Management Savings Plan - St. Jude Medical Inc.
ST. JUDE MEDICAL
MANAGEMENT SAVINGS PLAN
TABLE OF CONTENTS
TITLE AND DEFINITIONS
1.1 - Title. . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 - Definitions. . . . . . . . . . . . . . . . . . . . . . . . 1
2.1 - Participation. . . . . . . . . . . . . . . . . . . . . . . 6
3.1 - Elections to Defer Compensation. . . . . . . . . . . . . . 7
3.2 - Investment Elections . . . . . . . . . . . . . . . . . . . 9
4.1 - Deferral Account . . . . . . . . . . . . . . . . . . . . . 10
4.2 - Company Contribution Account . . . . . . . . . . . . . . . 11
5.1 - Deferral Account . . . . . . . . . . . . . . . . . . . . . 12
5.2 - Company Contribution Account . . . . . . . . . . . . . . . 12
6.1 - Distribution of Deferred Compensation. . . . . . . . . . . 13
6.2 - Forfeitures. . . . . . . . . . . . . . . . . . . . . . . . 15
6.3 - Early Distributions. . . . . . . . . . . . . . . . . . . . 15
6.4 - Inability to Locate Participant. . . . . . . . . . . . . . 16
6.5 - Trust. . . . . . . . . . . . . . . . . . . . . . . . . . . 16
7.1 - Committee. . . . . . . . . . . . . . . . . . . . . . . . . 18
7.2 - Committee Action . . . . . . . . . . . . . . . . . . . . . 18
7.3 - Powers and Duties of the Committee . . . . . . . . . . . . 18
7.4 - Construction and Interpretation. . . . . . . . . . . . . . 19
7.5 - Information. . . . . . . . . . . . . . . . . . . . . . . . 19
7.6 - Compensation, Expenses and Indemnity . . . . . . . . . . . 20
7.7 - Quarterly Statements . . . . . . . . . . . . . . . . . . . 20
7.8 - Disputes . . . . . . . . . . . . . . . . . . . . . . . . . 20
8.1 - Unsecured General Creditor . . . . . . . . . . . . . . . . 22
8.2 - Restriction Against Assignment . . . . . . . . . . . . . . 22
8.3 - Withholding. . . . . . . . . . . . . . . . . . . . . . . . 23
8.4 - Amendment, Modification, Suspension or Termination . . . . 23
8.5 - Governing Law. . . . . . . . . . . . . . . . . . . . . . . 23
8.6 - Receipt or Release . . . . . . . . . . . . . . . . . . . . 23
8.7 - Payments on Behalf of Persons Under Incapacity . . . . . . 24
8.8 - Headings, etc. Not Part of Agreement . . . . . . . . . . . 24
ST. JUDE MEDICAL
MANAGEMENT SAVINGS PLAN
WHEREAS, St. Jude Medical, Inc. (the 'Company') desires to establish a
deferred compensation plan to provide supplemental retirement income benefits
for a select group of management and highly compensated employees through
deferrals of salary and bonuses, effective as of February 1, 1995; and
WHEREAS, it is believed that the adoption of this plan providing for
deferred compensation at the election of each executive will be in the best
interests of the Company;
NOW, THEREFORE, it is hereby declared as follows:
TITLE AND DEFINITIONS
1.1 - TITLE.
This Plan shall be known as the St. Jude Medical Management Savings Plan.
1.2 - DEFINITIONS.
Whenever the following words and phrases are used in this Plan, with the
first letter capitalized, they shall have the meanings specified below.
'Account' or 'Accounts' shall mean a Participant's Deferral Account and/or
Company Contribution Account.
'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 (other than the death benefits described in Section
6.1(c)(1) unless such person is designated as a beneficiary under the Policy
described therein). No beneficiary designation shall become effective until it
is filed with the Committee. If there is no Beneficiary designation in effect,
then the person designated to receive the death benefit specified in Section
6(c)(1) shall be the Beneficiary. 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 to receive any
benefits payable in accordance with the preceding sentence, 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, 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
'Board of Directors' or 'Board' shall mean the Board of Directors of St.
Jude Medical, Inc.
