Document:

Exhibit
10.2

 

WJ COMMUNICATIONS, INC.

401 RIVER OAKS PARKWAY

SAN JOSE, CALIFORNIA  95134

 

June 28, 2005

 

Mr. Bruce W.
Diamond

 

Re:                               Employment
Agreement

 

Dear Mr.
Diamond:

 

This letter
agreement (this “Agreement”) sets forth the terms and conditions of your
employment with WJ Communications, Inc. (the “Company”), effective as of the
earlier of (A) two weeks after you provide notice of resignation to your
current employer, but in no event later than June 30, 2005, or (B) the
effective date of resignation from your current employer (the “Effective Date”).  You acknowledge that if the Effective Date
does not occur on or before June 30, 2005, the Company shall have no
obligation to employ you and this Agreement shall terminate.

 

1.                                       Employment
and Services.  Subject to Board
approval of your election as President and CEO, the Company shall employ you as
President and Chief Executive Officer of the Company for the period beginning
on the Effective Date and ending upon termination pursuant to paragraph 5 (the “Employment
Period”).  During the Employment Period,
you shall be located at the Company’s principal headquarters and you shall
render such services to the Company and its affiliates and subsidiaries as the
Board of Directors of the Company shall reasonably designate from time to time,
and you shall devote your best efforts and full time and attention to the
business of the Company.  You will
continue to serve as a member of the Board as of the Effective Date and the
Company shall nominate you to serve on the Board at each subsequent annual
meeting of the Company’s shareholders during the Employment Period.  During the Employment Period, you agree not
to sit on any Boards (or comparable bodies) or engage in any outside business
activities without the consent of the Board of Directors (which approval shall
not be unreasonably withheld).

 

2.                                       Compensation.

 

a.                                       Annual Base Salary. 
The Company shall pay you an annual base salary (“Annual Base Salary”)
of $350,000 during the Employment Period, subject to annual review in each year
of the Employment Period thereafter by the Compensation Committee of the Board
of Directors (the “Compensation Committee”) (for any partial year during the
Employment Period, the Annual Base Salary shall be prorated based on the number
of days during such year on which you are employed by the Company).  Your Annual Base Salary may be increased in
years following the first anniversary of the Effective Date at the sole
discretion of the Compensation Committee but may not be decreased.  As used herein, the term “Annual Base Salary”
refers to the

 

 

Annual Base
Salary as so increased.  Such Annual Base
Salary shall be payable in installments in accordance with the Company’s
regular payroll practices.

 

b.                                      Annual Bonus. 
In addition, you will be eligible to receive an annual bonus to be
awarded no later than ninety (90) days after the end of each fiscal year, to be
paid as soon as practicable but no later than one hundred twenty (120) days
after the end of such fiscal year.  In
order to determine the amount of such bonus, beginning with fiscal year 2006
the Compensation Committee shall set your annual bonus target opportunity at
one hundred percent (100%) of your Annual Base Salary with fifty percent (50%)
based on defined Company Financial Performance Objectives (“FPO’s”) and fifty
percent (50%) based on defined Major Business Objectives (“MBO’s”).  The Company shall determine appropriate FPO’s
and MBO’s for each fiscal year and your annual bonus shall be based upon the
extent to which the Company attains such objectives.  You shall be permitted to provide input to
the Company regarding the performance objectives prior to the Company’s
determination of such objectives.  The
determination of the appropriate FPO’s and MBO’s with respect to each
subsequent fiscal year shall take place not later than thirty (30) days
following the receipt by the Board of Directors of the Company from the Company’s
senior management of the Company’s operating budget with respect to such fiscal
year provided such determination shall occur no later than ninety (90) days
after the beginning of such fiscal year. 
The annual bonus target opportunity for the fiscal year ending December 31,
2005 shall be set at fifty percent (50%) of your Annual Base Salary and will be
based on your achievement of defined objectives to be determined by the Company
within its sole discretion on or following the commencement of the Employment
Period.  In order to make up for
compensation forfeited from your former employer when you join the Company,
your actual bonus shall be not less than $50,000 provided that you remain in
the Company’s employ through December 31, 2005, with such bonus to be paid
as soon as practicable but no later than two and a half (2 1⁄2) months after the
end of the 2005 fiscal year.

 

c.                                       Notwithstanding anything herein
to the contrary, there shall be deducted or withheld from all amounts payable
to you amounts for all federal, state, city or other taxes required by
applicable law to be so withheld or deducted and any other amounts authorized
for deduction by or required by law.

 

3.                                       Restricted
Stock.  Within thirty (30) days of
the commencement of the Employment Period, you will be granted 1,000,000 shares
of restricted common stock (“Restricted Stock”) at the commencement of the
Employment Period for a purchase price equal to the par value of the common
stock of $0.01 per share.  These shares
of Restricted Stock will vest as set forth below, provided that you must
be employed as of any vesting date and, except as provided in Section 5 of
this Agreement, if you are terminated for any reason, all unvested Restricted
Stock will be forfeited and cancelled; and  provided  further
that upon a termination of your employment by the Company within three (3)
months prior to or nine (9) months following the occurrence of a Change in
Control (as defined below) either by the Company other than for Cause (as
defined herein) or by you with Good Reason (as defined below), you shall be
fully vested in any then unvested Restricted Stock.  These shares of Restricted Stock will not be
transferable by you until

 

 

they are
vested.  Unvested shares will be subject
to repurchase by the Company at $0.01 per share upon termination of your
employment for Cause or your voluntary resignation without Good Reason. Unless you
elect to be taxed upon receipt of the Restricted Stock (by filing a special
election under Section 83(b) of the Internal Revenue Code of 1986, as
amended (the “Code”), with the Internal Revenue Service within 30 days), you
will be taxed (and subject to income tax withholding) on the value of the
Restricted Stock as the shares vest.  In
order to satisfy any applicable tax withholding, you may elect to have the
Company withhold otherwise deliverable shares having a fair market value equal
to the amount required to be withheld. 
You should consult with your tax advisor regarding the federal, state
and local income tax consequences of receiving the grant of Restricted Stock
hereunder.  In connection with this grant
of restricted stock, you represent and warrant as provided for in Annex 1
hereto.

 

a.                                       Time-Vested Restricted Stock. 
500,000 Shares of the Restricted Stock shall vest over time (“Time
Shares”) subject to the terms and conditions of the Company’s 2000 Stock
Incentive Plan (the “Plan”), and the applicable Time Restricted Stock Agreement
(the “Time Award”).  Time Shares shall
vest ratably on a monthly basis over a thirty-six (36) month period following
the date of grant (e.g., 13,888.88 Time Shares shall vest per month).

 

b.                                      Performance-Vested Restricted
Stock.  500,000 Shares of the Restricted Stock shall
vest based on performance (“Performance Shares”) subject to the terms and
conditions of the Plan and the applicable Performance Restricted Stock
Agreement (the “Performance Award”).  The
Performance Shares shall vest conditioned on your satisfaction of certain
performance targets and objectives to be determined by the Company with the
performance period for such award to be not more than two (2) years or in the
case of performance criteria conditioned on appreciation in the value of the
Company’s common stock, the price targets designated by the Company.  You shall be given the opportunity to provide
input to the Company regarding the performance targets and objectives prior to
the Company’s final determination of such targets and objectives.

 

4.                                       Benefits.  During the Employment Period, you shall be
entitled to participate in the Company’s fringe benefit plans for its senior
executives, subject to and in accordance with applicable eligibility
requirements, such as executive medical reimbursement, tax preparation, 401(k),
employee stock purchase program, life and disability insurance plans and all
other benefit plans (other than severance and equity-based plans or
arrangements) generally available to the Company’s senior executive
officers.  In addition, the Company will
reimburse your reasonable out-of-pocket expenses incurred in connection with
the performance of your duties hereunder, consistent with Company policy. You shall
be entitled to take time off in accordance with the Company’s top management
vacation policy.

 

5.                                       Termination
and Severance.  The Employment Period
shall terminate on the first to occur of (i) forty-five (45) days following
written notice by you to the Company of your resignation without Good Reason
(it being understood that you will continue to perform your services hereunder
during such forty-five (45) day period if requested,  but the Company may terminate your services
sooner if it so elects, without any severance obligations hereunder), (ii)
thirty (30) days following written notice by you to the Company of your
resignation with Good Reason (it

 

 

being understood that you will continue to perform your services
hereunder during such thirty (30) day period provided that the Company does not
elect to terminate your employment sooner if it so elects), (iii) your death or
Disability, (iv) a vote of the Board of the Company directing such termination
for Cause, (v) a vote of the Board of the Company directing such termination
without Cause, or (vi) the third (3rd) anniversary of the Effective Date (the “Scheduled
Expiration Date”); provided, however, that the Scheduled Expiration Date shall
be automatically extended for successive one-year periods unless, at least one
hundred and twenty  (120) days prior to
the then-current Scheduled Expiration Date, either the Company or you shall
give written notice to the other of an intention not to extend the Employment
Period.  In the event your employment
with the Company terminates for any reason, you will be entitled to (a) any
unpaid Base Salary accrued up to the effective date of termination, (b) unpaid,
but earned and accrued Annual Bonus for any completed fiscal year that is
unpaid as of the termination of your employment, (c) pay for accrued but unused
vacation that the Company is legally obligated to pay you, (d) benefits or
compensation as provided under the terms of any employee benefit and
compensation agreements or plans applicable to you, (e) unreimbursed business
expenses required to be reimbursed to you, and (f) rights to indemnification
you may have under the Company’s Articles of Incorporation, Bylaws, the
Agreement or separate indemnification agreement, as applicable.  In the event of termination of the Employment
Period pursuant to clause (ii) or (v) above, the Company shall pay to you (i)
an amount equal to one hundred fifty percent (150%) of your Annual Base Salary
as in effect immediately prior to the termination of the Employment
Period,  (ii) eighteen (18) months
accelerated vesting with respect to any outstanding, unvested Time Shares, and
(iii) reimbursement for premiums paid for continued health benefits for you and
your dependents under the Company’s health plans for eighteen (18) months.  Such amounts provided for in this section shall
be paid within thirty (30) days of the date of such termination (the “Severance
Benefit”).  Notwithstanding the preceding
sentence, the Severance Benefit shall be computed as an amount equal to (i) two
hundred ninety-nine percent (299%) of your Annual Base Salary as in effect
immediately prior to the termination of the Employment Period, (ii) full
vesting with respect to any outstanding, unvested Time Shares and Performance
Shares, and (iii) reimbursement for premiums paid for continued health benefits
for you and your dependents under the Company’s health plans for thirty-six
(36) months with such amounts to be paid within thirty (30) days of the date of
such termination, in each case solely in a circumstance in which there is a
termination of your employment within three (3) months prior to or nine (9)
months following the occurrence of a Change in Control either by the Company
other than for Cause or by you with Good Reason.

 

In the event
that the severance and other benefits provided for in Agreement (i) constitute “parachute
payments” within the meaning of Section 280G of the Code and (ii) but
for this Section 5, would be subject to the excise tax imposed by Section 4999
of the Code (the “Excise Tax”), then your severance benefits hereunder Section 5
shall be either (i) delivered in full, or (ii) delivered as to such lesser
extent which would result in no portion of such severance benefits being
subject to the Excise Tax, whichever of the foregoing amounts, taking into
account the applicable federal, state and local income taxes and the Excise
Tax, results in the receipt by you on an after-tax basis, of the greatest
amount of severance benefits, notwithstanding that all or some portion of such
severance benefits may be taxable under Section 4999 of the Code.  Unless the Company and you otherwise agree in
writing, any determination required under this Section 5 shall be made in
writing in good faith by the accounting firm serving as the Company’s
independent public accountants immediately prior to the Change of Control (the “Accountants”).  In the event of a reduction in benefits

 

 

hereunder, you shall be given the choice
of which benefits to reduce. For purposes of making the calculations required
by this Section 5, the Accountants may make reasonable assumptions and
approximations concerning applicable taxes and may rely on reasonable, good
faith interpretations concerning the application of Sections 280G and 4999 of
the Code.  The Company and you shall furnish
to the Accountants such information and documents as the Accountants may
reasonably request in order to make a determination under this Section.  The Company shall bear all costs the
Accountants may reasonably incur in connection with any calculations
contemplated by this Section.

 

Except as otherwise set forth in this paragraph 5 or pursuant to the
terms of employee benefit plans in which you participate pursuant to paragraph
4, you shall not be entitled to any compensation or other payment from the
Company in connection with the termination of your employment hereunder.

