<SEC-DOCUMENT>0000950123-00-001952-index.html : 20000307
<SEC-HEADER>0000950123-00-001952.hdr.sgml : 20000307
ACCESSION NUMBER: 0000950123-00-001952
CONFORMED SUBMISSION TYPE: S-8
PUBLIC DOCUMENT COUNT: 5
FILED AS OF DATE: 20000306
EFFECTIVENESS DATE: 20000306
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: MERCK & CO INC
CENTRAL INDEX KEY: 0000064978
STANDARD INDUSTRIAL CLASSIFICATION: PHARMACEUTICAL PREPARATIONS [2834]
IRS NUMBER: 221109110
STATE OF INCORPORATION: NJ
FISCAL YEAR END: 1231
FILING VALUES:
FORM TYPE: S-8
SEC ACT:
SEC FILE NUMBER: 333-31762
FILM NUMBER: 561359
BUSINESS ADDRESS:
STREET 1: ONE MERCK DR
STREET 2: P O BOX 100
CITY: WHITEHOUSE STATION
STATE: NJ
ZIP: 08889-0100
BUSINESS PHONE: 9084234044
MAIL ADDRESS:
STREET 1: ONE MERCK DR
STREET 2: PO BOX 100 WS3AB-05
CITY: WHITEHOUSE STATION
STATE: NJ
ZIP: 08889-0100
</SEC-HEADER>
<DOCUMENT>
<TYPE>S-8
<SEQUENCE>1
<DESCRIPTION>MERCK & CO., INC.
<TEXT>
<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 6, 2000
REGISTRATION NO. 333-____
--------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------
FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
MERCK & CO., INC.
(Exact Name of Registrant as Specified in its Charter)
<TABLE>
<CAPTION>
NEW JERSEY 22-1109110
<S> <C>
(State or Other Jurisdiction of Incorporation or Organization) (I.R.S. Employer Identification No.)
</TABLE>
P.O. BOX 100
ONE MERCK DRIVE
WHITEHOUSE STATION, NJ 08889-0100
(Address, Including Zip Code, of Principal Executive Offices)
MERIAL 401(k) SAVINGS PLAN
(Full Title of the Plan)
CELIA A. COLBERT
VICE PRESIDENT, SECRETARY AND ASSISTANT GENERAL COUNSEL
MERCK & CO., INC.
P.O. BOX 100
WHITEHOUSE STATION, NEW JERSEY 08889-0100
(908) 423-1000
(Name, Address, Including Zip Code, and Telephone Number,
Including Area Code, of Agent for Service)
----------------------
With a copy to:
WARREN J. CASEY, ESQ.
PITNEY, HARDIN, KIPP & SZUCH LLP
P.O. BOX 1945
MORRISTOWN, NEW JERSEY 07962-1945
(973) 966-6300
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Title of Amount Proposed Maximum Proposed Maximum Amount Of
Securities To To Be Offering Price Aggregate Registration
Be Registered Registered Per Share Offering Price Fee
------------------------- ----------------------- ----------------------- ------------------------ -----------------------
<S> <C> <C> <C> <C>
Common Stock (Par Value
$.01 per share) 200,000 (1) $60.75 (2) $12,150,000 (2) $3,207.60
Plan interests related An indeterminate N/A N/A N/A
to Merial Limited amount of plan
401(k) Savings interests (3)
Plan............
------------------------- ----------------------- ----------------------- ------------------------ -----------------------
</TABLE>
(1) Based on an estimate of the number of shares that will be purchased
pursuant to the Merial Limited 401(k) Savings Plan. Pursuant to Rule
416(c) of the Securities Act of 1933, as amended (the "Securities
Act"), there is also being registered such number of additional shares
that may become available for purchase pursuant to such plan in the
event of certain changes in the outstanding shares, including
reorganizations, mergers, recapitalizations, restructurings, stock
dividends, stock splits, reverse stock splits and reclassifications.
(2) Estimated pursuant to paragraphs (c) and (h) of Rule 457 of 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 Common Stock on March 1, 2000, as reported on the New York
Stock Exchange.
(3) Pursuant to Rule 416 (c) of the Securities Act, this Registration
Statement covers an indeterminate amount of plan interests to be
offered or sold pursuant to the Merial Limited 401(k) Savings Plan
attached as an exhibit hereto.
<PAGE> 2
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
The document(s) containing the information specified in this Part I
will be sent or given to employees as specified by Rule 428(b)(1)
promulgated under the Securities Act. Such documents need not be filed with
the Securities and Exchange Commission (the "Commission").
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE
The following documents filed by Merck & Co., Inc. (the
"Registrant") (Exchange Act File No. 1-3305) with the Commission are
incorporated herein and made a part hereof:
(a) Annual Report on Form 10-K, filed on March 24, 1999, for
the fiscal year ended December 31, 1998;
(b) Proxy Statement for the Annual Meeting of Stockholders
held on April 27, 1999, filed on March 18, 1999;
(c) Quarterly Report on Form 10-Q, filed on May 12, 1999, for
the quarter ended March 31, 1999;
(d) Form 10-K/A, filed on June 11, 1999, amending the
Registrant's Annual Report on Form 10-K for the fiscal
year ended December 31, 1998;
(e) Quarterly Report on Form 10-Q, filed on August 12, 1999,
for the quarter ended June 30, 1999;
(f) Quarterly Report on Form 10-Q, filed on November 12, 1999,
for the quarter ended September 30, 1999;
(g) Current Report on Form 8-K dated December 9, 1999, filed
on December 16, 1999; and
(h) 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.
All reports or other documents filed by the Registrant pursuant to
Sections 13, 14 or 15(d) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act") and prior to the filing of a post-effective amendment
which indicates that all securities offered have been sold or which
deregisters all securities then remaining unsold, hereby are incorporated
herein by reference and shall be deemed a part hereof from the date of
filing of such documents. An Exhibit Index can be found on page 9 of this
Registration Statement. 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 or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Registration Statement.
2
<PAGE> 3
ITEM 4. DESCRIPTION OF SECURITIES
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
The validity of the Common Stock will be passed upon for the
Registrant by Celia A. Colbert, Vice President, Secretary & Assistant
General Counsel of the Company.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The New Jersey Business Corporation Act provides that a New Jersey
corporation has the power to indemnify a director or officer against his or
her expenses and liabilities in connection with any proceeding involving the
director or officer by reason of his or her being or having been such a
director or officer, other than a proceeding by or in the right of the
corporation, if such a director or officer acted in good faith and in a
manner he or she reasonably believed to be in or not opposed to the best
interests of the corporation; and with respect to any criminal proceeding,
such director or officer had no reasonable cause to believe his or her
conduct was unlawful.
The indemnification and advancement of expenses shall not exclude any
other rights, including the right to be indemnified against liabilities and
expenses incurred in proceedings by or in the right of the corporation, to
which a director or officer may be entitled under a certificate of
incorporation, bylaw, agreement, vote of shareholders, or otherwise;
provided that no indemnification shall be made to or on behalf of a director
or officer if a judgment or other final adjudication adverse to the director
or officer establishes that his or her acts or omissions (a) were in breach
of his or her duty of loyalty to the corporation or its shareholders, (b)
were not in good faith or involved a knowing violation of law or (c)
resulted in receipt by the director or officer of an improper personal
benefit.
The Registrant's Restated Certificate of Incorporation provides that,
to the fullest extent permitted by the laws of the State of New Jersey,
directors and officers of the Registrant shall not be personally liable to
the Registrant or its stockholders for damages for breach of any duty owed
to the Registrant or its stockholders, except that a director or officer
shall not be relieved from liability for any breach of duty based upon an
act or omission (a) in breach of such person's duty of loyalty to the
Registrant or its stockholders, (b) not in good faith or involving a knowing
violation of law or (c) resulting in receipt by such person of an improper
personal benefit.
The By-Laws of the Registrant provide that a former, present or future
director, officer or employee of the Registrant or the legal representative
of any such director, officer or employee shall be indemnified by the
Registrant:
(a) against reasonable costs, disbursements and counsel fees
paid or incurred where such person has been successful in the defense
on the merits or otherwise of any pending, threatened or completed
civil, criminal, administrative or arbitrative action, suit or
proceeding, and any appeal therein and any inquiry or investigation
which could lead to such action, suit, or proceeding or in defense of
any claim, issue or matter therein, brought by reason of such person's
being or having been such director, officer or employee, and
(b) with respect to the defense of any such action, suit,
proceeding, inquiry or investigation for which indemnification is not
made under (a) above, against reasonable costs, disbursements (which
shall include amounts paid in satisfaction of settlements, judgments,
fines and penalties, exclusive, however, of any amount paid or payable
to the Registrant) and counsel
3
<PAGE> 4
fees if such person acted in good faith and in a manner such person
reasonably believed to be in or not opposed to the best interests of
the Registrant, and in connection with any criminal proceedings such
person also had no reasonable cause to believe the conduct was
unlawful, with the determination as to whether the applicable standard
of conduct was met to be made by a majority of the members of the
Board of Directors (sitting as a Committee of the Board) who were not
parties to such inquiry, investigation, action, suit or proceeding or
by any one or more disinterested counsel to whom the question may be
referred by the Board of Directors; provided, however, in connection
with any proceeding by or in the right of the Registrant, no
indemnification shall be provided as to any person adjudged by any
court to be liable to the Registrant except as and to the extent
determined by such court.
The Registrant enters into indemnification agreements with its
directors and officers and enters into insurance agreements on its own
behalf. The indemnification agreements provide that the Registrant agrees to
hold harmless and indemnify its directors and officers to the fullest extent
authorized or permitted by the Business Corporation Act of the State of New
Jersey, or any other applicable law, or by any amendment thereof or other
statutory provisions authorizing or permitting such indemnification that is
adopted after the date hereof. Without limiting the generality of the
foregoing, the Registrant agrees to hold harmless and indemnify its
directors and officers to the fullest extent permitted by applicable law
against any and all expenses, judgments, fines, and amounts paid in
settlement actually and reasonably incurred by its directors and officers in
connection with the defense of any present or future threatened, pending, or
completed claim, action, suit, or proceeding by reason of the fact that they
were, are, shall be, or shall have been a director or officer of the
Registrant, or are or were serving, shall serve, or shall have served, at
the request of the Registrant, as director or officer of another
corporation, partnership, joint venture, trust, employee benefit plan, or
other enterprise.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED
Not applicable.
ITEM 8. EXHIBITS
3(a) Restated Certificate of Incorporation of the
Registrant (May 6, 1992) (Incorporated by
reference to Form 10-K Annual Report for the
fiscal year ended December 31, 1992)
3(b) Certificate of Amendment to the Certificate of
Incorporation of Merck & Co., Inc. (as amended
January 14, 1999, effective February 16, 1999)
(Incorporated by reference to Form 10-K Annual
Report for the fiscal year ended December 31,
1998)
3(c) By-laws of the Registrant (as amended effective
February 25, 1997) (Incorporated by reference to
Form 10-Q Quarterly Report for the period ended
March 31, 1997)
5 Opinion of Consent of Celia A. Colbert, Vice
President, Secretary & Assistant General Counsel
of the Registrant
23 Consent of Arthur Andersen LLP
4
<PAGE> 5
24 Certified Resolution of Board of Directors and
Power of Attorney
99 Merial 401(k) Savings Plan
ITEM 9. UNDERTAKINGS
1. The undersigned Registrant hereby undertakes:
(a) To file, during any period in which offers or
sales are being made, a post-effective amendment to this
Registration Statement 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.
(b) 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.
(c) To remove from registration by means of a
post-effective amendment any of the securities being
registered which remain unsold at the termination of the
offering.
2. That, for the purpose of determining any liability under
the Securities Act, each filing of the Registrant's annual
report pursuant to Section 13(a) or 15(d) of the Exchange
Act (and, where applicable, each filing of an employee
benefit plan's annual report pursuant to 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.
3. Insofar as indemnification for liabilities arising under
the Securities Act may be permitted to directors, officers
and controlling persons of the Registrant pursuant to the
foregoing provisions, or otherwise, the Registrant has
been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in
the Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities
(other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any
action, suit or proceeding) is asserted by such director,
officer or controlling person in connection with the
securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled
by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by
it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
5
<PAGE> 6
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets
all the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Whitehouse Station and the State
of New Jersey, on this 6th day of March, 2000.
MERCK & CO., INC.
(REGISTRANT)
By: /s/ Celia A. Colbert
----------------------
Celia A. Colbert
Vice President, Secretary and
Assistant General Counsel
Pursuant to the requirements of the Securities Act, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
* March 6, 2000
------------------------------
Raymond V. Gilmartin Chairman of the Board,
President and Chief Executive
Officer
(principal executive officer)
* March 6, 2000
------------------------------
Judy C. Lewent Senior Vice President and
Chief Financial Officer
(principal financial officer)
* March 6, 2000
------------------------------
Richard C. Henriques, Jr. Vice President, Controller
(principal accounting officer)
* March 6, 2000
------------------------------
H. Brewster Atwater, Jr. Director
* March 6, 2000
------------------------------
Derek Birkin Director
* March 6, 2000
------------------------------
Lawrence A. Bossidy Director
</TABLE>
* Celia A. Colbert, by signing her name hereto, does hereby sign this
document pursuant to powers of attorney duly executed by the persons
named, filed with the Securities and Exchange Commission as an exhibit
to this document, on behalf of such persons, all in the capacities and
on the date stated, such persons including a majority of the directors
of the Company.
6
<PAGE> 7
<TABLE>
<S> <C> <C>
* March 6, 2000
------------------------------
William G. Bowen Director
* March 6, 2000
------------------------------
Johnnetta B. Cole Director
* March 6, 2000
------------------------------
Carolyne K. Davis Director
* March 6, 2000
------------------------------
Lloyd C. Elam Director
March 6, 2000
------------------------------
Charles E. Exley, Jr. Director
* March 6, 2000
------------------------------
Carleton S. Fiorina Director
* March 6, 2000
------------------------------
William B. Harrison, Jr. Director
* March 6, 2000
------------------------------
William N. Kelley Director
* March 6, 2000
------------------------------
Edward M. Scolnick Director
* March 6, 2000
------------------------------
Samuel O. Thier Director
* March 6, 2000
------------------------------
Dennis Weatherstone Director
</TABLE>
* Celia A. Colbert, by signing her name hereto, does hereby sign this
document pursuant to powers of attorney duly executed by the persons
named, filed with the Securities and Exchange Commission as an exhibit
to this document, on behalf of such persons, all in the capacities and
on the date stated, such persons including a majority of the directors
of the Company.
By: /s/ Celia A. Colbert
----------------------------------
Celia A. Colbert
Vice President, Secretary and
Assistant General Counsel
Attorney-in-Fact
7
<PAGE> 8
Pursuant to the requirements of the Securities Act, the administrative
committee of the Plan has duly caused this Registration Statement to be signed
on its behalf by the undersigned, thereunto duly authorized, in Iselin, New
Jersey, on this 6th day of March, 2000.
MERIAL 401(k) SAVINGS PLAN
(PLAN)
By: /s/ Robert Stewart
-------------------------------
Robert Stewart
Executive Director, Human
Resources, North America
/s/ Philip Forte
------------------------------
Philip Forte
Executive Director, Finance
8
<PAGE> 9
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
<S> <C>
3(a) Restated Certificate of Incorporation of the
Registrant (May 6, 1992) (Incorporated by
reference to Form 10-K Annual Report for the
fiscal year ended December 31, 1992)
3(b) Certificate of Amendment to the Certificate of
Incorporation of Merck & Co., Inc. (as amended
January 14, 1999, effective February 16, 1999)
(Incorporated by reference to Form 10-K Annual
Report for the fiscal year ended December 31,
1998)
3(c) By-laws of the Registrant (as amended effective
February 25, 1997) (Incorporated by reference to
Form 10-Q Quarterly Report for the period ended
March 31, 1997)
5 Opinion of Consent of Celia A. Colbert, Vice
President, Secretary and Assistant General
Counsel of the Registrant
23 Consent of Arthur Andersen LLP
24 Certified Resolution of Board of Directors and
Power of Attorney
99 Merial 401(k) Savings Plan
</TABLE>
9
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-5
<SEQUENCE>2
<DESCRIPTION>OPINION OF CONSENT
<TEXT>
<PAGE> 1
EXHIBIT 5
March 6, 2000
Board of Directors
Merck & Co., Inc.
