EXHIBIT 99.1
AMENDED AND RESTATED
NEUROCRINE BIOSCIENCES, INC. NONQUALIFIED DEFERRED COMPENSATION PLAN
EFFECTIVE APRIL 26, 2005
TABLE OF CONTENTS
Page
PURPOSE......................................................................... 1
ARTICLE 1. Definitions.......................................................... 1
1.1 "Account Balance"................................................... 1
1.2 "Accounts".......................................................... 1
1.3 "Administrator"..................................................... 1
1.4 "Annual Bonus"...................................................... 1
1.5 "Annual Company Contribution Amount"................................ 2
1.6 "Annual Company Matching Amount".................................... 2
1.7 "Annual Deferral Amount"............................................ 2
1.8 "Annual Installment Method"......................................... 2
1.9 "Base Annual Salary"................................................ 2
1.10 "Beneficiary"....................................................... 2
1.11 "Beneficiary Designation Form"...................................... 2
1.12 "Board"............................................................. 2
1.13 "Cause"............................................................. 2
1.14 "Change in Control"................................................. 3
1.15 "Change in Control Benefit"......................................... 4
1.16 "Claimant".......................................................... 4
1.17 "Code".............................................................. 4
1.18 "Committee"......................................................... 4
1.19 "Company"........................................................... 4
1.20 "Company Contribution Account"...................................... 4
1.21 "Company Matching Account".......................................... 5
1.22 "Company Stock Measurement Fund".................................... 5
1.23 "Deduction Limitation".............................................. 5
1.24 "Deferral Account".................................................. 5
1.25 "Director".......................................................... 5
1.26 "Director Fees"..................................................... 5
1.27 "Disability"........................................................ 5
1.28 "Disability Benefit"................................................ 6
1.29 "Election Form"..................................................... 6
1.30 "Employee".......................................................... 6
1.31 "Employer(s)"....................................................... 6
1.32 "ERISA"............................................................. 6
1.33 "Exchange Act"...................................................... 6
1.34 "Excise Tax Limitation"............................................. 6
1.35 "Fixed Date Payout"................................................. 6
1.36 "Fixed Date Payout Account Balance"................................. 6
1.37 "Key Employee"...................................................... 6
1.38 "Measurement Fund".................................................. 6
1.39 "Non-Employee Director"............................................. 7
1.40 "Participant"....................................................... 7
1.41 "Plan".............................................................. 7
1.42 "Plan Year"......................................................... 7
1.43 "Pre-Retirement Survivor Benefit"................................... 7
1.44 "Retirement", "Retire(s)" or "Retired".............................. 7
1.45 "Retirement Benefit"................................................ 7
1.46 "Rule 16b-3"........................................................ 7
1.47 "Securities Act".................................................... 7
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1.48 "Stock"............................................................. 7
1.49 "Termination Benefit"............................................... 7
1.50 "Termination of Employment"......................................... 7
1.51 "Trust"............................................................. 8
1.52 "Unforeseeable Financial Emergency"................................. 8
1.53 "Years of Service".................................................. 8
ARTICLE 2. SELECTION, ENROLLMENT, ELIGIBILITY................................... 8
2.1 Selection by Administrator.......................................... 8
2.2 Enrollment Requirements............................................. 8
2.3 Eligibility; Commencement of Participation.......................... 8
2.4 Termination of Participation and/or Deferrals....................... 8
ARTICLE 3. DEFERRAL COMMITMENTS/COMPANY CONTRIBUTIONS/CREDITING/TAXES........... 9
3.1 Election to Defer; Effect of Election Form.......................... 9
3.2 Minimum Deferrals................................................... 9
3.3 Maximum Deferral.................................................... 10
3.4 Accounts; Crediting of Deferrals.................................... 10
3.5 Vesting............................................................. 10
3.6 Earnings Credits or Losses.......................................... 11
3.7 Distributions....................................................... 12
ARTICLE 4. DISTRIBUTIONS........................................................ 12
4.1 Fixed Date Payout................................................... 12
4.2 Retirement Benefit.................................................. 13
4.3 Pre-Retirement Survivor Benefit..................................... 13
4.4 Termination Benefit................................................. 14
4.5 Disability Benefit.................................................. 14
4.6 Change in Control Benefit........................................... 15
ARTICLE 5. UNFORESEEABLE FINANCIAL EMERGENCIES.................................. 15
ARTICLE 6. BENEFICIARY DESIGNATION.............................................. 16
6.1 Beneficiary......................................................... 16
6.2 Beneficiary Designation; Change..................................... 16
6.3 No Beneficiary Designation.......................................... 16
6.4 Doubt as to Beneficiary............................................. 16
6.5 Discharge of Obligations............................................ 16
ARTICLE 7. TERMINATION, AMENDMENT OR MODIFICATION............................... 17
7.1 Termination......................................................... 17
7.2 Amendment...........................................................
7.3 Effect of Payment...................................................
ARTICLE 8. ADMINISTRATION....................................................... 18
8.1 Administrator Duties................................................ 18
8.2 Binding Effect of Decisions......................................... 18
8.3 Committee........................................................... 18
8.4 Indemnification..................................................... 18
8.5 Employer Information................................................ 18
ARTICLE 9. CLAIMS PROCEDURES.................................................... 19
9.1 Presentation of Claim............................................... 19
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9.2 Notification of Decision............................................ 19
9.3 Review of a Denied Claim............................................ 19
9.4 Decision on Review.................................................. 20
9.5 Designation......................................................... 20
9.6 Arbitration......................................................... 20
ARTICLE 10. TRUST............................................................... 20
10.1 Establishment of the Trust.......................................... 20
10.2 Interrelationship of the Plan and the Trust......................... 21
10.3 Investment of Trust Assets.......................................... 21
10.4 Distributions From the Trust....................................... 21
ARTICLE 11. PROVISIONS RELATING TO SECURITIES LAWS.............................. 21
11.1 Designation of Participants......................................... 21
11.2 Action by Committee................................................. 21
11.3 Compliance with Section 16.......................................... 21
ARTICLE 12. MISCELLANEOUS....................................................... 21
12.1 Status of Plan...................................................... 21
12.2 Unsecured General Creditor.......................................... 21
12.3 Employer's Liability................................................ 22
12.4 Nonassignability.................................................... 22
12.5 Tax Withholding..................................................... 22
12.6 Coordination with Other Benefits.................................... 23
12.7 Compliance.......................................................... 23
12.8 Not a Contract of Employment........................................ 23
12.9 Furnishing Information.............................................. 23
12.10 Governing Law....................................................... 23
12.11 Notice.............................................................. 23
12.12 Successors.......................................................... 23
12.13 Spouse's Interest................................................... 24
12.14 Validity............................................................ 24
12.15 Incompetent......................................................... 24
12.16 Court Order......................................................... 24
12.17 Insurance........................................................... 24
12.18 Savings Clause...................................................... 26
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AMENDED AND RESTATED
NEUROCRINE BIOSCIENCES, INC.
NONQUALIFIED DEFERRED COMPENSATION PLAN
EFFECTIVE APRIL 26, 2005
PURPOSE
Neurocrine Biosciences, Inc., a Delaware corporation (the "Company")
established, effective December 1, 1996, the Neurocrine Biosciences, Inc.
Nonqualified Deferred Compensation Plan, which plan was amended and restated
effective February 22, 2000 and August 5, 2003(the "Plan"), for the benefit of a
select group of management and highly compensated Employees and Directors who
contribute materially to the continued growth, development and future business
success of the Company and its subsidiaries, if any, that sponsor this Plan.
This Plan shall be unfunded for tax purposes and for purposes of Title I of
ERISA. The Company hereby amends and restates the Plan in its entirety effective
April 26, 2005 as set forth herein.
This Plan shall consist of two plans, one for the benefit of a
select group of management and highly compensated Employees of the Employers as
described in Sections 201(2), 301(a)(3) and 401(a)(1) of ERISA, and one for the
benefit of Non-Employee members of the boards of directors of any Employer. To
the extent required by law, the terms of this Plan applicable to Directors shall
also constitute a separate written plan document with its terms set forth in the
applicable portions of this Plan.
ARTICLE 1.
DEFINITIONS
As used within this document, the following words and phrases have the
meanings described in this Article 1 unless a different meaning is required by
the context. Some of the words and phrases used in the Plan are not defined in
this Article 1, but for convenience, are defined as they are introduced into the
text. Words in the masculine gender shall be deemed to include the feminine
gender. Any headings used are included for ease of reference only and are not to
be construed so as to alter any of the terms of the Plan.
1.1 "Account Balance" shall mean, with respect to a Participant, a credit
on the records of the Employer equal to the sum of (i) the Deferral Account
balance, (ii) the Company Contribution Account balance, and (iii) the Company
Matching Account balance. The Account Balance, and each other specified account
balance, shall be a bookkeeping entry only and shall be utilized solely as a
device for the measurement and determination of the amounts to be paid to a
Participant, or his or her designated Beneficiary, pursuant to this Plan.
1.2 "Accounts" of a Participant shall mean, as the context indicates,
either or all of his or her Deferral Account, Company Contribution Account and
Company Matching Account.
1.3 "Administrator" shall mean the Committee appointed pursuant to Article
8 to administer the Plan, or such other person or persons to whom the Committee
has delegated its duties pursuant to Article 8.
1.4 "Annual Bonus" shall mean any cash compensation, in addition to Base
Annual Salary, relating to services performed during any calendar year, whether
or not paid in such calendar year or included on the Federal Income Tax Form W-2
for such calendar year, payable to a Participant as an Employee under any
Employer's annual bonus and cash incentive plans, excluding stock options and
restricted stock.
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1.5 "Annual Company Contribution Amount" shall mean, for any one Plan
Year, the amount determined in accordance with Section 3.4(b).
1.6 "Annual Company Matching Amount" for any one Plan Year shall be the
amount determined in accordance with Section 3.4(c).
1.7 "Annual Deferral Amount" shall mean that portion of a Participant's
Base Annual Salary, Annual Bonus and Director Fees that a Participant elects to
defer, and is deferred, in accordance with Article 3, for any one Plan Year. In
the event of a Participant's Retirement, Termination of Employment as a result
of his or her Disability or death or a Termination of Employment prior to the
end of a Plan Year, such year's Annual Deferral Amount shall be the actual
amount withheld prior to such event.
