AMERICAN HOME PRODUCTS CORPORATION
DEFERRED COMPENSATION PLAN
Amended and Restated as of April 1, 2001
PURPOSE The American Home Products Corporation Deferred Compensation Plan
(the "Plan") is an unfunded deferred compensation plan, that provides certain
key employees of American Home Products Corporation, a Delaware corporation
("AHPC") and its wholly-owned Subsidiaries in the United States, including
Puerto Rico (together with AHPC, the "Company") with the opportunity to
voluntarily defer receipt of a portion of their compensation. AHPC adopted the
Plan to enable the Company to attract and retain a select group of management
and highly compensated Employees.
SECTION ONE - DEFINITIONS
Whenever used in the Plan, unless clearly apparent from the context, the
following terms shall have the following meanings:
(a) "Administrator" means the Committee or such entity or person to whom the
Committee may delegate responsibility for administration of the Plan.
(b) "AHPC ERP" means the American Home Products Corporation Executive
Retirement Plan, as amended from time to time.
(c) "AHPC SERP" means the American Home Products Corporation Supplemental
Executive Retirement Plan, as amended from time to time.
(d) "AHPC SESP" means the American Home Products Corporation Supplemental
Employee Savings Plan, as amended from time to time.
(e) "Amended and Restated Effective Date" means April 1, 2001.
(f) "Base Salary" means, except as set forth in the next sentence, for purposes
of deferrals under the Plan, the annual base cash compensation to be paid
during a Plan Year by the Company to an Eligible Employee for services
rendered during such Plan Year. Notwithstanding the foregoing, solely for
purposes of determining whether an Employee is an Eligible Employee, "Base
Salary" means the annual base compensation from all sources (i.e.,
regardless of whether United States source or foreign source) to be paid
during a Plan Year by AHPC and its Subsidiaries to an Employee for services
rendered during such Plan Year.
(g) "Beneficiary" means one or more persons or entities (including a trust or
estate) designated by a Participant to receive payment of any unpaid
balance in the Participant's Deferral Account under the Plan in the event
of the Participant's death. Such designation shall be made on a form
provided by the Recordkeeper and approved by the Administrator in
accordance with its rules as provided in Section 9(i).
(h) "Board of Directors" means the Board of Directors of AHPC.
(i) "Bonus Compensation" means cash compensation to be paid during a Plan Year
to an Eligible Employee by the Company for services rendered under any
incentive compensation or bonus plan, program or arrangement which is
maintained or which may be adopted by the Company.
(j) "Change in Control" means the first to occur of any of the following
events:
(i) any person or persons acting in concert (excluding AHPC benefit plans)
becomes the beneficial owner of securities of AHPC having at least
twenty percent (20%) of the voting power of AHPC's then outstanding
securities (unless the event causing the twenty percent (20%)
threshold to be crossed is an acquisition of voting common securities
directly from AHPC); or
(ii) the consummation of any merger or other business combination of AHPC,
sale or lease of AHPC's assets, or combination of the foregoing
transactions (the "Transactions"), other than a Transaction
immediately following which the shareholders of AHPC who owned shares
immediately prior to the Transaction (including any trustee or
fiduciary of any AHPC employee benefit plan) own, by virtue of their
prior ownership of AHPC's shares, at least sixty-five percent (65%) of
the voting power, directly or indirectly, of (a) the surviving
corporation in any such merger or other business combination; (b) the
purchaser or lessee of the AHPC's assets; or (c) both the surviving
corporation and the purchaser or lessee in the event of any
combination of Transactions; or
(iii)within any twenty-four (24) month period, the persons who were
directors immediately before the beginning of such period (the
"Incumbent Directors") shall cease (for any reason other than death)
to constitute at least a majority of the Board of Directors or the
board of directors of a successor to AHPC. For this purpose, any
director who was not a director at the beginning of such period shall
be deemed to be an Incumbent Director if such director was elected to
the Board of Directors by, or on the recommendation of or with the
approval of, at least two-thirds of the directors who then qualified
as Incumbent Directors (so long as such director was not nominated by
a person who has expressed an intent to effect a Change in Control or
engage in a proxy or other control contest).
(k) "Code" means the Internal Revenue Code of 1986, as amended from time
to time.
(l) "Committee" means the Compensation and Benefits Committee of the Board
of Directors.
(m) "Company" means American Home Products Corporation, a Delaware
corporation ("AHPC"), together with its wholly owned Subsidiaries in
the United States, including Puerto Rico.
(n) "Deemed Interest" means the amount of interest that would have been
earned had an amount deferred hereunder been invested at the Deemed
Rate of Interest.
(o) "Deemed Rate of Interest" - means (i) prior to June 1, 1999, the
average of the quarter end yields for a ten (10) year period ending
September 30 of the prior year of the ten (10) year U.S. Treasury
notes plus two percent (2%); and (ii) thereafter, ten percent (10%)
per annum, compounded quarterly. The Deemed Rate of Interest in
subparagraph (ii) above may be increased or decreased from time to
time by the Board of Directors as it may deem appropriate; provided
that no such decrease shall be effective for Deemed Interest accruing
prior to the latest of: (i) April 1, 2004, (ii) the date of the Board
of Directors action implementing such decrease, and (iii) the date
such decrease is communicated generally to Participants; and provided,
further, that, if effective on or after April 1, 2004 the Board of
Directors decreases the Deemed Rate of Interest below ten percent
(10%) per annum, such decrease shall not apply to any amounts which
were deferred as of April 1, 2004 and with respect to which the Deemed
Rate of Interest has been selected at all times from April 1, 2004
through the date of such decrease, and the ten percent (10%) per annum
rate shall continue to apply with respect to such amounts (unless and
until another Investment Option is subsequently elected).
(p) "Deferral Account" means a bookkeeping account (including all
subaccounts) maintained by the Recordkeeper for each Participant to
record his or her balance under the Plan. A Participant's Deferral
Account shall consist of the sum of: (i) all of a Participant's
deferrals under the Plan, whether made before or after the Amended and
Restated Effective Date, including amounts rolled into the Predecessor
Plan as of the Original Effective Date, plus or minus (ii) Investment
Earnings/Losses on those amounts in accordance with the applicable
crediting provisions of the Plan that relate to the Participant's
Deferral Account, minus (iii) all distributions or withdrawals made to
a Participant or his or her Beneficiary pursuant to the Plan that
relate to his or her Deferral Account.