One Merck Drive
Whitehouse Station, NJ 08889-0100
Re: Merck & Co., Inc. - Common Stock
Ladies and Gentlemen:
I am the Vice President, Secretary & Assistant General Counsel of Merck & Co.,
Inc., a New Jersey corporation (the "Corporation"), and in such capacity have
acted as counsel for the Corporation in connection with the proposed
registration under the Securities Act of 1933, as amended, of up to 200,000
shares of the Common Stock, par value $0.01 per share (the "Shares"), of the
Corporation, which may be issued by the Corporation pursuant to the Merial
401(k) Savings Plan, or any successor plans thereto, as such plans or successor
plans may be amended from time to time. I have examined such corporate records
and other documents, including the Registration Statement on Form S-8 relating
to the Shares, and have reviewed such matter of law as I have deemed necessary
for this opinion.
I am admitted to the Bar of the state of New York. The opinions expressed
herein are limited in all respects to the federal laws of the United States of
America, the laws of the State of New York, and the Business Corporation Act of
the State of New Jersey.
On the basis of the foregoing examination and review, I advise you that, in my
opinion:
1. The Corporation is a corporation duly organized and existing under the
laws of the State of New Jersey.
2. All necessary corporate action on the part of the Corporation has been
taken to authorize the issuance of the Shares and, when issued as
described in the Registration Statement, the Shares will be legally
and validly issued, fully paid and non-assessable.
The opinions expressed herein are rendered only to you and are solely for your
benefit and may not be relied upon by any person, firm, or corporation for any
reason without my prior written consent.
10
<PAGE> 2
I consent to the filing of this opinion as an exhibit to the Registration
Statement. In giving this consent I do not admit that I am in the category of
persons whose consent is required under Section 7 of the Securities Act of 1933
or the rules and regulations of the Securities and Exchange Commission
thereunder.
By: /s/ Celia A. Colbert
----------------------
Celia A. Colbert
11
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-23
<SEQUENCE>3
<DESCRIPTION>CONSENT OF ARTHUR ANDERSEN LLP
<TEXT>
<PAGE> 1
EXHIBIT 23
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the
incorporation by reference in this Form S-8 Registration Statement of our
report dated January 26, 1999 included in and incorporated by reference in
Merck & Co., Inc.'s Annual Report on Form 10-K, for the fiscal year ended
December 31, 1998, as amended by Form 10-K/A dated June 11, 1999 and to all
references to our firm included in or made a part of this Registration
Statement.
ARTHUR ANDERSEN LLP
New York, New York
March 6, 2000
12
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-24
<SEQUENCE>4
<DESCRIPTION>CERTIFIED RESOLUTION AND POWER OF ATTORNEY
<TEXT>
<PAGE> 1
EXHIBIT 24
CERTIFIED RESOLUTION OF
BOARD OF DIRECTORS
I, Nancy V. Van Allen, Senior Assistant Secretary of Merck & Co.,
Inc., a Corporation duly organized and existing under the laws of the State of
New Jersey, do hereby certify that the following is a true copy of a resolution
adopted on December 21, 1999, at a meeting of the Directors of said Corporation
held in the City of New York, State of New York, duly called in accordance with
the provisions of the By-Laws of said Corporation, and at which a quorum of
Directors was present:
RESOLVED, that the Merck Puerto Rico Employee Savings and
Security Plan (the "Merck Puerto Rico Plan") is hereby ratified in the
form presented to this meeting;
RESOLVED, that the proper officers of the Company are hereby
authorized and directed on behalf of the Company to prepare, execute
and file with the Securities and Exchange Commission (the "SEC")
Registration Statements and any and all amendments thereto, and any
and all exhibits and other documents relating thereto or required by
law or regulation in connection therewith, for the registration under
the Securities Act of 1933 of the shares of Common Stock of the
Company which may be purchased under the Merck Puerto Rico Plan and
the Merial 401(k) Savings Plan (hereinafter collectively referred to
as the "Plans");
RESOLVED, that Celia A. Colbert is hereby appointed and
designated the person duly authorized to receive communication and
notices from the SEC with respect to such Registration Statements or
any amendments thereto and as agent for service of process;
RESOLVED, that each officer, director or employee of the
Company who may be required to execute such Registration Statements or
any amendments thereto (whether on behalf of the Company, or as an
officer or director thereof, or by attesting the seal of the Company,
or on behalf of the Plan, or otherwise), is hereby authorized to
execute a power of attorney appointing Celia A. Colbert and Kenneth C.
Frazier, and each of them severally, his or her true and lawful
attorney or attorneys to execute in his or her name, place and stead
(in any such capacity) such Registration Statements and any and all
amendments thereto and any and all exhibits and other documents
necessary or incidental in connection therewith, and
13
<PAGE> 2
to file the same with the SEC, each of said attorneys to have power to
act with or without the other, and to have full power and authority to
do and perform in the name and on behalf of each of said officers,
directors and employees, or any of them, as the case may be, every act
whatsoever necessary or advisable to be done in the premises as fully
and to all intents and purposes as any such officer, director or
employee might or could do in person;
RESOLVED, that the proper officers of the Company are hereby
authorized and directed to arrange with the New York Stock Exchange
and the Philadelphia Stock Exchange for the listing of the additional
shares of the Common Stock of the Company to be issued in connection
with the Plans; and
RESOLVED, that the proper officers of the Company, with the
advice of counsel, are hereby authorized to take any action and to
execute and deliver any letters, documents, agreements or other
instruments as they deem necessary, appropriate or desirable to carry
out the purposes and intents of this Special Resolution.
IN WITNESS WHEREOF, I have hereunto subscribed my signature and
affixed the seal of the Corporation this 31st day of January, 2000.
By: /s/ Nancy V. Van Allen
----------------------
Nancy V. Van Allen
Senior Assistant Secretary
[Corporate Seal]
14
<PAGE> 3
EXHIBIT 24
POWER OF ATTORNEY
KNOW TO ALL MEN BY THESE PRESENTS that each of the undersigned hereby
severally constitutes and appoints Kenneth C. Frazier and Celia A. Colbert, and
each of them, their true and lawful attorney-in-fact and agent for the
undersigned, in any and all capacities, with full power and authority of
substitution, to execute for and on behalf of the undersigned a REGISTRATION
STATEMENT ON FORM S-8 by Merck & Co., Inc. for the Merial 401(k) Savings Plan,
and all amendments or supplements to this Registration Statement and all
related documents and instruments, and to file the same with exhibits thereto
and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto each attorney-in-fact and agent full power and
authority to take such action as he/she deems advisable or necessary to carry
out the intent of this Power of Attorney.
IN WITNESS WHEREOF, this instrument has been duly executed as of the
21st day of December, 1999.
MERCK & CO., INC.
By: /s/ Raymond V. Gilmartin
-----------------------------------
Raymond V. Gilmartin
Chairman of the Board, President
& Chief Executive Officer
(Principal Executive Officer)
/s/ Judy C. Lewent
-----------------------------------
Judy C. Lewent
Senior Vice President & Chief
Financial Officer
(Principal Financial Officer)
/s/ Richard C. Henriques, Jr.
-----------------------------------
Richard C. Henriques, Jr.
Vice President, Controller
(Principal Accounting Officer)
15
<PAGE> 4
DIRECTORS
/s/ H. Brewster Atwater, Jr. /s/ Charles E. Exley, Jr.
------------------------------- -------------------------------
H. Brewster Atwater, Jr. Charles E. Exley, Jr.
/s/ Derek Birkin /s/ Carleton S. Fiorina
------------------------------- -------------------------------
Derek Birkin Carleton S. Fiorina
/s/ Lawrence A. Bossidy /s/ William B. Harrison, Jr.
------------------------------- -------------------------------
Lawrence A. Bossidy William B. Harrison, Jr.
/s/ William G. Bowen /s/ William N. Kelley
------------------------------- -------------------------------
William G. Bowen William N. Kelley
/s/ Johnnetta B. Cole /s/ Edward M. Scolnick
------------------------------- -------------------------------
Johnnetta B. Cole Edward M. Scolnick
/s/ Carolyne K. Davis /s/ Samuel O. Thier
------------------------------- -------------------------------
Carolyne K. Davis Samuel O. Thier
/s/ Lloyd C. Elam /s/ Dennis Weatherstone
------------------------------- -------------------------------
Lloyd C. Elam Dennis Weatherstone
16
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99
<SEQUENCE>5
<DESCRIPTION>MERIAL 401(K) SAVINGS PLAN
<TEXT>
<PAGE> 1
EXHIBIT 99
Merial 401(k) Savings Plan
Effective January 1, 1998
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TABLE OF CONTENTS
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Article Contents Page
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I Definitions 2
II Participation 10
III Participant Salary Reduction 13
IV Employer Contributions 20
V Participant Contributions 30
VI Termination of Service 33
VII Time and Method of Payment of Benefits 35
VIII Withdrawals 41
IX Investment of Contributions 45
X Loans 48
XI Employer Administrative Provisions 51
XII Participant Administrative Provisions 53
XIII Administration of the Plan 57
XIV Fiduciary Duties and Responsibilities 62
XV Top Heavy Rules 63
XVI Exclusive Benefit, Amendment, and Termination 67
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PREAMBLE
Effective August 1, 1997, Merck & Co., Inc. and Rhone-Poulenc entered
into a joint venture with respect to their animal health business to create
Merial Limited, a company limited by shares registered in England and Wales
(registered number 3332751) with a registered office at 27 Knightsbridge,
London SW1X 7QT, England, and domesticated in Delaware, USA as Merial LLC
("Merial"). Effective August 1, 1997, Merial assumed sponsorship of the Rhone
Merieux/Select 401(k) Plan and Trust (the "Rhone Merieux Plan"), renaming the
Rhone Merieux Plan the Merial 401(k) Savings Plan (the "Plan"). The Plan is
hereby restated in its entirety effective January 1, 1998. Benefits for any
Participant, or Beneficiary of such Participant, who retired, died, or
terminated employment at any time prior to January 1, 1998 will be determined
under the provisions of the Plan as in effect on the date of the Participant's
retirement, death, or termination, unless additional benefits are specifically
provided by a subsequent amendment to the Plan. The restated Plan contained
herein will apply to Participants, or Beneficiaries of such Participants, who
retire, die or terminate employment at any time on or after January 1, 1998.
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ARTICLE I
DEFINITIONS
Whenever the following words and phrases appear in the Plan, they
shall have the respective meaning set forth below, unless the context clearly
indicates otherwise:
1.1 "Accounting Date" shall be the last day of the Plan Year
and each other date, if any, agreed upon by the Retirement Committee and the
Trustee. The fair market value of the Trust's assets will be determined as of
the Accounting Date. The Retirement Committee shall allocate the earnings and
losses for a particular Plan Year to each Participant's account in the ratio
that such Account Balance bears to all Account Balances as of the Accounting
Date of that Plan Year. Further, all contributions under the Plan will be
allocated as of the Accounting Date.
1.2 "Account Balance" shall mean the aggregate of the amount
in the Participant's Salary Reduction Contribution Account, Matching
Contribution Account, Voluntary Contribution Account, and Rollover Contribution
Account as of any date, less any excess amounts which must be returned to the
Participant in order to avoid exceeding the limitations of Article IV.
1.3 "Annual Addition" shall mean for any Plan Year the sum of
(a) Employer contributions, (b) Employee contributions, (c) forfeitures, and
(d) amounts allocated to an individual medical account, as defined in Section
415(l)(2) of the Code which is part of a pension or annuity plan maintained by
the Employer, and amounts derived from contributions paid or accrued which are
attributable to post-retirement medical benefits allocated to the separate
account of a key employee, as defined in Section 419A(d)(3) of the Code, under
a welfare benefit fund, as defined in Section 419(e) of the Code, maintained by
the Employer.
1.4 "Annuity Starting Date" shall mean the first day of the
first period for which the Plan pays an amount as an annuity or in any other
form.
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1.5 "Beneficiary" is a person designated by a Participant who
is or may become entitled to a benefit under the Plan.
1.6 "Benefit Claims Committee" shall mean the committee
designated by the Retirement Committee to hear Participant claims and appeals
under Section 12.8 of the Plan.
1.7 "Code" means the Internal Revenue Code of 1986, as
amended.
1.8 "Company" shall mean the United States branch of Merial
Limited.
1.9 "Compensation" shall mean (a) the total regular or base
salary or wages received by an Employee from the Employer for services rendered
to the Employer, as well as any amounts contributed by or on behalf of an
Employee to a cafeteria plan or a cash or deferred arrangement which are not
includible in income under Section 125 or 402(g)(3) of the Code, but excluding
bonuses, commissions, and overtime pay, and (b) short-term disability benefits
paid by the Employer to an Employee to the extent included in gross income.
All other forms of remuneration shall be excluded from Compensation. For
purposes of Sections 1.15, 3.5, 4.2 and 4.6 of this Plan, "Compensation" shall
mean wages within the meaning of Section 3401(a) of the Code and all other
payments of compensation to an Employee for which the Employer is required to
furnish a Form W-2, as well as amounts deferred pursuant to Article III and
amounts contributed pursuant to a cafeteria plan as defined by Section 125 of
the Code. For purposes of the preceding sentence, Compensation shall be
determined without regard to any rules under Section 3401(a) that limit the
remuneration included in wages based on the nature or location of the
employment or services performed. A Participant's Compensation in his or her
initial year of participation in the Plan shall include only that Compensation
attributable to the period during which he or she is a Participant.
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In addition to other applicable limitations set forth in the Plan, and
notwithstanding any other provision of the Plan to the contrary, the annual
Compensation of each Employee taken into account under the Plan shall not
exceed the OBRA'93 Annual Compensation Limit. The OBRA'93 Annual Compensation
Limit is $150,000, as adjusted by the Commissioner for increases in the cost of
living in accordance with Section 401(a)(17)(B) of the Code. The
cost-of-living adjustment in effect for a calendar year applies to any period,
not exceeding 12 months, over which Compensation is determined (determination
period) beginning in such calendar year. If a determination period consists of
fewer than 12 months, the OBRA'93 Annual Compensation Limit will be multiplied
by a fraction, the numerator of which is the number of months in the
determination period, and the denominator of which is 12.
Any reference in this Plan to the limitation under Section 401(a)(17)
of the Code shall mean the OBRA'93 Annual Compensation Limit set forth in this
provision.
If Compensation for any prior determination period is taken into
account in determining an Employee's benefits accruing in the current Plan
Year, the Compensation for that prior determination period is subject to the
OBRA'93 Annual Compensation Limit in effect for that prior determination
period.
1.10 "ERISA" shall mean the Employee Retirement Income
Security Act of 1974, as amended.
1.11 "Effective Date" of this Plan as originally adopted is
January 1, 1989. The Effective Date of this Plan as amended and restated is
January 1, 1998.
1.12 "Employee" shall mean any employee of the Employer or of
any other employer required to be aggregated under Section 414(b), (c), (m), or
(o) of the Code.
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1.13 "Employer" shall mean the Company and any Participating
Employer which adopts this Plan, as well as any predecessors or successors to
the Employer.
1.14 "Employment Commencement Date" shall mean the date on
which the Employee first performs an Hour of Service for the Employer.
1.15 "Highly Compensated Employee" shall mean an Employee who:
(a) at any time during the Plan Year or the preceding year was a more
than 5% owner of the Employer (applying the constructive ownership
rules of Section 318 of the Code); or
(b) for the preceding year had Compensation in excess of $80,000 (as
adjusted by the Commissioner of Internal Revenue for the relevant
year).
The term "Highly Compensated Employee" also includes any former
Employee who separated from service (or has a deemed separation from service,
as determined under Treasury regulations) prior to the Plan Year, performs no
service for the Employer during the Plan Year, and was a Highly Compensated
Employee either for the separation year or any Plan Year ending on or after his
or her 55th birthday. If the former Employee's separation from service
occurred prior to January 1, 1987, he or she is a Highly Compensated Employee
only if he or she satisfied clause (a) of this Section or received Compensation
in excess of $50,000 during: (1) the year of his or her separation from service
(or the prior year); or (2) any year ending after his or her 54th birthday.
The Retirement Committee shall also have discretion to use
any other definition of "Highly Compensated Employee" promulgated by the
Secretary of Treasury.
