Exhibit 10.15
DEPUY, INC.
SUPPLEMENTAL RETIREMENT PLAN
(PLAN NO. 1)
(As Amended and Restated
Effective as of October 1, 1996)
DEPUY, INC. SUPPLEMENTAL RETIREMENT PLAN (PLAN NO. 1)
(As Amended and Restated Effective as of October 1, 1996)
CONTENTS
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SECTION PAGE
ARTICLE I. ESTABLISHMENT OF THE PLAN
1.1 Establishment and Restatement 1
1.2 Purpose 1
ARTICLE II. DEFINITIONS AND CONSTRUCTION
2.1 Definitions 2
2.2 Gender and Number 6
2.3 Employment Rights 7
2.4 Applicable Law 7
ARTICLE III. ADMINISTRATION
3.1 Administration 8
3.2 Finality of Determination 8
3.3 Indemnification and Exculpation 8
ARTICLE IV. PARTICIPATION
4.1 Participation 9
4.2 Other Retirement Income 9
ARTICLE V. BENEFITS
5.1 Retirement Benefits 10
5.2 Death Benefits 12
5.3 Supplemental Deferred Vested Benefits 13
5.4 Commencement of Payments 13
5.5 Form of Payments 14
5.6 Calculation of Offsets and Actuarial Equivalence 14
5.7 Reductions for Certain Surviving Spouses 16
5.8 DETERMINATION OF BENEFITS. 16
5.9 Transferred Employees from
Boehringer Mannheim Corporation. 17
5.10 Participants Transferring to Boehringer
Mannheim Corporation. 17
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DEPUY, INC. SUPPLEMENTAL RETIREMENT PLAN (PLAN NO. 1)
(As Amended and Restated Effective as of October 1, 1996)
CONTENTS
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SECTION PAGE
ARTICLE VI. OTHER TERMINATIONS OF EMPLOYMENT
6.1 Termination Before Five or Ten Years of Service 18
6.2 Termination for Cause 18
ARTICLE VII. NONCOMPETITION
7.1 Noncompetition 19
ARTICLE VIII. MISCELLANEOUS
8.1 Amendment and Termination 21
8.2 Funding 21
8.3 Tax Liability 22
8.4 Assignment 22
8.5 Successors 22
8.6 Severability 22
8.7 Nonuniform Determinations 22
8.8 Separation From Other Plans 23
8.9 Effective Date 23
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ARTICLE I. ESTABLISHMENT OF THE PLAN
1.1 ESTABLISHMENT AND RESTATEMENT
Boehringer Mannheim U.S. Holdings, Inc. previously established and maintained a
supplemental benefits plan on behalf of its subsidiaries and other affiliated
corporations. Such plan was last amended and restated effective as of January 1,
1993. Effective as of January 1, 1994, sponsorship of the plan was assumed by
Corange U.S. Holdings, Inc., and the plan became known as the Corange U.S.
Holdings, Inc. Supplemental Retirement Plan (Plan No. 1). Effective as of
October 1, 1996, the assets and liabilities held under this plan which related
to Participants employed by Boehringer Mannheim Corporation or affiliates of
Boehringer Mannheim Corporation were spun off and transferred to a new plan
known as the Boehringer Mannheim Corporation Supplemental Retirement Plan (Plan
No. 1) and a related trust agreement. The original plan is hereby amended and
restated effective as of October 1, 1996, and shall be renamed the "DePuy, Inc.
Supplemental Retirement Plan, Plan No. 1" (the "Plan"). The Plan sponsor shall
be changed from Corange U.S. Holdings, Inc. to DePuy, Inc.
1.2 PURPOSE
The Plan is intended to ensure a competitive level of retirement benefits to a
select group of senior executives of DePuy in order to attract and retain
talented executives.
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ARTICLE II. DEFINITIONS AND CONSTRUCTION
2.1 DEFINITIONS
Whenever the following terms are used in this Plan, they shall have the meaning
specified unless a contrary intention is specifically and clearly indicated.
(a) "ACTUARIAL EQUIVALENT" means a benefit having the same present value as the
benefit it replaces. For purposes of establishing actuarial equivalence,
present value shall be determined on the bases of the 1984-UP Mortality
Table and the Assumed Interest Rate.
(b) "ADMINISTRATOR" means DePuy.
(c) "ASSUMED INTEREST RATE" means a rate equal to 120 percent of the interest
rate used, by the Pension Benefit Guaranty Corporation, for valuing
immediate annuities upon termination of defined benefit plans. The Assumed
Interest Rate used under the Plan during any Fiscal Year shall be based on
120 percent of the PBGC rate in effect on the first day of the month in
which payment of a Participant's Benefits will commence.
(d) "BENEFITS" means any amounts payable under the Plan as Supplemental
Retirement Benefits, Supplemental Early Retirement Benefits, Disability
Retirement Benefits, Death Benefits, or Supplemental Deferred Vested
Benefits, to or on behalf of a Participant who has met the requirements of
the Plan for eligibility for such payments. For the purpose of calculating
a Participant's total service with DePuy, all service with any company(s)
in the worldwide DePuy group shall be included, subject to the provisions
of section 5.8 of the Plan.
(e) "BOARD" means the Board of Directors of DePuy.
(f) "CEO" means the Chief Executive Officer of DePuy.
(g) "CODE" means the Internal Revenue Code of 1986, as it may be amended from
time to time. Reference to a section of the Code shall also include any
comparable provision of the Code that supersedes said section.
