical trials, or is otherwise
under study to determine its maximum tolerated dose, its
toxicity, its safety, its efficacy or how any of these
factors compares with standard means of treatment or
diagnosis; or
d) in the case of a drug or device, if it is prescribed or
used "off label," i.e., dispensed for a use for which it
is not approved by the U.S. Food and Drug Administration;
or
e) if panelists participating in an evaluation under the
American Medical Association's Diagnostic and Therapeutic
Technology Assessment Program support a consensus that the
safety or effectiveness of a drug, device, medical treat-
ment or procedure is "doubtful" or "unacceptable" or "in-
appropriate"; or
f) if the drug, device, medical treatment or procedure is
considered by the U.S. Department of Health and Human
Services Health Care Financing Administration to be inves-
tigational, not reasonable and necessary, not primarily
medical in nature or not verified as effective by scien-
tific controlled studies.
The Trustees may, from time to time, retain a medical consul-
tant, who may, in the exercise of his or her judgment, waive
the exclusion of a drug, device, medical treatment or proce-
dure described in subparagraph b) or d) above, or in subpara-
graph c) above (but may not waive the exclusion of a drug,
device, medical treatment or procedure that is the subject of
an ongoing Phase I clinical trial).
24) Intentionally self-inflicted injury.
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<PAGE> 108
25) Injury or illness resulting from the Covered Individual's com-
mission of a crime that is a felony in the jurisdiction in
which it is committed. With respect to such a crime, Medical
Benefits shall not be payable if there is an investigation
or charges pending against the Covered Individual or if the
Covered Individual is convicted of the crime.
26) Injury or illness resulting from the Covered Individual's
being intoxicated due to alcohol consumption or under the
influence of any illegal drug. For purposes of this para-
graph, "intoxicated" means a substantially impaired mental or
physical capacity resulting from the introduction of a sub-
stance into the body.
27) Medication used to treat erectile dysfunction or impotency
in excess of six (6) doses in any one month. This includes
all dosage forms of such medication. Medications for which
coverage is limited by this paragraph include, but are not
limited to, Viagra, Caverject and Muse.
D. DENTAL CARE COVERAGE
Subject to the provisions and limitations of the Plan, the amount
of the benefits hereinafter described shall be payable by the Plan
in accordance with the Plan's claims procedures for the Covered
Dental Expenses incurred by an individual while covered by the
Plan or Former Plan.
DENTAL CARE DEFINITIONS
As used in these Dental Care coverage provisions, the following
terms, whether or not capitalized, shall have the meanings indi-
cated below. Words used herein in the masculine gender shall be
deemed to include the feminine and vice versa.
1) "Covered Dental Expense" means only the expense incurred,
or portion of such expense, for the dental care, services or
supplies described in the section entitled COVERED DENTAL
EXPENSES below which are a) furnished or prescribed by a
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<PAGE> 109
Dentist, b) not excluded from payment of benefits by the
DENTAL CARE LIMITATIONS AND EXCLUSIONS provision and c) not
in excess of the reasonable, usual and customary charges for
the same or similar dental care, services and supplies (in
determining whether an expense, or what portion of an expense,
is included in part c) of this definition, the Plan shall take
into account the fees and prices generally charged for cases
of comparable nature and severity at the time and place where
such dental care, services and supplies are rendered or re-
ceived); an expense shall be deemed to be incurred on the date
the dental care, service and supply is rendered or received;
2) "Dentist" means only a Physician of Dental Surgery (D.D.S.)
practicing within the scope of his license.
3) "Former Plan" means Paul Mueller Company Employees Group In-
surance Plan.
DENTAL EXPENSE BENEFIT
Dental Care benefits are payable in an amount equal to 100% of the
Covered Dental Expenses incurred by a Covered Individual during a
calendar year; provided, however, that the amount of benefits pay-
able in the aggregate for all Covered Dental Expenses incurred by
a Covered Individual (whether or not there is any interruption in
his coverage under the Plan and whether or not there is any change
in the status of such person from Participant to Dependent and
vice versa) during a calendar year shall not exceed $500. A sepa-
rate $500 Maximum Amount is applicable to each Covered Individual
each calendar year.
