Document:

ALPHARMA INC

 

 

ALPHARMA INC. 

2005 SUPPLEMENTAL SAVINGS PLAN

Effective January 1, 2005 

ALPHARMA INC. 

2005 SUPPLEMENTAL SAVINGS PLAN

TABLE OF CONTENTS

	
ARTICLE 
	
DESCRIPTION 
	
PAGE 

	 	
INTRODUCTION 
	
1

	
I
	
DEFINITIONS 
	
2

	
II
	
PARTICIPATION 
	
6

	
III
	
DEFERRAL ELECTIONS AND 

COMPANY MATCHING CONTRIBUTIONS 
	
7

	
IV
	
DEFERRAL ACCOUNTS AND TRUST FUNDING 
	
10

	
V
	
VESTING 
	
12

	
VI
	
DISTRIBUTIONS 
	
13

	
VII
	
ADMINISTRATION
	
16

	
VIII
	
MISCELLANEOUS
	
19

INTRODUCTION

Alpharma Inc. (the "Company") has established the Alpharma Inc. 2005 Supplemental Savings Plan (the "Plan") effective January 1, 2005.  The Plan is an unfunded arrangement established and maintained by the Company for the purpose of providing deferred compensation to a select group of management or highly compensated employees.  

Participants are permitted to defer a portion of their Compensation to the Plan after their pre-tax deferrals under the Alpharma Inc. Savings Plan (the "Savings Plan") reach the applicable dollar amount specified under Section 402(g) of the Code for that year. 

The Plan is intended to comply with Section 409A of the Code, the regulations thereunder and related guidance issued by the Internal Revenue Service ("IRS").  

ARTICLE I

DEFINITIONS

Whenever the following words and phrases are used in this Plan, with the first letter capitalized, they shall have the meanings specified below.

1.1    "Account" or "Accounts" shall mean all of such accounts as are established under this Plan from time to time.

1.2    "Base Salary" shall mean a Participant's annual base compensation, excluding bonuses, commissions, incentive and all other remuneration for services rendered to Company and prior to reduction for any salary deferrals, including but not limited to, deferrals under plans established pursuant to Section 125 of the Code or qualified pursuant to Section 401(k) of the Code.

1.3    "Beneficiary" or "Beneficiaries" shall mean the person or persons, including a trustee, personal representative or other fiduciary, last designated in writing by a Participant in accordance with procedures established by the Committee to receive the benefits specified hereunder in the event of the Participant's death.  No beneficiary designation shall become effective until it is filed with the Committee.  Any designation shall be revocable at any time through a written instrument filed by the Participant with the Committee with or without the consent of the previous Beneficiary.  In the event that a Participant who designated his or her spouse as Beneficiary under the Plan subsequently becomes divorced or legally separated, then such prior Beneficiary designation shall automatically be deemed revoked as it relates to the spouse (or former spouse), unless it is subsequently ratified in writing by the Participant.

If there is no such designation, or if there is no surviving designated Beneficiary, then the Participant's surviving spouse shall be the Beneficiary.  If there is no surviving spouse, the duly appointed and currently acting personal representative of the Participant's estate (which shall include either the Participant's probate estate or living trust) shall be the Beneficiary.  In any case where there is no such personal representative of the Participant's estate duly appointed and acting in that capacity within 90 days after the Participant's death (or such extended period as the Committee determines is reasonably necessary to allow such personal representative to be appointed, but not to exceed 180 days after the Participant's death), then Beneficiary shall mean the person or persons who can verify by affidavit or court order to the satisfaction of the Committee that they are legally entitled to receive the benefits specified hereunder.  In the event any amount is payable under the Plan to a minor, payment shall not be made to the minor, but instead be paid (a) to that person's living parent(s) to act as custodian, (b) if that person's parents are then divorced, and one parent is the sole custodial parent, to such custodial parent, to act as custodian, or (c) if no parent of that person is then living, to a custodian selected by the Committee to hold the funds for the minor under the Uniform Transfers or Gifts to Minors Act in effect in the jurisdiction in which the minor resides.  If no parent is living and the Committee decides not to select another custodian to hold the funds for the minor, then payment shall be made to the duly appointed and currently acting guardian of the estate for the minor or, if no guardian of the estate for the minor is duly appointed and currently acting within 60 days after the date the amount becomes payable, payment shall be deposited with the court having jurisdiction over the estate of the minor.  Payment by the Company pursuant to any unrevoked Beneficiary designation, or to the Participant's estate if no such designation exists, shall be considered complete satisfaction of all benefits owed under the Plan.  

1.4    "Board of Directors" or "Board" shall mean the Board of Directors of Company.

1.5    "Code" shall mean the Internal Revenue Code of 1986, as amended.

1.6    "Committee" shall mean the Committee appointed by the Board to administer the Plan in accordance with Article VII.

1.7    "Company" shall mean Alpharma Inc.

1.8    "Company Matching Contribution Account" shall mean the bookkeeping account maintained by or for the Committee for each Participant, which account consist of (a) the amount credited by the Company on behalf of the Participant pursuant to Section 3.3, and (b) earnings and losses pursuant to Section 4.2.

1.9    "Compensation" shall mean the Participant's Base Salary, including amount deferred under the Plan and the Savings Plan. 

1.10    "Compensation Deferral Election" shall mean an Eligible Employee's election to defer a portion of his or her Compensation during a Plan Year to the Plan. 

1.11    "Deferral Account" shall mean the bookkeeping account maintained by or for the Committee for each Participant, which account is credited with amounts equal to (a) the portion of the Participant's Compensation that he or she elects to defer to the Plan pursuant to a Compensation Deferral Election, and (b) earnings and losses pursuant to Section 4.1.

1.12    "Disabled" shall mean a Participant who (a) 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, or (b) 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 Company.  The Committee has the sole and absolute discretion to determine whether a Participant is Disabled. 

1.13    "Distributable Amount" shall mean the vested balance in the Participant's Deferral Account and Company Matching Contribution Account.

1.14    "Effective Date" shall be January 1, 2005.

1.15    "Eligible Employee" shall mean an employee of the Company who is designated by the Committee as eligible to participate in the Plan. 

1.16    "ERISA" shall mean the Employee Retirement Income Security Act of 1974, as amended. 

1.17    "Fund" or "Funds" shall mean one or more of the investment funds selected by the Committee pursuant to Section 3.4.

1.18    "Initial Election Period" shall mean the 30-day period prior to the Effective Date of the Plan, or the 30-day period following the time an employee shall be designated by the Company as an Eligible Employee.

1.19    "Interest Rate" shall mean, for each Fund, an amount equal to the net gain or loss on the assets of such Fund during each month, as determined by the Committee.

1.20    "Investment Fund Subaccount" or "Investment Fund Subaccounts" shall mean one or more subsaccounts under a Participant's Deferral Account and Company Matching Contribution Account which corresponds to a Funds elected by the Participant pursuant to Section 3.4.

1.21    "Participant" shall mean any Eligible Employee who becomes a Participant in this Plan in accordance with Article II.

1.22    "Payment Date" shall mean the date that distribution of a Participant's Account under the Plan commences.  Unless otherwise provided herein, a Participant's Payment Date shall not be earlier than six (6) months after the Participant separates from service with the Company.

1.23    "Payment Election" shall mean a Participant's election as to timing and form of payment of his or her Deferral Account and Company Matching Contribution Account. 

