Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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SCHERING-PLOUGH CORPORATION
(Exact name of Registrant as specified in its charter)
New Jersey 22-1918501
(State or Other (I.R.S. Employer
Jurisdiction of Identification Number)
Incorporation or
Organization)
One Giralda Farms
Madison, New Jersey 07940-1000
(Address of Principal Executive Offices) (Zip Code)
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The Schering-Plough
Employees' Savings Plan
(Full Title of the Plan)
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WILLIAM J. SILBEY, ESQ.
Staff Vice President, Associate General Counsel and Secretary
Schering-Plough Corporation
One Giralda Farms
Madison, New Jersey 07940-1000
(Name and address of agent for service)
(973) 822-7000
(Telephone number, including Area Code, of Agent for Service)
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CALCULATION OF REGISTRATION FEE
Title of securities Amount to be
to be registered (1) registered
Common Stock, $.50 par value (3) 2,000,000 Shares
Proposed maximum offering price per share (2) $52.75
Proposed maximum aggregate offering price (2) $105,500,000
Amount of registration fee $29,329.00
(1) In addition, pursuant to Rule 416(c) under the Securities Act
of 1933, this registration statement also covers an indeterminate
amount of interests to be offered or sold pursuant to the
employee benefit plan described herein.
(2) Calculated pursuant to Rule 457(c) and 457(h) based upon the
average of the high and low prices reported on the New York Stock
Exchange on September 9, 1999.
(3) Includes one attached Preferred Share Purchase Right per
share.
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
Documents relating to the Schering-Plough Employees'
Savings Plan (the "Plan") and containing the information
specified in this Part I will be sent or given to participants
under the Plan pursuant to Rule 428(b)(1) under the Securities
Act of 1933 (the "Act"). These documents, together with the
documents incorporated by reference herein pursuant to Item 3 of
Part II below, taken together, constitute a prospectus that meets
the requirements of Section 10(a) of the Act.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents which have been filed with the
Securities and Exchange Commission (the "Commission") are hereby
incorporated by reference:
(a) the Registrant's Annual Report on Form 10-K for
the fiscal year ended December 31, 1998 (file no.1-6571) (the
"1998 Form 10-K");
(b) the Plan's Annual Report on Form 11-K for the
fiscal year ended December 31, 1998;
(c) the Registrant's Quarterly Report on Form 10-Q for
the three months ended March 31, 1999 and June 30, 1999;
(d) the description of Common Stock and Preferred
Share Purchase Rights set forth in the Registrant's registration
statements on Form 8-A filed with the Commission pursuant to
Section 12 of the Securities Exchange Act of 1934 (the "Exchange
Act") and any amendment or report filed for the purpose of
updating such descriptions; and
(e) the information contained in the Registrant's
Proxy Statement dated March 10, 1999 for its Annual Meeting of
Shareholders held on April 27, 1999 that has been incorporated by
reference in the 1998 Form 10-K.
All documents filed by the Registrant pursuant to
Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act after the
date of this Registration Statement and prior to the filing of a
post-effective amendment hereto that indicates that all
securities offered have been sold or that deregisters all such
securities then remaining unsold, shall be deemed to be
incorporated by reference herein and to be a part hereof from the
date of filing of such documents.
Any statement contained in a document incorporated by
reference herein shall be deemed to be modified or superseded for
purposes of this Registration Statement to the extent that a
statement contained herein or in any other subsequently filed
document that also is incorporated or deemed to be incorporated
by reference herein modifies or supersedes such statement. Any
such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this
Registration Statement.
Item 4. Description of Securities.
Not applicable.
Item 5. Interests of Named Experts and Counsel.
None.
Item 6. Indemnification of Directors and Officers.
The Registrant is organized under the laws of the State
of New Jersey. The New Jersey Business Corporation Act provides
that a New Jersey corporation has the power generally to
indemnify its directors, officers, employees and other agents
against expenses and liabilities in connection with any
proceeding involving such person by reason of his being a
corporation agent, other than a proceeding by or in the right of
the corporation, if such person acted in good faith and in a
manner he reasonably believed to be in or not opposed to the best
interests of the corporation and, with respect to any criminal
proceeding, such person had no reasonable cause to believe his
conduct was unlawful. In the case of an action brought by or in
the right of the corporation, indemnification of directors,
officers, employees and other agents against expenses is
permitted if such person acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests
of the corporation; however, no indemnification is permitted in
respect of any claim, issue or matter as to which such person
shall have been adjudged to be liable to the corporation, unless
and only to the extent that the New Jersey Superior Court, or the
court in which such proceeding was brought, shall determine upon
application that despite the adjudication of liability, but in
view of all the circumstances of the case, such person is fairly
and reasonably entitled to such indemnification. Expenses
incurred by a director, officer, employee or other agent in
connection with a proceeding may be, under certain circumstances,
paid by the corporation in advance of the final disposition of
the proceeding as authorized by the board of directors. The
power to indemnify and advance expenses under the Act does not
exclude other rights to which a director, officer, employee or
other agent of the corporation may be entitled to under the
certificate of incorporation, by laws, agreement, vote of
stockholders, or otherwise provided that no indemnification is
permitted to be made to or on behalf of such person if a judgment
or other final adjudication adverse to such person establishes
that his acts or omissions were in breach of his duty of loyalty
to the corporation, were not in good faith or involved a
violation of the law, or resulted in the receipt of such person
of an improper personal benefit.
The Registrant's Certificate of Incorporation provides
that directors and officers of the Registrant shall not be
personally liable to the Registrant or its shareholders for
damages for breach of any duty owed to the Registrant or its
shareholders, except for liability for any breach of duty based
upon an act or omission (i) in breach of such persons' duty of
loyalty to the Registrant or its shareholders, (ii) not in good
faith or involving a knowing violation of law or (iii) resulting
in receipt by such persons of an improper personal benefit.
The Certificate of Incorporation of the Registrant also
provides that each person who was or is made a party or is
threatened to be made a party to or who is involved in any
pending, threatened or completed civil, criminal, administrative
or arbitrative action, suit or proceeding, or any appeal therein
or any inquiry or investigation which could lead to such action,
suit or proceeding (a "proceeding"), by reason of his or her
being or having been a director, officer, employee, or agent of
the Registrant or of any constituent corporation absorbed by the
Registrant in a consolidation or merger, or by reason of his or
her being or having been a director, officer, trustee, employee
or agent of any other corporation (domestic or foreign) or of any
partnership, joint venture, sole proprietorship, trust, employee
benefit plan or other enterprise (whether or not for profit),
serving as such at the request of the Registrant or of any such
constituent corporation, or the legal representative of any such
director, officer, trustee, employee or agent, shall be
indemnified and held harmless by the Registrant to the fullest
extent permitted by the New Jersey Business Corporation Act, as
the same exists or may be amended (but, in the case of any such
amendment, only to the extent that such amendment permits the
Registrant to provide broader indemnification rights than said
Act permitted prior to such amendment), from and against any and
all reasonable costs, disbursements and attorneys' fees, and any
and all amounts paid or incurred in satisfaction of settlements,
judgments, fines and penalties, incurred or suffered in
connection with any such proceeding, and such indemnification
shall continue as to a person who has ceased to be a director,
officer, trustee, employee or agent and shall inure to the
benefit of his or her heirs, executors, administrators and
assigns; provided, however, that, the Registrant shall indemnify
any such person seeking indemnification in connection with a
proceeding (or part thereof) initiated by such person only if
such proceeding (or part thereof) was specifically authorized by
the Board of Directors of the Registrant. The right to
indemnification created by the Certificate of Incorporation shall
be a contract right and shall include the right to be paid by the
Registrant the expenses incurred in connection with any
proceeding in advance of the final disposition of such proceeding
as authorized by the Board of Directors; provided, however, that,
if the New Jersey Business Corporation Act so requires, the
payment of such expenses in advance of the final disposition of a
proceeding shall be made only upon receipt by the Registrant of
an undertaking, by or on behalf of such director, officer,
employee, or agent to repay all amounts so advanced unless it
shall ultimately be determined that such person is entitled to be
indemnified under the Certificate of Incorporation or otherwise.
The right to indemnification and advancement of expenses provided
by or granted pursuant to the Certificate of Incorporation shall
not exclude or be exclusive of any other rights to which any
person may be entitled under a certificate of incorporation, by-
law, agreement, vote of shareholders or otherwise, provided that
no indemnification shall be made to or on behalf of such person
if a judgment or other final adjudication adverse to such person
establishes that such person has not met the applicable standard
of conduct required to be met under the New Jersey Business
Corporation Act.
The Registrant may purchase and maintain insurance on
behalf of any director, officer, employee or agent of the
Registrant or another corporation, partnership, joint venture,
trust, employee benefit plan or other enterprise against any
expenses incurred in any proceeding and any liabilities asserted
against him or her by reason of such person's being or having
been such a director, officer, employee or agent, whether or not
the Registrant would have the power to indemnify such person
against such expenses and liabilities under the provisions of the
Certificate of Incorporation or otherwise. The Registrant
maintains such insurance on behalf of its directors and officers.
The foregoing statements are subject to the detailed
provisions of the New Jersey Business Corporation Act and the
Registrant's Certificate of Incorporation.
Item 7. Exemption from Registration Claimed.
Not applicable.
Item 8. Exhibits.
Exhibit
Number Description
4.1 Certificate of Incorporation, as amended (incorporated by
reference to Exhibit 3(i) to the Registrant's Quarterly Report on
Form 10-Q for the quarter ended June 30, 1995, file no 1-6571).
Certificate of Amendment of Certificate of Incorporation
(incorporated by reference to Exhibit 3 to the Registrant's
Quarterly Report on Form 10-Q for the quarter ended June 30,
1997, file no. 1-6571).
4.2 By-laws, as amended (incorporated by reference to Exhibit
4(2) to the Registrant's Registration Statement on Form S-3,
Registration No. 333-00853). Amendment to By-laws, effective
September 22, 1998 (incorporated by reference to Exhibit 4 to the
Registrant's Quarterly Report on Form 10-Q for the quarter ended
September 30, 1998, file no. 1-6571).
4.3 Rights Agreement dated as of June 24, 1997 by and between
the Registrant and The Bank of New York (incorporated by
reference to Exhibit 1 of Form 8-A filed by the Registrant on
June 30, 1997 with the Securities and Exchange Commission, file
no. 1-6571).
4.4* Schering-Plough Employees' Savings Plan, as amended
5 The registrant hereby undertakes to submit the Schering-Plough
Employees' Savings Plan, as amended (the "Plan"), and any
amendment thereto, to the Internal Revenue Service ("IRS") in a
timely manner and will make all changes required by the IRS in
order to qualify the Plan under Section 401 of the Internal
Revenue Code.
23* Consent of Deloitte & Touche LLP
24* Powers of Attorney
_______________________
* Filed herewith.
Item 9. Undertakings.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or
sales are being made, a post-effective amendment to this
registration statement:
(i) To include any prospectus required by
Section 10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts
or events arising after the effective date of the registration
statement (or the most recent post-effective amendment thereof)
which, individually or in the aggregate, represent a fundamental
change in the information set forth in the registration
statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar
value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if,
in the aggregate, the changes in volume and price represent no
more than a 20 percent change in the maximum aggregate offering
price set forth in the "Calculation of Registration Fee" table in
the effective registration statement;
(iii) To include any material information
with respect to the plan of distribution not previously disclosed
in the registration statement or any material change to such
information in the registration statement;
provided, however, that paragraphs (a)(1)(i) and
(a)(1)(ii) do not apply if the registration statement is on Form
S-3, Form S-8 or Form F-3 and the information required to be
included in a post-effective amendment by those paragraphs is
contained in periodic reports filed with or furnished to the
Commission by the Registrant pursuant to Section 13 or Section
15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the registration statement.
(2) That, for the purpose of determining any
liability under the Securities Act of 1933, each such post-
effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(3) To remove from registration by means of a
post-effective amendment any of the securities being registered
which remain unsold at the termination of the offering.
(b) The undersigned Registrant hereby undertakes that,
for purposes of determining any liability under the Securities
Act of 1933, each filing of the Registrant's annual report
pursuant to Section 13(a) or 15(d) of the Securities Exchange Act
of 1934 (and, where applicable, each filing of an employee
benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by
reference in the registration statement shall be deemed to be a
new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.
(h) Insofar as indemnification for liabilities arising
under the Securities Act of 1933 may be permitted to directors,
officers and controlling persons of the Registrant pursuant to
the foregoing provisions, or otherwise, the Registrant has been
advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities
(other than the payment by the Registrant of expenses incurred or
paid by a director, officer or controlling person of the
Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in
the Act and will be governed by the final adjudication of such
issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of
1933, the Registrant certifies that it has reasonable grounds to
believe that it meets all of the requirements for filing on Form
S-8 and has duly caused this Registration Statement to be signed
on its behalf by the undersigned, thereunto duly authorized, in
the Boro of Madison, State of New Jersey, on the 10th day of
September, 1999.
SCHERING-PLOUGH CORPORATION
By: *
_________________________
Richard Jay Kogan,
Chairman of the Board and
Chief Executive Officer
Pursuant to the requirements of the Securities Act of
1933, this Registration Statement has been signed below by the
following persons in the indicated capacities on September 10,
1999.
Signatures Title
*
______________________
Richard Jay Kogan Chairman of the Board and
Chief Executive Officer, and
Director (Principal Executive
Officer)
*
______________________
Raul E. Cesan President and Chief
Operating Officer, and
Director
*
______________________
Hugh A. D'Andrade Vice Chairman of the Board
and Chief Administrative
Officer, and Director
*
______________________
Jack L. Wyszomierski Executive Vice President and
Chief Financial Officer
(Principal Financial Officer)
*
______________________
Thomas H. Kelly Vice President and
Controller (Principal
Accounting Officer)
*
______________________
Hans W. Becherer Director
*
______________________
David C. Garfield Director
*
______________________
Regina E. Herzlinger Director
*
______________________
Robert P. Luciano Director
*
______________________
Donald L. Miller Director
*
______________________
H. Barclay Morley Director
*
______________________
Carl E. Mundy, Jr. Director
*
______________________
Richard de J. Osborne Director
*
______________________
Patricia F. Russo Director
*
______________________
William A. Schreyer Director
*
______________________
Robert F.W. van Oordt Director
*
______________________
James Wood Director
*Thomas H. Kelly hereby signs this Registration Statement on Form
S-8 on behalf of each of the indicated persons for whom he is
attorney-in-fact on September 10, 1999 pursuant to a power of
attorney filed herewith.
By: /s/Thomas H. Kelly
Thomas H. Kelly
Attorney-in-Fact
Pursuant to the requirements of the Securities Act of 1933,
the Schering-Plough Corporation Employees' Savings Plan has duly
caused this registration statement to be signed on its behalf by
the undersigned members of the Schering-Plough Corporation
Employee Benefits Committee, thereunto duly authorized, in the
Boro of Madison, State of New Jersey on September 10, 1999.