(h) "DEATH BENEFITS" means benefits payable to a Surviving Spouse upon the
death of a Participant pursuant to section 5.2.
(i) "DEPUY" means DePuy, Inc., a Delaware corporation, or any successor
corporation resulting from a merger or consolidation with DePuy or transfer
of substantially all of the assets of DePuy.
(j) "DEPUY AFFILIATED GROUP" means DePuy, together with--
(1) any subsidiary of DePuy and any other entity which, together with
DePuy, is a member of a "controlled group" of corporations (as
described in section 414(b) of the Code);
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(2) any other entity which has been merged into or acquired by DePuy or by
any subsidiary of DePuy which is included in the DePuy controlled
group (as defined above), as long as the merged or acquired entity was
part of the same controlled group as DePuy (or the DePuy subsidiary)
in which it was merged or by which it was acquired immediately prior
to the merger or the acquisition; and
(3) any successor entity resulting from a merger or consolidation with
DePuy or from the transfer of substantially all of the assets of
DePuy.
(k) "DEPUY INCOME" means the total amount of income received by a Participant
in the form of base salary in a Fiscal Year, plus one half of the annual
cash bonus, paid to the Participant from the DePuy Affiliated Group,
calculated in United States dollars. DePuy Income shall also include any
Participant deferrals pursuant to a cash or deferred arrangement under
section 401(k) of the Code maintained by DePuy, any salary deferred under
any nonqualified deferred compensation arrangement maintained by DePuy, and
any amounts excluded from wages by reason of any Participant election
pursuant to a cafeteria plan under section 125 of the Code maintained by
DePuy. Except for the annual cash bonus, DePuy Income shall not include any
incentive compensation (deferred or otherwise) or any other forms of
compensation provided by DePuy to an employee.
(l) "DISABILITY" means that because of injury or sickness a Participant cannot
perform substantially all of the material duties of his position as they
existed immediately prior to such injury or sickness.
(m) "DISABILITY RETIREMENT DATE" means the date upon which a Participant ceases
Employment as the result of a Disability.
(n) "EARLY RETIREMENT" means Retirement by a Participant at any time on or
after the Participant's Early Retirement Date, but before his Normal
Retirement Date.
(o) "EARLY RETIREMENT DATE" means, the date upon which a Participant retires
from Employment with the DePuy Affiliated Group, at any time earlier than
the Participant's Normal Retirement Date and after the Participant both
attains age 55 and completes five years of service within the DePuy
Affiliated Group.
(p) "EMPLOYMENT" means employment with the DePuy Affiliated Group as determined
by DePuy. However, the Administrative Committee may (in its sole
discretion) treat any material diminution in a Participant's
responsibilities or any change from active, full-time status as
constituting a termination of Employment.
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(q) "FINAL AVERAGE DEPUY INCOME" means the annual average of a Participant's
DePuy Income for the 36-month period ending on the date of the
Participant's termination of Employment (by reason of Retirement or
otherwise) or the Participant's Disability. If a Participant completed
fewer than 36 months of service within the DePuy Affiliated Group, his
Final Average DePuy Income shall mean the Participant's annual average
DePuy Income for his entire period of service with the DePuy Affiliated
Group.
(r) "FISCAL YEAR" means the fiscal year of DePuy, which is the calendar year,
unless changed by the Board.
(s) "INDEPENDENT ACTUARY" means a person (or a firm of which he is a member)
who is an "enrolled actuary" under the Employee Retirement Income Security
Act of 1974 ("ERISA") and who is chosen by the Administrative Committee to
assist in performing calculations under the Plan.
(t) "LONG-TERM DISABILITY PLAN" means any long-term disability plan maintained
by an affiliate within the DePuy Affiliated Group and covering a
Participant, including benefits paid thereunder.
(u) "NORMAL RETIREMENT" means Retirement by a Participant on or after the
Participant's Normal Retirement Date.
(v) "NORMAL RETIREMENT DATE" means the last day of the DePuy pay period
immediately following a Participant's sixty-fifth birthday.
(w) "OTHER RETIREMENT INCOME" means, the total amount of annual retirement
income payable to a Participant, calculated in United States dollars, from
any employment source other than the DePuy Affiliated Group. Other
Retirement Income shall include--
(1) any employer-provided benefits that a Participant is entitled to
receive (whether or not waived or deferred) from any plan that is a
qualified retirement plan under section 401(a) of the Code and that is
subject to the minimum funding requirements of section 412 of the
Code;
(2) any employer-derived benefits that a Participant is entitled to
receive (whether or not waived) under a defined benefit retirement
plan maintained outside of the United States;
(3) one-half of any primary Social Security benefits that a Participant is
entitled to receive (whether or not waived or deferred); and
(4) any benefits that a Participant is entitled to receive (whether or not
waived or deferred) under a program that is comparable to
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the United States Social Security program and that is maintained by a
government other than the United States government.
In calculating any Death Benefits payable under section 5.2(a), "Other
Retirement Income" shall not include any primary Social Security benefits
under paragraph (3) or any benefits comparable to Social Security benefits
under paragraph (4). In calculating benefits under paragraph (1) or (2)
above, employer-derived benefits shall be taken into account only if the
period of employment to which they relate occurred prior to the
Participant's employment within the DePuy Affiliated Group.
