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EXHIBIT 10.15
ALLERGAN, INC.
EXECUTIVE DEFERRED COMPENSATION PLAN
As of January 1, 1995
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ALLERGAN, INC.
EXECUTIVE DEFERRED COMPENSATION PLAN
ARTICLE I
INTRODUCTION
1.1 Purpose. The Allergan, Inc. Executive Deferred Compensation Plan is
hereby established by the Board of Directors of Allergan, Inc., a Delaware
corporation, to provide deferred compensation benefits to selected executive
and management employees of the Company as more fully provided herein. The
benefits provided under this Plan are intended to be in addition to other
employee benefit programs offered by the Company, including but not limited to
tax-qualified employee benefit plans.
1.2 Effective Date and Term. This Plan is adopted effective as of January
1, 1995 and shall continue in effect until terminated by the Board of
Directors.
1.3 Applicability of ERISA. This Plan is intended to be a "top-hat" plan
- -- that is, an unfunded plan maintained primarily for the purpose of providing
deferred compensation to a select group of management or highly compensated
employees within the meaning of ERISA.
ARTICLE II
DEFINITIONS
2.1 Annual Deferral. "Annual Deferral" means the amount of Base Salary or
Bonuses which the Participant elects to defer in each Deferral Period pursuant
to Article 3.1 of the Plan.
2.2 Base Salary. "Base Salary" means the Participant's annual basic rate
of pay from the Company (excluding Bonuses, commissions, and other non-
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regular forms of compensation) before reductions for deferrals under this Plan,
the Savings and Investment Plan, or "cafeteria plan" under Section 125 of the
Code.
2.3 Beneficiary. "Beneficiary" means the person or persons or entity
designated as such in accordance with Article XVI of the Plan.
2.4 Board; Board of Directors. "Board" and "Board of Directors" each mean
the Board of Directors of the Company. The Organization and Compensation
Committee of the Board, or any successor thereto, shall exercise any and all
rights, duties and obligations that are retained by or assigned to the Board
under the Plan.
2.5 Bonuses. "Bonuses" means non-salary amounts earned by the Participant
that are designated as bonuses. Bonuses shall be treated as earned in the
Deferral Period designated by the Committee even though they may be paid in the
subsequent Deferral Period in accordance with Company policy or practice.
2.6 Code. "Code" means the Internal Revenue Code of 1986, as amended.
2.7 Committee. "Committee" means the committee authorized to administer
this Plan as set forth in Section 13.1 hereof.
2.8 Company. "Company" means Allergan, Inc., a Delaware corporation, and
each Affiliated Company (as defined in the Savings and Investment Plan)
designated by the Board of Directors.
2.9 Declared Rate. "Declared Rate" means one hundred percent (100%) of
the ten-year Treasury Note one hundred twenty (120) month rolling average to be
determined on December 15 of each Plan Year and made applicable for the next
following Plan Year.
2.10 Deferral Account. "Deferral Account" means the account established
for a Participant pursuant to Section 5.1 of the Plan.
2.11 Deferral Election. "Deferral Election" means the election made by the
Participant pursuant to the terms of Section 4.1 of the Plan.
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2.12 Deferral Election Form. "Deferral Election Form" means the written
agreement to defer Salary or Bonuses made by the Participant. Such written
agreement shall be in a format designated by the Committee.
2.13 Deferral Period. "Deferral Period" means the Plan Year or, in the
case of a newly hired or promoted employee who becomes an Eligible Employee
during a Plan Year, the remaining portion of the Plan Year.
2.14 Disability. "Disability" means any injury, illness or condition that
constitutes a disability that qualifies for payment under the Company's
Long-Term Disability Plan.
2.15 Early Retirement Date. "Early Retirement Date" means the
Participant's fifty-fifth (55th) birthday or, if later, the date on which the
Participant completes at least five (5) years of Credited Service (as defined
in the Savings and Investment Plan).
2.16 Effective Date. "Effective Date" means January 1, 1995.
2.17 Eligible Employee. "Eligible Employee" means an employee of the
Company who is a U.S. local or U.S. based expatriate that is either exempt
grade 9E and above or is employed in another executive or management position
as approved by the Committee. An employee shall be treated as an Eligible
Employee only upon selection and notification in writing of such status by the
Committee. An employee shall cease to be an Eligible Employee if he or she is
demoted below exempt grade 9E, except that any Deferral Election which has been
made (and deferrals having commenced) may be completed.
2.18 Employee Stock Ownership Plan. "Employee Stock Ownership Plan" means
the Allergan, Inc. Employee Stock Ownership Plan, as amended.
2.19 ERISA. "ERISA" means the Employee Retirement Income Security Act of
1974, as amended.
2.20 Financial Hardship. "Financial Hardship" means an unexpected and
significant need for cash (which cannot be met reasonably and contemporaneously
from other sources) arising from an illness, casualty loss, sudden financial
reversal, or other such unforeseeable occurrence as determined by the Committee
in its sole
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discretion. Cash needs arising from foreseeable events or discretionary
expenditures such as the purchase of a residence or education expenses for
children shall not, alone, be considered a Financial Hardship.
