Exhibit 10(f)
BECTON, DICKINSON AND COMPANY
DEFERRED COMPENSATION PLAN
(Formerly the Becton, Dickinson and Company Salary and Bonus Deferral Plan)
Amended and Restated as of November 1, 2001
BECTON, DICKINSON AND COMPANY
DEFERRED COMPENSATION PLAN
Amended and Restated as of November 1, 2001
TABLE OF CONTENTS
ARTICLE I Definitions................................................................4
Section 1.1 "Accounts"........................................................4
Section 1.2 "Annual Open Enrollment Period"...................................4
Section 1.3 "Base Salary".....................................................4
Section 1.4 "Board of Directors"..............................................4
Section 1.5 "Bonus"...........................................................4
Section 1.6 "Change in Control"...............................................4
Section 1.7 "Code"............................................................5
Section 1.8 "Committee".......................................................5
Section 1.9 "Common Stock"....................................................5
Section 1.10 "Company".........................................................5
Section 1.11 "Company Discretionary Credits"...................................5
Section 1.12 "Company Discretionary Credit Account"............................5
Section 1.13 "Company Matching Credits"........................................5
Section 1.14 "Company Matching Credit Account".................................5
Section 1.15 "Deferral Election"...............................................5
Section 1.16 "Deferred Bonus"..................................................5
Section 1.17 "Deferred Bonus Account"..........................................6
Section 1.18 "Deferred Bonus Election".........................................6
Section 1.19 "Deferred Salary".................................................6
Section 1.20 "Deferred Salary Account".........................................6
Section 1.21 "Deferred Salary Election"........................................6
Section 1.22 "Deferred SERP Distribution"......................................6
Section 1.23 "Deferred SERP Distribution Account"..............................6
Section 1.24 "Deferred SERP Distribution Election".............................6
Section 1.25 "Deferred Stock Account"..........................................6
Section 1.26 "Deferred Stock Election".........................................6
Section 1.27 "Disabled"........................................................6
Section 1.28 "Dividend Reinvestment Return"....................................6
Section 1.29 "ERISA"...........................................................6
Section 1.30 "Fiscal Year".....................................................6
Section 1.31 "Investment Election".............................................6
Section 1.32 "Investment Options"..............................................6
Section 1.33 "NYSE"............................................................6
Section 1.34 "Participant".....................................................7
Section 1.35 "Plan"............................................................7
Section 1.36 "Plan Year".......................................................7
Section 1.37 "SERP"............................................................7
Section 1.38 "Stock Trust".....................................................7
ARTICLE II Eligibility and Participation..............................................8
Section 2.1 Eligibility.......................................................8
Section 2.2 Participation.....................................................8
ARTICLE III Deferral Elections and Deferral Periods.................................10
Section 3.1 Deferred Salary Election.........................................10
Section 3.2 Deferred Bonus Election..........................................10
Section 3.3 Deferred SERP Distribution Election..............................10
Section 3.4 Company Matching Credits.........................................11
Section 3.5 Company Discretionary Credits....................................11
Section 3.6 Deferral Period..................................................11
Section 3.7 Modification of Deferral Period..................................11
ARTICLE IV Participants' Accounts..................................................13
Section 4.1 Crediting of Employee Deferrals and Company Matching
and Discretionary Credits........................................13
Section 4.2 Investment Election..............................................13
Section 4.3 Hypothetical Earnings............................................13
Section 4.4 Vesting..........................................................15
Section 4.5 Account Statements...............................................15
ARTICLE V Distributions and Withdrawals...........................................16
Section 5.1 Timing of Distribution...........................................16
Section 5.2 Form of Distribution.............................................18
ARTICLE VI General Provisions......................................................20
Section 6.1 Unsecured Promise to Pay.........................................20
Section 6.2 Plan Unfunded....................................................20
Section 6.3 Designation of Beneficiary.......................................20
Section 6.4 Expenses.........................................................20
Section 6.5 Voting Common Stock..............................................20
Section 6.6 Non-Assignability................................................20
Section 6.7 Mandatory Deferral...............................................21
Section 6.8 Employment/Participation Rights..................................21
Section 6.9 Severability.....................................................21
Section 6.10 No Individual Liability..........................................21
Section 6.11 Tax Withholding..................................................21
Section 6.12 Applicable Law...................................................21
Section 6.13 Incompetency.....................................................21
Section 6.14 Notice of Address................................................22
ARTICLE VII Administration..........................................................23
Section 7.1 Committee........................................................23
Section 7.2 Claims Procedure.................................................23
ARTICLE VIII Amendment, Termination and Effective Date...............................24
Section 8.1 Amendment of the Plan............................................24
Section 8.2 Termination of the Plan..........................................24
Section 8.3 No Impairment of Benefits........................................24
Section 8.4 Effective Date...................................................24
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BECTON, DICKINSON AND COMPANY
DEFERRED COMPENSATION PLAN
Amended and Restated as of November 1, 2001
FOREWORD
Effective as of August 1, 1994 (the "Effective Date"), Becton, Dickinson and
Company (the "Company") adopted the Becton, Dickinson and Company Salary and
Bonus Deferral Plan (the "Plan") for the benefit of certain of its employees.
The Plan is intended to be an unfunded plan of deferred compensation primarily
for the benefit of a select group of management and highly compensated
employees. To the extent that the Plan permits the voluntary deferral of
bonuses, the Plan is intended to amend and replace the Bonus Deferral Option of
the Becton, Dickinson and Company Executive Bonus Plan.
The purpose of the Plan is to permit those employees of the Company who are part
of a select group of management or highly compensated employees to defer,
pursuant to the provisions of the Plan, a portion of the salaries, bonuses and
other remuneration otherwise payable to them.
Effective as of August 15, 1996, the Board of Directors of the Company amended
the Plan to permit Participants to have their deferred salaries or deferred
bonuses considered to be invested in Common Stock of the Company, to permit
those Participants to vote a number of shares of Common Stock equal to the
number considered to be held for their benefit under the Plan, and for certain
other purposes.
Effective as of November 1, 2001, the Plan is amended and restated to rename the
Plan as the Becton, Dickinson and Company Deferred Compensation Plan, and to
modify the deferral opportunities and the distribution and withdrawal options
under the Plan, and to make certain other modifications deemed desirable.
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ARTICLE I
Definitions
Section 1.1 "Accounts" means the bookkeeping accounts established under
the Plan, if any, on behalf of a Participant and includes earnings credited
thereon or losses charged thereto.
Section 1.2 "Annual Open Enrollment Period" means the annual period
designated by the Committee, which ends not later than the September 30 of a
Plan Year, during which a Participant may make or change elections to defer
annual Base Salary, Bonuses and SERP distributions. Notwithstanding the
foregoing, the Annual Open Enrollment Period for 2001 shall be the period
designated by the Committee which ends not later than November 9, 2001.