1.16 "Hour of Service" shall mean: an hour for which an
Employee is paid, or entitled to payment for the performance of duties.
1.17 "Leased Employee" shall mean an individual (who otherwise
is not an Employee of the Employer) who, pursuant to a leasing agreement
between the Employer and any
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other person, has performed services for the Employer (or for the Employer and
any persons related to the Employer within the meaning of Section 414(n)(6) of
the Code) on a substantially full time basis for at least one year. The Plan
does not treat Leased Employees as eligible to participate.
The Plan does not treat a Leased Employee as an Employee if the
leasing organization covers the employee in a safe harbor plan and, prior to
application of this safe harbor plan exception, 20% or less of the Employer's
Employees (other than Highly Compensated Employees) are Leased Employees. A
safe harbor plan is a money purchase pension plan providing immediate
participation, full and immediate vesting, and a nonintegrated contribution
formula equal to at least 10% of the employee's compensation without regard to
employment by the leasing organization on a specified date. The safe harbor
plan must determine the 10% contribution on the basis of compensation as
defined in Section 415(c)(3) of the Code plus contributions to a cash or
deferred arrangement under Section 401(k) of the Code.
1.18 "Matching Contribution Account" shall mean the account
maintained for a Participant to record matching contributions made by the
Employer pursuant to Article IV.
1.19 "Merck Common Stock" shall mean shares of common stock in
Merck & Co.
1.20 "Merck Plan" shall mean the Merck & Co., Inc. Savings and
Security Plan.
1.21 "Merial Limited" shall mean a company limited by shares
registered in England and Wales (registered number 3332751) with a registered
office at 27 Knightsbridge, London SW1X 7QT, England, and domesticated in
Delaware, USA as Merial LLC.
1.22 "Named Fiduciary" shall mean a person designated a
fiduciary under this Plan.
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1.23 "Nonforfeitable" shall mean a Participant's or
Beneficiary's unconditional claim, legally enforceable against the Plan, to the
Participant's Account Balance.
1.24 "Normal Retirement Date" shall mean the date the
Participant attains the Normal Retirement Age of 65.
1.25 "Participant" is an Employee who is eligible to be and
becomes a Participant in accordance with the provisions of Article II.
1.26 "Participating Employer" shall mean any member of a
controlled group of corporations or trades or businesses, as defined in
Sections 414(b) and (c) of the Code, of which the Company is a member and which
adopts this Plan with the written consent of the Company.
1.27 "Plan Administrator" shall mean the person appointed by the
Retirement Committee in accordance with Article XIII.
1.28 "Plan Year" shall mean the twelve (12) consecutive month
period commencing on January 1 and ending on December 31.
1.29 "Plan" shall mean the Merial 401(k) Savings Plan.
1.30 "Plan Entry Dates" shall mean the Effective Date and any
date thereafter.
1.31 "Retirement Committee" shall mean the Committee appointed
by the U.S. Animal Health Compensation & Benefits Committee to administer this
Plan pursuant to Article XIII hereof. Each Retirement Committee member is
designated a Named Fiduciary under the Plan.
1.32 "Rhone-Poulenc ADRs" shall mean American Depository
Receipts representing shares of common stock in Rhone-Poulenc, a French
corporation.
1.33 "Rollover Contribution Account" shall mean the account
maintained for a Participant to record rollover contributions made pursuant to
Section 5.2 of the Plan.
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1.34 "Salary Reduction Contribution" shall mean the amount by
which the Participant elects to reduce his or her Compensation which is then
contributed to the Trust by the Employer.
1.35 "Salary Reduction Contribution Account" shall mean the
account maintained for a Participant to record Salary Reduction Contributions
made on his or her behalf by the Employer.
1.36 "Salary Reduction Agreement" shall mean the agreement
between the Participant and the Employer whereby the Participant directs the
Employer to contribute a designated percentage of his or her Compensation to
the Trust.
1.37 "Transferred Merck Participant" shall mean a Participant
whose Account Balance includes a Transferred Merck Benefit.
1.38 "Transferred Merck Benefit" shall mean the account balance
of a Transferred Merck Participant under the Merck Plan which is transferred
to this Plan.
1.39 "Trust" shall mean the trust created under the Plan, known
as the Merial 401(k) Savings Plan Trust.
1.40 "Trust Fund" shall mean all property of every kind held or
acquired by the Trustee pursuant to this Plan and the Trust Agreement. Trust
assets will be valued at fair market value.
1.41 "Trustee" shall Smith Barney Corporate Trust Company or any
successor Trustee appointed pursuant to the terms of the Trust.
1.42 "U.S. Animal Health Compensation & Benefits Committee"
shall mean the U.S. Animal Health Compensation & Benefits Committee of the
Company.
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1.43 "Voluntary Contribution Account" shall mean the account
maintained for a Participant to record voluntary contributions made pursuant to
Section 5.1 of the Plan.
1.44 Wherever used herein, the singular shall include the plural
and the masculine shall include the feminine and the neuter, unless the context
clearly indicates otherwise.
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ARTICLE II
PARTICIPATION
2.1 ELIGIBILITY.
(a) Each Employee who was a Participant in the Plan on December
31, 1997 shall remain a Participant in the Plan. Each other Employee shall
become a Participant in the Plan as soon as administratively feasible following
the date on which he or she performs his or her first Hour of Service with the
Employer and executes a Salary Reduction Agreement pursuant to Section 3.1.
(b) Notwithstanding Section 2.1(a), any person who is a member
of a collective bargaining unit is excluded from participation. If a
Participant does not terminate employment but becomes a member of a collective
bargaining unit, then unless the applicable collective bargaining agreement
provides otherwise, during the period that such Participant is a member of a
collective bargaining unit, the Retirement Committee shall limit that
Participant's sharing in the allocation of Employer contributions and
Participant forfeitures, if any, under the Plan to the extent of his or her
Compensation paid by the Employer for services rendered while he or she is not
a member of a collective bargaining unit. However, during such period, the
Participant's Account Balance shall continue to share fully in Trust Fund
earnings and losses.
If an Employee who is not a Participant ceases to be a member of a
collective bargaining unit, he or she shall participate in the Plan immediately
if he or she would have been a Participant had he or she not been a member of a
collective bargaining unit during his or her period of service with the
Employer.
For purposes of this Section 2.1(b), an Employee is a member of a
collective bargaining unit if he or she is included in a unit of Employees
covered by an agreement which the
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Secretary of Labor finds to be a collective bargaining agreement between
employee representatives and one (1) or more employers if there is evidence
that retirement benefits were the subject of good faith bargaining between such
employee representatives and such employer or employers. The term "employee
representatives" does not include an organization of which more than one half
the members are owners, officers or executives of the Employer.
(c) Notwithstanding Section 2.1(a), any person (i) who is not
on the United States payroll of the Employer, (ii) who is not a citizen of the
United States and does not perform services within the United States, or (iii)
who is employed by Hubbard ISA, the poultry genetics division of the Company,
is excluded from participation. If a Participant does not terminate employment
but enters into an ineligible status as described in (i), (ii) or (iii), then
during such period of ineligibility, the Retirement Committee shall limit the
allocation of Employer contributions and forfeitures, if any, to the
Participant's account to the allocation such Participant would be entitled to
based only on Compensation paid by the Employer for services rendered while he
or she is not subject to the exclusions. However, during the period of
ineligibility, the Participant's Account Balance shall continue to share fully
in Trust Fund earnings and losses.
If an Employee who is not a Participant ceases to be ineligible
pursuant to (i), (ii) or (iii) above, he or she shall participate in the Plan
immediately if he or she would have been a Participant had he or she not been
subject to the foregoing exclusions during his or her period of service with
the Employer.
2.2 PARTICIPATION UPON RE-EMPLOYMENT. A Participant whose
employment terminates shall re-enter the Plan as a Participant on the date of
his or her re-employment.
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ARTICLE III
PARTICIPANT SALARY REDUCTION
3.1 SALARY REDUCTION AGREEMENT. A Participant may elect to
enter into a Salary Reduction Agreement with the Employer which will be
applicable to all payroll periods within such Plan Year after the Plan Entry
Date following execution of the Salary Reduction Agreement. The terms of any
such Salary Reduction Agreement shall provide that the Participant agrees to a
reduction in Compensation from the Employer equal to any whole percentage from
one percent (1%) to fifteen percent (15%) of his or her Compensation for each
payroll period within such Plan Year; provided, however, that the total
percentage of Salary Reduction Contributions made under this Section 3.1 and
voluntary contributions made under Section 5.1 shall not exceed fifteen percent
(15%) of a Participant's Compensation for each payroll period within a Plan
Year. A Participant who does not elect to enter into a Salary Reduction
Agreement with the Employer shall continue to receive his or her entire amount
of Compensation in cash.
3.2 CHANGE IN SALARY REDUCTION RATE. A Participant may revise
or suspend his or her contributions under his or her Salary Reduction Agreement
at any time by filing written advance notice of any change. Salary Reduction
Agreement revisions and suspensions shall be effective as of the first day of
the first pay period after such advance notice is provided. Notwithstanding
the above, the Employer may decrease at any time the Salary Reduction
Contribution of any Participant by any percentage, whether whole or fractional,
if the Retirement Committee notifies the Employer that such decrease is
necessary to ensure that the limitations of Sections 3.4, 3.5 or 4.6 are met
for the Plan Year.
3.3 VESTING - SALARY REDUCTION CONTRIBUTION ACCOUNTS. Amounts
credited to a Participant's Salary Reduction Contribution Account shall be 100%
vested
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and Nonforfeitable at all times. The Retirement Committee shall pay all Salary
Reduction Contributions over to the Trust as soon as administratively possible,
but in no event later than fifteen (15) business days after the close of the
month in which the funds were withheld from the Participant's Compensation.
3.4 SALARY REDUCTION CONTRIBUTION LIMITATIONS. Notwithstanding
Section 3.1 hereof, the maximum amount of Compensation a Participant is
permitted to defer during any calendar year is limited to $10,000 as adjusted
by the Secretary of Treasury pursuant to Section 402(g)(5) of the Code. Any
amount that cannot be credited to the Participant's Salary Reduction
Contribution Account due to the foregoing limit shall be paid to the
Participant in cash. For purposes of the limitation of this Section 3.4, the
amount contributed to a Participant's Salary Reduction Contribution Account
shall not include any Salary Reduction Contributions properly returned to the
Participant as excess Annual Additions under Section 4.6.
If a Participant would exceed the limitation of this Section 3.4 when
the amount the Participant elects to contribute to his or her Salary Reduction
Contribution Account is aggregated with the amounts deferred by the Participant
under other plans or arrangements described in Sections 401(k), 408(k), 403(b),
457 or 501(c)(18) of the Code, the Participant may request that the Retirement
Committee distribute the excess deferrals to him or her. Such excess deferrals
and income or loss allocable thereto, determined in accordance with the
procedure for calculating income allocable to Excess Contributions under
Section 3.6, may be distributed no later than April 15 of the year following
the year in which any such excess deferrals are contributed, to Participants
who claim such allocable deferral contributions for the preceding calendar
year. The Participant's claim shall be in writing; shall be submitted to the
Retirement Committee no later than March 1; shall specify the Participant's
deferral contribution amount for the preceding calendar year; and
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shall be accompanied by the Participant's written statement that if such
amounts are not distributed, such deferral contributions, when added to amounts
deferred under other plans or arrangements described in Sections 401(k),
408(k), 403(b), 457 or 501(c)(18) of the Code, exceed the limit imposed on the
Participant in accordance with the applicable provisions of the Code for the
year in which the deferral occurred. To the extent the excess deferral arises
under this Plan when combined with other plans of the Employer, the individual
will be deemed to have notified the Retirement Committee of the excess deferral
and requested distribution of the excess deferral.
The income or loss allocable to the excess deferrals shall be the sum
of (1) the amount determined by multiplying the income or loss allocable to the
Participant's accounts containing the excess deferrals for the calendar year by
a fraction, the numerator of which is the excess deferrals on behalf of the
Participant for the calendar year and the denominator of which is the
Participant's account balance in his or her accounts containing the excess
deferrals as of the last day of the calendar year in which the excess deferrals
are made without regard to any gain or loss allocable to such total amount for
the calendar year; and (2) ten (10) percent of the amount determined under (1)
multiplied by the number of whole calendar months between the end of the
calendar year in which the excess deferrals were made and the date of
distribution, counting the month of distribution if distribution occurs after
the 15th day of such month. Excess deferrals shall be treated as Annual
Additions, unless such amounts are distributed to the Participant no later than
April 15 of the year following the year in which any such excess deferrals are
contributed.
3.5 SALARY REDUCTION DISCRIMINATION LIMITATION. The Employer
shall not permit a Participant to defer an amount of Compensation that would
cause the Plan to not satisfy at least one of the following tests; provided,
however, that effective January 1,
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1999, this Section 3.5 shall only be operative in Plan Years in which the
Employer fails to satisfy the requirements necessary to satisfy the safe harbor
under Section 401(k)(12) of the Code:
(a) The Actual Deferral Percentage for the group of Highly
Compensated Employees shall not exceed the Actual Deferral
Percentage of all other eligible Employees multiplied by 1.25;
or
(b) The Actual Deferral Percentage for the group of Highly
Compensated Employees shall not exceed the Actual Deferral
Percentage for all other eligible Employees multiplied by 2,
provided that the Actual Deferral Percentage for the group of
Highly Compensated Employees does not exceed the Actual
Deferral Percentage of all other eligible Employees by more
than two (2) percentage points or such lesser amount as the
Secretary of the Treasury shall prescribe to prevent the
multiple use of this alternative limitation with respect to
any Highly Compensated Employee.
In performing the Actual Deferral Percentage test, the "current year" testing
method shall be utilized; provided, however, that for Plan Years beginning on
or after January 1, 1999, the "prior year" testing method shall be utilized.
The Actual Deferral Percentage for a specified group of Employees for a Plan
Year shall be the average of ratios (calculated separately for each Employee in
such group) of (i) the amount of Salary Reduction Contributions actually paid
over to the Trust on behalf of each such Employee for such Plan Year, to (ii)
the Employee's Compensation for that portion of the Plan Year during which the
Employee was eligible to participate. In computing the Actual Deferral
Percentage, Salary Reduction Contributions shall not include any amounts
properly returned to (i) the Participant as excess Annual Additions under
Section 4.6; or (ii) a Nonhighly Compensated Employee as excess deferrals under
Section 3.5. The Actual Deferral Percentage for a Participant who makes no
Salary Reduction Contributions during a Plan Year shall be 0%. Contributions
taken into account for purposes of determining the Actual Deferral Percentage
test must be made before the last day of the twelve-month period immediately
following the Plan Year to which the contributions relate. In computing the
Actual Deferral Percentage, the Retirement
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Committee may include in subparagraph (i) above, the amount of any Employer
contributions which are 100% vested when made and are unavailable for
withdrawal or distribution except under the same circumstances as Salary
Reduction Contributions. If matching contributions are taken into account for
purposes of this subparagraph (i), they must meet the requirements applicable
to Employer contributions in the preceding sentence and cannot be taken into
account under Section 4.2(i). In the event Salary Reduction Contributions are
used to satisfy the Average Contribution Percentage test under Section 4.2, the
Actual Deferral Percentage test must be satisfied both with and without
inclusion of the Salary Reduction Contributions used in the Average
Contribution Percentage test.
The Actual Deferral Percentage for any Employee who is a Highly
Compensated Employee for the Plan Year and who has Salary Reduction
Contributions allocated to his or her account under two or more plans of the
Employer, shall be determined as if all such contributions were made under a
single plan. If the above plans have different plan years, all cash or
deferred arrangements ending with or within the same calendar year shall be
treated as a single arrangement.
In the event that this Plan satisfies the requirements of Section
401(k), 401(a)(4) or 410(b) of the Code only if aggregated with one or more
other plans, or if one or more other plans satisfy the requirements of Section
401(k), 401(a)(4) or 410(b) of the Code only if aggregated with this Plan, then
this Section 3.5 shall be applied by determining the Actual Deferral
Percentages of Participants as if all such plans were a single plan. Plans may
be aggregated to satisfy Section 401(k) of the Code only if they have the same
plan year.
The Employer shall maintain records sufficient to demonstrate
satisfaction of the Actual Deferral Percentage test. The determination
and treatment of the Actual Deferral Percentage
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amounts of any Participant shall satisfy such other requirements as may be
prescribed by the Secretary of the Treasury.
