0000950123-01-507071.txt : 20011010
0000950123-01-507071.hdr.sgml : 20011010
ACCESSION NUMBER: 0000950123-01-507071
CONFORMED SUBMISSION TYPE: S-8
PUBLIC DOCUMENT COUNT: 8
FILED AS OF DATE: 20011009
EFFECTIVENESS DATE: 20011009
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: KRAFT FOODS INC
CENTRAL INDEX KEY: 0001103982
STANDARD INDUSTRIAL CLASSIFICATION: FOOD & KINDRED PRODUCTS [2000]
IRS NUMBER: 363083135
FISCAL YEAR END: 1231
FILING VALUES:
FORM TYPE: S-8
SEC ACT: 1933 Act
SEC FILE NUMBER: 333-71266
FILM NUMBER: 1755269
BUSINESS ADDRESS:
STREET 1: THREE LAKES DRIVE
CITY: NORTHFIELD
STATE: IL
ZIP: 60093
BUSINESS PHONE: 8476463060
MAIL ADDRESS:
STREET 1: KRAFT FOODS INC
STREET 2: THREE LAKES DRIVE
CITY: NORTHFIELD
STATE: IL
ZIP: 60093
S-8
1
y53486s-8.txt
KRAFT FOODS INC.
1
As filed with the Securities and Exchange Commission on October 9, 2001
Registration No. 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
Kraft Foods Inc.
(Exact name of registrant as specified in its charter)
Virginia 52-2884372
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
Three Lakes Drive 60093
Northfield, Illinois (Zip Code)
(Address of Principal
Executive Offices)
Kraft Foods Thrift Plan
Kraft Foods TIP Plan (formerly known as Kraft Foods
Employee Thrift-Investment Plan)
Nabisco, Inc. Capital Investment Plan
Nabisco, Inc. Employee Savings Plan
(Full titles of the plans)
Calvin J. Collier, Esq.
General Counsel
Kraft Foods Inc.
Three Lakes Drive
Northfield, Illinois 60093
(Name and address of agent for service)
(847) 646-2805
(Telephone number, including area code, of agent for service)
___________________________________________________________________________________________________________________________________
CALCULATION OF REGISTRATION FEE
___________________________________________________________________________________________________________________________________
Proposed
maximum Proposed
Amount to offering maximum
Title of securities be price aggregate Amount of
to be registered Title of Plan registered per share(1) offering price(1) registration fee
------------------------------------------------------------------------------------------------------------------------------------
Class A common stock, no par value Kraft Foods Thrift Plan 43,000,000 shs. (2) $ 34.17 $ 1,469,310,000 $ 367,327.50
------------------------------------------------------------------------------------------------------------------------------------
Class A common stock, no par value Kraft Foods TIP Plan 3,000,000 shs. (2) $ 34.17 $ 102,510,000 $ 25,627.50
------------------------------------------------------------------------------------------------------------------------------------
Class A common stock, no par value Nabisco, Inc. Capital
Investment Plan 13,000,000 shs. (2) $ 34.17 $ 444,210,000 $ 111,052.50
------------------------------------------------------------------------------------------------------------------------------------
Class A common stock, no par value Nabisco, Inc. Employee
Savings Plan 3,000,000 shs. (2) $ 34.17 $ 102,510,000 $ 25,627.50
------------------------------------------------------------------------------------------------------------------------------------
Total: 62,000,000 shs. (2) $ 2,118,540,000 $ 529,635.00
------------------------------------------------------------------------------------------------------------------------------------
(1) Estimated solely for the purpose of computing the registration fee and
calculated in accordance with Rule 457(c) under the Securities Act of 1933,
based upon the average of the high and low prices for the Class A common stock
reported in the consolidated reporting system on October 1, 2001.
In addition, pursuant to Rule 416(c) under the Securities Act of 1933, this
Registration Statement also covers an indeterminate amount of interests to be
offered or sold pursuant to the employee benefit plans described herein.
(2) Plus such additional shares as may be issued by reason of stock splits,
stock dividends or similar transactions.
2
Explanatory Note
In December 2000, Kraft Foods Inc. (the "Company") acquired all of the
outstanding shares of Nabisco Holdings Corp. Prior to June 13, 2001, the Company
was a wholly-owned subsidiary of Philip Morris Companies Inc. ("Philip Morris").
On June 13, 2001, the Company completed an initial public offering of
280,000,000 shares of its Class A common stock. Immediately after the initial
public offering, Philip Morris owned common stock representing 97.7% of the
combined voting power of the Company's common stock.
Presently, the Kraft Foods Thrift Plan (the "Thrift Plan") and the Kraft
Foods TIP Plan (the "TIP Plan" and together with the Thrift Plan, the "Kraft
Plans") offer shares of Philip Morris common stock to eligible participants of
the respective Kraft Plan pursuant to the provisions of the respective Kraft
Plan and, in the case of the Thrift Plan, Philip Morris' Registration Statement
on Form S-8 filed with the Securities and Exchange Commission (the "Commission")
under the Securities Act of 1933, as amended (the "Securities Act")
(Registration No. 33-37115), and, in the case of the TIP Plan, Philip Morris'
Registration Statement on Form S-8 filed with the Commission under the
Securities Act (Registration No. 33-1479).
The Thrift Plan and the TIP Plan have now been amended to offer the
Company's Class A common stock to eligible participants of the Kraft Plans. The
Nabisco, Inc. Capital Investment Plan (the "CIP Plan") and the Nabisco, Inc.
Employee Savings Plan (the "ESP Plan" and together with the CIP Plan, the
"Nabisco Plans") also have now been amended to offer the Company's Class A
common stock and Philip Morris' common stock to eligible participants of the
Nabisco Plans.
This Registration Statement is being filed for the purpose of registering
62,000,000 shares of Class A common stock of the Company, together with an
indeterminate amount of interests to be issued pursuant to the Kraft Plans and
the Nabisco Plans. Philip Morris has filed a separate Registration Statement on
Form S-8 today to register 11,000,000 shares of its common stock, together with
an indeterminate amount of interest to be issued pursuant to the Nabisco Plans.
The Thrift Plan, the TIP Plan, the CIP Plan and the ESP Plan are filed herewith
as Exhibits 4.1, 4.2, 4.3 and 4.4, respectively.
Part I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
Item 1. Plan Information.
Not required to be filed with the Commission.
Item 2. Registrant Information and Employee Plan Annual Information.
Not required to be filed with the Commission.
2
3
Part II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents filed by the Company with the Commission
(File No. 1-16483) are incorporated herein by reference and made a part hereof:
(i) the prospectus of the Company filed pursuant to Rule
424(b) under the Securities Act, dated June 12, 2001,
with respect to the registration statement on Form S-1,
as amended (Registration No. 333-57162) (the
"Prospectus");
(ii) the annual reports on Form 11-K for each of the Kraft
Plans for the year ended December 31, 2000, filed with
the Commission on June 12, 2001;
(iii) the annual reports on Form 11-K for each of the Nabisco
Plans for the year ended December 30, 2000, filed with
the Commission on October 5, 2001;
(iv) the Company's Current Report on Form 8-K, filed with the
Commission on August 10, 2001;
(v) the Company's Quarterly Report on Form 10-Q for the
quarterly period ended June 30, 2001; and
(vi) the description of the Company's Class A common stock
contained in the Company's Registration Statement on
Form 8-A dated May 9, 2001, including any subsequent
amendment or any report filed for the purpose of
updating such description.
All annual reports of the Kraft Plans and the Nabisco Plans
subsequently filed pursuant to Section 13(a) or 15(d) of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), and all documents subsequently
filed by the Company pursuant to Section 13(a), 13(c), 14 or 15(d) of the
Exchange Act, prior to the filing of a post-effective amendment that indicates
that all securities offered have been sold or that deregisters all securities
then remaining unsold, shall be deemed to be incorporated by reference in this
Registration Statement and to be a part hereof from the date of filing of such
documents. Any statement contained in a document incorporated by reference
herein shall be deemed to be modified or superseded for purposes of this
Registration Statement to the extent that a statement contained herein or in any
other subsequently filed document that is incorporated by reference herein
modifies or supersedes such earlier statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Registration Statement.
Item 4. Description of Securities.
Not applicable.
Item 5. Interests of Named Experts and Counsel.
Not applicable.
Item 6. Indemnification of Directors and Officers.
The Virginia Stock Corporation Act (the "VSCA") permits, and the
Company's Articles of Incorporation require, indemnification of the Registrant's
directors, officers and controlling persons in a variety of circumstances, which
may include indemnification for liabilities under the Securities Act. The
Company's Articles of Incorporation require the Company to indemnify its
directors, officers and controlling persons to the full extent permitted by the
VSCA. Sections 13.01-697 and 13.01-702 of the VSCA generally authorize a
Virginia corporation to indemnify its directors, officers, employees or agents
in civil or criminal actions if they acted in good faith and believed their
conduct to be in the best interests of the corporation and, in the case of
criminal actions, had no reasonable cause to believe that the conduct
3
4
was unlawful. Section 13.01-704 of the VSCA also provides that a Virginia
corporation has the power to make any further indemnity to any director,
officer, employee or agent, including under its articles of incorporation or any
bylaw or shareholder resolution, except an indemnity against their willful
misconduct or a knowing violation of the criminal law.
The Company's Articles of Incorporation also provide that, to the
full extent that the VSCA permits the limitation or elimination of the liability
of directors, officers and certain controlling persons, no director, officer or
such controlling person of the Company shall be liable to the Company or its
shareholders for monetary damages arising out of any transaction, occurrence or
course of conduct. Section 13.1-692.1 of the VSCA presently permits the
elimination of liability of directors and officers in any proceeding brought by
or in the right of a corporation or brought by or on behalf of shareholders of a
corporation, except for liability resulting from such person's having engaged in
willful misconduct or a knowing violation of the criminal law or any federal or
state securities law, including, without limitation, any unlawful insider
trading or manipulation of the market for any security. Sections 13.1-692.1 and
13.1-696 to -704 of the VSCA are hereby incorporated by reference herein.
The Company carries insurance on behalf of directors, officers,
employees or agents that may cover liabilities under the Securities Act.
Item 7. Exemption From Registration Claimed.
Not applicable.
Item 8. Exhibits.
Exhibit
No. Description
------- -----------
4.1 Kraft Foods Thrift Plan, as amended (filed herewith).
4.2 Kraft Foods TIP Plan, as amended (filed herewith).
4.3 Nabisco, Inc. Capital Investment Plan, as amended (filed
herewith).
4.4 Nabisco, Inc. Employee Savings Plan, as amended (filed herewith).
4.5 Articles of Incorporation of the Company (incorporated by
reference to Exhibit 3.1 to the Company's Form S-1, filed with
the Commission on March 16, 2001 (Reg. No. 333-57162)).
4.6 Articles of Amendment to the Articles of Incorporation of the
Company (incorporated by reference to Exhibit 3.2 to the Company's
Form S-1, filed with the Commission on March 16, 2001).
4.7 Amended and Restated Bylaws of the Company (incorporated by
reference to Exhibit 3.3 to the Company's Amendment No. 5 to Form
S-1, filed with the Commission on June 8, 2001).
5.1 Opinion of Hunton & Williams as to the legality of the securities
being registered (filed herewith).
4
5
5.2 In lieu of the opinion of counsel or determination letter
contemplated by Item 601(b)(5) of Regulation S-K, the Company hereby
confirms that it has submitted the Kraft Plans and undertakes that
it will submit all amendments thereto to the Internal Revenue
Service (the "IRS") in a timely manner, and that it has made or will
make all changes required by the IRS in order to qualify the Kraft
Plans under Section 401 of the Internal Revenue Code.
23.1 Consent of Hunton & Williams (included in Exhibit 5).
23.2 Consent of PricewaterhouseCoopers LLP, Independent Accountants
(filed herewith).
23.3 Consent of Deloitte & Touche LLP, Independent Auditors (filed
herewith).
Item 9. Undertakings.
(a) The undersigned registrant hereby undertakes:
1. To file, during any period in which offers or sales are made,
a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the
registration statement (or the most recent
post-effective amendment thereof) which,
individually or in the aggregate, represent a
fundamental change in the information set forth in
the registration statement; and
(iii) To include any material information with respect
to the plan of distribution not previously
disclosed in the registration statement or any
material change in such information in the
registration statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
registration statement is on Form S-3, Form S-8 or Form F-3, and the information
required to be included in a post-effective amendment by those paragraphs is
contained in periodic reports filed by the registrant pursuant to Section 13 or
Section 15(d) of the Exchange Act that are incorporated by reference in the
registration statement.
2. That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
3. To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act, each filing of
the registrant's annual report pursuant to Section 13(a) or 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in the registration statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
5
6
(c) Insofar asindemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Securities Act,
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by
such director, officer or controlling person in connection with the securities
being registered, the registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and will be governed
by the final adjudication of such issue.
6
7
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Northfield, State of Illinois, on the 9th day of
October, 2001.
KRAFT FOODS INC.
By: /s/ JAMES P. DOLLIVE
--------------------------------------
Name: James P. Dollive
Title: Senior Vice President and
Chief Financial Officer
7
8
Pursuant to the requirements of the Securities Act, this registration
statement has been signed by the following persons in the capacities and on the
dates indicated.
Signature Title Date
--------- ----- ----
Co-Chief Executive October 9, 2001
/s/ Betsy D. Holden Officer and Director
------------------------------- (principal co-executive officer)
Betsy D. Holden
/s/ Roger K. Deromedi Co-Chief Executive October 9, 2001
------------------------------- Officer and Director
Roger K. Deromedi (principal co-executive officer)
/s/ James P. Dollive Senior Vice President October 9, 2001
-------------------------------- and Chief Financial
James P. Dollive Officer (principal
financial officer)
/s/ John F. Mowrer, III Vice President and October 9, 2001
-------------------------------- Controller (principal
John F. Mowrer, III accounting officer)
/s/ Geoffrey C. Bible
-------------------------------- Director October 9, 2001
Geoffrey C. Bible
/s/ Louis C. Camilleri
-------------------------------- Director October 9, 2001
Louis C. Camilleri
-------------------------------- Director
W. James Farrell
-------------------------------- Director
John C. Pope
-------------------------------- Director
Mary L. Schapiro
/s/ William H. Webb
-------------------------------- Director October 9, 2001
William H. Webb
-------------------------------- Director
Deborah C. Wright
8
9
Pursuant to the requirements of the Securities Act, the Management
Committee for Employee Benefits of Kraft Foods North America, Inc. having
administrative responsibility of the Kraft Foods Thrift Plan, has duly caused
this Form S-8 to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Northfield, State of Illinois, on the 9th day of
October, 2001.
KRAFT FOODS THRIFT PLAN
By: /s/ TERRY M. FAULK
-----------------------------------
Name: Terry M. Faulk
Title: Chairman, Management
Committee for Employee Benefits
Pursuant to the requirements of the Securities Act, the Management
Committee for Employee Benefits of Kraft Foods North America, Inc. having
administrative responsibility of the Kraft Foods TIP Plan, has duly caused this
Form S-8 to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Northfield, State of Illinois, on the 9th day of
October, 2001.
KRAFT FOODS TIP PLAN
By: /s/ TERRY M. FAULK
-----------------------------------
Name: Terry M. Faulk
Title: Chairman, Management
Committee for Employee Benefits
Pursuant to the requirements of the Securities Act, the Nabisco
Employee Benefits Committee, having administrative responsibility of the
Nabisco, Inc. Capital Investment Plan, has duly caused this Form S-8 to be
signed on its behalf by the undersigned, thereunto duly authorized, in the City
of Northfield, State of Illinois, on the 9th day of October, 2001.
NABISCO, INC. CAPITAL INVESTMENT PLAN
By: /s/ JILL K. YOUMAN
-----------------------------------
Name: Jill K. Youman
Title: Vice President,
Human Resources, Benefits
Pursuant to the requirements of the Securities Act, the Nabisco
Employee Benefits Committee, having administrative responsibility of the
Nabisco, Inc. Employee Savings Plan, has duly caused this Form S-8 to be signed
on its behalf by the undersigned, thereunto duly authorized, in the City of
Northfield, State of Illinois, on the 9th day of October, 2001.
NABISCO, INC. EMPLOYEE SAVINGS PLAN
By: /s/ JILL K. YOUMAN
-----------------------------------
Name: Jill K. Youman
Title: Vice President,
Human Resources, Benefits
9
10
EXHIBIT INDEX
Exhibit
No. Description
------- -----------
4.1 Kraft Foods Thrift Plan, as amended (filed herewith).
4.2 Kraft Foods TIP Plan, as amended (filed herewith).
4.3 Nabisco, Inc. Capital Investments Plan, as amended (filed
herewith).