COVERED DENTAL EXPENSES
A) Routine oral examinations and prophylaxis, including cleaning,
scaling and polishing, twice in any calendar year;
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<PAGE> 110
B) Topical application of fluoride to children under age nineteen
(19), twice in any calendar year;
C) Bitewing x-rays, twice in any calendar year;
D) Full mouth x-rays, once in any thirty-six (36) month period,
or more frequently if required in connection with the diagno-
sis of specific conditions.
DENTAL LIMITATIONS AND EXCLUSIONS
Benefits shall not be payable under the Dental Care coverage pro-
vided by the Plan for or in connection with:
1) Services or supplies not reasonably necessary for the preven-
tive dental care of the Covered Individual;
2) Services or supplies not furnished by a Dentist except x-rays
ordered by a Dentist and services of a Licensed Dental Hygien-
ist under the Dentist's supervision;
3) Services or supplies furnished or reimbursed by any government
or government program or law, unless payment is legally re-
quired;
4) Services or supplies due to occupational injuries or diseases,
to the extent covered by Workers' Compensation or similar
legislation;
5) Failure to keep a scheduled visit with the Dentist;
6) Services or supplies which do not meet accepted standards of
dental practice, including those which are experimental in
nature;
7) Services or supplies due to war or act of war, declared or
undeclared;
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<PAGE> 111
8) Restorations or appliances;
9) Endodontics, periodontics (except periodontal scaling) or oral
surgery;
10) Crowns, inlays, onlays, bridgework or dentures;
11) Orthodontics;
12) Completion of insurance forms;
13) Paid by Former Plan. Services or supplies for which benefits
were paid by the Former Plan.
14) Incurred While Not Covered. Any expense that is incurred
while an individual is not a Covered Individual, unless a Plan
provision specifically provides otherwise. For this purpose,
an expense is incurred at the time the service or supply is
actually provided.
COORDINATION OF BENEFITS AND EXCESS COVERAGE PROVISION
If any person covered under this Plan is also covered under any
other plan (as defined below) and is entitled to benefits or ser-
vices as to dental care, services or supplies for which benefits
are payable under this Plan, the benefits otherwise payable under
this Plan shall be adjusted to the extent hereinafter provided
if required by the terms of this provision so as to consider the
benefits or services under such other plan.
DEFINITIONS
As used in this Coordination of Benefits and Excess Coverage pro-
vision, the following terms, whether or not capitalized, shall
have the meanings indicated:
1) "Plan" means any plan providing benefits for or by reason of
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<PAGE> 112
dental care or treatment for which benefits or services are
paid, payable or furnished by any of the types of coverage,
plans or programs listed below or any other group or blanket
type contracts or plans as are not available to the general
public and under which benefits for an individual and his
dependents can be obtained and maintained only because of the
covered person's membership in or connection with a particular
organization or group, except as otherwise provided in the
next to last sentence of this item 1):
a) any group or blanket insurance plan, or any other plan
covering individual or members as a group,
b) any self-insured or non-insured, or any other plan, ar-
ranged through any employer, trustee, union, employer
organization, or employee benefit organization,
c) any hospital service prepayment plan, medical service pre-
payment plan, group practice, health maintenance organiza-
tion and any other prepayment coverage,
d) any coverage under governmental programs (except Medi-
care), or any coverage required or provided by any
statute.
In addition, the definition of "plan" shall include group
automobile insurance coverage and individual or family sub-
scriber policies or contracts issued under a group or blanket
type plan, but shall not include 1) hospital indemnity type
contracts, or 2) types of plans covering students for accident
benefits only. The term "plan" shall be construed separately
with respect to each policy, contract or other arrangement for
benefits or services and separately with respect to that por-
tion of any such policy, contract, or other arrangement which
reserves the right to take the benefits or services of other
plans into consideration in determining the benefits there-
under and that portion which does not.
2) "Allowable Expense" means any necessary, reasonable, and cus-
tomary item of dental expense which is covered under this
Plan.
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<PAGE> 113
3) "Benefit Determination Period" means a period from January 1
of each year to December 31 of the same year, both dates in-
clusive.
BENEFIT DETERMINATION
The benefits payable under this Plan shall be subject to the fol-
lowing:
1) This Coordination of Benefits and Excess Coverage provision
shall apply in determining the benefits as to a person covered
under this Plan for any Benefit Determination Period if the
sum of
a) the benefits that would otherwise be payable under this
Plan in the absence of this provision, and
b) the benefits that would otherwise be payable under all
other plans in the absence therein of provisions of
similar purpose to this provision, exceed the Allowable
Expenses incurred by or on behalf of such person during
such period.
