Exhibit 10.65
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Amgen Nonqualified Deferred Compensation Plan
Plan Document
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Nonqualified Deferred Compensation Plan
Effective January 1, 2002
Copyright (C) 2001
By Clark/Bardes Consulting -- Compensation Resource Group
All Rights Reserved
TABLE OF CONTENTS
Page
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Purpose............................................................................................. 1
ARTICLE 1 Definitions............................................................................. 1
ARTICLE 2 Selection/Enrollment/Eligibility........................................................ 5
2.1 Selection by Committee.................................................................. 6
2.2 Enrollment Requirements................................................................. 6
2.3 Eligibility/Commencement of Participation............................................... 6
2.4 Termination of Participation and/or Deferrals........................................... 6
ARTICLE 3 Deferral Commitments/Company Matching/Crediting/Taxes................................... 6
3.1 Minimum Deferrals....................................................................... 6
3.2 Maximum Deferrals....................................................................... 7
3.3 Election to Defer/Effect of Election Form............................................... 7
3.4 Withholding of Annual Deferral Amounts.................................................. 8
3.5 Annual Company Contribution Amount...................................................... 8
3.6 Vesting................................................................................. 8
3.7 Crediting/Debiting of Account Balances.................................................. 9
3.8 Distribution............................................................................ 10
ARTICLE 4 Short-Term Payout/Unforeseeable Financial Emergencies/Withdrawal Election............... 11
4.1 Short-Term Payout....................................................................... 11
4.2 Other Benefits Take Precedence Over Short-Term.......................................... 11
4.3 Withdrawal Payout/Suspensions for Unforeseeable Financial Emergencies................... 11
4.4 Withdrawal Election..................................................................... 12
ARTICLE 5 Retirement Benefit...................................................................... 12
5.1 Retirement Benefit...................................................................... 12
5.2 Payment of Retirement Benefit........................................................... 12
5.3 Death Prior to Completion of Retirement Benefit......................................... 13
ARTICLE 6 Pre-Retirement Survivor Benefit......................................................... 13
6.1 Pre-Retirement Survivor Benefit......................................................... 13
6.2 Payment of Pre-Retirement Survivor Benefit.............................................. 13
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ARTICLE 7 Termination Benefit..................................................................... 14
7.1 Termination Benefit..................................................................... 14
7.2 Payment of Termination Benefit.......................................................... 14
ARTICLE 8 Disability Waiver and Benefit........................................................... 14
8.1 Disability Waiver....................................................................... 14
8.2 Continued Eligibility/Disability Benefit................................................ 14
ARTICLE 9 Beneficiary Designation................................................................. 15
9.1 Beneficiary............................................................................. 15
9.2 Beneficiary Designation Change/Spousal Consent.......................................... 15
9.3 Acknowledgement......................................................................... 15
9.4 No Beneficiary Designation.............................................................. 15
9.5 Doubt as to Beneficiary................................................................. 15
9.6 Discharge of Obligations................................................................ 16
ARTICLE 10 Leave of Absence........................................................................ 16
10.1 Paid Leave of Absence................................................................... 16
10.2 Unpaid Leave of Absence................................................................. 16
ARTICLE 11 Termination/Amendment or Modification................................................... 16
11.1 Termination............................................................................. 16
11.2 Amendment............................................................................... 17
11.3 Plan Agreement.......................................................................... 17
11.4 Effect of Payment....................................................................... 17
ARTICLE 12 Administration.......................................................................... 17
12.1 Committee Duties........................................................................ 17
12.2 Administration Upon Change In Control................................................... 18
12.3 Agents.................................................................................. 18
12.4 Binding Effect of Decisions............................................................. 18
12.5 Indemnity of Committee.................................................................. 18
12.6 Employer Information.................................................................... 19
ARTICLE 13 Other Benefits and Agreements........................................................... 19
13.1 Coordination with Other Benefits........................................................ 19
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ARTICLE 14 Claims Procedures....................................................................... 19
14.1 Presentation of Claim................................................................... 19
14.2 Notification of Decision................................................................ 19
14.3 Review of a Denied Claim................................................................ 20
14.4 Decision on Review...................................................................... 20
14.5 Legal Action............................................................................ 20
ARTICLE 15 Trust................................................................................... 21
15.1 Establishment of the Trust.............................................................. 21
15.2 Interrelationship of the Plan and the Trust............................................. 21
15.3 Distributions From the Trust............................................................ 21
3.10 Investment of Trust Assets.............................................................. 21
ARTICLE 16 Miscellaneous........................................................................... 21
16.1 Status of Plan.......................................................................... 21
16.2 Unsecured General Creditor.............................................................. 22
16.3 Employer's Liability.................................................................... 22
16.4 Nonassignability........................................................................ 22
16.5 Not a Contract of Employment............................................................ 22
16.6 Furnishing Information.................................................................. 22
16.7 Terms .................................................................................. 23
16.8 Captions................................................................................ 23
16.9 Governing Law........................................................................... 23
16.10 Notice.................................................................................. 23
16.11 Successors.............................................................................. 23
16.12 Spouse's Interest....................................................................... 23
16.13 Validity................................................................................ 24
16.14 Incompetent............................................................................. 24
16.15 Court Order............................................................................. 24
16.16 Distribution in the Event of Taxation................................................... 24
16.17 Insurance............................................................................... 24
16.18 Legal Fees To Enforce Rights After Change in Control.................................... 25
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AMGEN NONQUALIFIED DEFERRED COMPENSATION PLAN
Effective January 1, 2002
Purpose
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The purpose of this Plan is to provide specified benefits to a select group
of management or highly compensated Employees and Directors who contribute
materially to the continued growth, development and future business success of
Amgen, Inc., a Delaware corporation, and its subsidiaries, if any, that sponsor
this Plan. This Plan shall be unfunded for tax purposes and for purposes of
Title I of ERISA.
ARTICLE 1
Definitions
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For purposes of this Plan, unless otherwise clearly apparent from the
context, the following phrases or terms shall have the following indicated
meanings:
1.1 "Account Balance" shall mean, with respect to a Participant, a credit on
the records of the Employer equal to the sum of (i) the Deferral Account
balance and (ii) the vested Company Contribution Account balance. The
Account Balance, and each other specified account balance, shall be a
bookkeeping entry only and shall be utilized solely as a device for the
measurement and determination of the amounts to be paid to a Participant,
or his or her designated Beneficiary, pursuant to this Plan.
1.2 "Annual Base Salary" shall mean the wages, salaries, fees for professional
services, and other amounts received (without regard to whether or not an
amount is paid in cash) for personal services actually rendered in the
course of employment with any Employer to the extent that the amounts are
includable in gross income (including, but not limited to, commissions paid
to salespersons, compensation for services on the basis of a percentage of
profits, commissions on reimbursements or other expense allowances under a
nonaccountable plan (as described in Treasury Regulation Section 1.62-
2(c)), but excluding any "goods and services allowance" provided to certain
expatriate staff members. Notwithstanding anything else in the Plan to the
contrary, Annual Base Salary shall not include the Annual Bonus. Annual
Base Salary shall be computed without regard to any election to reduce or
defer salary under the Amgen, Inc. Retirement and Savings Plan or any other
employee benefit plan, including the cafeteria plan under Section 125 of
the Code. Annual Base Salary shall not include: (a) any Company
contributions to the Amgen, Inc. Retirement and Savings Plan or any other
employee benefit plan for or on account of the Employee, except as
otherwise provided in the preceding sentence or (b) the items described in
Treasury Regulation Section 1.415-2(d)(3), which, among other items, would
exclude from compensation amounts realized from the exercise of a
nonqualified stock option (or when restricted stock (or property) held by
an Employee either becomes freely transferable or is no longer subject to a
substantial risk of forfeiture under Section 83 of the
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Code) and amounts realized from the sale, exchange or other disposition of
stock acquired under a qualified stock option.
1.3 "Annual Bonus" shall mean the wages, salaries, fees for professional
services, and other amounts received (without regard to whether or not an
amount is paid in cash) for personal services actually rendered in the
course of employment with any Employer to the extent that the amounts are
includable in gross income and are paid pursuant to the Management
Incentive Plan (MIP).
