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As filed with the Securities and Exchange Commission on June 28, 1996
Registration No. 33-64665
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
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POST-EFFECTIVE AMENDMENT NO. 2
TO
FORM S-8
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
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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 Identification No.)
incorporation or organization)
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
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PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents, as filed by Merck & Co., Inc. (the
"Registrant") with the Securities and Exchange Commission (the "Commission"),
are incorporated by reference in this Registration Statement:
(a) Annual Report on Form 10-K, filed on March 20, 1996 for
the fiscal year ended December 31, 1995;
(b) Form 10-K/A filed on June 24, 1996, amending the
Registrant's Annual Report on Form 10-K for the fiscal year ended
December 31, 1995;
(c) Quarterly Report on Form 10-Q filed on May 14, 1996 for
the Quarter ended March 31, 1996;
(d) Proxy Statement for the Annual Meeting of Stockholders
held on April 23, 1996;
(e) The descriptions of the Common Stock of the Registrant set
forth in the Registrant's Registration Statements pursuant to Section
12 of the Exchange Act, and any amendment or report filed for the
purpose of updating such description.
In addition, the Report on Form 11-K for the fiscal year ended
December 31, 1995 with respect to the Astra Merck Inc. Employee Savings and
Security Plan (the "Plan"), filed with the Commission, is incorporated by
reference in this Registration Statement.
All reports and other documents filed by the Registrant and
the Plan pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Securities
Exchange Act of 1934, after the date of this registration statement and prior to
the filing of a post-effective amendment that indicates that all securities
offered hereby have been sold or that deregisters all securities then remaining
unsold, shall be deemed to be incorporated by reference herein and to be part
hereof from the date of filing of such documents.
Any statement contained in a document incorporated by
reference herein shall be deemed to be modified or superseded for purposes
hereof to the extent that a statement contained herein (or in any other
subsequently filed document that is also incorporated by reference herein)
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part hereof.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
The financial statements incorporated in this Registration
Statement by reference to the Report of the Astra Merck Inc. Employee Savings
and Security Plan on Form 11-K for the fiscal year ended December 31, 1995, have
been so incorporated in reliance on the report of Price Waterhouse LLP,
independent accountants, given on the authority of said firm as experts in
auditing and accounting.
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ITEM 8. EXHIBITS.
The exhibits filed as part of this Registration Statement are
as follows:
Exhibit
Number Exhibit
- ------- -------
5.1 Opinion re legality (Common Stock of Registrant)*
5.2 Opinion of Morgan, Lewis & Bockius LLP (interests in Plan)*
23.1 Consent of Price Waterhouse LLP
23.2 Consent of Arthur Andersen LLP*
23.3 Consent of Morgan, Lewis & Bockius LLP (included in Exhibit 5.2)*
24 Power of Attorney and Certified Resolution of Board of Directors*
99 Astra Merck Inc. Employee Savings and Security Plan
* Previously filed
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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 25th day of June, 1996.
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, June 25, 1996
- -------------------- President and Chief Executive Officer;
Raymond V. Gilmartin Principal Executive Officer; Director
* Senior Vice President June 25, 1996
- -------------------- and Chief Accounting Officer;
Judy C. Lewent Principal Financial Officer
* Vice President, Controller; June 25, 1996
- -------------------- Principal Accounting Officer
Peter E. Nugent
* Director June 25, 1996
- --------------------
H. Brewster Atwater, Jr.
* Director June 25, 1996
- --------------------
Derek Birkin
* Director June 25, 1996
- --------------------
Lawrence A. Bossidy
* Director June 25, 1996
- --------------------
William G. Bowen, Ph.D.
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* Director June 25, 1996
- --------------------
Johnnetta B. Cole, Ph.D.
* Director June 25, 1996
- --------------------
Carolyne K. Davis, Ph.D.
* Director June 25, 1996
- --------------------
Lloyd C. Elam, M.D.
* Director June 25, 1996
- --------------------
Charles E. Exley, Jr.
* Director June 25, 1996
- --------------------
William N. Kelley, M.D.
* Director June 25, 1996
- --------------------
Samuel O. Thier, M.D.
* Director June 25, 1996
- --------------------
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 June 24,
1996.
ASTRA MERCK INC.
EMPLOYEE SAVINGS AND SECURITY PLAN
By: /s/ Linda E. Robertson
--------------------------------
Name: Linda E. Robertson
Title: Administrative Committee
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Exhibit 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 of Merck & Co., Inc., of our report dated May 24, 1996
appearing on page 2 of the Report of the Astra Merck Inc. Employee Savings and
Security Plan on Form 11-K for the year ended December 31, 1995.
/s/ Price Waterhouse LLP
Price Waterhouse LLP
Philadelphia, PA
May 24, 1996
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Exhibit 99
ASTRA MERCK INC.
