EXHIBIT 10.46
BIOGEN SAVINGS PLAN
As amended and restated by the
Thirteenth Amendment
(December 31, 2001)
BIOGEN SAVINGS PLAN
Table of Contents
Page
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ARTICLE 1 INTRODUCTION.............................................. 1
1.1 Establishment of Plan..................................... 1
1.2 Compliance with Code and ERISA............................ 1
1.3 Exclusive Benefit of Participants......................... 1
1.4 Limitation on Rights Created By Plan...................... 1
1.5 Application of Plan's Terms............................... 1
1.6 Benefits Not Guaranteed................................... 1
ARTICLE 2 DEFINITIONS............................................... 1
2.1 Applicable compensation................................... 1
2.2 Beneficiary............................................... 2
2.3 Biogen.................................................... 2
2.4 Code...................................................... 2
2.5 Employee.................................................. 2
2.6 Employer.................................................. 2
2.7 ERISA..................................................... 2
2.8 Participant............................................... 2
2.9 Plan...................................................... 2
2.10 Plan administrator........................................ 2
2.11 Plan year................................................. 2
2.12 Trust agreement........................................... 2
2.13 Trust fund................................................ 2
2.14 Trustee................................................... 2
ARTICLE 3 PLAN SERVICE.............................................. 2
3.1 Plan Service.............................................. 3
3.2 Employment Defined........................................ 3
3.3 Service with Affiliated Companies......................... 3
3.4 Affiliated Company Defined................................ 3
ARTICLE 4 PARTICIPATION............................................. 3
4.1 Eligible Class............................................ 3
4.2 Participation............................................. 4
4.3 End of Participation...................................... 4
4.4 Reentry of Former Active Participant...................... 4
ARTICLE 5 SAVINGS DEPOSITS BY PARTICIPANTS.......................... 4
5.1 Savings Deposits.......................................... 4
5.2 401(k) Limits............................................. 5
5.3 Changes in Savings Deposits............................... 7
5.4 Collection of Savings Deposits............................ 8
5.5 Rollover Contributions.................................... 8
ARTICLE 6 EMPLOYER CONTRIBUTIONS.................................... 8
6.1 Matching Employer Contributions........................... 9
6.2 401(m) Limits............................................. 9
6.3 Form and Time of Contribution............................. 10
6.4 Biogen Stock Defined...................................... 10
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6.5 Return of Contribution Made in Error or Not Deductible.... 10
ARTICLE 7 ACCOUNTS AND CREDITS...................................... 10
7.1 Establishment of Accounts................................. 10
7.2 Crediting Participants' Savings Deposits.................. 11
7.3 Crediting Matching Contributions and Forfeitures.......... 11
7.4 Crediting Rollovers....................................... 11
7.5 Charges to Accounts....................................... 11
7.6 Maximum Additions......................................... 11
ARTICLE 8 INVESTMENT FUNDS AND CREDITING INVESTMENT EXPERIENCE...... 12
8.1 Investment Funds.......................................... 12
8.2 Investment Directions and Transfers Among Funds........... 12
8.3 Valuation of Assets and Crediting Investment Experience... 13
ARTICLE 9 LOANS TO PARTICIPANTS..................................... 14
9.1 Loans to Participants..................................... 14
9.2 Accounting for Loans...................................... 15
ARTICLE 10 WITHDRAWALS AND DISTRIBUTIONS............................. 15
10.1 In-Service Withdrawals from Savings Deposits.............. 15
10.2 In-Service Withdrawals from Rollover Account.............. 17
10.3 Distribution Upon Retirement or Disability................ 17
10.4 Distribution Upon Termination of Employment............... 17
10.5 Right to Defer............................................ 18
10.6 Distribution Upon Death of Participant.................... 18
10.7 Manner of Payment......................................... 19
10.8 Direct Rollovers.......................................... 19
10.9 Rehire Before Distribution................................ 20
ARTICLE 11 AMENDMENT, MERGER AND TERMINATION OF PLAN................. 20
11.1 Amendment of Plan......................................... 20
11.2 Merger of Plans........................................... 20
11.3 Termination............................................... 20
11.4 Effect of Termination..................................... 21
ARTICLE 12 NAMED FIDUCIARIES......................................... 21
12.1 Identity of Named Fiduciaries............................. 21
12.2 Responsibilities and Authority of Plan Administrator...... 21
12.3 Responsibilities and Authority of Trustee................. 21
12.4 Responsibilities of Biogen................................ 21
12.5 Responsibilities Not Shared............................... 22
12.6 Dual Fiduciary Capacity Permitted......................... 22
12.7 Actions by Biogen......................................... 22
12.8 Procedure for Allocation and Delegation of
Responsibilities.......................................... 22
12.9 Advice.................................................... 22
12.10 Indemnification........................................... 22
ARTICLE 13 THE PLAN ADMINISTRATOR.................................... 22
13.1 Appointment............................................... 22
13.2 Notice to Trustee......................................... 23
13.3 Administration of Plan.................................... 23
13.4 Reporting and Disclosure.................................. 23
13.5 Records................................................... 23
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13.6 Compensation and Expenses................................. 23
13.7 Decisions, Rules and Regulations.......................... 23
13.8 Secretary................................................. 23
13.9 Claims Review Procedure................................... 24
ARTICLE 14 MISCELLANEOUS............................................. 24
14.1 Qualified Domestic Relations Orders....................... 24
14.2 Nonalienation of Benefits................................. 24
14.3 Payment to Minors and Incompetents........................ 24
14.4 Current Address of Payee; Unclaimed Payments.............. 25
14.5 Disputes over Entitlement to Benefits..................... 25
14.6 Payment of Benefits....................................... 25
14.7 Top-Heavy Plan Provisions................................. 25
14.8 Rules of Construction..................................... 26
14.9 Text Controls............................................. 27
14.10 Applicable State Law...................................... 27
14.11 Paperless Administration.................................. 27
14.12 Correction of Mistakes in Plan Operation.................. 27
14.13 Veterans' Rights.......................................... 27
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INDEX OF TERMS
--------------
The items listed below are defined or explained in the plan sections or
articles indicated.
Accounts..........................................7.1
Affiliated........................................3.4
Applicable compensation...........................2.1
Beneficiary.......................................2.2
Biogen............................................2.3
Biogen stock......................................6.4
Claim............................................13.9
Claimant.........................................13.9
Code..............................................2.4
Deferral percentage............................5.2(c)
Defined benefit plan fraction..................7.6(c)
Defined contribution plan fraction.............7.6(c)
Direct Rollovers.................................10.8
Disability....................................10.3(b)
Eligible class....................................4.1
Employee..........................................2.5
Employer..........................................2.6
Employment........................................3.2
ERISA.............................................2.7
Financial hardship............................10.1(b)
Higher paid group..............................5.2(b)
Loans.............................................9.1
Lower paid group...............................5.2(c)
Matching contribution percentage...............6.2(b)
Matching employer contributions...................6.1
Maximum additions.................................7.6
Named fiduciaries....................Article 12, 12.1
Participant.......................................2.8
Participation.....................................4.2
Plan..............................................2.9
Plan Administrator.........................Article 13
Plan service......................................3.1
Plan year........................................2.11
Qualified domestic relations order...............14.1
Retirement....................................10.3(b)
Rollover contributions............................5.5
Savings deposits..................................5.1
Top-heavy........................................14.7
total compensation.............................7.6(a)
Trust agreement..................................2.12
Trust fund.......................................2.13
Trustee..........................................2.14
Valuation date....................................8.3
Vested interest...............................10.4(b)
Withdrawals................................10.1, 10.2
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ARTICLE 1
INTRODUCTION
1.1 ESTABLISHMENT OF PLAN. Biogen established this plan effective as
of January 1, 1987. The plan has subsequently been amended as specified in
Appendix A.
1.2 COMPLIANCE WITH CODE AND ERISA. This plan is intended to qualify
as a profit-sharing plan under Section 401(a) of the Internal Revenue Code of
1986, as amended from time to time, and a qualified cash or deferred arrangement
described in Section 401(k) of said Code, and to comply with the applicable
provisions of the Employee Retirement Income Security Act of 1974, as amended
from time to time. This plan is also intended to comply in all respects with
Rule 16b-3 or its successors promulgated under the Securities Exchange Act of
1934 ("1934 Act") with respect to participants who are subject to Section 16 of
the 1934 Act. The plan will be interpreted in a manner that comports with these
intentions.
1.3 EXCLUSIVE BENEFIT OF PARTICIPANTS. The plan is for the exclusive
benefit of participants and their beneficiaries. Employer and employee
contributions are made to the trust fund for the purpose of accumulating a fund
for distribution to participants and their beneficiaries in accordance with the
plan. Except as provided in Section 6.5, no part of the trust fund or any
distribution therefrom will be used for or diverted to purposes other than for
the exclusive benefit of participants and their beneficiaries and defraying
those reasonable expenses of administering the plan and trust fund not paid by
the employers.
1.4 LIMITATION ON RIGHTS CREATED BY PLAN. Nothing appearing in the
plan will be construed (a) to give any person any benefit, right or interest
except as expressly provided herein, or (b) to create a contract of employment
or to give any employee the right to continue as an employee or to affect or
modify his terms of employment in any way.
1.5 APPLICATION OF PLAN'S TERMS. The benefits and rights of a
participant and his beneficiaries under the plan will be determined in
accordance with the terms of the plan that are in effect on the date that
contributions on a participant's behalf are made or credited to his accounts, or
on the date of the participant's retirement, death or other termination of
employment, whichever may be applicable.
1.6 BENEFITS NOT GUARANTEED. The employers, the trustee and the plan
administrator do not guarantee the payment of benefits hereunder. Benefits will
be paid only from the assets of the trust fund and are limited to the amount of
assets therein.
ARTICLE 2
DEFINITIONS
This article contains a number of definitions of terms used in the plan.
Other terms are defined, explained or clarified in other articles. This is done
for convenience of plan administration. There is no other significance to the
location of a definition.
2.1 APPLICABLE COMPENSATION of an employee for any calendar year or
other period of reference means his total compensation for services paid by his
employer during such period including wages, salary, overtime, cash bonuses and
shift differential. Applicable compensation also includes salary reduction
contributions made by his employer to this plan or any other employee benefit
program on behalf of the employee in accordance with a salary reduction
agreement under Code Section 401(k), 125 or, effective on and after January 1,
2001, 132(f)(4) with the employee. However, applicable compensation does not
include reimbursed expenses, life insurance premiums included in his
compensation for income tax purposes, stock options or stock bonuses, or any
other items not constituting direct compensation for services. Compensation also
does not include payments to or benefits received under this or any other public
or private employee benefit plan (other than salary reduction contributions
under this plan or other employee benefit program). The amount of applicable
compensation taken into account under the plan for any participant in a
particular plan year will not exceed $150,000 (as adjusted in
accordance with Code Section 401(a)(17)). Notwithstanding the foregoing,
effective January 1, 2002, the amount of applicable compensation taken into
account under the plan for any participant in a particular plan year will not
exceed the maximum provided for under Code Section 401(a)(17)(A) for such year
(as adjusted in accordance with Code Section 401(a)(17)(B)).
2.2 BENEFICIARY means a person, class of persons or trust designated
by a participant or, if there is no such designation, by the plan to receive a
death benefit hereunder.
2.3 BIOGEN means Biogen, Inc. (a Massachusetts corporation) or its
successor.
2.4 CODE means the Internal Revenue Code of 1986, as amended from time
to time, or any successor statute enacted in its place.
2.5 EMPLOYEE means an individual classified as an employee under the
regular personnel classifications and practices of his employer. An individual
is not an employee for purposes of this plan if the individual is classified as
a consultant or contractor under his employer's regular personnel
classifications and practices, or he is a party to an agreement to provide
services to his employer without participating in this plan, notwithstanding
that such individual may be treated as a common law employee for payroll tax or
other legal purposes.