1.4 "Annual Company Contribution Amount" shall mean, for any one Plan Year, the
amount determined in accordance with Section 3.5.
1.5 "Annual Deferral Amount" shall mean that portion of a Participant's Annual
Base Salary Annual Bonus and/or Director Fees, as applicable, that a
Participant elects to have, and is deferred, in accordance with Article 3,
for any one Plan Year.
1.6 "Annual Installment Method" shall be an annual installment payment over the
number of years selected by the Participant in accordance with this Plan,
calculated as follows: The Account Balance of the Participant shall be
calculated as of the most recent Valuation Date. The annual installment
shall be calculated by multiplying this balance by a fraction, the
numerator of which is one, and the denominator of which is the remaining
number of annual payments due the Participant. By way of example, if the
Participant elects a 10-year Annual Installment Method, the first payment
shall be 1/10 of the Account Balance as of the most recent Valuation Date.
The following year, the payment shall be 1/9 of the Account Balance as of
the most recent Valuation Date. Each annual installment shall be paid on
or as soon as practicable after the amount is calculated.
1.7 "Beneficiary" shall mean one or more persons, trusts, estates or other
entities, designated in accordance with Article 9, or entitled under
Article 9 in the absence of a designation, that are entitled to receive
benefits under this Plan upon the death of a Participant.
1.8 "Beneficiary Designation Form" shall mean the form established from time to
time by the Committee that a Participant completes, signs and returns to
the Committee to designate one or more Beneficiaries.
1.9 "Board" shall mean the board of directors of the Company.
1.10 "Change in Control" shall have the meaning set forth in the Amgen, Inc.
Change In Control Severance Plan, as it may be amended from time to time.
1.11 "Claimant" shall have the meaning set forth in Section 14.1.
1.12 "Code" shall mean the Internal Revenue Code of 1986, as it may be amended
from time to time.
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1.13 "Committee" shall mean the committee described in Article 12.
1.14 "Company" shall mean Amgen, Inc., and any successor to all or substantially
all of the Company's assets or business.
1.15 "Company Contribution Account" shall mean (i) the sum of the Participant's
Annual Company Contribution Amounts, plus (ii) amounts credited (net of
amounts debited) in accordance with all the applicable crediting provisions
of this Plan that relate to the Participant's Company Contribution Account,
less (iii) all distributions made to the Participant or his or her
Beneficiary pursuant to this Plan that relate to the Participant's Company
Contribution Account.
1.16 "Deduction Limitation" shall mean the following described limitation on a
benefit that may otherwise be distributable pursuant to the provisions of
this Plan. Except as otherwise provided, this limitation shall be applied
to all distributions that are "subject to the Deduction Limitation" under
this Plan. If an Employer determines in good faith prior to a Change in
Control that there is a reasonable likelihood that any compensation paid to
a Participant for a taxable year of the Employer would not be deductible by
the Employer solely by reason of the limitation under Code Section 162(m),
then to the extent deemed necessary by the Employer to ensure that the
entire amount of any distribution to the Participant pursuant to this Plan
prior to the Change in Control is deductible, the Employer may defer all or
any portion of a distribution under this Plan. Any amounts deferred
pursuant to this limitation shall continue to be credited and debited with
additional amounts in accordance with Section 3.13 below, even if such
amount is being paid out in installments. The amounts so deferred and
amounts credited (net of amounts debited) thereon shall be distributed to
the Participant or his or her Beneficiary (in the event of the
Participant's death) at the earliest possible date, as determined by the
Employer in good faith, on which the deductibility of compensation paid or
payable to the Participant for the taxable year of the Employer during
which the distribution is made will not be limited by Section 162(m), or if
earlier, the effective date of a Change in Control. Notwithstanding
anything to the contrary in this Plan, the Deduction Limitation shall not
apply to any distributions made after a Change in Control.
1.17 "Deferral Account" shall mean (i) the sum of all of a Participant's Annual
Deferral Amounts, plus (ii) amounts credited (net of amounts debited) in
accordance with all the applicable provisions of this Plan that relate to
the Participant's Deferral Account, less (iii) all distributions made to
the Participant or his or her Beneficiary pursuant to this Plan that relate
to his or her Deferral Account.
1.18 "Director" shall mean any member of the Board.
1.19 "Director Fees" shall mean the annual fees paid by any Employer, including
retainer fees and meeting fees, as compensation for serving on the Board.
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1.20 "Disability" shall mean that the Participant is determined under Title II
or XVI of the Social Security Act, to have been disabled. The Participant
must submit evidence to the Committee of the Social Security
Administration's determination of disability before a person is to be
deemed Disabled under this Plan.
1.21 "Disability Benefit" shall mean the benefit set forth in Article 8.
1.22 "Election Form" shall mean the form established from time to time by the
Committee that a Participant completes, signs and returns to the
Committee to make an election under the Plan.
1.23 "Employee" shall mean a person whom an Employer classifies as an
employee.
1.24 "Employer" shall mean the Company or any of its subsidiaries or
affiliates (now in existence or hereafter formed or acquired) that have
been selected by the Board to participate in the Plan and have adopted
the Plan by permitting their Employees to participate in the Plan.
1.25 "ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as it may be amended from time to time.
1.26 "401(k) Plan" shall be that certain Amgen Inc. Retirement and Savings
Plan adopted by the Company, as it may be amended from time to time.
1.27 "Participant" shall mean any Employee (i) who is selected by the
Committee from among the highly compensated or management employees of
the Employer to participate in the Plan, (ii) who elects to participate
in the Plan, (iii) who signs a Plan Agreement, an Election Form and a
Beneficiary Designation Form, (iv) whose signed Plan Agreement, Election
Form and Beneficiary Designation Form are accepted by the Committee, (v)
who commences participation in the Plan, and (vi) whose Plan Agreement
has not terminated. A spouse or former spouse of a Participant shall not
be treated as a Participant in the Plan or have an account balance under
the Plan, even if he or she has an interest in the Participant's benefits
under the Plan as a result of applicable law or property settlements
resulting from legal separation or divorce.
1.28 "Plan" shall mean the AMGEN NONQUALIFIED DEFERRED COMPENSATION PLAN,
effective January 1, 2002, which shall be evidenced by this instrument
and by each Plan Agreement, as they may be amended from time to time.
1.29 "Plan Agreement" shall mean a written agreement, as may be amended from
time to time, which is entered into by and between an Employer and a
Participant. Each Plan Agreement executed by a Participant and the
Participant's Employer shall provide for the entire benefit to which such
Participant is entitled under the Plan; should there be more than one
Plan Agreement, the Plan Agreement bearing the latest date of acceptance
by the Employer shall supersede all previous Plan Agreements in their
entirety and shall govern such entitlement. The terms of any Plan
Agreement may be different for any Participant, and any Plan
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Agreement may provide additional benefits not set forth in the Plan or
limit the benefits otherwise provided under the Plan; provided, however,
that any such additional benefits or benefit limitations must be agreed
to by both the Employer and the Participant.
1.30 "Plan Year" shall mean a period beginning on January 1 of each calendar
year (beginning January 1, 2002), and continuing through December 31 of
such calendar year.
1.31 "Pre-Retirement Survivor Benefit" shall mean the benefit set forth in
Article 6.
1.32 "Retirement", "Retire(s)" or "Retired" shall mean, with respect to an
Employee, severance from employment from all Employers for any reason
other than death or Disability at such time as the Employee is at least
sixty (60) years old.
1.33 "Retirement Benefit" shall mean the benefit set forth in Article 5.
1.34 "Short-Term Payout" shall mean the payout set forth in Section 4.1.
1.35 "Termination Benefit" shall mean the benefit set forth in Article 7.
1.36 "Termination " shall mean the severing of employment with all Employers,
voluntarily or involuntarily, for any reason other than Retirement,
Disability or death. Termination of Employment shall not be deemed to
occur, however, upon the transfer of a Participant from the employ of the
Company or another Employer to the employ of any subsidiary or affiliate,
regardless of whether that subsidiary or affiliate is an Employer under
the Plan.
1.37 "Trust" shall mean one or more trusts established pursuant to that
certain Trust Agreement, dated as of _____ 1, 2002 between the Company
and the trustee named therein, as amended from time to time.
