ELAN U.S. Severance Plan Effective March 1, 2001 and Amended and Restated as of January 1, 2006
Exhibit
99.3
ELAN
U.S.
Effective
March 1, 2001 and
Amended
and Restated as of January 1, 2006
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Page
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ARTICLE
I Introduction
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1
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ARTICLE
II Definitions
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1
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ARTICLE
III Eligibility
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4
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ARTICLE
IV Pay and Benefits In Lieu of WARN Notice
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6
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ARTICLE
V Severance Pay and Severance Benefits
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6
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ARTICLE
VI Waiver and Release Agreement
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12
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ARTICLE
VII Plan Administration
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12
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ARTICLE
VIII Procedures for Making and Appealing Claims for Plan
Benefits
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13
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ARTICLE
IX Amendment/Termination/Vesting
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15
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ARTICLE
X No Assignment
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15
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ARTICLE
XI Confidential Information/Cooperation
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15
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ARTICLE
XII Miscellaneous Provisions
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16
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ELAN
U.S.
(Effective
March 1, 2001, and
Amended
and Restated Effective as of January 1, 2006)
ARTICLE
I
INTRODUCTION
Athena
Neurosciences, Inc. (the "Company") adopted the Elan U.S. Severance Plan (the
"Plan"), effective March 1, 2001, for the benefit of certain "Eligible
Employees" of the Company and certain Affiliates specified by the Company.
The
Plan is intended to apply to United States based "Employees," as described
herein. The Plan was amended and restated on January 1, 2004 and August 15,
2004. By this instrument, the Company hereby amends and restates the Plan,
effective January 1, 2006. The Plan shall be binding on any successor to all
or
substantially all of the Company's assets or business.
The
Plan
is an unfunded welfare benefit plan for purposes of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"). Except as otherwise provided
herein, the Plan supersedes any prior formal or informal severance plans,
programs or policies of the Company or its Affiliates covering Eligible
Employees. The Plan operates on a calendar year.
ARTICLE
II
DEFINITIONS
2.1. "Affiliate"
means
any member of the group of corporations, trades or businesses or other
organizations comprising the "controlled group" with Athena Neurosciences,
Inc.
under Section 414 of the Internal Revenue Code.
2.2. "Change
in
Control" means:
| (a) |
The
consummation of a merger or consolidation of Elan Corporation, plc
with or
into another entity or any other corporate reorganization, if more
than
fifty percent (50%) of the combined voting power of the continuing
or
surviving entity's issued shares or securities outstanding immediately
after such merger, consolidation or other reorganization is owned
by
persons who were not shareholders of Elan Corporation, plc immediately
prior to such merger, consolidation or other
reorganization;
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| (b) |
The
sale, transfer or other disposition of all or substantially all of
Elan
Corporation, plc's assets;
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| (c) |
A
change in the composition of the Board of Directors of Elan Corporation,
plc, as a result of which fewer than fifty percent (50%) of the incumbent
directors are
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directors
who either (i) had been directors of Elan Corporation, plc on the date 24 months
prior to the date of the event that may constitute a Change in Control (the
"original directors") or (ii) were elected, or nominated for election, to the
Board with the affirmative votes of at least a majority of the aggregate of
the
original directors who were still in office at the time of the election or
nomination and the directors whose election or nomination was previously so
approved; or
| (d) |
Any
transaction as a result of which any person is the "beneficial owner"
(as
defined in Rule 13d-3 under the Exchange Act), directly or indirectly,
of
securities of Elan Corporation, plc representing at least fifty percent
(50%) of the total voting power represented by Elan Corporation,
plc's
then outstanding voting securities (e.g., issued shares). The term
"person" shall have the same meaning as when used in sections 13(d)
and
14(d) of the Exchange Act but shall exclude (i) a trustee or other
fiduciary holding securities under an employee benefit plan of Elan
Corporation, plc or of any subsidiary of Elan Corporation, plc and
(ii) a
company owned directly or indirectly by the shareholders of Elan
Corporation, plc in substantially the same proportions as their ownership
of the ordinary shares of Elan Corporation,
plc.
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A
transaction shall not constitute a Change in Control if its sole purpose is
to
create a holding company that will be owned in substantially the same
proportions by the persons who held Elan Corporation, plc's issued shares
immediately before such transaction.
2.3. "Company"
means
Athena Neurosciences, Inc.
2.4. "Comparable
Position"
means a
position either with the Company or any of its Affiliates or with a successor
or
transferee of all or a part of the business of the Company or Affiliate, on
terms which do not cause a Significant Reduction in Scope or Target Compensation
and do not entail a Relocation. The Plan Administrator, in its sole discretion,
will determine a Comparable Position.
2.5. "Confidential
Information"
means
trade secrets and other propriety information of an Employer or any Affiliate.
If an Eligible Employee entered into a confidentiality or proprietary rights
agreement with an Employer or any Affiliate, the term "Confidential Information"
for purposes of this Plan shall have the meaning ascribed to any such term
or
concept as it is defined under, or used in, the separate agreement.