3.6 EXCESS CONTRIBUTIONS. Notwithstanding the fore-going
paragraph, with respect to any Plan Year in which the salary reduction
discrimination limitation of Section 3.5 is operative and Salary Reduction
Contributions on behalf of Highly Compensated Employees exceed the applicable
limit, the Retirement Committee shall reduce the amount of the Excess
Contributions made on behalf of the Highly Compensated Employees by (a)
determining the amount of Excess Contributions by each Highly Compensated
Employee (in order of actual deferral percentages beginning with the highest),
and (b) distributing any Excess Contributions which are determined to exist, as
adjusted by the income or loss allocable to such Excess Contributions, to the
affected Highly Compensated Employees (in order of highest dollar amount of
Salary Reduction Contributions) no later than March 15 of the year following
the Plan Year in which any such Excess Contributions are made, but in no event
shall such amounts be distributed later than the end of the Plan Year following
the Plan Year in which such Excess Contributions were contributed.
For purposes of Section 3.6, "Excess Contributions" shall mean, with
respect to any Plan Year, the aggregate amount of Employer contributions
actually taken into account in computing the Actual Deferral Percentage of the
Highly Compensated Employees over the maximum amount of such contributions
permitted by the Actual Deferral Percentage test. The income or loss allocable
to the Excess Contributions shall be the sum of (1) the amount determined by
multiplying the income or loss allocable to the Participant's accounts
containing the Excess Contributions for the Plan Year, and for the period
between the end of the Plan Year and the date of distribution, by a fraction,
the numerator of which is the Excess Contributions on behalf of the Participant
for the Plan Year and the denominator of which is the Participant's account
balance in
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his or her accounts containing the Excess Contributions as of the Accounting
Date of the Plan Year in which the Excess Contribution is made without regard
to any gain or loss allocable to such total amount for the Plan Year; and (2)
ten (10) percent of the amount determined under (1) multiplied by the number of
whole calendar months between the end of the Plan Year in which the Excess
Contributions were made and the date of distribution, counting the month of
distribution if distribution occurs after the 15th day of such month.
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ARTICLE IV
EMPLOYER CONTRIBUTIONS
4.1 FIXED MATCHING CONTRIBUTION. The Employer shall make a
matching contribution to each Participant's Matching Contribution Account equal
to 100% of a Participant's Salary Reduction Contributions and voluntary
contributions up to 3% of the Participant's Compensation and 50% of a
Participant's Salary Reduction Contributions and voluntary contributions
between 3% and 6% of the Participant's Compensation. Matching contributions
shall be made on a Participant's Salary Reduction Contributions before they are
made on a Participant's voluntary contributions. Amounts credited to a
Participant's Matching Contribution Account shall be 100% vested and
Nonforfeitable at all times. Notwithstanding the above, the Employer may
decrease the matching contribution allocable to any Participant if such
decrease is necessary to ensure that the limitations of Sections 4.2 and 4.6
are met for such Plan Year.
4.2 LIMITATIONS ON MATCHING CONTRIBUTIONS. The Employer shall
not make matching contributions to the Plan which, when aggregated with
voluntary contributions made by the Participant under Section 5.01, would cause
the Plan not to satisfy at least one of the following tests:
(a) The Average Contribution Percentage for the group of Highly
Compensated Employees shall not exceed the Average Contribution
Percentage for all other eligible Employees multiplied by 1.25; or
(b) The Average Contribution Percentage for the group of Highly
Compensated Employees shall not exceed the Average Contribution
Percentage for all other eligible Employees multiplied by 2, provided
that the Average Contribution Percentage for the group of Highly
Compensated Employees does not exceed the Average Contribution
Percentage for all other eligible Employees by more than two (2)
percentage points or such lesser amount as the Secretary of the
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Treasury shall prescribe to prevent the multiple use of this
alternative limitation with respect to any Highly Compensated
Employee.
In performing the Average Contribution Percentage test, the "current year"
testing method shall be utilized; provided, however, that for Plan Years
beginning on or after January 1, 1999, the "prior year" testing method shall be
utilized. For purposes of this Section, the Average Contribution Percentage
for a specified group of Employees shall be the average of the ratios
(calculated separately for each Employee in the group) of (i) the matching
contributions under the Plan on behalf of the Employee for the Plan Year, to
(ii) the Employee's Compensation for that portion of the Plan Year during which
the Employee was eligible to participate. The Average Contribution Percentage
for a Participant who is not allocated a matching contribution and makes no
voluntary contributions shall be 0%. For purposes of determining Contribution
Percentages, Salary Reduction Contributions are considered to have been made in
the Plan Year in which contributed to the Trust. Employer contributions will
be considered made for a Plan Year if made no later than the end of the
twelve-month period beginning on the day after the close of the Plan Year. In
computing Contribution Percentages, the Retirement Committee may include in
subparagraph (i) above, Salary Reduction Contributions, except for Salary
Reduction Contributions which are properly distributed as excess Annual
Additions under Section 4.6.
In computing Contribution Percentages, the Retirement Committee shall
not include matching contributions that are forfeited either to correct Excess
Aggregate Contributions under Section 4.3 or because the contributions to which
the matching contributions relate are excess deferrals under Section 3.4,
Excess Contributions under Section 3.6 or Excess Aggregate Contributions under
Section 4.3.
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The Contribution Percentage for any Employee who is a Highly
Compensated Employee for the Plan Year and who has matching contributions
allocated to his or her account under two or more plans of the Employer shall
be determined as if all such contributions were made under a single plan. If
the above plans have different plan years, the plans ending with or within the
same calendar year shall be treated as a single plan.
In the event that this Plan satisfies the requirements of Section
401(m), 401(a)(4) or 410(b) of the Code only if aggregated with one or more
other plans, or if one or more other plans satisfy the requirements of Section
401(m), 401(a)(4) or 410(b) of the Code only if aggregated with this Plan, then
this Section 4.2 shall be applied by determining the Contribution Percentages
of Employees as if all such plans were a single plan. Plans may be aggregated
in order to satisfy Section 401(m) of the Code only if they have the same Plan
Year.
The determination and treatment of the Contribution Percentage of any
Employee shall satisfy such other requirements as may be prescribed by the
Secretary of the Treasury. The Employer shall maintain records sufficient to
demonstrate satisfaction of the Average Contribution Percentage test.
Effective January 1, 1999, this Section 4.2 shall be operative with
respect to matching contributions only if the Employer fails to satisfy the
requirements necessary to fall within the safe harbor under Section 401(m)(11)
of the Code. This Section 4.2 shall remain operative as to voluntary
contributions at all times.
4.3 DISTRIBUTION OF EXCESS AGGREGATE CONTRIBUTIONS. To the
extent that Section 4.2 of this Plan is operative and the limitations therein
are not satisfied for a given Plan Year, Excess Aggregate Contributions and
income allocable thereto shall be distributed no later than March 15 of the
Plan Year following the Plan Year in which any such
21
<PAGE> 24
Excess Aggregate Contribution were made, but in no event shall the Excess
Aggregate Contributions be distributed later than the last day of the Plan Year
following the Plan Year in which the contributions giving rise to the Excess
Aggregate Contributions were allocated. If Excess Aggregate Contributions are
distributed more than 2 1/2 months after the last day of the Plan Year in which
such excess amounts arose, a ten (10) percent excise tax will be imposed on the
Employer maintaining the Plan with respect to those amounts. Excess Aggregate
Contributions shall be treated as Annual Additions under the Plan.
For purposes of Section 4.3, "Excess Aggregate Contributions" shall
mean, with respect to any Plan Year, the excess of the aggregate Contribution
Percentage amounts taken into account in computing the numerator of the
Contribution Percentage actually made on behalf of Highly Compensated Employees
for such Plan Year, over the maximum Contribution Percentage amounts permitted
by the Average Contribution Percentage test. Excess Aggregate Contributions
shall be reduced by (a) determining the amount of Excess Aggregate
Contributions by each Highly Compensated Employee (in order of Contribution
Percentages beginning with the highest); and (b) distributing any Excess
Aggregate Contributions which are determined to exist to the affected Highly
Compensated Employees (in order of highest dollar amount of Salary Reduction
Contributions). Such determination shall be made after first determining
Excess Contributions pursuant to Section 3.6 and then determining Excess
Aggregate Contributions pursuant to this Section 4.3. The Excess Aggregate
Contributions to be distributed to a Participant shall be adjusted by the
income or loss allocable to such Excess Aggregate Contribution. The income or
loss allocable to the Excess Aggregate Contributions shall be the sum of (1)
the amount determined by multiplying the income or loss allocable to the
Participant's accounts containing the excess amounts for the Plan Year, and for
the period between the end of the Plan Year and the date of distribution,
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<PAGE> 25
by a fraction, the numerator of which is the Excess Aggregate Contributions on
behalf of the Participant for the Plan Year and the denominator of which is the
Participant's account balance in the accounts containing the excess amounts as
of the Accounting Date of the Plan Year in which the Excess Aggregate
Contribution is made without regard to any gain or loss allocable to such total
amount for the Plan Year; and (2) ten (10) percent of the amount determined
under (1) multiplied by the number of whole calendar months between the end of
the Plan Year in which the Excess Aggregate Contributions were made and the
date of distribution, counting the date of distribution if distribution occurs
after the 15th day of such month.
4.4 FORFEITURE OF MATCHING CONTRIBUTIONS. In order to
satisfy Section 4.2, the Retirement Committee, in its discretion, may forfeit
non-vested matching contributions and the income allocable thereto in lieu of
distributing Excess Aggregate Contributions. In the event a matching
contribution relates to an excess deferral under Section 3.4, or an Excess
Contribution under Section 3.6, the matching contribution and income allocable
thereto shall be forfeited. The income allocable to a matching contribution
shall be determined in accordance with the procedure for determining income
allocable to Excess Aggregate Contributions set forth in Section 4.3. Forfeited
matching contributions and the income allocable thereto shall be applied to
reduce the Employer's matching contribution obligation as of the last day of
the month following the date on which the forfeiture occurs. The forfeited
amounts are treated as Annual Additions under the Plan for both those
Participants to whose Accounts such amounts are reallocated as well as for
those Participants from whose Accounts the amounts are forfeited. Matching
contributions shall be administered in accordance with Section 401(a)(4) of the
Code.
4.5 EMPLOYER CONTRIBUTIONS. This Plan is intended to be
a profit sharing plan to which Employer contributions shall be made without
regard to current or
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<PAGE> 26
accumulated profits. All contributions by the Employer shall be paid to the
Trustee not later than the time prescribed by law for filing the federal income
tax return of the Employer, including any extensions which have been granted
for the filing of such return.
4.6 LIMITATION ON ALLOCATION TO PARTICIPANT'S ACCOUNT. If an
Employee does not and has not ever received an allocation of Annual Additions
as defined in 1.3(d), the amount of Annual Additions which the Retirement
Committee may allocate under this Plan on a Participant's behalf for a
Limitation Year shall not exceed the Maximum Permissible Amount. Prior to the
determination of the Participant's actual Compensation for a Limitation Year,
the Retirement Committee may determine the Maximum Permissible Amount on the
basis of the Participant's estimated annual Compensation for such Limitation
Year. The Retirement Committee shall make this determination on a uniform and
reasonable basis for all Participants similarly situated. As soon as is
administratively feasible after the end of the Limitation Year, the Retirement
Committee shall determine the Maximum Permissible Amount for the Limitation
Year on the basis of the Participant's Compensation for the Limitation Year.
If, as a result of the Retirement Committee's estimation of the
Participant's Compensation, as a result of a forfeiture allocation, or as a
result of a reasonable error in determining the amount of Salary Reduction
Contributions that may be made with respect to any Participant under the limits
of Section 415 of the Code, an Excess Amount exists, any Salary Reduction
Contributions or nondeductible voluntary contributions will be returned to the
Participant. To the extent an Excess Amount still exists, the Retirement
Committee shall reduce any Employer contributions and forfeitures to the
Participant's Accounts at the end of the Limitation Year by the Excess Amount,
and any remaining Excess Amount shall be carried over to the next Limitation
Year. If the Participant is not covered by the Plan as of the end of the
Limitation Year,
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<PAGE> 27
then the Excess Amount will be allocated to the Accounts of all other
Participants in the Plan for the Limitation Year before any other amounts are
allocated for such Limitation Year.
If an Employee is a Participant at any time in both a defined benefit
plan and a defined contribution plan maintained by the Employer, the sum of the
defined benefit plan fraction and the defined contribution plan fraction for
any Plan Year may not exceed 1.
The defined benefit plan fraction for any Plan Year is a fraction, the
numerator of which is the Participant's projected annual benefit under the plan
(determined at the close of the Plan Year) and the denominator of which is the
lesser of (1) 1.25 multiplied by the dollar limitation in effect for such Plan
Year under Section 415(b)(1)(A) of the Code as adjusted by Section 415(d) of
the Code; or (2) 1.4 multiplied by one-hundred percent (100%) of the
Participant's average monthly Compensation during the three consecutive years
when the total Compensation paid to him or her was highest, including any
adjustment under Section 415(b) of the Code. Notwithstanding the above, if the
Participant was a participant as of the first day of the first Limitation Year
beginning after December 31, 1986, in one or more defined benefit plans
maintained by the Employer which were in existence on May 6, 1986, the
denominator of this fraction will not be less than 125 percent of the sum of
the annual benefits under such plans which the Participant had accrued as of
the close of the last Limitation Year beginning before January 1, 1987,
disregarding any changes in the terms and conditions of the plan after May 5,
1986. The preceding sentence applies only if the defined benefit plans
individually and in the aggregate satisfied the requirements of Section 415 for
all Limitation Years beginning before January 1, 1987.
The defined contribution plan fraction for any Plan Year is a
fraction, the numerator of which is the sum of the Annual Additions to the
Participant's Account Balance as of the close of the Plan Year, (including the
Annual Additions attributable to the Participant's nondeductible
25
<PAGE> 28
employee contributions to all defined benefit plans, whether or not terminated,
maintained by the Employer, and the Annual Additions attributable to all
welfare benefit funds, as defined in Section 419(e) of the Code, and individual
medical accounts, as defined in Section 415(l)(2) of the Code, maintained by
the Employer) and the denominator of which is the sum of the applicable maximum
amounts of Annual Additions which could have been made under Section 415(c) of
the Code for such Plan Year and for all prior years of such Participant's
employment. If the employee was a Participant as of the end of the first day
of the first Limitation Year beginning after December 31, 1986, in one or more
defined contribution plans maintained by the Employer which were in existence
on May 6, 1986, the numerator of this fraction will be adjusted if the sum of
this fraction and the defined benefit fraction would otherwise exceed 1.0,
under the terms of this Plan. Under the adjustment, an amount equal to the
product of (1) of the excess of the sum of the fractions over 1.0 times (2) the
denominator of this fraction, will be permanently subtracted from the numerator
of this fraction. The adjustment is calculated using the fractions as they
would be computed as of the end of the last Limitation Year beginning before
January 1, 1987, and disregarding any changes in the terms and conditions of
the Plan made after May 5, 1986, but using the Section 415 limitation
applicable to the first Limitation Year beginning on or after January 1, 1987.
The applicable maximum amount for any Plan Year shall be equal to the
lesser of (1) 1.25 multiplied by the dollar limitation in effect for such Plan
Year under Section 415(c)(1)(A) of the Code; or (2) 1.4 multiplied by
twenty-five percent (25%) of the Participant's Compensation for such Plan Year.
For purposes of this limitation, all defined benefit plans of the Employer,
whether or not terminated, are to be treated as one defined benefit plan and
all defined contribution plans of the Employer, whether or not terminated, are
to be treated as one defined contribution plan.
The following definitions apply to this Section only:
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<PAGE> 29
(a) "Maximum Permissible Amount" - For a Limitation Year, the
Maximum Permissible Amount with respect to any Participant
shall be the lesser of (i) $30,000 (or, if greater, 25% of the
dollar limitation in effect under Section 415(b)(1)(A) of the
Code), or (ii) twenty-five percent (25%) of the Participant's
Compensation for the Limitation Year.
(b) "Compensation" - Compensation as defined in Section 1.09
of the Plan.
(c) "Employer" - The Employer which adopts this Plan as well
as any entity which must be aggregated with the Employer
pursuant to Section 414(b), (c), (m), (n) or (o) of the Code.