1.38 "Unforeseeable Financial Emergency" shall mean an unanticipated emergency
that is caused by an event beyond the control of the Participant that
would result in severe financial hardship to the Participant resulting
from (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) another extraordinary and
unforeseeable circumstance arising as a result of events beyond the
control of the Participant, all as determined in the sole discretion of
the Committee.
1.39 "Valuation Date" shall mean the last day of each Plan Year or any other
date as of which the Committee, in its sole discretion, designates as a
Valuation Date.
1.40 "Years of Service" shall mean each Plan Year or portion thereof during
which an Employee is credited with at least 1000 hours of service.
ARTICLE 2
Selection/Enrollment/Eligibility
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2.1 Selection by Committee. Participation in the Plan shall be limited to a
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select group of Employees and Directors of the Employers, each of whom is
a member of management or is highly compensated. From the group of
Employees who are management or highly compensated, the Committee shall
select, in its sole discretion, Employees and Directors to participate in
the Plan.
2.2 Enrollment Requirements. As a condition to participation, each selected
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Employee shall complete, execute and return to the Committee a Plan
Agreement, an Election Form and a Beneficiary Designation Form, all within
the number of days specified by the Committee after he or she is selected
to participate in the Plan. In addition, the Committee may establish from
time to time such other enrollment requirements as it determines in its
sole discretion are necessary.
2.3 Eligibility/Commencement of Participation. Provided an Employee selected
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to participate in the Plan has met all enrollment requirements set forth
in this Plan and required by the Committee, including returning all
required documents to the Committee within the specified time period, that
Employee shall commence participation in the Plan on the first day of the
month following the month in which the Employee completes all enrollment
requirements or such other date specified by the Committee.
2.4 Termination of Participation and/or Deferrals. If the Committee determines
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in good faith that a Participant no longer qualifies as a member of a
select group of management or highly compensated employees, as membership
in such group is determined in accordance with Sections 201(2), 301(a)(3)
and 401(a)(1) of ERISA, the Committee shall have the right, in its sole
discretion, to (i) terminate any deferral election the Participant has
made for the remainder of the Plan Year in which the Participant's
membership status changes, and (ii) prevent the Participant from making
future deferral elections or, in the Committee's discretion, may also
(iii) immediately distribute the Participant's then Account Balance as a
Termination Benefit and terminate the Participant's participation in the
Plan.
ARTICLE 3
Deferral Commitments/Company Matching/Crediting/Taxes
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3.1 Minimum Deferrals.
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(a) Annual Base Salary and Annual Bonus. For each Plan Year, a
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Participant may elect to defer, as his or her Annual Deferral
Amount, Annual Base Salary or Annual Bonus, or both, in the
following minimum amounts for each deferral elected:
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Deferral Minimum Amount
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Annual Base Salary and/or
Annual Bonus $2,000
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If an election is made for less than stated minimum amounts, or if
no election is made, the amount deferred shall be zero.
(b) Short Plan Year. Notwithstanding the foregoing, if a Participant
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first becomes a Participant after the first day of a Plan Year, the
minimum Annual Base Salary deferral shall be an amount equal to the
minimum set forth above, multiplied by a fraction, the numerator of
which is the number of complete months remaining in the Plan Year
and the denominator of which is 12.
3.1 Maximum Deferrals.
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(a) Annual Base Salary Annual Bonus and Director Fees. For each Plan
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Year, a Participant may elect to defer, as his or her Annual
Deferral Amount, Annual Base Salary and Annual Bonus up to the
following maximum percentages for each deferral elected:
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Deferral Maximum
Percentage
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Annual Base Salary 50%
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Annual Bonus 100%
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Director Fees 100%
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(b) Notwithstanding the foregoing, if a Participant first becomes a
Participant after the first day of a Plan Year, the maximum Annual
Deferral Amount, with respect to Annual Base Salary and Annual Bonus
shall be based on the amount of compensation not yet earned by the
Participant as of the date the Participant submits a Plan Agreement
and an Election Form to the Committee for acceptance.
3.3 Election to Defer/Effect of Election Form.
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(a) First Plan Year of Participation. Within thirty (30) days after
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being designated by the Committee for participation in the Plan, the
Participant shall make an irrevocable deferral election for the Plan
Year in which the Participant commences participation, along with
such other elections as the Committee deems necessary or desirable
under the Plan. For these elections to be valid, the Election Form
must be completed and signed by the Participant, timely delivered to
the Committee (in accordance with Section 2.2 above) and accepted by
the Committee.
(b) Subsequent Plan Years. For each succeeding Plan Year, an irrevocable
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deferral election for that Plan Year, and such other elections as
the Committee deems necessary or desirable under the Plan, shall be
made by timely delivering to the Committee, in accordance with its
rules and procedures, before the end of the Plan Year preceding the
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Plan Year for which the election is made, a new Election Form. If no
such Election Form is timely delivered for a Plan Year, the Annual
Deferral Amount shall be zero for that Plan Year.
3.4 Withholding of Annual Deferral Amounts. For each Plan Year, for each
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Participant, the Annual Base Salary portion of the Annual Deferral Amount
shall be withheld on a ratable basis, to the extent possible, from each
regularly scheduled Annual Base Salary payroll. The Annual Bonus portion
of the Annual Deferral Amount shall be withheld, to the extent possible,
at the time the Annual Bonus is or otherwise would be paid to the
Participant, whether or not this occurs during the Plan Year itself.
3.5 Annual Company Contribution Amount. For each Plan Year, an Employer, in
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its sole discretion, may, but is not required to, credit any amount it
desires to any Participant's Company Contribution Account under this Plan,
which amount shall be for that Participant the Annual Company Contribution
Amount for that Plan Year. The amount so credited to a Participant may be
smaller or larger than the amount credited to any other Participant, and
the amount credited to any Participant for a Plan Year may be zero, even
though one or more other Participants receive an Annual Company
Contribution Amount for that Plan Year. The Annual Company Contribution
Amount, if any, shall be credited as of the date determined by the
Committee in its sole discretion. If a Participant is not employed by an
Employer as of the last day of a Plan Year for a reason other than his or
her Retirement or death while employed, the Annual Company Contribution
Amount for that Plan Year shall be zero.
3.6 Vesting.
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(a) A Participant shall at all times be 100% vested in his or her
Deferral Account.
(b) A Participant shall be vested in his or her Company Contribution
Account in accordance with the vesting schedules established by the
Committee, in its sole and absolute discretion, for each Annual
Company Contribution Amount (and amounts credited or debited
thereon) at the time each such Annual Company Contribution Amount is
first credited to the Participant's Account Balance under the Plan.
The vesting schedules established by the Committee for each Annual
Company Contribution Amount may be different for different
Participants.
(c) Notwithstanding anything in this Section to the contrary, except as
provided in subsection (d) below, in the event of a Change in
Control, a Participant's Company Contribution Account shall
immediately become 100% vested (without regard to whether it is
already vested in accordance with the above vesting schedules).
(d) Except as otherwise provided by written agreement between a
Participant and his/her Employer, notwithstanding anything in this
Section or the Plan to the contrary, the vesting schedule for a
Participant's Company Contribution Account shall not be accelerated
to the extent that the Committee determines that such acceleration
would
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cause the deduction limitations of Section 280G of the Code to
become effective. In the event that any portion of a Participant's
Company Contribution Account is not vested pursuant to such a
determination, the Participant may request independent verification
of the Committee's calculations with respect to the application of
Section 280G. In such case, the Committee must provide to the
Participant within 15 business days of such a request an opinion
from a nationally recognized accounting firm selected by the
Participant (the "Accounting Firm"), to the effect that, in the
Accounting Firm's opinion that any limitation in the vested
percentage hereunder is necessary to avoid the limits of Section
280G, and containing supporting calculations, or, in the absence of
such an opinion, shall cause the relevant portion of the
Participant's Company Contribution Account to become vested. The
cost of such opinion shall be paid for by the Company.