1.8 "Annual Installment Method" shall be an annual installment payment
over the number of years selected by the Participant in accordance with this
Plan, which shall in no event exceed fifteen (15) years, calculated as follows:
The Account Balance of the Participant (or the Fixed Date Payout Account
Balance, in the event of a Fixed Date Payout) shall be calculated as of the
close of business three (3) business days prior to the last business day of the
year or the date of the Fixed Date Payout. The annual installment shall be
calculated by multiplying this balance by a fraction, the numerator of which is
one, and the denominator of which is the remaining number of annual payments due
the Participant. By way of example, if the Participant elects a ten (10) year
Annual Installment Method, the first payment shall be 1/10 of the Account
Balance (or the Fixed Date Payout Account Balance, in the event of a Fixed Date
Payout), calculated as described in this definition. The following year, the
payment shall be 1/9 of the Account Balance (or the Fixed Date Payout Account
Balance, in the event of a Fixed Date Payout), calculated as described in this
definition. Each annual installment shall be paid within sixty (60) days
following each anniversary of the day the distributions are scheduled to
commence.
1.9 "Base Annual Salary" shall mean the annual cash compensation relating
to services performed during any calendar year, whether or not paid in such
calendar year or included on the Federal Income Tax Form W-2 for such calendar
year, excluding bonuses, commissions, overtime, fringe benefits, stock options,
relocation expenses, incentive payments, non-monetary awards, Director Fees and
other fees, automobile and other allowances paid to a Participant for employment
services rendered (whether or not such allowances are included in the Employee's
gross income). Base Annual Salary shall be calculated before reduction for
compensation voluntarily deferred or contributed by the Participant pursuant to
all qualified or non-qualified plans of any Employer and shall be calculated to
include amounts not otherwise included in the Participant's gross income under
Code Sections 125, 132(f), 402(e)(3), 402(h), or 403(b) pursuant to plans
established by any Employer; provided, however, that all such amounts will be
included in compensation only to the extent that, had there been no such plan,
the amount would have been payable in cash to the Employee.
1.10 "Beneficiary" shall mean one or more persons, trusts, estates or
other entities, designated in accordance with Article 6, that are entitled to
receive benefits under this Plan upon the death of a Participant.
1.11 "Beneficiary Designation Form" shall mean the form established from
time to time by the Administrator that a Participant completes, signs and
returns to the Administrator to designate one or more Beneficiaries.
1.12 "Board" shall mean the board of directors of the Company.
1.13 "Cause" shall mean, with respect to a Participant, the occurrence of
any of the following (in each case determined by the Participant's Employer (or
the Employer's Board of Directors, if the Participant is the Employer's Chief
Executive Officer)):
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(a) any intentional action or intentional failure to act by a
Participant which was performed in bad faith and to the material
detriment of the Participant's Employer;
(b) Participant's intentional refusal or intentional failure to act
in accordance with any lawful and proper direction or order of the
Chief Executive Officer (or the Employer's Board of Directors, if
the Participant is the Employer's Chief Executive Officer);
(c) Participant's willful and habitual neglect of the duties of
employment; or
(d) Participant's conviction of a felony crime involving moral
turpitude;
provided, that in the event any of the foregoing events is capable
of being cured, the Employer (or the Employer's Board of Directors, if the
Participant is the Employer's Chief Executive Officer) shall provide written
notice to Participant describing the nature of such event and Participant shall
thereafter have ten (10) business days to cure such event.
1.14 A "Change in Control" shall be deemed to occur if any of the
following events shall occur:
(a) the Company is merged or consolidated or reorganized into or
with another corporation or other legal person, and as a result of such
merger, consolidation or reorganization less than fifty percent (50%) of
the combined voting power of the then-outstanding securities of such
surviving corporation or person immediately after such transaction are
held in the aggregate by the holders of voting securities of the Company
immediately prior to such transaction;
(b) the Company sells all or substantially all of its assets or any
other corporation or other legal person and thereafter less than fifty
percent (50%) of the combined voting securities of the acquiring or
consolidated entity are held in the aggregate by the holders of voting
securities of the Company immediately prior to such sale;
(c) there is a report filed on Schedule 13D or Schedule 14D-1 (or
any successor schedule, form or report), each as promulgated pursuant to
the Exchange Act, disclosing that any "person" (as such term is used in
Sections 13(d)(3) and 14(d)(2) of the Exchange Act) has become the
"beneficial owner" (as defined in Rule 13d-3 or any successor rule or
regulation promulgated under the Exchange Act), directly or indirectly, of
securities of the Company representing fifty percent (50%) or more of the
combined voting power of the then-outstanding voting securities of the
Company;
(d) the Company shall file a report or proxy statement with the
Securities and Exchange Commission pursuant to the Exchange Act disclosing
in response to Item 1 of Form 8-X thereunder or Item 5(f) of Schedule 14A
thereunder (or any successor schedule, form or report or item therein)
that the change in control of the Company has or may have occurred or will
or may occur in the future pursuant to any then-existing contract or
transaction; or
(e) during any period of two (2) consecutive years, individuals who
at the beginning of any such period constitute the Directors of the
Company cease for any reason to constitute at least a majority thereof
unless the election or the nomination for election by the Company's
shareholders of each Director of the Company first elected during such
period was approved by a vote of at least two-thirds (2/3) of the
Directors of the Company then still in office who were Directors of the
Company at the beginning of such period;
provided, that for purposes of distribution of Post-December 31,
2004 Deferrals under Section 4.6, "Change in Control" shall be limited to:
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(f) the acquisition by any one person, or more than one person
acting as a group (within the meaning of Q&A-12(b) of Internal
Revenue Service Notice 2005-1, of ownership of stock of the
Company that, together with stock held by such person or group
constitutes more than fifty percent (50%) of the total fair
market value or total voting power of the stock of the
Company; provided, however, that if any one person or more
than one person acting as a group, is considered to own more
than fifty percent (50%) of the total fair market value or
total voting power of the stock of the Company, the
acquisition of additional stock by the same person or persons
is not considered to be a Change in Control. such foregoing
definition of Change in Control shall be deemed amended to the
extent necessary to comply with the provisions of Code Section
409A and any regulations promulgated thereunder.
(g) Either (i) the acquisition by one person or more than one
person acting as a group during the twelve (12) month period
ending on the date of the most recent acquisition by such
person or persons of ownership of stock of the Company
possessing thirty-five percent (35%) or more of the total
voting power of the stock of the Company or (ii) the
replacement of a majority of the members of the Board during
any twelve (12) month period by directors whose appointment or
election is not endorsed by a majority of the members of the
Company's Board prior to the date of the appointment or
election; or
(h) The acquisition by one person or more than one person acting
as a group during the twelve (12) month period ending on the
date of the most recent acquisition, assets from the Company
that have a total gross fair market value equal to or more
than forty percent (40%) of the total gross fair market value
of all assets of the Company immediately before such
acquisition or acquisitions. For this purpose, gross fair
market value means the value of the assets of the Company, or
the value of the assets being disposed of, determined without
regard to any liabilities associated with such assets.
Notwithstanding the foregoing, whether a Change in Control has
occurred for purposes of distributions of Post-December 31, 2004 Deferrals shall
be determined in accordance with Code Section 409A, Internal Revenue Service
Notice 2005-1 and any similar authority.
1.15 "Change in Control Benefit" shall mean the benefit set forth in
Section 4.6.
1.16 "Claimant" shall have the meaning set forth in Section 9.1.
1.17 "Code" shall mean the Internal Revenue Code of 1986, as it may be
amended from time to time. Reference to a section of the Code shall include that
section and any comparable section or sections of any future legislation that
amends, supplements or supersedes such section.
1.18 "Committee" shall mean the Compensation Committee of the Board or
another committee or subcommittee of the Board appointed to administer the Plan
pursuant to Article 8.
1.19 "Company" shall mean Neurocrine Biosciences, Inc, a Delaware
corporation, and any successor to all or substantially all of the Company's
assets or business.
1.20 "Company Contribution Account" shall mean (i) the sum of all of a
Participant's Annual Company Contribution Amounts, plus (ii) the hypothetical
deemed investment earnings and losses credited or charged in accordance with all
the applicable provisions of this Plan that relate to the Participant's Company
Contribution Account, less (iii) all distributions made to the Participant or
his or her Beneficiary pursuant to this Plan that relate to the Participant's
Company Contribution Account.
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1.21 "Company Matching Account" shall mean (i) the sum of all of a
Participant's Annual Company Matching Amounts, plus (ii) the hypothetical deemed
investment earnings and losses credited or charged in accordance with all the
applicable provisions of this Plan that relate to the Participant's Company
Matching Account, less (iii) all distributions made to the Participant or his or
her Beneficiary pursuant to this Plan that relate to the Participant's Company
Matching Account.
1.22 "Company Stock Measurement Fund" shall mean the Measurement Fund
which shall be deemed invested in the Company's Stock. Participants will have no
rights as stockholders of the Company with respect to allocations made to their
Accounts which are deemed invested in the Company Stock Measurement Fund.
1.23 "Deduction Limitation" shall mean the following described limitation
on a benefit that may otherwise be distributable pursuant to the provisions of
this Plan. Except as otherwise provided, this limitation shall be applied to all
distributions, other than distributions of Post-December 31, 2004 Deferrals,
that are "subject to the Deduction Limitation" under this Plan. If an Employer
determines in good faith that there is a reasonable likelihood that any
compensation paid to a Participant for a taxable year of the Employer would not
be deductible by the Employer solely by reason of the limitation under Code
Section 162(m), then to the extent deemed necessary by the Employer to ensure
that the entire amount of any distribution to the Participant pursuant to this
Plan is deductible, the Employer may defer all or any portion of a distribution
under this Plan, other than a distribution of Post-December 31, 2004 Deferrals.
Any amounts deferred pursuant to this limitation shall continue to be
credited/debited with additional amounts in accordance with Section 3.6 below.
The amounts so deferred and amounts credited thereon shall be distributed to the
Participant or his or her Beneficiary (in the event of the Participant's death)
at the earliest possible date, as determined by the Employer in good faith, on
which the deductibility of compensation paid or payable to the Participant for
the taxable year of the Employer during which the distribution is made will not
be limited by Section 162(m), or if earlier, the date that is twenty-four (24)
months following the date on which the distribution was first distributable to
the Participant pursuant to the provisions of this Plan.
1.24 "Deferral Account" shall mean (i) the sum of all of a Participant's
Annual Deferral Amounts, plus (ii) the hypothetical deemed investment earnings
and losses credited or charged in accordance with all the applicable provisions
of this Plan that relate to the Participant's Deferral Account, less (iii) all
distributions made to the Participant or his or her Beneficiary pursuant to this
Plan that relate to his or her Deferral Account.