*
_________________________
John P. Ryan, Chairman
*
_________________________
Daniel A. Nichols, Member
*
_________________________
E. Kevin Moore, Member
*
_________________________
William J. Silbey, Member
*
_________________________
Vincent Sweeney, Member
*William J. Silbey hereby signs this Registration Statement on
Form S-8 on behalf of each of the indicated persons for whom he
is attorney-in-fact on September 10, 1999 pursuant to a power of
attorney filed herewith.
By: /s/William J. Silbey
William J. Silbey
Attorney-in-Fact
EXHIBIT INDEX
Exhibit
Number Description
4.4 Schering-Plough Employees' Savings Plan, as amended
23 Consent of Deloitte & Touche LLP
24 Powers of Attorney
51056
1
2
SCHERING-PLOUGH EMPLOYEES' SAVINGS PLAN
Effective January 1, 1997
ARTICLE 1. DEFINITIONS
1.01 "Accounts" means the Salary Deferral Account and the
Employee Rollover Account.
1.02 "Actual Deferral Percentage" means, with respect to a
specified group of Eligible Employees, the average of the ratios,
calculated separately for each Eligible Employee in that group, of
(a) the amount of Salary Deferral Contributions made pursuant to
Section 3.01 for a Plan Year (including Salary Deferral
Contributions returned to a Highly-Compensated Employee under
Section 3.01(c) and Salary Deferral Contributions returned to any
Eligible Employee pursuant to Section 3.01(d)), to (b) the Eligible
Employees' Statutory Compensation for that entire Plan Year,
provided that, upon the direction of the Committee, Statutory
Compensation for a Plan Year shall only be counted if received
during the period an Eligible Employee is, or is eligible to
become, a Participant. The Actual Deferral Percentage for each
group and the ratio determined for each Eligible Employee in the
group shall be calculated to the nearest one one-hundredth of 1
percent. For purposes of determining the Actual Deferral
Percentage for a Plan Year, Salary Deferral Contributions may be
taken into account for a Plan Year only if they:
(a) relate to compensation that either would have been received by
the Eligible Employee in the Plan Year but for the deferral
election, or are attributable to services performed by the Eligible
Employee in the Plan Year and would have been received by the
Eligible Employee within 2 and one-half months after the close of
the Plan Year but for the deferral election,
(b) are allocated to the Eligible Employee as of a date within
that Plan Year and the allocation is not contingent on the
participation or performance of service after such date, and
(c) are actually paid to the Trustee no later than 12 months after
the end of the Plan Year to which the contributions relate.
1.03 "Affiliated Employer" means any company which is a member
of a controlled group of corporations (as defined in Section 414(b)
of the Code) which also includes as a member an Employer; any trade
or business under common control (as defined in Section 414(c) of
the Code) with an Employer; any organization (whether or not
incorporated) which is a member of an affiliated service group (as
defined in Section 414(m) of the Code) which includes an Employer;
and any other entity required to be aggregated with an Employer
pursuant to regulations under Section 414(o) of the Code.
Notwithstanding the foregoing, for purposes of Sections 1.27 and
3.07, the definitions in Sections 414(b) and (c) of the Code shall
be modified as provided in Section 415(h) of the Code.
1.04 "Annual Dollar Limit" means $150,000, as adjusted from time
to time for cost of living in accordance with Section 401(a)(17)(B)
of the Code.
1.05 "Annuity Starting Date" means the first day of the first
period for which an amount is paid following a Participant's
retirement or other termination of employment.
1.06 "Associated Company" means any corporation or other entity
which is a subsidiary of or associated with the Company and which
is not an Employer or Affiliated Employer.
1.07 "Beneficiary" means any person, persons or entity
designated by a Participant to receive any benefits payable in the
event of the Participant's death. However, a married Participant's
spouse shall be deemed to be the Participant's Beneficiary, unless
or until the Participant elects another Beneficiary with Spousal
Consent. If no Beneficiary designation is in effect at the
Participant's death, or if no person, persons or entity so
designated survives the Participant, the Participant's surviving
spouse, if any, shall be deemed to be the Beneficiary; otherwise
the Beneficiary shall be the estate of the Participant.
1.08 "Board of Directors" means the Board of Directors of the
Plan Sponsor.
1.09 "Code" means the Internal Revenue Code of 1986, as amended
from time to time.
1.10 "Committee" means (i) prior to January 1, 1999, the Profit-
Sharing and Savings Committee and (ii) on and after January 1,
1999, the Employee Benefits Committee, established by the Company
to administer the Plan as provided in Article 10.
1.11 "Company" means Schering-Plough Corporation, or any
successor by merger, purchase or otherwise.
1.12 "Company Stock" means the common stock of the Company.
1.13 "Company Stock Fund" means the Investment Fund that is
intended to be invested primarily in Company Stock.
1.14 "Compensation" means the sum of an Eligible Employee's base
pay, commissions, paid cash bonus, overtime, and shift differential
paid through an Employer's U.S. payroll to an Eligible Employee for
services rendered to the Employer, determined prior to any
reduction pursuant to Section 3.01 or pursuant to a cafeteria plan
under Section 125 of the Code. However, Compensation for a Plan
Year shall not exceed the Annual Dollar Limit. The Annual Dollar
Limit shall apply, in the case of Salary Deferral Contributions, to
Compensation earned after the date in the Plan Year that an
Eligible Employee first elects to make contributions under Section
3.01.
1.15 "Disability" means either (a) the Member is receiving
benefits under an Employer's long-term disability plan, or (b) the
Committee or its delegate determines that the Member would be
receiving disability benefits under the Employer's long-term
disability plan if the Member were covered under such plan.
1.16 "Earnings" means the amount of earnings to be returned with
any excess deferrals or excess contributions under Section 3.01 or
3.05 for a Plan Year, determined as of the last day of such Plan
Year under the Plan's method of allocating income to Participants'
Accounts pursuant to Article 5.
1.17 "Effective Date" means January 1, 1983, the date as of
which the Plan was first effective.
1.18 "Eligible Employee" means an Employee who receives stated
compensation from an Employer other than a pension, severance pay,
retainer, or fee under contract; however, the term "Eligible
Employee" excludes (i) any person who is included in a unit of
employees covered by a collective bargaining agreement which does
not provide for his or her participation in the Plan, (ii) any
person who serves only as a director of an Employer, (iii) any
person who is not a citizen of the United States who is on
temporary assignment with an Employer for a period not exceeding
five years unless with the consent of the Committee or its
delegate, (iv) any person who is, agrees or has agreed that he or
she is an independent contractor, or who has any agreement or
understanding with an Employer or Affiliated Employer that the
person is not an Employee or Eligible Employee, even if the
individual previously may have been an Employee or Eligible
Employee, (v) any Leased Employee, or (vi) any person who is
employed by a temporary or other employment agency, regardless of
the amount of control, supervision or training provided by an
Employer or Affiliated Employer, whether or not such person is a
Leased Employee. These exclusions are unaffected by any ruling of
a court, agency or other authority holding that any person is in
fact an employee of an Employer or Affiliated Employer under any
standard whatsoever.
1.19 "Employee" means an individual who is employed by an
Employer or Affiliated Employer on a part-time or full-time basis
and who is paid by such Employer or Affiliated Employer.
1.20 "Employee Rollover Account" means the account credited with
the Rollover Contributions made by a Participant and any earnings
on those contributions.
1.21 "Employer" means the Plan Sponsor, with respect to its
employees; or any other company participating in the Plan as
provided in Section 12.03, with respect to its employees.
1.22 "ERISA" means the Employee Retirement Income Security Act
of 1974, as amended from time to time.
1.23 "Highly-Compensated Employee" means for a Plan Year
commencing on or after January 1, 1997, any employee of an Employer
or an Affiliated Employer (whether or not eligible for
participation in the Plan) who
(i) was a five percent owner (as defined in Section 416(i) of the
Code) for such Plan Year or the prior Plan Year, or
(ii) for the preceding Plan Year received Statutory Compensation
in excess of $80,000. The $80,000 dollar amount in the preceding
sentence shall be adjusted from time to time for cost of living in
accordance with Section 414(q) of the Code.
Notwithstanding the foregoing, employees who are nonresident
aliens and who receive no earned income from an Employer or an
Affiliated Employer which constitutes income from sources within
the United States shall be disregarded for all purposes of this
Section.
The provisions of this Section shall be further subject to
such additional requirements as shall be described in Section
414(q) of the Code and its applicable regulations, which shall
override any aspects of this Section inconsistent therewith.
1.24 "Hour of Service" means each hour for which the employee is
paid or entitled to payment for the performance of duties for an
Employer or Affiliated Employer.
1.25 "Investment Committee" means the Schering-Plough Employee
Benefits Investment Committee.
1.26 "Investment Fund" means the separate funds or investment
vehicles in which contributions to the Plan are invested in
accordance with Article 4.
1.27 "Leased Employee" means any person performing services for
an Employer or an Affiliated Employer as a leased employee as
defined in Section 414(n) of the Code. In the case of any person
who is a Leased Employee before or after a period of service as an
Eligible Employee, the entire period during which he or she has
performed services as a Leased Employee shall be counted as service
as an Eligible Employee for all purposes of the Plan, except that
he or she shall not, by reason of that status, become a Participant
of the Plan or have contributions made to the Plan on his or her
behalf while a Leased Employee.
1.28 "Non-Highly-Compensated Employee" means for any Plan Year
an employee of an Employer or an Affiliated Employer who is not a
Highly-Compensated Employee for that Plan Year.
1.29 "Notice" means the indication by the Eligible Employee of
his or her wishes through the written, electronic or telephonic
means provided for the particular purpose by the Committee or its
delegate.
1.30 "Participant" means any person included in the
participation of the Plan as provided in Article 2.
1.31 "Plan" means the Schering-Plough Employees' Savings Plan as
set forth in this document or as amended from time to time.
1.32 "Plan Sponsor" means Schering Corporation, or any successor
by merger, purchase or otherwise.
1.33 "Plan Year" means the 12-month period beginning on any
January 1.
1.34 "Retirement" means the termination of employment of a
Participant by early, normal or other retirement under a retirement
plan of an Employer or an Affiliated Employer.
1.35 "Rollover Contributions" means amounts contributed pursuant
to Section 3.02.
1.36 "Salary Deferral Account" means the account credited with
the Salary Deferral Contributions made on a Participant's behalf
and any earnings on those contributions.
1.37 "Salary Deferral Contributions" means amounts contributed
pursuant to Section 3.01.
1.38 "Severance Date" means the earliest of (a) the date an
Employee quits, retires, is discharged or dies, (b) in respect of
an Eligible Employee who ceases to be employed by an Employer on
account of Disability and who fails to return to employment with an
Employer or Affiliated Employer on recovery from Disability, the
date of such recovery from Disability, or (c) the first anniversary
of the date on which an Employee is first absent from service, with
or without pay, for any reason such as vacation, holiday, sickness,
disability, layoff or leave of absence. Notwithstanding the
foregoing, if an Employee is granted an authorized leave of absence
(which may include such periods of layoff or other absence as the
Committee or its delegate determines, under rules equally
applicable to similarly situated Employees), and the Employee
returns to service on or before the end of such authorized leave of
absence, then no Severance Date shall be deemed to have occurred
because of such authorized leave of absence.
1.39 "Spousal Consent" means the written consent of a
Participant's spouse to the Participant's designation of a
specified Beneficiary. The specified Beneficiary shall not be
changed unless further Spousal Consent is given. The spouse's
consent shall be witnessed by a Plan representative or notary
public. The consent of the spouse shall also acknowledge the
effect on him or her of the Participant's election. The
requirement for spousal consent may be waived by the Committee or
its delegate if it believes there is no spouse, or the spouse
cannot be located, or because of such other circumstances as may be
established by applicable law. Spousal Consent shall be applicable
only to the particular spouse who provides such consent.
1.40 "Statutory Compensation" means an employee's total
compensation up to the Annual Dollar Limit paid by an Employer
which is reported on the employee's federal income tax reporting
statement (Form W-2) for the Plan Year. For purposes of
determining Highly-Compensated Employees under Section 1.23 and key
employees under Section 13.05(a)(iii), Statutory Compensation shall
include amounts contributed by an Employer pursuant to a salary
reduction agreement which are not includible in the gross income of
the employee under Sections 125, 402(e)(3), 402(h) or 403(b) of the
Code. For all other purposes, Statutory Compensation shall also
include the amounts referred to in the preceding sentence, unless
the Committee directs otherwise for a particular Plan Year.
1.41 "Trust Fund" means the fund established by the Plan Sponsor
as part of the Plan into which contributions are to be made and
from which benefits are to be paid in accordance with the terms of
the Plan.
1.42 "Trustee" means the trustee holding the funds of the Plan
as provided in Article 11.
1.43 "Valuation Date" means each trading day of the New York
Stock Exchange.
1.44 "Year of Service" means, with respect to any employee, a
12-month period of employment with an Employer or an Affiliated
Employer, whether or not as an Eligible Employee, beginning on the
date he or she first completes an Hour of Service and ending on his
or her Severance Date. However, if an employee's employment is
terminated and he or she is later reemployed within one year of the
earlier of (i) his or her date of termination of service or (ii)
the first day of an absence from service immediately preceding his
or her date of termination, the period between his or her Severance
Date and his or her date of reemployment shall be included in his
or her Years of Service. For purposes of this Section 1.44,
service with an Associated Company shall be treated as service with
an Employer solely to the extent designated by the Committee under
rules equally applicable to similarly situated employees. In
addition:
(a) Solely with respect to employees of Schering-Plough Animal
Health Corporation on July 1, 1997, Years of Service shall
include periods of employment with Mallinckrodt, Inc. or any
wholly-owned subsidiary thereof which would otherwise be
recognized as Years of Service under the foregoing provisions of
this Section 1.44 had such periods of employment been with an
Employer.
(b) Solely with respect to employees of Syntro Corporation on
July 1, 1997, Years of Service shall include periods of
employment with Mallinckrodt, Inc. or any wholly-owned subsidiary
thereof which would otherwise be recognized as Years of Service
under the foregoing provisions of this Section 1.44 had such
periods of employment been with an Employer.
(c) Solely with respect to employees of SyntroVet Incorporated
on July 1, 1997, Years of Service shall include periods of
employment with Mallinckrodt, Inc. or any wholly-owned subsidiary
thereof which would otherwise be recognized as Years of Service
under the foregoing provisions of this Section 1.44 had such
periods of employment been with an Employer.
(d) Solely with respect to employees of Schering-Plough
Veterinary Operations, Inc. on July 1, 1997, Years of Service
shall include periods of employment with Mallinckrodt, Inc. or
any wholly-owned subsidiary thereof which would otherwise be
recognized as Years of Service under the foregoing provisions of
this Section 1.44 had such periods of employment been with an
Employer.
ARTICLE 2. ELIGIBILITY AND PARTICIPATION
2.01 Eligibility
Each Employee shall be eligible to become a Participant on any date
coincident with or following the date he or she completes one Year
of Service, provided he or she is then an Eligible Employee.
