AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON NOVEMBER 26 ,
1997
REGISTRATION
NO. 333-35447
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
STANDARD MANAGEMENT CORPORATION
(Exact name of Registrant as specified in its charter)
INDIANA 35-1773567
(State or Other Jurisdiction (I.R.S. Employer
of Incorporation or Organization) Identification Number)
9100 KEYSTONE CROSSING 46240
INDIANAPOLIS, INDIANA (Zip Code)
(Address of Principle Executive
Offices)
STANDARD MANAGEMENT CORPORATION SAVINGS PLAN
(Full Title of the Plan)
STEPHEN M. COONS COPIES TO:
STANDARD MANAGEMENT CORPORATION JOHN M. O'HARE
9100 KEYSTONE CROSSING SIDLEY & AUSTIN
INDIANAPOLIS, INDIANA 46240 ONE FIRST NATIONAL PLAZA
(317) 574-6200 CHICAGO, ILLINOIS 60603
(Name, Address and Telephone Number,
Including Area Code, of Agent for Service)
___________________________________________
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Title of Securities to Amount to be Registered Proposed Maximum Proposed Maximum Amount of Registration
be Registered(1) Offering Price Per Aggregate Offering Fee
Share Price
<S> <C> <C> <C>
Common Stock, without 500,000 shares{ (1)} $6.8125{ (2)} $3,406,250{ (2)} $1,032
par value
</TABLE>
(1) In addition, pursuant to Rule 416(c) under the Securities Act of 1933, as
amended (the "Securities Act"), this Registration Statement also covers an
indeterminate amount of plan interests to be offered pursuant to the employee
benefit plan described herein.
(2) Estimated solely for the purpose of calculating the registration fee
required by Section 6(b) of the Securities Act, pursuant to Rule 457(c)
thereunder, based on the average of the high and low prices of the Common Stock
on November 18, 1997, as reported in the consolidated reporting system.
<PAGE>
PART II
INFORMATION REQUIRED IN THE
REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents heretofore filed with the Securities and
Exchange Commission (the "Commission") by Standard Management Corporation (the
"Company") (file number 0-20882) and the Standard Management Corporation
Savings Plan (the "Plan") are incorporated herein by reference:
(a) the Company's Annual Report on Form 10-K, as amended by the
Company's Annual Reports on Form 10-K/A No. 1 and Form 10-K/A No. 2 for the
year ended December 31, 1996;
(b) the Company's Quarterly Reports on Form 10-Q for the quarters
ended March 31, 1997 and June 30, 1997, as amended by the Company's Quarterly
Reports on Form 10-Q/A No. 1 for the quarters ended March 31, 1997, and June
30, respectively, and the Company's Quarterly Report on Form 10-Q for the
quarter ended September 30, 1997;
(c) the Company's Current Report on Form 8-K dated January 22,
1997, the Company's Current Report on Form 8-K dated January 24, 1997, as
amended by the Company's Current Reports on Form 8-K/A filed February 19, 1997,
April 10, 1997, May 20, 1997 and August 29, 1997, the Company's Current Report
on Form 8-K dated February 17, 1997, the Company's Current Report on Form 8-K
dated October 8, 1997 and the Company's Current Report on Form 8-K dated
October 29, 1997;
(d) the Plan's Annual Report on Form 11-K for the year ended
December 31, 1996; and
(e) the description of the common stock, without par value, of
the Company (the "Common Stock") contained in the Registration Statement on
Form 8-A filed by the Company with the Commission on November 20, 1992,
including any amendments or reports filed for the purpose of updating such
description.
All documents filed by the Company pursuant to Sections 13(a),
13(c), 14 or 15(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and all documents filed by the Plan pursuant to Section 15(d)
of the Exchange Act, after the date of this Registration Statement and prior to
the filing of a post-effective amendment which indicates that all securities
offered hereby have been sold or which deregisters all securities then
remaining unsold, are deemed to be incorporated by reference into this
Registration Statement and to be a part hereof from the respective dates of
filing of such documents (such documents, and the documents enumerated above,
being hereinafter referred to as "Incorporated Documents").
Any statement contained in an Incorporated Document shall be deemed
to be modified or superseded for purposes of this Registration Statement to the
extent that a statement contained herein or in any other subsequently filed
Incorporated Document modifies or supersedes such statement. Any such
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Registration Statement.
ITEM 4. DESCRIPTION OF SECURITIES
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
Not applicable.
<PAGE>
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Indiana Business Corporation Law permits an Indiana corporation
to indemnify its directors and officers from liability for their conduct if
such conduct was made in good faith with the reasonable belief that such
conduct was in the corporation's best interest. If the individual was not
acting in his or her official capacity with the corporation, then
indemnification is permitted for good faith conduct made with the reasonable
belief that such conduct was at least not opposed to the best interest of the
corporation. Unless limited by its articles of incorporation, a corporation
must indemnify a director or officer, who is wholly successful in the defense
of any proceeding to which the director or officer is a party by virtue of
being a director or officer of the corporation, against reasonable expenses
incurred in connection with the proceeding. Indemnification can be made in
advance of the final disposition of a proceeding if certain procedural
requirements are met. An Indiana corporation is permitted to purchase and
maintain insurance on behalf of directors and officers against liability
asserted against them in that capacity or arising from an individual's status
as a director or officer, whether or not the corporation would have power to
indemnify the individual against the same liability under the Indiana Business
Corporation Law. In addition, the stockholders of a corporation may approve
the inclusion of other or additional indemnification provisions in the articles
of incorporation or by-laws.
The Articles of Incorporation of the Company provide for the
indemnification of directors and officers against reasonable expenses actually
incurred, except in relation to any action in which it is finally adjudged that
the director or officer is liable for willful misconduct or recklessness in the
performance of corporate duties. In addition, indemnification is permitted for
amounts paid by directors or officers upon judgement and the reasonable costs
of settlement of any such action, if a majority of a disinterested committee of
the Company Board of Directors determines that such payment or settlement is in
the interest of the Company and that the director or officer to be reimbursed
did not engage in any act constituting willful misconduct or recklessness in
the performance of corporate duties.
The Bylaws of the Company provide for indemnification of directors
and officers to the fullest extent available under then applicable law.
The Company has entered into separate indemnification agreements
with some of its directors that may require the Company, among other things, to
indemnify them against certain liabilities that may arise by reason of their
status of service as directors, to the maximum extent permitted under the
Indiana Business Corporation Law. Standard Life Insurance Company of Indiana,
a wholly-owned subsidiary of the Company ("Standard Life"), has entered into
separate indemnification agreements with each of its directors and each of the
directors of the Company, which agreements require Standard Life, among other
things, to indemnify such directors against certain liabilities that may arise
by reason of their status or service as directors to the maximum extent
permitted under Indiana law.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED
Not applicable.