Section 1.3 "Base Salary" means the base salary or wages otherwise
taken into account under the Becton, Dickinson and Company Savings Incentive
Plan, determined in accordance with the provisions of such plan, but without
regard to the limitation on compensation otherwise required under Code section
401(a)(17), and without regard to any deferrals of the foregoing of compensation
under this or any other plan of deferred compensation maintained by the Company.
Section 1.4 "Board of Directors" means the Board of Directors of the
Company.
Section 1.5 "Bonus" means the annual bonus payable under the Company's
Performance Incentive Plan, or any successor thereto.
Section 1.6 "Change in Control" of the Company means any of the
following events:
(1) the acquisition by any individual, entity or group (within
the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange
Act of 1934, as amended (the "Exchange Act")) (a "Person") of
beneficial ownership (within the meaning of Rule 13d-3 promulgated
under the Exchange Act) of 25% or more of either (A) the
then-outstanding shares of common stock of the Company (the
"Outstanding Company Common Stock") or (B) the combined voting power of
the then-outstanding voting securities of the Company entitled to vote
generally in the election of directors (the "Outstanding Company Voting
Securities"); provided, however, that, for purposes of this Section
1.6, the following acquisitions shall not constitute a Change of
Control: (i) any acquisition directly from the Company, (ii) any
acquisition by the Company, (iii) any acquisition by any employee
benefit plan (or related trust) sponsored or maintained by the Company
or any affiliated company, (iv) any acquisition by any corporation
pursuant to a transaction that complies with Sections 1.6(3)(A),
1.6(3)(B) and 1.6(3)(C), or (v) any acquisition that the Board
determines, in good faith, was inadvertent, if the acquiring Person
divests as promptly as practicable a sufficient amount of the
Outstanding Company Common Stock and/or the Outstanding Company Voting
Securities, as applicable, to reverse such acquisition of 25% or more
thereof.
(2) Individuals who, as of April 24, 2000, constitute the
Board (the "Incumbent Board") cease for any reason to constitute at
least a majority of the Board; provided, however, that any individual
becoming a director subsequent to April 24, 2000 whose election, or
nomination for election as a director by the Company's shareholders,
was approved by a vote of at least a majority of the directors then
comprising the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but excluding, for
this purpose, any such individual whose initial assumption of office
occurs as a result of an actual or threatened election contest with
respect to the election or removal of directors or other actual or
threatened solicitation of proxies or consents by or on behalf of a
Person other than the Board.
(3) Consummation of a reorganization, merger, consolidation or
sale or other disposition of all or substantially all of the assets of
the Company (a "Business Combination"), in each case, unless, following
such Business Combination, (A) all or substantially all of the
individuals and entities that were the beneficial owners of the
Outstanding Company Common Stock and the Outstanding Company Voting
Securities immediately prior to such Business Combination beneficially
own, directly or indirectly, more than 60% of the then-outstanding
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shares of common stock and the combined voting power of the
then-outstanding voting securities entitled to vote generally in the
election of directors, as the case may be, of the corporation resulting
from such Business Combination (including, without limitation, a
corporation that, as a result of such transaction, owns the Company or
all or substantially all of the Company's assets either directly or
through one or more subsidiaries) in substantially the same proportions
as their ownership immediately prior to such Business Combination of
the Outstanding Company Common Stock and the Outstanding Company Voting
Securities, as the case may be, (B) no Person (excluding any
corporation resulting from such Business Combination or any employee
benefit plan (or related trust) of the Company or such corporation
resulting from such Business Combination) beneficially owns, directly
or indirectly, 25% or more of, respectively, the then-outstanding
shares of common stock of the corporation resulting from such Business
Combination or the combined voting power of the then-outstanding voting
securities of such corporation, except to the extent that such
ownership existed prior to the Business Combination, and (C) at least a
majority of the members of the board of directors of the corporation
resulting from such Business Combination were members of the Incumbent
Board at the time of the execution of the initial agreement or of the
action of the Board providing for such Business Combination; or
(4) Approval by the shareholders of the Company of a complete
liquidation or dissolution of the Company.
Section 1.7 "Code" means the Internal Revenue Code of 1986, as amended,
or any successor statute.
Section 1.8 "Committee" means the committee that is responsible for
administering the Plan. The Committee shall consist of three or more employees
of the Company as determined by, and appointed by, the Board of Directors. The
Committee may delegate pursuant to a written authorization (including, by way of
illustration, through a contract, memorandum, or other written delegation
document) any or all of its responsibilities involving ongoing day-to-day
administration or ministerial acts, as set forth in this Plan to one or more
individuals or service-providers. In any case where this Plan refers to the
Committee, such reference is deemed to be a reference to any delegate of the
Committee appointed for such purpose.
Section 1.9 "Common Stock" means the common stock ($1.00 par value) of
the Company, including any shares into which it may be split, subdivided or
combined.
Section 1.10 "Company" means Becton, Dickinson and Company and any
successor to such corporation by merger, purchase or otherwise.
Section 1.11 "Company Discretionary Credits" means the amounts credited
to a Participant's Company Discretionary Credit Account, if any, pursuant to
Section 3.5.
Section 1.12 "Company Discretionary Credit Account" means the
bookkeeping account established under Section 3.5, if any, on behalf of a
Participant and includes any earnings credited thereon or losses charged thereto
pursuant to Article IV.
Section 1.13 "Company Matching Credits" means the amounts credited to a
Participant's Company Matching Credit Account, if any, pursuant to Section 3.4.
Section 1.14 "Company Matching Credit Account" means the bookkeeping
account established under Section 3.4, if any, on behalf of a Participant and
includes any earnings credited thereon or losses charged thereto pursuant to
Article IV.
Section 1.15 "Deferral Election" means the Participant's election to
participate in this Plan and defer amounts eligible for deferral in accordance
with the Plan terms. Except as the context otherwise requires, references herein
to Deferral Elections include any subsequent modifications of a prior Deferral
Election.
Section 1.16 "Deferred Bonus" means the amount of a Participant's Bonus
that such Participant has elected to defer until a later year pursuant to an
election under Section 3.2.
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Section 1.17 "Deferred Bonus Account" means the bookkeeping account
established under Section 3.2 on behalf of a Participant, and includes any
earnings credited thereon or losses charged thereto pursuant to Article IV.
Section 1.18 "Deferred Bonus Election" means the election by a
Participant under Section 3.2 to defer a portion of the Participant's Bonus
until a later year.
Section 1.19 "Deferred Salary" means the amount of a Participant's Base
Salary that such Participant has elected to defer until a later year pursuant to
an election under Section 3.1.
Section 1.20 "Deferred Salary Account" means the bookkeeping account
established under Section 3.1 on behalf of a Participant, and includes any
earnings credited thereon or losses charged thereto pursuant to Article IV.
Section 1.21 "Deferred Salary Election" means the election by a
Participant under Section 3.1 to defer until a later year a portion of his or
her Base Salary.
Section 1.22 "Deferred SERP Distribution" means the amount of a
Participant's SERP distribution that such Participant has elected to defer under
this Plan pursuant to an election under Section 3.3.