2.6. "Eligible
Employee"
means
each Employee who is not (i) covered by a written employment agreement that
contains a severance provision, or covered by a written severance agreement
(for
the duration of that agreement); (ii) classified as "temporary," including
without limitation, anyone classified as an "intern" or "co-op"; (iii) a
consultant; (iv) a "leased employee" as defined in Section 414(n) of the
Internal Revenue Code; or (v) a person performing services for an Employer
on a
contract basis or as an independent contractor or
consultant
or through a purchase order, supplier agreement or any other form of agreement
that the Employer enters into for services.
2.7. "Employee"
means
any full-time or part-time employee of an Employer.
2.8. "Employer"
means
the Company and each Affiliate identified on Attachment A, including the
wholly-owned subsidiaries of the Affiliates identified on Attachment
A.
2.9. "ERISA"
means
the Employee Retirement Income Security Act of 1974, as amended.
2.10. "Executive
Employee"
means an
Eligible Employee who has the title of Senior Vice President or Executive Vice
President or any other title ranked at or higher than Senior Vice
President.
2.11. "Involuntary
Termination"
means a
termination of an Eligible Employee's employment by the Employer due to a
business condition, as determined in the sole discretion of the Company. The
term Involuntary Termination shall include (i) a termination effective when
the
Eligible Employee exhausts a leave of absence during, or at the end of, a WARN
Notice Period and (ii) a situation where an Eligible Employee on an approved
leave of absence during which the Employee's position is protected under
applicable law (e.g., a leave under the Family Medical Leave Act), returns
from
such leave, and cannot be placed in employment with the Employer.
2.12. "Plan"
means
the Elan U.S. Severance Plan, as set forth in this instrument and as hereafter
amended.
2.13. "Relocation"
means a
change in the Eligible Employee's primary job site, and such new location
increases the Eligible Employee's commute between home and primary job site
by
at least thirty (30) miles. Notwithstanding the foregoing, this term shall
not
apply to an Eligible Employee who is a field-based sales representative or
who
works from home.
2.14. "Severance
Date"
means
the final day of employment with the Employer which date shall be communicated
in writing by the Employer to the Employee.
2.15. "Significant
Reduction in Scope or Target Compensation"
means a
significant reduction in the Eligible Employee's total target compensation
or a
significant reduction in the scope of the Eligible Employee's employment
responsibilities and duties. The Plan Administrator, in its sole discretion,
shall determine whether an Eligible Employee experiences a "Significant
Reduction".
2.16. "Triggering
Event"
means an
Involuntary Termination, Relocation or Significant Reduction in Scope or Target
Compensation.
2.17. "WARN
Notice Date"
means
the date the Employer is required to notify an Eligible Employee pursuant to
the
WARN Act that he or she is to be terminated from employment with the Employer
in
conjunction with a "plant closing" or "mass layoff" as described in the WARN
Act.
2.18. "WARN
Notice Period"
means
the sixty (60) consecutive calendar day period commencing on an Eligible
Employee's WARN Notice Date.
2.19. "Week
of
Pay"
shall be
determined based on the Eligible Employee's status as a salaried or hourly
Employee. If the Eligible Employee is a salaried Employee, Week of Pay shall
be
the Eligible Employee's regular weekly base salary compensation rate in effect
on his/her Severance Date. If the Eligible Employee is an hourly Employee,
Week
of Pay shall be the Eligible Employee's regular hourly base compensation rate
multiplied by his/her regularly scheduled number of hours worked per week in
effect on his/her Severance Date. If the Eligible Employee works part-time,
his/her Week of Pay is determined on a prorated basis by calculating his/her
average number of hours per week actually worked during the prior Year of
Service.
2.20. "Years
of Service"
shall be
determined in accordance with the Employer's personnel records. An Eligible
Employee shall receive credit for a Year of Service for each twelve (12) month
period of active service with the Employer. For partial years of employment,
the
Eligible Employee shall receive credit for a full Year of Service if he or
she
completes at least six (6) full months of active service. If an Eligible
Employee has not completed at least six full months of active service during
a
partial year, he or she shall not receive credit for a Year of
Service.
ARTICLE
III
ELIGIBILITY
3.1. Conditions
of Eligibility.
To be
eligible for benefits as described in Article V, the Eligible Employee must
(i)
remain an Employee through the Severance Date, (ii) through the Severance Date,
fulfill the normal responsibilities of his/her position, including meeting
regular attendance, workload and other standards of the Employer, as applicable,
and (iii) submit the signed Waiver and Release Agreement required by the Plan
Administrator on, or within forty-five (45) days after, his/her Severance Date
or receipt of the Waiver and Release Agreement (whichever occurs later) and
not
revoke the signed Waiver and Release Agreement.
3.2. Conditions
of Ineligibility.