2.21 In-Service Distribution. "In-Service Distribution" means a
distribution elected by the Participant pursuant to Article X of the Plan.
2.22 Normal Retirement Date. "Normal Retirement Date" means the last day
of the calendar month in which Participant's sixty-fifth (65th) birthday occurs
or, if later, the date on which the Participant completes at least one (1) year
of Credited Service (as defined in the Savings and Investment Plan).
2.23 Participant. "Participant" means any Eligible Employee who commences
participation in this Plan as provided under Section 3.1 hereof.
2.24 Participation Agreement. "Participation Agreement" means the written
agreement that an Eligible Employee must complete and submit in order to
commence participation in the Plan. Such written agreement shall be in a
format designated by the Committee.
2.25 Pension Plan. "Pension Plan" means the Allergan, Inc. Pension Plan as
amended.
2.26 Plan. "Plan" means this Allergan, Inc. Executive Deferred
Compensation Plan adopted as of the Effective Date hereof and as it may be
amended from time to time.
2.27 Plan Year. "Plan Year" means the calendar year.
2.28 Retirement Rate. "Retirement Rate" means one hundred twenty percent
(120%) of the ten-year Treasury Note one hundred twenty (120) month rolling
average to be determined on December 15 of each Plan Year and made applicable
for the next following Plan Year.
2.29 Savings and Investment Plan. "Savings and Investment Plan" means the
Allergan, Inc. Savings and Investment Plan, as amended.
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2.30 Termination; Termination of Employment. "Termination" or "Termination
of Employment" means the termination of a Participant's employment with the
Company for any reason whatsoever, whether voluntary or involuntary.
2.31 Unscheduled Withdrawal. "Unscheduled Withdrawal" means a distribution
requested by the Participant and approved by the Committee pursuant to Article
XI of the Plan.
ARTICLE III
ELIGIBILITY AND PARTICIPATION
3.1 Participation - Eligibility and Initial Period. Participation in this
Plan is open only to Eligible Employees of the Company (as defined in Section
2.17). Each Eligible Employee of the Company, as of the Effective Date hereof,
may become a Participant for the Deferral Period commencing on the Effective
Date if he or she submits a properly completed Participation Agreement and
Deferral Election Form to the Committee prior to January 1, 1995. Any employee
of the Company who becomes, subsequent to the Effective Date hereof, an
Eligible Employee, e.g., newly hired or promoted employees in an eligible
category, shall become a Participant commencing thirty (30) days after
attaining eligibility if he or she submits a properly completed Participation
Agreement and Deferral Election Form (for the remainder of the Deferral Period
in progress) to the Committee within such thirty (30) day period.
3.2 Participation - Subsequent Entry into Plan. An Eligible Employee who
does not elect to become a Participant at the time of initial eligibility as
set forth in Section 3.1 shall remain eligible to become a Participant
subsequently as long as he or she continues his or her status as an Eligible
Employee. In such event, the Eligible Employee may become a Participant if he
or she submits a properly completed Participant Agreement and Deferral Election
Form prior to January 1 of the Deferral Period for which it is effective.
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ARTICLE IV
DEFERRAL ELECTIONS
4.1 Deferral Election. For each Deferral Period after initial
participation commences, a Participant may make a Deferral Election on a
voluntary basis by properly completing and submitting a Deferral Election Form
prior to the first day (January 1) of the Deferral Period for which the
Deferral Election is effective. A Participant shall not be obligated to make a
Deferral Election in each Deferral Period, and (subject to the requirements set
forth in Sections 4.2 and 4.3 below) a Participant may change the amount of
each future Deferral Election. Once a Deferral Period commences for which a
Deferral Election is made, such Deferral Election shall continue for the entire
Deferral Period except that it shall terminate on Termination of Employment or
as otherwise provided in Section 4.4 or Article XI.
4.2 Maximum Deferral Election. A Participant may elect in the Deferral
Election Form to defer up to fifty percent (50%) of Base Salary or one hundred
percent (100%) of Bonuses earned during the Deferral Period. The Participant
may also elect to defer a specified dollar amount or a percentage of Bonuses
earned during the Deferral Period but limited to the extent such Bonuses exceed
a specified dollar amount. A Deferral Election shall be automatically reduced
or adjusted if the Committee determines that such action is necessary or
appropriate to meet Federal or State tax withholding obligations.
4.3 Minimum Deferral Election. In order for a Deferral Election Form to
be valid, the Participant must elect to defer at least five thousand dollars
($5,000) (or such other amount as may be designated by the Committee) in the
Deferral Period from either Base Salary or Bonuses or a combination of Base
Salary and Bonuses. Thus, Deferral Elections of Base Salary and Bonuses for
the same Deferral Period shall be aggregated for the purpose of determining
whether the Participant has elected at least the minimum Deferral Election.
