<PAGE>
As filed with the Securities and Exchange Commission on May 19, 1999
Registration No. 333-**
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------------------
FORM S-8
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
---------------------------
PHARMACIA & UPJOHN, INC.
(Exact name of company as specified in its charter)
Delaware 98-0155411
(State or Other Jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or Organization)
95 Corporate Drive
Bridgewater, New Jersey 08807-0995
(Address of principal executive offices) (Zip Code)
Pharmacia & Upjohn, Inc.
Savings Plus Plan
(Full title of the plan)
Don W. Schmitz
Vice President, Associate General Counsel &
Corporate Secretary
Pharmacia & Upjohn, Inc.
95 Corporate Drive
Bridgewater, New Jersey 08807-0995
(Name and address of agent for service)
(908) 306-4400
(Telephone number, including area code, of agent for service)
---------------------------
Copy of all communications to:
Robert J. Lichtenstein
Morgan, Lewis & Bockius LLP
1701 Market Street
Philadelphia, Pennsylvania 19103-2921
(215) 963-5000
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
======================================================================================================================
Proposed maximum Proposed maximum
Title of securities Amount to be offering price aggregate Amount of
to be registered registered (1) per share (2) offering price (2) registration fee (2) (3)
<S> <C> <C> <C> <C>
Common Stock, $0.01 4,000,000 $52.094 $208,376,000 $57,928.53
par value
======================================================================================================================
</TABLE>
(1) This Registration Statement covers shares of Common Stock of Pharmacia
& Upjohn, Inc. which may be offered or sold pursuant to the Pharmacia &
Upjohn, Inc. Savings Plus Plan. Pursuant to Rule 416 under the
Securities Act of 1933, as amended (the"Securities Act"), this
Registration Statement also covers such additional shares as may
hereinafter be offered or issued to prevent dilution resulting from
stock splits, stock dividends, recapitalizations or certain other
capital adjustments.
(2) Estimated pursuant to Paragraphs (c) and (h) of Rule 457 under the
Securities Act, solely for the purpose of calculating the registration
fee, based upon the average of the high and low sales prices of shares
of the Company's Common Stock on May 17, 1999, as reported on the New
York Stock Exchange.
(3) The registration fee of $57,928.53 was wired from the Company.
================================================================================
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENTS
Item 3. Incorporation of Documents by Reference.
The following documents filed with the U.S. Securities and
Exchange Commission (the "Commission") by Pharmacia & Upjohn, Inc. (the
"Company") (File No. 1-11557) pursuant to the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), are incorporated by reference in this Form S-8
Registration Statement (the "Registration Statement") and made a part hereof:
1. The Company's Annual Report on Form 10-K for the year ended
December 31, 1998 (the "1998 10-K");
2. The Company's Quarterly Report on Form 10-Q for the period
ended March 31, 1999; and
3. The description of the Common Stock contained in the Company's
Registration Statement on Form 8-A filed on October 24, 1995.
All documents and reports filed by the Company pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this
Registration Statement and prior to the filing of a post-effective amendment
which indicates that all securities offered hereby have been sold or which
deregisters all securities then remaining unsold shall be deemed to be
incorporated by reference herein and to be a part hereof from the date of filing
of such documents or reports. Any statement contained in a document incorporated
or deemed to be incorporated by reference herein shall be deemed to be modified
or superseded for purposes of this Registration Statement to the extent that a
statement contained herein or in any other subsequently filed document which
also is or is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any such statement so modified shall not be deemed to
constitute a part of the Registration Statement except as so modified and any
statement so superseded shall not be deemed to constitute a part of this
Registration Statement.
Independent Accountants
- -----------------------
The financial statements incorporated in this Prospectus by
reference to the Company's Annual Report on Form 10-K for the year ended
December 31, 1998 have been so incorporated in reliance on the report of
PricewaterhouseCoopers LLP, independent accountants, given on the authority of
said firm as experts in auditing and accounting. With respect to the unaudited
financial information of the Company for the three-month period ended March 31,
1999 incorporated by reference in this Prospectus, PricewaterhouseCoopers LLP
reported that they have applied limited procedures in accordance with
professional standards for a review of such information. However, their separate
report dated April 29, 1999 incorporated by reference herein states that they
did not audit and they do not express an opinion on that unaudited financial
information. Accordingly, the degree of reliance on their report on such
information should be restricted in light of the limited nature of the review
procedures applied. PricewaterhouseCoopers LLP is not subject to the liability
provisions of Section 11 of the Securities Act of 1933, as amended (the "Act"),
for their report on the unaudited financial information because that report is
not a "report" or a "part" of the registration statement prepared or certified
by PricewaterhouseCoopers LLP within the meaning of Sections 7 and 11 of the
Act.
II-1
<PAGE>
Item 4. Description of Securities.
Not Applicable
Item 5. Interests of Named Experts and Counsel.
Not Applicable
Item 6. Indemnification of Directors and Officers.
Section 145 of the Delaware General Corporation Law authorizes a
court to award, or a corporation's board of directors to grant, indemnity to
directors and officers in terms sufficiently broad to permit such
indemnification under certain circumstances for liabilities (including
reimbursement for expenses incurred) arising under the Securities Act. The
Company's Certificate of Incorporation and By-laws provide for indemnification
of its directors, officers, employees and other agents to the maximum extent
permitted by the Delaware General Corporation Law. In addition, the Company has
entered into Indemnification Agreements with its executive officers and
directors. The Company has also purchased and maintained insurance for its
officers, directors, employees or agents against liabilities which an officer, a
director, an employee or an agent may incur in his capacity as such.
Item 7. Exemption from Registration Claimed.
Not Applicable
Item 8. Exhibits.