4.4 Nabisco, Inc. Employee Savings Plan, as amended (filed herewith).
4.5 Articles of Incorporation of the Company (incorporated by
reference to Exhibit 3.1 to the Company's Form S-1, filed with
the Commission on March 16, 2001 (Reg. No. 333-57162)).
4.6 Articles of Amendment to the Articles of Incorporation of the
Company (incorporated by reference to Exhibit 3.2 to the Company's
Form S-1, filed with the Commission on March 16, 2001).
4.7 Amended and Restated Bylaws of the Company (incorporated by
reference to Exhibit 3.3 to the Company's Amendment No. 5 to Form
S-1, filed with the Commission on June 8, 2001).
5.1 Opinion of Hunton & Williams as to the legality of the securities
being registered (filed herewith).
5.2 In lieu of the opinion of counsel or determination letter
contemplated by Item 601(b)(5) of Regulation S-K, the Company hereby
confirms that it has submitted the Kraft Plans and undertakes that
it will submit all amendments thereto to the Internal Revenue
Service (the "IRS") in a timely manner, and that it has made or will
make all changes required by the IRS in order to qualify the Kraft
Plans under Section 401 of the Internal Revenue Code.
23.1 Consent of Hunton & Williams (included in Exhibit 5).
23.2 Consent of PricewaterhouseCoopers LLP, Independent Accountants
(filed herewith).
23.3 Consent of Deloitte & Touche LLP, Independent Auditors (filed
herewith).
10
EX-4.1
3
y53486ex4-1.txt
KRAFT FOODS THRIFT PLAN
1
Exhibit 4.1
KRAFT FOODS THRIFT PLAN
(As Amended and Restated Effective
As of January 1, 1997)
Mayer, Brown & Platt
Chicago
2
I, Jill Youman, Secretary of the Management Committee for Employee
Benefits ("MCEB"), hereby certify that I have approved the form of the document
attached hereto and that such document is a full, true and complete copy of the
Kraft Foods Thrift Plan as amended through the date hereof. I hereby further
certify that Supplement N to the Kraft Foods Thrift Plan was adopted by
unanimous written consent of MCEB dated August 27, 2001.
Dated this 24th day of September, 2001.
/s/ Jill Youman
-------------------------
Secretary as Aforesaid
3
TABLE OF CONTENTS
PAGE
INDEX OF DEFINED TERMS..........................................................................................vi
SECTION 1 General........................................................................................1
History, Purpose and Effective Date............................................................1
Related Companies and Employers................................................................1
Plan Administration, Trust and Fiduciary Responsibility........................................1
Plan Year......................................................................................2
Accounting Dates...............................................................................2
Applicable Laws................................................................................2
Gender and Number..............................................................................2
Notices........................................................................................2
Form of Election and Signature.................................................................2
Evidence.......................................................................................3
Action by Employers............................................................................3
Plan Supplements...............................................................................3
Defined Terms..................................................................................3
Compliance With USERRA.........................................................................3
SECTION 2 Participation In Plan..........................................................................3
Eligibility for Participation..................................................................3
Commencement of Participation..................................................................4
Inactive Participation.........................................................................4
Plan Not Contract of Employment................................................................4
Leased Employees...............................................................................5
SECTION 3 Service........................................................................................5
Years of Service...............................................................................5
Hour of Service................................................................................6
One Year Break in Service......................................................................6
Service With Philip Morris Affiliates and Predecessor Employers................................7
SECTION 4 Before-Tax, After-Tax And Rollover Contributions...............................................7
Before-Tax Contributions.......................................................................7
After-Tax Contributions........................................................................7
Total Before-Tax and After-Tax Contributions...................................................8
Payment of Before-Tax and After-Tax Contributions..............................................8
Modification, Discontinuance and Resumption of Before-Tax or After-Tax Contributions...........8
Rollover Contributions.........................................................................8
Eligible Compensation..........................................................................8
Limitation on Compensation Taken Into Account For Any Plan Year................................9
SECTION 5 Matching And Qualified Matching Contributions..................................................9
Matching Contributions.........................................................................9
Qualified Matching Contributions...............................................................9
-i-
4
Limitations on Amount of Employer Contributions...............................................10
Payment of Employer Contributions.............................................................10
SECTION 6 Investment Of The Trust Fund..................................................................10
Investment Funds and Loan Account.............................................................10
Loan Account and Investment Fund Accounting...................................................10
Investment Fund Elections.....................................................................10
Transfers Between Investment Funds............................................................10
SECTION 7 Plan Accounting...............................................................................11
Participants' Accounts........................................................................11
Allocation of Fund Earnings and Changes in Value..............................................11
Allocation and Crediting of Contributions.....................................................12
Correction of Error...........................................................................12
Statement of Plan Interest....................................................................13
SECTION 8 Limitations On Compensation, Contributions And Allocations....................................13
Reduction of Contribution Rates...............................................................13
Compensation for Limitation/Testing Purposes..................................................13
Limitations on Annual Additions...............................................................13
Excess Annual Additions.......................................................................14
Combined Plan Limitation......................................................................14
Annual Dollar Limitation......................................................................15
Section 401(k)(3) Testing.....................................................................15
Correction Under Section 401(k) Test..........................................................16
Section 401(m)(2) Testing.....................................................................16
Correction Under Section 401(m) Test..........................................................16
Multiple Use of Alternative Limitation........................................................17
Highly Compensated............................................................................17
Separate Testing of Early Eligible Group......................................................17
SECTION 9 Vesting Service, Vesting And Termination Dates................................................18
Determination of Vesting Service and Vested Interest..........................................18
Accelerated Vesting...........................................................................18
Termination Date..............................................................................19
Distribution of Before-Tax Account Only Upon Separation From Service..........................19
SECTION 10 Loans And Withdrawals Of Contributions While Employed.........................................19
Loans to Participants.........................................................................19
Withdrawals During Employment.................................................................21
Determination of Hardship.....................................................................22
Withdrawals From General Foods Account Balances During Employment.............................23
Form of Withdrawals...........................................................................24
SECTION 11 Distributions.................................................................................24
Distributions to Participants After Termination of Employment.................................24
-ii-
5
Distributions to Beneficiaries................................................................25
Special Rules Governing Annuity Elections.....................................................26
Forfeitures and Restorations of Non-Vested Contributions......................................27
Limits on Commencement and Duration of Distributions..........................................28
Beneficiary Designations......................................................................30
Form of Payment...............................................................................30
Facility of Payment...........................................................................30
Interests Not Transferable....................................................................31
Absence of Guaranty...........................................................................31
Missing Participants or Beneficiaries.........................................................31
Direct Rollover Option........................................................................31
Distributions on Account of Permanent and Total Disability....................................31
SECTION 12 No Reversion To Employers.....................................................................32
SECTION 13 Administration................................................................................32
Committee Membership and Authority............................................................32
Allocation and Delegation of Committee Responsibilities and Powers............................33
Uniform Rules.................................................................................33
Information to be Furnished to Committee......................................................33
Committee's Decision Final....................................................................34
Exercise of Committees' Duties................................................................34
Remuneration and Expenses.....................................................................34
Indemnification of the Committees.............................................................34
Resignation or Removal of Committee Member....................................................34
Appointment of Successor Committee Members....................................................34
SECTION 14 Amendment And Termination.....................................................................35
Amendment.....................................................................................35
Merger and Consolidation of the Plan, Transfer of Plan Assets.................................35
Distribution on Termination and Partial Termination...........................................36
Notice of Amendment, Termination or Partial Termination.......................................36
SECTION 15 Change Of Control Provisions..................................................................36
Application...................................................................................36
Definition of Change of Control...............................................................36
Contribution Requirement......................................................................38
Vesting.......................................................................................38
Enforcement Rights; Amendment Restrictions....................................................38
Construction..................................................................................39
-iii-
6
Supplement A - Top Heavy Provisions
Supplement B - Special Benefit Schedule for Former
Participants in the H. F. Behrhorst &
Son, Inc. Employees Profit Sharing Plan
Supplement C - Special Benefit Schedule for Former
Participants in the Profit Sharing Plan
for Mueller Foodservice Corp.
Supplement D - Special Benefit Schedule for Former
Participants in the Tombstone Pizza
Corporation Profit Sharing Plan
Supplement E - Special Benefit Schedule for Former
Participants in the Churny Company,
Inc. Profit Sharing Plan
Supplement F - Special Benefit Schedule Applicable to Employees of the
California Vegetable Concentrates Division
Supplement G - Special Benefit Schedule for Former
Participants in the Lender's Bagel
Bakery, Inc. Profit Sharing Plan
Supplement H - Special Benefit Schedule for Former
Participants in the Capri Sun, Inc.
Retirement Savings Plan
Supplement I - Special Benefit Schedule for Former
Participants in the Jack's Frozen Pizza,
Inc. 401(k) Profit Sharing Plan
Supplement J - Special Benefit Schedule for Former
Participants in the Salary Reduction and
Voluntary Investment Plan for Salaried
Employees of Oscar Mayer Foods Corporation
Supplement K - Special Benefit Schedule for Former
Participants in the RJR Nabisco Capital
Investment Plan
Supplement L - Special Benefit Schedule for Former
Participants in the Entenmann's, Inc.
Employee Savings Plan
-iv-
7
Supplement M - Special Benefit Schedule for Former
Participants in the Freihofer Savings
and Profit Sharing Plan
Supplement N - Kraft Foods Inc. Common Stock
-v-
8
INDEX OF DEFINED TERMS
----------------------
1.9 - Access System
1.5 - Accounting Date
7.1 - Accounts
7.1(c) - After-Tax Account
4.2 - After-Tax Contribution
8.3 - Annual Additions
7.1(b) - Before-Tax Account
4.1 - Before-Tax Contribution
11.6 - Beneficiary
15.2 - Change of Control
1.1 - Code
1.2 - Committee
1.3 - Committees
6.1(c) - Common Stock
1.1 - Company
8.2 - Compensation
3.1(b) - Computation Period
8.9 - Contribution Percentage
8.7 - Deferral Percentage
11.1(c) - Distribution Date
1.1 - Effective Date
4.7 - Eligible Compensation
1.2 - Employer
6.2(a) - Equity Fund
1.3 - ERISA
8.10 - Excess Aggregate Contributions
8.8 - Excess Contributions
8.7 - Family Member
3.1 - Full-time employee
10.4 - GF Plan
10.3 - Hardship
8.12 - Highly Compensated
8.9 - Highly Compensated Group
Contribution Percentage
8.7 - Highly Compensated Group
Deferral Percentage
3.2 - Hour of Service
6.2(b) - Interest Income Fund
1.3 - Investment Committee
6.1 - Investment Funds
7.1(f) - IRA Account
11.3(a) - Joint and Survivor Annuity
2.5 - Leased Employee
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9
6.2(e) - Loan Fund
7.1(a) - Matching Account
5.1 - Matching Contribution
7.9 - Non-highly Compensated Group
Contribution Percentage
7.7 - Non-highly Compensated Group
Deferral Percentage
3.3 - One Year Break in Service
14.2(a) - Outstanding Parent Voting Securities
2.1 - Participant
3.1 - Part-time or seasonal employee
9.2 - Permanently and totally disabled
6.2(c) - Philip Morris Stock Fund
1.9 - PIN
1.1 - Plan
1.4 - Plan Year
3.4 - Predecessor Employer
7.1(d) - Qualified Matching Account
5.2 - Qualified Matching Contribution
1.2 - Related Company
11.5(b) - Required Beginning Date
7.1(e) - Rollover Account
4.6 - Rollover Contribution
8.3 - Section 415 Affiliate
9.4 - Separation from service
3.4 - Subsidiary
9.3 - Termination Date
1.3 - Trust
1.3 - Trust Agreement
1.3 - Trustee
6.2(d) - U.S. Government Securities Fund
3.1, 9.1 - Year of Service
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10
KRAFT FOODS THRIFT PLAN
(As Amended and Restated Effective
As of January 1, 1997)
SECTION 1
General
1.1 History, Purpose and Effective Date. Kraft Foods, Inc. (the
"Company"), a Delaware corporation, has established the Kraft Foods Thrift Plan
(the "Plan"), formerly the Kraft General Foods Thrift Plan, to encourage
eligible employees to save a portion of their earnings on a regular basis and to
accumulate capital for their future economic security. The following provisions
constitute an amendment, restatement and continuation of the Plan as in effect
immediately prior to January 1, 1997, the "Effective Date" of the Plan as set
forth herein. To the extent that any provision of the Plan as set forth herein
specifically provides for an effective date other than January 1, 1997, such
provision will constitute an amendment of the Plan as in effect on such date
and, if such special effective date is later than the general Effective Date,
the applicable provisions of the Plan as in effect immediately prior to the
Effective Date will continue to govern until such special effective date. The
Plan is intended to qualify as a profit sharing plan under section 401(a) of the
Internal Revenue Code of 1986, as amended (the "Code"), and is further intended
to include a qualified cash or deferred arrangement under section 401(k) of the
Code.
1.2 Related Companies and Employers. The term "Related Company"
means any corporation or trade or business during any period during which it is,
along with the Company, a member of a controlled group of corporations or a
controlled group of trades or businesses, as described in sections 414(b) and
414(c), respectively, of the Code. The Company and each Related Company which
adopts the Plan with the consent of the Management Committee for Employee
Benefits (the "Committee") are referred to below collectively as the "Employers"
and individually as an "Employer".
1.3 Plan Administration, Trust and Fiduciary Responsibility. The
authority to control and manage the non-investment operations of the Plan is
vested in the Committee, as more fully described in subsection 13.1. Except as
otherwise expressly provided herein, the Committee shall have the rights, duties
and obligations of an "administrator" as that term is defined in section
3(16)(A) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA") and of a "plan administrator" as that term is defined in section
414(g) of the Code. With respect to the Plan's funding and the investment of its
assets, the Corporate Employee Plans Investment Committee of Philip Morris
Companies Inc. (the "Investment Committee") has the authority and responsibility
to appoint or select trustees, custodians, investment managers and insurance
companies to handle Plan assets and to allocate assets to each of them, to
determine the advisability of establishing or modifying the description of any
Investment Fund (as defined in subsection 6.1) made available under the Plan, to
establish investment guidelines,
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11
proxy voting policies and securities trading procedures, and to monitor the
investment performance of the fiduciaries responsible for the investment of Plan
assets. The Committee and the Investment Committee are collectively referred to
as the "Committees". The Company and the Committees shall be "named
fiduciaries", as described in section 402 of ERISA, with respect to their
authority under the Plan. All assets of the Plan will be held, managed and
controlled by one or more trustees (the "Trustee") acting under a "Trust"
established pursuant to a "Trust Agreement" which forms a part of the Plan. As
of the Effective Date, the assets of the Plan are held under the Kraft General
Foods Master Defined Contribution Trust established pursuant to the Master
Savings Plan Trust Agreement by and between the Corporate Employee Plans
Investment Committee of Philip Morris Companies Inc., Philip Morris Companies
Inc. and Bankers Trust Company, Trustee, dated as of April 1, 1992.
1.4 Plan Year. The term "Plan Year" means the
twelve-consecutive-month period beginning on each January 1 and ending on the
following December 31.
1.5 Accounting Dates. The term "Accounting Date" means each business
day as determined by the Committee in its sole discretion.
1.6 Applicable Laws. The Plan shall be construed and administered in
accordance with the internal laws of the State of Illinois to the extent that
such laws are not preempted by the laws of the United States of America.
1.7 Gender and Number. Where the context permits, words in any
gender shall include any other gender, words in the singular shall include the
plural and the plural shall include the singular.
1.8 Notices. Any notice or document required to be filed with the
Committee under the Plan will be properly filed if delivered or mailed by
registered mail, postage prepaid, to the Committee (or its delegate), in care of
the Company, at its principal executive offices. Any notice required under the
Plan may be waived by the person entitled to notice.
1.9 Form of Election and Signature. Unless otherwise specified
herein, any election or consent permitted or required to be made or given by any
Participant or other person entitled to benefits under the Plan, and any
permitted modification or revocation thereof, shall be made in writing or shall
be given by means of such interactive telephone system or Internet connection as
the Committee may designate from time to time as the vehicle(s) for executing
regular transactions under the Plan (referred to generally herein as the "Access
System"). Each Participant shall have a personal identification number or "PIN"
for purposes of executing transactions through the Access System, and entry by a
Participant of his PIN shall constitute his valid signature for purposes of any
transaction the Committee determines should be executed by means of the Access
System, including but not limited to enrolling in the Plan, electing
contribution rates, making investment choices, executing loan documents, and
consenting to a withdrawal or distribution. Any election made through the Access
System shall be considered submitted to the Committee on the date it is
electronically transmitted.