(d) "Excess Amount" - The excess of the Participant's Annual
Additions credited to the Participant's Account for the
Limitation Year over the Maximum Permissible Amount. Any
Excess Amount shall be held in a suspense account which does
not participate in the allocation of the Trust's investment
gains and losses. Excess Amounts may not be distributed to
Participants or former Participants. Any Excess Amount which
is allocated shall be deemed to be an Annual Addition for the
Limitation Year in which it is allocated.
(e) "Limitation Year" - The Plan Year.
(f) "Projected Annual Benefit" - The annual retirement
benefit (adjusted if such benefit is expressed in a form other
than a straight life annuity or qualified joint and survivor
annuity) to which the Participant would be entitled under the
terms of the plan assuming:
(1) the Participant will continue employment until
normal retirement age under the plan (or current age, if
later), and
(2) the Participant's Compensation for the current
Limitation Year and all other relevant factors used to
determine benefits under the Plan will remain constant for all
future Limitation Years.
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<PAGE> 30
ARTICLE V
PARTICIPANT CONTRIBUTIONS
5.1 VOLUNTARY CONTRIBUTIONS. A Participant may make
nondeductible employee contributions ("voluntary contributions") in an amount
equal to any whole percentage from one percent (1%) to fifteen percent (15%) of
his or her Compensation for each payroll period within such Plan Year;
provided, however, that the total percentage of voluntary contributions made
under this Section 5.1 and Salary Reduction contributions made under Section
3.1 shall not exceed fifteen percent (15%) of a Participant's Compensation for
each payroll period within a Plan Year. Any voluntary contributions made by a
Participant will be allocated to the Participant's Account Balance as soon as
administratively possible, but in no event later than fifteen (15) business
days after the close of the month in which the funds were withheld from the
Participant's Compensation. The Retirement Committee shall not accept any
Participant's voluntary contributions which when aggregated with matching
contributions made on behalf of the Participant do not satisfy the
nondiscrimination test set forth in Section 4.2. For purposes of Section 4.2,
the Average Contribution Percentage of a Participant who is not allocated a
matching contribution and does not make a voluntary contribution shall be 0%.
A Participant's voluntary contribution will be considered to have been made in
the Plan Year during which it is contributed to the Trust. To the extent
Section 4.2 is not satisfied, any Excess Aggregate Contributions must be
returned to the Participant pursuant to Section 4.3. The Retirement Committee
shall return voluntary contributions prior to returning any other Excess
Aggregate Contributions. All voluntary contributions made by a Participant and
income accruing thereon shall be one hundred percent (100%) vested. A separate
account will be maintained to reflect voluntary contributions and income
accruing thereon. All voluntary contributions made after December 31, 1986 and
the
28
<PAGE> 31
income allocable thereto shall be treated as a separate contract for purposes
of the distribution rules under Section 72 of the Code. The Retirement
Committee shall maintain records of withdrawals, contributions, earnings and
losses attributable to each contract. A separate account will be maintained to
reflect voluntary contributions and income accruing thereon. All voluntary
contributions made after December 31, 1986 and the income allocable thereto
shall be treated as a separate contract for purposes of the distribution rules
under Section 72 of the Code. The Committee shall maintain records of
withdrawals, contributions, earnings and losses attributable to each contract.
A Participant may make a withdrawal at any time of his voluntary contributions.
Withdrawals shall be made from pre-1987 voluntary contributions first. After
the contract attributable to pre-1987 voluntary contributions is depleted,
withdrawals can be made from the other contract. Voluntary contributions shall
be administered in accordance with Section 401(a)(4) of the Code.
5.2 ROLLOVER CONTRIBUTIONS. Any Employee, with the Retirement
Committee's consent, may contribute cash to the Trust Fund, if the contribution
is a Rollover Contribution. For this purpose a Rollover Contribution means (a)
a contribution by an Employee of a distribution received from the qualified
plan of another employer provided the Employee makes the contribution within 60
days of his or her receipt of a distribution which satisfied the requirements
of Section 402(a)(5) of the Code before January 1, 1993 and Section 402(c) on
or after January 1, 1993; (b) a contribution by an Employee under Section
408(d)(3) of the Code of the balance in an individual retirement account or
annuity which amount is attributable to a prior rollover distribution which
satisfied the requirements of Section 402(a)(5) of the Code (or current Section
402(c)); or (c) a direct transfer of the Employee's interest from the trustee
of a qualified plan maintained by another employer. Before accepting a
Rollover Contribution, the
29
<PAGE> 32
Retirement Committee may require the Employee to furnish satisfactory evidence
that the proposed transfer is in fact a Rollover Contribution which the Code
permits an Employee to make to a qualified plan. All Rollover Contributions
shall be fully vested at all times.
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ARTICLE VI
TERMINATION OF SERVICE
6.1 NORMAL RETIREMENT DATE. Upon reaching his or her Normal
Retirement Date, a Participant shall be fully vested in his or her Account
Balance. A Participant who remains employed after reaching his or her Normal
Retirement Date shall continue to fully participate in this Plan. Upon
termination of a Participant's employment for any reason after Normal
Retirement Date, the Retirement Committee shall direct the Trustee to commence
payment of the Participant's Account Balance to him or her (or to his or her
Beneficiary if the Participant is deceased), in accordance with the provisions
of Article VII no later than sixty (60) days after the close of the Plan Year
in which the Participant's employment terminates.
6.2 PARTICIPANT DISABILITY. The Retirement Committee shall
direct the Trustee to commence payment of the Participant's Account Balance to
him or her in accordance with the provisions of Article VII no later than sixty
(60) days after the close of the Plan Year in which the Participant is deemed
disabled. The Plan shall consider a Participant disabled on the date the
Retirement Committee determines the Participant, because of a physical or
mental disability, will be unable to perform the duties of his or her customary
position of employment (or is unable to engage in any substantial gainful
activity) for an indefinite period which the Retirement Committee considers
will be of long and continued duration. The Retirement Committee also shall
consider a Participant disabled if he or she incurs the permanent loss of use
of a member or function of the body, or is permanently disfigured. The
immediately preceding sentence shall not apply unless the Participant
terminates employment. The Retirement Committee may require a Participant to
submit to a physical examination in order to confirm disability. If the
disabled Participant is a member of the Retirement Committee, a disinterested
third party shall be appointed by the Retirement Committee to evaluate the
Retirement
31
<PAGE> 34
Committee member's condition. The Retirement Committee shall apply the
provisions of this Section 6.2 in a nondiscriminatory, consistent and uniform
manner.
6.3 TERMINATION OF SERVICE PRIOR TO NORMAL RETIREMENT DATE.
Upon termination of a Participant's employment prior to Normal Retirement Date
(for any reason other than death or disability), the Retirement Committee shall
direct the Trustee to commence payment of the Participant's vested Account
Balance to him or her (or to his or her Beneficiary if the Participant is
deceased), in accordance with the provisions of Article VII, no later than
sixty (60) days after the close of the Plan Year in which the Participant's
employment terminates.
6.4 VESTING - EMPLOYER CONTRIBUTIONS. All Participants shall be
fully and immediately vested in their Account Balances as of January 1, 1998.
Amounts credited thereafter to a Participant's Matching Contribution Account
shall likewise be one hundred percent (100%) vested at all times.
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ARTICLE VII
TIME AND METHOD OF PAYMENT OF BENEFITS
7.1 TIME OF PAYMENT OF ACCOUNT BALANCE. Unless the
Participant elects in writing, if distribution has not yet commenced pursuant
to Sections 6.2 or 6.3, the Retirement Committee shall direct the Trustee to
commence distribution of a Participant's Account Balance determined as of the
Accounting Date occurring on or about the date of distribution as soon as
practicable but no later than sixty (60) days after the close of the Plan Year
in which the later of the following events occurs:
(a) The date the Participant reaches his or her Normal Retirement
Date, or
(b) The date the Participant terminates service with the Employer.
The Retirement Committee shall, however, direct the Trustee to commence
distribution no later than the Participant's Required Beginning Date. The
Required Beginning Date is April 1 of the calendar year following the calendar
year in which a Participant attains age 70-1/2. Notwithstanding the foregoing,
the Required Beginning Date for a Participant who is not a 5% owner and who
attains age 70-1/2 after December 31, 1998 shall be April 1 of the calendar
year following the calendar year in which the Participant attains age 70-1/2 or
retires, whichever is later.
7.2 DEFERRED DISTRIBUTION. A Participant who separates from
service may request that the Retirement Committee direct the Trustee to defer
commencement of his or her distribution until his or her Normal Retirement
Date.
7.3 FORMS OF PAYMENT. The Participant may elect one of the
optional forms of payment described herein. The election of such option must
be in writing, in such form as the Retirement Committee shall prescribe, signed
by the Participant and filed with the Retirement
33
<PAGE> 36
Committee during the 90 day period preceding the Annuity Starting Date. Any
election may be revoked by written notice filed with the Retirement Committee
at least 30 days prior to the Participant's Annuity Starting Date. Such
distribution may commence less than 30 days after the Participant is advised
that he or she may elect an immediate distribution, provided that:
(a) the Retirement Committee clearly informs the Participant that the
Participant has a right to a period of at least 30 days after
receiving the notice to consider the decision of whether or not to
elect a distribution (and, if applicable, a particular distribution
option), and
(b) the Participant, after receiving the notice, affirmatively elects
a distribution.
The following optional forms of distribution will be available:
(a) a lump sum payment in cash; or
(b) annual installment payments in cash over a period not to exceed
ten years.
Notwithstanding the preceding paragraph, a Participant may request that that
portion of his or her Account Balance which is invested in Merck Common Stock
or Rhone-Poulenc ADRs be distributed in-kind.
7.4 PAYMENT UPON DEATH. If distribution of the Participant's
Account Balance has commenced in accordance with a method selected pursuant to
Section 7.3 and the Participant dies before his or her entire interest is
distributed to him or her, the remaining portion of such interest shall be
distributed at least as rapidly as under the method of distribution selected by
the Participant as of his or her date of death.
If a Participant dies prior to the commencement of distribution of his
or her Account Balance, distribution of his or her Account Balance to his or
her designated Beneficiary shall be
34
<PAGE> 37
completed by December 31 of the calendar year containing the fifth anniversary
of his or her death, unless one of the following exceptions apply:
(a) If the Participant's Account Balance is payable to or for the
benefit of a designated Beneficiary, it may be distributed over the
life of such Beneficiary (or over a period not extending beyond the
life expectancy of such Beneficiary), provided such distribution
commences no later than the December 31 following the close of the
calendar year in which the Participant's death occurred.
(b) In the event that the Participant's spouse is his or her
designated Beneficiary, distribution to the spouse must commence no
later than the later of the December 31 of the calendar year in which
the deceased Participant would have attained age 70 1/2 had he or she
survived or the December 31 following the close of the calendar year
in which the Participant's death occurred. If the surviving spouse
dies before distribution to such spouse has commenced, then the five
year distribution requirement of this Section shall apply as if the
spouse were the Participant.
If the Participant has not designated a method of distribution in
accordance with (a) or (b) above, the Participant's designated Beneficiary must
elect the method of distribution no later than the earlier of (1) December 31
of the calendar year in which distributions would be required to begin under
this Section, or (2) December 31 of the calendar year which contains the fifth
anniversary of the date of death of the Participant. If the Participant has no
designated Beneficiary, or if the designated Beneficiary does not elect a
method of distribution, distribution of the Participant's entire interest must
be completed by December 31 of the calendar year containing the fifth
anniversary of the Participant's death.
For purposes of this Section, any amount paid to a child of the
Participant will be treated as if it had been paid to the surviving spouse if
the amount becomes payable to the surviving spouse when the child reaches the
age of majority. For purposes of this Section only, distribution of a
Participant's interest is considered to begin on the Participant's Required
Beginning Date (or, if
35
<PAGE> 38
(b) above is applicable, the date distribution is required to begin to the
surviving spouse). If distribution in the form of an annuity irrevocably
commences to the Participant before the Required Beginning Date, the date
distribution is considered to begin is the date distribution actually
commences.
If the Trustee makes distribution in accordance with the exceptions in
either clause (a) or (b), the minimum distribution for a calendar year equals
the Participant's Nonforfeitable Account Balance as of the latest Accounting
Date preceding the beginning of the calendar year (adjusted by distributions
made after the Accounting Date but prior to the end of the calendar year),
divided by the designated Beneficiary's life expectancy without recalculation.
A distribution to the Beneficiary in the form of an annuity will satisfy the
minimum distribution requirements of this Section 7.4 if the method of
distribution provides substantially nonincreasing payments and otherwise
satisfies applicable Treasury regulations. The Retirement Committee shall use
the unisex life expectancy multiples under Treasury regulation Section 1.72-9
for purposes of applying this paragraph. In construing this Section 7.4, the
method of distribution to the Participant's Beneficiary must satisfy Section
401(a)(9) of the Code and the applicable Treasury regulations.
7.5 MINIMUM DISTRIBUTION REQUIREMENTS. Notwithstanding
anything else to the contrary herein, the Retirement Committee may not direct
the Trustee to distribute the Participant's Nonforfeitable Account Balance, nor
may the Participant elect to have the Trustee distribute his or her Account
Balance over a period extending beyond the Participant's life expectancy or
over a period extending beyond the joint life and last survivor life expectancy
of the Participant and his or her designated Beneficiary. The minimum
distribution for a calendar year equals the Participant's Nonforfeitable
Account Balance as of the most recent Accounting Date preceding the calendar
year (adjusted for allocations of contributions, forfeitures and distributions
36
<PAGE> 39
made after the Accounting Date but prior to the end of the calendar year, if
applicable), divided by the applicable life expectancy or, if the Participant's
spouse is not his or her designated Beneficiary, the applicable divisor
determined from the table set forth in Q&A-4 of Section 1.401(a)(9)-2 of the
proposed regulations. The applicable life expectancy shall be the life
expectancy (or joint and last survivor expectancy) calculated using the
attained age of the Participant (or designated Beneficiary) as of the
Participant's (or designated Beneficiary's) birthday in the first distribution
calendar year reduced by one for each calendar year which elapsed since the
date life expectancy was first calculated. Applicable life expectancies will
be determined under the unisex life expectancy multiples under Treasury
regulation Section 1.72-9, and will not be recomputed. The minimum distribution
required for the Participant's first distribution calendar year must be made on
or before the Participant's Required Beginning Date. The minimum distribution
for other calendar years, including the minimum distribution for the
distribution calendar year in which the Participant's Required Beginning Date
occurs, must be made on or before December 31 of that distribution calendar
year. The first distribution calendar year is the calendar year immediately
preceding the calendar year which contains the Participant's Required Beginning
Date. All distributions under the Plan must be made in accordance with Section
401(a)(9) of the Code and the Treasury regulations thereunder. To the extent
provisions of this Plan are inconsistent with Section 401(a)(9) of the Code,
Section 401(a)(9) of the Code will override such provisions.
7.6 IMMEDIATE DISTRIBUTION If the Participant's
Nonforfeitable Account Balance is $3,500 or less, including voluntary
contributions, if applicable, the Retirement Committee will immediately
distribute such amount to the Participant without his or her consent upon his
or her termination of employment. The previous sentence notwithstanding,
effective January 1, 1998, the Committee will immediately distribute a
Participant's Nonforfeitable Account
37
<PAGE> 40
Balance to the Participant without his or her consent upon his or her
termination of employment if the Participant's Nonforfeitable Account Balance,
including voluntary contributions, if applicable, is $5,000 or less. No
distribution may be made pursuant to this Section after the Annuity Starting
Date without the consent of the Participant, and if applicable, the
Participant's spouse.
