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EXHIBIT 10.30
IDEC PHARMACEUTICALS CORPORATION
DEFERRED COMPENSATION PLAN
THIS DEFERRED COMPENSATION PLAN is adopted by IDEC Pharmaceuticals Corporation a
Delaware corporation (the "Company"), effective as of January 1 1999, with
reference to the following:
A. The Company is establishing this plan to provide key employees
and non-employee Board members a tax deferred, capital
accumulation, retention program.
B. This Plan is intended to provide benefits to a select group of
management or highly compensated personnel in order to attract
and retain the highest quality executives. This Plan is not
intended to be a qualified plan within the meaning of sections
401(a) and 501(a) of the Internal Revenue Code of 1986, as
amended (the "Code").
C. This Plan is intended to be an unfunded plan for purposes of the
Employee Retirement Income Security act of 1975, as amended
("ERISA").
NOW, THEREFORE, the Company hereby adopts the IDEC Pharmaceuticals Corporation
Deferred Compensation Plan on the following terms and conditions:
1.0 Definitions. Whenever used in this Plan, the following words and
phrases shall have the same meaning set forth below, unless a
different meaning is expressly provided or plainly required by
the context in which the words or phrases are used:
1.1 Beneficiary means a person designated by a Participant to
receive Plan benefits in the event of the Participant's death.
1.2 Board means the Board of Directors of the Company and its
successors.
1.3 CFO means the Chief Financial Officer of the Company and their
successors.
1.4 Change in Control of Company means:
(A) a change in ownership, or power to vote such that 35% or
more of the voting stock of the Company is concentrated
in the hands of any one person, entity or group of
related persons or entities or group of persons or
entities acting in concert;
(B) a change in the composition of the Board as a result of
which individuals serving on the Board immediately prior
to such change cease to constitute at least a majority
thereof;
(C) the stockholders of the Company approved any plan or
proposal for the liquidation or dissolution of the
Company;
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(D) substantially all of the assets of the Company are sold
or otherwise transferred to parties that are not within
the "controlled group or corporations" (as defined in
section 1563 of the Internal Revenue Code of 1986) in
which the Company is a member.
1.5 Company means IDEC Pharmaceuticals Corporation a Delaware
corporation
1.6 Disability means:
(A) "disability" as defined in any group long-term
disability policy or program sponsored by the Company
and in effect at the time a Participant who has suffered
a physical or mental impairment makes application under
this Plan for a disability distribution, or
(B) if no such policy or program is in force at such time,
"disability" as defined in section 1392c(a)(3) of volume
42 of the United States Code and regulations promulgated
thereunder, provided, however, that the disability
(whether under the definition in (a) or in (b)) must be
of a duration of at least six (6) consecutive months
from the date the Participant suffers the disability
notwithstanding any different requirements of duration
under either definition in the actual policy or program
or in the United States Code, respectively.
A Participant who has suffered a Disability shall be
disabled within the meaning of this Section 1.6.
The determination of whether a Participant is disabled
within the meaning of this Section 1.6 shall be made by
the CFO. A Participant who believes they have suffered a
disability within the meaning of this Section 1.6 shall
make application to the CFO, on a form prescribed by the
CFO, for a determination of whether they are disabled
under the terms of this Section 1.6. The Participant
shall make such written application to the CFO on or
after the date which is at least five (5) consecutive
months following the date they first suffered the
impairment under consideration. Any determination by the
CFO that a disability exists under the provisions of
this Section 1.6 shall be effective only after the date
the disability has existed for six (6) consecutive
months. All determinations made by the CFO shall be
final, and no Participant shall be considered disabled
for any purpose whatsoever under the provisions of this
Plan if determined not to be disabled by the CFO under
the procedures set forth in this Section 1.6.
The CFO shall notify each Participant who has made
application under this Section 1.6, in writing, for
their determination within three (3) months of the date
the CFO receives the Participant's application
hereunder. The Participant shall cooperate in providing
any information to the CFO which it requires in making
its determination, including, but not limited to, access
to the Participant's medical records, direct contact
with their physician and physical examination by a
physician selected by the Company. Any Participant who
does not fully cooperate shall be deemed not disabled by
the CFO and so notified.
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1.7 Key Employee means an employee of the Company, selected
by the CFO, who is a member of a select group of
management or highly compensated employees within the
meaning of Section 2520.104-23 of the Department of
Labor ERISA Regulations.