 

For purposes of this Agreement, the following
definitions will apply:  (a) “Good Reason”
shall mean the occurrence of any of the following without your written consent
which shall remain uncured for a period of not less than thirty (30) days
following your delivery of notice of such occurrence to the Company (it being
understood that your failure to deliver such notice in a timely manner shall
waive your rights to allege Good Reason): 
(i) the transfer or relocation of your principal place of employment to
a geographic location more than twenty-five (25) miles from the current
location of the Company’s principal headquarters, (ii) a significant reduction
of your duties, position, or responsibilities, relative to your duties,
position, or responsibilities in effect immediately prior to such reduction,
(iii) a substantial reduction by the Company in the aggregate nature or level
of employee benefits to which you are entitled immediately prior to such
reduction with the result that your overall benefits package is materially
reduced, other than in connection with an across-the-board reduction applicable
to all senior executives of comparable status , (iv) a reduction in your Annual
Base Salary or Annual Bonus as in effect immediately prior to such reduction,
(v) the failure of the Company to obtain the assumption of the Agreement by a
successor, or (vi) any material breach of this Agreement by the Company which
is not cured or which the Company is not undertaking to cure within thirty (30)
days after the Company has received written notice from you identifying the
breach in reasonable detail; (b) “Cause” shall mean any of the following acts
or circumstances:  (i) willful
destruction by you of Company property having a material value to the Company,
(ii) fraud, embezzlement, or theft (other than immaterial acts by you that are
cured immediately and in the reasonable judgment of the Board were not
intentional), (iii) your conviction of or entering a plea of guilty or nolo
contendre to any crime constituting a felony or a misdemeanor involving fraud,
or dishonesty or moral turpitude that the Board reasonably believes has had or
will have a material detrimental effect on the Company’s reputation or
business, (iv) your breach, neglect, refusal, or failure to discharge your
material duties under this Agreement (other than due to Disability) or any
Company policy or your failure to comply with the lawful and reasonable
directions of the Board, in any such case that is not cured within thirty (30)
days after you have received written notice thereof from the Board of the
Company, or (v) a willful and knowing misrepresentation to the Board of the
Company that will have a material adverse effect on the business, prospects or
affairs of the Company or your performance under this Agreement; (c) “Disability”
shall mean that for a period of six (6) consecutive months or an aggregate of
six (6) months in any twelve (12) month period you are incapable of
substantially fulfilling the duties of your positions as set forth in paragraph
1 because of physical, mental or emotional incapacity, injury, sickness or

 

 

disease; and (d) a “Change in Control” shall mean (i) the acquisition
by any “person” as such term is used in Sections 13(d) and 14(d) of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”), other than a current
shareholder or affiliate of such shareholder or the Company, of stock of the
Company representing more than fifty percent (50%) of the combined voting power
of the Company’s stock; (ii) a merger or consolidation of the Company with any
other person (other than an affiliate), other than a merger or consolidation
which would result in the voting stock of the Company outstanding immediately
prior thereto continuing to represent (either by remaining outstanding or by
being converted into voting interests of the surviving entity) more than sixty
percent (60%) of the surviving entity’s outstanding combined voting power
immediately after such merger or consolidation; provided, however, that
a merger or consolidation effected to implement a recapitalization of the
Company (or similar transaction) in which no person acquires more than fifty
percent (50%) of the combined voting stock of the Company’s then outstanding
interests shall not constitute a Change in Ownership; (iii) the approval by
stockholders of the Company, or if stockholder approval is not required of a
plan a complete liquidation or dissolution of the Company or the sale or
disposition by the Company of all or substantially all of the Company’s assets
(in all cases other than the sale, transfer or disposition of all or
substantially all of the assets of the Company to an affiliate); or (iv) a
change in the composition of the Board, as a result of which fewer than a
majority of the directors are Incumbent Directors.  “Incumbent Directors” shall mean directors
who either (A) are directors of the Company as of the date hereof, or (B) are
elected, or nominated for election, to the Board with the affirmative votes of
at least a majority of those directors whose election or nomination was not in
connection with any transactions described in subsections (i), (ii), or (iii)
or in connection with an actual or threatened proxy contest relating to the
election of directors of the Company. 
With regard to the definition of “Disability” in clause (c) above, any
question as to the existence or extent of the Disability upon which you and the
Company cannot agree shall be determined by a qualified, independent physician
selected by the Company and subject to your approval, which shall not be
unreasonably withheld.  The determination
of any such physician shall be final and conclusive for all purposes; provided,
however, that you or your legal representatives shall have the right to present
to such physician such information as to such Disability as you or they may
deem appropriate, including the opinion of your personal physician.

 

6.                                       Confidential
Information.  You acknowledge that
information obtained by you while employed by the Company or any affiliate
thereof concerning the business or affairs of (i) the Company, its affiliates
and subsidiaries or (ii) any enterprise which is the subject of an actual or
potential transaction (“Potential Transaction”), considered, evaluated,
reviewed or otherwise, made known to Fox Paine & Company, LLC, the Company,
its affiliates of subsidiaries, or you (“Confidential Information”) is the
property of the Company. You shall not, without the prior written consent of
the Board of the Company, disclose to any person or use for your own account
any Confidential Information except (i) in the normal course of performance of
your duties hereunder, (ii) to the extent necessary to comply with applicable
laws or regulatory process (provided that, if permissible, you shall give the
Company prompt notice prior to or following any such disclosure), or (iii) to
the extent that such information becomes generally known to and available for
use by the public other than as a result of your acts or omissions to act.  Upon termination of your employment or at the
request of the Board of the Company at any time, you shall deliver to the Board
all documents containing Confidential Information or relating to the

 

 

business or
affairs of the Company, its affiliates and subsidiaries that you may then
possess or have under your control.

 

7.                                       Non-Solicitation.

 

a.                                       Non-Solicitation. 
As a means reasonably designed to protect the Company’s Confidential
Information, you agree that, for a period of twelve (12) months from the
conclusion of the Employment Period, you will not directly, indirectly or as an
agent on behalf of or in conjunction with any person, firm, partnership,
corporation or other entity (i) hire, solicit, encourage the resignation of or
in any other manner seek to engage or employ any person (other than your
personal assistant) who is then, or within the prior three (3) months had been,
an employee of the Company, whether or not for compensation and whether or not
as an officer, consultant, adviser, independent sales representative,
independent contractor or participant, or (ii) contact, solicit, service or
otherwise have any dealings related to the sale, manufacture, distribution,
marketing or provision of products, components, equipment, hardware, other
technology or services (of any sort) in the wireless communications industry or
any other industry or business or prospective industry or business in which the
Company materially participates or has taken material steps toward
participating in as of such conclusion and actually enters such business within
twelve (12) months thereafter, with any person or entity with whom the Company
has a current business relationship or with whom the Company develops such a
relationship during the Employment Period (including without limitation any
customers, vendors or suppliers); provided in each case described in this
clause (ii) that such activity by you does or could reasonably be expected to
have a material adverse effect on the relationship between the Company and any
such third party.

 

b.                                      Scope of Restriction. 
If, at the time of enforcement of this paragraph 7, a court shall hold
that the duration, scope or area restrictions stated herein are unreasonable
under circumstances then existing, the parties hereto agree that the maximum
duration, scope or area reasonable under such circumstances shall be
substituted for the stated duration, scope or area.

 

c.                                       Works Made For Hire. 
You agree that all intellectual property rights, developments, designs,
computer software, inventions, applications and improvements, including but not
limited to trade names, assumed names, service names, service marks,
trademarks, logos, patents, copyrights, licenses, formulas, trade secrets and
technology, whether in design, methods, processes, formulae, machines or devices
and all other applications (collectively, “Inventions”), whether made, created,
invented, devised, acquired, succeeded to (whether by devise, estate,
testamentary disposition or otherwise), or developed prior to the date of this
Agreement for the Company by you, other than Inventions made, created,
invented, devised or developed by you (i) on your own personal time, (ii)
without the use of the Company’s equipment, supplies, facilities and resources
and (iii) which are not related to the sale, manufacture, distribution,
marketing development or provision of products, components, equipment,
hardware, other technology or services (of any sort) in the wireless
communications industry (collectively, “Unrelated Inventions”),

 

 

are works made for hire and shall be
the exclusive property of the Company without separate compensation to
you.  You will, at the request and
expense of the Company made at any time, execute and deliver to the Company or
its nominee such applications and instruments as may be desirable and
appropriate for obtaining for the Company or its nominee, patents, copyrights,
trademarks, know-how and other intellectual property protection of the United
States and all other countries for vesting in the Company or its nominee, all
of your claim, right, title and interest in said Inventions and for
maintaining, enforcing and funding the same, and to otherwise vest in or
evidence the Company’s or its nominee’s exclusive ownership of all of the
rights referred to herein. In the event that for whatever reason the results of
your past or future work for the Company should not be deemed to be works made
for hire, you agree to assign, and you hereby do assign, to the Company or its
nominee all claim, right, title and interest, in any country, to each and every
of the inventions that is the result of work done in the course of your past or
future employment by the Company, or that you create or develop, or that you
acquire by whatever means that was created or developed, in whole or in part by
using the Company’s equipment, supplies, resources or facilities.  Each and every such assignment is and shall
be in consideration of this Agreement with the Company, and no further
consideration therefor is or shall be provided to you by the Company.  You hereby waive enforcement of any moral or
legal rights which might limit the Company’s rights to exploit any of the
foregoing materials in any manner.

 

d.                                      No Duty to Mitigate. 
You shall not be required to mitigate the amount of any payment
contemplated by this Agreement, nor shall any earnings that you may receive
from any other source reduce any such payment.

 

e.                                       Equitable Relief. 
You acknowledge that the provisions contained in Sections 6 and 7 hereof
are reasonable and necessary to protect the legitimate interests of the
Company, that any breach or threatened breach of such provisions will result in
irreparable injury to the Company and that the remedy at law for such breach or
threatened breach would be inadequate. Accordingly, in the event of the breach
by you of any of the provisions of Sections 6 and 7 hereof, the Company, in
addition and as a supplement to such other rights and remedies as may exist in
its favor, may apply to any court of law or equity having jurisdiction to
enforce this Agreement, shall be entitled to injunctive relief against any act
than would violate any of the provisions of this Agreement (without being
required to post a bond), and notwithstanding the arbitration provisions of Section 18
of this Agreement. You further agree that injunctive relief may be sought for
any breach or threatened breach of Section 6 or Section 7 without a
showing of irreparable injury, in order to prevent any such breach or
threatened breach.  Such right to obtain
injunctive relief may be exercised, at the option of the Company, concurrently
with, prior to, after, or in lieu of, the exercise of any other rights or
remedies that the Company may have as a result of any such breach or threatened
breach.

 

8.                                       Survival.  Any termination of your employment or of this
Agreement shall have no effect on the continuing operation of paragraphs 5, 6,
or 7 for the periods specified therein.

 

 

9.                                       Waiver
of Claims.  You agree as a condition
to your receipt of any termination or severance benefits pursuant to paragraph
5 hereof, you will agree, as of the date of such termination, to waive,
discharge and release any and all claims, demands and causes of action, whether
known or unknown, against the Company, its affiliates and subsidiaries, and
their respective current and former directors, officers, employers, attorneys
and agents arising out of, connected with or incidental to your employment or
other dealings with the Company, its affiliates or subsidiaries, which you or
anyone acting on your behalf might otherwise have had or asserted and any claim
to any compensation or benefits from your employment with the Company or its
affiliates (other than employee benefits to be provided pursuant to the terms
of paragraph 5 hereof or of any employee benefit plans as set forth in
paragraph 4 hereof). Notwithstanding anything contained herein to the contrary,
no termination or severance payments shall be made under this Agreement or
otherwise until such time as you have delivered an executed release of claims
and any applicable revocation periods under state or federal law have
expired.  The Company agrees, as further
consideration for your waiver, to concurrently execute a waiver of unknown
clams against you on terms and conditions substantially identical to the waiver
provided by you (it being understood that the Company may specifically reserve
claims identified in writing by the Company at the time that such waiver is
provided).

 

10.                                 Governing Law.  This Agreement and all questions concerning
the construction, validity and interpretation of this Agreement shall be
governed by and determined in accordance with the internal law, and not the law
of conflicts, of the State of California.

 

11.                                 Notices.  All demands, notices and communications
hereunder shall be in writing and shall be deemed to have been duly given, if
mailed, by registered or certified mail, return receipt requested, or, if by
other means, when received by the other party at the address set forth herein,
or such other address as may hereafter be furnished to the other party by like
notice. Notice or communication hereunder shall be deemed to have been received
on the date delivered to or received at the premises of the addressee if
delivered other than by mail, and in the case of mail, three days after the
depositing of the same in the United States mail as above stated (or, in the
case of registered or certified mail, by the date noted on the return
receipt).  Notices shall be addressed as
follows:

 

 

	
  If
  to the Executive:

  	
   

  	
  Mr.
  Bruce W. Diamond

  
	
   

  	
   

  	
  At the last
  residential address known to the Company

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  If to the
  Company:

  	
   

  	
  WJ
  Communications, Inc.

  
	
   

  	
   

  	
  401 River
  Oaks Parkway

  
	
   

  	
   

  	
  San Jose, CA
  95134

  
	
   

  	
   

  	
  Attention:
  Chairman

  
	
   

  	
   

  	
   

  
	
  with a copy to:

  	
   

  	
  Fox Paine
  & Company, LLC

  
	
   

  	
   

  	
  950 Tower
  Lane

  
	
   

  	
   

  	
  Suite 1150

  
	
   

  	
   

  	
  Foster City,
  CA 94404

  
	
   

  	
   

  	
  Attention:
  W. Dexter Paine, III

  

 

 

12.                                 Separability Clause.  Any part, provision, representation or
warranty of this Agreement which is prohibited or which is held to be void or
unenforceable shall be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof.