An
otherwise Eligible Employee shall not receive severance pay or severance
benefits under the Plan if:
| (a) |
the
Employee ceases to be an Eligible Employee as defined by the
Plan;
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| (b) |
the
Employee terminates employment with the Employer by reason of
death;
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Amended
& Restated Severance Plan Document (January 1, 2006)
4
| (c) |
the
Employer terminates the Employee's employment for one or more of
the
following reasons (determined in the sole discretion of the Plan
Administrator): Commission by the Employee of an act of fraud, theft,
misappropriation of funds, dishonesty, bad faith or disloyalty; violation
by the Employee of any federal, state, local law or regulation; violation
by the Employee of any rule, regulation or policy of the Employer
or other
job related misconduct; failure to perform the duties of the position
held
by such Employee in a manner which satisfies the reasonable expectations
of the Employer; failure by the Employee to meet any requirement
reasonably imposed upon such Employee by the Employer as a condition
of
continued employment; or dereliction or neglect by the Employee in
the
performance of such Employee's job duties;
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| (d) |
the
Employee terminates employment with the Employer through job
abandonment;
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| (e) |
other
than as set forth in the last sentence of Section 2.11, the Employee
is
eligible to receive long-term disability benefits from the Employer
(as
determined under the applicable Employer-sponsored long-term disability
plan) as of the date the Triggering Event would have occurred had
the
individual been actively at work on such
date;
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| (f) |
the
Employee is employed in an operation, division, department or facility,
that is sold, leased or otherwise transferred, in whole or in part,
from
an Employer, and (i) the Employee accepts any position with the new
owner/operator, or (ii) the Employee is offered a Comparable Position
by
the new owner/operator;
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| (g) |
the
Employee gives notice of his/her voluntary termination (other than
as
provided in Section 2.16) prior to his/her Severance Date or the
effective
date of a sale, lease or transfer of an operation, division, department
or
facility, as described in Section 3.2(f), regardless of the effective
date
of such termination;
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| (h) |
the
Employee ceases working with the Employer and receives severance
benefits
under the terms of another group reorganization/restructuring benefit
plan
or severance program sponsored by the
Employer;
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| (i) |
the
Employee is offered a Comparable Position from an Employer, or accepts
any
position with an Employer, even if it is not a Comparable
Position;
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| (j) |
the
Employee experiences a Triggering Event after the Plan is
terminated;
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| (k) |
the
Employee does not timely execute and return to the Plan Administrator
a
valid Waiver and Release Agreement;
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Amended
& Restated Severance Plan Document (January 1, 2006)
5
| (l) |
the
Employee works primarily in an office located in a country other
than the
United States and is entitled to severance benefits under the laws
of such
country or the policies of the company at which he or she is based
and
such severance benefits may not be waived;
or
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| (m) |
the
Employee is offered a Comparable Position by, or accepts any position
with, an employer with which the Company or any of its Affiliates
has
reached an agreement or arrangement under which the employer agrees
to
offer employment to the otherwise Eligible
Employee.
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The
foregoing list of conditions is intended to be illustrative and may not be
all
inclusive; the Plan Administrator will determine in the Plan Administrator's
sole discretion whether an Eligible Employee is eligible for severance pay
and
severance benefits under the Plan.
ARTICLE
IV
PAY
AND BENEFITS IN LIEU OF WARN NOTICE
4.1. Wage
Payments.
If an
Eligible Employee is entitled to advance notice of a "plant closing" or a "mass
layoff" under the WARN Act, but experiences a Triggering Event before the end
of
a WARN Notice Period, the Eligible Employee shall be entitled to receive Weeks
of Pay until the end of the WARN Notice Period as if he or she were still
employed through such date. The Weeks of Pay under this Section 4.1 will be
issued according to the normal payroll practices of the Employer and shall
not
be subject to the Waiver and Release Agreement.
4.2. Benefits.
An
Eligible Employee described in Section 4.1 shall be entitled to benefits under
an Employer-sponsored medical and dental benefit plans, as amended from time
to
time, through the end of the WARN Notice Period on the same terms and under
the
same conditions as applied to the Eligible Employee immediately prior to the
Triggering Event. The benefits under this Section 4.2 are not subject to the
Waiver and Release Agreement.
ARTICLE
V
SEVERANCE
PAY AND SEVERANCE BENEFITS
5.1. Generally.
In
exchange for providing the Employer with an enforceable Waiver and Release
Agreement, in a form acceptable to the Plan Administrator, an Eligible Employee
who terminates employment on account of a Triggering Event shall be eligible
to
receive severance pay and severance benefits as described below and subject
to
the other provisions of this Plan. The consideration for the voluntary Waiver
and Release Agreement shall be the severance pay and severance benefits the
Eligible Employee would not otherwise be eligible to receive.
5.2. Severance
Pay.
Severance pay shall be determined in accordance with the table below based
on
the Eligible Employee's "Band" classification and in accordance with the terms
Amended
& Restated Severance Plan Document (January 1, 2006)
hereof.
If
the applicable Triggering Event occurs within two years following a Change
in
Control and the Eligible Employee was an Employee at the time of the Change
in
Control, the Eligible Employee's severance pay shall be determined under the
column in the table below titled "Change in Control Severance Pay" and shall
be
paid in accordance with the terms hereof. The Band applicable to any Eligible
Employee shall be determined by the Plan Administrator, in its sole discretion,
based on the Eligible Employee's job position relative to the job grading system
in place for the applicable Employer.
|
Employment
Classification
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Severance
Pay
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Change
in Control Severance Pay
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Band
I
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Six
(6) Weeks of Pay plus two (2) additional Weeks of Pay for each Year
of
Service, limited to a maximum period of thirty-nine (39) Weeks of
Pay.
