Document:

_ALPHARMA INC

ALPHARMA INC.

EMPLOYEE STOCK PURCHASE PLAN

(As Amended and Restated 

Effective as of October 1, 2002)

 

 

ALPHARMA INC.

EMPLOYEE STOCK PURCHASE PLAN

Table of Contents

1.History of The Plan1

2.Purpose1

3.Effective Date1

4.Plan Administration1

5.Eligibility2

6.Participation2

7.Payroll Deductions and Other Contributions2

8.Contributions by the Company3

9.The Plan Year3

10.Plan Quarters4

11.Allocation of Participant and Company Contributions4

12.Share Purchases4

13.Allocation of Shares5

14.Issuance, Transfer or Sale of Share Certificates5

15.Expenses7

16.Cash Dividends and Share Distributions7
a.Cash Dividends7

b.Share Distributions and Share Splits7

c.Share Rights and Warrants8

d.Changes in Common Stock8

17.Voting Rights8

18.Records and Reports to Participants.8

19.Termination of Employment10

20.Amendment and Termination of the Plan10

21.Limitation on Sale of Shares10

22.Amendments to Effect Registration11

ALPHARMA INC.

EMPLOYEE STOCK PURCHASE PLAN

1.History of The Plan.  This plan was originally adopted by A.L. Laboratories, Inc. on September 7, 1990 as the A.L. Laboratories, Inc. Employee Stock Purchase Plan with an effective date of October 1, 1990.  The Plan was subsequently amended from time to time and amended and restated in its entirety, effective as of October 1, 2002 as the Alpharma Inc. Employee Stock Purchase Plan (the "Plan").  The Plan is maintained by Alpharma Inc. (the "Company") and any of its domestic or international subsidiaries that may adopt the Plan from time to time (each such adopting subsidiary referred to herein as a "Covered Entity") with the Company's consent.

2.Purpose.  The purpose of the Plan is to give employees wishing to do so a convenient means of purchasing shares of Alpharma Inc. Class A Common Stock (the "Shares") through after-tax payroll deductions, supplemented by contributions made by the Company or a Covered Entity.  The Company believes that ownership of Shares by employees will foster greater employee interest in the Company's growth and development.

3.Effective Date.  The "effective date" of this amendment and restatement of the Plan is October 1, 2002.

4.Plan Administration.  The Plan shall be administered by a committee appointed for such purpose by the Company's Board of Directors (the "Benefit Plans Administrative Committee").  As Plan administrator, the Benefit Plans Administrative Committee shall have complete control of the administration of the Plan, which includes the determination of employees' eligibility for participation in accordance with the standards set forth in Section 5 hereof, the interpretation of provisions of the Plan, the adoption of any rules or regulations which may be necessary, advisable or desirable in the operation of the Plan, including restrictions on the sale by employees of Shares purchased under the Plan, and the delegation of certain of the duties of the Benefit Plans Administrative Committee to an agent to facilitate the purchase and transfer of Shares and to otherwise assist in the administration of the Plan.  The Benefit Plans Administrative Committee shall control the general administration of the Plan with all powers necessary to enable it to carry out its duties in that respect, except that, if for any reason a Benefit Plans Administrative Committee shall not have been appointed or shall cease to exist or function, all authority and duties of the Benefit Plans Administrative Committee under this Plan shall be vested in and exercised by the Board of Directors of the Company.

5.Eligibility.  Any employee of the Company or a Covered Entity shall be eligible to participate in the Plan on the January 1, April 1, July 1 or October 1 (or at special entry dates approved by the Benefit Plans Administrative Committee) coinciding with or next following the completion of three months of employment (the "Plan Entry Date") provided such employee (i) regularly works at least 9 months during the calendar year (or the Company anticipates as of the Plan Entry Date that the employee shall work at least 9 months during the calendar year), (ii) has an average work week of 20 hours or more during the period worked, (iii) has attained age 18, (iv) does not, and shall not by reason of participating in the Plan, own stock in the Company possessing 5% or more of the total combined voting power or the value of all classes of stock of the Company or its subsidiary corporations, and (v) is not an employee of a domestic or international subsidiary of the Company which is (a) prohibited by law from participating in the Plan, or (b) in the discretion of the Benefit Plans Administrative Committee, precluded from participating in the Plan by government regulation or other action ("Eligible Employees").  The Benefit Plans Administrative Committee shall determine which employees are eligible to participate in the Plan in accordance with the standards set forth in this Section.

6.Participation.  Participation in the Plan is entirely voluntary.  An Eligible Employee may become a participant at a Plan Entry Date by submitting an election to participate on a form supplied by the Company and submitting such form to the Company at least 30 days prior to the Plan Entry Date (or otherwise in accordance with administrative procedures approved by the Benefit Plans Administrative Committee) on which that Eligible Employee would like to begin participation. 