In determining whether the Participant has made the minimum Deferral
Election, if the amount is stated in the form of a percentage of Base Salary or
Bonuses, the adequacy of the deferral shall be based on the Base Salary and
Bonuses earned by the Participant in the Plan Year immediately preceding the
Deferral Period. The Committee may, in its sole discretion, permit
Participants to elect to defer amounts in the form of a percentage based on
anticipated Base Salary and Bonuses.
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4.4 Termination of Deferral. If it is evident that a Participant has not
or will not actually defer the minimum Deferral Election required by Section
4.3 (whether due to Termination of Employment or otherwise), the Committee may,
in its sole discretion, terminate the Deferral Election and distribute the
portion of the Participant's Deferral Account attributable to such Deferral
Election in a single lump sum payment with interest credited to the last day of
the month preceding distribution at the prime rate announced by Bank of
America, N.A.
ARTICLE V
DEFERRAL ACCOUNTS
5.1 Deferral Accounts. Solely for record keeping purposes, a Deferral
Account shall be maintained for each Participant. The Deferral Account shall
be credited with (i) the Annual Deferrals at the time such amounts would
otherwise have been paid to the Participant, and (ii) a Plan Restoration
Credit. The "Plan Restoration Credit" shall be equal to the dollar amount of
the employer contributions to, or allocations (other than trust income or
earnings) made under, the Savings and Investment Plan and the Employee Stock
Ownership Plan, if any, that would have been contributed or allocated on behalf
of the Participant but that are otherwise not contributed or allocated because
of Deferral Elections made under this Plan. In applying the preceding
sentence, (i) the Committee shall make the Plan Restoration Credit contingent
on vesting in such amounts under the Savings and Investment Plan and the
Employee Stock Ownership Plan, and (ii) the contribution or allocation rate for
purposes of the Employee Stock Ownership Plan shall be deemed to be one and
one-half percent (1 1/2%).
5.2 Interest on Deferral Accounts. The Deferral Account of a Participant
shall be credited each month with interest which shall be compounded on an
annual basis. The rate of interest shall be calculated on two methods -- the
Declared Rate and the Retirement Rate. The Declared Rate shall apply to the
payment of designated benefits under the Plan, except in cases where this Plan
otherwise specifically provides for the crediting of interest at the Retirement
Rate, e.g., Article VI (Retirement Benefits), Article VIII (Death Benefits), or
Article XIV (Change in Control).
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5.3 Statement of Accounts. The Committee shall provide to each
Participant a quarterly statement setting forth the balance of the Deferral
Account maintained for such Participant. While the quarterly statement shall
present the Deferral Account with interest at both the Declared Rate and the
Retirement Rate, the provisions of the Plan shall govern exclusively the actual
rate of interest to be credited and paid.
ARTICLE VI
RETIREMENT BENEFITS
6.1 Entitlement to Deferral Accounts. Upon Termination of Employment on
or after Early Retirement Date or Normal Retirement Date, the Company shall pay
to the Participant a retirement benefit, in the form and manner provided in
Section 6.2 below, equal to the balance of the Participant's Deferral Account
with interest credited at the Retirement Rate.
6.2 Form of Retirement Benefits. The retirement benefit shall be paid in
one hundred eighty (180) substantially equal monthly installments unless the
Participant elects in the Participation Agreement to have the retirement
benefit paid in either a single lump sum or in sixty (60) or one hundred twenty
(120) substantially equal monthly installments.
6.3 Time of Commencement. A Participant may elect in the Participation
Agreement to have payments begin within sixty (60) days following the date of
Termination of Employment or, alternatively, (a) on the first business day of
January of the next following calendar year or (b) on the first business day of
January of a later year (not to exceed ten (10) years from the date of
Termination of Employment or, if earlier, the year in which the Participant
attains age seventy (70)).
6.4 Change in Payout Timing. A Participant may change his or her
Participation Agreement at any time prior to Termination of Employment in order
to revise the timing of retirement benefits to another method (or over another
period) permitted under Sections 6.2 and 6.3 above. If such a change is made
within thirteen (13) months prior to Termination of Employment (unless
Termination of Employment is on account of Disability), there shall be a ten
percent (10%) penalty charged at the time of change against the Participant's
Deferral Account.
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ARTICLE VII
TERMINATION BENEFITS
7.1 Entitlement to Deferral Accounts. Upon Termination of Employment
prior to Early Retirement Date or Normal Retirement Date, the Company shall pay
to the Participant a termination benefit, in the form and manner provided in
Section 7.2 below, equal to the balance of the Participant's Deferral Account
with interest credited at the Declared Rate.
7.2 Form of Termination Benefits. The termination benefit shall be paid
in a single lump sum payment within sixty (60) days following the date of
Termination of Employment or, if otherwise elected in the Participation
Agreement, either (a) on the first business day of January following
Termination of Employment or (b) if at least ten (10) years has elapsed since
the first day of the first Deferral Period in which participation commences, in
five (5) substantially equal annual installments. If installments are to be
paid under this Section 7.2, they shall commence within sixty (60) days
following the date of Termination of Employment. If (a) or (b) is elected, the
only interest to be credited after the date of Termination of Employment shall
be at eighty percent (80%) of the Declared Rate. Notwithstanding the
foregoing, the Company may, in its sole discretion (except following a Change
in Control as defined in Section 14.2), elect to revise the payment of a single
lump sum and instead to pay the termination benefits over a period of three (3)
years in substantially equal annual installments.
