Exhibit 10.9


 





 


SEPRACOR INC.


 


CORPORATE
POLICIES


 


	
  SUBJECT/TITLE:

  

  Sepracor Severance Benefit Program



  	
   

  	
  

  POLICY: No. 2.03

  	
   

  	
   

  



 


	
  Supersedes:

  	
   

  	
  Approval

  	
   

  	
   

  	
  Date Issued:

  	
   

  	
  Page: 1 of 13

  
	
  Policy dated

  	
   

  	
  Signature:

  	
  /s/ Adrian Adams

  	
   

  	
  December 10, 2008

  	
   

  	
   

  
	
  4.10.06

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


Purpose:


 


To provide assistance to Employees (as defined below) as they
transition out of the Company (as hereinafter defined) and to encourage
Employees to remain with Sepracor Inc., its subsidiaries, affiliates and or any
successor entity (collectively “Sepracor” or “Company”) as long as needed in
the event of a Change in Control (as defined below) of Sepracor.


 


Scope:


 


Sepracor agrees to provide severance benefits to regular full time and
part time Employees in the event that: 1) the Company elects to terminate
employment of an Employee without Cause (as defined below), or 2) a Change in
Control occurs and the Company elects to terminate the employment of an
employee without Cause or an Employee resigns for Good Reason (as defined
below) on or prior to the twelve (12) month anniversary of a Change in Control.


 


This Policy is intended to be a welfare benefit plan within the meaning
of Section 3(1) of the Employee Retirement Income Security Act of
1974, as amended, or ERISA.


 


Eligibility:


 


A.                       Any
Employee whose employment is terminated by the Company without Cause is
eligible to receive severance benefits under this Policy, as set forth below.


 


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B.                        Any
Employee whose employment is terminated without Cause or for Good Reason on or
prior to the twelve-month anniversary of a Change in Control will be eligible
to receive the benefits described below. Notwithstanding the foregoing, if (i) an
Employee resigns within twelve months after the Change in Control and designates
his or her resignation as one with Good Reason or (ii) the Employee’s
employment is terminated without Cause, and, in either case, within 20 days
after such resignation or termination Sepracor determines that the Employee’s
conduct prior to his or her resignation or termination warranted a discharge
for Cause, such resignation or termination will be deemed a discharge for
Cause. If Sepracor determines that the Employee’s conduct warranted a discharge
for Cause, Sepracor may require that benefits, if any, paid after resignation
or termination of employment pursuant to this Policy must be repaid to
Sepracor, including by means of a valid setoff.


 


C.                        Notwithstanding
anything to the contrary contained herein, payment of any and all severance
benefits under this Policy are subject to the Employee’s binding execution of a
Severance Agreement (as defined below).


 


D.                       For
clarification, no Employee who (i) voluntarily quits, (ii) is
terminated for Cause, (iii) retires, or (iv) refuses to accept other
Suitable Employment (as defined below) offered by Sepracor, is eligible for the
severance benefits provided by this Policy, unless otherwise agreed to in
writing between Sepracor and such Employee.


 


Terms:


 


A.                      “Cause” is
determined by Sepracor in its sole discretion and may include, but is not
limited to, the willful failure to perform reasonable assigned duties (other
than any such failure resulting from incapacity due to physical or mental
illness) willful engagement in illegal or immoral conduct or misconduct, and/or
violation(s) of corporate policies, which is/are materially injurious to
Sepracor.


 


B.                        “Change in
Control” or “CIC” is defined as:  (i) the
acquisition by a party or a group of more than 50% of the outstanding stock of
the Company; (ii) a change, without approval of the Company’s Board of
Directors (the “Board of Directors”), of a majority of the Board of Directors;
or (iii) the acquisition of the Company by means of a reorganization,
merger, consolidation or asset sale; provided in each case that such event
constitutes a “change in control event” within the meaning of Section 409A
of the Internal Revenue Code, as amended, and the guidance issued thereunder
(the “Code”).