1.25 "Director" shall mean any member of the board of directors of any
Employer.
1.26 "Director Fees" shall mean the annual fees paid by any Employer,
including retainer fees and meetings fees, as compensation for serving on the
board of directors.
1.27 "Disability"shall mean a mental or physical disability as determined
by the Administrator in accordance with standards and procedures similar to
those under the Company's broad-based regular long-term disability plan, if any.
At any time that the Company does not maintain such a long-term disability plan,
"Disability" shall mean the inability of a Participant, as determined by the
Administrator, substantially to perform such Participant's regular duties and
responsibilities due to a medically determinable physical or mental illness
which has lasted, or can reasonably be expected to last, for a period of six (6)
consecutive months, but only to the extent that such definition does not violate
the Americans with Disabilities Act. Notwithstanding the foregoing, for purposes
of distributions of Post-December 31, 2003 Deferrals under Section 4.5,
Disability shall be limited to any medically determinable mental or physical
impairment, which can be expected to result in death or to last for a continuous
period of not less than twelve (12) months, rendering a Participant (i) unable
to engage in any substantial gainful activity, or (ii) eligible to receive
income replacement benefits for a period of not less than three (3) months under
the Company's accident and health plan, if any.
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1.28 "Disability Benefit" shall mean the benefit set forth in Section 4.5.
1.29 "Election Form" shall mean the form established from time to time by
the Administrator that a Participant completes, signs and returns to the
Administrator to make an election under the Plan.
1.30 "Employee" shall mean a person who is an employee of any Employer.
1.31 "Employer(s)" shall mean the Company and/or any of its subsidiaries
(now in existence or hereafter formed or acquired) that have been selected by
the Board to participate in the Plan and have adopted the Plan as a sponsor.
1.32 "ERISA" shall mean the Employee Retirement Income Security Act of
1974, as it may be amended from time to time. Reference to a section of ERISA
shall include that section and any comparable section or sections of any future
legislation that amends, supplements or supersedes such section.
1.33 "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended. Reference to a section of the Exchange Act shall include that section
and any comparable section or sections of any future legislation that amends,
supplements or supersedes such section.
1.34 "Excise Tax Limitation" shall mean the following described limitation
on a benefit that may otherwise be distributable pursuant to the provisions of
this Plan. Except as otherwise provided, this limitation shall be applied to all
distributions that are "subject to the Excise Tax Limitation" under this Plan,
other than Post-December 31, 2004 Deferrals. If an Employer determines in good
faith that there is a reasonable likelihood that any distribution to be paid to
a Participant pursuant to this Plan (other than a distribution of Post-December
31, 2004 Deferrals) would not be deductible by the Employer solely because all
or a portion of the distribution would constitute an "excess parachute payment"
within the meaning of Code Section 280G, as determined consistent with the
proposed regulations issued by the Internal Revenue Service under Code Section
280G, then to the extent deemed necessary by the Employer to ensure that the
entire amount of any distribution to the Participant pursuant to this Plan is
deductible, the Employer may defer all or any portion of a distribution under
this Plan. Any amounts deferred pursuant to this limitation shall continue to be
credited/debited with additional amounts in accordance with Section 3.6 below.
The amounts so deferred and amounts credited thereon shall be distributed to the
Participant or his or her Beneficiary (in the event of the Participant's death)
at the earliest possible date, as determined by the Employer in good faith, on
which the deductibility of compensation paid or payable to the Participant for
the taxable year of the Employer during which the distribution is made will not
be limited or, if earlier, the date that is twenty-four (24) months following
the date on which the distribution was first distributable to the Participant
pursuant to the provisions of this Plan.
1.35 "Fixed Date Payout" shall mean the payout set forth in Section 4.1.
1.36 "Fixed Date Payout Account Balance" shall mean, with respect to a
Participant, a credit on the records of the Employer equal to the sum of (i) the
amount deferred by the Participant and/or Employer contributions made on his or
her behalf and with respect to which a Fixed Date Payout was elected, plus (ii)
amounts credited or debited in the manner provided in Section 3.6 on such
amount. The Fixed Date Payout Account Balance shall be a bookkeeping entry only
and shall be utilized solely as a device for the measurement and determination
of the amounts to be paid to a Participant, or his or her designated
Beneficiary, pursuant to this Plan.
1.37 "Key Employee" shall mean any Employee who would qualify as a "key
employee" within the meaning of Code Section 416(i), without regard to Paragraph
5 thereof.
1.38 "Measurement Fund" shall mean the investment fund or funds selected
by the Administrator from time to time.
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1.39 "Non-Employee Director" shall mean a Director who is not an Employee
of the Company.
1.40 "Participant" shall mean any Employee or Director (i) who is selected
to participate in the Plan, (ii) who elects to participate in the Plan, (iii)
who signs an Election Form and a Beneficiary Designation Form, (iv) whose signed
Election Form and Beneficiary Designation Form are accepted by the
Administrator, and (v) who commences participation in the Plan. A spouse or
former spouse of a Participant shall not be treated as a Participant in the Plan
or have an account balance under the Plan, even if he or she has an interest in
the Participant's benefits under the Plan as a result of applicable law or
property settlements resulting from legal separation or divorce.
1.41 "Plan" shall mean the Neurocrine Biosciences, Inc. 2005 Nonqualified
Deferred Compensation Plan, which shall be evidenced by this instrument, as
amended from time to time.
1.42 "Plan Year" shall mean a period beginning on January 1 of each
calendar year and continuing through December 31 of such calendar year.
1.43 "Post-December 31, 2004 Deferrals" means any portion of a
Participant's Accounts which as of December 31, 2004 were not earned and vested
within the meaning of Internal Revenue Service Notice 2005-1. Post-December 31,
2004 Deferrals shall be subject to Code Section 409A and any regulations
promulgated thereunder. Portions of a Participant's Account that were earned and
vested as of December 31, 2004 within the meaning of Internal Revenue Service
Notice 2005-1, together with any earnings on such amounts, shall not be
Post-December 31, 2004 Deferrals and shall not be subject to Code Section 409A
and any regulations promulgated thereunder. "Pre-Retirement Survivor Benefit"
shall mean the benefit set forth in Section 4.3.
1.45 "Retirement", "Retire(s)" or "Retired" shall mean, with respect to an
Employee, severance from employment from all Employers, and with respect to a
Director who is not an Employee, severance of his or her directorships with all
Employers, for any reason other than a leave of absence, death or Disability on
or after the earlier of the attainment of (a) age sixty-five (65) or (b) age
fifty-five (55) with a minimum of ten (10) Years of Service. If a Participant is
both an Employee and a Director, Retirement shall not occur until he or she
Retires as both an Employee and a Director. Notwithstanding the foregoing, for
purposes of distributions of Post-December 31, 2004 Deferrals, "Retirement"
shall be deemed to mean such severance from employment and/or directorship as
would otherwise constitute a "separation from service" within the meaning of
Code Section 409A(a)(2)(A)(i) and any regulations promulgated thereunder.
1.46 "Retirement Benefit" shall mean the benefit set forth in Section 4.2.
1.47 "Rule 16b-3" shall mean that certain Rule 16b-3 under the Exchange
Act, as such Rule may be amended from time to time.
1.48 "Securities Act" shall mean the Securities Act of 1933, as amended.
1.49 "Stock" shall mean Neurocrine Biosciences, Inc. common stock.
1.50 "Termination Benefit" shall mean the benefit set forth in Section
4.4.
1.51 "Termination of Employment" shall mean the severing of employment
with all Employers, or service as a Director of all Employers, voluntarily or
involuntarily, for any reason other than Retirement, Disability, death or an
authorized leave of absence. If a Participant is both an Employee and a
Director, a Termination of Employment shall occur only upon the termination of
the last position held. Notwithstanding the foregoing, with respect to
distributions of Post-December 31, 2004 Deferrals "Termination of Employment"
shall be deemed to mean such terminations of employment and/or
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directorship as would otherwise constitute a "separation from service" within
the meaning of Code Section 409A(a)(2)(A)(i) and any regulations promulgated
thereunder.
1.52 "Trust" shall mean one or more trusts established pursuant to that
certain Trust Agreement, dated as of January 1, 2004, between the Company and
the trustee named therein, as amended from time to time.
1.53 "Unforeseeable Financial Emergency" shall mean an unanticipated
emergency that is caused by an event beyond the control of the Participant that
would result in severe financial hardship to the Participant not covered by
insurance, liquidation of other assets (to the extent the liquidation itself
will not cause severe financial hardship or cessation of deferrals under this
Plan, resulting from (i) a sudden and unexpected illness or accident of the
Participant or a dependent (as defined in Section 152(a) of the Code) of the
Participant, (ii) a loss of the Participant's property due to casualty, or (iii)
such other extraordinary and unforeseeable circumstances arising as a result of
events beyond the control of the Participant, all as determined in the sole
discretion of the Administrator.
1.54 "Years of Service" shall mean each twelve (12) month period during
which a Participant is employed by an Employer, whether or not continuous, and
including periods commencing prior to the effective date of this Plan; provided,
however, that in the case of a Participant whose employment with an Employer has
been interrupted by a period of twelve (12) consecutive months or more (a "Break
in Service"), his or her Years of Service prior to such Break in Service shall
be disregarded for any purpose under the Plan.
ARTICLE 2.
SELECTION, ENROLLMENT, ELIGIBILITY
2.1 Selection by Administrator. Participation in the Plan shall be limited
to a select group of management and highly compensated Employees and
Non-Employee Directors of the Employers, as determined by the Administrator in
its sole discretion. Subject to the requirements of Article 11, from that group,
the Administrator shall select, in its sole discretion, Employees and
Non-Employee Directors to participate in the Plan.
2.2 Enrollment Requirements. As a condition to participation, each
selected Employee or Non-Employee Director shall complete, execute and return to
the Administrator an Election Form and a Beneficiary Designation Form. In
addition, the Administrator shall establish from time to time such other
enrollment requirements as it determines in its sole discretion are necessary.
2.3 Eligibility; Commencement of Participation. Provided an Employee or
Non-Employee Director selected to participate in the Plan has met all enrollment
requirements set forth in this Plan and required by the Administrator, including
returning all required documents to the Administrator within the specified time
period, that Employee or Non-Employee Director shall commence participation in
the Plan on the day on which his or her Election Form first becomes effective or
the date on which a contribution is first credited to his or her Company
Contribution Account or Company Matching Account, whichever occurs first.