<TABLE>
<CAPTION>
Exhibit Numbers Exhibit
----------------------------------------------------------------------------------------
<S> <C>
4 Restated Certificate of Incorporation and Restated By-laws of
Pharmacia & Upjohn, Inc. (incorporated by reference to Exhibits 4.1
and 4.2 to Pharmacia & Upjohn, Inc.'s Registration Statement on
Form S-8 filed May 3, 1996)
5.1 Opinion of Morgan, Lewis & Bockius LLP
15 Awareness Letter from PricewaterhouseCoopers LLP
23.1 Consent of PricewaterhouseCoopers LLP
23.2 Consent of Morgan, Lewis & Bockius LLP (included as part of
Exhibit 5.1)
24 Power of Attorney (included as part of the signature page)
99.1 Pharmacia & Upjohn, Inc. Savings Plus Plan
</TABLE>
Item 9. Undertakings.
The undersigned hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration
Statement:
II-2
<PAGE>
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the Registration
Statement (or the most recent post-effective
amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the
information set forth in the Registration Statement.
(iii) To include any material information with
respect to the plan of distribution not previously
disclosed in the Registration Statement or any
material change to such information in the
Registration Statement;
provided, however, that subparagraphs (a)(1)(i) and (a)(1)(ii) of
this section do not apply if the information required to be
included in a post-effective amendment by those subparagraphs is
contained in periodic reports filed with or furnished to the
Commission by the Company pursuant to Section 13 or Section 15(d)
of the Exchange Act that are incorporated by reference in the
Registration Statement.
(2) That, for the purpose of determining any liability under
the Securities Act, each such post-effective amendment shall be
deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering
thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered that remain
unsold at the termination of the offering.
The undersigned company hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the Company's
annual report pursuant to Section 13(a) or Section 15(d) of the Exchange Act
that is incorporated by reference in this Registration Statement shall be deemed
to be a new Registration Statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the Company pursuant to the foregoing provisions, or otherwise, the Company
has been advised that in the opinion of the Commission such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Company of expenses incurred or paid
by a director, officer or controlling person of the Company in the successful
defense of any action, suit or proceeding) is asserted by such director, officer
or controlling person in connection with the securities being registered, the
Company will, unless in the opinion of its counsel the matter has been settled
by controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as
expressed in the Securities Act and will be governed by the final adjudication
of such issue.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Company
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in Bridgewater, State of New Jersey on this 19 day of May, 1999.
PHARMACIA & UPJOHN, INC.
By: /S/
---------------------------------------------
Name: Fred Hassan
Title: President and Chief Executive Officer
Pursuant to the requirements of the Securities Act, this Registration
Statement has been signed below by or on behalf of the following persons in the
capacities and on the dates indicated.
Each person, in so signing, also makes, constitutes and appoints Fred
Hassan, Christopher Coughlin and Richard Collier, and each such officer acting
singly, his true and lawful attorney-in-fact, in his name, place and stead to
execute and cause to be filed with the Securities and Exchange Commission any or
all amendments to this Registration Statement, with all exhibits and any and all
documents required to be filed with respect thereto, and to do and perform each
and every act and thing necessary to effectuate the same.
<TABLE>
<CAPTION>
Name Title Date
- ---- ----- ----
<S> <C> <C>
/S/ President and Chief Executive May 19, 1999
- ------------------------------------------------- Officer
Fred Hassan
/S/ Executive Vice President and May 19, 1999
- ------------------------------------------------- Chief Financial Officer
Christopher Coughlin (Principal Financial Officer)
/S/ Senior Vice President (Principal May 19, 1999
- ------------------------------------------------- Accounting Officer)
Robert Thompson
/S/ Director May 19, 1999
- -------------------------------------------------
Richard H. Brown
- ------------------------------------------------ Director May 19, 1999
Frank C. Carlucci
/S/ Director May 19, 1999
- -------------------------------------------------
Gustaf A.S. Douglas
/S/ Director May 19, 1999
- -------------------------------------------------
M. Kathryn Eickhoff
</TABLE>
II-4
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
/S/ Director May 19, 1999
- ------------------------------
J. Soren Gyll
/S/ Director May 19, 1999
- ------------------------------
R.L. Berthold Lindquist
/S/ Director May 19, 1999
- ------------------------------
Olf G. Lund
/S/ Director May 19, 1999
- ------------------------------
C. Steven McMillan
/S/ Director May 19, 1999
- ------------------------------
William U. Parfet
/S/ Director May 19, 1999
- ------------------------------
Ulla B. Reinius
/S/ Director May 19, 1999
- ------------------------------
Bengt Samuelsson
</TABLE>
II-5
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit Numbers Exhibit
-----------------------------------------------------------------------------------------
<S> <C>
4 Restated Certificate of Incorporation and Restated By-laws of
Pharmacia & Upjohn, Inc. (incorporated by reference to Exhibits 4.1
and 4.2 to Pharmacia & Upjohn, Inc.'s Registration Statement on Form
S-8 filed May 3, 1996)
5.1 Opinion of Morgan, Lewis & Bockius LLP
15 Awareness Letter from PricewaterhouseCoopers LLP
23.1 Consent of PricewaterhouseCoopers LLP
23.2 Consent of Morgan, Lewis & Bockius LLP (included as part of
Exhibit 5.1)
24 Power of Attorney (included as part of the signature page)
99.1 Pharmacia & Upjohn, Inc. Savings Plus Plan
</TABLE>
II-6
<PAGE>
EXHIBIT 5.1
May 19, 1999
Pharmacia & Upjohn, Inc.
95 Corporate Drive
Bridgewater, New Jersey 08807-0995
Ladies and Gentlemen:
We have acted as counsel to Pharmacia & Upjohn, Inc., a Delaware corporation
(the "Company"), in connection with the preparation of a registration statement
on Form S-8 (the "Registration Statement") to be filed pursuant to the
Securities Act of 1933, as amended (the "Act") and relating to 4,000,000 shares
(the "Shares") of the Company's Common Stock, $0.01 par value per share (the
"Common Stock"). The Shares covered by this Registration Statement will be
issued pursuant to the Pharmacia & Upjohn, Inc. Savings Plus Plan (the "Plan").