'Bonus' shall mean any cash incentive compensation payable to a Participant
in addition to the Participant's Salary prior to reduction for any salary
deferral contributions to a plan qualified under Section 125 or Section 401(k)
of the Code.
'Code' shall mean the Internal Revenue Code of 1986, as amended.
'Committee' shall mean the Committee appointed by the Board to administer
the Plan in accordance with Article VII.
'Company' shall mean St. Jude Medical, Inc., and, effective April 1, 1995,
Pacesetter, Inc. and any successor corporations. Company shall include each
corporation which is a member of a controlled group of corporations (within the
meaning of Section 414(b) of the Code) of which St. Jude Medical is a component
member, if the Board provides that such corporation shall participate in the
'Company Contribution Account' shall mean the bookkeeping account
maintained by the Committee for each Participant that is credited with an amount
equal to the Company Contribution Amount, if any, and earnings or losses
pursuant to Section 4.2.
'Company Contribution Amount' shall mean, for each Participant for a Plan
Year the sum of the following amounts:
(1) An amount equal to the Participant's Compensation deferred under
this Plan for a Plan Year, provided that the maximum amount under this
clause (1) shall not exceed the excess of 3% of the Participant's
Compensation paid that Plan Year over the Company's matching contribution
that would have been made under the Profit Sharing Plan for the Participant
if the Participant made the maximum Section 401(k) deferral permitted to
highly compensated employees under the Profit Sharing Plan. For purposes of
this 3% limitation, Compensation shall mean the Salary paid during a Plan
Year plus the Bonus paid in that Plan Year, even though such Bonus is paid
with respect to services performed in a prior Plan Year.
(2) An amount equal to A multiplied by B where:
A equals the excess of the Participant's Compensation for the Plan
Year over the Code Section 401(a)(17) limit for the Plan Year, and
B equals the rate of contributions made by the Company, if any,
with respect to compensation in excess of the social security wage
base under the Profit Sharing Plan.
By way of example, assume a Participant has Compensation of
$180,000 in 1995 and the Employer contribution to the Profit
Sharing Plan equals 5% of compensation (below the social security
wage base) and 10% of compensation in excess of the social
security wage base. The Company Contribution Amount shall equal
10% of ($180,000 minus $150,000), or $3,000.
(3) An additional discretionary amount allocated to Participants under
this Plan, as determined by the Board. Such amount may differ from
Participant to Participant (both in dollar amount and as a percentage of
Notwithstanding the above, in the case of a Participant who is not eligible to
participate in the Profit Sharing Plan, the amounts set forth in clause (1) and
(2) above shall be zero.
'Compensation' shall mean the Salary and Bonus that the Participant is
entitled to for services rendered to the Company.
'Deferral Account' shall mean the bookkeeping account maintained by the
Committee for each Participant that is credited with amounts equal to (1) the
portion of the Participant's Salary that he or she elects to defer, (2) the
portion of the Participant's Bonus that he or she elects to defer, and (3)
interest pursuant to Section 4.1.
'Distributable Amount' shall mean the amount credited to a Participant's
Deferral Account and the vested portion of the amount credited to his or her
Company Contribution Account.
'Effective Date' shall mean February 1, 1995.
'Eligible Employee' shall mean each executive officer of the Company whose
Compensation (as described in the next sentence) exceeds $150,000. For this
purpose, Compensation shall mean the Salary payable for the current Plan Year
plus the Bonus paid in the prior Plan Year (with respect to services performed
in the second preceding Plan Year). Once an executive officer becomes an
Eligible Employee, such individual shall remain an Eligible Employee as long as
he or she remains an executive officer unless the individual's Compensation for
a subsequent Plan Year does not exceed $100,000.
'Fund' or 'Funds' shall mean one or more of the mutual funds or contracts
selected by the Committee pursuant to Section 3.2(b).
'Initial Election Period' for an Eligible Employee shall mean the 30-day
period following the later of January 1, 1995 (April 1, 1995, for employees of
Pacesetter, Inc.) or the Eligible Employee's date of hire.
'Interest Rate' shall mean, for each Fund, an amount equal to the net rate
of gain or loss on the assets of such Fund during each month.
'Participant' shall mean any Eligible Employee who becomes a Participant in
accordance with Section 2.1.