1.24    "Plan" shall mean this Alpharma Inc. 2005 Supplemental Savings Plan, as it may be amended from time to time.

1.25    "Plan Year" shall be the calendar year.  

1.26    "Unforeseeable Emergency" shall mean a severe financial hardship to the Participant resulting from a sudden and unexpected illness or accident of the Participant or of his or her spouse or dependent (as defined in Section 152(a) of the Code), loss of a Participant's property due to casualty, or other similar or extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Participant.  The circumstances that would constitute an Unforeseeable Emergency will depend upon the facts of each case, and the Committee has the sole and exclusive ability to determine whether such an Unforeseeable Emergency exists, but, in any case, an Unforeseeable Emergency may not be made to the extent that such hardship is or may be relieved (a) through reimbursement or compensation by insurance or otherwise, or (b) by liquidation of the Participant's assets, to the extent that the liquidation of assets would not itself cause severe financial hardship. The amounts distributed with respect to an Unforeseeable Emergency shall not exceed the amounts necessary to satisfy such Unforeseeable Emergency plus amounts necessary to pay taxes reasonably anticipated as a result of the distribution.

1.27    "Year of Service" shall mean each Plan Year in which a Participant completes at least 1,000 hours of service, as defined under the Savings Plan, as determined by the Committee.  

 

ARTICLE II 

PARTICIPATION

2.1    Eligibility.  The Board shall designate, as of the Effective Date and as of the beginning of each Plan Year, each employee as an Eligible Employee.  The Committee may designate an employee as an Eligible Employee during a Plan Year, provided that such employee after the beginning of the Plan Year, (a) is hired by the Company, or (b)  becomes a member of a select group of management or highly compensated employees.

2.2    Participation.  An Eligible Employee shall become a Participant in the Plan by timely executing a Compensation Deferral Election and a Payment Election, and filing them with the Committee in accordance with Article III of the Plan. 

 

ARTICLE III 

DEFERRAL ELECTIONS AND COMPANY MATCHING CONTRIBUTIONS

3.1    Elections to Defer Compensation.

(a)   Initial Election Period.  Each Eligible Employee may elect to defer Compensation by filing with the Committee a Compensation Deferral Election that conforms to the requirements of this Section 3.1, on a form provided by the Committee, no later than the last day of his or her Initial Election Period (or such earlier date that Committee may specify).  Such Compensation Deferral Election, however, can only relate to Compensation that has not yet been earned.  No later than the last day of his or her Initial Election Period (or such earlier date that the Committee may specify), the Eligible Employee shall also file with the Committee a Payment Election with respect to such deferral of Compensation and related Company Matching Contributions, if any, on a form provided by the Committee.  In the event that an Eligible Employee does not file a Payment Election during the Initial Election Period, the Eligible Employee shall be deemed to have elected a lump sum with respect to such deferral of Compensation and related Company Matching Contributions.  The deemed election of the lump sum will continue in effect for future Plan Years until the Eligible Employee makes a new Payment Election pursuant to subsection (d). 

(b)   General Rule.  The amount of Compensation which an Eligible Employee may elect to defer is such Compensation to be earned after the time at which the Eligible Employee files with the Committee a Compensation Deferral Election in accordance with Section 3.1(a).  The amount of Compensation which an Eligible Employee may elect to defer shall be a percentage of Compensation, which shall not exceed twenty-five percent (25%) of the Eligible Employee's Compensation, provided that the total amount deferred by a Participant shall be limited in any calendar year, if necessary, to satisfy social security taxes (including Medicare), income taxes and employee benefit plan withholding requirements, as determined in the sole and absolute discretion of the Committee.  

(c)   Duration of Compensation Deferral Election.  An Eligible Employee's initial Compensation Deferral Election must be made prior to the Effective Date and is to be effective with respect to Compensation earned after such Compensation Deferral Election is processed.  A Participant may increase, decrease or terminate a Compensation Deferral Election with respect to Compensation for any subsequent Plan Year by filing a new Compensation Deferral Election not less than 14 days prior to the beginning of the next Plan Year, which election shall be effective on the first day of the next following Plan Year.  In the absence of an affirmative election by the Participant to the contrary, a Compensation Deferral Election for one Plan Year will continue in effect for future Plan Years.  In the case of an employee who becomes an Eligible Employee after the Effective Date, such Eligible Employee shall have 30 days from the date he or she has become an Eligible Employee to make an Initial Election with respect to deferral of Compensation.  Such Compensation Deferral Election shall be for the remainder of the Plan Year (and future Plan Years, unless subsequently changed prior to the commencement of a given Plan Year) in the event the Plan Year has commenced.

(d)   Duration of Payment Election.  An Eligible Employee's initial Payment Election to defer Compensation must be made prior to the Effective Date and is to be effective with respect to Compensation earned after such Compensation Deferral Election is processed.  The Payment Election as to timing and form of payment of such deferred Compensation is irrevocable for a given Plan Year, except as otherwise provided herein.  A Participant may change his or her Payment Election with respect to Compensation for any subsequent Plan Year by filing a new Payment Election not less than 14 days prior to the beginning of the next Plan Year, which Payment Election shall be effective on the first day of the next following Plan Year.  In the absence of an affirmative Payment Election by the Participant to the contrary, a Payment Election for one Plan Year will continue in effect for future Plan Years.  In the case of an employee who becomes an Eligible Employee after the Effective Date, such Eligible Employee shall have 30 days from the date he or she has become an Eligible Employee to make an Initial Election with respect to payment of Compensation.  Such Payment Election shall be for the remainder of the Plan Year (and future Plan Years, unless subsequently changed prior to the commencement of a given Plan Year) in the event the Plan Year has commenced.  Notwithstanding the foregoing, a Participant may modify his or her Payment Election for a prior Plan Year only in accordance with Section 6.1.

(e)   Elections other than Elections during the Initial Election Period.  Subject to the limitations of Section 3.1(b) above, any Eligible Employee who has terminated a prior Compensation Deferral Election may elect to again defer Compensation, by filing a Compensation Deferral Election and a Payment Election, on forms provided by the Committee, not less than 14 days prior to the beginning of the Plan Year to which such Compensation Deferral Election relates.  An election to defer Compensation must be filed in a timely manner in accordance with Sections 3.1(c) and (d).

3.2    Timing of Deferrals.  Deferrals to the Plan made pursuant to a Participant's Compensation Deferral Election shall commence on the first day of the first payroll period immediately following the payroll period in which the Participant's pre-tax deferrals under the Savings Plan reach the applicable dollar amount under Section 402(g) of the Code for that year and shall continue until deferrals under the Plan reach the percentage specified in the Participant's Compensation Deferral Election. 

3.3    Company Matching Contributions.  The Company shall credit a Company Matching Contribution to each Participant's Company Matching Contribution Account in an amount equal to the applicable percentage of the first six percent (6%) of the amount of Compensation deferred under the Plan:

	
Years of Service
	
Company Matching Contribution

	
Less than 5 Years of Service 
	
40%

	
5 but less than 10 Years of Service 
	
50%

	
10 but less than 15 Years of Service
	
60%

	
Years of Service
	
Company Matching Contribution

	
15 but less than 20 Years of Service
	
70%

	
20 but less than 25 Years of Service
	
80%

	
25 but less than 30 Years of Service
	
90%

	
30 or more Years of Service
	
100%

If a Participant was employed by the Company prior to July 1, 1994, he or she shall be entitled to a Company Matching Contribution equal to one-hundred percent (100%) of the first six percent (6%) of the amount of Compensation deferred under the Plan. 