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12
1.10 Evidence. Evidence required of anyone under the Plan may be by
certificate, affidavit, document or other information which the person acting on
it considers pertinent and reliable, and signed, made or presented by the proper
party or parties.
1.11 Action by Employers. Any action required or permitted to be
taken by any Employer which is a corporation shall be by resolution of its Board
of Directors or a duly authorized committee thereof, or by a duly authorized
officer of the Employer. Any action required or permitted to be taken by any
Employer which is a partnership shall be by a general partner of such
partnership or by a duly authorized officer thereof.
1.12 Plan Supplements. The provisions of the Plan as applied to any
Employer or any group of employees of any Employer may be modified or
supplemented from time to time by the Committee by the adoption of one or more
Supplements. Each Supplement shall form a part of the Plan as of the
Supplement's effective date. In the event of any inconsistency between a
Supplement and the Plan document, the terms of the Supplement shall govern.
1.13 Defined Terms. Terms used frequently with the same meaning are
defined throughout the Plan. The Index of Defined Terms contains an alphabetical
listing of all such terms and the subsections in which they are defined.
1.14 Compliance With USERRA. Notwithstanding any provisions of the
Plan to the contrary, contributions and benefits with respect to qualified
military service will be provided in accordance with section 414(u) of the Code.
SECTION 2
Participation in Plan
2.1 Eligibility for Participation. Participation in the Plan is
entirely voluntary. An eligible employee who elects to participate (a
"Participant") shall commence participation on the date determined under
subsection 2.2. Subject to the conditions and limitations of the Plan, each
individual who was a Participant in the Plan immediately prior to the Effective
Date will continue as such on and after that date, and each other employee of an
Employer who was not a Participant immediately prior to the Effective Date will
be eligible to participate in the Plan the date he meets the following
eligibility requirements:
(a) he has completed one Year of Service (as defined in subsection
3.1);
(b) contributions are not being made on his behalf to another
defined contribution plan intended to be qualified under
section 401(a) of the Code that is sponsored by an Employer or
a Related Company;
(c) he is not a member of either (i) a collective bargaining unit
as to which retirement benefits have been the subject of good
faith bargaining unless the Plan has been extended to the
collective bargaining unit under a currently effective
collective bargaining agreement, (ii) a unit of agricultural
workers or (iii) any other group of
-3-
13
employees who have specifically been excluded from
participation in the Plan by Committee action, and
(d) he does not perform services for an Employer under a contract,
agreement or arrangement that purports to treat him as either
an independent contractor or the employee of a leasing
organization, agency, vendor or any other third-party, even if
he is subsequently determined (by judicial action or
otherwise) to have instead been a common law employee of such
Employer.
Notwithstanding the foregoing provisions of this subsection 2.1, if an
individual is employed or reemployed by an Employer on or after the date on
which he first completes one Year of Service, he shall be eligible to become a
Participant in the Plan on the first day on which he meets the requirements of
paragraphs (b) and (c) of this subsection 2.1.
Effective May 1, 1998 a regular full-time employee or a regular part-time
salaried employee scheduled to work at least 1,000 hours per year who otherwise
is eligible under this subsection 2.1 may begin to participate in the Plan for
purposes of Section 4 immediately, before completion of a Year of Service,
although eligibility for matching contributions under Section 5 is still
conditioned on satisfaction of paragraph (a) above. Hourly part-time employees,
and salaried part-time employees scheduled to work fewer than 1,000 hours per
year, must satisfy all of the eligibility requirements of this subsection to
participate in the Plan.
2.2 Commencement of Participation. Each employee eligible to
participate in the Plan is required to make an election to participate prior to
his commencement of participation in the Plan. An employee may elect to commence
participation in the Plan on the first day following the date he has satisfied
the eligibility requirements set forth in subsection 2.1. If an eligible
employee does not properly elect to commence participation on such date, he may
commence his participation on any day thereafter.
2.3 Inactive Participation. If an individual ceases to meet the
eligibility requirements of subsection 2.1, such individual shall be considered
an inactive Participant in the Plan as long as any amount is credited to his
Account under the Plan, and:
(a) no contributions shall be made by or for him under Section 4 or
Section 5;
(b) he may not obtain a loan after he has ceased to be an employee of
an Employer or a Related Company, unless he otherwise is a "party
in interest" with respect to the Plan (as such term is defined in
section 3(14) of ERISA); and
(c) he may not make a withdrawal under Section 10 after he ceases to
be an employee of an Employer or a Related Company.
2.4 Plan Not Contract of Employment. The Plan does not constitute a
contract of employment, and participation in the Plan will not give any employee
or Participant the right to be retained in the employ of any Employer nor any
right or claim to any benefit under the Plan, unless such right or claim has
specifically accrued under the terms of the Plan.
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14
2.5 Leased Employees. If a person satisfies the requirements of
section 414(n) of the Code and applicable Treasury regulations for treatment as
a "Leased Employee", such Leased Employee shall not be eligible to participate
in this Plan but, to the extent required by section 414(n) of the Code and
applicable Treasury regulations, such person shall be treated as if the services
performed by him in such capacity were performed by him as an employee of a
Related Company which has not adopted the Plan; provided, however, that no such
service shall be credited for any period during which not more than 20% of the
non-Highly Compensated workforce of the Employers and the Related Companies
consists of Leased Employees and the Leased Employee is a participant in a money
purchase pension plan maintained by the leasing organization which (i) provides
for a non-integrated employer contribution of at least 10 percent of
compensation, (ii) provides for full and immediate vesting, and (iii) covers all
employees of the leasing organization (beginning with the date they become
employees), other than those employees excluded under section 414(n)(5) of the
Code. For purposes of this subsection 2.5, "Highly Compensated" shall have the
meaning set forth in subsection 8.12.
SECTION 3
Service
3.1 Years of Service. For purposes of Section 2, an employee's "Years
of Service" means:
(a) With respect to any full-time employee, the aggregate of all time
periods commencing on the employee's first day of employment or
reemployment and ending on the day he commences a One Year Break
in Service (as defined in subsection 3.3). An employee's first
day of employment or reemployment is the first day for which he
is credited with an Hour of Service (as defined in subsection
3.2).
(b) With respect to any part-time or seasonal employee, each
Computation Period (as defined below) during which he completes
at least 1,000 Hours of Service. A "Computation Period" is the
initial 12-consecutive-month period commencing on the date an
employee is first credited with an Hour of Service, and each Plan
Year commencing with the first Plan Year which begins on or after
the date he is first credited with an Hour of Service. An
individual who completes 1,000 Hours of Service during his first
Computation Period will be eligible to begin participating in the
Plan on the day following the end of such Computation Period; an
individual who first completes 1,000 Hours of Service in a
subsequent Computation Period will be eligible to begin
participating in the Plan on the day following the day in which
he worked his 1,000th Hour of Service.
For purposes of this subsection 3.1, a full-time employee is an employee who is
regularly scheduled to work at least 1,000 hours in a calendar year, and a
part-time or seasonal employee is an employee who is scheduled to work for fewer
than 1,000 hours in a calendar year.
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15
3.2 Hour of Service. The term "Hour of Service" means, with
respect to any employee, each hour for which he is paid or entitled to payment
for the performance of duties for an Employer or a Related Company or for which
back pay, irrespective of mitigation of damages, has been awarded to the
employee or agreed to by an Employer or a Related Company, subject to the
following:
(a) An employee or Participant shall be credited with the number of
regularly scheduled working hours included in the time period on
the basis of which payment to the Employee is calculated (or, if
the number of such hours is not determinable, 8 Hours of Service
per day (to a maximum of 40 Hours of Service per week)) for any
period during which he performs no duties for an Employer or a
Related Company (irrespective of whether the employment
relationship has terminated) by reason of a vacation, holiday,
illness, incapacity (including disability), layoff, jury duty,
military duty, leave of absence or salary continuation period
pursuant to a severance plan of (or severance agreement with) his
Employer or a Related Company, but for which he is directly or
indirectly paid or entitled to payment by an Employer or a
Related Company. Payments considered for purposes of the
foregoing sentence shall include payments unrelated to the length
of the period during which no duties are performed but shall not
include payments made solely as reimbursement for medically
related expenses or solely for the purpose of complying with
applicable workmen's compensation, unemployment compensation or
disability insurance laws.
(b) Hours of Service shall be calculated and credited pursuant to
Department of Labor Regulation section 2530.200b-2, which is
incorporated herein by reference.
3.3 One Year Break in Service. Except with respect to an employee
whose absence from employment constitutes a Maternity or Paternity Absence, an
approved leave of absence, military service or a salary continuation period (as
described below), the term "One Year Break in Service" means the
12-consecutive-month period commencing on the earlier of
(a) the day an employee's employment with the Employers and Related
Companies is terminated for any reason, or
(b) in the event an employee remains absent from service with the
Employers and Related Companies for any reason other than a quit,
retirement, discharge or death, the first anniversary of the
first day of such period of absence,
if he is not paid or entitled to payment for the performance of duties for an
Employer or a Related Company during that 12-consecutive-month period.
An employee or Participant who is absent on an approved leave of
absence for a period shorter than 12 months will commence a One Year Break in
Service on the date of his scheduled return to work if he does not in fact
return to work at the expiration of such leave an employee or Participant who is
absent on an approved leave of absence for a period of 12 months or more will
commence a One Year Break in Service on the first anniversary of the first day
of such leave if he does not return to work at the scheduled expiration of such
leave. An individual who is
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16
absent because of service in the U.S. Armed Forces will begin a One Year Break
in Service on the 91st day following his discharge from military service, if he
does not return to work within 90 days of such discharge. With respect to an
individual whose absence from employment constitutes a Maternity or Paternity
Absence, a One Year Break in Service will commence on the second anniversary of
the first day of such absence, and the period between the first and second
anniversaries of the first day of a Maternity or Paternity Absence shall not
constitute a Year of Service. The term "Maternity or Paternity Absence" means an
employee's or Participant's absence from work because of the pregnancy of such
individual, the birth of a child of such individual, the placement of a child
with such individual in connection with the adoption of a child by such
individual, or for purposes of caring for the child by such individual
immediately following such birth or placement. The Committee may require the
employee or Participant to furnish such information as it considers necessary to
establish that such individual's absence was a Maternity or Paternity Absence.
If a Participant is credited with Hours of Service under subsection 3.2 for a
salary continuation period pursuant to a severance plan or severance agreement
with his Employer or a Related Company, a One Year Break in Service with respect
to such Participant shall not begin until the completion of such salary
continuation period.
3.4 Service With Philip Morris Affiliates and Predecessor Employers.
For purposes of subsections 3.1 and 9.1, service with a Subsidiary or a
Predecessor Employer shall be counted in the same manner as if such entity were
a Related Company. A "Subsidiary" is any corporation in which Philip Morris
Companies Inc. owns (directly or indirectly) more than 50% of the outstanding
voting stock. "Predecessor Employer" means a corporation or business which has
been merged into or consolidated with, or all or substantially all of its assets
acquired by, a Related Company or a Subsidiary.
SECTION 4
Before-Tax, After-Tax and Rollover Contributions
4.1 Before-Tax Contributions. Subject to the limitations set forth in
subsections 4.3 and 4.8 and Section 8 and such additional rules as the Committee
may establish on a uniform and nondiscriminatory basis, for any payroll period a
Participant may elect to have his salary or wages from his Employer reduced by a
whole percentage, and a corresponding amount contributed on his behalf to the
Plan by his Employer as a "Before-Tax Contribution", which amount shall not be
less than 1 percent nor more than 16 percent of his Eligible Compensation (as
defined in subsection 4.7) for that payroll period. Any election pursuant to
this subsection 4.1 shall be entered into the Access System prior to the time it
is to take effect.
4.2 After-Tax Contributions. Subject to the limitations set forth in
subsections 4.3 and 4.8 and Section 8 and such additional rules as the Committee
may establish on a uniform and nondiscriminatory basis, for any payroll period a
Participant may elect to make "After-Tax Contributions" to the Plan through
payroll deduction in a whole percentage that is not less than 1 percent nor more
than 16 percent of his Eligible Compensation for that payroll period. Any
election pursuant to this subsection 4.2 shall be entered into the Access System
prior to the time it is to take effect.
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17
4.3 Total Before-Tax and After-Tax Contributions. Notwithstanding the
foregoing provisions of this Section 4, Before-Tax Contributions made on behalf
of a Participant and After-Tax Contributions made by such Participant for any
payroll period may not together exceed 16 percent of his Eligible Compensation
for such payroll period.
4.4 Payment of Before-Tax and After-Tax Contributions. Before-Tax
Contributions and After-Tax Contributions shall be paid to the Trustee by the
Employer on the earliest date on which such contributions can reasonably be
segregated from the Employer's general assets, but not later than 90 days after
the date on which such amounts are received by the Employer or would otherwise
have been payable to the Participant.
4.5 Modification, Discontinuance and Resumption of Before-Tax or
After-Tax Contributions. Subject to such rules and restrictions as the Committee
may establish on a uniform and nondiscriminatory basis, a Participant may adjust
his Before-Tax and/or After-Tax Contributions prospectively by entering into the
Access System, prior to the time such change is to be effective, an election to
make any of the changes listed below:
(a) Change his Before-Tax and/or After-Tax Contribution rates within
the limits specified above.
(b) Discontinue making Before-Tax and/or After-Tax Contributions.
(c) Resume making Before-Tax and/or After-Tax Contributions.
4.6 Rollover Contributions. A Participant or an employee who meets
the eligibility requirements of subsection 2.1 (without regard to paragraph (a)
thereof) may make a Rollover Contribution (as defined below) to the Plan,
subject to the determination of the Committee that such rollover satisfies the
requirements of this subsection 4.6. Before approving a rollover, the Committee
may request from the Participant or employee any documents or opinion of counsel
which the Committee, in its discretion, deems necessary. The term "Rollover
Contribution" means a rollover contribution of all or part of a distribution
which, under applicable provisions of the Code, is permitted to be rolled over
to a qualified plan. In no event shall a Participant or employee be permitted to
make a rollover contribution of any amounts previously contributed to another
plan by the Participant on an after-tax basis. If an employee who is not
otherwise a Participant makes a Rollover Contribution to the Plan, he shall be
treated as a Participant only with respect to his Rollover Account (defined in
subsection 7.1) until he has met all of the requirements for Plan participation
set forth in subsections 2.1 and 2.2.
4.7 Eligible Compensation. A Participant's "Eligible Compensation"
for any Plan Year shall mean the amounts actually paid or made available to the
Participant during the Plan Year for personal services rendered in the course of
his employment with an Employer or amounts paid as salary continuation under an
Employer's severance or short term disability program, which are includable in
gross income as wages, salary, commissions, tips, bonuses, overtime and other
premium pay, plus any amounts contributed by an Employer pursuant to a salary
reduction agreement and which is not includable in gross income under sections
125, 402(a)(8), 402(h) or 403(b) of the Code, but excluding (even if includable
in gross income) long term disability payments, reimbursements or other expense
allowances, fringe benefits and other
-8-
18
non-cash compensation, deferred bonuses, dividends on stock granted under a
management incentive compensation or stock ownership program or a restricted
stock plan, cash payments or stock distribution made under a restricted stock
plan, long term incentive plan or stock option plan, any cash or stock payments
under a phantom stock program, proceeds from the exercise of stock options, lump
sum severance pay, tuition or moving expense reimbursements, and bonuses,
incentive compensation, vacation pay or any other compensation (other than
salary continuation payments) paid subsequent to termination of employment. For
purposes of this subsection 4.7 an amount shall be considered a bonus only if it
is paid to a Participant under a program of general application, as determined
by the Committee in its sole discretion. Examples of bonuses to be included
under this subsection 4.7 are the annual Management Incentive Plan bonus and the
Corporate Incentive Plan bonus. An example of a payment excluded under this
subsection 4.7 is a payment made with respect to an employee's sale of his home.
4.8 Limitation on Compensation Taken Into Account For Any Plan Year.
Notwithstanding any other provision of the Plan to the contrary, once a
Participant or employee has earned Eligible Compensation at the maximum level
permitted for a Plan Year under section 401(a)(17) of the Code, such
Participant's or employee's active participation in the Plan for the remainder
of such Plan Year shall cease regardless of whether he has taken maximum
advantage of the contributions permitted under Sections 4 and 5 up to that point
in the Plan Year.
