As filed with the Securities and Exchange Commission on January 31, 1996
Registration No. 33-64665
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
POST-EFFECTIVE AMENDMENT NO. 1
TO
FORM S-8
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
MERCK & CO., INC.
(Exact name of registrant as specified in its charter)
New Jersey 22-1109110
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
One Merck Drive
Whitehouse Station, NJ 08889-0100
(Address of principal executive offices (Zip Code)
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
<PAGE>
Item 8. Exhibits.
The exhibits filed as part of this Registration Statement
are as follows:
Exhibit Method of
Number Exhibit Filing
5.1 Opinion re legality (Common Stock of
Registrant) (1) Previously filed
5.2 Opinion of Morgan, Lewis & Bockius LLP
(interests in Plan) Previously filed
23.1 Consent of Arthur Andersen LLP Previously filed
23.2 Consent of Price Waterhouse LLP Previously filed
23.3 Consent of Morgan, Lewis & Bockius LLP
(included in Exhibit 5.2) Previously filed
24 Power of Attorney and Certified Resolution
of Board of Directors Previously filed
99 Astra Merck Inc. Employee Savings and
Security Plan Filed herewith
(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.
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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
Amendment to be signed on its behalf by the undersigned,
thereunto duly authorized, in Whitehouse Station, New Jersey, on
the 19th day of December, 1995.
MERCK & CO., INC.
By: *
RAYMOND V. GILMARTIN
Chairman of the Board, President
and Chief
Executive Office 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.
Signatures Title Date
* Chairman of the Board, December 19, 1995
Raymond V. Gilmartin President and Chief Executive Officer;
Principal Executive Officer; Director
* Senior Vice President December 19, 1995
Judy C. Lewent and Chief Accounting Officer;
Principal Financial Officer
* Vice President, Controller; December 19, 1995
Peter E. Nugent Principal Accounting Officer
* Director December 19, 1995
H. Brewster Atwater, Jr.
* Director December 19, 1995
Derek Birkin
* Director December 19, 1995
Lawrence A. Bossidy
2 <PAGE>
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* Director December 19, 1995
William G. Bowen, Ph.D.
* Director December 19, 1995
Johnnetta B. Cole, Ph.D.
* Director December 19, 1995
Carolyne K. Davis, Ph.D.
* Director December 19, 1995
Lloyd C. Elam, M.D.
* Director December 19, 1995
Charles E. Exley, Jr.
* Director December 19, 1995
William N. Kelley, M.D.
* Director December 19, 1995
Samuel O. Thier, M.D.
* Director December 19, 1995
Dennis Weatherstone
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 the
Registration Statement, 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
Amendment to be signed on its behalf by the undersigned,
thereunto duly authorized, in Wayne, Pennsylvania on December 18,
1995.
ASTRA MERCK INC.
EMPLOYEE SAVINGS AND SECURITY PLAN
By: /s/ Linda E. Robertson
Name: Linda E. Robertson
Title: Administrative Committee
3 <PAGE>
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INDEX TO EXHIBITS
Sequentially
Exhibit Numbered
Number Exhibit Page
5.1 Opinion re legality (Common Stock
of Registrant) (1) Previously Filed
5.2 Opinion of Morgan, Lewis & Bockius LLP
(interests in Plan) Previously Filed
23.1 Consent of Arthur Andersen LLP Previously Filed
23.2 Consent of Price Waterhouse LLP Previously Filed
23.3 Consent of Morgan, Lewis & Bockius LLP
(included in Exhibit 5.2) Previously Filed
24 Power of Attorney and Certified Resolution
of Board of Directors Previously Filed
99 Astra Merck Inc. Employee Savings
and Security Plan
(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.
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EXHIBIT 99
ASTRA MERCK INC.
