<PAGE> 1
As filed with the Securities and Exchange Commission on December 1, 1995
Registration No. 33-
-----------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
-------------------
FORM S-8
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
-------------------
MERCK & CO., INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
New Jersey 22-1109110
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
One Merck Drive
Whitehouse Station, NJ 08889-0100
(Address of principal executive offices) (Zip Code)
</TABLE>
ASTRA MERCK INC.
EMPLOYEE SAVINGS AND SECURITY PLAN
(Full title of the plan)
CELIA A. COLBERT
Secretary and Assistant General Counsel
Merck & Co., Inc.
One Merck Drive
Whitehouse Station, New Jersey 08889-0100
(Name and address of agent for service)
(908)423-1000
(Telephone number, including area code, of agent for service)
-------------------
Copy of all communications to:
ROBERT J. LICHTENSTEIN, ESQ.
Morgan, Lewis & Bockius LLP
2000 One Logan Square
Philadelphia, PA 19103
(215) 963-5726
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
========================================================================================================
Title of securities Amount to be Proposed maximum Proposed maximum Amount of
to be registered registered offering price aggregate registration fee
per share (1) offering price (1)
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, no par 100,000 shares $58.6875 $5,868,750 $2,023.55
value
========================================================================================================
</TABLE>
(1) Estimated pursuant to paragraphs (c) and (h) of Rule 457 solely
for the purpose of calculating the registration fee, based upon
the average of the high and low sales prices of shares of Common
Stock on November 27, 1995, as reported on the New York Stock
Exchange.
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 Astra Merck Inc. Employee Savings and Security Plan.
<PAGE> 2
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents, as filed by Merck & Co., Inc. (the
"Registrant") with the Securities and Exchange Commission (the "Commission"),
are incorporated by reference in this Registration Statement:
(a) Annual Report on Form 10-K, dated March 22,
1995 for the fiscal year ended December 31, 1994;
(b) Form 10-K/A filed on June 29, 1995, amending
the Registrant's Annual Report on Form 10-K for the fiscal year
ended December 31, 1994;
(c) Quarterly Report on Form 10-Q filed on May
11, 1995 for the Quarter ended March 31, 1995;
(d) Quarterly Report on Form 10-Q filed on August
10, 1995 for the quarter ended June 30, 1995;
(e) Quarterly Report on Form 10-Q filed on
November 13, 1995 for the quarter ended September 30, 1995;
(f) Proxy Statement for the Annual Meeting of
Stockholders held on April 25, 1995;
(g) Current Report on Form 8-K filed on July 19,
1995;
(h) Current Report on Form 8-K filed on October
4, 1995; and
(i) The descriptions of the Common Stock of the
Registrant set forth in the Registrant's Registration Statements pursuant to
Section 12 of the Exchange Act, and any amendment or report filed for the
purpose of updating such description.
In addition, the Report on Form 11-K for the nine month period
ended September 30, 1995 with respect to the Astra Merck Inc. Employee Savings
and Security Plan (the "Plan"), filed with the Commission, is incorporated by
reference in this Registration Statement.
All reports and other documents filed by the Registrant and the
Plan pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Securities Exchange
Act of 1934, after the date of this registration statement and prior to the
filing of a post-effective amendment that indicates that all securities offered
hereby have been sold or that deregisters all securities then remaining unsold,
shall be deemed to be incorporated by reference herein and to be 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 hereof to the
extent that a statement contained herein (or in any other subsequently filed
document that is also 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 hereof.
2
<PAGE> 3
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
The consolidated financial statements of the Registrant and its
subsidiaries included in the Registrant's Report on Form 10-K for the fiscal
year ending December 31, 1994 and incorporated by reference in this
registration statement have been audited by Arthur Andersen LLP, independent
auditors, as set forth in their report contained therein. Such financial
statements are, and audited annual financial statements to be included in
subsequently filed documents will be, incorporated herein in reliance upon the
reports of Arthur Andersen LLP pertaining to such financial statements (to the
extent covered by consents filed with the Securities and Exchange Commission)
given upon the authority of such firm as experts in accounting and auditing.
The financial statements incorporated in this Registration
Statement by reference to the Report of the Astra Merck Inc. Employee Savings
and Security Plan on Form 11-K for the nine months ended September 30, 1995,
have been so incorporated in reliance on the report of Price Waterhouse LLP,
independent accountants, given on the authority of said firm as experts in
auditing and accounting.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The New Jersey Business Corporation Act provides that a New Jersey
corporation has the power to indemnify a director or officer against his or her
expenses and liabilities in connection with any proceedings involving the
director or officer by reason of his or her being or having been such a
director or officer, other than proceedings by or in the right of the
corporation, if such director or officer acted in good faith and in a manner he
or she reasonably believed to be in or not opposed to the best interests of the
corporation; and with respect to any criminal proceeding, such director or
officer had no reasonable cause to believe his or her conduct was unlawful.
The indemnification and advancement of expenses shall not exclude
any other rights, including the right to be indemnified against liabilities and
expenses incurred in proceedings by or in the right of the corporation, to
which a director or officer may be entitled under a certificate of
incorporation, bylaw, agreement, vote of shareholders or otherwise; provided
that no indemnification shall be made to or on behalf of a director or officer
if a judgment or other final adjudication adverse to the director or officer
establishes that his or her acts or omissions (a) were in breach of his or her
duty of loyalty to the corporation or its shareholders, (b) were not in good
faith or involved a knowing violation of law or (c) resulted in receipt by the
director or officer of an improper personal benefit.
The Registrant's Restated Certificate of Incorporation provides
that, to the fullest extent permitted by the laws of the State of New Jersey,
directors and officers of the Registrant shall not be personally liable to the
Registrant or its stockholders for damages for breach of any duty owed to the
Registrant or its stockholders, except that a director or officer shall not be
relieved from liability for any breach of duty based upon an act or omission
(a) in breach of such person's duty of loyalty to the Registrant or its
stockholders, (b) not in good faith or involving a knowing violation of law or
(c) resulting in receipt by such person of an improper personal benefit.
The By-Laws of the Registrant provide that a former, present or
future director, officer or employee of the Registrant or the legal
representative of any such director, officer or employee shall be indemnified
by the Registrant:
(a) against reasonable costs, disbursements and
counsel fees paid or incurred where such person has been
successful in the defense on the merits or otherwise of any
pending, threatened or completed civil, criminal,
administrative or arbitrative action, suit or proceeding,
brought by reason of such person's being or having been
such director, officer or employee, and
3
<PAGE> 4
(b) with respect to the defense of any such
action, suit, proceedings, inquiry or investigation for
which indemnification is not made under (a) above, against
reasonable costs, disbursements (which shall include
amounts paid in satisfaction of settlements, judgments,
fines and penalties, exclusive, however, of any amount paid
or payable to the Registrant) and counsel fees if such
person acted in good faith and in a manner such person
reasonably believed to be in or not opposed to the best
interests of the Registrant, and in connection with any
criminal proceedings such person also had no reasonable
cause to believe the conduct was unlawful, with the
determination as to whether the applicable standard of
conduct was met to be made by a majority of the members of
the Board of Directors (sitting as a Committee of the
Board) who were not parties to such inquiry, investigation,
action, suit or proceedings or by any one or more
disinterested counsel to whom the question may be referred
by the Board of Directors; provided, however, in connection
with any proceedings by or in the right of the Registrant,
no indemnification shall be provided as to any person
adjudged by any court to be liable to the Registrant except
as and to the extent determined by such court.
The Registrant enters into indemnification agreements with its
directors and officers and enters into insurance agreements on its own behalf.
The indemnification agreements provide that the Registrant agrees to hold
harmless and indemnify its directors and officers to the fullest extent
authorized or permitted by the Business Corporation Act of the State of New
Jersey, or any other applicable law, or by any amendment thereof or other
statutory provisions authorizing or permitting such indemnification that is
adopted after the date hereof. Without limiting the generality of the
foregoing, the Registrant agrees to hold harmless and indemnify its directors
and officers to the fullest extent permitted by applicable law against any and
all expenses, judgments, fines, and amounts paid in settlement actually and
reasonably incurred by its directors and officers in connection with the
defense of any present or future threatened, pending or completed claim,
action, suit or proceeding by reason of the fact that they were, are, shall be
or shall have been a director or officer of the Registrant, or are or were
serving, shall serve or shall have served, at the request of the Registrant, as
a director or officer of another corporation, partnership, joint venture,
trust, employee benefit plan or other enterprise.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
4
<PAGE> 5
ITEM 8. EXHIBITS.
The exhibits filed as part of this Registration Statement are as
follows:
<TABLE>
<CAPTION>
Exhibit
Number Exhibit
- ------- -------
<S> <C>
5.1 Opinion re legality (Common Stock of Registrant) (1)
5.2 Opinion of Morgan, Lewis & Bockius LLP (interests in Plan)
23.1 Consent of Arthur Andersen LLP
23.2 Consent of Price Waterhouse LLP
23.3 Consent of Morgan, Lewis & Bockius LLP (included in Exhibit 5.2)
24 Power of Attorney and Certified Resolution of Board of Directors
99 Astra Merck Inc. Employee Savings and Security Plan
</TABLE>
(1) In lieu of an opinion of counsel concerning compliance with the
requirements of the Employee Retirement Income Security Act of 1974 as
amended ("ERISA") and an Internal Revenue Service ("IRS")
determination letter that the Plan is qualified under Section 401 of
the Internal Revenue Code of 1986, as amended, the Registrant hereby
undertakes to submit the Plan to the IRS in a timely manner, and shall
make all changes required by the IRS, in order to qualify the Plan.
ITEM 9. UNDERTAKINGS.
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; and
(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 subparagraphs (1)(i) and (1)(ii) of
this section do not apply if the information required to be included in a
post-effective amendment by those subparagraphs is contained in periodic
reports filed 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.
5
<PAGE> 6
(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 that remain
unsold at the termination of the offering.
The undersigned Registrant hereby undertakes that, for the purpose of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and 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 this registration statement shall be
deemed to be a new registration statement relating to the securities offered
herein and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
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.
6
<PAGE> 7
SIGNATURES
The Registrant. 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 Whitehouse Station, New Jersey, on the 28th day
of November, 1995.
MERCK & CO., INC.
By: *
------------------------
RAYMOND V. GILMARTIN
Chairman of the Board, President and Chief
Executive Officer and Director
By: /s/ Celia A. Colbert
----------------------
CELIA A. COLBERT
Secretary and Assistant
General Counsel
(Attorney-in-fact)
Pursuant to the requirements of the Securities Act 1933, this Registration
Statement has been signed below by the following persons in the capacities and
on the date indicated.
<TABLE>
<CAPTION>
Signatures Title Date
---------- ----- ----
<S> <C> <C>
*
- --------------------
Raymond V. Gilmartin Chairman of the Board, President and November 28, 1995
Chief Executive Officer; Principal
Executive Officer; Director
*
- -------------------
Judy C. Lewent Senior Vice President and Chief Financial November 28, 1995
Officer; Principal Financial Officer
*
- ------------------
Peter E. Nugent Vice President, Controller; Principal November 28, 1995
Accounting Officer
*
- -----------------------
H. Brewster Atwater, Jr. Director November 28, 1995
</TABLE>
7
<PAGE> 8
<TABLE>
<S> <C> <C>
*
- --------------------
Sir Derek Birkin Director November 28, 1995
*
- --------------------
Lawrence A. Bossidy Director November 28, 1995
*
- ----------------------
William G. Bowen, Ph.D Director November 28, 1995
*
- -----------------------
Johnnetta B. Cole, Ph.D Director November 28, 1995
*
- -----------------------
Carolyne K. Davis, Ph.D Director November 28, 1995
*
- --------------------
Lloyd C. Elam, M.D. Director November 28, 1995
*
- --------------------
Charles E. Exley, Jr. Director November 28, 1995
*
- -----------------------
William N. Kelley, M.D. Director November 28, 1995
*
- --------------------
Samuel O. Thier, M.D. Director November 28, 1995
*
- --------------------
Dennis Weatherstone Director November 28, 1995
</TABLE>
8
<PAGE> 9
* Celia A. Colbert, by signing her name hereto, does hereby sign this document
pursuant to powers of attorney duly executed by the persons named, filed with
the Securities and Exchange Commission as an exhibit to this document, on
behalf of such persons, all in the capacities and on the date stated, such
persons including a majority of the directors of the Company.
By /s/ Celia A. Colbert
-----------------------------
Celia A. Colbert
(Secretary and Assistant
General Counsel)
(Attorney-in-Fact)
The Plan. Pursuant to the requirements of the Securities Act of 1933,
the Plan has duly caused this registration statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in Wayne, Pennsylvania
as of November 28, 1995.
ASTRA MERCK INC.
EMPLOYEE SAVINGS AND SECURITY PLAN
By: /s/ Linda E. Robertson
---------------------------
Name: Linda E. Robertson
Title: Administrative Committee
9
<PAGE> 10
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit Method of
Number Exhibit Filing
- ----- ------- ------
<S> <C> <C>
5.1 Opinion re legality (Common Stock of Registrant) (1) Filed with this document
5.2 Opinion of Morgan, Lewis & Bockius LLP (interests in Plan) Filed with this document
23.1 Consent of Arthur Andersen LLP Filed with this document
23.2 Consent of Price Waterhouse LLP Filed with this document
23.3 Consent of Morgan, Lewis & Bockius LLP (included in Exhibit 5.2) Filed with this document
24 Power of Attorney and Certified Resolution of Board of Directors Filed with this document
99 Astra Merck Inc. Employee Savings and Security Plan Filed with this document
</TABLE>
(1) In lieu of an opinion of counsel concerning compliance with the
requirements of the Employee Retirement Income Security Act of 1974
as amended ("ERISA") and an Internal Revenue Service ("IRS")
determination letter that the Plan is qualified under Section 401 of
the Internal Revenue Code of 1986, as amended, the undersigned
registrant hereby undertakes to submit the Plan to the IRS in a timely
manner, and shall make all changes required by the IRS, in order to
qualify the Plan.
10
<PAGE> 1
Exhibit 5.1
November 28, 1995
Merck & Co., Inc.
One Merck Drive
Whitehouse Station, NJ 08889
Dear Sir or Madam:
Merck & Co., Inc. (the "Company") has requested my opinion, as General
Counsel of the Company, in connection with the Registration Statement on Form
S-8 to be filed by the Company with the Securities and Exchange Commission
under the Securities Act of 1933 (the "Act") with respect to 100,000 shares of
the Company's Common Stock, no par value (the "Shares"), which are issuable
pursuant to the Astra Merck Employee Savings and Security Plan (the "Plan").
I or attorneys under my supervision have examined such records and
have made such examination of law as I deem appropriate in connection with
rendering such opinion. I have also assumed that the registration provisions
of the Act and of such securities or "Blue Sky" laws as may be applicable shall
have been complied with. Based thereon, it is my opinion that, when issued and
delivered in accordance with the provisions of the Plan, the shares will be
legally issued, fully paid and non-assessable.
I hereby consent to the filing of this opinion as an Exhibit to the
Registration Statement. In giving this consent I do not admit that I am in the
category of persons whose consent is required under Section 7 for the
Securities Act of 1933 or the rules and regulations for the Securities and
Exchange Commission thereunder.
Very truly yours,
/s/ Mary M. McDonald
--------------------
Mary M. McDonald
11
<PAGE> 1
Exhibit 5.2
November 22, 1995
Astra Merck Inc.
725 Chesterbrook Boulevard
Wayne, PA 19087-5677
Ladies and Gentlemen:
We have acted as counsel to Astra Merck Inc., a Delaware corporation (the
"Company"), in connection with the preparation and filing with the Securities
and Exchange Commission (the "Commission") under the Securities Act of 1933, as
amended (the "1933 Act"), of a Registration Statement on Form S-8 (the
"Registration Statement") relating to the registration by Merck & Co., Inc.
("Merck") of an aggregate of 100,000 shares (the "Shares") of Merck's Common
Stock, no par value, and an indeterminate amount of interests (the "Interests")
in the Astra Merck Inc. Employee Savings and Security Plan (the "Plan"), to be
offered or sold to participants in the Plan.
In connection with the opinions expressed herein, we have examined originals or
photostatic or certified records of the Company and of agreements,
communications or other instruments, certificates of public officials,
certificates of corporate officers, and such other documents, and have examined
such questions of law, as we deemed relevant and necessary as a basis for the
opinion hereinafter expressed. In making such examinations, we have assumed
the genuineness of all signatures, the authenticity of all documents submitted
to us as originals and the conformity to original documents of all documents
submitted to us as certified or photostatic copies. As to questions of fact
material to this opinion, we have relied solely, and without independent
investigation, upon certificates of officers of the Company and of public
officials.
Based on and subject to the foregoing, we are of the opinion that the Interests
covered by the Registration Statement will be valid and binding interests in
the Plan.
We express no opinion as to matters governed by any laws other than the laws of
the Commonwealth of Pennsylvania, the General Corporation Law of the State of
Delaware and the federal laws of the United States of America.
We hereby consent to the use of this opinion as Exhibit 5 to the Registration
Statement. In giving such opinion, we do not thereby admit that we are acting
within the category of persons whose consent is required under Section 7 of the
1933 Act or the rules and regulations of the Commission promulgated thereunder.
Very truly yours,
/s/ Morgan, Lewis & Bockius, LLP
- -------------------------------
12
<PAGE> 1
Exhibit 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the
incorporation by reference in this Registration Statement on Form S-8 of our
report dated January 24, 1995 included in and incorporated by reference in the
Annual Report on Form 10-K of Merck & Co., Inc. as amended by Form 10-K/A on
June 29, 1995 for the year ended December 31, 1994 and to all references to our
Firm included in this Registration Statement.
/S/ ARTHUR ANDERSEN LLP
-----------------------
ARTHUR ANDERSEN LLP
New York, N.Y.
November 28, 1995
13
<PAGE> 1
Exhibit 23.2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
We hereby consent to the incorporation by reference in this
Registration Statement on Form S-8 of Merck & Co., Inc., of our report dated
November 3, 1995 appearing on page 2 of the Report of the Astra Merck Inc.
Employee Savings and Security Plan on Form 11-K for the nine months ended
September 30, 1995.
/S/ PRICE WATERHOUSE LLP
-------------------------
PRICE WATERHOUSE LLP
Philadelphia, PA
November 16, 1995
14
<PAGE> 1
Exhibit 24
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints
Celia A. Colbert and Mary M. McDonald, and each of them, as his or her true and
lawful attorneys-in-fact and agents, with full power of substitution and
resubstitution, for him or her and in his or her name, place and stead, in any
and all capacities, to sign this Registration Statement and any and all
amendments (including post-effective amendments) and all documents relating
thereto, and to file the same, with all exhibits thereto, and other documents
in connection therewith, with the Securities and Exchange Commission granting
unto said attorneys-in-fact and agents, and each of them, full power and
authority to do and perform each and every act and thing necessary or advisable
to be done in and about the premises, as fully to all intents and purposes as
he or she might or could do in person, hereby ratifying and confirming all that
said attorneys-in-fact and agents, or any of them, or their substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, this instrument has been duly executed as of the
28th day of November, 1995.