(x) "PARTICIPANT" means an employee of DePuy selected to participate in the
Plan as described under section 4.1 and who has formally agreed to
participate in the Plan. An individual shall continue as a Participant
after his termination of Employment with DePuy until all Benefits payable
hereunder with respect to the individual have been paid or forfeited under
the Plan. The word "Participant" shall not include any references to the
spouse of an employee or of a former employee who participates in the Plan.
(y) "PLAN" means this DePuy, Inc. Supplemental Retirement Plan (Plan No. 1).
(z) "RETIREMENT" means the total cessation of Employment within the DePuy
Affiliated Group by a Participant after attaining age 55 and completing at
least five years of service within the DePuy Affiliated Group or after
attaining age 60.
(aa) "RETIREMENT DATE" means the date that a Participant begins receiving
benefits under this Plan due to Retirement, Disability, or other
termination of Employment.
(bb) "RIP PLAN" means the DePuy, Inc. Retirement Income Plan.
(cc) "SUPPLEMENTAL DEFERRED VESTED BENEFITS" means Benefits payable pursuant to
section 5.3, to a Participant whose Employment has ceased for a reason
other than death, Disability, or Retirement and who is eligible for a
benefit pursuant to the other provisions of the Plan.
(dd) "SUPPLEMENTAL DISABILITY RETIREMENT BENEFITS" means Benefits payable
pursuant to section 5.1(c), to a Participant whose Employment has ceased as
a result of Disability.
(ee) "SUPPLEMENTAL EARLY RETIREMENT BENEFITS" means reduced Benefits payable
pursuant to section 5.1(b), upon Early Retirement.
(ff) "SUPPLEMENTAL RETIREMENT BENEFITS" means Benefits payable to a Participant
who retires, pursuant to section 5.1(a).
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(gg) "SURVIVING SPOUSE" means the legally married spouse of a Participant who
survives that Participant's death.
(hh) "TERMINATION FOR CAUSE" means that a Participant's Employment within the
DePuy Affiliated Group has terminated because the Participant engaged in a
willful or deliberate act of commission or omission which is injurious to
the finances or reputation of DePuy or any affiliate within the DePuy
Affiliated Group. Termination for Cause shall include, but is not limited
to--
(1) committing any material breach of this Plan, including, without
limitation, the provisions of Article VII regarding non-competition;
(2) committing any dishonest, unethical, fraudulent, or felonious act
either in respect to duties to DePuy or an affiliate within the DePuy
Affiliated Group, or which results in material damage to the business,
reputation, or goodwill of DePuy or an affiliate within the DePuy
Affiliated Group;
(3) gross negligence or intentional wrongdoing in connection with
employment, which has a substantial adverse effect on DePuy or an
affiliate within the DePuy Affiliated Group, its business, or
reputation;
(4) prolonged unexcused absence from duties;
(5) material breach of any employment or other agreement with DePuy or an
affiliate within the DePuy Affiliated Group; or
(6) entering into unauthorized negotiations with any organization which is
competitive with the then present business of DePuy or an affiliate
within the DePuy Affiliated Group regarding the rendering of personal
services for such organization.
If a Participant resigns from Employment with DePuy or an affiliate within
the DePuy Affiliated Group, and the Administrative Committee determines
that the resignation was in anticipation of Termination for Cause, the
Participant's resignation shall be deemed a Termination for Cause.
(ii) "VALUATION DATE" means the first day of the calendar year for which a
contribution is made.
2.2 GENDER AND NUMBER
Except when otherwise indicated by the context, words in the masculine gender
shall include the feminine and neuter genders; the plural shall include the
singular and the singular shall include the plural.
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2.3 EMPLOYMENT RIGHTS
Establishment of the Plan shall not be construed to give any Participant the
right to be retained in the employment of the DePuy Affiliated Group or to any
benefits not specifically provided by the Plan.
2.4 APPLICABLE LAW
This Plan is fully exempt from Titles II, III, and IV of ERISA. The Plan shall
be governed by and construed in accordance with Title I of ERISA and the laws of
the State of Indiana.
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ARTICLE III. ADMINISTRATION
3.1 ADMINISTRATION
Except as specifically provided elsewhere in the Plan, the Administrator shall
have all such powers as may be necessary to carry out the provisions of the Plan
and the transaction of the Plan's business. The authority granted under this
Article shall be subject to the right of the Board to amend or terminate the
Plan, as provided in section 8.1.
3.2 FINALITY OF DETERMINATION
The determination of the Administrator as to any disputed questions arising
under this Plan, including questions of construction and interpretation shall be
final, binding, and conclusive upon all persons; except where the right to make
such determination is reserved to the CEO or the Board.
3.3 INDEMNIFICATION AND EXCULPATION
Any individual who is directed by DePuy to carry out responsibilities or duties
imposed by the Plan shall be indemnified and held harmless by DePuy or an
affiliate within the DePuy Affiliated Group against and from any and all loss,
cost, liability, or expense that may be imposed upon or reasonably incurred by
them in connection with or resulting from any claim, action, suit, or proceeding
to which they may be a party or in which they may be involved by reason of any
action taken or failure to act under this Plan and against and from any and all
amounts paid by them in settlement (with DePuy's written approval) or paid by
them in satisfaction of a judgment in any such action, suit, or proceeding. The
foregoing provision shall not be applicable to any person if the loss, cost,
liability, or expense is due to such person's gross negligence or willful
misconduct.