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Same
as severance pay described at left
|
|
Band
II
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Nine
(9) Weeks of Pay plus two (2) additional Weeks of Pay for each Year
of
Service, limited to a maximum period of thirty-nine (39) Weeks of
Pay.
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Same
as severance pay described at left
|
|
Band
III
|
Fifteen
(15) Weeks of Pay plus two (2) additional Weeks of Pay for each Year
of
Service, limited to a maximum period of forty-five (45) Weeks of
Pay.
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Same
as severance pay described at left
|
|
Band
IV
|
Fifteen
(15) Weeks of Pay plus two (2) additional Weeks of Pay for each Year
of
Service, limited to a maximum period of forty-five (45) Weeks of
Pay.
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Same
as severance pay described at left
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Band
V
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Twenty-four
(24) Weeks of Pay plus two (2) additional Weeks of Pay for each Year
of
Service, limited to a maximum period of fifty-two (52) Weeks of
Pay.
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The
greater of (i) severance pay described at left or (ii) twenty-six
(26)
Weeks of Pay plus an amount equal to the bonus attributable to the
Eligible Employee's most recent Year of Service.
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Band
VI
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Thirty-six
(36) Weeks of Pay plus two (2) additional Weeks of Pay for each Year
of
Service, limited to a maximum period of seventy-eight (78) Weeks
of
Pay.
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The
greater of (i) severance pay described at left or (ii) seventy-eight
(78)
Weeks of Pay plus an amount equal to the bonus attributable to the
Eligible Employee's most recent Year of
Service
|
Amended
& Restated Severance Plan Document (January 1, 2006)
7
|
Executive
Employee
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Thirty-six
(36) Weeks of Pay plus two (2) additional Weeks of Pay for each Year
of
Service, limited to a maximum period of seventy-eight (78) Weeks
of
Pay.
|
If
such Executive Employee is a Senior Vice President, then an amount
equal
to the greater of (i) severance pay as described at left or (ii)
Two times
(2x) the sum of (a) the base pay attributable to the Executive Employee's
most recent Year of Service and (b) the bonus attributable to the
Executive Employee's most recent Year of Service.
If
such Executive Employee is an Executive Vice President (or has a
title
that is the equivalent thereof or higher), then an amount equal to
the
greater of (i) severance pay as described at left or (ii) Two and
one half
times (2.5x) the sum of (a) the base pay attributable to the Executive
Employee's most recent Year of Service and (b) the bonus attributable
to
the Executive Employee's most recent Year of Service.
*
*
*
Furthermore,
all Executive Employees will be entitled to the benefits of the Modified
Excise Tax Gross-Up pursuant to Section 5.4 under the
Plan.
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Severance
pay shall be paid in a lump sum payment as soon as practicable following the
later of the Severance Date or the end of the WARN Notice Period, as applicable,
but in no event later than March 15 of the year following the year of the
Severance Date or the end of the WARN Notice Period. Notwithstanding the
foregoing, any severance pay and severance benefits which become payable shall
be paid only after the seven (7) day revocation period for a signed Waiver
and
Release Agreement has passed. All legally required taxes and any sums owed
the
Employer shall be deducted from Plan severance pay.
If
an
Employer reemploys an Eligible Employee who is receiving severance pay and
benefits under the Plan, the individual shall become ineligible and such pay
and
benefits shall cease effective as of the reemployment date. Further, the former
Eligible Employee must repay
Amended
& Restated Severance Plan Document (January 1, 2006)
the
portion of the severance pay attributable to the period that begins on the
date
the Eligible Employee was reemployed. If the Plan Administrator, in its sole
discretion, determines that the former Eligible Employee's services address
a
critical business need, then the Plan Administrator may provide that no such
repayment is required.
5.3. Severance
Benefits.
(a) Medical
and Dental Benefits Coverage Continuation.
Under
federal health care continuation coverage law (referred to as "COBRA"), the
Eligible Employee who is receiving health care coverage under an
Employer-sponsored health plan is entitled to elect health care continuation
coverage under the applicable Employer health plan if his/her employment
terminates for certain reasons. Any of the Triggering Events would qualify
the
Eligible Employee to receive such continuation coverage, subject to the terms
of
the applicable health plan and governing law. Under COBRA, the Eligible Employee
is required to pay the full cost for such coverage plus a two-percent
administrative fee. If an Eligible Employee experiences a Triggering Event
before his or her WARN Notice Period (if applicable) expires, his or her COBRA
rights begin when the WARN Notice Period expires.