We have examined the Registration Statement and such corporate records, statutes
and other documents as we have deemed relevant in rendering this opinion. As to
matters of fact, we have relied on representations of officers of the Company.
In our examination, we have assumed the genuineness of documents submitted to us
as originals and the conformity with originals of documents submitted to us as
copies thereof.
Based on the foregoing, it is our opinion that Shares originally issued by the
Company to participants in the Plan will be, when issued in accordance with the
terms of the Plan, validly issued, fully paid and nonassessable.
The opinion set forth above is limited to the General Corporation Law of the
State of Delaware.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement. In giving such consent, we do not thereby admit that we
come within the category of persons whose consent is required under Section 7 of
the Act or the rules or regulations of the Securities and Exchange Commission
thereunder.
Very truly yours,
Morgan Lewis & Bockius LLP.
<PAGE>
EXHIBIT 15
May 19, 1999
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Commissioners:
We are aware that our report dated April 29, 1999 on our review of interim
financial information of Pharmacia & Upjohn, Inc. (the "Company") as of and for
the three month period ended March 31, 1999, included in the Company's quarterly
report on Form 10-Q for the quarter then ended is incorporated by reference in
its Registration Statement on Form S-8 pertaining to the Pharmacia & Upjohn,
Inc. Savings Plus Plan dated May 19, 1999.
Very truly yours,
PRICEWATERHOUSECOOPERS LLP
<PAGE>
EXHIBIT 23.1
Consent of Independent Accountants
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 pertaining to the Pharmacia & Upjohn, Inc. Savings Plus
Plan of our report dated February 10, 1999 relating to the financial statements,
which appear in the 1998 Annual Report to Shareholders of Pharmacia & Upjohn,
Inc. (the "Company"), which is incorporated by reference in the Company's Annual
Report on Form 10-K for the year ended December 31, 1998. We also consent to the
reference to our firm under the caption "Independent Accountants."
PRICEWATERHOUSECOOPERS LLP
Florham Park, New Jersey
May 19, 1999
<PAGE>
EXHIBIT 99.1
PHARMACIA & UPJOHN, INC. SAVINGS PLUS PLAN
<PAGE>
PHARMACIA & UPJOHN, INC.
Savings Plus Plan
<PAGE>
ARTICLE 1
PURPOSE
In recognition of the services provided by certain key employees, the
Board of Directors of Pharmacia & Upjohn, Inc. ("P&U") hereby adopts a deferred
compensation plan (the "Plan") to make additional retirement benefits and
increased financial security, on a tax-favored basis, available to those
individuals, effective July 1, 1999. Under the Plan, the Board also intends to
provide a vehicle that will allow for additional future compensation to be paid
to these individuals so that such employees may be retained and their productive
efforts encouraged.
ARTICLE 2
DEFINITIONS
Account. "Account" means, with respect to a Participant, the account
established on the books of the Company pursuant to Section 5.1.
Affiliate. "Affiliate" means any firm, partnership, or corporation that
directly or indirectly through one or more intermediaries, controls, is
controlled by, or is under common control with P&U. "Affiliate" also includes
any other organization similarly related to P&U that is designated as such by
the Board.
Annual Incentive Deferral. "Annual Incentive Deferral" means the
portion of a Participant's Compensation based on the Company's annual incentive
plan, in which the Participant participates, that the Participant has elected to
defer pursuant to Article 4.
Base Salary Deferral. "Base Salary Deferral" means the portion of a
Participant's Compensation constituting base salary from the Company that the
Participant has elected to defer pursuant to Article 4.
Beneficiary. "Beneficiary" means the person or persons designated as
such in accordance with Section 10.3.
Board. "Board" means the Board of Directors of P&U.
Change of Control. "Change of Control" shall mean:
(1) the acquisition by any individual, entity or group (a "Person"), including
any "person" within the meaning of Section 13(d)(3) or 14(d)(2) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), of beneficiary
ownership within the meaning of Rule 13d-3 promulgated under the Exchange Act,
of 33% or more of either (i) the then outstanding shares of Common Stock of P&U
(the "Outstanding Company Common Stock") or (ii) the combined voting power of
the then outstanding securities of P&U entitled to vote generally in the
election of directors (the "Outstanding Company Voting Securities"): provided,
however, that the following acquisitions of Outstanding Company Common Stock or
Outstanding Company Voting Securities shall not constitute a Change of Control:
(A) any acquisition by P&U, (B) any acquisition by an employee
2
<PAGE>
benefit plan (or related trust) sponsored or maintained by P&U or any
corporation controlled by P&U, or (C) any acquisition by any corporation
pursuant to a reorganization, merger or consolidation involving P&U, if,
immediately after such reorganization, merger or consolidation, each of the
conditions described in clauses (i), (ii) and (iii) of subsection (3) of this
Section shall be satisfied; and provided further that, for purposes of clause
(A), if any Person (other than P&U or any employee benefit plan (or related
trust) sponsored or maintained by P&U or any corporation controlled by P&U)
shall become the beneficial owner of 33% or more of the Outstanding Company
Common Stock or 33% or more of the Outstanding Company Voting Securities by
reason of any acquisition of Outstanding Company Common Stock or Outstanding
Company Voting Securities by P&U and such Person shall, after such acquisition
by P&U, becomes the beneficial owner of any additional shares of the Outstanding
Company Stock or any additional Outstanding Voting Securities and such
beneficial ownership is publicly announced, such additional beneficial ownership
shall constitute Change in Control;
(2) individuals who, as of the date hereof, constitute the Board (the "Incumbent
Board") cease for any reason to constitute at least a majority of such Board;
provided, however, that any individual who becomes a director of P&U subsequent
to the date hereof whose election, or nomination for election by P&U's
stockholders, was approved by the vote of at least three-quarters of the
directors then comprising the Incumbent Board (either by a specific vote or by
approval of the proxy statement of P&U in which such person is named as a
nominee for director, without objection to such nomination) shall be deemed to
have been a member of the Incumbent Board; and provided further, that no
individual who was initially elected as a director of P&U as a result of an