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ARTICLE IV. PARTICIPATION
4.1 PARTICIPATION
Participants in the Plan shall be selected by the CEO or the Board from senior
executives within the DePuy Affiliated Group. Selections will be based upon the
CEO's or the Board's determination of the past, present, and expected future
contributions by executives to the long-term performance and growth of DePuy and
other affiliates within the DePuy Affiliated Group. Executives selected by the
CEO or the Board must accept participation in the Plan by written notice to the
Administrator. As a condition of participation in the Plan, candidates for
participation shall be required to execute such other documents and agreements
and to agree to such other conditions as the Administrator may impose.
4.2 OTHER RETIREMENT INCOME
(a) Executives who agree to participate also agree to submit a complete
description of their Other Retirement Income, as defined in this Plan, at
the time they accept participation and to update the description of Other
Retirement Income at the beginning of each Fiscal Year. Foreign source
income includable in Other Retirement Income will be translated into United
States dollars using the rate of exchange accepted by the Internal Revenue
Service for the preceding tax year. Upon DePuy's written request, the
Participant agrees to submit the last full year tax return filed with the
Internal Revenue Service to the outside auditor of DePuy's choice, in order
to verify the Other Retirement Income reported by the Participant.
(b) A Participant who has received or receives a distribution in any form
(including a lump sum payment under a non-DePuy retirement plan) will
report that amount as Other Retirement Income.
(c) The final determination of the exact amount of Other Retirement Income
shall be made by the Administrator and shall be binding upon all
Participants.
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ARTICLE V. BENEFITS
5.1 RETIREMENT BENEFITS
(a) A Participant who attains his Normal Retirement Date while employed within
the DePuy Affiliated Group shall be eligible to receive Supplemental
Retirement Benefits under the Plan. The Supplemental Retirement Benefits
will begin as soon as practical following the date of the Participant's
Normal Retirement. A Participant's Supplemental Retirement Benefit will be
an annual amount, payable for the Participant's lifetime, equal to--
(1) sixty percent of the Participant's Final Average DePuy Income, reduced
by
(2) the sum of the Participant's Other Retirement Income, the benefit
payable to the Participant under the RIP Plan, and any benefit payable
to the Participant under any defined benefit retirement arrangement
maintained by DePuy or by any non-United States based affiliate of
DePuy.
(b) A Participant who attains his Early Retirement Date while employed within
the DePuy Affiliated Group and retires before his Normal Retirement Date
shall be eligible to receive Supplemental Early Retirement Benefits under
the Plan. The Supplemental Early Retirement Benefits will begin as soon as
practical following the Participant's Early Retirement. Except as adjusted
below, a Participant's Supplemental Early Retirement Benefits will be an
annual amount computed in the same manner as Supplemental Retirement
Benefits under subsection (a). The following calculations shall be applied
in determining the Supplemental Early Retirement Benefit:
(1) The amount determined in section 5.1(a)(1) (before the application of
the offset in section 5.1(a)(2)) shall be reduced to reflect the early
commencement of the Benefit. The reduction for early commencement
shall be .25 percent for each of the first 60 months and .41667
percent for each of the next 60 months (if any), that commencement of
the Supplemental Early Retirement Benefits precedes the Participant's
Normal Retirement Date.
(2) Additionally, if the Participant entered the Predecessor Plan after
January 1, 1992 and has completed fewer than ten complete years of
service within the DePuy Affiliated Group, his Supplemental Early
Retirement Benefit (after reduction for early commencement) will be
further reduced. The reduction shall be .41667 percent for each whole
or fractional month that the Participant's years of service are less
than ten years. This service reduction (in addition to the early
commencement reduction)
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shall be applied to the amount determined under section 5.1(a)(1)
before the application of the offset in section 5.1(a)(2), but after
the application of the reduction in paragraph (1).
(3) Instead of the reductions described in paragraph (2), if the
Participant entered the Plan before January 1, 1992 and has completed
fewer than five complete years of service with Boehringer, his
Supplemental Early Retirement Benefit (after reduction for early
commencement) will be further reduced. The reduction shall be .833
percent for each whole or fractional month that the Participant's
years of service are less than five years, and this service reduction
(in addition to the early commencement reduction) shall be applied to
the amount determined under section 5.1(a)(1) before the application
of the offset in section 5.1(a)(2), but after the application of the
reduction in paragraph (1).
(c) A Participant who incurs a Disability while employed within the DePuy
Affiliated Group shall be eligible to receive Supplemental Disability
Retirement Benefits under the Plan if the Participant completed five years
of service within the DePuy Affiliated Group or attained age 60 prior to
the Participant's Disability Retirement Date. If a Participant is not
enrolled in the Long-Term Disability Plan, the Participant shall receive no
Supplemental Disability Retirement Benefits under this Plan. The
Supplemental Disability Retirement Benefits will begin as soon as practical
following the Participant's Disability Retirement Date. A Participant's
Supplemental Disability Retirement Benefit will be an annual amount,
payable for the Participant's lifetime, equal to--
(1) sixty percent of the Participant's Final Average DePuy Income, reduced
by
(2) the sum of--
(A) the amount the Participant would be eligible to receive under the
Long-Term Disability Plan (assuming the Participant selected the
highest level of coverage available under such Plan); plus
(B) the sum of the Participant's Other Retirement Income and the
benefit payable to the Participant under the RIP Plan.
The Participant's Supplemental Disability Retirement Benefit will not be reduced
to reflect commencement thereof before the Participant's Normal Retirement Date
or the Participant's failure to complete five years of service within the DePuy
Affiliated Group. If a Participant recovers from a Disability, his Supplemental
Disability Retirement Benefits shall cease. Upon his subsequent Retirement or
other termination of employment, he
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shall receive a benefit pursuant to the remaining provisions of this Plan, to
the extent that he has satisfied the Plan requirements for such Benefits.