SECTION 5
Matching and Qualified
Matching Contributions
5.1 Matching Contributions. Subject to the conditions and limitations
of subsection 4.8 and Section 8, for each payroll period during a Plan Year an
Employer shall contribute to the Plan on behalf of each Participant employed by
such Employer who has completed a Year of Service an amount equal to a specified
percentage (as determined for that Plan Year by the Company in its sole
discretion) of the Before-Tax and After-Tax Contributions made by and on behalf
of the Participant that together do not exceed 6 percent of such Participant's
Eligible Compensation for such payroll period during a Plan Year. The Committee,
in its sole discretion, may designate different matching percentages for
different groups of participating employees for a Plan Year. Any contribution
made pursuant to this subsection 5.1 shall be referred to hereinafter as a
"Matching Contribution".
5.2 Qualified Matching Contributions. For each Plan Year any Employer
may, but shall not be required to, contribute an additional percentage of the
Before-Tax Contributions made on behalf of Participants employed by such
Employer who are not Highly Compensated (as defined in subsection 8.12). Any
contribution made pursuant to this subsection 5.2 shall be referred to
hereinafter as a "Qualified Matching Contribution". At the discretion of the
Committee Qualified Matching Contribution may be tested under subsection 8.7 or
8.9 in accordance with applicable Treasury regulations.
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19
5.3 Limitations on Amount of Employer Contributions. In no event
shall the sum of any Before-Tax Contributions, Matching Contributions and
Qualified Matching Contributions made by an Employer for any Plan Year exceed
the limitations imposed by Section 404 of the Code on the maximum amount
deductible on account thereof by the Employer for that year.
5.4 Payment of Employer Contributions. Each Employer's contributions
under the Plan (other than Before-Tax Contributions) for any Plan Year shall be
paid to the Trustee, without interest, no later than the time prescribed by law
for filing the Employer's federal income tax return, including any extensions
thereof.
SECTION 6
Investment of the Trust Fund
6.1 Investment Funds and Loan Account. The Investment Committee shall
establish and cause the Trustee to maintain one or more "Investment Funds" for
the investment of Participants' Accounts, and a "Loan Account" to reflect any
loans to Participants pursuant to subsection 10.1. The Investment Committee in
its discretion may add additional Investment Funds, may delete any Investment
Fund or may change the investment strategy of any Investment Fund without prior
notice to Participants.
6.2 Loan Account and Investment Fund Accounting. The Committee shall
maintain or cause to be maintained separate subaccounts for each Participant in
each of the Investment Funds and in the Loan Account to separately reflect his
interests in each such Fund or in the Loan Account and the portion thereof that
is attributable to each of his Accounts.
6.3 Investment Fund Elections. At the time that a Participant enrolls
in the Plan he may specify the percentage of contributions subsequently credited
to his Accounts that are to be invested in each of the Investment Funds in
accordance with uniform rules established by the Committee from time to time.
Any such investment direction shall be deemed to be a continuing direction until
changed. During any period in which no such direction has been given in
accordance with rules established by the Committee, contributions credited to a
Participant shall be invested in the Investment Funds as determined by the
Committee. A Participant may modify his investment direction prospectively by
entering into the Access System his election to do so prior to the effective
time of the change in accordance with uniform rules established by the
Committee.
6.4 Transfers Between Investment Funds. Subject to uniform rules
established by the Committee from time to time, each Participant may elect to
transfer prospectively the value of his Accounts held in any Investment Fund to
any other Investment Fund then made available to such Participant. Any such
election shall be made by entering it into the Access System prior to the time
it is to be effective in accordance with uniform rules established by the
Committee. Notwithstanding the foregoing, if a Participant terminates employment
before he is fully vested in his Accounts, and forfeiture of the non-vested
portion of his Accounts is delayed pending distribution of the vested portion,
such non-vested portion shall be invested in accordance with
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20
rules established by the Committee to minimize the risk of loss, and shall not
be subject to the investment direction of the Participant.
SECTION 7
Plan Accounting
7.1 Participants' Accounts. The Committee shall maintain the
following "ACCOUNTS" in the name of each Participant:
(a) a "Matching Account," which shall reflect Matching Contributions,
if any, made on his behalf and the income, losses, appreciation
and depreciation attributable thereto;
(b) a "Before-Tax Account," which shall reflect Before-Tax
Contributions, if any, made on his behalf and the income, losses,
appreciation and depreciation attributable thereto;
(c) an "After-Tax Account," which shall reflect After-Tax
contributions made by the Participant and the income, losses,
appreciation and depreciation attributable thereto;
(d) a "Qualified Matching Account," which shall reflect Qualified
Matching Contributions, if any, made on his behalf, and the
income, losses, appreciation and depreciation attributable
thereto;
(e) a "Rollover Account," which shall reflect Rollover Contributions,
if any, made by him and the income, losses, appreciation and
depreciation attributable thereto; and
(f) a "QVEC Account," which shall reflect qualified voluntary
employee contributions, if any, made by him prior to January 1,
1987, and the income, losses, appreciation and depreciation
attributable thereto.
In addition, the Committee may maintain subaccounts within the Before-Tax and
After-Tax Accounts to distinguish contributions (and the earnings thereon)
eligible to be matched from contributions (and the earnings thereon) above the
matching limit, as well as subaccounts to reflect balances transferred to this
Plan from another qualified plan that are subject to special rules. The Accounts
and subaccounts provided for in this subsection 7.1 shall be for accounting
purposes only, and there shall be no segregation of assets within the Investment
Funds or the Loan Account among the separate Accounts. Reference to the
"balance" in a Participant's Accounts means the aggregate of the balances in the
subaccounts maintained in the Investment Funds and Loan Account attributable to
those Accounts.
7.2 Allocation of Fund Earnings and Changes in Value. Subject to the
last sentence of this subsection, as of each Accounting Date, interest,
dividends and changes in value in each
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Investment Fund since the preceding Accounting Date shall be allocated to each
Participant's subaccounts invested in such Investment Fund by adjusting upward
or downward the balance of his subaccounts invested in such Investment Fund in
the ratio which the subaccounts of such Participant invested in such Investment
Fund bears to the total of the subaccounts of all Participants invested in such
Investment Fund as of such Accounting Date, excluding therefrom, for purposes of
this allocation only, all Before-Tax, After-Tax, Matching, Qualified Matching
and Rollover Contributions received since the preceding Accounting Date, so that
the total of the subaccounts of all Participants in each Investment Fund shall
equal the total value of such fund (exclusive of such contributions) as
determined by the Trustee in accordance with uniform procedures consistently
applied. Notwithstanding the fact that the Plan shall use a daily valuation
system, which generally means that Participants' Accounts will be updated each
Accounting Date to reflect activity for that day, such as new contributions
received by the Trustee, changes in Participants' investment elections, and
changes in the unit value of the Investments Funds, events may occur that cause
an interruption in the process affecting a single Participant or a group of
Participants. Neither the Employers, the Trustee nor the Plan guarantee that any
given transaction will be processed on the anticipated day.
The Investment Committee, in its discretion, may establish special rules for
valuing any Investment Fund invested primarily in stock of the Company or a
Related Company, to address the possibility of unusually high trading volume or
a temporary suspension of trading in such stock. Such rules may set forth the
circumstances under which transfers out of such Investment Fund will be valued
using either the closing price on the applicable day on the New York Stock
Exchange, a composite price listed in the Wall Street Journal, or a weighted
average selling price.
7.3 Allocation and Crediting of Contributions. Subject to the
provisions of Section 8, contributions shall be allocated and credited as
follows:
(a) Before-Tax, After-Tax, Matching, and Rollover Contributions made
on behalf of a Participant for any payroll period shall be
credited to that Participant's appropriate Accounts as of the
Accounting Date coinciding with or immediately following the last
day of such payroll period; and
(b) As of the last day of each Plan Year, any Qualified Matching
Contributions made by an Employer for that year shall be
allocated among and credited to the Accounts of non-Highly
Compensated Participants who are employed on the last day of that
year by such Employer in accordance with subsection 5.2.
Notwithstanding the foregoing, unless the Committee establishes uniform rules to
the contrary, contributions made to the Plan shall share in the gains and losses
of the Investment Funds only when actually made to the Trustee.
7.4 Correction of Error. In the event of an error in the adjustment
of a Participant's Accounts, the Committee, in its sole discretion, may correct
such error by either crediting or charging the adjustment required to make such
correction to or against income and expenses of the Trust for the Plan Year in
which the correction is made or the Employer may make an
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additional contribution to permit correction of the error. Except as provided in
this subsection 7.4, the Accounts of other Participants shall not be readjusted
on account of such error.
7.5 Statement of Plan Interest. As soon as practicable after the last
day of each Plan Year and at such other intervals as the Committee may
determine, the Committee shall provide each Participant with a statement
reflecting the balances of his Accounts. Each Participant is responsible for
reviewing his statement and any Participant who discovers an error shall bring
it to the attention of the Committee within 90 days of receipt of the statement.
If a Participant does not bring errors in his statement to the attention of the
Committee within 90 days of receipt of his statement, the Participant will be
deemed to have confirmed the accuracy of the statement.
SECTION 8
Limitations on Compensation, Contributions and Allocations
8.1 Reduction of Contribution Rates. To conform the operation of the
Plan to sections 401(a)(4), 401(k)(3), 401(m)(2), 402(g) and 415(c) of the Code,
the Committee may establish limits on the Before-Tax and After-Tax Contribution
rates that may be elected by Participants, may unilaterally modify or revoke any
Before-Tax or After-Tax Contribution election made by a Participant pursuant to
subsections 4.1 and 4.2, and may reduce the level of Matching Contributions
(even to zero) allocable to any Participant pursuant to subsection 5.l.
8.2 Compensation for Limitation/Testing Purposes. "Compensation" for
purposes of this Section 8 shall mean:
(a) the Participant's wages, salary, commissions, bonuses and
other amounts received (in cash or kind) during the Plan Year
from any Employer or Related Company for personal services
actually rendered in the course of employment and includable in
gross income, including taxable fringe and welfare benefits,
nonqualified stock options taxable in the year of grant, amounts
taxable under a section 83(b) election and nondeductible moving
expenses, but excluding distributions from any deferred
compensation plan (qualified or nonqualified), amounts realized
from the exercise of (or disposition of stock acquired under) any
nonqualified stock option or other benefits given special tax
treatment and lump sum severance pay, all as defined in Treas.
Reg. Section 1.415-2(d)(2), plus
(b) any amounts contributed on the Participant's behalf for the
Plan Year to a plan sponsored by an Employer or Related Company
pursuant to a salary reduction agreement which are not includable
in gross income under sections 125, 402(a)(8), 402(h) or 403(b)
of the Code,
up to the maximum limit for that year under Code section 401(a)(17).
8.3 Limitations on Annual Additions. Notwithstanding any other
provisions of the Plan to the contrary, a Participant's Annual Additions (as
defined below) for any Plan Year shall not exceed an amount equal to the lesser
of:
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(a) $30,000; or
(b) 25 percent of the Participant's Compensation for that Plan
Year, determined for Plan Years prior to 1998 without regard to
clause ( b) of subsection 8.2 and calculated as if each Section
415 Affiliate (defined below) were a Related Company,
reduced by any Annual Additions for the Participant for the Plan Year under any
other defined contribution plan of an Employer or a Related Company or Section
415 Affiliate, provided that, if any other such plan has a similar provision,
the reduction shall be pro rata. The term "Annual Additions" means, with respect
to any Participant for any Plan Year, the sum of all contributions allocated to
a Participant's Accounts under the Plan for such year, excluding Rollover
Contributions and any Before-Tax Contributions that are distributed as excess
deferrals in accordance with subsection 8.6, but including any Before-Tax,
After-Tax or Matching Contributions treated as excess contributions or excess
aggregate contributions under subsections 8.8, 8.10 and 8.11. The term Annual
Additions shall also include employer contributions allocated for a Plan Year to
any individual medical account (as defined in section 415(l) of the Code) of a
Participant and any amount allocated for a Plan Year to the separate account of
a Participant for payment of post-retirement medical benefits under a funded
welfare benefit plan (as described in section 419A (d)(2) of the Code), which is
maintained by an Employer or a Related Company or Section 415 Affiliate.
"Section 415 Affiliate" means any entity that would be a Related Company if the
ownership test of section 414 of the Code was "more than 50%" rather than "at
least 80%".
8.4 Excess Annual Additions. If, as a result of a reasonable error in
estimating a Participant's Compensation, a reasonable error in determining the
amount of Before-Tax Contributions that may be made with respect to a
Participant under the limits of section 415 of the Code or such other mitigating
circumstances as the Commissioner of Internal Revenue shall prescribe, the
Annual Additions for a Participant for a Plan Year exceed the limitations set
forth in subsection 8.3, the excess amounts shall be treated, as necessary, in
accordance with Treas. Reg. Section 1.415-6(b)(6)(ii), after any After-Tax
Contributions, and then any Before-Tax Contributions, and any income, losses,
appreciation or depreciation attributable to the foregoing, are first returned
to the Participant to reduce the excess amount.
8.5 Combined Plan Limitation. If a Participant also participates in
any defined benefit plan (as defined in section 415(k) of the Code) maintained
by an Employer or a Related Company or Section 415 Affiliate, the aggregate
benefits payable to, or on account of, the Participant under such plan together
with this Plan will be determined in a manner consistent with section 415(e) of
the Code, to the extent then applicable. The benefit provided for the
Participant under the defined benefit plan shall be adjusted to the extent
necessary so that the sum of the "defined benefit fraction" and the "defined
contribution fraction" (as such terms are defined in section 415(e) of the Code
and applicable regulations thereunder) calculated with regard to such
Participant does not exceed 1.0. For purposes of this subsection 8.5, all
qualified defined benefit plans (whether or not terminated) of the Employers,
Related Companies and Section 415 Affiliates shall be treated as one defined
benefit plan.
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8.6 Annual Dollar Limitation. In no event shall the Before-Tax
Contributions for a Participant under the Plan and any other elective deferrals
(as defined in section 402(g)(3) of the Code) under any other cash-or-deferred
arrangement maintained by an Employer or a Related Company for any taxable year
exceed $9,500 or such larger amount as may be permitted under section 402(g) of
the Code. If during any taxable year a Participant is also a participant in any
other cash-or-deferred arrangement, and if his elective deferrals made under
such other arrangements together with his Before-Tax Contributions made under
the Plan exceed the maximum amount permitted for the Participant for that year
under section 402(g) of the Code, the Participant, not later than March 1
following the close of such taxable year, may request the Committee to direct
the Trustee to distribute all or a portion of such excess to him, with any gains
or losses allocable thereto for that Plan Year determined in accordance with any
reasonable method adopted by the Committee for that Plan Year that either (i)
conforms to the accounting provisions of Section 7 and is consistently applied
to the distribution of excess contributions under this subsection 8.6 and
subsections 8.8, 8.10 and 8.11 to all affected Participants, or (ii) satisfies
any alternative method set forth in applicable Treasury regulations. Any such
request shall be in writing and shall include adequate proof of the existence of
such excess, as determined by the Committee in its sole discretion. If the
Committee is so notified, such excess amount shall be distributed to the
Participant no later than the April 15 following the close of the Participant's
taxable year. In addition, if the applicable limitation for a Plan Year happens
to be exceeded with respect to this Plan alone, or this Plan and another plan or
plans of the Employers and Related Companies, the Committee shall direct such
excess Before-Tax Contributions (with allocable gains or losses) to be
distributed to the Participant as soon as practicable after the Committee is
notified of the excess deferrals by the Company, an Employer or the Participant,
or otherwise discovers the error (but no later than the April 15 following the
close of the Participant's taxable year). Notwithstanding the foregoing
provisions of this subsection 8.6, the dollar amount of any distribution due
hereunder shall be reduced by the dollar amount of any Before-Tax Contributions
previously distributed to the same Participant pursuant to subsection 8.8,
provided, however, that for purposes of subsections 8.3 and 8.7, the correction
under this subsection 8.6 shall be deemed to have occurred before the correction
under subsection 8.8.
8.7 Section 401(k)(3) Testing. For the 1997 Plan Year, the amount by
which the average of the Deferral Percentages for such Plan Year (as defined
below) of each eligible employee who is Highly Compensated (the "Highly
Compensated Group Deferral Percentage") for such Plan Year exceeds the average
of the Deferral Percentages for such Plan Year of each eligible employee who is
not Highly Compensated for such Plan Year (the "Non-highly Compensated Group
Deferral Percentage"), shall be less than or equal to either (i) a factor of
1.25 or (ii) both a factor of 2 and a difference of 2. For 1998 and subsequent
Plan Years, the foregoing test shall be performed using the Deferral Percentage
for the prior year for eligible employees who were not Highly Compensated for
such prior year instead of the current-year Deferral Percentage for the current
year non-Highly Compensated Group. The "Deferral Percentage" for any eligible
employee for a Plan Year shall be determined by dividing his Before-Tax
Contributions (and Qualified Matching Contributions, if applicable) for that
Plan Year by his Compensation for that Plan Year, subject to any special rules
set forth in applicable Treasury regulations.