ARTICLE VIII
DEATH BENEFITS
8.1 Death of Employee Prior to Early Retirement Date. If a Participant
dies prior to Termination of Employment and before reaching Early Retirement
Date or Normal Retirement Date, the Participant's Beneficiary will receive
payment of the Participant's Deferral Account in a single lump sum if the
balance is less than fifty thousand dollars ($50,000), and in either a single
lump sum or in sixty (60) substantially equal monthly installments (as elected
by the Participant in his or her
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Participation Agreement) if the balance is fifty thousand dollars ($50,000) or
more. Interest on the Deferral Account not yet paid at death shall be credited
at the Declared Rate.
8.2 Death of Employee on or After Early Retirement Date. If a Participant
dies prior to Termination of Employment and on or after reaching Early
Retirement Date or Normal Retirement Date, the Participant's Beneficiary will
receive payment of the Participant's Deferral Account in a single lump sum
payment or in sixty (60), one hundred twenty (120), or one hundred eighty (180)
substantially equal monthly installments (as elected by the Participant in his
or her Participation Agreement). The Beneficiary may request that the
Committee accelerate installment payments into a single lump sum payment and
the Committee shall decide, in its sole discretion, whether to so accelerate
based on factors, such as the Beneficiary's needs and Plan liquidity, deemed
appropriate under the circumstances by the Committee. Interest on the Deferral
Account not yet paid at death shall be credited at the Retirement Rate.
8.3 Death After Termination of Employment. If a Participant dies after
Termination of Employment, the Participant's Beneficiary will receive payment
of the Participant's Deferral Account (or remaining unpaid portion if
distributions have already begun) in the same manner and in all respects as the
Participant was entitled to receive (if the Participant continued to live)
pursuant to the terms of Article VI (Retirement Benefits) or Article VII
(Termination Benefits) whichever is applicable. Notwithstanding the foregoing,
if, and only if, the Participant dies after having reached Early Retirement
Date or Normal Retirement Date at the time of Termination of Employment, the
Beneficiary may request that the Committee accelerate any remaining installment
payments into a single lump sum payment and the Committee shall decide, in its
sole discretion, whether to so accelerate based on factors, such as the
Beneficiary's needs and Plan liquidity, deemed appropriate under the
circumstances by the Committee.
ARTICLE IX
DISABILITY
9.1 Continuation of Participation. If a Participant suffers a Disability,
the Participant shall be deemed not to incur a Termination of Employment if,
and only
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as long as, he or she continues on the payroll of the Company for Salary or
Bonuses. In such event, the Participant may continue participation in the Plan
on the same basis as other Participants, provided that payments to the
Participant made under programs of the Company for Short-Term Disability,
Long-Term Disability, or sick pay may not be treated as Salary or Bonuses for
purposes of a Deferral Election.
9.2 Crediting of Interest and Financial Hardship Withdrawals. Consistent
with Section 9.1, in determining whether the applicable rate of interest to be
credited is the Declared Rate or the Retirement Rate, and in determining the
availability of a Financial Hardship withdrawal, a Participant who suffers a
Disability shall not be deemed to incur a Termination of Employment until the
time that he or she ceases to receive Salary or Bonuses on the payroll of the
Company.
ARTICLE X
IN-SERVICE DISTRIBUTIONS
10.1 Election to Take In-Service Distributions. A Participant may elect in
each Deferral Election Form, for that particular Deferral Election, to receive
in the future an In-Service Distribution from his or her Deferral Account.
10.2 Maximum In-Service Distribution. An In-Service Distribution may be
stated as a specified dollar amount or as a percentage of up to one hundred
percent (100%) of the amount of the particular Deferral Election. Interest on
any In-Service Distributions shall be credited at the Declared Rate if the
distribution is made prior to the Participant reaching Early Retirement Date or
Normal Retirement Date, and at the Retirement Rate if the distribution is made
on or after the Participant reaches the Early Retirement Date or Normal
Retirement Date. Notwithstanding the election under this Section, if benefit
payments with respect to a Deferral Election are otherwise made at a time
earlier than elected under an In-Service Distribution, for example due to an
Unscheduled Withdrawal, the In-Service Distribution shall be superseded by such
earlier distribution event and shall be reduced or eliminated to such extent.
10.3 Timing of In-Service Distribution. The In-Service Distribution shall
be paid to the Participant in a single lump sum or in four (4) substantially
equal annual
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installments as elected by the Participant in the Deferral Election Form.
However, in no event shall the In-Service Distribution be paid or commence at
the time before the fifth (5th) year following the first business day of the
Deferral Period to which the In-Service Distribution relates.
