EXHIBIT 10.35
U.S. BIOSCIENCE, INC.
INCOME DEFERRAL PLAN
The Board of Directors of U.S. Bioscience Inc. ("USB") wishes to make
additional retirement benefits available to certain key executive employees of
USB whose retirement benefits are otherwise restricted because of the
limitations imposed on contributions to the USB Savings Plan by the Federal tax
laws. Such benefits shall be provided to those individuals under the terms and
conditions hereinafter set forth.
ARTICLE 1
Definitions
1.1 "Account" means a bookkeeping account established pursuant to Section
3.1 which reflects the amount standing to the credit of the Participant
under the Plan.
1.2 "Affiliated Company" means any subsidiary of USB.
1.3 "Base Compensation" means the annual amount of base salary and wages
paid by the Employer to an Executive for any Plan Year, including
amounts contributed under an arrangement maintained by the Employer
pursuant to Section 125 or 401(k) of the Code as well as under this
Plan, but excluding all Employer contributions to benefit plans and all
other forms of compensation; provided, however, that the amount of the
Social Security Wage Base for the Plan Year of determination shall be
subtracted in order to determine a Participant's Base Compensation.
1.4 "Beneficiary" means the person(s) designated by a Participant to
receive any benefits payable under this Plan subsequent to the
Participant's death. In the event a Participant has not filed an
effective Beneficiary designation with the Committee, in such form as
the Committee shall specify, the Beneficiary shall be the Participant's
surviving spouse or, if there is no surviving spouse, the Participant's
estate.
1.5 "Board" means the Board of Directors of USB, the Compensation Committee
of the Board or other committee designated by the Board to act under
this Plan on behalf of USB or an Employer.
1.6 "Bonus" means bonus compensation awards that may become due to the
Executive under any incentive plan of an Employer.
1.7 "Code" means the Internal Revenue Code of 1986, as the same may be
amended from time to time.
1.8 "Committee" means the committee appointed by the Board to administer
the Plan.
1.9 "Disability" means a condition resulting in permanent and total
disability within the meaning of the Employer's group long term
disability plan (or a condition that would qualify the Participant for
a benefit under such plan if such Participant were employed by the
Employer).
1.10 "Effective Date" means April 1, 1997.
1.11 "Executive" means any individual employed by an Employer, on a regular,
full-time basis, in a key management or other highly compensated
position, within the meaning of Section 201(2) of ERISA (as determined
in accordance with the personnel policies and practices of the
Employer), or who is an officer or otherwise considered to be a member
of the Employer's senior management, but shall not include any
individual who is a member of the Board but is not employed by USB.
1.12 "Employer" means USB and/or any Participating Employer, either
collectively or individually, as the context requires.
1.13 "ERISA" means the Employee Retirement Income Security Act of 1974, as
the same may be amended from time to time.
1.14 "Participant" means any Executive who is designated as eligible to
participate, pursuant to Section 2.1. In the event of the death or
incompetency of a Participant, the term shall mean his or her personal
representative or guardian. An individual shall remain a Participant
until a full distribution of any amount credited to the Participant's
Account has occurred.
1.15 "Participating Employer" means each Affiliated Company that the Board
has authorized to cover its Executives under the terms of the Plan and
which has elected to do so by resolutions of its board of directors.
1.16 "Plan" means the U.S. Bioscience, Inc. Income Deferral Plan as the same
is set forth in this text, and as it may be amended from time to time.
1.17 "Plan Year" means each calendar year during which the Plan is in effect
commencing on the Effective Date.
1.18 "Separates from Employment" means the Executive's termination of
employment from the Employer for any reason other than a Disability.
Except as otherwise provided herein, a Separation from Employment shall
be deemed to have occurred on the last day of the Executive's service
to the Employer and shall be determined without reference to any
compensation continuation arrangement or severance benefit
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arrangement that may be applicable. With respect to an Executive who is
a member of the Board but who is not otherwise employed by the
Employer, such individual's Separation from Employment shall mean the
last day such individual serves as a member of the Board.