ITEM 8. EXHIBITS
The Company will submit or has submitted the Plan and any amendment
thereto to the Internal Revenue Service (the "IRS") in a timely manner and has
made all changes required by the IRS in order to qualify the Plan under Section
401 of the Internal Revenue Code of 1986, as amended.
Exhibit
NUMBER DESCRIPTION OF EXHIBIT
4.1 Amended and Restated Articles of Incorporation of the Company, as
amended (incorporated by reference to the Company's Annual Report
on Form 10-K (File No. 2-20882) for the year ended December 31,
1995).
4.2 Amended and Restated Bylaws of the Company, as amended
(incorporated by reference to the Company's Registration Statement
on Form S-1 (Registration No. 33-53370) as filed with the
Commission on January 27, 1993 and to Exhibit 3 of the Company's
Quarterly Report on Form 10-Q (File No. 0-20882) for the quarter
ended September 30, 1994).
4.3 Standard Management Corporation Amended and Restated 1992 Stock
Option Plan (incorporated by reference to the Company's
Registration Statement on Form S-4 (Registration No. 333-35447) as
filed with the Commission on September 11, 1997.
4.4 Form of Senior Note Agreement Warrant (incorporated by reference to
the Company's Registration Statement on Form S-1 (Registration No.
33-53370) as filed with the Commission on January 27, 1993).
4.5 Form of Oppbridge Partners Warrant (incorporated by reference to
the Company's Registration Statement on Form S-1 (Registration No.
33-53370) as filed with the Commission on January 27, 1993).
4.6 Registration Rights Agreement, dated as of May 3, 1990 among the
Company, Howard T. Cohn and Joseph J. Piazza and the first
amendment thereto, dated June 4, 1990 (incorporated by reference to
the Company's Registration Statement on Form S-1 (Registration No.
33-53370) as filed with the Commission on January 27, 1993).
4.7 Amended and Restated Registration Rights Agreement dated as of
November 8, 1996 by and between the Company and Fleet National Bank
(incorporated by reference to the Company's Quarterly Report on
Form 10-Q (File No. 0-20882) for the quarter ended September 30,
1996).
4.8 Form of Fleet National Bank Warrant (incorporated by reference to
the Company's Quarterly Report on Form 10-Q (File No. 0-20882) for
the quarter ended September 30, 1996).
4.9 Form of President's Club Warrant (incorporated by reference to the
Company's Annual Report on Form 10-K (File No. 0-20882) for the
quarter ended December 31, 1995).
4.10 Registration Rights Agreement dated as of November 8, 1996 by and
between the Company and Great American Reserve Insurance Company
(incorporated by reference to the Company's Quarterly Report on
Form 10-Q (File No. 0-20882) for the quarter ended September 30,
1996).
4.11 Form of Sand Brothers & Company, Ltd. Warrant (incorporated by
reference to the Company's Annual Report on Form 10-K (File No. 0-
20882) for the year ended December 31, 1996).
*4.12 Standard Management Corporation 401(k) Plan.
*23.1 Consent of Ernst & Young LLP.
*23.2 Consent of KPMG Audit.
24 Powers of Attorney (included in the signature page of this
Registration Statement).
_____________________
* Filed herewith.
<PAGE>
ITEM 9. UNDERTAKINGS
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933, as amended (the "Securities Act");
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in
the registration statement; and notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total dollar
value of securities offered would not exceed that which was registered)
and any deviation from the low or high end of the estimated maximum
offering range may be reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) if, in the aggregate, the changes in
volume and price represent no more than a 20 percent change in the
maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement; and
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement;
PROVIDED, HOWEVER, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
registration statement is on Form S-3, Form S-8 or Form F-3, and the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the Registrant pursuant to Section 13 or 15(d) of the Exchange
Act that are incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial BONA
FIDE offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination
of the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in the registration statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial BONA
FIDE offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by
such director, officer or controlling person in connection with the securities
being registered, the Registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and will be governed
by the final adjudication of such issue.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-8 and has duly caused this
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Indianapolis, State of Indiana, on November 26,
1997.
STANDARD MANAGEMENT CORPORATION
By: RONALD D. HUNTER
Ronald D. Hunter
Chairman, President and
Chief Executive Officer
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears immediately below constitutes and appoints Ronald D. Hunter and Stephen
M. Coons, and each or any of them, his true and lawful attorney-in-fact and
agent, with full power of substitution and resubstitution, for him and in his
name, place and stead, in any and all capacities, to sign any and all
amendments (including post-effective amendments) to this Registration
Statement, and to file the same with all exhibits thereto and other documents
in connection therewith, with the Securities and Exchange Commission, granting
unto said attorney-in-fact and agents, and each of them, full power and
authority to do and perform each and every act and thing requisite and
necessary to be done, as fully to all intents and purposes as he might or could
do in person, hereby ratifying and confirming all that said attorneys-in-fact
and agents or any of them, or their or his substitute or substitutes, may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities indicated and on the dates indicated.
SIGNATURE TITLE DATE
RONALD D. HUNTER Chairman, President and Chief November 26, 1997
Ronald D. Hunter Executive Officer
PAUL B. PHEFFER Executive Vice President, November 26, 1997
Paul B. Pheffer Chief Financial Officer,
Treasurer and Director
(Principal Financial Officer)
GERALD R. HOCHGESANG Senior Vice President -- Finance November 26, 1997
Gerald R. Hochgesang (Principal Accounting Officer)
RAYMOND J. OHLSON Director November 26, 1997
Raymond J. Ohlson
EDWARD T. STAHL Director November 26, 1997
Edward T. Stahl
STEPHEN M. COONS Director November 26, 1997
Stephen M. Coons
* Director November 26, 1997
Martial R. Knieser
* Director November 26, 1997
Ramesh H. Bhat
* Director November 26, 1997
James C. Lanshe
* Director November 26, 1997
Robert A. Borns
* By RONALD D. HUNTER
Ronald D. Hunter
Attorney-in-Fact
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, as amended,
the trustees (or other persons who administer the employee benefit plan) have
duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Indianapolis, State of
Indiana, on November 26, 1997.
STANDARD MANAGEMENT CORPORATION
401(K) PLAN
By: EDWARD T. STAHL
Edward T. Stahl Trustee
<PAGE>
INDEX TO EXHIBITS TO REGISTRATION STATEMENT ON FORM S-8
Exhibit
NUMBER DESCRIPTION OF EXHIBIT
4.1 Amended and Restated Articles of Incorporation of the Company, as
amended (incorporated by reference to the Company's Annual Report
on Form 10-K (File No. 2-20882) for the year ended December 31,
1995).