2) As to any Benefit Determination Period with respect to which
this provision is applicable, the benefits that would other-
wise be payable under this Plan in the absence of this provi-
sion for the Allowable Expenses incurred by or on behalf of
such person during such Benefit Determination Period shall be
reduced, except as provided in item 3) below, to the extent
necessary so that the sum of such reduced benefits and all
the benefits paid for, payable or furnished in connection
with such Allowable Expenses under all other plans shall not
exceed the total of such Allowable Expenses. For the pur-
poses of this provision, all benefits payable or furnished
under another plan shall be taken into account whether or not
claim has been duly made therefor.
3) If coverage under another plan is involved, as provided in
item 2) above, and
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<PAGE> 114
a) such plan contains a provision coordinating the benefits
thereunder with those of this Plan and according to its
terms and conditions, benefits thereunder would not be
determined until after the benefits of this Plan have been
determined, and
b) the terms and conditions set forth in item 4) below would
require benefits under this Plan to be determined before
benefits are determined under such other plan,
then the benefits otherwise provided under such other plan
will not be taken into account for the purposes of determining
the benefits under this Plan.
4) For the purposes of item 3) above, the basis for establishing
the order of benefit determination shall be as follows:
a) the benefits of the plan which covers the person on whom
claim is based other than as a dependent shall be deter-
mined before the benefits of a plan which covers such
person as a dependent;
b) except for cases of a person for whom claim is made as a
dependent child whose parents are separated or divorced,
the benefits of a plan which covers the person on whom
claim is based as a dependent of a person whose date
of birth, excluding year of birth, occurs earlier in a
calendar year shall be determined before the benefits of
a plan which covers such person as a dependent of a person
whose date of birth, excluding year of birth, occurs later
in a calendar year. If either plan does not have the pro-
visions of this Paragraph 4)b) regarding dependents, which
results either in each plan determining its benefits be-
fore the other or in each plan determining its benefits
after the other, the provisions of this Paragraph 4)b)
shall not apply, and the rule set forth in the plan which
does not have the provisions of this Paragraph 4)b) shall
determine the order of benefits;
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<PAGE> 115
c) in the case of a person for whom claim is made as a depen-
dent child whose parents are separated or divorced;
i) if the parent with custody of the child has not remar-
ried, the benefits of a plan which covers the child as
a dependent of the parent with custody of the child
will be determined before the benefits of a plan which
covers the child as a dependent of the parent without
custody;
ii) if the parent with custody has remarried, the benefits
of a plan which covers the child as a dependent of the
parent with custody shall be determined before the
benefits of a plan which covers that child as a depen-
dent of the stepparent, and the benefits of a plan
which covers that child as a dependent of the step-
parent will be determined before the benefits of a
plan which covers that child as a dependent of the
parent without custody;
notwithstanding i) and ii) above, if there is a court
decree which would otherwise establish financial respon-
sibility for the medical, dental or other health care
expenses with respect to the child, the benefits of a plan
which covers the child as a dependent of the parent with
such financial responsibility shall be determined before
the benefits of any other plan which covers the child as
a dependent;
d) when rules a), b) and c) do not establish an order of
benefit determination, the benefits of a plan which has
covered the person on whom claim is based for the longer
period of time shall be determined before the benefits
of a plan which has covered such person for the shorter
period of time, provided, however, that the benefits of
the plan which covers the person on whose expenses claim
is based as a terminated, laid-off or retired employee,
a dependent of such a person or a former dependent of a
current or former employee shall be determined after the
benefits of any other plan covering such person other than
as a terminated, laid-off or retired employee, a dependent
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<PAGE> 116
of such a person or a former dependent of a current or
former employee.
5) When this provision operates to reduce the total amount of
benefits otherwise payable with respect to a person covered
under this Plan during any Benefit Determination Period, each
benefit that would otherwise be payable in the absence of this
provision shall be reduced proportionately and such reduced
amount shall be charged against any applicable benefit limit
of this Plan.