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ARTICLE VIII
WITHDRAWALS
8.1 HARDSHIP WITHDRAWAL. If a Participant elects to withdraw
all or any part of his or her Salary Reduction Contribution Account prior to
the date he or she attains age 59-1/2, such withdrawal will require the consent
of the Retirement Committee and such consent shall be given only if, under
uniform rules of application, the Retirement Committee determines that the
purpose of the withdrawal is to meet heavy and immediate financial needs of the
Participant and the amount of the hardship distribution requested is necessary
to satisfy the specified need. Withdrawals are permitted only for (1) payment
of college or graduate school tuition and related educational fees for college
or graduate school for the next 12 months for the Participant, the
Participant's spouse, children or dependents; (2) costs directly related to the
purchase of a principal residence for the Participant, excluding mortgage
payments; (3) payments necessary to prevent the Participant's eviction from, or
foreclosure on the mortgage of, the Participant's principal residence; and (4)
expenses for medical care, to the extent not covered by insurance, which have
either been previously incurred by the Participant, the Participant's spouse or
dependents or are necessary for the Participant, the Participant's spouse or
dependents to obtain medical care. The foregoing definition of hardship may be
altered by the Retirement Committee, as may the time, amount and manner of
distributions under this Section, to the extent required by the Code or
applicable regulations. No distributions may be made under this Section to the
extent that such distributions would be allocable to income allocable to Salary
Reduction Contributions.
The amount of the hardship distribution shall not exceed the amount of
the Participant's immediate and heavy financial
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need. The amount of an immediate and heavy financial need may include any
amounts necessary to pay any Federal, state or local income taxes or penalties
reasonably anticipated to result from the distribution. Prior to obtaining a
hardship distribution from this Plan, the Participant must obtain all
distributions, other than hardship distributions, and all nontaxable loans from
this Plan and from all other plans maintained by the Employer.
A hardship distribution from this Plan will be permitted only if all
other plans maintained by the Employer prohibit the Participant from making (a)
elective contributions and Employee contributions for at least twelve (12)
months subsequent to the hardship distribution; and (b) elective contributions
for the taxable year subsequent to the taxable year of the hardship
distribution, which exceed the limit on such deferrals under Section 402(g) of
the Code for such subsequent taxable year less the amount of such Participant's
elective contributions for the taxable year of the hardship distribution.
A Participant who has obtained a hardship distribution shall not make
Salary Reduction Contributions or voluntary contributions to this Plan for at
least twelve (12) months subsequent to the hardship distribution nor shall the
Participant make Salary Reduction Contributions to this Plan for the taxable
year subsequent to the taxable year of the hardship distribution, which exceed
the limit on such deferrals under Section 402(g) of the Code for such
subsequent taxable year less the amount of such Participant's Salary Reduction
Contributions for the taxable year of the hardship distribution.
8.2 AGE 59-1/2 WITHDRAWALS. A Participant may elect to
withdraw any portion of his Salary Reduction Contribution Account, Matching
Contribution Account, or Rollover Contribution Account for any reason after
attainment of age 59-1/2.
8.3 IN-SERVICE WITHDRAWALS ATTRIBUTABLE TO TRANSFERRED MERCK
BENEFITS. The following special rules apply to in-service withdrawals by a
Transferred
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Merck Participant from that portion of his or her Account Balance which is
attributable to his or her Transferred Merck Benefit:
(a) Notwithstanding any other provision of this Plan to the contrary,
a Transferred Merck Participant may request once per year an in-service
withdrawal of that portion of his or her Account Balance attributable to his or
her Transferred Merck Benefit with respect to the following contributions: (i)
subject to Section 8.3(c) of this Plan, Company Matching Contributions made
under the Merck Plan that were subject to after-tax distribution rules under
the terms of the Merck Plan; (ii) rollover contributions made under the Merck
Plan; and (iii) trust-to-trust transfer contributions, and any earnings
thereon, made under the Merck Plan. Minimum required distributions under this
Plan, distributions necessary to enable a Transferred Merck Participant to
obtain a hardship distribution under Section 8.1, and hardship distributions
under Section 8.1 shall not count toward the annual limit of one in-service
withdrawal with respect to in-service withdrawals under this Section 8.3.
(b) The minimum in-service withdrawal available to a Transferred
Merck Participant under this Section 8.3 shall be no less than the least of (i)
the amount of his or her Transferred Merck Benefit available for distribution
in accordance with Section 8.3(c); (ii) $500; or (iii) his or her entire
Transferred Merck Benefit.
(c) A Transferred Merck Participant whose combined participation in
the Merck Plan and this Plan is less than five years may not request an
in-service withdrawal pursuant to this Section 8.3 which includes any portion
of Company Matching Contributions made under the Merck Plan, but not earnings
attributable thereto, contributed less than two years prior to the date of the
requested withdrawal.
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(d) To the extent that more than one of the sources listed in Section
8.3(a) is available to a Transferred Merck Participant under this Section 8.3,
he or she may specify the sources from which an in-service withdrawal requested
under this Section 8.3 will be satisfied.
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ARTICLE IX
INVESTMENT OF CONTRIBUTIONS
9.1 FUNDING VEHICLE. The Company has entered into a Trust
Agreement with the Trustee providing for the establishment of a Trust to which
all Salary Reduction Contributions, matching contributions, and voluntary
contributions, if any, shall be contributed and from which all benefits under
the Plan shall be paid.
9.2 INVESTMENT FUNDS. The Trustee may, pursuant to the
direction of the Retirement Committee, establish and maintain separate subfunds
into which the Participants may direct the investment of their Accounts.
9.3 INVESTMENT ELECTIONS. If the Trustee maintains separate
subfunds pursuant to Section 9.2, each Participant's Account Balance shall be
allocated to any or all of the subfunds, in such whole percentages as the
Participant shall elect. Such election shall be made by the Participant in the
manner designated by with the Retirement Committee. A Participant's initial
election shall be made as soon as practicable upon or following his or her
entry into the Plan. Separate accounts will be maintained reflecting the
interest of each Participant attributable to each subfund.
9.4 CHANGE IN INVESTMENT ELECTION. Any investment election
made by the Participant shall be deemed to be a continuing election until
changed. A Participant may change his or her investment election with respect
to future contributions in the manner designated by the Retirement Committee as
frequently as the Participant wishes, without limitation; provided, however,
that elections regarding the investment of future contributions in Merck Common
Stock or Rhone-Poulenc ADRs may only be made two times per month. Such change
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shall be effective only with respect to future amounts deferred from the
Participant's Compensation and for future matching contributions, if any.
9.5 TRANSFERS BETWEEN FUNDS. A Participant may direct the
Trustee to transfer designated amounts from one subfund to another as
frequently as the Participant wishes, without limitation; provided, however,
that a Participant may transfer designated amounts into or out of the Merck
Common Stock and Rhone-Poulenc ADR Fund only two times per month.
9.6 INVESTMENT OF EARNINGS. All earnings (whether
denominated income, capital gain or otherwise) from investments in each subfund
shall be reinvested in the same subfund.
9.7 PASS-THROUGH OF VOTING RIGHTS.
(a) To the extent that a Participant directs the investment
of some portion of his or her Account in either Merck Common Stock or
Rhone-Poulenc ADRs, all voting, tender, and similar rights shall be passed
through to the Participant and the Participant shall direct the Trustee as to
how said rights shall be exercised. With respect to the portion of the
Participant's account balance which has been invested in the other investment
options offered under the Plan, the Trustee shall vote all interests held by
the Trust as directed by the Employer.
(b) Procedures shall be established and maintained to ensure
the confidentiality of all information regarding Participants' purchase,
holding, and sale of Merck Common Stock and Rhone-Poulenc ADRs as well as
Participants' exercise of appurtenant rights under this Section 9.7, except to
the extent necessary to comply with federal law or state law not preempted by
ERISA. The Plan Administrator is hereby designated as the fiduciary
responsible for ensuring that these confidentiality procedures are adequate and
are followed. In the event that the Plan Administrator determines that a
particular transaction relating to Merck Common Stock or Rhone-Poulenc ADRs
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may involve the potential for undue Employer influence, the Plan Administrator
shall designate an independent fiduciary, who shall not be an affiliate of the
Employer, to assume responsibility for all activities relating to said
transaction.
9.8 LOAN FUNDS. Notwithstanding anything in this Article IX
to the contrary, any Participant who borrows from the Trust Fund pursuant to
Article X will be treated as having directed the Trustee to allocate such
portion of his or her Account Balance as is equal to the borrowed amount to the
Participant's Loan Fund. The Loan Fund, and the promissory note executed by
the Participant held therein, remains a part of the Trust Fund, but to the
extent of the loan outstanding at any time, the borrowing Participant's Loan
Fund alone shares in any interest paid on the loan, and it alone bears any
expense or loss it incurs in connection with the loan. The Trustee may retain
in an interest-bearing account any interest and principal paid on the borrowing
Participant's loan in the Loan Fund on behalf of the borrowing Participant
until the Trustee deems it appropriate to add the amount paid to the
Participant's Loan Fund under the Plan (plus interest, if any) back to the
Participant's Account Balance, at the same time reducing the amount treated as
having been allocated to the Participant's Loan Fund by the amount of principal
payments made with respect to the loan.
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ARTICLE X
LOANS
10.1 LOAN APPLICATIONS. A Participant may make application to the
Retirement Committee to borrow from the Trust Fund, and the Retirement
Committee may, in its sole discretion, permit such loan, provided, however,
that such loans shall be made available to all Participants on a reasonably
equivalent basis. The authority herein granted to the Retirement Committee to
approve loans from the Trust Fund shall not be used as a means of distributing
benefits before they otherwise become due.
10.2 LOAN TERMS AND CONDITIONS.
(a) The aggregate amount of all such loans to a Participant from
this Plan shall not, at the time any such loan is made, exceed the lesser of
(i) $50,000 reduced by the excess (if any) of the highest outstanding balance
of loans from the Plan during the one year period ending on the day before the
date on which such loan was made, over the outstanding balance of loans from
the Plan on the date on which such loan was made, or (ii) fifty percent (50%)
of the vested portion of the Participant's Account Balance at the time of the
making of such loan. For purposes of this limitation, all loans from all
qualified plans maintained by the Employer or by any entity which is required
to be aggregated with the Employer pursuant to Sections 414(b), (c), (m) or (o)
must be aggregated.
(b) Loans shall be made pursuant to notes approved by the
Retirement Committee which shall bear a reasonable interest rate equal to the
prevailing rate charged by lenders for similar loans and shall specify the time
and manner of repayment, as determined by the Retirement Committee.
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(c) Loans shall not be made available to Participants who are
Highly Compensated Employees in an amount greater than the amount made
available to other Participants.
(d) For all loans, the Participant must consent in writing within
the 90 day period before the making of the loan, to the possible reduction in
the Participant's Account Balance if the terms of the loan are not properly
fulfilled and fully executed. The consent must be in writing, must acknowledge
the effect of the loan, and must be witnessed by a Plan representative or
notary public. A new consent shall be required if the Account Balance is used
for renegotiation, extension, renewal, or other revision of the loan.
(e) All loans shall be adequately secured. A loan shall be deemed
to be adequately secured if the aggregate amount of all such loans to a
Participant does not exceed fifty percent (50%) of the vested amount of the
Participant's Account Balance at the time of the making of such loan. If, at
any time, the aggregate amount of outstanding loans to a Participant does
exceed that limitation, then the Retirement Committee shall require the
Participant to repay the amount of principal balance due on such loans to an
amount not in excess of such limitation, or to adequately secure with
collateral other than the vested amount of the Participant's Account Balance
the amount by which such loans exceed the limitation. The Retirement Committee
shall have sole discretion to determine the nature and amount of security
required.
(f) The period for repayment of a loan issued pursuant to this
Section must, by the terms of the note, not exceed five (5) years.
Notwithstanding the above, if the purpose or use of the loan, as determined at
the time of issuance, is to acquire any dwelling unit which within a reasonable
time is to be used as the principal residence of the Participant, the period
for repayment of the loan may be extended to thirty (30) years. Repayment of a
loan shall be made through
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payroll deduction. Any loan shall, by its terms, require that
repayment of principal and interest be amortized at least quarterly over the
period of the loan.
(g) A Participant may have up to two standard loans and one loan for
purposes of acquisition of a primary residence outstanding at any time.
(h) In the event the Participant ceases to make Salary Reduction
Contributions, repayment of the loan shall be accelerated and any amount due
shall be paid from the Loan Fund unless otherwise satisfied by the Participant.
(i) In the event of default, foreclosure on the note and attachment
of security will not occur until a distributable event occurs in the Plan.
(j) No loans will be made to any shareholder-employee or
Owner-Employee. For purposes of this requirement, a shareholder-employee means
an employee or officer of an electing small business (Subchapter S) corporation
who owns (or is considered as owning within the meaning of Section 318(a)(1) of
the Code), on any day during the taxable year of such corporation, more than 5%
of the outstanding stock of the corporation.
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ARTICLE XI
EMPLOYER ADMINISTRATIVE PROVISIONS
11.1 INFORMATION TO RETIREMENT COMMITTEE. The Employer shall
supply current information to the Retirement Committee as to the name, date of
birth, date of employment, annual Compensation, leaves of absence and date of
termination of employment of each Employee who is, or who will be eligible to
become, a Participant under the Plan, together with any other information which
the Retirement Committee considers necessary. The Employer's records as to the
current information the Employer furnishes to the Retirement Committee shall be
conclusive as to all persons.
11.2 NO LIABILITY. The Employer assumes no obligation or
responsibility to any of its Employees, Participants or Beneficiaries for any
act of, or failure to act, on the part of its Retirement Committee, the Benefit
Claims Committee, the Plan Administrator, or the Trustee.
11.3 INDEMNITY. The Employer indemnifies and holds harmless
the members of the Retirement Committee, the Plan Administrator, and each of
them, from and against any and all loss resulting from liability to which the
Retirement Committee or members of the Retirement Committee or the Plan
Administrator may be subjected by reason of any act or conduct (except willful
misconduct or gross negligence) in their official capacities in the
administration of this Plan or Trust or both, including all expenses reasonably
incurred in their defense in case the Employer fails to provide such defense.
The indemnification provisions of this Section 11.3 shall not relieve any
Retirement Committee member or the Plan Administrator from any liability he or
she may have under the Code or ERISA for breach of a fiduciary duty.
11.4 FACILITY OF PAYMENT. If satisfactory evidence is
received that a person entitled to receive any benefits is physically incapable
or mentally incompetent to receive
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such payment and give a valid release therefor, and another person or
institution has been maintaining or has custody of such person, payment of such
benefit may be made to such person or institution and the release of such
person or institution shall be a valid and complete discharge of any liability
under this Plan.
11.5 MISSING RECIPIENTS. If the Retirement Committee is
unable, within three years after any benefit becomes due under the Plan to a
Participant or Beneficiary, to make payment because the identity and/or
whereabouts of such person cannot be ascertained notwithstanding the mailing of
due notice to any last known address or addresses, the Retirement Committee
shall direct that any such benefits shall be forfeited and used to reduce
future Company contributions; provided, however, that such benefit shall be
restored (in an amount equal to the amount forfeited) upon proper claim made by
such Participant or Beneficiary prior to the termination of the Plan. In the
event a proper claim is made, benefits under this Section 11.5 shall be
restored based on the following order of priority:
(a) from forfeitures arising under Article VII; and
(b) from additional Employer contributions made in order to restore
such benefits.
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ARTICLE XII
PARTICIPANT ADMINISTRATIVE PROVISIONS
12.1 BENEFICIARY DESIGNATION. The Beneficiary of a married
Participant shall be the surviving spouse. A married Participant may designate
a Beneficiary other than the spouse only if the Participant obtains the written
consent of the spouse to the alternate beneficiary, the spouse acknowledges the
effect of the consent and the spouse's signature is witnessed by a notary
public or Plan representative. Subject to the foregoing limitation, any
Participant may from time to time designate, in writing, any person or persons,
contingently or successively, to whom the Trustee shall pay his or her Account
Balance in the event of his or her death. The Retirement Committee shall
prescribe the form for the written designation of Beneficiary and, upon the
Participant's filing the form with the Retirement Committee, it effectively
shall revoke all designations filed prior to that date by the same Participant.
12.2 NO BENEFICIARY DESIGNATION. If a Participant fails to name a
Beneficiary, or if the Beneficiary named by a Participant predeceases him or
her, then the Trustee shall pay the Participant's Account Balance (subject to
the provisions of Articles V and VII) in the following order of priority to:
(a) The Participant's surviving spouse:
(b) The Participant's surviving children, including adopted
children, in equal shares;
(c) The Participant's surviving parents, in equal shares; or
(d) The legal representative of the estate of the last to die of
the Participant and his or her Beneficiary.
The Retirement Committee shall direct the Trustee as to whom the
Trustee shall make payment under this Section 12.2.