'Payment Eligibility Date' shall mean the first day of the month following
the end of the calendar quarter in which a Participant terminates employment or
'Plan' shall mean the St. Jude Medical Management Savings Plan set forth
herein, now in effect, or as amended from time to time.
'Plan Year' shall mean the 12 consecutive month period beginning on January
1, provided, however, that the first Plan Year shall be a short year beginning
on February 1, 1995 and ending on December 31, 1995.
'Profit Sharing Plan' shall mean the St. Jude Medical Profit Sharing
Employee Savings Plan.
'Salary' shall mean the Participant's base salary prior to reduction for
any salary deferral contributions to a plan qualified under Section 125 or
Section 401(k) of the Code.
2.1 - PARTICIPATION.
An Eligible Employee shall become a Participant in the Plan by (1) electing
to defer a portion of his or her Compensation in accordance with Section 3.1,
and (2) filing a life insurance application form along with his or her deferral
3.1 - ELECTIONS TO DEFER COMPENSATION.
(a) Initial Election Period. Subject to Section 2.1, each Eligible Employee
may elect to defer Compensation by filing with the Committee an 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.
(b) General Rule. The amount of Compensation which an Eligible Employee may
elect to defer is as follows:
(1) Any percentage of Salary up to 50%; and/or
(2) Any percentage or dollar amount of Bonus up to 100%;
provided, however, that no election shall be effective to reduce the
Compensation paid to an Eligible Employee for a calendar year to an amount which
is less than the Social Security Wage Base for such calendar year.
(c) Minimum Deferrals. For each year during which an Eligible Employee is a
Participant, the minimum amount that may be elected under Section 3.1(b) is 5%
of the Participant's Salary. Such minimum may be satisfied by deferring Salary
and/or the Bonus payable for services rendered for such Plan Year (even though
it is not paid until the next Plan Year); provided that if Salary is deferred,
the minimum deferral is 5%. Accordingly, if no Salary is deferred for a Plan
Year and the total amount of the Bonus elected to be deferred with respect to
that Plan Year is in fact less than 5% of the Participant's Salary, then no
portion of the Bonus shall be deferred.
(d) Effect of Initial Election. An election to defer Compensation during an
Initial Election Period shall be effective with respect to Salary earned during
the first pay period beginning after the end of the Initial Election Period.
Notwithstanding anything in paragraphs (a), (d), (g) or (f) of this Section 3.1
to the contrary, for the first Plan Year only, an Eligible Employee may elect,
no later than January 31, 1995 (March 31, for Pacesetter, Inc. employees), to
defer any Bonus which is subsequently declared and paid for services performed
during the Company's fiscal year ending on December 31, 1995.
(e) Duration of Salary Deferral Election. Any Salary deferral election made
under paragraph (a) or paragraph (g) of this Section 3.1 shall remain in effect,
notwithstanding any change in the Participant's Salary, until changed or
terminated in accordance with the terms of this paragraph (e); provided,
however, that such election shall terminate for any Plan Year for which the
Participant is not an Eligible Employee. Subject to the minimum deferral
requirement of Section 3.1(c) and the limitations of Section 3.1(b), a
Participant may increase, decrease or terminate his or her Salary deferral
election, effective for Salary earned during pay periods beginning after any
January 1, by filing a new election, in accordance with the terms of this
Section 3.1, with the Committee on or before the preceding December 1.
(f) Duration of Bonus Deferral Election. Any Bonus deferral election made
under paragraph (a) or paragraph (g) of this Section 3.1 shall be irrevocable
and, except as provided in paragraph (a), shall apply only to the Bonus payable
with respect to services performed during the Plan Year for which the election
is made. For each subsequent Plan Year, an Eligible Employee may make a new
election, subject to the limitations set forth in this Section 3.1, to defer a
percentage of his or her Bonus. Such election shall be on forms provided by the
Committee and shall be made on or before the December 1 preceding the Plan Year
for which the election is to apply.
(g) Elections other than Elections during the Initial Election Period.
Subject to the minimum deferral requirement of paragraph (c) above, any Eligible
Employee who fails to elect to defer compensation during his or her Initial
Election Period may subsequently become a Participant, and any Eligible Employee
who has terminated a prior Salary deferral election may elect to again defer
Salary, by filing an election, on a form provided by the Committee, to defer
Compensation as described in paragraph (b) above. An election to defer Salary
and/or Bonus must be filed on or before December 1 and will be effective for
Salary earned during pay periods beginning after the following January 1 and the
Bonus paid with respect to services performed in the Plan Year beginning on the
following January 1.