4.2 Amended and Restated Bylaws of the Company, as amended
(incorporated by reference to the Company's Registration Statement
on Form S-1 (Registration No. 33-53370) as filed with the
Commission on January 27, 1993 and to Exhibit 3 of the Company's
Quarterly Report on Form 10-Q (File No. 0-20882) for the quarter
ended September 30, 1994).
4.3 Standard Management Corporation Amended and Restated 1992 Stock
Option Plan (incorporated by reference to the Company's
Registration Statement on Form S-4 (Registration No. 333-35447) as
filed with the Commission on September 11, 1997.
4.4 Form of Senior Note Agreement Warrant (incorporated by reference to
the Company's Registration Statement on Form S-1 (Registration No.
33-53370) as filed with the Commission on January 27, 1993).
4.5 Form of Oppbridge Partners Warrant (incorporated by reference to
the Company's Registration Statement on Form S-1 (Registration No.
33-53370) as filed with the Commission on January 27, 1993).
4.6 Registration Rights Agreement, dated as of May 3, 1990 among the
Company, Howard T. Cohn and Joseph J. Piazza and the first
amendment thereto, dated June 4, 1990 (incorporated by reference to
the Company's Registration Statement on Form S-1 (Registration No.
33-53370) as filed with the Commission on January 27, 1993).
4.7 Amended and Restated Registration Rights Agreement dated as of
November 8, 1996 by and between the Company and Fleet National Bank
(incorporated by reference to the Company's Quarterly Report on
Form 10-Q (File No. 0-20882) for the quarter ended September 30,
1996).
4.8 Form of Fleet National Bank Warrant (incorporated by reference to
the Company's Quarterly Report on Form 10-Q (File No. 0-20882) for
the quarter ended September 30, 1996).
4.9 Form of President's Club Warrant (incorporated by reference to the
Company's Annual Report on Form 10-K (File No. 0-20882) for the
quarter ended December 31, 1995).
4.10 Registration Rights Agreement dated as of November 8, 1996 by and
between the Company and Great American Reserve Insurance Company
(incorporated by reference to the Company's Quarterly Report on
Form 10-Q (File No. 0-20882) for the quarter ended September 30,
1996).
4.11 Form of Sand Brothers & Company, Ltd. Warrant (incorporated by
reference to the Company's Annual Report on Form 10-K (File No. 0-
20882) for the year ended December 31, 1996).
*4.12 Standard Management Corporation 401(k) Plan.
*23.1 Consent of Ernst & Young LLP.
*23.2 Consent of KPMG Audit.
24 Powers of Attorney (included in the signature page of this
Registration Statement).
_____________________
* Filed herewith.
H:\USER\ELWARTOD\DOCS\S8\S8_401K.97
STANDARD MANAGEMENT CORPORATION SAVINGS
PLAN
SUMMARY PLAN DESCRIPTION
APRIL, 1996
<PAGE>
SUMMARY PLAN DESCRIPTION
TABLE OF CONTENTS
PAGE
I INTRODUCTION 1
II PLAN DATA 1
Name of Plan 1
Agent for Service of Legal Process 1
Effective Date 1
Employer 1
Plan Administrator 1
Plan Year 1
Trustee 1
Type Of Administration 1
III DEFINITIONS 2
Break In Service 2
Compensation 2
Disability 2
Effective Date 2
Elective Deferral 2
Entry Date 2
Family Member 2
Highly Compensated Employee 3
Hour Of Service 3
Maternity/Paternity Leave 3
Normal Retirement Age 4
Period of Severance 4
Spouse 4
Year Of Service 4
IV ELIGIBILITY REQUIREMENTS AND PARTICIPATION 5
V EMPLOYEE CONTRIBUTIONS 5
Elective Deferrals 5
Rollover And Transfer Contributions 5
VI EMPLOYER CONTRIBUTIONS 6
Contribution Formula 6
Eligibility For Allocation 6
VII GOVERNMENT REGULATIONS 6
VIII PARTICIPANT ACCOUNTS 7
IX VESTING 7
Determining Vested Benefit 7
Payment Of Vested Benefit 8
Loss Of Benefits 8
Reallocation of Forfeiture 8
Reemployment 9
X TOP-HEAVY RULES 10
XI RETIREMENT BENEFITS AND DISTRIBUTIONS 10
Retirement Benefits 10
Distributions During Employment 10
Hardship Withdrawals 11
Beneficiary 12
Death Benefits 12
Form Of Payment 12
Rollover of Payment 12
Time Of Payment 13
Joint and Survivor Annuity Rules 13
XII INVESTMENTS 14
Trust Fund 14
Investment Responsibility 14
Employee Investment Direction 14
Participant Loans 14
XIII ADMINISTRATION 15
Plan Administrator 15
Trustee 16
XIV AMENDMENT AND TERMINATION 16
XV LEGAL PROVISIONS 16
Rights Of Participants 16
Fiduciary Responsibility 17
Employment Rights 17
Benefit Insurance 17
Claims Procedure 17
Assignment 18
Questions 18
Conflicts With Plan 18
<PAGE>
I INTRODUCTION
Your Employer has established a retirement plan to help supplement
your retirement income. Details about how the Plan works are
contained in this summary. While the summary describes the principal
provisions of the Plan, it does not include every limitation or
detail. If there is a discrepancy between this booklet and the
official Plan document, the Plan document shall govern. You may
obtain a copy of the Plan document from the Plan Administrator. The
Plan Administrator may charge a reasonable fee for providing you with
the copy.
II PLAN DATA
A. NAME OF PLAN: Standard Management Corporation Savings
Plan
B. AGENT FOR SERVICE OF LEGAL PROCESS: The Employer or Trustee.
C. EFFECTIVE DATE:The Effective Date of the original Plan was June
1, 1987; the Effective Date of the amended Plan
is January 1, 1996.
D. EMPLOYER: Standard Management Corporation
Address: 9100 Keystone Crossing
Suite 600
Indianapolis, IN 46240
Telephone No.: (317) 574-6252
Tax I.D. No.: 35-1773567
Plan No.: 001
E. PLAN ADMINISTRATOR: The Employer has been designated to serve
as Plan Administrator.
F. PLAN YEAR: The 12-month period beginning on January 1 and
ending on December 31.