 

13.                                 Successors and Assigns- Assignment of Agreement.  This Agreement shall bind and
inure to the benefit of and be enforceable by the parties hereto and the
respective successors and assigns of the parties hereto.  As used in this Agreement, “Company” shall
mean the Company as hereinbefore defined and any successors to its businesses
and/or assets as aforesaid which assume and agree to perform this Agreement by
operation of law, or otherwise.  For this
purpose, “successor” means any person, firm, corporation, or other business
entity which at any time, whether by purchase, merger, or otherwise, directly
or indirectly acquires all or substantially all of the assets or business of
the Company.  This Agreement is personal
to you and without the prior written consent of the Company shall not be
assignable by you other than by will or the laws of descent and distribution.

 

14.                                 Indemnification.  Subject to applicable law, you shall be
provided indemnification to the maximum extent permitted by the Company’s
Articles of Incorporation or Bylaws, including, if applicable, any directors
and officers insurance policies, with such indemnification to be on terms
determined by the Board or any of its committees, but on terms no less
favorable than provided to any other Company executive officer or director and
subject to the terms of any separate written indemnification agreement.

 

15.                                 Waiver.  The failure of any party to insist upon
strict performance of a covenant hereunder or of any obligation hereunder,
irrespective of the length of time for which such failure continues, shall not
be a waiver of such party’s right to demand strict compliance in the future. No
consent or waiver, express or implied, to or of any breach or default in the
performance of any obligation hereunder, shall constitute a consent or waiver
to or of any other breach or default in the performance of the same or any
other obligation hereunder.  No term or provision
of the Agreement may be waived unless such waiver is in writing and signed by
the party against whom such waiver is sought to be enforced.

 

16.                                 Legal Expenses.  The Company will reimburse you up to $15,000
for reasonable legal advice expenses incurred by you in connection with the
negotiation, preparation and execution of this Agreement.

 

17.                                 Entire Agreement.  This Agreement together with the standard
forms of equity award grant that describes your outstanding equity awards
constitutes the entire Agreement between the parties hereto with respect to the
subject matter contemplated herein and supersedes all prior agreements, whether
written or oral, between the parties, relating to the subject matter
hereof.  This Agreement shall not be
modified except in writing executed by all parties hereto.

 

18.                                 Captions.  Titles or captions of paragraphs contained in
this Agreement are inserted only as a matter of convenience and for reference,
and in no way define, limit, extend or describe the scope of this Agreement or
the intent of any provision hereof.

 

19.                                 Counterparts.  For the purpose of facilitating proving this
Agreement, and for other purposes, this Agreement may be executed
simultaneously in any number of counterparts. 
Each

 

 

counterpart shall be deemed to be an original, and all such counterparts shall
constitute one and the same instrument.

 

20.                                 Arbitration.  In the event that any disagreement or dispute
whatsoever shall arise between the parties concerning this Agreement, such
disagreement or dispute shall be submitted to the Judicial Arbitration and
Mediation Services, Inc. (“JAMS”) for resolution in a confidential private
arbitration in accordance with the comprehensive rules and procedures of JAMS,
including the internal appeal process provided for in Rule 34 of the JAMS rules
with respect to any initial judgment rendered in an arbitration.  Any such arbitration proceeding shall take
place in Palo Alto, California before a single arbitrator (rather than a panel
of arbitrators).  The parties agree that
the arbitrator shall have no authority to award any punitive or exemplary
damages and waive, to the full extent permitted by law, any right to recover
such damages in such arbitration.  Each
party shall each bear their respective costs (including attorney’s fees, and
there shall be no award of attorney’s fees). Judgment upon the final award
rendered by such arbitrator, after giving effect to the JAMS internal appeal
process, may be entered in any court having jurisdiction thereof.  If JAMS is not in business or is no longer
providing arbitration services, then the American Arbitration Association shall
be substituted for JAMS for the purposes of the foregoing provisions.  Each party agrees that it shall maintain
absolute confidentiality in respect to any dispute between them. In addition, any
dispute, controversy or claim arising under or in connection with your rights
or obligations pursuant to any stock option or other equity arrangements
between you and the Company, shall be settled exclusively as provided for by
the terms of the applicable Company plans.

 

21.                                 Code Section 409A.  The Company and you agree to consider
amendments to this Agreement necessary or appropriate to avoid imposition of
any additional tax or income recognition prior to actual payment to you under
Code Section 409A and any temporary or final Treasury Regulations and
Internal Revenue Service guidance thereunder.

 

[signature page:  to
follow]

 

 

Please execute
a copy of this letter Agreement in the space below and return it to the
undersigned at the address set forth above to confirm your understanding and
acceptance of the agreements contained herein.

 

	
  Very truly
  yours,

  
	
   

  
	
  WJ
  COMMUNICATIONS, INC.

  
	
   

  
	
   

  
	
  By:

  	
    /s/
  W. DEXTER PAINE III

  	
   

  
	
   

  
	
  Name: W.
  Dexter Paine, III

  
	
  Title:

  	
  Chairman

  
	
   

  
	
   

  
	
  Accepted and
  agreed to:

  
	
   

  
	
  /s/ BRUCE W. DIAMOND

  	
   

  
	
   

  
	
  Mr. Bruce W.
  Diamond

  
					

 

 

Annex 1

 

REPRESENTATIONS AND WARRANTIES

 

In connection
with the purchase and sale of WJ Communications Stock hereunder, you represent
and warrant to the Company that:

 

(a)                                  The
WJ Communications Stock to be acquired by you pursuant to this Agreement shall
be acquired for your own account and not with a view to, or intention of,
distribution thereof in violation of the Securities Act, or any applicable
state securities laws, and the WJ Communications Stock shall not be disposed of
in contravention of the Securities Act or any applicable state securities laws.

 

(b)                                 You
are an officer of the Company, are sophisticated in financial matters and are
able to evaluate the risks and benefits of the investment in the WJ Communications
Stock.  You are an “accredited investor”,
as defined in Regulation D promulgated under the Securities Act.

 

(c)                                  To
the extent that any of the securities being purchased by you are not subject to
an effective registration statement, you are able to bear the economic risk of
your investment in such WJ Communications Stock for an indefinite period of
time and you understand that such securities cannot be sold unless subsequently
registered under the Securities Act or an exemption from such registration is
available.

 

(d)                                 You
have had an opportunity to ask questions and receive answers concerning the
terms and conditions of the offering of WJ Communications Stock and have had
full access to such other information concerning the Company as you have
requested.  You have reviewed, or have
had an opportunity to review, a copy of the Stockholders’ Agreement.

 

(e)                                  This
Agreement constitutes a legal, valid and binding obligation of yours,
enforceable in accordance with its terms, and the execution, delivery and performance
of this Agreement by you does not and shall not conflict with, violate or cause
a breach of any agreement, contract or instrument to which you are a party or
any judgment, order or decree to which you are subject.

 

(f)                                    You
are not a party to or bound by any employment agreement, noncompete agreement
or confidentiality agreement with any person or entity other than the Company.

 

(g)                                 You
have consulted with independent legal counsel regarding your rights and
obligations under this Agreement and you fully understand the terms and
conditions contained herein.  You have
obtained advice from persons other than the Company and its counsel regarding
the tax effects of the transaction contemplated hereby.Exhibit 10.1

 

The
CORPORATEplan for RetirementSM

EXECUTIVE PLAN

 

 

Adoption
Agreement

 

 

IMPORTANT
NOTE

 

This
document has not been approved by the Department of Labor, the Internal Revenue
Service or any other governmental entity. 
An Adopting Employer must determine whether the plan is subject to the
Federal securities laws and the securities laws of the various states.  An Adopting Employer may not rely on this
document to ensure any particular tax consequences or to ensure that the Plan
is “unfunded and maintained primarily for the purpose of providing deferred
compensation to a select group of management or highly compensated employees”
under the Employee Retirement Income Security Act with respect to the Employer’s
particular situation.  Fidelity Management
Trust Company, its affiliates and employees cannot provide you with legal
advice in connection with the execution of this document.  This document should be reviewed by the
Employer’s attorney prior to execution.

 

 

ADOPTION
AGREEMENT

 

ARTICLE 1

 

	
  1.01

  	
  PLAN INFORMATION

  
	
   

  	
   

  	
   

  
	
   

  	
  (a)

  	
  Name of Plan:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  This is the Amylin Pharmaceuticals, Inc.
  2001 Non-Qualified Deferred Compensation Plan  (the “Plan”).

  
	
   

  	
   

  	
   

  
	
   

  	
  (b)

  	
  Name of Plan
  Administrator, if not the Employer:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
                                                                                 

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   Address:

  	
                                                                                 

  	
   

  
	
   

  	
   

  	
   

  	
                                                                                 

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   Phone Number:

  	
                                                                                 

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  The Plan Administrator is the agent for
  service of legal process for the Plan.

  
	
   

  	
   

  	
   

  
	
   

  	
  (c)

  	
  Plan Year End is
  December 31.

  
	
   

  	
   

  	
   

  
	
   

  	
  (d)

  	
  Plan Status (check
  one):

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (1)          o            Effective Date of
  new Plan:                        

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (2)          ý            Amendment Effective
  Date:  1/1/2005

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  The original effective date of the
  Plan:  4/1/2000

  
	
   

  	
   

  	
   

  
	
  1.02

  	
  EMPLOYER

  
	
   

  	
   

  	
   

  
	
   

  	
  (a)

  	
  The Employer is:

  	
  Amylin Pharmaceuticals, Inc.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Address:

  	
  9360 Towne Center Drive

  Suite 110

  
	
   

  	
   

  	
   

  	
  San Diego, CA 92121

  
	
   

  	
   

  	
  Contact’s Name:

  	
  Ms. Sue Baccino

  
	
   

  	
   

  	
  Telephone Number:

  	
  (858) 642-7098

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (1)          Employer’s Tax Identification
  Number:   33-0266089

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (2)          Business form of Employer (check one):

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (A)                ý                Corporation (Other
  than a Subchapter S corporation)

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (B)                   ̈                Other (e.g.,
  Subchapter S corporation, partnership, sole proprietor)

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (3)          Employer’s fiscal year end:  12/31

  
						

 

1

 

	
   

  	
  (b)

  	
  The term “Employer”
  includes the following Related Employer(s)

  
	
   

  	
   

  	
  (as defined in Section 2.01(a)(24)):

  
	
   

  	
   

  
	
  1.03

  	
  COVERAGE

  
	
   

  	
   

  	
   

  
	
   

  	
  (a)

  	
  The following
  Employees are eligible to participate in the Plan:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (1)

  	
  o

  	
  Only those Employees listed in Attachment A
  will be eligible to participate in the Plan.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (2)

  	
  ý

  	
  Only those Employees in the eligible class
  described below will be eligible to participate in the Plan:

  
	
   

  	
   

  	
   

  	
   

  	
  (a) Non-employee
  board Members; (b) Employees internally designated as “Directors” or
  higher and whose compensation exceeds the amount defined in section 414(q)
  of the Internal Revenue Code by at least $10,000.

  

 

	
   

  	
   

  	
  (3)

  	
   ̈

  	
  Only those
  Employees described in the Board of Directors Resolutions attached hereto and
  hereby made a part hereof will be eligible to participate in the Plan.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (b)

  	
  The Entry Date(s)
  shall be (check one):

  
	
   

  	
   

  	
  (1)

  	
   ̈

  	
  each January 1.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (2)

  	
   ̈

  	
  each January 1 and each July 1.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (3)

  	
  ý

  	
  each January 1 and each April 1, July 1
  and October 1.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (4)

  	
   ̈

  	
  the first day of each month.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (5)

  	
   ̈

  	
  immediate upon meeting the eligibility
  requirements specified in Subsection 1.03(a).

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1.04

  	
  COMPENSATION

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  For purposes of
  determining Contributions under the Plan, Compensation shall be as defined
  (check (a) or (b) below, as appropriate):

  
	
   

  	
  (a) ý                 in Section 2.01(a)(8), (check (1) or
  (2) below, if and as appropriate)):

  
	
   

  	
   

  	
  (1)          ý            but excluding (check
  the appropriate box(es)):

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (A)  ̈

  	
  Overtime Pay.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (B)  ̈

  	
  Bonuses.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (C)  ̈

  	
  Commissions.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (D) ý

  	
  The value of a qualified or a non-qualified
  stock option granted to an Employee by the Employer to the extent such value
  is includable in the Employee’s taxable income.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (E)  ̈

  	
  The following:

  
	
   

  	
   

  	
   

  	
   

  	
                                                                                                                            

  	
   

  
								

 

2

 

	
   

  	
   

  	
  (2)                                   ̈                                    except
  as otherwise provided below:

  
	
   

  	
   

  
	
   

  	
  (b)  ̈                  in the                          
  Plan maintained by the
  Employer to the extent it is in excess of the limit imposed under Code Section 401(a)(17).

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1.05

  	
  CONTRIBUTIONS

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  (a)         Employee
  contributions (Complete all that apply)

  	
   

  
	
   

  	
   

  	
  (1)

  	
  ý            Deferral
  Contributions.  The Employer shall make
  a Deferral Contribution in accordance with, and subject to, Section 4.01
  on behalf of each Participant who has an executed salary reduction agreement
  in effect with the Employer for the calendar year (or portion of the calendar
  year) in question, not to exceed 80 % of Compensation, exclusive of
  any Bonus. 