Notwithstanding the foregoing, with respect to any one year, in no event shall a Participant be entitled to a Company Matching Contribution which is based on more than a total of six percent (6%) of his or her deferred Compensation under the Savings Plan and this Plan.  

For purpose of determining Company Matching Contributions, Years of Service shall be determined as of the anniversary date of the Participant's date of hire with the Company. 
3.4    Investment Elections.

	At the time a Participant files a Compensation Deferral Election described in Section 3.1, the Participant shall designate, on a form provided by the Committee, the types of Funds in which the Participant's Account will be deemed to be invested for purposes of determining the amount of earnings and losses to be credited to that Account.  In making the designation pursuant to this Section 3.4, the Participant may specify that all or any percentage of his or her Account is to be deemed invested, in whole percentage increments, in one or more of the types of Funds deemed to be provided under the Plan, as communicated from time to time by the Committee.  A Participant may change the designation made under Section 3.4 at any time.  If a Participant fails to elect a type of Fund under this Section 3.4, he or she shall be deemed to have elected the Funds elected by the Participant (or otherwise in effect) under the Savings Plan.

	Although the Participant may designate the type of investments, the Committee shall not be bound by such designation.  The Committee shall select from time to time, in its sole and absolute discretion, commercially available investments of each of the types communicated by the Committee to the Participant pursuant to Section 3.4(a) above to be the Funds.  The Interest Rate of each such commercially available Fund shall be used to determine the amount of earnings or losses to be credited to Participant's Account under Article IV.

 

ARTICLE IV

DEFERRAL ACCOUNTS AND TRUST FUNDING

4.1    Deferral Accounts.  The Committee shall establish and maintain a Deferral Account for each Participant under the Plan.  Each Participant's Deferral Account shall be further divided into separate subaccounts ("Investment Fund Subaccounts"), each of which corresponds to a Fund elected by the Participant pursuant to Section 3.4(a).  A Participant's Deferral Account shall be credited as follows:

(a)   As soon as administratively practicable after amounts are withheld and deferred from a Participant's Compensation, the Committee shall credit the Investment Fund Subaccounts of the Participant's Deferral Account with an amount equal to Compensation deferred by the Participant in accordance with the Participant's election under Section 3.4(a); that is, the portion of the Participant's deferred Compensation that the Participant has elected to be deemed to be invested in a certain type of Fund shall be credited to the Investment Fund Subaccount corresponding to that Fund; and 

(b)   Each business day, each Investment Fund Subaccount of a Participant's Deferral Account shall be credited with earnings or losses in an amount determined by multiplying the balance credited to such Investment Fund Subaccount as of the prior day, plus contributions credited that day to the Investment Fund Subaccount, by the Interest Rate for the corresponding Fund selected by the Company pursuant to Section 3.4(b).

4.2    Company Matching Contribution Account.  The Committee shall establish and maintain a Company Matching Contribution Account for each Participant under the Plan.  Each Participant's Company Matching Contribution Account shall be further divided into separate Investment Fund Subaccounts corresponding to the Fund elected by the Participant pursuant to Section 3.4.  A Participant's Company Matching Contribution Account shall be credited as follows:

(a)   As soon as administratively practicable after a Company Matching Contribution Amount, the Committee shall credit the Investment Fund Subaccounts of the Participant's Company Matching Contribution Account with an amount equal to the Company Matching Contribution Amount, if any, which the Participant elected to be deemed to be invested in a certain type of Fund shall be credited to the corresponding Investment Fund Subaccount; and

(b)   Each business day, each Investment Fund Subaccount of a Participant's Company Contribution Account shall be credited with earnings or losses in an amount determined by multiplying the balance credited to such Investment Fund Subaccount as of the prior day, plus contributions credited that day to the Investment Fund Subaccount, by the Interest Rate for the corresponding Fund selected by the Company pursuant to Section 3.4(b).

4.3    Trust Funding.  The Company may create a trust with a trustee.  In the event that the Company creates a trust, the Company may cause the trust to be funded each year.  Although the principal of the trust and any earnings thereon shall be held separate and apart from other funds of Company and shall be used exclusively for the uses and purposes of Plan Participants and Beneficiaries as set forth therein, neither the Participants nor their Beneficiaries shall have any preferred claim on, or any beneficial ownership in, any assets of the trust prior to the time such assets are paid to the Participants or Beneficiaries as Plan benefits.  All rights created under this Plan shall be unsecured contractual rights of Plan Participants and Beneficiaries against the Company.  Any assets held in the trust will be subject to the claims of the Company's general creditors under federal and state law in the event of bankruptcy or insolvency as defined in the agreement governing the trust.  The assets of the Plan and trust shall never inure to the benefit of the Company, except to the extent required in the event of the Company's bankruptcy or insolvency, and the same shall be held for the exclusive purpose of providing benefits to Participants and their Beneficiaries and for defraying reasonable expenses of administering the Plan and trust.

ARTICLE V

VESTING

A Participant shall be one-hundred percent (100%) vested in his or her Deferral Account at all times.  A Participant shall become one-hundred percent (100%) vested in his or her Company Matching Contribution Account upon completion of three Years of Service.  Notwithstanding the foregoing, a Participant shall become one-hundred percent (100%) vested in his or her Company Matching Contribution Account upon death while employed with the Company or becoming Disabled while employed with the Company.

ARTICLE VI

DISTRIBUTIONS

6.1    Distribution Upon Termination of Employment.

(a)   Account Balance More Than $25,000.  In the case of a Participant who separates from service with Company and has a vested Account balance of more than $25,000, the Distributable Amount shall be paid to the Participant in one of the following forms, in accordance with his or her Payment Election:
(i)   A lump sum distribution paid on or about the Participant's Payment Date.

(ii)   Substantially equal installments over a period of two (2) to fifteen (15) years, beginning on the Participant's Payment Date.

A Participant may modify the timing of the distribution of his or her Account, provided that the modification is made at least one (1) year prior to the applicable Payment Date, and provided further that such modification also delays the payment or payments to be made for at least five (5) years beyond the date on which the first payment otherwise would have been made, and further provides that the re-deferral does not have the effect of accelerating any payments that is otherwise prohibited under Section 409A of the Code.   A Participant may modify the timing of his or her Account only once. 

A Participant who elected to have his or her Account distributed in a lump sum may instead elect to have his or her Account distributed as substantially equal installments, provided that such modification is made at least one (1) year prior to the applicable Payment Date, and provided further that such modification also delays the payments to be made for at least five (5) years beyond the date on which the lump sum otherwise would have been made and does not have the effect of accelerating any payment that is otherwise prohibited under Section 409A of the Code.  

(b)   Account Balance of $25,000 or Less.  In the case of a Participant who terminates employment with Company and has a vested Account balance of $25,000 or less, the Distributable Amount shall be paid to the Participant in the form of a lump sum on or about the Participant's Payment Date.

(c)   The Participant's Account shall continue to be credited with earnings pursuant to Article IV of the Plan until all amounts credited to his or her Account under the Plan have been distributed.

(d)   A Participant's Payment Date shall not be earlier than six (6) months after the Participant separates from service with the Company.