EMPLOYEE SAVINGS AND SECURITY PLAN
EFFECTIVE JANUARY 1, 1995
<PAGE>
TABLE OF CONTENTS
Article Subject Matter Page
I Statement of Purpose 1
1.01 Purpose 1
1.02 Qualification Under the
Internal Revenue Code 1
1.03 Documents 1
II Definitions 2
III Participation Eligibility 11
3.01 Eligibility to Participate 11
3.02 Employee Elections 11
IV Contributions 12
4.01 Employee Contributions 12
4.02 Matching Contributions 13
4.03 Qualified Employer
Contributions 14
4.04 Rollover Contributions 14
4.05 Timing of Contributions 15
4.06 Contingent Nature of
Contributions 15
4.07 Exclusive Benefit; Refund of
Contributions 15
V Limitations on Contributions 17
5.01 Calendar Year Limitation on
Salary Deferrals 17
5.02 Nondiscrimination Limitations
on Salary Deferrals, After-Tax
Employee Contributions and Matching
Contributions 17
5.03 Correction of Discriminatory
Contributions 19
5.04 Annual Additions Limitations 20
VI Investment and Valuation of Trust
Fund; Maintenance of Accounts 22
6.01 Investment of Assets 22
6.02 Participant Investment
Direction 22
6.03 Investment Elections 22
6.04 Change of Election 23
6.05 Transfers Between Investment
Funds 23
6.06 Individual Accounts 23
6.07 Valuations 24
6.08 Allocation to Individual
Accounts 24
6.09 Valuation for Distribution 24
6.10 Transfer From Merck Plan 25
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VII Vesting 26
7.01 Full and Immediate Vesting 26
VIII Benefit Distributions 27
8.01 Death Benefits 27
8.02 Benefits Upon Separation from
Service 27
8.03 Withdrawals 27
8.04 Form of Benefit Payment 30
8.05 Provisions Applicable to
Distributions Other Than Automatic
Distributions 31
8.06 Beneficiary Designation Right 32
8.07 Required Distribution Dates 33
8.08 Domestic Relations Orders 34
8.09 Post Distribution Credits 35
8.10 Direct Rollovers 35
IX Participant Loans 36
9.01 In General 36
9.02 Loans as Trust Fund Investments36
X Provisions Relating to Top-Heavy
Plans 40
10.01 Definitions 40
10.02 Determination of Top-Heavy
Status 42
10.03 Top-Heavy Plan Minimum
Allocation 42
10.04 Top-Heavy Plan Maximum
Allocations 43
XI Administration 44
11.01 Plan Design Committee 44
11.02 Administrative Committee 44
11.03 Investment Committee 44
11.04 Exclusivity of Fiduciary
Responsibility; Employment of
Advisors 45
11.05 Limitations on Obligations of
Named Fiduciaries 45
11.06 Indemnification 45
XII Trust Agreement 47
XIII Amendment and Termination 50
13.01 Amendment 50
13.02 Plan Termination 50
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13.03 Complete Discontinuance of
Employee Contributions 51
13.04 Mergers and Consolidations of
Plans 51
XIV Miscellaneous Provisions 52
14.01 Nonalienation of Benefits
14.02 No Contract of Employment 52
14.03 Severability of Provisions 52
14.04 Heirs, Assigns and Personal
Representatives 52
14.05 Headings and Captions 52
14.06 Gender and Number 52
14.07 Controlling Law 53
14.08 Funding Policy 53
14.09 Title to Assets 53
14.10 Payments to Minors, Etc. 53
14.11 Lost Payees 53
14.12 Counterparts 53
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ARTICLE I
STATEMENT OF PURPOSE
Sec. 1.01 Purpose. Astra Merck Inc. (the
"Company") adopted the Astra Merck Inc. Employee Savings and
Security Plan (the "Plan), effective 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 transfer from
the Merck & Co., Inc. Employee Savings and Security Plan (the
"Merck Plan") of assets and liabilities attributable to
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 those 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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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 2.15, (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 Administrative 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. Sec. 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
2 <PAGE>
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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.
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 "Astra AB ADR Fund" shall mean the
Investment Fund consisting of ADRs of Astra AB.
Sec. 2.08 "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. 2.09 "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. 2.10 "Beneficiary" shall mean the person or
entity designated or otherwise determined to be such in
accordance with Section 8.06.
Sec. 2.11 "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. 2.12 "Code" shall mean the Internal Revenue
3 <PAGE>
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Code of 1986, as the same may be amended from time to time, and
any successor statute of similar purpose.
Sec. 2.13 "Committees" shall mean the Plan Design
Committee, the Administrative Committee and the Investment
Committee specified in Article XI.