1.8 Normal Retirement Age means the later of age 60 or five
years of participation in this Plan.
1.9 Participant means:
(A) a key employee designated by the CFO, in
writing, to participate in the benefits under
the Plan who timely files a written election
pursuant to Section 2.4, below, and
(B) a former Employee who, at the time of their
termination from employment, retirement, death
or occurrence of disability, retains, or whose
beneficiary retains, benefits earned under the
Plan in accordance with its terms. A Participant
is considered an active participant in the Plan
until the earliest of the following:
(i) the Participant retires, dies or becomes
disabled under the terms of this Plan;
or
(ii) the Participant is determined or
believed by the CFO to no longer qualify
as a member of a "select group of highly
compensated or management employees" and
such Participant has received
distribution of their entire benefit
hereunder; or
(iii) the participant terminates employment
with the Company.
1.10 Plan means the IDEC Pharmaceuticals Corporation Deferred
Compensation Plan established by this document.
1.11 Plan Year means the period which is the same as the calendar
year.
1.12 Plan Year Compensation means the total income paid to an active
Participant by the Company during any Plan Year, or portion
thereof in which they are a Participant in this Plan, as
reflected on the Participant's form W-2. For purposes of the
elections under Section 2.4 of this Plan, Plan Year Compensation
shall consist of one or more of the following types of income:
annual base salary or annual bonus.
2.0 Participation.
2.1 Eligibility. A Key Employee of the company is eligible to
participate in this Plan on the entry date first following the
date as of which both of the following events have occurred:
(A) the CFO has designated an individual in writing as a
Participant in the Plan, and
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(B) the Key Employee has made a written election in
accordance with the terms of Section 2.4 below.
2.2 Entry Date. Any Key Employee who has met the eligibility
requirements specified in Section 2.1 as of the effective date
of this Plan shall become a Participant in the Plan as of the
first day of the Plan Year following their hire date. Any Key
Employee of the Company who meets the eligibility requirements
specified in Section 2.1 after the effective date of this Plan
shall become a Participant in the Plan immediately upon the date
on which they have met the eligibility requirements.
2.3 Designation. The CFO shall designate for each Plan Year, in
writing, the name of each Key Employee who shall be entitled to
participate in the Plan for the Plan Year. Such designation by
the CFO shall occur on a date such that each designated Key
Employee shall have sufficient time to make their written
election as required by Section 2.4 below.
2.4 Written Election by Participant. Each Key Employee designated by
the CFO as a Participant for a Plan Year shall submit a written
election prior to the first day of the Plan Year in which they
will be a Participant.
(A) Such written election shall be made on the form
presented to the Key Employee by the Plan Committee and
shall set forth:
(i) their election to participate in this Plan under
the terms hereof;
(ii) the amount of Plan Year Compensation the Key
Employee has determined to defer under the Plan
for the Plan Year, pursuant to Section 3.1
below;
(iii) the date on which their benefit is to be
distributed which is the earlier of (a) the date
specified for an In-Service Withdrawal or (b)
the later of (i) a specific date or (ii) when
they terminate employment with the Company due
to termination of service, retirement,
disability or death;
(iv) the form in which their benefit is to be
distributed upon termination of service or
retirement.
(B) A Participant's most recently submitted written election
shall remain in effect for subsequent Plan Years until
the Participant changes it in accordance with the
following:
(i) A Participant may change the amount of Plan Year
Compensation they will defer under the Plan for
future Plan Years by submitting a new written
election to the Company. Such new election must
be submitted to the Company on or before the
seventh (7th) day immediately proceeding the
Plan Year for which the new election is to be
effective. Any election of the amount of Plan
Year Compensation to defer for a given Plan Year
shall be irrevocable on and after the first day
of the Plan Year for which the election was
made.
(ii) A Participant may change the date or form of
distribution by submitting a new written
election to the Company, provided that such
change is submitted at least sixty (60) days
prior to the
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original date of distribution, the new date of
distribution is subsequent to the original date
of distribution, and only one change may be made
after the original election.
2.5 Duration of Participant. Any Key Employee who has become a
Participant at any time shall remain a Participant, even though
they are no longer an active Participant, until their entire
benefit under the terms of the Plan has been paid to them (or to
their Beneficiary in the event of their death), at which time
they cease to be a Participant.