ARTICLE XI
UNSCHEDULED AND FINANCIAL HARDSHIP WITHDRAWALS
11.1 Unscheduled Withdrawals. A Participant may take Unscheduled
Withdrawals (but no more than one in any Plan Year) from his or her Deferral
Account. The amount of any Unscheduled Withdrawal shall be equal to the
portion of the Deferral Account attributable to one or more Deferral Elections
that have been previously completed and shall include interest credited at the
Declared Rate.
11.2 Financial Hardship Withdrawal. A Participant may request that the
Committee permit him or her to take a withdrawal or withdrawals on account of
Financial Hardship (as defined in Section 2.20). In such event, the Committee
shall determine in its sole discretion whether a Financial Hardship exists and,
if it so determines, whether the Participant should be permitted to take such a
withdrawal. The Committee shall also determine the amount of the permitted
withdrawal, which shall not exceed the amount necessary to address the
Financial Hardship, and whether the Participant must reduce or cease a current
Deferral Election, if any, as a condition for a Financial Hardship withdrawal.
11.3 Penalty for Unscheduled Withdrawals. There shall be a penalty charged
against the Deferral Account of a Participant at the time of an Unscheduled
Withdrawal. The penalty shall be equal to ten percent (10%) of the Unscheduled
Withdrawal, except the penalty shall be five percent (5%) if the Unscheduled
Withdrawal is made within two (2) years following a Change in Control (as
defined in Section 14.2). In addition to the foregoing penalty, upon taking an
Unscheduled Withdrawal a Participant's current Deferral Election, if any, shall
automatically be deemed terminated and the Participant may not make a new
Deferral Election for the next following Deferral Period.
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ARTICLE XII
ADDITIONAL BENEFIT PAYMENT RULES
12.1 Small Benefit Payments. Notwithstanding any other provision of the
Plan, in the event that the payment of a Deferral Account (or total remaining
installments under any method) to a Participant or Beneficiary is ten thousand
dollars ($10,000) or less, the Company may, in its sole discretion, elect to
make such payment(s) in a single lump sum payment as soon as administratively
practicable.
12.2 Constructive Receipt. The Committee may change any election or option
available under the Plan, or the form or timing of any benefit payment, if the
Committee determines, based on the advice of counsel or other consultants to
the Company, that such a change is necessary or advisable in order to avoid or
limit the risk of adverse tax consequences to Participants or Beneficiaries
based on application of the doctrine of "constructive receipt" or a similar
Federal or State tax principle.
12.3 Postponement of Payment. If a distribution of all or part of a
Deferral Account would not be deductible to the Company because of the
restrictions imposed by Section 162(m) of the Code (or any successor
provision), such distribution shall be postponed (to the extent necessary) to
the first business day of the first Plan Year in which the limitation on
deductibility would not apply. Any postponed distribution under this Section
shall be credited with interest at the rate otherwise applicable to the
Deferral Account at the time when the distribution was originally scheduled for
payment.
12.4 Commencement Date and Interest Crediting for Benefit Payments. Unless
the Plan specifically provides otherwise, benefit payments (whether a single
lump sum payment or installments) shall commence to a Participant or
Beneficiary no later than sixty (60) days from the date of the event, e.g.,
Termination of Employment or request for Unscheduled Withdrawal, that gives
rise to such payments. Installment payments shall be made on the same day of
each month or year (depending on whether monthly or annual installments apply)
following the initial payment. Interest on a single lump sum payment or on a
first installment payment shall be credited through the end of the month in
which the date of the event that gives rise to such payment occurs. Interest
on subsequent installment payments shall be credited through the end of the
month preceding payment.
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ARTICLE XIII
ADMINISTRATION OF THE PLAN
13.1 Administration by Committee. This Plan shall be administered by the
same committee (the "Committee") which is appointed to administer the Pension
Plan. A member of the Committee may be a Participant in this Plan; provided,
however, that any action to be taken by the Committee solely with respect to
the particular interest in this Plan of a Committee member shall be taken by
the remaining members of the Committee.
13.2 Committee Authority; Rules and Regulations. The Committee shall have
discretionary authority to (a) make, amend, interpret and enforce all
appropriate rules and regulations for the administration of the Plan, (b)
decide or resolve any and all questions, including interpretations of the Plan,
as may arise in connection with the Plan, and (c) take or approve all such
other actions relating to the Plan (other than amending or terminating the Plan
or making a final determination concerning an application for Plan benefits as
set forth in Section 13.6 hereof); provided, however, that the Board may, by
written notice to the Committee, withdraw all or any part of the Committee's
authority at any time, in which case such withdrawn authority shall immediately
revest in the Board. Subject to Section 13.6 hereof, the decision or action of
the Committee in respect of any question arising out of or in connection with
the administration, interpretation and application of this Plan and the rules
and regulations promulgated hereunder shall be final, conclusive and binding
upon all persons having any interest in the Plan.
13.3 Appointment of Agents. In the administration of the Plan, the Board
and the Committee may from time to time employ agents (which may include
officers and employees of the Company) and delegate to them such administrative
duties as it sees fit and may from time to time consult with counsel who may be
counsel to the Company.