If
an
Eligible Employee elects to exercise his/her applicable COBRA continuation
rights under the Employer health plan, the Eligible Employee will only be
required to pay the same share of the applicable premium that would apply if
he
or she were participating in the plan as an active employee. This
Employer-subsidized premium continues for a period lasting as long as the
Eligible Employee would be entitled to receive regular (i.e., not Change in
Control) severance pay under this Plan (as described in the middle column on
the
previous page) if severance pay were not paid in a lump sum, limited to a
maximum period of six (6) months. Even if the Eligible Employee is entitled
to
Change in Control severance pay, the Employer-subsidized premium described
in
this Section 5.3 will stop after (i) the period that applies to regular
severance pay, or (ii) six (6) months, whichever period is shorter. Any partial
month will be rounded up to the next whole month. After the Employer-subsidized
premium period ends, the Eligible Employee shall be required to pay the full
applicable COBRA premium.
All
of the
terms and conditions of an Employer-sponsored medical and dental benefit plans,
as amended from time to time, shall be applicable to an Eligible Employee (and
his/her eligible dependents, if applicable) participating in any form of
continuation coverage under a Employer-sponsored medical and dental benefit
plans. This Plan is not to be interpreted to expand an Eligible Employee's
health care continuation rights under COBRA.
(b) Career
Transition Assistance.
A career
transition assistance firm selected and paid for by an Employer shall provide
career transition assistance. An Eligible Employee must begin the available
career transition assistance services within sixty (60) days following his/her
Severance Date.
Amended
& Restated Severance Plan Document (January 1, 2006)
9
Subject
to
the limitations set forth above, career transition assistance shall be provided
in accordance with the following table:
|
Employment
Classification
|
Career
Transition Services
|
|
Band
I
|
QuickLaunch
or reasonably equivalent program.
|
|
Band
II
|
One
month Powerstart Program or reasonable equivalent.
|
|
Band
III
|
Three-month
executive program.
|
|
Band
IV
|
Six-month
executive program.
|
|
Band
V
|
Nine-month
executive program.
|
|
Band
VI
|
Twelve-month
executive program.
|
|
Executive
Employee
|
Key
Executive Program.
|
(c) Severance
Reduction for WARN Notice Period.
If the
Employer is required to provide advance notice to an Eligible Employee of a
"plant closing" or "mass layoff" under the WARN Act, and the Eligible Employee
(i) is placed on a paid leave of absence during the WARN Notice Period (or
any
portion thereof) or, (ii) receives wages and benefits under Sections 4.1 and
4.2
through the end of the WARN Notice Period, the Employer shall offset against
the
Eligible Employee's severance pay and benefits described above the amount of
pay
and benefits the Eligible Employee received under Sections 4.1 and 4.2. Under
Section 5.2, this means the Weeks of Pay that would otherwise apply are reduced
by each Week of Pay the Eligible Employee received during the WARN Notice
Period. Partial weeks are prorated. Likewise, under Section 5.3, the period
of
Employer-subsidized health coverage is reduced by the time during which the
Eligible Employee received health coverage during the WARN Notice Period.
| 5.4 |
Taxes.
|
(a) Parachute
Gross-Up Payment.
This
Section 5.4 shall apply only if an Executive Employee experiences a Triggering
Event within two (2) years following a Change in Control and the Eligible
Employee was an Employee at the time of the Change in Control. If it is
determined that the pay and benefits under this Plan and any other plan or
arrangement of an Employer (the "Total Payments") constitute a "parachute
payment" (within the meaning of Section 280G of the Internal Revenue Code (the
"Code") that would be subject to the excise tax imposed by Code Section 4999
or
any interest or penalties with respect to such excise tax (such excise tax
and
any such interest or penalties are collectively referred to as the "Excise
Tax"), then the Executive Employee shall be entitled to receive an additional
payment (a "Gross-Up Payment") in an amount calculated to ensure that after
the
Executive Employee pays all taxes (and any interest or penalties imposed with
respect to such taxes), including any Excise Tax imposed upon the Gross-Up
Payment, the Executive Employee retains an amount of the Gross-Up Payment equal
to the Excise Tax imposed upon the Total Payments.
Amended
& Restated Severance Plan Document (January 1, 2006)
10
(b) Determination
by Accountant.
All
determinations and calculations required to be made under this Section 5.4
shall
be made by an independent accounting firm selected by the Executive Employee
from among the largest five accounting firms in the United States (the
"Accounting Firm"). The Accounting Firm shall provide its determination (the
"Determination"), together with detailed supporting calculations regarding
the
amount of any Gross-Up Payment and any other relevant matter, to the Executive
Employee and the Company within ten (10) business days after the Executive
Employee or the Company made the request (if the Executive Employee reasonably
believes that any of the Total Payments may be subject to the Excise Tax).
If
the Accounting Firm determines that no Excise Tax is payable by the Executive
Employee, it shall furnish the Executive Employee with a written statement
that
it has concluded that no Excise Tax is payable (including reasons therefor)
and
that the Executive Employee has substantial authority not to report any Excise
Tax on his federal income tax return. If a Gross-Up Payment is determined to
be
payable, it shall be paid to the Executive Employee within ten (10) business
days after the Determination has been delivered to the Company. Any
determination by the Accounting Firm shall be binding upon the Company and
the
Executive Employee, absent manifest error.
(c) Over
-
and Underpayments.
