Exhibit 10.54
WYETH 2005 (409A)
DEFERRED COMPENSATION
PLAN
(effective January 1,
2005)
PURPOSE
The Plan is an unfunded deferred
compensation plan that provides certain key Employees with the
opportunity to voluntarily defer receipt of a portion of their
compensation. Wyeth adopted the Plan to enable the Company to
attract and retain a select group of management and highly
compensated Employees. The Plan is intended to satisfy the
requirements of Section 409A. Wyeth also maintains the Prior
Plan, which governs certain compensation deferred by a select group
of management and highly compensated Employees that is not subject
to Section 409A.
Capitalized terms not otherwise
defined in the text hereof shall have the meanings set forth in
Section 1.
SECTION 1
DEFINITIONS
1.1 Rules of
Construction . Except
where the context indicates otherwise, any masculine terminology
used herein shall also include the feminine gender, and the
definition of any term herein in the singular shall also include
the plural. All references to sections and appendices are, unless
otherwise indicated, to sections or appendices of the
Plan.
1.2 Terms Defined in the
Plan . Whenever used
herein, the following terms shall have the meanings set forth
below:
(a) “ Administrative
Procedures ” means the policies and procedures
established by the Committee and/or the Administrative Record
Keeper from time to time governing elections to participate in the
Plan, maintenance of Deferral Accounts, Investment Options,
calculation of Investment Earnings/Losses, required Election Forms,
distributions from the Plan and such other matters as are necessary
for the proper administration of the Plan.
(b) “ Administrative Record
Keeper ” means the person or persons designated by the
Committee in accordance with Section 2.
(c) “ Affiliate ”
means any corporation which is included in a controlled group of
corporations (within the meaning of Section 414(b) of the
Code) which includes Wyeth and any trade or business (whether or
not incorporated) which is under common control with Wyeth (within
the meaning of Section 414(c) of the Code); provided ,
however , that in applying Section 1563(a)(1), (2), and
(3) of the Code for purposes of determining a controlled group
of
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corporations under Section 414(b) of the
Code the language “at least 50 percent” shall be used
instead of “at least 80 percent” each place it appears
in Section 1563(a)(1), (2) and (3) of the Code, and
in applying Section 1.414(c)-2 of the Treasury Regulations,
for purposes of determining trades or businesses (whether or not
incorporated) that are under common control for purposes of
Section 414(c) of the Code, “at least
50 percent” shall be used instead of “at least
80 percent” in each place it appears in
Section 1.414(c)-2 of the Treasury Regulations.
(d) “ Base Salary
” means the annual base compensation to be paid during a Plan
Year by the Company to an Employee for services rendered to the
Company from all sources ( i.e. , regardless of whether
United States source or foreign source).
(e) “ Beneficiary
” means one or more persons or entities (including a trust or
estate) designated by a Participant to receive payment of any
unpaid balance in the Participant’s Deferral Account in the
event of the Participant’s death. Such designation shall be
made on a form provided by the Administrative Record Keeper. If no
valid Beneficiary designation is in effect at the
Participant’s death, or if no person or persons so designated
survives the Participant, or if each surviving validly designated
Beneficiary is legally impaired or prohibited from receiving
payment, Participant’s Beneficiary shall be the
Participant’s Surviving Spouse, if any, or if the Participant
has no Surviving Spouse, then his estate. If the Committee is in
doubt as to the right of any person to receive such amount, it may
retain such amount, without liability for any interest thereon,
until the rights thereto are determined, or the Committee may pay
such amount into any court of competent jurisdiction and such
payment shall be a complete discharge of the liability of the
Plan.
(f) “ Board of
Directors ” means the Board of Directors of Wyeth (or any
committee of the Board of Directors to whom the Board delegates,
from time to time, its authority hereunder).
(g) “ Bonus
Compensation ” means cash compensation to be paid to an
Eligible Employee by the Company with respect to services rendered
during a Plan Year under any incentive compensation or bonus plan,
program or arrangement which is maintained or which may be adopted
by the Company.
(h) “ Business Day
” means each day that the New York Stock Exchange is open for
business.
(i) “ Claimant ”
has the meaning set forth in Section 9.1.
(j) “ Code ”
means the Internal Revenue Code of 1986, as amended, and any
applicable rulings and regulations promulgated
thereunder.
(k) “ Committee ”
means the committee of such officers and/or employees of the
Company as shall be designated from time to time by Wyeth to
administer the Plan and any successor thereto.