13.4 Application for Benefits. The Committee may require any person
claiming benefits under the Plan to submit an application therefor, together
with such documents and information as the Committee may require. In the case
of any person suffering from a disability or other condition which prevents
such person from making personal application for benefits, the Committee may,
in its discretion, permit application to be made by another person acting on
his or her behalf. Notwithstanding
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the foregoing, if the Committee shall have all information necessary to
determine the amount and form of Plan benefits payable to a Participant or
Beneficiary who is entitled to benefit payments under this Plan (including, to
the extent applicable and without limiting the generality of the foregoing, the
name, age, sex and proper mailing address of all parties entitled to benefit
payments), then the failure of a Participant or Beneficiary to file an
application for benefits shall not cause the Committee to defer the
commencement of benefit payments beyond the benefit commencement date required
under this Plan.
13.5 Action on Application. Within sixty (60) days following receipt of an
application and all necessary documents and information, the Committee shall
furnish the claimant with written notice of the decision rendered with respect
to such application. Should special circumstances require an extension of time
for processing the claim, written notice of the extension shall be furnished to
the claimant prior to the expiration of the initial sixty (60) day period. The
notice shall indicate the special circumstances requiring an extension of time
and the date by which a final decision is expected to be rendered. In no event
shall the period of the extension exceed ninety (90) days from the end of the
initial sixty (60) day period. In the case of a denial of the claimant's
application, the written notice thereof shall set forth specific reasons for
the denial, with references to the Plan provisions upon which the denial is
based, a description of any additional information or material necessary to
perfect the application (together with an explanation why such material or
information is necessary), and an explanation of the Plan's claim review
procedure.
13.6 Appeal of Committee Decision.
(a) A claimant who does not agree with the decision rendered by the
Committee with respect to his application may appeal such decision to the
Board. The appeal must be in writing and must be filed with the Board within
sixty-five (65) days after the date of notice of the Committee's decision with
respect to the application, or, if the application has neither been approved
nor denied within the applicable period provided in Section 13.5 hereof, then
the appeal must be filed within sixty-five (65) days after the expiration of
such applicable period.
(b) The claimant may request that his or her application be given full
and fair review by the Board. The claimant may review all pertinent documents
and submit issues and comments to the Board in writing in connection with the
appeal. The decision of the Board shall be made promptly, and not later than
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sixty (60) days after the Board's receipt of a request for review and all
supporting documentation and information to be submitted by the claimant,
unless special circumstances require an extension of time for processing, in
which case a decision shall be rendered as soon as possible, but not later than
one hundred twenty (120) days after receipt of a request for review and such
supporting documentation and information. The Board's decision on review shall
be in writing and shall include specific reasons for the decision, written in a
manner calculated to be understood by the claimant, with specific reference to
the pertinent Plan provisions upon which the decision is based.
ARTICLE XIV
CHANGE IN CONTROL
14.1 Effect of a Change in Control. Notwithstanding any other provision of
the Plan, in the event that a Change in Control (as defined in Section 14.2)
occurs on or after the Effective Date hereof, each Participant shall be
entitled to have interest credited for all purposes under the Plan at the
Retirement Rate if (a) he or she has a Termination of Employment within
twenty-four (24) months after the date such Change in Control occurs and (b)
the Termination of Employment constitutes a "Qualified Termination" under the
Company's Change in Control policies in effect immediately prior to the Change
in Control. In addition, notwithstanding Section 16.6, the Company may not,
after a Change in Control, amend the Plan to change downward the method of
determining the interest rate to be credited to the Deferral Accounts of
Participants thereafter without the written consent of such Participants.
14.2 Change in Control. As used in this Plan, "Change in Control" shall
mean the following and shall be deemed to occur if any of the following events
occur:
(a) Any "person," as such term is used in Sections 13(d) and 14(d) of
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), is or
becomes the "beneficial owner" (as defined in Rule 13d-3 under the Exchange
Act), directly or indirectly, of securities of the Company representing twenty
percent (20%) or more of the combined voting power of the Company's then
outstanding voting securities;
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(b) Individuals who, as of the Effective Date hereof, constitute the
Board of Directors (the "Incumbent Board") cease for any reason to constitute
at least a majority of the Board of Directors, provided that any person
becoming a director subsequent to the Effective Date hereof whose election, or
nomination for election by the Company's stockholders, is approved by a vote of
at least a majority of the directors then comprising the Incumbent Board (other
than an election or nomination of an individual whose initial assumption of
office is in connection with an actual or threatened election contest relating
to the election of the directors of the Company, as such terms are used Rule
14a-11 of Regulation 14A promulgated under the Exchange Act) shall, for the
purposes of this Plan, be considered as though such person were a member of the
Incumbent Board of the Company;
(c) The stockholders of the Company approve a merger or
consolidation with any other corporation, other than
(i) a merger or consolidation which would result in the voting
securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being
converted into voting securities of another entity) more than eighty
percent (80%) of the combined voting power of the voting securities
of the Company or such other entity outstanding immediately after
such merger or consolidation, and
(ii) a merger or consolidation effected to implement a
recapitalization of the Company (or similar transaction) in which
no person acquires twenty percent (20%) or more of the combined
voting power of the Company's then outstanding voting securities; or
(d) The stockholders of the Company approve a plan of complete
liquidation of the Company or an agreement for the sale or other disposition by
the Company of all or substantially all of the Company's assets.