6.2    Distribution on Account of Participant's Death. 

(a)   Death prior to Commencement of the Distribution of Participant's Account.  In the case of a Participant who dies prior to commencing distribution of his or her Account, such Participant's Beneficiary shall receive the Participant's Account in the form elected by the Participant pursuant to the Payment Election.  Notwithstanding a Participant's Payment Election, if the Account balance is $25,000 or less, the Distributable Amount shall be paid to the Beneficiary in the form of a lump sum distribution..

(b)   Death after Commencement of Account.  In the event a Participant dies after commencing his or her Account in substantially equal installments, his or her Beneficiary shall continue to be paid in installments for the remainder of the period in accordance with the Participant's Payment Election.  

6.3    Distribution on Account of Disability.  A Participant who becomes Disabled shall be entitled to immediately commence distribution of his or her Account pursuant to the existing Payment Election in the form elected by the Participant. 

6.4    Unforeseeable Emergency.  A Participant shall be permitted to elect a distribution on account of an Unforeseeable Emergency from his or her vested Accounts prior to the Payment Date, subject to the following restrictions:

(a)   The election to take such a distribution shall be made by filing a form provided by and filed with Committee prior to the end of any calendar month.

(b)   The Committee shall have made a determination that the requested distribution constitutes an Unforeseeable Emergency in accordance with the terms of the Plan and Section 409A of the Code, and that the amount of the distribution is not in excess of the amount needed to satisfy the extreme financial emergency, plus any tax liability associated with the payment.

(c)   The amount determined by the Committee as a distribution on account of an Unforeseeable Emergency shall be paid in a single cash lump sum as soon as practicable after the end of the calendar month in which the distribution election is made and approved by the Committee.

6.5    Distribution Upon a Change in Control.  A Participant's Account may be distributed upon a change in control, as defined, and in accordance with Section 409A of the Code, the regulations thereunder and other guidance issued by the IRS. 

6.6    Payment of Taxes.  Notwithstanding anything herein to the contrary, the timing of the distribution of a Participant's Account may be accelerated as may be necessary to pay Federal Insurance Contributions Act Tax ("FICA Tax") imposed under Sections 3101 and 3121(v)(2) of the Code.  The timing of the distribution of a Participant's Account also may be accelerated as may be necessary to pay the income tax on wages imposed under Section 3401 of the Code on the FICA Tax amount, and to pay the additional income tax on wages attributable to the pyramiding of Section 3401 wages and taxes.  However, the total payment amount that is accelerated must not exceed the aggregate of the FICA Tax amount, and the income tax withholding related to the FICA Tax amount.   

6.7    Inability to Locate Participant.  In the event that the Committee is unable to locate a Participant or Beneficiary within two years following the required Payment Date, the amount allocated to the Participant's Deferral Account and Company Matching Contribution Account shall be forfeited.  If, after such forfeiture, the Participant or Beneficiary later claims such benefit, such benefit shall be reinstated without interest or earnings.

ARTICLE VII

ADMINISTRATION

7.1    Committee.  A committee shall be appointed by, and serve at the pleasure of, the Board of Directors.  The number of members comprising the Committee shall be determined by the Board, which may from time to time vary the number of members.  A member of the Committee may resign by delivering a written notice of resignation to the Board.  The Board may remove any member by delivering a certified copy of its resolution of removal to such member.  Vacancies in the membership of the Committee shall be filled promptly by the Board.  A member of the Committee will automatically cease to be such a member upon the termination of his or her employment with the Company.

7.2    Committee Action.  The Committee shall act at duly noticed meetings by affirmative vote of a majority of the members of the Committee voting (attended by at least 50% of the Committee members).  Any action permitted to be taken at a meeting may be taken without a meeting if, prior to such action, a written consent to the action is signed by all members of the Committee and such written consent is filed with the minutes of the proceedings of the Committee.  A member of the Committee shall not vote or act upon any matter which relates solely to himself or herself as a Participant.  The Chairman or any other member or members of the Committee designated by the Chairman may execute any certificate or other written direction on behalf of the Committee.

7.3    Powers and Duties of the Committee. The Committee, on behalf of the Participants and their Beneficiaries, shall enforce the Plan in accordance with its terms, shall be charged with the general administration of the Plan, and shall have all powers necessary to accomplish its purposes, including, but not by way of limitation, the following:

(a)   To select the Funds in accordance with Section 3.4 hereof;

(b)   To construe and interpret the terms and provisions of this Plan;

(c)   To compute and certify to the amount and kind of benefits payable to Participants and their Beneficiaries;

(d)   To maintain all records that may be necessary for the administration of the Plan;

(e)   To provide for the disclosure of all information and the filing or provision of all reports and statements to Participants, Beneficiaries or governmental agencies as shall be required by law;

(f)   To make and publish such rules for the regulation of the Plan and procedures for the administration of the Plan as are not inconsistent with the terms hereof;

(g)   To appoint a Plan administrator or any other agent, and to delegate to them such powers and duties in connection with the administration of the Plan as the Committee may from time to time prescribe; and

(h)   To take all actions necessary for the administration of the Plan.

7.4    Construction and Interpretation.  The Committee shall have full discretion to construe and interpret the terms and provisions of this Plan, which interpretations or construction shall be final and binding on all parties, including but not limited to the Company and any Participant or Beneficiary.  The Committee shall administer such terms and provisions in a uniform and nondiscriminatory manner and in full accordance with any and all laws applicable to the Plan.

7.5    Information.  To enable the Committee to perform its functions, the Company shall supply full and timely information to the Committee on all matters relating to the Compensation of all Participants, their death or other events which cause termination of their participation in this Plan, and such other pertinent facts as the Committee may require.

7.6    Compensation, Expenses and Indemnity.

(a)   The members of the Committee shall serve without compensation for their services hereunder.

(b)   The Committee is authorized at the expense of the Company to employ such legal counsel as it may deem advisable to assist in the performance of its duties hereunder.  Expenses and fees in connection with the administration of the Plan shall be paid by the Company.

(c)   To the extent permitted by New Jersey state law, the Company shall indemnify and hold harmless the Committee and each member thereof, the Board of Directors and any delegate of the Committee who is an employee of the Company against any and all expenses, liabilities and claims, including legal fees to defend against such liabilities and claims arising out of their discharge in good faith of responsibilities under or incident to the Plan, other than expenses and liabilities arising out of willful misconduct.  This indemnity shall not preclude such further indemnities as may be available under insurance purchased by the Company or provided by the Company under any bylaw, agreement or otherwise, as such indemnities are permitted under state law.

7.7    Disputes.

(a)   Claim.  A Participant who believes that he or she is being denied a benefit to which he or she is entitled under this Plan (hereinafter referred to as "Claimant") must file a written request for such benefit with the Committee, setting forth his or her claim.  The request must be addressed to the Committee.

(b)   Claim Decision.  Upon receipt of a claim, the Committee shall advise the Claimant that a reply will be forthcoming within ninety (90) days and shall, in fact, deliver such reply within such period.  The Committee may, however, extend the reply period for an additional ninety (90) days for special circumstances.

If the claim is denied in whole or in part, the Committee shall inform the Claimant in writing, using language calculated to be understood by the Claimant, setting forth:  
(i)   The specified reason or reasons for such denial; 

(ii)   The specific reference to pertinent provisions of this Plan on which such denial is based; 

(iii)   A description of any additional material or information necessary for the Claimant to perfect his or her claim and an explanation of why such material or such information is necessary; 

(iv)   Appropriate information as to the steps to be taken if the Claimant wishes to submit the claim for review; and 

(v)   The time limits for requesting a review under subsection (c).