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12.3 PERSONAL DATA TO RETIREMENT COMMITTEE. Each Participant
and each Beneficiary of a deceased Participant must furnish to the Retirement
Committee such evidence, data or information as the Retirement Committee
considers necessary or desirable for the purpose of administering the Plan.
The provisions of this Plan are effective for the benefit of each Participant
upon the condition precedent that each Participant will furnish promptly full,
true and complete evidence, data and information when requested by the
Retirement Committee, provided that the Retirement Committee shall advise each
Participant of the effect of his or her failure to comply with its request.
12.4 ADDRESS FOR NOTIFICATION. Each Participant and each
Beneficiary of a deceased Participant shall file with the Retirement Committee
from time to time, in writing, his or her post office address and any change of
post office address. Any communication, statement or notice addressed to a
Participant or Beneficiary at his or her last post office address filed with
the Retirement Committee, or as shown on the records of the Employer, shall
bind the Participant, or Beneficiary, for all purposes of this Plan.
12.5 ASSIGNMENT OR ALIENATION. Neither a Participant nor a
Beneficiary shall anticipate, assign or alienate (either at law or in equity)
any benefit provided under the Plan, and the Trustee shall not recognize any
such anticipation, assignment or alienation. Furthermore, a benefit under the
Plan is not subject to attachment, garnishment, levy, execution or other legal
or equitable process. The Retirement Committee shall, however, abide by any
Qualified Domestic Relations Order as defined in Section 414(p) of the Code and
Section 206(d)(3) of ERISA which is served upon the Plan.
12.6 NOTICE OF CHANGE IN TERMS. The Retirement Committee,
within the time prescribed by ERISA and the applicable regulations thereunder,
shall furnish all
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Participants and Beneficiaries with a summary description of any material
amendment to the Plan or notice of discontinuance of the Plan and all other
information required by ERISA to be furnished without charge.
12.7 INFORMATION AVAILABLE. Any Participant in the Plan or
any Beneficiary may examine copies of the Plan description, latest annual
report, any bargaining agreement, this Plan and Trust, as well as any contract
or other instrument under which the Plan was established or is operated. The
Retirement Committee will maintain all of the items listed in this Section 12.7
in its office, or in such other place or places as it may designate from time
to time in order to comply with the regulations issued under ERISA, for
examination during reasonable business hours. Upon the written request of a
Participant or Beneficiary the Retirement Committee shall furnish him or her
with a copy of any item listed in this Section 12.7. The Retirement Committee
may make a reasonable charge to the requesting person for the copy so
furnished.
12.8 CLAIM FOR BENEFITS. Any claim for benefits under this Plan
shall be made in writing to the Plan Administrator. If a claim for benefits is
wholly or partially denied, the Plan Administrator shall so notify the
Participant or Beneficiary within 90 days after receipt of the claim, except
that if there are special circumstances which require more time for processing,
the 90-day period shall be extended to 180 days upon notice to the Participant
or Beneficiary to that effect. The notice of denial shall be written in a
manner calculated to be understood by the Participant or Beneficiary and shall
contain (a) the specific reason or reasons for denial of the claim, (b) a
specific reference to the pertinent Plan provisions upon which the denial is
based, (c) a description of any additional material or information necessary to
perfect
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the claim together with an explanation of why such material or information is
necessary and (d) an explanation of the claims review procedure.
12.9 REVIEW OF CLAIM. Within 60 days after the receipt by the
Participant or Beneficiary of notice of denial of a claim (or at such later
time as may be reasonable in view of the nature of the benefit subject to claim
and other circumstances), the Participant or Beneficiary may (a) file a request
with the Benefit Claims Committee that it conduct a full and fair review of the
denial of the claim, (b) review pertinent documents and (c) submit questions
and comments to the Benefit Claims Committee in writing.
12.10 DECISION AFTER REVIEW. Within 60 days after the receipt
of a request for review under Section 12.9, the Benefit Claims Committee shall
deliver to the Participant or Beneficiary a written decision with respect to
the claim, except that if there are special circumstances which require more
time for processing, the 60-day period shall be extended to 120 days upon
notice to the Participant or Beneficiary to that effect. The decision shall be
written in a manner calculated to be understood by the Participant or
Beneficiary and shall (a) include the specific reason or reasons for the
decision and (b) contain a specific reference to the pertinent Plan provisions
upon which the decision is based.
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ARTICLE XIII
ADMINISTRATION OF THE PLAN
13.1 THE U.S. ANIMAL HEALTH COMPENSATION & BENEFITS COMMITTEE.
The U.S. Animal Health Compensation & Benefits Committee shall appoint the
members of the Retirement Committee and, to the extent provided in Section 16.2
of the Plan, shall have the authority to amend this Plan.
13.2 THE RETIREMENT COMMITTEE. The Plan shall be administered
by the Retirement Committee, which shall have the responsibilities and duties
delegated to it in this Plan and any responsibilities and duties under this
Plan which are not specifically delegated to anyone else. The Retirement
Committee shall appoint any Investment Manager.
13.3 THE TRUSTEE. The Company shall enter into a Trust
Agreement with the Trustee. The Trustee shall have exclusive authority and
discretion to manage and control the Trust Fund except to the extent that
authority to manage the assets held by the Trust is directed by Participants or
delegated by the Retirement Committee to an Investment Manager. The Trustee
may designate agents or others to carry out certain of the administrative
responsibilities in connection with management of the Trust.
13.4 THE PLAN ADMINISTRATOR. The Plan Administrator (who
shall be appointed by the Retirement Committee) shall be responsible for (a)
the maintenance of all records of Participants and Beneficiaries necessary for
the administration of this Plan, (b) the taking of any action necessary to meet
the reporting and disclosure requirements imposed by ERISA, and (c) making
initial determinations with respect to Participant claims, pursuant to Section
12.8. The
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Retirement Committee may authorize the Plan Administrator to designate agents
to carry out certain of its responsibilities.
13.5 DECISION AND ACTION OF THE RETIREMENT COMMITTEE, PLAN
ADMINISTRATOR, AND BENEFIT CLAIMS COMMITTEE.
(a) The Retirement Committee from time to time may establish
rules for the administration of the Plan. Except to the extent vested in the
Plan Administrator and the Benefit Claims Committee, the Retirement Committee
shall have the sole discretion to make decisions and take any action with
respect to questions arising in connection with the Plan, including but not
limited to, the construction and interpretation of the Plan and the Trust
Agreement. Any such decision or action shall be final and binding upon all
Participants and Beneficiaries.
(b) The Plan Administrator and the Benefit Claims Committee
shall have the sole discretion to determine eligibility for benefits and to
construe the terms of the Plan in connection therewith. Except insofar as
determinations of the Plan Administrator may be appealed to the Benefit Claims
Committee for review, the decisions and actions of the Plan Administrator and
Benefit Claims Committee shall be final and binding on all Participants and
Beneficiaries.
13.6 MEMBERSHIP OF THE RETIREMENT COMMITTEE. The Retirement
Committee shall consist of at least 3 but no more than 5 members. Each person
appointed a member of the Retirement Committee shall file his or her acceptance
of the appointment with the secretary of the Company. Any member of the
Committee may resign by delivering his or her written resignation to the
secretary of the Company; the resignation shall become effective 30 days
following receipt by the Secretary (or at any other time agreed upon by the
member and the U.S. Animal Health Compensation & Benefits Committee. The U.S.
Animal Health Compensation & Benefits Committee may remove any member of the
Retirement Committee at any time, with our
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without cause, upon notice to the member being removed. Notice of the
appointment, resignation, or removal of a member of the Retirement Committee
shall be given by the U.S. Animal Health Compensation & Benefits Committee to
the Trustee and to members of the Retirement Committee.
13.7 OFFICERS AND MEETINGS OF THE RETIREMENT COMMITTEE. The
Retirement Committee shall elect a chairman and a secretary (who need not be a
member of the Retirement Committee) and shall hold meetings upon such notice
and at such times and places as it may from time to time determine. Notice of
a meeting need not be given to any member of the Retirement Committee who
submits a signed waiver of notice before or after the meeting or who attends
the meeting.
13.8 PROCEDURES OF THE RETIREMENT COMMITTEE. A majority of
the total number of members of the Retirement Committee shall constitute a
quorum for the transaction of business. The vote of a majority of members of
the Retirement Committee present at the time of a vote, if a quorum is present
at the time, shall be required for action by the Retirement Committee.
Resolutions may be adopted or other action taken without a meeting upon the
written consent of all members of the Retirement Committee. Any person dealing
with the Retirement Committee shall be entitled to rely upon a certificate of
any member of the Retirement Committee or its secretary as to any act or
determination of the Retirement Committee.
13.9 ACTUARY. The Benefits Committee shall appoint an
actuary to perform actuarial services with respect to this Plan.
13.10 BENEFIT CLAIMS COMMITTEE. The Retirement Committee shall
appoint a Benefits Claims Committee which shall consist of at least three
members (who may or may not be members of the Retirement committee) to
administer the benefit claims review
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procedure under Article XII. In the absence of appointment of a Benefit Claims
Committee, the Retirement Committee shall serve as the Benefit Claims
Committee.
13.11 SUBCOMMITTEES, ADVISORS AND AGENTS OF RETIREMENT
COMMITTEE. The Retirement Committee may (a) appoint subcommittees with such
powers as the Retirement Committee shall determine are advisable; (b) authorize
one or more of its members or an agent to execute any instrument; and (c)
utilize the services of Employees and engage accountants, actuaries, agents,
clerks, legal counsel, medical advisers and professional consultants to assist
in the administration of the Plan or to render advice with regard to any
responsibility under the Plan.
13.12 LIABILITY OF THE RETIREMENT COMMITTEE. The members of
the Retirement Committee shall have no liability with respect to any action or
omission by them in good faith in reliance upon (a) the advice or opinion of
any accountant, actuary, legal counsel, medical adviser or other professional
consultant or (b) any resolutions of the U.S. Animal Health Compensation &
Benefits Committee certified by the secretary or assistant secretary of the
Company.
13.13 EXPENSES OF THE PLAN: FIDELITY BOND. All expenses
relating to this Plan shall be an expense of the Plan and, except to the extent
paid by the Employer, shall be paid out of the Trust Fund. Any Employee who
serves as a Trustee, Plan Administrator or member of the Retirement Committee
shall receive no compensation for such service. The Company may require any
Trustee, Plan Administrator or member of the Retirement Committee to furnish a
fidelity bond satisfactory to the Company; the premium for any fidelity bond
shall be an expense of the Plan except to the extent paid by the Employer.
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13.14 SERVICE IN MORE THAN ONE CAPACITY. Any person or group
of persons may serve the Plan in more than one capacity, including service both
as Plan Administrator and as a member of the Retirement Committee.
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ARTICLE XIV
FIDUCIARY DUTIES AND RESPONSIBILITIES
14.1 GENERAL FIDUCIARY STANDARD OF CONDUCT. Each Fiduciary of
the Plan shall discharge his or her duties hereunder solely in the interest of
the Participants and their Beneficiaries and for the exclusive purpose of
providing benefits to Participants and their Beneficiaries and defraying
reasonable expenses of administering the Plan. Each Fiduciary shall act with
the care, skill, prudence and diligence under the circumstances that a prudent
man acting in a like capacity and familiar with such matters would use in
conducting an enterprise of like character and with like aims, in accordance
with the documents and instruments governing this Plan, insofar as such
documents and instruments are consistent with this standard.
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ARTICLE XV
TOP HEAVY RULES
15.1 MINIMUM EMPLOYER CONTRIBUTION. If this Plan becomes top
heavy, a minimum contribution will be paid under the Merial Cash Balance Plan
to each Non-Key Employee who is a Participant employed by the Employer on the
Accounting Date, unless a Non-Key Employee does not participate in the Merial
Cash Balance Plan. If a Non-Key Employee in this Plan does not participate in
the Merial Cash Balance Plan and this Plan becomes top heavy, this Plan
guarantees a minimum contribution of three percent (3%) of Compensation for
each such Non-Key Employee who is a Participant employed by the Employer on the
Accounting Date of the Plan Year. For purposes of determining whether the
minimum contribution is satisfied, Salary Reduction Contributions and matching
contributions shall be disregarded. The minimum contribution shall not be
forfeited under Sections 411(a)(3)(B) or (D) of the Code. The Plan satisfies
the guaranteed minimum contribution for the Non-Key Employee if the Non-Key
Employee's contribution rate is at least equal to the minimum contribution.
Notwithstanding the above, if the contribution rate for the Key
Employee with the highest contribution rate is less than three percent (3%),
the guaranteed minimum contribution for Non-Key Employees shall equal the
highest contribution rate received by a Key Employee (provided that the
Employer does not also sponsor a defined benefit plan which has designated this
Plan to provide the top heavy minimum). The contribution rate is the sum of
Employer contributions (not including Employer contributions to Social
Security) and forfeitures allocated to the Participant's account for the Plan
Year divided by his or her Compensation for the Plan Year.
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To determine the contribution rate, the Retirement Committee shall consider all
qualified defined contribution plans maintained by the Employer as a single
plan.
15.2 ADDITIONAL CONTRIBUTION. If the contribution rate for the
Plan Year with respect to a Non-Key Employee described in Section 15.1 is less
than the minimum contribution, the Employer will increase its contribution for
such Employee to the extent necessary so that his or her contribution rate for
the Plan Year will equal the guaranteed minimum contribution. The Retirement
Committee shall allocate the additional contribution to the Matching
Contribution Account of the Non-Key Employee for whom the Employer makes the
contribution.
15.3 DETERMINATION OF TOP HEAVY STATUS. The Plan is top heavy for
a Plan Year if the top heavy ratio as of the Determination Date exceeds sixty
percent (60%). The top heavy ratio is a fraction, the numerator of which is
the sum of the present value of the Account Balances of all Key Employees as of
the Determination Date and distributions made within the five (5) Plan Year
period ending on the Determination Date, and the denominator of which is a
similar sum determined for all Employees. The Retirement Committee shall
calculate the top heavy ratio without regard to the Account Balance
attributable to any Non-Key Employee who was formerly a Key Employee. The
Retirement Committee shall calculate the top heavy ratio, including the extent
to which it must take into account contributions not made as of the
Determination Date, distributions, rollovers and transfers, in accordance with
Section 416 of the Code and the regulations thereunder.
If the Employer maintains other qualified plans (including a
simplified employee pension plan) this Plan is top heavy only if it is part of
the Required Aggregation Group, and the top heavy ratio for both the Required
Aggregation Group and the Permissive Aggregation Group
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exceeds sixty percent (60%). The Retirement Committee will calculate the top
heavy ratio in the same manner as required by the first paragraph of this
Section 15.3, taking into account all plans within the aggregation group. The
Retirement Committee shall calculate the present value of accrued benefits and
the other amounts the Retirement Committee must take into account under defined
benefit plans or simplified employee pension plans included within the group in
accordance with the terms of those plans, Section 416 of the Code and the
regulations thereunder. The Retirement Committee shall calculate the top heavy
ratio with reference to the Determination Dates that fall within the same
calendar year.
15.4 LIMITATION ON ALLOCATIONS. If, during any Limitation Year,
the Participant is a participant in both a defined contribution plan and a
defined benefit plan which are a part of a top heavy group, the Retirement
Committee shall apply the limitations of Article IV to such Participant by
substituting "1.0%" for "1.25%" each place it appears in Section 4.6. This
Section 15.4 shall not apply if:
(a) The Plan would satisfy Section 15.1 if the guaranteed
minimum contribution was one percent (1%) greater than the
guaranteed minimum contribution the Retirement Committee
otherwise would calculate; and
(b) The top heavy ratio does not exceed ninety percent (90%).
15.5 DEFINITIONS. For purposes of applying the provisions of this
Article XV:
(a) "Key Employee" shall mean, as of any Determination Date,
any Employee or former Employee, or any Beneficiary thereof,
who, at any time during the Plan Year (which includes the
Determination Date) or during the preceding four Plan Years,
(i) is an officer of the Employer who has annual Compensation
in excess of 50% of the amount in effect under Section
415(b)(1)(A) of the Code;
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(ii) one of the ten Employees owning the largest interests in
the Employer with annual Compensation in excess of the dollar
limit on Annual Additions to a defined contribution plan under
Section 415 of the Code;
(iii) a more than five percent (5%) owner of the Employer; or
(iv) a more than one percent (1%) owner of the Employer who
has annual Compensation of more than $150,000.