(l) “ Company ”
means Wyeth and its Affiliates.
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(m) “ Company Account
Plan ” means any arrangement sponsored by the Company,
other than the Plan, that (i) is required to be aggregated
with the Plan under Treasury Regulation 1.409A-1(c)(2) and
(ii)(A) is an “account balance plan,” as such term
is defined in Treasury Regulation 1.409A-1(c)(2)(i)(A) or
(B) provides for the deferral of compensation other than at
the election of the Employee, as described in Treasury Regulation
1.409A-1(c)(2)(i)(B).
(n) “
Company Stock ” means the Investment Option available
under the Plan that is designed to track the performance of
Wyeth’s Common Stock, par value $0.33
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/
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.
(o) “ Default Investment
Option ” means the default investment option specified
from time to time by the Committee for hypothetical investment of a
Participant’s Deferral Account in the event the Participant
fails to allocate all or a portion of his Deferral Account to a
particular Investment Option.
(p) “ Deferral Account
” means a bookkeeping account (including all sub-accounts)
maintained by the Administrative Record Keeper for each Participant
to record (i) the Participant’s Base Salary and/or Bonus
Compensation deferrals under the Plan, (ii) the amount of a
Valid Notional Rollover of all or a portion of the
Participant’s (A) ERP 409A Benefit, (B) SERP 409A
Benefit, and (C) SESP 409A Account, plus or minus
(iii) Investment Earnings/Losses on those amounts minus
(iv) all distributions or withdrawals made to a Participant or
his Beneficiary.
(q) “ Deferred Compensation
Tax Compliance Committee ” means a committee of such
officers and/or employees of the Company as shall be designated
from time to time by the Company.
(r) “ Delayed Payment
Amount ” shall have the meaning set forth in
Section 7.6.
(s) “ Disability
” means a Separation from Service by reason of disability for
purposes of (i) a long-term disability plan maintained by the
Company in which a Participant participates or (ii) Social
Security Disability Insurance (SSDI), as determined by the Social
Security Administrator.
(t) “ Election Form
” means the form or forms established from time to time by
the Administrative Record Keeper and/or the Committee, that an
Eligible Employee completes and submits to the Administrative
Record Keeper to make an election under the Plan. Election Forms
can be in paper, electronic or such other media (or combination
thereof) as the Administrative Record Keeper shall specify from
time to time.
(u) “ Eligible Employee
” means an Employee (i) whose terms and conditions of
employment are not subject to a collective bargaining agreement,
(ii) who at any time during the Plan Year is eligible to
receive Base Salary for the Plan Year on an annualized basis of not
less than one hundred fifty-five thousand dollars ($155,000) or
such greater amount as may be determined from time to time by the
Committee, and (iii) who is paid in whole or in part through
the Company’s regular U.S. payroll. Notwithstanding the
foregoing, an individual shall not become an “Eligible
Employee” until the first day of the month following the date
on which such
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individual satisfies requirement (ii) of
the previous sentence. Further, the term “ Eligible
Employee ” shall exclude individuals classified by the
Company as leased employees, independent contractors or consultants
or any other individuals who are not paid through the
Company’s regular payroll.
(v) “ Employee ”
means an employee of the Company.
(w) “ ERP ” means
the Wyeth Executive Retirement Plan (amended and restated effective
as of January 1, 2005), as amended from time to
time.
(x) “ ERP 409A Benefit
” means the portion of an Eligible Employee’s benefit
under the ERP that is subject to Section 409A.
(y) “ ERP Grandfathered
Benefit ” means the portion of an Eligible
Employee’s benefit under the ERP that, for purposes of
Section 409A, was both earned and vested on or before
December 31, 2004.
(z) “ Installment
Retirement Benefit ” shall have the meaning set forth in
Section 7.2(a).
(aa) “ Investment
Earnings/Losses ” means the income, gains and losses that
would have been realized had an amount deferred hereunder actually
been invested in the Investment Option or Options selected by a
Participant.
(bb) “ Investment
Options ” means the Market Interest Option and such other
investment options as selected from time to time by the Committee
that are used as hypothetical investment options among which the
Participant may allocate all or a portion of his Deferral
Account.