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (2)

  	
  ý            Bonus
  Contributions.  The Employer requires
  Participants to enter into a special salary reduction agreement to make
  Deferral Contributions of any percentage of Employer paid cash Bonuses, up to
  100% of such Bonuses.  (The
  Compensation definition elected by the Employer in Section 1.04 must
  include Bonuses if Bonus contributions are permitted.) 

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (b)   ̈

  	
   

  	
  Matching
  Contributions (Choose (1) or (2) below, and (3) below, as
  applicable.)

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (1)

  	
   ̈            The Employer
  shall make a Matching Contribution on behalf of each Participant in an amount
  equal to the following percentage of a Participant’s Deferral Contributions
  during the Plan Year (check one):

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (A)        ̈

  	
  50%

  
	
   

  	
   

  	
   

  	
  (B)        ̈

  	
  100%

  
	
   

  	
   

  	
   

  	
  (C)        ̈

  	
          %

  
	
   

  	
   

  	
   

  	
  (D)        ̈

  	
  (Tiered Match)
                 
  % of the first
                  %
  of the Participant’s Compensation contributed to the Plan.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (E)         o

  	
  The percentage declared for the year, if
  any, by a Board of  Directors’
  resolution.

  
	
   

  	
   

  	
   

  	
  (F)         o

  	
  Other:               

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (2)

  	
   ̈            Matching
  Contribution Offset.  For each Participant
  who has made 401(k) Deferrals at least equal to the maximum under Code Section 402(g) or,
  if less, the maximum permitted under the Qualified Plan, the Employer shall
  make a Matching Contribution for the calendar year equal to (A) minus (B) below:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (A)       The
  401(m) Match that the Participant would have received under the Qualified
  Plan for such calendar year on the sum of the Participant’s Deferral
  Contributions and the Participant’s 401(k) Deferrals if no limits otherwise
  imposed by tax law applied to 401(m) Match and deeming the Participant’s
  Deferral Contributions to be 401(k) Deferrals.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (B)       The
  401(m) Match actually allocated to such Participant under the Qualified Plan
  for the calendar year.

  
									

 

3

 

	
   

  	
   

  	
   

  	
  For purposes of this Section 1.05(b): “Qualified
  Plan” means the  Plan; “401(k)
  Deferrals” means contributions under the Qualified Plan’s cash or deferred
  arrangement as defined in Code Section 401(k); and  “401(m) Match” means a matching
  contribution as defined in Code Section 401(m).

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (3)

  	
   ̈            Matching
  Contribution Limits (check the appropriate box(es)):

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (A)        ̈

  	
  Deferral Contributions in excess of
             % of  the Participant’s Compensation for the
  period in question shall not be considered for Matching Contributions.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Note: If the Employer elects a percentage limit in (A) above
  and requests the Trustee to account separately for matched and unmatched
  Deferral Contributions, the Matching Contributions allocated to each
  Participant must be computed, and the percentage limit applied, based upon
  each period.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (B)        ̈

  	
  Matching Contributions for each Participant
  for each Plan Year shall be limited to
  $.          

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (4)

  	
   

  	
  Eligibility Requirement(s) for Matching
  Contributions. 
  A Participant who makes Deferral Contributions during the Plan Year
  under Section 1.05(a) shall be entitled to Matching Contributions
  for that Plan Year if the Participant satisfies the following requirement(s)
  (Check the appropriate box(es). 
  Options (B) and (C) may not be elected together):

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (A)        ̈

  	
  Is employed by the Employer on the last day
  of the Plan Year.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (B)        ̈

  	
  Earns at least 500 Hours of Service during
  the Plan Year.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (C)        ̈

  	
  Earns at least 1,000 Hours of Service
  during the Plan Year.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (D)       o

  	
  Other:           

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (E)          ̈

  	
  No requirements.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Note:   If
  option (A), (B) or (C) above is selected, then Matching
  Contributions can only be made
  by the Employer after the Plan
  Year ends.  Any Matching Contribution
  made before Plan Year end shall not be subject to the eligibility
  requirements of this Section 1.05(b)(3)).

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (c)

  	
   

  	
  Employer
  Contributions

  
	
   

  	
  (1)

  	
   

  	
  o

  	
  Fixed Employer Contributions.  The Employer shall make an Employer
  Contribution on behalf of each Participant in an amount determined as
  described below (check at least one):

  
								

 

	
   

  	
   

  	
   

  	
   

  	
  (A)

  	
   ̈

  	
  In an amount equal to
             % of each
  Participant’s Compensation each Plan Year.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  (B)

  	
  o

  	
  In an amount determined and allocated as
  described below:

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
                                     

  

 

4

 

	
   

  	
   

  	
   

  	
  (C)

  	
   ̈

  	
  In an amount equal to (check at least one):

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  (i.)  ̈

  	
  Any profit sharing contribution that the
  Employer would have made on behalf of the Participant under the following
  qualified defined contribution plan but for the limitations imposed by Code Section 401(a)(17):

                                    

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  (ii.)  ̈

  	
  Any contribution described in Code Section 401(m)
  that the Employer would have made on behalf of the Participant under the
  following qualified defined contribution plan but for the limitations imposed
  by Code Section 401(a)(17):

                                     

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (2)

  	
  ý

  	
   

  	
  Discretionary Employer Contributions. The Employer may
  make Employer Contributions to the accounts of Participants in any amount, as
  determined by the Employer in its sole discretion from time to time, which
  amount may be zero.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (3)

  	
   

  	
   

  	
  Eligibility Requirement(s) for Employer
  Contributions. A Participant shall only be entitled
  to Employer Contributions under Section 1.05(c)(1) for a Plan Year
  if the Participant satisfies the following requirement(s) (Check the
  appropriate box(es). Options (B) and (C) may not be elected
  together):

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (A)

  	
  o

  	
   

  	
  Is employed
  by the Employer on the last day of the Plan Year.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (B)

  	
   ̈

  	
   

  	
  Earns at least 500 Hours of Service during
  the Plan Year.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (C)

  	
   ̈

  	
   

  	
  Earns at least 1,000 Hours of Service
  during the Plan Year.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (D)

  	
  ý

  	
   

  	
  Other: Is a Non-Employee Director

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (E)

  	
  o

  	
   

  	
  No requirements.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1.06

  	
  DISTRIBUTION DATES

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Distribution from a Participant’s Account
  pursuant to Section 8.02 shall begin upon the following date(s) (check
  either (a) or (b); check (c), if desired):

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (a)  ̈

  	
   

  	
  Non-Class Year
  Accounting (complete (1) and (2)).

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (1)

  	
  The earliest of termination of employment
  with the Employer (see Plan Section 7.03) and the following event(s) (check
  appropriate box(es); if none selected, all distributions will be upon
  termination of employment):

  
	
   

  	
   

  	
   

  	
   

  	
  (A)  ̈

  	
  Attainment of Normal Retirement Age (as defined in Section 1.07(f)).

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  (B)  ̈

  	
  Attainment of Early Retirement Age (as
  defined in Section 1.07(g)).

  
										

 

5

 

	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  (C)  ̈

  	
  The date on which the Participant becomes
  disabled (as defined in Section 1.07(h)).

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (2)

  	
  Timing of distribution (check either (A) or
  (B)).

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  (A) o

  	
  The distribution of the Participant’s
  Account will be begin in the month following the event described in (a)(1) above,
  however, if the event is termination of employment, then such distribution
  will begin as soon as practicable on or after the 1st day of the seventh
  calendar month following such separation if the Participant was a Key
  Employee.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  (B)  ̈

  	
  The distribution of the Participant’s
  Account will begin as soon as administratively feasible in the calendar year
  following distribution event described in (a)(1) above, provided
  however, that if the event is termination of employment, in no event will
  such distribution begin earlier than the 1st day of the seventh calendar
  month following such separation if the Participant was a Key Employee.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (b) ý

  	
   

  	
  Class Year
  Accounting (complete
  (1) and (2)).

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (1)  Upon (check at least one; (A) must
  be selected if plan has contributions pursuant to section 1.05(b) or
  (c)):

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
     (A)

  	
  ý                                    Termination
  of employment with the Employer (see Plan Section 7.03); provided
  however, that if the event is termination of employment, in no event will
  such distribution begin earlier than the 1st day of the seventh calendar
  month following such separation if the Participant was a Key Employee.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
     (B)

  	
  ý                                    The
  date elected by the Participant, pursuant to Plan Section 8.02, and
  subject to the restrictions imposed in Plan Section 8.02 with respect to future Deferral
  Contributions, in which event such date of distribution must be at least one
  year after the date such Deferral Contribution would have been paid to the
  Participant in cash in the absence of the election to make the Deferral
  Contribution.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (2)

  	
  Timing of distribution subject to Subsection (b)(1)(A) above
  (check either (A) or (B)).

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
     (A)

  	
  ý                                    The Distribution
  of the Participant’s Account  will
  begin 03/01 (specify month and day) following the event described in (b)(1) above.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
     (B)

  	
  o                                    The Distribution
  of the Participant’s Account will begin
             (specify month
  and day) of the calendar year following the event described in (b)(1) above.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (c) ý

  	
    Upon a Change of Control in
  accordance with Plan Section 7.08.

  
							

 

6

 

	
   

  	
   

  	
  Note: 
  Internal Revenue Code Section 280G could impose certain, adverse
  tax consequences on both Participants and the Employer as a result of the
  application of this Section 1.06(c). 
  The Employer should consult with its attorney prior to electing to
  apply Section 1.06(c).

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1.07

  	
  VESTING SCHEDULE

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (a)         The
  Participant’s vested percentage in Matching Contributions elected in Section 1.05(b) shall
  be based upon the schedule(s) selected below.

  
	
   

  	
   

  	
  (1)

  	
  ý

  	
  N/A - No Matching Contributions

  
	
   

  	
   

  	
  (2)

  	
  o

  	
  100% Vesting
  immediately

  
	
   

  	
   

  	
  (3)

  	
  o

  	
  3 year cliff
  (see C below)

  
	
   

  	
   

  	
  (4)

  	
  o

  	
  5 year cliff
  (see D below)

  
	
   

  	
   

  	
  (5)

  	
  o

  	
  6 year
  graduated (see E below)

  
	
   

  	
   

  	
  (6)

  	
  o

  	
  7 year
  graduated (see F below)

  
	
   

  	
   

  	
  (7)

  	
  o

  	
  G below

  
	
   

  	
   

  	
  (8)

  	
  o

  	
  Other
  (Attachment “B”)

  
						

 

	
  Years of

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Service for

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Vesting Schedule

  	
   

  	
   

  	
   

  
	
  Vesting

  	
   

  	
  C

  	
   

  	
  D

  	
   

  	
  E

  	
   

  	
  F

  	
   

  	
  G

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  0

  	
   

  	
  0

  	
  %

  	
  0

  	
  %

  	
  0

  	
  %

  	
  0

  	
  %

  	
   

  	
   

  
	
  1

  	
   

  	
  0

  	
  %

  	
  0

  	
  %

  	
  0

  	
  %

  	
  0

  	
  %

  	
   

  	
   

  
	
  2

  	
   

  	
  0

  	
  %

  	
  0

  	
  %

  	
  20

  	
  %

  	
  0

  	
  %

  	
   

  	
   

  
	
  3

  	
   

  	
  100

  	
  %

  	
  0

  	
  %

  	
  40

  	
  %

  	
  20

  	
  %

  	
   

  	
   

  
	
  4

  	
   

  	
  100

  	
  %

  	
  0

  	
  %

  	
  60

  	
  %

  	
  40

  	
  %

  	
   

  	
   

  
	
  5

  	
   

  	
  100

  	
  %

  	
  100

  	
  %

  	
  80

  	
  %

  	
  60

  	
  %

  	
   

  	
   

  
	
  6

  	
   

  	
  100

  	
  %

  	
  100

  	
  %

  	
  100

  	
  %

  	
  80

  	
  %

  	
   

  	
   

  
	
  7

  	
   

  	
  100

  	
  %

  	
  100

  	
  %

  	
  100

  	
  %

  	
  100

  	
  %

  	
  100

  	
  %

  

 

	
   

  	
  (b)         The
  Participant’s vested percentage in Employer Contributions elected in Section 1.05(c) shall
  be based upon the schedule(s) selected below.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (1)

  	
  o

  	
  N/A - No Employer Contributions

  
	
   

  	
   

  	
  (2)

  	
  ý

  	
  100% Vesting immediately

  
	
   

  	
   

  	
  (3)

  	
  o

  	
  3 year cliff (see C below)

  
	
   

  	
   

  	
  (4)

  	
  o

  	
  5 year cliff (see D below)

  
	
   

  	
   

  	
  (5)

  	
  o

  	
  6 year graduated (see E below)

  
	
   

  	
   

  	
  (6)

  	
  o

  	
  7 year graduated (see F below)

  
	
   

  	
   

  	
  (7)

  	
  o

  	
  G below

  
	
   

  	
   

  	
  (8)

  	
  o

  	
  Other (Attachment “B”)

  

 

7

 

	
  Years of

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Service for

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Vesting Schedule

  	
   

  	
   

  	
   

  
	
  Vesting

  	
   

  	
  C

  	
   

  	
  D

  	
   

  	
  E

  	
   

  	
  F

  	
   

  	
  G

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  0

  	
   

  	
  0

  	
  %

  	
  0

  	
  %

  	
  0

  	
  %

  	
  0

  	
  %

  	
   

  	
   

  
	
  1

  	
   

  	
  0

  	
  %

  	
  0

  	
  %

  	
  0

  	
  %

  	
  0

  	
  %

  	
   

  	
   

  
	
  2

  	
   

  	
  0

  	
  %

  	
  0

  	
  %

  	
  20

  	
  %

  	
  0

  	
  %

  	
   

  	
   

  
	
  3

  	
   

  	
  100

  	
  %

  	
  0

  	
  %

  	
  40

  	
  %

  	
  20

  	
  %

  	
   

  	
   

  
	
  4

  	
   

  	
  100

  	
  %

  	
  0

  	
  %

  	
  60

  	
  %

  	
  40

  	
  %

  	
   

  	
   

  
	
  5

  	
   

  	
  100

  	
  %

  	
  100

  	
  %

  	
  80

  	
  %

  	
  60

  	
  %

  	
   

  	
   

  
	
  6

  	
   

  	
  100

  	
  %

  	
  100

  	
  %

  	
  100

  	
  %

  	
  80

  	
  %

  	
   

  	
   

  
	
  7

  	
   

  	
  100

  	
  %

  	
  100

  	
  %

  	
  100

  	
  %

  	
  100

  	
  %

  	
  100

  	
  %

  

 

	
   

  	
  (c)   ̈                Years
  of Service for Vesting shall exclude (check one):

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (1)

  	
   ̈

  	
  for new plans, service prior to the
  Effective Date as defined in Section 1.01(d)(1).