actual or threatened election contest, as such terms are used in Rule 14a-11 of
Regulation 14A promulgated under the Exchange Act, or any other actual or
threatened solicitation of proxies or consents by or on behalf of any Person
other than the Board shall be deemed to have been a member of the Incumbent
Board;
(3) approval by the stockholders of P&U of a reorganization, merger or
consolidation involving P&U unless, in any such case, immediately after such
reorganization, merger or consolidation, (i) more than 50% of the then
outstanding shares of common stock of the corporation resulting from such
reorganization, merger or consolidation and more than 50% of the combined voting
power of the then outstanding securities of such corporation entitled to vote
generally in the election of directors is then beneficially owned, directly or
indirectly, by all or substantially all of the individuals or entities who were
the beneficial owners, respectively, of the Outstanding Company Common Stock and
the Outstanding Company Voting Securities immediately prior to such
reorganization, merger or consolidation and in substantially the same
proportions relative to each other as their ownership, immediately prior to such
reorganization, merger or consolidation, of the Outstanding Company Common Stock
and the Outstanding Company Voting Securities, as the case may be, (ii) no
Person (other than P&U, any employee benefit plan (or related trust) sponsored
or maintained by P&U or the corporation resulting from such reorganization,
merger or consolidation (or any corporation controlled by P&U), or any Person
which beneficially owned, immediately prior to such reorganization, merger or
consolidation, directly or indirectly, 33% or more of the Outstanding Company
Common Stock or the Outstanding Company Voting Securities, as the case may be)
beneficially
3
<PAGE>
owns, directly or indirectly, 33% or more of the then outstanding shares of
common stock of such corporation or 33% or more of the combined voting power of
the then outstanding securities of such corporation entitled to vote generally
in the election of directors and (iii) at least a majority of the members of the
board of directors of the corporation resulting from such reorganization, merger
or consolidation were members of the Incumbent Board at the time of the
execution of the initial agreement or action of the Board providing for such
reorganization, merger or consolidation; or
(4) (i) approval by the stockholders of P&U of a plan of complete liquidation or
dissolution of P&U or (ii) the sale or other disposition of all or substantially
all of the assets of P&U other than to a corporation with respect to which,
immediately after such sale or other disposition, (A) more than 50% of the then
outstanding shares of common stock thereof and more than 50% of the combined
voting power of the then outstanding securities thereof entitled to vote
generally in the election of directors is then beneficially owned, directly or
indirectly, by all or substantially all of the individuals and entities who were
the beneficial owners, respectively, of the Outstanding Company Common Stock and
the Outstanding Company Voting Securities immediately prior to such sale or
other disposition and in substantially the same proportions relative to each
other as their ownership, immediately prior to such sale or other disposition,
of the Outstanding Company Common Stock and the Outstanding Company Voting
Securities, as the case may be, (B) no Person (other than P&U, any employee
benefit plan (or related trust) sponsored or maintained by P&U or such
corporation (or any corporation controlled by P&U), or any Person which
beneficially owned, immediately prior to such sale or other disposition,
directly or indirectly, 33% or more of the Outstanding Company Common Stock or
the Outstanding Company Voting Securities, as the case may be) beneficially
owns, directly or indirectly, 33% or more of the then outstanding shares of
common stock thereof entitled to vote generally in the election of directors and
(C) at least a majority of the members of the board of directors thereof were
members of the Incumbent Board at the time of the execution of the initial
agreement or action of the Board providing for such sale or other disposition
(or were approved directly or indirectly by the Incumbent Board).
Code. "Code" means the Internal Revenue Code of 1986, as amended from
time to time.
Committee. "Committee" means the Compensation Committee appointed by
the Board which shall administer the Plan and which also may act for P&U, the
Company or the Board in making decisions and performing specified duties under
the Plan. The Committee may delegate any or all of its duties under the Plan in
which case the term "Committee" shall apply to the Committee's delegate to the
same extent as it would have applied to the Committee.
Company. "Company" means P&U and any Affiliate which is authorized by
the Board to adopt the Plan and to cover its Eligible Employees and whose
designation as such has become effective upon acceptance of such status by the
board of directors of the Affiliate. An Affiliate may revoke its acceptance of
such designation at any time, but until such acceptance has been revoked, all
the provisions of the Plan and amendments
4
<PAGE>
thereto shall apply to the Eligible Employees of the Affiliate. In the event the
designation is revoked by the board of directors of an Affiliate, the Plan shall
be deemed terminated only with respect to such Affiliate.
Company Contributions. "Company Contributions" are those credited to
the Participant's Account by the Company in an amount equal to 50% of the
Participant's Base Salary Deferral not in excess of 5% of the portion of the
Participant's Compensation consisting of base salary and in excess of the
limitation of Section 401(a)(17) of the Code, paid to the Participant in the
Plan Year of reference. The "Company Contributions" shall be deemed to have been
made in phantom shares of the Voting Securities valued on the basis of the
closing price of the Voting Securities on the principal exchange on which the
voting Securities are traded on the day the Company Contribution is credited to
the Participant's Account.
Compensation. "Compensation" means the sum of an Eligible Employee's
base salary and such individual's annual incentive or sales incentive, as
applicable, to be paid by the Company to the Eligible Employee. In determining
"Compensation" the Participant's contributions under this Plan and under any
other plan of deferred compensation maintained by the Company or an Affiliate
shall be taken into account but there shall not be taken into account any
one-time or other special bonuses, Company contributions to benefit plans, all
fringe benefits, moving and relocation expenses and other forms of welfare
benefits or long-term incentive payments.