G. TRUSTEE(S): Edward T. Stahl
Address: c/o Standard Management Corporation
9100 Keystone Crossing
Suite 600
Indianapolis, IN 46240
Telephone No.: (317) 574-6252
H. TYPE OF ADMINISTRATION: Trust Fund
III DEFINITIONS
A. BREAK IN SERVICE. For purposes of vesting and eligibility, a
Break In Service is a Period of Severance of at least 12
consecutive months. (See definition of Period of Severance in
this Section.) If you go into the military service of the
United States, you are not considered terminated as long as you
return to work within the time required by law. If you separate
from employment and incur a Break In Service, all contributions
to your various accounts are suspended. [See special rules
relating to maternity and paternity leave below. Also, see
Section VI(B) to determine your eligibility to share in the
Employer's Contribution if you separate from employment, but do
not incur a Break In Service.] If a Break In Service occurs and
you return to full time employment with the Employer, your
rights are explained in the section entitled "Vesting".
B. COMPENSATION. Generally, your total salary, pay, or earned
income from the Employer, as reflected on tax Form W-2, which is
subject to withholding when earned. Compensation for
Discretionary Contributions will only include amounts received
by you during the Plan Year and earned while a Participant.
Compensation shall be limited to $200,000 as adjusted for
inflation. For Plan Years beginning in 1994, Compensation shall
be limited to $150,000 as adjusted for inflation. Compensation
shall include amounts deferred under 401(k) plans and Section
125 cafeteria plans.
C. DISABILITY. A potentially permanent illness or injury, as
certified to by a physician who is approved by the Employer,
which prevents you from engaging in work for which you are
qualified for a period of at least 12 months.
D. EFFECTIVE DATE. The date on which the Plan starts or an
amendment is effective.
E. ELECTIVE DEFERRAL. Employer contributions made to the Plan at
your election, instead of being given to you in cash as part of
your salary. You can elect to defer a portion of your salary,
instead of receiving it in cash, and your Employer will
contribute it to the Plan on your behalf. Elective Deferrals
are also known as salary reduction contributions.
F. ENTRY DATE. The date on which you enter the Plan. Your Entry
Date will be the first day of the month coinciding with or
following the date you satisfy the eligibility requirements.
G. FAMILY MEMBER. The Spouse or lineal ascendant or descendant (or
Spouse thereof) of either a more than 5% owner of the Employer
or one of the ten highest compensated Highly Compensated
Employees of the Employer.
H. HIGHLY COMPENSATED EMPLOYEE. Any Employee who during the
current or prior Plan Year (1) was a more than 5% owner, (2)
received more than $75,000 in Compensation as adjusted for
inflation (3) received more than $50,000 in Compensation as
adjusted for inflation and was in the top 20% of Employees when
ranked by Compensation, or (4) was an officer receiving more
than $45,000 in Compensation as adjusted for inflation. Family
Members of any 5% owner, or Highly Compensated Employee in the
group of the ten Employees with the greatest Compensation, will
be combined as if they were one person for purposes of
Compensation and contributions. If you are not currently or
never were Highly Compensated, or a Family Member of a Highly
Compensated Employee, you are a Non-Highly Compensated Employee.
I. HOUR OF SERVICE. You will receive credit for each hour you are
(1) paid for being on your job, (2) paid even if you are not at
work (vacation, sickness, leave of absence, or disability), or
(3) paid for back pay if hours were not already counted. A
maximum of 501 hours will be credited in any year for periods
during which you are not at work but are paid. Hours of Service
will be calculated based on actual hours you are entitled to
payment.
J. MATERNITY/PATERNITY LEAVE. You may be eligible for additional
Hours of Service if you leave employment, even if temporarily,
due to childbirth or adoption. If this is the case, you will be
credited with enough hours (up to 501) of service to prevent a
Break In Service, either in the year you leave employment or the
following year. For example, if you have 750 Hours of Service
in the year that your child is born, you would not get any more
hours credited for that Plan Year since you do not have a Break
In Service. Therefore, if you do not return to employment the
following year, you will get 501 Hours of Service so you will
not have a Break In Service in that year. Alternatively, if you
do return the following year, but work only 300 hours, you will
receive an additional 201 hours in order to prevent a break.
These Hours of Service for maternity or paternity leave must all
be used in one Plan Year. They are used only to prevent a Break
In Service and not for calculating your Years of Service for
eligibility, vesting or benefits.
Under the elapsed time method of calculating Years of Service,
if you are absent from employment for more than a 12-consecutive
month period due to Maternity/Paternity Leave, a Period of
Severance shall not start until the anniversary of the beginning
of such absence. The first year of your leave shall not
constitute a Period of Severance.
K. NORMAL RETIREMENT AGE. The attainment of age 65, or, if later,
the 5th anniversary of the first day of the Plan Year during
which you entered the Plan.
L. PERIOD OF SEVERANCE. A continuous period that you are not
employed by the Employer. Your Period of Severance shall
commence when you retire, die, quit, or are discharged. If you
leave your employment for any other reason, your Period of
Severance shall start on the first 12-month anniversary of you
leaving. If you go into the military service of the United
States, you are not considered terminated as long as you return
to work within the time required by law. If you incur a Period
of Severance, all contributions to your various accounts are
suspended. [See special rules relating to maternity and
paternity leave above.] If a Period of Severance occurs and you
return to full time employment with the Employer, your rights
are explained in the section entitled "Vesting".
M. SPOUSE. The person to whom you are or were legally married, or
your common law Spouse if common law marriage is recognized by
the state in which you live. In order for your Spouse to
receive a benefit under this Plan, he or she may not predecease
you. A former Spouse may be treated as a "Spouse" under this
definition if recognized as such under a Qualified Domestic
Relations Order as explained at Section XV(F) of this Summary
Plan Description.
N. YEAR OF SERVICE.
DISCRETIONARY CONTRIBUTION
For purposes of determining whether or not you are entitled to
have a discretionary contribution allocated to your account, a
Year of Service is a 12-consecutive month period, which is the
same as the Plan Year, during which you are credited with at
least 501 Hours of Service.
VESTING
For purposes of determining the extent to which you are vested
in your account balance a Year of Service is a period,
commencing on your date of hire, of 12 consecutive months of
service. You will continue to be credited with Years Of Service
until you have a 12 consecutive month period during which you
render no service (i.e., a Period of Severance).
Under the elapsed time method, a Year of Service is credited if the
Employee has 12 months of Service except for eligibility where only 6
months are required.
IV ELIGIBILITY REQUIREMENTS AND PARTICIPATION
You are eligible to participate in this Plan upon completing 6 months
of Service and attaining age 21.
Your participation in the Plan will begin on the Entry Date defined
at Section III.