2.4 Termination of Participation and/or Deferrals. If the Administrator
determines in good faith that a Participant no longer qualifies as a member of a
select group of management or highly compensated Employees, as membership in
such group is determined in accordance with Sections 201(2), 301(a)(3) and
401(a)(1) of ERISA, or as a Non-Employee Director, the Administrator shall have
the right, in its sole discretion, to (a) terminate any deferral election the
Participant has made for the remainder of the Plan Year in which the
Participant's membership status changes, (b) prevent the Participant from making
future deferral elections and/or (c) other than with respect to Post-December
31, 2004 Deferrals, immediately distribute the Participant's then Account
Balance as a Termination Benefit and terminate the Participant's participation
in the Plan.
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ARTICLE 3.
DEFERRAL COMMITMENTS/COMPANY CONTRIBUTIONS/CREDITING/TAXES
3.1 Election to Defer; Effect of Election Form. Subject to the terms and
conditions set forth herein and such terms and conditions as the Administrator
may determine, Participants may elect to defer Base Annual Salary, Annual Bonus
and/or Director Fees by timely completing and delivering to the Administrator an
Election Form prior to the beginning of each Plan Year during such period as may
be established by the Administrator in its discretion for such elections. After
a Plan Year commences, such deferral election shall be irrevocable and shall
continue for the entire Plan Year and subsequent years unless otherwise provided
in this Plan; provided, however, that a deferral election shall terminate upon
the execution and timely submission of a newly completed Election Form during a
subsequent election period or Termination of Employment.
(a) Base Annual Salary, Annual Bonus and/or Director Fees. Subject
to any terms and conditions imposed by the Administrator, Participants may
elect to defer, under the Plan, Base Annual Salary, Annual Bonus and/or
Director Fees. For these elections to be valid with respect to deferrals
of Base Annual Salary, Annual Bonus and/or Director Fees, the Election
Form must be completed and signed by the Participant, timely delivered to
the Administrator no later than December 31 of the year immediately
preceding the Plan Year for which the deferral election is to be effective
and accepted by the Administrator. If no such Election Form is timely
delivered for a Plan Year, the Annual Deferral Amount shall be zero for
that Plan Year.
(b) Performance-based Compensation. Notwithstanding the foregoing
and subject to any terms and conditions imposed by the Administrator, in
the case of any performance-based compensation within the meaning of Code
Section 409A(a)(4)(B)(iii) that is a Post-December 31, 2004 Deferral and
deferrable under this Plan, which compensation is based on services
performed for a period of at least twelve (12) months, Participants may
elect to defer such compensation by timely completing and delivering to
the Administrator an Election Form no later than six (6) months before the
end of such service period during such period as may be established by the
Administrator in its discretion for such elections.
(c) First Plan Year. Notwithstanding the foregoing, in the case of
the first Plan Year in which a Participant becomes eligible to participate
in this Plan, elections may be made with respect to services to be
performed subsequent to such election within thirty (30) days after the
date the Participant becomes eligible to participate in this Plan.
(d) Redeferral. A Participant may annually change his or her
election to an allowable alternative payout method by submitting a new
Election Form to the Administrator during such period as may be
established by the Administrator in its discretion for such elections,
provided, however, that such change shall not be given any effect until at
least twelve (12) months after the date on which the new election is made
and only if such new Election Form is submitted to and accepted by the
Administrator in its sole discretion at least thirteen (13) months prior
to the scheduled payout date of the distribution to be modified. The
Election Form most recently accepted by the Administrator shall govern the
payout of the Participant's benefits under the Plan.
3.2 Minimum Deferrals.
(a) Annual Minimum. For each Plan Year, the annual aggregate minimum
deferral amount for each Participant is $5,000. If an election is made for
less than such minimum amount, or if no election is made, the amount
deferred shall be zero.
(b) Short Plan Year. Notwithstanding the foregoing, if a Participant
first becomes a Participant after the first day of a Plan Year the minimum
Base Annual Salary deferral shall be an amount equal to the minimum set
forth above, multiplied by a fraction, the numerator of which is
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the number of complete months remaining in the Plan Year and the
denominator of which is twelve (12).
3.3 Maximum Deferral. For each Plan Year, a Participant may elect to
defer, as his or her Annual Deferral Amount, up to one hundred percent (100%) of
his or her Base Annual Salary, Annual Bonus and/or Director Fees. A
Participant's Annual Deferral Amount may be automatically reduced if the
Administrator determines that such action is necessary to meet federal or state
tax withholding obligations.
3.4 Accounts; Crediting of Deferrals. Solely for record keeping purposes,
the Administrator shall establish a Deferral Account, a Company Contribution
Account and a Company Matching Account for each Participant. A Participant's
Accounts shall be credited with the deferrals made by him or her or on his or
her behalf by his or her Employer under this Article 3 and shall be credited (or
charged, as the case may be) with the hypothetical or deemed investment earnings
and losses determined pursuant to Section 3.6, and charged with distributions
made to or with respect to him or her.
(a) Annual Deferral Amounts. For each Plan Year, the Base Annual
Salary portion of the Annual Deferral Amount shall be withheld and
credited to the Participant's Deferral Account at the time of each
regularly scheduled Base Annual Salary payroll in either the percentages
or dollar amounts specified by the Participant in the Election Form, as
adjusted from time to time for increases and decreases in Base Annual
Salary. The Annual Bonus and/or Director Fees portion of the Annual
Deferral Amount shall be withheld and credited to the Participant's
Deferral Account at the time the Annual Bonus and/or Director Fees are or
otherwise would be paid to the Participant, whether or not this occurs
during the Plan Year itself.
(b) Annual Company Contribution Amount. For each Plan Year, an
Employer, in its sole discretion, may, but is not required to, credit any
amount it desires to any Participant's Company Contribution Account under
this Plan, which amount shall be for that Participant the Annual Company
Contribution Amount for that Plan Year. The amount so credited to a
Participant may be smaller or larger than the amount credited to any other
Participant, and the amount credited to any Participant for a Plan Year
may be zero, even though one or more other Participants receive an Annual
Company Contribution Amount for that Plan Year. The Annual Company
Contribution Amount, if any, shall be credited to Participants' Company
Contribution Accounts on the date declared by the Employer.
(c) Annual Company Matching Amount. For each Plan Year, an Employer,
in its sole discretion, may, but is not required to, credit any amount it
desires to any Participant's Company Matching Account under this Plan,
which amount shall be for that Participant the Annual Company Matching
Amount for that Plan Year. The amount so credited to a Participant may be
smaller or larger than the amount credited to any other Participant, and
the amount credited to any Participant for a Plan Year may be zero, even
though one or more other Participants receive an Annual Company
Contribution Amount for that Plan Year. The Annual Company Contribution
Amount, if any, shall be credited to Participants' Company Matching
Accounts on the date declared by the Employer.
3.5 Vesting.
(a) A Participant shall at all times be one hundred percent (100%)
vested in his or her Deferral Account.
(b) Employer contributions credited to a Participant's Company
Contribution Account under Section 3.4(b) of the Plan or to a
Participant's Company Matching Account under Section 3.4(c) of the Plan
and any hypothetical or deemed investment earnings and losses
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attributable to these contributions shall become vested or nonforfeitable
as determined by the Administrator from time to time. The vesting schedule
may vary among Participants.
(c) In addition, a Participant shall be one hundred percent (100%)
vested in his or her Company Contribution Account and Company Matching
Account, including any deemed investment earnings and losses attributable
to these accounts, immediately prior to the effective date of a Change in
Control, immediately upon his or her death and immediately upon his or her
Termination of Employment as a result of Disability. In the event of a
Participant's Termination of Employment, other than by reason of his or
her death or Disability, prior to the date on which all Employer
contributions in such Participant's Company Contribution Account and
Company Matching Account have vested pursuant to this Section 3.5, the
unvested portion of such Employer contributions shall be forfeited and no
Employer or the Plan shall be liable for the payment of such unvested
amounts under the Plan to such Participant. Any amounts credited to a
Participant's Company Contribution Account and Company Matching Account by
his or her Employer on his or her behalf which are forfeited by such
Participant pursuant to the preceding sentence shall cease to be
liabilities of the Employer or the Plan and such amounts shall be
immediately debited from the Participant's Company Contribution Account
and Company Matching Account and credited to such Employer.
3.6 Earnings Credits or Losses. In accordance with, and subject to, the
rules and procedures that are established from time to time by the
Administrator, in its sole discretion, amounts shall be credited or debited to a
Participant's Account Balance in accordance with the following rules:
(a) Election of Measurement Funds. A Participant, in connection with
his or her initial deferral election in accordance with Section 3.1 above,
shall elect, on the Election Form, one or more Measurement Fund(s) (as
described in Section 3.6(c) below) to be used to determine the additional
amounts to be credited (or charged, as the case may be) to his or her
Account Balance, unless changed in accordance with the next sentence. The
Participant may (but is not required to) elect, by submitting an Election
Form to the Administrator that is accepted by the Administrator, to add or
delete one or more Measurement Fund(s) to be used to determine the
additional amounts to be credited (or charged, as the case may be) to his
or her Account Balance, or to change the portion of his or her Account
Balance allocated to each previously or newly elected Measurement Fund. If
an election is made in accordance with the previous sentence, it shall
become effective as soon as administratively practicable and shall
continue thereafter until changed in accordance with the previous
sentence. Changes may be made to allocations at any time during the Plan
Year.
(b) Proportionate Allocation. In making any election described in
Section 3.6(a) above, the Participant shall specify on the Election Form,
in increments of whole percentage points (1%), the percentage of his or
her Account Balance to be allocated to a Measurement Fund (as if the
Participant was making an investment in that Measurement Fund with that
portion of his or her Account Balance).
(c) Measurement Funds. The Administrator shall from time to time
select types of Measurement Funds and specific Measurement Funds for
deemed investment designation by Participants for the purpose of crediting
or charging hypothetical or deemed investment earnings and losses to his
or her Account Balance, including, without limitation, a Company Stock
Measurement Fund. As necessary, the Administrator may, in its sole
discretion, discontinue, substitute or add a Measurement Fund. The
Administrator shall notify the Participants of the types of Measurement
Funds and the specific Measurement Funds selected from time to time.