COORDINATION WITH MEDICAID
Eligibility for coverage under this Plan shall not be affected
by the fact that a person is eligible for or is provided medical
assistance under Medicaid, that is, a State plan for medical
assistance approved under Title XIX of the Social Security Act.
In addition, this Plan's coordination of benefits provision will
not apply to benefits a person is entitled to receive under Medi-
caid.
EXCESS COVERAGE
If one or more of the other plans involved (as defined in this
Coordination of Benefits and Excess Coverage provision) provides
benefits on an Excess Insurance or Excess Coverage basis, items 3)
and 4) of the BENEFIT DETERMINATION provisions shall not apply to
such plan(s) and this Plan will pay as excess coverage.
INFORMATION RIGHTS
For the purposes of determining the applicability and implementa-
tion of the terms of this provision of this Plan or any provision
of similar purpose of any other plan, the Trustees may, without
the consent of or notice to any person, release to or obtain from
any insurance company or other organization or person any informa-
tion which the Trustees deem to be necessary for such purposes.
Any person claiming benefits under this Plan shall as a condition
precedent thereto furnish to the Trustees such information as may
be necessary to implement this provision.
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<PAGE> 117
PAYMENT ADJUSTMENTS
Whenever payments which should have been made under this Plan in
accordance with this provision have been made under any other
plan, the Trustees shall have the right, exercisable alone and in
their sole discretion, to pay over to any organization making such
other payments any amounts they shall determine to be warranted in
order to satisfy the intent of this provision, and amounts so paid
shall be deemed to be benefits paid under this Plan and, to the
extent of such payments, the Trustees shall be fully discharged
from liability under this Plan.
RECOVERY RIGHT
Whenever payments have been made by the Trustees with respect to
Allowable Expense in a total amount, at any time, in excess of the
maximum amount of payment necessary at the time to satisfy the
intent of this provision, the Trustees shall have the right to
recover such payments, to the extent of such excess, from among
one or more of the following, as the Trustees shall determine: any
persons to whom, for whom, or with respect to whom such payments
were made, any insurance companies, and any other organizations.
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<PAGE> 118
ARTICLE IV
NAMED FIDUCIARIES
The Trustees shall be named fiduciary of the Plan, pursuant to the Em-
ployee Retirement Income Security Act of 1974 (hereinafter referred to
as ERISA). As named fiduciary under the Plan, the Trustees shall have
the responsibility(ies) specified below and shall have discretionary
authority to take such actions as are necessary to fulfill such re-
sponsibility(ies). The Trustees may employ one or more persons to
render advice with respect to their responsibility(ies) as named fidu-
ciary under the Plan. The Trustees may designate in writing a person
other than a named fiduciary to carry out all or a portion of their
fiduciary responsibility(ies) as set forth in a written instrument
executed by the designated person, and all of the Trustees. No indi-
vidual Trustee shall be liable with respect to a breach of fiduciary
duty, if such breach was committed before the individual became a
Trustee or after the individual ceases to be a Trustee.
As named fiduciary, the Trustees shall have the sole authority to:
1) Amend and/or terminate the Plan in accordance with Article VI
hereof.
2) Receive and invest the funds contributed to the Plan.
3) Make such changes as they deem prudent from time to time in the
funding policy of the Plan.
4) Retain a qualified public accountant on behalf of the Plan parti-
cipants to audit the Trust.
5) Make such rules as may be necessary for administration of the
Plan, construe the Plan subject to its provisions, supply any
omissions and reconcile any inconsistencies, make equitable ad-
justments for any mistakes or errors and decide all questions
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<PAGE> 119
arising in the interpretation of the Plan; all of which shall be
conclusive and binding on all parties.
The parties hereto specifically intend that the Trustees have the
greatest permissible discretionary authority to construe the terms
of the Plan and to determine all questions concerning eligibility,
participation and benefits. Any such decision made by the Trus-
tees shall be binding on the Employer, employees, retirees, par-
ticipants, dependents and beneficiaries, and is intended to be
subject to the most deferential standard of judicial review. Such
standard of review is not to be affected by any real or alleged
conflict of interest on the part of the Trustees.
6) Retain an Administrative Manager to be responsible for the day-to-
day administration of the Plan, maintenance of enrollment records
and administration of claims.
7) Formulate and amend the Claims Procedures of the Plan.