5.2 DEATH BENEFITS
(a) The Surviving Spouse of a Participant will be eligible to receive a death
benefit under this section 5.2(a) if the Participant dies while employed by
DePuy and prior to the commencement of benefits under section 5.1, but
after either--
(1) completing five years of service within the DePuy Affiliated Group; or
(2) attaining age 60.
The amount of such benefit will be an annual amount equal to 50 percent of the
annual amount of Supplemental Retirement Benefits which would have been payable
to the Participant, based on his DePuy Income at his death, if the Participant
had retired on his Normal Retirement Date and been entitled to receive benefits
under section 5.1(a). Such payments will begin on the first day of the month
next following the date of the Participant's death.
(b) The Surviving Spouse of a Participant will be eligible to receive a death
benefit under this section 5.2(b) if the Participant dies after the
commencement of Benefits under section 5.1 or 5.3. The amount of such
benefit will be an annual amount equal to 50 percent of the annual amount
of the Benefits payable to the Participant during his lifetime; provided,
however, that for purposes of determining the amount of death benefit
payable, the Benefits payable during the Participant's lifetime shall be
recalculated by excluding from Other Retirement Income any primary Social
Security benefit payable to the Surviving Spouse by reason of the
Participant's death and by including any payments to the Surviving Spouse
under the Long-Term Disability Plan. Such payments will begin on the first
day of the month next following the date of the Participant's death.
(c) The Surviving Spouse of a Participant will be eligible to receive a death
benefit under this section 5.2(c) if the Participant dies after termination
of employment within the DePuy Affiliated Group and prior to the
commencement of Supplemental Deferred Vested Benefits under section 5.3,
but after completing ten years of service within the DePuy Affiliated Group
(five years if the Participant entered the Plan before January 1, 1992).
The amount of such benefit will be an annual amount equal to 50 percent of
the annual amount of Supplemental Deferred Vested Benefits which would have
been payable to the Participant under section 5.3 on the first day of the
month next following the Participant's sixty-fifth birthday. Such payments
will
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begin on the first day of the month next following the date the Participant
would have attained his sixty-fifth birthday.
(d) Payments under this section shall be continued to the Surviving Spouse
until the Surviving Spouse's death.
5.3 SUPPLEMENTAL DEFERRED VESTED BENEFITS
A Participant whose Employment within the DePuy Affiliated Group is terminated
after completing ten years of service within the DePuy Affiliated Group (five
years if the Participant entered the Plan before January 1, 1992) but before
becoming eligible for Supplemental Retirement Benefits or Supplemental Early
Retirement Benefits, shall be eligible to receive Supplemental Deferred Vested
Benefits under the Plan. The Supplemental Deferred Vested Benefits will begin on
the first day of the month coincident with or next following the Participant's
sixty-fifth birthday. A Participant's Supplemental Deferred Vested Benefit will
be an annual amount computed in the same manner as Supplemental Retirement
Benefits under section 5.1(a), based on his Final Average DePuy Income at his
termination of employment and his projected age 65 Other Retirement Income and
benefit under the RIP Plan.
5.4 COMMENCEMENT OF PAYMENTS
(a) Except as otherwise specified in this section 5.4, benefits payable under
sections 5.1, 5.2, and 5.3 will commence on the dates specified therein.
(b) A Participant eligible for a benefit under 5.3 or a Surviving Spouse
eligible for a benefit under section 5.2(c) may request earlier
commencement of such benefit. The Administrator may allow Benefits payable
with respect to the Participant or Surviving Spouse to commence at any time
after the Participant attains (or would have attained) age 55.
(c) The Administrator may grant early commencement of benefits upon the written
petition of the Participant or, if the Participant is deceased, the
Participant's Surviving Spouse. The approval or denial of such petition
shall be in the sole discretion of the Administrator. However, such
petition may not be approved unless the Participant or Surviving Spouse can
demonstrate either--
(1) proof of financial need;
(2) that such payment is in the best interest of DePuy; or
(3) that such payment will not result in a significant financial detriment
to DePuy.
If benefits commence early under this section, they shall be reduced to
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reflect the early commencement thereof and shall be the Actuarial
Equivalent of the Benefits otherwise payable under the Plan.
5.5 FORM OF PAYMENTS
(a) Benefit payments under the Plan shall normally be made for the life of the
Participant and his Surviving Spouse, as described elsewhere in this
Article V. However, upon the written petition of the Participant (or the
Participant's Surviving Spouse if the Participant is dead), the
Administrator may provide for all or any part of the benefits payable with
respect to a Participant to be made in a single lump sum payment. The
approval or denial of such petition shall be in the sole discretion of the
Administrator; provided, however, such petition may not be approved unless
the Participant (or Surviving Spouse) can demonstrate either--
(1) proof of financial need;
(2) that such payment is in the best interest of DePuy; or
(3) that such payment will not result in a significant financial detriment
to DePuy.
As a condition of the Administrator's approval, a Participant or Surviving
Spouse who requests a lump sum payment, shall execute such other documents
and agreements as are consistent with the terms of this Plan as the
Administrator may impose.
(b) Lump sum payments under this section shall be the Actuarial Equivalent of
the Benefits payable with respect to the Participant or Surviving Spouse.