2.6 EMPLOYER means Biogen, Inc. or any successor organization to it,
or any subsidiary or affiliate of Biogen, Inc. or other entity that adopts the
plan for its employees with the consent of Biogen, Inc. upon such terms and
conditions as Biogen, Inc. determines. The terms EMPLOYER or EMPLOYERS may refer
to each employer individually, or to all the employers collectively, as the
context may require. Employers in addition to Biogen, Inc. are listed in
Appendix B.
2.7 ERISA means the Employee Retirement Income Security Act of 1974,
as amended from time to time, or any successor statute enacted in its place.
2.8 PARTICIPANT means an employee or former employee whose
participation in the plan has begun and has not yet ended.
2.9 PLAN means the Biogen Savings Plan, as set forth in this plan
instrument, and as it may be amended from time to time.
2.10 PLAN ADMINISTRATOR means the person, committee or entity appointed
by Biogen or otherwise designated under Article 13 to administer the plan.
2.11 PLAN YEAR means the 12-month period beginning on each January 1
during the continuance of the plan.
2.12 TRUST AGREEMENT means the instrument executed by Biogen and the
trustee, as amended from time to time, fixing the rights and responsibilities of
each party with respect to the holding, investment and administration of the
trust fund.
2.13 TRUST FUND means the property held by the trustee for the purposes
of the plan.
2.14 TRUSTEE means the person, individual or corporate, serving as sole
trustee, or the persons serving as co-trustees, at any time under the terms of
the trust agreement.
ARTICLE 3
PLAN SERVICE
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3.1 PLAN SERVICE. Plan service of an employee means the sum of the
following: (a) any period of his employment on and after January 1, 1987,
whether or not continuous; and (b) each period, if any, between a termination of
his employment on and after January 1, 1987, and his earliest subsequent
reemployment, but only if such reemployment occurs within one year after such
termination of employment.
To determine an employee's years of plan service, all periods of his plan
service will be aggregated, and each 365 days thereof will be one year of plan
service.
3.2 EMPLOYMENT DEFINED.
(a) ACTIVE SERVICE. Employment of a person means his active service as
an employee (determined under the regular personnel policies, practices and
classifications of his employer).
(b) CERTAIN ABSENCES. A period of absence from active service will be
considered part of an employee's employment if he receives compensation from his
employer for such period or if such period falls in one of the following
categories (whether or not he receives compensation for such period):
(i) absence for military service for which his reemployment
rights are protected by law; provided (but only for that part of the
absence which exceeds one year in length) he returns to active service as
an employee within the period when his reemployment rights are protected
by law (or within such longer period as his employer in its discretion
permits); and
(ii) leave of absence due to sickness, accident, disability or
other reason, for the period authorized by the employer, provided (but
only for that part of such leave of absence which exceeds one year in
length) he returns to active service with his employer at the end of such
period of authorized absence.
3.3 SERVICE WITH AFFILIATED COMPANIES. An employee's plan service with
an affiliated company will be counted for purposes of this plan.
3.4 AFFILIATED COMPANY DEFINED. Affiliated company means any
corporation (foreign or domestic) which is a member of a controlled group of
corporations (as defined in Code Section 414(b)) which includes the employer;
any trade or business (whether or not incorporated) which is under common
control (as defined in Code Section 414(c)) with the employer; any organization
(whether or not incorporated) which is a member of an affiliated service group
(as defined in Code Section 414(m)) which includes the employer; and any other
entity required to be aggregated with the employer pursuant to regulations under
Code Section 414(o).
ARTICLE 4
PARTICIPATION
4.1 ELIGIBLE CLASS.
(a) GENERAL RULE. Each regular employee (determined under the regular
personnel policies, practices and classifications of the employer) is in the
class eligible to participate in the plan unless he is (a) a student (whether
high school, college or graduate) employed on a temporary or casual basis, (b)
except as provided in subsection (b) below, an employee of a non-U.S. subsidiary
or division of an employer or (c) a member of a collective bargaining unit. An
individual is not considered an employee or "regular employee" for purposes of
this plan if the individual is classified as a consultant or contractor under
his employer's regular personnel classifications and practices, or he is a party
to an agreement to provide services to his employer without participating in
this plan, notwithstanding that such individual may be treated as a common law
employee for payroll tax or other legal purposes.
3
(b) ELIGIBILITY OF EMPLOYEES ON TEMPORARY FOREIGN ASSIGNMENT. An
otherwise eligible employee (under subsection (a) above) who is temporarily
assigned by the employer to work for the employer, an affiliated company, or on
a joint venture with the employer outside of the United States with the intent
on the part of the employer that such employee will return to work as an
eligible employee of the employer in the United States will be treated as an
employee in the class eligible to participate in the plan during such temporary
assignment. Accordingly, such employee will be eligible to make savings deposits
in accordance with the plan and to have employer matching contributions made
with respect to his basic savings deposits as provided in the plan (provided,
however, than any matching employer contributions that would otherwise be made
while the eligible employee is on temporary foreign assignment will be reduced -
but not below zero - to reflect any employer contributions on behalf of such
employee to a defined contribution program in which such employee participates
as a result of his temporary foreign assignment, unless it is reasonable to
expect that such employer contributions will later be forfeited by the employee.
4.2 PARTICIPATION. Participation in the plan is voluntary and no
employee will be required to participate. Each employee in the eligible class
who has attained age 21 will be eligible to make savings deposits. The plan
administrator, pursuant to its authority under Article 13, may adopt rules and
procedures regarding the exact date when savings deposits will commence and what
forms, if any, participants must complete and file with the plan administrator
as prerequisites for such savings deposits to commence. Each employee who has
met the eligibility requirements of this section will become a participant when
a savings deposit by such employee is first credited to his account.
4.3 END OF PARTICIPATION. A participant's active participation in the
plan will end upon the suspension of his savings deposits under Section 5.3 or
the termination of his service as an employee in the eligible class for any
reason. His participation will end when he has no further interest under the
plan.
4.4 REENTRY OF FORMER ACTIVE PARTICIPANT. A former active participant
who suspends his savings deposits may resume active participation under Section
5.3. A former active participant who terminates his service as an employee in
the eligible class and who later returns to service as an employee in the
eligible class will be eligible to make savings deposits which, subject to the
applicable rules and procedures of the plan administrator, may start effective
as of his date of rehire or any subsequent entry date. He will be an active
participant again when a savings deposit by such employee is first credited to
his account.
ARTICLE 5
SAVINGS DEPOSITS BY PARTICIPANTS
5.1 SAVINGS DEPOSITS.
(a) SAVINGS DEPOSITS BY PARTICIPANTS. Subject to the various
limitations imposed by the plan, each eligible employee described in Section 4.2
may make savings deposits to the plan in a whole percentage of his applicable
compensation. Subject to such limitations, the plan administrator may establish
reasonable minimum or maximum percentages for savings deposits by participants
(or by a particular class of participants such as highly compensated
participants). Savings deposits may be made on an after-tax basis (by salary
deduction) as described in subsection (e) below or on a before-tax basis (by
salary reduction). An eligible employee may elect savings deposits in such
amount as he specifies, provided that his before-tax savings deposits do not
exceed the limits of Section 5.2 and provided further that his before-tax and
after-tax savings deposits do not result in a violation of the limitations of
Section 7.6 or violate any rules of the plan administrator. In addition, a
participant may make special catch-up savings deposits as described in
subsection (d) below, subject to the limitations described therein.
The term SAVINGS DEPOSITS refers to a participant's after-tax and
before-tax savings deposits and catch-up savings deposits hereunder. A
participant's savings deposits under subsection (d) are referred to as his
catch-up savings deposits. A participant's savings deposits on an after-tax
basis are referred to as his AFTER-TAX SAVINGS DEPOSITS. A participant's
before-tax savings deposits up to six percent of his applicable compensation are
referred to as his BASIC SAVINGS DEPOSITS and any before-tax savings deposits
above this amount are referred to as his SUPPLEMENTAL SAVINGS DEPOSITS.
4
(b) SIGN-UP PROCEDURE FOR SAVINGS DEPOSITS. The plan administrator,
pursuant to Article 13, may adopt procedures and forms which participants must
complete and file on a timely basis, as determined by the plan administrator, as
prerequisites to commence savings deposits. The plan administrator may prescribe
any and all notice requirements, deadlines, time periods, and election rules as
it deems appropriate to administer participant sign-up requirements.
Participants will be provided information regarding all sign-up requirements and
procedures by the plan administrator.
(c) CHARACTER OF SAVINGS DEPOSITS. For purposes of Code Section
414(h), it is specifically provided that basic savings deposits and supplemental
savings (that is, all before-tax savings deposits) deposits and catch-up savings
deposits are employer contributions.
(d) SPECIAL CATCH-UP SAVINGS DEPOSITS. Effective as of January 1,
2002, each participant who is eligible to make savings deposits (elective
deferrals) under this plan and who has attained age 50 before the close of the
plan year shall be eligible to make additional savings deposits (referred to
herein as "catch-up savings deposits") in accordance with, and subject to the
limitations of, Code Section 414(v) and any regulations promulgated thereunder,
as in effect for a particular plan year. Such catch-up savings deposits shall
not be taken into account for purposes of the provisions of the plan
implementing the required limitations of Code Sections 402(g) and 415. The plan
shall not be treated as failing to satisfy the provisions of the plan
implementing the requirements of Code Section 401(k)(3), 401(k)(11), 401(k)(12),
410(b), or 416, as applicable, by reason of the making of such catch-up savings
deposits.
(e) AFTER-TAX SAVINGS DEPOSITS. Notwithstanding any other provision of
the Plan to the contrary, effective January 1, 2002, each participant who is
eligible to make savings deposits (elective deferrals) under this plan, except
one who is also a participant in the Biogen, Inc. Voluntary Executive
Supplemental Savings Plan (or who is designated as eligible to participate in
such plan, regardless of whether he is actually participating or not), shall be
eligible to make after-tax savings deposits to the Plan subject to the
applicable limitations and restrictions on such after-tax savings deposits under
the plan.
(f) Notwithstanding the foregoing provisions of this Section 5.1, the
maximum amount a participant may defer in the form of basic savings deposits,
supplemental savings deposits, catch-up saving deposits and after-tax savings
deposits shall be limited to 40 percent of the participant's applicable
compensation, provided however that a participant's savings deposits will also
be subject to the plan's annual additions limits, 401(k) limits, 401(m) limits
and other applicable limits or nondiscrimination requirements under the Code.
5.2 401(K) LIMITS.
(a) LIMITATIONS. A participant's basic and supplemental savings
deposits for a plan year may not exceed the limits of subsection (b) below or
result in a violation of Section 7.6. Also, a participant's basic and
supplemental savings deposits (when combined with any other elective deferrals -
as defined in regulations under Code Section 402(g) - under any other plan or
arrangement maintained by Biogen or any employer in a controlled group with
Biogen under Code Section 414(b) or (c), an affiliated service group with Biogen
under Code Section 414(m) or otherwise aggregated with Biogen under Code Section
414(o)) in any calendar year may not exceed the maximum amount provided for
under Code Section 402(g)(1) for such year (as adjusted periodically in
accordance with Code Section 402(g)(4)).
(b) HIGH-LOW TESTS.
Basic and supplemental savings deposits by highly-compensated
employees must not exceed amounts such that, as of the last day of each plan
year, the average of the individual deferral percentages of the
highly-compensated employees (the "highly-compensated deferral percentage" or
"HDP") for such plan year does not exceed the average of the individual deferral
percentages of lower-compensated employees (the "lower-compensated deferral
percentage" or "LDP") for the preceding plan year by more than the amount
specified under the following table. Notwithstanding the preceding sentence, if
elected by the plan administrator, the maximum HDP for a plan year may be
determined with reference to the LDP for that plan year (rather than the
preceding plan year). If the plan administrator makes an election under the
preceding sentence, the plan administrator may subsequently elect to determine
the maximum HDP for a plan year with reference to the LDP for the preceding plan
5
year again. However, elections under the preceding two sentences may be made
only under circumstances prescribed in regulations or other rulings of the
Internal Revenue Service.