3.2 - INVESTMENT ELECTIONS.
(a) At the time of making the deferral elections described in Section 3.1,
the Participant shall designate, on a form provided by the Committee, which of
the following types of mutual funds or contracts the Participant's Account will
be deemed to be invested in for purposes of determining the amount of earnings
to be credited to that Account:
1) Money Market Fund
2) Common Stock Fund
3) International Equity Fund
4) Balanced Fund
In making the designation pursuant to this Section 3.2, the Participant may
specify that all or any multiple of his Deferral Account (in excess of 10%) be
deemed to be invested in one or more of the types of mutual funds or contracts
listed above. Effective as of the end of any calendar quarter, a Participant may
change the designation made under this Section 3.2 by filing an election, on a
form provided by the Committee, at least 30 days prior to the end of such
quarter. If a Participant fails to elect a type of fund under this Section 3.2,
he or she shall be deemed to have elected the Money Market Fund.
(b) Although the Participant may designate the type of mutual funds or
contracts in paragraph (a) above, the Committee shall select from time to time,
in its sole discretion, a commercially available fund or contract of each of the
types described in paragraph (a) above to be the Funds. The Interest Rate of
each such commercially available fund or contract shall be used to determine the
amount of earnings or losses to be credited to Participants' Accounts under
4.1 - DEFERRAL ACCOUNT.
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 ('mutual fund subaccounts'), each of which
corresponds to a mutual fund or contract elected by the Participant pursuant to
Section 3.2(a). A Participant's Deferral Account shall be credited as follows:
(a) As of the last day of each month, the Committee shall credit the mutual
fund subaccounts of the Participant's Deferral Account with an amount equal to
Salary deferred by the Participant during each pay period ending in that month
in accordance with the Participant's election under Section 3.2(a); that is, the
portion of the Participant's deferred Salary that the Participant has elected to
be deemed to be invested in a certain type of mutual fund shall be credited to
the mutual fund subaccount corresponding to that mutual fund;
(b) As of the last day of the month in which the Bonus or partial Bonus
would have been paid, the Committee shall credit the mutual fund subaccounts of
the Participant's Deferral Account with an amount equal to the portion of the
Bonus deferred by the Participant's election under Section 3.2(a); that is, the
portion of the Participant's deferred Bonus that the Participant has elected to
be deemed to be invested in a particular type of mutual fund shall be credited
to the mutual fund subaccount corresponding to that mutual fund; and
(c) As of the last day of each month, each mutual fund subaccount of a
Participant's Deferral Account shall be credited with earnings or losses in an
amount equal to that determined by multiplying the balance credited to such
mutual fund subaccount as of the last day of the preceding month by the Interest
Rate for the corresponding Fund selected by the Company pursuant to Section
4.2 - COMPANY CONTRIBUTION ACCOUNT.
The Committee shall establish and maintain a Company Contribution Account
for each Participant under the Plan. Each Participant's Company Contribution
Account shall be further divided into separate mutual fund subaccounts
corresponding to the mutual fund or contract elected by the Participant pursuant
to Section 3.2(a). A Participant's Company Contribution Account shall be
credited as follows:
(a) As of the last day of each Plan Year, the Committee shall credit the
mutual fund subaccounts of the Participant's Company Contribution Account with
an amount equal to the Company Contribution Amount, if any, applicable to that
Participant; that is, the portion of the Company Contribution Amount, if any,
which the Participant elected to be deemed to be invested in a certain type of
mutual fund shall be credited to the corresponding mutual fund subaccount; and
(b) As of the last day of each month, each mutual fund subaccount of a
Participant's Company Contribution Account shall be credited with earnings or
losses in an amount equal to that determined by multiplying the balance credited
to such mutual fund subaccount as of the last day of the preceding month by the
Interest Rate for the corresponding Fund selected by the Company pursuant to
5.1 - DEFERRAL ACCOUNT.
A Participant's Deferral Account shall be 100% vested at all times.