5.6 CALCULATION OF OFFSETS AND ACTUARIAL EQUIVALENCE
(a) The Administrator is authorized to interpret the terms of the Plan and
calculate all Benefits payable under the Plan. Such interpretations shall
comply with the rules contained in this section. Such calculations shall be
made by, or with the guidance of, the Independent Actuary. However,
subsection (d) shall only apply to Participants who entered the Plan after
January 1, 1992.
(b) The offset under this Plan for a married Participant's Other Retirement
Income and under the RIP Plan shall be calculated as a 50 percent joint and
survivor annuity (with the Participant's Surviving Spouse as the contingent
annuitant) beginning at the later of--
(1) the Participant's Retirement Date; or
(2) the earliest date that the Other Retirement Income or RIP payments are
available.
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The offset under this Plan for an unmarried Participant's Other
Retirement Income and under the RIP Plan shall be calculated as a
single life annuity beginning on the later of--
(A) the Participant's Retirement Date or
(B) the earliest date that the Other Retirement Income or RIP Plan
payments are available.
Such annuities shall be the Actuarial Equivalent of the amount of
Other Retirement Income or the amount under the RIP Plan actually
payable (or paid) to the Participant.
(c) In the case of a Participant (or his Surviving Spouse) who is receiving
payments under this Plan in a lump sum--
(1) If the Participant's Other Retirement Income or benefit under the RIP
Plan is either maintained in an individually maintained account or is
paid as a lump sum, then the offset for the Other Retirement Income or
the benefit under the RIP Plan (as applicable) shall be determined on
the basis of such account balance or lump sum as of the Retirement
Date.
(2) If the Participant's Other Retirement Income is maintained under a
defined benefit plan, then the offset for the Other Retirement Income
shall be determined as of the date payment of the lump sum under this
Plan is payable.
(d) If the payment of Other Retirement Income begins before the payment of
Benefits under this Plan, the offset for the Other Retirement Income shall
be based on the sum of--
(1) the amount of such Other Retirement Income payments made when Benefits
are payable under this Plan and
(2) the annuity equivalent of all payments made before Benefits are
payable under this Plan, plus interest thereon.
For purposes of this subsection (d), interest on any payments of Other
Retirement Income shall be based on 120 percent of the interest rate used,
by the Pension Benefit Guaranty Corporation, for valuing immediate
annuities upon termination of defined benefit plans. The interest rate used
shall be based on such PBGC rates as in effect on the first day of each
Plan Year for the period between payment of the Other Retirement Income and
the commencement of Benefits under this Plan.
(e) For purposes of applying this section 5.6--
(1) If a benefit under this Plan is payable as a lump sum, a Participant's
primary Social Security benefit will be based on the law in effect on
his Retirement Date and will be determined on the assumption that the
maximum Social Security benefits will increase at an annual rate equal
to the Assumed Interest Rate in
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effect at the date on which payment of a Participant's Benefits
commence, minus 200 basis points.
(2) If a benefit under this Plan is payable as an annuity beginning before
a Participant's sixty-second birthday, the Participant's primary
Social Security benefit will equal the maximum primary Social Security
benefit based on the law in effect on the later of the Participant's
Retirement Date or the Participant's sixty-second birthday.
(f) In calculating Disability retirement benefits under section 5.3, the Social
Security benefit used under paragraph (3) will be based on the actual
Social Security disability award to the Participant.
(g) The offset under this Plan for benefits under any defined benefit
retirement arrangement shall be calculated by the Administrator, in its
sole discretion, consistent with section 5.6(b) above.
(h) For purposes of section 5.1(c) and section 5.2(b), the offsets for amounts
payable under the Long-Term Disability Plan shall only be effected for the
calendar months in which amounts are actually payable under the Long-Term
Disability Plan.
5.7 REDUCTIONS FOR CERTAIN SURVIVING SPOUSES
If a Surviving Spouse is entitled to Benefits under this Article V, and if the
Surviving Spouse is more than ten years younger than the Participant, the amount
otherwise payable to the Surviving Spouse hereunder shall be reduced to reflect
the actuarial value of such age difference. The Surviving Spouse's benefit shall
be reduced so that it is the Actuarial Equivalent of the benefit payable to a
Surviving Spouse who is ten years younger than the Participant.
5.8 DETERMINATION OF BENEFITS.
In determining the amount of a retirement or other benefit payable to a
Participant or Surviving Spouse under this Article V, the following provisions
shall apply:
(a) YEARS OF SERVICE. The Administrator shall have the sole authority to
determine a Participant's years of service under this Plan. In the case of
a Participant--
(1) who is employed by DePuy during a period when he does not participate
in the Plan;
(2) whose employment relationship with DePuy terminates; and
(3) who is subsequently rehired and becomes a Participant in the Plan,
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such Participant's years of service shall not include the initial period of
DePuy employment. Notwithstanding the preceding sentence, the Administrator
shall have the discretion at any time to retroactively include service for
such Participant's initial period of employment with DePuy.
(b) ESTIMATED BENEFITS. Notwithstanding any other provision of this Plan, in
determining the amount of any benefit payable under this Article V, or any
individual offset or other component of such a benefit, the Administrator
shall have the sole discretion to estimate such amount. Such an estimate
shall be calculated on the basis of the most current and most accurate data
reasonably available at the time of performing the benefit calculation, as
determined by the Administrator. The Administrator shall have the sole
discretion to consider such an estimate as a final calculation, or to
subsequently modify such benefit, and adjust Plan payments accordingly, if
and when additional data or information becomes available.