IF LDP IS: HDP MAY NOT EXCEED:
--------- ------------------
Less than 2% 2 times LDP
At least 2% but 2% more than LDP
less than 8%
8% or higher 1.25 times LDP
Compliance with the foregoing requirement will be determined after taking
into account any adjustments made to comply with the Code Section 415 limits
under Section 7.6 below. The plan administrator may elect to perform testing for
compliance with the foregoing requirement using any methodology (for example,
testing separately those eligible employees who have not completed one year of
service) available under regulations or rulings of the Internal Revenue Service,
provided that the plan administrator elects and applies such methodology in
accordance with such regulations or rulings.
(c) DEFINITIONS. For purposes of subsection (b) above, the following
definitions will apply.
(i) The DEFERRAL PERCENTAGE of a participant for a plan year
means his basic and supplemental basic and supplemental savings deposits
for such year computed as a percentage of his applicable compensation for
such year. If an employee is eligible to be a participant under Section
4.2 but has not elected to make basic and supplemental savings deposits,
he will nevertheless be taken into account and his deferral percentage
will be zero. In the plan administrator's discretion, basic and
supplemental savings deposits of a participant in the lower paid group
will not be included when determining his deferral percentage to the
extent that the requirements of (b) above are met without taking such
contributions into account.
(ii) HIGHLY-COMPENSATED EMPLOYEES DEFINED. An employee is
considered a highly-compensated employee for a plan year if he or she:
(A) owns (or is considered to own within the meaning of
Code Section 318) more than 5% of the outstanding stock of an
employer at any time during the plan year or the preceding plan
year;
(B) receives annual compensation from the employer in
excess of $90,000 (before any reductions in his compensation in
accordance with a salary reduction agreement) during the preceding
plan year.
However, at the election of the plan administrator, an
employee will be considered a highly compensated employee under
subsection (B) above only if he or she also was a member of the
top-paid group of employees for the preceding plan year. If the
plan administrator so elects, the "top-paid group of employees" is
the group consisting of the highest-paid 20% of employees of the
employer for such preceding plan year. In determining the number
of employees in the top-paid group, employees specified in Code
Section 414(q)(5) will be excluded. The $90,000 amount in (B)
above will be adjusted for cost-of-living increases in accordance
with Code Section 414(q). In addition, the plan administrator may
determine the highly-compensated employees for a plan year using
any methodology available under regulations or rulings of the
Internal Revenue Service, provided that the plan administrator
elects and applies such methodology in accordance with such
regulations or rulings.
6
(iii) If an eligible employee under Section 4.2 is not a highly
compensated employee for a plan year, then he is a lower-compensated
employee for such year.
(d) MONITORING AND ADJUSTING EMPLOYEE BASIC AND SUPPLEMENTAL SAVINGS
DEPOSITS. The plan administrator will monitor (or will arrange with the employer
or a record keeper or service provider to monitor) participants' basic and
supplemental savings deposits elections and deferral percentages and will adjust
the amount of basic and supplemental savings deposits elected or made by
highly-compensated employees to the extent necessary to satisfy the requirements
of subsection (b) above. Any such adjustments may be made during a plan year in
accordance with the plan administrator's procedures. If following the end of a
plan year such requirements are not satisfied, the plan administrator will
determine the maximum permitted HDP and will determine the amount needed to
reduce the deferral percentage of each highly compensated employee whose
deferral percentage is above such maximum to the maximum. After the aggregate
dollar amount of all such reductions in the amount of basic and supplemental
savings deposits for a plan year by highly-compensated employees to satisfy such
subsection has been determined, the necessary reductions will be accomplished by
reducing the basic and supplemental savings deposits of the participant (or
participants) in the highly-compensated group with the highest dollar amount of
basic and supplemental savings deposits first, next the participant (or
participants) in such group with the second highest dollar amount of basic and
supplemental savings deposits, and so on until adjustments equal to such
aggregate dollar amount have been made.
Such adjustments or reductions will be made by the plan administrator at
such time or times as the plan administrator determines, and will be made in
accordance with procedures established by the plan administrator. If basic and
supplemental savings deposits by a highly-compensated employee for a plan year
exceed the amount permitted under subsection (b) above, the necessary reduction
amount plus earnings on such amount (as determined in accordance with applicable
regulations under Code Section 401(k) but without any earnings for periods after
the end of the relevant plan year) will be paid to the affected participant.
Such payment will be made no later than the end of the succeeding plan year.
The amount of earnings (or losses) to be distributed with a participant's
excess basic and supplemental savings deposits will be determined under Section
8.3 with the following special rules: (i) payments to correct excess basic and
supplemental savings deposits will be paid from each separate investment fund
under Section 8.1 in which the participant's supplemental and (if necessary)
basic savings deposits accounts are invested in accordance with the plan's
ordering rules for withdrawals (or pro rata from each investment fund if there
are no ordering rules); and (ii) the amount of earnings (or losses) will be the
earnings or losses of such investment fund for the plan year of the correcting
distribution multiplied by a fraction whose numerator is the amount of excess
basic and supplemental savings deposits being distributed and whose denominator
is the total of (i) the balance in such investment fund(s) at the beginning of
such plan year plus (ii) the total of the contributions allocated to such
investment fund(s) during such year.
(e) 415 LIMITS. In addition, the plan administrator will monitor
participants' basic and supplemental savings deposits to insure that the annual
additions to each participant's accounts are within the limits specified in
Section 7.6. If additional basic and supplemental savings deposits by a
participant would cause a violation of such limits, his basic and supplemental
savings deposits will cease immediately.
5.3 CHANGES IN SAVINGS DEPOSITS.
(a) INCREASE OR REDUCTION. A participant making savings deposits may
increase or reduce the rate of his savings deposits to any higher or lower rate
permitted under Section 5.1(a) provided he satisfies such rules and procedures
the plan administrator adopts for changes in participant savings deposits. The
effective date of the new rate will be determined by rules and procedures
adopted by the plan administrator.
(b) SUSPENSION. A participant may suspend his savings deposits
provided he satisfies such rules and procedures the plan administrator adopts
for suspensions of participant savings deposits. The suspension of savings
7
deposits will become effective as soon as practicable upon fulfilling the
requirements established by the Plan administrator.
(c) RESUMPTION. Subject to Section 4.4 with respect to participants
described therein, a participant who suspended his savings deposits under
subsection (b) above may resume such deposits provided he satisfies such rules
and procedures the plan administrator adopts for resumption of savings deposits.
The effective date of such resumption will be determined in accordance with the
plan administrator's rules and procedures.
(d) PLAN ADMINISTRATOR RULES. The plan administrator may establish
such rules and procedures for savings deposits as the plan administrator deems
necessary for the efficient administration of the plan. The plan administrator's
rules may provide that any commencement or change in a participant's savings
deposits will be effective on the first day of the payroll period, may require a
specified reasonable minimum period of advance notice prior to a change in
savings deposits, and/or may provide for a minimum period of suspension prior to
the resumption of savings deposits by a participant.
5.4 COLLECTION OF SAVINGS DEPOSITS. The employer will collect
participants' savings deposits through payroll or other procedures and will
deliver the amounts collected to the trustee as soon as practicable after
collection (but in no event later than the deadline specified in any applicable
regulations of the Department of Labor under ERISA).
5.5 ROLLOVER CONTRIBUTIONS.
(a) With the approval of the plan administrator, an employee in the
eligible class (whether or not a participant hereunder) may make a rollover or a
direct rollover to the plan (or cause to be transferred to the plan directly
from a qualified trust, qualified annuity plan, individual retirement account or
individual retirement annuity) cash or property in an amount which constitutes
(i) an eligible rollover distribution (as defined in Code Section 402(c)(4) or
Code Section 403(a)(4), or (ii) a rollover contribution (as defined in Code
Section 408(d)(3)). However, no rollover to this plan of accumulated deductible
employee contributions made under another plan will be permitted, and a direct
or indirect transfer to this plan from another qualified plan will not be
permitted if such transfer would subject this plan to the qualified joint and
survivor rules of Code Section 401(a)(11).
(b) The employers, the plan administrator and the trustee have no
responsibility for determining the propriety of, proper amount or time of, or
status as a tax-free transaction of any transfer under subsection (a) above.
(c) If an employee who is not yet a participant makes a rollover
contribution under subsection (a) above, he will be considered to be a
participant with respect to such contribution only. He will not be a participant
for any other purpose of the plan until he completes the requirements for
participation under Article 4.
(d) A rollover will be credited to a separate rollover account in the
name of the employee making such rollover contribution.
(e) The plan administrator in its discretion may direct the return to
the employee (or the retransfer to another trustee or custodian designated by
the employee) of any rollover contribution to the extent the plan administrator
determines that such return may be necessary to insure the continued
qualification of this plan under Section 401(a) of the Code or that the holding
of such rollover contribution would be administratively burdensome.
(f) The plan administrator, in its discretion, may accept a rollover
contribution from a qualified trust or 403(b) arrangement through a
trustee-to-trustee transfer, which consists in whole or in part of an eligible
employee's after-tax contributions to such qualified trust or 403(b)
arrangement. The plan administrator shall separately account for such after-tax
contributions and any earnings thereon, including the portion of such rollover
contribution or transfer which is includible in gross income and the portion
which is not includible in gross income.
ARTICLE 6
EMPLOYER CONTRIBUTIONS
8
6.1 MATCHING EMPLOYER CONTRIBUTIONS.
(a) GENERAL RULE. Periodically each employer will make a matching
contribution on behalf of each participant employed by such employer who makes
basic savings deposits. Subject to the limitations of Section 6.2, the
employer's matching contribution will be equal to 25% of the participant's basic
savings deposits. Matching contributions will be reduced by any forfeitures
under Section 10.4, subject to the prior use of such forfeitures under Section
10.4(c) or Section 14.4.
Notwithstanding the foregoing, no matching contributions shall be
made to the plan on behalf of any participant based on special catch-up savings
deposits described in Section 5.1(d) of the plan or after-tax savings deposits
described in Section 5.1(e) of the plan made by such participant.
(b) TRUE-UP MATCHING CONTRIBUTIONS. Following the end of each plan
year (beginning with the 1999 plan year), an additional true-up matching
contribution may be made on behalf of an eligible participant who has made
savings deposits for the plan year equal to at least 6% of the participant's
applicable compensation for such plan year. The additional true-up matching
contribution, if any, made on behalf of an eligible participant for a plan year
shall equal (i) minus (ii) where:
(i) equals 1.5% of the participant's applicable compensation
for such plan year; and
(ii) equals the total amount of matching contribution previously
credited to such participant's account for such plan year (before
application of this subsection (b)).
(iii) Participants eligible for an additional true-up matching
contribution for the 1999 plan year shall include only those participants
who are employed by the employer as of August 1, 2000. Participants
eligible for an additional true-up matching contribution for each plan
year thereafter shall include only those participants who are employed by
the employer as of the April 1 following the end of such plan year.
6.2 401(m) LIMITS.
(a) GENERAL LIMITS. Matching employer contributions (including true-up
matching contributions, if any) and after-tax savings deposits (if any)
on behalf of highly-compensated employees must not exceed such amounts
that, as of the last day of each plan year, the average of the individual
matching contribution percentages of the highly-compensated employees
(the "highly-compensated matching contributions percentage" or "HMCP" may
not exceed the average of the individual matching contribution
percentages of the lower-compensated employees (the "lower-compensated
matching contributions percentage" or "LMCP") by more than the amount
specified in the following table. The maximum HMCP for a plan year will
be determined by reference to the LMCP for the preceding plan year, or
for that plan year (rather than the preceding plan year), in accordance
with procedures described in Section 5.2(b).
IF LMCP IS: HMCP MAY NOT EXCEED:
---------- -------------------
Less than 2% 2 times LMCP
At least 2% but 2% more than LMCP
less than 8%
8% or higher 1.25 times LMCP
Compliance with the foregoing requirement will be determined after taking
into account any adjustments made to comply with the Code Section 415 limits
under Section 7.6 below.
Highly compensated and lower-compensated employees are defined in Section
5.2(c).
9
The plan administrator will monitor and adjust matching contribution
percentages of highly compensated employees to the extent necessary to satisfy
this subsection. Such monitoring and adjustments will be accomplished under
procedures similar to those specified in Sections 5.2(b) and (d).