Sec. 2.14 "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) 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 Administrative 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 Administrative 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
4 <PAGE>
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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. 2.15 "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 Administrative 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 and employer matching
contributions made on his behalf under all such plans (excluding
those that are not permitted to be aggregated under Treas. Reg.
Sec. 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 Administrative
Committee may also take Salary Deferrals into account, in
accordance with Treasury regulations.
Sec. 2.16 "Covered Employee" shall mean each person
who is an Employee performing services on a full-time or part-
time 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 or the written personnel policies of the
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
5 <PAGE>
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leased employee within the meaning of section 414(n) or 414(o) of
the Code.
Sec. 2.17 "Effective Date" shall mean January 1,
1995.
Sec. 2.18 "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. 2.19 "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 2.23.
Sec. 2.20 "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. 2.21 "ERISA" shall mean the Employee
Retirement Income Security Act of 1974, as amended.
Sec. 2.22 "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;
(2) received Compensation from an Employer or
Affiliated Company 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 from an Employer or
Affiliated Company 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 from an Employer or Affiliated Company 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
6 <PAGE>
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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
Administrative 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. 2.23 "Hour of Service" shall mean, for any
Employee an 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.
Sec. 2.24 "Investment Fund" shall mean any of the
7 <PAGE>
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funds established pursuant to Section 6.02 for the investment of
the assets of the Trust Fund.
Sec. 2.25 "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. 2.26 "Limitation Year" shall mean the calendar
year.
Sec. 2.27 "Matching Contribution" shall mean a
contribution made by a Participating Employer pursuant to Section
4.02.
Sec. 2.28 "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 any Transferred Employee,
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. That portion of any Transferred Employee's Matching
Contribution Account which has been transferred from the Merck
Plan shall be referred to as the "Merck Match" and shall be
invested in the Merck Common Stock Fund.
Sec. 2.29 "Merck Common Stock Fund" shall mean the
Investment Fund consisting of shares of Merck & Co., Inc. Common
Stock.
Sec. 2.30 "Named Fiduciary" shall mean the
Participating Employers, the Trustee, the Investment Committee
and the Administrative 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. 2.31 "Normal Retirement Age" shall mean a
Participant's 65th birthday.
Sec. 2.32 "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
8 <PAGE>
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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. 2.33 "Participating Employer" shall mean Astra
Merck Inc. and any other Affiliated Company which adopts this
Plan and joins in the corresponding Trust Agreement.
Sec. 2.34 "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 2.23.
Sec. 2.35 "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. 2.36 "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.
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 the Participant attains age 70-1/2,
except as otherwise provided 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.
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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.
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
Administrative Committee may deem sufficient.
Sec. 2.49 "Transferred Employee" shall mean a
Covered Employee who was an employee of Merck & Co., Inc. on
December 31, 1994 (including an employee who was on layoff, short
or long-term disability or on an approved leave of absence which
began prior to November 1, 1994 and commences employment with
Astra Merck Inc. immediately upon the expiration of such leave of
absence) and whose employment was transferred to the Company as
of January 1, 1995 (unless still on layoff, disability or leave),
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pursuant to the Employee Lease Agreement dated as of November 1,
1994, between Merck & Co, Inc. and the Company.
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 Administrative
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 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. which were credited under the
Merck Plan 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 his completion of one Year of Employment, 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 his completion of one Year of Employment, if he is
a Covered Employee on such Enrollment Date. If a person is not a
Covered Employee on the Enrollment Date coincident with or next
following his completion of 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.
(c) For purposes of this Article III, the
Enrollment Date shall be each January 1 and July 1 or such other
date prescribed by the Administrative Committee.
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 Administrative Committee, at such
time in advance as the Administrative Committee may prescribe;
provided, however, that with respect to any Transferred Employee
the salary deferral election in effect under the Merck Plan on
the transfer date (as defined in Section 6.10) shall remain in
effect under this Plan on and after the transfer date until
changed by the Participant in accordance with Section 4.01 except
as otherwise prescribed by the Administrative 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 Administrative Committee.
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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
Administrative 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
Administrative 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 by filing the appropriate form at such
time as prescribed by the Administrative Committee. The
designation must be in increments of 10% of the payroll deduction
amount.