2.6 Maintenance of Records. The annual Designation of Participants
by the CFO shall be maintained in the corporate minute book. The
written elections by Participants shall be maintained in the
corporate records with all other files pertaining to this Plan
by the CFO.
3.0 Contributions and Allocations.
3.1 Participant Contributions. A Participant may elect to defer each
Plan Year a portion, up to 80%, of their Plan Year Compensation,
provided that a Participant may not defer an amount less than
the minimum established from year to year by the CFO. For the
initial Plan Year, such minimum shall be $5,000. Such election
shall designate the amount of income deferred during the Plan
Year, in actual dollar amounts or percentages. Once a
Participant's contributions for a Plan Year reach their elected
dollar amount or percentages, such Participant shall not be
allowed to defer additional portions of their Plan Year
Compensation for the remainder of the Plan Year. Any deferred
amounts in excess of their elected dollar amount shall be
refunded to the Participant as soon as practicable.
3.2 Allocation of Contributions. All amounts which a Participant
elects to defer under the terms of this Plan shall be allocated
to their Account. Each such Participant Account shall be
credited with earnings as provided in Section 3.3 below.
3.3 Credited Earnings. The account of each Participant shall be
credited with interest. During the first five years of
participation in the Plan by a Participant the account will be
credited with interest at a rate of 7% per annum compounded
quarterly. Upon completion of five years of participation in the
plan by the Participant the Participant's account will be
credited 9% per annum compounded annually. Additionally the
interest rate of 9% will be applied retroactively to all
contributions made during the first five years of participation.
3.4 Forfeitures. If any amount of Participants contributions are
forfeited in any year, such forfeited amounts shall be returned
to the Company.
3.5 Funding. The assets of the Plan shall be held by the Company. As
such, the Plan is intended to be an unfunded plan for purposes
of the requirements of ERISA and the Code.
Notwithstanding the provisions under the terms of the Plan the
amounts contributed to this Plan, plus earnings thereon, shall
be allocated to separate accounts of Participants, all such
amounts credited to such individual accounts
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shall remain the general assets of the Employer, and as such
shall remain subject to the claims of the general creditors of
the Company. This Plan does not create, nor does any Employee,
Participant or Beneficiary have, any right with respect to any
specific assets of the Company or the Plan.
4.0 Vest of Accounts. The Account of each Participant shall be 100%
vested in such Participant at all times, provided that a portion
of such accounts shall be forfeited in accordance with Unplanned
In-Service Distribution of Section 6.3.
5.0 Types of Benefits.
5.1 Retirement Benefit. A Participant's Retirement Benefit is the
unpaid balance of their Account which equals the total of all
contributions made by the Participant and allocated to their
account and all earnings credited to their account in accordance
with the terms of the Plan less any distributions already paid.
5.2 Termination of Service Benefit. If a Participant elects to
receive their retirement benefit upon termination of their
employment with the Company, or if a Participant's employment
with the Company terminates prior to distribution of their
In-Service Benefit, the Company will pay retirement benefit,
calculated under Section 5.1, under the applicable form elected
by the Participant in their written election.
5.3 Disability Benefit. If a Participant becomes disabled as defined
in Section 1.5 above, the Company will pay their retirement
benefit, calculated under Section 5.1, under the applicable form
elected by the Participant in their written election.
5.4 Death Benefit.
(A) If a Participant dies after a distribution has commenced
or if the Company has not purchased a life insurance
contract in connection with the Participant's Retirement
Benefit, the Company will continue the payments of such
distribution otherwise due to the Participant to their
designation Beneficiary, under the applicable form
elected by the participant in their written election.
(B) If a Participant dies while still employed by the
Company and the Company has purchased a life insurance
contact in connection with such Participant's Retirement
Benefit, the Company will pay the Participant's
designated Beneficiary the greater of their Retirement
Benefit as determined under Section 5.1 above or their
projected retirement benefit (as defined below), under
the applicable form elected by the Participant in their
written election. "Projected Retirement Benefit" means
the amount determined by projecting the Participant's
contribution for the Participant's first year of
participation hereunder at an assumed earnings rate of
9% to retirement at normal retirement age.