(b) MATCHING CONTRIBUTION PERCENTAGE. For purposes of this section,
the matching contribution percentage of a participant for a plan year means the
employer matching contribution (including true-up matching contribution, if any)
on his behalf for such year plus after-tax savings deposits (if any) by him
during such year, computed as a percentage of his applicable compensation for
such year. The plan administrator may in its discretion include savings deposits
of a participant in the lower compensated group in determining his matching
contribution percentage, to the extent that such savings deposits are not used
in determining his deferral percentage under Section 5.2(c)(i).
6.3 FORM AND TIME OF CONTRIBUTION. The employers' contribution under
Section 6.1 will be paid to the trustee in cash (provided that, in the
discretion of Biogen, employer contributions under Section 6.1 or under Section
5.1(c) may be in the form of Biogen stock to the extent that, in accordance with
participants' investment instructions hereunder, such contributions are to be
invested in the Biogen stock fund). Such contributions will normally be paid at
periodic intervals (not less frequently than quarterly) determined by the
employers. In any event, such contributions will be paid to the trustee no later
than the due date (including extensions) for filing the employers' federal
income tax return for such year.
6.4 BIOGEN STOCK DEFINED. Biogen stock means the common stock, $.01
par value, of Biogen. If the outstanding common stock of Biogen is changed into
or exchanged for a different kind of stock or other securities of Biogen or
another successor corporation by reason of any reorganization, merger,
consolidation, recapitalization, reclassification, change in par value or the
like, then Biogen stock means such other stock or security. If an employer
contribution is made in the form of Biogen stock under Section 6.3, for purposes
of determining the amount of such employer contribution, such Biogen stock will
be valued at its fair market value at the time of contribution to the trust
fund.
6.5 RETURN OF CONTRIBUTION MADE IN ERROR OR NOT DEDUCTIBLE. Unless
specifically identified as a non-deductible contribution, each matching employer
contribution hereunder is specifically conditioned upon its deductibility on the
federal income tax return covering the employer making the contribution. If all
or part of a matching employer contribution is made because of a mistake of fact
or if the deduction under Code Section 404 of any portion of a matching employer
contribution is disallowed, the amount contributed because of a mistake of fact
or the amount for which the deduction is disallowed will be returned to the
contributing employer if demand therefor is made within the time allowed by law.
ARTICLE 7
ACCOUNTS AND CREDITS
7.1 ESTABLISHMENT OF ACCOUNTS. The plan administrator will establish
and maintain in the name of each participant such of the following accounts as
are appropriate for the participant:
(a) basic savings deposits account;
(b) supplemental savings deposits account;
(c) matching contributions account;
(d) catch-up savings deposits accounts;
(e) after-tax savings deposits account; and
(f) rollover account (with separate accounting for after-tax
contributions included in such rollover account as required under Section 5.5).
10
Credits and charges to such accounts will be made as provided in the plan.
7.2 CREDITING PARTICIPANTS' SAVINGS DEPOSITS. Basic and supplemental
savings deposits made by a participant will be credited to such participant's
basic or supplemental savings deposits account, as appropriate, when received
and processed by the trustee. Catch-up savings deposits and after-tax savings
deposits (if any) made by a participant will be credited to such participant's
catch-up savings deposits accounts or after-tax savings deposits account, as
appropriate, when received and processed by the trustee.
7.3 CREDITING MATCHING CONTRIBUTIONS AND FORFEITURES. Matching
employer contributions on behalf of a participant and any forfeitures to be
credited to such participant under Section 6.1 will be credited to such
participant's matching contributions account when received and processed by the
trustee. To the extent that forfeitures during any period exceed the amount to
be credited under the preceding sentence during such period, the forfeitures
will be carried over and credited as a matching contribution for the next
processing period.
7.4 CREDITING ROLLOVERS. Rollovers by or on behalf of an eligible
employee will be credited to the employee's rollover account when received and
processed by the trustee following receipt thereof by the trustee.
7.5 CHARGES TO ACCOUNTS. Any amount distributed, paid, withdrawn or
transferred from an account will be a charge against such account as of the date
of distribution, payment, withdrawal or transfer. All distributions, payments,
withdrawals or transfers from an account will be based upon the amount in such
account as of the valuation date most recently preceding the date of such
distribution, payment, withdrawal or transfer.
7.6 MAXIMUM ADDITIONS.
(a) The annual additions to a participant's accounts for any plan year
(which will be the LIMITATION YEAR for purposes of Code Section 415) may not
exceed the lesser of (i) $40,000 as adjusted periodically for cost-of-living
changes in accordance with Code Section 415 and any regulations thereunder, or
(ii) 100 percent of his total compensation for such year. For purposes of this
section, TOTAL COMPENSATION means a participant's total compensation from his
employer for a plan year, as defined in Code Section 415 and regulations
thereunder.
(b) If the annual additions to a participant's accounts would exceed
the limitations of subsection (a) above, after-tax savings deposits (if any)
made on his behalf for such year which would be credited to his account but for
the limitations of subsection (a) will be returned to him, but only to the
extent necessary to comply with subsection (a). If, following the application of
the preceding sentence (to the extent applicable), the annual additions to a
participant's accounts would still exceed the limitations of subsection (a)
above, the supplemental savings deposits first and then, to the extent
necessary, basic savings deposits made on his behalf for such year which would
be credited to his accounts but for the limitations of subsection (a) will be
returned to him, but only to the extent necessary to comply with subsection (a).
Any amount returned to a participant under this subsection (b) will include
interest or earnings on such amount as provided in regulations in Code Section
415.
(c) For purposes of this Section 7.6, ANNUAL ADDITIONS to a
participant's accounts for any plan year means the sum of the following amounts
credited to his accounts for such year: (i) basic savings deposits, (ii)
supplemental savings deposits, (iii) after-tax savings deposits, and (iv)
matching employer contributions and forfeitures.
(d) For any plan year, the sum of a participant's defined contribution
plan fraction and his defined benefit plan fraction may not exceed one, as
follows:
(i) His DEFINED CONTRIBUTION PLAN FRACTION for any plan year is
the fraction (A) whose numerator is the sum of annual additions (as
defined in Code Section 415(c)(2)) to his accounts under all qualified
defined contribution plans maintained by Biogen (or any other employer
that is included in a controlled group or under common control with
Biogen within the meaning of Code Sections 414(b) and (c) and 415(h)) as
of the close of such plan year, and (B) whose denominator is the sum of
the lesser of the following amounts determined for such year and for each
prior year of plan service with his employer: the
11
product of 1.25 (1.0 if the plan is top-heavy) and the dollar limitation
in effect for such year, or the product of 1.4 and 25 percent of the
participant's compensation for such year.
(ii) His DEFINED BENEFIT PLAN FRACTION for any plan year is a
fraction (A) whose numerator is his aggregate projected annual benefit
under all defined benefit plans sponsored by Biogen (or any other
employer that is included in a controlled group or under common control
with Biogen within the meaning of Code Sections 414(b) and (c) and
415(h)) as of the close of such plan year, and (B) whose denominator is
the lesser of the product of 1.25 (1.0 if the plan is top-heavy) and the
dollar limitation in effect under Section 415(b)(1)(A) of the Code, or
the product of 1.4 and the participant's highest average compensation as
determined under Section 415(b)(1)(B) of the Code. For this purpose, the
PROJECTED ANNUAL BENEFIT of a participant means the total normal
retirement benefit to which he would be entitled on the assumptions that
his employment continues until his normal retirement date and his annual
earnings and all other relevant factors remain the same for all future
years as in the year when the projection is made.
(iii) If the sum of such fractions would exceed one without the
application of this section, his benefit under the defined benefit plan
or plans will be reduced to a benefit that will produce a defined benefit
plan fraction and a defined contribution plan fraction that equal one.
(iv) The provisions of this subsection (d) will not apply to any
limitation year or plan year when combined defined contribution and
defined benefit plan limitations are not applicable under Code Section
415(e).
ARTICLE 8
INVESTMENT FUNDS AND CREDITING INVESTMENT EXPERIENCE
8.1 INVESTMENT FUNDS. The plan administrator may direct the trustee to
establish two or more separate investment funds within the trust fund and to
invest each such separate investment fund in different types or categories of
assets (e.g., equities or fixed-income securities, or shares of specified mutual
funds) or in accordance with investment objectives specified by the plan
administrator. One such separate investment fund will consist of Biogen stock
(as defined in Section 6.4), plus shares of a money market mutual fund (or
similar cash equivalent investment) as are necessary to facilitate the operation
of such Biogen stock investment fund. The plan administrator may add or delete
separate investment funds at its discretion.
The plan administrator will maintain records that reflect the portion
of each account of a participant that is invested in each separate investment
fund. The plan administrator may delegate such record keeping responsibilities
or may contract with a service provider (which may be the trustee or an
affiliate of the trustee) for record keeping services. The existence of such
records and of participants' accounts will not be deemed to give any person any
right, title or interest in or to any specific assets or part of the trust fund
or any separate investment fund.
8.2 INVESTMENT DIRECTIONS AND TRANSFERS AMONG FUNDS.
(a) INVESTMENT OF MATCHING CONTRIBUTIONS.
(i) Except as provided in subsection (ii) below, the matching
contributions account of each participant will be invested in the Biogen
stock fund.
(ii) A participant who is at least age 55 and who has four or
more years of plan service may elect to transfer all or any of his
matching contributions account invested in the Biogen stock fund to one
or more of the other separate investment funds available for the
investment of savings deposits accounts, and the participant may
thereafter direct transfers of his matching contributions account among
the investment funds available under the plan in accordance with the
rules specified in subsection (c) below. In addition, an employee
described in the preceding sentence may direct that any future matching
contributions on his
12
behalf will be invested in one or more of the separate investment funds
(other than the Biogen stock fund) available for the investment of
savings deposits accounts.
(b) INVESTMENT OF SAVINGS DEPOSITS AND ROLLOVERS. Each participant may
direct the separate investment fund or funds in which his savings deposits
accounts and rollover account will be invested. A participant may direct
investment of these accounts on his behalf entirely in one investment fund or in
a combination of two or more of the investment funds. In addition, the
participant may direct transfers among the investment funds so that these
accounts are invested entirely in one investment fund or in a combination of two
or more of the investment funds.
The participant will have sole responsibility for the investment of his
savings deposits accounts, rollover account and, to the extent provided for in
subsection (a) (ii) above, matching contribution account, and for transfers
among the available investment funds, and no named fiduciary or other person
will have any liability for any loss or diminution in value resulting from the
participant's exercise of such investment responsibility. It is intended that
Section 404(c) of ERISA will apply to a participant's exercise of investment
responsibilities under this subsection.
(c) MANNER AND TIME OF GIVING DIRECTIONS. A participant's directions
governing the investment of his accounts under subsection (a) or (b) will be
given in accordance with such rules and procedures as the plan administrator may
from time to time establish and communicate to participants. A participant must
give such investment directions when he first authorizes savings deposits or
makes a rollover contribution. A participant may give new investment directions,
changing the investment of his future savings deposits or rollovers or future
matching employer contributions on the participant's behalf, or directing
transfers among the investment funds, subject in each case to subsections (a)
and (b) above.
8.3 VALUATION OF ASSETS AND CREDITING INVESTMENT EXPERIENCE.
(a) IN GENERAL. As of each valuation date, the trustee will determine
the fair market value of the plan's assets, relying upon such evidence of value
as it deems appropriate. In performing such valuations, the trustee may include
any accrued but unpaid dividends, interest or other items, but will not include
any contributions or forfeitures to be allocated as of such valuation date as an
asset of any participant's account. Investment income and gains and losses of
the trust fund will be credited or debited to participants' accounts in
proportion to the balances in such accounts as of the preceding valuation date,
reduced by any charges against any such account since such preceding valuation.
The last day of each plan year will be a valuation date, and the plan
administrator may from time to time designate other valuation dates for all
accounts or for specified accounts only (such as, by way of example, daily or
monthly valuation dates for accounts invested exclusively in shares of open-end
mutual funds and annual valuation dates for all other accounts).