(q) "Disability" means a period of disability during which a Participant
qualifies for permanent disability benefits under the Company's
long-term disability plan, or, if a Participant does not participate
in such a plan, a period of disability during which the Participant
would have qualified for permanent disability benefits under such a
plan had the Participant been a Participant in such a plan, as
determined in the sole discretion of the Administrator. If the Company
does not sponsor such a plan, or discontinues to sponsor such a plan,
Disability shall be determined by the Administrator in its sole
discretion.
(r) "Election Form" means the form or forms established from time to time
by the Administrator, that a Participant completes, signs and returns
to the Recordkeeper to make an election under the Plan.
(s) "Eligible Employee" means an active Employee of the Company who is
scheduled to receive Base Salary for the Plan Year of not less than
one hundred fifty-five thousand dollars ($155,000) or such other
amount as may be determined from time to time by the Administrator.
The determination of whether an Employee is an Eligible Employee shall
be made at the sole discretion of the Administrator.
(t) "Employee" means any employee of the Company.
(u) "Executive Retirement Payments" means the payments an Eligible
Employee is eligible to receive from the AHPC ERP, the AHPC SERP, and
the AHPC SESP.
(v) "Investment Earnings/Losses" means the income, gains and losses that
would have been realized had an amount deferred hereunder actually
been invested in the Investment Option or Options selected by a
Participant.
(w) "Investment Options" means the investment options as listed in
Appendix A, which is attached hereto and incorporated herein by this
reference, that are used as hypothetical investment options among
which the Participant may allocate all or a portion of his or her
Deferral Account. The Administrator may amend or change available
Investment Options (other than the Deemed Rate of Interest Investment
Option) from time to time as it deems appropriate in its sole
discretion, as provided for in Section 7(f); it being understood that
the Deemed Rate of Interest may be amended only by the Board of
Directors in accordance with Section 1(o) above.
(x) "Normal Retirement Date" shall have the same meaning as set forth in
the American Home Products Corporation Retirement Plan - United
States.
(y) "Original Effective Date" means the original effective date for the
Predecessor Plan, which was July 31, 1997.
(z) "Participant" means an Employee or Retiree (for so long as he or she
retains a Deferral Account under the Plan): (i) who at the time of
commencement of his or her participation in the Plan was an Eligible
Employee, (ii) who elects to participate in the Plan, (iii) who signs
and returns all enrollment forms required by the Recordkeeper, and
(iv) whose signed form(s) are accepted by the Recordkeeper. The term
"Participant" shall include an individual, including a Retiree, who is
not making deferrals but retains a Deferral Account in the Plan
(including through the Predecessor Plan).
(aa) "Plan" means the American Home Products Corporation Deferred
Compensation Plan as set forth herein and as it may be amended and/or
restated from time to time.
(bb) "Plan Year" means the calendar year.
(cc) "Predecessor Plan" means the AHPC Deferred Compensation Plan, which
was effective as of July 31, 1997, and which replaced and subsumed all
Company sponsored deferral plans or programs that existed for members
of a select group of management Employees prior to July 31, 1997.
(dd) "Recordkeeper" means the entity selected by the Administrator from
time to time to maintain records of the Deferral Accounts of
Participants and provide administrative services.
(ee) "Retiree" - means an individual who is Retired.
(ff) "Retirement", "Retire(s)" or "Retired" means separation from
employment from the Company for any reason other than a leave of
absence, death or Disability on or after the earlier of the attainment
of (i) age sixty-five (65) or (ii) age fifty-five (55) with five (5)
Years of Service.
(gg) "Retirement Benefit" means the type and form of payments available to
a Participant upon Retirement as described in Section 8(b).
(hh) "Retirement Benefit Installment Payout Dates" means, with respect to a
deferral made by a Participant, the first day of the calendar quarter
elected (initially or upon re-deferral pursuant to Section 8(b)(3)) by
the Participant for the commencement of installment payments and, in
the case of annual installments, the anniversary dates thereof and, in
the case of quarterly installments, the first day of each calendar
quarter thereafter, in each case through the final installment payout
date elected by the Participant with respect to such deferral;
provided that the first of such dates shall be (A) with respect to
Executive Retirement Payments, not less than twelve (12) months after
the Participant's Retirement date and (B) with respect to all other
Retirement Benefit payments, on or after the Participant's Retirement
date; and provided, further, that the final installment payout date
with respect to such deferral occurs (X) no earlier than the second
anniversary of the first installment payment and (Y) no later than the
earlier of (I) the quarter prior to the fifteenth anniversary of the
first installment payment and (II) the fifteenth anniversary of the
Participant's Normal Retirement Date.
(ii) "Retirement Benefit Lump Sum Payout Date" means, with respect to a
deferral made by a Participant, the first day of the calendar quarter
elected (initially or upon re-deferral pursuant to Section 8(b)(3)) by
the Participant for a lump sum payout of a Retirement Benefit;
provided that such date shall be (A) with respect to Executive
Retirement Payments, not less than twelve (12) months after the
Participant's Retirement date and (B) with respect to all other
Retirement Benefit payments, on or after the Participant's Retirement
date; and provided, further, that such date shall be no later than the
fifteenth anniversary of the Participant's Normal Retirement Date.
(jj) "Retirement Eligible" means a Participant who is an Employee and who
has attained the earlier of (i) age sixty-five (65), or (ii) age
fifty-five (55) with five (5) Years of Service.
(kk) "Severance Payments" means severance payments (including pension
enhancements) payable pursuant to Change in Control severance
agreements entered into between AHPC and members of the Finance
Committee, Operations Committee, and other principal elected corporate
officers and key Employees of AHPC, which provide for severance
benefits to such Employees in the event of their termination of
employment following a Change in Control.
(ll) "Short-Term Payout" means the type of payout available to a
Participant as described in Section 8(a).
(mm) "Short-Term Payout Date" means, with respect to a deferral made by a
Participant, the first day of the calendar quarter elected by the
Participant for payment of a Short-Term Payout; provided that such
date shall be in a Plan Year which, in the case of an initial
election, is at least three (3) but no more than fifteen (15) years
after the end of the Plan Year in which the deferral occurs and in the
case of a re-deferral pursuant to Section 8(a)(2), is at least three
(3) but not more than fifteen (15) years after the date on which the
Short-Term Payout, but for the re-deferral, would have been paid; and
provided, further, that in each case such date shall be no later than
the fifteenth anniversary of the Participant's Normal Retirement Date.
(nn) "Subsidiary(ies)" means, as to any person, any corporation,
partnership or joint venture, of which (or in which) such person,
together with one or more of its subsidiaries, directly or indirectly
owns more than fifty percent (50%) of the interest in the capital or
profits of such corporation, partnership or joint venture.
(oo) "Trust Agreement" means an agreement between the Trustee and AHPC
covering a grantor trust which AHPC may, in its sole discretion,
establish in connection with the Plan as described in Section 9(g).