Section 1.23 "Deferred SERP Distribution Account" means the bookkeeping
account established under Section 3.3 on behalf of a Participant, and includes
any earnings credited thereon or losses charged thereto pursuant to Article IV.
Section 1.24 "Deferred SERP Distribution Election" means the election
by a Participant under Section 3.3 to defer all or a portion of the
Participant's SERP distribution.
Section 1.25 "Deferred Stock Account" means the bookkeeping account
established under Section 4.3(b) on behalf of a Participant and includes, in
addition to amounts stated in that Section, any Dividend Reinvestment Return
credited thereon.
Section 1.26 "Deferred Stock Election" means the election by a
Participant under Section 4.3(b) to have applicable deferred amounts credited in
the form of Common Stock to the Participant's Deferred Stock Account.
Section 1.27 "Disabled" means that a Participant is totally and
permanently disabled as defined in the Company's Long-Term Disability Plan.
Section 1.28 "Dividend Reinvestment Return" means the amounts which are
credited to each Participant's Deferred Stock Account pursuant to Section 4.3(b)
to reflect dividends declared by the Company on its Common Stock.
Section 1.29 "ERISA" means the Employee Retirement Income Security Act
of 1974, as amended, or any successor statute.
Section 1.30 "Fiscal Year" means the fiscal year of the Company, which
currently is the twelve month period commencing on the first day of October and
ending on the last day of September of the following calendar year.
Section 1.31 "Investment Election" means the Participant's election to
have deferred amounts credited with hypothetical earnings credits (or losses)
that track the investment performance of the Investment Options and/or Company
Common Stock in accordance with Article IV.
Section 1.32 "Investment Options" means those hypothetical targeted
investment options designated by the Committee as measurements of the rate of
return to be credited to (or charged against) amounts deferred to Participants'
Accounts.
Section 1.33 "NYSE" means The New York Stock Exchange.
6
Section 1.34 "Participant" means a common law employee of the Company
who meets the eligibility requirements for a deferral under this Plan as set
forth in Article II and who is eligible to elect to defer amounts under this
Plan in accordance with Article III.
Section 1.35 "Plan" means the Becton, Dickinson and Company Deferred
Compensation Plan (previously the Becton, Dickinson and Company Salary and Bonus
Deferral Plan) as from time to time in effect.
Section 1.36 "Plan Year" means the calendar year.
Section 1.37 "SERP" means the Becton, Dickinson and Company Retirement
Benefit Restoration Plan, as from time to time in effect.
Section 1.38 "Stock Trust" means the Becton, Dickinson and Company
Deferred Salary and Bonus Trust established as of August 15, 1996 between the
Company and Wachovia Bank of North Carolina, N.A., as amended from time to time
thereafter.
7
ARTICLE II
Eligibility and Participation
Section 2.1 Eligibility
(a) An individual shall be eligible to become a Participant in this
Plan if the individual meets the following requirements:
(i) the individual is a common law employee of a unit of the
Company (or of one of its subsidiaries) to which the Plan has
been adopted pursuant to a decision by, or with the approval
of, the Board of Directors;
(ii) the individual is not a nonresident alien of the United States
receiving no United States source income within the meaning of
sections 861(a)(3) or 911(d)(2) of the Code; and
(iii) the employee:
(A) has a Base Salary of $100,000 or more effective as of
August 1 of the calendar year before the calendar year in
which compensation otherwise to be paid to the employee
may be deferred hereunder; or
(B) is a newly-hired employee and has a projected Base Salary
of $100,000 as of the employee's date of hire.
(b) The Committee shall have the ability to adjust, prospectively for
any Plan Year, the dollar limitations in Section 2.1(a)(iii).
(c) The Committee may also:
(i) designate as ineligible particular individuals, groups of
individuals or employees of business units who otherwise would
be eligible under Section 2.1(a); or
(ii) designate as eligible particular individuals, groups of
individuals or employees of business units who otherwise would
be ineligible under Section 2.1(a).
(d) An employee who, at any time, ceases to meet the foregoing
eligibility requirements, as determined in the sole discretion of
the Committee, shall thereafter cease to be a Participant eligible
to continue making deferrals under the Plan, and any deferral
elections then in effect shall cease to be effective. In such case,
the individual may remain a Participant in the Plan with respect to
amounts already deferred prior to the date such individual ceased
to be an active Participant.
Section 2.2 Participation
(a) Deferral Election. As soon as practicable after the Committee
determines that an employee is eligible to become a Participant,
the Committee shall provide the Participant with the appropriate
election forms with which a Participant may make a Deferral
Election. In the case of an employee who first becomes eligible
during a Plan Year, such Deferral Election may be made within the
first thirty (30) days of eligibility with respect to any Deferred
Salary to be earned thereafter for the remainder of the Plan Year.
If the Participant does not return the completed forms to the
Committee at such time as required by the Committee, the
Participant will not be allowed to participate in the Plan until
the next Annual Open Enrollment Period. All Deferral Elections
hereunder (including any modifications of prior Deferral Elections
otherwise permitted under the Plan) may be made in accordance with
written, electronic or telephonic procedures prescribed by the
Committee.
8
(b) Contents of Deferral Election. A Participant's Deferral Election
must be made in the manner designated by the Committee and must be
accompanied by:
(i) an election to defer Base Salary, Bonus, and/or Company
Matching Credits and, with respect to deferrals made on or
after January 1, 2002, a single deferral election and
distribution option election with respect to all such amounts
deferred for any Plan Year (all such amounts deferred with
respect to any Plan Year shall be treated as a single category
of deferral for purposes of determining deferral periods and
distribution options);
(ii) an election to defer SERP distributions and any Company
Discretionary Credits and a separate deferral period with
respect to each such separate category of deferral;
(iii) an Investment Election;
(iv) a designation of a beneficiary or beneficiaries to receive any
deferred amounts owed upon the Participant's death;
(v) a designation as to the form of distribution for each separate
year's deferral and each separate category of deferral;
provided, however, that if no specific election is made with
respect to any deferred amount, the Participant will be deemed
to have elected to receive such amounts in the form of a lump
sum distribution (in cash and, solely to the extent
distributable amounts are credited to the Participant's
Deferred Stock Account at the time of the distribution, shares
of Common Stock);
(vi) an application for a policy of life insurance under which the
Participant is the insured and the Company is the sole owner
of and beneficiary under such policy; and
(vii) such additional information as the Committee deems necessary
or appropriate.