(b) OPEN-END MUTUAL FUNDS. Notwithstanding subsection (a) above, in
the case of accounts that are invested exclusively in shares of open-end mutual
funds, the valuation of such accounts will be performed separately from the
valuation of the other accounts, and the value of such mutual fund shares as of
any valuation date will be the net asset value as of such date determined by the
mutual fund (with such adjustments, if any, as the mutual fund may make in
accordance with its normal procedures as described in its prospectus). Any
dividends or capital gains or other distributions on shares of a mutual fund
allocated to a participant's account will be reinvested in shares and fractional
shares of such mutual fund.
(c) BIOGEN STOCK. Notwithstanding subsection (a) above, in the case of
accounts that are invested in the Biogen stock fund, the valuation of such
accounts will be performed separately from the valuation of the other accounts,
and the value of a share of Biogen stock or a unit in such fund as of any
valuation date will be its fair market value as determined in good faith by the
trustee (subject to the following paragraph). Any cash dividends on shares of
Biogen stock or a unit in such fund will be reinvested in additional shares of
Biogen stock or units in such fund.
13
(d) At any time when Biogen stock (or any other employer security held
by the plan or proposed to be purchased by the plan) is not readily tradable on
an established securities market, all valuations of Biogen stock (or other
employer security) will be performed by an independent appraiser (meeting the
requirements of Code Section 401(a)(28)(C)), and the trustee's determination of
the fair market value of Biogen stock (or such other employer security) will be
based upon a valuation report of such independent appraiser.
ARTICLE 9
LOANS TO PARTICIPANTS
9.1 LOANS TO PARTICIPANTS.
(a) AVAILABILITY OF LOANS. Upon application by a participant, the
trustee may be directed to make a loan to the participant from his savings
deposits account(s) and rollover account. Loans will be available to each
eligible participant on a reasonably equivalent basis under uniform,
nondiscriminatory borrowing rules. Such borrowing rules must be formulated and
administered so that the requirements of Code Section 72(p) for non-taxable
loans, the applicable Department of Labor regulations on plan loans, and the
following provisions of this section are satisfied. Any loan hereunder will bear
a reasonable rate of interest and will be evidenced by a promissory note signed
by the participant in such form as the plan administrator may require. The
amount of any such loan will be withdrawn from the participant's accounts and
the investment fund or funds in which the participant's accounts are invested in
accordance with the borrowing rules.
(b) BORROWING RULES. The borrowing rules may contain such requirements
pertaining to loans as are deemed necessary or desirable and which are not
specified herein. The borrowing rules may govern the procedures and cut-off
dates for applying for loans hereunder and the terms of such loans, including
(i) the number of loans that a participant may request in any year and the
number of loans that may be outstanding at any time to a participant, (ii) any
restrictions on re-borrowing not stated in this section, (iii) the interest rate
in effect from time to time for loans or the method of ascertaining such
interest rate, and (iv) the repayment schedule for loans or the method for
determining the repayment schedule.
(c) AMOUNT OF LOANS. The minimum loan amount is $1,000 or such lesser
amount as the borrowing rules may from time to time provide. The maximum
aggregate loan amount is based upon the vested balance in the participant's
accounts. No participant loan will exceed the smallest of (i) the amount in the
participant's savings deposits accounts and rollover account, (ii) one-half of
the participant's vested account balances, or (iii) $50,000 (reduced by the
highest outstanding loan balance to the participant during the 12 months
preceding the loan). For purposes of applying such limits, account values as of
the valuation date immediately preceding the date when the loan is made will be
used.
(d) Maximum Repayment Period.
(i) OTHER THAN RESIDENTIAL LOANS. Except as provided in
subsection (ii) below, the maximum term of a loan will be five years
(provided that, if provided in the borrowing rules, there may be a
shorter repayment period for small loans).
(ii) RESIDENTIAL LOANS. If a participant requests a loan for the
acquisition or construction of his principal residence, maximum the
repayment period will be determined by reference to bank loans for the
same purpose but may not exceed 10 years.
(e) SECURITY FOR REPAYMENT. Each loan hereunder will be a
participant-directed investment for the benefit of the participant requesting
such loan; accordingly, any default in the repayment of principal or interest of
any loan hereunder will reduce the amount available for distribution to such
participant (or his beneficiary). Thus, any loan hereunder will be effectively
and adequately secured by the vested amount in the participant's accounts. To
the extent provided in the borrowing rules, other security for repayment of a
loan may be required in any
14
instance. A participant receiving a loan must execute such instruments and must
pay any fees for filings required to perfect any security interest in the
participant's accounts or other security.
(f) REPAYMENT. A participant may be required to execute an agreement
to repay the principal and interest of a loan through regular payroll deduction
payments from the participant's compensation. Back-up repayment procedures may
be established for participants who do not make payroll deduction repayment.
Except as otherwise may be permitted under Treasury regulations, any such
back-up procedures will provide for substantially level amortization payments
made quarterly or more frequently. Any loan hereunder may be prepaid, in
accordance with the note or other document evidencing the loan. If a
participant's service as an employee is terminated for any reason, the entire
unpaid principal and interest of any loan then outstanding to such participant
may become immediately due and payable in accordance with the note or other
document evidencing the loan.
(g) ACTION UPON DEFAULT. If a participant defaults on any payment of
interest or principal of a loan hereunder or defaults upon any other obligation
relating to such loan, the plan administrator may take (or direct the trustee to
take) such action or actions as it determines to be necessary to protect the
interests of the plan. Such actions may include commencing legal proceedings
against the participant, or foreclosing on any security interest in the
participant's accounts or other security given in connection with a loan
hereunder; however, the plan administrator will not direct foreclosure on the
participant's savings deposits accounts at a time when the participant would not
be entitled to withdraw from such account under Section 10.1.
(h) DISTRIBUTION TO PARTICIPANT WITH LOAN. In the case of any
participant with a loan outstanding hereunder, the amount available for
distribution to such participant (or his beneficiary) will consist of the
portion of his accounts invested in the investment funds of the trust fund. In
addition, the participant's note will be distributed to him (or his
beneficiary), and the trustee will report the value of the note for income tax
purposes as the amount of unpaid principal and interest due thereon at the date
of distribution.
9.2 ACCOUNTING FOR LOANS.
(a) SOURCE OF LOAN. The plan administrator will establish procedures
and ordering rules for liquidating the participant's accounts to make a loan to
him.
(b) LOAN ACCOUNT. The plan administrator will establish and maintain a
loan account for each borrowing participant. The unpaid principal and accrued
but unpaid interest on the loans to a participant will be reflected for plan
accounting purposes in the participant's loan account. Repayments by the
participant will be credited to his loan account, and will then be transferred
from his loan account to the participant's other accounts.
ARTICLE 10
WITHDRAWALS AND DISTRIBUTIONS
10.1 IN-SERVICE WITHDRAWALS FROM SAVINGS DEPOSITS.
(a) APPLICATION. A participant may apply to the plan administrator for
a withdrawal from his basic and supplemental savings deposits accounts. Except
as provided in subsection (d) below, such withdrawals will be available only in
cases of financial hardship. The participant will file an application setting
forth the specific immediate and heavy financial needs prompting his request and
the amount needed to meet such immediate financial need. The minimum withdrawal
amount is $100, and the maximum withdrawal amount is the lesser of (i) the total
amount in the participant's basic and supplemental savings deposits (excluding
any interest or earnings on such savings deposits--other than any such interest
or earnings in the participant's basic and supplemental savings deposits
accounts as of December 31, 1988 to the extent identifiable in the accounting
records of the plan) or (ii) the amount needed to alleviate his financial
hardship (including the amount reasonably expected to be needed for income taxes
and penalties payable on the amount withdrawn).
(b) FINANCIAL HARDSHIP DEFINED. Financial hardship means that a
participant has an immediate and heavy financial need and that the withdrawal is
necessary to meet the need.
15
(i) IMMEDIATE AND HEAVY FINANCIAL NEED. A withdrawal for an
immediate and heavy financial need must be occasioned by: (A) medical
expenses incurred or needed by the participant or his spouse or any of
his dependents; (B) tuition and related educational fees for the next 12
months of post-secondary education for the participant, his spouse, child
or dependent; (C) purchase of the participant's principal residence (not
including mortgage payments); (D) rent or mortgage payments to prevent
the participant's eviction from or the foreclosure of the mortgage on his
principal residence; (E) such other event or circumstance as the Internal
Revenue Service permits; or (F) any other extraordinary personal need
which the plan administrator in its sole discretion may determine under
uniform rules of general application. Financial need under (A) through
(E) above will be deemed to be a financial hardship without evidence of
the participant's other financial resources.
(ii) NECESSITY OF WITHDRAWAL. A withdrawal will be deemed
necessary to satisfy the participant's immediate and heavy financial need
if either (A) the participant has made all non-hardship withdrawals
available under Section 10.2 and obtained all non-taxable loans available
under Section 9.1, the participant does not make savings deposits
hereunder (or salary reduction contributions to any other deferred
compensation or other plan sponsored by Biogen or any other employer,
except a health or welfare plan) for a period of six months following the
date of the withdrawal, and following the participant's resumption of
savings deposits after such six-month period, the participant does not
make basic or supplemental savings deposits hereunder that, when added to
his basic or supplemental savings deposits during the calendar year of
the withdrawal, exceed any special rules or regulations for the
application of the limitation in Code Section 402(g) following such
resumption of savings deposits; or (B) the participant satisfies such
other requirements as may be prescribed by the Internal Revenue Service.
(iii) EVIDENCE AND DETERMINATION OF FINANCIAL HARDSHIP. A
participant must establish to the plan administrator's satisfaction both
that the participant has an immediate and heavy financial need and that
the withdrawal is necessary to meet the need. The participant may
establish either need or necessity (or both) under the deemed method
described in subsection (i) (A) through (E) and subsection (ii) above. If
the participant does not elect to use the deemed method to determine
immediate and heavy financial need under subsection (i) (A) through (E)
above, the participant in his hardship withdrawal application must show
facts and circumstances amounting to immediate and heavy financial need
under subsection (i)(F) above. If the participant does not elect to use
the deemed method to determine necessity under subsection (ii) above, the
participant in his hardship withdrawal application must show that the
participant lacks other reasonably available financial resources to meet
the hardship need (for example, by borrowing on commercially reasonable
terms or by reasonable liquidation of other assets of the participant) so
that the participant has no reasonable recourse other than to satisfy
such hardship need through a withdrawal from this plan.
(iv) PLAN ADMINISTRATOR DETERMINATIONS. A participant's
application for a hardship withdrawal may be in writing or transmitted by
electronic means, on such form and containing such information (or other
evidence or materials establishing the participant's financial hardship)
as the plan administrator may require. In determining whether a
participant has a financial hardship, the plan administrator may
reasonably rely upon the participant's representations, including
representations concerning his inability to meet the need through other
resources such as insurance proceeds, reasonable liquidation of other
assets, distributions or non-taxable loans from other plans, or borrowing
from other sources on reasonable terms, or through cessation of savings
deposits hereunder. The plan administrator's determination of the
existence of and the amount needed to meet a financial hardship will be
binding on the participant.
(c) PAYMENT. If approved by the plan administrator, a hardship
withdrawal will be paid to the participant as soon as practicable after the
hardship withdrawal is approved by the plan administrator. Any such withdrawal
will be paid first from the participant's supplemental savings deposits account
and next from his basic savings deposits account.
(d) EXCEPTIONS. The requirement for financial hardship will not apply
to withdrawals requested by a participant in the following situations: (i) after
the participant has reached age 59 1/2, or (ii) to remove supplemental
16
and basic savings deposits during a calendar year which, when added to savings
deposits under Code Section 401(k) or salary reduction contributions under Code
Section 403(b) during the same year to another plan, exceed the limits on
elective deferrals under Code Section 402(g). A request to remove excess
supplemental and basic savings deposits under (ii) above must be filed with the
plan administrator no later than the March 1 following such calendar year. Such
a withdrawal will be paid to the participant as soon as practicable after the
filing of his request and will include income and investment gain or loss
allocable to such withdrawn amount.