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (2)

  	
  o

  	
  for existing plans converting from another
  plan document, service prior to the original Effective Date as defined in Section 1.01(d)(2).

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (d)  ̈

  	
  A Participant will
  forfeit his Matching Contributions and Employer Contributions upon the
  occurrence of the following event (s):
                                                        

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (e)

  	
  A Participant will
  be 100% vested in his Matching Contributions and Employer Contributions upon
  (check the appropriate box(es), if any; if 1.06(c) is selected,
  Participants will automatically vest upon Change of Control as defined in Section 1.12):

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (1)

  	
   ̈

  	
  Normal Retirement Age (as defined in Section 1.07(f)).

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (2)

  	
   ̈

  	
  Early Retirement Age (as defined in Section 1.07(g)).

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (3)

  	
   ̈

  	
  Death.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (4)

  	
   ̈

  	
  The date on which the Participant becomes
  disabled, as determined under Section 1.07(h) of the Plan.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (f)

  	
  Normal Retirement
  Age  under the Plan is  (check one):

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (1)

  	
  ý

  	
   

  	
  age 65.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (2)

  	
  o

  	
   

  	
  age       (specify
  from 55 through 64).

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (3)

  	
  o

  	
   

  	
  the later of age
              (cannot
  exceed 65) or the fifth anniversary of the Participant’s Commencement Date.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  If no box is checked in this Section 1.07(f),
  then Normal Retirement Age is 65.

  

 

8

 

	
   

  	
  (g)

  	
   ̈

  	
  Early Retirement
  Age is the first day of the month after the Participant attains age            (specify 55 or greater) and completes            Years of Service for Vesting.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (h)

  	
  ý

  	
  A Participant is
  considered disabled when that Participant (check one):

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (1) ý                   is unable to
  engage in any substantial gainful activity by reason of any medically
  determinable physical or mental impairment which can be expected to result in
  death or can be expected to last for a continuous period of not less than 12
  months.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (2) o                   is, by reason
  of any medically determinable physical or mental impairment which can be
  expected to result in death or can be expected to last for a continuous
  period of not less than 12 months, receiving income replacement benefits for
  a period of not less than 3 months under an accident and health plan covering
  employees of the Employer.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1.08

  	
  PREDECESSOR EMPLOYER SERVICE

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   ̈                                    Service for purposes of vesting in
  Section 1.07(a) and (b) shall include service with the
  following employer(s):

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1.09

  	
  UNFORESEEABLE EMERGENCY WITHDRAWALS

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   Participant
  withdrawals for unforeseeable emergency prior to termination of employment
  (check one):

  
	
   

  	
   

  	
  (a)

  	
  ý

  	
   

  	
  will be allowed in
  accordance with Section 7.07, subject to a $ 1,000 minimum amount. (Must be at least
  $1,000)

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (b)

  	
   ̈

  	
   

  	
  will not be
  allowed.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1.10

  	
  DISTRIBUTIONS

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Subject to
  Articles 7 and 8 distributions under the Plan are always available as a lump
  sum.  Check below to allow
  distributions in installment payments:

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  ý

  	
   

  	
  under a systematic
  withdrawal plan (installments) not to exceed 10 years which (check one if box
  for this Section is selected):

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (a)

  	
   

  	
   ̈

  	
   

  	
  will not be
  accelerated, regardless of the Participant’s Account balance.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (b)

  	
   

  	
  ý

  	
   

  	
  will be
  accelerated to a lump sum distribution in accordance with Section 8.03.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1.11

  	
  INVESTMENT DECISIONS

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (a)

  	
   

  	
  Investment
  Directions

  
	
   

  	
   

  	
   

  	
  Investments in which the Accounts of
  Participants shall be treated as invested and reinvested shall be directed
  (check one):

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (1)

  	
   ̈

  	
  by the Employer among the options
  listed in (b) below.

  

 

9

 

	
   

  	
   

  	
   

  	
  (2)

  	
   ̈

  	
  by each Participant among the
  options listed in (b) below.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (3)

  	
  ý            in
  accordance with investment directions provided  by each Participant for all contribution
  sources in a Participant’s Account except the following sources shall be
  invested as directed by the Employer (check (A) and/or (B)):

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  (A) ý                                        Nonelective
  Employer Contributions

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  (B)  ̈                                        Matching
  Employer Contributions

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  The Employer must direct the applicable
  sources among the same investment options made available for Participant
  directed sources listed in the Service Agreement.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (b)

  	
   

  	
  Plan
  Investment Options

  
	
   

  	
   

  	
   

  	
  Participant Accounts will be treated as
  invested among the Investment Funds listed in the Service Agreement from time
  to time pursuant to Participant and/or Employer directions, as applicable.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Note:

  	
  The method and frequency for change of
  investments will be determined under the rules applicable to the
  selected funds.  Information will be
  provided regarding expenses, if any, for changes in investment options.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1.12

  	
  RELIANCE ON PLAN 

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  An adopting Employer may not rely solely on
  this Plan to ensure that the Plan is “unfunded and maintained primarily for
  the purpose of providing deferred compensation for a select group of
  management or highly compensated employees” with respect to the Employer’s
  particular situation.  This Agreement
  must be reviewed by the  Employer’s
  attorney before it is executed.

  
	
   

  	
   

  
	
   

  	
  This Adoption Agreement may be used only in
  conjunction with the CORPORATEplan for Retirement Executive Plan Basic Plan
  Document.

  
							

 

10

 

EXECUTION
PAGE

(Fidelity’s Copy)

 

IN WITNESS WHEREOF, the Employer has caused this Adoption Agreement to
be executed this 28th day of June, 2005.

 

	
   

  	
  Employer

  	
              Amylin
  Pharmaceuticals, Inc.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By

  	
              /s/
  Martin R. Brown

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Title

  	
              SVP
  HR & Corp. Services

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Employer

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Title

  	
   

  	
   

  

 

11

 

EXECUTION
PAGE

(Employer’s Copy)

 

IN WITNESS WHEREOF, the Employer has caused this Adoption Agreement to
be executed this 28th day of June, 2005.

 

 

	
   

  	
  Employer

  	
              Amylin
  Pharmaceuticals, Inc.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By

  	
              /s/
  Martin R. Brown

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Title

  	
              SVP
  HR & Corp. Services

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Employer

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Title

  	
   

  	
   

  

 

12

 

Attachment
A

 

Pursuant to Section 1.03(a), the
following are the Employees who are eligible to participate in the Plan:

 

 

	
   

  	
  Employer 

  	
       Amylin
  Pharmaceuticals, Inc.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By 

  	
       /s/
  Martin R. Brown

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Title 

  	
       SVP
  HR & Corp. Services

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Date 

  	
       6/28/05

  	
   

  

 

Note:    The Employer must revise Attachment A to add
Employees as they become eligible or delete Employees who are no longer
eligible.  Attachment A should be signed
and dated every time a change is made.

 

13

 

Attachment
B

 

	
  (a)

  	
   

  	
   ̈ The Participant’s vested percentage
  in Matching Contributions elected in Section 1.05(b) shall be based
  upon the following schedule:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  (b)

  	
   

  	
   ̈ The Participant’s vested
  percentage in Employer Contributions elected in Section 1.05(c) shall
  be based upon the following schedule:

  
	
   

  	
   

  	
   

  

 

14

 

FIRST
AMENDMENT TO THE

Amylin Pharmaceuticals, Inc. 2001 Non-Qualified Deferred Compensation Plan

 

WHEREAS, Amylin
Pharmaceuticals, Inc. (the “Corporation”) has adopted Amylin
Pharmaceuticals, Inc. 2001 Non-Qualified Deferred Compensation Plan (the “Plan”),
which has been established by the adoption of The CORPORATEplan for  RetirementSM
EXECUTIVE PLAN by executing an Adoption Agreement on July 1, 2005; and

 

WHEREAS, Section 9.01
of The CORPORATEplan for  RetirementSM EXECUTIVE PLAN provides for the
amendment of the Plan by the Employer, and

 

WHEREAS, the
Employer wants to allow a plan limit of 80% on
Bonus deferral contributions,

 

NOW THEREFORE,  Section 1.05(a)(2) of
the Plan is hereby amended in its entirety and replaced by the following July 1,
2005:

 

Bonus
Contributions.  The Employer requires
participants to enter into a special salary reduction agreement to make
Deferral Contributions of any percentage of Employer paid cash Bonuses, up to
80% of such Bonuses.  (The Compensation
definition elected by the Employer in Section 1.04 must include Bonuses if
Bonus contributions are permitted).

 

IN WITNESS WHEREOF Amylin Pharmaceuticals, Inc.
2001 Non-Qualified Deferred Compensation Plan has
caused this amendment to be executed this 28th day of June, 2005, by
its duly authorized officer.

 

	
   

  	
   

  	
    Amylin Pharmaceuticals, Inc.

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
    /s/ Martin R. Brown

  	
   

  
	
   

  	
   

  
	
   

  	
  Title: 

  	
    SVP HR & Corp. Services

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Attest:                                            

  	
   

  

 

 

The CORPORATEplan for
RetirementSM

EXECUTIVE PLAN

 

BASIC
PLAN DOCUMENT

 

 

 

IMPORTANT
NOTE

 

This
document has not been approved by the Department of Labor, the Internal Revenue
Service or any other governmental entity. 
An Adopting Employer must determine whether the plan is subject to the
Federal securities laws and the securities laws of the various states.  An Adopting Employer may not rely on this
document to ensure any particular tax consequences or to ensure that the Plan
is “unfunded and maintained primarily for the purpose of providing deferred
compensation to a select group of management or highly compensated employees”
under the Employee Retirement Income Security Act with respect to the Employer’s
particular situation.  Fidelity
Management Trust Company, its affiliates and employees cannot provide you with
legal advice in connection with the execution of this document.  This document should be reviewed by the
Employer’s attorney prior to execution.