(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
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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 the benefits department receipt of
the Participant's election to voluntarily suspend contributions,
which may be submitted to the benefits department 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 the benefits department 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 the benefits department
thirty (30) days prior to the time he/she wishes to resume
contributions.
(d) 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 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.
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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 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
15 <PAGE>
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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 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 14-60
Code as determined in accordance with procedures established by
the Administrative 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 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
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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 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 Administrative 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 Administrative 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 remain 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
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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
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
Contributions 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
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(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 2.22(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. 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
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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 he 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 Plan
Year and the date of distribution, and shall be determined by the
Administrative 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,
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the Administrative 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 2.22(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 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.
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(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. The
Investment Committee shall designate the available Investment
Funds to which a Participant shall direct the investment of
amounts credited to his Account, which shall include but not be
limited to the following funds:
(a) 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 from the benefits department. 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.
(b) Astra AB ADR Fund. This portfolio consists of
ADRs of Astra AB. Information about Astra AB's business may be
obtained from the benefits department. An investment in this
portfolio does not have the advantage of diversification, and is
subject both to normal external facts affecting the general level
of securities prices and to specific facts affecting Astra AB.
The Investment 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 Investment 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 Investment
Committee, may be held in the form of uninvested cash or in a
liquid asset account for temporary periods pending reinvestment
or distribution. 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.
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 Administrative Committee,
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the investment of contributions made on his behalf in any one or
more of the available Investment Funds, subject to such
limitations as the Administrative 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.
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) Except as provided in Section 6.05 (c), 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 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 Investment Funds to other Investment
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
Business Day. If the Participant's instructions regarding a
reallocation out of certain Investment Funds into other
Investment 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) Notwithstanding any provision herein to the
contrary , a Participant may not transfer any part of his Merck
Match from the Merck Common Stock Fund.
Sec. 6.06 Individual Accounts. There shall be
maintained on the books of the Plan with respect to each
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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, and such subaccounts as may be established by
the Administrative Committee, including with respect to each
Transferred Employee, if applicable, an Old Pre-Tax Match, a
Prior Company Match and an Astra Merck Match subaccount in the
Matching Contribution Account. Each such Account shall
separately reflect the Participant's interest in each Investment
Fund relating to 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.
Sec. 6.07 Valuations. The interest of a
Participant in the Merck Common Stock Fund, the Astra AB ADR Fund
and the other Investment Funds shall be valued on any given day
of a Participant's interest in any Investment Fund, which
investments are described in Section 6.02 shall be determined by
multiplying the number of Investment Fund shares and fractional
shares reflected in the Participant's Account as of the given day
by the applicable Investment Fund's closing price per share on
such given date. For purposes of initial purchase, reallocation
of Account balances, and distributions, the value of Investment
Funds shall be determined by reference to the closing price per
share of the applicable Investment Fund(s) on the given Business
Day the Trustee conducts the applicable sale or purchase.
Sec. 6.08 Allocation to Individual Accounts. The
Accounts of each Participant shall be adjusted as of each
Valuation Date by (a) reducing such Accounts by any payments made
therefrom since the preceding Valuation Date, and then (b)
increasing or reducing such Accounts 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 with any contributions made thereto since the preceding
Valuation Date.
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 Transfer From Merck Plan. Effective as
of the date as of which all assets and liabilities under the
Merck Plan attributable to Transferred Employees shall be
transferred to and become a part of the Trust Fund (the "transfer
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date"), all benefits payable with respect to a person's
participation in the Merck Plan, shall be payable from the Trust
Fund under the Plan to the extent not previously distributed.
With respect to each individual who has an account under the
Merck Plan as of the transfer date, the person's Pre-Tax
Contributions, After-Tax Contributions, Company Matching
Contributions, Rollover Contributions and Trust to Trust
Transfers 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 transfer date,
such loan and the associated promissory note shall be transferred
to the Plan and shall thenceforward 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 Administrative
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 Administrative
Committee or any insurance company contract or other instrument
governing the vehicles in which such amounts were invested
immediately prior to the transfer.
Sec. 6.11 Fiduciary Responsibility. This Plan is
intended to constitute a plan described in section 404(c) of
ERISA and Title 29 of the Code of Federal Regulations Sec.