 


C.                        “Employee”
means any employee of Sepracor, other than an employee who (i) is an
executive officer of Sepracor (e.g. Executive Vice President and President and
Chief Executive Officer) or (ii) has entered into an agreement with
Sepracor, that is still in effect at the date of his or her termination,
specifically providing for severance benefits upon termination of employment.


 


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D.                       “Suitable
Employment” means any position of a comparable or higher base salary  and Target Bonus (as defined below) that
is located within 50 miles of the facility where the Employee performed his or
her principal duties for Sepracor immediately prior to termination.


 


E.                         “Good
Reason” means, except as noted below: 1) a material reduction in the Employee’s
Salary as in effect on the date of the relevant Change in Control; 2) a
requirement that Employee work at any facility that is more than 50 miles from
the facility where the Employee performed his or her principal duties for
Sepracor immediately prior to the Change in Control or, in the case of a field
sales professional, 50 miles from such sales professional’s primary residence;
or 3) a significant diminution of the Employee’s overall authority or
responsibilities from those assigned to him or her immediately prior to the
Change in Control.


 


A resignation with Good Reason shall be tendered in writing, describing
in reasonable detail the event or events giving rise to the termination within
90 days of the initial existence of such event or events. However, any event
described above will not be deemed to constitute Good Reason if, within 30 days
of the Employee’s written resignation notice, such event has been corrected. Any
termination of the Employee’s employment for Good Reason will not be effective
until the date 31 days after the Employee’s delivery to Sepracor of the written
notice of Good Reason described above.


 


Severance Benefits:


 


Any Employee entitled to severance benefits under this Policy shall be
entitled to the following continuation of payments, based upon title/role as
determined by the Company in its sole discretion. Payments will be made in
equal installments on dates consistent with Sepracor’s normal payroll practices
then in effect.


 


	
  Role

  	
   

  	
  Non –
  CIC Severance

  	
   

  	
  CIC
  Severance

  
	
  Sr VP

  	
   

  	
  1.25 x Salary and Target Bonus (65 weeks)

  	
   

  	
  1.5 x Salary and Target Bonus + Pro-Rated
  Bonus (78 weeks)

  
	
  VP and AVP

  	
   

  	
  1. 0 x Salary (52 weeks)

  	
   

  	
  Same as Non – CIC

  
	
  Directors and Regional Directors

  	
   

  	
  .75 x Salary (39 wks)

  	
   

  	
  Same as Non – CIC

  
	
  Managers and District Managers

  	
   

  	
  .50 x Salary (26 wks)

  	
   

  	
  Same as Non – CIC

  
	
  Professionals & Admin

  	
   

  	
  .34 x Salary (18 wks)

  	
   

  	
  Same as Non – CIC

  
	
  Sales Rep

  	
   

  	
  .34 x Salary (18 wks)

  	
   

  	
  Same as Non – CIC

  



 


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Other Information:


 


A.                      Salary:  is defined as base salary only and does not
include overtime, bonuses, income or gains attributable to stock options,
restricted stock or other similar equity-based compensation or commissions.


 


B.                        Pro
Rated Bonus: is defined as an amount equal to the product of (A) the
Employee’s Target Bonus for the year in which termination of employment is
effective and (B) a fraction, the numerator of which is the number of days
in the current fiscal year through the effective date of such termination of
employment, and the denominator of which is 365. The only level eligible for a
pro-rated bonus award is a Senior Vice President. A pro-rated bonus is only
paid in the event of a change in control.


 


C.                        Target
Bonus:  is defined as the annual
bonus paid after year end results are evaluated, defined as a percentage of
Salary. The only level eligible for a Target Bonus award is a Senior Vice
President.


 


D.                       Severance
Period: is defined as the number of weeks an employee is entitled to
severance benefits, as set forth in the table above.


 


E.                         Tax
Implications:  Federal, state and
local taxes will be withheld from the severance payment.


 


F.                         Equity
Award Acceleration:  Employees will
be entitled to receive acceleration of vesting of any equity awards under
Sepracor’s equity incentive plans in accordance with the terms of such plans. Nothing
in this Policy is intended to modify or supersede the terms of Sepracor’s
equity incentive plans; provided, however, that any such acceleration would be
covered by the provisions of Section G below (Tax Gross-Up).