7.Payroll Deductions and Other Contributions.  A participant may authorize payroll deductions under the Plan, in an amount equal to one to four percent (in whole percentages) of a participant's compensation paid by the Company or other Covered Entity during the Plan Quarter.  For this purpose, "compensation" means the basic earnings paid to the participant excluding overtime pay, bonuses and commissions and any other incentive pay.  For purposes of the preceding sentence, a participant's compensation paid by the Company or Covered Entities shall include any salary reduction amounts elected by the participant and credited to a qualified or nonqualified deferred compensation program during the Plan Year notwithstanding the fact that amounts deferred under such programs are not reflected on the participant's federal withholding tax statement, Form W-2 (or other comparable wage statement designated by the Company).

Payroll deductions can be changed as of the beginning of any calendar quarter only by giving written notice to the Company adequately in advance of the beginning of such calendar quarter.  Reductions in payroll deductions to zero may be changed effective as of the next payroll date,  by giving written notice to the Company adequately in advance of such payroll date.   The Benefit Plans Administrative Committee may prospectively impose restrictions on participants who reduce their payroll deductions to zero.

8.Contributions by the Company.  The Company or the Covered Entity by whom a participant is employed on the last day of a calendar quarter will make contributions to the Plan in an amount equal to 50% of the total amount of participant contributions paid to the Plan during such quarter.  Such contributions, whether made by the Company or a Covered Entity, as appropriate, are sometimes referred to herein as "Company Contributions." Neither the Company nor the Covered Entity shall be required to make any contributions for a participant for the Plan Quarter in which such participant's employment terminates.  The Company or the Covered Entity may elect to make such additional contributions into the Plan in excess of the 50% contribution as it, in the exercise of its sole discretion, deems appropriate.  These additional contributions to the Plan by the Company or the Covered Entity in excess of 50% ("Company Voluntary Contributions"), if any, shall be made on an ad hoc basis and may vary based upon the discretion of the management of the employing entity with the consent of the Benefit Plans Administrative Committee.  The Benefit Plans Administrative Committee shall distribute Company Voluntary Contributions among participants in any manner the Company desires, and the Company or Covered Entity may direct that such Company Voluntary Contributions be distributed in a manner other than in proportion to the participants' own contributions to the Plan.

9.The Plan Year.  The Plan shall operate on a fiscal year beginning on the first day of January in each year and ending on the 31st day of December.  This fiscal year is referred to herein as the "Plan Year."

10.Plan Quarters.  The Plan Year shall be divided into four Plan quarters ending March 31, June 30, September 30 and December 31.  Each such quarter is referred to herein as a "Plan Quarter."

11.Allocation of Participant and Company Contributions.  The Benefit Plans Administrative Committee will establish a "cash account" and a "Share account" for each participant under the Plan for bookkeeping purposes.  As soon as practicable on or after the last day of each Plan Quarter, but in no case later than the fifteenth day of the month immediately following the end of the Plan Quarter, the Benefit Plans Administrative Committee will credit each participant's cash account with such participant's payroll deductions during the Plan Quarter ("Credited Payroll Deductions"), and will pay and allocate the Company Contributions applicable to such participant.  The date of crediting of such Credited Payroll Deductions and Company Contributions is referred to herein as the "Deduction Crediting Date".

The Benefit Plans Administrative Committee will allocate Company Contributions to each participant's cash account in an amount equal to 50% of each participant's Credited Payroll Deductions; provided, however, that Company Voluntary Contributions may be allocated among participants' accounts in any manner the Company may choose.  The Company shall not be required to pay or accrue interest on payroll deductions, the cash balances in participants' cash accounts or on the value of participants' Share accounts.

Benefits or rights which any person may expect to receive (contingently or otherwise) under the Plan may not be assigned or pledged.

12.Share Purchases.  The Benefit Plans Administrative Committee shall determine before the end of each Plan Quarter the number of Shares to be purchased for the benefit of participants, and whether such Shares shall be purchased on the open market, by private purchase or from the Company.  The Benefit Plans Administrative Committee shall then promptly notify its agent, if any, of this determination.  The Benefit Plans Administrative Committee will use the entire balance of funds in participants' cash accounts to purchase the Shares to be allocated to participants' accounts within the first 15 working days following the end of each Plan Quarter.  Shares to be purchased from the Company pursuant to the Plan shall be made available from currently or subsequently authorized and unissued Shares or Shares authorized, issued and owned now or hereafter by the Company.  In the event of a purchase by the Benefit Plans Administrative Committee (or its agent) on the open market, the cost per Share to participants will be determined by the actual average price per Share paid for the Shares by the Benefit Plans Administrative Committee (or its agent).  In the event of a private purchase or purchases by the Benefit Plans Administrative Committee (or its agent), the cost per Share to participants shall be equal to the average closing market price on the New York Stock Exchange per Share on the dates such Shares were actually purchased.  In the event of a purchase from the Company by the Benefit Plans Administrative Committee (or its agent), the cost per Share to participants shall be equal to the average closing market price on the New York Stock Exchange per Share during such Plan Quarter.