5.2 - COMPANY CONTRIBUTION ACCOUNT.
(a) A Participant's Company Contribution Account shall vest and become
nonforfeitable as follows:
Years of Vesting Service Earned
by the Participant Under the Profit
Sharing Plan (Including Vesting
Service Earned Prior to 1995) Percentage Vested
Less than 2 0%
5 or more 100%
6.1 - DISTRIBUTION OF DEFERRED COMPENSATION.
(a) In the case of a Participant who terminates employment with the Company
and who either (i) terminates as a result of a long-term disability (as defined
in the Company's long-term disability plan for executives), or (ii) who is 100%
vested in his or her Company Contribution Account under this Plan, the
Distributable Amount shall be paid to the Participant (and after his death to
his or her Beneficiary) in the form of a substantially equal quarterly
installments over 15 years beginning on his or her Payment Eligibility Date.
Notwithstanding the foregoing, a Participant described in the preceding sentence
may elect one of the following optional forms of distribution provided that his
or her election is filed with the Committee at least one year prior to his or
her termination of employment or, if later, January 31, 1995 (March 31 for
Pacesetter, Inc. employees):
(1) a cash lump sum payable on the Participant's Payment Eligibility
(2) substantially equal quarterly installments over five or ten years
beginning on the Participant's Payment Eligibility Date.
Notwithstanding this subsection, if the Distributable Amount is $25,000 or less,
the Distributable Amount shall automatically be distributed in the form of a
cash lump sum on the Participant's Payment Eligibility Date. The Participant's
Accounts shall continue to be credited monthly with earnings pursuant to Section
4.1 of the Plan until all amounts credited to his or her Accounts under the Plan
have been distributed. For all purposes under this Plan, a Participant shall not
be considered terminated from employment if the Participant remains employed by
a member of the Company's controlled group of corporations (within the meaning
of Section 414(b) of the Code), even if such member is not a Company. However,
if the Employee is employed by a Company or a member of its controlled group and
such entity ceases to be a member of such controlled group as a result of a sale
or other corporate reorganization, such sale or other corporate reorganization
shall be treated as termination of employment unless immediately following such
event and without any break in employment the Participant remains employed by
Company or another corporation which is a member of its controlled group of
corporations or the former member of the controlled group assumes liability for
the benefit of the Participant.
(b) In the case of a Participant who terminates employment prior to 100%
vesting in his or her Company Contribution Account and for reasons other than a
long-term disability or death, the Distributable Amount shall be paid to the
Participant in the form of a cash lump sum on the Participant's Payment
(c) In the case of a Participant who dies while employed by the Company,
the following benefits shall be provided:
(1) That portion of the death benefit of any life insurance policy
purchased by the trustee of the Trust described in Section 6.5 to insure
the life of the Participant (the 'Policy') which is equal to:
(x) in the case of Participants not employed by Pacesetter, Inc.
two times the sum of the Participant's Salary in effect at the
time the Participant dies plus the Participant's Bonus paid or
payable for services performed in the Plan Year prior to the Plan
Year in which Participant dies or (y) in the case of Participants
employed by Pacesetter, Inc., three times the Salary in effect at
the time the Participant dies,
shall be paid to Participant's beneficiary under the Policy by the
insurance company which issued the Policy. Any such Policy shall be subject
to certain conditions set forth in a 'Split-Dollar Life Insurance
Agreement' between the Participant and the Company, pursuant to which the
Participant may designate a beneficiary with respect to the portion of the
Policy proceeds described in the preceding sentence in the event the
Participant dies prior to terminating employment with the Company. The
Participant shall have the right to designate and change such beneficiary
(which need not be his Beneficiary) at any time on a form provided by and
filed with the insurance company. If no such form is on file with the
insurance company, the insurance proceeds designated in this paragraph (1)
shall be paid to the Beneficiary. The benefit payable pursuant to this
paragraph (1) shall only be paid if the insurance company agrees that the
Participant is insurable and shall be subject to all conditions and
exceptions set forth in the applicable insurance policy. Notwithstanding
the foregoing, no benefit shall be payable pursuant to this paragraph (1)
if the Participant dies within sixty days of the first day of the month in
which Compensation is first credited to the Participant's Account. A
Participant who is entitled to a death benefit pursuant to this paragraph
(1) shall not be entitled to any other group term life insurance benefits
from the Company under this Plan or any other policy provided by the
Company. Notwithstanding any provision of this Plan or any other document
to the contrary, neither the Trust nor Company shall have any obligation to
pay the Participant or his beneficiary any amounts described in this
Section 6.1(c)(1); all such amounts due pursuant to Section 6.1(c)(1) shall
be payable solely from the proceeds of the Policy, if any. Furthermore,
neither the Trust nor the Company is obligated to maintain the Policies; no
death benefit shall be payable hereunder if the Trust has been notified by
the Committee to discontinue the Policy for the Participant. In addition,
no Policy shall be allocated to any Account.