 


G.                        Tax
Gross-Up:  In accordance with the policy
adopted by the Board of Directors on February 25, 1999, to the extent
payments received hereunder constitute “parachute payments” under Section 280G
of the Code, and are therefore subject to the excise tax imposed by Section 4999
of the Code, the Employee will be entitled to an additional gross-up payment so
that the Employee will be placed in the same after-tax financial position he
would have been in if he had not incurred any excise tax liability under Section 4999
of the Code.


 


In addition, to the extent any other excise tax liability (including
any tax liability incurred under Section 409A of the Code) is imposed as a
result of payments received hereunder, the Employee will be entitled to an
additional gross-up payment so that the Employee will be placed in the same
after-tax financial position he would have been in if he had not incurred any
such excise tax liability. Any such gross-up payments shall be made by the end
of the tax year following the year in which the Employee pays the applicable excise
tax.


 


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Insurance Benefits:


 


Employees entitled to severance benefits under this Policy shall also
be entitled to the following benefits.


 


A.                       Medical and Dental Insurance:  During the Severance Period, the Company will
continue to provide medical, dental and employee assistance program benefits to
the Employee and the Employee’s spouse and dependents (in each case, as
provided in the applicable plan) at levels substantially similar to the
benefits provided by the Company immediately prior to the Employee’s date of
termination. If the Employee signs and does not revoke the Severance Agreement,
Sepracor will pay the employer portion of the premiums for medical and dental
coverage during the Severance Period. Employees will be responsible for payment
of the employee portion. If you find new employment and are eligible for health
and/or dental insurance you shall promptly notify Sepracor and Sepracor’s
obligation to provide such coverage during the Severance Period shall
immediately cease.


 


B.                         Vision and FLEX Account
Coverage:  Employees will be offered
continuation of vision and health care spending account coverage (i.e FLEX
spending account) through COBRA (as defined below) at the Employee’s expense.


 


C.                         Life and Disability
Insurance:  Each Employee will be
eligible for conversion of their group life and long-term disability insurance
to non-group life and long-term disability insurance, provided that the
respective policy permits such conversion. The Employee will be responsible for
payment of all premiums for non-group life and long-term disability insurance.


 


D.                        COBRA Benefits: Nothing in this Policy shall operate to reduce,
or be construed as reducing, the Employee’s benefit continuation rights under
the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”),
in any manner. Federal law defines the duration of continuation of medical and
dental benefits through COBRA.


 


Outplacement Benefits:


 


For any Employee entitled to benefits under this Policy, Sepracor will,
at the request of the Employee, arrange for reasonable outplacement benefits.
The benefit provided will be determined in Sepracor’s sole discretion and will
vary based on the Employee’s role within the organization. No outplacement
benefits will be paid after the second year following the year of termination.
Sepracor will arrange and pay for the reasonable outplacement services.


 


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Severance Agreement and Release:


 


As a condition to receipt of severance benefits under this Policy,
eligible Employees shall be required to timely sign and return and not revoke a
severance agreement and release in a form prepared by, and satisfactory to,
Sepracor (the “Severance Agreement”), and to abide by the provisions of the
Severance Agreement. Among other things, the Severance Agreement shall contain
a release and waiver of any claims the Employee or his/her representatives may
have against the Company, its successors, affiliates and/or representatives,
and shall release those entities and persons from any liability for such
claims. Employees are entitled and advised to consult an attorney of their own
choosing prior to signing the Severance Agreement. The severance payments will
commence 60 days following the date of the Employee’s termination (the “Payment
Commencement Date”), provided that the Severance Agreement has been properly
executed and any applicable revocation period has expired as of such date, or,
if the Severance Agreement has been properly executed and any applicable
revocation period has expired prior to the 30th day following the Employee’s termination, then
the severance payments may commence on the 30th day following the Employee’s termination,
unless the Payment Commencement Date occurs in the calendar year following the
termination of the Employee’s employment, in which case the payments may
commence no earlier than January 1 of such subsequent calendar year. Notwithstanding
the foregoing, if all of the severance payments will be made within the
short-term deferral period (as defined below) and otherwise satisfy the
requirements for the short-term deferral exception to Section 409A of the
Code, or the severance payments are otherwise exempt from Section 409A of
the Code, then the payments may commence earlier than the Payment Commencement
Date, as determined by Sepracor in its sole discretion


 


Severance Pay:


 


Final paychecks will include accrued but unused vacation time as
indicated in the policy Accrued Vacation Policy.