EMPLOYEE SAVINGS AND SECURITY PLAN
AMENDED AND RESTATED EFFECTIVE JANUARY 1, 1995
With amendments effective through July 1, 1996
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TABLE OF CONTENTS
Article Subject Matter Page
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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 12
3.01 Eligibility to Participate 12
3.02 Employee Elections 12
IV Contributions 13
4.01 Employee Contributions 13
4.02 Matching Contributions 14
4.03 Qualified Employer Contributions 15
4.04 Rollover Contributions 15
4.05 Timing of Contributions 15
4.06 Contingent Nature of Contributions 16
4.07 Exclusive Benefit; Refund of Contributions 16
V Limitations on Contributions 18
5.01 Calendar Year Limitation on Pre-Tax Contributions 18
5.02 Nondiscrimination Limitations on Pre-Tax
Contributions, After-Tax Employee Contributions
and Matching Contributions 18
5.03 Correction of Discriminatory Contributions 20
5.04 Annual Additions Limitations 22
VI Investment and Valuation of Trust Fund; 23
Maintenance of Accounts
6.01 Investment of Assets 23
6.02 Participant Investment Direction 23
6.03 Investment Elections 23
6.04 Change of Election 24
6.05 Transfers Between Investment Funds 24
6.06 Individual Accounts 24
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6.07 Valuations 25
6.08 Allocation to Individual Accounts 25
6.09 Valuation for Distribution 25
6.10 Transfer From Merck Plan 25
6.11 Fiduciary Responsibility 26
VII Vesting 27
7.01 Full and Immediate Vesting 27
VIII Benefit Distributions 28
8.01 Death Benefits 28
8.02 Benefits Upon Separation from Service 28
8.03 Withdrawals 28
8.04 Form of Benefit Payment 32
8.05 Provisions Applicable to Distributions 33
Other Than Automatic Distributions
8.06 Beneficiary Designation Right 34
8.07 Required Distribution Dates 35
8.08 Domestic Relations Orders 35
8.09 Post Distribution Credits 37
8.10 Direct Rollovers 37
IX Participant Loans 38
9.01 In General 38
9.02 Loans as Trust Fund Investments 38
X Provisions Relating to Top-Heavy Plans 42
10.01 Definitions 42
10.02 Determination of Top-Heavy Status 44
10.03 Top-Heavy Plan Minimum Allocation 44
10.04 Top-Heavy Plan Maximum Allocations 45
XI Administration 46
11.01 Plan Design Committee 46
11.02 Administrative Committee 46
11.03 Investment Committee 49
11.04 Exclusivity of Fiduciary Responsibility;
Employment of Advisors 49
11.05 Limitations on Obligations of Named Fiduciaries 49
11.06 Indemnification 49
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XII Trust Agreement 51
XIII Amendment and Termination 52
13.01 Amendment 52
13.02 Plan Termination 52
13.03 Complete Discontinuance of Employer 53
Contributions
13.04 Mergers and Consolidations of Plans 53
XIV Miscellaneous Provisions 54
14.01 Nonalienation of Benefits 54
14.02 No Contract of Employment 54
14.03 Severability of Provisions 54
14.04 Heirs, Assigns and Personal Representatives 54
14.05 Headings and Captions 54
14.06 Gender and Number 54
14.07 Controlling Law 55
14.08 Funding Policy 55
14.09 Title to Assets 55
14.10 Payments to Minors, Etc. 55
14.11 Lost Payees 55
14.12 Counterparts 55
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ARTICLE I
STATEMENT OF PURPOSE
Sec. 1.01 Purpose. Astra Merck Inc. (the "Company") adopted,
effective January 1, 1995, the Astra Merck Inc. Employee Savings and Security
Plan (the "Plan") for the benefit of Covered Employees of Participating
Employers. The Plan is now amended and restated to reflect certain clarification
amendments and design changes to the Plan. The Plan, as amended and restate,
shall be effective January 1, 1995, except as otherwise provided herein. 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 sections 401(k) and (m) of
the Code be satisfied as to those portions of the Plan represented by
contributions made pursuant to Participant Pre-Tax Contributions and After-Tax
Contributions 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 Pre-Tax Contributions for the Plan Year (excluding any
Pre-Tax Contributions that are (A) taken into account in determining the
Contribution Percentage described in Section 2.17, (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 or her behalf under all such arrangements
(excluding those that are not permitted to be aggregated under Treas. Reg.
Section 1.401(k)-1(b)(3)(ii)(B)) for the Plan Year, to (b) the Participant's
Compensation for the Plan Year. The "Actual Deferral Percentage" for a Covered
Employee who does not make Pre-Tax Contributions is zero.
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 2.07 or 5.04, sections 414(b) and (c) of
the Code shall be deemed modified by application of the provisions of section
415(h) of the Code, which substitutes the phrase "more than 50 percent" for the
phrase "at least 80 percent" in section 1563(a)(1) of the Code, which is then
incorporated by reference in sections 414(b) and (c).
Sec. 2.04 "After-Tax Contribution Account" shall mean so much
of a Participant's Account as consists of the Participant's After-Tax Employee
Contributions, plus amounts attributable to after-tax employee contributions
made under the Merck Plan which have been transferred to the Plan on behalf of
the Participant, including all earnings and accretions attributable thereto and
reduced by all losses attributable thereto, by all expenses chargeable
thereagainst and by all withdrawals and distributions therefrom.