2550.404c-1. Neither the Company, the Investment Committee, the
Administrative Committee, the Trustee or any other Plan fiduciary
shall be liable for any losses which are the direct and necessary
result of investment instructions provided by any Participant,
beneficiary or Alternate Payee.
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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, 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 the
benefits department 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.
Subject to Sections 9.02(e) and 8.04, 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 the benefits department 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 Administrative 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 and no portion of his Account
is paid in the form of a life annuity.
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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 Administrative
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:
(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.
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(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 Qualified Employer Contribution
Account.
(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)
Rollover Contribution Account, (3) Company Matching Contributions
Account subject to After-Tax distribution rules, and (4) if the
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Participant has attained age 59-1/2 or incurred a Total
Disability, his Salary Deferral Account and Company Matching
Contributions Account subject to pre-tax distribution rules. If
a Participant incurs a Total 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 in the
manner and at such times as the Administrative Committee may
prescribe and shall be based on the value of the Participant's
Account as of the most recent Valuation Date in such manner as
the Administrative Committee shall provide.
(2) All withdrawals shall be made in a single
sum payment from the Investment Funds designated by the
Participant; provided, however, if the entire distribution cannot
be satisfied based on the Participant's election or the
Participant fails to make an election, the appropriate portion of
the withdrawal shall be deemed to be made on a pro-rata basis
from the Investment Funds in which 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
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pursuant to Article IX.
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:
(1) 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
(2) 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
(3) 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.
If a Participant fails to make an election under this Section
8.04(a), by requesting a distribution of his Account Balance no
later than the last Business Day of the second month following
the month in which he incurs a Termination of Employment, then
his Account Balance will continue to be invested in the Plan in
accordance with the Participant's investment directions in effect
at that time. Thereafter, the Participant may request a lump sum
distribution of his entire Account Balance only, in accordance
with the provisions of Section 8.05. A Participant who has not
taken a distribution at the time he attains Normal Retirement Age
and whose Account Balance is not already subject to a
distribution election hereunder, shall have his Account Balance
valued no later than the tenth of the second month (or the next
Business Day if the tenth is not a Business Day) following his
65th birthday, and automatically distributed in a lump sum as
soon as administratively feasible following the valuation date.
(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
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prescribed by the Administrative 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.
(c) 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 Participant's Account are then
invested. In addition, the amount of each installment shall be
based upon the value of Participant's Account as of the 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.
Sec. 8.05 Provisions Applicable to Distributions
Other Than Automatic Distributions.
(a) Distribution of Cash or Shares.
Investment Fund shares shall always be distributed in cash except
that the Participant's interest in the Merck Common Stock Fund
and the Astra AB ADR Fund may be distributed in cash or shares as
the Participant directs. If the Participant fails to indicate
whether he wants cash or shares, shares will be issued If a
Participant's distribution consists entirely of shares, the
Participant will receive the number of shares which brings him
closest to but not over the dollar amount he requested. A
fractional share will not be distributed as part of an in-service
distribution.
(b) 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 post-1986 After-Tax
Contributions to the sum of post-1986 After-Tax Employee
Contributions plus earnings thereon, and (3) all other amounts in
the Plan -- earnings on pre-1987 After-Tax Contributions,
Rollover Contributions plus earnings, Company Matching
Contributions plus earnings and Pre-Tax Contributions plus
earnings. 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:
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(1) the requirements of subsection (c) are
satisfied, or
(2) the Participant has no spouse, or
(3) the Administrative 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 Administrative
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 Administrative
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 Administrative 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
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accordance with this subsection (c) shall not be effective with
respect to any subsequent spouse of the Participant.
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. Sec.
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 Administrative
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
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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 Administrative Committee, by a court
of competent jurisdiction, or otherwise), the Administrative
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 determined to be a QDRO within
eighteen (18) months of the date of its receipt by the
Administrative Committee (or from the beginning of any other
period during which the issue of its being a QDRO is being
determined by the Administrative Committee), the Administrative
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 Administrative 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
Administrative 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 Administrative Committee, the Administrative
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 Administrative
Committee shall not be required to modify or reverse any payment,
transaction or application of funds occurring before the receipt
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of any notice that would have affected such payment, transaction
or application of funds, nor shall the Administrative 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.