2.02 Participation
An Eligible Employee shall become a Participant as soon as
administratively practicable after the date on which he or she in
the manner prescribed by the Committee or its delegate:
(a) makes the election described in Section 3.01;
(b) authorizes the Employer to reduce his or her Compensation; and
(c) names a Beneficiary.
2.03 Reemployment of Former Employees and Former Participants
Any person reemployed by an Employer as an Eligible Employee, who
was previously a Participant or who was previously eligible to
become a Participant, shall become a Participant as soon as
administratively practicable after meeting the requirements of
Section 2.02 following his or her reemployment. Any person
reemployed by an Employer as an Eligible Employee, who was not
previously eligible to become a Participant, shall be eligible to
become a Participant on any date following the later of (i) his or
her reemployment date and (ii) first anniversary of the date he or
she completed his or her first Hour of Service during his or her
original period of employment, provided he or she is then an
Eligible Employee. Such reemployed Eligible Employee shall become
a Participant as soon as administratively practicable after the
date he or she meets the requirements of Section 2.02.
2.04 Transferred Participants
A Participant who remains in the employ of an Employer, an
Affiliated Employer or, solely to the extent designated by the
Committee under rules equally applicable to similarly situated
employees, an Associated Company but ceases to be an Eligible
Employee shall continue to be a Participant of the Plan but shall
not be eligible to make Salary Deferral Contributions while his or
her employment status is other than as an Eligible Employee.
2.05 Termination of Participation
A Participant's participation shall terminate on the date he or she
is no longer employed by an Employer, an Affiliated Employer or,
solely to the extent designated by the Committee under rules
equally applicable to similarly situated employees, an Associated
Company unless the Participant is entitled to benefits under the
Plan, in which event his or her (or such person's Beneficiary's)
participation shall terminate when those benefits are distributed
to such Participant or on his or her behalf.
ARTICLE 3. CONTRIBUTIONS
3.01 Salary Deferral Contributions
(a) A Participant may elect under Section 2.02 to reduce his or
her Compensation payable while a Participant by at least 1 percent
and not more than 4 percent (not more than 10 percent with respect
to an Eligible Employee covered by a collective bargaining
agreement between an Employer and the International Chemical
Workers Union, Council of the United Food and Commercial Workers
International Union No. 194-C), in multiples of 1 percent, and have
that amount contributed to the Plan by his or her Employer as
Salary Deferral Contributions. Salary Deferral Contributions shall
be further limited as provided below and in Sections 3.05, 3.06,
and 3.07. Any Salary Deferral Contributions shall be paid to the
Trustee as soon as practicable, but in no event later than the 15th
day of the month following the month in which the amounts would
otherwise have been payable to the Participant in cash.
(b) In no event shall the Participant's Salary Deferral
Contributions and similar contributions made on his or her behalf
by an Employer or an Affiliated Employer to all plans, contracts or
arrangements subject to the provisions of Section 401(a)(30) of the
Code in any calendar year exceed $7,000, as adjusted from time to
time for cost of living pursuant to Section 402(g)(5) of the Code.
If a Participant's Salary Deferral Contributions in a calendar
year reach that dollar limitation, his or her election of Salary
Deferral Contributions for the remainder of the calendar year will
be canceled. As of the first pay period of the calendar year
following such cancellation, the Participant's election of Salary
Deferral Contributions shall again become effective in accordance
with his or her previous election, unless the Participant elects
otherwise in accordance with Section 3.03.
(c) In the event that the sum of the Salary Deferral Contributions
and similar contributions to any other qualified defined
contribution plan maintained by an Employer or an Affiliated
Employer exceeds the dollar limitation in Section 3.01(b) for any
calendar year, the Participant shall be deemed to have elected a
return of Salary Deferral Contributions in excess of such limit
("excess deferrals") from this Plan. The excess deferrals,
together with Earnings, shall be returned to the Participant no
later than the April 15 following the end of the calendar year in
which the excess deferrals were made. The amount of excess
deferrals to be returned for any calendar year shall be reduced by
any Salary Deferral Contributions previously returned to the
Participant under Section 3.05 for that calendar year.
(d) If a Participant makes tax-deferred contributions under
another qualified defined contribution plan maintained by an
employer other than an Employer or an Affiliated Employer for any
calendar year and those contributions when added to his or her
Salary Deferral Contributions exceed the dollar limitation under
Section 3.01(b) for that calendar year, the Participant may
allocate all or a portion of such excess deferrals to this Plan. In
that event, such excess deferrals, together with Earnings, shall be
returned to the Participant no later than the April 15 following
the end of the calendar year in which such excess deferrals were
made. However, the Plan shall not be required to return excess
deferrals unless the Participant notifies the Committee, in
writing, by March 1 of that following calendar year of the amount
of the excess deferrals allocated to this Plan. The amount of any
such excess deferrals to be returned for any calendar year shall be
reduced by any Salary Deferral Contributions previously returned to
the Participant under Section 3.05 for that calendar year.
3.02 Rollover Contributions
With the permission of the Committee or its delegate and without
regard to any limitations on contributions set forth in this
Article 3, the Plan may receive from an Eligible Employee, whether
or not he or she has met the eligibility requirements for
participation, in cash, any amount previously received (or deemed
to be received) by him or her from a qualified plan. The Plan may
receive such amount either directly from the Eligible Employee or
from an individual retirement account or from a qualified plan in
the form of a direct rollover. Notwithstanding the foregoing, the
Plan shall not accept any amount unless such amount is eligible to
be rolled over to a qualified trust in accordance with applicable
law and the Eligible Employee provides evidence satisfactory to the
Committee or its delegate that such amount qualifies for rollover
treatment. Unless received by the Plan in the form of a direct
rollover, the Rollover Contribution must be paid to the Trustee on
or before the 60th day after the day it was received by the
Eligible Employee.
3.03 Change in Contributions
The percentages of Compensation designated by a Participant under
Section 3.01 shall automatically apply to increases and decreases
in his or her Compensation. A Participant may change his or her
election under Section 3.01 by giving such Notice as the Committee
or its delegate shall prescribe. The changed percentage shall
become effective as soon as administratively practicable following
receipt by the Plan Sponsor or its delegate of such Notice.
3.04 Suspension of Contributions
(a) A Participant may revoke his or her election under Section
3.01 by giving such Notice as the Committee or its delegate shall
prescribe. The revocation shall become effective as soon as
administratively practicable following receipt by the Plan Sponsor
or its delegate of such Notice.
(b) A Participant who has revoked his or her election under
Section 3.01 may resume having his or her Compensation reduced in
accordance with Section 3.01 by giving such Notice as the Committee
or its delegate shall prescribe. The resumption shall become
effective as soon as administratively practicable following receipt
by the Plan Sponsor or its delegate of such Notice.
3.05 Actual Deferral Percentage Test
With respect to each Plan Year commencing on or after January 1,
1997, the Actual Deferral Percentage for that Plan Year for Highly-
Compensated Employees who are Participants or eligible to become
Participants for that Plan Year shall not exceed the Actual
Deferral Percentage for the preceding Plan Year for all Non-Highly-
Compensated Employees for the preceding Plan Year who were
Participants or eligible to become Participants during the
preceding Plan Year multiplied by 1.25. If the Actual Deferral
Percentage for such Highly-Compensated Employees does not meet the
foregoing test, the Actual Deferral Percentage for such Highly-
Compensated Employees for that Plan Year may not exceed the Actual
Deferral Percentage for the preceding Plan Year for all Non-Highly-
Compensated Employees for the preceding Plan Year who were
Participants or eligible to become Participants during the
preceding Plan Year by more than two percentage points, and such
Actual Deferral Percentage for such Highly-Compensated Employees
for the Plan Year may not be more than 2.0 times the Actual
Deferral Percentage for the preceding Plan Year for all Non-Highly-
Compensated Employees for the preceding Plan Year who were
Participants or eligible to become Participants during the
preceding Plan Year. Notwithstanding the foregoing, the Committee
may elect to use the Actual Deferral Percentage for Non-Highly-
Compensated Employees for the Plan Year being tested rather than
the preceding Plan Year provided that such election must be
evidenced by a Plan amendment and once made may not be changed
except as provided by the Secretary of the Treasury.
The Committee may implement rules limiting the Salary Deferral
Contributions which may be made on behalf of some or all Highly-
Compensated Employees so that this limitation is satisfied. If the
Committee or its delegate determines that the limitation under this
Section 3.05 has been exceeded in any Plan Year, the following
provisions shall apply:
(a) The actual deferral ratio of the Highly-Compensated Employee
with the highest actual deferral ratio shall be reduced to the
extent necessary to meet the actual deferral percentage test or to
cause such ratio to equal the actual deferral ratio of the Highly-
Compensated Employee with the next highest ratio. This process
will be repeated until the actual deferral percentage test is
passed. Each ratio shall be rounded to the nearest one
one-hundredth of 1 percent of the Participant's Statutory
Compensation. The amount of Salary Deferral Contributions made by
each Highly-Compensated Employee in excess of the amount permitted
under his or her revised deferral ratio shall be added together.
This total dollar amount of excess contributions ("excess
contributions") shall then be allocated to some or all Highly-
Compensated Employees in accordance with the provisions of
paragraph (b) below.
(b) The Salary Deferral Contributions of the Highly-Compensated
Employee with the highest dollar amount of Salary Deferral
Contributions shall be reduced by the lesser of (i) the amount
required to cause that Eligible Employee's Salary Deferral
Contributions to equal the dollar amount of the Salary Deferral
Contributions of the Highly-Compensated Employee with the next
highest dollar amount of Salary Deferral Contributions, or (ii) an
amount equal to the total excess contributions. This procedure is
repeated until all excess contributions are allocated. The amount
of excess contributions allocated to a Highly-Compensated Employee,
together with Earnings thereon, shall be distributed to him or her
in accordance with the provisions of paragraph (c).
(c) The excess contributions, together with Earnings thereon,
allocated to a Participant shall be paid to the Participant before
the close of the Plan Year following the Plan Year in which the
excess contributions were made, and to the extent practicable,
within 2 and one-half months of the close of the Plan Year in which
the excess contributions were made.
3.06 Additional Discrimination Testing Provisions
(a) If any Highly-Compensated Employee is a Participant of another
qualified plan of an Employer or an Affiliated Employer, other than
an employee stock ownership plan described in Section 4975(e)(7) of
the Code or any other qualified plan which must be mandatorily
disaggregated under Section 410(b) of the Code, under which pre-tax
contributions are made on behalf of the Highly-Compensated
Employee, the Committee shall implement rules, which shall be
uniformly applicable to all employees similarly situated, to take
into account all such contributions for the Highly-Compensated
Employee under all such plans in applying the limitations of
Section 3.05. If any other such qualified plan has a plan year
other than the Plan Year defined in Section 1.33, the contributions
to be taken into account in applying the limitations of Section
3.05 will be those made in the plan years ending with or within the
same calendar year.
(b) In the event that this Plan is aggregated with one or more
other plans to satisfy the requirements of Sections 401(a)(4) and
410(b) of the Code (other than for purposes of the average benefit
percentage test) or if one or more other plans is aggregated with
this Plan to satisfy the requirements of such sections of the Code,
then the provisions of Section 3.05 shall be applied by determining
the Actual Deferral Percentage of employees as if all such plans
were a single plan. If this Plan is permissively aggregated with
any other plan or plans for purposes of satisfying the provisions
of Section 401(k)(3) of the Code, the aggregated plans must also
satisfy the provisions of Sections 401(a)(4) and 410(b) of the Code
as though they were a single plan. For Plan Years beginning after
December 31, 1989, plans may be aggregated under this paragraph (b)
only if they have the same plan year.
(c) Notwithstanding any provision of the Plan to the contrary, if
employees included in a unit of employees covered by a collective
bargaining agreement are participating in the Plan and not more
than 2 percent of such employees are Highly-Compensated Employees
and professionals, then such employees shall be disregarded in
applying the provisions of Section 3.05. However, a separate
actual deferral percentage test must be performed for the group of
collective bargaining employees on and after January 1, 1993 on the
basis that those employees are included in a separate cash-or-
deferred arrangement.
(d) For Plan Years commencing on and after January 1, 1999, if the
Committee or its delegate elects to apply the provisions of Section
410(b)(4)(B) to satisfy the requirements of Section 401(k)(3)(A)(i)
of the Code, the Committee may apply the provisions of Section 3.05
by excluding from consideration all eligible employees (other than
Highly-Compensated Employees) who have not met the minimum age and
service requirements of Section 410(a)(1)(A) of the Code.
3.07 Maximum Annual Additions
(a) The annual addition to a Participant's Accounts for any Plan
Year, which shall be considered the "limitation year" for
purposes of Section 415 of the Code, when added to the
Participant's annual addition for that Plan Year under any other
qualified defined contribution plan of an Employer or an Affiliated
Employer, shall not exceed an amount which is equal to the lesser
of (i) 25 percent of his or her aggregate remuneration (as defined
in paragraph (c) below) for that Plan Year or (ii) $30,000, as
adjusted pursuant to Section 415(d) of the Code.
(b) For purposes of this Section, the "annual addition" to a
Participant's Accounts under this Plan or any other qualified
defined contribution plan (including a deemed qualified defined
contribution plan under a qualified defined benefit plan)
maintained by an Employer or an Affiliated Employer shall be the
sum of:
(i) the total contributions, including Salary Deferral
Contributions, made on the Participant's behalf by all Employers
and Affiliated Employers,
(ii) all after-tax contributions, exclusive of any Rollover
Contributions, and
(iii) forfeitures, if applicable,
that have been allocated to the Participant's Accounts under this
Plan or his or her accounts under any other such qualified defined
contribution plan, and solely for purposes of clause (ii) of
paragraph (a) above, and
(iv) amounts described in Sections 415(1)(1) and 419A(d)(2)
allocated to the Participant.
For purposes of this paragraph (b), any Salary Deferral
Contributions distributed under Section 3.05 shall be included in
the annual addition for the year allocated. However, (i) any loan
repayments made under Article 8, and (ii) any excess deferrals
timely distributed from the Plan under Section 3.01(c) or (d) shall
be excluded from the definition of Annual Addition.
(c) For purposes of this Section, the term "remuneration" with
respect to any Participant shall mean the wages, salaries and other
amounts paid in respect of such Participant by an Employer or an
Affiliated Employer for personal services actually rendered, and
shall include amounts contributed by an Employer pursuant to a
salary reduction agreement which are not includible in the gross
income of the employee under Section 125, 402(g) or 457 of the
Code, but shall exclude deferred compensation, stock options and
other distributions which receive special tax benefits under the
Code. Notwithstanding the foregoing, for limitation years
commencing prior to January 1, 1998, remuneration shall exclude
amounts contributed by an Employer pursuant to a salary reduction
agreement which are not includible in the gross income of the
employee under Section 125, 402(g)(3) or 457 of the Code.
(d) If the annual addition to a Participant's Accounts for any
Plan Year, prior to the application of the limitation set forth in
paragraph (a) above, exceeds that limitation due to a reasonable
error in estimating a Participant's annual compensation or in
determining the amount of Salary Deferral Contributions that may be
made with respect to a Participant under Section 415 of the Code,
or as the result of the allocation of forfeitures, the amount of
contributions credited to the Participant's Accounts in that Plan
Year shall be adjusted to the extent necessary to satisfy that
limitation by reducing the Participant's Salary Deferral
Contributions under Section 3.01 to the extent necessary. The
amount of the reduction shall be returned to the Participant
together with any earnings on the contributions to be returned.