13.Allocation of Shares.  As soon as practicable after all necessary Shares have been purchased by the Benefit Plans Administrative Committee (or its agent) for the benefit of participants, the Benefit Plans Administrative Committee will allocate such Shares to participants' Share accounts (the date of such allocation to be referred to as the "Share Allocation Date") in the following manner:
(a)The Company will determine the average cost per Share to participants of all Shares purchased;

(b)The Company will then allocate whole Shares and fractional Shares to the Share accounts of the individual participants to the extent of the balances in their respective cash accounts.  The cash accounts will be charged with the cost to participants of all Shares so allocated.  No cash balances will remain in the participants' cash accounts immediately after each Share Allocation Date;

(c)Until certificates are issued, no person shall have any right to sell, assign, mortgage, pledge, hypothecate or otherwise encumber any of the Shares allocated to a participant's Share account, except as permitted under Section 14 by satisfying the specific administrative procedures directing the Share Administrative Agent to sell Shares directly from the participant's Share account.

14.Issuance, Transfer or Sale of Share Certificates.  Share certificates for the number of whole Shares in each participant's Share account may be issued to such participant or his brokerage account in paper form or electronically.  Share certificates shall be issued only upon receipt by the Share Administrative Agent, (who shall be selected from time to time in the discretion of the Benefit Plans Administrative Committee), of a participant's request indicating the number of Shares (up to a maximum of the number of whole Shares in the participant's Share account) for which the participant wishes to receive certificates.  Such request shall be made on a form or in such other manner as prescribed by the Benefit Plans Administrative Committee.  Share certificates shall be issued to the participant or his brokerage account as soon as practicable after such request is properly made.  If a participant requests the withdrawal of all whole Shares in his account, the whole number of Shares will be distributed to him in the form of Share certificates and, if requested, the remaining fractional Shares will be distributed to him in cash.

A participant may sell any or all of his Shares by providing a request (made in accordance with administrative procedures adopted by the Benefit Plans Administrative Committee) to the Share Administrative Agent.  The participant's Shares will be sold as soon as administratively practicable after such request is received by the Share Administrative Agent and the participant will receive the net proceeds of the sale of the Shares in the form of a local currency check (currently for a fee of US $15.00) or a wire transfer (for non-US participants only and currently for a fee of US $25.00) shortly thereafter.  As of October 1, 2002, net proceeds equals the gross proceeds from the actual sale of Shares less a processing fee of US $17.00 and a commission of 12 cents ($0.12) per Share sold -- the term "net proceeds" is subject to modification by the Benefit Plans Administrative Committee, in its sole discretion.

The Benefit Plans Administrative Committee, in its discretion, may impose additional restrictions on the issuance, transfer or sale of Shares, provided that (i) participants are provided with notice in advance of the effective date of any such restrictions, (ii) such restrictions would only apply to Shares which participants purchase after the effective date of such restrictions and (iii) such restrictions are administered in a nondiscriminatory and uniform manner.

A participant may elect in writing or in such other manner as prescribed by the Benefit Plans Administrative Committee on a form prescribed by and filed with the Benefit Plans Administrative Committee (or its agent) to have such Share certificates issued to both such participant and a designated individual, in joint tenancy with right of survivorship or in tenancy in common.  A joint ownership election will be effective with respect to the date that such Share certificates are issued.  Such joint ownership election will remain in effect for Share certificates issued to such participant on or before the earlier to occur of (i) the participant's death or (ii) the date which is 31 days after the participant files a proper written revocation of such election with the Benefit Plans Administrative Committee (or its agent).  A participant who revokes a joint ownership election may not make another joint ownership election during the 12 month period following the date the written revocation was received by the Benefit Plans Administrative Committee (or its agent).

Notwithstanding the foregoing provisions of this Section or any other provisions contained in this Plan, no Share certificates will be issued, transferred or sold on behalf of any participant who is an "Officer" of the Company, as such term is defined in Rule 16a-l(f) promulgated under the Securities Exchange Act of 1934, as amended, until six months after such Shares have been purchased for the account of the participant.

15.Expenses.  The Company or the Covered Entity will bear the costs associated with administering the Plan and purchasing Shares, including any brokers' fees, commissions, postage or transfer taxes.  No expenses attributable to a participant's sale or transfer of Shares, however, will be borne by the Company or the Covered Entity.

16.Cash Dividends and Share Distributions.
a.Cash Dividends.  Cash dividends attributable to Shares allocated to participants' Share accounts as of the record date for which such cash dividends are declared will be credited to participants' Share accounts as of the dividend payment date and applied to Share purchases and allocations on such date in accordance with the methods set forth in Sections 12 and 13 hereof. 

b.Share Distributions and Share Splits.  Share distributions and Share splits attributable to Shares allocated to participants' Share accounts as of the Share distribution record date or the Share split effective date will be credited directly to participants' Share accounts as of the record date and the effective date, respectively, of such Share distributions and such Share splits.

c.Share Rights and Warrants.  The Company may, from time to time, in the exercise of its sole discretion, declare Share rights or warrants with respect to Shares.  Following and as of the record date for determining those shareholders of record entitled to receive Share rights or warrants with respect to their Shares, the Company shall issue, and the Benefit Plans Administrative Committee shall allocate, such Share rights and/or warrants directly to the appropriate participants as though the Shares allocated to the account of each such participant were held of record by such participant.  Certificates representing such Share rights or warrants, if any such certificates have been authorized by the Board of Directors of the Company, may be issued to participants pursuant to the procedures set forth in Section 14 of this Plan.

d.Changes in Common Stock.  In the event of a reorganization, recapitalization, stock split, merger, consolidation or other event causing an increase or change in the Shares, the Benefit Plans Administrative Committee shall take appropriate changes in the number and type of Shares that at the time of such event remain available for purchase under the Plan.