(d) Crediting or Debiting Method. The performance of each elected
Measurement Fund (either positive or negative) will be determined by the
Administrator, in its sole discretion, based on the performance of the
Measurement Funds themselves. A Participant's Account
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Balance shall be credited or debited as frequently as is administratively
feasible, but no less often than monthly, based on the performance of each
Measurement Fund selected by the Participant, as determined by the
Administrator in its sole discretion.
(e) No Actual Investment. Notwithstanding any other provision of
this Plan that may be interpreted to the contrary, the Measurement Funds
are to be used for measurement purposes only, and a Participant's election
of any such Measurement Fund, the allocation to his or her Account Balance
thereto, the calculation of additional amounts and the crediting or
debiting of such amounts to a Participant's Account Balance shall not be
considered or construed in any manner as ----- --- an actual investment of
his or her Account Balance in any such Measurement Fund. In the event that
the Company or the Trustee (as that term is defined in the Trust), in its
own discretion, decides to invest funds in any or all of the Measurement
Funds, no Participant shall have any rights in or to such investments
themselves. Without limiting the foregoing, a Participant's Account
Balance shall at all times be a bookkeeping entry only and shall not
represent any investment made on his or her behalf by the Employer or the
Trust; the Participant shall at all times remain an unsecured creditor of
the Employers. Any liability of an Employer to any Participant, former
Participant, or Beneficiary with respect to a right to payment shall be
based solely upon contractual obligations created by the Plan. The
Company, the Board, the Administrator, any Employer and any individual or
entity shall not be deemed to be a trustee of any amounts to be paid under
the Plan. Nothing contained in the Plan, and no action taken pursuant to
its provisions, shall create or be construed to create a trust of any
kind, or a fiduciary relationship, between the Company and an Employer and
a Participant, former Participant, Beneficiary or any other individual or
entity. Neither the Company nor any Employer in any way guarantees any
Participant's Account Balance against loss or depreciation, whether caused
by poor investment performance, insolvency of a deemed investment or by
any other event or occurrence. In no event shall any Employee, officer,
Director or stockholder of the Company or any Employer be liable to any
individual or entity on account of any claim arising by reason of the Plan
provisions or any instrument or instruments implementing its provisions,
or for the failure of any Participant, Beneficiary or other individual or
entity to be entitled to any particular tax consequences with respect to
the Plan or any credit or payment hereunder.
(f) Company Contribution Accounts. Notwithstanding any other
provision of this Plan to the contrary, Company Contribution Amounts may
only be allocated to the Measurement Funds designated by the Administrator
from time to time, in its sole discretion.
3.7 Distributions. Any distribution with respect to a Participant's
Account Balance shall be charged to the appropriate account as of the date such
payment is made by the Employer or the trustee of the Trust which may be
established for the Plan.
ARTICLE 4.
DISTRIBUTIONS
4.1 Fixed Date Payout.
(a) Election of Fixed Date Payout. In connection with each Election
Form, a Participant may irrevocably elect to receive a future "Fixed Date
Payout" from the Plan of his or her vested Fixed Date Payout Account
Balance. Subject to the Deduction Limitation and the other terms and
conditions of this Plan, each Fixed Date Payout elected shall be paid out
no earlier than five (5) years from January 1 of the Plan Year following
the Plan Year in which the Annual Deferral Amount is actually deferred or
the Employer contribution is actually credited to the Participant's
account, but in no event later than the date on which the Participant
reaches age seventy (70) (the "Earliest Fixed Date Payout Date"). By way
of example, if a five (5) year Fixed Date Payout is elected for Annual
Deferral Amounts that are deferred in the Plan Year commencing January 1,
2003, the five (5) year Fixed Date Payout would become payable no
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earlier than January 1, 2009. A Participant shall elect on each Election
Form on which a Fixed Date Payout is elected to receive the Fixed Date
Payout Account Balance applicable to such election in a lump sum or
pursuant to an Annual Installment Method over a period of up to fifteen
(15) years. If a Participant does not elect to have his or her Fixed Date
Payout Account Balance paid in accordance with the Annual Installment
Method, then such benefit shall be payable in a lump sum. The lump sum
payment shall be made no later than sixty (60) days after the last day of
any Plan Year designated by the Participant that is after the Earliest
Fixed Date Payout Date. Any payment made shall be subject to the Deduction
Limitation.
(b) Redeferrals. A Participant may modify the date on which any such
Fixed Date Payout is to be paid or revoke a previous election with respect
thereto by submitting a new Election Form; provided that any such
modification or revocation shall not be given any effect until at least
twelve (12) months after the date on which the new election is made and
only if (i) such new Election Form is submitted to and accepted by the
Administrator in its sole discretion at least thirteen (13) months prior
to the scheduled payout date of the distribution to be modified or revoked
and (ii) any new payout date designated in such form is at least five (5)
years following the scheduled payout date of the distribution to be
deferred.
(c) Other Benefits Take Precedence Over Fixed Date. Should an event
occur that triggers a benefit under Section 4.2, 4.3, 4.4, 4.5 or 4.6, any
Fixed Date Payout Account Balance that is subject to a Fixed Date Payout
election under Section 4.1 shall not be paid in accordance with Section
4.1 but shall be paid in accordance with the other applicable Section.
4.2 Retirement Benefit.
(a) Retirement Benefit. A Participant who Retires shall receive, as
a Retirement Benefit, his or her Account Balance. A Participant, in
connection with his or her commencement of participation in the Plan,
shall elect on an Election Form to receive the Retirement Benefit in a
lump sum or pursuant to an Annual Installment Method over a period of up
to fifteen (15) years. If a Participant does not make any election with
respect to the payment of the Retirement Benefit, then such benefit shall
be payable in a lump sum. The lump sum payment shall be made, or
installment payments shall commence, no later than sixty (60) days after
the date the Participant Retires. Any payment made (other than payment of
a Post-December 31, 2004 Deferral) shall be subject to the Deduction
Limitation.
(b) Death Prior to Completion of Retirement Benefit. If a
Participant dies after Retirement but before the Retirement Benefit is
paid in full, the Participant's unpaid Retirement Benefit payments shall
continue and shall be paid to the Participant's Beneficiary in a lump sum
that is equal to the Participant's unpaid remaining vested Account Balance
as of the date of the Participant's death; provided that payment of
amounts that are Post-December 31, 2004 Deferrals shall be continue to be
made pursuant to the form elected in connection with the Participant's
commencement of participation in the Plan on an Election Form. Any lump
sum payment shall be made no later than sixty (60) days after the date of
the Participant's death. Any payment made (other than payment of a
Post-December 31, 2004 Deferral) shall be subject to the Deduction
Limitation.
(c) Key Employees. Notwithstanding any provision in Section 4.2(a)
above, if a Participant is a Key Employee as of the date of his or her
Retirement, solely with regard to Post-December 31, 2004 Deferrals, if
any, the lump sum payment shall be made, or installment payments shall
commence, no earlier than six (6) months after the date of the
Participant's Retirement.
4.3 Pre-Retirement Survivor Benefit. If a Participant dies before he or
she receives complete payment of benefits pursuant to this Article 4, such
Participant's Beneficiary shall receive a
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Pre-Retirement Survivor Benefit equal to the Participant's vested Account
Balance as of the date of the Participant's death (after giving effect to any
accelerated vesting as a result of the Participant's death pursuant to Section
3.5). The Pre-Retirement Survivor Benefit shall be paid to the Participant's
Beneficiary in a lump sum; provided that payment of amounts that are
Post-December 31, 2004 Deferrals shall be continue to be made pursuant to the
form elected in connection with the Participant's commencement of participation
in the Plan on an Election Form.. Any lump sum payment shall be made no later
than sixty (60) days after the date of the Participant's death. Any payment made
(other than payment of a Post-December 31, 2004 Deferral) shall be subject to
the Deduction Limitation.
4.4 Termination Benefit.
(a) Termination Other Than For Cause. If a Participant experiences a
Termination of Employment for any reason other than as a result of a
termination by the Company for Cause prior to his or her becoming entitled
to receive benefits by reason of any other sections of this Article 4,
such Participant shall receive a Termination Benefit, which shall be equal
to the Participant's vested Account Balance as of the date on which he or
she experiences a Termination of Employment. A Participant, in connection
with his or her commencement of participation in the Plan, shall elect on
an Election Form to receive the Termination Benefit pursuant to this
Section 4.4(a) in a lump sum or pursuant to an Annual Installment Method
over a period of up to fifteen (15) years. If a Participant does not make
any election with respect to the payment of the Termination Benefit
pursuant to this Section 4.4(a), then such benefit shall be payable in a
lump sum. The lump sum payment shall be made, or installment payments
shall commence, no later than sixty (60) days after the date of the
Participant experiences a Termination of Employment. Any payment made
(other than payment of a Post-December 31, 2004 Deferral) shall be subject
to the Deduction Limitation.
(b) Termination For Cause. If a Participant experiences a
Termination of Employment as a result of a termination by the Company for
Cause prior to his or her becoming entitled to receive benefits by reason
of any other sections of this Article 4, such Participant shall receive a
Termination Benefit, which shall be equal to the Participant's vested
Account Balance as of the date on which he or she experiences a
Termination of Employment. The Termination Benefit pursuant to this
Section 4.4(b) shall be paid in a lump sum. The lump sum payment shall be
made no later than sixty (60) days after the date of the Participant's
Termination of Employment. Any payment made (other than payment of a
Post-December 31, 2004 Deferral) shall be subject to the Deduction
Limitation.
(c) Key Employees. Notwithstanding any other provision in this
Section 4.4, if Participant is a Key Employee as of the date of his or her
Termination of Employment, solely with regard to Post-December 31, 2004
Deferrals, if any, the lump sum payment shall be made, or installment
payments shall commence, no earlier than six (6) months after the date of
the Participant's Termination of Employment.
4.5 Disability Benefit. In the event of the Participant's Termination of
Employment as a result of his or her Disability, as determined by the
Administrator, the Participant shall receive a Disability Benefit, which shall
be equal to the Participant's vested Account Balance as of the date on which he
or she experiences a Termination of Employment (after giving effect to any
accelerated vesting as a result of the Participant's Disability pursuant to
Section 3.5). A Participant, in connection with his or her commencement of
participation in the Plan, shall elect on an Election Form to receive the
Disability Benefit in a lump sum or pursuant to an Annual Installment Method
over a period of up to fifteen (15) years; provided, however, that
notwithstanding a Participant's election, other than with respect to
Post-December 31, 2004 Deferrals the Administrator may decide, in its sole
discretion, the manner in which such Disability Benefit shall be paid. If a
Participant does not make any election with respect to the payment of the
Disability Benefit, then the Participant shall be deemed to have elected to have
the Disability Benefit paid in a lump sum. The lump sum payment shall be made,
or installment payments shall commence, no
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later than sixty (60) days after the date of the Participant's Termination of
Employment. Any payment made (other than payment of a Post-December 31, 2004
Deferral) shall be subject to the Deduction Limitation.