<TABLE>
<CAPTION>
Name Title
---- -----
<S> <C>
/s/ Raymond V. Gilmartin Chairman of the Board, President and
- ---------------------------------------- Chief Executive Officer (Principal
RAYMOND V. GILMARTIN Executive Officer) and Director
/s/ Judy C. Lewent Senior Vice President and
- ---------------------------------------- Chief Financial Officer
JUDY C. LEWENT (Principal Financial Officer)
/s/ Peter E. Nugent Vice President, Controller
- ---------------------------------------- (Principal Accounting Officer)
PETER E. NUGENT
/s/ H. Brewster Atwater, Jr. Director
- ----------------------------------------
H. BREWSTER ATWATER, JR.
/s/ Derek Birkin Director
- ----------------------------------------
SIR DEREK BIRKIN
/s/ Lawrence A. Bossidy Director
- ----------------------------------------
LAWRENCE A. BOSSIDY
</TABLE>
15
<PAGE> 2
<TABLE>
<CAPTION>
Name Title
---- -----
<S> <C>
/s/ William G. Bowen Director
- ----------------------------------------
WILLIAM G. BOWEN, Ph.D.
/s/ Johnnetta B. Cole Director
- ----------------------------------------
JOHNNETTA B. COLE, Ph.D.
/s/ Carolyne K. Davis Director
- ----------------------------------------
CAROLYNE K. DAVIS, Ph.D.
/s/ Lloyd C. Elam Director
- ----------------------------------------
LLOYD C. ELAM, M.D.
/s/ Charles E. Exley, Jr. Director
- ----------------------------------------
CHARLES E. EXLEY, JR.
/s/ William N. Kelley Director
- ----------------------------------------
WILLIAM N. KELLEY, M.D.
/s/ Samuel O. Thier Director
- ----------------------------------------
SAMUEL O. THIER, M.D.
/s/ Dennis Weatherstone Director
- ----------------------------------------
DENNIS WEATHERSTONE
</TABLE>
16
<PAGE> 3
CERTIFIED RESOLUTION OF BOARD OF
DIRECTORS
I, Dolores O. Rosinski, Senior Assistant Secretary of Merck & Co.,
Inc., a Corporation duly organized and existing under the laws of the State of
New Jersey, do hereby certify that the following is a true copy of a resolution
adopted on October 24, 1995, at a meeting of the Directors of said Corporation
held in Whitehouse Station, New Jersey, duly called in accordance with the
provisions of the By-Laws of said Corporation, and at which a quorum of
Directors was present:
"RESOLVED, that the proper officers of Merck & Co.,
Inc. (the "Company") are hereby authorized and directed on
behalf of the Company to prepare, execute and file with the
Securities and Exchange Commission Registration Statements
and any and all amendments thereto, and any and all
exhibits and other documents relating thereto or required
by law or regulation in connection therewith, for the
registration under the Securities Act of 1933 of shares of
Common Stock of the Company which may be purchased under
the Non-Employee Directors Stock Option Plan and the 1996
Incentive Stock Plan and the Merck Employees Federal Credit
Union Stock Option Plan and the plan interests registered
pursuant to the USHH Incentive Plan and the Astra Merck
Inc. Employee Savings and Security Plan (the "Plans");
RESOLVED, that Celia A. Colbert is hereby appointed
and designated the person duly authorized to receive
communication and notices from the Securities and Exchange
Commission with respect to such Registration Statements or
any amendments thereto and as agent for service of process;
RESOLVED, that each officer, director or employee of
the Company who may be required to execute such
Registration Statements or any amendments thereto (whether
on behalf of the Company, or as an officer or director
thereof, or by attesting the seal of the Company, or on
behalf of the Plans or as a member of the Compensation and
Benefits Committee, or otherwise), is hereby authorized to
execute a power of attorney appointing Celia A. Colbert and
Mary M. McDonald, and each of them severally, his or her
true and lawful attorney or attorneys to execute in his or
her name, place and stead (in any such capacity) such
Registration Statements and any and all amendments thereto
and any and all exhibits and other documents necessary or
incidental in connection therewith, and to file the same
with the Securities and Exchange Commission, each of said
attorneys to have power to act with or without the other,
and to have full power and authority to do and perform in
the name and on behalf of each of said officers, directors
and employees, or any of them, as the case may be, every
act whatsoever necessary or advisable to be done in the
premises as fully and to all intents and purposes as any
such officer, director or employee might or could do in
person;
17
<PAGE> 4
RESOLVED, that the proper officers of the Company are
hereby authorized and directed to arrange with the New York
Stock Exchange and the Philadelphia Stock Exchange for the
listing of the additional shares of the Common Stock of the
Company to be issued in connection with the Plans;
RESOLVED, that the proper officers of the Company,
with the advice of counsel, are hereby authorized to take
any action and to execute and deliver any letters,
documents, agreements or other instruments as they deem
necessary, appropriate or desirable to carry out the
purposes and intents of this Special Resolution."
IN WITNESS WHEREOF, I have hereunto subscribed my signature
and affixed the seal of the Corporation this 28th day of November, 1995.
[Corporate Seal]
/s/ Dolores O. Rosinski
-----------------------
Senior Assistant Secretary
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<PAGE> 1
Exhibit 99
EMPLOYEE SAVINGS AND SECURITY PLAN
EFFECTIVE JANUARY 1, 1995
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Article Subject Matter Page
- ------- -------------- ----
<S> <C> <C>
I Statement of Purpose 1
1.01 Background and Purpose 1
1.02 Qualification Under the Internal Revenue Code 1
1.03 Documents 1
II Definitions 2
III Participation Eligibility 12
3.01 Eligibility to Participate 12
3.02 Employee Elections 12
IV Contributions 13
4.01 Employee Contributions 13
4.02 Matching Contributions 15
4.03 Qualified Employer Contributions 16
4.04 Rollover Contributions 16
4.05 Timing of Contributions 16
4.07 Contingent Nature of Contributions 16
4.08 Exclusive Benefit; Refund of Contributions 16
V Limitations on Contributions 18
5.01 Calendar Year Limitation on Salary Deferrals 18
5.02 Nondiscrimination Limitations on Salary Deferrals,
After-Tax Employee Contributions and
Matching Contributions 18
5.03 Correction of Discriminatory Contributions 20
5.04 Annual Additions Limitations 21
VI Investment and Valuation of Trust Fund; Maintenance of Accounts 23
6.01 Investment of Assets 23
6.02 Participant Investment Direction 23
6.03 Investment Elections 26
6.04 Change of Election 26
6.05 Transfers Between Investment Funds 27
6.06 Individual Accounts 28
</TABLE>
ii
<PAGE> 3
<TABLE>
<S> <C> <C>
6.07 Valuations 28
6.08 Allocation to Individual Accounts 28
6.09 Valuation for Distribution 29
6.10 Merger with Merck Plan 29
VII Vesting 30
7.01 Full and Immediate Vesting 30
VIII Benefit Distributions 31
8.01 Death Benefits 31
8.02 Benefits Upon Separation from Service 31
8.03 Withdrawals 32
8.04 Form of Benefit Payment 35
8.05 Provisions Applicable to Distributions
Other Than Automatic Distributions 36
8.06 Beneficiary Designation Right 36
8.07 Required Distribution Dates 38
8.08 Domestic Relations Orders 38
8.09 Post Distribution Credits 40
8.10 Direct Rollovers 40
IX Participant Loans 41
9.01 In General 41
9.02 Loans as Trust Fund Investments 42
X Provisions Relating to Top-Heavy Plans 45
10.01 Definitions 45
10.02 Determination of Top-Heavy Status 47
10.03 Top-Heavy Plan Minimum Allocation 47
10.04 Top-Heavy Plan Maximum Allocations 48
XI Administrative Committee 49
11.01 Appointment and Tenure 49
11.02 Delegations of Authority and Responsibility 49
11.03 Fiduciary Duty 50
11.04 Administrative Costs 50
11.05 Bonding 50
11.06 Indemnification of the Committee 50
</TABLE>
iii
<PAGE> 4
<TABLE>
<S> <C> <C>
XII Allocation and Delegation of Authority 51
12.01 Authority and Responsibilities of the Committee 51
12.02 Authority and Responsibilities of the Trustee 51
12.03 Limitations on Obligations of Named Fiduciaries 51
XIII Trust Agreement 52
XIV Claims Procedures 53
14.01 Applications for Benefits 53
14.02 Appeals of Denied Claims of Benefits 53
XV Amendment and Termination 54
15.01 Amendment 54
15.02 Plan Termination 54
15.03 Complete Discontinuance of Employer Contributions 55
15.04 Mergers and Consolidations of Plans 55
XVI Miscellaneous Provisions 56
16.01 Nonalienation of Benefits 56
16.02 No Contract of Employment 56
16.03 Severability of Provisions 56
16.04 Heirs, Assigns and Personal Representatives 56
16.05 Headings and Captions 56
16.06 Gender and Number 56
16.07 Controlling Law 57
16.08 Funding Policy 57
16.09 Title to Assets 57
16.10 Payments to Minors, Etc. 57
16.11 Lost Payees 57
16.12 Counterparts 57
</TABLE>
iv
<PAGE> 5
ARTICLE I
STATEMENT OF PURPOSE
Sec. 1.01 Background and Purpose. The Astra Merck Inc. Employee
Savings and Security Plan (the "Plan) is effective as of January 1, 1995, for
the benefit of Covered Employees of Participating Employers. The purpose of
the Plan is to enable Covered Employees to increase personal long-term savings
through the tax deferral opportunities offered under section 401(k) of the
Code, from contributions made by the Participating Employers and from the
results generated by investment of the assets of the Plan in the tax-sheltered
environment offered by the Plan's trust.
This Plan also reflects the merger as of the Effective Date of the
portion of the Merck & Co., Inc. Employee Savings and Security Plan (the
"Merck Plan") which covered Transferred Employees (as herein defined) and shall
provide benefits accrued by Transferred Employees under the Merck Plan prior to
such date to the extent that they have not been distributed.
Sec. 1.02 Qualification Under the Internal Revenue Code. It is
intended that the Plan be a qualified profit-sharing plan within the meaning of
section 401(a) of the Code, that the requirements of section 401(k) and (m) of
the Code be satisfied as to that portions of the Plan represented by
contributions made pursuant to Participant Salary Deferral elections and by
contributions made by the Employer as Matching Contributions, and that the
trust or other funding vehicle associated with the Plan be exempt from federal
income taxation pursuant to the provisions of section 501(a) of the Code.
Sec. 1.03 Documents. The Plan consists of the Plan document as set
forth herein, and any amendment thereto. Certain provisions relating to the
Plan and its operation are contained in the corresponding Trust Agreement (or
documents establishing any other funding vehicle for the Plan), and any
amendments, supplements, appendices and riders to any of the foregoing.
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<PAGE> 6
ARTICLE II
DEFINITIONS
Sec. 2.01 "Account" shall mean the entire interest of a Participant in
the Plan. A Participant's Account shall consist of one or more separate
accounts reflecting the various types of contributions permitted under the
Plan, as hereinafter provided.
Sec. 2.02 "Actual Deferral Percentage" shall mean the ratio (expressed
as a percentage to the nearest one-hundredth of one percent) of (a) (1) a
Participant's Salary Deferrals for the Plan Year (excluding any Salary
Deferrals that are (A) taken into account in determining the Contribution
Percentage described in Section 2.14, (B) distributed to a Participant who is
not a Highly Compensated Employee pursuant to a deemed claim for distribution
under Section 5.01, or (C) returned to the Participant pursuant to Section
5.04), plus (2) at the election of the Committee, any portion of the Qualified
Employer Contributions allocated to the Participant for the Plan Year permitted
to be taken into account under section 401(k) of the Code and regulations
thereunder, plus (3) in the case of any Highly Compensated Employee who is
eligible to participate in more than one cash or deferred arrangement
maintained by a Participating Employer or an Affiliated Company, elective
deferrals made on his behalf under all such arrangements (excluding those that
are not permitted to be aggregated under Treas. Reg. Section
1.401(k)-1(b)(3)(ii)(B)) for the Plan Year, to (b) the Participant's
Compensation for the Plan Year.
Sec. 2.03 "Affiliated Company" shall mean (a) any entity which, with
any Participating Employer, constitutes (1) a "controlled group of
corporations" within the meaning of section 414(b) of the Code, (2) a "group of
trades or businesses under common control" within the meaning of section 414(c)
of the Code, or (3) an "affiliated service group" within the meaning of section
414(m) of the Code or (b) is required to be aggregated with any Participating
Employer pursuant to regulations under section 414(o) of the Code. An entity
shall be considered an Affiliated Company only with respect to such period as
the relationship described in the preceding sentence exists. When the term
"Affiliated Company" is used in Section 2.06 or 5.04, sections 414(b) and (c)
of the Code shall be deemed modified by application of the provisions of
section 415(h) of the Code, which substitutes the phrase "more than 50 percent"
for the phrase "at least 80 percent" in section 1563(a)(1) of the Code, which
is then incorporated by reference in sections 414(b) and (c).
Sec. 2.04 "After-Tax Contribution Account" shall mean so much of a
Participant's Account as consists of the Participant's After-Tax Employee
Contributions, plus amounts attributable to after-tax employee contributions
made under the Merck Plan which have been transferred to the Plan on behalf of
the Participant, including all earnings and accretions attributable thereto and
reduced by all losses attributable thereto, by all expenses chargeable
thereagainst and by all withdrawals and distributions therefrom.
Sec. 2.05 "Alternate Payee" shall mean the person entitled to receive
payments of benefits under the Plan pursuant to a QDRO.
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<PAGE> 7
Sec. 2.06 "Annual Addition" shall mean, for any Participant for any
Limitation Year, the sum of the following amounts allocated to a Participant's
accounts under the Plan and any other qualified defined contribution plan
maintained by a Participating Employer or an Affiliated Company: (a) employer
contributions (including Qualified Employer Contributions, Matching
Contributions and Salary Deferral amounts, except Salary Deferrals distributed
pursuant to Section 5.01); (b) Participant contributions (including mandatory
or voluntary employee contributions made under a qualified defined benefit
plan, but excluding Rollover Contributions and amounts repaid pursuant to
Section 9.02(h)); (c) forfeitures; and (d) amounts described in Code section
415(l)(1) (relating to contributions allocated to individual medical accounts
which are part of a pension or annuity plan) and Code section 419A(d)(2)
(relating to contributions allocated to post-retirement medical benefit
accounts for key employees).
Sec. 2.07 "Average Actual Deferral Percentage" shall mean the average
(expressed as a percentage to the nearest one-hundredth of one percent) of the
Actual Deferral Percentages of a specified group of Active Participants.
Sec. 2.08 "Average Contribution Percentage" shall mean the average
(expressed as a percentage to the nearest one-hundredth of one percent) of the
Contribution Percentages of a specified group of Active Participants.
Sec. 2.09 "Beneficiary" shall mean the person or entity designated or
otherwise determined to be such in accordance with Section 8.06.
Sec. 2.10 "Benefit Payment Date" shall mean, for any Participant or
Beneficiary of a deceased Participant, the date as of which the first benefit
payment, including a single sum, from a Participant's Account is due; provided,
however, that the Benefit Payment Date applicable to any amount withdrawn
pursuant to Section 8.03 shall not be taken into account in determining the
Participant's Benefit Payment Date with respect to the remainder of his
Account.
Sec. 2.11 "Code" shall mean the Internal Revenue Code of 1986, as the
same may be amended from time to time, and any successor statute of similar
purpose.
Sec. 2.12 "Committee" shall mean the Plan administrative committee
named as such pursuant to the provisions of Article XI.
Sec. 2.13 "Compensation" shall mean, for any Employee, for any Plan
Year, Limitation Year or other applicable period as the case may be:
(a) for purposes of Section 4.01(a), the employee's annual base wage
or salary, and does not include certain amounts such as overtime, shift work,
differential, incentive payments, bonuses, separation payments, or long term
disability payments.
(b) except as otherwise provided below in this definition, wages
required to be reported on IRS Form W-2, paid by a Participating Employer to
the Employee during the applicable period, exclusive of (i) such amounts that
the Employee receives when he is not an Active Participant and (ii)
3
<PAGE> 8
reimbursements or other expense allowances, fringe benefits (cash and
non-cash), moving expenses, non-qualified deferred compensation, and welfare
benefits. Notwithstanding the above, Compensation shall be determined prior to
giving effect to any salary deferral election made pursuant to the terms of
this Plan or any other section 401(k) plan maintained by a Participating
Employer or to any salary reduction election made pursuant to any cafeteria
plan (within the meaning of section 125 of the Code) maintained by a
Participating Employer.
(c) for purposes of Article X and Sections 2.06 and 5.04, wages
required to be reported on IRS Form W-2 paid to the Employee during the
applicable period, including for purposes of the definition of "Key Employee"
in Article X, amounts that are excluded from gross income under section 125,
402(e)(3), 402(h) or 403(b) of the Code.
(d) for purposes of the definitions of "Actual Deferral Percentage"
and "Contribution Percentage," "compensation" for the applicable period, as
defined in section 414(s) of the Code as determined by the Committee on a
uniform and consistent basis for all Employees, exclusive of compensation for
any period during which an Employee is not an Active Participant; provided,
however, that, in the sole discretion of the Committee, Compensation may
include Salary Deferrals and other amounts excluded from gross income under
section 125, 402(e)(3), 402(h) or 403(b) of the Code.
(e) for purposes of the definition of "Highly Compensated Employee",
"compensation," as such word is defined in section 415(c)(3) of the Code, paid
to the Employee by a Participating Employer or Affiliated Company for the
applicable period, but including amounts that are excluded from gross income
under section 125, 402(e)(3), 402(h) or 403(b) of the Code.
(f) with respect to any Plan Year, only the first $150,000, or such
other amount as may be applicable under Code section 401(a)(17), of the amount
otherwise described in subsections (a), (b), (c) and (d) of this definition
shall be counted, except that this subsection (f) shall not apply for purposes
of Sections 2.06 and 5.04. In determining Compensation for purposes of this
limitation, the rules of section 414(q)(6) of the Code shall apply, except that
in applying such rules, the term "family" shall include only the spouse of the
Employee and any lineal descendants who have not attained age 19 before the
close of the Plan Year. If, as a result of the application of the rules of
Code section 414(q)(6), the limitation is exceeded, then the limitation shall
be prorated among the affected family members in proportion to each such
member's Compensation as determined under this Section prior to the application
of this limitation.