 


Section 409A Compliance:


 


Subject to the provisions in this section, any severance payments or benefits under this plan shall begin only upon the date of the Employee’s
“separation from service” (determined as set forth below) which occurs on or
after the date of termination
of his or her employment. The
following rules shall apply with respect to distribution of the payments
and benefits, if any, to be provided
under the plan.


 


A.            It is intended that each installment of the
severance payments and benefits provided under the plan shall be treated as a
separate “payment” for purposes of Section 409A of the Code. Neither the
Employee nor Sepracor shall have the right to accelerate or defer the delivery
of any such payments or benefits except to the extent specifically permitted or
required by Section 409A of the Code.


 


B.              If, as of the date of the Employee’s “separation
from service” from Sepracor, he or she is not a “specified employee” (within
the meaning of Section 409A of the Code), then each installment of the severance
payments and benefits shall be 


 


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made on the dates and terms set forth in the
plan.


 


C.              If, as of the date of the Employee’s “separation
from service” from Sepracor, he or she is a “specified employee” (within the
meaning of Section 409A of the Code), then:


 


1.                                       Each
installment of the severance payments and benefits due under the plan that, in
accordance with the dates and terms set forth herein, will in all
circumstances, regardless of when the separation from service occurs, be paid
within the short-term deferral period (within the meaning of Section 409A
of the Code) shall be treated as a short-term deferral within the meaning of
Treasury Regulation Section 1.409A-1(b)(4) to the maximum extent permissible
under Section 409A; and


 


2.                                       Each
installment of the severance payments and benefits due under the plan that is
not described in subsection C.1. above and that would, absent this subsection,
be paid within the six-month period following the Employee’s “separation from
service” from Sepracor shall not be paid until the date that is six months and
one day after such separation from service (or, if earlier, the Employee’s
death), with any such installments that are required to be delayed being
accumulated during the six-month period and paid in a lump sum on the date that
is six months and one day following the Employee’s separation from service and
any subsequent installments, if any, being paid in accordance with the dates
and terms set forth herein; provided, however, that the preceding
provisions of this sentence shall not apply to any installment of severance
payments and benefits if and to the maximum extent that such installment is
deemed to be paid under a separation pay plan that does not provide for a
deferral of compensation by reason of the application of Treasury
Regulation 1.409A-1(b)(9)(iii) (relating to separation pay upon an
involuntary separation from service). 
Any installments that qualify for the exception under Treasury
Regulation Section 1.409A-1(b)(9)(iii) must be paid no later than the
last day of the second taxable year following the taxable year in which the
separation from service occurs.


 


D.            The
determination of whether and when the Employee’s separation from service from
Sepracor has occurred shall be made in a manner consistent with, and based on
the presumptions set forth in, Treasury Regulation Section 1.409A-1(h).  Solely for purposes of this section D, “Sepracor” shall include
all persons with whom Sepracor would be considered a single employer under Section 414(b) and
414(c) of the Code.


 


Policy Administration:


 


A.                       Policy
Administrator. This Policy will be administered by Sepracor. The Policy
administrator will be one or more individuals appointed by Sepracor or, if no
individual is so appointed, Sepracor will be the Policy administrator. The
general


 


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administration
of the Policy and the responsibility for carrying out its provisions will be
vested in the Policy administrator.  The
Policy administrator will be the “administrator” within the meaning of Section 3(16)
of ERISA and will have all the responsibilities and duties contained therein.


 


The Policy administrator can be contacted at the following address:


 


Sepracor Inc.