(pp) "Trustee" means the trustee named by AHPC from time to time as the
trustee for the Trust Agreement.
(qq) "Year of Service" shall have the same meaning as in the AHPC
Retirement Plan.
(rr) "Yearly or Quarterly Installment Method" means a yearly (or quarterly)
installment payment over the number of years (or quarters) selected by
the Participant in accordance with the Plan, calculated as follows:
the Deferral Account of the Participant shall be calculated as of the
close of business on the date of reference (or, if the date of
reference is not a business day, on the immediately following business
day). The date of reference with respect to the first yearly (or
quarterly) installment payment dates shall be as provided in Section
1(hh), and the date of reference with respect to subsequent yearly (or
quarterly) installment payment dates shall be the anniversary date or
dates thereof in the applicable year. The yearly (or quarterly)
installment shall be calculated by multiplying the portion of the
Deferral Account not allocated to the Deemed Interest Investment
Option by a fraction, the numerator of which is one (1), and the
denominator of which is the remaining number of yearly (or quarterly)
payments due the Participant. By way of example, if the Participant
elects ten (10) yearly (or forty (40) quarterly) installment payments,
the first payment shall be one-tenth (1/10) (or one-fortieth (1/40))
of the Deferral Account, calculated as described in this definition.
For the following payment, the payment shall be one-ninth (1/9) (or
one thirty-ninth (1/39)) of the Deferral Account, calculated as
described in this definition.
SECTION TWO - DEFERRALS UNDER THE PREDECESSOR PLAN
Prior to the Amended and Restated Effective Date of the Plan, AHPC
maintained the Predecessor Plan, which allowed members of a select group of
management or highly compensated employees to defer receipt of various types of
compensation. In addition, some of those employees had separate non-qualified
plan balances consolidated into the Predecessor Plan as of the Original
Effective Date. Except as otherwise provided herein, any Participant who has a
Deferral Account as of the Amended and Restated Effective Date shall continue to
have that portion of his or her Deferral Account that is in existence as of that
date governed under the Plan by the distribution provisions of the Predecessor
Plan as elected by the Participant prior to the Amended and Restated Effective
Date. Notwithstanding the foregoing, a Participant with such a balance who is an
Eligible Employee on March 31, 2001, shall have the right (1) by June 1, 2001 to
amend any distribution election made prior to the Amended and Restated Effective
Date to conform with the distribution options allowed under Section 8, provided
that (i) such election is in a form and manner approved by the Administrator,
(ii) to the extent that such amendment relates to the deferrals of Base Salary
for the 2001 Plan Year, the distribution election designated by the Participant
in such amendment shall govern all deferrals of Base Salary during the 2001 Plan
Year and (iii) any such election does not apply (A) to the portion of each
balance that is otherwise payable under a prior election within six (6) months
of June 1, 2001, or (B) to the extent that it would accelerate the payment of
any distribution to a date on or before December 1, 2001; and (2) thereafter, to
amend any distribution election in accordance with and subject to the provisions
of Section 8. Further, notwithstanding the foregoing, a Participant with such a
balance may elect Investment Options with respect thereto in accordance with and
subject to the provisions of Section 7(d).
SECTION THREE - PARTICIPATION IN THE PLAN
(a) Participation on the Amended and Restated Effective Date. A Participant
in the Predecessor Plan on the Amended and Restated Effective Date shall
continue to be a Participant in the Plan. An Employee who is not a Participant
as of the Amended and Restated Effective Date but is an Eligible Employee, shall
become a Participant as of the Amended and Restated Effective Date if he or she
completes and files in a timely manner all forms required to become a
Participant in the Plan in accordance with the enrollment procedures set forth
below.
(b) Participation after the Amended and Restated Effective Date. An
Employee who is an Eligible Employee on the Amended and Restated Effective Date,
and who does not initially elect to become a Participant, or an Employee who
first becomes an Eligible Employee after the Amended and Restated Effective Date
during a Plan Year, may commence participation in the Plan as set forth in
Section 3(c) and (d) below.
(c) Enrollment Requirements. As a condition to participation, each Eligible
Employee who elects to participate in the Plan shall complete, execute, and
return to the Recordkeeper such forms as are required from time to time by the
Administrator, and all such forms must be submitted to the Recordkeeper within
thirty (30) days (or such other time period as the Administrator determines in
its sole discretion) of the date that an Employee is first notified that he or
she is an Eligible Employee. In addition, the Administrator may establish from
time to time such other enrollment requirements as it determines in its sole
discretion are appropriate.
(d) Commencement of Participation. Except as provided in Section 3(a)
above, once an Eligible Employee has met all of the enrollment requirements set
forth in the Plan, including returning all required documents within the
specified time period, the Eligible Employee shall commence participation in the
Plan on the first day of the month following the month in which the Eligible
Employee completes all enrollment requirements; provided, however that the
Administrator may designate, in its sole discretion, another commencement date
that is administratively reasonable. If an Eligible Employee fails to meet all
of the enrollment requirements within the period required in accordance with
Section 3(c), that Employee shall not be eligible to participate in the Plan
again until the first day of the following Plan Year, again subject to timely
delivery to and acceptance by the Recordkeeper of the required forms.
SECTION FOUR - DEFERRALS UNDER THE PLAN
(a) Deferral of Base Salary and/or Bonus Compensation.
(1) Subject to the following sentence, for each Plan Year, a Participant
may designate a percentage of his or her Base Salary and/or Bonus
Compensation that is payable in a Plan Year to be deferred in
accordance with Section 6. To be eligible to make a deferral of Base
Salary (but not Bonus Compensation) into the Plan, six percent (6%) of
the amount of Base Salary elected must be deferred in accordance with
the Plan for a Plan Year to be deferred under the AHPC SESP for the
same Plan Year in accordance with the AHPC SESP's rules. The remaining
elected deferral amount under the Plan shall then be deferred into the
Plan.
(2) For each Base Salary and/or Bonus Compensation deferral (adjusted to
reflect Investment Earnings/Losses with respect thereto), a
Participant shall make appropriate distribution elections in
accordance with Section 8 below with respect to such deferral amounts.
Notwithstanding any provision of the Plan to the contrary, all
elections with respect to the 2002 Plan Year and each Plan Year
thereafter shall be required to provide for the same Short-Term Payout
Date, Retirement Benefit Lump Sum Payout Date or Retirement Benefit
Installment Payout Dates, as the case may be, for all deferrals of
Base Salary and Bonus Compensation in the same Plan Year.