Sec. 2.14 "Contribution Percentage" shall mean the ratio (expressed as
a percentage to the nearest one-hundredth of one percent) of (a) (1) the
After-Tax Employee Contributions (including Before-Tax Contributions
recharacterized as After-Tax Employee Contributions pursuant to Article V and
Matching Contributions allocated to a Participant's Account for the Plan Year,
plus (2) at the election of the Committee, any portion of the Qualified
Employer Contributions allocated to the Participant for the Plan Year required
or permitted to be taken into account under section 401(m) of the Code and
regulations thereunder, plus (3) in the case of any Highly Compensated Employee
who is eligible to participate in more than one plan maintained by a
Participating Employer or an Affiliated Company to which employee or matching
contributions are made, after-tax employee contributions
4
<PAGE> 9
and employer matching contributions made on his behalf under all such plans
(excluding those that are not permitted to be aggregated under Treas. Reg.
Section 1.401(m)-1(b)(3)(ii)) for the Plan Year, to (b) the Participant's
Compensation for the Plan Year. For purposes of determining the Contribution
Percentage, the Committee may also take Salary Deferrals into account, in
accordance with Treasury regulations.
Sec. 2.15 "Covered Employee" shall mean each person who is an Employee
performing services on a full-time, part-time or temporary basis for a
Participating Employer, other than (a) any person in a category of Employees
excluded from coverage under the Plan by resolution of the board of directors
of a Participating Employer, (b) any Employee whose terms and conditions of
employment are determined through collective bargaining, unless the collective
bargaining agreement provides for the eligibility of such person to participate
in this Plan, (c) any Employee who, as to the United States, is a non-resident
alien with no U.S. source income from a Participating Employer, and (d) any
person who is an Employee solely by reason of being a leased employee within
the meaning of section 414(n) or 414(o) of the Code.
Sec. 2.16 "Effective Date" shall mean January 1, 1995.
Sec. 2.17 "Employee" shall mean a person who is employed by a
Participating Employer or an Affiliated Company. A person who is not otherwise
employed by a Participating Employer or Affiliated Company shall be deemed to
be employed by any such company if he is a leased employee with respect to
whose services such Participating Employer or Affiliated Company is the
recipient, within the meaning of section 414(n) or 414(o) of the Code, but to
whom Code section 414(n)(5) does not apply.
Sec. 2.18 "Employment Commencement Date" shall mean, with respect to
any person, the first date on which that person performs an Hour of Service as
described in Section 2.22.
Sec. 2.19 "Employment Date" shall mean the first day of each January
and each July. The board of directors of a Participating Employer may
designate another enrollment date for any employee who has become eligible to
participate in this Plan by the express authorization of such board of
directors.
Sec. 2.20 "ERISA" shall mean the Employee Retirement Income Security
Act of 1974, as amended.
Sec. 2.21 "Highly Compensated Employee" shall mean as follows:
(a) The term "Highly Compensated Employee generally means an Employee
who during the current Plan Year or the immediately preceding Plan Year:
(1) was at any time a five-percent (5%) owner, as defined in
section 416(i) of the Code;
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<PAGE> 10
(2) received Compensation in excess of $75,000, as adjusted
by the Secretary of the Treasury in accordance with section 415(d) of the Code;
(3) received Compensation in excess of $50,000, as adjusted
by the Secretary of the Treasury in accordance with section 415(d) of the Code,
and was in the top-paid group of Employees for such Plan Year; or
(4) was at any time an officer and received Compensation
greater than fifty percent (50%) of the amount in effect under section
415(b)(1)(A) of the Code.
(b) With respect to the Plan Year for which the relevant determination
is being made, an Employee not described in paragraph (2), (3), or (4) above
for the preceding Plan Year shall not be a Highly Compensated Employee unless
such Employee is a member of the group consisting of the 100 Employees paid the
greatest Compensation during the Plan Year for which such determination is
being made.
(c) An Employee is in the top-paid group of Employees for any Plan
Year if such Employee is in the group consisting of the top twenty percent
(20%) of the Employees when ranked on the basis of Compensation for such Plan
Year. For purposes of determining the number of Employees in the top-paid
group, Employees described in section 414(q)(8) of the Code shall be excluded
to the extent (1) permitted under section 414(q)(8) of the Code and regulations
thereunder and (2) elected by the Committee.
(d) For purposes of paragraph (4) of subsection (a), no more than
fifty (50) Employees (or, if lesser, the greater of three (3) Employees or ten
(10) percent of the Employees, excluding Employees described in section
414(q)(8) of the Code disregarded for purposes of identifying the top-paid
group of Employees) shall be treated as officers, and if for any Plan Year no
officer is described in such paragraph, the highest paid officer for such Plan
Year shall be treated as described in such paragraph.
(e) If any person is a member of the family of a five-percent (5%)
owner who is an Employee or former Employee or of a Highly Compensated Employee
in the group consisting of the ten (10) Highly Compensated Employees with the
greatest Compensation for the Plan Year, such person shall not be considered a
separate Employee. In such case, the family member (or family members) and
five-percent (5%) owner or Highly Compensated Employee shall be treated as a
single Highly Compensated Employee receiving Compensation and Plan
contributions equal to the sum of the Compensation and Plan contributions of
the family member(s) and the five-percent (5%) owner or Highly Compensated
Employee. The term "family" shall mean, with respect to any Employee or former
Employee, such Employee's spouse and lineal ascendants or descendants and the
spouses of such lineal ascendants or descendants.
(f) A former Employee shall be treated as a Highly Compensated
Employee, if such Employee was a Highly Compensated Employee while an active
Employee in either the Plan Year in which such Employee separated from service
or in any Plan Year ending on or after his 55th birthday.
Sec. 2.22 "Hour of Service" shall mean, for any Employee:
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<PAGE> 11
(a) except as provided in subsection (b),
(1) each hour for which he is directly or indirectly paid or
entitled to payment by a Participating Employer or an Affiliated Company for
the performance of employment duties; or
(2) each hour for which he is entitled, either by award or
agreement, to back pay from a Participating Employer or an Affiliated Company,
irrespective of mitigation of damages; or
(3) each hour for which he is directly or indirectly paid or
entitled to payment by a Participating Employer or an Affiliated Company on
account of a period of time during which no duties are performed due to
vacation, holiday, illness, incapacity (including disability), jury duty,
layoff, leave of absence, or military duty; or
(4) each hour for which he is absent for military service
under leave granted by a Participating Employer or Affiliated Company or
required by law, provided the Employee returns to service with the
Participating Employer or Affiliated Company within such period as his right to
reemployment is protected by law.
(b) Anything to the contrary in subsection (a) notwithstanding:
(1) No Hours of Service shall be credited to an Employee for
any period merely because, during such period, payments are made or due him
under a plan maintained solely for the purpose of complying with applicable
workers' compensation, unemployment compensation, or disability insurance laws.
(2) No Hours of Service shall be credited to an Employee with
respect to payments solely to reimburse for medical or medically related
expenses.
(3) No Hours of Service shall be credited twice.
(4) Hours of Service shall be credited at least as liberally
as required by the rules set forth in Department of Labor Reg. Section
2530.200b-2(b) and (c).
Sec. 2.23 "Investment Fund" shall mean any of the funds established
pursuant to Section 6.02 for the investment of the assets of the Trust Fund.
Sec. 2.24 "Investment Manager" shall mean any fiduciary (other than
the Trustee or Named Fiduciary) who has the power to manage, acquire, or
dispose of any asset of the Plan and who has qualified as an "investment
manager" within the meaning of section 3(38) of ERISA.
Sec. 2.25 "Limitation Year" shall mean the calendar year.
Sec. 2.26 "Matching Contribution" shall mean a contribution made by a
Participating Employer pursuant to Section 4.02.
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<PAGE> 12
Sec. 2.27 "Matching Contribution Account" shall mean so much of a
Participant's Account as consists of (a) amounts attributable to Matching
Contributions allocated to such Participant's Account under the Plan, and (b)
any Matching Contributions made under the Merck Plan which have been
transferred to the Plan on behalf of the Participant, including all earnings
and accretions attributable thereto and reduced by all losses attributable
thereto, by all expenses chargeable thereagainst and by all withdrawals and
distributions therefrom.
Sec. 2.28 "Merck Common Stock" shall mean shares of Merck & Co., Inc.
Common Stock.
Sec. 2.29 "Named Fiduciary" shall mean the Participating Employers,
the Trustee, and the Committee. Each Named Fiduciary shall have only those
particular powers, duties, responsibilities and obligations as are specifically
delegated to him under the Plan or the Trust Agreement. Any fiduciary, if so
appointed, may serve in more than one fiduciary capacity.
Sec. 2.30 "Normal Retirement Age" shall mean a Participant's 65th
birthday.
Sec. 2.31 "Participant" shall mean any person who has been or who is a
Covered Employee, who has been admitted to participation in the Plan pursuant
to the provisions of Article III and who has an Account balance as of the date
of reference. The term "Participant" shall include Active Participants (those
Participants who are currently Covered Employees and who have become Active
Participants pursuant to Section 3.01), Inactive Participants (those Employees
who previously were Active Participants but currently are not because they are
no longer employed in a "Covered Employee" status), and Vested Participants
(those former Active or Inactive Participants who have a vested interest under
the Plan).
Sec. 2.32 "Participating Employer" shall mean Astra Merck Inc. and any
other Affiliated Company which adopts this Plan and joins in the corresponding
Trust Agreement.
Sec. 2.33 "Period of Severance" shall mean the period beginning on a
person's Severance Date and ending on the first date on which he again performs
an Hour of Service as described in Section 2.22.
Sec. 2.34 "Plan" shall mean the Astra Merck Inc. Employee Savings and
Security Plan, as set forth herein, and as the same may from time to time
hereafter be amended.
Sec. 2.35 "Plan Committee" shall mean the committee appointed to
administer the Plan pursuant to Article XI.
Sec. 2.36 "Plan Year" shall mean the calendar year.
Sec. 2.37 "Qualified Employer Contribution" shall mean a contribution
made by a Participating Employer pursuant to Section 4.03.
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Sec. 2.38 "Qualified Employer Contribution Account" shall mean so much
of a Participant's Account as consists of amounts attributable to Qualified
Employer Contributions under the Plan, including all earnings and accretions
attributable thereto and reduced by all losses attributable thereto, by all
expenses chargeable thereagainst and by all withdrawals and distributions
therefrom.
Sec. 2.39 "QDRO" shall mean a "qualified domestic relations order"
within the meaning of Section 206(d)(3)(B) of ERISA and section 414(p) of the
Code.
Sec. 2.40 "Required Beginning Date" generally shall mean, for any
Participant, April 1 of the calendar year following the calendar year in which
he attains age 70-1/2, except as otherwise provided in Section 8.02(b),
pursuant to the Code and Treasury Regulations.
Sec. 2.41 "Retire" or "Retirement" shall mean a Termination of
Employment effected by the employee and the Company in accordance with the
provisions of the Company's pension plan in which the employee participates.
Sec. 2.42 "Rollover Account" shall mean so much of a Participant's
Account as consists of his Rollover Contributions under the Plan and the
Participant's rollover contributions under the Merck Plan which have been
transferred to the Plan, including all earnings and accretions attributable
thereto, and reduced by all losses attributable thereto, by all expenses
chargeable thereagainst and by all withdrawals and distributions therefrom.
Sec. 2.43 "Rollover Contributions" shall mean amounts contributed by a
Covered Employee pursuant to Section 4.04.
Sec. 2.44 "Salary Deferral Account" shall mean so much of a
Participant's Account as consists of his Salary Deferrals under the Plan and
the Participant's salary deferrals under the Merck Plan, which have been
transferred to the Plan, including all earnings and accretions attributable
thereto, and reduced by all losses attributable thereto, by all expenses
chargeable thereagainst and by all withdrawals and distributions therefrom.
Sec. 2.45 "Salary Deferrals" shall mean the portion of a Participant's
Compensation which is reduced in accordance with Section 4.01(a) and with
respect to which a corresponding contribution is made to the Plan by a
Participating Employer.
Sec. 2.46 "Severance Date" shall mean the earlier of (a) the date the
Employee dies or retires, quits or is discharged from all Participating
Employers and all Affiliated Companies, or (b) the first anniversary of the
date that the Employee is otherwise first absent from work for all
Participating Employers and all Affiliated Companies (with or without pay) for
any other reason; provided, however, that if the Employee is absent for
military duty under leave of absence granted by a Participating Employer or an
Affiliated Company or required by law, the Employee shall not be considered to
have a Severance Date provided the absent Employee returns to active service
with the Participating Employer or Affiliated Company within 90 days of his
release from active military duty or such shorter or longer period during which
his reemployment rights are protected by law.
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Sec. 2.47 "Termination of Employment" shall mean, for any Employee,
his death, retirement,resignation, discharge or any absence that causes him to
cease to be an Employee.
Sec. 2.48 "Total Disability" shall mean a disability due to bodily
injury or physical or mental disease which totally and permanently
incapacitates an Employee to such an extent as to render it impossible for him
to perform his customary or other duties with the Participating Employer and
provided that such incapacity to perform such duties with the Participating
Employer is established by such evidence as the Committee may deem sufficient.
Sec. 2.49 "Transferred Employee" shall mean each employee of Merck &
Co., Inc. on December 31, 1994 (including employees on an approved leave of
absence which began prior to November 1, 1994, and whose employment was
transferred to the Company as of January 1,1995, pursuant to the [agreement];
provided that any such employee who is on an approved leave of absence which
commenced prior to November 1, 1994, must commence employment with Astra Merck
Inc. immediately following such leave of absence in order to be treated as a
Transferred Employee under this Plan.
Sec. 2.50 "Trust Agreement" shall mean the Astra Merck Inc. Employee
Savings and Security Plan Trust Agreement as the same is presently constituted,
as it may hereafter be amended, and such additional and successor trust
agreements or other instruments as may be executed for purposes of providing a
vehicle for investment of the assets of the Plan.
Sec. 2.51 "Trustee" shall mean the party or parties so designated
pursuant to the Trust Agreement and each of their respective successors.
Sec. 2.52 "Trust Fund" shall mean all of the assets of the Plan held
by the Trustee under the Trust Agreement.
Sec. 2.53 "Valuation Date" shall mean the last day of each calendar
quarter during the Plan Year and each other interim date during the Plan Year
on which the Committee determines that a valuation of the Trust Fund shall be
made.
Sec. 2.54 "Year of Employment" shall mean twelve months of employment
with Astra Merck Inc. or an Affiliated Company, whether or not continuous. A
period of employment shall be credited beginning on the Employee's Employment
Commencement Date and ending on his Severance Date. With respect to periods of
employment of less than twelve consecutive months, thirty days equal one month
or one-twelfth of a year. Anything contained in this Section to the contrary
notwithstanding:
(a) if an Employee retires, quits or is discharged, the period
commencing on the Employee's Severance Date and ending on the first date on
which he again performs an Hour of Service shall be taken into account, if such
date is within twelve (12) consecutive months of the Employee's Severance Date;
and
(b) if the Employee is absent from work for a reason other than those
specified in subparagraph (a) and within twelve (12) consecutive months of the
first day of such absence, the
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Employee retires, quits or is discharged, the period commencing on the first
day of such absence and ending on the first date on which he again performs an
Hour of Service shall be taken into account, if such day is within twelve (12)
consecutive months of the date his absence began.
For purposes of this Section and Article III, all periods of employment with
Merck & Co., Inc. shall be credited with respect to each Transferred Employee.
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ARTICLE III
PARTICIPATION ELIGIBILITY
Sec. 3.01 Eligibility to Participate.
(a) Each Transferred Employee shall become an Active Participant in
the Plan on the later of (1) the Effective Date, or (2) the Enrollment Date
coincident with or next following both his completion of one Year of Employment
and his attainment of age 21, if he is a Covered Employee on such Enrollment
Date.
(b) Each other Covered Employee shall become an Active Participant as
of the Enrollment Date coincident with or next following the first date he has
both attained age 21 and completed one Year of Employment, if he is then a
Covered Employee. If a person is not a Covered Employee on the Enrollment Date
coincident with or next following the first date he has both attained age 21
and completed at least one Year of Employment, or (2) if a person who has
become an Active Participant ceases to be a Covered Employee, and, in either
event, later becomes a Covered Employee, the person shall become an Active
Participant as of the first day of the first payroll period thereafter on which
he is a Covered Employee.
Sec. 3.02 Employee Elections. Each Covered Employee who is eligible
to participate in the Plan as of any Enrollment Date pursuant to Section 3.01,
may elect to make Salary Deferrals and/or After-Tax Employee Contributions
pursuant to Article IV commencing on such Enrollment Date. Such election shall
be made by completing such forms and providing such data as are reasonably
required by the Committee, at such time in advance as the Committee may
prescribe; [provided, however, that any salary deferral election in effect for
a Covered Employee under the Merck Plan on the date such Plan is merged with
and into this Plan as described in Section 6.10 shall remain in effect under
this Plan on and after the merger date until changed by the Participant in
accordance with Section 4.01 except as otherwise prescribed by the Committee by
written notice to affected Participants.] If an Active Participant declines to
make Salary Deferrals and/or After-Tax Employee Contributions pursuant to
Section 4.01 effective as of the first date he may so elect as described in the
preceding sentences, he may thereafter elect to make Salary Deferrals
commencing on any subsequent Enrollment Date on which he is an Active
Participant, in accordance with procedures prescribed by the Committee.
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<PAGE> 17
ARTICLE IV
CONTRIBUTIONS
Sec. 4.01 Employee Contributions.
(a) Employee Elections. Subject to Section 3.02 and the limitations
set forth in Article V, each Active Participant may execute an election on a
form prescribed by the Committee pursuant to which such Participant may elect
to reduce his Compensation received on and after the effective date of the
election through payroll reductions by an amount equal to a whole percentage of
between 2% and 15% of his Compensation payable with respect to any payroll
period, rounded to the nearest whole dollar each month. Each Participant must
designate his/her contributions to the Plan as Salary Deferrals and/or
After-Tax Employee Contributions. This designation must be in increments of
10% of the payroll deduction amount. If no such designation is made, all
contributions shall be considered After-Tax Employee Contributions. If a
Participant designates all or part of his/her contributions as Salary
Deferrals, then such Participant must indicate whether, upon reaching the
maximum amount which can be contributed to the Plan on a pre-tax basis, the
amount designated as a Salary Deferral is to be contributed to the Plan on an
after-tax basis or returned to Compensation. If the participant does not make
an election, his/her contribution shall be designated as an After-Tax Employee
Contribution. The Salary Deferral and After-Tax Employee Contribution amounts
set forth in any Salary Deferral election shall be tentative and shall become
final only after the Committee has made such adjustments thereto as it deems
necessary to maintain the qualified status of the Plan and to satisfy all
requirements of section 401(k) or 401(m) of the Code. A Participant who is
incurring a Termination of Employment can only make a contribution via payroll
deduction for his/her final payroll period, if the Participant is being
compensated for the entire final payroll period.