8) Provide a full, fair and final review of any claim denied by the
Administrative Manager, in accordance with the Plan's Claims Pro-
cedures.
Paul Mueller Company shall serve as Administrator of the Plan for pur-
poses of ERISA. As Administrator, Paul Mueller Company shall perform
the following duties:
1) Comply with the requirements of ERISA with respect to the Summary
Plan Description, Annual Report, Summary Annual Report and other
reports to be provided to the Secretary of Labor, Internal Revenue
Service and/or Participants.
2) Establish, prepare, and maintain all records required for comple-
tion of reports to Participants and to governmental agencies.
83
<PAGE> 120
3) Be the agent for service of legal process in any legal action ini-
tiated under ERISA or otherwise.
ARTICLE V
FUNDING POLICY AND BASIS OF PAYMENTS TO AND FROM PLAN
Benefits provided under the Plan shall be funded through the payment
of contributions by the Employer and by Participants to the Trust in
accordance with the terms of the Trust. The Trustees shall hold any
group insurance contract(s) and excess risk insurance contract(s) used
to underwrite any insured benefits of the Plan and shall make premium
payments to the insurance carrier(s) from the assets of the Trust.
Benefits under such insurance contract(s) shall be paid directly
by the insurance carrier(s) in accordance with the group insurance
contract(s) and the Plan's Claims Procedures. Any dividends, retro-
spective rate reductions or premium refunds generated under any in-
surance contract(s) shall be paid to and shall become assets of the
Trust. Benefits under any self-insured portion(s) of the Plan shall
be paid by the Administrative Manager directly from the assets of the
Trust in accordance with the Plan's Claims Procedures.
ARTICLE VI
AMENDMENT AND TERMINATION OF PLAN
The Plan may be amended by resolution of the Trustees in accordance
with the provisions of the Declaration of Trust. The Plan may be
terminated by action of the Board of Directors of Paul Mueller Company
in accordance with the provisions of the Declaration of Trust.
ARTICLE VII
EXCLUSIVE BENEFIT OF PARTICIPANTS
All assets of the Trust shall be used for the exclusive benefit of
Participants and their beneficiaries and for defraying reasonable
84
<PAGE> 121
expenses of Plan administration, and shall under no circumstances
revert to the benefit of the Employer.
ARTICLE VIII
CLAIMS PROCEDURES
INSURED BENEFITS
1) CLAIM FILING PROCEDURE. Claims for any Plan benefits which are
insured under the Group Insurance Contract shall be filed in
accordance with the provisions of the Group Insurance Contract
with respect to submission of Notice and Proof of Claim. Such
claims shall be submitted to the Insurance Company through the
Administrative Manager.
2) PAYMENT OF CLAIMS. Claims for any Plan benefits which are insured
under the Group Insurance Contract shall be paid by the Insurance
Company in accordance with the Payment of Claims provisions of the
Group Insurance Contract.
3) REVIEW PROCEDURE. If a claim for a benefit which is insured under
the Group Insurance Contract is wholly or partially denied by the
Insurance Company, written notice of the decision shall be fur-
nished to the claimant by the Insurance Company within ninety (90)
days after receipt of such claim unless special circumstances re-
quire an extension of time for processing. If such an extension
of time is required, written notice of this extension shall be
furnished to the claimant by the Insurance Company prior to the
termination of the ninety (90) day period. The extension notice
shall indicate the special circumstances requiring an extension of
time and the date by which the Insurance Company expects to render
a final decision. In no event shall this date be more than ninety
(90) days after the end of the initial ninety (90) day period.
85
<PAGE> 122
If no response is received within ninety (90) days, allowing reason-
able time for mailing, the claimant may assume the claim has been
denied and proceed to the claim review stage outlined below.
The written notice of denial shall contain the following information:
a) The specific reason or reasons for the denial;
b) Specific reference to the pertinent provisions of the group insur-
ance contract upon which the denial is based;
c) A description of any additional material or information necessary
for the claimant to perfect the claim and an explanation of why
such material or information is necessary; and
d) An explanation of the Insurance Company's claim review procedure.
The claimant or his duly authorized representative i) may request a
review of the decision by written application to the Insurance Company
not later than sixty (60) days after receipt by the claimant of writ-
ten notification of denial of the claim, ii) may review pertinent
documents, and iii) may submit issues and comments in writing.