(cc) “ Key
Employee ” means (i) each “specified
employee,” as defined in Section 409A(a)(2)(B)(i) of the
Code, who meets the requirements of Section 416(i)(1)(A)(i),
(ii) or (iii) of the Code (applied in accordance with the
regulations thereunder and disregarding Section 416(i)(5) of
the Code) at any time during the 12-month period ending on
December 31 st of a calendar year and
(ii) to the extent not otherwise included in (i) hereof,
each of the top-100 paid individuals (based on taxable wages for
purposes of Section 3401(a) of the Code as reported in
Box 1 of Form W-2 for the 12-month period ending on
December 31 st of such calendar year plus
amounts that would be included in wages for such 12 month period
but for pre-tax deferrals to a tax-favored retirement plan or
cafeteria plan or for qualified transportation benefits) who
performed services for the Company at any time during the 12-month
period ending on December 31 st of such calendar year. A
Participant shall be treated as a Key Employee for the 12-month
period beginning on April 1 st of the calendar year following
the calendar year for which the determination under clause
(i) or (ii) of this definition is made.
(dd) “ Lump Sum Retirement
Benefit ” shall have the meaning set forth in
Section 7.2(a).
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(ee) “ Market Interest
Option ” means the Investment Option that provides for
Investment Earnings/Losses on amounts deferred under the Plan at
the Market Rate.
(ff) “ Market Rate
” means, for a particular calendar year, 120% of the long
term applicable federal rate, with quarterly compounding, for the
month of January of such calendar year, as published under
Section 1274(d) of the Code for such year, or such other
reasonable rate of interest as the Committee or the Board of
Directors may establish from time to time.
(gg) “ Normal Retirement
Date ” shall have the same meaning as set forth in the
Retirement Plan, as in effect on December 31, 2008.
(hh) “ Participant
” means an Employee or Retiree (for so long as he retains a
Deferral Account under the Plan) who participates in the
Plan.
(ii) “ Plan ”
means this Wyeth 2005 (409A) Deferred Compensation Plan, as
amended from time to time.
(jj) “ Plan Year
” means the calendar year.
(kk) “ Prior Plan
” means the terms of the Wyeth Deferred Compensation Plan (as
amended and restated as of November 20, 2003), as set forth in
the Company’s written documentation, rules, practices and
procedures applicable to such plan (but without regard to any
amendments thereto after October 3, 2004 that would result in
any material modification of such plan, within the meaning of
Section 409A).
(ll) “ Retiree ”
means an individual who is Retired.
(mm) “ Retirement”,
“Retire(s)” or “Retired ” means the
first day of the month coincident with or next following Separation
from Service with the Company for any reason other than a leave of
absence, death or Disability on or after the Participant becomes
Retirement Eligible.
(nn) “ Retirement
Benefit ” means the type and form of payments available
to a Participant upon Retirement as described in
Section 7.2(a).
(oo) “ Retirement Benefit
Installment Payout Dates ” means, with respect to a
deferral made by a Participant, the first day of the calendar
quarter elected (initially or upon redeferral pursuant to
Section 8) by the Participant for the commencement of
installment payments and, in the case of annual installments, the
anniversary dates thereof and, in the case of quarterly
installments, the first day of each calendar quarter thereafter, in
each case through the final installment payout date elected by the
Participant with respect to such deferral; provided ,
however , that the first of such dates shall be:
(i) with respect to a distribution
election made by a Participant in accordance with the SESP, at
least 12 months after a Valid Notional Rollover of all or a portion
of the SESP 409A Account;
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(ii) with respect to redeferral by a
Participant of the ERP 409A Benefit, the SERP 409A Benefit or all
or a portion of the SESP 409A Account pursuant to a Valid Notional
Rollover in accordance with the provisions of the ERP, the SERP or
the SESP, as the case may be, not earlier than five years after the
date such ERP 409A Benefit, SERP 409A Benefit or SESP 409A Account
would otherwise have been payable;
(iii) with respect to a deferral of
all or a portion of the ERP 409A Benefit or the SERP 409A Benefit
pursuant to a Valid Notional Rollover in accordance with the
provisions of the ERP or the SERP, as the case may be, by a
Participant who makes a distribution election in calendar year 2008
and incurs a Separation from Service during the calendar year 2009,
not earlier than January 1, 2010;
(iv) with respect to all other
Retirement Benefit payments (including all or a portion of the ERP
409A Benefit or the SERP 409A Benefit rolled over to the Plan in a
Valid Notional Rollover not in connection with a redeferral), on or
after the Participant’s Retirement Date; and
provided , further , that the final installment
payout date with respect to such deferral occurs (X) no
earlier than the second anniversary of the first installment
payment and (Y) no later than the earlier of (I) the
quarter prior to the fifteenth anniversary of the first installment
payment and (II) the fifteenth anniversary of the
Participant’s Normal Retirement Date.