As a
result of uncertainty in the application of Code Section 4999 at the time of
the
initial determination by the Accounting Firm hereunder, it is possible that
Gross-Up Payments not made by the Company should have been made
("Underpayments") or that Gross-Up Payments will have been made by the Company
that should not have been made ("Overpayments"). In either event, the Accounting
Firm shall determine the amount of the Underpayment or Overpayment that has
occurred. In the case of an Underpayment, the Company shall promptly pay the
amount of such Underpayment to the Executive Employee or for his benefit. In
the
case of an Overpayment, the Executive Employee shall, at the direction and
expense of the Company, take such steps as are reasonably necessary (including
the filing of returns and claims for refund), follow reasonable instructions
from, and procedures established by the Company, and otherwise reasonably
cooperate with the Company to correct such Overpayment, provided, however,
that
(i) the Executive Employee shall in no event be obligated to return to the
Company an amount greater than the net after-tax portion of the Overpayment
that
the Executive Employee has retained or has recovered as a refund from the
applicable taxing authorities and (ii) this provision shall be interpreted
in a
manner consistent with the intent of subsection (a) above, which is to make
the
Executive Employee whole, on an after-tax basis, from the application of the
Excise Tax, it being understood that the correction of an Overpayment may result
in the Executive Employee's repaying to the Company an amount that is less
than
the Overpayment.
(d) Limitation
on Parachute Payments.
Any other
provision of this Section 5.4 notwithstanding, if the Excise Tax could be
avoided by reducing the Total Payment by ten percent (10%) or less, then the
Total Payments shall be reduced to the extent necessary to avoid the Excise
Tax
and no Gross-Up Payment shall be made. If the Accounting Firm determines that
the Total Payments are to be reduced under the preceding sentence, then the
Company shall
Amended
& Restated Severance Plan Document (January 1, 2006)
11
promptly
give the Executive Employee notice to that effect and a copy of the detailed
calculation thereof. The Executive Employee may then elect, in his sole
discretion, which and how much of the Total Payments are to be eliminated or
reduced (as long as after such election no Excise Tax shall be payable), and
the
Executive Employee shall advise the Company in writing of his election within
ten (10) days of receipt of notice. If the Executive Employee makes no such
election within such ten (10)-day period, then the Company may elect which
and
how much of the Total Payments are to be eliminated or reduced (as long as
after
such election no Excise Tax shall be payable), and it shall notify the Executive
Employee promptly of such election.
ARTICLE
VI
WAIVER
AND RELEASE AGREEMENT
In
order
to receive the severance pay and severance benefits available under the Plan,
an
Eligible Employee must submit a signed Waiver and Release Agreement form to
the
Plan Administrator on or within forty-five (45) days after his/her Severance
Date or receipt of the Waiver and Release Agreement, whichever occurs later.
The
required Waiver and Release Agreement form is attached to the Summary Plan
Description as Attachment III and may be revised by the Company at any time.
An
Eligible Employee may revoke his/her signed ▇▇▇▇▇▇ and Release Agreement within
seven (7) days of his/her signing the Waiver and Release Agreement.
Any
such
revocation must be made in writing and must be received by the Plan
Administrator within such seven-(7) day period. An Eligible Employee who timely
revokes his/her Waiver and Release Agreement shall not be eligible to
receive any severance pay or severance benefits under the Plan, except as
provided in Article IV. An Eligible Employee who timely submits a signed ▇▇▇▇▇▇
and Release Agreement form and who does not exercise his/her right of revocation
shall be eligible to receive severance pay and severance benefits under the
Plan.
Eligible
Employees shall be advised to contact their personal attorney at their own
expense to review the Waiver and Release Agreement form if they so
desire.
ARTICLE
VII
PLAN
ADMINISTRATION
The
Company shall designate a committee to serve as the "Plan Administrator" of
the
Plan and the "named fiduciary" within the meaning of such terms as defined
in
ERISA. The Plan Administrator shall have full power and discretionary authority
to determine eligibility for Plan severance pay and severance benefits and
to
construe the terms of the Plan, including, but not limited to, the making of
factual determinations, the determination of all questions concerning benefits
and procedures for claim review and the resolution of all other questions
arising under the Plan. Severance pay and severance benefits under the Plan
will
be payable only if the Plan Administrator determines in the Plan Administrator's
discretion that the Eligible
Amended
& Restated Severance Plan Document (January 1, 2006)
12
Employee
is entitled to them. The decisions of the Plan Administrator shall be final
and
conclusive with respect to all questions concerning the administration of this
Plan.
The
Plan
Administrator may delegate to other persons responsibilities for performing
certain of the duties of the Plan Administrator under the terms of this Plan
and
may seek such expert advice as the Plan Administrator deems reasonably necessary
with respect to the Plan. The Plan Administrator shall be entitled to rely
upon
the information and advice furnished by such delegatees and experts, unless
actually knowing such information and advice to be inaccurate or unlawful.
The
Plan Administrator shall establish and maintain a reasonable claims procedure,
including a procedure for appeal of denied claims. The Plan Administrator has
discretionary authority to grant or deny benefits under this Plan. In no event
shall an Eligible Employee or any other person be entitled to challenge a
decision of the Plan Administrator in court or in any other administrative
proceeding unless and until the claim and appeals procedures established under
this Plan have been complied with and exhausted.