 

 

CORPORATEplan
for EXECUTIVE

BASIC
PLAN DOCUMENT

 

	
  ARTICLE 1

  	
   

  	
   

  
	
  ADOPTION
  AGREEMENT

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 2

  	
   

  	
   

  
	
  DEFINITIONS

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  2.01
  - Definitions

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 3

  	
   

  	
   

  
	
  PARTICIPATION

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  3.01 - Date of Participation

  	
   

  	
   

  
	
  3.02
  - Resumption of Participation Following Re employment

  	
   

  	
   

  
	
  3.03
  - Cessation or Resumption of Participation Following a Change in Status

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 4

  	
   

  	
   

  
	
  CONTRIBUTIONS

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  4.01 - Deferral
  Contributions

  	
   

  	
   

  
	
  4.02 - Matching
  Contributions

  	
   

  	
   

  
	
  4.03 - Employer
  Contributions

  	
   

  	
   

  
	
  4.04 - Time of
  Making Contributions

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 5

  	
   

  	
   

  
	
  PARTICIPANTS’ ACCOUNTS

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  5.01 - Individual Accounts

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 6

  	
   

  	
   

  
	
  INVESTMENT OF CONTRIBUTIONS

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  6.01 - Manner of Investment

  	
   

  	
   

  
	
  6.02 - Investment Decisions

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 7

  	
   

  	
   

  
	
  RIGHT
  TO BENEFITS

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  7.01 - Normal or
  Early Retirement

  	
   

  	
   

  
	
  7.02 - Death

  	
   

  	
   

  
	
  7.03 - Other
  Termination of Employment

  	
   

  	
   

  
	
  7.04 - Separate Account

  	
   

  	
   

  
	
  7.05
  - Forfeitures

  	
   

  	
   

  
	
  7.06 -
  Adjustment for Investment Experience

  	
   

  	
   

  
	
  7.07 -
  Unforeseeable Emergency Withdrawals

  	
   

  	
   

  
	
  7.08 - Change in
  Control

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 8

  	
   

  	
   

  
	
  DISTRIBUTION OF BENEFITS
  PAYABLE AFTER TERMINATION OF SERVICE

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  8.01
  - Distribution of Benefits to Participants and Beneficiaries

  	
   

  	
   

  
	
  8.02
  - Determination of Method of Distribution

  	
   

  	
   

  
	
  8.03 - Notice to Trustee

  	
   

  	
   

  
	
  8.04 - Time of Distribution

  	
   

  	
   

  

 

2

 

	
  ARTICLE 9

  	
   

  	
   

  
	
  AMENDMENT AND TERMINATION

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  9.01 - Amendment by
  Employer

  	
   

  	
   

  
	
  9.02 - Retroactive
  Amendments

  	
   

  	
   

  
	
  9.03
  - Termination

  	
   

  	
   

  
	
  9.04 -
  Distribution Upon Termination of the Plan

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 10

  	
   

  	
   

  
	
  MISCELLANEOUS

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  10.01 -
  Communication to Participants

  	
   

  	
   

  
	
  10.02 - Limitation of
  Rights

  	
   

  	
   

  
	
  10.03 -
  Nonalienability of Benefits

  	
   

  	
   

  
	
  10.04 - Facility of
  Payment

  	
   

  	
   

  
	
  10.05
  - Information between Employer and Trustee

  	
   

  	
   

  
	
  10.06
  - Notices

  	
   

  	
   

  
	
  10.07
  - Governing Law

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 11

  	
   

  	
   

  
	
  PLAN
  ADMINISTRATION

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  11.01
  - Powers and responsibilities of the Administrator

  	
   

  	
   

  
	
  11.02 -
  Nondiscriminatory Exercise of Authority

  	
   

  	
   

  
	
  11.03 - Claims
  and Review Procedures

  	
   

  	
   

  

 

3

 

PREAMBLE

 

 

It is the
intention of the Employer to establish herein an unfunded plan maintained
solely for the purpose of providing deferred compensation for a select group of
management or highly compensated employees as provided in ERISA.

 

Article 1.  Adoption Agreement.

 

Article 2.  Definitions.

 

2.01.  Definitions.

 

(a)   Wherever used herein, the following terms
have the meanings set forth below, unless a different meaning is clearly
required by the context:

 

(1)                    “Account”
means an account established on the books of the Employer for the purpose of
recording amounts credited on behalf of a Participant and any income, expenses,
gains or losses included thereon.

 

(2)                     “Administrator”
means the Employer adopting this Plan, or other person designated by the
Employer in Section 1.01(b).

 

(3)                    “Adoption
Agreement” means Article 1, under which the Employer establishes and adopts or
amends the Plan and designates the optional provisions selected by the
Employer.  The provisions of the Adoption
Agreement shall be an integral part of the Plan.

 

(4)                    “Beneficiary”
means the person or persons entitled under Section 7.02 to receive benefits
under the Plan upon the death of a Participant.

 

(5)                    “Bonus” means
any performance-based Compensation based on services performed for the Employer
over a period of at least 12 months.

 

(6)                    “Change of
Control” means a change in the ownership or effective control of the Employer,
or a substantial portion of the Employer’s assets as defined in the regulations
under Code Section 409A.

 

(7)                    “Code” means
the Internal Revenue Code of 1986, as amended from time to time.

 

(8)                    “Compensation”
means for purposes of Article 4 (Contributions) wages as defined in Section
3401(a) of the Code and all other payments of compensation to an employee by
the Employer (in the course of the Employer’s trade or business) for which the
Employer is required to furnish the employee a written statement under Section
6041(d) and 6051(a)(3) of the Code, excluding any items elected by the Employer
in Section 1.04, reimbursements or other expense allowances, fringe benefits
(cash and non-cash), moving expenses, deferred compensation and welfare benefits,
but including amounts that are not includable in the gross income of the
Participant under a salary reduction agreement by reason of the application of
Sections 125, 132(f)(4), 402(e)(3), 402(h) or 403(b) of the Code.  Compensation shall be determined without
regard to any rules under Section 3401(a) of the Code that limit the
remuneration included in wages based on the nature or location of the
employment or the services performed (such as the exception for agricultural
labor in Section 3401(a)(2) of the Code).

 

 

Compensation shall also include amounts deferred
pursuant to an election under Section 4.01.

 

In the case of any
Self-Employed Individual or an Owner-Employee, Compensation means the
Self-Employed Individual’s Earned Income.

 

(9)                    “Earned Income”
means the net earnings of a Self-Employed Individual derived from the trade or
business with respect to which the Plan is established and for which the
personal services of such individual are a material income-providing factor,
excluding any items not included in gross income and the deductions allocated
to such items, except that for taxable years beginning after December 31, 1989
net earnings shall be determined with regard to the deduction allowed under
Section 164(f) of the Code, to the extent applicable to the Employer.  Net earnings shall be reduced by
contributions of the Employer to any qualified plan, to the extent a deduction
is allowed to the Employer for such contributions under Section 404 of the
Code.

 

(10)              “Employee” means any
employee of the Employer, Self-Employed Individual or Owner-Employee.

 

(11)              “Employer” means the
employer named in Section 1.02(a) and any Related Employers designated in
Section 1.02(b).

 

(12)              “Employment
Commencement Date” means the date on which the Employee first performs an Hour
of Service.

 

(13)              “Entry Date” means
the date(s) designated in Section 1.03(b).

 

(14)              “ERISA” means the
Employee Retirement Income Security Act of 1974, as from time to time amended.

 

(15)              “Fund Share” means
the share, unit, or other evidence of ownership in a Permissible Investment.

 

(16)              “Hour of Service”
means, with respect to any Employee,

 

(A)        Each hour for which the Employee is
directly or indirectly paid, or entitled to payment, for the performance of
duties for the Employer or a Related Employer, each such hour to be credited to
the Employee for the computation period in which the duties were performed;

 

(B)         Each hour for which the Employee is
directly or indirectly paid, or entitled to payment, by the Employer or Related
Employer (including payments made or due from a trust fund or insurer to which
the Employer contributes or pays premiums) on account of a period of time
during which no duties are performed (irrespective of whether the employ-ment
relationship has terminated) due to vacation, holiday, illness, incapacity,
disability, layoff, jury duty, military duty, or leave of absence, each such
hour to be credited to the Employee for the Eligibility Computation Period in
which such period of time occurs, subject to the following rules:

 

(i)          No more than 501 Hours of Service
shall be credited under this paragraph (B) on account of any single continuous
period during which the Employee performs no duties;

 

2

 

(ii)         Hours of Service shall not be credited
under this paragraph (B) for a payment which solely reimburses the Employee for
medically-related expenses, or which is made or due under a plan maintained
solely for the purpose of complying with applicable workmen’s compensation,
unemployment compensation or disability insurance laws; and

 

(iii)        If the period during which the Employee
performs no duties falls within two or more computation periods and if the
payment made on account of such period is not calculated on the basis of units of
time, the Hours of Service credited with respect to such period shall be
allocated between not more than the first two such computation periods on any
reasonable basis consistently applied with respect to similarly situated
Employees; and

 

(C)         Each hour not counted under paragraph
(A) or (B) for which back pay, irrespective of mitigation of damages, has been
either awarded or agreed to be paid by the Employer or a Related Employer, each
such hour to be credited to the Employee for the computation period to which
the award or agreement pertains rather than the computation period in which the
award agreement or payment is made.

 

For purposes of
determining Hours of Service, Employees of the Employer and of all Related
Employers will be treated as employed by a single employer.  For purposes of paragraphs (B) and (C) above,
Hours of Service will be calculated in accordance with the provisions of
Section 2530.200b-2(b) of the Department of Labor regulations, which are incorporated
herein by reference.

 

Solely for
purposes of determining whether a break in service for participation purposes
has occurred in a computation period, an individual who is absent from work for
maternity or paternity reasons shall receive credit for the hours of service
which would otherwise been credited to such individual but for such absence, or
in any case in which such hours cannot be determined, 8 hours of service per
day of such absence.  For purposes of
this paragraph, an absence from work for maternity reasons means an absence (1)
by reason of the pregnancy of the individual, (2) by reason of a birth of a
child of the individual, (3) by reason of the placement of a child with the
individual in connection with the adoption of such child by such individual, or
(4) for purposes of caring for such child for a period beginning immediately
following such birth or placement.  The
hours of service credited under this paragraph shall be credited (1) in the
computation period in which the absence begins if the crediting is necessary to
prevent a break in service in that period, or (2) in all other cases, in the
following computation period.

 

(17)              “Key Employee” means
a Participant who is key employee pursuant to Code Section 416(i), without
regard to paragraph (5) thereof.  A
Participant will not be considered a Key Employee unless the Employer is a
corporation which has any of its stock publicly traded according to Code
Section 409A and regulations thereunder.

 

(18)              “Normal Retirement
Age” means the normal retirement age specified in Section 1.07(f) of the
Adoption Agreement.

 

(19)              “Owner-Employee”
means, if the Employer is a sole proprietorship, the individual who is the sole
proprietor, or, if the Employer is a partnership, a partner who owns more than
10 percent of either the capital interest or the profits interest of the
partnership.

 

(20)              “Participant” means
any Employee who participates in the Plan in accordance with Article 3 hereof.

 

3

 

(21)              “Permissible
Investment” means the investments specified by the Employer as available for
investment of assets of the Trust and agreed to by the Trustee. The Permissible
Investments under the Plan shall be listed in the Service Agreement.

 

(22)              “Plan” means the
plan established by the Employer as set forth herein as a new plan or as an
amendment to an existing plan, by executing the Adoption Agreement, together
with any and all amendments hereto.

 

(23)              “Plan Year” means
the 12-consecutive-month period designated by the Employer in Section 1.01(c).

 

(24)              “Related Employer”
means any employer other than the Employer named in Section 1.02(a), if the
Employer and such other employer are members of a controlled group of
corporations (as defined in Section 414(b) of the Code) or an affiliated
service group (as defined in Section 414(m)), or are trades or businesses
(whether or not incorporated) which are under common control (as defined in
Section 414(c)), or such other employer is required to be aggregated with the
Employer pursuant to regulations issued under Section 414(o).

 

(25)              “Self-Employed
Individual” means an individual who has Earned Income for the taxable year from
the Employer or who would have had Earned Income but for the fact that the
trade or business had no net profits for the taxable year.

 

(26)              “Service Agreement”
means the agreement between the Employer and Trustee regarding the arrangement
between the parties for recordkeeping services with respect to the Plan.

 

(27)              “Trust” means the
trust created by the Employer.

 

(28)              “Trust Agreement”
means the agreement between the Employer and the Trustee, as set forth in a
separate agreement, under which assets are held, administered, and managed
subject to the claims of the Employer’s creditors in the event of the Employer’s
insolvency, until paid to Plan Participants and their Beneficiaries as
specified in the Plan.

 

(29)              “Trust Fund” means
the property held in the Trust by the Trustee.

 

(30)              “Trustee” means the
corporation or individual(s) appointed by the Employer to administer the Trust
in accordance with the Trust Agreement.

 

(31)              “Years of Service
for Vesting” means, with respect to any Employee, the number of whole years of
his periods of service with the Employer or a Related Employer (the elapsed
time method to compute vesting service), subject to any exclusions elected by
the Employer in Section 1.07(c).  An
Employee will receive credit for the aggregate of all time period(s) commencing
with the Employee’s Employment Commencement Date and ending on the date a break
in service begins, unless any such years are excluded by Section 1.07(c).  An Employee will also receive credit for any
period of severance of less than 12 consecutive months.  Fractional periods of a year will be
expressed in terms of days.

 

In the case of a
Participant who has 5 consecutive 1-year breaks in service, all years of
service after such breaks in service will be disregarded for the purpose of
vesting the Employer-derived account balance that accrued before such breaks,
but both pre-break and post-break service will count for the purposes of
vesting the Employer-derived account balance that accrues after such
breaks.  Both accounts will share in the
earnings and losses of the fund.

 

In the case of a
Participant who does not have 5 consecutive 1-year breaks in service,
both the pre-break and post-break service will count in vesting both the
pre-break and post-break employer-derived account balance.

 

4

 

A break in service
is a period of severance of at least 12 consecutive months.  Period of severance is a continuous period of
time during which the Employee is not employed by the Employer.  Such period begins on the date the Employee
retires, quits or is discharged, or if earlier, the 12-month anniversary of the
date on which the Employee was otherwise first absent from service.

 

In the case of an
individual who is absent from work for maternity or paternity reasons, the
12-consecutive month period beginning on the first anniversary of the first
date of such absence shall not constitute a break in service.  For purposes of this paragraph, an absence
from work for maternity or paternity reasons means an absence (1) by reason of
the pregnancy of the individual, (2) by reason of the birth of a child of the
individual, (3) by reason of the placement of a child with the individual in
connection with the adoption of such child by such individual, or (4) for
purposes of caring for such child for a period beginning immediately following
such birth or placement.

 

If the Plan
maintained by the Employer is the plan of a predecessor employer, an Employee’s
Years of Service for Vesting shall include years of service with such
predecessor employer.  In any case in
which the Plan maintained by the Employer is not the plan maintained by a
predecessor employer, service for such predecessor shall be treated as service
for the Employer to the extent provided in Section 1.08.