5.5 In-Service Withdrawal. A Participant may designate a date in the
future for receipt of an in-Service Withdrawal with respect to
the Participant's contribution for a given Plan Year. Such
withdrawal may be paid while the Participant remains employed
with the Company, but shall be paid without credited earnings
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attributable to such Participant Contribution (which credited
earnings shall be distributed upon termination of employment or
retirement) in four (4) equal yearly installments commencing on
January 15 of the fourth Plan Year following the Plan Year of
deferral (the "In-Service Commencement Year"); provided,
however, that a Participant may elect to defer commencement of
an In-Service Withdrawal for an additional three years by
delivery to the Company of a written election not later than the
last day of the Plan year prior to the Plan Year immediately
preceding the In-Service Commencement Year.
5.6 Unplanned In-Service Benefit. A Participant may elect to receive
their Retirement Benefit as an Unplanned In-Service Benefit at
any time by providing the Plan Committee with a written election
to do so. In consideration for receiving an Unplanned in-Service
Benefit, such Participant shall permanently forfeit an amount
equal to ten percent (10%) of their retirement benefit and forgo
all future participation in the Plan.
5.7 Financial Hardship Benefit. A Participant may request a portion
of their retirement benefit as a financial hardship benefit at
any time by providing the Plan Committee, to its satisfaction,
with a written election to do so, proof of an unforeseeable
financial hardship, and proof that all other financial resources
have been explored and utilized. The amount of a financial
hardship benefit shall be limited to the lesser of the amount
needed for the financial hardship or such Participant's
retirement benefit. In consideration for receiving a financial
hardship benefit, the Participant will not be permitted to make
further contributions to the Plan for the remainder of the Plan
Year and the following Plan Year.
6.0 Distributions.
6.1 Forms of Benefits. The Company shall pay benefits in the form
associated with type of benefit elected by the Participant, and,
to the extent a type of benefit may be distributed in various
forms, the Company shall pay benefits in the form elected by the
Participant. The forms of benefits associated with the types of
benefits are the following:
(A) Retirement Benefit, Termination of Service Benefit,
Disability Benefit, and Death Benefit shall be paid in
(i) one lump sum;
(ii) 5 yearly installments;
(iii) 10 yearly installments; or
(iv) 15 yearly installments;
(B) In-Service Withdrawal shall be paid as provided in
Section 5.5 above;
(C) Unplanned In-Service Benefit shall be paid in one lump
sum; and
(D) Financial Hardship Benefit shall be paid in one lump
sum.
6.2 Commencement of Payments. The Company will pay, or begin to pay,
the Types of Benefits under this Plan to the Participant in
accordance with the following:
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(A) Retirement Benefit, Termination of Service Benefit,
Disability Benefit and Death Benefit payments shall
commence on the later of
(i) The date specified in the Participant's initial
election form or
(ii) January 15th of the Plan Year immediately
following the date on which the Participant
retires, terminates service, becomes disabled,
or dies;
(B) In-Service Withdrawal payments shall commence on the
date designated by the Participant on their written
election pursuant to Section 2.4, provided that such
payments are from Participant contributions that have
been in such Participant's account for at least three
years;
(C) Unplanned In-Service Benefit payments shall commence no
later than sixty-five (65) days after a written request
for an Unplanned In-Service Benefit is received by the
Committee;
(D) Financial Hardship Benefit payments shall commence no
later than sixty-five (65) days after a request for a
Financial Hardship Benefit is approved by the Plan
Committee.
7.0 Amendments, Termination of Plan, Change of Control.
7.1 Amendments. The Company reserves the right to amend the Plan at
any time by resolution of the CFO. The CFO will determine the
effective date of any such amendment. The amendment may not
deprive any Participant or Beneficiary of any portion of a
benefit under the terms of this Plan at the time of the
amendment.
7.2 Termination of Plan. The Company reserves the right to terminate
the Plan at any time by resolution of the CFO. In the event of
Plan termination, the Company will calculate the Retirement
Benefit of each Participant and distribute such amounts to the
Participant or Beneficiary in a lump sum within thirty (30) days
of the Plan's termination.
7.3 Change in Control. In the event of a Change in Control, the Plan
shall terminate and the provisions in Section 7.2 shall control.