In
the
event of a group termination, as determined in the sole discretion of the Plan
Administrator, the Plan Administrator shall furnish affected Eligible Employees
with such additional information as may be required by law.
ARTICLE
VIII
PROCEDURES
FOR MAKING AND APPEALING
CLAIMS
FOR PLAN BENEFITS
8.1. Claim
for Benefits.
It is
not necessary that an Eligible Employee apply for severance pay and severance
benefits under the Plan. However, if an Eligible Employee wishes to file a
claim
for severance pay and severance benefits, such claim must be in writing and
filed with the Plan Administrator. If the Eligible Employee does not provide
all
the necessary information for the Plan Administrator to process the claim,
the
Plan Administrator may request additional information and set deadlines for
the
Eligible Employee to provide that information. Within ninety (90) days after
receiving a claim, the Plan Administrator will:
| (a) |
either
accept or deny the claim completely or partially; and
|
| (b) |
notify
the claimant of acceptance or denial of the
claim.
|
8.2. Benefits
Review.
If the
claim is completely or partially denied, the Plan Administrator will furnish
a
written notice to the claimant containing the following
information:
| (a) |
specific
reasons for the denial;
|
| (b) |
specific
references to the Plan provisions on which any denial is
based;
|
Amended
& Restated Severance Plan Document (January 1, 2006)
13
| (c) |
a
description of any additional material or information that must be
provided by the claimant in order to support the claim and an explanation
of why such material or information is necessary;
and
|
| (d) |
an
explanation of the Plan's appeal procedures which shall also include
a
statement of the claimant's right to bring a civil action under Section
502(a) of ERISA following a denial of the claim upon
review.
|
8.3. Appeal
of Denied Claim.
A
claimant may appeal the denial of his/her claim and have the Plan Administrator
reconsider the decision. The claimant or the claimant's authorized
representative has the right to:
| (a) |
request
an appeal by written request to the Plan Administrator not later
than
sixty (60) days after receipt of notice from the Plan Administrator
denying his claim;
|
| (b) |
review
or receive copies, upon request and free of charge, any documents,
records
or other information "relevant" (within the meaning of Department
of Labor
Regulation 2560.503-1(m)(8)) to the claimant's claim;
and
|
| (c) |
submit
written comments, documents, records and other information relating
to his
or her claim.
|
In
deciding a claimant's appeal the Plan Administrator shall take into account
all
comments, documents, records and other information submitted by the claimant
relating to the claim, without regard to whether such information was submitted
or considered in the initial review of the claim. If the claimant does not
provide all the necessary information for the Plan Administrator to decide
the
appeal, the Plan Administrator may request additional information and set
deadlines for the claimant to provide that information.
The
Plan
Administrator will make a decision with respect to such an appeal within sixty
(60) days after receiving the written request for such appeal or, in special
circumstances, within one-hundred twenty (120) days after receiving the written
request for such appeal. The claimant will be advised of the Plan
Administrator's decision on the appeal in writing. The notice will set forth
(1)
the specific reasons for the decision, (2) specific reference to Plan provisions
upon which the decision on the appeal is based, (3) a statement that the
claimant is entitled to receive, upon request and free of charge, reasonable
access to, and copies of, all documents, records or other information relevant
to the claimant's claim, and (4) a statement of the claimant's right to bring
a
civil action under Section 502(a) of ERISA following a wholly or partially
denied claim for benefits.
In
no
event shall a claimant or any other person be entitled to challenge a decision
of the Plan Administrator in court or in any other administrative proceeding
unless and until the claim and appeal procedures described above have been
complied with and exhausted.
Amended
& Restated Severance Plan Document (January 1, 2006)
14
ARTICLE
IX
AMENDMENT/TERMINATION/VESTING
Eligible
Employees do not have any vested right to severance pay and/or severance
benefits under the Plan and the Company reserves the right, in its sole
discretion, to amend or terminate the Plan at any time in writing, signed by
an
authorized officer of the Company, provided, however, that (i) no amendment
nor
termination shall reduce severance pay or severance benefits attributable to
a
Triggering Event that occurs prior to the date the Plan terminates, and (ii)
any
amendment or termination that becomes effective after a Change in Control shall
not adversely affect the rights of any Eligible Employee compared with such
Eligible Employee's rights if his or her employment terminated effective
immediately before such amendment or termination became effective.
The
Plan shall be effective only with respect to Triggering Events that occur on
or
before December 31, 2007. The Company may extend the Plan in its sole
discretion.
ARTICLE
X
NO
ASSIGNMENT
Severance
pay and severance benefits payable under the Plan shall not be subject to
anticipation, alienation, pledge, sale, transfer, assignment, garnishment,
attachment, execution, encumbrance, levy, lien, or charge, and any attempt
to
cause such severance pay and severance benefits to be so subjected shall not
be
recognized, except to the extent required by law.