17.Voting Rights.  Holders of Shares have the right to vote on matters affecting the Company.  If one of these matters is submitted to the stockholders for a vote, then following the record date for any stockholder meeting at which such vote is to occur, the Benefit Plans Administrative Committee shall advise the Company of the number of participants for whom Shares are held in Share accounts on such record date, and the Company shall furnish the Benefit Plans Administrative Committee (or its agent) with sufficient sets of its proxy soliciting materials to deliver one set to each such participant.  The Benefit Plans Administrative Committee shall thereupon forward one set to each participant for whom allocated Shares are being held and request voting instructions.  Upon receipt of voting instructions, the Benefit Plans Administrative Committee shall vote the Shares as instructed.  The Benefit Plans Administrative Committee shall not vote any Share allocated to a participant's Share account unless voting instructions have been received from the participant.

18.Records and Reports to Participants.  The Benefit Plans Administrative Committee shall cause to be maintained true and accurate books of account, and a record of all transactions under the Plan, and such accounts, books and records relating thereto shall be open to inspection and audit by such person or persons designated by the Company.  At least annually, but in all cases on or before March 31 of each year, the Benefit Plans Administrative Committee shall file with the Treasurer of the Company a written report setting forth all receipts and disbursements and other transactions effected on behalf of the Plan during the last preceding Plan Year, including a description of all Shares purchased together with the cost of all such Shares.  Such report shall also disclose any liabilities of the Plan and shall show, as of the close of the Plan Year, the value of each active cash account and Share account of each participant together with the record of Share certificates delivered to each of the participants during such Plan Year.  The Benefit Plans Administrative Committee shall have the right to maintain one or more bank accounts for funds contributed to the Plan, and to make deposits in and withdrawals therefrom in connection with its administration of the Plan.

An annual report shall be rendered to each participant in the Plan annually within 90 days after the close of the Plan Year, showing for the Plan Year just ended:
a.the amounts of employee payroll deductions made for such participant;

b.the amounts of Company Contributions made for such participant;

c.the amounts of any Company Voluntary Contributions allocated to such participant's account;

d.the amounts of cash dividends credited to such participant's cash account;

e.the number of Shares acquired for such participant's Share account (including the amounts of Share distributions or Share splits so allocated or credited);

f.the cost to the participant per Share of Shares purchased for such participant;

g.the number of Shares, if any, for which certificates were delivered to such participant; and

h.the beginning and ending balances in the participant's Share and cash accounts.

19.Termination of Employment.  Settlement of the accounts of participants whose employment has terminated shall be made as soon as possible following the date on which termination of employment occurred.  As promptly as practicable after the date on which termination of employment occurred, the Benefit Plans Administrative Committee will deliver to such former participant (or such former participant's brokerage account, if elected by such participant on a timely basis) a certificate for the number of whole Shares allocated to such participant's Share account and not previously distributed, together with a check for (i) any remaining cash balance and (ii) the value of any fractional Shares allocated to such participant's Share account.  Alternatively, the terminated participant may elect on a timely basis to have the Share Administrative Agent sell the Shares in order to receive the net proceeds in lieu of the Shares.

In the event of a participant's death, settlement will be made to the participant's designated beneficiary, if any.  If no beneficiary has been designated, or if such beneficiary does not survive the participant, settlement will be made to the participant's duly appointed legal representative after the satisfaction of any applicable legal requirements.  If a participant has been married for at least one year at the time of his death, his spouse must consent (or have consented) in writing for any nonspousal beneficiary designation to be effective.

20.Amendment and Termination of the Plan.  The Company reserves the right to amend this Plan at any time and to terminate this Plan at the end of any Plan Quarter.  Any amendments, however, will not affect any participant's right to the benefit of contributions made by such participant and by the Company prior to the date of the amendment.

In the event of termination of the Plan, the Benefit Plans Administrative Committee will make an allocation of Shares to the Share accounts of the participants in the usual manner.  As soon as practicable, the Benefit Plans Administrative Committee will distribute to or on behalf of each participant the number of whole Shares held in such participant's Share account plus an amount of cash equal to the balance in such participant's cash account and the value of any fractional Shares allocated to such participant's Share account.

21.Limitation on Sale of Shares.  No Shares will be sold under the Plan to any employee residing or employed in any jurisdiction where the sale of such Shares is not permitted under the applicable laws.

22.Amendments to Effect Registration.  The Benefit Plans Administrative Committee is authorized upon advice of counsel to make such amendments to the Plan as may be necessary or desirable to facilitate obtaining an effective registration statement with the Securities and Exchange Commission under the Securities Act of 1933 and covering Shares issued pursuant hereto.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

O:\Legal\Corporate\Employee Benefits Plans\ESPP\FINAL AMENDED AND RESTATED ESPP.2002.docALPHARMA SEVERANCE AND CHANGE OF CONTROL PLAN

ALPHARMA INC. SEVERANCE PLAN 

 

 

Purpose of the Plan

The purpose of the Alpharma Inc. Severance Plan, effective March 11, 2002, is to provide permanent Employees (as defined below) with uniform severance benefits that will financially assist them with their transition following an involuntary termination of employment, other than for cause.