(b) Increase in or Reduction of Salary Deferrals and/or After-Tax
Employee Contributions. An Active Participant may increase or reduce the rate
of his Salary Deferrals and After-Tax Employee Contributions, within the limits
described in Section 4.01(a), and/or may change the percentage of his/her
contributions designated as Salary Deferrals and After-Tax Employee
Contributions, effective on the first day of any calendar year quarter, by
filing a form prescribed by the Committee. The designation must be in
increments of 10% of the payroll deduction amount. To be effective on the
first day of any calendar year quarter, the appropriate form for a change in
the amount of payroll deduction and/or designation as Salary Deferrals or
After-Tax Employee Contributions must be received by site personnel no later
than the last day of the second month preceding the first day of the calendar
quarter. For example, in order to have a change effective April 1st of any
year, site personnel must receive the appropriate form from the Participant no
later than February 28th.
(c) Suspension of Contributions. Suspension of Plan contributions
shall be in accordance with the following provisions:
(1) A Participant who is an active employee may
voluntarily suspend payroll deductions for a period
of time not less than three months. This suspension
shall be effective the first of the month following
site personnel's receipt of the Participant's
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election to voluntarily suspend contributions, which
may be submitted to site personnel no later than the
twentieth of the month preceding the month in which
the suspension is to be effective.
(2) A Participant's payroll deductions shall be
automatically suspended at the time he/she goes on an
authorized leave of absence at less than full pay and
such suspension will continue for the duration of the
authorized leave.
(3) A Participant's payroll deductions shall be
automatically suspended at the time he/she becomes
employed by any Affiliated Company whose employees
are not eligible to participate in the Plan, and such
suspension shall continue for the duration of such
employment.
(4) A Participant to whom the in-service
distribution provisions are applicable, shall have
his/her payroll deductions suspended for six months
in accordance with the terms of Section 8.03.
(5) A Participant to whom the hardship withdrawal
provisions are applicable shall have his/her payroll
deductions suspended for twelve months in accordance
with the terms of Section 8.03.
A Participant whose contributions have been suspended pursuant to paragraphs
(2), (3), (4) and (5) above or whose contributions have been voluntarily
suspended under paragraph (a) for a definite period of time, shall
automatically resume contributions at the expiration of the suspension period.
If a Participant does not wish to resume contributions at that time, he/she
must affirmatively notify site personnel of that fact no later than thirty (30)
days prior to the time contributions would otherwise resume. However, a
Participant who voluntarily suspends contributions pursuant to paragraph (1)
hereof for an indefinite period of time, must notify site personnel thirty (30)
days prior to the time he/she wishes to resume contributions.
(d) Catch-Up Contributions. Subject to the limitations of Section
415 of the Internal Revenue Code of 1986, as amended, a Participant may make
lump sum Catch-Up Contributions to the Plan only at the end of each Plan Year
in an amount not greater than the excess, if any, of (1) 10% of aggregate
Compensation for all Plan Years in which the Employee was a Participant since
the later of the date he/she became a Participant or January 1, 1970 over (2)
the After-Tax Employee Contributions, Catch-Up Contributions and Pre-Tax
Contributions made since the later of such dates. For periods after January
1990, the percent in subparagraph (1) of this Section 4.01(d) shall be 15%.
Catch-up Contributions shall be made in cash. Any Catch-Up Contribution shall
be designated as an After-Tax Contribution and must be at least $500. These
contributions shall be invested in accordance with the Participant's investment
election on a form prescribed by the Committee.
(e) Contribution and Allocation of Salary Deferral and After-Tax
Employee Contribution Amounts. Each Participating Employer shall contribute to
the Plan with respect to each Plan Year an amount equal to the Salary Deferrals
and After-Tax Employee Contributions of Participants who are Employees of the
Participating Employer for such Plan Year, as determined pursuant to the
elections in
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<PAGE> 19
force pursuant to this Section. There shall be directly and promptly allocated
to the Salary Deferral Account and After-Tax Employee Contribution Account of
each Participant the Salary Deferral and After-Tax Employee Contribution
amounts contributed by the Participating Employer to the Plan by reason of any
such election in force with respect to that Participant.
Sec. 4.02 Matching Contributions. Subject to the limitations
described in Article V, each Participating Employer shall make Matching
Contributions as follows:
(a) Amount of Matching Contributions. For each allocation period of
a Plan Year the Participating Employer shall contribute to the Plan, on behalf
of each Participant who is an Employee of the Participating Employer and has
made Salary Deferrals and/or After-Tax Employee Contributions during that
allocation period, an amount equal to 50% of each such Participant's Salary
Deferrals and/or After-Tax Employee Contributions for the allocation period
which are not in the aggregate in excess of five percent (5%) of the
Participant's Compensation for the allocation period from that Participating
Employer.
For salaried Participants, Compensation applicable to any pay period
in which the Participant makes a contribution shall be determined by dividing
the Participant's Compensation by the number of times the Participant is paid
in a month. For hourly Participants who are paid weekly, Base Compensation
applicable to any pay period in which the Participant makes a contribution
shall be determined by converting the Participant's hourly wage to a monthly
rate and dividing by four (4), the resulting amount being applied to each of
the first four pay periods in the month. For hourly Participants who are paid
bi-weekly, Base Compensation applicable to any pay period in which the
Participant makes a contribution shall be determined by converting the
Participant's hourly wage to a monthly rate and dividing by two (2), the
resulting amount being applied to each of the first two pay periods in the
month.
There shall be no Company Matching Contribution with respect to
Catch-Up Contributions, Rollover Contributions, or Trust to Trust Transfer
Contributions.
(b) Allocation of Matching Contributions. Matching Contributions
made pursuant to this Section shall be allocated, as of the last day of the
allocation period for which such contributions shall be made, to the Matching
Contribution Accounts of Participants who are eligible to share in such
contributions in the amount determined pursuant to subsection (a) above.
(c) Allocation Period. For purposes of this Section, "allocation
period" shall mean each portion of the Plan Year for which Matching
Contributions are made by the Participating Employer.
Sec. 4.03 Qualified Employer Contributions. Subject to the
limitations described in Article V, the Participating Employers may, in their
discretion, make Qualified Employer Contributions for a Plan Year, which shall
be allocated as of the last day of the Plan Year for which such contributions
are made, either (1) pro rata based on Compensation for the Plan Year or (2)
pro rata on the basis of Salary Deferrals and/or After-Tax Employee
Contributions for the Plan Year, as determined by the Participating Employers
at the time such contributions are made, among the Qualified Employer
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Contribution Accounts of only those Active Participants who are not Highly
Compensated Employees for the Plan Year in an amount necessary to satisfy at
least one of the tests in Section 5.02.
Sec. 4.04 Rollover Contributions. The Plan shall accept, as
"Rollover Contributions" made on behalf of any Covered Employee, cash equal to
(a) all or a portion of the amount received by the Covered Employee as a
distribution from (either directly or through a conduit individual retirement
account), or (b) an amount transferred directly to the Plan (pursuant to
section 401(a)(31) of the Code) on the Covered Employee's behalf by the trustee
of another qualified trust forming a part of a plan described in section
401(a) of the Code, but only if the deposit qualifies as a tax-free rollover as
defined in section 402 of the Code as determined in accordance with procedures
established by the Committee and is not less than $500. If the amount received
does not qualify as a tax-free rollover, the amount shall be refunded to the
Covered Employee. Rollover amounts shall be allocated to the Covered
Employee's Rollover Account and invested in accordance with the provisions of
Article VI. A Covered Employee who is not yet an Active Participant shall be
deemed a Participant only with respect to amounts, if any, in his Rollover
Account.
Sec. 4.05 Timing of Contributions. Matching Contributions for any
Plan Year under this Article shall be made no later than the last date on which
amounts so paid may be deducted for federal income tax purposes for the taxable
year of the Participating Employer in which the Plan Year ends. Qualified
Employer Contributions for any Plan Year under this Article shall be made no
later than twelve (12) months after the close of the Plan Year to which the
contribution applies. Amounts contributed as Salary Deferrals, After-Tax
Employee Contributions, Catch-Up Contributions and Rollover Contributions will
be remitted to the Trustee as soon as practicable, but no later than ninety
(90) days after the date on which such contributions were received or withheld
from the Participant's Compensation.
Sec. 4.06 Contingent Nature of Contributions. Each contribution made
by a Participating Employer pursuant to the provisions of Section 4.01, 4.02,
or 4.03 is hereby made expressly contingent on the deductibility thereof for
federal income tax purposes for the fiscal year with respect to which such
contribution is made and no such contribution shall be made for any year to the
extent it would exceed the deductible limit for such year as set forth in
section 404 of the Code.
Sec. 4.07 Exclusive Benefit; Refund of Contributions. All
contributions made to the Plan are made for the exclusive benefit of the
Participants and their Beneficiaries, and such contributions shall not be used
for, nor diverted to, purposes other than for the exclusive benefit of the
Participants and their Beneficiaries (including the costs of maintaining and
administering the Plan and corresponding trust). Notwithstanding the
foregoing, to the extent that such refunds do not, in themselves, deprive the
Plan of its qualified status, refunds of contributions shall be made to the
Participating Employers under the following circumstances and subject to the
following limitations:
(a) Initial Nonqualification. If, upon the timely filing of a
determination letter application on the qualified status of the Plan, the Plan
is determined not to initially satisfy the qualification requirements of
section 401(a) of the Code, and if the Participating Employers decline to amend
the Plan to satisfy such qualification requirements of section 401(a) of the
Code, contributions made prior
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<PAGE> 21
to the determination that the Plan has failed to qualify shall be returned to
the Participating Employers within one (1) year of such determination.
(b) Disallowance of Deduction. To the extent that a federal income
tax deduction is disallowed for any contribution made by a Participating
Employer, the Trustee shall refund to the Participating Employer the amount so
disallowed within one (1) year of the date of such disallowance.
(c) Mistake of Fact. In the case of a contribution which is made in
whole or in part by reason of a mistake of fact, so much of a Participating
Employer's contribution as is attributable to the mistake of fact shall be
returnable to the Participating Employer upon demand, upon presentation of
evidence of the mistake of fact to the Trustee and of calculations as to the
impact of such mistake. Demand and repayment must be effectuated within one
(1) year after the payment of the contribution to which the mistake applies.
In the event that any refund is paid to a Participating Employer
hereunder, such refund shall be made without regard to net investment gains
attributable to the contribution, but shall be reduced to reflect net
investment losses attributable thereto.
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ARTICLE V
LIMITATIONS ON CONTRIBUTIONS
Sec. 5.01 Calendar Year Limitation on Salary Deferrals.
(a) Notwithstanding anything contained herein to the contrary, Salary
Deferrals made on behalf of an Active Participant under this Plan together with
elective deferrals (as defined in section 402(g) of the Code) under any other
plan or arrangement maintained by a Participating Employer or an Affiliated
Company shall not exceed $7,000 (as adjusted in accordance with section 402(g)
of the Code and regulations thereunder) for any calendar year. Furthermore,
should a Participant claim that his Salary Deferrals under this Plan (reduced
by Salary Deferrals previously distributed pursuant to Section 5.03(a) or
returned to the Participant pursuant to Section 5.04) when added to his other
elective deferrals under any other plan or arrangement (whether or not
maintained by a Participating Employer or an Affiliated Company) exceed the
limit imposed by section 402(g) of the Code for the calendar year in which the
deferrals occurred, the Committee notwithstanding any other provision of the
Plan shall distribute, by April 15 of the following calendar year, the amount
of Salary Deferrals specified in the Participant's claim, plus income thereon
determined in the manner described in Section 5.03(c). The Participant's claim
shall be in writing and shall be submitted to the Committee no later than the
March 1 following the calendar year in which such deferrals occurred.
Notwithstanding anything in this Section 5.01 to the contrary, a Participant
shall be deemed to have made a claim for distribution of excess deferrals from
the Plan to the extent that his Salary Deferrals together with his elective
deferrals under any other plan or arrangement maintained by a Participating
Employer or an Affiliated Company exceed the limit imposed by section 402(g) of
the Code for the calendar year.
(b) In the event a Participant receives a distribution of excess
Salary Deferrals pursuant to subsection (a) and, after application of Section
5.03 for such year, any Matching Contributions allocated to the Participant by
reason of the distributed Salary Deferrals remaining in the Participant's
Account, the Participant shall forfeit such Matching Contributions (plus income
thereon), whether or not such amounts would otherwise be vested. Amounts
forfeited shall be applied to reduce future Matching Contributions pursuant to
Section 4.02.
Sec. 5.02 Nondiscrimination Limitations on Salary Deferrals, After-Tax
Employee Contributions and Matching Contributions.
(a) Salary Deferral Limitations. With respect to Salary Deferrals for
any Plan Year, one of the following tests must be satisfied:
(1) The Average Actual Deferral Percentage for Active
Participants who are Highly Compensated Employees for the Plan Year shall not
exceed the Average Actual Deferral Percentage for all other Active Participants
for the Plan Year multiplied by 1.25; or
(2) The Average Actual Deferral Percentage for Active
Participants who are Highly Compensated Employees for the Plan Year shall not
exceed the Average Actual Deferral Percentage
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<PAGE> 23
for all other Active Participants for the Plan Year multiplied by 2, provided
that the Average Actual Deferral Percentage for such Highly Compensated
Employees does not exceed the Average Actual Deferral Percentage for all other
Active Participants by more than two (2) percentage points.
(b) After-Tax Employee Contributions and Matching Contribution
Limitations. With respect to After-Tax Employee Contributions and Matching
Contributions for any Plan Year, one of the following tests must be satisfied:
(1) The Average Contribution Percentage for Active
Participants who are Highly Compensated Employees for the Plan Year shall not
exceed the Average Contribution Percentage for all other Active Participants
for the Plan Year multiplied by 1.25; or
(2) The Average Contribution Percentage for Active
Participants who are Highly Compensated Employees for the Plan Year shall not
exceed the Average Contribution Percentage for all other Active Participants
for the Plan Year multiplied by 2, provided that the Average Contribution
Percentage for such Highly Compensated Employees does not exceed the Average
Contribution Percentage for all other Active Participants by more than two (2)
percentage points.
(c) Aggregate Limitation. For any Plan Year in which both the
limitations in Sections 5.02(a)(1) and (b)(1) are exceeded, the sum of the
Average Actual Deferral Percentage and the Average Contribution Percentage for
Active Participants who are Highly Compensated Employees (determined after
adjustments are made under Sections 5.03(a) and (b) for purposes of satisfying
the limitations described in Sections 5.02(a) and (b)) shall not exceed the
greater of:
(1) the sum of (A) the greater of the Average Actual Deferral
Percentage or the Average Contribution Percentage for all other Active
Participants multiplied by 1.25, plus (B) the lesser of (i) two (2) multiplied
by the lesser of the Average Actual Deferral Percentage or the Average
Contribution Percentage for all other Active Participants, or (ii) 2% plus the
lesser of the Average Actual Deferral Percentage or the Average Contribution
Percentage for all other Active Participants; or
(2) the sum of (A) the lesser of the Average Actual Deferral
Percentage or the Average Contribution Percentage for all other Active
Participants multiplied by 1.25, plus (B) the lesser of (i) two (2) multiplied
by the greater of the Average Actual Deferral Percentage or the Average
Contribution Percentage for all other Active Participants, or (ii) 2% plus the
greater of the Average Actual Deferral Percentage or the Average Contribution
Percentage for all other Active Participants.
(d) For purposes of subsections (a) through (c), this Plan shall be
aggregated and treated as a single plan with other plans maintained by a
Participating Employer or an Affiliated Company to the extent that this Plan is
aggregated with any such other plan for purposes of satisfying section 410(b)
(other than section 410(b)(2)(A)(ii)) of the Code.
(e) The Actual Deferral Percentage or Contribution Percentage of any
Highly Compensated Employee described in Section 2.21(e) shall be determined by
aggregating the Compensation and Salary Deferrals, Matching Contributions
and/or Qualified Employer Contributions, as appropriate, of all family members
who are Active Participants and are required to be treated as a single
Employee.
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Except to the extent taken into account in the preceding sentence, the
Compensation, Salary Deferrals, Qualified Employer Contributions and Matching
Contributions of each such family member shall not be taken into account in
determining the Average Actual Deferral Percentage or Average Contribution
Percentage for the group of Active Participants who are not Highly Compensated
Employees or for the group of Active Participants who are Highly Compensated
Employees.
(f) The determination and treatment of the Salary Deferrals, Qualified
Employer Contributions Matching Contributions, Actual Deferral Percentage and
Contribution Percentage of any Employee shall satisfy such other requirements
as may be prescribed by the Secretary of the Treasury.
Sec. 5.03 Correction of Discriminatory Contributions.
(a) Should the nondiscrimination tests of Section 5.02(a) not be
satisfied with respect to Salary Deferrals for any Plan Year, the Actual
Deferral Percentage of the Highly Compensated Employee with the highest Actual
Deferral Percentage shall be reduced until the appropriate nondiscrimination
tests are satisfied, or until the Actual Deferral Percentage of such Highly
Compensated Employee is equal to the Actual Deferral Percentage of the Highly
Compensated Employee with the next highest Actual Deferral Percentage. This
process shall be repeated until the nondiscrimination tests of Section 5.02(a)
are satisfied. The Actual Deferral Percentage of any Highly Compensated
Employee which must be reduced pursuant to this subsection (a) shall be reduced
within twelve (12) months of the close of the Plan Year with respect to which
the reduction applies, and the provisions of Section 5.01(b) regarding the
forfeiture of related Matching Contributions shall apply. For purposes of
determining the necessary reduction, Salary Deferrals previously distributed
pursuant to Section 5.01 shall be treated as distributed under this Section
5.03(a).
(b) Should the nondiscrimination tests of Section 5.02(b) not be
satisfied with respect to After-Tax Employee Contributions and Matching
Contributions for any Plan Year, the Contribution Percentage of the Highly
Compensated Employee with the highest Contribution Percentage shall be reduced
until the nondiscrimination tests of Section 5.02(b) are satisfied, or until
the Contribution Percentage of such Highly Compensated Employee is equal to the
Contribution Percentage of the Highly Compensated Employee with the next
highest Contribution Percentage. This process shall be repeated until the
nondiscrimination tests of Section 5.02(b) are satisfied. The Contribution
Percentage of any Highly Compensated Employee which must be reduced pursuant to
this subsection (b) shall be reduced, within twelve (12) months of the close of
the Plan Year with respect to which the reduction applies, by (1) first,
distributing the Highly Compensated Employee's After-Tax Employee Contributions
to the extent such contributions do not form the basis for determining the
Employee's Matching Contributions under Section 4.02, (2) then, by distributing
the Employee's excess Matching Contributions, and (3) then, by distributing the
Highly Compensated Employee's After-Tax Employee Contributions not described in
clause (1).