4.6 Change in Control Benefit.
(a) Change in Control Benefit. The Committee may, in its sole
discretion, determine that a Participant shall receive a Change in Control
Benefit, which shall be equal to the Participant's vested Account Balance
in the event of a Change in Control (after giving effect to any
accelerated vesting as a result of the Participant's Disability pursuant
to Section 3.5). A Participant's Change in Control Benefit shall be paid
in a lump sum. The lump sum payment shall be made immediately prior to the
Change in Control. Any payment made shall be subject to the Deduction
Limitation and the Excise Tax Limitation. With respect to Post-December
31, 2004 Deferrals, any Change in Control Benefit that the Committee
determines to pay must be made within twelve (12) months after a Change in
Control and shall result in a termination of the Plan.
(b) Change in Control Benefit to Take Precedence Over Other
Benefits. Should the Committee decide to pay a Change in Control Benefit,
any Annual Deferral Amount other than a Post-December 31, 2004 Deferral,
plus amounts credited or debited thereon, that is subject to an existing
payout under Section 4.1, 4.2, 4.3, 4.4 or 4.5 shall not be paid in
accordance with such Section but shall be paid in accordance with this
Section 4.6. Payments of Post-December 31, 2004 Deferrals shall not be
accelerated as a result of this Section 4.6.
ARTICLE 5.
UNFORESEEABLE FINANCIAL EMERGENCIES; WITHDRAWAL ELECTION
5.1 Withdrawal Payout/Suspensions for Unforeseeable Financial Emergencies.
If a Participant experiences an Unforeseeable Financial Emergency, the
Participant may petition the Administrator to (i) suspend any deferrals required
to be made by a Participant and/or (ii) receive a partial or full payout from
the Plan. The payout shall not exceed the lesser of the Participant's vested
Account Balance, calculated as if such Participant were receiving a Termination
Benefit, or the amount reasonably needed to satisfy the Unforeseeable Financial
Emergency. If, subject to the sole discretion of the Administrator, the petition
for a suspension and/or payout is approved, suspension shall take effect upon
the date of approval and any payout shall be made within sixty (60) days of the
date of approval. The payment of any amount under this Section 5.1 (other than
payment of Post-December 31, 2004 Deferrals) shall be subject to the Deduction
Limitation. Once the payout is paid, the Participant shall not be eligible to
participate in the Plan for the remainder of the Plan Year during which the
payout is paid and the subsequent Plan Year.
5.2 Withdrawal Election. . A Participant (or, after a Participant's death,
his or her Beneficiary) may elect, at any time, to withdraw all or a portion of
his or her vested Account Balance (other than any Post-December 31, 2004
Deferrals), calculated as if there had occurred a Termination of Employment as
of the day of the election, less a withdrawal penalty equal to ten percent (10%)
of such amount (the net amount shall be referred to as the "Withdrawal Amount").
This election can be made at any time. The Participant (or his or her
Beneficiary) shall make this election by giving the Administrator advance
written notice of the election in a form determined from time to time by the
Administrator. The Participant (or his or her Beneficiary) shall be paid the
Withdrawal Amount within sixty (60) days of his or her election. Once the
Withdrawal Amount is paid, the Participant's participation in the Plan shall
terminate and the Participant shall not be eligible to participate in the Plan
for the remainder of the Plan Year during which the Withdrawal Amount is paid
and the subsequent Plan Year. The payment of this Withdrawal Amount shall be
subject to the Deduction Limitation.
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ARTICLE 6.
BENEFICIARY DESIGNATION
6.1 Beneficiary. Each Participant shall have the right, at any time, to
designate his or her Beneficiary(ies) (both primary as well as contingent) to
receive any benefits payable under the Plan to a beneficiary upon the death of a
Participant. The Beneficiary designated under this Plan may be the same as or
different from the Beneficiary designation under any other plan of an Employer
in which the Participant participates.
6.2 Beneficiary Designation; Change. A Participant shall designate his or
her Beneficiary by completing and signing the Beneficiary Designation Form, and
returning it to the Administrator or its designated agent. A Participant shall
have the right to change a Beneficiary by completing, signing and otherwise
complying with the terms of the Beneficiary Designation Form and the
Administrator's rules and procedures, as in effect from time to time. Upon the
acceptance by the Administrator of a new Beneficiary Designation Form, all
Beneficiary designations previously filed shall be canceled. The Administrator
shall be entitled to rely on the last Beneficiary Designation Form filed by the
Participant and accepted by the Administrator prior to his or her death.
6.3 No Beneficiary Designation. If a Participant fails to designate a
Beneficiary as provided in Sections 6.1 and 6.2 above or, if all designated
Beneficiaries predecease the Participant or die prior to complete distribution
of the Participant's benefits, then the Participant's designated Beneficiary
shall be deemed to be his or her surviving spouse. If the Participant has no
surviving spouse, the benefits remaining under the Plan to be paid to a
Beneficiary shall be payable to the executor or personal representative of the
Participant's estate.
6.4 Doubt as to Beneficiary. If the Administrator has any doubt as to the
proper Beneficiary to receive payments pursuant to this Plan, the Administrator
shall have the right, exercisable in its discretion, to cause the Participant's
Employer to withhold such payments until this matter is resolved to the
Administrator's satisfaction.
6.5 Discharge of Obligations. The payment of benefits under the Plan to a
Beneficiary shall fully and completely discharge all Employers and the
Administrator from all further obligations under this Plan with respect to the
Participant, and that Participant's Election Form shall terminate upon such full
payment of benefits.
ARTICLE 7.
LEAVE OF ABSENCE
7.1 Paid Leave of Absence. If a Participant is authorized by the
Participant's Employer for any reason to take a paid leave of absence from the
employment of the Employer, the Participant shall continue to be considered
employed by the Employer and the Annual Deferral Amount shall continue to be
withheld during such paid leave of absence in accordance with Section 3.4;
provided however, that this Section 7.1 shall not be effective with respect to
Post-December 31, 2004 Deferrals to the extent that such leave of absence
constitutes a "separation from service" within the meaning of Code Section
409A(a)(2)(A)(i) and any regulations promulgated thereunder.
7.2 Unpaid Leave of Absence; Disability Leave. If a Participant is
authorized by the Participant's Employer for any reason to take an unpaid leave
of absence from the employment of the Employer, or if a Participant is on leave
of absence as a result of his or her Disability, the Participant shall continue
to be considered employed by the Employer and the Participant shall be excused
from making deferrals until the earlier of the date the leave of absence expires
or the Participant returns to a paid employment status. Upon such expiration or
return, deferrals shall resume for the remaining portion of the Plan Year in
which the expiration or return occurs, based on the deferral election, if any,
made for that Plan Year. If no election was made for that Plan Year, no deferral
shall be withheld. Notwithstanding the
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foregoing, this Section 7.2 shall not be effective with respect to Post-December
31, 2004 Deferrals to the extent that such leave of absence constitutes a
"separation from service" within the meaning of Code Section 409A(a)(2)(A)(i)
and any regulations promulgated thereunder
ARTICLE 8.
TERMINATION, AMENDMENT OR MODIFICATION
8.1 Termination. Although each Employer anticipates that it will continue
the Plan for an indefinite period of time, there is no guarantee that any
Employer will continue the Plan or will not terminate the Plan at any time in
the future. Accordingly, each Employer reserves the right to discontinue its
sponsorship of the Plan and/or to terminate the Plan at any time with respect to
any or all of its participating Employees and Non-Employee Directors, by action
of its board of directors or similar governing body. Upon the termination of the
Plan with respect to any Employer, the participation of the affected
Participants who are employed by that Employer, or in the service of that
Employer as Directors, shall terminate and their Account Balances other than
Post-December 31, Deferrals determined as if they had experienced a Termination
of Employment on the date of Plan termination or, if Plan termination occurs
after the date upon which a Participant was eligible to Retire, then with
respect to that Participant as if he or she had Retired on the date of Plan
termination, shall, other than with respect to Post-December 31, 2004 Deferrals
be paid to the Participants in a lump sum within sixty (60) days following the
plan termination. Upon the Plan's termination, Post-December 31, 2004 Deferrals
shall be paid to Participants in accordance with the terms hereof in effect
immediately before such termination. The termination of the Plan shall not
adversely affect any Participant or Beneficiary who has become entitled to the
payment of any benefits under the Plan as of the date of termination; provided,
however, that other than with respect to Post-December 31, 2004 Deferrals the
Employer shall have the right to accelerate installment payments without a
premium or prepayment penalty by paying the Account Balance in a lump sum or
pursuant to an Annual Installment Method using fewer years (provided that the
present value of all payments that will have been received by a Participant at
any given point of time under the different payment schedule shall equal or
exceed the present value of all payments that would have been received at that
point in time under the original payment schedule).
8.2 Amendment. An Employer may, at any time, amend or modify the Plan in
whole or in part with respect to that Employer by the action of its board of
directors or similar governing body; provided, however, that no amendment or
modification shall be effective to decrease or restrict the value of a
Participant's Account Balance in existence at the time the amendment or
modification is made, calculated as if the Participant had experienced a
Termination of Employment as of the effective date of the amendment or
modification or, if the amendment or modification occurs after the date upon
which the Participant was eligible to Retire, the Participant had Retired as of
the effective date of the amendment or modification. The amendment or
modification of the Plan shall not affect any Participant or Beneficiary who has
become entitled to the payment of benefits under the Plan as of the date of the
amendment or modification; provided, however, that other than with respect to
Post-December 31, 2004 Deferrals the Employer shall have the right to accelerate
installment payments by paying the Account Balance in a lump sum or pursuant to
an Annual Installment Method using fewer years (provided that the present value
of all payments that will have been received by a Participant at any given point
of time under the different payment schedule shall equal or exceed the present
value of all payments that would have been received at that point in time under
the original payment schedule). Notwithstanding any provisions of this Section
8.2 to the contrary, the Committee may amend the Plan at any time, in any
manner, if the Committee determines any such amendment is required to ensure
that the Plan is characterized as providing deferred compensation for a select
group of management or highly compensated employees and as described in ERISA
Sections 201(2), 301(a)(3) and 401(a)(1) or to otherwise conform the Plan to the
provisions of any applicable law, including ERISA and the Code.