(3) A deferral election described above in this Section 4(a) with respect
to any Plan Year may not be revoked, except that a Participant may
revoke completely a deferral election for Base Salary not yet earned
at the time of the Participant's revocation election (which revocation
will itself be irrevocable for the remainder of the Plan Year).
(b) Deferral of Severance Payments.
(1) A Participant may designate a percentage of any Severance Payment that
is payable in a Plan Year to be deferred in accordance with Section 6,
provided, however, that such designation shall be given effect only if
the Participant is Retirement Eligible at the time of his or her
termination of employment.
(2) For any Severance Payment deferral (adjusted to reflect Investment
Earnings/Losses with respect thereto), a Participant shall make
appropriate distribution elections in accordance with Section 8 below
with respect to each such deferral.
(c) Deferral of Executive Retirement Payments.
(1) A Participant may designate a percentage of his or her Executive
Retirement Payments to be deferred in accordance with Section 6,
provided, however, that such designation shall be given effect only if
the Participant is Retirement Eligible at the time of his or her
termination of employment.
(2) For each Executive Retirement Payment deferral (adjusted to reflect
Investment Earnings/Losses with respect thereto), a Participant shall
make appropriate distribution elections in accordance with Section 8
below. A Participant shall be permitted to make a separate deferral
election with respect to amounts transferred to the Plan from the AHPC
SERP, the AHPC ERP and/or the AHPC SESP.
(d) Minimum/Maximum Amount of Deferral. For each Plan Year, a Participant
may elect to defer Base Salary, Bonus Compensation, Severance Payments and/or
Executive Retirement Payments, if applicable, under Section 4(a)-(c) in
increments of at least five percent (5%) (unless the Administrator determines
otherwise in its sole discretion) up to a maximum deferral of one hundred
percent (100%) of each type of deferral the Participant elects to make with
respect to that Plan Year.
SECTION FIVE - INVESTMENT EARNINGS/LOSSES
(a) Deemed Interest Prior to the Amended and Restated Effective Date. Prior
to the Amended and Restated Effective Date, amounts credited to the Predecessor
Plan shall be deemed to have earned interest at the Deemed Rate of Interest then
in effect, as adjusted. Such Deemed Interest shall be credited to the Deferral
Accounts of Participants in accordance with the crediting provisions of Section
7(g).
(b) Investment Earnings/Losses On and After the Amended and Restated
Effective Date. On and after the Amended and Restated Effective Date: (i)
amounts in the Plan on the Amended and Restated Effective Date, (ii) Base Salary
and/or Bonus Compensation deferred under the Plan, (iii) Executive Retirement
Payments deferred under the Plan, and (iv) Severance Payments deferred under the
Plan, shall be deemed to have realized Investment Earnings/Losses based on the
Investment Option or Options selected from time to time by the respective
Participants. Such Investment Earnings/Losses shall be credited and debited to
the Deferral Accounts of Participants in accordance with the debiting and
crediting provisions of Section 7(g).
SECTION SIX - DEFERRAL ELECTIONS
(a) Deferral Elections. All deferrals made in accordance with Section 4
shall be evidenced by the Participant's properly executing and submitting such
Election Forms and other forms as may be required by the Recordkeeper in
accordance with its rules and the rules set forth in this Section 6.
(b) Deferrals of Base Salary and/or Bonus Compensation. Except for a
Participant's first year of Plan participation, a Participant's election to
defer Base Salary and/or Bonus Compensation in accordance with Section 4(a) with
respect to a particular Plan Year must be received by the Recordkeeper no later
than the last day of the preceding Plan Year. For a Participant's first year of
Plan participation, deferral elections must be made in accordance with Section
3(c) and shall only apply to Base Salary earned and Bonus Compensation first
determined after the election. Each Participant must designate on the Election
Form the timing and form of distribution of such Base Salary and/or Bonus
Compensation (adjusted to reflect Investment Earnings/Losses with respect
thereto) in accordance with the distribution options described in Section 8.
(c) Deferrals of Severance Payments. A Participant's election to defer a
Severance Payment in accordance with Section 4(b) must be received by the
Recordkeeper prior to the date the applicable Change in Control following which
a Participant becomes entitled to receive such Severance Payment. The
Participant must designate on the Election Form the timing and form of
distribution of the Severance Payment (adjusted to reflect Investment
Earnings/Losses with respect thereto) in accordance with the options described
in Section 8.
(d) Deferrals of Executive Retirement Payments. A Participant's election to
defer Executive Retirement Payments in accordance with Section 4(c) must be
received by the Recordkeeper prior to the date of the Participant's Retirement.
The Participant must designate on the Election Form the timing and form of such
distribution of Executive Retirement Payments (adjusted to reflect Investment
Earnings/Losses with respect thereto) in accordance with the options described
in Section 8. Notwithstanding any other provision of the Plan to the contrary,
an election to defer such payments made after the Amended and Restated Effective
Date shall not apply (i) unless the payment elected is scheduled to commence not
less than twelve (12) months after the election is made, or (ii) to any payment
scheduled to commence within twelve (12) months of such election.
SECTION SEVEN - DEFERRAL ACCOUNTS
(a) Establishment of Deferral Accounts.The Recordkeeper shall establish and
maintain an individual Deferral Account under the Plan on behalf of each
Participant by or on behalf of whom deferrals have been made under Section 4 to
track the Investment Earnings/Losses or other elections applicable to the
Deferral Account of the Participant. The Deferral Account of each Participant
may have subaccounts established and maintained as appropriate to reflect the
Investment Option(s) and/or distribution elections selected by the Participant.
(b) Crediting of Amounts Deferred. A Participant's Deferral Account shall
be credited by the Recordkeeper for deferral amounts after such amounts are
withheld and deferred pursuant to a Participant's elections on the appropriate
Election Form with an amount equal to the amounts deferred by the Participant in
accordance with Section 7(g). Such amounts shall be allocated among the
available Investment Options in accordance with the selections made by the
Participant among the Investment Options pursuant to Section 7(f).
(c) Crediting/Debiting of Deferral Account. In accordance with Section 7(g)
and subject to the rules and procedures that are established from time to time
by the Administrator and/or the Recordkeeper (which may or may not be in
writing), Investment Earnings/Losses shall be credited or debited to a
Participant's Deferral Account.