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ARTICLE III
Deferral Elections and Deferral Periods
Section 3.1 Deferred Salary Election
(a) Each Participant who has elected to defer the maximum pre-tax
elective deferral that is permitted for a calendar year under the
Becton, Dickinson and Company Savings Incentive Plan and under Code
section 402(g) may make a Deferred Salary Election with respect to
Base Salary otherwise to be paid in such calendar year, provided
that a valid Deferred Salary Election is made by the date specified
in Section 3.1(b). A Participant may elect to defer from 1% to 75%
of the Participant's Base Salary (in increments of 1%); provided,
however, that the Participant must elect a Deferred Salary amount of
at least $5,000. Notwithstanding the foregoing, any Deferred Salary
Election must be made in a manner that will ensure that the
Participant is paid a sufficient amount of Base Salary that will
allow adequate amounts available for: (i) any tax required to be
withheld from the Participant's Base Salary (including tax
attributable to amounts deferred under this Plan) under the Code or
any state or local statute; (ii) any pre-tax elective deferrals
under the Becton, Dickinson and Company Savings Incentive Plan;
(iii) any amounts to be deferred by the Participant in order to
participate in any other benefit programs maintained by the Company;
and (iv) any other amounts required to be paid to the Participant or
withheld from the Participant's compensation by law or due to such
other requirements as determined by the Committee.
(b) Except with respect to Deferred Salary Elections made by
Participants who first become eligible to participate during a Plan
Year (which elections must be made as specified in Section 2.2(a)),
a Deferred Salary Election with respect to Base Salary for a
particular calendar year must be made on or before the September 30
(November 9, 2001 with respect to salary earned during the 2002
year) preceding the commencement of such calendar year. Once a
Deferred Salary Election is made, it shall be irrevocable for the
applicable calendar year and apply only to Base Salary otherwise to
be paid during the applicable calendar year. Such Deferred Salary
shall be credited to the Participant's Deferred Salary Account as of
the first business day after the last day of each payroll period.
Section 3.2 Deferred Bonus Election
(a) Each Participant may elect to make a Deferred Bonus Election with
respect to a Bonus otherwise to be paid in the calendar year
immediately following the year of the Participant's Deferred Bonus
Election. A Participant may elect to defer from 1% to 100% of the
Participant's Bonus (in increments of 1%); provided, however, that
the Participant's Deferred Bonus Election must result in a deferral
of at least $5,000.
(b) A Deferred Bonus Election with respect to any Bonus to be paid in a
particular calendar year must be made on or before the September 30
preceding the commencement of such calendar year (November 9, 2001
with respect to Bonus amounts to be paid in 2002). Once made, a
Deferred Bonus Election cannot be changed or revoked except as
provided herein. Such Deferred Bonus shall be credited to the
Participant's Deferred Bonus Account as of the first business day in
January of the year that the Bonus otherwise would have been paid to
the Participant in the absence of any deferral hereunder.
Section 3.3 Deferred SERP Distribution Election
(a) Each Participant who is otherwise a participant in the SERP may
elect to make a Deferred SERP Distribution Election, at the time
specified in subsection (b) below, with respect to a SERP
distribution that is otherwise to be paid to the Participant. A
Participant may elect to defer from 1% to 100% of the Participant's
applicable SERP
10
distribution (in increments of 1%); provided, however, that the
total of the Participant's Deferred SERP Distribution Election must
result in a deferral of at least $5,000.
(b) A Deferred SERP Distribution Election with respect to any SERP
distribution payable during a particular calendar year must be made
at least one year before the date that the SERP distribution is
otherwise payable to the Participant. Once made, a Deferred SERP
Distribution Election cannot be changed or revoked except as
provided herein. Such Deferred SERP Distribution shall be credited
to the Participant's Deferred SERP Distribution Account as soon as
practicable after such amount would otherwise have been payable to
the Participant. If the Participant otherwise becomes entitled to a
SERP distribution after having made such an election and before the
end of such one-year period, such election shall be ineffective and
the applicable SERP distribution shall not be deferred hereunder.
Section 3.4 Company Matching Credits
If a Participant has made a Deferred Salary Election in accordance
with Section 3.1 and, as a result of such Deferred Salary Election,
the Participant is entitled to a lower matching contribution amount
under the SIP, then the Participant shall be eligible to have
Company Matching Credits credited to the Participant's Company
Matching Credit Account. The amount of such Company Matching Credits
shall equal the amount of the matching contribution to which the
Participant would have been entitled under the SIP had the
Participant not made any Deferred Salary Election for the Plan Year
under this Plan (taking into account all applicable Code limitations
that limit the amount of matching contributions under the SIP) less
an amount equal to the actual matching contribution to which the
Participant is entitled under the SIP for the Plan Year. Such
amounts shall be credited to the Participant's Company Matching
Credit Account as soon as practicable after the end of the Plan Year
and shall be subject to the vesting schedule described in Article
IV.
Section 3.5 Company Discretionary Credits
The Company may, in its sole discretion, provide for additional
credits to all or some Participants' Accounts at any time. Such
amounts shall be credited to the Participant's Company Discretionary
Credit Account and shall be subject to the vesting schedule
established by the Company at the time such amounts are credited.
Section 3.6 Deferral Period
With respect to amounts deferred in accordance with Sections 3.1
through 3.5, each Participant must elect the deferral period for
each separate deferral and each compensation type. Subject to the
additional deferral provisions of Section 3.7 and the acceleration
provisions of Article V, a Participant's deferral period may be for
a specified number of years or until a specified date, subject to
any limitations that the Committee in its discretion may choose to
apply, provided that, in all events, a deferral period must be for
at least two (2) years from the first day of the Plan Year in which
the deferred amounts would otherwise be payable (or, in the case of
amounts described in Section 3.4 or Section 3.5, credited to the
Participant's Account). However, notwithstanding the deferral period
otherwise specified, payments shall be paid or begin to be paid
under the Plan in accordance with the mandatory distribution
provisions in Article V.
Section 3.7 Modification of Deferral Period
(a) With respect to any previously deferred amount credited to a
Participant's Accounts, a Participant may request that the Committee
approve an additional deferral period of at least two (2) years from
the date the previously deferred amounts were otherwise payable. Any
such request must be made by written notice to the Committee at
least twelve (12) months before the expiration of the deferral
period for any previously
11
deferred amount with respect to which an additional deferral
election is requested. Such additional deferral election may apply
to each separate deferral previously made (and each compensation
type previously deferred). Each such additional deferral election
request shall include a newly designated manner of payment election
in accordance with the provision of Section 5.2 below. No more than
two such extensions may be elected by a Participant with respect to
any specific deferred amount (or compensation type) previously
deferred.
(b) With respect to any previously deferred amount (and compensation
type) credited to a Participant's Accounts, a Participant may
request that the Committee approve an accelerated deferral date with
respect to amounts that are not otherwise payable for at least three
(3) years from the date of such request, provided that the resulting
accelerated deferral date may not be any earlier than two (2) years
from the date of such Participant election. Such deferral
modification election may be made for each separate deferral
previously made (and each compensation type). Each such modified
deferral period request shall include a newly designated manner of
payment election in accordance with the provisions of Section 5.2
below. No more than two such modifications may be elected by a
Participant with respect to any specific deferred amount (or
compensation type) previously deferred.