5.9 TRANSFERRED EMPLOYEES FROM BOEHRINGER MANNHEIM CORPORATION.
In the case of a person who becomes a Participant on or after October 1, 1996,
and who was transferred from a position of employment with Boehringer Mannheim
Corporation or one of its subsidiaries or affiliates, the person shall be
treated as a new employee, except as otherwise permitted under section 5.8(a).
5.10 PARTICIPANTS TRANSFERRING TO BOEHRINGER MANNHEIM CORPORATION.
A Participant who transfers from the DePuy Affiliated Group to a position of
employment within the Boehringer Mannheim Corporation controlled group, on or
after October 1, 1996, shall be treated as any other Participant who retires or
otherwise leaves the DePuy Affiliated Group.
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ARTICLE VI. OTHER TERMINATIONS OF EMPLOYMENT
6.1 TERMINATION BEFORE FIVE OR TEN YEARS OF SERVICE
If a Participant's Employment within the DePuy Affiliated Group terminates for
any reason other than Retirement, death, or Disability before the Participant
completes ten years of service within the DePuy Affiliated Group (five years in
the case of a Participant who entered the Plan before January 1, 1992), the
Participant (and his Surviving Spouse) will not be entitled to any benefits
under the Plan. If a Participant's Employment within the DePuy Affiliated Group
terminates due to death or Disability, and before the Participant completes five
years of service within the DePuy Affiliated Group or attains age 60, the
Participant (and his Surviving Spouse) will not be entitled to any benefits
under the Plan.
6.2 TERMINATION FOR CAUSE
Notwithstanding anything to the contrary contained elsewhere in this Plan, any
Participant whose employment is terminated under circumstances that constitute
Termination for Cause will not be entitled to any benefits under the Plan. This
provision shall apply without regard to the Participant's age or years of
service within the DePuy Affiliated Group at the time of such termination.
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ARTICLE VII. NONCOMPETITION
7.1 NONCOMPETITION
The Participant's right to receive Benefits provided in this Plan and to have
any Benefits paid to his Surviving Spouse under this Plan are further
conditioned upon the following terms and conditions--
(a) The Participant will not act, directly or indirectly, as a stockholder,
officer, director, employee, agent, sole proprietor, partner, or consultant
of, or otherwise participate in, any enterprise or organization which is
competitive with the then present business of DePuy or an affiliate within
the DePuy Affiliated Group, as it is now being conducted or may be
conducted during the payment of Benefits under the Plan. This does not
include a financial interest in widely held corporations which are quoted
and sold on the open market, unless--
(1) the amount held is in excess of ten percent of the outstanding stock
of that corporation; or
(2) the stock has a value representing more than 100 percent of the
individual's personal net worth.
(b) The Participant will not knowingly participate, directly or indirectly, in
the employment, solicitation for employment, or advice or recommendation to
any person or business entity that he or it employ, or solicit for
employment, any individual now or hereafter employed in other than an
hourly paid capacity by DePuy or an affiliate within the DePuy Affiliated
Group, including any dealer, distributor, or independent contractor acting
as an agent of DePuy or an affiliate within the DePuy Affiliated Group,
with respect to the sale or distribution of products sold by DePuy or an
affiliate within the DePuy Affiliated Group, without the prior express
written consent of DePuy.
(c) The Participant will not solicit, contact, or communicate with any
physician, scientist, or other person who is or has been involved in the
development of products of DePuy or an affiliate within the DePuy
Affiliated Group, during the Participant's employment with DePuy,
concerning the development of products reasonably related to the present
business of DePuy, as it is now being conducted or may be conducted during
the payment of Benefits under the Plan without the express prior written
consent of DePuy.
(d) The Participant will treat as confidential and will not, without prior
written authorization from DePuy, directly or indirectly disclose to any
person, firm, association, or corporation, or use for Participant's own
benefit, any financial statements, information, plans, products,
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data, results of tests or surveys, customer or supplier lists, or any other
trade secrets or confidential material or information regarding DePuy, or
an affiliate within the DePuy Affiliated Group, including any and all
information and instructions, technical or otherwise, obtained, compiled,
prepared, issued, or communicated for the use of DePuy, or an affiliate
within the DePuy Affiliated Group, or any information concerning the
present or future products, processes or methods of operation of DePuy or
an affiliate within the DePuy Affiliated Group, or information concerning
improvements or inventions or know-how relating to the same or any part
thereof, it being the intent of DePuy to restrict Participant from
disseminating or using for Participant's own benefit any information
belonging directly or indirectly to DePuy or an affiliate within the DePuy
Affiliated Group, or agents which is not readily available to the general
public.
(e) The Participant agrees to return to DePuy or an affiliate within the DePuy
Affiliated Group all data, drawings, prints, and other written information
(including all copies thereof) in the Participant's possession or under the
Participant's control which were prepared by or for the Participant or
furnished Participant by DePuy or an affiliate within the DePuy Affiliated
Group, or its employees, agents, or consultants during the term of the
Participant's employment by DePuy or an affiliate within the DePuy
Affiliated Group, prior to termination.
(f) The Participant will not, directly or indirectly, take any action which
could or would interfere with, damage, or destroy the goodwill and
reputation of DePuy or an affiliate within the DePuy Affiliated Group, or
any of its directors, officers, employees, operations, or products.
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ARTICLE VIII. MISCELLANEOUS
8.1 AMENDMENT AND TERMINATION
The CEO or the Board may at any time terminate or amend the Plan in any respect.