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. 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
Administrative 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 Administrative
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 Administrative 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 Section 9.02(e) and
such uniform and nondiscriminatory rules as may from time to time
be adopted by the Administrative Committee, the Trustee, upon
application by a Participant on forms approved by the
Administrative Committee, may make a loan or loans to such
applicant. 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 Administrative 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.
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
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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 Administrative 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 Administrative Committee and, in
determining the interest rate, the Administrative 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. For
those Participants who repay a loan via payroll deduction, loans
shall be repaid on a semi-monthly or monthly basis depending on
the Participant's payroll basis. 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
Administrative Committee shall have the right to require the
Participant to execute a revised promissory note to the extent
the Administrative 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 Administrative 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;
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(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 after
the due date for Participants who are Employees, and within
fifteen (15) days for Participants who are no longer Employees;
(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.
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(f) Loan Statement. Every Participant receiving a
loan hereunder will receive a statement from the Administrative
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 Administrative
Committee will not approve any loan if it is the belief of the
Administrative 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 pur-
poses, 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 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(b). 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 be credited 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 Administrative 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.
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(3) A five-percent (5%) owner (within the
meaning of section 416(i) of the Code) of a Participating
Employer.
(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
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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.
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)
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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.
(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 Plan Design Committee. The Plan Design
Committee shall consist of the Chief Executive Officer of the
Company, the Chief Financial Officer of the Company and the Vice
President-Human Resources of the Company. The Plan Design
Committee shall have authority to amend the Plan as herein
provided and shall appoint the Plan Administrative Committee and
the Investment Committee, each of which will have the duties and
powers described hereinbelow.
Sec. 11.02 Administrative Committee.
(a) Appointment. The Administrative Committee
shall consist of not less than three members who shall serve in
this capacity without compensation during the pleasure of the
Plan Design Committee. Any member of the Administrative
Committee may be removed at any time by the Plan Design Committee
which shall fill all vacancies however occurring. The
Administrative Committee, which shall be a Named Fiduciary
hereunder, shall have the sole authority and responsibility to
control and manage the operation and administration of the Plan.
The decision of the Administrative Committee in matters within
its jurisdiction shall be final, binding and conclusive upon each
Participant, Beneficiary and every other person interested or
concerned.
(b) Organization. The Administrative
Committee shall enact such rules and regulations consistent with
the Plan as it may consider desirable for the conduct of its
business and for the administration of the Plan. Its members
shall elect a chairman, who shall be a member of the
Administrative Committee, and a secretary, who may, but need not,
be a member of the Administrative Committee.
(c) Administrative Committee Action. A
majority of the members of the Administrative Committee shall
constitute a quorum for the transaction of business. All
resolutions or other actions taken by the Administrative
Committee at any meeting shall be by vote of a majority of the
Administrative Committee members present at such meeting.
Resolutions may be adopted or other action taken without a
meeting, upon written consent of all of the members of the
Administrative Committee. No member of the Administrative
Committee shall act on any matter which involves his personal
interest or benefit under the Plan as distinguished from the
general interest of all Employees under the Plan.
(d) Powers. The Administrative Committee
shall supervise and administer the Plan in accordance with the
terms hereof. It shall have all powers necessary to accomplish
such purpose, including, but not by way of limitation, the
following powers:
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(1) to construe and interpret the Plan,
correct defects and supply omissions therein, make factual
determinations, resolve ambiguities, decide all questions of
eligibility and determine the amount, manner and time of payment
of any benefits hereunder;
(2) to prescribe procedures to be
followed by Participants filing applications for benefits;
(3) to prepare and distribute, in such
manner as the Administrative Committee determines to be
appropriate, information explaining the Plan;
(4) to require a Participant to complete
and file with the Administrative Committee an application for a
benefit and all other forms approved by the Administrative
Committee, and to furnish all pertinent information requested by
the Administrative Committee; the Administrative Committee may
rely upon all such information so furnished, including the
Participant's current mailing address;
(5) to furnish to the Plan Design
Committee or the Board, upon request, appropriate reports with
respect to the administration of the Plan;
(6) to keep such records, make such
reports, and do such other acts at it deems appropriate in order
to comply with ERISA and governmental regulations thereunder;
(7) to adopt such rules and make such
determinations as are appropriate to the administration of the
Plan; all rules of the Administrative Committee shall be
uniformly and consistently applied to all Participants in similar
circumstances; when making a determination or calculation, the
Administrative Committee shall be entitled to rely upon
information furnished by a Participant or Beneficiary, the legal
counsel of the Company, the Trustee, or other appropriate
persons;
(8) to issue directions to the Trustee
concerning all benefits which are to be paid from the Fund
pursuant to the provisions of the Plan; the decision of the
Administrative Committee on matters within its jurisdiction
shall, to the extent permitted by ERISA, be final, binding and
conclusive upon the Company and the Trustee, and upon each
Participant, Beneficiary, and every other person interested or
concerned;
(9) to appoint or employ individuals to
carry out administrative duties under the Plan and any other
agents its deems advisable, and to rely in good faith upon the
opinion of any professional or specialist so employed;
(10) to arrange for bonding, if required
by law; and
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(11) to determine whether any domestic
relations order constitutes a QDRO and to take such action as the
Administrative Committee deems appropriate in light of such
domestic relations order.