(c)   Request For Review.  Within sixty (60) days after the receipt by the Claimant of the written opinion described above, the Claimant may request in writing that the Committee review the prior determination.  Such request must be addressed to the Committee.  The Claimant or his or her duly authorized representative may, but need not, review the pertinent documents and submit issues and comments in writing for consideration by the Committee.  If the Claimant does not request a review within such sixty (60) day period, he or she shall be barred and estopped from challenging the determination.

(d)   Review of Decision.  Within sixty (60) days after the Committee's receipt of a request for review, after considering all materials presented by the Claimant, the Committee will inform the Participant in writing, in a manner calculated to be understood by the Claimant, the decision setting forth the specific reasons for the decision containing specific references to the pertinent provisions of this Plan on which the decision is based.  If special circumstances require that the sixty (60) day time period be extended, the Committee will so notify the Claimant and will render the decision as soon as possible, but no later than one hundred twenty (120) days after receipt of the request for review.

ARTICLE VIII

MISCELLANEOUS

8.1    Unsecured General Creditor.  Participants and their Beneficiaries, heirs, successors, and assigns shall have no legal or equitable rights, claims, or interest in any specific property or assets of the Company.  No assets of the Company shall be held in any way as collateral security for the fulfilling of the obligations of the Company under this Plan.  Any and all of the Company's assets shall be, and remain, the general unpledged, unrestricted assets of the Company.  The Company's obligation under the Plan shall be merely that of an unfunded and unsecured promise of the Company to pay money in the future, and the rights of the Participants and Beneficiaries shall be no greater than those of unsecured general creditors.  It is the intention of the Company that this Plan be unfunded for purposes of the Code and for purposes of Title 1 of ERISA.

8.2    Restriction Against Assignment.  The Company shall pay all amounts payable hereunder only to the person or persons designated by the Plan and not to any other person or corporation.  No part of a Participant's Accounts shall be liable for the debts, contracts, or engagements of any Participant, his or her Beneficiary, or successors in interest, nor shall a Participant's Accounts be subject to execution by levy, attachment, or garnishment or by any other legal or equitable proceeding, nor shall any such person have any right to alienate, anticipate, sell, transfer, commute, pledge, encumber, or assign any benefits or payments hereunder in any manner whatsoever.  If any Participant, Beneficiary or successor in interest is adjudicated bankrupt or purports to anticipate, alienate, sell, transfer, commute, assign, pledge, encumber or charge any distribution or payment from the Plan, voluntarily or involuntarily, the Committee, in its discretion, may cancel such distribution or payment (or any part thereof) to or for the benefit of such Participant, Beneficiary or successor in interest in such manner as the Committee shall direct.

8.3    Withholding.  There shall be deducted from each payment made under the Plan or any other Compensation payable to the Participant (or Beneficiary) all taxes which are required to be withheld by the Company with respect to such payment or this Plan.  The Company shall have the right to reduce any payment (or Compensation) by the amount of cash sufficient to provide the amount of taxes, including FICA Taxes on Compensation that is deferred to the Plan and related Company Matching Contributions at the time such Company Matching Contributions become fully vested.  

8.4    Amendment, Modification, Suspension or Termination.  The Committee may amend, modify or suspend or the Plan in whole or in part, except that no amendment, modification or suspension shall have any retroactive effect to reduce any amounts allocated to a Participant's Accounts.  The Company may terminate the Plan only to the extent permitted under Section 409A of the Code, the regulations thereunder and other guidance issued by the IRS.    

8.5    Governing Law.  This Plan shall be construed, governed and administered in accordance with the laws of the State of New Jersey, except where pre-empted by Federal law.

8.6    Receipt or Release.  Any payment made in good faith to a Participant or the Participant's Beneficiary shall, to the extent thereof, be in full satisfaction of all claims against the Committee, its members and the Company.  The Committee may require such Participant or Beneficiary, as a condition precedent to such payment, to execute a receipt and release to such effect.

8.7    Payments on Behalf of Persons Under Incapacity.  In the event that any amount becomes payable under the Plan to a person who, in the sole judgment of the Committee, is considered by reason of physical or mental condition to be unable to give a valid receipt therefore, the Committee may direct that such payment be made to any person found by the Committee, in its sole judgment, to have assumed the care of such person.  Any payment made pursuant to such determination shall constitute a full release and discharge of the Committee and the Company.

8.8    Limitation of Rights and Employment Relationship.  Neither the establishment of the Plan and Trust nor any modification thereof, nor the creating of any Fund or Account, nor the payment of any benefits shall be construed as giving to any Participant, or Beneficiary or other person any legal or equitable right against the Company or the trustee of the Trust except as provided in the Plan and Trust; and in no event shall the terms of employment of any employee or Participant be modified or in any way be affected by the provisions of the Plan and Trust.

8.9    Headings.  Headings and subheadings in this Plan are inserted for convenience of reference only and are not to be considered in the construction of the provisions hereof.

 

____________________________________________

Alpharma Inc.Counsel

ATTENTION:

THIS RESTRICTED STOCK AWARD SHALL NOT BECOME EFFECTIVE

UNLESS AND UNTIL IT IS "ACCEPTED" BY THE EMPLOYEE

IN THE MANNER DESCRIBED IN SECTION 1(b) BELOW.

RESTRICTED STOCK AWARD AGREEMENT

 

This RESTRICTED STOCK AWARD Agreement (this "Agreement") is made as of the Grant Date (defined below), by and between Alpharma Inc., a Delaware (USA) corporation with an address at One Executive Drive, Fort Lee, New Jersey 07024 (the "Company"), and the Employee (defined below), pursuant and subject to the Company's 2003 Omnibus Incentive Compensation Plan (the "Plan"), on the following terms and conditions:

 

	
 

DEFINITIONS:  The following terms shall have the following meanings when used in this Agreement.

	
"Employee":

	 
	
"Full Vesting Date":

	 
	
"Grant Date":

	 
	
"Grant Price":

	 
	
"Number of Restricted Shares":

	 
	
"Vesting Schedule":

	
[For VP and above:  Shares shall become 100% vested on the fifth anniversary date of the Grant Date]

[For Directors:  Shares shall become 100% vested on the third anniversary date of the Grant Date]

1.   Grant and Acceptance of Restricted Stock Award.  

(a)   The Company hereby grants to the Employee, subject to the restrictions, forfeiture risks and other terms and conditions set forth herein and in the Plan, the "Restricted Stock Award", which shall consist of that Number of Restricted Shares (defined above) of the Company's Class A Common Stock (the "Shares"), at the Grant Price (defined above) per Share, issued under the Plan in the name of the Employee and bearing the legend set forth in Section 11 hereto, indicating that such Shares are subject to the terms of this Agreement.  

(b)   The Restricted Stock Award shall not be considered granted unless and until the Employee accepts the terms of this Agreement through the E*Trade system by clicking the button marked "ACCEPT" and completing each action required by the subsequent electronic prompts.  By so accepting the Restricted Stock Award, the Employee is memorializing that he or she has accepted the Restricted Stock Award as of the Grant Date.  Thereafter, the Restricted Stock Award shall vest in accordance with the Vesting Schedule (defined above), unless earlier accelerated or forfeited as set forth herein.  This Restricted Stock Award shall be considered "Vested" for all purposes under this Agreement with respect to individual Shares upon the first date the Restricted Stock Award is vested with respect to such Shares pursuant to the above schedule.  (If the Company has no record of the Employee's acceptance of the terms of this Agreement, or any other document required by the Company in connection with the Restricted Stock Award, the Restricted Stock Award shall be ineffective and the Employee shall have no rights in the Restricted Stock Award).