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Sec. 2.05 "After-Tax Employee Contributions" shall mean the
portion of a Participant's Compensation which is contributed, in accordance with
Section 4.01(a), to the Plan on behalf of a Participant by a Participating
Employer.
Sec. 2.06 "Alternate Payee" shall mean the person entitled to
receive payments of benefits under the Plan pursuant to a QDRO.
Sec. 2.07 "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 Pre-Tax Contributions
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. 2.08 "Astra AB ADR Fund" shall mean the Investment Fund
consisting of American Depository Receipts of Astra AB and cash. For the
purposes hereof, an "American Depository Receipt" shall mean a right to purchase
one ordinary share of the stock of Astra AB.
Sec. 2.09 "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. 2.10 "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. 2.11 "Beneficiary" shall mean the person or entity
designated or otherwise determined to be such in accordance with Section 8.06.
Sec. 2.12 "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 or her Account.
Sec. 2.13 "Board of Directors" shall mean the board of
directors of Astra Merck Inc.
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Sec. 2.14 "Code" shall mean the Internal Revenue Code of 1986,
as the same may be amended from time to time, and any successor statute of
similar purpose.
Sec. 2.15 "Committees" shall mean the Plan Design Committee,
the Administrative Committee and the Investment Committee specified in Article
XI.
Sec. 2.16 "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 or she 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 2.07 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 Pre-Tax Contributions and
other amounts excluded from gross income under sections 125, 402(e)(3), 402(h)
or 403(b) of the Code.
(e) for purposes of the definition of "Highly Compensated
Employee", "compensation," as such word is defined in section 415(c)(3) of the
Code, paid to the Employee by a Participating Employer or Affiliated Company for
the applicable period, but including amounts that are excluded from gross income
under section 125, 402(e)(3), 402(h) or 403(b) of the Code.
(f) with respect to any Plan Year, only the first $150,000, or
such other amount as may be applicable under section 401(a)(17) of the Code, of
the amount otherwise
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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 2.07 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. 2.17 "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 or her behalf under all such plans (excluding those
that are not permitted to be aggregated under Treas. Reg. Section 1.401(m)-
1(b)(3)(ii)) for the Plan Year, to (b) the Participant's Compensation for the
Plan Year. For purposes of determining the Contribution Percentage, the
Administrative Committee may also take Pre-Tax Contributions into account, in
accordance with Treasury regulations. The "Contribution Percentage" for a
Covered Employee who does not make After-Tax Employee Contributions is zero.
Sec. 2.18 "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 leased employee within the meaning of
section 414(n) or 414(o) of the Code.
Sec. 2.19 "Effective Date" shall mean January 1, 1995.
Sec. 2.20 "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 or she is a leased employee
with respect to whose services such Participating Employer or Affiliated
Company is the recipient, within the meaning of section
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414(n) or 414(o) of the Code, but to whom Code section 414(n)(5) does not apply.
Sec. 2.21 "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 2.25.
Sec. 2.22 "Enrollment Date" shall mean the first day of each
January and each July. Effective July 1, 1996, Enrollment Date shall mean the
first date on which an Employee completes an Hour of Service as a Covered
Employee. 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. 2.23 "ERISA" shall mean the Employee Retirement Income
Security Act of 1974, as amended.
Sec. 2.24 "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 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
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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 or her 55th birthday.
Sec. 2.25 "Hour of Service" shall mean, for any Employee an
hour for which he or she is directly or indirectly paid or entitled to payment
by a Participating Employer or an Affiliated Company, for the performance of
employment duties.
Sec. 2.26 "Investment Fund" shall mean any of the funds
established pursuant to Section 6.02 for the investment of the assets of the
Trust Fund.
Sec. 2.27 "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. 2.28 "Limitation Year" shall mean the calendar year.
Sec. 2.29 "Matching Contribution" shall mean a contribution
made by a Participating Employer pursuant to Section 4.02.
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Sec. 2.30 "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. 2.31 "Merck Common Stock Fund" shall mean the Investment
Fund consisting of shares of Merck & Co., Inc. Common Stock and cash.
Sec. 2.32 "Merck Plan" shall mean the Merck & Co., Inc.
Employee Savings and Security Plan, as in effect on December 31, 1994.
Sec. 2.33 "Named Fiduciary" shall mean 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 or her under the Plan or the
Trust Agreement. Any fiduciary, if so appointed, may serve in more than one
fiduciary capacity.
Sec. 2.34 "Normal Retirement Age" shall mean a Participant's
65th birthday.
Sec. 2.35 "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. The term "Participant" shall include
Active Participants (those Participants who are currently Covered Employees and
who have become Active Participants pursuant to Section 3.01), Inactive
Participants (those Employees who previously were Active Participants but
currently are not because they are no longer employed in a "Covered Employee"
status), and Vested Participants (those former Active or Inactive Participants
who have a vested interest under the Plan).
Sec. 2.36 "Participating Employer" shall mean Astra Merck Inc.
and each Affiliated Company that adopts this Plan and joins in the corresponding
Trust Agreement with the consent of the Board of Directors. Participating
Employer shall be considered an Employer only with respect to such period as the
Affiliated Company actively participates in the Plan.