V EMPLOYEE CONTRIBUTIONS
A. ELECTIVE DEFERRALS
You, as an eligible Employee, may authorize the Employer to
withhold from 1% up to 15% of your Compensation plus up to 15%
of any Employer paid cash bonus, not to exceed $7,000 as
adjusted for inflation ($9,500 for 1996) and to deposit such
amount in the Plan fund. If you participate in a similar plan
of an unrelated employer and your Elective Deferrals under this
Plan and the other plan exceed the $7,000 limit, for a given
year you must designate one of the Plans as receiving an excess
amount. If you choose this Plan as the one receiving the
excess, you must notify the Plan Administrator by March 1 of the
following year so that the excess and any income thereon may be
returned to you by April 15.
If you terminate contributions, you may not reinstate payroll
withholding until the first day of the next valuation period.
The Employer may also reduce or terminate your withholding if
required to maintain the Plan's qualified status.
B. ROLLOVER AND TRANSFER CONTRIBUTIONS
Rollover and Transfer Contributions are permitted. You may make
a Rollover or Transfer Contribution prior to becoming a
Participant. An Employer can refuse to allow Transfer
Contributions to its profit-sharing Plan if the transfer will
affect the Plan's ability to offer lump sum distributions as the
normal form of distribution.
A rollover or transfer of your retirement benefits may originate
from another qualified retirement plan or special individual
retirement arrangement (known as a "conduit" IRA) to this Plan.
If you have already received a lump-sum payment from another
qualified retirement plan, or if you received payment from
another qualified plan and placed it in a separate "conduit"
IRA, you may be eligible to redeposit that payment to this Plan.
The last day you may make a Rollover Contribution to this Plan
is the 60th day after you receive the distribution from the
other plan or IRA. A transfer occurs when the trustee of the
old plan transfers your assets to this Plan. If you believe you
qualify for a transfer or rollover, see the Plan Administrator
for more details.
VI EMPLOYER CONTRIBUTIONS
A. CONTRIBUTION FORMULA
ELECTIVE DEFERRALS:
The Employer will contribute all Compensation which you elect to
defer to the Plan within the limits outlined in Section V(A).
MATCHING CONTRIBUTIONS:
The Employer may make a Matching Contribution to each
Participant based on his or her Elective Deferrals in a
percentage set by the Employer. These Matching Contributions
shall be made to all Participants. The time period which will
be used for determining the amount of Matching Contributions
owed shall be monthly.
Employer Matching Contributions will only be made on Elective
Deferrals made to the Plan.
QUALIFIED NON-ELECTIVE CONTRIBUTIONS:
The Employer may also contribute an additional amount, known as
a 401(k) Bonus Contribution, determined in its sole judgment.
This additional contribution, if any, will be allocated to only
Non-Highly Compensated Employees, in proportion to each eligible
Non-Highly Compensated Employee's Compensation as a ratio of all
eligible Non-Highly Compensated Employees' Compensation. These
Contributions will be nonforfeitable and subject to withdrawal
restrictions.
B. ELIGIBILITY FOR ALLOCATION
For Plan Years beginning in 1990 and thereafter, the Employer's
Discretionary Contribution will be allocated among all
Participants who are employed at the end of the Plan Year,
without regard to the number of Hours of Service completed. The
Employer shall also make a Discretionary Contribution for each
Participant who separated from employment during the Plan Year
as long as the Participant completed more than 501 Hour(s) of
Service during that Plan Year.
VII GOVERNMENT REGULATIONS
The federal government sets certain limitations on the level of
contributions which may be made to a Plan such as this. There is also
a "percentage" limitation which means that the percentage of
Compensation which you may contribute (Elective Deferrals) depends on
the average percentage of Compensation that the other Participants are
contributing. Simply stated, all Participants are divided into 2
categories: Highly Compensated and Non-Highly Compensated and the
average for each group is calculated. The average contribution that
the Highly Compensated may make is based on the average contribution
that the Non-Highly Compensated make. If a Highly Compensated
Participant is contributing more than he or she is allowed, the
excess, plus or minus any gain or loss, will generally be returned.
Keep in mind that if you are a 5% owner of the business or one of the
ten highest paid Highly Compensated employees, your Family Member's
contribution percentages and Compensations will be combined with yours
for purposes of determining your contributions under the Plan.
VIII PARTICIPANT ACCOUNTS
The Employer will set up a record keeping account in your name to show
the value of your retirement benefit. The Employer will make the
following additions to your account:
A. your allocated share of the Employer's Contribution (including
your Elective Deferrals),
B. the amount of your personal Employee Voluntary Contributions,
Transfer Contributions and Rollover Contributions, if any, and
C. your share of investment earnings and appreciation in the value of
investments.
The Employer will make the following subtractions from your account:
D. any withdrawals or distributions made to you, and
E. your share of investment losses and depreciation in the value of
investments.
The Employer will value your account on the last day of each Plan Year
unless the Employer and Service Company choose to value your account
on such other date to accommodate the operational cycle of the Service
Company.
The Employer will provide you with a statement of account activity at
least once annually.
IX VESTING
A. DETERMINING VESTED BENEFIT
Vesting refers to your earning or acquiring a nonforfeitable right
to the full amount of your account. Any Elective Deferral,
Employee Contribution, Rollover Contribution, Transfer
Contribution, plus or minus any earnings or losses associated with
these contributions, is always 100% vested and cannot be forfeited
for any reason. The following vesting schedule will apply for
Employer Match Contributions:
YEARS OF SERVICE
1 2 3 4 5 6
0% 20% 40% 60% 80% 100%
Service prior to age 18 is not counted for purposes of vesting.
You automatically become fully vested, regardless of the vesting
table, upon attainment of Normal Retirement Age, upon retirement
due to Disability, upon death, and upon termination of the Plan.
B. PAYMENT OF VESTED BENEFIT
If you separate from Service before your retirement, death or
Disability, you may request early payment of your vested benefit
by submitting a written request to the Plan Administrator. If
your vested account balance at the time of termination or at the
time of any prior distributions exceeds or exceeded $3,500, you
may defer the payment of your benefit until April 1 of the
calendar year following the calendar year during which you attain
age 70- 1/2 . The portion of your account balance to which you
are not vested is called a "forfeiture" and remains in the Plan to
reduce the Employer's Contribution for the year.
C. LOSS OF BENEFITS
There are generally two events which can cause the loss of all or
a portion of your account. One is termination of employment
before you are 100% vested according to the vesting provisions
described at Section IX(A) and the other is a decrease in the
value of your account from investment losses or administrative
expenses and other costs of maintaining the Plan. NOTE: In
certain situations, Participants may have to forfeit all or a
portion of their accounts should an excess occur.
D. REALLOCATION OF FORFEITURE
If you receive the vested portion of your account upon separation
from service, the Employer will forfeit and reallocate the
nonvested portion of your account on the Valuation Date
immediately following the date of payment of your vested account
balance. If you have not received a distribution of your vested
balance, your nonvested portion will be forfeited at the end of
the Plan Year during which you incur your fifth consecutive 1-year
Period of Severance.