This Plan represents an amendment and restatement of all prior severance plans, practices or policies in effect at Alpharma or any of its Subsidiaries  as of the effective date hereof, and supersedes any and all such prior severance plans, practices and policies to the extent permitted by law.  Except as otherwise specified in the Plan all such prior severance plans, practices and policies are hereby discontinued and terminated.

Wherever any words are used herein in the masculine gender they shall be construed as though they were also used in the feminine gender in all cases where they would so apply, and wherever any words are used herein in the singular form they shall be construed as though they were also used in the plural form in all cases where they would so apply. 

 

SECTION I - DEFINITIONS

The following definitions shall apply for purposes of this Plan:

1.1"Alpharma" - Alpharma Inc., a Delaware company.

1.2"Automobile and Financial Planning Allowance" - The automobile and financial planning allowance a Participant is receiving immediately preceding his Termination Date.

1.3"Benefit Continuation Period" - In the case of a Participant who receives a Severance Benefit, his Benefit Continuation Period will be determined based on the number of weeks or months, as the case may be, used in Section 4.2 to compute the Participant's Severance Benefit.  

1.4"Board" - The Board of Directors of Alpharma.

1.5"Change in Control Plans" - The Change in Control Plan as may be approved by the Board or the Board's Compensation Committee.

1.6"Chief Executive Officer" - Chief Executive Officer of Alpharma Inc.

1.7"Committee" - The committee appointed by the Chief Executive Officer to administer the Plan which shall consist of three (3) employees: the Executive Vice President, Human Resources, who shall act as chairman, and two other Participants.

1.8 "Company" - Alpharma Inc.,  its US Subsidiaries and any non-US Subsidiary whose Board of Directors (or similar governing body) has adopted this Plan, or any successor by merger, consolidation or sale of assets.

1.9"Employee" - A full-time permanent salaried or hourly employee of the Company  as determined by the Committee. An Employee shall not include any individual classified by the Company as either a temporary employee, a leased employee or an independent contractor (regardless of whether such individual is classified or retroactively reclassified as an employee of the Company by any person, entity or agency).

1.10"Executive" - An Employee who is providing services to the Company in one of the following capacities: the Chief Executive Officer, a member of the Leadership Team, or an Employee holding the title of Vice President or Director of the Company  or its Operating Divisions or any other individual deemed by the Committee to be an Executive.

1.11"Executive Bonus Plan" - The Amended Alpharma Inc. Executive Bonus Plan (effective January 1, 2002), as amended from time to time, or such other bonus plan setting forth the Executives' annual awards of cash bonuses.

1.12"Incentive Award" - An Executive's annual target incentive award immediately preceding his Termination Date as set forth in the Executive Bonus Plan, as such agreement may be revised from time to time, provided however, that upon becoming eligible to receive Severance Benefits, the target incentive award for that participant may not be reduced.

1.13"Involuntary Termination of Employment" - A Termination of Employment which was initiated by  the Company other than a Termination for Cause.  The Committee shall have complete discretion to determine whether an Involuntary Termination of Employment has occurred. 

1.14Leadership Team" - The Chief Executive Officer and those officers of the Company that report directly to the Chief Executive Officer and such other Employees who the Chief Executive Officer, in his sole discretion, determines is eligible to be classified as a member of the Leadership Team for purposes of this Plan. 

1.15"Non Qualifying Sale" - A sale of (i) the stock or assets of  a Subsidiary or the assets of an Operating Division of the Company or (ii)  assets of the Company .

1.16Operating Division" -  The Company's operating divisions, which for management  or financial purposes are reported as individual business segments.

1.17"Participant" - An Employee or an Executive who the Committee determines is eligible to receive Severance Benefits pursuant to Article II.

1.18"Plan" - The Alpharma Inc. Severance Plan.

1.19"Salary" - (a) A Participant's annual base salary immediately preceding his Termination Date.  In the United States, Salary shall include amounts contributed on behalf of the Employee to a cafeteria plan or a cash or deferred arrangement and not includable in compensation under Section 125 or 402(e)(3) of the Internal Revenue Code.  Salary shall exclude the following:  commissions; incentive compensation; bonuses; overtime; extended workweek premiums; cost-of-living allowances; shift premiums; other premiums; deferred compensation; payments under consulting agreements; payments under advisory agreements; any other special payments, fees, or allowances. 

 (b) For purposes of this Plan, weekly Salary shall be equal to a Participant's annual Salary divided by 52.

1.20"Severance Benefits" - Has the meaning provided in Section 4.2.

1.21"Subsidiary" - Any corporation in which Alpharma owns either directly or indirectly, more than 50% of the voting stock.

1.22"Termination Date" - The date a Participant's active employment with the  Company terminates as a result of an Involuntary Termination of Employment.