Sec. 2.37 "Period of Severance" shall mean the period
beginning on a person's Severance Date and ending on the first date on which he
or she again performs an Hour of Service as described in Section 2.25.
Sec. 2.38 "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
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amended.
Sec. 2.39 "Plan Year" shall mean the calendar year.
Sec. 2.40 "Pre-Tax Contribution Account" shall mean so much of
a Participant's Account as consists of his or her Pre-Tax Contributions under
the Plan and the Participant's pre-tax contributions under the Merck Plan, which
have been transferred to the Plan, including all earnings and accretions
attributable thereto, and reduced by all losses attributable thereto, by all
expenses chargeable thereagainst and by all withdrawals and distributions
therefrom.
Sec. 2.41 "Pre-Tax Contributions" 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. 2.42 "Qualified Employer Contribution" shall mean a
contribution made by a Participating Employer pursuant to Section 4.03.
Sec. 2.43 "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. 2.44 "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. 2.45 "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. 2.46 "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. 2.47 "Rollover Account" shall mean so much of a
Participant's Account as consists of his or her Rollover Contributions under the
Plan and the Participant's rollover contributions under the Merck Plan which
have been transferred to the Plan, including all earnings and accretions
attributable thereto, and reduced by all losses attributable thereto, by all
expenses chargeable thereagainst and by all withdrawals and distributions
therefrom.
Sec. 2.48 "Rollover Contributions" shall mean amounts
contributed by a Covered Employee pursuant to Section 4.04.
Sec. 2.49 "Severance Date" shall mean the earlier of (a) the
date the
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Employee dies or retires, quits or is discharged from active service with 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 (including an unpaid leave of up to 12 weeks granted
under the Family and Medical Leave Act of 1993); 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 or on leave
of absence under a Participating Employer's or Affiliated Company's uniform
leave policy, 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 or her release from active
military duty or such shorter or longer period during which his or her
reemployment rights are protected by law or under the uniform leave policy. If
an Employee is absent from active employment for maternity or paternity reasons
beyond the first anniversary of the first date of such absence, his or her
Severance Date shall be the second anniversary of such first date of absence.
Nothing herein shall be deemed to expand the personnel policies of a
Participating Employer or Affiliated Company.
Sec. 2.50 "Termination of Employment" shall mean, for any
Employee, his or her death, retirement, resignation, discharge or any absence
that causes him or her to cease to be an Employee.
Sec. 2.51 "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 qualify the Employee for
benefits under the Astra Merck Inc. Long Term Disability Plan.
Sec. 2.52 "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), pursuant to the Employee Lease
Agreement dated as of November 1, 1994, between Merck & Co, Inc. and the
Company.
Sec. 2.53 "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. 2.54 "Trustee" shall mean the party or parties so
designated pursuant to the Trust Agreement and each of their respective
successors.
Sec. 2.55 "Trust Fund" shall mean all of the assets of the
Plan held by the
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Trustee under the Trust Agreement.
Sec. 2.56 "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. 2.57 "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 or her 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 or she 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 or she again performs an Hour of Service shall be
taken into account, if such day is within twelve (12) consecutive months of the
date his or her 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 or her completion of one
Year of Employment (effective July 1, 1996, the Enrollment Date), if he or she
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 or
her completion of one Year of Employment (effective July 1, 1996, the Enrollment
Date), if he or she 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 or her completion of one Year of Employment (effective July 1,
1996, the Enrollment Date), 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 or she is a Covered
Employee (effective July 1, 1996, the first date on which he or she becomes a
Covered Employee).
(c) For purposes of this Article III, the Enrollment Date
shall be each January 1 and July 1 (effective July 1, 1996, the first date on
which an Employee completes an Hour of Service as a Covered Employee) 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 Pre-Tax Contributions 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 Pre-Tax Contributions and/or After-Tax
Employee Contributions pursuant to Section 4.01 effective as of the first date
he or she may so elect as described in the preceding sentences, he or she may
thereafter elect to make Pre-Tax Contributions and/or After-Tax Employee
Contributions commencing on any subsequent Enrollment Date on which he or she 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 or her 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 or her Compensation
payable with respect to any payroll period, rounded to the nearest whole dollar
each month. Each Participant must designate his or her contributions to the Plan
as Pre-Tax Contributions 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 or her
contributions as Pre-Tax Contributions, 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 Pre-Tax Contribution 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 contributions shall be
designated as an After-Tax Employee Contribution. The Pre-Tax Contributions and
After-Tax Employee Contributions amounts set forth in any 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 sections 401(k) or 401(m)
of the Code. A Participant who is incurring a Termination of Employment can only
make a contribution for his or her final payroll period, if the Participant is
being compensated for the entire final payroll period.
(b) Increase in or Reduction of Pre-Tax Contributions and/or
After-Tax Employee Contributions. An Active Participant may increase or reduce
the rate of his or her Pre-Tax Contributions and After-Tax Employee
Contributions, within the limits described in Section 4.01(a), and/or may change
the percentage of his or her contributions designated as Pre-Tax Contributions
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
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 must be submitted to the benefits department no later than
the twenty-eighth of the month preceding the month in which the
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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 or 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 or 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) or (5) above or whose contributions have been voluntarily
suspended under paragraph (1) 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 pay period as to which 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 pay period as to which he/she
wishes to resume contributions.