(pp) “ Retirement Benefit
Lump Sum Payout Date ” means, with respect to a deferral
made by a Participant, the first day of the calendar quarter
elected (initially or upon redeferral pursuant to Section 8)
by the Participant for a lump sum payout of a Retirement Benefit;
provided , however , that such date shall not be
earlier than:
(i) with respect to a distribution
election made by a Participant in accordance with the SESP, at
least 12 months after a Valid Notional Rollover of all or a
portion of the SESP 409A Account;
(ii) with respect to redeferral by a
Participant of the ERP 409A Benefit, the SERP 409A Benefit or all
or a portion of the SESP 409A Account pursuant to a Valid Notional
Rollover in accordance with the provisions of the ERP, the SERP or
the SESP, as the case may be, not earlier than five years after the
date such ERP 409A Benefit, SERP 409A Benefit or SESP 409A
Account would otherwise have been payable;
(iii) with respect to a deferral of
the ERP 409A Benefit or the SERP 409A Benefit pursuant to a Valid
Notional Rollover in accordance with the provisions of the ERP or
the SERP, as the case may be, by a Participant who makes a
distribution election in calendar year 2008 and incurs a Separation
from Service during the calendar year 2009, not earlier than
January 1, 2010;
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(iv) with respect to all other
Retirement Benefit payments (including all or a portion of the
ERP 409A Benefit or the SERP 409A Benefit rolled over to the
Plan in a Valid Notional Rollover not in connection with a
redeferral), on or after the Participant’s Retirement date;
and
provided , further , that such date shall be no
later than the fifteenth anniversary of the Participant’s
Normal Retirement Date.
(qq) “ Retirement
Eligible ” means for a Participant, the earlier of
(i) age 65, or (ii) age 55 with at least five Years of
Vesting Service.
(rr) “ Retirement Plan
” means the Wyeth Retirement Plan – United States, as
amended from time to time.
(ss) “ Savings Plan
” means the Wyeth Savings Plan, as amended from time to
time.
(tt) “ Section 409A
” means Section 409A of the Code and the applicable
rulings and regulations promulgated thereunder.
(uu) “ Section 409A
Compliance ” has the meaning set forth in
Section 10.1.
(vv) “ Separation from
Service ” means a separation from service with the
Company for purposes of Section 409A, determined using the
default provisions set forth in Treasury Regulation
Section 1.409A-1(h). Notwithstanding the foregoing, if a
Participant would otherwise incur a Separation from Service in
connection with a sale of assets of the Company, the Company shall
retain the discretion to determine whether a Separation from
Service has occurred in accordance with Treasury Regulation
Section 1.409A-1(h)(4).
(ww) “ SERP ”
means the Wyeth Supplemental Executive Retirement Plan (amended and
restated effective as of January 1, 2005), as amended from
time to time.
(xx) “ SERP 409A
Benefit ” means the portion of an Eligible
Employee’s benefit under the SERP that is subject to
Section 409A.
(yy) “ SERP Grandfathered
Benefit ” means the portion of an Eligible
Employee’s Benefit under the SERP that, for purposes of
Section 409A, was both earned and vested on December 31,
2004.
(zz) “ SESP ”
means the Wyeth Supplemental Employee Savings Plan (amended and
restated effective as of January 1, 2005), as amended from
time to time.
(aaa) “ SESP 409A
Account ” means and Eligible Employee’s 409A
Account (as defined in the SESP) under the SESP.
(bbb) “ SESP Grandfathered
Account ” means an Eligible Employee’s
Grandfathered Account (as defined in the SESP) under the
SESP.
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(ccc) “ Short-Term
Payout ” means the type of payout available to a
Participant as described in Section 7.1.
(ddd) “ Short-Term Payout
Date ” means, with respect to a deferral of Base Salary
or Bonus Compensation made by a Participant, the first day of the
calendar quarter elected by the Participant for payment of a
Short-Term Payout; provided , however , that such
date shall be in a Plan Year which, in the case of an initial
election, is at least three but no more than 15 years after the end
of the Plan Year with respect to which a deferral occurs and in the
case of a redeferral pursuant to Section 8, is at least five
but not more than 15 years after the date on which the
Short-Term Payout, but for the redeferral, would have been paid;
and provided , further , that in each case such date
shall be no later than the fifteenth anniversary of the
Participant’s Normal Retirement Date.