Compensation Deferral. "Compensation Deferral" means that portion of
Compensation as to which a Participant has made an annual irrevocable election
to defer receipt until the Plan Year following the Participant's Termination
Date except as otherwise specifically provided herein. A Participant's
"Compensation Deferral" may consist of Base Salary Deferrals, Annual Incentive
Deferrals , Sales Incentive Deferrals or a combination.
Disabled. "Disabled" means a mental or physical condition that
qualifies a Participant for total and permanent disability benefits under a
Company sponsored long term disability plan.
Earnings Crediting Options. "Earnings Crediting Options" means the
deemed investment options selected by the Participant from time to time pursuant
to which deemed earnings are credited to the Participant's Account.
Effective Date. "Effective Date" means the effective date of the Plan
which is July 1, 1999.
Eligible Employee. "Eligible Employee" means an Employee who received
Compensation in the prior Plan Year in excess of the compensation limit of
section 401(a)(17) of the Code, as in effect from time to time. For a newly
hired Employee, i.e., an Employee hired in the Plan Year prior to the Plan Year
in which the Employee is to first elect to become a Participant, the Employee
shall be an "Eligible Employee" for that Plan Year only if the Employee's annual
rate of base salary is then in excess of the limit
5
<PAGE>
under Section 401(a)(17) of the Code.
Employee. "Employee" means any individual employed by the Company on a
regular, full-time basis (in accordance with the personnel policies and
practices of the Employer), including citizens of the United States employed
outside of their home country and resident aliens employed in the United States;
provided, however, that to qualify as an "Employee" for purposes of the Plan,
the individual must be a member of a group of "key management or other highly
compensated employees" within the meaning of Sections 201, 301 and 401 of the
Employee Retirement Income Security Act of 1974, as amended.
Enrollment Agreement. "Enrollment Agreement" means the authorization
form, which an Eligible Employee files with the Committee to participate under
Article 4 of the Plan.
Participant. "Participant" means an Eligible Employee who has filed a
completed and executed Enrollment Agreement with the Committee or its designee
and is participating in the Plan in accordance with the provisions of Article 4.
In the event of the death or incompetency of a Participant, the term shall mean
his personal representative or guardian. An individual shall remain a
Participant until that individual has received full distribution of any amount
credited to the Participant's Account.
Plan. "Plan" means this plan, called the Pharmacia & Upjohn, Inc.
Savings Plus Plan, as amended from time to time.
Plan Year. "Plan Year" means the 12 month period beginning on each
January 1 and ending on the following December 31 except that the first Plan
Year shall begin on the Effective Date.
Retirement. "Retirement" means the termination of the Participant's
Service with the Employer (for reasons other than death) at or after age 65, or,
if the Participant has 5 or more years of Service, at or after age 55.
Sales Incentive Deferral. "Sales Incentive Deferral" means the portion
of a Participant's Compensation based on the Company's sales incentive plan, in
which the Participant participates, that the Participant has elected to defer
pursuant to Article 4.
Savings Plan. "Savings Plan" means the Pharmacia & Upjohn Employee
Savings Plan, as it may be amended from time to time.
Termination Date. "Termination Date" means the date of termination of a
Participant's service with the Company and its Affiliates and shall be
determined without reference to any compensation continuation arrangement or
severance benefit arrangement that may be applicable.
Voting Securities. "Voting Securities" means any the common securities
of P&U, which carry the right to vote generally in the election of directors.
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ARTICLE 3
ADMINISTRATION OF THE PLAN AND DISCRETION
3.1 The Committee shall have full power and authority to interpret the
Plan, to prescribe, amend and rescind any rules, forms and procedures as it
deems necessary or appropriate for the proper administration of the Plan and to
make any other determinations and to take any other such actions as it deems
necessary or advisable in carrying out its duties under the Plan. All action
taken by the Committee arising out of, or in connection with, the administration
of the Plan or any rules adopted thereunder, shall, in each case, lie within its
sole discretion, and shall be final, conclusive and binding upon P&U, the
Company, the Board, all Employees, all Beneficiaries of Employees and all
persons and entities having an interest therein.
3.2 Members of the Committee and the Committee shall serve without
compensation for their services unless otherwise determined by the Board. The
Company shall pay all expenses of administering the Plan except as otherwise
determined by the Committee.
3.3 The Company shall indemnify and hold harmless each member of the
Committee from any and all claims, losses, damages, expenses (including counsel
fees) and liability (including any amounts paid in settlement of any claim or
any other matter with the consent of the Board) arising from any act or omission
of such member, except when the same is due to gross negligence or willful
misconduct.
3.4 Any decisions, actions or interpretations to be made under the Plan
by P&U, the Company, the Board or Committee shall be made in its respective sole
discretion, not as a fiduciary and need not be uniformly applied to similarly
situated individuals and shall be final, binding and conclusive on all persons
interested in the Plan.
ARTICLE 4
PARTICIPATION
4.1 Election to Participate. Annually, all Eligible Employees will be
offered the opportunity to make a Compensation Deferral. Any Eligible Employee
may enroll in the Plan for a Plan Year by filing a completed and fully executed
Enrollment Agreement with the Committee by a date set by the Committee, but in
any event prior to the last day of April of the Plan Year for which the election
is to be effective (for the Plan Year beginning on the Effective Date, the
executed Enrollment Agreement will be due on the day before the Effective Date).
Pursuant to said Enrollment Agreement, the Eligible Employee may elect an Annual
Incentive Deferral, a Sales Incentive Deferral or a Base Salary Deferral, or a
combination, and shall irrevocably elect the percentages, in whole percentages,
by which (as a result of payroll reduction) a portion of the Participant's
Compensation to be earned during the remainder of that Plan Year shall be
deferred. A Participant's (i) Annual Incentive Deferral may be equal to any
whole percentage of the Participant's annual incentive to be earned during the
Plan Year of reference, (ii) Sales Incentive Deferral may be equal to any whole
percentage of the
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Participant's periodic sales incentive to be earned during that Plan Year but
shall apply only to payments otherwise due after the election and (iii) Base
Salary Deferral may not exceed 80% of the Participant's base salary for that
Plan Year. The Eligible Employee shall also provide in the Enrollment Agreement
such other information as the Committee shall require. The Committee may
establish minimum or maximum amounts that may be deferred under this Section and
may change such standards from time to time. Any such limits shall be
communicated by the Committee to the Participants prior to the commencement of a
Plan Year.