2.   Restrictions / Rights of Company and Employee.

(a)   Vesting of Restricted Stock Award.  The Employee shall become 100% Vested in the Restricted Stock Award on the Full Vesting Date, subject to the other terms and conditions of this Agreement, including this Section 2.

(b)   Forfeiture Rights of the Company Upon Termination.  Subject to the further provisions of this Agreement, and except as otherwise provided in Section 2(c) below, prior to the Full Vesting Date, in the event that the Employee ceases to be a continuing employee of the Company as a result of a termination of his or her Employment by the Company (with or without cause), other than as a result of the death, Disability, or Retirement of the Employee, the entire non-Vested portion of the Restricted Stock Award shall automatically be forfeited by the Employee, and shall, with no further action on the part of the Employee, revert to the full beneficial and record ownership of the Company (the "Forfeiture Event").  (The terms "Employment", "Retirement" and "Disability" are defined in Section 3 below.)

(c)   Acceleration Rights of the Employee / The Death, Disability, or Retirement of the Employee.  In the event that the Employee dies, or an event of Disability or the Retirement of the Employee occurs prior to the Full Vesting Date, the Employee shall be immediately 100% vested in all of the Shares underlying the entire Restricted Stock Award granted hereunder and all of the Company's forfeiture rights under Section 2(b) above (the "Company's Forfeiture Rights") in such Shares shall terminate and be of no further force and effect.

(d)   Change in Control.  In the event that a Change in Control (as defined in the Alpharma Inc. Change in Control Plan, as amended from time to time (the "Change in Control Plan")) occurs, the Restricted Stock Award shall be governed by the Change in Control Plan and the provisions of this Agreement that contradict such Change in Control Plan shall become ineffective.  For the Employee's reference, a copy of the Change in Control Plan is publicly available as an exhibit to the Company's securities filings, and is also available for review upon request.

3.   Definitions.  For purposes of this Agreement: 

(a)   An event of "Disability" shall mean the Employee's termination in good standing from the employ of the Company for reasons of disability under the then-established rules of the Company, consistent with all applicable federal, state and local (including international) laws.

(b)   An event of "Retirement" shall mean the Employee's voluntary termination of his or her Employment with the Company under circumstances which would permit the Employee to receive retirement or early retirement benefits under a formal Company-sponsored pension plan or similar arrangement (assuming for the limited purposes of this definition that the Employee meets all of the criteria for participation in such plan or arrangement).

(c)   "Employment" shall mean the continuing status of the Employee as a full-time permanent salaried or hourly employee of the Company or another entity so long as that entity is, and at all relevant times continues to be, an affiliate (as that term is defined under the regulations of the United States Securities and Exchange Commission) of the Company.  Employment (i) shall include any period of illness or temporary disability during which the Employee continues to receive salary pursuant to the policies of the Company, as in effect from time to time, but (ii) shall not include any period of time during which the Employee is receiving salary continuation, payments in lieu of statutory or other notice, or during a statutory notice period, or other benefits as a result of the termination of Employment or any leave of absence of a duration longer than three (3) months.  

4.   Location of Certificates During Restriction Period.

(a)   Upon the Employee's acceptance of this Agreement, the Company shall instruct its stock transfer agent to issue the restricted Shares in the Employee's name.  The stock transfer agent may either make a "book entry" notation of the Restricted Stock Award, or it may issue and deliver and deposit with the Secretary of the Company or his or her delegate (the "Secretary") one or more share certificates representing the Shares.

(b)   Upon the occurrence of a Forfeiture Event, the Company may at anytime thereafter deliver to the Secretary a certificate executed by the Company attesting to the fact that a Forfeiture Event has occurred and, immediately upon receipt of such certificate, the Secretary is hereby irrevocably authorized by the Employee (without any further action on the part of the Employee) to take all actions necessary or appropriate to deliver the forfeited Shares, endorsed for transfer, to the Company.  By accepting this Agreement as set forth in Section 1(b) above, the Employee hereby appoints the Secretary as the Employee's true and lawful attorney-in-fact, and agent with full power of substitution for him or her in any and all capacities, to assign and transfer such Shares unto the Company, and to execute with respect to such Shares all documents necessary or appropriate to make such securities negotiable and to complete any transaction herein contemplated including, without limitation, the filing with any applicable state blue sky authority or any required applications for consent to, or notice of, transfer of the Shares.  The Employee further ratifies and confirms all that said attorney-in-fact may lawfully do or cause to be done by virtue hereof.

 

(c)   Upon the occurrence of the Full Vesting Date, (or earlier upon the vesting of the Restricted Stock Award pursuant to Section 2(c) above), the Secretary shall promptly, upon written request, deliver to the Employee the certificate or certificates representing such then-vested Shares, and the Secretary shall be discharged of all further obligations hereunder with respect to such Restricted Stock Award.

5.   No Liability.  Neither the Company nor the Secretary shall be liable for any act it may do or omit to do with respect to holding the Restricted Stock Award in escrow hereunder and while acting in good faith and in the exercise of its judgment.  The Secretary is expressly authorized to disregard any and all warnings given by any of the parties hereto or by any other person or corporation, excepting only orders or process of courts of law, and is hereby expressly authorized to comply with and obey orders, judgments or decrees of any court.  In the event that the Secretary obeys or complies with any such order, judgment or decree, the Secretary shall not be liable to any of the parties hereto or to any other person, firm or corporation by reason of such compliance, notwithstanding any such order, judgment or decree being subsequently reversed, modified, annulled, set aside, vacated or found to have been entered without jurisdiction.  The Secretary shall not be liable in any respect on account of the identity, authorities or rights of the parties executing or delivering or purporting to execute or deliver the Agreement or any documents or papers deposited or called for hereunder.  The Secretary shall be entitled to employ such legal counsel (which may be counsel to the Company) and other experts as it may deem necessary in connection with its obligations hereunder, it may rely upon the advice of such counsel, and it may cause the Company to pay such counsel reasonable compensation therefor.

6.   Disputes over Escrow.  It is understood and agreed that should any dispute arise with respect to the delivery and/or ownership or right of possession of any Shares of the Restricted Stock Award held by the Secretary pursuant to Section 4 above, the Secretary is authorized and directed to retain in its possession or to deliver into court without liability to anyone, all or any part of said Restricted Stock Award until such disputes shall have been settled either by mutual written agreement of the parties concerned or by a final order, decree or judgment of a court of competent jurisdiction after the time for appeal has expired and no appeal has been perfected, but the Secretary shall be under no duty whatsoever to institute or defend any such proceedings.

7.   Prohibition on Transfer.  The Employee is subject to Section 8.3 of the Plan, which sets forth restrictions on the transferability, sale, pledge, assignment, etc. of the Restricted Stock Award.