1.18 "USB" means U.S. Bioscience, Inc., a Delaware corporation and its
successors.
ARTICLE 2
Eligibility
2.1 Each Executive may participate if so designated by the Board on such
date as is specified by the Board. A list of the Participants in the
Plan on the Effective Date is attached hereto as Exhibit A; such list
may be modified from time to time by the Board.
ARTICLE 3
Deferrals
3.1 Prior to the commencement of a Plan Year, or, for the Plan Year which
includes the Effective Date or the date on which an Executive first
becomes a Participant, within 30 days of becoming a Participant, a
Participant may elect to have the Employer credit to the Participant's
Account (as a result of a written salary or bonus deferral election) an
amount equal to (i) any whole percentage or dollar amount of the
Participant's Bonus, if any, to be earned for that Plan Year or (ii)
any whole percentage or dollar amount of the Participant's Base
Compensation to be earned during that Plan Year; provided, however,
that the minimum amount that a Participant may elect to defer for any
Plan Year is $3,600. Such election shall remain in effect until
prospectively discontinued by the Participant in the manner specified
by the Committee. If an election is made to have a contribution
credited to the Participant's Account for a Plan Year, the credit shall
be made at the time that such amount would otherwise have been paid and
shall reduce the Participant's Bonus or Base Compensation, as
applicable, with respect to that Plan Year by a corresponding amount.
The Board may establish other minimum or maximum amounts that may be
deferred under this Section and may change such standards from time to
time. Any such limits shall be communicated by the Board to the
Committee and by the Committee to the Participants prior to the
commencement of a Plan Year. A Participant who wishes to receive a
distribution of all or a portion of the amount so deferred prior to the
date that the Participant Separates from Employment must also make the
election described in Section 4.2 at the time the Participant elects a
deferral under this Section, in the manner specified by the Committee.
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3.2 The Board shall cause the Employer to create and maintain on its books
an Account for each of its Participants to which it shall credit
amounts contributed to the Plan pursuant to this Article 3. The
Employer shall also credit each Participant's Account with deemed
earnings for each Plan Year in accordance with the provisions of
Article 8.
3.3 Any elections under this Article shall be made in writing on such form
as the Committee shall specify. Subject to the provisions of Section
4.3, any election by a Participant pursuant to this Article shall be
irrevocable and may be modified only prospectively.
ARTICLE 4
Distributions to Participants
4.1 Unless a Participant makes the election described in Section 4.2, the
Participant's benefit under the Plan shall be paid in one lump sum as
soon as practicable (but no later than 60 days) following the
completion of the valuation of the Participant's Account for the last
business day of the second Plan Year following the Plan Year in which
the Participant Separates from Employment. A Participant who incurs a
Disability shall not be deemed to have Separated from Employment until
180 days have elapsed after incurring the Disability. Notwithstanding
anything herein to the contrary, at the time of the deferral election
under Section 3.1 or no later than the end of the Plan Year (or within
30 days thereafter, if later) in which the Participant Separates from
Employment, the Participant may elect, in the manner specified by the
Committee, to (i) defer the distribution of the Participant's total
Account until the Plan Year in which the Participant attains age 65 (or
later date of actual retirement, if employed beyond age 65) or (ii)
receive distribution in annual installments over a period not to exceed
3 years if the amount to be distributed is over $30,000 but less than
$100,000 or 10 years if the amount to be distributed is $100,000 or
over (with the balance to be distributed continuing to be deemed
invested pursuant to Article 8 and distributed by dividing the
remaining Account balance by the number of installments remaining);
provided, that in the event that a Participant fails to make an
election, distribution shall be in one lump sum at the time specified
in the first sentence of this Section 4.1.