10.2 IN-SERVICE WITHDRAWALS FROM ROLLOVER ACCOUNT.
(a) AMOUNT. A participant may elect to withdraw from his rollover
account any amount he specifies from a minimum of $1,000 (or the amount in his
rollover account if less) to a maximum of the total amount in that account. A
withdrawal request under this section will be made in accordance with applicable
rules and procedures adopted by the plan administrator.
(b) PAYMENT. Such an in-service withdrawal by a participant will be
paid to him as soon as practicable after the participant files the form
requesting the withdrawal.
10.2A IN-SERVICE WITHDRAWALS FROM AFTER-TAX SAVINGS DEPOSITS ACCOUNT.
(a) AMOUNT. A participant may elect to withdraw from his after-tax
savings deposits account any amount he specifies from a minimum of $1,000 (or
the amount in such account, if less) to a maximum of the total amount in such
account. A withdrawal request under this section will be made in accordance with
applicable rules and procedures adopted by the plan administrator.
(b) PAYMENT. Such an in-service withdrawal by a participant will be
paid to him as soon as practicable after the participant files the form
requesting the withdrawal.
10.3 DISTRIBUTION UPON RETIREMENT OR DISABILITY.
(a) AMOUNT AND TIME OF DISTRIBUTION. A participant who retires from
service with his employer or terminates from such service because of disability
will receive the total amount in his account. Subject to Section 10.5,
distribution of his account will be made as soon as practicable after his
retirement or disability.
For plan years beginning January 1, 1997, and thereafter, a participant
may elect to receive a distribution on the April 1 of the year following the
calendar year in which the participant reaches age 70-1/2, or, if still an
employee of Biogen, the participant may elect to defer receiving distributions
until he/she retires from the employer. Such elections will be made in
accordance with rules and procedures of the plan administrator. Notwithstanding
the preceding sentence, in the case of a participant who is a 5% or greater
stockholder of Biogen, distribution must be made no later than the April 1 of
the year following the calendar year in which the participant reaches age
70 1/2.
(b) RETIREMENT AND DISABILITY DEFINED. For purposes of this plan,
retirement means a participant's termination of employment on or after his 55th
birthday. Disability means a participant's inability to perform the normal
duties of his position with his employer because of a physical or mental
impairment.
10.4 DISTRIBUTION UPON TERMINATION OF EMPLOYMENT.
(a) AMOUNT AND TIME OF DISTRIBUTION. A participant who terminates
employment for any reason other than retirement, disability or death will
receive the vested portion of his accounts. Subject to Section 10.5, his vested
accounts will be payable as soon as practicable after his termination of
employment.
(b) VESTED INTEREST. Except as provided in the next paragraph, a
participant will be fully vested in his accounts under the plan at all times.
17
A participant who is an active employee will be fully vested in his
matching contribution account on his 55th birthday. Before that date, such a
participant will have a vested interest in that percentage of his matching
contribution account specified in the following table based upon his number of
years of plan service:
Years of
Plan Service Vested Percentage
------------ -----------------
Less than 1 0%
1 25%
2 50%
3 75%
4 or more 100%
(c) FORFEITURE OF NON-VESTED INTEREST. The non-vested portion of a
terminated participant's matching contribution account, if any, will be
forfeited by him on the day after his termination of employment. If a terminated
participant whose account was wholly or partially forfeited returns to
employment with an employer within six years of his termination, the amount
forfeited (without adjustment for interest or earnings) will be restored to his
account (out of current forfeitures to the extent available) as soon as
practicable after the date of his return. The dollar amount restored will equal
the dollar value of the separate investment fund shares or units forfeited on
the date of forfeiture, and such restored dollar amount will be invested in
shares or units of the available separate investment funds at their then fair
market value on the date of such restoration in accordance with the
participant's investment instructions in effect on such date.
10.5 RIGHT TO DEFER. The plan administrator will notify a participant
of his right to receive payment of his vested account balance as soon as
practicable after his retirement, disability or other termination of employment.
Notwithstanding the foregoing provisions of this article, if his vested account
balance exceeds $5,000, the participant will be given the right to defer payment
of his accounts to a later date.
Distribution of a participant's accounts may be deferred to a date no
later than the April 1 following the year in which such participant reaches age
70 1/2. A participant who deferred payment of his accounts may accelerate such
payment by filing a notice with the plan administrator specifying the earlier
distribution date.
For purposes of determining whether a participant's account exceeds
$5,000 hereunder and application of the involuntary cash-out rules under the
plan, the participant's rollover contributions to the plan and any direct
rollovers or transfers on the participant's behalf to the plan shall not be
taken into account.
10.6 DISTRIBUTION UPON DEATH OF PARTICIPANT.
(a) IN GENERAL. If a participant dies during employment (or after
retirement or disability but before distribution of his accounts), his
beneficiary will receive the total amount in his accounts. Distribution of such
amount will be made as soon as practicable after the date the plan administrator
receives such evidence of the participant's death and the right of any
beneficiary to receive such payment as it deems necessary, but in no event later
than the end of the year following the calendar year containing participant's
date of death.
If a participant dies following termination of employment but before the
distribution of his vested interest, his beneficiary will receive the amount
owing to the participant under Section 10.4. Payment to the beneficiary will be
made in accordance with the last sentence of the preceding paragraph.
(b) DESIGNATION OF BENEFICIARY. A participant may designate one or
more beneficiaries to receive any distribution payable under subsection (a)
above and may revoke or change such a designation at any time. If the
participant names two or more beneficiaries, distribution to them will be in
such proportions as the participant designates or, if the participant does not
so designate, in equal shares. Any designation of beneficiary will be in writing
on such form as the plan administrator may prescribe and will be effective upon
filing with the plan administrator.
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Notwithstanding the preceding paragraph, the sole beneficiary of a
participant who is married immediately before his death will be the
participant's surviving spouse unless the participant designated and the spouse
consented in writing to such designation of another person as beneficiary. The
spouse's consent must acknowledge the effect of such consent and be witnessed by
a plan representative or a notary public.
(c) NO DESIGNATION. Any portion of a distribution payable upon the
death of a participant which is not disposed of by a designation of beneficiary
under subsection (b) above, for any reason whatsoever, will be paid to the
participant's surviving spouse if living at his death, otherwise to the
participant's estate.
(d) PAYMENT UNDER PRIOR DESIGNATION. The plan administrator may direct
payment in accordance with a prior designation of beneficiary (and will be fully
protected in so doing) if such direction (i) is given before a later designation
is received, or (ii) is due to the plan administrator's inability to verify the
authenticity of a later designation. Such a distribution will discharge all
liability therefor under the plan.
10.7 MANNER OF PAYMENT. Payments to a participant under the plan will
be distributed in cash. Notwithstanding the preceding sentence, at a
participant's election, the portion of the participant's accounts invested in
the Biogen stock fund will be paid to him or her in the form of whole shares of
Biogen stock (with the value of any fractional share paid in cash). The number
of shares of Biogen stock paid will be based upon the fair market value of a
share of Biogen stock determined by the trustee in good faith (subject to the
second paragraph of Section 8.3 (c)) as of the most recent practicable date
preceding payment.
10.8 DIRECT ROLLOVERS.
(a) APPLICABILITY OF THIS SECTION. Notwithstanding any provision of
the plan to the contrary that would otherwise limit a distributee's election
under this section, a distributee may elect, at the time and in the manner
prescribed by the plan administrator, to have any portion of an eligible
rollover distribution paid directly to an eligible retirement plan specified by
the distributee in a direct rollover (a distributee may designate only one
eligible retirement plan to receive such a direct payment).
(b) DEFINITIONS. The following definitions apply for purposes of this
section.
(i) ELIGIBLE ROLLOVER DISTRIBUTION means any distribution of
all or any portion of the balance to the credit of the distributee under
this plan, except that an eligible rollover distribution does not
include: any distribution that is one of a series of substantially equal
periodic payments (not less frequently than annually) made for the life
(or life expectancy) of the distributee or the joint lives (or joint life
expectancies) of the distributee and the distributee's designated
beneficiary, or for a specified period of ten years or more; any
distribution to the extent such distribution is required under Code
Section 401(a)(9); and any distribution made on account of hardship. The
portion of a distribution consisting of employee after-tax contributions
constitutes part of an eligible rollover distribution to the extent
provided in subsection (v) below. If the distributee receives a
distribution in the form of Biogen stock and cash, the cash distribution
may be directly rolled over to an eligible retirement plan if such cash
distribution qualifies as an eligible rollover distribution, and the sock
distribution may be retained by the distributee. Alternatively, the
entire distribution (cash and stock) may be directly rolled over to an
eligible retirement plan by the distributee. However, an eligible
rollover distribution will not include any distribution that is below any
threshold amount established by applicable regulations (including any
threshold amount for direct rollovers when only a portion of a
distributee's distribution is being rolled over).
In general, subject to any thresholds established under the last
sentence of the preceding paragraph, as long as Section 10.7 provides for
distributions to participants or beneficiaries only in the form of a lump
sum payment, all distributions from the plan will be eligible rollover
distributions (except the portion, if any, of such payment that
constitutes a required minimum distribution under Code Section
401(a)(9)).
19
(ii) ELIGIBLE RETIREMENT PLAN means an individual retirement
account described in Code Section 408(a), an individual retirement
annuity described in Code Section 408(b), an annuity plan described in
Code Section 403(a), or a qualified trust described in Code Section
401(a), an annuity contract or custodial account described in Code
Section 403(b) and an eligible plan under Code Section 457 which is
maintained by a state, political subdivision of a state, or any agency or
instrumentality of a state or political subdivision of a state, which
agrees to accept the distributee's eligible rollover distribution and to
separately account for amounts transferred into such plan from this plan.
(iii) DISTRIBUTEE means an employee or former employee. In
addition, an employee's or former employee's surviving spouse and an
employee's or former employee's spouse or former spouse who is an
alternate payee under a qualified domestic relations order, as defined in
Code Section 414(p), is a distributee with regard to the interest of the
spouse or former spouse.
(iv) DIRECT ROLLOVER means payment by this plan to the eligible
retirement plan specified by the distributee, with such payment being
made in any manner permitted by applicable regulations.
(v) For purposes of the direct rollover provisions contained in
this Section 10.8(b) of the plan, a portion of a distribution shall not
fail to be an eligible rollover distribution merely because the portion
consists of after-tax employee contributions which are not includible in
gross income; provided, however, such after-tax portion may be
transferred only to an individual retirement account or annuity described
in Code Section 408(a) or 408(b), or to a qualified defined contribution
plan described in Code Section 401(a) or 403(a) which provides for
separate accounting for such amounts transferred and earnings thereon,
including the portion of such distribution which is includible in gross
income and the portion which is not includible in gross income.
10.9 REHIRE BEFORE DISTRIBUTION. If a former active participant is
rehired before distribution of his accounts has been made, such distribution
will be deferred until his subsequent termination of employment.
ARTICLE 11
AMENDMENT, MERGER AND TERMINATION OF PLAN
11.1 AMENDMENT OF PLAN. At any time and from time to time, Biogen may
amend or modify any or all of the provisions of the plan without the consent of
any person, provided that no amendment will reduce any participant's
nonforfeitable account balance as of the date such amendment is adopted (or its
effective date if later), and provided further that no amendment will permit any
part of the trust fund to revert to the employers or be used for or diverted to
purposes other than for the exclusive benefit of participants or their
beneficiaries, except as provided in Section 6.5. In addition, the plan
administrator may, subject to the provisos contained in the preceding sentence,
amend or modify any or all of the provisions of the plan other than an amendment
that would materially affect the benefits of participants or that would
materially increase the cost of maintaining the plan to the employers.
11.2 MERGER OF PLANS. A merger or consolidation with, or transfer of
assets or liabilities to, any other plan will be permitted only if the benefit
each participant would receive if such plan were terminated immediately after
the merger, consolidation or transfer is not less than the benefit he would have
received if this plan had terminated immediately before the merger,
consolidation or transfer.
11.3 TERMINATION. Biogen has established the plan and the employers are
maintaining the plan with the bona fide expectation and intention that they will
be able to continue the plan and contributions thereto indefinitely, but they
will not be under any obligation or liability whatsoever to continue
contributions or maintain the plan for any particular length of time.