(eee) “ Transition
Elections ” means elections made by a Participant in
accordance with the provisions of Notices 2005-1, 2006-79, and
2007-86 promulgated by the U.S. Treasury Department and the
Internal Revenue Service and the Proposed Regulations under
Section 409A, 70 Fed. Reg. 191 (Oct. 4, 2005).
(fff) “ Treasury
Regulations ” means the regulations adopted by the
Internal Revenue Service under the Code, as they may be amended
from time to time.
(ggg) “ Unforeseeable
Emergency ” has the meaning ascribed in
Section 409A.
(hhh) “ Valid Notional
Rollover ” means a notional rollover in accordance with
the requirements of the SESP, the SERP or the ERP, as the case may
be, of all or a portion of a Participant’s (i) SESP 409A
Account, (ii) SERP 409A Benefit or (iii) ERP 409A
Benefit, to the Plan by a Participant in the SESP, the SERP or the
ERP, as the case may be, who is Retirement Eligible at the time of
his Separation from Service. The effective date of a Valid Notional
Rollover shall be the first of the month following the
Participant’s Separation from Service, even if all or a
portion of the SESP 409A Account, the SERP 409A Benefit or the ERP
409A Benefit would otherwise have been paid to the Participant at a
later date.
(iii) “ Wyeth ”
means Wyeth, a Delaware corporation, and any successor
thereto.
(jjj) “ Yearly or Quarterly
Installment Method ” means a yearly (or quarterly)
installment payment over the number of years (or quarters) selected
by the Participant in accordance with the Plan, determined by the
following annuity methodology. The amount of the annual or
quarterly installment payment shall be determined by the
Administrative Record Keeper as an annuity at the beginning of the
installment payout period elected by the Participant and shall be
recalculated each year as of January 1. The yearly (or
quarterly) installment shall be calculated based on the balance of
the Participant’s Deferral Account as of the beginning of the
installment payout period, assuming that the entire Deferral
Account is invested at the Market Rate in effect at the time the
calculation is made and assuming that the Market Rate will remain
unchanged throughout the payout period. The amount of the yearly or
(quarterly) installment payments shall be revised at the beginning
of each calendar year by adjusting the principal amount used to
determine the amount of the yearly (or quarterly) installment
payments to reflect
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the actual value of the Deferral Account
(determined based on the Investment Earnings/Losses attributable to
the Investment Options actually selected by the Participant and
amounts distributed in the prior year) and assuming that the
Participant’s Deferral Account is invested at the Market Rate
in effect at the time of the revised calculation.
(kkk) “ Year of Vesting
Service ” has the meaning ascribed to it in the
Retirement Plan as of January 1, 2006 and, prior to such date,
has the meaning ascribed to “Continuous Service,” as
such term was defined in the Retirement Plan prior to
January 1, 2006.
SECTION 2
ADMINISTRATION
2.1 General
Authority . The
general supervision of the Plan shall be the responsibility of the
Committee, which, in addition to such other powers as it may have
as provided herein, shall have the power, subject to the terms of
the Plan: (i) to determine eligibility to participate in, and
the amount of benefit to be provided to any Participant under, the
Plan; (ii) to make and enforce such rules and regulations as
it shall deem necessary or proper for the efficient administration
of the Plan; (iii) to determine all questions arising in
connection with the Plan, to interpret and construe the Plan, to
resolve ambiguities, inconsistencies or omissions in the text of
the Plan, to correct any defects in the text of the Plan and to
take such other action as may be necessary or advisable for the
orderly administration of the Plan; (iv) to make
determinations regarding the valuation of Deferral Accounts;
(v) to make any and all legal and factual determinations in
connection with the administration and implementation of the Plan;
(vi) to designate the Administrative Record Keeper and to
review actions taken by the Administrative Record Keeper or any
other person to whom authority is delegated under the Plan; and
(vii) to employ and rely on legal counsel, actuaries,
accountants and any other agents as may be deemed to be advisable
to assist in the administration of the Plan. All such actions of
the Committee shall be conclusive and binding upon all persons. The
Committee shall be entitled to rely conclusively upon all tables,
valuations, certificates, opinions, and reports furnished by any
actuary, accountant, controller, counsel, or other person employed
or engaged by the Company with respect to the Plan. If any member
of the Committee is a Participant, such member shall not resolve,
or participate in the resolution of,