1.23"Termination for Cause" - A Termination of Employment for reasons such as a conviction of a felony, habitual excessive use of drugs or alcohol, unsatisfactory attendance, substantial and willful neglect of job duties, failure or inability to adequately perform job duties, disclosure of confidential information regarding the Company or its operations, or the aiding or assisting of any person or entity which is competitive with the Company or its successors.  The determination of whether an Employee is terminated for cause or not for cause (as it relates to eligibility to receive benefits under the Plan) shall be made by the Committee in its sole discretion and shall be final and conclusive.

1.24"Termination of Employment" - A termination of employment with the Company for any reason other than by reason of retirement, death or disability.

1,25"US Subsidiary" - Any Subsidiary incorporated in the United States.

1.26"US Employee" - An Employee whose primary place of employment is in the United States.

1.27"Waiver and Release" - A form of waiver and release provided by the Company which has the effect of releasing the Company, its affiliates, officers, directors and employees from any and all claims, demands, causes of action, damages, expenses and liabilities, whether known or unknown, which the Participant has or may later have against the Company which relate in any way to his employment by the Company, or his separation from employment with the Company, or any other matter at the time of Termination of Employment.  

1.28"Years of Service" -  Each complete twelve (12) months of uninterrupted employment with the Company as an Employee. Only the last period of continuous employment as an Employee with the Company shall be considered in the determination of a Participant's number of Years of Service with the Company.

 

ARTICLE II - ELIGIBILITY

2.1    Eligibility for Severance Benefits.  

(a)Subject to Section 3.1, an Employee shall be eligible to receive Severance Benefits specified under Article IV in the event that he has an Involuntary Termination of Employment. 

(b)An Employee shall not be eligible for Severance Benefits if (i) he is eligible to receive Change in Control Benefits as defined under any Change in Control Plan or (ii) he is subject to a collective bargaining agreement or comparable labor agreement or is otherwise not permitted to participate pursuant to the laws of the jurisdiction where he is employed or (iii) to the extent he is an Employee other than an Executive, he  is eligible to receive different severance benefits pursuant to the laws of the jurisdiction in which he is employed. 

(c)An Employee shall not be entitled to Severance Benefits upon a Non-Qualifying Sale unless the Committee, in its discretion, adopts rules extending Severance Benefits to such Non-Qualifying Sale.

2.2Committee Discretion.  The Committee shall have full discretion to determine eligibility to receive benefits under this Plan.  Such discretion shall be exercised in accordance with the provisions set forth herein and in a uniform and non-discriminatory fashion.

 
ARTICLE III - CONDITIONS

3.1    Severance Benefits Conditions.  The following are conditions to a Participant receiving Severance Benefits: 
(a)Termination Date on or after March 11, 2002;

(b)Termination Date does not immediately follow a period during which the Participant has not been actively at work due to leave of absence, layoff or salary continuance, unless the Committee specifically designates the condition as not applicable to the Participant; and

(c)Participant executes a Waiver and Release and does not revoke it within seven (7) days after the execution thereof.  

(d)To the extent the duration of the Severance Benefits is longer than any notice period required under the laws of the jurisdiction in which participant is employed, then such severance benefits shall be in lieu of such notice period.

 
ARTICLE IV - SEVERANCE BENEFITS

4.1   General.  

Subject to Section 6.1, a Participant who is eligible under Section 2.1 to receive Severance Benefits and who satisfies the conditions in Section 3.1 shall receive the amount of Severance Benefits specified under Section 4.2 payable in accordance with Article VII and those other benefits as specified in Article V.

4.2Amount of Severance Benefits.  The amount of severance benefits ("Severance Benefits") shall be as follows:

	The Severance Benefit payable to a Participant who is not an Executive shall be an amount equal to two (2) weeks' Salary for each Year of Service.  In no event shall the Severance Benefit determined under the prior sentence be less than four (4) weeks' Salary or greater than fifty-two (52) weeks' salary.  
	The Severance Benefit payable to an Executive shall be an amount determined as follows:

	In the case of Chief Executive Officer, Salary and Automobile and Financial Planning Allowance during each of the 24 months following the Termination Date.  Additionally, he shall receive an Incentive Award for such 24 month period;
	In the case of a member of the Leadership Team,  Salary and Automobile and Financial Planning Allowance during each of the 18 months following the Termination Date.  Additionally, he shall receive an Incentive Award for such 18 month period;
	In the case of a Vice President, Salary during each of the 12 months following the Termination Date; and
	In the case of a Director, the greater of (i) Salary during each of the 6 months following the Termination date or (ii) Salary during the period determined under paragraph (a).

 
ARTICLE V - OTHER BENEFIT PROVISIONS

5.1Medical, Dental and/or Life Insurance Coverage.

A Participant shall be entitled to continued coverage under the medical, dental, accidental death and dismemberment and/or life insurance benefits plan sponsored by the Company under which Participant is covered and as in effect on the Participant's Termination Date (including medical and dental coverage for the participant's covered dependents, if any) for the duration of the applicable Benefit Continuation Period whether or not the Participant receives the benefit payments in a lump sum or in monthly payments.  Such coverage shall be equal to the coverage offered to the Employees of the Company during such Benefit Continuation Period and shall be at the same cost to the Participant as applicable to such Employees during the Benefit Continuation Period.   In no event shall a Participant who is a US Employee be entitled to add dependents to his medical or dental coverage after his Termination Date except as would otherwise be allowed by the Consolidated Omnibus Budget Reconciliation Act of 1985 ("COBRA").