A decision on review of a denied claim shall be made by the Insurance
Company not later than sixty (60) days after the Insurance Company's
receipt of a request for review, unless special circumstances require
an extension of time for processing, in which case a decision shall
be rendered within a reasonable period of time, but in no event later
than one hundred twenty (120) days after receipt of a request for re-
view. If such an extension is required, the claimant shall be so
notified within sixty (60) days after receipt of the request for re-
view. The decision on review shall be in writing and shall include
the specific reason(s) for the decision and specific reference(s) to
the pertinent Group Insurance Contract provisions on which the deci-
sion is based. The decision of the Insurance Company shall be final.
86
<PAGE> 123
SELF-INSURED BENEFITS-INSURED BENEFITS
1) CLAIM FILING PROCEDURE. Claims for Weekly Disability Income,
Medical Care and Dental Care Benefits, which are self-insured,
shall be submitted to the Administrative Manager for payment.
The Administrative Manager will furnish to the claimant such
forms as are prescribed by the Trustees for filing proof of claim.
The Trustees may, at their own expense, require an independent
medical examination to be performed by a Physician selected by the
Trustees.
Affirmative proof of claim must be furnished to the Administrative
Manager as follows:
a) In the case of Weekly Disability Income Benefits, within nine-
ty (90) days following commencement of disability and as re-
quested by the Administrative Manager thereafter during the
continuation of disability, and
b) In the case of Medical Care and Dental Care Benefits, within
twelve (12) months following the end of the calendar year
during which the covered expense on which claim is based was
incurred.
Failure to furnish proof of claim within the time required above
shall not invalidate nor reduce any claim if it is shown not to
have been reasonably possible to furnish such proof within such
time, provided such proof is furnished as soon as possible there-
after.
2) PAYMENT OF CLAIMS. Benefits provided under the Plan shall be paid
as follows, subject to due proof of claim as provided in 1. above.
a) Weekly Disability Income Benefits shall be paid every two (2)
weeks during the period for which the Plan is liable, and any
balance still unpaid at the end of such period will be paid
immediately after receipt of due proof.
87
<PAGE> 124
b) Medical Care and Dental Care Benefits shall be paid immedi-
ately after receipt of due proof.
3) ASSIGNMENT OF BENEFITS. Medical Care and Dental Care benefits
provided under the Plan in connection with Eligible Expenses with
respect to which a Hospital, Physician or Dentist has allowed a
discount to the Plan in accordance with a discount agreement be-
tween the Hospital, Physician or Dentist and the Trustees, shall
be paid directly to such Hospital, Physician or Dentist. All
other Medical Care and Dental Care benefits shall be paid to the
Participant, except that Medical Care and Dental Care benefits may
be assigned by the Participant to the Physician, Dentist, Hospital
or other person or institution rendering services or furnishing
supplies for which benefits are payable under the Plan. The Trus-
tees shall not be required to inquire into the validity of any
such assignment, and any payment made in accordance with any such
assignment and in good faith by the Trustees shall discharge the
obligation of the Trustees hereunder to the extent of such pay-
ment. This Plan will also honor any assignment of rights made by
or on behalf of a Covered Individual as required by Medicaid, that
is, a State plan for medical assistance approved under Title XIX
of the Social Security Act. In addition, to the extent that Medi-
caid makes payments which this Plan has a legal liability to make,
this Plan will reimburse Medicaid for those payments, but only to
the extent it is required to do so by State statute. Weekly Disa-
bility Income Benefits are not assignable. Life and Accidental
Death and Dismemberment Insurance Benefits are assignable only to
the extent permitted by the Insurance Company.