(c) Any distribution, forfeiture or recharacterization of Salary
Deferrals, After-Tax Employee Contributions or Matching Contributions necessary
pursuant to subsections (a) or (b) shall include a distribution or forfeiture
of the income, if any, allocable to such contributions. Such income shall be
equal to the sum of the allocable gain or loss for the Plan Year, and the
period between the end of the
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<PAGE> 25
Plan Year and the date of distribution, and shall be determined by the
Committee in a manner uniformly applicable to all Participants and consistent
with regulations issued by the Secretary of the Treasury.
(d) For purposes of satisfying the nondiscrimination test described in
Section 5.02(c), the Matching Contributions of all Highly Compensated Employees
shall be reduced as described in subsection (b).
(e) Notwithstanding anything in this Section to the contrary:
(1) for any Highly Compensated Employee who is an Active
Participant in the Plan while eligible to participate in any other qualified
retirement plan maintained by a Participating Employer or an Affiliated Company
under which the Employee has made employee contributions or elective deferrals,
or is credited with employer matching contributions for the year, the Committee
shall coordinate corrective actions under this Plan and such other plan for the
year.
(2) in the case of a Highly Compensated Employee whose Actual
Deferral Percentage or Contribution Percentage is determined pursuant to
Section 2.21(e), the Actual Deferral Percentage or Contribution Percentage
shall be reduced as described in Section 5.03(a) or (b), whichever applies, and
any excess amounts shall be allocated among the family members in proportion to
the contributions of each family member that have been aggregated.
(f) In lieu of or in addition to the actions described in subsections
(a) through (e) of this Section, to satisfy the tests in Section 5.02,
Participating Employers may make Qualified Employer Contributions as described
in Section 4.03.
Sec. 5.04 Annual Additions Limitations.
(a) In no event shall the Annual Addition on behalf of any Participant
for any Limitation Year exceed the lesser of:
(1) $30,000 (or, if greater, one-fourth of the defined
benefit dollar limit set forth in section 415(b)(l)(A) of the Code as in effect
for the Limitation Year), or
(2) twenty-five percent (25%) of such Participant's
Compensation for the Limitation Year.
The limitation referred to in Section 5.04(a)(2) shall not apply to any
contribution for medical benefits within the meaning of section 401(h) or
section 419(A)(f)(2) of the Code which is otherwise treated as an Annual
Addition under section 415(l)(1) or 419A(d)(2) of the Code.
If the amount otherwise allocable to the Account of a Participant would
exceed the amount described above as a result of the reallocation of
forfeitures, a reasonable error in estimating the Participant's Compensation, a
reasonable error in determining the amount of elective deferrals (within the
meaning of section 402(g) of the Code) that may be made under the limitations
of section 415 of the Code, or such other circumstances as permitted by law,
the Committee shall determine which
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portion, if any, of such excess amount is attributable to the Participant's
Salary Deferrals, and/or After-Tax Employee Contributions, and/or Qualified
Employer Contributions, and/or Matching Contributions, if any, until such
amount has been exhausted. To the extent any portion of a Participant's Salary
Deferrals, After-Tax Employee Contributions, Qualified Employer Contributions
and/or Matching Contributions are determined to be excess under this Section,
such Salary Deferrals and/or After-Tax Employee Contributions, with income
thereon, shall be distributed to the Participant as soon as administratively
practicable.
(b) In no event shall the amount allocated to the Account of any
Participant for any Limitation Year cause the sum of the "defined contribution
fraction" and the "defined benefit fraction," as such terms are defined in
section 415(e) of the Code, to exceed 1.0, or such other limitation as may be
applicable under section 415 of the Code with respect to any combination of
qualified plans without disqualification of any such plan. In the event that
the amount tentatively available for allocation to the Account of any
Participant in any Limitation Year exceeds the maximum amount permissible
hereunder, benefits under the defined benefit plan or plans in which the
Participant is participating shall be adjusted to the extent necessary to
satisfy the requirements of section 415(e) of the Code.
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ARTICLE VI
INVESTMENT AND VALUATION OF TRUST FUND;
MAINTENANCE OF ACCOUNTS
Sec. 6.01 Investment of Assets. All existing assets of the Trust Fund
and all future contributions shall be invested by the Trustee in accordance
with the terms of the Trust Agreement.
Sec. 6.02 Participant Investment Direction. A Participant may invest
in the following Investment Media in accordance with the provisions of this
Article VI.
MUTUAL FUNDS
1. Fidelity Balanced Fund
This fund seeks to obtain as much income as possible, consistent with
preservation of capital, by investing in a broadly diversified portfolio of
high-yielding securities, including common stocks, preferred stocks and bonds.
The objective is to provide a balanced investment in both stocks and bonds,
thereby affording the opportunity for capital growth and current income;
however, at least 25% of total assets will always be invested in fixed income
senior securities. Some growth in capital may result from this strategy
although that is not a fund objective.
2. Fidelity Daily Income Trust
This mutual fund seeks current income consistent with preservation of principal
and liquidity, and invests in a broad range of both government and private
issuer, short-term, U.S. dollar-denominated, money market instruments maturing
in one year or less.
3. Fidelity Equity-Income Fund
This fund seeks to invest in income-producing equity securities and to achieve
a dividend yield that exceeds the composite yield of the S&P 500. The fund
also considers the potential for capital growth. The fund may hold
investment-grade, fixed income securities when market conditions warrant.
4. Fidelity Retirement Growth Fund
This fund seeks long term capital appreciation by investing primarily in common
stock, although other types of securities may be included in the portfolio. The
fund's emphasis is on the realization of capital gains rather than on dividend
income.
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5. Fidelity Growth Company
This fund seeks to achieve capital appreciation by investing primarily in
common stock of companies considered to have above average growth
characteristics. These characteristics are most often associated with
companies in new and emerging areas of the economy, although the fund may also
hold shares in larger, mature or declining industry firms which have been
revitalized.
6. Fidelity Growth & Income Portfolio
This fund seeks a combination of long term capital growth, current income and
growth of income consistent with reasonable investment risk. the fund may
invest in any combination of common stock, preferred stock and fixed-income
securities. The fund will seek securities of companies which offer growth of
earnings potential while paying current dividends whose yield meets or exceeds
that of the S&P 500 Index.
7. Fidelity Capital and Income Fund
This fixed income fund seeks to earn a high level of current income by
investing primarily in high-yielding, low-rated, fixed-income corporate
securities. The securities would generally be subject to greater price
movement and credit risk associated with lower quality bonds. The fund's
weighted average maturity may be ten or more years.
8. Fidelity Intermediate Bond Fund
This fixed income fund seeks high current income by investing in high and
upper-medium grade, fixed-income obligations. This fund is for investors who
seek a high level of current income without the potentially greater yields and
the capital appreciation or depreciation of long-term fixed income funds. The
fund's dollar-weighted average maturity will range between three and ten years.
9. Fidelity Magellan Fund
This fund seeks capital appreciation by investing primarily in common stock and
securities convertible into common stock. Up to 20% of assets may also be
invested in debt securities of all types and qualities issued by foreign and
domestic issuers if the fund manager believes they have potential for capital
appreciation. Equity investment can be made in domestic or foreign
corporations. Foreign securities held by the portfolio may be subject to
currency risk, which can be hedged, and to political, financial, or sovereign
risk of the foreign issuer's home country.
10. Fidelity OTC Portfolio
This fund seeks to achieve capital appreciation by investing primarily in
securities traded on the over-the-counter (OTC) securities market. These are
frequently the securities of smaller or newer companies, whose instruments may
have limited marketability and may be subject to more erratic market movement.
The securities of many of these companies may be overlooked by most investors,
making them undervalued in the market place. This undervaluation offers the
potential for significant
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capital appreciation. The investments held by the OTC Portfolio will be
primarily common stocks, but may include debt securities as well.
11. Overseas Fund
This growth fund seeks long-term growth of capital, primarily through
investments in foreign securities. Normally, at least 65% of the Fund's total
assets will be invested in securities of companies from at least three
different countries outside of the United States. The fund expects to invest
most of its assets in securities of companies located in developed countries in
these general geographic areas: the Americas (non-U.S.), the Far East and
Pacific Basin, and Western Europe. Foreign securities held by the portfolio
may be subject to currency risk, which can e hedged, and to political,
financial, or sovereign risk of the foreign issuer's home country.
12. Fidelity U.S. Equity Index Portfolio
This specialty fund seeks to provide investment results that correspond to the
total return (i.e., the combination of capital appreciation and income)
performance of common stocks publicly traded in the United States. In seeking
this objective, the Portfolio attempts to duplicate the composition and total
return of the S&P 500 Index while keeping transaction costs and other expenses
low. The S&P 500 Index represents over 79% of the market value of all common
stocks publicly traded in the U.S. and is well known to investors. After
reaching an asset level of $20 million, under normal conditions, 90% of the
Portfolio's assets will be invested in securities of the companies which
compose the Index.
13. Fidelity U.S. Government Reserves
This mutual fund seeks as high a level of current income as is consistent with
the security of principal and liquidity by investing in money market
instruments maturing in one year or less. It invests only in obligations
issued or guaranteed as to principal and interest by the U.S. Government, its
agencies or instrumentalities, and repurchase agreements secured by these
obligations.
MERCK COMMON STOCK
14. Merck Common Stock Fund
This portfolio consists of shares of Merck Common Stock. Information about
Merck & Co., Inc.'s business may be obtained from the Annual Report to
stockholders and Form 10-K Annual Report, both of which are available at site
personnel offices. An investment in this portfolio does not have the advantage
of diversification, and is subject both to the normal external factors
affecting the general level of stock prices and to specific factors affecting
Merck & Co., Inc. This Fund is available only for Account balances transferred
from the Merck Plan and is not available for new investments or for transfers
from other Funds on and after the Effective Date.
PARTICIPANT LOANS
15. Participant Loans
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A Participant may borrow money from his/her Account in accordance with the
terms of Article IX. If a Participant does so, that loan will be considered an
investment for that Participant's Account.
The Committee, in its sole discretion, may from time to time designate
additional Investment Funds of the same or different types or modify, cease to
offer or eliminate any existing Investment Funds. Anything contained in this
Section 6.02 to the contrary notwithstanding, all or any part of the Trust Fund
may be invested by one or more Investment Managers appointed by the Committee
or under one or more pooled or commingled funds maintained by a bank or
insurance company, together with commingled assets of other plans of deferred
compensation qualified under section 401(a) of the Code. A portion of the
Trust Fund, as determined by the Committee, may be held in the form of
uninvested cash or in a liquid asset account for temporary periods pending
reinvestment or distribution.
Sec. 6.03 Investment Elections. Each Participant who elects to
participate shall direct in writing on a form and at the time or times
prescribed by the Committee, the investment of contributions made on his behalf
in any one or more of the available Investment Funds (other than the Merck
Company Stock Fund), subject to such limitations as the Committee may
prescribe. The investment elections must be expressed in whole percentages of
the payroll reduction amount (or Rollover Contribution, if it is the
Participant's initial contribution to the Plan), with a minimum investment of
1% in any Investment Fund. The election of Investment Funds shall be applied
pro rata to the different types of contributions which a Participant makes to
the Plan at any one time. A Catch-Up Contribution shall be invested in
accordance with the Participant's election of Investment Funds in effect at the
time the contribution is made.
Sec. 6.04 Change of Election. A Participant may change the Investment
Fund(s) in which his/her future contributions are invested by calling the
Trustee prior to 4 p.m. (ET) on any Business Day, giving his/her PIN, and
authorizing the specific investment change in whole percentages of the payroll
deduction amount. The change will become effective with the next contribution
received by the Trustee. Instructions given to the Trustee on the day that any
payroll deduction amounts are credited to a Participant's Account Balance will
be effective with the next contribution received by the Trustee. Changes in
Investment Media for future contributions may only be done via telephone to the
Trustee.
Sec. 6.05 Transfers Between Investment Funds.
(a) A Participant may change the Investment Fund(s) in which his/her
Account is invested by calling the Trustee, giving his/her PIN, and authorizing
the specific investment change(s). Changes in each Investment Fund must be done
in a dollar amount (Mutual Funds only) or a number of shares (Mutual Funds and
Merck Common Stock) with a minimum reallocation of $250 or, if less, the entire
amount the Participant has in such Investment Fund(s). Changes in Investment
Fund(s) for Accounts may only be done via telephone to the Trustee. No change
may be made which results in the simultaneous reallocation into and out of any
given Investment Fund.
(b) If the Participant wishes to reallocate his/her Account from one
or more Mutual Funds to other Mutual Funds, and if the Participant completes
his/her instructions to the Trustee prior to 4 p.m. (ET) on any Business Day,
then the transaction implementing the change will be valued as of that
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Business Day. If the Participant's instructions regarding a reallocation out
of certain Mutual Funds into other Mutual Funds are received after 4 p.m. (ET)
on a Business Day, then the transaction implementing the change will be valued
the next Business Day.
(c) A reallocation of any part of a Participant's Account into a
Mutual Fund(s) from Merck Common Stock involves two valuation dates. The
initial valuation date is the date Merck Common Stock is sold, while the second
valuation date is the date Mutual Fund shares are purchased. For purposes of
reallocating Accounts out of Merck Common Stock, Merck Common Stock will be
valued by the Trustee on either the first (1st) or sixteenth (16th) of any
month. Should the first or sixteenth of any month fall on a non-Business Day,
then the valuation will take place on the next Business Day.
In order to have Merck Common Stock valued on the first of any month, the
Participant must call and complete his/her instructions to the Trustee no
earlier than the sixteenth of the preceding month and no later than 4 p.m. (ET)
on the last Business Day of the preceding month. If Merck Common Stock is
valued on the first of the month, Mutual Fund shares will be purchased five
(5)Business Days following the date the Merck Common Stock was valued.
In order to have Merck Common Stock valued on the sixteenth of any month, the
Participant must call and complete his/her instructions to the Trustee no
earlier than the first Business Day of the month and no later than 4 p.m. (ET)
on the fifteenth of the month or, if the fifteenth is a non-Business Day, then
no later than 4 p.m. (ET) on the Business Day immediately preceding the
fifteenth. If Merck Common Stock is valued on the sixteenth of the month,
Mutual Fund(s) shares will be purchased five (5) Business Days following the
date the Merck Common Stock was valued.
(d) A Participant may not transfer any part of his Account into the
Merck Common Stock Fund.
(e) The maximum aggregate number of reallocations permitted under the
Plan each Plan Year is based on the aggregate number of reallocations permitted
per participant per year pursuant to the terms of all the Investment Fund
prospectuses multiplied by the number of Participants. If activity under the
Plan should approach this maximum, then the Plan Committee shall determine a
reasonable manner of ensuring that the Plan does not exceed such limit.
Sec. 6.06 Individual Accounts. There shall be maintained on the books
of the Plan with respect to each Participant, as applicable, a Salary Deferral
Account, an After-Tax Employee Contribution Account, a Qualified Employer
Contribution Account, a Matching Contribution Account, and a Rollover Account.
Each such Account shall separately reflect the Participant's interest in each
Investment Fund relating to such Account (and any subaccounts within such
Account). Each Participant shall receive, at least annually, a statement of
his Account showing the balances in each Investment Fund. A Participant's
interest in any Investment Fund shall be determined and accounted for based on
his beneficial interest in any such fund, and no Participant shall have any
interest in or rights to any specific asset of any Investment Fund.
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Sec. 6.07 Valuations. The interest of a Participant in Merck Common
Stock and Mutual Funds shall be valued as follows:
(a) The value on any given day of a Participant's interest in any
Mutual Fund, which investments are described in Section 6.02 shall be
determined by multiplying the number of Mutual Fund shares and fractional
shares reflected in the Participant's Account as of the given day by the
applicable Mutual Fund's closing price per share on such given date. For
purposes of initial purchase, reallocation of Account balances, and
distributions, the value of Mutual Funds shall be determined by reference to
the closing price per share of the applicable Mutual Fund(s) on the given
Business Day the Trustee conducts the applicable sale or purchase.
(b) The value on any given date of a Participant's interest in Merck
Common Stock, shall be determined by multiplying the number of share and any
fractional share reflected in the Participant's Account balance as of the given
date by the closing price per share of Merck Common Stock on the New York Stock
Exchange on such given date. However, for purposes of reallocation of Account
balances, and distributions, the value of a participant's interest in Merck
Common Stock shall be determined by the Average Transaction Price on the given
Business Day the Trustee conducted the applicable purchase or sale.
Sec. 6.08 Allocation to Individual Accounts. The Accounts (or
appropriate subaccounts) of each Participant shall be adjusted as of each
Valuation Date by (a) reducing such Accounts (or subaccounts) by any payments
made therefrom since the preceding Valuation Date, and then (b) increasing or
reducing such Accounts (or subaccounts) by the Participant's allocable share of
the net amount of income, gains and losses (realized and unrealized) and
expenses of each applicable Investment Fund since the preceding Valuation Date
(including reasonable fees reflecting the expense of administering Participant
investment elections), and (c) crediting such Accounts (or subaccounts) with
any contributions made thereto since the preceding Valuation Date.
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Sec. 6.09 Valuation for Distribution. For purposes of paying the
amounts to be distributed to a Participant or Beneficiary pursuant to Article
VIII, the value of the Participant's interest shall be determined in accordance
with the provisions of this Article as of the Valuation Date described in the
applicable Section of Article VIII.
Sec. 6.10 Merger With Merck Plan. Effective as of such date as the
Merck Plan shall be merged with and into this Plan (the "merger date"), all
assets held under the Merck Plan for Transferred Employees shall be transferred
to and become a part of the Trust Fund. All benefits payable on or after the
merger date with respect to a person's participation in the Merck Plan, shall
be payable from the Trust Fund under the Plan. With respect to each individual
who has an account under the Merck Plan as of the merger date, the person's
Salary Deferral Account, After-Tax Employee Contribution Account, Catch-Up
Contribution Account, Matching Contribution Account and Rollover Account shall
be transferred to his respective account under the Plan. In addition, to the
extent that any individual has a loan outstanding under the Merck Plan as of
the merger date, such loan and the associated promissory note shall be
transferred to the Plan and shall henceforward be treated as a loan from the
Plan. Amounts transferred from the Merck Plan to the Plan on behalf of any
Participant shall be invested upon such transfer among the available Investment
Funds as the Participant shall direct in writing on such form, at such time in
advance, and in accordance with such other procedures as the Committee or its
delegate may prescribe; provided, however, that investment of such amounts
shall be subject to such limitations and restrictions as may be imposed by the
Committee or any insurance company contract or other instrument governing the
vehicles in which such amounts were invested immediately prior to the transfer.