 

(b)  Pronouns used in the Plan are in the masculine
gender but include the feminine gender unless the context clearly indicates
otherwise.

 

Article 3.  Participation.

 

3.01.  Date
of Participation.  An eligible Employee (as set forth
in Section 1.03(a)) who has filed an election pursuant to Section 4.01 will
become a Participant in the Plan on the first Entry Date coincident with or following
the date on which such election would otherwise become effective, as determined
under Section4.01.

 

3.02.  Resumption of Participation Following
Reemployment.  If a Participant ceases to be an Employee and
thereafter returns to the employ of the Employer he will again become a
Participant as of an Entry Date following the date on which he completes an
Hour of Service for the Employer following his re employment, if he is an
eligible Employee as defined in Section 1.03(a), and has filed an election pursuant
to Section 4.01.

 

3.03.  Cessation or Resumption of Participation
Following a Change in Status.  If any Participant continues in the employ of
the Employer or Related Employer but ceases to be an eligible Employee as
defined in Section 1.03(a), the individual shall continue to be a Participant
until the entire amount of his benefit is distributed; however, the individual
shall not be entitled to make Deferral Contributions or receive an allocation
of Matching or Employer Contributions during the period that he is not an
eligible Employee.  Such Participant
shall continue to receive credit for service completed during the period for
purposes of determining his vested interest in his Accounts.  In the event that the individual subsequently
again becomes an eligible Employee, the individual shall resume full
participation in accordance with Section 3.01.

 

Article 4.  Contributions.

 

4.01.  Deferral
Contributions.  Each Participant may elect to
execute a salary reduction agreement with the Employer to reduce his
Compensation by a specified percentage, not exceeding the percentage set forth
in Section 1.05(a) and equal to a whole number multiple of one (1) percent, per
payroll period, subject to any election regarding Bonuses, as set out in
Subsection 1.05(a)(2).  Such agreement
shall become effective on the first day of the period as set forth in the
Participant’s election.  The election
will be effective to defer 

 

5

 

Compensation
relating to all services performed in a calendar year subsequent to the filing
of such an election, subject to any election regarding Bonuses, as set out in
Subsection 1.05(a)(2).  An election once
made will remain in effect until a new election is made; provided, however that
such an election choosing a distribution date pursuant to 1.06(b)(1)(B) will only
be effective for the Plan Year indicated. 
A new election will be effective as of the first day of the following
calendar year and will apply only to Compensation payable with respect to
services rendered after such date, except that a separate election made
pursuant to Section 1.05(a)(2) will be effective immediately if made no later
than 6 months before the end of the period during which the services on which
the Bonus is based are performed.  If the
Employer has selected 1.05(a)(2), no amount will be deducted from Bonuses
unless the Participant has made a separate election.  Amounts credited to a Participant’s account
prior to the effective date of any new election will not be affected and will
be paid in accordance with that prior election. 
The Employer shall credit an amount to the account maintained on behalf
of the Participant corresponding to the amount of said reduction.  Under no circumstances may a salary reduction
agreement be adopted retroactively. To the extent permitted in regulations
under Code Section 409A, a Participant may revoke a salary reduction agreement
for a calendar year during that year, provided, however, that such revocation
shall apply only to Compensation not yet earned.  In that event, the Participant shall be
precluded from electing to defer future Compensation hereunder during the
calendar year to which the revocation applies. 
Notwithstanding the above, in the calendar year in which the Plan first
becomes effective or in the year in which the Participant first becomes
eligible to participate, an election to defer compensation may be made within
30 days after the Participant is first eligible or the Plan is first effective,
which election shall be effective with respect to Compensation payable with
respect to services rendered after the date of the election.

 

4.02.  Matching
Contributions.  If so provided by the Employer in Section
1.05(b), the Employer shall make a “Matching Contribution” to be credited to
the account maintained on behalf of each Participant who had “Deferral
Contributions” pursuant to Section 4.01 made on his behalf during the year and
who meets the requirement, if any, of Section 1.05(b)(3).  The amount of the “Matching Contribution” shall
be determined in accordance with Section 1.05(b).

 

4.03.  Employer
Contributions.   If so provided by the Employer in
Section 1.05(c)(1), the Employer shall make an “Employer Contribution” to be
credited to the account maintained on behalf of each Participant who meets the
requirement, if any, of Section 1.05(c)(3) in the amount required by Section
1.05(c)(1).  If so provided by the
Employer in Section 1.05(c)(2), the Employer may make an “Employer Contribution”
to be credited to the account maintained on behalf of any Participant in such
an amount as the Employer, in its sole discretion, shall determine.  In making “Employer Contributions” pursuant
to Section 1.05(c)(2), the Employer shall not be required to treat all
Participants in the same manner in determining such contributions and may
determine the “Employer Contribution” of any Participant to be zero.

 

4.04.  Time of Making Contributions.  The Employer shall
remit contributions deemed made hereunder to the Trust as soon as practicable
after such contributions are deemed made under the terms of the Plan.

 

Article 5.  Participants’ Accounts.

 

5.01.  Individual
Accounts.  The Administrator will establish and maintain
an Account for each Participant, which will reflect Matching, Employer and
Deferral Contributions credited to the Account on behalf of the Participant and
earnings, expenses, gains and losses credited thereto, and deemed investments
made with amounts in the Participant’s Account. 
The Administrator will establish and maintain such other accounts and
records as it decides in its discretion to be reasonably required or
appropriate in order to discharge its duties under the Plan.  Participants will be furnished statements of
their Account values at least once each Plan Year.  The Administrator shall provide the Trustee
with information on the amount credited to the separate account of each
Participant maintained by the Administrator in its records.

 

 

6

 

Article 6.  Investment of Contributions.

 

6.01.  Manner
of Investment.  All amounts credited to the Accounts of
Participants shall be treated as though invested and reinvested only in
eligible investments selected by the Employer in the Service Agreement.

 

6.02.  Investment
Decisions. Investments
in which the Accounts of Participants shall be treated as invested and
reinvested shall be directed by the Employer or by each Participant, or both,
in accordance with the Employer’s election in Section 1.11(a).

 

(a)             All dividends,
interest, gains and distributions of any nature that would be earned in respect
of Fund Shares in which the Account is treated as investing shall be credited
to the Account as though reinvested in additional shares of that Permissible
Investment.

 

(b)            Expenses that would be
attributable to the acquisition of investments shall be charged to the Account
of the Participant for which such investment is treated as having been made.

 

Article 7.  Right to Benefits.

 

7.01.  Normal or Early Retirement.  If provided by the
Employer in Section 1.07(e), each Participant who attains his Normal Retirement
Age or Early Retirement Age will have a nonforfeitable interest in his Account
in accordance with the vesting schedule(s) elected in Section 1.07.  If a Participant retires on or after
attainment of Normal or Early Retirement Age, such retirement is referred to as
a normal retirement.  On or after his
normal retirement, the balance of the Participant’s Account, plus any amounts
thereafter credited to his Account, subject to the provisions of Section 7.06,
will be distributed to him in accordance with Article 8.

 

If provided by the
Employer in Section 1.07, a Participant who separates from service before
satisfying the age requirements for early retirement, but has satisfied the
service requirement will be entitled to the distribution of his Account,
subject to the provisions of Section 7.06, in accordance with Article 8, upon
satisfaction of such age requirement.

 

7.02.  Death.  If a Participant dies before the distribution
of his Account has commenced, or before such distribution has been completed,
his Account shall become vested in accordance with the vesting schedule(s)
elected in Section 1.07 and his designated Beneficiary or Beneficiaries will be
entitled to receive the balance or remaining balance of his Account, plus any
amounts thereafter credited to his Account, subject to the provisions of
Section 7.06.  Distribution to the
Beneficiary or Beneficiaries will be made in accordance with Article 8.  A distribution to a beneficiary of a Key
Employee is not considered to be a distribution to a Key Employee for purposes
of Sections 1.06 and 7.08.

 

A Participant may
designate a Beneficiary or Beneficiaries, or change any prior designation of
Beneficiary or Beneficiaries, by giving notice to the Administrator on a form
designated by the Administrator.  If more
than one person is designated as the Beneficiary, their respective interests
shall be as indicated on the designation form.

 

A copy of the
death certificate or other sufficient documentation must be filed with and
approved by the Administrator.  If upon
the death of the Participant there is, in the opinion of the Administrator, no
designated Beneficiary for part or all of the Participant’s Account, such
amount will be paid to his surviving spouse or, if none, to his estate (such
spouse or estate shall be deemed to be the Beneficiary for purposes of the
Plan).  If a Beneficiary dies after
benefits to such Beneficiary have commenced, but before they have been completed,
and, in the opinion of the Administrator, no person has been designated to
receive such remaining benefits, then such benefits shall be paid to the
deceased Beneficiary’s estate.

 

7.03.  Other Termination of Employment.  If provided by the Employer in Section 1.07,
if a Participant terminates his employment for any reason other than death or
normal retirement, he will be entitled to a termination benefit equal to (i)
the vested percentage(s) of the value of the Matching and Employer Contributions
to his Account, as adjusted for income, expense, gain, or loss, such
percentage(s) determined 

 

7

 

in accordance with the
vesting schedule(s) selected by the Employer in Section 1.07, and (ii) the
value of the Deferral Contributions to his Account as adjusted for income,
expense, gain or loss.  The amount
payable under this Section 7.03 will be subject to the provisions of Section
7.06 and will be distributed in accordance with Article 8.  For purposes of the Plan, a termination of
employment is a separation from service as defined pursuant to Code Section
409A and regulations thereunder.

 

7.04.  Separate
Account.  If a
distribution from a Participant’s Account has been made to him at a time when
he has a nonforfeitable right to less than 100 percent of his Account, the
vesting schedule in Section 1.07 will thereafter apply only to amounts in his
Account attributable to Matching and Employer Contributions allocated after
such distribution.  The balance of his
Account immediately after such distribution will be transferred to a separate
account that will be maintained for the purpose of determining his interest
therein according to the following provisions.

 

At any relevant
time prior to a forfeiture of any portion thereof under Section 7.05, a
Participant’s nonforfeitable interest in his Account held in a separate account
described in the preceding paragraph will be equal to P(AB + (RxD))-(RxD),
where P is the nonforfeitable percentage at the relevant time determined under
Section 7.05; AB is the account balance of the separate account at the relevant
time; D is the amount of the distribution; and R is the ratio of the account
balance at the relevant time to the account balance after distribution.  Following a forfeiture of any portion of such
separate account under Section 7.05 below, any balance in the Participant’s
separate account will remain fully vested and nonforfeitable.

 

7.05.  Forfeitures.  If a Participant
terminates his employment, any portion of his Account (including any amounts
credited after his termination of employment) not payable to him under Section
7.03 will be forfeited by him.

 

7.06.  Adjustment for Investment Experience.  If any distribution
under this Article 7 is not made in a single payment, the amount remaining in
the Account after the distribution will be subject to adjustment until
distributed to reflect the income and gain or loss on the investments in which
such amount is treated as invested and any expenses properly charged under the
Plan to such amounts.

 

7.07.  Unforeseeable Emergency Withdrawals.  Subject to the provisions of Article 8, a
Participant shall not be permitted to withdraw his Account (and earnings
thereon) prior to retirement or termination of employment, except that, to the
extent permitted under Section 1.09, a Participant may apply to the
Administrator to withdraw some or all of his Account if such withdrawal is made
on account of an 

unforeseeable emergency as determined by the Administrator in accordance with the
requirements of and subject to the limitations provided within Code Section
409A and regulations thereunder.

 

7.08.  Change in Control Distributions.  If the Employer has elected to apply Section
1.06(c), then, upon a Change in Control, notwithstanding any other provision of
the Plan to the contrary, all Participants shall have a nonforfeitable right to
receive the entire amount of their account balances under the Plan.  All distributions due to a Change in Control
shall be paid out to Participants as soon as administratively practicable,
except that any such distribution to a Key Employee who has terminated
employment pursuant to Section 7.03 shall not be earlier than the 1st day of
the seventh month following that  Key
Employee’s termination of employment.

 

Article 8.  Distribution of Benefits.

 

8.01.  Form of Distribution of Benefits to
Participants and Beneficiaries.  The
Plan provides for distribution as a lump sum to be paid in cash on the
date specified by the Employer in Section 1.06 pursuant to the method provided
in Section 8.02.  If elected by the
Employer in Section 1.10 and specified in the Participant’s deferral election,
the distribution will be paid through a systematic withdrawal plan
(installments) for a time period not exceeding 10 years beginning on the date
specified by the Employer in Section 1.06.

 

8

 

8.02.
Events Requiring Distribution of Benefits to Participants and
Beneficiaries.

 

(a)   If elected by the Employer in Section
1.06(a), the Participant will receive a distribution upon the earliest of the
events specified by the Employer in Section 1.06(a), subject to the provisions
of Section 7.08, and at the time indicated in Section 1.06(a)(2).  If the Participant dies before any event in
Section 1.06(a) occurs, the Participant shall be considered to have terminated
employment and the Participant’s benefit will be paid to the Participant’s
Beneficiary in the same form and at the same time as it would have been paid to
the Participant pursuant to this Article 8.