(e) For Limitation Years commencing prior to January 1, 2000, if a
Participant is a participant in any qualified defined benefit plan
required to be taken into account for purposes of applying the
combined plan limitations contained in Section 415(e) of the Code,
then for any Limitation Year the sum of the defined benefit plan
fraction and the defined contribution plan fraction, as such terms
are defined in said Section 415(e), shall not exceed 1.0. If for
any Limitation Year the foregoing combined plan limitation would be
exceeded after the reduction in the contributions to be allocated
to a Participant under the Schering-Plough Employees' Profit-
Sharing Incentive Plan as a result of such combined plan
limitation, then the Participant's Salary Deferral Contributions
under Section 3.01 shall be reduced to the extent necessary to meet
that limitation. The amount of the reduction shall be returned to
the Participant together with any earnings on the contributions to
be returned. For purposes of this paragraph (e), "Limitation
Year" means the Plan Year.
(f) Any Salary Deferral Contributions returned to a Participant
under paragraph (d) or (e) above shall be disregarded in applying
the dollar limitation on Salary Deferral Contributions under
Section 3.01(b), and in performing the Actual Deferral Percentage
Test under Section 3.05.
3.08 Return of Contributions
(a) If all or part of the deductions for contributions to the Plan
are disallowed by the Internal Revenue Service, the portion of the
contributions to which that disallowance applies shall be returned
to the Company on behalf of the applicable Employers without
interest but reduced by any investment loss attributable to those
contributions, provided that the contribution is returned within
one year after the disallowance of deduction. For this purpose,
all contributions made by the Company on behalf of the Employers
are expressly declared to be conditioned upon their deductibility
under Section 404 of the Code.
(b) The Company on behalf of the Employers may recover without
interest the amount of its contributions to the Plan made on
account of a mistake of fact, reduced by any investment loss
attributable to those contributions, if recovery is made within one
year after the date of those contributions.
(c) In the event that Salary Deferral Contributions made under
Section 3.01 are returned to an Employer in accordance with the
provisions of this Section 3.08, the elections to reduce
Compensation which were made by Participants on whose behalf those
contributions were made shall be void retroactively to the
beginning of the period for which those contributions were made.
The Salary Deferral Contributions so returned shall be distributed
in cash to those Participants for whom those contributions were
made.
3.09 Contributions Not Contingent Upon Profits
The Company on behalf of the Employers may make Salary Deferral
Contributions to the Plan without regard to the existence or the
amount of current and accumulated earnings and profits.
Notwithstanding the foregoing, however, this Plan is designed to
qualify as a "profit-sharing plan" for all purposes of the Code.
3.10 Contributions During Period of Military Leave
(a) Without regard to any limitations on contributions set forth
in this Article 3, a Participant who is absent from the service of
an Employer or any Affiliated Employer because of service in the
Armed Forces of the United States beginning on or after August 1,
1990, and he or she returns to service with an Employer or an
Affiliated Employer having applied to return while his or her
reemployment rights were protected by law, may elect to contribute
to the Plan the Salary Deferral Contributions that could have been
contributed to the Plan in accordance with the provisions of the
Plan had he or she remained continuously employed by an Employer
throughout such period of absence ("make-up contributions"). The
amount of make-up contributions shall be determined on the basis of
the Participant's Compensation in effect immediately prior to the
period of absence, and the terms of the Plan at such time. Any
Salary Deferral Contributions so determined shall be limited as
provided in Sections 3.01(b) and 3.05 with respect to the Plan Year
or Years to which such contributions relate rather than the Plan
Year in which payment is made. Any payment to the Plan described
in this paragraph shall be made during the applicable repayment
period. The repayment period shall equal three times the period of
absence, but not longer than five years and shall begin on the
latest of: (i) the Participant's date of reemployment, (ii) October
13, 1996, or (iii) date the Employer notifies the Eligible Employee
of his or her rights under this Section 3.10. Earnings (or losses)
on make-up contributions shall be credited commencing with the date
the make-up contribution is made in accordance with the provisions
of Article 4.
(b) All contributions under this Section 3.10 are considered
"annual additions," as defined in Section 415(c)(2) of the Code,
and shall be limited in accordance with the provisions of Section
3.07 with respect to the Plan Year or Years to which such
contributions relate rather than the Plan Year in which payment is
made.
ARTICLE 4. INVESTMENT OF CONTRIBUTIONS
4.01 Investment Funds
(a) Contributions to the Plan shall be invested in one or more
Investment Funds authorized by the Investment Committee, which,
from time to time, may include such equity funds, international
equity funds, fixed income funds, money market funds, a Company
Stock Fund, and other funds or investment vehicles as the
Investment Committee elects to offer.
(b) The Trustee may keep such amounts of cash as it shall deem
necessary or advisable as part of the Investment Funds, all within
the limitations specified in the trust agreement.
(c) Dividends, interest, and other distributions received on the
assets held by the Trustee in respect to each of the Investment
Funds shall be reinvested in the respective Investment Fund.
4.02 Investment of Participants' Accounts
A Participant shall make one investment election covering his or
her Accounts in accordance with one of the following options:
(a) 100 percent in one of the available Investment Funds;
(b) in more than one Investment Fund allocated in multiples of 1
percent;
provided, however, that in no event may a Participant allocate more
than 50 percent of future contributions to the Company Stock Fund.
If a Participant fails to make an investment election with respect
to 100 percent of his or her Accounts, the portion of such Accounts
not subject to the Participant's investment election shall be
invested in a money market fund or equivalent investment vehicle.
4.03 Responsibility for Investments
Each Participant is solely responsible for the selection of his or
her investment options. The Trustee, the Committee, the Investment
Committee, any Employer, and the officers, supervisors and other
employees of any Employer are not empowered to advise a Participant
as to the manner in which his or her Accounts shall be invested.
The fact that an Investment Fund is available to Participants for
investment under the Plan shall not be construed as a
recommendation for investment in that Investment Fund.
4.04 Change of Election
A Participant may change his or her investment election under
Section 4.02 by giving such Notice as the Committee or its delegate
shall prescribe. The changed investment election shall become
effective as soon as administratively practicable after the Trustee
receives such Notice, and shall be effective only with respect to
subsequent contributions.
4.05 Reallocation of Accounts Among the Investment Funds
A Participant may elect to reallocate his or her Accounts among the
Investment Funds, in multiples of 1 percent, by giving such Notice
as the Committee or its delegate shall prescribe; provided,
however, that in no event may a Participant allocate more than 50
percent of the value of his or her Accounts at the time of the
reallocation to the Company Stock Fund. The reallocation shall be
effective as soon as administratively practicable after the Trustee
receives such Notice.
4.06 Limitations Imposed by Contract
Notwithstanding anything in this Article to the contrary, any
contributions invested in a guaranteed investment contract shall be
subject to any and all terms of such contract, including any
limitations therein placed on the exercise of any rights otherwise
granted to a Participant under any other provisions of this Plan
with respect to such contributions.
4.07 ERISA Section 404(c) Compliance
This Plan is intended to constitute a plan described in Section
404(c) of ERISA.
ARTICLE 5. VALUATION OF THE ACCOUNTS
5.01 Valuation of the Investment Funds
The Trustee shall value the Investment Funds on each business day.
On each Valuation Date there shall be allocated to the Accounts of
each Participant his or her proportionate share of the increase or
decrease in the fair market value of his or her Accounts in each of
the Investment Funds. Whenever an event requires a determination
of the value of the Participant's Accounts, the value shall be
computed as of the Valuation Date coincident with or immediately
following the date of determination, subject to the provisions of
Section 5.02.
5.02 Right to Change Procedures
The Committee reserves the right to change from time to time the
procedures used in valuing the Accounts or crediting (or debiting)
the Accounts if it determines, after due deliberation and upon the
advice of counsel and/or the current recordkeeper, that such an
action is justified in that it results in a more accurate
reflection of the fair market value of assets. In the event of a
conflict between the provisions of this Article and such new
administrative procedures, those new administrative procedures
shall prevail.
5.03 Statement of Accounts
At least once each calendar quarter, each Participant shall be
furnished with a statement setting forth the value of his or her
Accounts.
ARTICLE 6. VESTED PORTION OF ACCOUNTS
A Participant shall at all times be 100 percent vested in, and have
a nonforfeitable right to, his or her Salary Deferral Account and
Employee Rollover Account.
ARTICLE 7. WITHDRAWALS WHILE STILL EMPLOYED
7.01 Withdrawal After Age 70
Effective on and after January 1, 1998, a Participant who shall
have attained age 70 in a calendar year may, subject to Section
7.03, elect in any subsequent calendar year to withdraw all or part
of his or her Employee Rollover Account and his or her Salary
Deferral Account, on a pro rata basis between such Accounts.
7.02 Hardship Withdrawal
(a) A Participant may, subject to Section 7.03, elect to withdraw
in the following order all or part of (i) his or her Salary
Deferral Contributions and any earnings credited to his or her
Salary Deferral Account prior to January 1, 1989 and (ii) his or
her Employee Rollover Account, provided that he or she furnishes
proof of "Hardship" satisfactory to the Committee or its delegate
in accordance with the provisions of paragraphs (b) and (c) below.
(b) As a condition for Hardship there must exist with respect to
the Participant an immediate and heavy financial need to draw upon
his or her Accounts.
(i) The Committee or its delegate shall presume the existence of
such immediate and heavy financial need if the requested withdrawal
is on account of any of the following:
(A) expenses for medical care described in Section 213(d) of the
Code previously incurred by the Participant, his or her spouse or
any of his or her dependents (as defined in Section 152 of the
Code) or necessary for those persons to obtain such medical care;
(B) costs directly related to the purchase of a principal
residence of the Participant (excluding mortgage payments);
(C) payment of tuition and related educational fees, and room
and board expenses, for the next 12 months of post-secondary
education of the Participant, his or her spouse, children or
dependents (as defined in Section 152 of the Code);
(D) payment of amounts necessary to prevent eviction of the
Participant from his or her principal residence or to avoid
foreclosure on the mortgage of his or her principal residence; or
(E) the inability of the Participant to meet such other
expenses, debts or other obligations recognized by the Internal
Revenue Service as giving rise to immediate and heavy financial
need for purposes of Section 401(k) of the Code.
(ii) The Committee or its delegate may determine the existence of
immediate and heavy financial need in situations other than those
described in (i) above where the Participant demonstrates the
withdrawal is necessary for such other exigent circumstances as the
Committee or its delegate shall determine in an objective and
nondiscriminatory manner.
The amount of the withdrawal may not be in excess of the amount of
the financial need of the employee, including an additional amount
equal to 30 percent of the amount otherwise needed to satisfy such
financial need to pay any federal, state or local taxes and any
amounts necessary to pay any penalties reasonably anticipated to
result from the hardship distribution.
In evaluating the relevant facts and circumstances, the Committee
or its delegate shall act in a nondiscriminatory fashion and shall
treat uniformly those Participants who are similarly situated. The
Participant shall furnish to the Committee or its delegate such
supporting documents as the Committee or its delegate may request
in accordance with uniform and nondiscriminatory rules prescribed
by the Committee or its delegate.
(c) The Participant who requests a hardship withdrawal must comply
with (i) below; the Participant who requests a hardship withdrawal
to satisfy a financial need described in (b)(ii) above must also
comply with (ii) below:
(i)(A) The Participant must have obtained all distributions, other
than distributions available only on account of hardship, and all
nontaxable loans currently available under all plans of Employers
and Affiliated Employers,
(B) The Participant is prohibited from making Salary Deferral
Contributions and after-tax contributions to (or, to the extent
prohibited by applicable regulations, the exercise of stock options
under) the Plan and all other plans of Employers and Affiliated
Employers under the terms of such plans or by means of an otherwise
legally enforceable agreement for at least 12 months after receipt
of the distribution, and
(C) The limitation described in Section 3.01(b) under all plans
of Employers and Affiliated Employers for the calendar year
following the year in which the withdrawal is made must be reduced
by the Participant's elective deferrals made in the calendar year
of the distribution for hardship.
For purposes of clause (B), "all other plans of Employers and
Affiliated Employers" shall include stock option plans, stock
purchase plans, qualified and non-qualified deferred compensation
plans and such other plans as may be designated under regulations
issued under Section 401(k) of the Code, but shall not include
health and welfare benefit plans and the mandatory employee
contribution portion of a defined benefit plan.
(ii) The Participant must certify to the Committee or its
delegate, on such form as the Committee or its delegate may
prescribe, that the financial need cannot be fully relieved (A)
through reimbursement or compensation by insurance or otherwise,
(B) by reasonable liquidation of the Participant's assets, (C) by
cessation of Salary Deferral Contributions, or (D) by other
distributions or nontaxable (at the time of the loan) loans from
the Plan or other plans of Employers or Affiliated Employers or by
borrowing from commercial sources at a reasonable rate in an amount
sufficient to satisfy the need. The actions listed are required to
be taken to the extent necessary to relieve the hardship but any
action which would have the effect of increasing the hardship need
not be taken. For purposes of this subsection (ii), there shall be
attributed to the Participant those assets of the Participant's
spouse and minor children which are reasonably available to the
Participant. The Participant shall furnish to the Committee or its
delegate such supporting documents as the Committee or its delegate
may request in accordance with uniform and nondiscriminatory rules
prescribed by the Committee or its delegate.
7.03 Procedures and Restrictions
To make a withdrawal, a Participant shall give such Notice as the
Committee or its delegate shall prescribe. A withdrawal shall be
made as soon as administratively practicable following receipt by
the Committee or its delegate of such Notice. If a loan and a
hardship withdrawal are processed as of the same Valuation Date,
the amount available for the hardship withdrawal will equal the
value of the Participant's Accounts on such Valuation Date reduced
by the amount of the loan. The amount of the withdrawal shall be
allocated between and among the Investment Funds in which the
applicable Account of the Participant is invested in accordance
with the Participant's election; provided, however, that if the
Participant fails to make such election or if the amount of the
withdrawal cannot be allocated between and among the Investment
Funds in which the applicable Account of the Participant is
invested in accordance with the Participant's election because the
Participant has insufficient monies invested in any one or more of
the Investment Funds, the amount of the withdrawal shall be
allocated between and among the Investment Funds in which the
applicable Account of the Participant is invested in as of the date
of the withdrawal on a pro rata basis. Subject to the provisions
of Section 9.09, all payments to Participants under this Article
shall be made in cash as soon as administratively practicable.
