|
Exhibit 10.1
CEPHALON, INC.
NON-QUALIFIED DEFERRED COMPENSATION PLAN
(As Amended and Restated Effective January 1, 2009)
1.
PURPOSE . The purpose of the Plan is to provide
Eligible Employees with the opportunity to defer a portion of their
Bonus on a tax-favored basis. The Corporation intends that
the Plan shall at all times be maintained on an unfunded basis for
federal income tax purposes under the Code and administered as a
nonqualified "top-hat" plan exempt from the substantive
requirements of ERISA. The Corporation also intends that the
Plan be maintained and operated in accordance with the requirements
of section 409A of the Code. Benefit payments commencing
prior to the Effective Date are governed by the terms of the Plan
as it existed prior to the Effective Date and are either
grandfathered from the requirements of section 409A of the Code or
payable pursuant to a fixed schedule as required by, and in
compliance with, section 409A of the Code. Payments made
between January 1, 2005 and December 31, 2008 that are
subject to the requirements of section 409A of the Code, the Plan
has been operated in accordance with transition relief established
by the Treasury Department and Internal Revenue Service pursuant to
section 409A of the Plan. The Plan, as amended and restated,
shall be effective as of the Effective Date. All capitalized
terms shall be as defined in Paragraph 2 below.
2.
DEFINITIONS . Certain terms shall be defined
hereunder as follows:
(a)
"Account" means the bookkeeping account established by the
Corporation to which are credited Bonus Deferrals, and notational
earnings and losses thereon.
(b)
"Beneficiary" means the person, persons, trust or trusts that a
Participant shall from time to time designate in writing to receive
any benefits payable to him under this Plan in the event of his
death.
(c)
"Board" means the Board of Directors of the Corporation.
1
(d)
"Bonus" means the amount earned by a Participant under the
Employer’s annual Management Incentive Compensation Plan for
a particular Plan Year.
(e)
"Bonus Deferral" means the portion of the Bonus as to which a
Participant has made an irrevocable election to defer receipt until
the date specified in the Participant’s Enrollment
Agreement.
(f)
"Change in Control" means the occurrence of a change in the
ownership or effective control of the Corporation (as defined in
Treas. Reg. §1.409A-3(i)(5)(v)), a change in effective control
of the Corporation (as defined in Treas. Reg.
§1.409A-3(i)(5)(vi)), or a change in the ownership of a
substantial portion of the assets of the Corporation (as defined in
Treas. Reg. §1.409A-3(i)(5)(vii)).
(g)
"Code" means the Internal Revenue Code of 1986, as amended from
time to time.
(h)
"Committee" means the Stock Option and Compensation Committee of
the Board (or any successor thereto) or its delegate, or such other
committee appointed by the Board to administer the Plan. If
no members have been appointed to the Committee, the Board shall
act as the Committee.
(i)
"Corporation" means Cephalon, Inc. or any successor
thereto.
(j)
"Deferred Bonus Account" means a Participant’s Account.
(k)
"Effective Date" means January 1, 2009, the effective date of
this amendment and restatement of the Plan. The Plan was
initially effective on November 1, 1993.
(l)
"Eligible Employee" means each Employee designated by the Committee
as eligible to participate in the Plan.
(m)
"Employee" means any individual employed by the Employer as an
employee; provided, however, to qualify as an "Employee" for
purposes of the Plan, the individual must be a member of a group of
"key management or highly compensated employees" of the Employer,
within the meaning of sections 201, 301 and 401 of ERISA.
(n)
"Employer" means the Corporation or any subsidiary of the
Corporation.
2
(o)
"Enrollment Agreement" means the authorization form which an
Eligible Employee files with the Committee to participate in the
Plan.
(p)
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended from to time.
(q)
"Plan" means the Cephalon, Inc. Non-Qualified Deferred
Compensation Plan, as it may be amended from time to time.
(r)
"Plan Year" means the period beginning on January 1 and ending
on December 31.
(s)
"Separation Date" means the last day on which a Participant is
employed by an Employer on account of a Separation from
Service.
(t)
"Separation from Service" means a Participant’s separation
from service with the Employer within the meaning of section 409A
of the Code and the regulations issued thereunder.
(u)
"Specified Employee" means any Participant who, at any time during
the twelve month period ending on the identification date as
determined by the Committee (or its delegate), is a specified
employee under section 409A of the Code, as determined by the
Committee (or its delegate). The determination of "specified
employees," including the number and identity of persons considered
"specified employees" and identification date, shall be made by the
Committee (or its delegate) in accordance with the provisions of
sections 416(i) and 409A of the Code and the regulations
issued thereunder.
(v)
"Specified Time" means a specified time within the meaning of
section 409A(a)(2)(A)(iv) of the Code and the corresponding
regulations.
(w)
"Trust" means a grantor "rabbi" trust.
(x)
"Unforeseeable Emergency" means the Participant has experienced an
"unforeseeable emergency" within the meaning of Treas. Reg.
§1.409A-3(i)(3)(i).
3
3.