3.7 Crediting/Debiting of Account Balances. In accordance with, and subject
--------------------------------------
to, the rules and procedures that are established from time to time by the
Committee, in its sole discretion, amounts shall be credited or debited to
a Participant's Account Balance in accordance with the following rules:
(a) Election of Measurement Funds. A Participant, in connection with his
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or her initial deferral election in accordance with Section 3.3(a)
above, shall elect, on the Election Form, one or more Measurement
Fund(s) to be used to determine the additional amounts to be
credited to his or her Account Balance for the first business day in
which the Participant commences participation in the Plan and
continuing thereafter for each subsequent day in which the
Participant participates in the Plan, unless changed in accordance
with the next sentence. Commencing with the first business day that
follows the Participant's commencement of participation in the Plan
and continuing thereafter for each subsequent day in which the
Participant participates in the Plan, the Participant may (but is
not required to) elect, by submitting an Election Form to the
Committee that is accepted by the Committee, to add or delete one or
more Measurement Fund(s) to be used to determine the additional
amounts to be credited to his or her Account Balance, or to change
the portion of his or her Account Balance allocated to each
previously or newly elected Measurement Fund. If an election is made
in accordance with the previous sentence, it shall apply to the next
business day and continue thereafter for each subsequent day in
which the Participant participates in the Plan, unless changed in
accordance with the previous sentence.
(b) Proportionate Allocation. In making any election described in
------------------------
Section 3.7(a) above, the Participant shall specify on the Election
Form, in increments of five percentage points (5%), the percentage
of his or her Account Balance to have gains and losses measured by a
Measurement Fund.
(c) Measurement Funds. From time to time, the Committee in its sole
-----------------
discretion shall select and announce to Participants its selection
of mutual funds, insurance company separate accounts, indexed rates
or other methods (each, a "Measurement Fund"), for the purpose of
providing the basis on which gains and losses shall be attributed to
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Account Balances under the Plan. The Committee may, in its sole
discretion, discontinue, substitute or add a Measurement Fund at any
time. Each such action will take effect as of the first day of the
calendar quarter that follows by thirty (30) days the day on which
the Committee gives Participants advance written notice of such
change.
(d) Crediting or Debiting Method. The performance of each elected
----------------------------
Measurement Fund (either positive or negative) will be determined by
the Committee, in its reasonable discretion, based on available
reports of the performance of the Measurement Funds. A Participant's
Account Balance shall be credited or debited on a daily basis based
on the performance of each Measurement Fund selected by the
Participant, as determined by the Committee in its sole discretion,
as though (i) a Participant's Account Balance were invested in the
Measurement Fund(s) selected by the Participant, in the percentages
applicable to such day, as of the close of business on such day, at
the closing price on such date; (ii) the portion of the Annual
Deferral Amount that was actually deferred during any day were
invested in the Measurement Fund(s) selected by the Participant, in
the percentages applicable to such day, no later than the close of
business on the first business day after the day on which such
amounts are actually deferred from the Participant's Annual Base
Salary through reductions in his or her payroll and from the
Participant's Annual Bonus, at the closing price on such date; and
(iii) any distribution made to a Participant that decreases such
Participant's Account Balance ceased being invested in the
Measurement Fund(s), in the percentages applicable to such day, no
later than one business day prior to the distribution, at the
closing price on such date.
(e) No Actual Investment. Notwithstanding any other provision of this
--------------------
Plan that may be interpreted to the contrary, the Measurement Funds
are to be used for measurement purposes only, and a Participant's
election of any such Measurement Fund, the allocation to his or her
Account Balance thereto, the calculation of additional amounts and
the crediting or debiting of such amounts to a Participant's Account
Balance shall not be considered or construed in any manner as an
actual investment of his or her Account Balance in any such
Measurement Fund. In the event that the Company or the Trustee (as
that term is defined in the Trust), in its own discretion, decides
to invest funds in any or all of the Measurement Funds, no
Participant shall have any rights in or to such investments
themselves. Without limiting the foregoing, a Participant's Account
Balance shall at all times be a bookkeeping entry only and shall not
represent any investment made on his or her behalf by the Company or
the Trust; the Participant shall at all times remain an unsecured
creditor of the Company.
3.8 Distributions. The Participant's Employer(s), or the trustee of the Trust,
-------------
shall withhold from any payments made to a Participant under this Plan all
federal, state and local income, employment and other taxes required to be
withheld by the Employer(s), or the trustee of the Trust, in connection
with such payments, in amounts and in a manner to be determined in the
sole discretion of the Employer(s) and the trustee of the Trust,
respectively (whichever is making the payment). The Participant's
Employer, or the trustee of the Trust, shall withhold from any payments
made to a Participant under this Plan any garnishment of wages in amounts
- --------------------------------------------------------------------------------
10
and in a manner to be determined by the sole discretion of the Employer(s)
and the trustee of the Trust, respectively (whichever is making the
payment).
3.9 Adjustment of Annual Deferral Amount. The Committee shall have the
------------------------------------
authority to reduce, without the Participant's consent, the Annual Deferral
Amount and/or the Annual Company Contribution Amount, to the extent
necessary to comply with applicable tax withholding obligations,
garnishments or court-mandated payments, or Participant-authorized
deferrals payments or contributions.
ARTICLE 4
Short-Term Payout/Unforeseeable Financial Emergencies/
------------------------------------------------------
Withdrawal Election
-------------------
4.1 Short-Term Payout. In connection with each election to defer an Annual
-----------------
Deferral Amount, a Participant may irrevocably elect to receive a future
"Short-Term Payout" from the Plan with respect to such Annual Deferral
Amount. Subject to the Deduction Limitation, the Short-Term Payout shall be
a lump sum payment in an amount that is equal to the Annual Deferral (or a
specified portion thereof) plus amounts credited or debited in the manner
provided in Section 3.7 above on that amount, determined at the time that
the Short-Term Payout becomes payable (rather than the date of a
Termination of Employment) or, alternatively if so elected by the
Participant, a fixed stated sum, up to the total Account. Subject to the
Deduction Limitation and the other terms and conditions of this Plan, each
Short-Term Payout elected shall be paid out during a 60 day period
commencing immediately after the last day of any Plan Year designated by
the Participant that is at least three Plan Years after the Plan Year in
which the Annual Deferral Amount is actually deferred.
4.2 Other Benefits Take Precedence Over Short-Term Payout. Should an event
-----------------------------------------------------
occur that triggers a benefit under Article 5, 6, 7 or 8, any Annual
Deferral Amount, plus amounts credited or debited thereon, that is subject
to a Short-Term Payout election under Section 4.1 shall not be paid in
accordance with Section 4.1 but shall be paid in accordance with the other
applicable Article.
4.3 Withdrawal Payout/Suspensions for Unforeseeable Financial Emergencies. If
---------------------------------------------------------------------
the Participant experiences an Unforeseeable Financial Emergency, the
Participant may petition the Committee to (i) suspend any deferrals
required to be made by a Participant or (ii) receive a partial or full
payout from the Plan. The payout shall not exceed the lesser of the
Participant's Account Balance, calculated as if such Participant were
receiving a Termination Benefit, or the amount reasonably needed to satisfy
the Unforeseeable Financial Emergency. If, subject to the sole discretion
of the Committee, the petition for a suspension and/or payout is approved,
suspension shall take effect upon the date of approval and any payout shall
be made within 60 days of the date of approval. The payment of any amount
under this Section 4.3 shall not be subject to the Deduction Limitation.
- --------------------------------------------------------------------------------
11
4.4 Withdrawal Election. A Participant (or, after a Participant's death, his or
-------------------
her Beneficiary) may elect, at any time, to withdraw a portion or all of
his or her Account Balance, calculated as if there had occurred a
Termination of Employment as of the day of the election, less a withdrawal
penalty equal to 10% of the amount withdrawn (the net amount shall be
referred to as the "Withdrawal Amount"). Notwithstanding anything in this
Section or the Plan to the contrary, to the extent a Participant elects to
withdraw a portion or all of his or her Account Balance pursuant to this
Section, the Participant may not defer any of his or her Annual Salary
Annual Bonus or Director Fees for the remainder of the Plan Year in which
the withdrawal is taken and for the next full Plan Year. This election can
be made at any time, before or after Retirement, Disability, death or
Termination of Employment, and whether or not the Participant (or
Beneficiary) is in the process of being paid pursuant to an installment
payment schedule. If made before Retirement, Disability or death, a
Participant's Withdrawal Amount shall be based on his or her Account
Balance calculated as if there had occurred a Termination of Employment as
of the day of the election. Notwithstanding anything in this Section or the
Plan to the contrary, a Participant may not elect a Withdrawal Amount less
than $5,000. The Participant (or his or her Beneficiary) shall make this
election by giving the Committee advance written notice of the election in
a form determined from time to time by the Committee. The Participant (or
his or her Beneficiary) shall be paid the Withdrawal Amount within 60 days
of his or her election and the Participant's Account shall concurrently be
reduced by the Withdrawal Amount plus the 10% penalty. The payment of this
Withdrawal Amount shall not be subject to the Deduction Limitation.