The constructive ownership rules of Section 318 of the Code
will apply to determine ownership in the Employer. The Retirement Committee
will make the determination of who is a Key Employee in accordance with Section
416(i)(1) of the Code and the regulations thereunder.
(b) "Non-Key Employee" is an Employee who does not meet the
definition of Key Employee.
(c) "Required Aggregation Group" means: (1) Each qualified
plan of the Employer in which at least one Key Employee
participates; and (2) Any other qualified plan of the Employer
which enables a plan described in (1) to meet the requirements
of Sections 401(a)(4) or 410 of the Code. Any terminated plan
that covered a Key Employee and was maintained within the five
year period ending on the Determination Date shall also be
included in the Required Aggregation Group.
(d) "Permissive Aggregation Group" is the Required Aggregation
Group plus any other qualified plans maintained by the
Employer, but only if such group would satisfy in the
aggregate the requirements of Sections 401(a)(4) and 410 of
the Code. The Retirement Committee shall determine which plan
to take into account in determining the Permissive Aggregation
Group.
(e) "Determination Date" for any Plan Year is the Accounting
Date of the preceding Plan Year or, in the case of the first
Plan Year of the Plan, the Accounting Date of that Plan Year.
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ARTICLE XVI
EXCLUSIVE BENEFIT, AMENDMENT AND TERMINATION
16.1 EXCLUSIVE BENEFIT. The Employer shall have no beneficial
interest in any asset of the Trust and no part of any asset in the Trust shall
ever revert to or be repaid to an Employer, either directly or indirectly; nor
prior to the satisfaction of all liabilities with respect to the Participants
and their Beneficiaries under the Plan, shall any part of the corpus or income
of the Trust Fund, or any asset of the Trust, be used for, or diverted to,
purposes other than for the exclusive purpose of providing benefits to
Participants or their Beneficiaries and defraying reasonable expenses of the
Plan and of the Trust.
Notwithstanding the foregoing, if the Commissioner of Internal
Revenue, upon the Employer's timely request for initial approval of this Plan,
determines that the Trust created under the Plan is not a qualified trust
exempt from Federal income tax, then the Trustee, upon written notice from the
Employer, shall return the Employer's contributions and increments attributable
to the contributions to the Employer. The Trustee must make the return of the
Employer contribution under this Section 16.1 within one (1) year of a final
disposition of the Employer's request for initial approval of the Plan. The
Plan and Trust shall terminate upon the Trustee' return of the Employer's
contributions.
The Employer contributes to this Plan on the condition that its
contribution is deductible under Section 404 of the Code. If the Employer's
contribution is disallowed as a deduction, or if the Employer's contribution is
attributable to a mistake of fact, the Trustee shall return to the Employer the
amount contributed over, as relevant, the amount that would have been
contributed had no mistake of fact occurred, or the amount of the deductible
contribution. Earnings attributable to the excess contribution may not be
returned to the Employer, but losses attributable
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thereto must reduce the amount returned. The excess contributions must be
returned within one year of the disallowance or mistake. Further, if the
amount returned to the Employer would cause any Participant's Account Balance
to be reduced to less than the balance which would have been in his or her
Account had the mistaken or nondeductible amount not been contributed, then the
amount to be returned to the Employer must be limited so as to avoid the
reduction. The Trustee may require the Employer to furnish it with whatever
evidence the Trustee deems necessary to enable the Trustee to confirm that the
amount the Employer has demanded be returned as properly returnable under the
Code and ERISA.
16.2 AMENDMENT. The Board of Directors of the Company, or a
subcommittee thereof to which the Board of Directors of the Company has
delegated such authority, may amend this Plan at any time; provided, however,
that the U.S. Animal Health Compensation & Benefits Committee of the Company
shall have the authority to amend or revise the terms of the Plan to the extent
that such amendment or revision (i) does not result in a cost increase to the
Employer in excess of 5%; (ii) does not have a significant adverse impact on
the prospective rights of Participants; (iii) does not have a significant
effect on the long-term rights or liabilities of the Employer; or (iv) is
necessary to enable the Plan to continue to comply with the requirements of the
Code or ERISA. If the Plan's vesting schedule is amended, each Participant
with three (3) or more Years of Service may elect to have the vesting schedule
applicable immediately prior to the amendment continue to apply. The period
during which such election may be made shall commence with the date the
amendment is adopted or deemed to be made and shall end on the latest of:
(1) 60 days after the amendment is adopted;
(2) 60 days after the amendment becomes effective; or
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(3) 60 days after the Participant is issued written notice of the
amendment by the Employer or Retirement Committee.
No amendment shall authorize or permit any of the Trust Fund
(other than the part required to pay taxes and administration expenses) to be
used for or diverted to purposes other than for the exclusive benefit of the
Participants or their Beneficiaries or estates. No amendment shall cause or
permit any portion of the Trust Fund to revert to or become the property of the
Employer; and no amendment may affect the rights, duties or responsibilities of
the Trustee or the Retirement Committee without the written consent of the
affected Trustee or the affected member of the Retirement Committee. No
amendment shall decrease a Participant's Account Balance or eliminate an
optional form of benefit to which the Participant is entitled as a result of
service prior to the amendment. All amendments shall be made in writing. Each
amendment shall state the date to which it is either retroactively or
prospectively effective.
16.3 DISCONTINUANCE. The Company shall have the right, at any
time, to suspend or discontinue its contributions under the Plan, and to
terminate, at any time, this Plan. Upon complete discontinuance of
contributions, the Account Balance of each affected Participant shall be one
hundred (100%) percent Nonforfeitable.
16.4 FULL VESTING ON TERMINATION. Notwithstanding any other
provision of this Plan to the contrary, upon either full or partial termination
of the Plan, an affected Participant's right to his or her Account Balance
shall be one hundred percent (100%) Nonforfeitable. The Plan shall terminate
upon the first to occur of the following:
(a) The date terminated by action of the Employer provided the
Employer gives the Trustee thirty (30) days' prior notice of
termination;
(b) The date the Employer shall be judicially declared bankrupt
or insolvent; or
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(c) The dissolution, merger, consolidation or reorganization of
the Employer or the sale by the Employer of all or substantially
all of its assets, unless the successor or purchaser makes
provision to continue the Plan, in which event the successor or
purchaser shall substitute itself as the Employer under this Plan.
16.5 MERGER. The Trustee shall not consent to, or be a party to,
any merger or consolidation with another plan, or to a transfer of assets or
liabilities to another plan, unless immediately after the merger, consolidation
or transfer, the surviving plan provides each Participant a benefit equal to or
greater than the benefit each Participant would have received had the Plan
terminated immediately before the merger or consolidation or transfer. The
Trustee possesses the specific authority to enter into merger agreements or
direct transfer of assets agreements with the Trustee of other retirement plans
described in Section 401(a) of the Code and to accept the direct transfer of
plan assets, or to transfer plan assets, as a party to any such agreement.
16.6 DIRECT ROLLOVERS. Notwithstanding any provision of the plan
to the contrary that would otherwise limit a distributee's election under this
Section, a distributee may elect, at the time and in the manner prescribed by
the Retirement Committee, to have any portion of an eligible rollover
distribution paid directly to an eligible retirement plan specified by the
distributee in a direct rollover.
Definitions:
(a) Eligible rollover distributions: An eligible rollover
distribution is any distribution of all or any portion of the
balance to the credit of the distributee, except that an
eligible rollover distribution does not include: any
distribution that is one of a series of substantially equal
periodic payments (not less frequently than annually) made for
the life (or life expectancy) of the distributee or the joint
lives (or joint life expectancies) of the distributee and the
distributee's designated
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beneficiary, or for a specified period of ten years or more;
any distribution to the extent such distribution is required
under Section 401(a)(9) of the Code; and the portion of any
distribution that is not includible in gross income (determined
without regard to the exclusion for net unrealized appreciation
with respect to employer securities).
(b) Eligible retirement plan: An eligible retirement plan is an
individual retirement account described in Section 408(a) of
the Code, an individual retirement annuity described in Section
408(b) of the Code, an annuity plan described in Section 403(a)
of the Code, or a qualified trust described in Section 401(a)
of the Code, that accepts the distributee's eligible rollover
distribution. However, in the case of an eligible rollover
distribution to the surviving spouse, an eligible retirement
plan is an individual retirement account or individual
retirement annuity.
(c) Distributee: A distributee includes an Employee or former
Employee. In addition, the Employee's or former Employee's
surviving spouse and the Employee's or former Employee's spouse
or former spouse who is the alternate payee under a qualified
domestic relations order, as defined in Section 414(p) of the
Code, are distributees with regard to the interest of the
spouse or former spouse.
(d) Direct rollover: A direct rollover is a payment by the plan to
the eligible retirement plan specified by the distributee.
16.7 EMPLOYMENT NOT GUARANTEED. Nothing contained in this Plan or
any modification or amendment to the Plan, or in the creation of any Salary
Reduction Contribution Account, or the payment of any benefit, shall give any
Participant the right to continued employment, or any legal or equitable right
against the Employer, an Employee of the Employer, the Trustee, or their agents
or employees, except as expressly provided by the Plan, the Trust, ERISA or the
Code or by a separate agreement.
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16.8 STATE LAW. New Jersey law shall determine all questions
arising with respect to the provisions of this Plan, except to the extent
Federal statute supersedes New Jersey law.
IN WITNESS WHEREOF, the Company has executed this instrument this
day of , 199___, effective as of the date first written above.
By:
---------------------------
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AMENDMENT NO 1 TO THE
MERIAL 401(k) SAVINGS PLAN
The Merial 401(k) Savings Plan (the "Plan") is hereby amended as
follows, effective as of the dates stated herein:
1. Section 1.36 of the Plan is hereby amended effective
September 1, 1999, by adding the following sentence at the end thereof:
"A Participant shall enter into a Salary Reduction
Agreement in the form and manner designated by the Retirement
Committee, which may include, but is not necessarily limited to,
enrollment via telephone."
2. Section 3.1 of the Plan is hereby amended effective
September 1, 1999, by substituting the word "completion" for the word
"execution" in the first sentence thereof. As amended, the first sentence of
Section 3.1 shall read as follows:
"A Participant may elect to enter into a Salary Reduction
Agreement with the Employer which will be applicable to all payroll
periods within such Plan Year after the Plan Entry Date following
completion of the Salary Reduction Agreement."
3. Section 3.2 of the Plan is hereby amended effective
September 1, 1999, by eliminating the first two sentences thereof and
substituting the following in their place:
"A Participant may revise or suspend his or her contributions under
his or her Salary Reduction Agreement at any time in the manner
designated by the Retirement Committee. Salary Reduction Agreement
revisions and suspensions shall be effective as soon thereafter as
administratively feasible."
4. Section 3.5 of the Plan is hereby amended effective
January 1, 1999, by deleting the first sentence thereof and substituting the
following in its place:
"The Employer shall not permit a Participant to defer an amount of
Compensation that would cause the Plan to not satisfy at least one of
the following tests:"
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5. Section 4.2 of the Plan is hereby amended effective
January 1, 1999, by deleting the last paragraph thereof.
6. Section 7.1 of the Plan is hereby amended effective
January 1, 1998, by replacing the introductory phrase, "Unless the Participant
elects in writing," at the beginning of the first sentence thereof with the
phrase "Subject to Section 7.2 of the Plan".
7. Section 7.4 of the Plan is hereby amended effective
January 1, 1998, by deleting Section 7.4(a) thereof and substituting the
following in its place:
"(a) If the Participant's Account Balance is payable to
or for the benefit of a designated Beneficiary, it may be distributed
in one of the distribution forms provided in Section 7.3, provided,
however, that it may not be distributed over a period that extends
beyond the life expectancy of such Beneficiary, and such distribution
must commence no later than the December 31 following the close of the
calendar year in which the Participant's death occurred."
8. Section 8.2 of the Plan is hereby amended effective
January 1, 1999, by deleting Section 8.2 in its entirety and substituting the
following in its place:
"8.2 AGE 59-1/2 WITHDRAWALS. A Participant may elect
to withdraw any portion of his or her Account Balance for any reason
after attainment of age 59-1/2."
9. Section 8.3 of the Plan is hereby deleted in its entirety
effective September 1, 1999, and the following substituted in its place:
"8.3 IN-SERVICE WITHDRAWALS.
(a) Notwithstanding anything in this Plan to the
contrary, effective September 1, 1999, a Participant may elect to
withdraw any portion of his or her Matching Contribution Account or
Rollover Contribution Account which is held under the Plan as of
August 31, 1999. This in-service withdrawal right shall not apply to
any contributions or earnings allocated to a Participant's Matching
Contribution Account or Rollover Contribution Account on or after
September 1, 1999.
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(b) If a Participant's combined years of participation in
this Plan, a predecessor to this Plan, and/or the Merck Plan is less
than five years, the Participant may not request an in-service
withdrawal pursuant to Section 8.3(a) that includes any portion of his
or her Matching Contribution Account, but not earnings attributable
thereto, contributed less than two years prior to the date of the
requested withdrawal."
10. Section 9.4 of the Plan is hereby amended effective
September 1, 1999, by adding the following at its end:
"Notwithstanding anything in this Section 9.4 to the contrary,
effective September 1, 1999 (subject to such blackout period as may be
administratively necessary to convert said funds into unitized funds),
a Participant may change his or her investment election with respect
to future contributions in the Merck Common Stock or Rhone-Poulenc
ADRs as frequently as the Participant wishes."
11. Section 9.5 of the Plan is hereby amended effective
September 1, 1999, by adding the following at its end:
"Notwithstanding anything in this Section 9.5 to the contrary,
effective September 1, 1999 (subject to such blackout period as may be
administratively necessary to convert said funds into unitized funds),
a Participant may transfer designated amounts into or out of the Merck
Common Stock Fund and the Rhone-Poulenc ADR Fund as frequently as the
Participant wishes."
12. Section 9.7(a) of the Plan is hereby amended effective
September 1, 1999, by deleting the last sentence thereof.
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AMENDMENT NO 2 TO THE
MERIAL 401(k) SAVINGS PLAN
The Merial 401(k) Savings Plan (the "Plan") is hereby amended as
follows, effective January 1, 2000:
1. Section 10.2(g) of the Plan is hereby amended by adding
the following at its end:
"The previous sentence notwithstanding, effective January 1, 2000, a
Participant may have no more than one standard loan and one loan for
purposes of acquisition of a primary residence outstanding at any
time. This limitation shall not affect the validity of any loans for
which applications were received by the Trustee, or which were
outstanding, immediately prior to January 1, 2000."
<PAGE> 77
AMENDMENT NO. 3 TO THE
MERIAL 401(k) SAVINGS PLAN
The Merial 401(k) Savings Plan (the "Plan") is hereby amended as
follows, effective as of December 20, 1999:
1. Section 1.32 of the Plan is hereby amended by adding the
following at its end:
"Effective December 15, 1999, Rhone-Poulenc merged with Hoechst, A.G.
to form Aventis, S.A. ("Aventis"), a French corporation. Effective as
of December 20, 1999, Rhone-Poulenc ADRs shall be replaced with
Aventis ADRs, which are American Depository Receipts representing
shares of common stock in Aventis."
2. Section 7.3 of the Plan is hereby amended by adding the
following at its end:
"In accordance with Section 1.32 of the Plan, effective December 20,
1999, Rhone-Poulenc ADRs shall be replaced by Aventis ADRs."
3. Section 9.4 of the Plan is hereby amended by adding the
following at its end:
"In accordance with Section 1.32 of the Plan, effective December 20,
1999, Rhone-Poulenc ADRs and the Rhone-Poulenc ADR Fund shall be
replaced by Aventis ADRs and the Aventis ADR Fund."
4. Section 9.5 of the Plan is hereby amended by adding the
following at its end:
"In accordance with Section 1.32 of the Plan, effective December 20,
1999, the Rhone-Poulenc ADR Fund shall be replaced by the Aventis ADR
Fund."
5. The following is hereby added as the second sentence of Section
9.7(a):
"In accordance with Section 1.32 of the Plan, effective December 20,
1999, Rhone-Poulenc ADRs shall be replaced by Aventis ADRs."
6. Section 9.7(b) of the Plan is hereby amended by adding the
following at its end:
"In accordance with Section 1.32 of the Plan, effective December 20,
1999, Rhone-Poulenc ADRs shall be replaced by Aventis ADRs."
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>