8.3 Effect of Payment. The full payment of the applicable benefit under
Article 4 of the Plan shall completely discharge all obligations to a
Participant and his or her designated Beneficiaries under this Plan.
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ARTICLE 9.
ADMINISTRATION
9.1 Administrator Duties. The Committee appointed pursuant to Section 9.3
shall be the Administrator and shall conduct the general administration of the
Plan in accordance with the Plan and shall have all the necessary power and
authority to carry out that function. Members of the Administrator may be
Participants under this Plan. Any individual serving on the Administrator who is
a Participant shall not vote or act on any matter relating solely to himself or
herself. Among the Committee's necessary powers and duties are the following:
(a) Except to the extent provided otherwise by Article 12, to
delegate all or part of its function as Administrator to others and to
revoke any such delegation.
(b) To determine questions of eligibility of Participants and their
entitlement to benefits, subject to the provisions of Articles 10 and 12.
(c) To select and engage attorneys, accountants, actuaries,
trustees, appraisers, brokers, consultants, administrators, physicians or
other persons to render service or advice with regard to any
responsibility the Administrator has under the Plan, or otherwise, to
designate such persons to carry out fiduciary responsibilities (other than
trustee responsibilities) under the Plan, and (with the Committee, the
Employers and their officers, Directors, trustees and Employees) to rely
upon the advice, opinions or valuations of any such persons, to the extent
permitted by law, being fully protected in acting or relying thereon in
good faith.
(d) To interpret the Plan for purpose of the administration and
application of the Plan, in a manner not inconsistent with the Plan or
applicable law and to amend or revoke any such interpretation.
(e) To conduct claims procedures as provided in Article 10.
9.2 Binding Effect of Decisions. The decision or action of the
Administrator with respect to any question arising out of or in connection with
the administration, interpretation and application of the Plan and the rules and
regulations promulgated hereunder shall be final and conclusive and binding upon
all persons having any interest in the Plan.
9.3 Committee. The Committee shall consist solely of two or more
Non-Employee Directors appointed by and holding office at the pleasure of the
Board, each of whom is both a "non-employee director" as defined by Rule 16b-3
and an "outside director" for purposes of Section 162(m) of the Code.
Appointment of Committee members shall be effective upon acceptance of
appointment. Committee members may resign at any time by delivering written
notice to the Board. Vacancies in the Committee may be filled by the Board.
9.4 Indemnification. All Employers shall indemnify and hold harmless any
of their officers, Directors, Committee members or Employees who are involved in
the administration of the Plan against any and all claims, losses, damages,
expenses or liabilities arising out of the good faith performance of their
administrative functions.
9.5 Employer Information To enable the Administrator to perform its
functions, each Employer shall supply full and timely information to the
Administrator on all matters relating to the compensation of its Participants,
the date and circumstances of the Retirement, Disability, death or Termination
of Employment of its Participants, and such other pertinent information as the
Administrator may reasonably require.
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ARTICLE 10.
CLAIMS PROCEDURES
10.1 Presentation of Claim. Any Participant or Beneficiary of a deceased
Participant (such Participant or Beneficiary being referred to below as a
"Claimant") may deliver to the Administrator a written claim for a determination
with respect to the amounts distributable to such Claimant from the Plan. The
claim must state with particularity the determination desired by the Claimant.
10.2 Notification of Decision. The Administrator shall consider a
Claimant's claim within a reasonable time, and shall notify the Claimant in
writing:
(a) that the Claimant's requested determination has been made, and
that the claim has been allowed in full; or
(b) that the Administrator has reached a conclusion contrary, in
whole or in part, to the Claimant's requested determination, and such
notice must set forth in a manner calculated to be understood by the
Claimant:
(i) the specific reason(s) for the denial of the claim, or
any part of it;
(ii) specific reference(s) to pertinent provisions of the
Plan upon which such denial was based;
(iii) a description of any additional material or information
necessary for the Claimant to perfect the claim, and an
explanation of why such material or information is
necessary; and
(iv) an explanation of the claim review procedure set forth
in Section 9.3 below, including a statement of the
Claimant's right to bring a civil action under Section
502(a) of ERISA following an adverse decision on review.
The notice of denial shall be given within a reasonable time period
but no later than ninety (90) days after the claim is filed, unless special
circumstances require an extension of time for processing the claim. If such
extension is required, written notice shall be furnished to the Claimant within
ninety (90) days of the date the claim was filed stating the special
circumstances requiring an extension of time and the date by which a decision on
the claim can be expected, which shall be no more than one hundred eighty (180)
days from the date the claim was filed.
10.3 Review of a Denied Claim. Within sixty (60) days after receiving a
notice from the Administrator that a claim has been denied, in whole or in part,
a Claimant (or the Claimant's duly authorized representative) may file with the
Administrator a written request for a review of the denial of the claim.
Thereafter, but not later than thirty (30) days after the review procedure
began, the Claimant (or the Claimant's duly authorized representative):
(a) may review and/or copy, free of charge, pertinent documents,
records and other information relevant to the Claimant's
claim;
(b) may submit issues, written comments or other documents,
records and information relating to the claim; and/or
(c) may request a hearing, which the Administrator, in its sole
discretion, may grant.
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10.4 Decision on Review. The Administrator shall render its decision on
review promptly, and not later than sixty (60) days after the filing of a
written request for review of the denial, unless a hearing is held or other
special circumstances require additional time, in which case the Administrator's
decision must be rendered within one hundred twenty (120) days after such date.
Such decision must be written in a manner calculated to be understood by the
Claimant, and it must contain:
(a) specific reasons for the decision;
(b) specific reference(s) to the pertinent Plan provisions upon
which the decision was based;
(c) a statement that the Claimant is entitled to receive upon
request and free of charge reasonable access to and copies of all
documents, records and other information relevant to the Claimant's claim
for benefits;
(d) a statement of the Claimant's right to bring a civil action
under Section 502(a) of ERISA following an adverse decision on review; and
(e) such other matters as the Administrator deems relevant.
10.5 Designation. The Administrator may designate any other person of its
choosing to make any determination otherwise required under this Article 10.
10.6 Arbitration.
(a) A Claimant whose appeal has been denied under Section 9.4 shall
have the right to submit said claim to final and binding arbitration
before a single arbitrator in San Diego, California, pursuant to the rules
of the American Arbitration Association. Any such requests for arbitration
must be filed by written demand to the American Arbitration Association
within sixty (60) days after receipt of the decision regarding the appeal.
The arbitrator's decision shall be final and binding upon the parties, and
may be entered and enforced in any court of competent jurisdiction by
either of the parties; provided, however, that the arbitrator shall not
have any power to alter, amend, modify or change any of the terms of this
Plan nor to grant any remedy which is either prohibited by the terms of
this Plan or not available in a court of law. The arbitrator shall have
the power to grant temporary, preliminary and permanent relief, including
without limitation, injunctive relief and specific performance.
(b) The Company will pay the direct costs and expenses of the
arbitration. The Claimant and the Company are responsible for their
respective attorneys' fees incurred in connection with the arbitration;
however, to the extent permitted by law, the arbitrator may, in his or her
discretion, award reasonable attorneys' fees to the prevailing party.
ARTICLE 11.
TRUST
11.1 Establishment of the Trust. The Company shall establish the Trust.
All benefits payable under this Plan to a Participant shall be paid directly by
the Employer(s) from the Trust. To the extent that such benefits are not paid
from the Trust, the benefits shall be paid from the general assets of the
Employer(s). The Trust, if any, shall be an irrevocable grantor trust which
conforms to the terms of the model trust as described in IRS Revenue Procedure
92-64, I.R.B. 1992-33. The assets of the Trust are subject to the claims of each
Employer's creditors in the event of its insolvency. Except as provided under
the Trust agreement, neither the Company nor an Employer shall be obligated to
set aside, earmark or escrow any funds or other assets to satisfy its
obligations under this Plan, and the Participant and/or his or her designated
Beneficiaries shall not have any property interest in any specific assets of the
Company
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or an Employer other than the unsecured right to receive payments from the
Employer, as provided in this Plan.
11.2 Interrelationship of the Plan and the Trust. The provisions of the
Plan shall govern the rights of a Participant to receive distributions pursuant
to the Plan. The provisions of the Trust shall govern the rights of the
Employers, Participants and the creditors of the Employers to the assets
transferred to the Trust. Each Employer shall at all times remain liable to
carry out its obligations under the Plan.
11.3 Investment of Trust Assets. The Trustee of the Trust shall be
authorized, upon written instructions received from the Administrator or
investment manager appointed by the Administrator, to invest and reinvest the
assets of the Trust in accordance with the applicable Trust Agreement, including
the disposition of Stock and reinvestment of the proceeds in one or more
investment vehicles designated by the Administrator.
11.4 Distributions From the Trust. Each Employer's obligations under the
Plan may be satisfied with Trust assets distributed pursuant to the terms of the
Trust, and any such distribution shall reduce the Employer's obligations under
this Plan.
ARTICLE 12.
PROVISIONS RELATING TO SECURITIES LAWS
12.1 Designation of Participants. With respect to any Employee or
Non-Employee Director who is then subject to Section 16 of the Exchange Act,
only the Committee may designate such Employee or Non-Employee Director as a
Participant in the Plan.
12.2 Action by Committee. With respect to any Participant who is then
subject to Section 16 of the Exchange Act, any function of the Administrator
under the Plan relating to such Participant shall be performed solely by the
Committee, if and to the extent required to ensure the availability of an
exemption under Section 16 of the Exchange Act for any transaction relating to
such Participant under the Plan.
12.3 Compliance with Section 16. Notwithstanding any other provision of
the Plan or any rule, instruction, election form or other form, the Plan and any
such rule, instruction or form shall be subject to any additional conditions or
limitations set forth in any applicable exemptive rule under Section 16 of the
Exchange Act (including any amendment to Rule 16b-3) that are requirements for
the application of such exemptive rule. To the extent permitted by applicable
law, such provision, rule, instruction or form shall be deemed amended to the
extent necessary to conform to such applicable exemptive rule.
ARTICLE 13.