4.2 Pursuant to the in-service distribution option provision specified in
Section 3.1, in the event that a Participant wishes to receive a
distribution of deferred amounts credited to the Participant's Account
prior to Separation from Employment, the Participant may make an
in-service distribution election; provided, however, that no
Participant may make more than two in-service distribution elections
during the Participant's participation in the Plan. The election, as to
any one Plan Year's deferral, shall be made at the time the Participant
first makes the election to defer under Section 3.1, or
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as of the beginning of any new Plan Year thereafter as to deferrals for
a Plan Year made on or after such election. Such election shall be to
receive all or the portion of the balance credited to the Participant's
Account that is attributable to the in-service distribution election
for the Plan Year of the election on the date in the future specified
in the in-service distribution election. The in-service distribution
election shall specify a percentage of the amount so deferred
(including earnings) to be distributed and the year in which such
distribution is to be made which may not be earlier than 5 years
following the Plan Year in which the deferral is credited to the
Participant's Account. The in-service distribution shall be paid in the
form of a lump sum or in up to three annual installments (with the
balance to be distributed continuing to be deemed invested under
Article 8 and distributed by dividing the remaining Account balance by
the number of installments remaining), as elected by the Participant,
in the manner and at the time specified by the Committee, to be made or
commence by the last day of January of the Plan Year specified based on
the value of the Participant's Account as of the last day of the
preceding Plan Year.
4.3 The Committee, in its sole discretion, may accelerate the time of
distribution of all or a portion of the Participant's Account, if the
Participant experiences a severe financial hardship due to illness,
accident or death in the immediate family, loss of or damage to
property due to casualty, or other extraordinary and unforeseeable
circumstances. Such Participant shall provide the Committee with a
statement in reasonable detail as to the nature of such financial
hardship together with a statement that such acceleration is necessary
to alleviate such hardship. In addition, the Committee shall accelerate
the time of distribution of all or a portion of the Participant's
Account in accordance with the provisions of Section 7.1.
4.4 The Board, in its sole discretion, may override any election made by a
Participant under the Plan and direct a distribution of all or a
portion of the balance credited to a Participant's Account at any time.
ARTICLE 5
Death Benefit
5.1 In the event of the death of a Participant prior to commencement of any
payments due pursuant to Article 4, the Participant's Beneficiary shall
receive a distribution equal to the balance of the Participant's
Account on the date of death. The benefit payment to the Beneficiary
shall be made in lump sum as soon as practicable (but no later than 60
days) following the completion of the valuation of the deceased
Participant's Account as of the last day of the month in which the
Participant's death occurs. In the event of the death of a Participant
after payment of a benefit has commenced in installments, pursuant to
Section 4.1, the Participant's Beneficiary shall receive a lump sum
payment of all amounts remaining due following the Participant's death
as soon as
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practicable (but no later than 60 days) following the completion of the
valuation of the deceased Participant's Account as of the last day of
the month in which the Participant's death occurs.
ARTICLE 6
Vesting
6.1 The balance credited to a Participant's Account shall be fully vested
at all times.
ARTICLE 7
Funding
7.1 The Board may, but shall not be required to, authorize the
establishment of a trust by USB to serve as the payment vehicle for the
benefits due under the Plan in accordance with the provisions of
Articles 4 and 5 and for the deemed investment of the amounts credited
to a Participant's Account under Article 8. Notwithstanding anything
herein to the contrary, a Participant may make a written election, at
the time and in the manner specified by the Committee, to withdraw
amounts credited to the Participant's Account for which the trust is to
serve as the payment vehicle upon the forfeiture of 10% of the balance
credited to the Participant's Account that is to be withdrawn and the
value of the Participant's Account shall be reduced accordingly. In any
event, the Employers' obligations hereunder shall constitute a general,
unsecured obligation, payable solely out of general assets, and no
Participant shall have any right to any specific assets of the
Employer. In addition, it is the intention of the Employer that the
Plan be unfunded for tax purposes and for purposes of Title I of ERISA.
USB shall not be required to provide any Participant with information
with respect to its financial condition.