(d) Election of Investment Options. A Participant, in connection with his
or her initial deferral election under the Plan or in connection with the
amendment and restatement of the Plan, shall elect, on the Election Form(s), one
or more Investment Option(s) as described in Section 7(f) below to be used to
determine the additional amounts to be credited or debited to his or her
Deferral Account. Such elections shall continue to apply to his or her Deferral
Account unless changed in accordance with the next sentence. The Participant may
(but is not required to) elect on any business day, by submitting an Election
Form(s) to the Recordkeeper that is accepted by the Recordkeeper (which
submission may take the form of an electronic or telephonic transmission, if
required or permitted by the Administrator), to add or delete one or more
Investment Option(s) to be used to determine the additional amounts to be
credited or debited to his or her Deferral Account, or to change the portion of
his or her Deferral Account allocated to each previously or newly elected
Investment Option(s). If an election is made in accordance with the previous
sentence, it shall apply the next business day (unless otherwise determined by
the Administrator) and shall continue until the Participant makes any changes to
those elections in accordance with the previous sentence. Notwithstanding the
foregoing, in no event may a Participant elect to add or delete the Deemed Rate
of Interest as an Investment Option or add amounts to or transfer amounts from
that Investment Option, once any Retirement Benefit payment as described in
Section 8(b) has commenced.
(e) Proportionate Allocation. In making any election described in Section
7(d) above, the Participant shall specify on the Election Form(s), in percentage
increments of at least five percent (5%) (unless the Administrator determines
otherwise in its sole discretion) the percentage of his or her Deferral Account
to be allocated to an Investment Option.
(f) Investment Options. The Administrator may, in its sole discretion,
amend or change available Investment Options in accordance with Section 1(w) and
subject to Section 1(o). Any discontinuation of an Investment Option shall not
take effect prior to the first day of the calendar quarter that follows by at
least thirty (30) days the day on which the Administrator generally gives
Participants written notice of such change. If any Investment Option is
discontinued, Participants having selected such Investment Option must designate
another Investment Option for the portion by his or her Deferral Account
allocated thereto within the timeframe designated by the Administrator. A
Participant may elect any new Investment Option added by the Administrator ten
(10) business days after being notified that the Investment Option was added. If
the Recordkeeper receives an initial Election Form that it deems to be
incomplete, unclear or improper, the Participant shall be deemed to have filed
no direction with respect thereto. If the Recordkeeper receives a revised
Election Form that it deems to be incomplete, unclear or improper, or fails to
receive a revised Election Form when one is required to be filed, the
Participant's Investment Option election then in effect shall remain in effect,
except in the case of a discontinued Investment Option, in which case the
Participant shall be deemed to have filed no direction with respect thereto. If
the Recordkeeper possesses (or is deemed to possess as provided in the previous
sentence) at any time directions as to Investment Options of less than all of
the Participant's Deferral Account, the Participant shall be deemed to have
elected for the undesignated portion of his or her Deferral Account the Deemed
Interest Investment Option or such other Investment Option as determined by the
Administrator in its sole discretion. Each Participant hereunder, as a condition
to his or her participation hereunder, agrees to indemnify and hold harmless the
Committee, the Administrator, and the Company, and their agents and
representatives, from any losses or damages of any kind relating to the
Investment Options made available hereunder.
(g) Crediting or Debiting Method. The performance of each elected
Investment Option (either positive or negative) will be determined by the
Recordkeeper, in accordance with the rules established by the Administrator in
its sole discretion, based on the performance of the actual Investment Options
themselves. A Participant's Deferral Account shall be credited or debited on
each business day, or as otherwise determined by the Recordkeeper in accordance
with the rules established by the Administrator in its sole discretion, as
though: (i) the amounts of the Participant's deferral election were actually
deferred no later than the close of business on the third business day after the
day on which (x) such amounts were otherwise payable to the Participant as Base
Salary, Bonus Compensation, or a Severance Payment and (y) in the case of
Executive Retirement Payments the date of the Participant's Retirement; (ii) a
Participant's Deferral Account was actually invested in the Investment
Options(s) selected by the Participant, in the percentages elected by the
Participant as of such date, at the closing price on such date; and (iii) any
distribution made to a Participant that decreases such Participant's Deferral
Account ceased being invested in the Investment Options(s), in the percentages
applicable to such day, no earlier than three (3) business days prior to the
distribution, at the closing price on such date.
(h) No Actual Investment. Notwithstanding any other provision of the Plan,
the Investment Options are to be used for measurement purposes only, and a
Participant's election of any such Investment Options, the allocation to his or
her Deferral Account thereto, the calculation of additional amounts and the
crediting or debiting of such amounts to a Participant's Deferral Account shall
not be considered or construed in any manner as an actual investment of his or
her Deferral Account in any such Investment Options. In the event that AHPC, in
its discretion, decides to invest funds in any or all of the Investment Options,
no Participant shall have any rights in or to such investments themselves.
Without limiting the foregoing, a Participant's Deferral Account shall at all
times be a bookkeeping entry only and shall not represent any investment made on
his or her behalf by AHPC or the Trust. The Participant shall at all times
remain an unsecured creditor of AHPC.
SECTION EIGHT- DISTRIBUTIONS
(a) Short-Term Payouts.
(1) Commencement of Payment of Short-Term Payouts. In connection with each
election to defer Base Salary and/or Bonus Compensation, a Participant
may elect to receive a "Short-Term Payout" with respect to each such
elected deferral. Each Short-Term Payout shall be a lump-sum payment
equal to the deferred amount, plus or minus Investment Earnings/Losses
debited or credited thereto in the manner provided in Section 7(g),
determined at the time the Short-Term Payout becomes payable. Each
Short-Term Payout elected shall be payable on the Short-Term Payout
Date designated by the Participant on the Election Form with respect
thereto. Short-Term Payouts shall be made as soon as practicable after
the applicable Short-Term Payout Date elected by the Participant on
the applicable Election Form, provided, that in no event shall such
payment be made later than thirty (30) days after the relevant elected
date.
(2) Re-Deferral of Short Term Payout. Notwithstanding anything in the Plan
to the contrary, a Participant who is an active Employee, may, with
respect to each elected Short-Term Payout, on a form designated by the
Recordkeeper, elect (on one or more occasions) to re-defer such
Short-Term Payout to another allowable Short-Term Payout Date;
provided, however, that any such re-deferral election shall not apply
(i) unless it is accepted by the Recordkeeper in accordance with the
rules established by the Administrator in its sole discretion, and
(ii) to any payment that would have been made under a prior election
within twelve (12) months of the date of such new election. In the
event that a scheduled Short-Term Payout, if paid, would (or in the
judgment of the Administrator, acting in its sole discretion, would be
reasonably likely to) result in the loss of deductibility for federal
income tax purposes of any compensation paid by the Company due to the
limitations of Section 162(m) of the Code in any given year, then the
scheduled Short-Term Payout shall be automatically re-deferred for a
period of three (3) years. Subject to the foregoing, the last Election
Form accepted by the Recordkeeper shall govern the Short-Term Payout
Date of that Short-Term Payout (adjusted to reflect Investment
Earnings/Losses with respect thereto).