(d) Contribution and Allocation of Pre-Tax Contribution 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
Pre-Tax Contributions 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 Pre-Tax Contribution Account and
After-Tax Employee Contribution Account of each Participant the Pre-Tax
Contributions and After-Tax Employee Contributions amounts contributed by the
Participating Employer to the Plan by reason of any such election in force with
respect to that Participant.
Sec. 4.02 Matching Contributions. Subject to the limitations
described in Article V, each Participating Employer shall make Matching
Contributions as follows:
(a) Amount of Matching Contributions. For each pay 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
Pre-Tax Contributions
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and/or After-Tax Employee Contributions during that pay period, an amount equal
to 50% (effective July 1, 1996, 2/3) of each such Participant's Pre-Tax
Contributions and/or After-Tax Employee Contributions for the pay period which
are not in the aggregate in excess of five percent (5%) (effective July 1, 1996,
six percent (6%)) of the Participant's Compensation for the pay period from that
Participating Employer.
There shall be no Company Matching Contribution with respect
to Rollover 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) Pay Period. For purposes of this Section, "pay period"
shall mean each portion of the Plan Year for which Matching Contributions are
made by the Participating Employer.
Sec. 4.03 Qualified Employer Contributions. Subject to the
limitations described in Article V, the Participating Employers may, in their
discretion, make Qualified Employer Contributions for a Plan Year, which shall
be allocated as of the last day of the Plan Year for which such contributions
are made, either (1) pro rata based on Compensation for the Plan Year or (2) pro
rata on the basis of Pre-Tax Contributions 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. If permitted by the
Committee in its sole discretion, the Plan shall accept, as "Rollover
Contributions" made on behalf of any Covered Employee, cash equal to (a) all or
a portion of the amount received by the Covered Employee as a distribution from
(either directly or through a conduit individual retirement account), or (b) an
amount transferred directly to the Plan (pursuant to section 401(a)(31) of the
Code) on the Covered Employee's behalf by the trustee of, another qualified
trust forming a part of a plan described in section 401(a) of the Code, but only
if the deposit qualifies as a tax-free rollover as defined in section 402 of the
Code as determined in accordance with procedures established by the Committee
and it 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 or her Rollover Account.
Sec. 4.05 Timing of Contributions. Matching Contributions made
for any
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Plan Year under this Article shall be paid 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 Pre-Tax Contributions, 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 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.
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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 Pre-Tax Contributions.
(a) Notwithstanding anything contained herein to the contrary,
Pre-Tax Contributions 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 or her Pre-Tax Contributions
under this Plan (reduced by Pre-Tax Contributions previously distributed
pursuant to Section 5.03(a) or returned to the Participant pursuant to Section
5.04) when added to his or her 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 Pre-Tax Contributions 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
or her Pre-Tax Contributions together with his or her 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 Pre-Tax Contributions 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 Pre-Tax Contributions 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 Pre-Tax
Contributions, After-Tax Employee Contributions and Matching Contributions.
(a) Pre-Tax Contribution Limitations. With respect to Pre-Tax
Contributions for any Plan Year, one of the following tests must be satisfied:
(1) The Average Actual Deferral Percentage for Active
Participants who are Highly Compensated Employees for the Plan Year shall not
exceed the
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<PAGE> 23
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
(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.
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(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 2.24(e) shall be
determined by aggregating the Compensation and Pre-Tax Contributions, 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, Pre-Tax Contributions, 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 Pre-Tax
Contributions, 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 Pre-Tax Contributions for any Plan Year, the Actual
Deferral Percentage of the Highly Compensated Employee with the highest Actual
Deferral Percentage shall be reduced until the appropriate nondiscrimination
tests are satisfied, or until the Actual Deferral Percentage of such Highly
Compensated Employee is equal to the Actual Deferral Percentage of the Highly
Compensated Employee with the next highest Actual Deferral Percentage. This
process shall be repeated until the nondiscrimination tests of Section 5.02(a)
are satisfied. The Actual Deferral Percentage of any Highly Compensated Employee
which must be reduced pursuant to this subsection (a) shall be reduced within
twelve (12) months of the close of the Plan Year with respect to which the
reduction applies, and the provisions of Section 5.01(b) regarding the
forfeiture of related Matching Contributions shall apply. For purposes of
determining the necessary reduction, Pre-Tax Contributions 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
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highest Contribution Percentage. This process shall be repeated until the
nondiscrimination tests of Section 5.02(b) are satisfied. The Contribution
Percentage of any Highly Compensated Employee which must be reduced pursuant to
this subsection (b) shall be reduced, within twelve (12) months of the close of
the Plan Year with respect to which the reduction applies, by (1) first,
distributing the Highly Compensated Employee's After-Tax Employee Contributions
to the extent such contributions do not form the basis for determining the
Employee's Matching Contributions under Section 4.02, (2) then, by distributing
the Employee's excess Matching Contributions, and (3) then, by distributing the
Highly Compensated Employee's After-Tax Employee Contributions not described in
clause (1). The reduction provided by this Section shall be determined after the
Administrative Committee determines whether to recharacterize any Pre-Tax
Contributions as After-Tax Employee Contributions (within the meaning of Treas.