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8.8 Correction Under Section 401(k) Test. In the event that the
Highly Compensated Group Deferral Percentage for any Plan Year does not
initially satisfy one of the tests referred to in subsection 8.7, the Committee
shall direct the Trustee to distribute to the Highly Compensated Participants to
whose accounts Excess Contributions (as defined below) were allocated for such
year, the amount of each such Participant's Excess Contributions, with any gains
or losses allocable thereto for that Plan Year. The "Excess Contributions" for
any Plan Year shall mean the excess of the aggregate amount of Before-Tax
Contributions taken into account in computing the Deferral Percentages of Highly
Compensated Participants for such year over the maximum amount of Before-Tax
Contributions permitted under the test set forth in subsection 8.7, determined
by reducing the amount of Before-Tax Contributions made on behalf of Highly
Compensated Participants in order of the dollar amounts of their Before-Tax
Contributions, beginning with the highest of such dollar amounts, in accordance
with applicable Treasury regulations or notices. The gain or loss allocable to
Excess Contributions shall be determined in accordance with any reasonable
method adopted by the Committee for that Plan Year that either (i) conforms to
the accounting provisions of Section 7 and is consistently applied to making
corrective distributions under this subsection 8.8 and subsections 8.6, 8.10 and
8.11 to all affected Participants or (ii) satisfies any alternative method set
forth in applicable Treasury regulations. The amounts to be distributed to any
Participant pursuant to this subsection 8.8 shall be reduced by the amount of
any Before-Tax Contributions distributed to him for the taxable year ending with
or within such Plan Year pursuant to subsection 8.6. The Committee shall take
such actions and cause any distribution to be made no later than the close of
the Plan Year following the Plan Year for which the Excess Contributions were
made.
8.9 Section 401(m)(2) Testing. For the 1997 Plan Year, the amount by
which the average of the Contribution Percentages for such Plan Year (as defined
below) of each eligible employee who is Highly Compensated for such Plan Year
(the "Highly Compensated Group Contribution Percentage") exceeds the average of
the Contribution Percentages for such Plan Year of each eligible employee who is
not Highly Compensated for such Plan Year (the "Non-highly Compensated Group
Contribution Percentage") shall be less than or equal to either (i) a factor of
1.25 or (ii) both a factor of 2 and a difference of 2. For 1998 and subsequent
Plan Years, the foregoing test shall be performed using the Contribution
Percentage for the prior year for eligible employees who were not Highly
Compensated for the prior year, instead of the current-year Contribution
Percentage for the current-year non-Highly Compensated Group. The "Contribution
Percentage" for any eligible employee for a Plan Year shall be determined by
dividing his total After-Tax Contributions and Matching Contributions (and, if
applicable, Qualified Matching Contributions) for that Plan Year by his
Compensation for that Plan Year, subject to any special rules set forth in
applicable Treasury regulations.
8.10 Correction Under Section 401(m) Test. In the event that the
Highly Compensated Group Contribution Percentage for any Plan Year does not
initially satisfy one of the tests referred to in subsection 8.9, the Committee
shall direct the Trustee to distribute to the Highly Compensated Participants to
whose Accounts Excess Aggregate Contributions (as defined below) were allocated
for such year, the amount of each such Participant's Excess Aggregate
Contributions, with any gains or losses allocable thereto for that Plan Year.
The "Excess Aggregate Contributions" for any Plan Year shall mean the excess of
the aggregate amount of After-Tax and Matching Contributions taken into account
in computing the Contribution Percentages of Highly Compensated Participants for
such year over the maximum amount of
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After-Tax Contributions and Matching Contributions permitted under the test set
forth in subsection 8.9, determined by reducing the amount of such contributions
made on behalf of Highly Compensated Participants in order of the dollar amounts
of such contributions, beginning with the highest of such dollar amounts, in
accordance with applicable Treasury regulations and notices. Excess Aggregate
Contributions shall include, first, any unmatched After-Tax Contributions, then
(if necessary) a proportionate share of matched After-Tax Contributions and the
Matching Contributions allocable thereto, and last, any remaining Matching
Contributions. The gain or loss allocable to Excess Aggregate Contributions
shall be determined in accordance with any reasonable method adopted by the
Committee for that Plan Year that either (i) conforms to the accounting
provisions of Section 7 and is consistently applied to making corrective
distributions under this subsection 8.10 and subsections 8.6, 8.8 and 8.11 to
all affected Participants or (ii) satisfies any alternative method set forth in
applicable Treasury regulations. Notwithstanding the foregoing provisions of
this subsection 8.10, any Matching Contributions distributable as Excess
Aggregate Contributions that are not yet vested in accordance with subsection
9.1 or are attributable to excess Before-Tax or After-Tax Contributions
distributed in accordance with subsections 8.4, 8.6 or 8.8 or this subsection
8.10 shall be forfeited as of the end of the Plan Year to which such corrective
distributions relate (and treated in the same manner as any other forfeiture
under the Plan). The Committee shall make any necessary distribution no later
than the close of the Plan Year following the Plan Year in which such Excess
Aggregate Contributions were contributed.
8.11 Multiple Use of Alternative Limitation. Notwithstanding any other
provision of this Section 8, if the 1.25 factors referred to in subsections 8.7
and 8.9 are both exceeded for a Plan Year, the leveling method of correction
prescribed in subsection 8.10 shall be continued until the aggregate limit set
forth in Treas. Reg. Section 1.401(m)-2(b) is satisfied for such Plan Year.
8.12 Highly Compensated. An employee or Participant shall be "Highly
Compensated" for any Plan Year if:
(a) during that Plan Year or the preceding Plan Year, he was at any
time a 5 percent owner of an Employer or a Related Company; or
(b) during the preceding Plan Year he received Compensation in excess
of $80,000 (indexed for cost-of-living adjustments under section
415(d) of the Code).
8.13 Separate Testing of Early Eligible Group. Notwithstanding the
foregoing provisions of this Section 8, for any Plan Year the Committee may
elect, in accordance with applicable Treasury regulations, to apply the tests
set forth in subsections 8.7 and 8.9 separately with respect to all eligible
employees who would not have been eligible to participate in the Plan for that
Plan Year had the Plan utilized the maximum age and service requirements for
eligibility permitted by the Code.
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SECTION 9
Vesting Service, Vesting and Termination Dates
9.1 Determination of Vesting Service and Vested Interest. A
Participant at all times shall have a fully vested, nonforfeitable interest in
his Before-Tax Account, After-Tax Account, Qualified Matching Account, Rollover
Account and QVEC Account. A Participant shall become vested in his Matching
Account in accordance with the following schedule:
Completed Years of Service Percent Vested
-------------------------- --------------
Less than 2 0%
2 25%
3 50%
4 75%
5 100%
For purposes of this subsection 9.1, a Participant's "Years of Service" will be
computed in accordance with paragraph 3.1(a) and subsection 3.4 regardless of
whether he is a full-time employee or a part-time or seasonal employee, provided
that no part-time or seasonal employee shall have fewer Years of Service for
purposes of this subsection 9.1 as of December 31, 1993 than he would have had
under the method of computing vesting service applicable to him under the terms
of the Plan as in effect on December 31, 1992.
Notwithstanding the foregoing provisions of this subsection 9.1, if an employee
or Participant terminates employment with the Employers and Related Companies
when he does not have a vested right to any portion of his Matching Account
under this subsection 9.1, and if the number of his consecutive One Year Breaks
in Service (as defined in subsection 3.3) equals or exceeds the greater of five
(5) or the aggregate number of his Years of Service prior to the first such One
Year Break in Service, then his Years of Service prior to such break shall be
erased and, if he is later employed or reemployed by an Employer or a Related
Company, he shall be considered a new employee for purposes of this subsection
9.1.
9.2 Accelerated Vesting. Notwithstanding the foregoing provisions of
this Section 9, a Participant shall have a fully vested, nonforfeitable interest
in all his Accounts when he attains age 65, dies or becomes permanently and
totally disabled while employed by an Employer or a Related Company. A
Participant who was a participant in one of the GF Plans (as defined in
subsection 10.4) shall be fully vested upon his retirement at or after
attainment of age 55. In addition, in the event of the Plan's termination (in
accordance with subsection 14.2) or partial termination (as determined under
applicable law and regulations) or the complete discontinuance of Employer
contributions to the Plan, each affected Participant shall be fully vested in
all his Accounts. For purposes of this subsection 9.2, a Participant will be
considered "permanently and totally disabled" if, on account of physical or
mental disability, he no longer is capable of engaging in any occupation or
employment whatsoever for remuneration or profit, such disability continues for
at least six (6) months, and it is demonstrated to the satisfaction of the
Committee that such disability will be permanent and continuous for the
remainder of his life. The Committee in its discretion may also determine that
the Accounts of Participants affected by
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a divestiture, plant closing or termination of an operation shall be fully
vested, even though such event does not constitute a partial termination.
9.3 Termination Date. If a Participant is terminated for any reason,
his "Termination Date" generally will be the last day for which he is paid wages
or salary for services performed for an Employer, unless he is terminated while
on an unpaid leave of absence, in which case his Termination Date will be the
day as of which he is notified of his termination or resigns (whichever is
applicable).
9.4 Distribution of Before-Tax Account Only Upon Separation From
Service. Notwithstanding any other provision of the Plan to the contrary, a
Participant may not commence distribution of the portion of his Account
attributable to his Before-Tax Contributions prior to the date he attains age
59-1/2, even though his employment with the Employers and Related Companies has
terminated and he is otherwise eligible for a distribution under Section 11,
unless or until he also has a "separation from service" within the meaning of
section 401(k)(2)(B) of the Code. The foregoing restriction shall not apply,
however, if the Participant's termination of employment occurs in connection
with the sale by an Employer or a Related Company to an unrelated corporation of
at least 85% of the assets of a trade or business or the disposition of its
interest in a subsidiary to an unrelated entity that meets the requirements for
distribution under applicable Treasury regulations.
SECTION 10
Loans and Withdrawals of Contributions While Employed
10.1 Loans to Participants. The Committee, upon request by a
Participant who is an employee of an Employer or a Related Company (excluding
any employee on layoff or a leave of absence without pay) or who is a "party in
interest" with respect to the Plan (as such term is defined in section 3(14) of
ERISA) may authorize a loan to be made to the Participant from his vested
interest in the Trust Fund, subject to the following:
(a) The minimum loan amount is $1,000. No loan shall be made to a
Participant if, immediately after such loan, the sum of the
outstanding balances (including principal and interest) of all
loans made to him under this Plan and under any other qualified
retirement plans maintained by the Related Companies would exceed
the lesser of:
(i) $50,000, reduced by the excess, if any, of:
(A) the highest outstanding balance of all loans to
the Participant from the plans during the
one-year period ending on the day immediately
before the date on which the loan is made; over
(B) the outstanding balance of loans from the plans
to the Participant on the date on which such
loan is made; or
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(ii) the combined values of the Participant's After-Tax,
Before-Tax and Rollover Accounts;
and no loan shall be made to a Participant from the Plan in an
amount that would exceed one-half of the total vested balance of
the Participant's Accounts under the Plan as of the date the loan
is made. Notwithstanding the foregoing, if the amount described
in clause (iii) above declines because of investment losses
between the date the loan is requested and the Accounting Date as
of which it is made, the difference may be taken from the vested
portion of his Matching Account (so long as the loan does not
exceed one-half of the total vested balance of his Accounts).
(b) Each loan to a Participant shall be charged against the
Participant's Accounts in the order and manner determined by the
Committee, and shall be charged pro rata against each Investment
Fund in which such Accounts are invested.
(c) Each loan shall be evidenced by a written note providing for:
(i) a repayment period of 12 through 60 months,
inclusive;
(ii) a reasonable rate of interest (as determined below);
(iii) substantially equal payments of principal and
interest over the term of the loan no less frequently
than quarterly; and
(iv) such other terms and conditions as the Committee
shall determine.
The interest rate shall provide the Plan with a return
commensurate with the interest rates charged by persons in the
business of lending money for loans which would be made under
similar circumstances and shall be a fixed rate for the life of
the loan. The interest rate which applies to a loan shall be the
rate in effect on the date that the loan application is made by
the Participant.
(d) A loan shall be the borrowing Participant's individual
investment within the Loan Account.
(e) Payments of principal and interest to the Trustee with respect
to any loan to a Participant:
(i) shall reduce the outstanding balance with respect to
that loan;
(ii) shall reduce the balance of the Loan Account holding
the promissory note reflecting that loan;
(iii) shall be credited to the Participant's Accounts in
the reverse order in which they were charged; and
(iv) shall be invested in the Investment Funds in
accordance with his current investment directions
with respect to such Accounts.
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(f) A Participant's obligation to repay a loan (or loans) from
the Plan shall be secured by the Participant's vested interest in
the Plan. The note evidencing the loan, the security agreement
and the payroll deduction authorization shall each be executed by
the Participant by entry of his PIN into the Access System.
Endorsement of the loan check shall constitute the Participant's
affirmation of the note, security agreement and payroll deduction
authorization set forth in the written confirmation sent to the
Participant after he made his loan request.
(g) Generally, loan repayments will be made by automatic payroll
deductions. However, during any period when payroll deduction is
not possible or is not permitted under applicable law, repayment
will be made by check or money order and shall be sent to the
Plan's service center.
(h) The loan may be prepaid in full, without penalty, at any time
after it has been outstanding for 12 months.
(i) Effective January 1, 1999, any loan to a Participant shall
become immediately due and payable without notice of any kind
upon his termination of employment with the Employers and Related
Companies or permanent and total disability. Notwithstanding any
other provision of the Plan to the contrary, if the outstanding
balance of principal and interest on any loan is not paid within
the grace period established by the Committee for a delinquent
payment (not later than the end of the calendar quarter following
the quarter in which it is due) or within 90 days after
acceleration in accordance with the preceding sentence, a default
shall occur and the Trustee shall apply all or a portion of the
Participant's vested interest in the Plan in satisfaction of such
outstanding obligation, but only to the extent such vested
interest (or portion thereof) is then distributable under
applicable provisions of the Code. If necessary to satisfy the
entire outstanding obligation, such application of the
Participant's vested interest may be executed in a series of
actions as amounts credited to the Participant's Accounts become
distributable. Any partial payments shall be applied first to the
payment of accrued interest and thereafter to the payment of
outstanding principal.
(j) If distribution is to be made to a Beneficiary in accordance
with subsection 11.2, any outstanding promissory note of the
Participant shall be canceled and the unpaid balance of the loan,
together with any accrued interest thereon, shall be treated as a
distribution to or on behalf of the Participant immediately prior
to commencement of distribution to the Beneficiary.
(k) The Committee shall establish uniform procedures for applying
for a loan, evaluating loan applications, and setting reasonable
rates of interest, which shall be communicated to Participants in
writing. A Participant may have only one loan outstanding at any
time, and any prior loan must be repaid and credited to a
Participant's Accounts before the Participant may apply for a new
loan.
10.2 Withdrawals During Employment. Subject to the provisions of
paragraph 10.3(c), a Participant whose Termination Date has not yet occurred and
who incurs a Hardship (as
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defined in subsection 10.3) may elect to withdraw all or part of his interest in
his Accounts, as provided and in the order set forth below:
(a) up to 100% of his After-Tax Account, and the earnings thereon, in
the following order:
(i) first, from the After-Tax Contributions (excluding any
earnings thereon) made by the Participant prior to January
1, 1987; and
(ii) then, from the balance of his After-Tax Account;
(b) up to 100% of his Rollover Account;
(c) up to 100% of the Before-Tax Contributions credited to his
Before-Tax Account and any earnings credited to such account as
of December 31, 1988; and
(d) up to 100% of his QVEC Account.
Any such Hardship withdrawal is subject to a minimum amount of $500. A
Participant who does not have at least $500 in the Accounts listed above is
ineligible for a Hardship withdrawal. Once a Participant attains age 59 1/2 he
may withdraw all or any portion of his entire vested Account balance regardless
of whether he has a Hardship.