8.0 Benefits not Funded. Participants and Beneficiaries have the
status of unsecured creditors of the Company, and the Plan
constitutes a mere promise by the Company to make benefit
payments in the future. A Participant's or Beneficiary's
interest in the Plan is an unsecured claim against the general
assets of the Company, and neither the Participant nor a
Beneficiary has any right against the account until the Plan has
distributed the benefit. All amounts credited to an account are
the general assets of the Company and may be disposed of or used
by the Company in such manner as it determines.
It is the intention of the parties that this Plan shall
constitute an unfunded arrangement maintained for the purpose of
providing deferred compensation for a select group of management
or highly compensated employees for purposes of Title I of the
Employee Retirement Income Security Act of 1974.
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9.0 Miscellaneous.
9.1 Designation of Beneficiary. Each Participant shall designate, in
writing, prior to the date they first become a Participant in
the Plan, one or more beneficiaries to receive their benefits
under the provisions of Section 5.4. The Participant shall file
the written designation with the Plan Committee. The Participant
may revoke a previous beneficiary designation by filing a new
written beneficiary designation with the Plan Committee.
In any event, if a Participant or Beneficiary who has designated
another beneficiary is divorced, all beneficiary designation
executed prior to the effective date of the dissolution of
marriage (or other decree or order entered under applicable
state law) are automatically revoked under the term of this
Section 9.1. In such event, the Participant or Beneficiary may
designate one or more Beneficiaries in accordance with the terms
of this Section 9.1. If none is made following the effective
date of the dissolution of the marriage, the individual's
benefits shall pass under the laws of interstate succession and
the terms of the next following paragraph.
If a Participant fails to file a valid designation of
beneficiary with the Plan Committee under the provisions of this
Section 9.1, or if a designated beneficiary fails to survive or
receive any or all payments due hereunder, then the death
benefit payable under this Plan shall be payable to the
Participant's (or the Beneficiary's) spouse; if no spouse
survives, then the Participant's (or Beneficiary's) children,
with equal shares among living children and with the living
descendants of a deceased child receiving equal portions of the
deceased child's share; in the absence of spouse or descendants,
to the Participant's (or Beneficiary's) parents; and in the
absence of spouse, descendants or parents, to the Participant's
(Beneficiary's) brothers and sisters, with the living
descendants of a deceased brother and those of a deceased sister
receiving equal portions of the deceased brother's or sister's
share; in the absence of any of the persons name herein, to the
Participant's (or beneficiary's) estate.
For purposes of this Section 9.1, the term "descendant" means
all persons who are descended from the person referred to either
by birth or to legal adoption by such person, and "child" or
"children" includes adopted children.
9.2 Benefits Not Assignable. The rights of each Participant are not
subject in any manner or anticipation, alienation, sale,
transfer, assignment, pledge, encumbrance, attachment, or
garnishment by creditors of the Participant nor any Beneficiary.
Neither the Participant nor Beneficiary may assign, transfer or
pledge the benefits under this Plan. Any attempt to assign,
transfer or pledge a Participant's benefits under this Plan is
void.
9.3 Benefit. This Plan constitutes an agreement between the Company
and each of the Participants which is binding upon and inures to
the Company, its successors and assigns and upon the Participant
and their heirs and legal representatives
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9.4 Headings. The headings of the Articles and Sections of this Plan
are included for purposes of convenience only, and shall not
affect the construction or interpretation of any of its
provisions.
9.5 Notices. All notices requests, demands, and other communication
under this Plan shall be in writing and shall be deemed to have
been duly given on the date of service if served personally on
the party to whom notice is to be given, or on the third day
after mailing if mailed to the party to whom notice is to be
given, by first class mail, registered or certified (return
receipt requested), postage prepaid, and properly addressed to
the last known address to each party as set forth on the first
page thereof. Any party may change its address for purposes of
this Section by giving the other parties written notice of the
new address in the manner set forth above.
9.6 No Loans. The Plan does not permit any loans to be made to any
Participant or Beneficiary.
9.7 Gender Usage. The use of the masculine gender includes the
feminine gender for all purposes of this Plan.
9.8 Expenses. Costs of administration of the Plan shall be paid by
the Company.
IN WITNESS WHEREOF, the Company has adopted the Plan on
_________________, 19__, effective January 1, 1999.
IDEC PHARMACEUTICALS CORPORATION
By: /s/ Phillip M. Schneider
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Phillip M. Schneider
Vice President and Chief
Financial Officer