Reg. Sec. 1.401(m)-1(e)(2)(ii)).
(c) Any distribution, forfeiture or recharacterization of
Pre-Tax Contributions, 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, 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 2.24(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.
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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 Pre-Tax Contributions, 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 Pre-Tax Contributions, After-Tax Employee
Contributions, Qualified Employer Contributions and/or Matching Contributions
are determined to be excess under this Section, such Pre-Tax Contributions
and/or After-Tax Employee Contributions, with income (or loss) thereon, shall be
distributed to the Participant as soon as administratively practicable.
(b) In no event shall the amount allocated to the Account of
any Participant for any Limitation Year cause the sum of the "defined
contribution fraction" and the "defined benefit fraction," as such terms are
defined in section 415(e) of the Code, to exceed 1.0, or such other limitation
as may be applicable under section 415 of the Code with respect to any
combination of qualified plans without disqualification of any such plan. In the
event that the amount tentatively available for allocation to the Account of any
Participant in any Limitation Year exceeds the maximum amount permissible
hereunder, benefits under the defined benefit plan or plans in which the
Participant is participating shall be adjusted to the extent necessary to
satisfy the requirements of section 415(e) of the Code.
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ARTICLE VI
INVESTMENT AND VALUATION OF TRUST FUND;
MAINTENANCE OF ACCOUNTS
Sec. 6.01 Investment of Assets. All existing assets of the
Trust Fund and all future contributions shall be invested by the Trustee in
accordance with the terms of the Trust Agreement.
Sec. 6.02 Participant Investment Direction. The Investment
Committee shall designate the available Investment Funds to which a Participant
shall direct the investment of amounts credited to his or her 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. When authorized by the Investment
Committee, this portfolio consists of American Depository Receipts 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 factors 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 or
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, the investment of contributions made
on his or her behalf in any one or more of the available Investment Funds,
subject to such limitations as the Administrative
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Committee may prescribe. The investment elections must be expressed in whole
percentages of the contributions (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, or are
made on his or her behalf, to the Plan at any one time.
Sec. 6.04 Change of Election. A Participant may change the
Investment Fund(s) in which his or her future contributions are invested by
calling the Trustee prior to 4 p.m. (ET) on any Business Day, giving his or 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 Funds in which a Participant's future contributions are to
be invested 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 or her Account is invested by calling
the Trustee, giving the information required, 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 or her Account
from one or more Investment Funds to other Investment Funds, and if the
Participant completes his or 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,
prior to July 1, 1996, a Participant may not transfer any part of his or her
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 Participant, as applicable, a Pre-Tax
Contribution 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
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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 or her 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 or her 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 or units and fractional shares
or units 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 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
or her 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 henceforward be treated as a loan from the Plan. Amounts transferred
from the Merck Plan to the Plan on behalf of any Participant shall be invested
upon such transfer among the available Investment Funds as the Participant shall
direct in writing on such form, at such time in advance, and in accordance with
such other
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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 Section2550.404c-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 or her Account, subject to the provisions of Sections 4.06, 4.07
and Article V.
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ARTICLE VIII
BENEFIT DISTRIBUTIONS
Sec. 8.01 Death Benefits. Subject to Section 9.02(e), in the
event of a Participant's death, his or her Beneficiary shall be entitled to
receive a death benefit in a lump sum equal to the balance of his or her Account
payable to the Participant's Beneficiary as soon as practicable thereafter.
Sec. 8.02 Benefits Upon Separation from Service. Subject to
Section 9.02(e) and except as provided in Section 8.04(a) or (b), the Plan
benefit payable to a Participant upon such Participant's Termination of
Employment for reasons other than death, shall be equal to the balance of his or
her Account, 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 consent of the Participant in accordance with procedures
established by the Committee. If the Participant does not so consent, then
distribution will be deferred until the Participant consents 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 or she attains Normal
Retirement Age must be made within the 90 day period ending on the Benefit
Payment Date and in no event earlier than the date the Committee provides the
Participant with written information relating to his or her right to defer
payment until his or her Normal Retirement Age, the modes of payment available
to him, the relative values of each and his or her right to make a direct
rollover as set forth in Section 8.10. 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 or her right to a 30 day period to make a decision
regarding the distribution, the Participation affirmatively elects a
distribution.
Sec. 8.03 Withdrawals. A Participant, while still employed,
may request a withdrawal from his or her 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 or her 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
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(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 (including room and board) for the next twelve (12) months of
post-secondary education for the Participant, his or her spouse, children or
dependents;
(D) the need to prevent the eviction of the
Participant from his or her principal residence or foreclosure on the mortgage
of his or her principal residence; or
(E) such other circumstances or events as
the Administrative Committee determines to result in an immediate and heavy
financial need.
(2) Prior to July 1, 1996, 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.