84 Waterford Drive


Marlborough, MA  01752


Attn: Executive Vice President, Human Resources and Administration


 


B.                        Decisions,
Powers and Duties.  The Policy
administrator’s decisions and determinations (including determinations of the
meaning and reference of terms used in the Policy) will be binding on all
persons.  The Policy administrator will
be the named fiduciary for purposes of ERISA. 
The Policy administrator will have such powers and discretion as are
necessary to discharge its duties, including, but not limited to,
interpretation and construction of the Policy, the determination of all questions
of eligibility, participation and benefits and all other related or incidental
matters, and such duties and powers of Policy administration which are not
assumed from time to time by any other appropriate entity, individual or
institution.  The Policy administrator
will decide all such questions in its discretion and in accordance with the
terms of the controlling legal documents and applicable law, and its good faith
decision will be binding on the Employee, the Employee’s spouse or other
dependents or beneficiaries and all other interested parties.


 


The Policy administrator will discharge its
duties with respect to the Policy solely in the interest of the Employees and
their beneficiaries, with the care, skill, prudence and diligence under the
circumstances then prevailing that a prudent person acting in a like capacity
and familiar with such matters would use in the conduct of an enterprise of a
like character and with like objectives.


 


The Policy administrator may adopt rules and regulations of
uniform applicability in its interpretation and implementation of this Policy.


 


C.                         Proof
of Information. The Policy administrator may require that each Employee or
other person submit, in such form as it will deem reasonable and acceptable,
proof of any information that the Policy administrator finds necessary or
desirable for the proper administration of this Policy.


 


D.                        Records
and Disclosures.  The Policy
administrator will maintain such records as are necessary to carry out the
provisions of the Policy.  The Policy
administrator also will make all disclosures that are required by ERISA and any
subsequent amendments to ERISA.


 


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E.                          Mistakes.  If there has been a mistake in the amount of
an Employee’s benefits paid under this Policy, the mistake may be corrected by
the Policy administrator or its designee when the mistake is discovered.  The mistake may be corrected in any
reasonable manner authorized by the Policy administrator (for example, by
offset against payments remaining to be paid or by payments between the
Employee and us).  In appropriate
circumstances (for example, where a mistake is not timely discovered), the
Policy administrator may waive the making of any correction.


 


F.                          Expenses.  All costs and expenses incurred by Sepracor
in administering this Policy, including the expenses of the Policy
administrator, will be borne by Sepracor.


 


G.                        Indemnification.  To the extent permitted by law, the Policy
administrator and all Employees, officers, directors, agents and
representatives of the Policy administrator will be indemnified by Sepracor and
held harmless against any claims and the expenses of defending against such
claims, resulting from any action or conduct relating to the administration of
this Policy except to the extent that such claims arise from gross negligence,
willful neglect, or willful misconduct.


 


H.                        Integration
with Statutory Pay or Benefits Requirements.  To the extent that any federal, state or
local law, including so called “plant closing” laws, requires that Sepracor give
advance notice or make a payment of any kind to an Employee because of that
Employee’s involuntary termination due to a layoff, reduction in force, plant
or facility closing, sale of business, or similar event, the benefits provided
under this Policy or the other arrangement will either be reduced or eliminated
to avoid any duplication of payment. Sepracor intends for the benefits provided
under this Policy to satisfy any and all statutory obligations that may arise
out of an Employee’s involuntary termination for the foregoing reasons, and the
Policy administrator will so construe and implement the terms of this
Policy.  The Policy administrator will
determine how to apply this provision, and may override other provisions of
this Policy in doing so.


 


I.                             Policy
Name and Type.  The name of the
severance and retention program is the Sepracor Severance Benefit Program.  The program is intended to constitute an “Employee
Welfare Benefits Plan” under Department of Labor Regulation Section 2510.3-2(b) and
other applicable regulations and statutes. 
Accordingly, benefits under this Policy will not be contingent on
retirement, will not exceed twice the annual compensation of the Employee
participating in the program, and will be completed within twenty-four (24) months
of termination of employment.  The
program will be construed and interpreted in a manner consistent with this
intent.


 


J.                            Funding.  Benefits will be paid from the general assets
of Sepracor and will not be funded by trust or otherwise.  Nothing herein will be deemed to create a
trust of any kind.