ARTICLE 8. LOANS TO PARTICIPANTS
8.01 Amount Available
(a) A Participant who is an employee of an Employer or an
Affiliated Employer or, solely to the extent designated by the
Committee under rules equally applicable to similarly situated
employees, is an employee of an Associated Company may borrow, on
written application to the Committee or its delegate and on
approval by the Committee or its delegate under such uniform rules
as the Committee or its delegate shall adopt, an amount which, when
added to the outstanding balance of any other loans to the
Participant from this Plan or any other qualified plan of an
Employer or Affiliated Employer, including any accrued but unpaid
interest on any deemed loan distribution, does not exceed the
lesser of
(i) 50 percent of the value of his or her Accounts, or
(ii) $50,000 reduced by the excess, if any, of (A) the highest
outstanding balance of loans to the Participant from such plans
during the one year period ending on the day before the day the
loan is made, over (B) the outstanding balance of loans to the
Participant from such plans on the date on which the loan is made.
(b) The interest rate to be charged on loans shall be determined
at the time of the loan application and shall be 1 percent above
the prime rate as promulgated by The Chase Manhattan Bank at the
close of business on the last day of the month preceding the month
in which the loan is made. The interest rate so determined for
purposes of the Plan shall be fixed for the duration of such loan.
(c) The amount of the loan is to be transferred from Participant's
Accounts on a pro rata basis and from the Investment Funds in which
the Participant's Accounts are invested in accordance with the
Participant's election (or if the Participant fails to make such
election or if the amount of the loan cannot be allocated between
and among the Investment Funds in accordance with the Participant's
election, from the Investment Funds in which the Participant's
Accounts are invested in as of the date of the loan on a pro rata
basis), to a special "Loan Fund" for the Participant under the
Plan. The Loan Fund consists solely of the amount transferred to
the Loan Fund and is invested solely in the loan made to the
Participant. The amount transferred to the Loan Fund shall be
pledged as security for the loan. Payments of principal on the loan
will reduce the amount held in the Participant's Loan Fund. Those
payments, together with the attendant interest payment, will be
reinvested in the Investment Funds in accordance with the
Participant's election on his or her loan application, or if none,
in accordance with the Participant's then effective investment
election.
8.02 Terms
(a) In addition to such rules and regulations as the Committee or
its delegate may adopt, all loans shall comply with the following
terms and conditions:
(i) An application for a loan by a Participant shall be made in
writing to the Committee or its delegate, whose action in approving
or disapproving the application shall be final;
(ii) Each loan shall be evidenced by a promissory note payable to
the Plan;
(iii) The period of repayment for any loan shall be arrived at by
mutual agreement between the Committee or its delegate and the
Participant, but that period shall not exceed five years unless the
loan is to be used in conjunction with the purchase of the
principal residence of the Participant. In the event a Participant
enters the uniformed services of the United States and retains
reemployment rights under law, repayments shall be suspended during
the period of leave and the period of repayment shall be extended
by the number of months of the period of service in the uniformed
services.
(iv) Payments of principal and interest will be made by payroll
deductions from the payroll of an Employer or an Affiliated
Employer or, solely to the extent designated by the Committee under
rules equally applicable to similarly situated employees, an
Associated Company, or in a manner agreed to by the Participant and
the Committee or its delegate in substantially level amounts, but
no less frequently than quarterly, in an amount sufficient to
amortize the loan over the repayment period;
(v) A loan may be prepaid in full as of any date without penalty;
(vi) Only one loan may be granted in any calendar year;
(vii) Only two loans may be outstanding at any given time except
that a third loan may be made in conjunction with the purchase of
the principal residence of the Participant.
(b) If a loan is not repaid in accordance with the terms contained
in the promissory note and a default occurs, the Plan may execute
upon its security interest in the Participant's Accounts under the
Plan to satisfy the debt; however, the Plan shall not levy against
any portion of the Loan Fund attributable to amounts held in the
Participant's Salary Deferral Account until such time as a
distribution of the Salary Deferral Account could otherwise be made
under the Plan.
(c) Any additional rules or restrictions as may be necessary to
implement and administer the loan program shall be in writing and
communicated to employees. Such further documentation is hereby
incorporated into the Plan by reference, and the Committee or its
delegate is hereby authorized to make such revisions to these rules
as it deems necessary or appropriate.
(d) To the extent required by law and under such rules as the
Committee or its delegate shall adopt, loans shall also be made
available on a reasonably equivalent basis to any Beneficiary or
former Eligible Employee (i) who maintains an account balance under
the Plan and (ii) who is still a party-in-interest (within the
meaning of Section 3(14) of ERISA).
ARTICLE 9. DISTRIBUTION OF ACCOUNTS UPON
TERMINATION OF EMPLOYMENT
9.01 Eligibility
Upon a Participant's termination of employment, the value of his or
her Accounts shall be distributed as provided in this Article.
9.02 Forms of Distribution
(a) Distribution of the value of a Participant's Accounts shall be
made in a cash lump sum; provided, however, that a Participant may
elect, in such manner as the Committee or its delegate shall
prescribe, to receive an optional form of benefit described below:
(i) To receive the entire value of his or her Accounts in a fixed
dollar amount payable in cash in approximately equal monthly,
quarterly or annual installments, such fixed dollar amount and
installment frequency to be designated by the Participant. In the
event that the Participant dies before complete distribution of his
or her Accounts, the remaining installments shall be paid to his or
her Beneficiary. In the event that the Beneficiary dies before
complete distribution of his or her Accounts, the remaining balance
in the Accounts shall be paid in an immediate cash lump sum to the
Beneficiary's estate.
(ii) To receive the entire value of his or her Accounts in the
form of a variable dollar amount payable in cash in monthly,
quarterly or annual installments over a fixed period of time
designated by the Participant. In the event that the Participant
dies before all installments have been paid, the remaining
installments shall be paid to his or her Beneficiary. In the event
that the Beneficiary dies before all installments have been paid,
the remaining balance in his or her Accounts shall be paid in an
immediate cash lump sum to the Beneficiary's estate.
(iii) To receive the entire value of his or her Accounts in a lump
sum, the portion of such Accounts invested in the Company Stock
Fund to be paid in shares of Company Stock (except that such part
thereof as is represented by a fractional share or that has not yet
been converted into Company Stock shall be distributed in cash) and
the remainder of such Accounts to be paid in cash.
(iv) To receive the portion of his or her Accounts invested in the
Company Stock Fund in a lump sum consisting of shares of Company
Stock (except that such part thereof as is represented by a
fractional share or that has not yet been converted into Company
Stock shall be distributed in cash) and to receive the remainder of
his or her Accounts in a form of payment set forth in clause (i) or
(ii) above, as the Participant elects.
(v) To receive the portion of his or her Accounts invested in the
Company Stock Fund in the form of a variable dollar amount payable
in shares of Company Stock (except that such part thereof as is
represented by a fractional share or that has not yet been
converted into Company Stock shall be distributed in cash) in
annual installments over a fixed period of time designated by the
Participant and to receive the remainder of his or her Accounts in
either a cash lump sum or in a form of payment set forth in clause
(i) or (ii) above, as the Participant elects. In the event that
the Participant dies before all installments have been paid, the
remaining installments shall be paid to his or her Beneficiary. In
the event that the Beneficiary dies before all installments have
been paid, the remaining balance in his or her Accounts shall be
paid in an immediate lump sum to the Beneficiary's estate.
(b) Notwithstanding the provisions of paragraph (a) above, upon
the later of a Participant's attainment of age 70 and one-half and
his or her termination of employment, the Committee or its delegate
shall calculate the minimum amount required each distribution
calendar year to satisfy the minimum distribution requirements of
Section 401(a)(9) of the Code. Such minimum amount will be
determined on the basis of the life expectancy of the Participant,
unless the Participant elects that such minimum amount be
determined on the basis of the joint life expectancy of the
Participant and his or her Beneficiary. To the extent permitted
under Section 401(a)(9) of the Code and the regulations thereunder,
such life expectancy will be recalculated each year unless the
Participant irrevocably elects otherwise. If the minimum amount
calculated for a distribution calendar year is greater than the
amount that would otherwise be paid to the Participant, such
minimum amount will be distributed in lieu thereof. If the minimum
amount calculated for a distribution calendar year is less than the
amount that would otherwise be paid to the Participant, the
Participant may elect that such minimum amount be distributed in
lieu thereof. The amount of the distribution shall be taken on a
pro rata basis from the Participant's Accounts and shall be
allocated between and among the Investment Funds in accordance with
the Participant's election; provided, however, that if the
Participant fails to make such election the amount of the
distribution shall be allocated between and among the Investment
Funds in which the Accounts are invested in as of the date of the
distribution on a pro rata basis. Any elections under this
paragraph (b) shall be made in such manner as the Committee or its
delegate shall prescribe. Solely to the extent permitted by the
Committee or its delegate under rules equally applicable to
similarly situated Participants and except as otherwise provided in
the Plan, the Participant may change his or her elections under
Section 9.02(a) or (b).
(c) If a Participant dies before his or her Annuity Starting Date,
the value of his or her Accounts shall be paid to his or her
Beneficiary in a cash lump sum; provided, however, that the
Beneficiary may elect, in such manner as the Committee or its
delegate shall prescribe, to receive an optional form of benefit
described below:
(i) To receive the entire value of the Participant's Accounts in
the form of a fixed dollar amount payable in cash in approximately
equal monthly, quarterly, or annual installments, such fixed dollar
amount and installment frequency to be designated by the
Beneficiary; provided, however, that if the Beneficiary is not the
Participant's surviving spouse, upon the expiration of the five-
year period commencing on the Annuity Starting Date the remaining
balance in the Accounts shall be paid in an immediate cash lump sum
to the Beneficiary. In the event that the Beneficiary dies before
complete distribution of his or her Accounts, the remaining balance
in the Accounts shall be paid in an immediate cash lump sum to the
Beneficiary's estate.
(ii) To receive the entire value of the Participant's Accounts in
the form of a variable dollar amount payable in cash in monthly,
quarterly or annual installments over a fixed period designated by
the Beneficiary; provided, however, that if the Beneficiary is not
the Participant's surviving spouse, upon the expiration of the
five-year period commencing on the Annuity Starting Date the
remaining balance in the Accounts shall be paid in an immediate
cash lump sum to the Beneficiary. In the event that the
Beneficiary dies before all installments have been paid, the
remaining balance in his or her Accounts shall be paid in an
immediate cash lump sum to the Beneficiary's estate.
(iii) To receive the entire value of the Participant's Accounts in
a lump sum, the portion of such Accounts invested in the Company
Stock Fund to be paid in shares of Company Stock (except that such
part thereof as is represented by a fractional share or that has
not yet been converted into Company Stock shall be distributed in
cash) and the remainder of such Accounts to be paid in cash.
(iv) To receive the portion of the Participant's Accounts invested
in the Company Stock Fund in a lump sum consisting of shares of
Company Stock (except that such part thereof as is represented by a
fractional share or that has not yet been converted into Company
Stock shall be distributed in cash) and to receive the remainder of
the Participant's Accounts in a form of payment set forth in clause
(i) or (ii) above, as the Beneficiary elects.
(v) To receive the portion of the Participant's Accounts invested
in the Company Stock Fund in the form of a variable dollar amount
payable in shares of Company Stock (except that such part thereof
as is represented by a fractional share or that has not yet been
converted into Company Stock shall be distributed in cash) in
annual installments over a fixed period of time designated by the
Beneficiary and to receive the remainder of his or her Accounts in
either a cash lump sum or in a form of payment set forth in clause
(i) or (ii) above, as the Beneficiary elects; provided, however,
that if the Beneficiary is not the Participant's surviving spouse,
upon the expiration of the five-year period commencing on the
Annuity Starting Date the remaining balance in the Accounts shall
be paid in an immediate lump sum to the Beneficiary. In the
event that the Beneficiary dies before all installments have been
paid, the remaining balance in his or her Accounts shall be paid in
an immediate lump sum to the Beneficiary's estate.
(d) Notwithstanding the provisions of paragraph (c) above, if a
Participant dies prior to his or her Annuity Starting Date, upon
the later of the Participant's date of death and the date the
Participant would have attained 70 and one-half the Committee or
its delegate shall calculate the minimum amount required each
distribution calendar year to satisfy the minimum distribution
requirements of Section 401(a)(9) of the Code. Such minimum amount
will be determined on the basis of the life expectancy of the
Beneficiary. To the extent permitted under Section 401(a)(9) of the
Code and the regulations thereunder, such life expectancy will be
recalculated once each year unless the Beneficiary irrevocably
elects otherwise. If the minimum amount calculated for a
distribution calendar year is greater than the amount that would
otherwise be paid to the Beneficiary, such minimum amount will be
distributed in lieu thereof. If the minimum amount calculated for
a distribution calendar year is less than the amount that would
otherwise be paid to the Beneficiary, the Beneficiary may elect
that such minimum amount be distributed in lieu thereof. The
amount of the distribution shall be taken on a pro rata basis from
the Participant's Accounts and shall be allocated between and among
the Investment Funds in accordance with the Beneficiary's election;
provided, however, that if the Beneficiary fails to make such
election the amount of the distribution shall be allocated between
and among the Investment Funds in which the Accounts are invested
in as of the date of the distribution on a pro rata basis. Any
elections under this paragraph (d) shall be made in such manner as
the Committee or its delegate shall prescribe. Solely to the
extent permitted by the Committee or its delegate under rules
equally applicable to similarly situated Beneficiaries and except
as otherwise provided in the Plan, the Beneficiary may change his
or her elections under Section 9.02(c) or (d).
9.03 Commencement of Payments
(a) Except as otherwise provided in this Article, distribution of
the value of a Participant's Accounts shall commence as soon as
administratively practicable following the later of (i) the
Participant's termination of employment or (ii) the 65th
anniversary of the Participant's date of birth (but not more than
60 days after the close of the Plan Year in which the later of (i)
or (ii) occurs).
(b) In lieu of a distribution as described in paragraph (a) above,
a Participant may, in accordance with such procedures as the
Committee or its delegate shall prescribe, elect to have the
distribution of the value of his or her Accounts commence as of any
Valuation Date coincident with or following his or her termination
of employment which is no later than April 1 of the calendar year
following the calendar year in which the Participant attains age 70
and one-half. Subject to the limitations set forth in the
preceding sentence, a Participant who elects to receive the portion
of his or her Accounts invested in the Company Stock Fund in shares
of Company Stock may elect one commencement date for such
distribution and a different commencement date for distribution of
the remainder of his or her Accounts.
(c) In the case of the death of a Participant before his or her
benefits commence, distribution of the value of his or her Accounts
shall commence to his or her Beneficiary as soon as
administratively practicable following the Participant's date of
death; provided, however, that if the Beneficiary is the
Participant's spouse, such Beneficiary may elect to have the value
of his or her Accounts commence as of any Valuation Date coincident
with or following the Participant's death which is no later than
April 1 of the calendar year following the calendar year in which
the Participant would have attained age 70 and one-half. Subject
to the limitations set forth in the preceding sentence, a
Beneficiary who elects to receive the portion of his or her
Accounts invested in the Company Stock Fund in shares of Company
Stock may elect one commencement date for such distribution and a
different commencement date for distribution of the remainder of
his or her Accounts.