(e) Claims Procedure. The Administrative
Committee shall make all determinations as to the right of any
person to a benefit under the Plan. If the Administrative
Committee denies in whole or part any claim for a benefit under
the Plan by a Participant, Spouse, or Beneficiary, the
Administrative Committee shall furnish the claimant with notice
of the decision not later than 90 days after receipt of the
claim, unless special circumstances require an extension of the
time for processing the claim. If such an extension of time for
processing is required, written notice of the extension shall be
furnished to the claimant prior to the termination of the initial
90-day period. In no event shall such extension exceed the
period of 90 days from the end of such initial period. The
extension notice shall indicate the special circumstances
requiring an extension of time and the date by which the
Administrative Committee expects to render the final decision.
The written notice which the Administrative
Committee shall provide to every claimant who is denied a claim
for benefit shall set forth in a manner calculated to be
understood by the claimant:
(1) the specific reason or reasons for
the denial;
(2) specific reference to pertinent Plan
provisions on which the denial is based;
(3) a description of any additional
material or information necessary for the claimant to perfect the
claim and an explanation of why such material or information is
necessary; and
(4) appropriate information as to the
steps to be taken if the claimant wishes to submit his claim for
review.
A claimant or his authorized representative may
request a review of the denied claim by the Administrative
Committee. Such request shall be made in writing and shall be
presented to the Administrative Committee not more than 60 days
after receipt by the claimant of written notification of the
denial of a claim. The claimant shall have the right to review
pertinent documents and to submit issues and comments in writing.
The Administrative Committee shall review the claim based upon
the pertinent documents and upon the consideration of such issues
and comments as the claimant may direct in writing to the
Administrative Committee. The Administrative Committee shall
make its decision on review not later than 60 days after receipt
of the claimant's request for review, unless special
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circumstances require an extension of time, in which case a
decision shall be rendered as soon as possible but not later than
120 days after receipt of the request for review. If an
extension of time for review is required because of special
circumstances, written notice of the extension shall be furnished
to the claimant prior to the commencement of the extension. The
decision on review shall be in writing and shall include specific
reasons for the decision, written in a manner calculated to be
understood by the claimant, and specific references to the
pertinent Plan provisions on which the decision is based.
It is intended that the claims procedure of
this Plan be administered in accordance with the claims procedure
regulations of the Department of Labor.
Sec. 11.03 Investment Committee. The
Investment Committee shall consist of not less than three members
who shall serve in this capacity without compensation during the
pleasure of the Plan Design Committee. The Investment Committee
shall have authority to appoint the Plan Trustee, and to remove
and/or appoint a new Trustee in the event of the Trustee's
removal or resignation. Subject to periodic review by the Plan
Design Committee, the Investment Committee shall have exclusive
authority to designate available Funds and to appoint an
Investment Manager to determine and direct any or all
investments with respect to any Fund, as it deems appropriate.
The Investment Committee shall be a Named Fiduciary of the Plan
for purposes of section 402(a) of ERISA.
The Investment Committee shall establish a
funding policy and method to carry out Plan objectives in light
of the short-run and long-run financial needs of the Plan and
shall communicate such policy to the Trustee, and, to the extent
appropriate, to any Investment Manager it has appointed.