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ARTICLE VII
VESTING
Sec. 7.01 Full and Immediate Vesting. A Participant, at all times,
shall have a fully (100%) vested and nonforfeitable interest in the balance of
his Account, subject to the provisions of Sections 4.06, 4.07 and Article V.
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ARTICLE VIII
BENEFIT DISTRIBUTIONS
Sec. 8.01 Death Benefits. Subject to Section 9.02(e). In the event
of a Participant's death, his Beneficiary shall be entitled to receive a death
benefit in a lump sum equal to the balance of his Account, determined no later
than the tenth of the second month (or the next Business Day if the tenth is
not a Business Day) following his date of death, or the date site personnel
learns of the Participant's death. Such death benefit shall be payable to the
Participant's Beneficiary as soon as practicable thereafter.
Sec. 8.02 Benefits Upon Separation from Service. (a) Subject to
Section 9.02(e) and except as provided in Section 8.04(a) or (b), the Plan
benefit payable to a Participant upon such Participant's Termination of
Employment for reasons other than death, shall be equal to the balance of his
Account, determined no later than the tenth of the second month (or the next
Business Day if the tenth is not a Business Day) following the later of the
Participant's Termination of Employment or the date site personnel learns of
the Participant's Termination of Employment. Such benefit shall be paid in a
lump sum to the Participant as soon as practicable after the Participant's
Termination of Employment; provided, however, that in the case of a Participant
whose Account balance exceeds $3,500 (or, in the case of a Participant who has
not reached Normal Retirement Age, has ever exceeded $3,500 at the time of any
prior distribution), no distribution shall be made at such time without the
written consent of the Participant. If the Participant does not so consent,
then distribution will be deferred until the Participant consents in writing to
such distribution, in which case distribution shall be made on or as soon as
administratively practicable following the date of the Participant's consent.
In no event, however, shall distribution be made later than the earlier of the
Participant's Normal Retirement Date or Required Beginning Date. A
Participant's election to receive payment prior to the date he attains Normal
Retirement Age must be made within the 90 day period ending on the Benefit
Payment Date and in no event earlier than the date the Committee provides the
Participant with written information relating to his right to defer payment
until his Normal Retirement Age, the modes of payment available to him, the
relative values of each and his right to make a direct rollover as set forth in
Section 8.08. Such information must be supplied not less than 30 days nor more
than 90 days prior to the Benefit Payment Date. Notwithstanding the preceding
sentence, a Participant's Benefit Payment Date may occur less than 30 days
after such information has been supplied to the Participant provided that,
after the Participant has received such information and has been advised of his
right to a 30 day period to make a decision regarding the distribution, the
Participation affirmatively elects a distribution.
(b) A Participant must commence to receive distributions under the
Plan no later than the April 1st of the calendar year following the year in
which the Participant attains age 70-1/2. The Participant's entire interest
shall be distributed to him/her over a period no greater than the Participant's
life expectancy. Distributions pursuant to this paragraph shall comply with
Section 401(a)(9) of the Internal Revenue Code and with any regulations
promulgated thereunder. The initial mandatory payment to a Participant shall
be valued on the twenty-fifth of March (or the next Business Day if the
twenty-fifth is not a Business Day) following the year in which the Participant
attains age 70-1/2. This initial mandatory payment shall be calculated by
dividing the Participant's Account balance as of
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December 31 of the second year preceding the initial mandatory payment date by
the Participant's life expectancy in the year immediately preceding the initial
mandatory payment date as determined under appropriate IRS mortality tables.
Each succeeding mandatory distribution shall be made annually and valued as of
the Business Day following the tenth of December each year. Each succeeding
mandatory payment shall be calculated by dividing the Participant's Account
balance as of December 31 of the preceding year by the Participant's life
expectancy in the year of distribution as determined under appropriate IRS
mortality tables. If a Participant has a distribution valued in a Plan Year,
that distribution will offset any amount required to be mandatorily distributed
for that Plan Year. This provision shall not apply to Participants who
attained age 70-1/2 prior to 1988. In a mandatory distribution, a Participant
shall receive cash for his/her interest in Mutual Funds, and stock certificates
for his/her interest in Merck Common Stock. Sources and Investment Media shall
be debited proportionally for this distribution.
Sec. 8.03 Withdrawals. A Participant, while still employed, may
request a withdrawal from his Account as follows:
(a) Withdrawals In the Event of Hardship. Subject to the limitations
described in this subsection, a Participant may request a withdrawal from his
Account on account of immediate and heavy financial need. Withdrawals pursuant
to this Section 8.03(a) must satisfy all of the following rules:
(1) A distribution shall be deemed to be on account of an
immediate and heavy financial need of a Participant and permissible under this
subsection (a) if the Committee finds that the distribution is on account of:
(A) expenses for medical care described in section
213(d) of the Code incurred by the Participant, the Participant's spouse, or
any dependents of the Participant as defined in section 152 of the Code (or the
distribution is necessary for such persons to obtain such medical care);
(B) costs directly related to the purchase (excluding
mortgage payments) of a principal residence for the Participant;
(C) payment of tuition and related educational fees
for the next twelve (12) months of post-secondary education for the
Participant, his spouse, children or dependents;
(D) the need to prevent the eviction of the
Participant from his principal residence or foreclosure on the mortgage of his
principal residence; or
(E) such other circumstances or events as may be
prescribed by the Secretary or the Treasury or his delegate.
(2) A withdrawal shall be deemed necessary to satisfy the
financial need of a Participant and permissible under this subsection (a) if:
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(A) the amount of the withdrawal does not exceed the
amount of the Participant's immediate and heavy financial need, including any
amounts necessary to pay any federal, state or local income taxes or penalties
reasonably anticipated to result from the distribution;
(B) the Participant has obtained all currently
permissible distributions (other than hardship distributions of elective
deferrals) and non-taxable loans under this and all other plans maintained by
the Participating Employers and all Affiliated Companies; and
(C) the Participant agrees to be bound by the rules
of paragraph (3) below.
(3) If the Participant withdraws any amount from his Salary
Deferral Account pursuant to this Section, or withdraws any elective deferrals
under any other qualified retirement plan maintained by a Participating
Employer or an Affiliated Company, which other plan conditions such withdrawal
upon the Participant's being subject to rules similar to those stated in this
paragraph and paragraph (2) above, such Participant:
(A) may not make Salary Deferrals under this Plan or
employee contributions (other than mandatory contributions under a defined
benefit plan) or elective deferrals under any other plan maintained by a
Participating Employer or an Affiliated Company for a period of twelve (12)
months commencing on the date of his receipt of the withdrawal; and
(B) in the calendar year next following the calendar
year of such withdrawal, may not make Salary Deferrals under this Plan or
elective deferrals under any other qualified retirement plan maintained by a
Participating Employer or an Affiliated Company in excess of:
(i) the dollar amount described in Section
5.01 for such year, minus
(ii) the total Salary Deferrals under this
Plan and elective deferrals under any other qualified plan made by the
Participant during the calendar year of the withdrawal.
(4) Withdrawals pursuant to this subsection (a) shall be made
from amounts then available for withdrawal from the following Accounts in the
following order of priority: (i) first from a Participant's Rollover Account,
(ii) then from his After-Tax Employee Contribution Account, (iii) then from his
Matching Contribution Account, and (vi) then from his Salary Deferral Account;
provided, however, that:
(A) the aggregate amount of a Participant's
withdrawals from his Salary Deferral Account shall not exceed the total of his
Salary Deferrals, exclusive of earnings attributable thereto, except earnings
(i) which are attributable to salary deferrals in his Merck Plan and (ii) which
were credited under the Merck Plan as of December 31, 1988 (if not previously
withdrawn); and
(B) no Participant shall be permitted to withdraw any
portion of his Post-Participation Qualified Employer Contribution subaccount.
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(b) Other Withdrawals. A Participant, while still employed, may
request once each Plan Year a withdrawal of all or a portion of his (1)
After-Tax Employee Contribution Account (2) Catch-Up Account, (3) Rollover
Account, (4) Matching Contributions subject to After-Tax distribution rules,
and (4) if the Participant has attained age 59-1/2 or incurred a Disability,
his Salary Deferrals and Company Matching Contributions subject to pre-tax
distribution rules. If a Participant incurs a Disability in a Plan Year in
which he previously has taken a distribution, such Participant may request a
second distribution. Required distributions, distributions of available monies
in order for a Participant to qualify for a hardship distribution, and hardship
distributions do not count toward this annual limit of one in-service
distribution.
(c) Minimum Amount of Distribution. The amount of an in-service
distribution may be no less than the lesser of (1) the amount of the Account
balance available for distribution as of the valuation date without causing a
suspension under paragraph (e) of this Section 8.03, (2) $500, or (3) the
Participant's entire Account balance.
(d) Specifying Amount of Distribution. In requesting an in-service
distribution, the Participant must specify the dollar amount of the
distribution he/she wishes to receive.
(e) Suspension. If a Participant who has less than five years of
participation in the Plan from the date of his/her enrollment requests an
in-service distribution which includes any part of the Matching Contributions
but not earnings attributable thereto, contributed during the Plan Year in
which the distribution is to be valued or during either of the two preceding
Plan Years, then although the Participant shall receive all such monies, he/she
shall be suspended from making contributions to the Plan for six consecutive
months beginning with the month following the month in which his/her in-service
distribution was valued.
(f) Rules Applicable to All Withdrawals.
(1) All withdrawals shall be made by filing a written request
with the Committee on such form and at such times as the Committee may
prescribe, and shall be based on the value of the affected portion of the
Participant's Account as of the most recent Valuation Date in such manner as
the Committee shall provide.
(2) All withdrawals shall be made in a single sum payment and
shall be deemed to be made on a pro-rata basis from the Investment Funds in
which the affected portions of the Participant's Account are then invested.
(3) Notwithstanding anything in this Section to the contrary,
no Participant shall be permitted to withdraw any portion of his Account
pledged as security for a loan pursuant to Article IX.
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Sec. 8.04 Form of Benefit Payment. (a) Should a Participant whose
Account balance is in excess of $3,500 incur a Termination of Employment for
any reason including Retirement but other than death,the Participant may make
an irrevocable election to receive his/her Account balance in accordance with
one of the following methods of payment:
(i) in a lump sum valued no later than the valuation date
next following the last Business Day of the second month following the
Participant's Termination of Employment; or
(ii) in a lump sum valued the tenth of the first month (or
the next Business Day if the tenth is not a Business Day) of the year
following the year in which the Participant incurs a Termination of
Employment; or
(iii) in substantially equal annual installments not to exceed
ten to commence with the year in which the Participant incurs the
Termination of Employment, and such election shall be made no later
than the last Business Day of the second month following the
Participant's Termination of Employment. Each succeeding annual
installment shall be valued at the same time in each succeeding year
as the initial installment was valued in the year of termination.
Installment payments shall be disbursed proportionally from the
subaccounts which make up the Participant's Account.
(b) If a Participant dies after all or a portion of his benefit has
commenced to be paid in installments pursuant to subsection (a) above and his
Beneficiary is his spouse, benefits payable to such spouse as Beneficiary
pursuant to Section 8.01 shall be paid to the spouse in the same installments
as in effect prior to the Participant's death; provided, however, that the
spouse may at any time thereafter elect, in writing on a form prescribed by the
Committee, to receive payment of the balance of the portion of the
Participant's Account being paid in installments in a single sum, such single
sum to be determined and paid as soon as administratively practicable following
the date of the spouse's request for payment.
All installment payments made pursuant to this Section 8.04 shall be deemed to
be made on a pro-rata basis from the Investment Funds in which the affected
portions of the Participant's Account are then invested. In addition, the
amount of each installment shall be based upon the value of the affected
portion of the Participant's Account as of the Valuation Date coincident with
or immediately preceding the date the installment is paid, except as otherwise
required to comply with section 401(a)(9) of the Code and regulations
thereunder.
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Sec. 8.05 Provisions Applicable to Distributions Other Than Automatic
Distributions.
(a) Distribution of Cash and/or Stock. Mutual Fund shares shall
always be distributed in cash, and Merck Common Stock may be distributed in
cash or shares as the Participant directs. If the Participant fails to
indicate whether he/she wants Merck Common Stock in cash or shares, shares will
be issued If a Participant's distribution consists entirely of shares of Merck
Common Stock, the Participant will receive the number of shares which brings
him/her closest to but not over the dollar amount he/she requested. A
fractional share of Merck Common Stock will not be distributed as part of an
in-service distribution.
(b) Distribution Valuation Dates. Distributions shall be valued on
the tenth (10th) and twenty-fifth (25th) of each month. Should the tenth
and/or twenty-fifth of any month fall on a non-Business Day, then the valuation
shall take place on the Business Day next following the tenth or twenty-fifth
as applicable. In order to have a distribution valued on the tenth of a month,
a Participant must have his/her distribution request to site personnel no later
than the twenty-sixth (26th) of the preceding month (or if the site personnel
office will be closed on the twenty-sixth, the last day immediately preceding
the twenty-sixth that the site personnel office is open). In order to have a
distribution valued on the twenty-fifth of a month, a Participant must have
his/her distribution request to site personnel no later than the eleventh
(11th) day of the same month (or if the site personnel office will be closed on
the eleventh, the last day immediately preceding the eleventh that the site
personnel office is open). Distributions to the Participant will be made as
soon as administratively feasible following the valuation date. Distributions
which involve Merck Common Stock will require more time to implement than
distributions which involve Mutual Funds only.
(c) Order In Which Monies Will Be Distributed. The amount of any
distribution shall be disbursed from the Participant's Account in the following
order: (1) After-Tax Contributions made before 1987, (2) After-Tax
Contributions made after 1986 with a pro rata portion of earnings on these
contributions determined by the ratio of your post-1986 After-Tax Contributions
to the sum of your post-1986 After-Tax Employee Contributions plus earnings
thereon, and (3) all other amounts in the Plan -- earnings on pre-1987
After-Tax Contributions, Catch-Up Contributions Rollover Contributions plus
earnings. Company Matching Contributions plus earnings, Pre-Tax Contributions
plus earnings Consistent with this rule, a Participant may specify the order
in which Investment Funds are to be debited on account of a distribution, and
if the Participant specifies a hierarchy from which the entire distribution
cannot be satisfied, then after exhausting the hierarchy specified by the
Participant, the Investment Funds shall be debited pro rata. If a Participant
fails to specify any hierarchy, the Investment Funds will be debited pro rata.
Sec. 8.06 Beneficiary Designation Right.
(a) Spouse as Beneficiary. The Beneficiary of the death benefit shall
be the Participant's spouse; provided, however, that the Participant may
designate a Beneficiary other than his spouse if:
(1) the requirements of subsection (c) are satisfied, or
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(2) the Participant has no spouse, or
(3) the Committee determines that the spouse cannot be
located or such other circumstances exist under which spousal consent is not
required, as prescribed by Treasury regulations.
In such event, the designation of a Beneficiary shall be made on a form
satisfactory to the Committee. A Participant may at any time revoke his
designation of a Beneficiary or change his Beneficiary by filing written notice
of such revocation or change with the Committee. However, the Participant's
spouse must again consent in writing to any such change or revocation, unless
the prior consent of the spouse expressly permits designations by the
Participant without any requirement of further consent by the spouse.
(b) Beneficiary Designation Right. Each unmarried Participant and
each married Participant whose spouse has consented to designation of persons
or entities other than such spouse as Beneficiaries in accordance with the
provisions of subsection (c) hereof, shall have the right to designate one or
more primary and one or more secondary Beneficiaries to receive any benefit
becoming payable upon the Participant's death. All Beneficiary designations
shall be in writing in form satisfactory to the Committee. Each Participant
shall be entitled to change his Beneficiaries at any time and from time to
time.
In the event that the Participant fails to designate a Beneficiary to
receive a benefit that becomes payable pursuant to the provisions of this
Article, or in the event that the Participant is predeceased by all designated
primary and secondary Beneficiaries, the death benefit shall be payable as
follows:
(1) to the Participant's spouse; and
(2) to the Participant's estate.
(c) Form and Content of Spouse's Consent.
A spouse may consent to the designation of one or more Beneficiaries
other than such spouse provided that such consent shall be in writing, must
consent to the specific alternate beneficiary or beneficiaries designated (or
permit beneficiary designations by the Participant without the spouse's further
consent), must acknowledge the effect of such consent, and must be witnessed by
a notary public or a Plan representative. Such spouse's consent shall be
irrevocable, unless expressly made revocable. The consent of a spouse in
accordance with this subsection (c) shall not be effective with respect to any
subsequent spouse of the Participant.
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Sec. 8.07 Required Distribution Dates. Unless the Participant elects
otherwise, the Benefit Payment Date for any Participant shall not be later than
the 60th day following the close of the Plan Year in which the Participant
attains his Normal Retirement Age or has a Termination of Employment, whichever
occurs last. The failure of a Participant to apply for his benefit pursuant to
Section 14.01 by the date described in the preceding sentence shall be deemed
to be an election to defer payment to a later date. Anything contained in the
Plan to the contrary notwithstanding:
(a) a Participant's Benefit Payment Date shall in no event be later
than his Required Beginning Date;
(b) with respect to the Beneficiary of a Participant, the Benefit
Payment Date under Section 8.01 shall be no later than (1) December 31 of the
year containing the fifth anniversary of the Participant's death, if the
Participant's death occurs prior to his Required Beginning Date, or (2) the
next regular payment date under the payments in effect for the Participant
under Section 8.04(b), if the Participant's death occurs after his Required
Beginning Date;
(c) distributions under the Plan shall otherwise comply with the
requirements of section 401(a)(9) of the Code and the regulations thereunder,
including the minimum distribution incidental benefit requirements of proposed
Treas. Reg. Section 1.401(a)(9)-2; and
(d) no distribution shall be made from a Participant's Salary Deferral
Account to the extent that such distribution would fail to satisfy the
requirements of section 401(k)(2)(B) of the Code.
Sec. 8.08 Domestic Relations Orders.
(a) Effect of QDROs. All benefits provided under this Plan are
subject to the provisions of any QDRO in effect with respect to the Participant
at the Participant's Benefit Payment Date, and are subject to diminution
thereby.
(b) Determination of QDRO Status. Upon receipt of notification of any
judgment, decree or order (including approval of a property settlement
agreement) which relates to the provision of child support, alimony payments,
or marital property rights of a spouse, former spouse, child, or other
dependent of a Participant and which is made pursuant to a state domestic
relations law (including a community property law) (herein referred to as a
"domestic relations order"), the Committee shall (a) notify the Participant and
any prospective Alternate Payee named in the order of the receipt and date of
receipt of such domestic relations order and of the Plan's procedures for
determining the status of the domestic relations order as a QDRO, and (b)
within a reasonable period after receipt of such order, determine whether it
constitutes a QDRO.