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ARTICLE IV
Participants' Accounts
Section 4.1 Crediting of Employee Deferrals and Company Matching and
Discretionary Credits
Deferrals to this Plan that are made under Article III shall be
credited to the Participant's Accounts in accordance with such rules
established by the Committee from time to time. Each Participant's
Accounts shall be administered in a way to permit separate Deferral
Elections, deferral periods, and Investment Elections with respect
to various Plan Year deferrals and compensation types as the
Committee determines, in its sole discretion, are necessary or
appropriate.
Section 4.2 Investment Election
Effective January 1, 2002, all balances reflected through December
31, 2001 credited to the Accounts of Participants who are not
actively employed on January 1, 2002 shall continue to be credited
with earnings (or charged with losses) to reflect the income (or
loss) that would have been earned had the deferred amounts been
invested in the Investment Options then in effect with respect to
such Participants. Notwithstanding the provisions of this Article IV
that allow Participants the ability to make and modify Investment
Elections, no modifications of Investment Elections shall be allowed
with respect to amounts credited to such Participants' Accounts as
of December 31, 2001 and all hypothetical earnings (or losses)
attributable to such balances thereafter. With respect to amounts
credited to all other Participants' Accounts under the Plan (other
than amounts credited to Deferred Stock Accounts, which may not be
transferred out of such Accounts), Participants' Investment
Elections with respect to deferred amounts hereunder shall be made
pursuant to the written, telephonic or electronic methods prescribed
by the Committee and subject to such rules on Investment Elections
and Investment Options as established by the Committee from time to
time. Upon receipt by the Committee, and in accordance with rules
established by the Committee, an Investment Election shall be
effective as soon as practicable after receipt and processing of the
election by the Committee. Investment Elections will continue in
effect until changed by the Participant. An eligible Participant
(including a Participant who terminates employment on or after
January 1, 2002) may change a prior Investment Election (or default
Investment Election) with respect to deferred amounts on a monthly
basis, by notifying the Committee, at such time and in such manner
as approved by the Committee. Any such changed Investment Election
may result in amending Investment Elections for prior deferrals or
for future deferrals or both. Notwithstanding the foregoing, in all
events, a Participant may not reallocate any deferrals out of a
Deferred Stock Account so that the deferrals will track targeted
rates of return measured by the Investment Options.
Section 4.3 Hypothetical Earnings
(a) General. Subject to Section 4.2, additional hypothetical bookkeeping
amounts shall be credited to (or deducted from) a Participant's
Accounts to reflect the earnings (or losses) that would have been
experienced had the deferred amounts been invested in the Investment
Options selected by the Participant as targeted rates of return, net
of all fees and expenses otherwise associated with the Investment
Options. The Committee may add or delete Investment Options, on a
prospective basis, by notifying all Participants whose Accounts are
hypothetically invested in such Options, in advance, and soliciting
elections to transfer deferred amounts so that they track
investments in other Investment Options then available.
(b) Company Stock Investment Option. Instead of having deferred amounts
credited with hypothetical earnings (or losses) in accordance with
Section 4.3(a), and subject to Section 4.2, a Participant may elect
(as a part of the Participant's Deferral Election) to have all or
part of the Participant's future deferred amounts (in whole
percentage
13
increments) credited in the form of Common Stock to a Deferred Stock
Account. In addition, any amounts credited to a Participant's
Accounts other than the Participant's Deferred Stock Account may be
transferred for hypothetical investment tracking purposes to the
Participant's Deferred Stock Account. A Deferred Stock Election to
have any deferrals hereunder credited to the Participant's Deferred
Stock Account shall be made in accordance with the procedures
established by the Committee. Once amounts are credited to the
Participant's Deferred Stock Account, the Participant may not
reallocate those amounts to have them reflect the hypothetical
earnings (or losses) of any other targeted rate of return Investment
Option. All distributions of amounts credited to a Participant's
Deferred Stock Account may only be distributed in whole shares of
Common Stock (with cash for fractional shares).
A Participant's Deferred Stock Account will be credited:
(i) as of the first business day after the last day of each
bi-weekly payroll period, with the number of shares of Common
Stock (in whole shares and fractional shares, as determined by
the Committee) determined by dividing the Participant's
deferred amounts attributable to Deferred Salary for such
bi-weekly payroll period subject to the Deferred Stock
Election by the price for shares of Common Stock, determined
by the Committee, as of the day such deferred amounts are
credited to the Participant's Account; and
(ii) annually, as of the first business day in January of each
calendar year, with the number of shares of Common Stock (in
whole shares and fractional shares, as determined by the
Committee) determined by dividing the portion of the
Participant's Deferred Bonus and Company Matching Credits
subject to the Deferred Stock Election by the price for shares
of Common Stock, determined by the Committee, as of the day
such deferred amounts are credited to the Participant's
Accounts; and
(iii) at such other times as the Committee determines with respect
to all other deferred amounts under the Plan, with the number
of shares of Common Stock (in whole shares and fractional
shares, as determined by the Committee) determined by dividing
the portion of the Participant's deferred amounts to be
credited in the Deferred Stock Account by the price for shares
of Common Stock, determined by the Committee, as of the day
such deferred amounts are credited to the Participant's
Account.
If the Company enters into transactions involving stock splits,
stock dividends, reverse splits or any other recapitalization
transactions, the number of shares of Common Stock credited to a
Participant's Deferred Stock Account will be adjusted (in whole
shares and fractional shares, as determined by the Committee) so
that the Participant's Deferred Stock Account reflects the same
equity percentage interest in the Company after the recapitalization
as was the case before such transaction.
If at least a majority of the Company's stock is sold or exchanged
by its shareholders pursuant to an integrated plan for cash or
property (including stock of another corporation) or if
substantially all of the assets of the Company are disposed of and,
as a consequence thereof, cash or property is distributed to the
Company's shareholders, each Participant's Deferred Stock Account
will, to the extent not already so credited under this Section
4.3(b), be (i) credited with the amount of cash or property
receivable by a Company shareholder directly holding the same number
of shares of Common Stock as is credited to such Participant's
Deferred Stock Account and (ii) debited by that number of shares of
Common Stock surrendered by such equivalent Company shareholder.
Each time the Company declares a dividend on its Common Stock, each
Participant's Deferred Stock Account will be credited with a
Dividend Reinvestment Return equal to that number of shares of
Common Stock (in whole shares and fractional shares, as
14
determined by the Committee) determined by dividing (i) the amount
that would have been paid (or the fair market value thereof, if the
dividend is not paid in cash) to the Participant on the total number
of shares of Common Stock credited to the Participant's Deferred
Stock Account had that number of shares of Common Stock been held by
such Participant by (ii) the price for shares of Common Stock,
determined by the Committee, as of the dividend payment date.