4) FACILITY OF PAYMENT. Weekly Disability Income, Medical Care and
Dental Care Benefits due under the Plan shall be paid in accor-
dance with Paragraph 2) and 3) above, except that with respect to
any benefits which have not been validly assigned:
88
<PAGE> 125
a) In the event of the death of the participant, the Trustees
will pay any remaining unpaid benefits to the natural person
or persons, if any, who become entitled at the death of the
participant to receive in an individual capacity any proceeds
of the participant's life insurance under the Plan (excluding
any person known by the Trustees at the time of payment to be
a minor); otherwise, payment of such remaining unpaid benefits
shall instead be made to the executors or administrators of
the participant;
b) If the participant, in the opinion of the Trustees, is not
competent or incapable of executing a valid receipt and dis-
charge for any payment, the Trustees may, at their option,
during the participant's lifetime, unless claim has been made
by a duly appointed guardian or committee, pay any amount
otherwise payable to the participant to any beneficiary desig-
nated by the participant under the life insurance of the Plan,
provided that such beneficiary is a living natural person,
is not known by the Trustees at the time of payment to be a
minor, and was not designated beneficiary in a fiduciary
capacity; or if there is no such designated beneficiary
living, the Trustees may, at their option, make such payment
or any portion thereof to any person or institution who, in
the opinion of the Trustees, is or has been rendering services
to, caring for, or supporting the participant.
Any payments in accordance with this Facility of Payment provision
shall be a complete discharge of the Trustees' liability to the
extent of such payment, and the Trustees shall not be obligated to
see to the application of the money so paid.
5) RECOVERY OF OVERPAYMENTS. If a claim for Weekly Disability In-
come, Medical Care or Dental Care Benefits is overpaid, the Trus-
tees shall have the right to recover the overpayment from the
participant or any other person or organization to whom the bene-
fits were paid. If such other person or organization does not
89
<PAGE> 126
repay the overpayment, repayment is the responsibility of the
participant.
6) REVIEW PROCEDURE. If a claim for Weekly Disability Income, Medi-
cal Care or Dental Care Benefits is wholly or partially denied by
the Administrative Manager, written notice of the decision shall
be furnished to the claimant by the Administrative Manager within
ninety (90) days after receipt of such claim unless special cir-
cumstances require an extension of time for processing. If such
an extension of time is required, written notice of this extension
shall be furnished to the claimant prior to the termination of the
ninety (90) day period. The extension notice shall indicate the
special circumstances requiring an extension of time and the date
by which the Plan expects to render a final decision. In no event
shall this date be more than ninety (90) days after the end of the
initial ninety (90) day period.
If no response is received within ninety (90) days, allowing rea-
sonable time for mailing, the claimant may assume the claim has
been denied and proceed to the claim review stage outlined below.
The written notice of denial shall contain the following informa-
tion:
a) The specific reason or reasons for the denial;
b) Specific reference to the pertinent provisions of the Plan
upon which the denial is based;
c) A description of any additional material or information neces-
sary for the claimant to perfect the claim and an explanation
of why such material or information is necessary; and
d) An explanation of the Plan's claim review procedure.
The claimant or his duly authorized representative i) may request
a review of the decision by written application to the Trustees
90
<PAGE> 127
not later than sixty (60) days after receipt by the claimant of
written notification of denial of the claim, ii) may review per-
tinent documents, and iii) may submit issues and comments in
writing. The written application for review must contain or be
accompanied by:
1. A concise statement of the facts upon which the claim for
benefits is based;
2. The reasons why the Administrative Manager's denial is unlaw-
ful, improper or erroneous. Such statements shall be without
argument;
3. Additional factual information, if any, which was not sub-
mitted previously, together with a statement of the reasons
for failure to submit such information;
4. Argument or discussion as to why the decision should be re-
versed, including case citations and statutory references, if
any;
5. Statements of fact shall be verified by the claimant on his
personal knowledge and not information and belief. Failure to
so verify factual statements will result in their not being
considered by the Trustees.
If the Trustees hold regular meetings at least quarterly, a deci-
sion on review of a denied claim shall be made by the Trustees not
later than the date of the Trustees' meeting which immediately
follows the Administrative Manager's receipt of a request for re-
view, unless the request for review is received within thirty (30)
days preceding the date of such meeting, in which case a decision
shall be made no later than the date of the second Trustee's meet-
ing following the Administrative Manager's receipt of the request
for review. If special circumstances require a further extension
of time for processing, a decision shall be rendered no later than
the date of the third Trustees' meeting following the Administra-
tive Manager's receipt of the request for review. If such an
extension is required, the claimant shall be so notified prior to
commencement of the extension.