10.3 Determination of Hardship. A withdrawal will not be considered to
be made on account of "Hardship" unless the following requirements are met:
(a) The withdrawal is requested because of an immediate and heavy
financial need of the Participant, and will be so deemed if the
Participant represents that the withdrawal is made on account of:
(i) uninsured expenses for medical care described in section
213(d) of the Code incurred by the Participant, the
Participant's spouse or any dependent of the Participant
(as defined in section 152 of the Code) or necessary for
such persons to obtain such medical care;
(ii) the purchase (excluding mortgage payments) of a principal
residence of the Participant;
(iii) payment of tuition and related educational fees for the
next 12 months of post-secondary education for the
Participant, or his spouse, children or dependents;
(iv) the need to prevent the eviction of the Participant from
his principal residence or foreclosure on the mortgage of
the Participant's principal residence;
(v) funeral expenses of a family member, past due taxes, past
due child support, other past due obligations, cash
settlements due in a divorce, the
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cost of repairs to the Participant's home as a result
of major damage or to a major appliance, or repairs
to or purchase of a car needed to commute to work; or
(vi) any other circumstances of immediate and heavy
financial need identified as such in revenue rulings,
notices or other documents of the Internal Revenue
Service of general applicability or other unusual or
unexpected expenses meeting such criteria as are
determined by the Committee to constitute an
immediate and heavy financial need.
(b) The withdrawal must also be necessary to satisfy an immediate
and heavy financial need of the Participant. It will be
considered necessary if the Committee determines that the amount
of the withdrawal does not exceed the amount required to relieve
the financial need (taking into account any applicable income or
penalty taxes resulting from the withdrawal) and if the need
cannot be satisfied from other resources that are reasonably
available to the Participant. In making this determination, the
Committee may reasonably rely on the Participant's written
representation that the need cannot be relieved:
(i) through reimbursement or compensation by insurance or
otherwise;
(ii) by reasonable liquidation of the Participant's assets,
to the extent such liquidation would not itself give
rise to an immediate and heavy financial need;
(iii) by ceasing to make Before-Tax or After-Tax Contributions
to the Plan (or any other plan of the Employer
permitting deferral of compensation); or
(iv) by a loan pursuant to subsection 10.1 or by borrowing
from commercial sources on reasonable commercial terms.
(c) The withdrawal must be made pursuant to a written request to
the Committee, which request shall include any representation
required by this subsection 10.3 and adequate proof thereof, as
determined by the Committee in its sole discretion.
10.4 Withdrawals From General Foods Account Balances During
Employment. A Participant whose Termination Date has not yet occurred and whose
Accounts include monies transferred to the Plan from either the General Foods
Employee Thrift-Investment Plan or the General Foods Employee Thrift-Investment
Plan for Salaried Employees (the "GF Plans") may withdraw the portion of his
After-Tax Account attributable to after-tax contributions and the earnings
thereon credited to the GF Plans immediately prior to such transfer, and, if he
has been a participant in the GF Plan and the Plan together for at least 5
years, the portion of his Matching Account attributable to matching
contributions and the earnings thereon credited to the GF Plans immediately
prior to such transfer. Until November 1, 1999, any such withdrawal is subject
to a minimum amount of $500 or the total amount that may be withdrawn pursuant
to this subsection 10.4, whichever is less. A Participant who is eligible to
make a withdrawal under this subsection 10.4 must withdraw the full amount
available to him before he makes a Hardship withdrawal under subsection 10.2.
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10.5 Form of Withdrawals. All loan proceeds shall be paid in cash.
Withdrawals from the Philip Morris Stock Fund shall be made in cash, except to
the extent the Participant elects to receive whole shares of Common Stock, and
from the other Investment Funds shall be made in cash. Hardship withdrawals
shall be made solely in cash.
SECTION 11
Distributions
11.1 Distributions to Participants After Termination of Employment.
If a Participant's Termination Date occurs (for a reason other than his death),
the vested portions of his Accounts shall be distributed in accordance with the
following provisions of this subsection 11.1, subject to the rules of
subsections 11.4 and 9.3:
(a) Effective January 1, 1998 if the value of the vested portions of
the Participant's Accounts (including any loans outstanding on
his Termination Date) does not exceed $5,000 or such larger
amount as may be permitted for involuntary cash-outs under
applicable provisions of the Code (and for determinations made
prior to September 1, 1999 did not exceed such amount at the
time of any earlier withdrawal), determined as of the Accounting
Date coincident with or next following his Termination Date,
such vested portions, less any outstanding loan balance
distributable in accordance with subsection 10.1(i), shall be
distributed to him approximately 90 days following notification,
in a lump sum payment.
(b) If the value of the vested portions of the Participant's
Accounts (including any loans outstanding on his Termination
Date) exceeds the cash-out limit described in paragraph (a)
above, determined as of the Accounting Date coincident with or
next following his Termination Date, such vested portions, less
any outstanding loan balance distributable in accordance with
subsection 10.1(i), shall be distributed (or shall begin to be
distributed) to the Participant on (or as soon as practicable
after) the Distribution Date (as defined in paragraph (c) below)
he elects, by one of the following methods chosen by the
Participant:
(i) by payment in a lump sum; or
(ii) by payment in a series of monthly, quarterly, semi-annual
or annual installments for a period selected by the
Participant that complies with subsection 11.5 (the
amount of each installment as of each applicable
Accounting Date shall be equal to the product of the
Participant's then Account balances multiplied by a
fraction, the numerator of which is one and the
denominator of which is the difference between the number
of installments selected and the number of installments
previously paid); provided, however, that a Participant
may elect payments in the form of a fixed amount option
under which the Participant will receive a specified
dollar amount payable at specified intervals (monthly,
quarterly, semiannually or annually) until his account is
completely liquidated, and a
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Participant may elect to change the fixed amount
(without shortening or lengthening the payout period
or changing the frequency of the payments) subject to
uniform rules established by the Committee; and
provided further that the Participant may elect to
accelerate any installment payments and to have his
remaining vested Account balance distributed to him
in a lump sum payment as soon as practicable after
the Accounting Date coincident with or next following
the date his acceleration election is submitted to
the Committee; or
(iii) by purchase from an insurance company and
distribution to him of an annuity contract providing
for periodic distributions to him for his life (with
or without a period certain) or to him and his
Beneficiary for their joint lives, subject to the
provisions of subsection 11.3.
(c) A Participant's "Distribution Date" shall mean the Accounting
Date as of which a payment in any form is made to him pursuant to
this Section 11, without regard to any reasonable administrative
delay; provided, however, that in the event of an election of an
annuity under clause (b)(iii) above, the Distribution Date shall
be no later than the date payment is irrevocably made on behalf
of the Participant to the insurance company issuing the annuity
contract. A Participant may elect that his Distribution Date
occur as of any Accounting Date occurring on or after his
Termination Date (but not later than the date on which he attains
age 70 1/2), provided that no election of a Distribution Date
will be valid if it is made more than 90 days prior to such date.
(d) Notwithstanding the foregoing provisions of this subsection
11.1, a Participant with an Account balance of at least $1,000
above the limit for involuntary cash outs under paragraph (a)
above may elect one partial lump sum payment of any portion of
such balance (but not less than $1,000). Any such election may be
made at any time after his Termination Date, provided his
Distribution Date with respect to a distribution under paragraph
(b) has not yet occurred. Any such partial lump sum distribution
shall be charged against his Accounts and his interests in the
Investment Funds in such order and proportion as the Committee
shall determine in accordance with uniform rules it establishes.
If a partial lump sum distribution is taken after calculated
installment payments have commenced pursuant to subparagraph
(b)(ii) above, the amount of the remaining installments will be
reduced proportionately to reflect such lump sum payment.
11.2 Distributions to Beneficiaries. Subject to subsection 11.5, the
following rules shall apply if a Participant dies while any vested portion of
his Accounts remains undistributed:
(a) If the Participant dies before benefit payments to him have
commenced, the vested balance of his Accounts, less any
outstanding loan balance distributable in accordance with
paragraph 10.1(j), shall be distributed as follows:
(i) If the value of the vested portion of the Participant's
Accounts (less the outstanding loan balance) does not
exceed $5,000 (or such larger amount
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as may be permitted for involuntary cash-outs under
applicable provisions of the Code), determined as of the
Accounting Date coincident with or next following his date
of death, or, effective September 1, 1999, if the
Beneficiary is not the Participant's surviving spouse,
such vested portion (less the outstanding loan balance)
shall be distributed to his Beneficiary as soon as
practicable after the Accounting Date following the date
of his death, in a lump sum payment.
(ii) If the value of the vested portion of the Participant's
Accounts (less the outstanding loan balance) exceeds
$5,000 (or such larger amount as may be permitted for
involuntary cash-outs under applicable provisions of the
Code), determined as of the Accounting Date coincident
with or next following his date of death, and effective
September 1, 1999 the Beneficiary is the Participant's
spouse, such vested portion (less the outstanding loan
balance) shall be distributed to his Beneficiary as of any
Accounting Date following the date of his death selected
by the Beneficiary (in accordance with subsection 11.5),
in one of the methods described at paragraph 11.1(b) as
chosen by the Beneficiary.
(b) If a Participant dies after benefit payments to him have
commenced, the vested balance, if any, of his Accounts shall
continue to be distributed to his Beneficiary in accordance with
the method of distribution selected by the Participant; provided,
however, that the Beneficiary may elect to accelerate the
payments and to have such remaining vested balances distributed
in a lump sum payment as soon as practicable after the Accounting
Date next following the date the Beneficiary's acceleration
election is filed with the Committee.
11.3 Special Rules Governing Annuity Elections. If a married
Participant elects distribution in the form of an annuity pursuant to clause
11.1(b)(iii), the following rules shall apply and shall supersede any other
provision of the Plan to the contrary:
(a) The vested portions of the Participant's Accounts, less any
outstanding loan balance distributable in accordance with
paragraph 10.1(i), shall be used to purchase a nontransferable
"Joint and Survivor Annuity" (that is, an annuity payable for the
life of the Participant with a survivor annuity payable for the
life of his spouse which is not less than 50% of the amount of
the annuity payable during the joint lives of the Participant and
spouse), unless he elects another form of annuity and, if
applicable, a Beneficiary other than his spouse, with the consent
of his spouse to such form and Beneficiary, during the 90-day
period immediately preceding his Distribution Date, which
Distribution Date shall be no earlier than 30 days after his
receipt of a written explanation from the Committee of the terms
and conditions of the Joint and Survivor Annuity and the effect
of an election of a different annuity form.
(b) No consent by the spouse to the election of a form of annuity
other than the Joint and Survivor Annuity and, if applicable,
Beneficiary other than the spouse shall be effective unless it is
in writing, acknowledges the effect of such consent and is
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witnessed by a Plan representative or a notary public (unless
the Committee determines that there is no spouse, that the
spouse cannot be located, that the Participant and his spouse
are legally separated, that the Participant has been abandoned
(under applicable state law) and the Participant has a court
order to that effect, or that consent may be waived because of
such other circumstances as regulations or rulings under Code
section 417 set forth).
(c) During the period between his election of an annuity and his
Distribution Date, no loan may be made to a Participant pursuant
to subsection 10.1, no amount may be withdrawn by the
Participant pursuant to subsection 10.2 or 10.4 and no amount
may be distributed to the Participant pursuant to subsection
11.1, in any form other than a Joint and Survivor Annuity,
without the written consent of the spouse as provided in
paragraph (b) of this subsection 11.3.
(d) Subject to paragraph (e) below, if the Participant dies during
the period between his election of an annuity and his
Distribution Date, the vested portions of his Accounts (less any
amounts credited to the Loan Fund, which shall be distributed in
accordance with paragraph 10.1(j)) shall be paid to his spouse
in the form of a life annuity as of the Accounting Date next
following the date the Participant would have attained age 65
or, if the spouse so elects, as soon as practicable after any
earlier Accounting Date next following his death; provided,
however, that a spouse to whom payment is due under this
paragraph (d) may elect to have such vested portions, if any,
distributed in the form of a lump sum payment.
(e) The provisions of paragraph (d) above shall not apply, and
distribution upon the death of the Participant shall be made in
accordance with subsection 11.2, if the spouse consents to the
designation of a Beneficiary other than the spouse in accordance
with subsection 11.6 during the period between the Participant's
election of an annuity and his death, and acknowledges that such
consent to the Participant's designation of such Beneficiary
constitutes the spouse's consent to the Participant's waiver of
a qualified preretirement survivor annuity payable to the spouse
in accordance with section 417 of the Code.
(f) A Participant may revoke his election pursuant to this
subsection 11.3, and may make a new election of any form of
distribution permitted under paragraph 11.1(b), at any time
during the 90-day period immediately preceding his Distribution
Date; provided, however, that if the effect of such revocation
is to select a distribution form other than a Joint and Survivor
Annuity, it shall be ineffective without the written consent of
his spouse in accordance with paragraph (b) of this subsection
11.3 to the new form of distribution and, if applicable, a
Beneficiary other than the spouse.
11.4 Forfeitures and Restorations of Non-Vested Contributions. If a
Termination Date occurs with respect to a Participant who is not fully vested in
his Accounts (as determined under Section 9), the following rules shall apply:
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(a) The non-vested portion of his Accounts shall be forfeited as of
the earlier of the date as of which the vested portion of his
Accounts is distributed to him or the date the Participant incurs
five consecutive One Year Breaks in Service.
(b) If a forfeiture occurs due to the distribution of the vested
portion of the Participant's Accounts, and the Participant is
reemployed by an Employer or a Related Company before he incurs
five consecutive One Year Breaks in Service, the Matching
Contributions and earnings thereon forfeited under paragraph (a)
above shall be restored, with adjustment for earnings under the
Interest Income Fund, as soon as practicable after his
reemployment.
(c) If a forfeiture occurs due to the distribution of the vested
portion of the Participant's Accounts, and the Participant is
reemployed by an Employer or Related Company after he incurs five
consecutive One Year Breaks in Service, such reemployment shall
have no effect on the forfeiture under paragraph (a) above.
(d) The restoration referred to in paragraph (b) above shall be made
first from current forfeitures, if any, under the Plan and then,
if necessary, from a special Employer contribution to the Plan.
(e) A restoration pursuant to paragraph (b) above shall not be
considered an annual addition for purposes of subsection 8.3.
(f) If a Participant who is reemployed by an Employer or Related
Company prior to incurring five consecutive One Year Breaks in
Service received a distribution of the vested portion of his
Matching Account, the amount restored under paragraph (b) above
shall be maintained in a separate subaccount within the
Participant's Matching Account and his vested interest in each
subaccount shall be determined in accordance with the rules set
forth in Treasury regulation Section 1.411(a)-7(d)(5)(iii)(A).
(g) During the period between the Participant's Termination Date and
the date he is either reemployed by an Employer or Related
Company or the date the non-vested portion of his Matching
Account is forfeited such non-vested portion shall be credited to
a forfeiture subaccount and invested in the Interest Income Fund.
(h) All forfeitures under this subsection 11.4 shall be used to
reduce Matching Contributions under Section 5, except to the
extent needed to restore prior forfeitures under paragraph (b)
above.
11.5 Limits on Commencement and Duration of Distributions. The
following distribution rules shall be applied in accordance with sections
401(a)(9) and 401(a)(14) of the Code and applicable regulations thereunder,
including the minimum distribution incidental benefit requirement of Treas. Reg.
Section 1.401(a)(9)-2, and shall supersede any other provision of the Plan to
the contrary:
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(a) Unless the Participant elects otherwise, in no event shall
distribution commence later than 60 days after the close of
the Plan Year in which the latest of the following events
occurs: the Participant's attainment of age 65; the 10th
anniversary of the year in which the Participant began
participating in the Plan; or the Participant's Termination
Date. The failure of a Participant to consent to a
distribution is deemed to be an election to defer commencement
of payment for purposes of the preceding sentence.
(b) Notwithstanding any other provision herein to the contrary, in
the case of a Participant who has not incurred a Termination
Date, distribution of his Accounts shall commence to be made
to him (or on his behalf) in the form of a lump sum
distribution or, if elected by the Participant, in any other
form permitted by paragraph 11.1(b), on or before his Required
Beginning Date (as defined below) and each December 31
thereafter. (In the event an annuity or lump sum has been
elected, each additional payment shall consist of a lump sum
payment of all amounts then credited to his Accounts.)
Effective January 1, 1999 a Participant's "Required Beginning
Date" shall mean the April 1 of the calendar year following
the calendar year in which the later of the following events
occurs: he attains age 70 1/2 or he terminates employment with
the Employers and related Companies, except that the latter
shall not apply to a 5% owner.
(c) Distribution payments shall be made over the life of the
Participant or, if the Participant provides accurate and
timely Beneficiary information, over the lives of such
Participant and his Beneficiary (or over a period not
extending beyond the life expectancy of such Participant or
the life expectancy of such Participant and his Beneficiary).
(d) If a Participant dies after distribution of his vested
interest in the Plan has begun, the remaining portion of such
vested interest, if any, shall be distributed to his
Beneficiary at least as rapidly as under the method of
distribution used prior to the Participant's death.