Notwithstanding any other provision hereof, an employer in its discretion may
discontinue contributions to the plan indefinitely or temporarily and Biogen may
terminate this plan at any time. There will be no liability to any participant,
beneficiary or other person as a result of any such discontinuance or
termination.
20
An employer's failure to make contributions in any year or years will not
operate to terminate the plan in the absence of formal action by Biogen to
terminate the plan.
11.4 EFFECT OF TERMINATION. Upon complete discontinuance of
contributions or termination or partial termination of the plan, the accounts of
affected participants will become nonforfeitable. After termination of the plan,
no employee will become a participant and no further savings deposits or
contributions will be made hereunder on behalf of participants.
The trustee will continue to hold the assets of the trust fund for
distribution as directed by the plan administrator. The plan administrator will
determine whether to direct the trustee to disburse the plan's assets as
immediate benefit payments, to retain and disburse them in the future, or to
follow any other procedure which it deems advisable.
ARTICLE 12
NAMED FIDUCIARIES
12.1 IDENTITY OF NAMED FIDUCIARIES.
(a) NAMED FIDUCIARIES. Biogen, the trustee, any investment manager
appointed by Biogen, and the plan administrator will be the named fiduciaries
under the plan and will control and manage the plan and its assets to the extent
and in the manner indicated in this article and in the trust agreement. Any
responsibility assigned to a named fiduciary will not be deemed to be a duty of
a "fiduciary" (as defined in ERISA) solely because of such assignment.
(b) PLAN ADMINISTRATOR. Biogen will be the "plan administrator" as
defined in ERISA.
12.2 RESPONSIBILITIES AND AUTHORITY OF PLAN ADMINISTRATOR. The plan
administrator will control and manage the operation and administration of the
plan except to the extent that such responsibilities are specifically assigned
hereunder to Biogen, to an investment manager or to the trustee. The
responsibilities and authority of the plan administrator are set forth in detail
in various articles of this plan and primarily in Article 13.
12.3 RESPONSIBILITIES AND AUTHORITY OF TRUSTEE. The trustee will manage
and control the assets of the plan, except to the extent that such
responsibilities are specifically assigned hereunder or under the trust
agreement to Biogen or the plan administrator, or are delegated to one or more
investment managers by Biogen, or are performed by a participant with respect to
the investment of his accounts among the investment funds in the trust fund or
with respect to his taking a loan from his accounts in accordance with the plan.
The responsibilities and authority of the trustee are set forth in detail
primarily in the trust agreement.
12.4 RESPONSIBILITIES OF BIOGEN. Biogen will have the following
responsibilities and authority with respect to control and management of the
plan and its assets:
(a) to amend or terminate the plan;
(b) to merge or consolidate the plan with, or transfer all or part of
the assets or liabilities to, any other plan;
(c) to appoint, remove and replace the trustee and the plan
administrator and to monitor their performances;
(d) to appoint, remove and replace one or more investment managers, or
to refrain from such appointments, and to monitor their performance;
(e) to communicate such information to the plan administrator, trustee
and investment managers as they may need for the proper performance of their
duties; and
21
(f) to perform such additional duties as are imposed by the plan or by
law.
The responsibilities and authority of Biogen are set forth in further
detail in the various articles of the plan and in the trust agreement.
12.5 RESPONSIBILITIES NOT SHARED. Except as otherwise provided herein
or required by law, each named fiduciary will have only those responsibilities
that are specifically assigned to it hereunder, and no named fiduciary will
incur liability because of improper performance or nonperformance of
responsibilities assigned to another named fiduciary.
12.6 DUAL FIDUCIARY CAPACITY PERMITTED. Any person or group of persons
may serve in more than one fiduciary capacity, including service both as trustee
and plan administrator.
12.7 ACTIONS BY BIOGEN. Wherever the plan specifies that Biogen is
required or permitted to take any action, such action will be taken by its board
of directors, or by a duly authorized committee thereof, or by one or more
directors, officers, employees or other persons duly authorized to do so by the
board of directors.
12.8 PROCEDURE FOR ALLOCATION AND DELEGATION OF RESPONSIBILITIES. The
plan administrator or the members of the board of directors of Biogen or of a
committee of such board may allocate their responsibilities among themselves in
any reasonable manner and may delegate any of their responsibilities to any
other person or persons by so specifying in a written instrument. No plan
administrator or director will be liable for the improper discharge or
nonperformance of any responsibility so allocated or delegated to another person
except to the extent liability is imposed by law.
12.9 ADVICE. A named fiduciary may employ or retain such attorneys,
accountants, investment advisors, consultants, specialists and other persons or
firms as it deems necessary or desirable to advise or assist it in the
performance of its duties. Unless otherwise provided by law, the fiduciary will
be fully protected with respect to any action taken or omitted by him or it in
reliance upon any such person or firm rendered within his or its area of
expertise.
12.10 INDEMNIFICATION. To the extent permitted by law and not prohibited
by Biogen's charter and by-laws, Biogen will indemnify and hold harmless every
individual serving as a fiduciary (whether a named fiduciary or otherwise), and
the estate of such an individual if he is deceased, from and against all claims,
loss, damages, liability, and reasonable costs and expenses, incurred in
carrying out his fiduciary responsibilities, unless due to the gross negligence,
bad faith or willful misconduct of such individual; provided that counsel fees
and amounts paid in settlement must be approved by Biogen and provided further
that this Section 12.10 will not apply to any claim, loss, damages, liability,
or costs and expenses which are covered by a liability insurance policy
maintained by Biogen, or by the plan or by an individual fiduciary. The
preceding sentence will not apply to a corporate trustee, an insurance company,
an investment manager or outside service provider (or to an employee of any of
the foregoing) unless Biogen otherwise specifies in writing.
ARTICLE 13
THE PLAN ADMINISTRATOR
13.1 APPOINTMENT. Biogen will appoint a plan administrator to perform
the duties of the plan administrator in accordance with the plan.
The plan administrator may be an individual or the plan administrator may
be a committee. The individual plan administrator or the committee members may,
but need not, be plan participants or employees or officers of Biogen. If a
committee, the number of persons serving on the committee at any time will be
determined by Biogen, and may be changed from time to time by Biogen. Biogen may
remove any person serving as plan administrator or committee member at any time,
with or without cause, by filing written notice of his removal with such person
and the trustee. A person serving as plan administrator or committee member may
resign at any time by filing his written resignation with Biogen and the
trustee. If a person who is serving as plan administrator or committee
22
member is an employee of Biogen, such person's appointment as plan administrator
or committee member will automatically terminate when such person is no longer
an employee of Biogen. A vacancy, however arising, will be filled by Biogen.
In the event Biogen does not designate an individual as plan
administrator or appoint a committee pursuant to this section, the Director of
Human Resources (or the official performing the duties thereof) will be the plan
administrator hereunder shall have all the same functions of the plan
administrator.
13.2 NOTICE TO TRUSTEE. Biogen will notify the trustee in writing of
the appointment of each person serving as plan administrator or committee
member, and the trustee may assume such appointment continues in effect until
written notice to the contrary is given by Biogen.
13.3 ADMINISTRATION OF PLAN. The plan administrator will have all
powers and authority necessary or appropriate to carry out its responsibilities
with respect to the operation and administration of the plan. It will have
discretion to interpret and apply all plan provisions and may correct any
defect, supply and omission or reconcile any inconsistency or ambiguity in such
manner as it deems advisable. It will in its discretion make all final
determinations concerning eligibility, benefits and rights hereunder, and all
other matters concerning plan administration. All determinations and actions of
the plan administrator will be conclusive and binding upon all persons, except
as otherwise provided herein or by law, and except that the plan administrator
may revoke or modify a determination or action previously made in error. Any
action or omission by the plan administrator will be subject to review (by a
court or otherwise) only for an abuse of discretion.
13.4 REPORTING AND DISCLOSURE. The plan administrator, acting as agent
of Biogen in its capacity as ERISA plan administrator, will prepare, file,
submit, distribute or make available any plan descriptions, reports, statements,
forms or other information to any government agency, employee, former employee,
or beneficiary as may be required by law or by the plan.
13.5 RECORDS. The plan administrator will record its acts and
decisions, and keep all data, records, books of account and instruments
pertaining to plan administration, which will be subject to inspection or audit
by Biogen at any time. The employers will supply all information required by the
plan administrator to administer the plan, and the plan administrator may rely
upon the accuracy of such information.
13.6 COMPENSATION AND EXPENSES. The plan administrator will serve
without compensation unless otherwise determined by Biogen, provided that in no
event will an employee of an employer be compensated for his services as a plan
administrator. All reasonable expenses of administering the plan will be paid
out of the trust fund unless paid by the employers at the option of Biogen (with
each employer bearing such share of the expenses that Biogen specifies). Such
expenses include the compensation of all persons employed or retained by the
plan administrator, premiums for bonds and insurance protecting the plan or
trust fund and required by law or deemed advisable by the plan administrator,
and all other costs of plan administration.
13.7 DECISIONS, RULES AND REGULATIONS. When the plan administrator is a
committee, any action or decision concurred in by a majority of the members,
either at a meeting or in writing without a meeting, will constitute an action
or decision of the plan administrator.
No plan administrator may act or vote on any matter which relates
exclusively to himself.
The plan administrator may adopt and amend such rules for the conduct of
its business and may adopt, promulgate and amend any and all such rules relating
to the administration of the plan, including, but not limited to, rules relating
to plan enrollment periods, forms and procedures, elections, notice
requirements, claims other rules and procedures it deems, with the discretionary
powers granted to it under Section 13.3 of this Article, advisable to administer
the plan.
13.8 SECRETARY. If the plan administrator is a committee, the committee
at its option may appoint any member or other person to serve as secretary, and
may remove him at any time. The committee will notify the trustee in writing of
such appointment, and the trustee may assume his appointment as secretary
continues until
23
written notice to the contrary is given by the committee. The secretary, or a
majority of the committee members then in office, will have the authority to
execute all instruments or memoranda necessary or appropriate to carry out the
actions and decisions of the whole committee; and any person may rely upon any
instrument or memorandum so executed as evidence of the committee action or
decision indicated thereby.
13.9 CLAIMS REVIEW PROCEDURE. Any request for benefits (the "CLAIM") by
a participant or his beneficiary (the "CLAIMANT") will be filed with the plan
administrator. Within a reasonable period after receipt of a claim, the plan
administrator will provide written notice to any claimant whose claim has been
wholly or partly denied, including: (a) the reasons for the denial, (b) the plan
provisions on which the denial is based, (c) any additional material or
information necessary to perfect the claim and the reasons it is necessary, and
(d) the plan's claims review procedure. A claimant will be given a full and fair
review by the plan administrator of the denial of his claim if he requests a
review in writing within 60 days after notification of the denial. The claimant
may review pertinent documents and may submit issues and comments orally, in
writing, or both. The plan administrator will render its decision on review
promptly and in writing and will include specific reasons for the decision and
reference to the plan provisions on which the decision is based.
ARTICLE 14
MISCELLANEOUS
14.1 QUALIFIED DOMESTIC RELATIONS ORDERS.
(a) A qualified domestic relations order (QDRO) is a judgment, decree,
or order which meets the requirements of Code Section 414(p). An alternate payee
is an individual named in the QDRO who is to receive some or all of the
participant's benefit.
(b) Upon receipt of any domestic relations order, the plan
administrator will notify the participant involved and each alternate payee
under the order (and under any previous QDRO relating to the participant's
benefits). The plan administrator will determine whether the order is a QDRO and
will notify each affected individual of its determination. In general, subject
to the provisions of Code Section 414(p), the plan's claims procedure rules
under Section 13.9 apply to this determination and any subsequent determination
relating to the order. To the extent permitted by law, the plan administrator's
determination that an order is or is not a QDRO is final. Any subsequent change
in this determination is applied only prospectively unless the plan
administrator rules otherwise.