If the Trustees do not hold regular meetings at least quarterly, a
91
<PAGE> 128
decision on review of a denied claim shall be made by the Trustees
not later than sixty (60) days following the Administrative Mana-
ger's receipt of a request for review. If special circumstances
require a further extension of time for processing, a decision
shall be rendered within a reasonable period of time, but in no
event later than one hundred twenty (120) days following the
Administrative Manager's receipt of the request for review. If
such an extension is required, the claimant shall be so notified
within sixty (60) days after the Administrative Manager's re-
ceipt of the request for review.
The decision on review shall be in writing and shall include the
specific reason(s) for the decision and specific reference(s) to
the pertinent Plan provisions on which the decision is based.
The decision of the Trustees shall be final.
If a claimant has sought precertification a hospitalization or
service in accordance with the section entitled UTILIZATION RE-
VIEW REQUIREMENT in Article III, Part C, and if precertification
has been denied based upon a ground other than the medical neces-
sity and appropriateness of the hospitalization or procedure,
the claimant or his duly authorized representative may request
review of the denial under the terms of this section.
OTHER MATTERS
Any claim by an employee, beneficiary or other party involving a mat-
ter other than benefits (for example, if the Fund has denied that an
employee is an eligible Participant) must be presented in writing to
the Administrative Manager. A written response shall be furnished
to the person presenting the claim. If any employee, beneficiary
or other party believes that any action of the Fund is incorrect or
improper, an appeal must be filed. The appeal must be signed by the
person affected by the action and submitted to the Administrative
Manager within one (1) year of the action which the appeal concerns.
The person appealing may review all papers pertinent to the subject
matter of the appeal in the possession of the Trustees and may pre-
92
<PAGE> 129
sent additional evidence and a statement of his position. The
Trustees or a party appointed by the shall review the appeal and
provide a prompt written decision to the person appealing.
ARTICLE IX
GENERAL PROVISIONS
PHYSICAL EXAMINATION AND AUTOPSY
The Trustees shall have the right and opportunity to examine the per-
son with respect to whom benefits are claimed when and so often as
they may reasonably require during pendency of claim hereunder, and
also the right and opportunity to make an autopsy in case of death
where it is not forbidden by law.
LEGAL ACTIONS
No action at law or in equity shall be brought to recover under the
Plan prior to the expiration of one hundred eighty (180) days after
proof of claim has been filed in accordance with the requirements
of the Plan and the Plan's claims procedures nor shall such action
be brought at all unless brought within three (3) years from the
expiration of the time within which proof of claim is required in
accordance with the Plan's Claims Procedures or such longer period
as required by the ERISA, as amended.
NOT WORKERS' COMPENSATION INSURANCE
The coverage provided by the Plan is not in lieu of and does not af-
fect any requirements of coverage by Workers' Compensation Insurance.
PLAN REPLACES FORMER PLAN
This Plan replaces the Paul Mueller Company Employees Group Insurance
Plan (the "Former Plan"). In determining a Covered Individual's max-
imum benefits and deductible and co-payment requirements, payments
made under the Former Plan will be taken into account. If an indi-
vidual was covered under the Former Plan immediately prior to the
effective date of this Plan, he will neither gain nor lose coverage
93
<PAGE> 130
solely because of the switch from the Former Plan to this Plan.
APPLICABLE LAW
The Plan is established in the State of Missouri. As a general
matter, questions arising under the Plan will be determined under
federal law. To the extent federal law does not apply, questions
arising under the Plan will be determined under the laws of the State
of Missouri unless those state laws are preempted by federal law.
EFFECTIVE DATE
This Plan shall be effective June 1, 1988.
EFFECTIVE DATE OF AMENDMENT AND RESTATEMENT
This amendment and restatement of the Plan shall be effective July 1,
1998.
PLAN YEAR
The Plan shall be operated on a calendar year basis.
Executed this 5th day of August, 1998 at Springfield, Missouri.
BY: _________________________ BY: _________________________
Donald E. Golik, Trustee Gail Henrichs, Trustee
BY: _________________________ BY: _________________________
Gerald S. Miller, Trustee Michael W. Young, Trustee
94
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<PAGE>
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<S> <C>
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<PERIOD-END> SEP-30-1998
<CASH> 2,537
<SECURITIES> 8,248
<RECEIVABLES> 13,725
<ALLOWANCES> 736
<INVENTORY> 12,333
<CURRENT-ASSETS> 37,149
<PP&E> 58,041
<DEPRECIATION> 39,279
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0
0
<OTHER-SE> 39,734
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