8.   Failure to Deliver Granted Shares to be Forfeited.  In the event that Shares to be forfeited to the Company under this Agreement are not in the Secretary's possession pursuant to Section 4 above or otherwise and the Employee or the Employee's successor-in-interest fails to deliver such Shares to the Company (or its designee, as the case may be), the Company may elect to immediately take such action as is appropriate to transfer record title of such Shares from the Employee to the Company (or its designee, as the case may be) and to treat the Employee and such Shares in all respects as if delivery of such Shares had been made as required by this Agreement.  The Employee has granted the Company a power of attorney in Section 4(b) above that shall be coupled with an interest for the purpose of effectuating the preceding sentence.

9.   Additional Securities.  If the Company shall pay a stock dividend or declare a stock split on or with respect to any of its Class A Common Stock, or otherwise distribute securities of the Company to the holders of its Class A Common Stock, the number of shares of stock or other securities of the Company then being so issued to the Employee with respect to the Shares of the Restricted Stock Award, that are subject to the restrictions contained in this Agreement, shall be added to the Shares subject to the Company's Forfeiture Rights.  If the Company shall distribute to its stockholders securities of another corporation, the securities of such other corporation then being so distributed to the Employee with respect to the Shares of the Restricted Stock Award, that are subject to the restrictions contained in this Agreement, shall be added to the Shares subject to the Company's Forfeiture Rights.  If the outstanding shares of the Company's Class A Common Stock shall be subdivided into a greater number of shares or combined into a smaller number of shares, or in the event of a reclassification of the outstanding shares of the Company's Class A Common Stock, or if the Company shall be a party to a merger, consolidation or capital reorganization, there shall be substituted for the Shares of the Restricted Stock Award then subject to this Agreement such amount and kind of securities (or cash) as are issued in such subdivision, combination, reclassification, merger, consolidation or capital reorganization in respect of such Shares subject immediately prior thereto to the Company's Forfeiture Right pursuant to this Agreement.

10.   Tax Matters.  In the event that an Employee is subject to federal, state or local (including international) income tax and the Company becomes obligated to pay withholding of taxes as a result of the expiration of any restrictions hereunder applicable to any particular Share of Restricted Stock Award or an election made by the Employee under Section 83(b) of the Internal Revenue Code of 1986, as amended, the Employee or such other person entitled to receive such Restricted Stock Award shall pay to the Company an amount equal to the amount of such withholding payment.

11.   Legend and Other Transfer Restrictions.  Prior to the Full Vesting Date, (or earlier upon the vesting of the Restricted Stock Award pursuant to Section 2(c) above), all certificates representing the then-non-vested Shares of the Restricted Stock Award shall have endorsed thereon, in addition to any other legends required by applicable securities laws, a legend substantially as follows:

"THE SALE OR OTHER TRANSFER OF THE SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE, WHETHER VOLUNTARY, INVOLUNTARY, OR BY OPERATION OF LAW, IS SUBJECT TO CERTAIN RESTRICTIONS ON SALE AND TRANSFER (INCLUDING FORFEITURE) AS SET FORTH IN THE ALPHARMA INC. 2003 OMNIBUS INCENTIVE COMPENSATION PLAN AND IN THE ASSOCIATED RESTRICTED STOCK AWARD AGREEMENT, AS AMENDED OR AMENDED AND RESTATED FROM TIME TO TIME.  COPIES OF THE PLAN AND SUCH RESTRICTED STOCK AWARD AGREEMENT MAY BE OBTAINED FROM ALPHARMA INC."

In addition to the transfer restrictions referred to above and in Section 7 above, the Employee recognizes that United States federal and state securities laws govern and may restrict his or her right to sell or otherwise dispose of the Restricted Stock Award after the Full Vesting Date (or such earlier vesting date pursuant to Section 2(c) above).  The Employee also understands that local non-United States laws may also govern the Employee's disposition of Shares, if the Employee is located outside of the United States.

12.   Equitable Relief and Consent to Jurisdiction.  The Employee specifically acknowledges and agrees that in the event of a breach or threatened breach of the provisions of this Agreement including, without limitation, the attempted transfer of all or part of the Restricted Stock Award by the Employee in violation of this Agreement, monetary damages may not be adequate to compensate the Company, and, therefore, in the event of such a breach or threatened breach, in addition to any right to damages, the Company shall be entitled to equitable relief from any court having competent jurisdiction.  Nothing herein shall be construed as prohibiting the Company from pursuing any other remedies available to it for any such breach or threatened breach.

13.   Section 83(b) Election.  If the Employee is subject to United States federal income tax, the Employee hereby acknowledges that he or she has been informed that, with respect to the Restricted Stock Award, an election may be filed by the Employee with the Internal Revenue Service ("IRS"), within thirty (30) days of the issuance of the Restricted Stock Award to the Employee, electing pursuant to Section 83(b) of the Internal Revenue Code of 1986, as amended, to be taxed currently on any difference between the purchase price of the Shares underlying the Restricted Stock Award (paid by the Employee for such Restricted Stock Award; in this Agreement, that amount is $0.00) and the fair market value of the Shares underlying the Restricted Stock Award on the date of purchase (market price for the Class A Common Stock (the Grant Price per Share)).  Absent such an election, taxable income will be measured and recognized by the Employee at the time of the Full Vesting Date (or such earlier vesting date pursuant to Section 2(c) above with respect to earlier-vested Shares of the Restricted Stock Award).  Absent such an election, alternative minimum taxable income will be measured and recognized by the Employee at the time of vesting.  The Employee is strongly encouraged to seek the advice of his or her own tax consultants in connection with the issuance of the Restricted Stock Award and the advisability of filing of the election under Section 83(b) of the Code.  The Employee shall promptly provide a copy of any such election filed with the IRS with the Company.

As of the date this Agreement was drafted, the IRS provided information regarding the Section 83(b) election in its Publication 525 "Taxable and Non-Taxable Income", available on its website at www.IRS.gov, which the Employee may want to review for informational purposes.  The Employee understands and agrees that the Company is providing this information solely for the Employee's reference, and the Company is in no way responsible for any information provided on the IRS website, or available through hyperlinks located on the IRS website to other websites.

THE EMPLOYEE ACKNOWLEDGES THAT IT IS THE EMPLOYEE'S SOLE RESPONSIBILITY, AND NOT THE COMPANY'S, TO FILE TIMELY THE ELECTION UNDER SECTION 83(b).

14.   Employment.  The Company is not by this Agreement obligated to continue the Employee as an employee, consultant or director of the Company or any of its affiliates, and the Company or any affiliate employing the Employee may terminate his or her Employment or otherwise treat him or her without regard to the effect it may have upon him or her under this Agreement.  The Company and the Employee understand and agree that any references herein to employment of the Employee by the Company shall include the Employee's Employment or service as an employee of the Company or any affiliate of the Company.

15.   Voting Rights and Dividends.  At all times prior to the occurrence of a Forfeiture Event with respect to any Shares underlying the Restricted Stock Award, the Employee may exercise full voting rights and shall receive all dividends paid with respect to such Shares.  As set forth in Section 9 above, dividends may be paid in the form of Shares subject to this Agreement.

16.   Consent.  The Employee specifically acknowledges that the Company must use certain personal information of the Employee for the limited purpose of granting and administering the Restricted Stock Award to the Employee, including sharing such information with E*Trade or other third party administrators, and that such use may include the transfer of the Employee's personal information across international borders, and the Employee hereby consents to the use of his or her personal information for such purpose.  