ARTICLE 5
Retirement Benefit
------------------
5.1 Retirement Benefit. Subject to the Deduction Limitation, a Participant who
------------------
Retires shall receive, as a Retirement Benefit, his or her Account Balance.
5.2 Payment of Retirement Benefit. A Participant, in connection with his or her
-----------------------------
commencement of participation in the Plan, shall elect on an Election Form
the form in which the Retirement Benefit will be paid, if that benefit
becomes payable under the terms of the Plan, which form shall be a lump sum
or an Annual Installment Method of not more than ten (10) years. The
Participant may change his or her election to an allowable alternative
payout period by submitting a new Election Form to the Committee; provided,
however, the last Election Form that is submitted at least 1 year prior to
the Participant's Retirement and is accepted by the Committee in its sole
discretion shall be the governing Election Form as to this matter. If a
Participant does not make any election with respect to the payment of the
Retirement Benefit, then such benefit shall be payable in a lump sum. The
lump sum payment shall be made, or installment payments shall commence, no
later than 60 days after the Participant Retires. Any payment made shall be
subject to the Deduction Limitation. Notwithstanding anything in this
Section or the Plan to the contrary, but subject to the Deduction
Limitation, the Retirement Benefit paid pursuant to a Participant's elected
Annual Installment Method shall be paid in the
- --------------------------------------------------------------------------------
12
number of annual installments elected by the Participant; provided,
however, the annual installments shall not exceed the lesser of the
Participant's Years of Service or ten (10) years.
5.3 Death Prior to Completion of Retirement Benefit. If a Participant dies
-----------------------------------------------
after Retirement but before the Retirement Benefit is paid in full, the
Participant's unpaid Retirement Benefit payments shall continue and shall
be paid to the Participant's Beneficiary (a) over the remaining number of
years and in the same amounts as that benefit would have been paid to the
Participant had the Participant survived, or (b) in a lump sum, if
requested by the Beneficiary and allowed in the sole discretion of the
Committee, that is equal to the Participant's unpaid remaining Account
Balance.
ARTICLE 6
Pre-Retirement Survivor Benefit
-------------------------------
6.1 Pre-Retirement Survivor Benefit. Subject to the Deduction Limitation, the
-------------------------------
Participant's Beneficiary shall receive a Pre-Retirement Survivor Benefit
equal to the Participant's Account Balance if the Participant dies before
he or she Retires, experiences a Termination of Employment or suffers a
Disability.
6.2 Payment of Pre-Retirement Survivor Benefit. A Participant, in connection
------------------------------------------
with his or her commencement of participation in the Plan, shall elect on
an Election Form whether the Pre-Retirement Survivor Benefit shall be
received by his or her Beneficiary in a lump sum or pursuant to an Annual
Installment Method of up to ten (10) years. The Participant may annually
change this election to an allowable alternative payout period by
submitting a new Election Form to the Committee, which form must be
accepted by the Committee in its sole discretion. The Election Form most
recently accepted by the Committee prior to the Participant's death shall
govern the payout of the Participant's Pre-Retirement Survivor Benefit. If
a Participant does not make any election with respect to the payment of the
Pre-Retirement Survivor Benefit, then such benefit shall be paid in a lump
sum. Notwithstanding the foregoing, if the Participant's Account Balance
at the time of his or her death is less than $25,000, payment of the Pre-
Retirement Survivor Benefit may be made, in the sole discretion of the
Committee, in a lump sum or pursuant to an Annual Installment Method of not
more than 5 years. The lump sum payment shall be made, or installment
payments shall commence, no later than 60 days after the Committee is
provided with proof that is satisfactory to the Committee of the
Participant's death.
- --------------------------------------------------------------------------------
13
ARTICLE 7
Termination Benefit
-------------------
7.1 Termination Benefit. Subject to the Deduction Limitation, the Participant
-------------------
shall receive a Termination Benefit, which shall be equal to the
Participant's Account Balance if a Participant experiences a Termination of
Employment prior to his or her Retirement, death or Disability.
7.2 Payment of Termination Benefit. The Termination Benefit shall be paid to
------------------------------
the Participant in a lump sum. Notwithstanding anything in this Section or
the Plan to the contrary, a Participant may request that the Company pay
the lump sum payment or commence the installment payments 60 days after the
end of the Plan Year in which the Participant terminates his or her
employment. The Committee may, in its sole discretion, accept or reject
such a request from a Participant.
ARTICLE 8
Disability Waiver and Benefit
-----------------------------
8.1 Disability Waiver.
-----------------
(a) Waiver of Deferral. A Participant who is determined by the Committee
------------------
to be suffering from a Disability shall (i) have no further deferrals
of the Annual Deferral Amount that would otherwise have been withheld
from a Participant's Annual Base Salary Annual Bonus or Director Fees
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 this
Plan.
(b) Return to Work. If a Participant returns to employment with an
--------------
Employer, after a Disability ceases, the Participant may elect to
defer an Annual Deferral Amount for the Plan Year following his or her
return to employment or service and for every Plan Year thereafter
while a Participant in the Plan; provided such deferral elections are
otherwise allowed and an Election Form is delivered to and accepted by
the Committee for each such election in accordance with Section 3.3
above.
8.2 Continued Eligibility/Disability Benefit. A Participant suffering a
----------------------------------------
Disability shall, for benefit purposes under this Plan, continue to be
considered to be employed and shall be eligible for the benefits provided
for in Articles 4, 5, 6 or 7 in accordance with the provisions of those
Articles. Notwithstanding the foregoing, the Committee shall have the right
to, in its sole and absolute discretion, deem the Participant to have
experienced a Termination of Employment, or in the case of a Participant
who is eligible to Retire, to have Retired, at any time after such
Participant is determined to be suffering a Disability, in which case the
Participant shall receive a Disability Benefit equal to his or her Account
Balance at the time of the Committee's determination; provided, however,
that should the Participant otherwise have been eligible to Retire, he or
she shall be paid in accordance with Article 5 as though the Participant
Retired.
- --------------------------------------------------------------------------------
14
The Disability Benefit shall be paid in a lump sum within 60 days of the
Committee's exercise of such right. Any payment made shall be subject to
the Deduction Limitation.
ARTICLE 9
---------
Beneficiary Designation
-----------------------
9.1 Beneficiary. Each Participant shall have the right, at any time, to
-----------
designate his or her Beneficiary(ies) (both primary and contingent) to
receive any benefits payable under the Plan to a beneficiary upon the death
of a Participant. The Beneficiary designated under this Plan may be the
same as or different from the Beneficiary designation under any other plan
of an Employer in which the Participant participates.
9.2 Beneficiary Designation Change/Spousal Consent. A Participant shall
----------------------------------------------
designate his or her Beneficiary by completing and signing the Beneficiary
Designation Form, and returning it to the Committee or its designated
agent. A Participant shall have the right to change a Beneficiary by
completing, signing and otherwise complying with the terms of the
Beneficiary Designation Form and the Committee's rules and procedures, as
in effect from time to time. A Participant may name someone other than his
or her spouse as a Beneficiary only if a spousal consent, in the form
designated by the Committee, is signed by that Participant's spouse and
returned to the Committee. Upon the acceptance by the Committee of a new
Beneficiary Designation Form, all Beneficiary designations previously filed
shall be canceled. The Committee shall be entitled to rely on the last
Beneficiary Designation Form filed by the Participant and accepted by the
Committee prior to his or her death. Notwithstanding anything in this
Section or the Plan to the contrary, a Participant's designation of a
spouse as a Beneficiary shall automatically be cancelled and revoked on the
date a Participant's divorce from that spouse becomes final.
9.3 Acknowledgment. No designation or change in designation of a Beneficiary
--------------
shall be effective until received and acknowledged in writing by the
Committee or its designated agent.