E. REEMPLOYMENT
If you terminate service with your Employer, then are later
reemployed, you will become a Participant immediately upon your
return to employment. If you are not a member of a class of
employees eligible to participate in the Plan and later become a
member of the eligible class, you will participate immediately if
you have satisfied the minimum age and service requirements.
Should you become ineligible to share in future Contributions and
forfeitures because you are no longer a member of an eligible
class, you shall again share upon your return to an eligible
class. All years of prior Service will be counted when
calculating your vested percentage in your new account balance.
The following rules apply in connection with reemployed
Participants.
(a) TERMINATED PARTIALLY VESTED PARTICIPANTS. If you terminate
employment and receive payment of your partially vested
interest and are reemployed prior to incurring five
consecutive one-year Breaks In Service, you have the right to
buy back the nonvested portion of your account if it was
forfeited. If your nonvested balance was not forfeited it
will still be part of your account and the buy back is not
necessary. If a buy back is necessary to regain the
forfeiture, you must redeposit the amount paid to you without
interest within five years of your date of reemployment. If
you do not repay the amount you received, the nonvested
portion of your Employer account will be permanently
forfeited. Whether you repay or not, your prior Service will
count toward vesting service for future Employer
contributions.
FOR EXAMPLE, assume that you terminate your job with your
current Employer. At the time of termination you had accrued
a total benefit of $10,000 under the retirement Plan.
Although this amount had been allocated to your account, you
were only 40% vested in that amount when you left. You
decided to take a distribution of your vested account balance
(40% of $10,000, or $4,000) when you quit. The nonvested
balance of your account ($6,000) was forfeited. Three years
later, you became reemployed by the same Employer. Since you
were reemployed within 5 years, you have the right to repay
the $4,000 distribution you received when you quit. You
would have to repay the $4,000 within 5 years of being
rehired. If you do so, the nonvested portion of your account
($6,000) will be restored to your account. After
restoration, you will be vested in 40% of this account, but
your vested percentage will increase based on your Years of
Service after your reemployment. Your prior Service will
ALWAYS count towards vesting of Employer Contributions which
you receive after reemployment, whether or not you decide to
repay and restore your prior account.
(b) TERMINATED NONVESTED PARTICIPANTS. If you were not vested in
any portion of your Employer Contribution account prior to
your separation from service and are reemployed before
incurring five consecutive one-year Periods of Severance, you
will be credited for vesting with all pre-break and post-
break service. Your prior unpaid account balance will
automatically be restored and you will continue to vest in
that account. If you are reemployed after incurring five
consecutive one-year Periods of Severance, you will lose your
prior account balance, but your pre-break Years of Service
will count towards vesting in your new account balance.
X TOP-HEAVY RULES
A "top-heavy" plan is one in which more than 60% of the contributions
or benefits are attributable to certain "key employees", such as
owners, officers and stockholders. The Plan Administrator is
responsible for determining each year if the Plan is "top-heavy". If
the Plan becomes top-heavy special rules apply to the allocation of
the Employer's contribution. These special rules require that only
Participants who are not key employees will generally receive an
allocation of the Employer's contribution equal to 3% of compensation,
or if less, the greatest percentage allocated to the account of any
key employee. Under this Plan, only eligible non-key employees who
are Participants are entitled to receive a minimum allocation upon
completing at least one Hour of Service in the top-heavy Plan Year
provided they are employed on the last day of the Plan Year. The
Employer's minimum contribution can be satisfied by another Employer
sponsored retirement plan, if so elected by the Employer. The current
vesting schedule(s) may also have to be accelerated if the Plan
becomes Top-Heavy.
XI RETIREMENT BENEFITS AND DISTRIBUTIONS
A. RETIREMENT BENEFITS
The full value of your account balance is payable at your Normal
Retirement Age, even if you continue to work, or you may defer
payment until April 1 following the year you reach age 70 1/2 .
If you work beyond your Normal Retirement Age, you will continue
to fully participate in the Plan.
B. DISTRIBUTIONS DURING EMPLOYMENT
Upon attainment of age 59 1/2 , benefits attributable to Employer
Contributions, and Elective Deferrals, allocated to your
account(s) are available for withdrawal if you are vested in those
benefits.
If applicable, benefits attributable to your Voluntary
Contributions under the Plan plus any Rollover Contributions are
available for withdrawal upon request to the Plan Administrator.
Transfer Contributions may be withdrawn only if they originate
from plans meeting certain safe harbor provisions.
C. HARDSHIP WITHDRAWALS
You may file a written request for a hardship withdrawal of the
portion of your account balance attributable to only Elective
Deferrals. Earnings on Elective Deferrals up to the last day of
the Plan Year prior to July 1, 1989 may be included in any
hardship withdrawal, but earnings on Elective Deferrals after that
date may not be included. You must generally have your Spouse's
written consent for a hardship withdrawal unless you are advised
otherwise by the Plan Administrator. Prior to receiving a
hardship distribution, you must take any other distribution and
borrow the maximum non-taxable loan amount allowed under this and
other plans of the Employer. Note, however, that if the effect of
the loan would be to increase the amount of your financial need,
you are not required to take the loan. For example, if you need
funds to purchase a principal residence, and a plan loan would
disqualify you from obtaining other necessary financing, you do
not have to take the loan. Hardship withdrawals may be authorized
by the Employer for the following reasons:
(a) to assist you in purchasing a personal residence which is
your primary place of residence (not including mortgage
payments),
(b) to assist you in paying tuition expenses for you, your
Spouse, or your dependents, for the next twelve months of
post-secondary education,
(c) to assist you in paying expenses incurred or necessary on
behalf of you, your Spouse, or your dependents for
hospitalization, doctor or surgery expenses which are not
covered by insurance, or
(d) to prevent your eviction from or foreclosure on your
principal residence.
Any hardship distribution is limited to the amount needed to meet
the financial need. Hardship withdrawals must be approved by the
Employer and will be administered in a non-discriminatory manner.
Such withdrawals will not affect your eligibility to continue to
share in Employer Contributions to the Plan with the exception of
Matching Contributions, if applicable. However, your right to
make Voluntary Contributions and Elective Deferrals will be
suspended for twelve months. Any withdrawals you receive under
these rules may not be recontributed to the Plan and may be
subject to taxation, as well as an additional 10% penalty tax if
the withdrawal is received before you reach age 59 1/2 . These
payments shall also be subject to a mandatory 20% withholding for
income tax purposes.