(2) The Distributable Amount shall be paid to the Participant's
Beneficiary in a lump sum.
6.2 - FORFEITURES.
When a Participant (or, in the case of his or her death, the Participant's
Beneficiary) receives a distribution of benefits under this Plan, the portion of
his or her Company Contribution Account which is not vested shall be forfeited,
and the Company shall have no obligation to the Participant (or Beneficiary)
with respect to such forfeited amount.
6.3 - EARLY DISTRIBUTIONS.
Participant shall be permitted to elect to withdraw amounts from their
Accounts prior to termination of employment with the Company ('Early
Distributions'), subject to the following restrictions:
(a) The election to take an Early Distribution shall be made by filing a
form provided by and filed with the Committee prior to the end of any calendar
(b) The amount of the Early Distribution shall in all cases equal 90% of
the Distributable Amount as of the end of the calendar month as of which the
distribution is to be made.
(c) The amount described in subsection (b) above shall be paid in a single
cash lump sum as soon as practicable after the end of the calendar month in
which the Early Distribution election is made.
(d) If a Participant receives an Early Distribution, the remaining balance
of his or her Accounts (including both the portion, if any, which is not vested
and 10% of the Distributable Amount) shall be permanently forfeited and the
Company shall have no obligation to the Participant or his Beneficiary with
respect to such forfeited amount.
(e) If a Participant receives an Early Distribution, the following rules
will apply for the balance of the Plan Year and for the following Plan Year: (i)
the Participant will be ineligible to participate in the Plan, (ii) the
Participant will not receive any allocations of Company Contribution Amounts and
(iii) neither the Participant (nor his Beneficiary or beneficiaries) shall be
entitled to death benefits under Section 6.1(c)(1) or (2).
6.4 - INABILITY TO LOCATE PARTICIPANT.
In the event that the Committee is unable to locate a Participant or
Beneficiary within two years following the Participant's Payment Eligibility
Date, the amount allocated to the Participant's Deferral Account and Company
Contribution Amounts shall be forfeited. If, after such forfeiture, the
Participant or Beneficiary later claims such benefit, such benefit shall be
reinstated without interest or earnings, provided that Section 6.2 shall still
6.5 - TRUST.
(a) The Company shall cause the payment of benefits under this Plan
(excluding amounts described in Section 6.1(c)(1)) to be made in whole or in
part by the Trustee of the St. Jude Medical Management Savings Plan Rabbi Trust
(the 'Trust') in accordance with the provisions of this Section 6.5. As soon as
practicable after the end of each Plan Year (but no later than the tax return
due date of the Company for such year), the Company shall contribute to the
Trust for each Participant an amount equal to the amount deferred by the
Participant for the Plan Year and the Company Contribution Amount for the
Participant for the Plan Year. The Company shall also contribute cash in amounts
approximately equal to the 'cost of insurance' (as defined in each Policy)
needed to fund the death benefits described in Section 6.1(c)(1); provided that
such obligation shall not apply with respect to a Policy if (1) the Committee
has directed to the Trust to discontinue the Policy, (2) the Participant is no
longer employed by the Employer, or (3) the Participant is not entitled to a
death benefit under the Policy because he has taken an early distribution (as
described in Section 6.4 of the Plan). Notwithstanding the foregoing, prior to
the date the Policies are contributed to the Trust, the amounts described in the
preceding two sentences shall be used to pay premiums on the Policy, rather than
contributed to the Trust.