ARTICLE
XI
CONFIDENTIAL
INFORMATION/COOPERATION
Recognizing
that the disclosure or improper use of such Confidential Information will cause
serious and irreparable injury to an Employer, Eligible Employees with such
access acknowledge that (i) they will not at any time, directly or indirectly,
disclose Confidential Information to any third party or otherwise use such
Confidential Information for their own benefit or the benefit of others and
(ii)
payment of severance pay and severance benefits under the Plan shall cease
if an
Eligible Employee discloses or improperly uses such Confidential Information.
Any Eligible Employee subject to an individual confidentiality agreement or
proprietary rights agreement with an Employer or any Affiliate will be deemed
to
violate the terms of this Article XI if he or she violates the terms of the
individual confidentiality agreement or proprietary rights
agreement.
Subject
to
the terms of the Waiver and Release Agreement, each Eligible Employee shall
cooperate with any Employer and its legal counsel in connection with any current
or future investigation or litigation relating to any matter to which the
Eligible Employee was involved or of which the Eligible Employee has knowledge
or which occurred during the Eligible Employee's employment. Such assistance
shall include, but not be limited to, depositions and
Amended
& Restated Severance Plan Document (January 1, 2006)
15
testimony
and shall continue until such matters are resolved. In addition, an Eligible
Employee shall not in any way disparage any Employer nor any person associated
with an Employer to any person, corporation, or other entity.
ARTICLE
XII
MISCELLANEOUS
PROVISIONS
12.1. Return
of Property.
In order
for an Eligible Employee to commence receiving severance pay and severance
benefits under the Plan, (i) he/she shall be required to return all Employer
property (including, but not limited to, Confidential Information, client lists,
keys, credit cards, documents and records, identification cards, equipment,
laptop computers, software, and pagers), and (ii) repay any outstanding bills,
advances, debts, amounts due to an Employer, as of his/her Severance
Date.
All
pay
and other benefits (except Plan severance pay and severance benefits) payable
to
an Eligible Employee as of his/her Severance Date according to the established
policies, plans, and procedures of the Employer shall be paid in accordance
with
the terms of those established policies, plans and procedures. In addition,
any
benefit continuation or conversion rights which an Eligible Employee has as
of
his/her Severance Date according to the established policies, plans, and
procedures of the Employer shall be made available to him/her.
12.2. Code
Section 409A Compliance.
It is
the Company's intent that amounts paid under this Plan shall not constitute
"deferred compensation" as that term is defined under Code Section 409A and
the
regulations promulgated thereunder. However, if any amount paid under this
Plan
is determined to be "deferred compensation" within the meaning of Code Section
409A and compliance with one or more of the provisions of this Plan causes
or
results in a violation of Code Section 409A, then such provision shall be
interpreted or reformed in the manner necessary to achieve compliance with
Code
Section 409A, including but not limited to, the imposition of a six-month delay
in payment to any "key employee" (as defined in Code Section 416(i)) following
such key employee's date of termination which entitles him or her to a payment
under this Plan.
12.3. Representations
Contrary To The Plan.
No
employee, officer, or director of an Employer has the authority to alter, vary,
or modify the terms of the Plan except by means of an authorized written
amendment to the Plan. No verbal or written representations contrary to the
terms of the Plan and its written amendments shall be binding upon the Plan,
the
Plan Administrator, or an Employer.
12.4. No
Employment Rights.
This
Plan shall not confer employment rights upon any person. No person shall be
entitled, by virtue of the Plan, to remain in the employ of an Employer and
nothing in the Plan shall restrict the right of an Employer to terminate the
employment of any Eligible Employee or other person at any time.
Amended
& Restated Severance Plan Document (January 1, 2006)
16
12.5. Plan
Funding.
No
Eligible Employee shall acquire by reason of the Plan any right in or title
to
any assets, funds, or property of the Company. Any severance pay, which becomes
payable under the Plan is an unfunded obligation and shall be paid from the
general assets of the Company. No employee, officer, director or agent of the
Company personally guarantees in any manner the payment of Plan severance pay
and severance benefits.
12.6. Applicable
Law.
This
Plan shall be governed and construed in accordance with ERISA and in the event
that any reference shall be made to State law, the laws of the State of Delaware
shall apply, without regard to its conflicts of law provisions.
12.7. Severability.
If any
provision of the Plan is found, held or deemed by a court of competent
jurisdiction to be void, unlawful or unenforceable under any applicable statute
or other controlling law, the remainder of the Plan shall continue in full
force
and effect.
12.8. Recovery
Of Payments Made By Mistake.
An
Eligible Employee shall be required to return to the Company any severance
pay
payment and any severance benefits payment, or portion thereof, made by a
mistake of fact or law.
▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇▇, INC.
By:______________________________
Its:_______________________________
Amended
& Restated Severance Plan Document (January 1, 2006)
17
Elan
U.S.
Severance
Plan
Attachment
A
For
purposes of this Plan, "Employer" means Athena Neurosciences, Inc. and each
of
the following Affiliates to the extent each remains and Affiliate (including
wholly-owned subsidiaries of these Affiliates):
| 1. |
Elan
Pharmaceuticals, Inc.
|
| 2. |
Elan
Drug Delivery, Inc.
|
| 3. |
Elan
Holdings, Inc.
|