 


K.                       Effective
Date.  This Policy is effective as of
December 10, 2008.


 


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L.                          Name
and Address of Employer.  This Policy
is sponsored by:


 


Sepracor Inc.


84 Waterford Drive


Marlborough, Massachusetts 01752


 


M.                     Claims
Procedure.  Any Employee who believes
he or she is entitled to severance or retention benefits under this Policy
which are not being paid may submit a written claim for payment to the Policy
administrator.  Any Employee otherwise
entitled to benefits under this Policy must make such claim within sixty (60)
days of termination of employment in order to be eligible for benefits. Any
claim for benefits shall be in writing, addressed to the Policy administrator
and must be sufficient to notify the Policy administrator of the benefit
claimed.  If the claim of an Employee is
denied, the Policy administrator will within a reasonable period of time
provide a written notice of denial to the Employee.  The notice will include the specific reasons
for denial, the provisions of this Policy on which the denial is based, and the
procedure for a review of the denied claim. 
Where appropriate, it will also include a description of any additional
material or information necessary to complete or perfect the claim and an
explanation of why that material or information is necessary.  The Employee may request in writing a review
of a claim denied by the Policy administrator and may review pertinent
documents and submit issues and comments in writing to the administrator.  The Policy administrator will provide to the
Employee a written decision upon such request for review of a denied
claim.  The decision of the Policy
administrator upon such review will be final.


 


N.                        Drafting
Errors.  If, due to errors in
drafting, any Policy provision does not accurately reflect its intended
meaning, as demonstrated by consistent interpretations or other evidence of
intent, or as determined by the Policy administrator in its sole and exclusive
judgment, the provision will be considered ambiguous and will be interpreted by
the Policy administrator and all Policy fiduciaries in a fashion consistent
with its intent, as determined in the sole and exclusive judgment of the Policy
administrator.  The Policy administrator
will amend the Policy retroactively to cure any such ambiguity.


 


Miscellaneous Provisions:


 


A.                       No
Employment Rights.


Nothing in this Policy will be construed to
provide any Employee with a guarantee  
of employment and does not supersede Sepracor’s policy of at will
employment.


 


B.                        Governing
Law.  This Policy and the rights of
all persons under this Policy will be construed in accordance with and under
applicable provisions of ERISA, and the regulations there under, and the laws
of the Commonwealth of Massachusetts


 


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(without
regard to conflict of laws provisions) to the extent not preempted by federal
law.


 


C.                         No
Limitation Upon Rights of Sepracor. 
This Policy will not affect in any way Sepracor’s right or power to make
adjustments, reclassifications or changes of Sepracor’s capital or business
structure; to merge or consolidate; to dissolve or liquidate; or to sell or
transfer all or any part of Sepracor’s business or assets.


 


D.                        Entire
Agreement.  This Policy is a
consolidation, amendment, and restatement of, and supersedes any and all
severance plans or separation policies applying to Employees that may have been
in effect throughout Sepracor prior to the effective date of this Policy, with
the exception of the 280G Gross-Up Policy adopted by the Board of Directors on February 25,
1999 and any retention or other written agreements applicable to executive
officers. Notwithstanding the
foregoing, the acceleration of stock options and other stock awards granted
under the Sepracor equity incentive plans will continue to be in full force and
effect and will not be amended or modified by this Policy, and any such
acceleration would be covered by the provisions of Section B of “Stock
Options” above.


 


E.                          Successor
and Assigns.  Sepracor will require
any successor (whether direct or indirect, by purchase, merger, consolidation
or otherwise) to all or substantially all of the business and/or assets of
Sepracor to expressly assume and agree to perform Sepracor’s obligations under
this Policy in the same manner and to the same extent that Sepracor would be
required to perform it if no such succession had taken place.


 


F.                          Severability.  In case any one or more of the provisions of
this Policy (or part of any provision) will be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
will not affect the other provisions of this Policy, and this Policy will be
construed as if such invalid, illegal or unenforceable provisions (or part of
any provision) never had been contained herein.