D. BENEFICIARY
Every Participant or former Participant with Plan benefits may
designate a person or persons who are to receive benefits under
the Plan in the event of his or her death. The designation must
be made on a form provided by and returned to the Plan
Administrator. You may change your designation at any time. If
you are married, your beneficiary will automatically be your
Spouse. If you and your Spouse wish to waive this automatic
designation, you must complete a beneficiary designation form.
The form must be signed by you and your Spouse in front of a Plan
representative or a Notary Public.
E. DEATH BENEFITS
In the event of your death, the full value of your account is
payable to your beneficiary. If you die after benefit payments
have started under an installment option and after the attainment
of age 70 1/2 , your beneficiary will continue to receive payments
in accordance with the payment option you selected.
F. FORM OF PAYMENT
When benefits become due, you or your representative should apply
to the Employer requesting payment of your account and specifying
the manner of payment. The normal or automatic form of payment is
a qualified annuity unless you elect otherwise. If you do not wish
to receive the normal form of payment when your payments are due
to start, you may request to receive your benefit in any of the
optional forms indicated: a single sum payment; a straight life
annuity; single life annuities with certain periods of five, ten,
or fifteen years; a single life annuity with installment refund;
survivorship life annuities with installment refund and survivor
percentages of 50, 66 2/3, or 100; fixed period annuities for any
period of whole months which is not less than sixty and does not
exceed the Life Expectancy of the Member with a minimum payment
each year beginning with the year the Member turns age 70 1/2.
G. ROLLOVER OF PAYMENT
If your benefits qualify as eligible rollovers, you have the
option of having them paid directly to you, when they become due,
or having them directly rolled over to another qualified plan or
an IRA. If you do not choose to have the benefits directly rolled
over, the Plan is required to automatically withhold 20% of your
payment for tax purposes. If you do choose to have the payment
made to you, you still have the option of rolling over the payment
yourself to a qualified plan or an IRA within sixty days (first
check with a tax advisor to make sure it is an eligible rollover).
However, 20% of your payment will still be withheld. The
following example illustrates how this works:
For example, if you have $100,000 in your vested account balance
and choose to have the payment of your benefits made directly to
an IRA or another qualified plan, the entire $100,000 will be
transferred to the trustee of the other plan or the IRA, and you
will treat the entire amount as a rollover on your tax return so
that you will not pay taxes on the entire amount. If you choose
NOT to have the account transferred directly to an IRA or
qualified plan, 20% or $20,000 will automatically be withheld from
your payment. Thus, you will receive only $80,000 as a
distribution of your benefits. In order to roll the entire amount
over into your IRA, you would have to come up with $20,000 out of
your own pocket to make up the difference. If this is done, the
$20,000 which was withheld may be returned when you file your
taxes at the end of the year. However, if you are unable to
produce the extra cash, the rollover amount will only be $80,000,
and the other $20,000 which was withheld will be treated as
taxable income to you. If you are under age 59 1/2 when you
receive your benefit payment, the withheld amount will also be
subject to the 10% early distribution penalty.
Certain benefit payments are not eligible for rollover and
therefore will also not be subject to the 20% mandatory
withholding. They are as follows:
1. annuities paid over life;
2. installments for a period of at least 10 years; and
3. minimum required distributions at age 70 1/2 .
There are also several operational exceptions and a "de minimis"
exception for payments of less than $200. Also Employee Voluntary
contributions are not eligible for rollover.
H. TIME OF PAYMENT
If you separate from service for any reason, payments will start
as soon as administratively feasible following the date on which a
distribution is requested by you or is otherwise payable.
I. JOINT AND SURVIVOR ANNUITY RULES
RETIREMENT BENEFITS
If the benefit under the Plan is payable in the form of an
annuity, the Plan is subject to the joint and survivor annuity
rules. Under these rules, there are two automatic methods of
payment for vested Participants depending on your marital status.
If you do not choose another form of payment (such as a lump sum
or installments), the normal form of payment is a straight life
annuity if you are not married at the commencement of your
benefit, or a qualified joint and survivor annuity if you are
married. Under a straight life annuity, you will receive equal
monthly payments for as long as you live. No further payments
will be made after your death. Under a qualified joint and
survivor annuity, you will receive a reduced benefit each month
for your lifetime. After you die, 50% of that amount will be paid
each month to your Spouse for his or her lifetime. The amount of
your monthly benefit is reduced under a joint and survivor annuity
because it is expected that payments will be made over two
lifetimes instead of one. You may choose another form of payment
by filling out the proper form and returning it to the Plan
Administrator. In order to choose another form of payment or a
beneficiary other than your Spouse, you must make a proper
election, with your Spouse's written consent. Your Spouse's
consent must be witnessed by a Plan representative or Notary
Public. Written notice of these rules will be provided to you on
a timely basis.
DEATH BENEFITS
If you die while still employed by the Employer, or die after you
retire or terminate employment but before benefit payments start,
your surviving Spouse will be entitled to a life annuity based on
the full value of your account. These payments will continue for
your spouse's lifetime unless he or she chooses to accelerate such
payments. Again, you and your Spouse can waive this coverage by
obtaining the proper form from the Plan Administrator and
completing it.
XII INVESTMENTS
A. TRUST FUND
The money contributed to the Plan may be invested in a variety of
investment vehicles considered prudent for a retirement plan.
B. INVESTMENT RESPONSIBILITY
The Plan's assets are held by the Trustee who is identified in
Section II of this Summary. The Trustee is responsible for the
safekeeping of Plan assets.
C. EMPLOYEE INVESTMENT DIRECTION
Participants may direct the investments among alternative
investment funds provided under the Plan. Information regarding
the investment funds available to you and the procedures for
making an election can be obtained from the Plan Administrator.
You may change your investment selection and move monies from one
fund to another in accordance with the rules established by the
Plan Administrator.
D. PARTICIPANT LOANS
Participant loans are permitted under the Plan. In order to get a
loan from the Plan, you must make application to the Plan
Administrator. Unless you specify otherwise when requesting a
loan, the order of withdrawal will be in order of amounts
attributable to Voluntary Contributions, Rollover contributions,
Transfer Contributions, Elective Deferrals, Qualified Non-Elective
Contributions, Qualified Matching Contributions, vested Matching
Contributions, and vested Discretionary Contributions, as
applicable.
Loans must be approved by the Plan Administrator and are subject
to a strict set of rules established by law. The rules are
covered in a separate Loan Application form and Loan Note and
Security Agreement. These forms are available from the Plan
Administrator.
XIII ADMINISTRATION
The Plan will be administered by the following parties:
A. PLAN ADMINISTRATOR
The Employer is the party who has established the Plan and who has
overall control and authority over administration of the Plan.