 

(b)   If elected
by the Employer in Section 1.06(b), the Participant will receive a distribution
of all amounts not deferred pursuant to Section 1.06(b)(1)(B) (and earnings
attributable to those amounts) upon termination of employment, subject to the
delay applicable to Key Employees described therein, as applicable.  If elected by the Employer in Section
1.06(b)(1)(B), the Participant shall have the election to receive distributions
of amounts deferred pursuant to Section 4.01 (and earnings attributable to
those amounts) after a date specified by the Participant in his deferral
election which is at least 12 months after the first day of the calendar year
in which such amounts would be earned. 
Amounts distributed to the Participant pursuant to Section 1.06(b) shall
be distributed at the time indicated in Section 1.06(b)(2).   Subject to the provisions of Section 7.08,
the Participant shall receive a distribution in the form provided in Section
8.01.  If the Participant dies before any
event in Section 1.06(a) occurs, the Participant shall be considered to have
terminated employment and the Participant’s benefit will be paid to the
Participant’s Beneficiary in the same form and at the same time as it would
have been paid to the Participant pursuant to this Article 8.  However, if the Participant dies before the
date specified by the Participant in an election pursuant to Section
1.06(b)(1)(B), then the Participant’s benefit shall be paid to the Participant’s
Beneficiary in the form provided in Section 8.01 as if the Participant had
elected to be paid at termination of employment.

 

8.03.  Determination of Method of Distribution.  The Participant
will determine the method of distribution of benefits to himself and his
Beneficiary, subject to the provisions of Section 8.02.  Such determination will be made at the time
the Participant makes a deferral election. 
A Participant’s election cannot be altered, except, if elected by the
Employer in Section 1.10(b), if the Participant’s balance falls below the level
described in regulations under Code Section 409A, the Participant’s benefit
payable due to termination of employment will be distributed in a lump sum
rather than installments.

 

(a) When
Section 1.06(a) has been elected by the Employer.   The distribution period specified in a
Participant’s first deferral election specifying distribution under a
systematic withdrawal plan shall apply to all subsequent elections of
distributions under a systematic withdrawal plan made by the Participant.  Once a Participant has made an election for
the method of distribution, that election shall be effective for all
contributions made on behalf of the Participant attributable to any Plan Year
after that election was made and before the Plan Year for which that election
has been altered in the manner prescribed by the Administrator.  If the Participant does not designate in the
manner prescribed by the Administrator the method of distribution, such method
of distribution shall be a lump sum at termination of employment.

 

(b)  When Section 1.06(b) has been elected by
the Employer.  The distribution
period for distributions under a systematic withdrawal plan shall be specified
in each Participant’s contribution election selecting payments under a
systematic withdrawal plan.  If the
Participant does not designate in the manner prescribed by the Administrator
the method of distribution, such method of distribution for all such
contributions shall be a lump sum at termination of employment.

 

8.04.  Notice
to Trustee.  The Administrator will notify the Trustee,
pursuant to the method stated in the Trust Agreement for providing direction,
whenever any Participant or Beneficiary is entitled to receive benefits under
the Plan.  The Administrator’s notice
shall indicate the form, amount and frequency of benefits that such Participant
or Beneficiary shall receive.

 

8.05.  Time
of Distribution.  In no event will distribution to a
Participant be made later than the date specified by the Participant in his
salary reduction agreement. All distributions will be made as soon as 

 

9

 

administratively feasible
following the distribution date specified in Section 1.06 or Section 7.08, if
applicable.

 

Article 9.  Amendment and Termination.

 

9.01  Amendment
by Employer.  The Employer reserves the authority to amend
the Plan by filing with the Trustee an amended Adoption Agreement, executed by
the Employer only, on which said Employer has indicated a change or changes in
provisions previously elected by it. 
Such changes are to be effective on the effective date of such amended
Adoption Agreement.  Any such change
notwithstanding, no Participant’s Account shall be reduced by such change below
the amount to which the Participant would have been entitled if he had
voluntarily left the employ of the Employer immediately prior to the date of
the change.  The Employer may from time
to time make any amendment to the Plan that may be necessary to satisfy the
Code or ERISA.  The Employer’s board of
directors or other individual specified in the resolution adopting this Plan
shall act on behalf of the Employer for purposes of this Section 9.01.

 

9.02  Retroactive
Amendments.  An amendment made by the Employer in
accordance with Section 9.01 may be made effective on a date prior to the first
day of the Plan Year in which it is adopted if such amendment is necessary or
appropriate to enable the Plan and Trust to satisfy the applicable requirements
of the Code or ERISA or to conform the Plan to any change in federal law or to
any regulations or ruling thereunder. 
Any retroactive amendment by the Employer shall be subject to the
provisions of Section 9.01.

 

9.03.  Termination.  The Employer has
adopted the Plan with the intention and expectation that contributions will be
continued indefinitely.  However, said
Employer has no obligation or liability whatsoever to maintain the Plan for any
length of time and may discontinue contributions under the Plan or terminate
the Plan at any time by written notice delivered to the Trustee without any
liability hereunder for any such discontinuance or termination.

 

9.04.  Distribution upon Termination of the Plan.  Upon termination of
the Plan, no further Deferral, Employer or Matching Contributions shall be made
under the Plan, but Accounts of Participants maintained under the Plan at the
time of termination shall continue to be governed by the terms of the Plan
until paid out in accordance with the terms of the Plan.

 

Article 10.  Miscellaneous.

 

10.01.  Communication to Participants.  The Plan will be communicated to all Participants
by the Employer promptly after the Plan is adopted.

 

10 02.  Limitation
of Rights.  Neither the establishment of the Plan and the
Trust, nor any amendment thereof, nor the creation of any fund or account, nor
the payment of any benefits, will be construed as giving to any Participant or
other person any legal or equitable right against the Employer, Administrator
or Trustee, except as provided herein; and in no event will the terms of
employment or service of any Participant be modified or in any way affected
hereby.

 

10.03.  Nonalienability of Benefits.  The benefits
provided hereunder will not be subject to alienation, assignment, garnishment,
attachment, execution or levy of any kind, either voluntarily or involuntarily,
and any attempt to cause such benefits to be so subjected will not be
recognized, except to such extent as may be required by law.

 

10 04.  Facility
of Payment.  In
the event the Administrator determines, on the basis of medical reports or
other evidence satisfactory to the Administrator, that the recipient of any
benefit payments under the Plan is incapable of handling his affairs by reason
of minority, illness, infirmity or other incapacity, the Administrator may
disburse such payments, or direct the Trustee to disburse such payments, as
applicable, to a person or institution designated by a court which has
jurisdiction over such recipient or a person or institution otherwise having
the legal authority under State law for the care and control of such recipient.  The receipt by such person or institution of
any such payments shall be complete acquittance therefore, and any such payment
to the extent thereof, shall discharge the liability of the Trust for the
payment of benefits hereunder to such recipient.

 

10

 

10.05.  Information between Employer and Trustee.  The Employer agrees to furnish the Trustee,
and the Trustee agrees to furnish the Employer with such information relating
to the Plan and Trust as may be required by the other in order to carry out
their respective duties hereunder, including without limitation information
required under the Code or ERISA and any regulations issued or forms adopted
thereunder.

 

10.06.  Notices.
 Any notice or other communication in
connection with this Plan shall be deemed delivered in writing if addressed as
provided below and if either actually delivered at said address or, in the case
of a letter, three business days shall have elapsed after the same shall have
been deposited in the United States mails, first-class postage prepaid and
registered or certified:

 

(a)   If to the Employer or Administrator, to it at
the address set forth in the Adoption Agreement, to the attention of the person
specified to receive notice in the Adoption Agreement;

 

(b)   If to the Trustee, to it at the address set
forth in the Trust Agreement;

 

or, in each case at such
other address as the addressee shall have specified by written notice delivered
in accordance with the foregoing to the addressor’s then effective notice
address.

 

10.07.  Governing
Law.  The Plan and the accompanying Adoption
Agreement will be construed, administered and enforced according to ERISA, and
to the extent not preempted thereby, the laws of the Commonwealth of
Massachusetts, without regard to its conflicts of law principles.

 

Article 11.  Plan Administration.

 

11.01.  Powers and responsibilities of the
Administrator.  The Administrator has the full power and the
full responsibility to administer the Plan in all of its details, subject,
however, to the applicable requirements of ERISA.  The Administrator’s powers and
responsibilities include, but are not limited to, the following:

 

(a)   To make and enforce such rules and
regulations as it deems necessary or proper for the efficient administration of
the Plan;

 

(b)   To interpret the Plan, its interpretation
thereof in good faith to be final and conclusive on all persons claiming
benefits under the Plan;

 

(c)   To decide all questions concerning the Plan
and the eligibility of any person to participate in the Plan;

 

(d)   To administer the claims and review
procedures specified in Section 11.03;

 

(e)   To compute the amount of benefits which will
be payable to any Participant, former Participant or Beneficiary in accordance
with the provisions of the Plan;

 

(f)    To determine the person or persons to whom
such benefits will be paid;

 

(g)   To authorize the payment of benefits;

 

(h)   To comply with any applicable reporting and
disclosure requirements of Part 1 of Subtitle B of Title I of ERISA;

 

11

 

(i)    To appoint such agents, counsel,
accountants, and consultants as may be required to assist in administering the
Plan;

 

(j)    By written instrument, to allocate and
delegate its responsibilities, including the formation of an Administrative
Committee to administer the Plan;

 

11.02.  Nondiscriminatory Exercise of Authority.  Whenever, in the
administration of the Plan, any discretionary action by the Administrator is
required, the Administrator shall exercise its authority in a nondiscriminatory
manner so that all persons similarly situated will receive substantially the
same treatment.

 

11.03.  Claims and Review Procedures.

 

(a)   Claims Procedure.  If any person believes he is being denied any
rights or benefits under the Plan, such person may file a claim in writing with
the Administrator.  If any such claim is
wholly or partially denied, the Administrator will notify such person of its
decision in writing.  Such notification
will contain (i) specific reasons for the denial, (ii) specific reference to
pertinent Plan provisions, (iii) a description of any additional material or
information necessary for such person to perfect such claim and an explanation
of why such material or information is necessary, and (iv) information as to
the steps to be taken if the person wishes to submit a request for review,
including a statement of the such person’s right to bring a civil action under
Section 502(a) of ERISA following as adverse determination upon review.  Such notification will be given within 90
days after the claim is received by the Administrator (or within 180 days, if
special circumstances require an extension of time for processing the claim,
and if written notice of such extension and circumstances is given to such
person within the initial 90-day period).

 

        If the claim concerns disability
benefits under the Plan, the Plan Administrator must notify the claimant in
writing within 45 days after the claim has been filed in order to deny it.  If special circumstances require an extension
of time to process the claim, the Plan Administrator must notify the claimant
before the end of the 45-day period that the claim may take up to 30 days
longer to process.  If special
circumstances still prevent the resolution of the claim, the Plan Administrator
may then only take up to another 30 days after giving the claimant notice
before the end of the original 30-day extension.  If the Plan Administrator gives the claimant
notice that the claimant needs to provide additional information regarding the
claim, the claimant must do so within 45 days of that notice.

 

(b)   Review Procedure.  Within 60 days after the date on which a
person receives a written notice of a denied claim (or, if applicable, within
60 days after the date on which such denial is considered to have occurred),
such person (or his duly authorized representative) may (i) file a written
request with the Administrator for a review of his denied claim and of
pertinent documents and (ii) submit written issues and comments to the Administrator.  This written request may include comments,
documents, records, and other information relating to the claim for
benefits.  The claimant shall be
provided, upon the claimant’s request and free of charge, reasonable access to,
and copies of, all documents, records, and other information relevant to the
claim for benefits.  The review will 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 benefit determination.  The Administrator will notify such person of
its decision in writing.  Such
notification will be written in a manner calculated to be understood by such
person and will contain specific reasons for the decision as well as specific
references to pertinent Plan provisions. 
The decision on review will be made within 60 days after the request for
review is received by the Administrator (or within 120 days, if special
circumstances require an extension of time for processing the request, such as
an election by the Administrator to hold a hearing, and if written notice of
such extension and circumstances is given to such person within the initial
60-day period). The extension notice shall indicate the special circumstances
requiring an extension of time and the date by which the Plan expects to render
the determination on review.

 

12

 

If the initial
claim was for disability benefits under the Plan and has been denied by the
Plan Administrator, the claimant will have 180 days from the date the claimant
received notice of the claim’s denial in which to appeal that decision.  The review will be handled completely
independently of the findings and decision made regarding the initial claim and
will be processed by an individual who is not a subordinate of the individual
who denied the initial claim.  If the
claim requires medical judgment, the individual handling the appeal will
consult with a medical professional whom was not consulted regarding the
initial claim and who is not a subordinate of anyone consulted regarding the
initial claim and identify that medical professional to the claimant.

 

The Plan
Administrator shall provide the claimant with written notification of a plan’s
benefit determination on review.  In the
case of an adverse benefit determination, the notification shall set forth, in
a manner calculated to be understood by the claimant – the specific reason or
reasons for the adverse determinations, reference to the specific plan
provisions on which the benefit determination is based, a statement that the
claimant is entitled to receive, upon the claimant’s request and free of
charge, reasonable access to, and copies of, all documents, records, and other
information relevant to the claim for benefits.

 

13

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