(3) Changing a Short-Term Payout to a Retirement Benefit. A Participant
may change any Short-Term Payout election up to the date of Retirement
to an allowable Retirement Benefit payout by submitting a new Election
Form to the Recordkeeper; provided that any such Election Form is (i)
submitted at least twelve (12) months prior to the Retirement Benefit
Lump Sum Payout Date or the initial Retirement Benefit Installment
Payout Date, as the case may be, elected by the Participant, and (ii)
accepted by the Recordkeeper in accordance with the rules established
by the Administrator in its sole discretion; provided, further, that
such election shall not apply to any payment that would have been made
under a prior election within twelve (12) months of the date of such
new election.
(b) Retirement Benefit Payout.
(1) Commencement of Retirement Benefit. A Participant who Retires shall
receive, as a "Retirement Benefit", the portion of his or her Deferral
Account that he or she has not elected to be distributed in the form
of a Short-Term Payout, or that is not distributed in accordance with
another provision of the Plan as a result of the Participant's death,
Disability or termination of employment prior to Retirement.
(2) Time of Payment of Retirement Benefit. An active Participant, in
connection with each type of deferral of Retirement Benefits, shall
elect to receive that deferral (adjusted to reflect Investment
Earnings/Losses with respect thereto) on either a Retirement Benefit
Lump Sum Payout Date or on Retirement Benefit Installment Payout Dates
elected by such Participant. A Participant may change any Retirement
Benefit payout election up to the date of Retirement to an allowable
alternative Retirement Benefit payout date or dates by submitting a
new Election Form to the Recordkeeper; provided that any such Election
Form is (i) submitted at least twelve (12) months prior to the
Retirement Benefit Lump Sum Payout Date or the initial Retirement
Benefit Installment Payout Date, as the case may be, elected by the
Participant, and (ii) accepted by the Recordkeeper in accordance with
rules established by the Administrator in its sole discretion; and
provided, further, that such election shall not apply to any payments
that would have been made under a prior election or the terms of any
other plan within twelve (12) months of the date of such new election.
The last Election Form accepted by the Recordkeeper shall govern the
payout date or dates of that Retirement Benefit (adjusted to reflect
Investment Earnings/Losses with respect thereto).
(3) Re-deferral of Retirement Benefits. A Retired Participant who Retires
on or after the Amended and Restated Effective Date may elect to
re-defer Retirement Benefits prior to the commencement of any payments
thereof to another allowable Retirement Benefit Lump Sum Payout Date
or other allowable Retirement Benefit Installment Payout Dates;
provided that such re-deferral election shall not apply (i) to any
Retiree to whom payment of any Retirement Benefit has already
commenced and (ii) unless it is accepted by the Recordkeeper in
accordance with the rules established by the Administrator in its sole
discretion; and provided, further, that such re-deferral election
shall not apply to any payments that would have been made under a
prior election or the terms of any other plan within twelve (12)
months of the date of such new election.
(4) Form of Distribution of Retirement Benefits. A Participant, in
connection with each deferral of Retirement Benefits, shall elect to
receive the deferral (adjusted to reflect Investment Earnings/Losses
with respect thereto) in a lump sum on a Retirement Benefit Lump Sum
Payout Date elected by the Participant or in quarterly or yearly
installment payments on Retirement Benefit Installment Payout Dates
elected by the Participant. A Participant may change his or her
election up to the date of Retirement to an allowable alternative form
of payout by submitting a new Election Form to the Recordkeeper;
provided that any such Election Form is (i) submitted at least twelve
(12) months prior to the Retirement Benefit Lump Sum Payout Date or
the initial Retirement Benefit Installment Payout Date, as the case
may be, elected by the Participant, and (ii) accepted by the
Recordkeeper in accordance with rules established by the Administrator
in its sole discretion; and provided, further, that such election
shall not apply to any payments that would have been made under a
prior election or the terms of any other plan within twelve (12)
months of the date of such new election. (Changes may not be made
after Retirement except in accordance with Section 8(b)(3).) The
Election Form last accepted by the Recordkeeper shall govern the form
of a Retirement Benefit (adjusted to reflect Investment
Earnings/Losses with respect thereto). Retirement Benefit payments
shall be made as soon as practicable after the applicable Retirement
Benefit Lump Sum Payout Date or Retirement Benefit Installment Payout
Dates elected by the Participant on the applicable Election Form;
provided, that in no event shall such payments be made later than
thirty (30) days after the relevant elected dates.
(5) Installment Payments for Retirement Benefits Allocated to Investment
Options (Other than the Deemed Interest Investment Option). The amount
of each installment payment with respect to the portion of a Deferral
Account that is allocated to an Investment Option (other than the
Deemed Interest Investment Option) shall be determined by the Yearly
installment method, if the Participant elected to receive annual
installments or the Quarterly Installment Method, if the Participant
elected to receive quarterly installments.
(6) Installment Payments for Retirement Benefits Allocated to the Deemed
Interest Investment Option. The amount of each installment payment
with respect to the portion of a Deferral Account that is allocated to
the Deemed Interest Investment Option shall be determined by the
following annuity methodology. The amount of each installment payment
shall be calculated as an annuity at the beginning of the installment
payout period elected by the Participant, based on: (i) the balance of
the applicable portion of the Deferral Account that is allocated to
the Deemed Interest Investment Option (adjusted to reflect Deemed
Interest with respect thereto) on the business day prior to the payout
date of each installment, (ii) the number of remaining installments,
(iii) the Deemed Rate of Interest then in effect, and (iv) a final
value of zero dollars ($0). To illustrate, assume a retiring
Participant has a Plan balance of $100,000 as of June 30 and has
elected to receive his/her payout over a ten-year period quarterly
installments, commencing July 1. Assume further that the annual Deemed
Rate of Interest is 10%, compounded quarterly. The amount of the
installment payments to commence July 1 would be calculated based on a
June 30 Plan balance of $100,000, an interest rate of 2.5% (i.e., the
annual interest rate of 10% divided by four), and forty (40) payments
(i.e., ten years times four quarters). Calculating an annuity at the
beginning of the installment period selected by the Participant, and
assuming the Deemed Rate of Interest remains unchanged throughout the
payout period, the Participant would receive forty quarterly payments
of $3,886.46. Over the ten-year payout period, the Participant would
receive payments totaling $155,458.40, of which $100,000 represents
the deferred amount and $55,458.40 represents Deemed Interest with
respect thereto.