The Employer's duties as Plan Administrator include:
(a) appointing the Plan's professional advisors needed to
administer the Plan including, but not limited to, an
accountant, attorney, actuary, or administrator,
(b) directing the Trustee with respect to payments from the Fund,
(c) communicating with Employees regarding their participation
and benefits under the Plan, including the administration of
all claims procedures and Domestic Relations Orders,
(d) filing any returns and reports with the Internal Revenue
Service, Department of Labor, or any other governmental
agency,
(e) reviewing and approving any financial reports, investment
reviews, or other reports prepared by any party appointed by
the Employer,
(f) establishing a funding policy and investment objectives
consistent with the purposes of the Plan and the Employee
Retirement Income Security Act of 1974, and
(g) construing and resolving any question of Plan interpretation.
The Plan Administrator's interpretation and application
thereof is final.
B. TRUSTEE
The Trustee shall be responsible for the administration of
investments held in the Fund. These duties shall include:
(a) receiving contributions under the terms of the Plan,
(b) making distributions from the Fund in accordance with written
instructions received from the Plan Administrator, and
(c) keeping accounts and records of the financial transactions of
the Fund.
XIV AMENDMENT AND TERMINATION
The Employer may amend the Plan at any time, provided that no
amendment will divert any part of the Plan's assets to any purpose
other than for the exclusive benefit of you and the other Participants
in the Plan or eliminate an optional form of distribution. The
Employer may also terminate the Plan. In the event of an actual Plan
termination, all amounts credited to your account will be fully vested
and will be paid to you. Depending on the facts and circumstances, a
partial termination may be found to occur where a significant number
of Employees are terminated by the Employer or excluded from Plan
participation. In case of a partial termination, only those affected
will become 100% vested.
XV LEGAL PROVISIONS
A. RIGHTS OF PARTICIPANTS
As a Plan Participant, you have certain rights and protection
under the Employee Retirement Income Security Act of 1974 (ERISA).
The law says that you are entitled to:
(a) Examine, without charge, all documents relating to the
operation of the Plan and any documents filed with the U.S.
Department of Labor. These documents are available for
review in the Employer's offices during regular business
hours.
(b) Obtain copies of all Plan documents and other Plan
information upon written request to the Employer. The
Employer may impose a reasonable charge for producing the
copies.
(c) Receive from the Employer at least once each year a summary
of the Plan's annual financial report.
(d) Obtain, at least once a year, a statement of the total
benefits accrued for you, and your nonforfeitable (vested)
benefits, if any. The Plan provides that you will receive
this statement automatically. If you are not vested, you may
request a statement showing the date when your account will
begin to become nonforfeitable.
(e) File suit in a federal court, if any materials requested are
not received within 30 days of your request, unless the
materials were not sent because of matters beyond the control
of the Employer. If you are improperly denied access to
information you are entitled to receive, the Employer may be
required to pay up to $100 for each day's delay until the
information is provided to you.
B. FIDUCIARY RESPONSIBILITY
ERISA also imposes obligations upon the persons who are
responsible for the operation of the Plan. These persons are
referred to as "fiduciaries." Fiduciaries must act solely in your
interest as a Plan Participant and they must exercise prudence in
the performance of their duties. Fiduciaries who violate ERISA
may be removed and required to reimburse any losses they have
caused you or other Participants in the Plan.
C. EMPLOYMENT RIGHTS
Participation in the Plan is not a guarantee of employment.
However, the Employer may not fire you or discriminate against you
to prevent you from becoming eligible for the Plan or from
obtaining a benefit or exercising your rights under ERISA.
D. BENEFIT INSURANCE
Your benefits under this Plan are not insured by the Pension
Benefit Guaranty Corporation since the law does not require plan
termination insurance for this type of Plan.
E. CLAIMS PROCEDURE
If you feel you are entitled to a benefit under the Plan, mail or
deliver your written claim to the Plan Administrator. The Plan
Administrator will notify you, your beneficiary, or authorized
representative of the action taken within 60 days of receipt of
the claim. If you believe that you are being improperly denied a
benefit in full or in part, the Employer must give you a written
explanation of the reason for the denial. If the Employer denies
your claim, you may, within 60 days after receiving the denial,
submit a written request asking the Employer to review your claim
for benefits. Any such request should be accompanied by documents
or records in support of your appeal. You, your beneficiary, or
your authorized representative may review pertinent documents and
submit issues and comments in writing. If you get no satisfaction
from the Employer, you have the right to request assistance from
the U.S. Department of Labor or you can file suit in a state or
federal court. Service of legal process may be made upon the Plan
Trustee or the Plan Administrator. If you are successful in your
lawsuit, the court may require the Employer to pay your legal
costs, including your attorney's fees. If you lose, and the court
finds that your claim is frivolous, you may be required to pay the
Employer's legal fees.
F. ASSIGNMENT
Your rights and benefits under this Plan cannot be assigned, sold,
transferred or pledged by you or reached by your creditors or
anyone else except under a Qualified Domestic Relations Order or
as provided by state law. A Qualified Domestic Relations Order
(QDRO) is a court Order issued under state domestic relations law
relating to divorce, legal separation, custody, or support
proceedings. The QDRO recognizes the right of someone other than
you to receive your Plan benefits. You will be notified if a QDRO
relating to your Plan benefits is received. Receipt of a
Qualified Domestic Relations Order shall allow for an earlier than
normal distribution to the person(s) other than the Participant
listed in the order.
G. QUESTIONS
If you have any questions about this statement of your rights
under ERISA, please contact the Employer or the Pension and
Welfare Benefits Administration, Room N-5644, U.S. Department of
Labor, 200 Constitution Ave., N.W., Washington, D.C. 20210.
H. CONFLICTS WITH PLAN
This booklet is not the Plan document, but only a Summary Plan
Description of its principal provisions and not every limitation
or detail of the Plan is included. Every attempt has been made to
provide concise and accurate information. However, if there is a
discrepancy between this booklet and the official Plan document,
the Plan document shall prevail.
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration
Statement on Form S-8 pertaining to the Standard Managment Corporation
Savings Plan of our report dated March 18, 1997, except for Note 20, as to
which the date is August 21, 1997, with respect to the consolidated
financial statements and schedules of Standard Management Corporation
included in its Annual Report on Form 10-K/A No. 2 for the year ended
December 31, 1996, filed with the Securities and Exchange Commission.
Ernst & Young LLP
Indianapolis, Indiana
November 26, 1997
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement
on Form S-8 pertaining to the Standard Management Corporation Savings Plan
and of our report dated March 12, 1997, with respect to the consolidated
financial statements of Standard Management International S.A. included in
the Annual Report on Form 10-K/A No. 2 for the year ended December 31, 1996 of
Standard Management Corporation, filed with the Securities and Exchange
Commission.
KPMG AUDIT
Luxembourg
November 26, 1997