Section 4.4 Vesting
At all times a Participant shall be fully vested in his Deferred
Salary, Deferred Bonus, and Deferred SERP Distributions hereunder
(including any earnings or losses and Dividend Reinvestment Return
thereon). A Participant shall become vested in any Company Matching
Credits in the same manner and to the same extent as the Participant
is vested in matching contributions otherwise credited to the
Participant under the Becton, Dickinson and Company Savings
Incentive Plan. A Participant shall become vested in any Company
Discretionary Credits pursuant to the vesting schedule established
by the Company at the time such Credits, if any, are made. Except as
otherwise provided in Section 5.1(b) (death) or Section 5.1(c)
(disability), if a Participant terminates employment at any time
prior to becoming fully vested in amounts credited to the
Participant's Accounts hereunder, the nonvested amounts credited to
the Participant's Accounts shall be immediately forfeited and the
Participant shall have no right or interest in such nonvested
deferred amounts.
Section 4.5 Account Statements
Within 60 days following the end of each Plan Year (or at such more
frequent times determined by the Committee), the Committee shall
furnish each Participant with a statement of Account which shall set
forth the balances of the individual's Accounts as of the end of
such Plan Year (or as of such time determined by the Committee),
inclusive of tracked earnings (or losses) and any Dividend
Reinvestment Return. In addition, the Committee shall maintain
records reflecting each year's deferrals separately by type of
compensation.
15
ARTICLE V
Distributions and Withdrawals
Section 5.1 Timing of Distribution
(a) Time of Distribution - Distributions Other than Death, Disability,
or Scheduled Distributions. Except as otherwise provided herein in
the case of a Participant who retires and subject to Section 5.1(d),
a Participant's vested Accounts shall be paid or commence to be
paid, in the form of distribution elected in a particular Deferral
Election (subject to Section 5.2), at such date as determined in the
sole discretion of the Committee following the earlier of: (i) the
Participant's termination of employment, or (ii) the date otherwise
specified in the Participant's Deferral Election. In the case of a
Participant who retires from employment hereunder (as defined
below), and subject to Section 5.1(d), a Participant's vested
Accounts shall be paid or commence to be paid, in the form of
distribution elected in a particular Deferral Election (subject to
Section 5.2), at such date as determined in the sole discretion of
the Committee following the later of: (i) the Participant's
retirement from active employment, or (ii) the date otherwise
specified in the Participant's Deferral Election; provided however
that, in all events distributions to such a retired Participant must
be made (or commence to be paid) as of the earlier of the
Participant's attainment of age 70 or death. For purposes of this
Section 5.1(a), a Participant has "retired" from active employment
if:
(i) the Participant terminates from active employment after having
attained age 65 with five years of service with the Company or
an affiliate;
(ii) the Participant terminates from active employment after having
attained age 55 with ten years of service with the Company or
an affiliate; or
(iii) the Committee, in its sole discretion, otherwise determines
that the Participant has retired for this purpose.
(b) Timing of Distributions - Participant's Death. If a Participant dies
before the full distribution of the Participant's Accounts under
this Article V, any deferred amounts that are not vested and have
not previously been forfeited shall become 100% vested. Unless the
Participant had commenced receiving installment payments, as soon as
practicable after the Participant's death, all remaining amounts
credited to the Participant's Accounts shall be paid in a single
lump sum payment to the Participant's named beneficiary (or
beneficiaries). In the absence of any beneficiary designation,
payment shall be made to the personal representative, executor or
administrator of the Participant's estate. Beneficiary designations
may be changed by a Participant at any time without the consent of
the Participant's spouse or any prior beneficiary. If the
Participant dies after having commenced to receive installment
payments, the Participant's beneficiary may accelerate the payment
of any remaining installment payments as follows:
(i) The beneficiary may request (within a reasonable time after
the Participant's death, as specified by the Committee) that
all remaining installment payments that are otherwise to be
paid to the beneficiary at least twelve (12) months after the
date of the request be accelerated and paid in a single lump
sum payment as of a date specified by the Committee that is at
least twelve (12) months after the date of the request; or
(ii) The beneficiary may request (within a reasonable time after
the Participant's death, as specified by the Committee) that
all remaining installment payments that are otherwise to be
paid to the beneficiary be accelerated and paid in the form of
an immediate lump sum payment, subject to the requirement that
ten percent (10%) of the remaining amounts be permanently
forfeited.
16
(c) Timing of Distributions - Participant's Disability. Notwithstanding
anything in the Plan to the contrary, if a Participant becomes
Disabled, the Participant will be treated as having terminated
employment and any deferred amounts that are not vested and have not
previously been forfeited shall become 100% vested. Notwithstanding
anything in a Participant's Deferral Election to the contrary with
respect to payment commencement, as soon as practicable after the
Participant becomes Disabled, all remaining amounts credited to the
Participant's Accounts shall be paid or commence to be paid to the
Participant in the form of distribution elected by the Participant
in the Participant's Deferral Election. In addition, as soon as
practicable after the Participant becomes Disabled, the Participant
may request that the Committee change any installment distribution
election so that amounts subject to the election are accelerated and
paid in the form of a single lump sum distribution. Such
distribution shall be made only if the Committee, taking into
account the type of factors taken into account in the event of a
hardship under Section 5.1(f), in its sole discretion, approves such
request.
(d) Scheduled Distribution. As a part of the Participant's Deferral
Election, a Participant may elect to receive a lump sum distribution
or annual installments (over 2, 3, 4 or 5 years, as elected by the
Participant) equal to all or any part of the vested balance of the
Participant's Accounts to be paid (or commence to be paid) at a
scheduled distribution date, subject to the timing requirements in
Section 5.1(a). For these purposes, the amount of each installment
payment shall be determined by multiplying the value of the
Participant's remaining vested Accounts subject to the scheduled
distribution election by a fraction, the numerator of which is one
(1) and the denominator of which is the number of calendar years
remaining in the installment period. These scheduled distributions
are generally available only for distributions that are scheduled to
commence to be paid while a Participant is employed by the Company.
If a Participant terminates employment before commencing receipt of
scheduled distributions, the timing requirements of Section 5.1(a)
shall apply (which requirements provide for payment upon termination
of employment, unless the Participant has attained retirement age,
in which case a later distribution date may apply). If a Participant
terminates employment while receiving scheduled installment
payments, such installment payments shall continue to be paid in the
same form of distribution, subject to the Participant's right to
accelerate the remaining payments in accordance with Section 5.1(e)
or Section 5.1(f). Notwithstanding the foregoing, if a Participant's
employment is terminated for cause, as determined by the Company,
full payment of all remaining amounts in such Participant's Account
shall be paid in the form of a single lump sum payment as soon as
practicable after such termination.
(e) Early Distribution. Notwithstanding any other provision of the Plan,
a Participant or beneficiary may, at any time prior to or subsequent
to commencement of payments, request in writing to the Committee to
have any or all vested amounts in his or her Accounts paid in an
immediate lump sum distribution, provided that an amount equal to
ten percent (10%) of the requested distribution shall be permanently
forfeited from the Participant's Accounts prior to such
distribution. Any such lump sum distribution shall be paid as soon
as practicable after the Committee's receipt of the Participant's
(or beneficiary's) request. The minimum permitted early distribution
under this Section 5.1(e) shall be $3,000.