However, a termination or amendment of the Plan shall not, without the written
consent of the Participant reduce the amount payable with respect to the
Participant, based on--
(a) the Participant's DePuy Income at the time the amendment is adopted,
(b) the Plan provisions in effect at the time the amendment is adopted, and
(c) the value of offsets for Other Retirement Income as determined when Benefit
payments under this Plan commence.
8.2 FUNDING
(a) All benefits paid under the Plan shall be paid from the general assets of
DePuy, except to the extent paid from any "grantor trust" (under sections
671 through 677 of the Code) maintained by DePuy or any affiliate within
the DePuy Affiliated Group, in connection with the Plan. Said trust is
subject to the claims of creditors of DePuy or any affiliate within the
DePuy Affiliated Group, in the event of insolvency. This Plan shall not be
interpreted to provide any Participant or Surviving Spouse with any secured
interest or right to any assets of DePuy, and no Participant or Surviving
Spouse shall acquire any interest greater than that of an unsecured
creditor.
(b) DePuy shall make contributions to the trust no less often than twice per
year. The Administrator shall ensure that contributions are calculated
using the guidance and methodology of Financial Accounting Standards Board
statement No. 87. The first contribution required hereunder each year, to
be made no later than July 1 of such year, shall fund the annual cost for
the Participants on June 30 of such year. The second contribution required
hereunder will be made no later than December 31 of each year. The second
contribution shall fund the annual cost for individuals who become
Participants in this Plan between July 1 and December 31 of such year.
DePuy may, in its sole discretion, make additional contributions to the
trust to fund benefits accrued under this Plan.
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8.3 TAX LIABILITY
DePuy may withhold, or direct the withholding of, from any payment of Benefits
hereunder any taxes required to be withheld and such sum as
DePuy may reasonably estimate to be necessary to cover any taxes for which DePuy
may be liable and which may be assessed with regard to such payment.
8.4 ASSIGNMENT
The Participant (or Surviving Spouse) may not assign, pledge, or otherwise
transfer or encumber any of the Participant's (or Surviving Spouse's) Benefits
except as permitted by agreement of the CEO or the Board.
8.5 SUCCESSORS
The Plan and the rights and obligations of DePuy or any affiliate within the
DePuy Affiliated Group hereunder shall be binding upon, and inure to the
benefits of the Participants and their Surviving Spouses only, and the
successors and assigns of DePuy or any affiliate within the DePuy Affiliated
Group.
8.6 SEVERABILITY
In the event that any one or more of the provisions of this Plan shall be held
to be invalid, illegal, or unenforceable, the validity, legality, or
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
8.7 NONUNIFORM DETERMINATIONS
The determinations of the CEO, the Board, or the Administrator under the Plan
need not be uniform and may be made selectively among Participants (and
Surviving Spouses) who receive, or are eligible to receive, Benefits under the
Plan, whether or not such Participants (or Surviving Spouses) are similarly
situated. Such determinations, however, may not result in payment to a
Participant or Surviving Spouse of an amount that is less than the amount that
is otherwise provided for under the terms of this Plan. The Administrator may,
with the approval of the CEO or the Board, waive the application of specific
provisions of the Plan for individual Participants or Surviving Spouses. Such
waivers may not adversely affect the Participant or Surviving Spouse, and can be
granted only if the waiver will not have a material adverse economic or
competitive impact on the Plan or DePuy or any affiliate within the DePuy
Affiliated Group.
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8.8 SEPARATION FROM OTHER PLANS
Except as otherwise required by law, no Benefits under the Plan shall be taken
into account in determining any benefit under any other pension, retirement,
thrift, profit sharing, 401(k), group insurance, or other benefit plan
maintained or hereafter established by DePuy or any affiliate within the DePuy
Affiliated Group.
8.9 EFFECTIVE DATE
This Plan, as initially adopted, was effective January 1, 1985. The Plan as
restated shall be effective as of October 1, 1996.
* * * * * * * * * *
IN WITNESS WHEREOF, DePuy, Inc. has caused this instrument to be executed by its
duly authorized officers on this 31 day of December, 1996, effective as
of the first day of October 1996.
DEPUY, INC.
ATTEST:
By /s/ G. Taylor Seward
_______________________________
By /s/ Carol Hadley
_______________________________
23
EXHIBIT A
DEPUY, INC. SUPPLEMENTAL RETIREMENT PLAN (PLAN NO. 1)
ELECTION FORM
The undersigned, an employee of DePuy, Inc. (including its subsidiaries and
affiliates), having been selected by the CEO or the Board of Directors of DePuy,
Inc. to participate in the DePuy, Inc. Supplemental Retirement Plan (Plan No. 1)
does hereby acknowledge having read the Supplemental Retirement Plan, prior to
executing this Election Form, understanding the same and in consideration of
becoming a Participant under the Plan, agrees to be bound by the terms and
conditions of the Plan in all respects.
* * * * * * * * * *
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IN WITNESS WHEREOF, I have executed this Election Form to the DePuy, Inc.
Supplemental Retirement Plan (Plan No. 1), effective ______________________.
WITNESS: PARTICIPANT
- ------------------------------- -------------------------------
Signature
-------------------------------
Printed or Typed Name
Received and Acknowledged:
DePuy, Inc.
By_____________________________
Signature
- -------------------------------
- -------------------------------
Printed or Typed Name and Title
Date___________________________
25