9.04 Age 70 and one-half Required Distribution
(a) Notwithstanding any provision of the Plan to the contrary, if
a Participant is a five percent owner (as defined in Section 416(i)
of the Code), distribution of the Participant's Accounts shall
begin no later than the April 1 following the calendar year in
which he or she attains age 70 and one-half. No minimum
distribution payments will be required to be made to a Participant
under the provisions of Section 401(a)(9) of the Code on or after
January 1, 1997 if the Participant is not a five percent owner as
defined above. Such Participant may, however, elect to receive in-
service withdrawals in accordance with the provisions of Article 7
while he or she remains in service.
(b) In the event a Participant in active service is required to
begin receiving payments while in service under the provisions of
paragraph (a) above, the Plan shall distribute to the Participant
in each distribution calendar year the minimum amount required to
satisfy the provisions of Section 401(a)(9) of the Code; provided,
however, that the payment for the first distribution calendar year
shall be made on or before April 1 of the following calendar year.
Such minimum amount will be determined on the basis of the life
expectancy of the Participant, unless the Participant elects that
such minimum amount be determined on the basis of the joint life
expectancy of the Participant and his or her Beneficiary. To the
extent permitted under Section 401(a)(9) of the Code and the
regulations thereunder, such life expectancy will be recalculated
once each year unless the Participant irrevocably elects otherwise.
The amount of the distribution shall be taken on a pro rata basis
from the Participant's Accounts and shall be allocated between and
among the Investment Funds in accordance with his or her election;
provided, however, that if the Participant fails to make such
election the amount of the distribution shall be allocated between
and among the Investment Funds in which the Accounts are invested
in as of the date of the distribution on a pro rata basis. The
commencement of payments under this Section 9.04 shall not
constitute an Annuity Starting Date for purposes of Sections 72,
401(a)(11) and 417 of the Code. Upon the Participant's subsequent
termination of employment, payment of the Participant's Accounts
shall be made in accordance with the provisions of Section 9.02.
Any elections under this paragraph (b) shall be made in such manner
as the Committee or its delegate shall prescribe. Solely to the
extent permitted by the Committee or its delegate under rules
equally applicable to similarly situated Participants and except as
otherwise provided in the Plan, the Participant may change his or
her elections under this paragraph (b).
(c) In the event a Participant in active service who is not a 5
percent owner was required to begin receiving payments to satisfy
the provisions of Section 401(a)(9) of the Code, such Participant
may irrevocably elect in such manner as the Committee or its
delegate shall prescribe, to have such payments cease. If a
Participant elects such cessation of payments, payments to the
Participant shall recommence in accordance with Section 9.03(a).
Such Participant may, however, elect to receive in-service
withdrawals in accordance with the provisions of Article 7 while he
or she remains in service.
9.05 Small Benefits
Notwithstanding any provision of the Plan to the contrary, a lump
sum payment shall be made in lieu of all vested benefits if the
value of the Participant's Accounts as of his or her termination of
employment amounts to (i) $3,500 or less if the date of
determination is prior to January 1, 1999 or (ii) $5,000 or less if
the date of determination is on or after January 1, 1999. Such
lump sum payment shall be made in cash; provided, however, that the
Participant (or Beneficiary in the case of the Participant's death)
may elect, in such manner as the Committee or its delegate shall
prescribe, to receive the portion of the Participant's Accounts
invested in the Company Stock Fund in shares of Company Stock
(except that such part thereof as is represented by a fractional
share or that has not yet been converted into Company Stock shall
be distributed in cash). The lump sum payment shall automatically
be made as soon as administratively practicable following the
Participant's termination of employment.
9.06 Status of Accounts Pending Distribution
Until completely distributed under Section 9.03, 9.04 or 9.05, the
Accounts of a Participant who is entitled to a distribution shall
continue to be invested as part of the funds of the Plan and the
Participant shall retain investment transfer rights as described in
Section 4.05 during the deferral period. However, loans or
withdrawals shall not be permitted during the deferral period
except to the extent required by law.
9.07 Proof of Death and Right of Beneficiary or Other Person
The Committee or its delegate may require and rely upon such proof
of death and such evidence of the right of any Beneficiary or other
person to receive the value of the Accounts of a deceased
Participant as the Committee or its delegate may deem proper and
its determination of the right of that Beneficiary or other person
to receive payment shall be conclusive.
9.08 Distribution Limitation
Notwithstanding any other provision of this Article 9, all
distributions from this Plan shall conform to the regulations
issued under Section 401(a)(9) of the Code, including the
incidental death benefit provisions of Section 401(a)(9)(G) of the
Code. Further, such regulations shall override any Plan provision
that is inconsistent with Section 401(a)(9) of the Code.
9.09 Direct Rollover of Certain Distributions
This Section applies to distributions made on or after January 1,
1993. Notwithstanding any provision of the Plan to the contrary
that would otherwise limit a distributee's election under this
Section, a distributee may elect, at the time and in the manner
prescribed by the Committee or its delegate, to have any portion of
an eligible rollover distribution paid directly by the Plan to an
eligible retirement plan specified by the distributee in a direct
rollover. The following definitions apply to the terms used in this
Section:
(a) "Eligible rollover distribution" means any distribution of
all or any portion of the balance to the credit of the distributee,
except that an eligible rollover distribution does not include any
distribution to the extent such distribution is required under
Section 401(a)(9) of the Code, and the portion of any distribution
that is not includible in gross income (determined without regard
to the exclusion for net unrealized appreciation with respect to
employer securities);
(b) "Eligible retirement plan" means an individual retirement
account described in Section 408(a) of the Code, an individual
retirement annuity described in Section 408(b) of the Code, an
annuity plan described in Section 403(a) of the Code, or a
qualified trust described in Section 401(a) of the Code, that
accepts the distributee's eligible rollover distribution. However,
in the case of an eligible rollover distribution to the surviving
spouse, an eligible retirement plan is an individual retirement
account or individual retirement annuity;
(c) "Distributee" means an employee or former employee. In
addition, the employee's or former employee's surviving spouse and
the employee's or former employee's spouse or former spouse who is
the alternate payee under a qualified domestic relations order as
defined in Section 414(p) of the Code, are distributees with regard
to the interest of the spouse or former spouse; and
(d) "Direct rollover" means a payment by the Plan to the
eligible retirement plan specified by the distributee.
In the event that the provisions of this Section 9.09 or any part
thereof cease to be required by law as a result of subsequent
legislation or otherwise, this Section or any applicable part
thereof shall be ineffective without the necessity of further
amendments to the Plan.
9.10 Waiver of Notice Period
Except as provided in the following sentence, an election by the
Participant to receive a distribution, to the extent such election
is required by Section 411(a)(11) of the Code and the regulations
thereunder, shall not be valid unless the written election is made
(a) after the Participant has received the notice required under
Section 1.411(a)-11(c) of the Income Tax Regulations and (b) within
a reasonable time before the effective date of the commencement of
the distribution as prescribed by said regulations. If the
distribution is one to which Section 401(a)(11) and 417 of the Code
do not apply, such distribution may commence less than 30 days
after the notice required under Section 1.411(a)-11(c) of the
Income Tax Regulations is given, provided that:
(i) the Plan Sponsor or its delegate clearly informs the
Participant that he or she has a right to a period of at least 30
days after receiving the notice to consider the decision of whether
or not to elect a distribution (and, if applicable, a particular
distribution option), and
(ii) the Participant, after receiving the notice, affirmatively
elects a distribution.
ARTICLE 10. ADMINISTRATION OF PLAN
10.01 Appointment of Committee
The general administration of the Plan and the responsibility for
carrying out the provisions of the Plan shall be placed in the
Committee, which shall be established pursuant to the general
policies and procedures as adopted by the Company from time to
time.
10.02 Duties of Committee
The members of the Committee may appoint from their number such
subcommittees with such powers as they shall determine; may
authorize one or more of their number or any agent to execute or
deliver any instrument or make any payment on their behalf; shall
have the responsibility with respect to reporting and disclosure
requirements under ERISA; may retain counsel, employ agents and
provide for such clerical, accounting, and consulting services as
they may require in carrying out the provisions of the Plan; and
may allocate among themselves or delegate to other persons all or
such portion of their duties under the Plan, other than those
granted to the Trustee under the trust agreement adopted for use in
implementing the Plan, as they shall decide; and may perform such
other duties as provided in the general policies and procedures as
adopted by the Company from time to time; subject to such general
policies and procedures and any determination of the Board of
Directors.
10.03 Meetings
The Committee and the Investment Committee shall hold meetings upon
such notice, at such place or places, and at such time or times as
they may from time to time determine or as provided in the general
policies and procedures as adopted by the Company from time to
time.
10.04 Action of Majority
Any act which the Plan authorizes or requires the Committee to do
may be done by a majority of its members. The action of that
majority expressed from time to time by a vote at a meeting or in
writing without a meeting shall constitute the action of the
Committee and shall have the same effect for all purposes as if
assented to by all members of the Committee at the time in office.
A written resolution or memorandum signed by a majority of the
members of the Committee shall be sufficient evidence to any person
of any action taken by such Committee.
10.05 Compensation and Bonding
No members of the Committee or the Investment Committee shall
receive any compensation from the Plan for his or her services as
such. Except as may otherwise be required by law, no bond or other
security need be required of any members in that capacity in any
jurisdiction.
10.06 Establishment of Rules
Subject to the limitations of the Plan, the Committee or its
delegate from time to time shall establish rules for the
administration of the Plan and the transaction of its business.
The Committee shall have discretionary authority to construe and
interpret the Plan (including, but not limited to, determination of
an individual's eligibility for Plan participation, the periods of
layoff or other absence that constitute an authorized leave of
absence, the right and amount of any benefit payable under the Plan
and the date on which any individual ceases to be a Participant).
The determination of the Committee as to the interpretation of the
Plan or any disputed question shall be conclusive and final to the
extent permitted by applicable law.
10.07 Appointment of Investment Committee
An Investment Committee shall be established pursuant to the
general policies and procedures as adopted by the Company from time
to time.
10.08 Duties of Investment Committee
In addition to any other responsibilities assigned to it under the
Plan, the Investment Committee shall have primary responsibility
and authority for setting and implementing the Plan's investment
and funding objectives and policies and communicating the same to,
and monitoring, the Trustee and investment managers and reporting
as required pursuant to the general policies and procedures as
adopted by the Company from time to time to the Pension Committee
of the board of directors of the Company. The Investment Committee
shall have the authority to retain independent consultants and
advisors. The Investment Committee shall have no responsibility as
to investment decisions respecting Plan Accounts.
10.09 Individual Accounts
The Committee or its delegate shall maintain, or cause to be
maintained, records showing the individual balances in each
Participant's Accounts. However, maintenance of those records
and Accounts shall not require any segregation of the funds of
the Plan.
10.10 Appointment of Investment Manager
The Investment Committee may, in its discretion, appoint one or
more investment managers (within the meaning of Section 3(38) of
ERISA) to manage (including the power to acquire and dispose of)
all or part of the assets of the Plan, as the Investment Committee
shall designate. In that event authority over and responsibility
for the management of the assets so designated shall be the sole
responsibility of that investment manager.
10.11 Prudent Conduct
The members of the Committee and the Investment Committee shall use
that degree of care, skill, prudence and diligence that a prudent
man acting in a like capacity and familiar with such matters would
use in his or her conduct of a similar situation.
10.12 Service in More Than One Fiduciary Capacity
Any individual, entity or group of persons may serve in more than
one fiduciary capacity with respect to the Plan and/or the funds of
the Plan.
10.13 Limitation of Liability
The members of the Investment Committee and the Committee and their
agents and delegates shall be entitled to rely upon the advice,
opinions, reports, statements, and certificates of counsel,
actuaries, accountants, and other experts retained by them. No
member of any committee provided for herein shall be responsible
for the breach of any obligation or duty expressly delegated under
the Plan to any other committee, unless such member knowingly
participates in or knowingly undertakes to conceal such breach.
An Employer, the Board of Directors, the members of the Committee
and the Investment Committee, and any officer, employee or agent of
an Employer shall not incur any liability individually or on behalf
of any other individuals or on behalf of any Employer for any act
or failure to act, made in good faith in relation to the Plan or
the funds of the Plan, except with regard to any matters at to
which they shall be adjudged to be liable for gross negligence or
willful misconduct in the performance of their duties. However,
this limitation shall not act to relieve any such individual or an
Employer from a responsibility or liability for any fiduciary
responsibility, obligation or duty under Part 4, Title I of ERISA.
10.14 Indemnification
To the extent permitted by ERISA and applicable state law, the
Employers shall indemnify and save harmless the Board of Directors,
the members of the Committee and the Investment Committee, and the
officers and employees of the Employers against all liabilities and
expenses, including attorneys' fees, reasonably incurred by them
in connection with any legal action to which they may be a party or
any threatened legal action arising out of their discharge in good
faith of responsibilities under or incident to the Plan, except for
actions or failures to act made in bad faith or for which they
shall be adjudged to be liable for gross negligence or willful
misconduct in the performance of their duties. The foregoing
indemnity shall not preclude such further indemnities as may be
available by the purchase of insurance, as such indemnities are
permitted by law. The foregoing indemnification shall be from the
assets of the Employers and shall not be made directly or
indirectly from the Plan.
10.15 Named Fiduciary
For purposes of ERISA, the Plan Sponsor shall be the named
fiduciary of the Plan.
10.16 Claims and Review Procedures
(a) Applications for benefits and inquiries concerning the Plan
(or concerning present or future rights to benefits under the Plan)
shall be submitted to the Committee or its delegate in writing. An
application for benefits shall be submitted on the prescribed form
and shall be signed by the Participant or, in the case of a benefit
payable after his death, by his or her Beneficiary.
(b) In the event that an application for benefits is denied in
whole or in part, the Committee or its delegate shall notify the
applicant in writing of the denial and of the right to review of
the denial. The written notice shall set forth, in a manner
calculated to be understood by the applicant, specific reasons for
the denial, specific references to the provisions of the Plan on
which the denial is based, a description of any information or
material necessary for the applicant to perfect the application, an
explanation of why the material is necessary, and an explanation of
the review procedure under the Plan. The written notice shall be
given to the applicant within a reasonable period of time (not more
than 90 days) after the Committee or its delegate received the
application, unless special circumstances require further time for
processing and the applicant is advised of the extension. In no
event shall the notice be given more than 180 days after the
Committee or its delegate received the application.
(c) An applicant whose application for benefits was denied in
whole or part, or the applicant's duly authorized representative,
may appeal the denial by submitting to the Committee or its
delegate a request for a review of the application within 60 days
after receiving written notice of the denial from the Committee or
its delegate. The Committee or its delegate shall give the
applicant or his representative an opportunity to review pertinent
materials, other than legally privileged documents, in preparing
the request for a review. The request for a review shall be in
writing and addressed to the Committee or its delegate. The
request for a review shall set forth all of the grounds on which it
is based, all facts in support of the request and any other matters
that the applicant deems pertinent. The Committee or its delegate
may require the applicant to submit such additional facts,
documents or other materials as it may deem necessary or
appropriate in making its review.