9.4 No Beneficiary Designation. If a Participant fails to designate a
--------------------------
Beneficiary as provided in Sections 9.1, 9.2 and 9.3 above or, if all
designated Beneficiaries predecease the Participant or die prior to
complete distribution of the Participant's benefits, then the Participant's
designated Beneficiary shall be deemed to be his or her surviving spouse.
If the Participant has no surviving spouse, the Participant's designated
Beneficiary shall be deemed to be the Participant's estate.
9.5 Doubt as to Beneficiary. If the Committee has any doubt as to the proper
-----------------------
Beneficiary to receive payments pursuant to this Plan, the Committee shall
have the right, exercisable in its discretion, to cause the Company to
withhold such payments until this matter is resolved to the Committee's
satisfaction.
- --------------------------------------------------------------------------------
15
9.6 Discharge of Obligations. The payment of benefits under the Plan to a
------------------------
Beneficiary shall fully and completely discharge all Employers and the
Committee from all further obligations under this Plan with respect to the
Participant, and that Participant's Plan Agreement shall terminate upon
such full payment of benefits.
ARTICLE 10
Leave of Absence
----------------
10.1 Paid Leave of Absence. If a Participant is authorized by the Participant's
---------------------
Employer for any reason to take a paid leave of absence from the employment
of the Employer, the Participant shall continue to be considered employed
by the Employer and the Annual Deferral Amount shall continue to be
withheld during such paid leave of absence in accordance with Article 3.
10.2 Unpaid Leave of Absence. If a Participant is authorized by the
-----------------------
Participant's Employer for any reason to take an unpaid leave of absence
from the employment of the Employer, the Participant shall continue to be
considered employed by the Employer and deferrals shall not be made, in the
absence of compensation. Upon such expiration of the unpaid leave and
resumption of entitlement to compensation, deferrals shall resume for the
remaining portion of the Plan Year in which the return occurs, based on the
deferral election, if any, made for that Plan Year. If no election was made
for that Plan Year, no deferral shall be withheld.
ARTICLE 11
Termination/Amendment or Modification
-------------------------------------
11.1 Termination. Although the Company anticipates that it will continue the
-----------
Plan for an indefinite period of time, there is no guarantee that the
Company will continue the Plan or will not terminate the Plan at any time
in the future. Accordingly, the Company reserves the right to discontinue
its sponsorship of the Plan and to terminate the Plan at any time with
respect to any or all of its participating Employees and Directors, by
action of its Board of Directors. Upon the termination of the Plan, the
Plan Agreements of the affected Participants shall terminate and their
Account Balances, determined as if they had experienced a Termination of
Employment on the date of Plan termination or, if Plan termination occurs
after the date upon which a Participant was eligible to Retire, then with
respect to that Participant as if he or she had Retired on the date of Plan
termination, shall be paid to the Participants as follows: Prior to a
Change in Control, if the Plan is terminated with respect to all of its
Participants, the Company shall have the right, in its sole discretion, and
notwithstanding any elections made by the Participant, to pay such benefits
in a lump sum or pursuant to an Annual Installment Method of up to ten (10)
years, with amounts credited and debited during the installment period as
provided herein. Prior to a Change in Control, if the Plan is terminated
with respect to less than all of its Participants, the Company shall be
required to pay such benefits in a lump sum. After a Change in Control, the
Company shall be required to pay such benefits in a lump sum. The
termination of the Plan shall not adversely affect any Participant or
Beneficiary who has become entitled to the payment of any benefits under
the Plan as of the date of termination; provided however, that the Company
shall have the right to accelerate installment payments
- --------------------------------------------------------------------------------
16
without a premium or prepayment penalty by paying the Account Balance in a
lump sum or pursuant to an Annual Installment Method using fewer years.
11.2 Amendment. The Company may, at any time, amend or modify the Plan in whole
---------
or in part by the action of the Committee ; provided, however, that: (i)
no amendment or modification shall be effective to decrease or restrict
the value of a Participant's Account Balance in existence at the time the
amendment or modification is made, calculated as if the Participant had
experienced a Termination of Employment as of the effective date of the
amendment or modification or, if the amendment or modification occurs
after the date upon which the Participant was eligible to Retire, the
Participant had Retired as of the effective date of the amendment or
modification, (ii) no adverse amendment or modification shall be effective
upon or after a Change in Control without the prior written consent of a
majority of the Participants, and (iii) no amendment or modification of
this Section 11.2 or Section 12.2 of the Plan shall be effective. The
amendment or modification of the Plan shall not affect any Participant or
Beneficiary who has become entitled to the payment of benefits under the
Plan as of the date of the amendment or modification; provided, however,
that the Employer shall have the right to accelerate installment payments
by paying the Account Balance in a lump sum or pursuant to an Annual
Installment Method using fewer years (provided that the present value of
all payments that will have been received by a Participant at any given
point of time under the different payment schedule shall equal or exceed
the present value of all payments that would have been received at that
point in time under the original payment schedule).
11.3 Plan Agreement. Despite the provisions of Sections 11.1 and 11.2 above, if
--------------
a Participant's Plan Agreement contains benefits or limitations that are
not in this Plan document, the Company may only amend or terminate such
provisions with the consent of the Participant.
11.4 Effect of Payment. The full payment of the applicable benefit under
-----------------
Articles 4, 5, 6, 7 or 8 of the Plan shall completely discharge all
obligations to a Participant and his or her designated Beneficiaries under
this Plan and the Participant's Plan Agreement shall terminate.
ARTICLE 12
Administration
--------------
12.1 Committee Duties. Except as otherwise provided in this Article 12, this
----------------
Plan shall be administered by the Compensation Committee of the Board, or
such committee of delegates as the Compensation Committee of the Board
shall appoint. The Committee shall also have the discretion and authority
to (i) make, amend, interpret, and enforce all appropriate laws, rules and
regulations for the administration of this Plan and (ii) decide or resolve
any and all questions including interpretations of this Plan, as may arise
in connection with the Plan. Any individual serving on the Committee who
is a Participant shall not vote or act on any matter relating solely to
himself or herself. When making a determination or calculation, the
- --------------------------------------------------------------------------------
17
Committee shall be entitled to rely on information furnished by a
Participant, the Company or any Employer.
12.2 Administration Upon Change In Control. For purposes of this Plan, the
-------------------------------------
Company, acting through the Committee, shall be the "Administrator" at all
times prior to the occurrence of a Change in Control. Upon and after the
occurrence of a Change in Control, the "Administrator" shall be an
independent third party selected by the Trustee and approved by the
individual who, immediately prior to such event, was the Company's Chief
Executive Officer or, if not so identified, the Company's highest ranking
officer (the "Ex-CEO"). The Administrator shall have the discretionary
power to determine all questions arising in connection with the
administration of the Plan and the interpretation of the Plan and Trust
including, but not limited to benefit entitlement determinations;
provided, however, upon and after the occurrence of a Change in Control,
the Administrator shall have no power to direct the investment of Plan or
Trust assets or select any investment manager or custodial firm for the
Plan or Trust. Upon and after the occurrence of a Change in Control, the
Company must: (1) pay all reasonable administrative expenses and fees of
the Administrator; (2) pursuant to Section 12.5, indemnify the
Administrator against any costs, expenses and liabilities including,
without limitation, attorney's fees and expenses arising in connection
with the performance of the Administrator hereunder, except with respect
to matters resulting from the gross negligence or willful misconduct of
the Administrator or its employees or agents; and (3) pursuant to Section
12.6, supply full and timely information to the Administrator or all
matters relating to the Plan, the Trust, the Participants and their
Beneficiaries, the Account Balances of the Participants, the date of
circumstances of the Retirement, Disability, death or Termination of
Employment of the Participants, and such other pertinent information as
the Administrator may reasonably require. Upon and after a Change in
Control, the Administrator may be terminated (and a replacement appointed)
by the Trustee only with the approval of the Ex-CEO. Upon and after a
Change in Control, the Administrator may not be terminated by the Company.
12.3 Agents. In the administration of this Plan, the Committee and the
------
Administrator may, from time to time, employ agents and delegate to them
such of their respective administrative duties as they see fit (including
acting through a duly appointed representative) and may from time to time
consult with counsel who may be counsel to any Employer.