 


G.                         Non
Assignability.  No right or interest
of any Employee will be assignable or transferable in whole or in part either
directly or by operation of law or otherwise, including, but not limited to,
execution, levy, garnishment, attachment, pledge or bankruptcy, provided,
however, that this provision will not be applicable in the case of obligations
of an Employee to us.


 


H.                        Amendment
or Termination.  Sepracor reserves
the right to modify, amend or terminate this Policy in whole or in part at any
time in the manner and subject to the limitations described below.  Any amendment, modification or termination
must be effected by a written instrument executed by an authorized officer of
Sepracor.  No modification, amendment or
termination will be effective as to an Employee during the two year period
following a Change in Control without the prior consent of the Employee.  In no event will an amendment, modification
or termination reduce or diminish any severance or retention benefits owing
under this Policy for


 


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terminations
of employment prior to the date of the amendment or termination without the
consent of the Employee to whom the benefits are owed.


 


I.                             Section 409A.  This Policy is intended to comply with Section 409A
and shall be interpreted consistently therewith.


 


Statement of ERISA Rights:


 


The following statement is required by federal law and
regulations.  ERISA provides that all
program participants shall be entitled to:


 


A.                       Examine,
without charge at the Policy administrator’s office and at other specified
locations, such as work sites, all documents constituting the Policy, and
copies of all documents filed with the U.S. Department of Labor, such as
detailed annual reports and program descriptions.


 


B.                        Obtain
copies of all documents and the Policy information upon written request to the
Policy administrator.  The Policy
administrator may make a reasonable charge for copies.


 


C.                        Receive a
copy of a summary of the annual financial report for the Policy.  The Policy administrator is required by law
to furnish each participant with a copy of this Summary Annual Report.


 


D.                       Obtain a
statement advising the Employee whether he or she has a right to receive
benefits under the Policy and what benefits the Employee may receive.  This statement must be requested in writing
and is not required to be given more than once a year.  The Policy administrator must provide the
statement free of charge.


 


E.                         In
addition to creating rights for participants, ERISA imposes duties upon the
people who are responsible for the operation of the employee benefit
Policy.  The people who operate the
Policy, called “fiduciaries” of the program, have a duty to do so prudently and
in the interest of participants and beneficiaries.  Employers nor any other person may fire an
Employee or otherwise discriminate against an Employee in any way to prevent an
Employee from obtaining a benefit under the Policy or exercising the Employee’s
rights under ERISA.


 


F.                          If
an Employee’s claim for a benefit is denied in whole or in part, the Employee
must receive a written explanation of the reason for the denial.  The Employee has the right to have the Policy
administrator review and reconsider the Employee’s claim.  Under ERISA, there are steps an Employee can
take to enforce the above rights.  For
instance, if the Employee requests materials from the Policy administrator and
does not receive them within thirty (30) days, the Employee may file suit in a
federal court.  In such a case, the court
may require the Policy administrator to provide the materials and pay the
Employee up to $110 per day


 


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until you
receive the materials, unless the materials were not sent because of reasons
beyond the control of the Policy administrator.


 


G.                        If an
Employee’s claim for benefits is denied or ignored, in whole or in part, the
Employee may file suit in a state or federal court.  If the fiduciaries misuse Policy funds, or if
an Employee is discriminated against for asserting his or her rights, the
Employee may seek assistance from the U.S. Department of Labor, or may file
suit in a federal court.  The court will
decide who should pay court costs and legal fees.


 


H.                       If an
Employee is successful, the court may order the person sued to pay costs and
fees.  If the Employee loses, the court
may order the Employee to pay these fees (for example, if the claim is
frivolous).


 


I.                            Employees
should contact the Policy administrator concerning questions about this
Policy.  Employees who have any questions
about this statement or rights under ERISA should contact the nearest area
office of the Employee Benefits Security Administration, U.S. Department of Labor,
listed in your telephone directory or the Division of Technical Assistance and
Inquiries, Employee Benefits Security Administration, U.S. Department of Labor,
200 Constitution Avenue N.W., Washington, D.C. 20210. Participants may also
obtain certain publications about your rights and responsibilities under ERISA
by calling the publications hotline of the Employee Benefits Security
Administration.


 


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