PARTICIPATION . Any person who was a Participant in
the Plan immediately prior to the Effective Date shall continue to
be a Participant in the Plan as of the Effective Date. Any
person who becomes an Eligible Employee as of the Effective Date,
or becomes an Eligible Employee after the Effective Date, shall be
eligible to become a Participant in the Plan in accordance with the
requirements of Paragraph 4 below. A Participant who ceases
as an Eligible Employee during the Plan Year shall cease to be
eligible to elect to make future Bonus Deferrals to the Plan with
respect to any subsequent Plan Year; however, such
Participant’s Bonus Deferral election with respect to the
Plan Year shall continue in effect with respect to the Bonus that
is paid for such Plan Year. If such Participant again
qualifies as an Eligible Employee for a future Plan Year, such
individual shall be eligible to elect to make Bonus Deferrals to
the Plan in accordance with the requirements of Paragraph 4 below
with respect to future Plan Years in which such individual
qualifies as an Eligible Employee.
4.
DEFERRAL OF BONUS; GENERAL RULE AND SPECIAL RULES .
(a)
Prior to the beginning of each Plan Year each Eligible Employee
will be offered the opportunity to make a Bonus Deferral with
respect to the Bonus that is to be earned for the performance
period that begins in such Plan Year. Any Eligible Employee
may enroll in the Plan effective as of the first day of such Plan
Year by filing a completed and fully executed Enrollment Agreement
with the Committee by the date set by the Committee, which in no
event shall be later than then the December 31 of the
preceding Plan Year. Pursuant to said Enrollment Agreement,
the Eligible Employee shall irrevocably elect, except as provided
in subparagraph (c) below, to defer the portion of the
Participant’s Bonus for such Plan Year, up to 100% of the
Participant’s Bonus for such Plan Year. Prior to the
beginning of each Plan Year, an Eligible Employee must execute a
new Enrollment Agreement to elect to make a Bonus Deferral for such
Plan Year.
(b)
If an individual becomes an Eligible Employee after the Plan Year
has commenced, such individual shall not be eligible to elect to
make a Bonus Deferral for such Plan Year. Instead, such
individual must wait until the next Plan Year to elect to make a
Bonus Deferral, in accordance with the requirements of subparagraph
(a) above.
4
(c)
A Participant’s election to defer his Bonus for any Plan Year
shall be irrevocable as of the last day of the preceding Plan Year,
except that if during the Plan Year an Eligible Employee
experiences an Unforeseeable Emergency such Eligible Employee may
submit a request to the Committee on the form provided by the
Committee to cancel the Eligible Employee’s Bonus Deferral
election for such Plan Year. If the Committee determines that
the Eligible Employee has experienced an Unforeseeable Emergency
the cessation of the Eligible Employee’s Bonus Deferrals will
be effective after the Committee’s determination. Any
Eligible Employee who ceases Bonus Deferrals on account of an
Unforeseeable Emergency shall not be eligible to elect to make any
future Bonus Deferrals for the remainder of the Plan Year in which
the Unforeseeable Emergency occurs. For any future Plan Year,
the Eligible Employee will need to execute a new Enrollment
Agreement within the time period described in subparagraph
(a) above.
5.
ELECTION TO TIME AND FORM OF DISTRIBUTION .
(a)
At the time he makes a deferral election, the Participant must
designate in his Enrollment Agreement whether the Bonus Deferral
will commence to be paid at a Specified Time or on account of a
Separation from Service; provided, however, that if the Participant
does not specify the timing of the distribution in his Enrollment
Agreement, the distribution will be paid on the Participant’s
Separation from Service, and provided further that, irrespective of
the election made by the Participant, Paragraph 12 shall apply if
the Participant has a Separation from Service prior to the date of
the Specified Time, if elected, and Paragraph 13 shall apply in the
event of the Participant’s death.
(b)
At the time he makes a deferral election, the Participant must also
designate in his Enrollment Agreement the form of distribution;
provided, however, that if the Participant does not specify the
form of the distribution in his Enrollment Agreement, the
distribution will be paid in a lump sum. A Participant may
elect to receive his benefit under the Plan in a single lump sum or
in substantially equal annual installments over a period not to
exceed ten (10) years if the payment is on account of a
Specified Time. The only form of payment that is payable to
the Participant on account of Separation from Service is a single
lump sum.
5
6.
RECORDS . The Corporation shall maintain appropriate
records of each Participant’s Bonus Deferrals with respect to
each Plan Year. The Corporation shall credit to a Deferred
Bonus Account all Bonus Deferrals elected by the Participant.
7.
AUTHORIZED INVESTMENTS . Subject to Paragraph 15, all
Bonus Deferrals credited to the Deferred Bonus Account for a
Participant may be kept in cash or invested by the Corporation in
such manner, in such portions and in such amounts as the Committee,
in its sole discretion, may elect. In the exercise of the
foregoing discretionary investment powers, the Committee may engage
investment advisers and, if it so desires, may delegate to such
advisers full or limited authority to select the assets in which
the Bonus Deferrals are to be invested.
8.
INVESTMENT INCOME . Subject to Paragraph 15, amounts
credited to each Participant’s Deferred Bonus Account will be
increased annually at the interest rate determined by the
Committee, in its sole discretion. Such rate shall be
determined by the Committee prior to the beginning of the
applicable Plan Year pursuant to a Committee resolution, and shall
be communicated to Participant’s prior to the beginning of
the applicable Plan Year. The designated rate for a
particular Plan Year shall apply to all Bonus Deferrals credited to
the Participant’s Deferred Bonus Account. For 2009, the
Committee has confirmed a growth rate of five percent (5%) per
annum.
9.
STATUS OF INVESTMENTS . All investments made by the
Corporation under this Plan will be deemed made solely for the
purpose of aiding the Corporation in measuring and meeting its
obligations under this Plan. The Corporation shall be the
sole owner of all such investments and of
| 