Sec. 11.04 Exclusivity of Fiduciary
Responsibility; Employment of Advisors. It is the purpose of the
Plan and Trust Agreement to allocate to the Committees and the
Trustee (the "Named Fiduciaries") the exclusive responsibility
for the prudent execution of the functions assigned to each and
no responsibility for execution of functions assigned to others.
Whenever one such fiduciary is required by the Plan or Trust
Agreement to follow the directions of another such fiduciary, the
two parties shall not be deemed to have been assigned a shared
responsibility, but the fiduciary giving the directions shall
have sole responsibility for the functions assigned to him,
including issuing such directions, and the fiduciary receiving
the directions shall have sole responsibility for the functions
assigned to him, including following such directions insofar as
they are on their face proper under the Plan and Trust Agreement
and under applicable law. Any such fiduciary may employ an
advisor or advisors with regard to such fiduciary's
responsibilities under the Plan or Trust Agreement.
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Sec. 11.05 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 the 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. The determination of any Named
Fiduciary as to any matter involving its responsibilities
hereunder shall be conclusive and binding on all persons.
Sec. 11.06 Indemnification. Each person,
other than the Trustee, who is a Named Fiduciary or is a member
of any committee or board comprising a Named Fiduciary shall be
indemnified by the Company against costs, expenses and
liabilities (other than amounts paid in settlement to which the
Company does not consent) reasonably incurred by him in
connection with any action to which he may be a party by reason
of his service as a Named Fiduciary except in relation to matters
as to which he shall be adjudged in such action to be personally
guilty of gross 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
person 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 person may be entitled pursuant to
the by-laws of the Company Service as a Named Fiduciary shall be
deemed in partial fulfillment of the person's function as an
employee, officer and/or director of the Company, if he serves in
that capacity as well as in the role of Named Fiduciary.
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ARTICLE XII
TRUST AGREEMENT
Sec. 12.01 The Company shall enter into a trust
agreement with a Trustee to be designated by the Investment
Committee. 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
Investment Committee, by written resolution, may change the
Trustee in its sole discretion.
Sec. 12.02 Before each annual or special meeting of
the stockholders of Merck & Co., Inc. and of Astra AB, 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 and/or Astra AB credited to the
Participant's Account Balance should be voted. Upon receipt of
such instructions, the Trustee shall vote such shares as
instructed.
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ARTICLE XIII
AMENDMENT AND TERMINATION
Sec. 13.01 Amendment. The provisions of the Plan
may be amended at any time and from time to time by the Company,
provided, however, that:
(a) No amendment shall increase the duties or
liabilities of the Committees 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, the Plan Design Committee may adopt by written
resolution without the further approval of the Board or Directors
(1) any amendment necessary to qualify the Plan under section
401(a) of the Code, and (2) any administrative, regulatory or
compliance amendment which such 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.
Sec. 13.02 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 to the extent funded, 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
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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. 13.03 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
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 13.02, 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 Administrative
Committee of instructions to dissolve the Trust Fund.
Sec. 13.04 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 XIV
MISCELLANEOUS PROVISIONS
Sec. 14.01 Nonalienation of Benefits.
(a) Except as provided in Section 13.01(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 14.01(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. 14.02 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. 14.03 Severability of Provisions. If any
provision of the Plan shall be held invalid or unenforceable,
such invalidity or 55 shall not affect any other provisions
hereof, and the Plan shall be construed and enforced as if such
provisions had not been included.
Sec. 14.04 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. 14.05 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. 14.06 Gender and Number. Except where
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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.
Sec. 14.07 Controlling Law. This Plan shall be
construed and enforced according to the laws of the Commonwealth
of Pennsylvania to the extent not preempted by federal law, which
shall otherwise control.
Sec. 14.08 Funding Policy. The Investment
Committee shall establish, and communicate to the Trustee, a
funding policy consistent with the objectives of the Plan and of
the Trust Fund.
Sec. 14.09 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. 14.10 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
Administrative Committee, the Participating Employers and all
other parties with respect thereto.
Sec. 14.11 Lost Payees. A benefit shall be deemed
forfeited if the Administrative 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. 14.12 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 ______ day of __________________,_____.
ASTRA MERCK INC.
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Attest: _____________________
By:_______________________________
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