(c) Determination Period. During any period in which the issue of
whether a domestic relations order is a QDRO is being determined (by the
Committee, by a court of competent jurisdiction, or otherwise), the Committee
shall segregate in a separate account in the Plan or in an escrow account held
by a Trustee the amounts, if any, which would have been payable to the
Alternate Payee during such period if the order had been determined to
constitute a QDRO. If a domestic relations order is
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determined to be a QDRO within eighteen (18) months of the date of its receipt
by the Committee (or from the beginning of any other period during which the
issue of its being a QDRO is being determined by the Committee), the Committee
shall cause to be paid to the persons entitled thereto the amounts, if any,
held in the separate or escrow account referred to above. If a domestic
relations order is determined not to be a QDRO, or if the status of the
domestic relations order as a QDRO is not finally resolved within such eighteen
(18) month period, the Committee shall cause the separate or escrow account
balance, with interest thereon, to be returned to the Participant's credit, or
to be paid to the person or persons to whom such amount would have been paid if
there had been no such domestic relations order, whichever is appropriate. Any
subsequent determination that such domestic relations order is a QDRO shall be
prospective in effect only.
(d) Provisions Relating to Alternate Payees.
(1) Alternate Payees shall not have any right to (A) borrow
money under any Participant loan provisions under the Plan, (B) exercise any
Participant investment direction rights or privileges under the Plan, (C)
exercise any other election, privilege, option or direction rights of the
Participant under the Plan except as specifically provided in the QDRO, or (D)
receive communications with respect to the Plan except as specifically provided
by law, regulation or the QDRO.
(2) Each Alternate Payee shall advise the Committee in
writing of each change of his name, address or marital status, and of each
change in the provisions of the QDRO or of any circumstance set forth therein
which may be material to the Alternate Payee's entitlement to benefits
thereunder or the amount thereof. Until such written notice has been provided
to the Committee, the Committee shall be (i) fully protected in not complying
with, and in conducting the affairs of the Plan in a manner inconsistent with,
the information set forth in the notice, and (ii) required to act with respect
to such notice prospectively only, and then only to the extent provided for in
the QDRO. The Committee shall not be required to modify or reverse any
payment, transaction or application of funds occurring before the receipt of
any notice that would have affected such payment, transaction or application of
funds, nor shall the Committee or any other party be liable for any such
payment, transaction or application of funds.
(3) Except as specifically provided for in the QDRO, an
Alternate Payee shall have no right to interfere with the exercise by the
Participant or by any Beneficiary of their respective rights, privileges and
obligations under the Plan.
(4) Notwithstanding any restrictions on the timing of
distributions and withdrawals under the Plan, a QDRO may provide for
distribution at any time permitted under section 414(p)(10) of the Code.
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Sec. 8.09 Post Distribution Credits. In the event that, after the
payment of a single-sum distribution under this Plan (other than an in-service
benefit distribution), there shall remain in the Participant's Account any
funds, or any funds shall be subsequently credited to such Account, such
additional funds, shall be paid to the Participant or applied for the
Participant's benefit as promptly as practicable thereafter; provided that the
Participant is not then an Employee or, if he is an Employee, he has reached
his Required Beginning Date. In the event that after any installment payout
has commenced, there shall be additional funds (other than earnings) credited
to the Account of a Participant, such additional funds shall be applied to
increase the periodic payments then in effect for such Participant, as promptly
as practicable thereafter; provided that the Participant is not then an
Employee or, if he is an Employee, he has reached his Required Beginning Date.
Sec. 8.10 Direct Rollovers. Effective January 1, 1993, in the event
any payment or payments to be made to a person pursuant to this Article VIII
would constitute an "eligible rollover distribution" within the meaning of
section 401(a)(31)(C) of the Code and regulations thereunder, such person may
request that, in lieu of payment to the person, all or part of such eligible
rollover distribution be rolled over directly to the trustee or custodian of an
"eligible retirement plan" within the meaning of section 401(a)(31)(D) of the
Code and regulations thereunder. Any such request shall be made in writing, on
the form and subject to such requirements and restrictions as may be prescribed
by the Committee for such purpose pursuant to Treasury regulations, at such
time in advance of the date payment would otherwise be made as may be required
by the Committee. For purposes of this Section, a "person" shall include an
Employee or former Employee or his surviving spouse or his spouse or former
spouse who is an Alternate Payee.
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ARTICLE IX
PARTICIPANT LOANS
Sec. 9.01 In General.
(a) Permissibility. Each Participant who is an Employee of a
Participating Employer and any other Participant or Beneficiary who is a party
in interest as defined in ERISA may apply for a loan from the Plan. Each
Participant shall be permitted to have outstanding at any time no more than two
loans with a five year term and one loan with a term in excess of five years.
The Committee shall have the right to require any applicant for a Participant
loan to secure the written consent of any party for whose benefit there exists
a QDRO in respect to the Participant's interest under the Plan.
(b) Application. Subject to such uniform and nondiscriminatory rules
as may from time to time be adopted by the Committee, the Trustee, upon
application by such Participant on forms approved by the Committee, may make a
loan or loans to such applicant. Loan distributions will be valued on the
tenth of every month (or the next Business Day if the tenth is not a Business
Day). Therefore, a Participant must have his/her loan application to site
personnel no later than the twenty-sixth (or if the site personnel office will
be closed on the twenty-sixth, the next day immediately preceding the
twenty-sixth that the site personnel office will be open) of the month
preceding the month in which the Participant elects to have a loan valued. A
loan may not be obtained if a Participant intends to use the proceeds to
purchase or carry any security in a manner that would violate the "margin
rules" promulgated under the Securities Exchange Act of 1934 or any successor
statute.
(c) Limitation on Amount. Loans shall be at least $500 in amount, and
in no event shall total loans exceed the lesser of (1) 50% of the vested
balance credited to such Participant's Account, or (2) $50,000, reduced by the
excess, if any, of (A) the highest outstanding balance of all loans during the
12 months prior to the time the new loan is to be made over (B) the outstanding
balance of loans made to the Participant on the date such new loan is made.
Loans under any other qualified plan sponsored by a Participating Employer or
an Affiliated Company shall be aggregated with loans under the Plan in
determining whether or not the limitation stated herein has been exceeded.
(d) Equality of Borrowing Opportunity. Loans shall be available to
all Participants and Beneficiaries who are parties in interest on a reasonably
equivalent basis, provided, however, that the Committee may make reasonable
distinctions among prospective borrowers on the basis of credit worthiness.
Loans shall not be made available to Participants who are or were Highly
Compensated Employees in an amount (when calculated as a percentage of the
borrower's vested interest under the Plan) greater than the amount (similarly
calculated) available to other Participants.
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Sec. 9.02 Loans as Trust Fund Investments. All loans shall be
considered as fixed income investments of a segregated account of the Trust
Fund directed by the borrower. Accordingly, the following conditions shall
prevail with respect to each such loan:
(a) Security. All loans shall be secured by the pledge of one-half of
the Participant's entire vested interest in the Trust Fund at the time the loan
is made, and by the pledge of such further collateral as the Committee, in its
discretion, deems necessary to assure repayment of the borrowed amount and all
interest to be accrued thereon in accordance with the terms of the loan.
(b) Interest Rate. Interest shall be charged at a rate to be fixed by
the Committee and, in determining the interest rate, the Committee shall take
into consideration interest rates currently being charged on similar commercial
loans by persons in the business of lending money.
(c) Loan Term. Loans shall be for terms not to exceed five (5) years.
A loan must be repaid within five (5) years after the date the loan is valued,
except that a loan used to acquire the Participant's primary residence may be
repaid within 30 years. All loans shall be levelly amortized. Loans shall be
repaid on a monthly basis. For those Participants who repay a loan via payroll
deduction, loan repayments are due the end of each month. For those
Participants who repay by means other than payroll deduction, the loan
repayments are due to Treasury Operations by the twentieth of each month.
Loans shall be non-renewable and non-extendable.
(d) Promissory Note. Any loan made to a Participant under this
Article IX shall be evidenced by a promissory note executed by such
Participant. Such promissory note shall contain the irrevocable consent of the
Participant to the payroll withholding described in subsection (h). The
Committee shall have the right to require the Participant to execute a revised
promissory note to the extent the Committee determines it is necessary to
comply with ERISA or the Code. In the event the Participant does not execute
such revised promissory note by the date prescribed by the Committee, the loan
shall become due and payable as of such date.
(e) Default and Remedies. In the event that:
(1) the Participant has a Termination of Employment and is
not reemployed as an Employee within sixty (60) days of such Termination of
Employment (other than a Participant who continues to be a party in interest);
(2) the loan is not repaid by the time the promissory note
matures;
(3) the Participant attempts to revoke any payroll
withholding authorization for repayment of the loan;
(4) the Participant fails to pay any installment (plus any
additional interest as may be prescribed by the terms of the promissory note)
within sixty (60) days of the due date;
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(5) the Participant fails to execute a revised promissory
note pursuant to subsection (d); or
(6) distributions under Article VIII to a Participant who has
reached his Required Beginning Date would require distribution of amounts
pledged as security for the loan, before a loan is repaid in full, the unpaid
balance of the loan, with interest due thereon, shall become immediately due
and payable; provided, however, that, notwithstanding paragraph (4), a
Participant's loan shall become due and payable immediately upon his failure to
pay any installment (i) if the term of the loan would otherwise expire prior to
the end of the 60-day period described in paragraph (4) or (ii) if permitting
amounts due to remain unpaid to the end of the period described in paragraph
(4) would, if the Participant failed to make payment during that period cause
the amount due under the loan to exceed $50,000 (or the amount pledged as
security for the loan pursuant to subsection (a), if less). In such event, the
Participant (or his Beneficiary in the event of his death) may satisfy the loan
by paying the outstanding balance within such time as may be specified in the
promissory note. If the principal amount and interest are not repaid within
the time specified, any such outstanding loan or loans shall be deducted from
any benefit which is or becomes payable to the Participant or his Beneficiary
from the amount of his Account pledged as security for the loan, and any other
security pledged shall be sold by the Trustee at public or private sale as soon
as is practicable after such default. In the case of a benefit which becomes
payable pursuant to Section 8.01 or 8.02, the deduction described in the
preceding sentence shall occur on the earliest date following such default on
which the Participant or Beneficiary could receive payment of such benefit, had
the proper application been filed or election been made, regardless of whether
or not payment is actually made to the Participant or Beneficiary on such date.
In the case of a benefit which becomes payable under any other provision, the
deduction shall occur on the date such benefit is paid to the Participant.
The proceeds of the sale of any security shall first be applied to pay the
expenses of conducting the sale, including reasonable attorneys' fees, and
then to pay any sums due from the borrower to the Trust Fund, with such payment
to be applied first to accrued interest and then to principal. The Participant
shall remain liable for any deficiency, and any surplus remaining shall be paid
to the Participant. Once a Participant defaults on a Plan loan, he/she may not
apply for another Plan loan for three years from the date of the default. Any
Participant who defaults, on two Plan loans is precluded from taking another
Plan loan.
(f) Loan Statement. Every Participant receiving a loan hereunder will
receive a statement from the Committee clearly reflecting the charges involved
in each transaction, including the dollar amount and annual interest rate of
the finance charges. The statement will provide all information required to
meet applicable "truth-in-lending" laws.
(g) Restriction on Loans. The Committee will not approve any loan if
it is the belief of the Committee that such loan, if made, would constitute a
prohibited transaction (within the meaning of section 406 of ERISA or section
4975(c) of the Code), would constitute a distribution taxable for federal
income tax purposes, or would imperil the status of the Plan or any part
thereof under section 401(k) of the Code.
(h) Repayment. Loans shall be repaid in equal installments (not less
frequently than monthly) through payroll withholding or by personal check in
the case of (1) a Participant or Beneficiary who is
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not an Employee of a Participating Employer but who is a party in interest or
(2) a Participant who is on an unpaid authorized leave of absence. Loans may
be prepaid in full at any time without penalty.
(i) Applicable Investment Funds. The amount of any loan shall be
disbursed from the Participant's account in an order inverse to that set forth
in Section 8.05(c). Consistent with this rule, a Participant may specify the
order in which Investment Funds are to be debited on account of a loan, and if
the Participant specifies a hierarchy from which the entire loan cannot be
satisfied, then after exhausting the hierarchy specified by the Participant,
the Investment Funds shall be debited pro rata. If a Participant fails to
specify any hierarchy, the Investment Funds will be debited pro rata. Loan
repayments shall becredited to the Investment Funds in the same manner as the
Participant directs for his Salary Deferrals and/or After-Tax Employee
Contributions in the same proportion as such accounts are to be credited on
loan repayment.
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ARTICLE X
PROVISIONS RELATING TO TOP-HEAVY PLANS
Sec. 10.01 Definitions. For purposes of this Article X, the following
terms shall have the following meanings:
(a) "Aggregation Group" shall mean the group of qualified plans
sponsored by a Participating Employer or by an Affiliated Company formed by
including in such group (1) all such plans in which a Key Employee participates
in the Plan Year containing the Determination Date, or any of the four
preceding Plan Years, including any terminated plan that was maintained within
the five year period ending on the Determination Date, (2) all such plans which
enable any plan described in clause (1) to meet the requirements of either
section 401(a)(4) of the Code or section 410 of the Code, and (3) such other
qualified plans sponsored by a Participating Employer or an Affiliated Company
as the Committee elects to include in such group, as long as the group,
including those plans electively included, continues to meet the requirements
of sections 401(a)(4) and 410 of the Code.
(b) "Determination Date" shall mean the last day of the preceding Plan
Year or, in the case of the first Plan Year, the last day of such Plan Year.
(c) "Key Employee" shall mean a person employed or formerly employed
by a Participating Employer or an Affiliated Company who, during the Plan Year
or during any of the preceding four (4) Plan Years, was any of the following:
(1) An officer of a Participating Employer having an annual
Compensation of more than fifty percent (50%) of the amount in effect under
section 415(b)(1)(A) of the Code for the Plan Year. The number of persons to
be considered officers in any Plan Year and the identity of the persons to be
so considered shall be determined pursuant to the provisions of section 416(i)
of the Code and the regulations published thereunder.
(2) One (1) of the ten (10) Employees who owns (or is
considered as owning under the attribution rules set forth at section 318 of
the Code and the regulations thereunder) the largest interest in a
Participating Employer or an Affiliated Company, provided that no person shall
be considered a Key Employee under this paragraph (2) if his annual
Compensation is not greater than the limitation in effect for such Plan Year
under section 415(c)(1)(A) of the Code, nor shall any person be considered a
Key Employee under this paragraph (2) if his ownership interest in the Plan
Year being tested and the preceding four (4) Plan Years was at all times less
than one-half of one percent (1/2%) in value of any of the entities forming the
Participating Employer and Affiliated Companies.
(3) A five-percent (5%) owner (within the meaning of section
416(i) of the Code) of a Participating Employer.
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<PAGE> 50
(4) A person who is both an Employee whose annual
Compensation exceeds one hundred fifty thousand dollars ($150,000) and who is a
one-percent (1%) owner (within the meaning of section 416(i) of the Code) of a
Participating Employer.
The beneficiary of any deceased Participant who was a Key Employee
shall be considered a Key Employee for the same period as the deceased
Participant would have been so considered.
(d) "Key Employee Ratio" shall mean the ratio (expressed as a
percentage) for any Plan Year, calculated as of the Determination Date with
respect to such Plan Year, determined by dividing the amount described in
paragraph (1) hereof by the amount described in paragraph (2) hereof, after
deduction from both such amounts of the amount described in paragraph (3)
hereof.
(1) The amount described in this paragraph (1) is the sum of
(A) the aggregate of the present value of all accrued benefits of Key Employees
under all qualified defined benefit plans included in the Aggregation Group,
(B) the aggregate of the balances in all of the accounts standing to the credit
of Key Employees under all qualified defined contribution plans included in the
Aggregation Group, and (C) the aggregate amount distributed from all plans in
such Aggregation Group to or on behalf of any Key Employee during the period of
five (5) Plan Years ending on the Determination Date.
(2) The amount described in this paragraph (2) is the sum of
(A) the aggregate of the present value of all accrued benefits of all
Participants under all qualified defined benefit plans included in the
Aggregation Group, (B) the aggregate of the balances in all of the accounts
standing to the credit of all Participants under all qualified defined
contribution plans included in the Aggregation Group, and (C) the aggregate
amount distributed from all plans in such Aggregation Group to or on behalf of
any Participant during the period of five (5) Plan Years ending on the
Determination Date.
(3) The amount described in this paragraph (3) is the sum of
(A) all rollover contributions (or similar transfers) to the Plan initiated by
an Employee from a plan sponsored by an employer which is not a Participating
Employer or an Affiliated Company, (B) any amount that would have been included
under paragraph (1) or (2) hereof with respect to any person who has not
rendered service to a Participating Employer at any time during the five year
period ending on the Determination Date, and (C) any amount that is included in
paragraph (2) hereof for, on behalf of, or on account of, a person who is a
Non-Key Employee as to the Plan Year of reference but who was a Key Employee as
to any earlier Plan Year.
The present value of accrued benefits under any defined benefit plan
shall be determined under the method used for accrual purposes for all plans
maintained by the Participating Employers and all Affiliated Companies if a
single method is used by all such plans, or otherwise, the slowest accrual
method permitted under section 411(b)(1)(C) of the Code.
(e) "Non-Key Employee" shall mean any Employee or former Employee who
is not a Key Employee as to that Plan Year, or a beneficiary of a deceased
Participant who was a Non-Key Employee.
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Sec. 10.02 Determination of Top-Heavy Status. The Plan shall be
deemed "top-heavy" as to any Plan Year if, as of the Determination Date with
respect to such Plan Year, either of the following conditions are met:
(a) The Plan is not part of an Aggregation Group and the Key Employee
Ratio under the Plan exceeds sixty percent (60%), or
(b) The Plan is part of an Aggregation Group, and the Key Employee
Ratio of such Aggregation Group exceeds sixty percent (60%).
The Plan shall be deemed "super top-heavy" as to any Plan Year if, as of the
Determination Date with respect to such Plan Year, the conditions of
subsections (a) or (b) hereof are met with "ninety percent(90%)" substituted
for "sixty percent (60%)" therein.
Sec. 10.03 Top-Heavy Plan Minimum Allocation.
(a) General Rule. The aggregate allocation made under the Plan to the
Account of each Active Participant who is a Non-Key Employee for any Plan Year
in which the Plan is a Top-Heavy Plan and who remained in the employ of a
Participating Employer or an Affiliated Company through the end of such Plan
Year (whether or not in the status of Covered Employee) shall be not less than
the lesser of:
(1) Three percent (3%) of the Compensation of each such
Active Participant for such Plan Year; or
(2) The percentage of such Compensation so allocated under
the Plan to the Account of the Key Employee for whom such percentage is the
highest for such Plan Year.