(b) The Committee shall direct the Trustee to pay the Participant or his
Beneficiary at the time and in the amount described in Article VI (excluding
amounts described in Section 6.1(c)(1)). In the event the amounts held under the
Trust are not sufficient to provide the full amount (excluding amounts described
in Section 6.1(c)(1)) payable to the Participant, the Company shall pay for the
remainder of such amount at the time set forth in Article VI (excluding amounts
described in Section 6.1(c)(1)).
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.
7.2 - COMMITTEE ACTION.
The Committee shall act at meetings by affirmative vote of a majority of
the members of the Committee. 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.
(a) 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:
(1) To select the funds or contracts to be the Funds in accordance
with Section 3.2(b) hereof;
(2) To construe and interpret the terms and provisions of this Plan;
(3) To compute and certify to the amount and kind of benefits payable
to Participants and their Beneficiaries;
(4) To maintain all records that may be necessary for the
administration of the Plan;
(5) 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
(6) 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;
(7) 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
(8) To take all actions set forth in the Trust agreement, including
determining whether to hold or discontinue the Policies.
7.4 - CONSTRUCTION AND INTERPRETATION.
The Committee shall have full discretion to construe and interpret the
terms and provisions of this Plan, which interpretation 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 cause of termination, 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
(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 applicable state law, the Company shall
indemnify and save 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 - QUARTERLY STATEMENTS.
Under procedures established by the Committee, a Participant shall receive
a statement with respect to such Participant's Accounts on a quarterly basis as
of each March 31, June 30, September 30 and December 31.
7.8 - DISPUTES.
A person who believes that he or she is being denied a benefit to which he
or she is entitled under this Agreement (hereinafter referred to as 'Claimant')
may file a written request for such benefit with the Employer, setting forth his
or her claim. The request must be addressed to the President of the Employer at
its then principal place of business.
(b) Claim Decision.
Upon receipt of a claim, the Employer 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 Employer 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 Employer shall inform the
Claimant in writing, using language calculated to be understood by the Claimant,
setting forth: (A) the specified reason or reasons for such denial; (B) the
specific reference to pertinent provisions of this Agreement on which such
denial is based; (C) a description of any additional material or information
necessary for the Claimant to perfect his or her claim and an explanation why
such material or such information is necessary; (D) appropriate information as
to the steps to be taken if the Claimant wishes to submit the claim for review;
and (E) 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 determination of the Employer. Such request must be addressed to the
Secretary of the employer, at its then principal place of business. 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
(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, of its decision setting forth the specific reasons for the
decision and containing specific references to the pertinent provisions of this
Agreement 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.
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 under any
trust, or 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 (and the
Trust described in Section 6.5) be unfunded for purposes of the Code and for
purposes of Title I 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 in 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 said taxes.
8.4 - AMENDMENT, MODIFICATION, SUSPENSION OR TERMINATION.
The Chief Executive Officer of St. Jude Medical, Inc. may amend, modify,
suspend or terminate the Plan in whole or in part, except that no amendment,
modification, suspension or termination shall have any retroactive effect to
reduce any amounts allocated to a Participant's Accounts (neither the Policies
themselves, nor the death benefit described in Section 6.1(c)(1) shall be
treated as allocated to Accounts). In addition, the Chief Executive Officer has
the right to amend or terminate Section 6.1(c)(1). In the event that this Plan
is terminated, the amounts allocated to a Participant's Accounts (regardless of
whether such amounts had become vested) shall be distributed to the Participant
or, in the event of his or her death, his or her Beneficiary in a lump sum
within thirty (30) days following the date of termination.
8.5 - GOVERNING LAW.
This Plan shall be construed, governed and administered in accordance with
the laws of the State of Minnesota.
8.6 - RECEIPT OR RELEASE.
Any payment to a Participant or the Participant's Beneficiary in accordance
with the provisions of the Plan shall, to the extent thereof, be in full
satisfaction of all claims against the Committee 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 judgement 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 judgement, 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 - HEADINGS, ETC. NOT PART OF AGREEMENT.
Headings and subheadings in this Plan are inserted for convenience of
reference only and are not to be considered in the construction of the
IN WITNESS WHEREOF, the Company has caused this document to be executed by
its duly authorized officer on this ________ day of __________, 1995.
ST. JUDE MEDICAL, INC.