(c) If an order is determined to be a QDRO, the provisions of the QDRO
will take precedence over any conflicting provisions of the plan (including
Section 14.2 relating to non-alienation of benefits). To the extent provided in
a QDRO, a former spouse will be treated as the spouse or surviving spouse of a
participant for purposes of the death benefit provisions of Section 10.6 and any
other relevant provision of the plan. The plan administrator may carry out the
requirements of a QDRO and may make distribution to an alternate payee in
accordance with a QDRO regardless of the age of the participant and regardless
of whether the participant himself would be eligible to receive a distribution
at such time.
14.2 NONALIENATION OF BENEFITS. No benefit, right or interest hereunder
of any person will be subject to anticipation, alienation, sale, transfer,
assignment, pledge, encumbrance or charge, or to seizure, attachment or other
legal, equitable or other process, or be liable for, or subject to, the debts,
liabilities or other obligations of such person, except that the plan
administrator may prescribe rules for the payment of benefits in accordance with
a qualified domestic relations order as defined in Section 14.1, and except that
payments may be made from a participant's account to the extent required under
Code Section 410(a)(13) and the regulations thereunder.
14.3 PAYMENT TO MINORS AND INCOMPETENTS. If the plan administrator
deems any person incapable of giving a binding receipt for benefit payments
because of his minority, illness, infirmity or other incapacity, it may direct
payment directly for the benefit of such person, or to any person selected by
the plan administrator to disburse it. Such payment, to the extent thereof, will
discharge all liability for such payment under the plan.
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14.4 CURRENT ADDRESS OF PAYEE; UNCLAIMED PAYMENTS. Any person entitled
to benefits is responsible for keeping the plan administrator informed of his
current address at all times. The plan administrator, trustee and the employers
have no obligation to locate such person, and will be fully protected if all
payments and communications are mailed to his last known address as shown on the
records of his employer, or are withheld pending receipt of proof of his current
address and proof that he is alive.
If a communication from the plan has been mailed to the participant's or
beneficiary's last known address and is returned with no forwarding address or
if the check for a plan distribution is not cashed, and if the participant (or
his beneficiary) makes no claim for such benefit, the participant's benefit will
be forfeited and reallocated to other participants when a period of three years
less one day has elapsed since such communication or benefit payment check was
mailed. If the participant (or his beneficiary) subsequently makes a claim for
such benefit, the amount that was forfeited (without investment earnings or
gains or losses) will be restored and such amount will be distributed to the
participant (or beneficiary). Such restoration will be made first using any
available forfeitures and second (to the extent necessary) using a contribution
by the participant's employer.
14.5 DISPUTES OVER ENTITLEMENT TO BENEFITS. If two or more persons
claim entitlement to payment of the same benefit hereunder, the plan
administrator in its discretion may withhold payment of such benefit until the
dispute has been determined by a court of competent jurisdiction or has been
settled by the persons concerned.
14.6 PAYMENT OF BENEFITS. Unless he elects otherwise (but subject to
the requirements of Section 10.5), a participant's benefit payments under the
plan will begin no later than 60 days after the close of the plan year in which
the latest of the following dates occurs: (a) the date he terminates service
with his employer; (b) his 65th birthday; and (c) the tenth anniversary of the
year in which he began participating in the plan.
14.7 TOP-HEAVY PLAN PROVISIONS.
(a) APPLICABILITY OF SECTION. This section is included in the plan to
meet the requirements of Code Section 416, and the provisions of this section
will be operative only if, when and to the extent that Code Section 416 applies
to the plan. At such time as the requirements of Code Section 416 apply to the
plan because the plan is top-heavy as defined in subsection (b)(i) below, the
provisions of this section will apply and will govern over any contrary
provision of the plan.
(b) Definitions.
(i) The plan will be TOP-HEAVY for a plan year if, as of the
determination date, the sum of the aggregate amount in the accounts of
participants who are key employees exceeds 60 percent of such amount
determined for all participants in this plan.
Notwithstanding the preceding paragraph, if the plan is included
within a required or permissive aggregation group, the plan will be top
heavy for a plan year if, as of the determination date, the sum of (A)
the aggregate amount in the accounts of participants who are key
employees (including all defined contribution plans within such group)
and (B) the aggregate present value of cumulative accrued benefits of
participants who are key employees (including all defined benefit plans
within such group), exceeds 60 percent of such amount determined for all
participants in all such plans.
In determining the amounts in participants' accounts and present
values of accrued benefits under the preceding two paragraphs, (V) the
present value of accrued benefits will be based on the actuarial
assumptions used to determine the minimum funding requirements of Code
Section 412(b); if there is more than one defined benefit plan in the
aggregation group, each plan will use the same actuarial assumptions for
purposes of the top heavy test, as determined by the actuary; (W)
distributions made during the one-year period (five-year period in the
case of any in-service withdrawal) ending on the determination date will
be taken into account (X) rollover contributions after December 31, 1983,
will be taken into account only to the extent provided in regulations
under Code Section 416(g)(4)(A); (Y) account balances and accrued benefit
values of a person who was but no longer is a key employee will be
disregarded; and (Z) account balances and accrued benefit values of any
individual who has not performed any services for an
25
employer and received compensation therefor (other than benefits under a
deferred compensation plan) at any time during the one-year ending on the
determination date will be disregarded.
(ii) THE DETERMINATION DATE for purposes of determining whether
the plan is top-heavy under subsection (i) for a particular plan year is
the last day of the preceding plan year. In the case of the first plan
year, the determination date is the last day of that year.
(iii) A KEY EMPLOYEE is any employee or former employee
(including a beneficiary of such an employee) who at any time during the
plan year or any of the four preceding plan years was:
(A) an officer of an employer having annual compensation
greater than $130,000 (adjusted in accordance with Code Section
416(i) and any regulations thereunder) for such plan year (but no
more than the lesser of 50 employees or 10% of all employees will
be taken into account under this subsection (A) as key employees);
(B) a person owning (or considered as owning within the
meaning of Code Section 318) more than 5% of the outstanding stock
of his employer (or any direct or indirect parent of his employer)
or stock possessing more than 5% of the total combined voting
power of all such stock; or
(C) a person who has annual compensation from his
employer of more than $150,000 and who would be described in
subsection (C) above if 1% were substituted for 5%.
For purposes of applying Code Section 318 to the provisions
of this subsection (iii), subparagraph (C) of Code Section 318(a)(2) will
be applied by substituting "five percent" for "50 percent". In addition,
the rules of Code Section 414 (b), (c) and (m) will not apply for
purposes of determining ownership under subsections (C) and (D) above.
(iv) A NON-KEY EMPLOYEE is any employee in the plan (including a
beneficiary of such an employee) who is not a key employee under
subsection (iii) above.
(v) A REQUIRED AGGREGATION GROUP includes all qualified plans
of the employers in which a key employee participates and each other
qualified plan of the employers that enables any of such plans to meet
the requirements of Section 401(a)(4) or Section 410 of the Code. A
permissive aggregation group includes (in addition to plans in a required
aggregation group) any plan which Biogen designates for inclusion
provided that inclusion of such plan does not cause the group to fail the
requirements of Section 401(a)(4) or Section 410 of the Code.
(c) MINIMUM CONTRIBUTION. For any plan year in which the plan is
top-heavy, the employers will make a minimum contribution on behalf of each
non-key employee who has satisfied the requirements of Section 4.2 (and who is
therefore eligible to make savings deposits) equal to 3% of his total
compensation (as defined in Section 7.6(a)). However, the minimum contribution
called for under the preceding sentence will not exceed the contribution
(determined as a percentage of his total compensation) for such plan year under
this plan (and any other defined contribution plan included in an aggregation
group with this plan) on behalf of the key employee for whom such contribution
is the highest. Also, such minimum contribution will take into account any
savings deposits and matching contributions by such employee during such plan
year, and will be reduced as permitted under regulations under Code Section 416
to reflect contributions on behalf of or benefits accrued by such non-key
employee under any other plan maintained by the employers.
14.8 RULES OF CONSTRUCTION.
26
(a) A word or phrase defined or explained in any section or article
has the same meaning throughout the plan unless the context indicates otherwise.
(b) Where the context so requires, the masculine includes the
feminine, the singular includes the plural, and the plural includes the
singular.
(c) Unless the context indicates otherwise, the words "herein",
"hereof", "hereunder", and words of similar import refer to the plan as a whole
and not only to the section in which they appear.
14.9 TEXT CONTROLS. Headings and titles are for convenience only, and
the text will control in all matters.
14.10 APPLICABLE STATE LAW. To the extent that state law applies, the
provisions of the plan will be construed, enforced and administered according to
the laws of the Commonwealth of Massachusetts.
14.11 PAPERLESS ADMINISTRATION. The plan administrator may establish
procedures whereby an electronic or voice recognized authorization or election
or election made by a participant may be acceptable under the plan in lieu of
filing a written form as may otherwise be required under the plan. In such
event, any reference in the plan to a written form shall be deemed to include
such other authorization or election.
14.12 CORRECTION OF MISTAKES IN PLAN OPERATION. If as a result of a
mistake in plan operation or administration (including by way of illustration
and not by way of limitation, the omission of an employee who should have become
a participant, the inclusion of an employee as a participant who should not have
become a participant, the crediting of the wrong amount to a participant's
accounts, and similar mistakes), the plan administrator may take such steps as
the plan administrator determines are necessary or proper to correct the mistake
(i.e., to put the affected participant(s) in the same position he would have
been in if the mistake had never occurred). In so doing, the plan administrator
may apply a correction methodology promulgated in any program of the IRS such as
the Employee Plans Compliance Resolution System (EPCRS) or any successor or
replacing program or other similar program.
14.13 VETERANS' RIGHTS. Notwithstanding any provision of this plan to
the contrary, contributions and service credit with respect to qualified
military service will be provided in accordance with Code Section 414(u).
Executed on December 31, 2001.
BIOGEN, INC.
By: /s/ Frank A. Burke, Jr.
------------------------------------------
Frank A. Burke, Jr.
Executive Vice President - Human Resources
27
APPENDIX A
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Plan Amendments
---------------
1. The plan was amended by the First Amendment effective as of January 1,
1987.
2. The plan was amended by the Second Amendment effective as of December 30,
1989.
3. The plan was amended by the Third Amendment effective generally as of
January 1, 1989.
4. The plan was amended by the Fourth Amendment effective as of December 6,
1991.
5. The plan was amended by the Fifth Amendment effective generally as of April
1, 1994.
6. The plan was amended by the Sixth Amendment effective generally as of May
1, 1995.
7. The plan was amended by the Seventh Amendment effective as of January 1,
1996
8. The plan was amended and restated in its entirety by the Eighth Amendment,
effective as of January 1, 1997.
9. The plan was amended by the Ninth Amendment, effective as stated therein.
10. The plan was amended by the Tenth Amendment with various effective dates
recited therein (amendments to comply with SBJPA `96, TRA `97 and IRRA `98,
and various other amendments.
Notwithstanding Section 1.5, and the amendment to Section 10.5 (increasing
the cash out threshold from $3,500 to $5,000) will apply to participants
who terminated employment with the Employer before January 1, 1999 and
whose vested account balances on January 1, 1999 do not exceed $5,000;
under amended Section 10.5, such participants will receive payment of their
vested account balances.
The amendment to Section 4.1(a) (clarifying that an individual classified
as a consultant or contractor, etc. is not considered an employee or
regular employee for purposes of the plan and therefore is not eligible to
participate in the plan) is a clarification of existing plan requirements,
and it is not intended to and does not create any implication that, prior
to the Tenth Amendment, such an individual might have been eligible to
participate in the plan.
11. The plan was amended by the Eleventh Amendment, effective as of April 1,
1999 (changes related to entry dates).
12. The plan was amended by the Twelfth Amendment effective August 1, 2000.
13. The plan was amended and restated by the Thirteenth Amendment and
Restatement, effective generally as of January 1, 2002 (with other
effective dates as specified therein) (changes to reflect the Economic
Growth and Tax Relief and Reconciliation Act of 2001 and other changes).
28
APPENDIX B
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Participating Employers
-----------------------
Biogen U.S. Corporation
Biogen U.S. Limited Partnership
29