(c) Payment Upon Separation From Service. Notwithstanding anything in the
Plan to the contrary, in the event a Participant terminates employment with the
Company for reasons other than Retirement, death or Disability, or in the event
that any Subsidiary that employs a Participant ceases to be a wholly-owned
Subsidiary of AHPC, the entire balance of the Participant's Deferral Account
(adjusted to reflect Investment Earnings/Losses with respect thereto) shall be
distributed to the Participant in a single lump sum within ninety (90) days
thereafter. The foregoing shall not apply in the case of a Participant who is
Retirement Eligible as of his or her date of termination of employment or the
date on which such Subsidiary ceases to be a wholly-owned Subsidiary of AHPC, as
the case may be.
(d) Payment Upon Death. Notwithstanding anything in the Plan to the
contrary, in the event a Participant dies prior to the receipt of any or all of
his or her Deferral Account, the balance of such account shall be distributed in
a single lump sum to the Participant's Beneficiary(ies) within ninety (90) days
following his or her death.
(e) Acceleration of Payments. Notwithstanding anything in the Plan to the
contrary, during the twenty-four (24) month period following a Change in
Control, a Participant may elect to accelerate any or all payments not currently
due under the Plan to a single sum payment to be made on (i) a date that is at
least twelve (12) months subsequent to such election, without a penalty or
forfeiture, or (ii) with the imposition of a withdrawal penalty equal to six
percent (6%) of the accelerated payment, any date within twelve (12) months of
such election. Payments shall be made as soon as practicable after the date
elected for payment; provided, that in no event shall payment be made later than
thirty (30) days thereafter.
(f) Disability Waiver.
(1) Waiver of Deferral. A Participant who is determined by the
Administrator to be suffering from a Disability shall be excused from
fulfilling that portion of any current deferral election that would
otherwise have been withheld for the Plan Year during which the
Participant first suffers a Disability. During the period of
Disability, the Participant shall not be allowed to make any
additional deferral elections, but will continue to be considered a
Participant for all other purposes of the Plan.
(2) Return to Work. If a Participant returns to employment with the
Company after a Disability ceases, the Participant may elect to defer
additional amounts in accordance with the Plan for the Plan Year
following his or her return to employment or service and for every
Plan Year thereafter while an Eligible Employee and Participant,
provided such deferral elections are otherwise allowed and an Election
Form is delivered to and accepted by the Recordkeeper.
(3) Continued Eligibility; Disability Benefit. A Participant suffering a
Disability shall, for benefit purposes under the Plan, continue to be
considered to remain a Participant to be eligible for the benefits
provided for in this Section 8 in accordance with its provisions.
Notwithstanding the above, the Administrator shall have the right to,
in its sole discretion and for purposes of the Plan only, with respect
to a Participant who has been determined to have suffered a
Disability, pay out his or her Deferral Account balance in a lump-sum.
(g) Other Distributions. Any distributions that are required to be made
due to the provisions of the Predecessor Plan with respect to a type
of deferral no longer eligible to be deferred as of the Amended and
Restated Effective Date, shall be made in accordance with Section 2.
SECTION NINE - MISCELLANEOUS
(a) Funding of the Plan. The Plan is unfunded and AHPC has no obligation to
set aside, earmark, or place in trust any funds with which to pay its
obligations under the Plan. AHPC's obligation under the Plan shall not be
secured in any way and a Participant's rights shall not be secured in any way
and a Participant's rights shall in no way be preferred over the general
creditors of AHPC.
(b) Employment. Neither the Plan nor any agreement, document, form or
instrument delivered or entered into pursuant hereto constitutes an employment
contract between the Company and a Participant. Nothing herein or therein shall
be construed to give a Participant the right to be retained in the service of
the Company, nor interfere with the right of the Company to terminate or
discipline a Participant at any time.
(c) Governing Law. The Plan shall be construed and interpreted under the
laws of the State of New Jersey (without giving effect to the principles of
conflicts of laws) and applicable provisions of federal law.
(d) Taxes. The Company shall have the right to deduct from distributions
otherwise payable from any deferral under the Plan any taxes required to be
withheld under federal, state, or local law. For each Plan Year in which a
deferral is being deducted for a Participant, the Company shall withhold from
that portion of the Participant's Base Salary and/or Bonus Compensation that is
not being deferred, in a manner determined by the Company, the Participant's
share of FICA and other employment taxes on such deferral amounts. If necessary,
the Company may reduce any amount deferred in order to comply with this Section.
(e) Non-Assignable. A Participant's right to receive the amounts in his or
her Deferral Account under the Plan may not be anticipated, assigned (either at
law or equity), alienated, pledged, encumbered, or subjected to attachment,
garnishment, levy, execution, or other legal process, and any attempt to effect
any of the foregoing shall be void.
(f) Minors and Incompetents. If the Administrator determines that any
person to whom a payment is due hereunder is a minor or incompetent by reason of
physical or mental disability, the Administrator shall have the power to cause
the payments then due to such person to be made to another for the benefit of
the minor or incompetent, without responsibility of the Company, the Committee,
the Administrator or the Recordkeeper to see to the application of such payment,
unless claim prior to such payment is made therefor by a duly appointed legal
representative. Payments made pursuant to such power shall operate as a complete
discharge of the Company, the Committee, and the Administrator.
(g) Trust Fund. In connection with the Plan, AHPC may, but shall not be
required to, establish a grantor trust for the purpose of accumulating funds to
satisfy the obligations incurred by AHPC under the Plan. At any time, AHPC may
transfer assets to the trust to satisfy all or part of the obligations incurred
by AHPC, subject to the return of such assets at a time as determined in
accordance with the terms of such trust. Any assets of the trust shall remain at
all times subject to the claims of creditors of AHPC in the event of AHPC's
insolvency, and no asset or other funding medium used to pay benefits accrued
under the Plan shall result in the Plan not being considered as "unfunded" under
ERISA. Notwithstanding the establishment of the trust, the right of any
Participant to receive future payments under the Plan shall remain an unsecured
claim against the general assets of AHPC.
(h) Severability. In the event any provision of the Plan shall be held
illegal or invalid for any reason, the illegality or invalidity shall not affect
the remaining provisions of the Plan, and the Plan shall be constructed and
enforced as if the illegal or invalid provision had not been included in the
Plan.