(d) The Committee or its delegate shall act on each request for a
review within 60 days after receipt, unless special circumstances
require further time for processing and the applicant is advised of
the extension. In no event shall the decision on review be rendered
more than 120 days after the Committee or its delegate received the
request for a review. The Committee or its delegate shall give
prompt written notice of its decision to the applicant. In the
event that the Committee or its delegate confirms the denial of the
application for benefits in whole or in part, the notice shall set
forth, in a manner calculated to be understood by the applicant,
the specific reasons for the decision and specific references to
the provisions of the Plan on which the decision is based.
(e) The Committee or its delegate shall adopt such rules,
procedures and interpretations of the Plan as it deems necessary or
appropriate in carrying out its responsibilities under this Section
10.16.
(f) No legal action for benefits under the Plan shall be brought
unless and until the claimant (i) has submitted a written
application for benefits in accordance with paragraph (a), (ii) has
been notified by the Committee or its delegate that the application
is denied, (iii) has filed a written request for a review of the
application in accordance with paragraph (c) and (iv) has been
notified in writing that the Committee or its delegate has affirmed
the denial of the application; provided, however, that legal action
may be brought after the Committee or its delegate has failed to
take any action on the claim within the time prescribed by
paragraphs (b) and (d) above.
ARTICLE 11. MANAGEMENT OF FUNDS
11.01 Trust Agreement
All the funds of the Plan shall be held by the Trustee appointed
from time to time by the Investment Committee or its delegate under
a trust agreement adopted, or as amended, by the Board of
Directors. The Employer and the Investment Committee shall have no
liability for the payment of benefits under the Plan nor for the
administration of the funds paid over to the Trustee.
11.02 Exclusive Benefit Rule
Except as otherwise provided in the Plan, no part of the corpus or
income of the funds of the Plan shall be used for, or diverted to,
purposes other than for the exclusive benefit of Participants and
other persons entitled to benefits under the Plan and paying the
expenses of the Plan not paid directly by the Company on behalf of
the Employers. No person shall have any interest in, or right to,
any part of the earnings of the funds of the Plan, or any right in,
or to, any part of the assets held under the Plan, except as and to
the extent expressly provided in the Plan.
11.03 Voting of Company Stock
Company Stock held by the Trustee shall be voted by the Trustee at
each annual meeting and at each special meeting of stockholders of
the Company as directed by the Participant to whose Accounts such
Company Stock is credited. Fractional shares shall be aggregated
for this purpose. The Company shall cause each Participant to be
provided with a copy of a notice of each such stockholder meeting
and the proxy statement of the Company, together with an
appropriate form or method for the Participant to indicate his or
her voting instructions. If instructions are not timely received
by the Trustee with respect to any such Company Stock, the Trustee
shall not vote the uninstructed Company Stock.
11.04 Tender Offers
Each Participant (or in the event of his or her death, his or her
Beneficiary) shall have the right to instruct the Trustee in
writing or in such other method as approved by the Committee or its
delegate as to the manner in which to respond to a tender or
exchange offer for any or all shares of Company Stock credited to
the Participant's (or Beneficiary's) Accounts under the Plan. The
Company shall cause each Participant (or Beneficiary) to be
notified and utilize its best efforts to distribute on a timely
basis, or cause to be distributed, such information as will be
distributed to the shareholders of the Company in connection with
any such tender or exchange offer. Upon its receipt of such
instructions, the Trustee shall tender such shares of Company Stock
as and to the extent so instructed. If the Trustee shall not
receive instruction for a Participant (or Beneficiary) regarding
any such tender or exchange offer for Company Stock, the Trustee
shall have no discretion in such matter and shall take no action
with respect to such tender or exchange offer.
11.05 Confidentiality
The Trustee is precluded from disclosing information to employees
of an Employer on the purchase, holding and sale of shares in the
Company Stock Fund, except where requested by such employees to
comply with a subpoena or otherwise to be provided as necessary for
the proper administration of the Participant's or Beneficiary's
Accounts. In addition, the Company, each Employer, and their
respective employees and agents are precluded from disclosing such
information other than as necessary to administer the Plan. With
respect to the exercise of voting, tender, and similar rights, the
Trustee and the Company's transfer agents are precluded from
disclosing to employees of an Employer information on the exercise
of such rights, except as required by law.
ARTICLE 12. AMENDMENT, MERGER AND TERMINATION
12.01 Amendment of Plan
The Board of Directors reserves the right at any time and from time
to time, and retroactively if deemed necessary or appropriate, to
amend in whole or in part any or all of the provisions of the Plan.
Such action shall be evidenced by written resolution certified in
writing by the Secretary or Assistant Secretary of the Plan
Sponsor. However, no amendment shall make it possible for any part
of the funds of the Plan to be used for, or diverted to, purposes
other than for the exclusive benefit of persons entitled to
benefits under the Plan. No amendment shall be made which has the
effect of decreasing the balance of the Accounts of any Participant
or of reducing the nonforfeitable percentage of the balance of the
Accounts of a Participant below the nonforfeitable percentage
computed under the Plan as in effect on the date on which the
amendment is adopted, or if later, the date on which the amendment
becomes effective.
12.02 Merger, Consolidation or Transfer
The Board of Directors may, in its sole discretion, merge this Plan
into another qualified plan, subject to any applicable legal
requirements. The Plan may not be merged or consolidated with, and
its assets or liabilities may not be transferred to, any other plan
unless each person entitled to benefits under the Plan would, if
the resulting plan were then terminated, receive a benefit
immediately after the merger, consolidation, or transfer which is
equal to or greater than the benefit he or she would have been
entitled to receive immediately before the merger, consolidation,
or transfer if the Plan had then terminated.
12.03 Additional Participating Employers
(a) If any company is or becomes a subsidiary of or associated
with an Employer, the Committee may include the employees of that
subsidiary or associated company in the participation of the Plan
upon appropriate action by that company necessary to adopt the
Plan. In that event, or if any persons become Eligible Employees
of an Employer as the result of merger or consolidation or as the
result of acquisition of all or part of the assets or business of
another company, the Committee shall determine to what extent, if
any, previous service with the subsidiary, associated or other
company shall be recognized under the Plan, but subject to the
continued qualification of the trust for the Plan as tax-exempt
under the Code.
(b) Any subsidiary or associated company may terminate its
participation in the Plan upon appropriate action by it. In that
event the funds of the Plan held on account of Participants in the
employ of that company, and any unpaid balances of the Accounts of
all Participants who have separated from the employ of that
company, shall be determined by the Committee. Those funds shall
be distributed as provided in Section 12.04 if the Plan should be
terminated, or shall be segregated by the Trustee as a separate
trust, pursuant to certification to the Trustee by the Committee or
its delegate, continuing the Plan as a separate plan for the
employees of that company under which the board of directors of
that company shall succeed to all the powers and duties of the
Board of Directors.
12.04 Termination of Plan
(a) The Board of Directors may terminate the Plan or completely
discontinue contributions under the Plan for any reason at any
time. In case of termination or partial termination of the Plan,
or complete discontinuance of Employer contributions to the Plan,
the rights of affected Participants to their Accounts under the
Plan as of the date of the termination or discontinuance shall be
nonforfeitable. In the event of the Plan's termination, the total
amount in each Participant's Accounts shall be distributed to him
or her if permitted by law or continued in trust for his or her
benefit, as the Committee shall direct.
(b) Upon termination of the Plan, Salary Deferral Contributions,
with earnings thereon, shall only be distributed to Participants if
(i) neither the Employer nor an Affiliated Employer establishes or
maintains a successor defined contribution plan, and (ii) payment
is made to the Participants in the form of a lump sum distribution
(as defined in Section 402(d)(4) of the Code, without regard to
clauses (i) through (iv) of subparagraph (A), subparagraph (B), or
subparagraph (F) thereof). For purposes of this paragraph, a
"successor defined contribution plan" is a defined contribution
plan (other than an employee stock ownership plan as defined in
Section 4975(e)(7) of the Code ("ESOP") or a simplified employee
pension as defined in Section 408(k) of the Code ("SEP")) which
exists at the time the Plan is terminated or within the 12-month
period beginning on the date all assets are distributed. However,
in no event shall a defined contribution plan be deemed a successor
plan if fewer than 2 percent of the employees who are eligible to
participate in the Plan at the time of its termination are or were
eligible to participate under another defined contribution plan of
the Employer or an Affiliated Employer (other than an ESOP or a
SEP) at any time during the period beginning 12 months before and
ending 12 months after the date of the Plan's termination.
12.05 Distribution of Accounts Upon a Sale of Assets or a
Sale of a Subsidiary
Upon the disposition by the Employer of at least 85 percent of the
assets (within the meaning of Section 409(d)(2) of the Code) used
by the Employer in a trade or business or upon the disposition by
the Employer of its interest in a subsidiary (within the meaning of
Section 409(d)(3) of the Code), Salary Deferral Contributions, with
earnings thereon, may be distributed to those Participants who
continue in employment with the employer acquiring such assets or
with the sold subsidiary, provided that (a) the Employer maintains
the Plan after the disposition, (b) the buyer does not adopt the
Plan or otherwise become a participating employer in the Plan and
does not accept any transfer of assets or liabilities from the Plan
to a plan it maintains in a transaction subject to Section
414(l)(1) of the Code, (c) payment is made to the Participant in
the form of a lump sum distribution (as defined in Section
402(d)(4) of the Code, without regard to clauses (i) through (iv)
of subparagraph (A), subparagraph (B), or subparagraph (F)
thereof), and (d) payment is made by the end of the second calendar
year following the calendar year in which the disposition occurred.
Notwithstanding the foregoing, if the value of the Vested Portion
of the Participant's Accounts is $3,500 ($5,000 with respect to
dispositions on or after January 1, 1999) or less, the
Participant's vested Accounts shall be distributed as soon as
administratively practicable after the Valuation Date following the
date the Participant's employment with the Employer terminates due
to the disposition referenced above.
ARTICLE 13. GENERAL PROVISIONS
13.01 Nonalienation
Except as required by any applicable law, no benefit under the Plan
shall in any manner be anticipated, assigned or alienated, and any
attempt to do so shall be void. However, payment shall be made in
accordance with the provisions of any judgment, decree, or order
which:
(a) creates for, or assigns to, a spouse, former spouse, child or
other dependent of a Participant the right to receive all or a
portion of the Participant's benefits under the Plan for the
purpose of providing child support, alimony payments or marital
property rights to that spouse, child or dependent,
(b) is made pursuant to a State domestic relations law,
(c) does not require the Plan to provide any type of benefit, or
any option, not otherwise provided under the Plan, and
(d) otherwise meets the requirements of Section 206(d) of ERISA,
as amended, as a "qualified domestic relations order", as
determined by the Committee or its delegate.
Notwithstanding anything herein to the contrary, if the amount
payable to the alternate payee under the qualified domestic
relations order is less than (i) $3,500 if the date of
determination is prior to January 1, 1999 or (ii) $5,000 if the
date of determination is on or after January 1, 1999, such amount
shall be paid in one lump sum as soon as administratively
practicable following the qualification of the order. Such lump
sum payment shall be made in cash; provided, however, that the
alternate payee may elect to receive the portion of the
Participant's Accounts assigned to him or her that is invested in
the Company Stock Fund in shares of Company Stock (except that such
part thereof as is represented by a fractional share or that has
not yet been converted into Company Stock shall be distributed in
cash). If the amount payable to the alternate payee exceeds (i)
$3,500 if the date of determination is prior to January 1, 1999 or
(ii) $5,000 if the date of determination is on or after January 1,
1999, it may be paid as soon as administratively practicable
following the qualification of the order if the qualified domestic
relations order so provides and the alternate payee consents
thereto; otherwise it may not be payable before the earlier of (i)
the Participant's termination of employment or (ii) the
Participant's attainment of age 50.
13.02 Conditions of Employment Not Affected by Plan
The establishment of the Plan shall not confer any legal rights
upon any Employee or other person for a continuation of employment,
nor shall it interfere with the rights of an Employer to discharge
any Employee and to treat him or her without regard to the effect
which that treatment might have upon him or her as a Participant or
potential Participant of the Plan.
13.03 Facility of Payment
If the Committee or its delegate shall find that a Participant or
other person entitled to a benefit is unable to care for his or her
affairs because of illness or accident or is a minor, the Committee
or its delegate may direct that any benefit due him or her, unless
claim shall have been made for the benefit by a duly appointed
legal representative, be paid to his or her spouse, a child, a
parent or other blood relative, or to a person with whom he or she
resides. Any payment so made shall be a complete discharge of the
liabilities of the Plan for that benefit.
Furthermore, if the Committee or its delegate receives from a
Participant a power of attorney valid under state law, the
Committee or its delegate shall comply with the instructions of the
named attorney to the extent that the Committee or its delegate
would comply with such instructions if given by the Participant and
such instructions are consistent with the power of attorney.
13.04 Information
Each Participant, Beneficiary or other person entitled to a
benefit, before any benefit shall be payable to him or her or on
his or her account under the Plan, shall file with the Committee or
its delegate the information that it shall require to establish his
or her rights and benefits under the Plan.
13.05 Top-Heavy Provisions
(a) The following definitions apply to the terms used in this
Section:
(i) "applicable determination date" means the last day of the
preceding Plan Year;
(ii) "top-heavy ratio" means the ratio of (A) the value of the
aggregate of the Accounts under the Plan for key employees to (B)
the value of the aggregate of the Accounts under the Plan for all
key employees and non-key employees;
(iii) "key employee" means an employee who is in a category of
employees determined in accordance with the provisions of Sections
416(i)(1) and (5) of the Code and any regulations thereunder, and
where applicable, on the basis of the Eligible Employee's Statutory
Compensation from an Employer or an Affiliated Employer;
(iv) "non-key employee" means any Eligible Employee who is not a
key employee;
(v) "applicable Valuation Date" means the Valuation Date
coincident with or immediately preceding the last day of the
preceding Plan Year;
(vi) "required aggregation group" means any other qualified
plan(s) of an Employer or an Affiliated Employer in which there are
Participants who are key employees or which enable(s) the Plan to
meet the requirements of Section 401(a)(4) or 410 of the Code; and
(vii) "permissive aggregation group" means each plan in the
required aggregation group and any other qualified plan(s) of an
Employer or an Affiliated Employer in which all Participants are
non-key employees, if the resulting aggregation group continues to
meet the requirements of Sections 401(a)(4) and 410 of the Code.
(b) For purposes of this Section, the Plan shall be "top-heavy"
with respect to any Plan Year if as of the applicable determination
date the top-heavy ratio exceeds 60 percent. The top-heavy ratio
shall be determined as of the applicable Valuation Date in
accordance with Sections 416(g)(3) and (4) of the Code and Article
5 of this Plan. For purposes of determining whether the Plan is
top-heavy, the account balances under the Plan will be combined
with the account balances or the present value of accrued benefits
under each other plan in the required aggregation group, and in the
Committee's or its delegate's discretion, may be combined with the
account balances or the present value of accrued benefits under any
other qualified plan in the permissive aggregation group.
Distributions made with respect to a Participant under the Plan
during the five-year period ending on the applicable determination
date shall be taken into account for purposes of determining the
top-heavy ratio; distributions under plans that terminated within
such five-year period shall also be taken into account, if any such
plan contained key employees and therefore would have been part of
the required aggregation group.