12.4 Binding Effect of Decisions. The decisions or actions of the Committee,
---------------------------
the Administrator and/or their respective delegates, with respect to any
question arising out of or in connection with the administration,
interpretation and application of the Plan and the rules and regulations
promulgated hereunder shall be final and conclusive and binding upon all
persons having any interest in the Plan.
12.5 Indemnity of Committee. All Employers shall indemnify and hold harmless
----------------------
the members of the Committee, and any Employee to whom the duties of the
Committee may be delegated, and the Administrator against any and all
claims, losses, damages, expenses or liabilities arising
- --------------------------------------------------------------------------------
18
from any action or failure to act with respect to this Plan, except in the
case of willful misconduct by the Committee, any of its members, any such
Employee or the Administrator.
12.6 Employer Information. To enable the Committee and Administrator to perform
--------------------
their respective functions, the Company and each Employer shall supply
full and timely information to the Committee or Administrator, as the case
may be, on all matters relating to the compensation of its Participants,
the date and circumstances of the Retirement, Disability, death or
Termination of Employment of its Participants, and such other pertinent
information as the Committee or Administrator may reasonably require.
ARTICLE 13
----------
Other Benefits and Agreements
-----------------------------
13.1 Coordination with Other Benefits. The benefits provided for a Participant
--------------------------------
and Participant's Beneficiary under the Plan are in addition to any other
benefits available to such Participant under any other plan or program for
employees of the Participant's Employer. The Plan shall supplement and
shall not supersede, modify or amend any other such plan or program except
as may otherwise be expressly provided.
ARTICLE 14
Claims Procedures
-----------------
14.1 Presentation of Claim. Any Participant or Beneficiary of a deceased
---------------------
Participant (such Participant or Beneficiary being referred to below as a
"Claimant") may deliver to the Committee a written claim for a
determination with respect to the amounts distributable to such Claimant
from the Plan. If such a claim relates to the contents of a notice
received by the Claimant, the claim must be made within 60 days after such
notice was received by the Claimant. All other claims must be made within
180 days of the date on which the event that caused the claim to arise
occurred. The claim must state with particularity the determination
desired by the Claimant.
14.2 Notification of Decision. The Committee shall consider a Claimant's claim
------------------------
within a reasonable time, and shall notify the Claimant in writing:
(a) that the Claimant's requested determination has been made, and that
the claim has been allowed in full; or
(b) that the Committee has reached a conclusion contrary, in whole or in
part, to the Claimant's requested determination, and such notice
must set forth in a manner calculated to be understood by the
Claimant:
- --------------------------------------------------------------------------------
19
(i) the specific reason(s) for the denial of the claim, or any
part of it;
(ii) specific reference(s) to pertinent provisions of the Plan upon
which such denial was based;
(iii) a description of any additional material or information
necessary for the Claimant to perfect the claim, and an
explanation of why such material or information is necessary;
and
(iv) an explanation of the claim review procedure set forth in
Section 14.3 below.
14.3 Review of a Denied Claim. Within 60 days after receiving a notice from
------------------------
the Committee that a claim has been denied, in whole or in part, a
Claimant (or the Claimant's duly authorized representative) may file with
the Committee a written request for a review of the denial of the claim.
Thereafter, but not later than 30 days after the review procedure began,
the Claimant (or the Claimant's duly authorized representative):
(a) may review pertinent documents;
(b) may submit written comments or other documents; and/or
(c) may request a hearing, which the Committee, in its sole discretion,
may grant.
14.4 Decision on Review. The Committee shall render its decision on review
------------------
promptly, using an abuse of discretion standard of review, and shall
render its decision not later than 60 days after the filing of a written
request for review of the denial, unless a hearing is held or other
special circumstances require additional time, in which case the
Committee's decision must be rendered within 120 days after such date.
Such decision must be written in a manner calculated to be understood by
the Claimant, and it must contain:
(a) specific reasons for the decision;
(b) specific reference(s) to the pertinent Plan provisions upon which
the decision was based; and
(c) such other matters as the Committee deems relevant.
14.5 Legal Action. A Claimant's compliance with the foregoing provisions of
------------
this Article 14 is a mandatory prerequisite to a Claimant's right to
commence any legal action with respect to any claim for benefits under
this Plan.
- --------------------------------------------------------------------------------
20
ARTICLE 15
Trust
-----
15.1 Establishment of the Trust. The Company may establish the Trust, and each
--------------------------
Employer may transfer over to the Trust such assets as the Employer
determines, in its sole discretion, to provide for its respective future
liabilities created with respect to the Annual Deferral Amounts and
Annual Company Contribution Amounts, for such Employer's Participants for
all periods prior to the transfer, as well as any debits and credits to
the Participants' Account Balances for all periods prior to the transfer,
taking into consideration the value of the assets in the trust at the
time of the transfer.
15.2 Interrelationship of the Plan and the Trust. The provisions of the Plan
-------------------------------------------
and the Plan Agreement shall govern the rights of a Participant to
receive distributions pursuant to the Plan. The provisions of the Trust
shall govern the rights of the Employers, Participants and the other
creditors of the Employers to the assets transferred to the Trust. Each
Employer shall at all times remain liable to carry out its obligations
under the Plan.
15.3 Distributions From the Trust. Each Employer's obligations under the Plan
----------------------------
may be satisfied with Trust assets distributed pursuant to the terms of
the Trust, and any such distribution shall reduce the Employer's
obligations under this Plan.
15.4 Investment of Trust Assets. The Trustee of the Trust shall be authorized,
--------------------------
upon written instructions received from the Committee or investment
manager appointed by the Committee, to invest and reinvest the assets of
the Trust in accordance with the applicable Trust Agreement,
ARTICLE 16
Miscellaneous
-------------
16.1 Status of Plan. The Plan is intended to be a plan that is not qualified
--------------
within the meaning of Code Section 401(a) and that "is unfunded and is
maintained by an employer primarily for the purpose of providing deferred
compensation for a select group of management or highly compensated
employees" within the meaning of ERISA Sections 201(2), 301(a)(3) and
401(a)(1). The Plan shall be administered and interpreted to the extent
possible in a manner consistent with that intent. The Plan is an
unfunded, nontax-qualified, individual account, profit sharing plan. Plan
benefits shall only accrue immediately before they are paid and may be
paid directly by the Company. A person entitled to benefits shall be
entitled to receive distributions at the time otherwise provided under
the Plan if he or she consents in writing to the distribution within 90
days before it is made. Failing such consent, the distribution shall be
delayed to such later date as the person elects. In this case, the
amounts otherwise payable shall be deposited at the earliest time
otherwise payable with the consent of the person, less taxes required to
be withheld, in a brokerage house account for the benefit of that person,
and
- --------------------------------------------------------------------------------
21
invested as the person directs. However, this account shall be owned
by a trustee appointed by the Plan Administrator, who shall transfer
ownership of the account to the person on or after his or her 60th
birthday. By electing to contribute to this Plan, each Participant
acknowledges that this Plan is subject to ERISA but exempted from all of
ERISA's substantive requirements because it is a "top hat plan,"
acknowledges that the Company would not have implemented or continued
this Plan but for its good faith belief that it is a top hat plan, agrees
that all Plan benefits shall be contingent on the Plan being a top hat
plan and promises never to assert otherwise.
16.2 Unsecured General Creditor. Participants and their Beneficiaries, heirs,
--------------------------
successors and assigns shall have no legal or equitable rights, interests
or claims in any property or assets of an Employer. For purposes of the
payment of benefits under this Plan, the Employer's assets shall be, and
remain, neither pledged nor restricted under or as a result of this Plan.
An Employer's obligation under the Plan shall be merely that of an
unfunded and unsecured promise to pay money in the future.
16.3 Employer's Liability. An Employer's liability for the payment of benefits
--------------------
shall be defined only by the Plan and the Plan Agreement, as entered into
between the Employer and a Participant. An Employer shall have no
obligation to a Participant under the Plan except as expressly provided
in the Plan and his or her Plan Agreement.