 At the end of the Benefit Continuation Period,  a Participant who is a US Employee may elect to continue medical and dental benefits according to the continuation coverage requirements of group health plans in COBRA, and all of the health insurance continuation provisions under COBRA shall regulate a Participant's election to continue medical and dental benefits at the end of the period during which he is covered under the terms of this Plan.  The period for which  such Participant is eligible for COBRA shall be reduced by the number of weeks during which he received medical and/or dental coverage as a result of his participation in the Plan.  

At the end of the Benefit Continuation Period, accidental death and dismemberment and life insurance benefits shall cease.

5.2Retiree Medical Benefits.

(1)A Participant who is eligible to retire and who is eligible for retiree medical insurance as of his Termination Date shall be provided retiree welfare benefits in accordance with the provisions of the applicable plans rather than the benefits described in this Article V.

(2)A Participant who is eligible to retire and who is not eligible for retiree medical insurance as of his Termination Date shall be eligible for Medical/Dental benefits for the Benefit Continuation Period, in accordance with the provisions of this Article V. 
5.3Retirement Plans.

In the event a Participant becomes eligible to receive Severance Benefits, the benefit payments under this Plan shall not be considered for purposes of computing benefits under the Alpharma Inc. Pension Plan and the A.L. Pharma Inc. Supplemental Pension Plan or any similar pension or retirement plan.   A Participant shall not be eligible to actively participate under such Plans after his Termination Date.
5.4Savings Plan and Stock Purchase Plan.

In the event a Participant becomes eligible to receive Severance Benefits, the benefit payments under this Plan shall not be considered for purposes of computing benefits under any defined contribution plan or stock purchase plan sponsored by the Company including the Employee Stock Purchase Plan, the Alpharma Inc. Savings Plan and the Alpharma Inc. Supplemental Savings Plan.  A Participant shall not be eligible to actively participate under any of these Plans after his Termination Date.

 

5.5Stock Options.

In the event that a Participant is eligible to receive Severance Benefits and the Participant has any outstanding Options or Units (as such terms are defined in the 1997 Incentive Stock Option and Appreciation Right Plan, as amended, ("Stock Option Plan")) as of his Termination Date then (i) any unvested Options or Units shall be forfeited unless another plan or agreement specifically provides for the vesting of such options and (ii) any nonforfeitable Options and Units shall become exercisable for  the period   permitted under the Stock Option Plan.  

5.6Other Plans.

A Participant's participation in all other employee benefit plans sponsored by the Company or the Company shall cease being effective as of the Participant's Termination Date.

5.7Terms of Other Plans.

Continued participation during the Benefit Continuation Period in any of the plans noted above shall be subject to the terms of said plans; as in the past, the Company continues to retain the right to amend or terminate such plans at any time.

 
ARTICLE VI - EMPLOYMENT AGREEMENTS

6.1    Employment Agreements.

Notwithstanding, anything to the contrary herein, to the extent that an Employee is party to an employment agreement with the Company or any of its Subsidiaries to the extent an Employee satisfies the conditions in Sections 2.1 and 3.1, the Employee shall be entitled to receive severance benefits (taken individually) equal to the greater of (i) the severance benefits available under the Plan or (ii) benefits available under such employment agreement under laws of jurisdiction. 

6.2Local Laws.

Notwithstanding anything to the contrary herein, to the extent that an Employee satisfies the conditions in Sections 2.1 and 3.1 and such Employee is entitled to benefits at the time of a Termination of Employment under applicable local laws which are more favorable than the Severance Benefits available under the Plan, then Employee shall receive only those benefits available under local law.
 

ARTICLE VII - PAYMENT

7.1Method of Payment.

	Severance Benefits under Section 4.2 shall be paid to a Participant in installments in accordance with the Company's standard payroll cycles beginning with the first payroll period immediately after his Termination Date and continuing for the applicable Benefit Continuation Period.

(b)If a Participant dies after his Involuntary Termination of Employment but before receiving the total amount of his Severance Benefit such benefit will instead be paid in a lump sum to the Participant's surviving spouse, if any, and otherwise to the Participant's estate commencing as soon as administratively feasible after the date of death.

 

ARTICLE VIII - ADMINISTRATION

8.1The Committee.

The Committee shall have the complete authority to: (a) determine eligibility for benefits in accordance with the provisions of the Plan; (b) construe the terms of the Plan; and (c) control and manage the operation of the Plan.

8.2Administrative Rules.

Subject to the limitations of the Plan, the Committee from time to time shall establish rules for the administration and interpretation of the Plan and the transaction of its business.  The determination of the Committee as to any disputed question shall be conclusive.  All actions, decisions and interpretations of the Committee in administering the Plan shall be conclusive.  All actions, decisions and interpretations of the Committee in administering the Plan shall be performed in a uniform and non-discriminatory manner.

8.3Delegation.

The Committee may, in its sole discretion, delegate some or all of its functions to third parties and employ counsel and other agents and may procure such clerical, actuarial accounting and other services as the Committee may require in carrying out the provisions of the Plan.