4.2 Company Contributions. The Company shall credit to each
Participant's Account a Company Contribution based on the amount of the
Participant's Base Salary Deferrals. Company Contributions will be credited as
frequently as determined by the Committee acting on behalf of the Company.
ARTICLE 5
ACCOUNTS
5.1 Creation of Accounts. The Committee shall establish and maintain
separate Accounts with respect to each Participant. The amount of the
Participant's Compensation Deferral shall be credited by the Company to the
Participant's Account no later than the first day of the month following the
month in which such Compensation would otherwise have been paid. Any amount once
taken into account as Compensation for purposes of this Plan shall not be taken
into account thereafter. The Participant's Account shall be reduced by the
amount of payments made by the Company to the Participant or the Participant's
Beneficiary pursuant to this Plan.
5.2 Earnings on Accounts. A Participant's Account shall be credited
with earnings in accordance with the Earnings Crediting Options elected by the
Participant from time to time. Participants may allocate the sums credited their
Account among the Earnings Crediting Options available under the Plan only in
whole percentages; provided, however, that the Company Contribution shall be
deemed to be invested, and shall remain, in phantom shares of Voting Securities.
The deemed rate of return, positive or negative, credited under each Earnings
Crediting Option is based upon the actual investment performance of the
corresponding investment portfolios of the Savings Plan, or such other
investment fund(s) as the Committee may designate from time to time, and shall
equal the total return of such investment fund net of asset based charges,
including, without limitation, money management fees, fund expenses, mortality
and expense risk insurance contract charges, and such other administrative
expenses as the Committee determines should be charged to the Participants'
Accounts. The Committee reserves the right, on a prospective basis, to add or
delete Earnings Crediting Options.
5.3 Earnings Crediting Options. Notwithstanding that the rates of
return credited to Participants' Account under the Earnings Crediting Options
are based upon the actual performance of the corresponding portfolios of these
Trusts, or such other investment funds as the Committee may designate, the
Company shall not be obligated to
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invest any Compensation deferred by Participants under this Plan, Company
Contributions, or any other amounts, in such portfolios or in any other
investment funds.
5.4 Changes in Earnings Crediting Options. A Participant may change the
Earnings Crediting Options to which the Participant's Account is deemed to be
allocated with whatever frequency is determined by the Committee which shall not
be less than four times per Plan Year. Each such change may include (a)
reallocation of the Participant's existing Account in whole percentages and/or
(b) change in investment allocation of amounts to be credited to the
Participant's Account in the future, as the Participant may elect.
5.5 Valuation of Accounts. The value of a Participant's Account as of
any date shall equal the amounts theretofore credited to such Account, including
any earnings (positive or negative) deemed to be earned on such Account in
accordance with Section 5.2 through the day preceding such date, less the
amounts theretofore deducted from such Account.
5.6 Statement of Account. The Committee shall provide to each
Participant, not less frequently than quarterly, a statement in such form as the
Committee deems desirable setting forth the balance standing to the credit of
each Participant in the Participant's Account.
5.7 Distributions from Accounts. Any distribution made to or on behalf
of a Participant from the Participant's Account shall be in cash except that, to
the extent the Account is deemed invested in phantom shares of Voting
Securities, a Participant may elect, in the manner prescribed by the Committee,
to receive Voting Securities. Where a distribution will be in an amount that is
less than the entire balance of any such Account, the distribution shall be made
pro rata from each of the Earnings Crediting Options to which such Account is
then allocated.
ARTICLE 6
DISTRIBUTION OF ACCOUNTS
6.1 Distribution. Benefits shall be distributed in the Plan Year
following (i) the Participant's Retirement or (ii) the Plan Year in which occurs
the Participant's Termination Date, other than on account of death or becoming
Disabled, as follows:
(a) Benefits Upon Retirement. In the case of a Participant
whose Service with the Employer terminates on account of his Retirement, the
Participant's Account shall be distributed in one of the following methods, as
elected by the Participant in writing either in the Enrollment Agreement or in a
separate election made at least three months prior to the beginning of the Plan
Year in which distribution is to occur: (i) in a lump sum; or (ii) in annual
installments not in excess of 10, as elected by the Participant. Any lump-sum
benefit payable in accordance with this paragraph shall be paid in, but not
later than January 31 of, the Plan Year following the Plan Year in which occurs
the Participant's Retirement valued as of the last business day of the Plan Year
preceding the date of payment. Annual installment payments, if any, shall
commence not later than
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January 31 of the Plan Year following the Plan Year in which occurs the
Participant's Retirement, in an amount equal to (i) the value of such Account as
of the last business day of the Plan Year preceding the date of payment, divided
by (ii) the number of annual installment payments elected by the Participant in
the Enrollment Agreement or election form. The remaining annual installments
shall be paid not later than January 31 of each succeeding Plan Year in an
amount equal to (i) the value of such Account as of the last business day of the
immediately preceding Plan Year divided by (ii) the number of installments
remaining. A Participant may change the election regarding the manner of payment
as described in Section 6.1 of the Participant's Account at any time prior to
October 1 of the Plan Year in which occurs the Participant's Retirement.
(b) Benefits Upon Termination of Employment. In the case of a
Participant whose Termination Date occurs prior to the earliest date on which
the Participant is eligible for Retirement, other than on account of becoming
Disabled or by reason of death, the Participant's Account shall be distributed
in a lump sum by January 31 of the Plan Year following the Participant's
Termination Date valued as of the last business day of the Plan Year preceding
the date of payment.