16.4 Nonassignability. Neither a Participant nor any other person shall have
----------------
any right to commute, sell, assign, transfer, pledge, anticipate,
mortgage or otherwise encumber, transfer, hypothecate, alienate or convey
in advance of actual receipt, the amounts, if any, payable hereunder, or
any part thereof, which are, and all rights to which are expressly
declared to be, unassignable and non-transferable. No part of the amounts
payable shall, prior to actual payment, be subject to seizure,
attachment, garnishment or sequestration for the payment of any debts,
judgments, alimony or separate maintenance owed by a Participant or any
other person, be transferable by operation of law in the event of a
Participant's or any other person's bankruptcy or insolvency or be
transferable to a spouse as a result of a property settlement or
otherwise.
16.5 Not a Contract of Employment. The terms and conditions of this Plan shall
----------------------------
not be deemed to constitute a contract of employment between any Employer
and the Participant. Such employment is hereby acknowledged to be an "at
will" employment relationship that can be terminated at any time for any
reason, or no reason, with or without cause, and with or without notice,
except to the extent expressly provided in a written employment
agreement, if any. Nothing in this Plan shall be deemed to give a
Participant the right to be retained in the service of any Employer or to
interfere with the right of any Employer to discipline or discharge the
Participant at any time.
16.6 Furnishing Information. A Participant or his or her Beneficiary, as a
----------------------
condition to entitlement to benefits hereunder, shall cooperate with the
Committee by furnishing any and all information requested by the
Committee and take such other actions as may be requested in order to
facilitate the administration of the Plan and the payments of benefits
hereunder,
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22
including but not limited to taking such physical examinations as the
Committee may deem necessary.
16.7 Terms. Whenever any words are used herein in the masculine, they shall be
-----
construed as though they were in the feminine in all cases where they
would so apply; and whenever any words are used herein in the singular or
in the plural, they shall be construed as though they were used in the
plural or the singular, as the case may be, in all cases where they would
so apply.
16.8 Captions. The captions of the articles, sections and paragraphs of this
--------
Plan are for convenience only and shall not control or affect the meaning
or construction of any of its provisions.
16.9 Governing Law. Subject to ERISA, the provisions of this Plan shall be
-------------
construed and interpreted according to the internal laws of the State of
California without regard to its conflicts of laws principles.
16.10 Notice. Any notice or filing required or permitted to be given to the
------
Committee under this Plan shall be sufficient if in writing and hand-
delivered, or sent by registered or certified mail, to the address below:
Amgen Inc. Nonqualified
Deferred Compensation Plan
Committee
----------------------------------
Amgen, Inc.
----------------------------------
One Amgen Center Drive
----------------------------------
Thousand Oaks, CA 91320-1799
----------------------------------
Such notice shall be deemed given as of the date of delivery or, if
delivery is made by mail, as of the date shown on the postmark on the
receipt for registration or certification.
Any notice or filing required or permitted to be given to a Participant
under this Plan shall be sufficient if in writing and hand-delivered, or
sent by mail, to the last address of the Participant shown on the records
of the Company.
16.11 Successors. The provisions of this Plan shall bind and inure to the
----------
benefit of the Participant's Employer and its successors and assigns and
the Participant and the Participant's designated Beneficiaries.
16.12 Spouse's Interest. The interest in the benefits hereunder of a spouse of
-----------------
a Participant who has predeceased the Participant shall automatically
pass to the Participant and shall not be transferable by such spouse in
any manner, including but not limited to such spouse's will, nor shall
such interest pass under the laws of intestate succession.
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23
16.13 Validity. In case any provision of this Plan shall be illegal or invalid
--------
for any reason, said illegality or invalidity shall not affect the
remaining parts hereof, but this Plan shall be construed and enforced as
if such illegal or invalid provision had never been inserted herein.
16.14 Incompetent. If the Committee determines in its discretion that a benefit
-----------
under this Plan is to be paid to a minor, a person declared incompetent
or to a person incapable of handling the disposition of that person's
property, the Committee may direct payment of such benefit to the
guardian, legal representative or person having the care and custody of
such minor, incompetent or incapable person. The Committee may require
proof of minority, incompetence, incapacity or guardianship, as it may
deem appropriate prior to distribution of the benefit. Any payment of a
benefit shall be a payment for the account of the Participant and the
Participant's Beneficiary, as the case may be, and shall be a complete
discharge of any liability under the Plan for such payment amount.
16.15 Court Order. The Committee is authorized to cause the Company or any
-----------
Employer to make any payments directed by court order in any action in
which the Plan or the Committee has been named as a party. In addition,
if a court determines that a spouse or former spouse of a Participant has
an interest in the Participant's benefits under the Plan in connection
with a property settlement or otherwise, the Committee, in its sole
discretion, shall have the right, notwithstanding any election made by a
Participant, to immediately cause the Company or any Employer to
distribute the spouse's or former spouse's interest in the Participant's
benefits under the Plan to that spouse or former spouse.
16.16 Distribution in the Event of Taxation.
-------------------------------------
(a) In General. If, for any reason, all or any portion of a
----------
Participant's benefits under this Plan becomes taxable to the
Participant prior to receipt, a Participant may petition the
Committee before a Change in Control, or the trustee of the Trust
after a Change in Control, for a distribution of that portion of
his or her benefit that has become taxable. Upon the grant of such
a petition, which grant shall not be unreasonably withheld (and,
after a Change in Control, shall be granted), a Participant's
Employer shall distribute to the Participant immediately available
funds in an amount equal to the taxable portion of his or her
benefit (which amount shall not exceed a Participant's unpaid
Account Balance under the Plan). If the petition is granted, the
tax liability distribution shall be made within 90 days of the
date when the Participant's petition is granted. Such a
distribution shall affect and reduce the benefits to be paid under
this Plan.
(b) Trust. If the Trust terminates in accordance with its terms and
-----
benefits are distributed from the Trust to a Participant in
accordance with that Section, the Participant's Account, and
accordingly the benefits under this Plan, shall be reduced to the
extent of such distributions.
16.17 Insurance. The Employers, on their own behalf or on behalf of the trustee
---------
of the Trust, and, in their sole discretion, may apply for and procure
insurance on the life of the Participants, in such
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24
amounts and in such forms as the Trust may choose. The Employers or the
trustee of the Trust, as the case may be, shall be the sole owner and
beneficiary of any such insurance. The Participants shall have no
interest whatsoever in any such policy or policies, and at the request of
the Employers 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 the Employers have applied for
insurance.
16.18 Legal Fees To Enforce Rights After Change in Control. The Company and
----------------------------------------------------
each Employer is aware that upon the occurrence of a Change in Control,
the Board or the board of directors of a Participant's Employer (which
might then be composed of new members) or a shareholder of the Company or
the Participant's Employer, or of any successor corporation might then
cause or attempt to cause the Company, the Participant's Employer or such
successor to refuse to comply with its obligations under the Plan and
might cause or attempt to cause the Company or the Participant's Employer
to institute, or may institute, litigation seeking to deny Participants
the benefits intended under the Plan. In these circumstances, the purpose
of the Plan could be frustrated. Accordingly, if, following a Change in
Control, it should appear to any Participant that the Company, the
Participant's Employer or any successor corporation has failed to comply
with any of its obligations under the Plan or any agreement thereunder
or, if the Company, such Employer or any other person takes any action to
declare the Plan void or unenforceable or institutes any litigation or
other legal action designed to deny, diminish or to recover from any
Participant the benefits intended to be provided, then the Company and
the Participant's Employer irrevocably authorize such Participant to
retain counsel of his or her choice at the expense of the Company and the
Participant's Employer (who shall be jointly and severally liable) to
represent such Participant in connection with the initiation or defense
of any litigation or other legal action, whether by or against the
Company, the Participant's Employer or any director, officer, shareholder
or other person affiliated with the Company, the Participant's Employer
or any successor thereto in any jurisdiction. Notwithstanding anything in
this Section or the Plan to the contrary, the Company and/or the
Participant's Employer shall have no obligation under this Section to the
extent there is a judicial determination or final arbitration decision
that the litigation or other legal action brought by the Participant is
frivolous.
IN WITNESS WHEREOF, the Company has signed this Plan document as of
02/01, 2002.
-----
"Company"
Amgen Inc., a Delaware corporation
By: /s/ Brian M. McNamee
---------------------
Title: Sr. Vice President, Human Resources
-----------------------------------
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25