(3) Prior to July 1, 1996, if the Participant
withdraws any amount from his or her Pre-Tax Contribution 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 Pre-Tax Contributions under
this
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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 or her receipt of the withdrawal; and
(B) in the calendar year next following the
calendar year of such withdrawal, may not make Pre-Tax Contributions 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 Pre-Tax
Contributions under this Plan and elective deferrals under any other qualified
plan made by the Participant during the calendar year of the withdrawal.
(4) Notwithstanding Section 8.2(a)(2) and Section 8.2(a)(3),
effective July 1, 1996, whether a distribution is necessary to satisfy the
financial need of a Participant will be determined by the Administrative
Committee on the basis of all relevant facts and circumstances. A distribution
will not be treated as necessary to satisfy an immediate and heavy financial
need to the extent the amount of the distribution is in excess of the amount
required to relieve the financial need of the Participant or to the extent such
need may be satisfied from other resources that are reasonably available to the
Participant. This determination may take into account, at the Participant's
election, federal, state and local taxes or penalties reasonably anticipated to
result from the distribution. A distribution generally may be treated as
necessary to satisfy a financial need if the Administrative Committee relies on
the Participant's representation (unless the Administrative Committee has actual
knowledge to the contrary) that the need cannot be relieved:
(A) through reimbursement or compensation by
insurance or otherwise;
(B) by reasonable liquidation of the
Participant's assets, to the extent such liquidation would not itself cause an
immediate and heavy financial need;
(C) by cessation of Pre-tax Contributions;
(D) by other distributions or nontaxable (at
the time of the loan) loans from the Plan or other plans maintained by the
Employer or any other employer or by borrowing from other commercial sources on
reasonable commercial grounds, to the extent such loan would not itself cause an
immediate and heavy financial need.
A Participant's resources shall include the resources of the
Participant's spouse and minor children, to the extent that those resources are
reasonably
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available to the Participant.
(5) 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 or her After-Tax Employee Contribution Account,
(iii) then from his or her Matching Contribution Account, and (vi) then from his
or her Pre-Tax Contribution Account; provided, however, that:
(A) the aggregate amount of a Participant's
withdrawals from his or her Pre-Tax Contribution Account shall not exceed the
total of his or her Pre-Tax Contributions, exclusive of earnings attributable
thereto, except earnings (i) which are attributable to pre-tax contributions in
his or her account under the 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 or her 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 or her
(1) After-Tax Employee Contribution Account, (2) Rollover Contribution Account,
(3) Company Matching Contribution Account subject to paragraph (e) of this
Section 8.03, and (4) if the Participant has attained age 59-1/2 or incurred a
Total Disability, his or her Pre-Tax Contribution 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 or she 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. The order in which
monies will be disbursed from a Participant's Account shall be in accordance
with the provisions of Section 8.05(b).
(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
being subject to the rules under paragraph (e) of this Section 8.03 or (2) $500.
(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) Five-Year Participation or Two-Year Contribution
requirement. A Participant who has less than five years of participation in the
Plan from the date of his or her enrollment may not withdraw, in an in-service
distribution, any Matching Contributions (without earnings attributable
thereto), which were contributed during the Plan Year in which the distribution
is to be valued or during either of the two preceding Plan Years,
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unless such withdrawal would qualify as a hardship withdrawal pursuant to
paragraph (a) of this Section 8.03.
(f) Rules Applicable to All Withdrawals.
(1) All withdrawals shall be made by filing a request
with the Administrative Committee at such times and in such manner as the
Administrative Committee may prescribe, and shall be based on the value of the
affected portion of the Participant's Account as of the most recent Valuation
Date in such manner as the Administrative Committee shall provide.
(2) All withdrawals shall be made in a single sum
payment on a pro-rata basis from all of 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 or
her Account pledged as security for a loan 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 or her Account balance in accordance
with one of the following methods of payment:
(1) in a lump sum following the Participant's
Termination of Employment; or
(2) in a lump sum in 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), to
request a distribution of his or her Account balance no later than the last
business day of the second month following the month in which he or she incurs a
Termination of Employment, then his or her 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 or her entire Account balance only, in accordance
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with the provisions of Section 8.05. A Participant who has not taken a
distribution at the time he or she attains Normal Retirement Age and whose
Account balance is not already subject to a distribution election hereunder,
shall have his or her Account balance valued following his or her 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 or her
benefit has commenced to be paid in installments pursuant to subsection (a)
above and his or her Beneficiary is his or her spouse, benefits payable to such
spouse as Beneficiary pursuant to Section 8.01 shall be paid to the spouse in
the same installments as in effect prior to the Participant's death; provided,
however, that the spouse may at any time thereafter elect, in writing on a form
prescribed by the 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 or she 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 or her closest to but not over the
dollar amount he or she 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
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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 or her spouse if:
(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 or her designation of a Beneficiary or change his or her
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 a form satisfactory to the Administrative Committee. Each
Participant shall be entitled to change his or her 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
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(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. Such spouse's consent shall be irrevocable,
unless expressly made revocable. The consent of a spouse in accordance with this
subsection (c) shall not be effective with respect to any subsequent spouse of
the Participant.