(c) Benefits Upon Change of Control. Within six months after a
Change of Control, or if the Committee determines that a Change of Control is
imminent, the Committee may determine to distribute a Participant's Account in a
lump sum by January 31 of the Plan Year following the Change of Control or the
date of the Committee's decision regarding the imminency of the Change of
Control valued as of the last business day of the Plan Year preceding the date
of payment.
ARTICLE 7
DISABILITY
In the event a Participant becomes Disabled, the Participant's right to
make any further deferrals under this Plan shall terminate as of the date for
which the Participant first receives long-term disability benefits from the
Company. A Participant who becomes Disabled shall be entitled to elect, within
90 days after receiving the first long-term disability benefit, but in any event
prior to the end of the current Plan Year, to be treated as a Participant then
eligible for Retirement, in which case the provisions of Section 6.1(a) shall be
applicable, or else shall be treated as not having incurred a Termination Date
until the Participant would otherwise have been eligible for Retirement in which
case the provisions of Section 6.1(a) shall be applicable when the Participant
would otherwise have actually been eligible for Retirement. The Participant's
Account shall continue to be credited with earnings in accordance with Section
5.2 until such Account is fully distributed.
ARTICLE 8
SURVIVOR BENEFITS
8.1 Death of Participant Prior to the Commencement of Benefits. In the
event of a Participant's death prior to the commencement of benefits in
accordance with Article 6, benefits shall be paid to the Participant's
Beneficiary, as determined under Section
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10.3, as provided in Section 8.2 in lieu of any benefits otherwise payable under
the Plan to or on behalf of such Participant.
8.2 Survivor Benefits. In the case of a Participant who dies prior to
the commencement of benefits pursuant to Section 6.1, distribution of such
Account shall be made, as elected by the Participant in the Enrollment Agreement
or as may have been changed by the Participant, (a) in a lump sum as soon as
practicable following the Participant's death, or (b) in the manner and at such
time as such Account would otherwise have been distributed in accordance with
Section 6.1(a) had the Participant lived and retired on the earliest possible
date. The amount of any lump sum benefit payable in accordance with this Section
shall equal the value of such Account as of the last business day of the
calendar month immediately preceding the date on which such benefit is paid. The
amount of any annual installment benefit payable in accordance with this Section
shall equal (a) the value of such Account as of the last business day of the
calendar month immediately preceding the date on which such installment is paid,
divided by (b) the number of annual installments to be paid pursuant to the
election of the Participant in the Enrollment Agreement or as may have been
changed by the Participant.
8.3 Death of Participant After Benefits Have Commenced. In the event a
Participant dies after annual installment benefits payable under Section 6.1
from the Participant's Account has commenced, but before the entire balance of
such Account has been paid, any remaining installments shall continue to be paid
to the Participant's Beneficiary, as determined under Section 10.3, at such
times and in such amounts as they would have been paid to the Participant had he
survived.
ARTICLE 9
EMERGENCY BENEFIT
In the event that the Committee, upon written request of a Participant
receiving installment distributions, determines, in its sole discretion, that
the Participant has suffered an unforeseeable financial emergency, the Company
shall pay to the Participant from the Participant's Account, as soon as
practicable following such determination, an amount necessary to meet the
emergency, after deduction of any and all taxes as may be required pursuant to
Section 10.9 (the "Emergency Benefit"), based on the value of the Participant's
Account as of the last business day of the month preceding the date of the
Company's receipt of the Participant's request for payment. For purposes of this
Plan, an unforeseeable financial emergency is an unexpected need for cash
arising from an illness, casualty loss, sudden financial reversal, or other such
unforeseeable occurrence. Cash needs arising from foreseeable events such as the
purchase of a house or education expenses for children shall not be considered
to be the result of an unforeseeable financial emergency. It is intended that
the Committee's determination as to whether a Participant has suffered an
"unforeseeable financial emergency" shall be made consistent with the
requirements under section 457(d) of the Code.
ARTICLE 10
MISCELLANEOUS
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10.1 Amendment and Termination. The Plan may be amended, suspended,
discontinued or terminated at any time by P&U; provided, however, that no such
amendment, suspension, discontinuance or termination shall reduce or in any
manner adversely affect the rights of any Participant with respect to benefits
that are payable or may become payable under the Plan based upon the balance of
the Participant's Accounts as of the effective date of such amendment,
suspension, discontinuance or termination.
10.2 Claims Procedure.
(a) Claim. A person who believes that he is being denied a
benefit to which he is entitled under the Plan (hereinafter referred to as a
"Claimant") may file a written request for such benefit with the Committee,
setting forth the claim.
(b) Claim Decision. Upon receipt of a claim, the Committee
shall advise the Claimant that a reply will be forthcoming within ninety days
and shall, in fact, deliver such reply within such period. The Committee may,
however, extend the reply period for an additional ninety days for reasonable
cause.
If the claim is denied in whole or in part, the Claimant shall be
provided a written opinion, using language calculated to be understood by the
Claimant, setting forth:
(i) The specific reason or reasons for such
denial;
(ii) The specific reference to pertinent
provisions of this Agreement on which such denial is based;
(iii) A description of any additional material or
information necessary for the Claimant to perfect his claim
and an explanation why such material or such information is
necessary;
(iv) Appropriate information as to the steps to be
taken if the Claimant wishes to submit the claim for review;
and
(v) The time limits for requesting a review under
subsection (c) and for review under subsection (d) hereof.
(c) Request for Review. Within sixty days after the receipt by
the Claimant of the written opinion described above, the Claimant may request in
writing that the Committee review the determination of the Committee. The
Claimant or his duly authorized representative may, but need not, review the
pertinent documents and submit issues and comment in writing for consideration
by the Committee. If the Claimant does not request a review of the initial
determination within such sixty-day period, the Claimant shall be barred and
estopped from challenging the determination.