(e) If a Participant dies before distribution of his vested
interest in the Plan has begun, distribution of such vested
interest to his Beneficiary shall be completed by December 31
of the calendar year in which the fifth anniversary of the
Participant's death occurs; provided, however, that this
five-year rule shall not apply to a natural person designated
as Beneficiary by the Participant or under the specific terms
of the Plan, if
(i) such vested interest will be distributed over the
life of such designated Beneficiary (or over a period
not extending beyond the life expectancy of such
Beneficiary), and
(ii) such distribution to the Beneficiary begins not later
than December 31 of the calendar year following the
calendar year in which the Participant died or, if
such Beneficiary is the Participant's surviving
spouse, not later than
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December 31 of the calendar year following the
calendar year in which the Participant would have
attained age 70 1/2.
(f) If the Participant's surviving spouse is his Beneficiary and
such spouse dies before the distributions to such spouse begins,
paragraph (e) shall be applied as if the surviving spouse were
the Participant.
(g) For purposes of paragraph (d) and (e), distribution of a
Participant's vested interest in the Plan is considered to begin
on his Required Beginning Date; provided, however, that
distribution irrevocably begun in the form of an annuity shall
be considered to begin on the date it actually commences.
(h) For purposes of this subsection 11.5, the life expectancy of a
Participant and/or a Beneficiary will be determined in
accordance with Tables V and VI of Treas. Reg. Section 1.72-9
(provided that the Participant gives the Committee or its
delegate accurate and timely Beneficiary information), and will
not be recalculated.
11.6 Beneficiary Designations. The term "Beneficiary" shall mean the
Participant's surviving spouse. However, if the Participant is not married, or
if the Participant is married but his spouse consents (as provided below) to the
designation of a person other than the spouse, the term Beneficiary shall mean
such person or persons as the Participant designates to receive the vested
portions of his Accounts upon his death. Such designation may be made, revoked
or changed (without the consent of any previously-designated Beneficiary except
his spouse) only by an instrument signed by the Participant and filed with the
Committee prior to his death. A spouse's consent to the designation of a
Beneficiary other than the spouse shall be in writing, shall acknowledge the
effect of such designation, shall be witnessed by a Plan representative or a
notary public and shall be effective only with respect to such consenting
spouse. In default of such designation, or at any time when there is no
surviving spouse and no surviving Beneficiary designated by the Participant, his
Beneficiary shall be his surviving children (in equal shares) or, if he has no
children, the estate of the last to die of the Participant or his designated
Beneficiary. For purposes of the Plan, "spouse" means the person to whom the
Participant is legally married at the relevant time. Notwithstanding the
foregoing provisions of this subsection 11.6, no spousal consent to the
designation of a person other than, or in addition to, the spouse as Beneficiary
shall be required if (i) the Participant and his spouse are legally separated or
the Participant has been abandoned (under applicable state law) and the
Participant has a court order to that effect or (ii) it is established to the
satisfaction of the Committee that the spouse's consent cannot be obtained
because there is no spouse, because the spouse cannot be located or because of
such other circumstances as may be prescribed in applicable Treasury
regulations.
11.7 Form of Payment. Distributions from the Philip Morris Stock Fund
shall be made in cash, except to the extent the Participant or Beneficiary
elects to receive whole shares of Common Stock. Distributions from the other
Investment Funds shall be made in cash.
11.8 Facility of Payment. Notwithstanding the provisions of
subsections 11.1 and 11.2, if, in the Committee's opinion, a Participant or
other person entitled to benefits under the Plan is under a legal disability or
is in any way incapacitated so as to be unable to manage his financial affairs,
the Committee may direct the Trustee to make payment to a relative or friend of
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such person for his benefit until claim is made by a conservator or other person
legally charged with the care of his person or his estate. Thereafter, any
benefits under the Plan to which such Participant or other person is entitled
shall be paid to such conservator or other person legally charged with the care
of his person or his estate.
11.9 Interests Not Transferable. The interests of Participants and
other persons entitled to benefits under the Plan are not subject to the claims
of their creditors and may not be voluntarily or involuntarily assigned,
alienated or encumbered, except in the case of qualified domestic relations
orders that relate to the provision of child support, alimony or marital rights
of a spouse, child or other dependent and which meet such other requirements as
may be imposed by section 414(p) of the Code or regulations issued thereunder.
Notwithstanding any other provision of the Plan to the contrary, distribution of
the entire portion of the Account balance of a Participant awarded to his
alternate payee may be made in a lump sum payment, as soon as practicable after
the Committee determines that such order is qualified, without regard to whether
the Participant would himself be entitled under the terms of the Plan to
withdraw or receive a distribution of such amount at that time, but only if the
terms of the order provide for such immediate distribution either specifically
or by general reference to any manner of distribution permitted under the Plan.
11.10 Absence of Guaranty. None of the Committee, the Trustee, or the
Employers in any way guarantee the assets of the Plan from loss or depreciation.
The Employers do not guarantee any payment to any person. The liability of the
Trustee to make any payment is limited to the available assets of the Plan held
under the Trust.
11.11 Missing Participants or Beneficiaries. Each Participant and
each designated Beneficiary must file with the Committee from time to time in
writing his post office address and each change of post office address. Any
communication, statement or notice addressed to a Participant or designated
Beneficiary at his last post office address filed with the Committee, or, in the
case of a Participant, if no address is filed with the Committee, then at his
last post office address as shown on the Employers' records, will be binding on
the Participant and his designated Beneficiary for all purposes of the Plan.
None of the Committee, the Employers, or the Trustee will be required to search
for or locate a Participant or designated Beneficiary.
11.12 Direct Rollover Option. In accordance with uniform rules
established by the Committee, each Participant, surviving spouse of a
Participant or alternate payee under a qualified domestic relations order within
the meaning of section 414(p) of the Code who is due to receive an eligible
rollover distribution from the Plan may direct the Committee to transfer all or
a portion of such distribution directly to another eligible retirement plan. For
purposes of this subsection, the terms "eligible rollover distribution" and
"eligible retirement plan" as applied to any such individual shall have the
meaning accorded such terms under section 401(a)(31) of the Code (or any
successor provision thereto) and applicable Treasury regulations and notices
thereunder.
11.13 Distributions on Account of Permanent and Total Disability. For
purposes of this Section 11, a Participant will be considered to have terminated
employment and will be entitled to a distribution of his vested Account balances
when he is eligible for long term disability
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benefits under a disability plan sponsored by an Employer and determined by the
Committee to be permanently and totally disabled (as defined in subsection 9.2).
SECTION 12
No Reversion to Employers
No part of the corpus or income of the Trust shall revert to the
Employers or be used for, or diverted to, purposes other than the exclusive
benefit of Participants and Beneficiaries, subject to the following:
(a) Employer contributions under the Plan are conditioned upon the
deductibility of the contributions under section 404 of the
Code, and, to the extent any such deduction is disallowed, the
Trustee shall, upon written request of the Employer, return
the amount of any contribution (to the extent disallowed),
reduced by the amount of any losses thereon, to the Employer
within one year after the date the deduction is disallowed.
(b) If a contribution or any portion thereof is made by an
Employer by a mistake of fact, the Trustee shall, upon written
request of that Employer, return the amount of such
contribution or portion, reduced by the amount of any losses
thereon, to that Employer within one year after the date of
payment.
(c) If, upon termination of the Plan, any amounts are held under
the Plan in a suspense account pursuant to Treas. Reg. Section
1.415-6(b)(6)(ii) and such amounts may not be credited to the
Accounts of Participants, such amount will be returned to the
Employers as soon as practicable after the termination of the
Plan.
SECTION 13
Administration
13.1 Committee Membership and Authority. The Committee referred to
in subsection 1.3 shall consist of one or more members appointed by the Company.
Except as otherwise specifically provided in this Section 13, the Committee
shall act by a majority of its then members, by meeting or by writing filed
without meeting, and shall have the following discretionary authority, powers,
rights and duties in addition to those vested in it elsewhere in the Plan or
Trust Agreement:
(a) to adopt such rules of procedure and regulations as, in its
opinion, may be necessary for the proper and efficient
administration of the Plan and as are consistent with the
provisions of the Plan;
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(b) to enforce the Plan in accordance with its terms and with such
applicable rules and regulations as may be adopted by the
Committee;
(c) to determine conclusively all questions arising under the
Plan, including the power to determine the eligibility of
employees and the rights of Participants and other persons
entitled to benefits under the Plan and their respective
benefits, to make factual findings and to remedy ambiguities,
inconsistencies or omissions of whatever kind;
(d) to maintain and keep adequate records concerning the Plan and
concerning its proceedings and acts in such form and detail as
the Committee may decide;
(e) to direct all payments of benefits under the Plan;
(f) to perform the functions of a "plan administrator", as defined
in section 414(g) of the Code, for all purposes of the Plan,
including for purposes of establishing and implementing
procedures to determine the qualified status of domestic
relations orders (in accordance with the requirements of
section 414(p) of the Code) and to administer distributions
under such qualified orders;
(g) to employ agents, attorneys, accountants or other persons (who
may also be employed by or represent the Employers) for such
purposes as the Committee considers necessary or desirable to
discharge its duties;
(h) to establish a claims procedure in accordance with section 503
of ERISA; and
(i) to furnish the Employers, the Investment Committee and the
Trustee with such information with respect to the Plan as may
be required by them for tax or other purposes.
The certificate of a majority of the members of the Committee that the Committee
has taken or authorized any action shall be conclusive in favor of any person
relying on the certificate.
13.2 Allocation and Delegation of Committee Responsibilities and
Powers. In exercising its authority to control and manage the operation and
administration of the Plan, the Committee may allocate all or any part of its
responsibilities and powers to any one or more of its members and may delegate
all or any part of its responsibilities and powers to any person or persons
selected by it. Any such allocation or delegation may be revoked at any time.
Any member or delegate exercising Committee responsibilities and powers under
this subsection shall periodically report to the Committee on its exercise
thereof and the discharge of such responsibilities.
13.3 Uniform Rules. In managing the Plan, the Committee shall
uniformly apply rules and regulations adopted by it to all persons similarly
situated.
13.4 Information to be Furnished to Committee. The Employers and
Related Companies shall furnish the Committee such data and information as may
be required for it to discharge its duties. The records of the Employers and
Related Companies as to an employee's
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43
or Participant's period of employment, termination of employment and the reason
therefor, leave of absence, reemployment and Compensation shall be conclusive on
all persons unless determined to be incorrect. Participants and other persons
entitled to benefits under the Plan must furnish to the Committee such evidence,
data or information as the Committee considers desirable to carry out the Plan.
13.5 Committee's Decision Final. Any interpretation of the Plan
and any decision on any matter within the discretion of the Committee made by
the Committee shall be binding on all persons. A misstatement or other mistake
of fact shall be corrected when it becomes known, and the Committee shall make
such adjustment on account thereof as it considers equitable and practicable.
13.6 Exercise of Committees' Duties. Notwithstanding any other
provisions of the Plan, the Committees shall discharge their duties hereunder
solely in the interests of the Participants and other persons entitled to
benefits under the Plan, and:
(a) for the exclusive purpose of providing benefits to Participants
and other persons entitled to benefits under the Plan; and
(b) with the care, skill, prudence and diligence under the
circumstances then prevailing that a prudent man acting in a
like capacity and familiar with such matters would use in the
conduct of an enterprise of a like character and with like aims.
13.7 Remuneration and Expenses. No remuneration shall be paid from
the Plan to a member of any of the Committees who is an employee of any Employer
or Related Company. Except as otherwise determined by the Committee, the
reasonable expenses of administering the Plan and the fees and expenses incurred
in connection with the collection, administration, management, investment,
protection and distribution of the Plan assets under the Trust shall be paid
directly by the Trust out of Plan assets or, if paid by one or more Employers,
reimbursed by the Trust to the maximum extent permitted by law.
13.8 Indemnification of the Committees. To the extent not
reimbursed by any applicable insurance policy, the Committees, the individual
members thereof and the secretary (if any) of each of the Committees shall be
indemnified by the Employers against any and all liabilities, losses, costs and
expenses (including legal fees and expenses) of whatsoever kind and nature which
may be imposed on, incurred by or asserted against any of them by reason of the
performance of the Committees' functions if the Committees or such members or
secretary did not act dishonestly or in willful violation of the law or
regulation under which such liability, loss, cost or expense arises.
13.9 Resignation or Removal of Committee Member. A Committee
member may resign at any time by giving ten days' advance written notice to the
Company, the Trustee and the other Committee members. The Company may remove a
Committee member by giving advance written notice to him and the other Committee
members.
13.10 Appointment of Successor Committee Members. The Company may
fill any vacancy in the membership of the Committee and shall give prompt
written notice thereof to the
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44
other Committee members. While there is a vacancy in the membership of the
Committee, the remaining Committee members shall have the same powers as the
full Committee until the vacancy is filled.
SECTION 14
Amendment and Termination
14.1 Amendment. While it is expected that the Plan will be continued,
either the Company or the Committee nevertheless may terminate the Plan or amend
it from time to time, except that no amendment will reduce a Participant's
interest in the Plan to less than an amount equal to the amount he would have
been entitled to receive if he had resigned from the employ of the Employers and
the Related Companies on the day of the amendment, and no amendment will
eliminate an optional form of benefit with respect to a Participant or
Beneficiary except as otherwise permitted by law.
14.2 Termination. The Plan will terminate as to all of the Employers
on any day specified by the Company upon advance written notice of the
termination given to the Employers. Employees of an Employer shall cease active
participation in the Plan (and will be treated as inactive Participants in
accordance with subsection 2.3) on the first to occur of the following:
(a) the date on which that Employer ceases to be a contributing
sponsor of the Plan, by appropriate action taken by the Company
or by such Employer;
(b) the date that Employer is judicially declared bankrupt or
insolvent; or
(c) the dissolution, merger, consolidation, reorganization or sale
of that Employer, or the sale of all or substantially all of the
assets of an Employer, except that, subject to the provisions of
subsection 14.3, with the consent of the Company or the
Committee, in any such event arrangements may be made whereby
the Plan will be continued by any successor to that Employer or
any purchaser of all or substantially all of that Employer's
assets, in which case the successor or purchaser will be
substituted for the Employer under the Plan.
14.3 Merger and Consolidation of the Plan, Transfer of Plan Assets.
The Committee in its discretion may direct the Trustee to transfer all or a
portion of the assets of this Plan to another defined contribution plan of the
Employers or Related Companies which is qualified under section 401(a) of the
Code or, in the event of the sale of stock of an Employer or all or a portion of
the assets of an Employer, to a qualified plan of an employer which is not a
Related Company, or to accept a transfer of assets and liabilities to this Plan
from another defined contribution plan that is qualified under section 401(a) of
the Code. In the case of any such merger, or transfer of assets and liabilities,
provision shall be made so that each affected Participant in the Plan on the
date thereof would receive a benefit immediately after the merger, or transfer
which is equal to the benefit he would have been entitled to receive immediately
prior to the merger, or transfer. The Committee may adopt such amendment or
Supplement to the
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45
Plan as may be necessary to preserve protected rights that may not be changed or
eliminated by reason of such transfer or merger under section 411 of the Code;
pending such amendment or adoption of such Supplement, the applicable provisions
of the merged or transferee plan describing such section 411 protected rights
shall be incorporated herein by reference.
14.4 Distribution on Termination and Partial Termination. Upon
termination or partial termination of the Plan, all benefits under the Plan
shall continue to be paid in accordance with Sections 10 and 11 as those
sections may be amended from time to time.
14.5 Notice of Amendment, Termination or Partial Termination.
Affected Participants will be notified of an amendment, termination or partial
termination of the Plan as required by law.
SECTION 15
Change of Control Provisions
15.1 Application. In the event of a Change of Control (as defined in
subsection 15.2), the provisions of this Section 15 shall apply, notwithstanding
any other provision in the Plan to the contrary.