(f) Hardship Distribution. At any time prior to the time an amount is
otherwise payable hereunder, an active Participant may request a
distribution of all or a portion of any vested amounts credited to
the Participant's Accounts on account of the Participant's financial
hardship, subject to the following requirements:
(i) Such distribution shall be made, in the sole discretion of the
Committee, if the Participant has incurred an unforeseeable
emergency.
(ii) For purposes of this Plan, an "unforeseeable emergency" shall
mean an unanticipated emergency that is caused by an event
beyond the control of the
17
Participant and that would result in severe financial hardship
to the Participant resulting from a sudden and unexpected
illness or accident of the Participant or of a Participant's
dependent (as defined in Code section 152(a)), loss of the
Participant's property due to casualty, or other similar
extraordinary and unforeseeable circumstances arising as a
result of events beyond the Participant's control. The
circumstances that will constitute an unforeseeable emergency
will depend upon the facts of each case and be based on the
information supplied by the Participant, in writing, pursuant to
the procedure prescribed by the Committee. In addition to the
foregoing, distributions under this subsection shall not be
allowed for purposes of sending a child to college or the
Participant's desire to purchase a home or other residence. In
all events, distributions made on account of an unforeseeable
emergency are limited to the extent reasonably needed to satisfy
the emergency need.
(iii) Notwithstanding the foregoing, payment under this subsection
may not be made to the extent that such hardship is or may be
relieved:
(A) through reimbursement or compensation by insurance or
otherwise,
(B) by liquidation of the Participant's assets, to the extent
the liquidation of such assets would not itself cause severe
financial hardship, or
(C) by cessation of deferrals under the Plan.
(iv) All distributions under this subsection shall be made in cash
as soon as practicable after the Committee has approved the
distribution and that the requirements of this subsection have
been met.
(v) The minimum permitted hardship withdrawal shall be $3,000.
Section 5.2 Form of Distribution
(a) General. Except as otherwise provided in this Article V, all amounts
payable from a Participant's Accounts shall be paid in one of the
forms of distribution described in Subsections (b) and (c) below, as
elected by the Participant in a Deferral Election or as modified by
the Participant in accordance with Subsection (d) below. Any
Participant who fails to elect a form of distribution with respect
to any deferral amount (or any compensation type) shall be deemed to
have elected to receive such amounts in the form of a lump sum
distribution in cash and, to the extent distributable amounts are
credited to the Participant's Deferred Stock Account, in shares of
Common Stock (with any fractional share interest therein paid in
cash to the extent of the then fair market value thereof).
(b) Lump Sum Distribution. A Participant may elect, in accordance with
such procedures established by the Committee, to have any vested
deferral amounts credited to his Accounts paid in the form of a
single lump sum distribution at the time otherwise required or
permitted under the Plan.
(c) Annual Installment Distributions. A Participant may elect, in
accordance with such procedures established by the Committee, to
have any vested deferral amounts credited to his Accounts paid at
the time otherwise required or permitted in the form of annual
installments over a 5, 10 or 15-year period commencing at the time
otherwise required or permitted under the Plan and paid annually
thereafter for the remainder of the installment period (subject to
Section 5.1(b)). For these purposes, the amount of each installment
payment shall be determined by multiplying the value of the
Participant's remaining vested Accounts by a fraction, the numerator
of which is one (1) and the denominator of which is the number of
calendar years remaining in the installment period. Notwithstanding
the foregoing, if a Participant's employment is terminated for
cause, as
18
determined by the Company, full payment of all remaining amounts in
such Participant's Account shall be paid in the form of a single
lump sum payment as soon as practicable after such termination.
(d) Change in Form
(i) Notwithstanding the foregoing, in accordance with the written,
telephonic or electronic procedures prescribed by the Committee,
a Participant may elect to change the form applicable to a
particular deferral (or deferred compensation type) at any time,
provided that such election must be made at least twelve (12)
consecutive months before the date on which such distribution
otherwise would have been made or commenced. Any such change
that is not in effect for at least the applicable twelve (12)
month period shall be disregarded and the last valid election
shall be substituted in its place. In the absence of such a
valid election, distribution shall be made in the form of a
single lump sum distribution in cash and, to the extent
distributable amounts are credited to the Participant's Deferred
Stock Account, in shares of Common Stock (with any fractional
share interest therein paid in cash to the extent of the then
fair market value thereof).
(ii) In addition, with respect to a Participant who has commenced
receiving installment payments, such Participant may elect,
pursuant to the written, telephonic or electronic method
prescribed by the Committee (or its delegate), to have all
remaining installment payments that are otherwise to be paid to
the Participant at least twelve (12) months after the date of
the election be accelerated and paid in a single lump sum
payment as of a date specified by the Committee that is at least
twelve (12) months after the date of the election.
19
ARTICLE VI
General Provisions
Section 6.1 Unsecured Promise to Pay
The Company shall make no provision for the funding of any amounts
payable hereunder that (i) would cause the Plan to be a funded plan for
purposes of section 404(a)(5) of the Code, or Title I of ERISA, or (ii)
would cause the Plan to be other than an "unfunded and unsecured promise
to pay money or other property in the future" under Treasury Regulations
ss. 1.83-3(e); and, except to the extent specified in the Stock Trust
following a "change of control" (as defined in the Stock Trust) of the
Company, the Company shall have no obligation to make any arrangement
for the accumulation of funds to pay any amounts under this Plan.
Subject to the restrictions of the preceding sentence and in Section
4.3, the Company, in its sole discretion, may establish one or more
grantor trusts described in Treasury Regulations ss. 1.677(a)-1(d) to
accumulate funds and/or shares of Common Stock to pay amounts under this
Plan, provided that the assets of such trust(s) shall be required to be
used to satisfy the claims of the Company's general creditors in the
event of the Company's bankruptcy or insolvency.
Section 6.2 Plan Unfunded
In the event that the Company (or one of its subsidiaries) shall decide
to establish an advance accrual reserve on its books against the future
expense of payments hereunder, such reserve shall not under any
circumstances be deemed to be an asset of this Plan but, at all times,
shall remain a part of the general assets of the Company (or such
subsidiary), subject to claims of the Company's (or such subsidiary's)
creditors. A person entitled to any amount under this Plan shall be a
general unsecured creditor of the Company (or the Participant's employer
subsidiary) with respect to such amount. Furthermore, a person entitled
to a payment or distribution with respect to any amounts credited to
Participant Accounts shall have a claim upon the Company (or the
Participant's employer subsidiary) only to the extent of the vested
balance(s) credited to such Accounts.
Section 6.3 Designation of Beneficiary
The Participant's beneficiary under this Plan with respect to amounts
credited to the Participant's Accounts hereunder shall be the person
designated to receive benefits on account of the Participant's death on
a form provided by the Committee.