(d) Review of Decision. Within sixty days after the
Committee's receipt of a request for review, it will review the initial
determination. After considering all materials presented by the Claimant, the
Committee will render a written opinion,
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written in a manner calculated to be understood by the Claimant, setting forth
the specific reasons for the decision and containing specific references to the
pertinent provisions of this Agreement on which the decision is based. If
special circumstances require that the sixty day time period be extended, the
Committee will so notify the Claimant and will render the decision as soon as
possible, but no later than one hundred twenty days after receipt of the request
for review.
10.3 Designation of Beneficiary. Each Participant may designate a
Beneficiary or Beneficiaries (which Beneficiary may be an entity other than a
natural person) to receive any payments which may be made following the
Participant's death. Such designation may be changed or canceled at any time
without the consent of any such Beneficiary. Any such designation, change or
cancellation must be made in a form approved by the Committee and shall not be
effective until received by the Committee, or its designee. If no Beneficiary
has been named, or the designated Beneficiary or Beneficiaries shall have
predeceased the Participant, the Beneficiary shall be the Participant' s estate.
If a Participant designates more than one Beneficiary, the interests of such
Beneficiaries shall be paid in equal shares, unless the Participant has
specifically designated otherwise.
10.4 Limitation of Participant's Right. Nothing in this Plan shall be
construed as conferring upon any Participant any right to continue in the
employment of the Company, nor shall it interfere with the rights of the Company
to terminate the employment of any Participant and/or to take any personnel
action affecting any Participant without regard to the effect which such action
may have upon such Participant as a recipient or prospective recipient of
benefits under the Plan. Any amounts payable hereunder shall not be deemed
salary or other compensation to a Participant for the purposes of computing
benefits to which the Participant may be entitled under any other arrangement
established by the Employer for the benefit of its employees.
10.5 No Limitation on Company Actions. Nothing contained in the Plan
shall be construed to prevent the Company from taking any action that is deemed
by it to be appropriate or in its best interest. No Participant, Beneficiary, or
other person shall have any claim against the Employer as a result of such
action.
10.6 Obligations to Company. If a Participant becomes entitled to a
distribution of benefits under the Plan, and if at such time the Participant has
outstanding any debt, obligation, or other liability representing an amount
owing to the Employer, then the Employer may offset such amount owed to it
against the amount of benefits otherwise distributable. Such determination shall
be made by the Committee.
10.7 Nonalienation of Benefits. Except as expressly provided herein, no
Participant or Beneficiary shall have the power or right to transfer (otherwise
than by will or the laws of descent and distribution), alienate, or otherwise
encumber the Participant's interest under the Plan. The Company's obligations
under this Plan are not assignable or transferable except to (a) any corporation
or partnership which acquires all or substantially all of the Company's assets
or (b) any corporation or partnership into which the Company may be merged or
consolidated. The provisions of the Plan shall inure to
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the benefit of each Participant and the Participant's Beneficiaries, heirs,
executors, administrators or successors in interest.
10.8 Protective Provisions. Each Participant shall cooperate with the
Employer by furnishing any and all information requested by the Employer in
order to facilitate the payment of benefits hereunder, taking such physical
examinations as the Employer may deem necessary and taking such other relevant
action as may be requested by the Employer. If a Participant refuses to
cooperate, the Employer shall have no further obligation to the Participant
under the Plan, other than payment to such Participant of the then current
balance of the Participant's Account in accordance with his prior elections.
10.9 Withholding Taxes. The Company may make such provisions and take
such action as it may deem necessary or appropriate for the withholding of any
taxes which the Company is required by any law or regulation of any governmental
authority, whether Federal, state or local, to withhold in connection with any
benefits under the Plan, including, but not limited to, the withholding of
appropriate sums from any amount otherwise payable to the Participant (or his
Beneficiary). Each Participant, however, shall be responsible for the payment of
all individual tax liabilities relating to any such benefits.
10.10 Unfunded Status of Plan. The Plan is intended to constitute an
"unfunded" plan of deferred compensation for Participants. Benefits payable
hereunder shall be payable out of the general assets of the Company, and no
segregation of any assets whatsoever for such benefits shall be made.
Notwithstanding any segregation of assets or transfer to a grantor trust, with
respect to any payments not yet made to a Participant, nothing contained herein
shall give any such Participant any rights to assets that are greater than those
of a general creditor of the Company. In the event that the Committee determines
that a Change of Control is imminent, the Committee shall cause the company to
create and fund a grantor trust of the Company that shall serve as the vehicle
for paying all benefits due under the Plan and the amount contributed by the
Company shall be the amount the Committee determines would then be due if the
Plan were to terminate and all benefits were then to be paid in lump sum. If a
Change of Control shall not have occurred within six months of such contribution
by the Company, the Board may adopt a resolution to the effect that a Change of
Control is not imminent and, in that event, up to all amounts contributed to the
Trust and all earnings thereon, shall be repaid to the Company at the direction
of the Board.
10.11 Severability. If any provision of this Plan is held
unenforceable, the remainder of the Plan shall continue in full force and effect
without regard to such unenforceable provision and shall be applied as though
the unenforceable provision were not contained in the Plan.
10.12 Governing Law. The Plan shall be construed in accordance with and
governed by the laws of the state of New Jersey, without reference to the
principles of conflict of laws.
10.13 Headings. Headings are inserted in this Plan for convenience of
reference
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only and are to be ignored in the construction of the provisions of the Plan.
10.14 Gender, Singular and Plural. All pronouns and any variations
thereof shall be deemed to refer to the masculine, feminine, or neuter, as the
identity of the person or persons may require. As the context may require, the
singular may read as the plural and the plural as the singular.
10.15 Notice. Any notice or filing required or permitted to be given to
the Committee under the Plan shall be sufficient if in writing and hand
delivered, or sent by registered or certified mail, to the Human Resources
Department, or to such other entity as the Committee may designate from time to
time. Such notice shall be deemed given as to the date of delivery, or, if
delivery is made by mail, as of the date shown on the postmark on the receipt
for registration or certification.