(c) For any Plan Year with respect to which the Plan is top-heavy,
an additional Employer contribution shall be allocated on behalf of
each Participant (and each Eligible Employee eligible to become a
Participant) who is a non-key employee, and who has not separated
from service as of the last day of the Plan Year equal to 3 percent
of such individual's remuneration. However, if the greatest
percentage of remuneration contributed on behalf of a key employee
under Section 3.01 for the Plan Year (disregarding any
contributions made under Section 3.10 for the Plan Year) would be
less than 3 percent, that lesser percentage shall be substituted
for "3 percent" in the preceding sentence. Notwithstanding the
foregoing provisions of this subparagraph (ii), no minimum
contribution shall be made under this Plan with respect to a
Participant (or an Eligible Employee eligible to become a
Participant) if the required minimum benefit under Section
416(c)(1) of the Code is provided to him or her by any other
qualified pension plan of an Employer or an Affiliated Employer.
For the purposes of this subparagraph (ii), remuneration has the
same meaning as set forth in Section 3.07(c).
13.06 Prevention of Escheat
If the Committee or its delegate cannot ascertain the whereabouts
of any person to whom a payment is due under the Plan, the
Committee or its delegate may, no earlier than three years from the
date such payment is due, mail a notice of such due and owing
payment to the last known address of such person, as shown on the
records of the Committee or an Employer. If such person has not
made written claim therefor within three months of the date of the
mailing, the Committee or its delegate may, if it so elects and
upon receiving advice from counsel to the Plan, direct that such
payment and all remaining payments otherwise due such person be
canceled on the records of the Plan and the amount thereof applied
to reduce the contributions of the Employer. Upon such
cancellation, the Plan and the Trust Fund shall have no further
liability therefor except that, in the event such person or his or
her beneficiary later notifies the Committee or its delegate of his
or her whereabouts and requests the payment or payments due to him
or her under the Plan, the amount so applied shall be paid to him
or her in accordance with the provisions of the Plan.
13.07 Written Elections
Any elections, notifications or designations made by a Participant
pursuant to the provisions of the Plan shall be made in a time and
manner and to the party determined by the Committee or its delegate
under rules uniformly applicable to all employees similarly
situated. The Committee or its delegate reserves the right to
change from time to time the time and manner for making
notifications, elections or designations by Participants under the
Plan if it determines after due deliberation that such action is
justified in that it improves the administration of the Plan. In
the event of a conflict between the provisions for making an
election, notification or designation set forth in the Plan and
such new administrative procedures, those new administrative
procedures shall prevail.
13.08 Construction
(a) The Plan shall be construed, regulated and administered under
ERISA and the laws of the State of New Jersey, except where ERISA
controls.
(b) The masculine pronoun shall mean the feminine wherever
appropriate.
(c) The titles and headings of the Articles and Sections in this
Plan are for convenience only. In the case of ambiguity or
inconsistency, the text rather than the titles or headings shall
control.
SCHERING-PLOUGH EMPLOYEES'
SAVINGS PLAN
APPENDIX A
SPECIAL PROVISIONS APPLICABLE TO
TRANSFERRED CANJI, INC. EMPLOYEES
Notwithstanding any other provision of the Plan to the contrary,
the provisions of this Appendix A shall take precedence and be
applicable with respect to an individual who:
(i) as of January 1, 1997 had been employed by Canji, Inc. for a
period of at least ninety days and had attained age 18 (hereinafter
referred to as a "Canji Employee"); and
(ii) (a) previously was employed by Canji, Inc., (b) was a
participant in the Canji, Inc. 401(k) Profit Sharing Plan on
December 31, 1996, and (c) elected to roll his or her account
balance in the Canji, Inc. 401(k) Profit Sharing Plan on December
31, 1996 (hereinafter referred to as the "Canji Account Balance")
into the Plan (hereinafter referred to as a "Former Canji
Employee").
1. A Canji Employee shall become eligible to participate in the
Plan effective January 1, 1997.
2. A Former Canji Employee shall become a Participant of the Plan
effective January 1, 1997.
SCHERING-PLOUGH EMPLOYEES'
SAVINGS PLAN
Effective January 1, 1997
SCHERING-PLOUGH EMPLOYEES'
SAVINGS PLAN
Effective January 1, 1997
TABLE OF CONTENTS
Page
ARTICLE 1. DEFINITIONS 1
ARTICLE 2. ELIGIBILITY AND PARTICIPATION 13
2.01 ELIGIBILITY 13
2.02 PARTICIPATION 13
2.03 REEMPLOYMENT OF FORMER EMPLOYEES AND FORMER PARTICIPANTS 13
2.04 TRANSFERRED PARTICIPANTS 14
2.05 TERMINATION OF PARTICIPATION 14
ARTICLE 3. CONTRIBUTIONS 15
3.01 SALARY DEFERRAL CONTRIBUTIONS 15
3.02 ROLLOVER CONTRIBUTIONS 17
3.03 CHANGE IN CONTRIBUTIONS 18
3.04 SUSPENSION OF CONTRIBUTIONS 18
3.05 ACTUAL DEFERRAL PERCENTAGE TEST 18
3.06 ADDITIONAL DISCRIMINATION TESTING PROVISIONS 21
3.07 MAXIMUM ANNUAL ADDITIONS 23
3.08 RETURN OF CONTRIBUTIONS 26
3.09 CONTRIBUTIONS NOT CONTINGENT UPON PROFITS 27
3.10 CONTRIBUTIONS DURING PERIOD OF MILITARY LEAVE 27
ARTICLE 4. INVESTMENT OF CONTRIBUTIONS 29
4.01 INVESTMENT FUNDS 29
4.02 INVESTMENT OF PARTICIPANTS' ACCOUNTS 29
4.03 RESPONSIBILITY FOR INVESTMENTS 30
4.04 CHANGE OF ELECTION 30
4.05 REALLOCATION OF ACCOUNTS AMONG THE INVESTMENT FUNDS 30
4.06 LIMITATIONS IMPOSED BY CONTRACT 31
4.07 ERISA SECTION 404(C) COMPLIANCE 31
ARTICLE 5. VALUATION OF THE ACCOUNTS 32
5.01 VALUATION OF THE INVESTMENT FUNDS 32
5.02 RIGHT TO CHANGE PROCEDURES 32
5.03 STATEMENT OF ACCOUNTS 32
ARTICLE 6. VESTED PORTION OF ACCOUNTS 34
ARTICLE 7. WITHDRAWALS WHILE STILL EMPLOYED 35
7.01 WITHDRAWAL AFTER AGE 70 35
7.02 HARDSHIP WITHDRAWAL 35
7.03 PROCEDURES AND RESTRICTIONS 39
ARTICLE 8. LOANS TO PARTICIPANTS 40
8.01 AMOUNT AVAILABLE 40
8.02 TERMS 41
ARTICLE 9. DISTRIBUTION OF ACCOUNTS UPON TERMINATION OF
EMPLOYMENT 44
9.01 ELIGIBILITY 44
9.02 FORMS OF DISTRIBUTION 44
9.03 COMMENCEMENT OF PAYMENTS 50
9.04 AGE 70 AND ONE-HALF REQUIRED DISTRIBUTION 52
9.05 SMALL BENEFITS 54
9.06 STATUS OF ACCOUNTS PENDING DISTRIBUTION 55
9.07 PROOF OF DEATH AND RIGHT OF BENEFICIARY OR OTHER PERSON 55
9.08 DISTRIBUTION LIMITATION 55
9.09 DIRECT ROLLOVER OF CERTAIN DISTRIBUTIONS 56
9.10 WAIVER OF NOTICE PERIOD 57
ARTICLE 10. ADMINISTRATION OF PLAN 59
10.01 APPOINTMENT OF COMMITTEE 59
10.02 DUTIES OF COMMITTEE 59
10.03 MEETINGS 60
10.04 ACTION OF MAJORITY 60
10.05 COMPENSATION AND BONDING 60
10.06 ESTABLISHMENT OF RULES 60
10.07 APPOINTMENT OF INVESTMENT COMMITTEE 61
10.08 DUTIES OF INVESTMENT COMMITTEE 61
10.09 INDIVIDUAL ACCOUNTS 62
10.10 APPOINTMENT OF INVESTMENT MANAGER 62
10.11 PRUDENT CONDUCT 62
10.12 SERVICE IN MORE THAN ONE FIDUCIARY CAPACITY 62
10.13 LIMITATION OF LIABILITY 63
10.14 INDEMNIFICATION 63
10.15 NAMED FIDUCIARY 64
10.16 CLAIMS AND REVIEW PROCEDURES 64
ARTICLE 11. MANAGEMENT OF FUNDS 67
11.01 TRUST AGREEMENT 67
11.02 EXCLUSIVE BENEFIT RULE 67
11.03 VOTING OF COMPANY STOCK 67
11.04 TENDER OFFERS 68
11.05 CONFIDENTIALITY 68
ARTICLE 12. AMENDMENT, MERGER AND TERMINATION 70
12.01 AMENDMENT OF PLAN 70
12.02 MERGER, CONSOLIDATION OR TRANSFER 70
12.03 ADDITIONAL PARTICIPATING EMPLOYERS 71
12.04 TERMINATION OF PLAN 72
12.05 DISTRIBUTION OF ACCOUNTS UPON A SALE OF ASSETS OR A SALE OF A
SUBSIDIARY 73
ARTICLE 13. GENERAL PROVISIONS 75
13.01 NONALIENATION 75
13.02 CONDITIONS OF EMPLOYMENT NOT AFFECTED BY PLAN 76
13.03 FACILITY OF PAYMENT 76
13.04 INFORMATION 77
13.05 TOP-HEAVY PROVISIONS 77
13.06 PREVENTION OF ESCHEAT 80
13.07 WRITTEN ELECTIONS 81
13.08 CONSTRUCTION 81
APPENDIX A SPECIAL PROVISIONS APPLICABLE TO TRANSFERRED CANJI EMPLOYEES
50987
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DOC:P51067JR.DOC 2/23/99
EXHIBIT 4.4
DOC:P51067JR.DOC 2/23/99
SCHERING-PLOUGH EMPLOYEES'
SAVINGS PLAN
Effective January 1, 1997
TABLE OF CONTENTS
(cont'd)
Page
DOC:P51067JR.DOC 2/23/99
EXHIBIT 23
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration
Statement of Schering-Plough Corporation on Form S-8 of our
reports dated February 12, 1999, appearing in and incorporated by
reference in the Annual Report on Form 10-K of Schering-Plough
Corporation for the year ended December 31, 1998 and of our
report dated June 15, 1999, appearing in the Annual Report on
Form 11-K of Schering-Plough Employees' Savings Plan for the year
ended December 31, 1998.
/s/ Deloitte & Touche LLP
Deloitte & Touche LLP
Parsippany, New Jersey
September 10, 1999
50993-1
EXHIBIT 24
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned officers
and/or directors of Schering-Plough Corporation, a New Jersey
corporation (herein called the "Corporation"), does hereby constitute
and appoint Jack L. Wyszomierski and Thomas H. Kelly, or any of them,
his or her true and lawful attorney or attorneys and agent or agents,
to do any and all acts and things and to execute any and all
instruments which said attorney or attorneys and agent or agents may
deem necessary or advisable to enable the Corporation to comply with
the Securities Act of 1933, as amended, and any rules, regulations,
requirements or requests of the Securities and Exchange Commission
thereunder or in respect thereof in connection with the registration
under said Act of shares of Common Stock of the Corporation to be
issued under the Schering-Plough Employees' Savings Plan (the "Plan")
and interests to be offered or sold pursuant to the Plan; including
specifically, but without limiting the generality of the foregoing,
the power and authority to sign the respective names of the
undersigned officers and/or directors as indicated below to the
Registration Statement on Form S-8 to be filed with the Securities and
Exchange Commission with respect to the registration of such shares of
Common Stock and interests and/or to any amendments or supplements to
such Registration Statement, and each of the undersigned does hereby
ratify and confirm all that said attorney or attorneys and agent or
agents, or any of them, shall do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, each of the undersigned has hereunto set his hand
this 22nd day of June, 1999.
/s/Richard Jay Kogan /s/Donald L. Miller
Richard Jay Kogan, Chairman of the Donald L. Miller
Board and Chief Executive Officer; Director
Director
/s/Raul E. Cesan /s/H. Barclay Morley
Raul E. Cesan, President and H. Barclay Morley
Chief Operating Officer; Director Director
/s/Hugh A. D'Andrade /s/Carl E. Mundy, Jr.
Hugh A. D'Andrade, Vice Chairman Carl E. Mundy, Jr.
of the Board and Chief Director
Administrative Officer; Director
/s/Jack L. Wyszomierski /s/Richard de J. Osborne
Jack L. Wyszomierski, Executive Richard de J. Osborne
Vice President and Chief Financial Director
Officer
/s/Thomas H. Kelly /s/Patricia F. Russo
Thomas H. Kelly, Vice President Patricia F. Russo
and Controller; Principal Director
Accounting Officer
/s/Hans W. Becherer /s/William A. Schreyer
Hans W. Becherer William A. Schreyer
Director Director
/s/David C. Garfield /s/Robert F. W. van Oordt
David C. Garfield Robert F. W. van Oordt
Director Director
/s/Regina E. Herzlinger /s/James Wood
Regina E. Herzlinger James Wood
Director Director
/s/Robert P. Luciano
Robert P. Luciano
Director
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned members
of the Employee Benefits Committee of Schering-Plough Corporation, a
New Jersey corporation (herein called the "Corporation"), does hereby
constitute and appoint William J. Silbey and Thomas H. Kelly, or any
of them, his or her true and lawful attorney or attorneys and agent or
agents, to do any and all acts and things and to execute any and all
instruments which said attorney or attorneys and agent or agents may
deem necessary or advisable to enable the Corporation to comply with
the Securities Act of 1933, as amended, and any rules, regulations,
requirements or requests of the Securities and Exchange Commission
thereunder or in respect thereof in connection with the registration
under said Act of shares of Common Stock of the Corporation to be
issued under the Schering-Plough Employees' Savings Plan (the "Plan")
and interests to be offered or sold pursuant to the Plan; including
specifically, but without limiting the generality of the foregoing,
the power and authority to sign the respective names of the
undersigned officers and/or directors as indicated below to the
Registration Statement on Form S-8 to be filed with the Securities and
Exchange Commission with respect to the registration of such shares of
Common Stock and interests and/or to any amendments or supplements to
such Registration Statement, and each of the undersigned does hereby
ratify and confirm all that said attorney or attorneys and agent or
agents, or any of them, shall do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, each of the undersigned has hereunto set his hand
this 22nd day of June, 1999.
/s/John P. Ryan /s/William J. Silbey
John P. Ryan, Chairman William J. Silbey, Member
/s/Daniel A. Nichols /s/Vincent Sweeney
Daniel A. Nichols, Member Vincent Sweeney, Member
/s/E. Kevin Moore
E. Kevin Moore, Member
51031 - 2 -
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51031