ARTICLE 8
Investments
8.1 The balance credited to a Participant's Account shall be deemed to be
invested, as elected by the Participant in one or more of the
investments or investment funds designated as available under the Plan
for the purposes hereof by the Committee, as listed on Exhibit B
hereto, as it may be changed by the Board from time to time. A
Participant may make changes in the deemed investment elections in
accordance with procedures specified by the Committee. USB shall credit
the Participant's Account with the interest, earnings or losses with
respect to the balance then credited to the Participant's Account,
equal to the investment return produced by the Participant's deemed
investments under this Section, based on the assumption that the
contributions
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attributable to the Participant's Base Compensation for each calendar
month of a Plan Year are credited to the Participant's Account on the
last day of each such calendar month and the portion of the
contribution attributable to the Participant's Bonus is credited to the
Participant's Account within 30 days after such Bonus would otherwise
have been paid.
8.2 In no event shall any Participant be entitled to have any investments
under Section 8.1 actually made other than on a deemed basis as
provided in Section 8.1. The Committee shall inform each eligible
Participant as to (i) how such elections may be made, (ii) the manner
and the time it has prescribed for making deemed investment changes and
(iii) how to make prospective changes in deemed current investments of
contributions. The Committee shall provide each Participant with
periodic statements as to the value of the Participant's Account and
shall be responsible for furnishing appropriate election forms to each
Participant and for keeping appropriate records.
ARTICLE 9
Administration and Other Actions
9.1 The Committee shall have full power and authority to interpret the
Plan, to prescribe, amend and rescind any rules, forms and procedures
as it deems necessary or appropriate for the proper administration of
the Plan and to make any other determinations, including factual
determinations, and to take any other such actions as it deems
necessary or advisable in carrying out its duties under the Plan. All
action taken by the Committee arising out of, or in connection with,
the administration of the Plan or any rules adopted thereunder, shall,
in each case, lie within its sole discretion, and shall be final,
conclusive and binding upon the Employer, the Board, all Executives and
Beneficiaries and all persons and entities having an interest therein.
9.2 The Committee shall serve without compensation for their services
unless otherwise determined by the Board. All expenses of administering
the Plan shall be paid by the Employer.
9.3 USB shall indemnify and hold harmless each member of the Committee from
any and all claims, losses, damages, expenses (including counsel fees)
and liability (including any amounts paid in settlement of any claim or
any other matter with the consent of the Board) arising from any act or
omission of such member, except when the same is due to gross
negligence or willful misconduct.
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9.4 Any decisions, actions or interpretations to be made under the Plan by
USB, the Employer or the Board shall be made in its respective sole
discretion, not as a fiduciary, need not be uniformly applied to
similarly situated individuals and shall be final, binding and
conclusive on all persons interested in the Plan.
9.5 In the case of any Participant (whether active, retired or terminated)
or Beneficiary who wishes to file a claim as to the payment of a
benefit under this Plan, the Committee shall provide adequate notice in
writing of any adverse determination setting forth the specific reasons
for such denial in a manner calculated to be understood by the
recipient thereof. Such Participant or Beneficiary shall be afforded a
reasonable opportunity for a full and fair review of the decision
denying the claim by the Board.
ARTICLE 10
Amendment
10.1 The Board, acting on behalf of USB, and not as a fiduciary, may at any
time, and from time to time, amend this Plan in any respect without
restriction and without the consent of any Participant; provided that
any such amendment shall not, without the consent of any Participant
then entitled to a benefit under the Plan, impair such Participant's
right to receive that benefit accrued hereunder prior to such
amendment.
ARTICLE 11
Termination
11.1 Continuance of the Plan is completely voluntary and is not assumed as a
contractual obligation of the Employer. The Board, acting on behalf of
USB and not as a fiduciary, shall have the right to terminate the Plan
in whole or in part at any time all without the consent of, or notice
to, any person or entity; provided, however, that such termination
shall not have the effect of divesting a Participant of the benefit
which the Participant would otherwise receive hereunder at the time the
termination is approved. In the event of the termination of the Plan,
USB may distribute a benefit to a Participant as if such Participant
had a Separation from Service as of the date of the termination of the
Plan or postpone distribution until such time as distribution would
ordinarily be made to the Participant under the terms of the Plan.