Notwithstanding the preceding provisions of this Section 14.2, a Change in
Control shall not be deemed to have occurred (1) if the "person" described in
the preceding provisions of this Section 14.2 is an underwriter or underwriting
syndicate that has acquired the ownership of twenty percent (20%) or more of
the combined voting power of the Company's then outstanding voting securities
solely in connection with
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a public offering of the Company's securities, or (2) if the "person" described
in the preceding provisions of this Section 14.2 is an employee stock ownership
plan or other employee benefit plan maintained by the Company (or any of its
affiliated companies) that is qualified under the provisions of the Code.
ARTICLE XV
ESTABLISHMENT OF TRUST AND INSURANCE CONTRACTS
15.1 Establishment of Trust. Contemporaneous with the adoption of this
Plan, the Company has established the Trust Agreement for Allergan, Inc.
Executive Deferred Compensation Plan (the "Trust" or "Trust Agreement"). The
Trust created thereunder is a grantor trust within the meaning of subpart E,
part I, subchapter J, chapter 1, subtitle A of the Code. Mellon Bank, N.A. has
been named as Trustee under such Trust Agreement. The provisions of the Trust
Agreement are incorporated herein by reference.
15.2 Funding of Trust. All amounts of Base Salary or Bonuses that are
subject to Deferral Elections by Participants under this Plan shall be
contributed by the Company to the Trust at or about the same time as such
amounts are credited to the Deferral Accounts of Participants.
15.3 Investment in Insurance Contracts. The Committee shall direct the
Trustee to invest the majority or all of the assets of the Trust in life
insurance contracts, to be selected by the Committee, on the lives of
Participants. In order for a Participant's Participation Agreement to be
effective, the Committee may require that each Participant cooperate in signing
an insurance application, submit to medical examination, and provide any
relevant information to third parties, including the insurance company(ies) or
outside consultants. Such information shall be held in confidence by those who
receive it and such information shall not be provided to the Committee or the
Company. Participation shall not be denied to an Eligible Employee because he
or she is not insurable or must be rated in order for insurance to be issued.
Notwithstanding any other provision in this Plan, if insurance is denied or
discontinued because a Participant fails to disclose (or makes a material
misrepresentation) of medical or other information, or if the Participant
commits suicide during the first two (2) years of participation in the Plan,
any amounts which are deferred by the Participant under a Deferral Election
shall be repaid to the Participant with interest
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credited at eighty percent (80%) of the Declared Rate and no other benefits
shall be due to Participant.
ARTICLE XVI
MISCELLANEOUS PROVISIONS
16.1 Designation of Beneficiary. A Participant shall be entitled to
designate one or more individuals or entities, in any combination, as his or
her "Beneficiary" or "Beneficiaries" to receive any Plan payments to which such
Participant is entitled as of, or by reason of, his or her death. Any such
designation may be made or changed at any time prior to the Participant's death
by written notice filed with the Committee, with such written notice to be in
such form and contain such information as the Committee may from time to time
determine. In the event that either (a) a Beneficiary designation is not on
file at the date of a Participant's death, (b) no Beneficiary survives the
Participant, or (c) no Beneficiary is living at the time any payment becomes
payable under this Plan, then, for purposes of making any further payment of
any unpaid benefits under this Plan, such Participant's Beneficiary or
Beneficiaries shall be deemed to be the estate of the Participant.
16.2 Payments During Incapacity. In the event a Participant (or
Beneficiary) is under mental or physical incapacity at the time of any payment
to be made to such Participant (or Beneficiary) pursuant to this Plan, any such
payment may be made to the conservator or other legally appointed personal
representative having authority over and responsibility for the person or
estate of such Participant (or Beneficiary), as the case may be, and for
purposes of such payment references in this Plan to the Participant (or
Beneficiary) shall mean and refer to such conservator or other personal
representative, whichever is applicable. In the absence of any lawfully
appointed conservator or other personal representative of the person or estate
of the Participant (or Beneficiary), any such payment may be made to any person
or institution that has apparent responsibility for the person and/or estate of
the Participant (or Beneficiary) as determined by the Committee. Any payment
made in accordance with the provisions of this Section 16.2 to a person or
institution other than the Participant (or Beneficiary) shall be deemed for all
purposes of this Plan as the equivalent of a payment to such Participant (or
Beneficiary), and the Company shall have no further obligation or
responsibility with respect to such payment.
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16.3 Prohibition Against Assignment. Except as otherwise expressly
provided in Sections 16.1 and 16.2 hereof, the rights, interests and benefits
of a Participant under this Plan (a) may not be sold, assigned, transferred,
pledged, hypothecated, gifted, bequeathed or otherwise disposed of to any other
party by such Participant or any Beneficiary, executor, administrator, heir,
distributee or other person claiming under such Participant, and (b) shall not
be subject to execution, attachment or similar process. Any attempted sale,
assignment, transfer, pledge, hypothecation, gift, bequest or other disposition
of such rights, interests or benefits contrary to the foregoing provisions of
this Section 16.3 shall be null and void and without effect.