Section 6.4 Expenses
All commissions, fees and expenses that may be incurred in operating the
Plan and any related trust(s) established in accordance with the Plan
(including the Stock Trust) will be paid by the Company.
Section 6.5 Voting Common Stock
Each Participant who has a Deferred Stock Account shall be entitled to
provide directions to the Committee to cause the Committee to similarly
direct the Trustee of the Stock Trust to vote, on any matter presented
for a vote to the shareholders of the Company, that number of shares of
Common Stock held by the Stock Trust equivalent to the number of shares
of Common Stock credited to the Participant's Deferred Stock Account.
The Committee shall arrange for distribution to all such Participants in
a timely manner all communications directed generally to the
shareholders of the Company as to which their votes are solicited.
Section 6.6 Non-Assignability
Participants, their legal representatives and their beneficiaries shall
have no right to anticipate, alienate, sell, assign, transfer, pledge or
encumber their interests in the Plan, nor shall such
20
interests be subject to attachment, garnishment, levy or execution by or
on behalf of creditors of the Participants or of their beneficiaries.
Section 6.7 Mandatory Deferral
Notwithstanding any other provision of this Plan, the Compensation and
Benefits Committee of the Company's Board of Directors may require an
employee to defer: (i) the portion of any Base Salary, Bonus amount or
SERP distribution, or (ii) the portion of any payment from any Account
hereunder, in any case where the Company anticipates that such portion
otherwise would be nondeductible pursuant to section 162(m) of the Code.
Section 6.8 Employment/Participation Rights
(a) Nothing in the Plan shall interfere with or limit in any way the
right of the Company to terminate any Participant's employment at
any time, nor confer upon any Participant any right to continue in
the employ of the Company.
(b) Nothing in the Plan shall be construed to be evidence of any
agreement or understanding, express or implied, that the Company
will continue to employ a Participant in any particular position or
at any particular rate of remuneration.
(c) No employee shall have a right to be selected as a Participant, or,
having been so selected, to be continued as a Participant.
(d) Nothing in this Plan shall affect the right of a recipient to
participate in and receive benefits under and in accordance with any
pension, profit-sharing, deferred compensation or other benefit plan
or program of the Company.
Section 6.9 Severability
If any particular provision of the Plan shall be found to be illegal or
unenforceable for any reason, the illegality or lack of enforceability
of such provision shall not affect the remaining provisions of the Plan,
and the Plan shall be construed and enforced as if the illegal or
unenforceable provision had not been included.
Section 6.10 No Individual Liability
It is declared to be the express purpose and intention of the Plan that
no liability whatsoever shall attach to or be incurred by the
shareholders, officers, or directors of the Company (or any affiliate)
or any representative appointed hereunder by the Company (or any
affiliate), under or by reason of any of the terms or conditions of the
Plan.
Section 6.11 Tax Withholding
The Company shall have the right to deduct from all payments made from
the Plan any federal, state, or local taxes required by law to be
withheld with respect to such payments.
Section 6.12 Applicable Law
This Plan shall be governed by and construed in accordance with the laws
of the State of New Jersey except to the extent governed by applicable
federal law.
Section 6.13 Incompetency
Any person receiving or claiming benefits under the Plan shall be
conclusively presumed to be mentally competent and of age until the
Committee receives written notice, in a form and manner acceptable to
it, that such person is incompetent or a minor, and that a guardian,
conservator, or other person legally vested with the care of his estate
has been appointed. If the Committee finds
21
that any person to whom a benefit is payable under the Plan is unable to
properly care for his or her affairs, or is a minor, then any payment
due (unless a prior claim therefor shall have been made by a duly
appointed legal representative) may be paid to the spouse, a child, a
parent, or a brother or sister, or to any person deemed by the Committee
to have incurred expense for the care of such person otherwise entitled
to payment. If a guardian or conservator of the estate of any person
receiving or claiming benefits under the Plan shall be appointed by a
court of competent jurisdiction, payments shall be made to such guardian
or conservator provided that proper proof of appointment is furnished in
a form and manner suitable to the Committee. Any payment made under the
provisions of this Section shall be a complete discharge of liability
therefor under the Plan.
Section 6.14 Notice of Address
Any payment made to a Participant or a designated beneficiary at the
last known post office address of the distributee on file with the
Committee, shall constitute a complete acquittance and discharge of any
obligations of the Company under this Plan, unless the Committee shall
have received prior written notice of any change in the condition or
status of the distributee. Neither the Committee, the Company nor any
director, officer, or employee of the Company shall have any duty or
obligation to search for or ascertain the whereabouts of a Participant
or a designated beneficiary.
22
ARTICLE VII
Administration
Section 7.1 Committee
Prior to a Change in Control, the Plan shall be administered by the
Committee. The Committee shall have the exclusive right to interpret the
Plan (including questions of construction and interpretation) and the
decisions, actions and records of the Committee shall be conclusive and
binding upon the Company and all persons having or claiming to have any
right or interest in or under the Plan. The Committee may delegate to
such officers, employees or departments of the Company, or to
service-providers or other persons, such authority, duties, and
responsibilities of the Committee as it, in its sole discretion,
considers necessary or appropriate for the proper and efficient
operation of the Plan, including, without limitation, (i) interpretation
of the Plan, (ii) approval and payment of claims, and (iii)
establishment of procedures for administration of the Plan.
Notwithstanding the foregoing, after a Change in Control, the trustee of
any grantor trust established for the purpose of accumulating funds to
satisfy the obligations incurred by the Company under this Plan shall
administer the Plan and shall have the same privileges and rights as
given to the Committee prior to a Change in Control.
Section 7.2 Claims Procedure
Any person dissatisfied with the Committee's determination of a claim
for benefits (or claim for eligibility for participation) hereunder must
file a written request for reconsideration with the Committee. This
request must include a written explanation setting forth the specific
reasons for such reconsideration. The Committee shall review its
determination promptly and render a written decision with respect to the
claim, setting forth the specific reasons for such denial written in a
manner calculated to be understood by the claimant. Such claimant shall
be given a reasonable time within which to comment, in writing, to the
Committee with respect to such explanation. The Committee shall review
its determination promptly and render a written decision with respect to
the claim. Such decision of the Committee shall be conclusive, binding,
and final upon all claimants under this Plan.
23
ARTICLE VIII
Amendment, Termination and Effective Date
Section 8.1 Amendment of the Plan
Subject to Section 8.3, the Plan may be wholly or partially amended or
otherwise modified at any time by written action of the Board of
Directors.
Section 8.2 Termination of the Plan
Subject to the provisions of Section 8.3, the Plan may be terminated at
any time by written action of the Board of Directors.
Section 8.3 No Impairment of Benefits
Notwithstanding the provisions of Sections 8.1 and 8.2, no amendment to
or termination of the Plan shall reduce the amount credited to any
Participant's Accounts hereunder.
Section 8.4 Effective Date
The Plan, as previously amended and restated, was effective as of August
15, 1996. The Plan as set forth herein is amended and restated effective
as of November 1, 2001.
24