8.4.Indemnification.

The Company shall indemnify and hold harmless each member of the Committee against all expenses and liabilities arising out of the Committee member's service as such, excepting only expenses and liabilities arising from the member's own gross negligence or willful misconduct.
8.5Claim Procedure.

(a)The Company will notify an Employee at the time of Termination of Employment what benefits, if any, he will receive under the Plan.  If an Employee believes that he is entitled to receive additional benefits under the Plan he must submit a claim for benefits in writing to the Committee.  Any claim for benefits must be received by the Committee within 60 days after the date of the Employee's Terminated Employment.  If a claim for benefits under the Plan is denied in whole or in part, the claimant will receive written notice of the denial within 90 days after the filing of the claim.  The notice will state the specific reason for the denial of benefits.

(b)Any claimant whose claim for benefits is denied may request a review of the decision denying his claim.  The claimant or his duly authorized representative must submit a written request for review to the Committee within 60 days after receiving the notice of denial.  When making a request for review, a claimant should state the reasons why he believes the claim was improperly denied and should submit any documents or information relevant to the claim.

(c)The decision on review will be completed and furnished to the claimant in writing within 60 days after receipt of the request for review.  All decisions of the Committee are final and binding.  In unusual circumstances the Committee may require an extension of time for deciding on a claim for benefits or a request for review.  Whenever there is a need for an extension of time, the Committee will notify the claimant of the extension.  In no event will such an extension exceed a period of 90 days in the case of the initial claim or 60 days in the case of the decision on review.

(d)If the Committee fails to take any action required by it within the time limits specified above, the claim shall be deemed denied as of the latest date by which such action should have been completed.

 

ARTICLE IX - MISCELLANEOUS

9.1Amendment and Termination.

The Company reserves the right to amend or modify the Plan, to terminate the Plan in its entirety, or to terminate the participation in the Plan of any Subsidiary, provided that (i) any such amendment, modification or termination shall be approved by the Compensation Committee of the Board of Directors, and (ii) any such amendment, modification or termination shall not be applicable to a Participant who has already been notified of a Termination of Employment.  

9.2Parachute Payments.

Notwithstanding anything in this Agreement to the contrary, to the extent that any payment or benefit received or to be received by an Employee in connection with  the termination of such Employee's employment (whether pursuant to the terms of this Agreement ("Contract Payments") or any other plan, arrangement or agreement with the Company, or any person affiliated with the Company or such person (collectively with the Contract Payments, "Total Payments")) would, as determined by tax counsel selected by the Company, result in "Excess Parachute Payments" (as defined below) equal to or greater than three times the "base amount" (the "Maximum Amount") as defined in Section 280G of the Code , an Employee shall not be entitled to receive such portion of the payment or benefit under this Agreement which is  greater than the Maximum Amount.  "Excess Parachute Payments" shall mean "parachute payments" as defined in Section 280G of the Code other than (A) health and life insurance benefits and (B) payments attributable to any award, benefit or other compensation plan or program based upon the number of full or fractional months of any restricted period (relating thereto) which has elapsed prior to the Termination Date.  Furthermore, such payments or benefits provided to the Employee under this Agreement shall be reduced to the extent necessary so that no portion thereof shall be subject to the excise taxes imposed by Section 4999 of the Code, but only if, by reason of such reduction, Employee's net after-tax benefit shall exceed the net after-tax benefit if such reduction were not made.  "Net after-tax benefit" shall mean the sum of (1) all payments and benefits which Employee receives or is then entitled to receive from the Company and any of its Subsidiaries that would constitute a "parachute payment" within the meaning of Section 280G of the Code, less (2) the amount of federal income taxes payable with respect to the payments and benefits described in (1) above calculated at the maximum marginal income tax rate for each year in which such payments and benefits shall be paid to Employee (based upon the rate in effect for such year as set forth in the Code at the time of the first payment of the foregoing), less (3) the amount of excise taxes imposed with respect to the payments and benefits described in (1) above by Section 4999 of the Code.

The terms of any new or revised tax regulations relating to Excess Parachute Payments shall be incorporated by reference herein.  

 

9.3Withholding.

The Company shall withhold all required local, state and federal income taxes from any benefits payable under this Plan.

9.4Binding on Successors.

The obligations of the Company under the Plan shall be binding upon any organization which shall succeed to all or substantially all of the assets of the Company, and the term "Company," whenever used in the Plan, shall mean and include any such organization after the succession.

9.5Applicable Law.  

The Plan shall be governed by and construed in accordance with the laws of the State of New Jersey (regardless of the laws that might otherwise govern under applicable New Jersey principles of conflicts of law).

9.6Contract Right of Participants.  

The Board of Directors of the Company intends this Plan to constitute an enforceable contract between the Company and each Participant and intends this Plan to vest rights in such Participants as third party beneficiaries. 

9.7Compensation.  

For all purposes hereof,  a Participant's incentive award amount, compensation, rate of base earnings, job grade or band, target award or similar amounts or status shall be the higher of such amount, grade, band or status (as the case may be) at the time of the termination of the Participant's employment.

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