ARTICLE 12
Miscellaneous
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12.1 Nothing contained herein (i) shall be deemed to exclude a Participant
from any compensation, bonus, pension, insurance, severance pay or
other benefit to which he or she otherwise is or might become entitled
as an Executive or (ii) shall be construed as conferring upon an
Executive the right to continue in the employ of the Employer.
12.2 Any amounts payable hereunder shall not be deemed salary or other
compensation to a Participant for the purposes of computing benefits to
which the Participant may be entitled under any other arrangement
established by the Employer for the benefit of its employees. All
payments of benefits shall be reduced by any withholding required by
applicable Federal, state and local law.
12.3 The rights and obligations created hereunder shall be binding on a
Participant's heirs, executors and administrators and on the successors
and assigns of the Employer.
12.4 The masculine pronoun whenever used shall include the feminine and the
singular shall be construed as the plural, where applicable.
12.5 The provisions of the Plan shall be construed and applied under the
laws of the Commonwealth of Pennsylvania.
12.6 The rights of any Participant under this Plan are personal and may not
be assigned, transferred, pledged or encumbered. Any attempt to do so
shall be void. In addition, a Participant's rights hereunder are not
subject, in any manner, to anticipation, alienation, sale, transfer,
assignment, pledge, encumbrance, attachment or garnishment by creditors
of the Participant or the Participant's Beneficiary.
12.7 If any provision of the Plan shall be held invalid or unenforceable,
such invalidity or unenforceability shall not effect any other
provisions hereof and the Plan shall be construed and enforced as if
such provisions had not been included.
12.8 The headings and captions herein are provided for convenience only, and
shall not be construed as part of the Plan, and shall not be employed
in the construction of the Plan.
12.9 Any benefit payable to or for the benefit of a payee who is a minor, an
incompetent person, or is otherwise incapable of receipting therefor
shall be deemed paid when paid to such person's guardian or to the
party providing, or reasonably appearing to provide, the care for such
person, and such payment shall fully discharge the Employer, the
Committee, the Board and all other parties with respect thereto.
ARTICLE 13
Claims Procedure
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13.1 Each Participant or Beneficiary believing himself or herself eligible
for a benefit under the Plan shall apply for such benefits by
completing and filing with the Committee an application for benefits on
a form supplied by the Committee. In the event that any claim for
benefits is denied in whole or in part, the Participant or Beneficiary
whose claim has been so denied shall be notified of such denial in
writing by the Committee. The notice advising of the denial shall
specify the reason or reasons for denial, make specific reference to
pertinent Plan provisions, describe any additional material or
information necessary for the claimant to perfect the claim (explaining
why such material or information is needed), and shall advise the
Participant or Beneficiary of the procedure for the appeal of such
denial. All appeals shall be made by the following procedure:
(a) The Participant or Beneficiary whose claim has been denied shall
file with the Committee a notice of desire to appeal the denial. Such
notice shall be filed within 60 days of notification by the Committee
of claim denial, shall be made in writing, and shall set forth all of
the facts upon which the appeal is based. Appeals not timely filed
shall be barred.
(b) The Committee shall consider the merits of the claimant's written
presentations, the merits of any facts or evidence in support of the
denial of benefits, and such other facts and circumstances as the
Committee shall deem relevant.
(c) The Committee shall ordinarily render a determination upon the
appealed claim within 60 days after receipt which determination shall
be accompanied by a written statement as to the reasons therefor.
However, in special circumstances the Committee may extend the response
period for up to an additional 60 days, in which event it shall notify
the claimant in writing prior to commencement of the extension. The
determination so rendered shall be binding upon all parties.
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EXHIBIT A
PARTICIPANTS ON THE EFFECTIVE DATE:
All Executives with title of Director or above.
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EXHIBIT B
INVESTMENT FUNDS ON THE EFFECTIVE DATE:
Vanguard Money Market Reserves Prime Portfolio
Fidelity Investor Asset Manager Fund
Vanguard Index Trust 500 Portfolio
Fidelity Advisor Equity Income Fund
Vanguard Fixed Income Securities Fund Intermediate-Term Corporate Portfolio
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