16.4 Binding Effect. The provisions of this Plan shall be binding upon the
Company, the Participants and any successor-in-interest to the Company or to
any Participant.
16.5 No Transfer of Interest. Other than as provided in Article XV and in
the Trust Agreement, benefits under this Plan shall be payable solely from the
general assets of the Company and no person shall be entitled to look to any
source for payment of such benefits other than the general assets of the
Company. The Company shall have and possess all title to, and beneficial
interest in, any and all funds or reserves maintained or held by the Company on
account of any obligation to pay benefits as required under this Plan, whether
or not earmarked by the Company as a fund or reserve for such purpose; any such
funds or reserves shall be subject to the claims of the creditors of the
Company, and the provisions of this Plan are not intended to create, and shall
not be interpreted as vesting, in any Participant, Beneficiary or other person,
any right to or beneficial interest in any such funds or reserves.
16.6 Amendment or Termination of the Plan. The Company, by action of its
Board of Directors, may amend this Plan from time to time in any respect that
it deems appropriate or desirable, and may terminate this Plan at any time;
provided, however, that any such Plan amendment or Plan termination shall not,
without a Participant's written consent, be given effect with respect to such
Participant to the extent such Plan amendment or Plan termination operates to
reduce or eliminate (except to the extent that amounts are distributed under
the Plan) such Participant's Deferral Account as of the date of such amendment
or termination. In addition, if the Board amends the Plan so as to make a
change in the formula for determining the interest rate to be credited under
the Plan, such amendment shall not become effective until thirty (30) days
advance written notice is given to Participants.
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16.7 No Right to Employment. This Plan is voluntary on the part of the
Company, and the Plan shall not be deemed to constitute an employment contract
between the Company and any Participant, nor shall the adoption or existence of
the Plan or any provision contained in the Plan be deemed to be a required
condition of the employment of any Participant. Nothing contained in this Plan
shall be deemed to give any Participant the right to continued employment with
the Company, and the Company may terminate any Participant at any time, in
which case the Participant's rights arising under this Plan shall be only those
expressly provided under the terms of this Plan.
16.8 Notices. All notices, requests, or other communications (hereinafter
collectively referred to as "Notices") required or permitted to be given
hereunder or which are given with respect to this Plan shall be in writing and
may be personally delivered, or may be deposited in the United States mail,
postage prepaid and addressed as follows:
To the Company Allergan, Inc.
or the Committee at: Attention: Administrative Committee
(Executive Deferred Compensation Plan)
2525 Dupont Drive
Irvine, CA 92715-1599
To Participant at: The Participant's residential mailing address as
reflected in the Company's employment records
A Notice which is delivered personally shall be deemed given as of the date of
personal delivery, and a Notice mailed as provided herein shall be deemed given
on the second business day following the date so mailed. Any Participant may
change his or her address for purposes of Notices hereunder pursuant to a
Notice to the Committee, given as provided herein, advising the Committee of
such change. The Company and/or the Committee may at any time change its
address for purposes of Notices hereunder pursuant to a Notice to all
Participants, given as provided herein, advising the Participants of such
change.
16.9 Governing Law. This Plan shall be governed by, interpreted under, and
construed and enforced in accordance with ERISA and, to the extent applicable,
the internal laws (and not the laws pertaining to conflicts or choice of laws),
of the
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State of California applicable to agreements made and to be performed wholly
within the State of California.
16.10 Titles and Headings; Gender of Terms. Article and Section headings
herein are for reference purposes only and shall not be deemed to be part of
the substance of this Plan or in any way to enlarge or limit the meaning or
interpretation of any provision in this Plan. Use in this Plan of the
masculine, feminine or neuter gender shall be deemed to include each of the
omitted genders if the context so requires.
16.11 Severability. In the event that any provision of this Plan is found
to be invalid or otherwise unenforceable by a court or other tribunal of
competent jurisdiction, such invalidity or unenforceability shall not be
construed as rendering any other provision contained herein invalid or
unenforceable, and all such other provisions shall be given full force and
effect to the same extent as though the invalid and unenforceable provision was
not contained herein.
16.12 Tax Effect of Plan. The Company does not warrant any tax benefit nor
any financial benefit under the Plan. Without limiting the foregoing,
directors, officers, and employees of the Company (other than in their capacity
as Participants) shall be held harmless by the Company from, and shall not be
subject to any liability on account of, any Federal or State tax consequences
or any consequences under ERISA of any determination as to the amount of Plan
benefits to be paid, the method by which Plan benefits are paid, the persons to
whom Plan benefits are paid, or the commencement or termination of the payment
of Plan benefits.
IN WITNESS WHEREOF, the Company has caused this Plan to be executed by its
duly authorized officer effective as of the Effective Date hereof.
ALLERGAN, INC.,
a Delaware corporation
By: _____________________________________
Its: _____________________________________
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