(i) Beneficiary. Each Participant shall have the right, at any time, to
designate his or her Beneficiary(ies) (both primary as well as contingent) to
receive any benefits payable under the Plan upon the death of a Participant. The
Beneficiary(ies) designated under the Plan may be the same as or different from
the Beneficiary designation under any other plan of AHPC in which the
Participant participates. A Participant shall designate his or her
Beneficiary(ies) by completing and signing the beneficiary designation form, and
returning it to the Administrator or its designated agent. A Participant shall
have the right to change his or her Beneficiary(ies) by completing, signing and
otherwise complying with the terms of the beneficiary designation form and the
Administrator's rules and procedures, as in effect from time to time. Upon the
acceptance by the Administrator of a new beneficiary designation form, all
Beneficiary designations previously filed shall be canceled. The Administrator
shall be entitled to rely on the last beneficiary designation form filed by the
Participant and accepted by the Administrator prior to his or her death. No
designation or change in designation of a Beneficiary shall be effective until
received and acknowledged in writing by the Administrator or its designated
agent. If a Participant fails to designate a Beneficiary(ies) as provided above
or, if all designated Beneficiaries predecease the Participant or die prior to
complete distribution of the Participant's benefits, then the benefits remaining
under the Plan to be paid to a Beneficiary shall be payable to the executor or
personal representative of the Participant's estate.
(j) Insurance. AHPC, on its own behalf or on behalf of the Trustee of the
trust, and, in its sole discretion, may apply for and procure insurance on the
life of some or all Participants, in such amounts and in such forms as AHPC may
choose. AHPC or the Trustee of the trust, as the case may be, shall be the sole
owner and beneficiary of any such insurance. The Participant shall have no
interest whatsoever in any such policy or policies, and at the request of AHPC
shall submit to medical examinations and supply such information and execute
such documents as may be required by the insurance company or companies to whom
AHPC has applied for insurance.
SECTION TEN - EMERGENCY BENEFIT
In the event that the Administrator, upon the written request of the
Participant, determines that the Participant has suffered an unforeseeable
financial emergency, the Administrator shall in accordance with the request of
the Participant (i) pay to the Participant as soon as possible following such
determination, an amount not in excess of the amount needed to satisfy the
emergency and any taxes payable on those amounts, and/or (ii) suspend any
deferrals required to be made to the Plan by the Participant. For this purpose,
an "unforeseeable financial emergency" means an unanticipated emergency that is
caused by an event beyond the control of the Employee that would result in
severe financial hardship if the emergency distribution were not permitted and
would include (i) a sudden and unexpected illness or accident of the Participant
or a dependent of the Participant, (ii) a loss of the Participant's property due
to casualty, or (iii) such other extraordinary and unforeseeable circumstances
arising as a result of events beyond the control of the Participant, all as
determined in the sole discretion of the Administrator.
SECTION ELEVEN - ADMINISTRATION OF THE PLAN
The Plan shall be administered by the Administrator which shall have full
discretionary authority to interpret the Plan; to make all determinations as may
be necessary or advisable; and to adopt, amend or rescind any rules,
regulations, and procedures as it deems necessary or appropriate for the
administration of the Plan. The interpretations, determinations, actions, and
decisions of the Administrator shall be binding and conclusive for all purposes
and upon all persons. The Administrator may delegate part or all of its
responsibilities under the Plan to such party or parties as it may deem
necessary or appropriate.
SECTION TWELVE - AMENDMENT AND TERMINATION
The Board of Directors may amend or revise the terms of the Plan from time
to time, or may discontinue the Plan, in whole or in part, at any time. However,
such amendment, revision or discontinuance of the Plan may not adversely affect
a Participant's benefit(s) accrued under the Plan prior to the date of such
action.
SECTION THIRTEEN - CLAIMS PROCEDURE
If a Participant does not receive the timely payment of the benefits that
he or she believes are due under the Plan, the Participant may make a claim for
benefits in the manner hereinafter provided. All claims for benefits under the
Plan shall be made in writing and shall be signed by the Participant. Claims
shall be submitted to the Administrator. If the Participant does not furnish
sufficient information with the claim for the Administrator to determine the
validity of the claim, the Administrator shall indicate to the Participant any
additional information, which is necessary for the Administrator to determine
the validity of the claim. Each claim hereunder shall be acted on and approved
or disapproved by the Administrator within ninety (90) days following the
receipt by the Administrator of the information necessary to process the claim.
In the event the Administrator denies a claim for benefits in whole or in part,
the Administrator shall notify the Participant in writing of the denial of the
claim and notify the Participant of his right to a review of the Administrator's
decision by the Committee or such entity or person delegated such authority by
the Committee. Such notice by the Administrator shall also set forth, in a
manner calculated to be understood by the Participant, the specific reason for
such denial, the specific provisions of the Plan on which the denial is based,
and a description of any additional material or information necessary to perfect
the claim, with an explanation of the Plan's appeals procedure as set forth in
this Section 13. If the Administrator takes no action on a Participant's claim
within ninety (90) days after receipt by the Administrator, such claim shall be
deemed to be denied for purposes of the following appeals procedure. Any
Participant whose claim for benefits is denied in whole or in part may appeal
for a review of the decision by the Administrator. Such appeal must be made
within three (3) months after the applicant has received actual or constructive
notice of the denial as provided above. An appeal must be submitted in writing
within such period and must:
(a) request a review by the Administrator of the claim for benefits under
the Plan;
(b) set forth all of the grounds upon which the Participant's request for
review is based or any facts in support thereof; and
(c) set forth any issues or comments that the Participant deems pertinent
to the appeal.
The Administrator shall act upon each appeal within sixty (60) days after
receipt thereof unless special circumstances require an extension of the time
for processing, in which case a decision shall be rendered by the Administrator
as soon as possible but not later than one hundred and twenty (120) days after
the appeal is received. The Administrator may require the Participant to submit
such additional facts, documents or other evidence as the Administrator in its
discretion deems necessary or advisable in making its review. The Participant
shall be given the opportunity to review pertinent documents or materials upon
submission of a written request to the Administrator, provided the Administrator
finds the requested documents or materials are pertinent to the appeal. On the
basis of its review, the Administrator shall make an independent determination
of the Participant's eligibility for benefits under the Plan. The decision of
the Administrator on any appeal of a claim for benefits shall be final and
conclusive upon all parties thereto. In the event the Administrator denies an
appeal in whole or in part, it shall give written notice of the decision to the
Participant, which notice shall set forth, in a manner calculated to be
understood by the Participant, the specific reasons for such denial and which
shall make specific reference to the pertinent provisions of the Plan on which
the Administrator's decision is based.
APPENDIX A
AMERICAN HOME PRODUCTS CORPORATION
DEFERRED COMPENSATION PLAN
INVESTMENT OPTIONS
1. Balanced Portfolio
2. S&P 500 Index Portfolio or Total Stock Market Index Portfolio
3. International Equity Portfolio
4. Deemed Interest Option - a hypothetical investment option which earns
interest at the Deemed Rate of Interest