If any person who is an Active Participant in the Plan is a Participant under
any defined benefit pension plan qualified under section 401(a) of the Code
sponsored by a Participating Employer or an Affiliated Company, there shall be
substituted "Four percent (4%)" for "Three percent (3%)" in paragraph (1)
above. For the purposes of determining whether or not the provisions of this
Section have been satisfied, (i) contributions or benefits under chapter 2 of
the Code (relating to tax on self-employment income), chapter 21 of the Code
(relating to Federal Insurance Contributions Act), title II of the Social
Security Act, or any other federal or state law are disregarded; (ii) all
defined contribution plans in the Aggregation Group shall be treated as a
single plan; and (iii) employer matching contributions and elective deferrals
under all plans in the Aggregation Group shall be disregarded. For the
purposes of determining whether or not the requirements of this Section have
been satisfied, contributions allocable to the account of the Participant under
any other qualified defined contribution plan that is part of the Aggregation
Group shall be deemed to be contributions made under the Plan, and, to the
extent thereof, no duplication of such contributions shall be required
hereunder solely by reason of this Section. Paragraph (2) above shall not
apply in any Plan Year in which the Plan is part of an Aggregation Group
containing a defined benefit pension plan (or a combination of such defined
benefit pension plans) if the Plan enables a defined benefit pension plan
required to be included in such Aggregation Group to satisfy the requirements
of either section 401(a)(4) or section 410 of the Code.
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(b) Exceptions to the General Rule. The provisions of subsection (a)
above shall not apply to any Participant for a Plan Year if, with respect to
that Plan Year:
(1) such Participant was an active participant in a qualified
defined benefit pension plan sponsored by a Participating Employer or by an
Affiliated Company under which plan the Participant's accrued benefit is not
less than the minimum accrued pension benefit that would be required under
section 416(c)(1) of the Code, treating such defined benefit pension plan as a
Top-Heavy Plan and treating all such defined benefit pension plans as
constitute an Aggregation Group as a single plan; or
(2) such Participant was an active participant in a qualified
defined contribution plan sponsored by a Participating Employer or by an
Affiliated Company under which plan the amount of the employer contribution
allocable to the account of the Participant for the accrual computation period
of such plan ending with or within the Plan Year, exclusive of elective
deferrals and employer matching contributions, is not less than the
contribution allocation that would be required under section 416(c)(2) of the
Code under this Plan.
Sec. 10.04 Top-Heavy Plan Maximum Allocations. If the Plan is a Super
Top-Heavy Plan, or if the Plan is a Top-Heavy Plan which fails to satisfy the
additional minimum allocation requirements under Section 10.03 hereof, the
definitions of "defined contribution fraction" and "defined benefit fraction"
as incorporated by reference in Section 5.04 shall be modified as required
under section 416 of the Code.
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ARTICLE XI
ADMINISTRATION
Sec. 11.01 Appointment and Tenure. The Plan shall be administered by
the Plan Committee. The Plan Committee is authorized, subject to the
provisions of the Plan, to establish such rules and regulations as it deems
necessary for the proper administration of the Plan. The Plan Committee shall
have full discretionary power and authority to make factual determinations, to
interpret the Plan, to make benefit eligibility determinations, and to resolve
all questions arising in the administration, interpretation and application of
the Plan. The Plan Committee shall correct any defect, reconcile any
inconsistency, or supply any omission with respect to the Plan. All such
corrections, reconciliations, interpretations and completions of Plan
provisions shall be final, binding and conclusive upon the parties, including
the Company, the employees, their families, dependents, beneficiaries, and any
alternate payees.
The Company, the Trustee, the Plan Committee, and all fiduciaries with respect
to the Plan, and all other persons or entities associated with the operation of
the Plan, the management of it assets, and the provision of benefits
thereunder, may reasonably rely on the truth, accuracy and completeness of any
data provided by any Participant, any beneficiary or any alternate payee,
including, without limitation, representations as to age, health and marital
status. None of the aforementioned persons or entities associated with the
operation of the Plan, its assets and the benefits provided under the Plan
shall have any duty to inquire into any such data, and all may rely on such
data being current to the date of reference, it being the duty of the
Participants, spouses of Participants, beneficiaries, and alternate payees to
advise the appropriate parties of any change in such data. Furthermore, the
Company, the Trustee, the Plan Committee and all fiduciaries with respect to
the Plan may reasonably rely on all consents, elections and designations filed
with the Plan or those associated with the operation of the Plan and the trust
by any Participant, the spouse of any Participant, any beneficiary of any
Participant, any alternate payee, or the representatives of such persons
without duty to inquire into the genuineness of any such consent, election or
designation.
The Plan Committee shall take such steps as are considered necessary and
appropriate to remedy any inequity that results from incorrect information
received or communicated in good faith or as the consequence of an
administrative error.
Astra Merck Inc. shall be the administrator of the Plan only to the extent that
such term is used in the Employee Retirement Income Security Act of 1974, as
from time to time amended, and in any regulations issued thereunder.
Sec. 11.02 Delegation of Authority and Responsibility. The
fiduciaries named herein may allocate their authority to control and manage the
operation and administration of the Plan to other persons, as may from time to
time be deemed appropriate for the proper operation and administration of the
Plan. Further, a named fiduciary, or a fiduciary designated by a named
fiduciary as described above, may employ one or more persons to render advice
with regard to any responsibility such fiduciary may have under the Plan.
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Sec. 11.03 Fiduciary Duty. A fiduciary, as that term is defined in
the Employee Retirement Income Security Act of 1974, as amended, and any
regulations issued thereunder, shall discharge his/her fiduciary duties with
respect to the Plan solely in the interests of the Plan Participants and
beneficiaries. A fiduciary shall discharge his/her fiduciary duties in
accordance with the documents and instruments governing the Plan and in
accordance with any and all applicable laws or regulations.
Sec. 11.04 Administrative Costs. The Committee shall serve without
compensation. All direct expenses of administration of the Plan, including
Trustee and recordkeeping fees, brokerage commissions for Merck Common Stock
only, transfer taxes and other expenses charged or incurred by the Trustee,
shall be borne by the Company and the Company shall reimburse the Trustee for
such expenses incurred. The Company will not cover any expenses of a Mutual
Fund which expenses are reflected in the Mutual Fund's price per share, nor
will the Company cover any taxes assessed against monies in the Trust.
Sec. 11.05 Bonding. The Committee shall arrange for such bonding as
is required by law, but no bonding in excess of the amount required by law
shall be considered required by the Plan.
Sec. 11.06 Indemnification of the Committee. Each member of the
Committee shall be indemnified by the Participating Employers against costs,
expenses and liabilities (other than amounts paid in settlement to which the
Participating Employers do not consent) reasonably incurred by him in
connection with any action to which he may be a party by reason of his service
on the Committee except in relation to matters as to which he shall be adjudged
in such action to be personally guilty of negligence or willful misconduct in
the performance of his duties. The foregoing right to indemnification shall be
in addition to such other rights as the Committee member may enjoy as a matter
of law or by reason of insurance coverage of any kind, but shall not extend to
costs, expenses and/or liabilities otherwise covered by insurance or that would
be so covered by any insurance then in force if such insurance contained a
waiver of subrogation. Rights granted hereunder shall be in addition to and
not in lieu of any rights to indemnification to which the Committee member may
be entitled pursuant to the bylaws of the Participating Employers. Service on
the Committee shall be deemed in partial fulfillment of the Committee member's
function as an employee, officer and/or director of a Participating Employer,
if he serves in that capacity as well as in the role of Committee member.
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ARTICLE XII
ALLOCATION AND DELEGATION OF AUTHORITY
Sec. 12.01 Authority and Responsibilities of the Committee. The
Committee shall have the authority and responsibilities imposed by Article XI
hereof.
Sec. 12.02 Authority and Responsibilities of the Trustee. The Trustee
shall have the powers and duties set forth in the Trust Agreement.
Sec. 12.03 Limitations on Obligations of Named Fiduciaries. No Named
Fiduciary shall have authority or responsibility to deal with matters other
than as delegated to it under this Plan, under the Trust Agreement, or by
operation of law. A Named Fiduciary shall not in any event be liable for
breach of fiduciary responsibility or obligation by another fiduciary
(including Named Fiduciaries) if the responsibility or authority of the act or
omission deemed to be a breach was not within the scope of the said Named
Fiduciary's authority or delegated responsibility.
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ARTICLE XIII
TRUST AGREEMENT
Sec. 13.01 The Company shall enter into a trust agreement with a
Trustee to be designated by the Board of Directors. The trust agreement shall
provide, among other things, that all funds received by the Trustee thereunder
will be held, managed, invested and distributed by the Trustee in accordance
with the Plan. Funds paid to the Trustee shall not revert to the Company
except as provided in Section 4.07. The Board of Directors may change the
Trustee in its sole discretion.
Sec. 13.02 Before each annual or special meeting of the stockholders
of the Company, the Trustee will arrange to furnish each Participant with a
copy of the proxy solicitation material for such meeting, together with a form
requesting the Participant's confidential instruction on how the shares of
Merck Common Stock credited to the Participant's Account Balance should be
voted. Upon receipt of such instructions, the Trustee shall vote such Merck
Common Stock as instructed.
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ARTICLE XIV
CLAIMS PROCEDURES
Sec. 14.01 Application for Benefits. Each Participant and/or
Beneficiary believing himself or herself eligible for benefits under the Plan
shall apply for such benefits by completing and filing with the Committee an
application for benefits on a form supplied by the Committee. Before the date
on which benefit payments commence, each such application must be supported by
such information and data as the Committee deems relevant and appropriate.
Evidence of age, marital status (and, in the appropriate instances, health,
death or disability), and location of residence shall be required of all
applicants for benefits.
Sec. 14.02 Appeals of Denied Claims for Benefits. In the event that
any claim for benefits is denied in whole or in part, the Participant or
Beneficiary whose claim has been so denied shall be notified of such denial in
writing by the Committee. The notice advising of the denial shall specify the
reason or reasons for denial, make specific reference to pertinent Plan
provisions, describe any additional material or information necessary for the
claimant to perfect the claim (explaining why such material or information is
needed), and shall advise the Participant or Beneficiary, as the case may be,
of the procedure for the appeal of such denial. All appeals shall be made by
the following procedure:
(a) The Participant or Beneficiary whose claim has been denied shall
file with the Committee a notice of desire to appeal the denial. Such notice
shall be filed within sixty (60) days of notification by the Committee of claim
denial, shall be made in writing, and shall set forth all of the facts upon
which the appeal is based. Appeals not timely filed shall be barred.
(b) The Committee shall consider the merits of the claimant's written
presentations, the merits of any facts or evidence in support of the denial of
benefits, and such other facts and circumstances as the Committee shall deem
relevant.
(c) The Committee shall render a determination upon the appealed claim
which determination shall be accompanied by a written statement as to the
reasons therefor. The determination so rendered shall be binding upon all
parties.
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ARTICLE XV
AMENDMENT AND TERMINATION
Sec. 15.01 Amendment. The provisions of the Plan may be amended at
any time and from time to time by the Participating Employers, provided,
however, that:
(a) No amendment shall increase the duties or liabilities of the
Committee or of the Trustee without the consent of that party;
(b) No amendment shall deprive any Participant or Beneficiary of any
of the benefits to which he is entitled under the Plan with respect to
contributions previously made, nor shall any amendment decrease the vested
percentage of any Participant's Account nor result in the elimination or
reduction of a benefit "protected" under section 411(d)(6) of the Code, unless
otherwise permitted or required by law;
(c) No amendment shall provide for the use of funds or assets held to
provide benefits under the Plan other than for the benefit of Participants and
their Beneficiaries or to meet the administrative expenses of the Plan, except
as may be specifically authorized by statute or regulation.
Each amendment shall be approved by resolution of the board of
directors of each Participating Employer with respect to which the amendment is
to apply; provided, however, that no Participating Employer shall amend the
Plan in a manner which will cause the Plan to fail to satisfy the requirements
of section 401(a) of the Code when all benefits provided by all Participating
Employers which are required to be aggregated for such purposes are taken into
account. Notwithstanding the foregoing, (1) any amendment necessary to qualify
the Plan under section 401(a) of the Code, and (2) any administrative,
regulatory or compliance amendment which the Committee shall deem necessary and
shall not significantly increase the cost of the Plan, adversely affect the
benefit of any Participant or significantly affect the long-term liability of
the Company, may be made by the Committee without the further approval of the
board of directors of any Participating Employer.
Sec. 15.02 Plan Termination. While it is the intention of the
Participating Employers to continue the Plan indefinitely in operation, the
right is, nevertheless, reserved on behalf of each Participating Employer to
terminate its participation in the Plan in whole or in part. Whole or partial
termination of the Plan shall result in full and immediate vesting in each
affected Participant of the entire amount standing to his credit in his
Account, and there shall not thereafter be any forfeitures with respect to any
such affected Participant for any reason. Termination of the Plan in whole or
in part shall be effective as of the date specified by resolution of the board
of directors of the Participating Employers to which the termination applies,
subject, however, to the provisions of Section 15.03 hereof. Upon termination
of the Plan, Accounts shall be distributed in accordance with applicable law.
Sec. 15.03 Complete Discontinuance of Employer Contributions. While
it is the intention of the Participating Employers to make substantial and
recurrent contributions to the Trust Fund pursuant to the provisions of the
Plan, the right is, nevertheless, reserved to at any time completely
discontinue
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employer contributions. Such complete discontinuance shall be established by
resolution of the board of directors of each Participating Employer and shall
have the effect of a termination of the Plan, as set forth in Section 15.02,
except that the Trustee shall not have the authority to dissolve the Trust Fund
except upon adoption of a further resolution by the board of directors of each
Participating Employer to the effect that the Plan is terminated and upon
receipt from the Committee of instructions to dissolve the Trust Fund.
Sec. 15.04 Mergers and Consolidations of Plans. In the event of any
merger or consolidation with, or transfer of assets or liabilities to, any
other plan, each Participant shall have a benefit in the surviving or
transferee plan (determined as if such plan were then terminated immediately
after such merger, consolidation or transfer) that is equal to or greater than
the benefit he would have been entitled to receive immediately before such
merger, consolidation or transfer in the Plan in which he was then a
Participant (had such Plan been terminated at that time). For the purposes
hereof, former Participants and Beneficiaries shall be considered Participants.
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ARTICLE XVI
MISCELLANEOUS PROVISIONS
Sec. 16.01 Nonalienation of Benefits.
(a) Except as provided in Section 15.01(b), none of the payments,
benefits or rights of any Participant or Beneficiary shall be subject to any
claim of any creditor, and, in particular, to the fullest extent permitted by
law, all such payments, benefits and rights shall be free from attachment,
garnishment, trustee's process, or any other legal or equitable process
available to any creditor of such Participant or Beneficiary. Except as
provided in Section 16.01(b), no Participant or Beneficiary shall have the
right to alienate, anticipate, commute, pledge, encumber or assign any of the
benefits or payments which he may expect to receive, contingently or otherwise,
under the Plan, except the right to designate a Beneficiary or Beneficiaries as
hereinabove provided.
(b) Compliance with the provisions and conditions of any QDRO pursuant
to Section 8.07 or of any federal tax levy made pursuant to section 6331 of the
Code shall not be considered a violation of this provision.
Sec. 16.02 No Contract of Employment. Neither the establishment of
the Plan, nor any modification thereof, nor the creation of any fund, trust or
account, nor the payment of any benefits shall be construed as giving any
Participant or Employee, or any person whomsoever, the right to be retained in
the service of a Participating Employer, and all Participants and other
Employees shall remain subject to discharge to the same extent as if the Plan
had never been adopted.
Sec. 16.03 Severability of Provisions. If any provision of the Plan
shall be held invalid or unenforceable, such invalidity or unenforceability
shall not affect any other provisions hereof, and the Plan shall be construed
and enforced as if such provisions had not been included.
Sec. 16.04 Heirs, Assigns and Personal Representatives. This Plan
shall be binding upon the heirs, executors, administrators, successors and
assigns of the parties, including each Participant and Beneficiary, present and
future and all persons for whose benefit there exists any QDRO (as defined in
Section 8.07) with respect to any Participant (except that no successor to a
Participating Employer shall be considered a Participating Employer unless that
successor adopts the Plan).
Sec. 16.05 Headings and Captions. The headings and captions herein
are provided for reference and convenience only, shall not be considered part
of the Plan, and shall not be employed in the construction of the Plan.
Sec. 16.06 Gender and Number. Except where otherwise clearly
indicated by context, the masculine and the neuter shall include the feminine
and the neuter, the singular shall include the plural, and vice-versa.
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Sec. 16.07 Controlling Law. This Plan shall be construed and enforced
according to the laws of the State of Delaware to the extent not preempted by
federal law, which shall otherwise control.
Sec. 16.08 Funding Policy. The Committee shall establish, and
communicate to the Trustee, a funding policy consistent with the objectives of
the Plan and of the Trust Fund.
Sec. 16.09 Title to Assets. No Participant or Beneficiary shall have
any right to, or interest in, any assets of the Trust Fund upon Separation from
Service or otherwise, except as provided from time to time under the Plan, and
then only to the extent of the benefits payable under the Plan to such
Participant or out of the assets of the Trust Fund. All payments of benefits
as provided for in the Plan shall be made from the assets of the Trust Fund,
and neither the Participating Employers nor any other person shall be liable
therefor in any manner.
Sec. 16.10 Payments to Minors, Etc. Any benefit payable to or for the
benefit of a minor, an incompetent person or other person incapable of
receipting therefor shall be deemed paid when paid to such person's guardian or
to the party providing or reasonably appearing to provide for the care of such
person, and such payment shall fully discharge the Trustee, the Committee, the
Participating Employers and all other parties with respect thereto.
Sec. 16.11 Lost Payees. A benefit shall be deemed forfeited if the
Committee is unable to locate a Participant, a spouse or a Beneficiary to whom
payment is due, provided, however, that such benefit shall be reinstated if a
claim is made by the Participant or Beneficiary for the forfeited benefit.
Sec. 16.12 Counterparts. This Plan and any amendment hereto may be
executed in multiple counterparts. Each such counterpart document shall be
deemed an original, and the production of any one such counterpart shall be
considered the production of all and shall be sufficient for all legal
purposes.
EXECUTED this 30th day of November, 1995.
ASTRA MERCK INC.
Attest: /s/ Judy Yun By: /s/ David H. Bescherer
--------------------- -------------------------------
Judy Yun David H. Bescherer
Assistant Secretary Vice President, Finance
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