MISCELLANEOUS
13.1 Status of Plan. The Plan is intended to be a plan that is not
qualified within the meaning of Code Section 401(a) and that "is unfunded and is
maintained by an employer primarily for the purpose of providing deferred
compensation for a select group of management or highly compensated employees"
within the meaning of ERISA Sections 201(2), 301(a)(3) and 401(a)(1). The Plan
shall be administered and interpreted to the extent possible in a manner
consistent with that intent.
13.2 Unsecured General Creditor. Participants and their Beneficiaries,
heirs, successors and assigns shall have no legal or equitable rights, interests
or claims in any property or assets of any Employer. For purposes of the payment
of benefits under this Plan, any and all of an Employer's assets shall be, and
remain, the general, unpledged unrestricted assets of the Employer. An
Employer's
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obligation under the Plan shall be merely that of an unfunded and unsecured
promise to pay money in the future.
13.3 Employer's Liability. An Employer's liability for the payment of
benefits shall be defined only by the Plan and the Election Form(s), as entered
into between the Employer and a Participant. An Employer shall have no
obligation to a Participant under the Plan except as expressly provided in the
Plan and his or her Election Form(s).
13.4 Nonassignability. Neither a Participant nor any other person shall
have any right to commute, sell, assign, transfer, pledge, anticipate, mortgage
or otherwise encumber, transfer, hypothecate, alienate or convey in advance of
actual receipt, the amounts, if any, payable hereunder, or any part thereof,
which are, and all rights to which are expressly declared to be, unassignable
and non-transferable. No part of the amounts payable shall, prior to actual
payment, be subject to seizure, attachment, garnishment or sequestration for the
payment of any debts, judgments, alimony or separate maintenance owed by a
Participant or any other person, be transferable by operation of law in the
event of a Participant's or any other person's bankruptcy or insolvency or be
transferable to a spouse as a result of a property settlement or otherwise. The
benefits which a Participant may accrue under this Plan are not subject to the
terms of any Qualified Domestic Relations Order (as that term is defined in
Section 414(p) of the Code) with respect to any Participant, and the
Administrator, the Board, the Committee, the Company and any Employer shall not
be required to comply with the terms of such order in connection with this Plan.
Notwithstanding the foregoing, the withholding of taxes from Plan payments, the
recovery of Plan overpayments of benefits made to a Participant or Beneficiary,
the transfer of Plan benefit rights from the Plan to another plan, or the direct
deposit of Plan payments to an account in a financial institution (if not
actually a part of an arrangement constituting an assignment or alienation)
shall not be construed as an assignment or alienation under this Section 13.4
and shall be permitted under the Plan.
13.5 Tax Withholding.
(a) Annual Deferral Amounts. For each Plan Year in which an Annual
Deferral Amount is being withheld from a Participant, the Participant's
Employer(s) shall be entitled to require payment by the Participant of any
sums required by federal, state or local tax law to be withheld with
respect to the deferral, in amounts and in a manner to be determined in
the sole discretion of the Employer(s).
(b) Company Matching Amounts and Company Contribution Amounts. When
a Participant becomes vested in a portion of his or her Company Matching
Account and/or Company Contribution Account, the Participant's Employer(s)
shall be entitled to require payment by the Participant of any sums
required by federal, state or local tax law to be withheld with respect to
the deferral, in amounts and in a manner to be determined in the sole
discretion of the Employer(s).
(c) Distributions. The Participant's Employer(s), or the trustee of
the Trust, shall withhold from any payments made to a Participant under
this Plan all federal, state and local income, employment and other taxes
required to be withheld by the Employer(s), or the trustee of the Trust,
in connection with such payments, in amounts and in a manner to be
determined in the sole discretion of the Employer(s) and the trustee of
the Trust.
(d) Satisfaction of Tax Obligations. The Administrator, in its sole
discretion, may allow a Participant to pay to his or her Employer(s) any
amounts required to be withheld by the Employer(s) in connection with the
Plan in cash, by deduction of such amounts from other compensation payable
to the Participant, or to have such amounts withheld from his or her
deferrals, vested Account Balance or distributions.
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13.6 Coordination with Other Benefits. The benefits provided for a
Participant and Participant's Beneficiary under the Plan are in addition to any
other benefits available to such Participant under any other plan or program for
Employees of the Participant's Employer(s). The Plan shall supplement and shall
not supersede, modify or amend any other such plan or program except as may
otherwise be expressly provided.
13.7 Compliance. A Participant shall have no right to receive payment with
respect to the Participant's Account Balance until all legal and contractual
obligations of the Employer(s) relating to establishment of the Plan and the
making of such payments shall have been complied with in full.
13.8 Not a Contract of Employment. The terms and conditions of this Plan
shall not be deemed to constitute a contract of employment between any Employer
and the Participant. Such employment is hereby acknowledged to be an "at will"
employment relationship that can be terminated at any time for any reason, or no
reason, with or without cause, and with or without notice, unless expressly
provided in a written employment agreement. Nothing in this Plan shall be deemed
to give a Participant the right to be retained in the service of any Employer,
either as an Employee or a Director, or to interfere with the right of any
Employer to discipline or discharge the Participant at any time.
13.9 Furnishing Information. A Participant or his or her Beneficiary will
cooperate with the Administrator by furnishing any and all information requested
by the Administrator and take such other actions as may be requested in order to
facilitate the administration of the Plan and the payments of benefits
hereunder, including but not limited to taking such physical examinations as the
Administrator may deem necessary.
13.10 Governing Law. Subject to ERISA, the provisions of this Plan shall
be construed and interpreted according to the internal laws of the State of
California without regard to its conflicts of laws principles.
13.11 Notice. Any notice or filing required or permitted to be given to
the Administrator under this Plan shall be sufficient if in writing and
hand-delivered, or sent by registered or certified mail, to the address below:
Chief Financial Officer
Neurocrine Biosciences, Inc.
12790 El Camino Real
San Diego, CA 92130
with a copy to:
Secretary
Neurocrine Biosciences, Inc.
12790 El Camino Real
San Diego, CA 92130
Such notice shall be deemed given as of the date of delivery or, if
delivery is made by mail, as of the date shown on the postmark on the receipt
for registration or certification.
Any notice or filing required or permitted to be given to a Participant
under this Plan shall be sufficient if in writing and hand-delivered, or sent by
mail, to the last known address of the Participant.
13.12 Successors. The provisions of this Plan shall bind and inure to the
benefit of the Participant's Employer and its successors and assigns and the
Participant and the Participant's designated Beneficiaries.
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13.13 Spouse's Interest. The interest in the benefits hereunder of a
spouse of a Participant who has predeceased the Participant shall automatically
pass to the Participant and shall not be transferable by such spouse in any
manner, including but not limited to such spouse's will, nor shall such interest
pass under the laws of intestate succession.
13.14 Validity. In case any provision of this Plan shall be illegal or
invalid for any reason, said illegality or invalidity shall not affect the
remaining parts hereof, but this Plan shall be construed and enforced as if such
illegal or invalid provision had never been inserted herein.
13.15 Incompetent. If the Administrator determines in its discretion that
a benefit under this Plan is to be paid to a minor, a person declared
incompetent or to a person incapable of handling the disposition of that
person's property, the Administrator may direct payment of such benefit to the
guardian, legal representative or person having the care and custody of such
minor, incompetent or incapable person. The Administrator may require proof of
minority, incompetence, incapacity or guardianship, as it may deem appropriate
prior to distribution of the benefit. Any payment of a benefit shall be a
payment for the account of the Participant and the Participant's Beneficiary, as
the case may be, and shall be a complete discharge of any liability under the
Plan for such payment amount.
13.16 Court Order. The Administrator is authorized to make any payments
directed by court order in any action in which the Plan or the Administrator has
been named as a party. In addition, if a court determines that a spouse or
former spouse of a Participant has an interest in the Participant's benefits
under the Plan in connection with a property settlement or otherwise, the
Administrator, in its sole discretion, shall have the right, notwithstanding any
election made by a Participant, to immediately distribute the spouse's or former
spouse's interest in the Participant's benefits under the Plan to that spouse or
former spouse.
13.17 Distribution in the Event of Taxation.
(a) In General. If, for any reason, all or any portion of a
Participant's benefits under this Plan becomes taxable to the Participant
prior to receipt, a Participant may petition the Administrator for a
distribution of that portion of his or her benefit that has become
taxable. Upon the grant of such a petition, which grant shall not be
unreasonably withheld, a Participant's Employer shall distribute to the
Participant immediately available funds in an amount equal to the Federal
Insurance Contributions Act ("FICA") tax imposed under Code Sections 3101
and 3121(v)(2) on amounts deferred under the Plan (the "FICA Amount") as
well as income tax at source on wages imposed under Code Section 3041 with
respect to his or her benefit, as well as the additional income tax at
source on wages attributable to the pyramiding Code Section 3401 wages and
taxes (which aggregate amounts shall not exceed the lesser of a
Participant's unpaid Account Balance under the Plan or the aggregate
amount of the FICA Amount and the income tax withholding related to such
FICA Amount). If the petition is granted, the tax liability distribution
shall be made within ninety (90) days of the date when the Participant's
petition is granted. Such a distribution shall affect and reduce the
benefits to be paid under this Plan.
(b) Trust. If the Trust terminates in accordance with the provisions
of the Trust and benefits are distributed from the Trust to a Participant
in accordance with such provisions, the Participant's benefits under this
Plan shall be reduced to the extent of such distributions
13.18 Insurance. The Employers, on their own behalf or on behalf of the
trustee of the Trust, and, in their sole discretion, may apply for and procure
insurance on the life of the Participant, in such amounts and in such forms as
the Trust may choose. The Employers or the trustee of the Trust, as the case may
be, shall be the sole owner and beneficiary of any such insurance. The
Participant shall have no interest whatsoever in any such policy or policies,
and at the request of the Employers shall submit to medical examinations and
supply such information and execute such documents as may be required by the
insurance company or companies to whom the Employers have applied for insurance.
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13.19 Savings Clause. In the event any provision of this Plan, or the
application thereof, is or becomes inconsistent with Code Section 409A and any
regulations promulgated thereunder, such provision shall be void or
unenforceable or in the sole discretion of the Committee shall be deemed amended
to comply with Code Section 409A and any regulations promulgated thereunder. The
other provisions of this Plan shall remain in full force and effect.
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IN WITNESS WHEREOF, the Company has signed this Plan document as of April
26, 2005.
Neurocrine Biosciences, Inc., a Delaware corporation
By: _______________________________________
Title: Executive Vice President and Chief
Financial Officer
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