17.   Administration.  This Agreement and the Employee's rights hereunder are subject to all of the terms and conditions of the Plan, as the same may be amended from time to time, as well as to such rules and regulations and administrative decisions that may be adopted thereunder.  The Company may terminate, amend or modify the Plan at any time; provided that no such action shall in any way adversely affect the Employee's rights under this Agreement.  For the Employee's reference, a copy of the Plan is available for the Employee's review as part of the E*Trade delivery system, as publicly filed with the Company's securities filings, and with representative Company Human Resources personnel.

18.   Notices.  Any notice or other communication to be made, served or given to the Company under or pursuant to the terms hereof (a "Notice") shall be in writing and shall be addressed to the Company, in care of the Vice President, Compensation & Benefits, at One Executive Drive, Fort Lee, New Jersey 07024 USA, and any notice to be given to the Employee shall be in writing and addressed to the Employee's address maintained from time to time in the employment records of the Company or any affiliate, or at such other address as either party may hereafter designate in writing to the other.  Such Notice shall be sent by personal delivery or by registered or certified mail, return receipt requested, postage prepaid, or by a nationally known overnight courier (or internationally known courier if sent from outside of the United States), providing written proof of delivery.  Any Notice sent in the manner set forth above shall be deemed to have been given and received upon receipt if personally delivered, two (2) days after it has been delivered to a nationally (internationally) known overnight courier, and three (3) days after it has been deposited in the United States mail (or other non-United States government-sponsored mail system) if sent by mail.  If a Notice is delivered otherwise than as set forth above, it shall be deemed to have been given when received.  The substance of any Notice shall be deemed to have been fully acknowledged in the event of refusal of acceptance by the party to whom the notice is addressed.

19.   Binding Effect.  This Agreement shall be binding upon, and shall inure to the benefit of, the Employee and the Company and their respective permitted successors, assigns, heirs, beneficiaries and representatives.  This Agreement is personal to the Employee and may not be assigned by him or her without the prior written consent of the Company.  Any attempted assignment in violation of this Section 19 shall be null and void.

20.   Governing Law and Jurisdiction.  This Agreement shall be construed and enforced in accordance with the terms of Section 20.5 of the Plan providing for use of the internal laws of the State of New Jersey in the United States; provided, however, that, insofar as the Company is incorporated under the laws of the State of Delaware in the United States, the General Corporate Law of the State of Delaware (or any successor statute) shall govern those matters that apply to the internal governance of the Company.  Furthermore, the Employee hereby irrevocably submits to the co-exclusive jurisdiction of (i) the Superior Court of New Jersey, and (ii) the United States District Court for the District of New Jersey, to resolve any and all issues that may arise out of or relate to this Agreement.  THE SECURITIES ISSUED HEREUNDER SHALL BE GOVERNED BY AND IN ACCORDANCE WITH THE CORPORATE SECURITIES LAWS OF THE UNITED STATES AND ANY OTHER APPLICABLE NON-UNITED STATES LAWS.  Each of the parties hereto further agrees that service of any process, summons, notice or documents by United States registered mail, return receipt requested, or internationally-known courier, in accordance with the provisions of Section 18 above, shall be effective service of process for any action, suit or proceeding in New Jersey. 

21.   Severability.  Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, but shall be interpreted as if it were written so as to be enforceable to the maximum extent permitted by applicable law, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.  To the extent permitted by applicable law, the parties waive any provision of law that renders any provisions hereof prohibited or unenforceable in any respect.

22.   Entire Agreement.  This Agreement constitutes the entire agreement and understanding between the parties hereto with respect to the subject matter hereof and supersedes all prior oral or written agreements and understandings relating to the subject matter hereof.  No statement, representation, warranty, covenant or agreement not expressly set forth in this Agreement or incorporated herein by reference shall affect or be used to interpret, change or restrict the express terms and provisions of this Agreement.

23.   Modifications and Amendments; Waivers and Consents.  The terms and provisions of this Agreement may not be modified, amended, renewed, or terminated, nor may any term, condition or breach of any term or condition be waived, except by a writing signed by the Company and the Employee.  Any waiver of any term, condition or breach hereof shall not be a waiver of any other term or condition or of the same term or condition for the future, or of any subsequent breach.

24.   Consent of Spouse.  If the Employee is married as of the date of this Agreement, the Employee's spouse shall execute a Consent of Spouse in a form acceptable to the Company (a sample of which is included as Exhibit A hereto), effective as of the date hereof.  Such consent shall not be deemed to confer or convey to the spouse any rights in the Restricted Stock Award that do not otherwise exist by operation of law or the agreement of the parties.  If the Employee marries or remarries subsequent to the date hereof, the Employee shall, not later than sixty (60) days thereafter, obtain his or her new spouse's acknowledgment of and consent to the existence and binding effect of all restrictions contained in this Agreement by such spouse's executing and delivering a Consent of Spouse form.

25.   Acceptance. By accepting this Agreement through the E*Trade system (as described in Section 1(b) above), the Employee is accepting the Restricted Stock Award as set forth in this Agreement and agreeing to the terms and conditions hereof, including all provisions of the Plan.  The Employee is further acknowledging that a copy of the Plan is available for the Employee's review as part of the E*Trade delivery system, as publicly filed with the Company's securities filings, and with representative Human Resources personnel.

End of Agreement.

 

EXHIBIT A

CONSENT OF SPOUSE

I, ____________________________, spouse of _____________________, acknowledge that I have read the Restricted Stock Award Agreement dated as of __________, 20__ (the "Agreement") and that I know its contents.  Capitalized terms used and not defined herein shall have the meanings assigned to such terms in the Agreement.  I am aware that, by its provisions, the Restricted Stock Award owned by my spouse is subject to forfeiture in favor of Alpharma Inc. (the "Company") and that, accordingly, the Restricted Stock Award, shall, upon a Forfeiture Event, automatically revert to the ownership of the Company, and this may include Shares of which I may become possessed as a result of a court decree and/or any property settlement in any domestic litigation (or otherwise).

I hereby agree that my interest, if any, in the Restricted Stock Award subject to the Agreement shall be irrevocably bound by the Agreement and I further understand and agree that any community property interest I may have in the Restricted Stock Award shall be similarly bound by the Agreement.

I agree to the Company's Forfeiture Rights described in the Agreement and I hereby consent to the forfeiture of the Restricted Stock Award to the Company in accordance with the provisions of the Agreement.  Further, as part of the consideration for the Agreement, I agree that, at my death, if I have not disposed of any interest of mine in the Restricted Stock Award by an outright bequest of the Restricted Stock Award to my spouse, then the Company shall have the same rights against my legal representative to exercise its rights of forfeiture with respect to any interest of mine in the Restricted Stock Award as it would have had pursuant to the Agreement if I had acquired such interest pursuant to a court decree in domestic litigation.

I AM AWARE THAT THE LEGAL, FINANCIAL AND RELATED MATTERS CONTAINED IN THE AGREEMENT ARE COMPLEX AND THAT I AM FREE TO SEEK INDEPENDENT PROFESSIONAL GUIDANCE OR COUNSEL WITH RESPECT TO THIS CONSENT.  I HAVE EITHER SOUGHT SUCH GUIDANCE OF COUNSEL OR DETERMINED AFTER REVIEWING THE AGREEMENT CAREFULLY THAT I WILL WAIVE SUCH RIGHT.

Dated as of the _______ day of ________________, 20__.

______________________

Print name

Signature

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