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 or her Normal Retirement Age or has a Termination of
Employment, whichever occurs last. The failure of a Participant to apply for his
or her benefit pursuant to Section 8.02 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 or her 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 or her 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 or her
Required Beginning Date;
(c) distributions under the Plan shall otherwise comply with
the requirements of section 401(a)(9) of the Code and the regulations
thereunder, including the minimum distribution incidental benefit requirements
of proposed Treas. Reg. Section 1.401(a)(9)-2; and
(d) no distribution shall be made from a Participant's Pre-Tax
Contribution 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.
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(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 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 other election, privilege, option or direction rights of the Participant
under the Plan except as specifically provided in the QDRO, or (C) 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 or her 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
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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 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 or she is an Employee, he or she
has reached his or her 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 or she is an Employee, he or she
has reached his or her 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 such manner 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 or her surviving spouse or his or her
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 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
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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 the Administrative Committee by the twenty-eighth 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 thirty (30) days of such Termination
of Employment (other than a Participant who continues to be a party in
interest);
(2) the loan is not repaid by the time the promissory
note matures;
(3) the Participant attempts to revoke any payroll
withholding authorization for repayment of the loan;
(4) the Participant fails to pay any installment
(plus any additional interest as may be prescribed by the terms of the
promissory note) within sixty (60) days after the due date for Participants who
are Employees, and within thirty (30) days for Participants who are no longer
Employees;
(5) the Participant fails to execute a revised
promissory note pursuant to subsection (d); or
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(6) distributions under Article VIII to a Participant
who has reached his or her 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 or her 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 or her Beneficiary in the
event of his or her 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 or her Beneficiary from the amount of his or
her Account pledged as security for the loan, and any other security pledged
shall be sold by the Trustee at public or private sale as soon as is practicable
after such default. In the case of a benefit which becomes payable pursuant to
Section 8.01 or 8.02, the deduction described in the preceding sentence shall
occur on the earliest date following such default on which the Participant or
Beneficiary could receive payment of such benefit, had the proper application
been filed or election been made, regardless of whether or not payment is
actually made to the Participant or Beneficiary on such date. In the case of a
benefit which becomes payable under any other provision, the deduction shall
occur on the date such benefit is paid to the Participant. The proceeds of the
sale of any security shall first be applied to pay the expenses of conducting
the sale, including reasonable attorneys' fees, and then to pay any sums due
from the borrower to the Trust Fund, with such payment to be applied first to
accrued interest and then to principal. The Participant shall remain liable for
any deficiency, and any surplus remaining shall be paid to the Participant. Once
a Participant defaults on a Plan loan, he/she may not apply for another Plan
loan for three years from the date of the default. Any Participant who defaults,
on two Plan loans is precluded from taking another Plan loan.
(f) Loan Statement. Every Participant receiving a loan
hereunder will receive a statement from the 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 purposes, or would
imperil the status of the Plan or any part thereof under section 401(k) of the
Code.
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(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. After being outstanding for at
least six months, a loan may be prepaid in $1000 increments (or the balance of
the loan, if less) 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, loan repayments shall be
credited to the Investment Funds in the same manner and in the same proportion
as the Participant directs for his or her Pre-Tax Contributions and/or After-Tax
Employee Contributions.
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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 or her 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 or her ownership interest in the Plan Year being
tested and the preceding four (4) Plan Years was at all times less than one-half
of one percent (1/2%) in value of any of the entities forming the Participating
Employer and Affiliated Companies.
(3) A five-percent (5%) owner (within the meaning of
section
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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 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
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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) 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
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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 or her 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:
(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
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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 of Directors, 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
(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.
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(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 or her claim for review.
A claimant or his or her 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 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.
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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 it,
including issuing such directions, and the fiduciary receiving the directions
shall have sole responsibility for the functions assigned to it, 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.
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
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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 in connection with any action to
which he or she may be a party by reason of his or her service as a Named
Fiduciary except in relation to matters as to which he or she shall be adjudged
in such action to be personally guilty of gross negligence or willful misconduct
in the performance of his or her 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 or she 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. or of Astra AB (if the Astra AB ADR Fund is
then one of the Investment Funds), 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 all such
instructions, the Trustee shall vote such shares as instructed. If the
Investment Committee does not receive instructions from a Participant with
respect to any shares of Merck Common Stock and/or Astra AB credited to the
Participant's Account Balance, the Investment Committee shall not vote such
shares.
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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 or she 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 of 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 or her credit in his
or her 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 Participating Employers
to which the termination applies, subject, however, to the provisions of Section
13.03 hereof. Upon termination of the Plan, Accounts shall be distributed in
accordance with applicable law.
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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 or she would have been entitled to receive immediately before
such merger, consolidation or transfer in the Plan in which he or she 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 or she 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 8.08 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 unenforceability
shall not affect any other provisions hereof, and the Plan shall be construed
and enforced as if such provisions had not been included.
Sec. 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 8.08) 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 otherwise clearly
indicated by context, the masculine and the neuter shall include the feminine
and the neuter, the singular shall include the plural, and vice-versa.
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Sec. 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.
Attest: By:
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55