15.2 Definition of Change of Control. For purposes of the Plan, a
"Change of Control" means the happening of any of the following events:
(a) The acquisition by any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act")) (a
"Person") of beneficial ownership (within the meaning of Rule
13d-3 promulgated under the Exchange Act) of 20% or more of
either (i) the then outstanding shares of common stock of Philip
Morris Companies Inc. (the "Parent") (such stock hereinafter
referred to as the "Outstanding Parent Common Stock") or (ii)
the combined voting power of the then outstanding voting
securities of the Parent entitled to vote generally in the
election of directors (the "Outstanding Parent Voting
Securities"); provided, however, that the following acquisitions
shall not constitute a Change of Control: (i) any acquisition
directly from the Parent, (ii) any acquisition by the Parent,
(iii) any acquisition by any employee benefit plan (or related
trust) sponsored or maintained by the Parent or any corporation
controlled by the Parent or (iv) any acquisition by any
corporation pursuant to a transaction described in clauses (i),
(ii) and (iii) of paragraph (c) of this subsection 15.2; or
(b) Individuals who, as of November 1, 1989, constitute the Board
of Directors of the Parent (the "Incumbent Board") cease for any
reason to constitute at least a majority of such Board;
provided, however, that any individual becoming a director
subsequent to November 1, 1989 whose election, or nomination for
election by the Parent's shareholders, was approved by a vote of
at least a majority of the directors then comprising the
Incumbent Board shall be
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46
considered as though such individual were a member of the
Incumbent Board, but excluding, for this purpose, any such
individual whose initial assumption of office occurs as a
result of an actual or threatened election contest with
respect to the election or removal of directors or other
actual or threatened solicitation of proxies or consents by or
on behalf of a Person other than the Incumbent Board; or
(c) Approval by the shareholders of the Parent of a
reorganization, merger, share exchange or consolidation (a
"Business Combination"), in each case, unless, following such
Business Combination, (i) all or substantially all of the
individuals and entities who were the beneficial owners,
respectively, of the Outstanding Parent Common Stock and
Outstanding Parent Voting Securities immediately prior to such
Business Combination beneficially own, directly or indirectly,
more than 80% of, respectively, the then Outstanding shares of
common stock and the combined voting power of the then
outstanding voting securities entitled to vote generally in
the election of directors, as the case may be, of the
corporation resulting from such Business Combination
(including, without limitation, a corporation which as a
result of such transaction owns the Parent through one or more
subsidiaries) in substantially the same proportions as their
ownership, immediately prior to such Business Combination, of
the Outstanding Parent Common Stock and Outstanding Parent
Voting Securities, as the case may be, (ii) no Person
(excluding any employee benefit plan (or related trust) of the
Parent or such corporation resulting from such Business
Combination) beneficially owns, directly or indirectly, 20% or
more of, respectively, the then outstanding shares of common
stock of the combined voting power of the then outstanding
voting securities of such corporation except to the extent
that such ownership existed prior to the Business Combination
and (iii) at least a majority of the members of the board of
directors of the corporation resulting from such Business
Combination were members of the Incumbent Board at the time of
the execution of the initial agreement, or of the action of
the Incumbent Board, providing for such Business Combination;
or
(d) Approval by the shareholders of the Parent of (i) a complete
liquidation or dissolution of the Parent or (ii) the sale or
other disposition of all or substantially all of the assets of
the Parent, other than to a corporation, with respect to which
following such sale or other disposition, (A) more than 80%
of, respectively, the then outstanding shares of common stock
of such corporation and the combined voting power of the then
outstanding voting securities of such corporation entitled to
vote generally in the election of directors is then
beneficially owned, directly or indirectly, by all or
substantially all of the individuals and entities who were the
beneficial owners, respectively, of the Outstanding Parent
Common Stock and Outstanding Parent Voting Securities
immediately prior to such sale or other disposition in
substantially the same proportion as their ownership,
immediately prior to such sale or other disposition, of the
Outstanding Parent Common Stock and Outstanding Parent Voting
Securities, as the case may be, (B) less than 20% of,
respectively, the then outstanding shares of common stock of
such corporation and the combined voting power of the then
outstanding voting securities of such
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corporation entitled to vote generally in the election of
directors is then beneficially owned, directly or indirectly, by
any Person (excluding any employee benefit plan (or related
trust) of the Parent or such corporation), except to the extent
that such Person owned 20% or more of the Outstanding Parent
Common Stock or Outstanding Parent Voting Securities prior to
the sale or disposition and (C) at least a majority of the
members of the board of directors of such corporation were
members of the Incumbent Board at the time of the execution of
the initial agreement, or of the action of the Incumbent Board,
providing for such sale or other disposition of assets of the
Parent or were elected, appointed or nominated by the Incumbent
Board.
15.3 Contribution Requirement. Subject to the conditions and
limitations of Section 8 (after taking into account the affect thereon of the
last sentence of this subsection 15.3) and of the next sentence, upon the
occurrence of a Change of Control, for the year in which the Change of Control
occurs and for each of the two years following the year in which the Change of
Control occurs, each Employer shall make a "Matching Contribution" to the Plan
on behalf of each Participant employed by such Employer who has made Before-Tax
or After-Tax Contributions to the Plan for that year in an amount equal to the
greater of:
(a) the average rate of matching contributions made by that
Employer to the Plan for the two Plan Years prior to the Plan
Year in which the Change of Control occurs, or
(b) 75 percent of the Before-Tax and After-Tax Contributions made
by each Participant, excluding any such contributions which
exceed, in the aggregate, 6 percent of the Participant's
Eligible Compensation.
In no event shall the sum of the Before-Tax Contributions and any Matching
Contributions made by an Employer for any Plan Year exceed the limitations
imposed by section 404 of the Code on the maximum amount deductible on account
thereof by the Employer for that year. Each Employer's Matching Contributions
for any Plan Year shall be paid to the Trustee, without interest, no later than
the time prescribed by law for filing the Federal corporate income tax return of
Philip Morris Companies Inc., or its successors, as applicable, including any
extensions thereof. The Matching Contributions made on behalf of a Participant
pursuant to this Section 14 shall be allocated to a "Matching Contribution
Account" established for each Participant, shall be aggregated with the
Participant's After-Tax Contributions, if any, for purposes of determining
contribution percentages and applying the limitations of Section 8, and, to the
extent corrective distributions are required to be made to any highly
compensated employee in accordance with Section 8, the amounts required to be
distributed shall be made first from the affected Highly Compensated employee's
unmatched After-Tax Contributions (if any) and thereafter on a pro rata basis
from his matched After-Tax Contributions (if any) and his Matching
Contributions.
15.4 Vesting. Upon and after a Change of Control, a Participant's
vested percentage in all his Accounts under the Plan shall be 100%.
15.5 Enforcement Rights; Amendment Restrictions.
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(a) In addition to all other rights under the Plan and applicable
law, any individual who shall be a Participant or Beneficiary at
the date on which the Change of Control occurs (the "Control
Date") shall from and after such date have the right to bring an
action, either individually or on behalf of all Participants and
Beneficiaries, to enforce the provisions of this Section 15 by
seeking injunctive relief or damages, or both, and the Company
shall be obligated to pay or reimburse such Participant or
Beneficiary who shall prevail, in whole or in substantial part,
for all reasonable expenses, including attorney's fees, in
connection with such action.
(b) Anything in the Plan to the contrary notwithstanding, on and
after the Control Date none of the provisions of this Section 15
shall be amended unless within sixty days after the date of the
action taken to amend such provisions at least two-thirds of the
individuals who were Participants at the date of such action
shall have given their written approval of such action based on
full and complete information provided to them regarding the
actual and potential effects of such action on them.
15.6 Construction. The foregoing provisions of this Section 15
shall be construed liberally to the end that its purposes shall be fully
implemented.
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SUPPLEMENT A
KRAFT FOODS THRIFT PLAN
Top-Heavy Provisions
Application A-1. This Supplement A to the Kraft Foods Thrift Plan
shall be applicable on and after the date on which
the Plan becomes Top-Heavy (as described in
subsection A-5).
Effective Date A-2. The Effective Date of the top-heavy provisions
as set forth in this Supplement A is January 1, 1993.
Definitions A-3. Unless the context clearly implies or indicates
the contrary, a word, term or phrase used or defined
in the Plan is similarly used or defined for purposes
of this Supplement A.
Affected Participant A-4. For purposes of this Supplement A, the term
"Affected Participant" means each Participant who is
employed by an Employer or a Related Company during
any Plan Year for which the Plan is Top-Heavy;
provided, however, that the term "Affected
Participant" shall not include any Participant who is
covered by a collective bargaining agreement if
retirement benefits were the subject of good faith
bargaining between his Employer and his collective
bargaining representative.
Top-Heavy A-5. The Plan shall be "Top-Heavy" for any Plan Year
if, as of the Determination Date for that year (as
described in paragraph (a) next below), the present
value of the benefits attributable to Key Employees
(as defined in subsection A-6) under all Aggregation
Plans (as defined in subsection A-9) exceeds 60% of
the present value of all benefits under such plans.
The foregoing determination shall be made in
accordance with the provisions of section 416 of the
Code. Subject to the preceding sentence:
(a) The Determination Date with respect to any
plan for purposes of determining Top-Heavy
status for any plan year of that plan shall
be the last day of the preceding plan year
or, in the case of the first plan year of
that plan, the last day of that year. The
present value of benefits as of any
Determination Date shall be determined as of
the accounting date or valuation date
coincident with or next preceding the
Determination Date. If the plan years of all
Aggregation Plans do not coincide, the
Top-Heavy
A-1
50
status of the Plan on any Determination Date
shall be determined by aggregating the
present value of Plan benefits on that date
with the present value of the benefits under
each other Aggregation Plan determined as of
the Determination Date of such other
Aggregation Plan which occurs in the same
calendar year as the Plan's Determination
Date.
(b) Benefits under any plan as of any
Determination Date shall include the amount
of any distributions from that plan made
during the plan year which includes the
Determination Date (including distributions
under a terminated plan which, if it had not
been terminated, would have been included in
an aggregation group) or during any of the
preceding four plan years, but shall not
include any amounts attributable to employee
contributions which are deductible under
section 219 of the Code, any amounts
attributable to employee-initiated rollovers
or transfers made after December 31, 1983
from a plan maintained by an unrelated
employer, or, in case of a defined
contribution plan, any amounts attributable
to contributions made after the
Determination Date unless such contributions
are required by section 412 of the Code or
are made for the plan's first plan year.
(c) Benefits attributable to a participant shall
include benefits paid or payable to a
beneficiary of the participant, but shall
not include benefits paid or payable to any
participant who has not performed services
for an Employer or Related Company during
any of the five plan years ending on the
applicable Determination Date; provided,
however, that if a participant performs no
services for five years and then performs
services, the benefits attributable to such
participant shall be included.
(d) The accrued benefit of any participant who
is a Non-Key Employee with respect to a plan
but who was a Key Employee with respect to
such plan for any prior plan year shall not
be taken into account.
(e) The accrued benefit of a Non-Key Employee
shall be determined under the method which
is used for accrual purposes for all plans
of the Employer and Related Companies; or,
if there is not such method,
A-2
51
as if the benefit accrued not more rapidly
than the slowest accrual rate permitted
under section 411(b)(1)(C) of the Code.
(f) The present value of benefits under all
defined benefit plans shall be determined on
the basis of a 7.5% per annum interest
factor and the 1951 Group Annuity Projected
Mortality Table for Males, with a one-year
setback.
Key Employee A-6. The term "Key Employee" means an employee or
deceased employee (or beneficiary of such deceased
employee) who is a Key Employee within the meaning
ascribed to that term by section 416(i) of the Code.
Subject to the preceding sentence, the term Key
Employee includes any employee or deceased employee
(or beneficiary of such deceased employee) who at any
time during the plan year which includes the
Determination Date or during any of the four
preceding plan years was:
(a) an officer of any Employer or Related
Company with Compensation for that year in
excess of 50 percent of the amount in effect
under section 415(b)(1)(A) of the Code for
the calendar year in which that year ends;
provided, however, that the maximum number
of employees who shall be considered Key
Employees under this paragraph (a) shall be
the lesser of 50 or 10% of the total number
of employees of the Employers and the
Related Companies disregarding any
excludable employees under Code section
414(q)(8).
(b) one of the 10 employees owning the largest
interests in any Employer or any Related
Company (disregarding any ownership interest
which is less than 1/2 of one percent),
excluding any employee for any plan year
whose Compensation for that year did not
exceed the applicable amount in effect under
section 415(c)(1)(A) of the Code for the
calendar year in which that year ends;
(c) a 5% owner of any Employer or of any Related
Company; or
(d) a 1% owner of any Employer or any Related
Company having Compensation for that year in
excess of $150,000.
A-3
52
Compensation A-7. The term "Compensation" for purposes of this
Supplement A generally means compensation within the
meaning of section 415(c)(3) for that year, not
exceeding $200,000 or such larger amount as may be
permitted for any year under Code section 401(a)(17).
However, for Plan Years beginning on or after January
1, 1989, solely for purposes of determining who is a
Key Employee, the term "Compensation" means
compensation as defined in Code section 414(q)(7).
Non-Key Employee A-8. The term "Non-Key Employee" means any employee
(or beneficiary of a deceased employee) who is not a
Key Employee.
Aggregation Plan A-9. The term "Aggregation Plan" means the Plan and
each other retirement plan (including any terminated
plan) maintained by an Employer or Related Company
which is qualified under section 401(a) of the Code
and which:
(a) during the plan year which includes the
applicable Determination Date, or during any
of the preceding four plan years, includes a
Key Employee as a participant;
(b) during the plan year which includes the
applicable Determination Date or, during any
of the preceding four plan years, enables
the Plan or any plan in which a Key Employee
participates to meet the requirements of
section 401(a)(4) or 410 of the Code; or
(c) at the election of the Employer, would meet
the requirements of sections 401(a)(4) and
410 if it were considered together with the
Plan and all other plans described in
paragraphs (a) and (b) next above.
Required Aggregation A-10. The term "Required Aggregation Plan" means Plan
Plan a plan described in Plan either paragraph (a) or (b)
of subsection A-9.
Permissive Aggregation A-11. The term "Permissive Aggregation Plan" means a
Plan plan described in Plan paragraph (c) of subsection
A-9.
Vesting A-12. For any Plan Year during which the Plan is
Top-Heavy, the Account balances of each Affected
Participant who has completed at least three Years of
Service shall be 100% vested. If the Plan ceases to
be Top-Heavy for any
A-4
53
Plan Year, the provisions of this subsection A-12
shall continue to apply to any Affected Participant
who had completed at least 3 Years of Service prior
to such Plan Year.
Minimum Contribution A-13. For any Plan Year during which the Plan is
Top-Heavy, the minimum amount of Employer
contributions, excluding elective contributions as
defined in Code section 401(k), allocated to the
Accounts of each Affected Participant who is employed
by an Employer or Related Company on the last day of
that year who is a Non-Key Employee and who is not
entitled to a minimum benefit for that year under any
defined benefit Aggregation Plan which is top-heavy
nor is entitled to a minimum contribution for that
year under any other defined contribution Aggregation
Plan maintained by the Employer shall, when expressed
as a percentage of the Affected Participant's
Compensation for that year, be equal to the lesser
of:
(a) 3%; or
(b) the percentage at which Employer
contributions (including Employer
contributions made pursuant to a cash or
deferred arrangement) are allocated to the
Accounts of the Key Employee for whom such
percentage is greatest.
For purposes of the preceding sentence,
compensation earned while a member of a
group of employees to whom the Plan has not
been extended shall be disregarded.
Paragraph (b) next above shall not be
applicable for any Plan Year if the Plan
enables a defined benefit plan described in
paragraph A-9(a) or A-9(b) to meet the
requirements of section 401(a)(4) or 410 for
that year. Employer contributions for any
Plan Year during which the Plan is Top-Heavy
shall be allocated first to Non-Key
Employees until the requirements of this
subsection A-13 have been met and, to the
extent necessary to comply with the
provisions of this subsection A-13,
additional contributions shall be required
of the Employers.
Aggregate Benefit Limit A-14. For any Plan Year during which the Plan is
Top-Heavy, paragraphs (2)(B) and (3)(B) of section
415(e) of the Code shall be applied by substituting
"1.0" for "1.25".
A-5
54
SUPPLEMENT B
KRAFT FOODS THRIFT PLAN
Special Benefit Schedule for Former Participants in the
H.F. Behrhorst & Son, Inc. Employees Profit Sharing Plan
Pursuant to subsection 1.12, this Supplement B is made a part of the
Plan and supersedes any provisions thereof which are not consistent with this
Supplement B.
(1) Participating Group: Former employees of H. F. Behrhorst & Son, Inc.
who immediately prior to the Effective Date were participants in the H.
F. Behrhorst & Son, Inc. Employees Profit Sharing Plan ("Behrhorst
Participants"). These employees were employed by Kraft, Inc. on January
4, 1988.
(2) Effective Date: November 1, 1989.
(3) Eligibility: As of the Effective Date, the employees described in
paragraph 1 became eligible to participate in the Plan subject to its
normal terms, except as provided in paragraph 4 of this Supplement B.
(4) Special Provisions: The following provision of this paragraph (4) shall
apply only to the portion of a Behrhorst Participant's Accounts
attributable to amounts transferred from the plan described in
paragraph (1) above:
A Behrhorst Participant may elect to have the following definition of
"permanent and total disability" apply:
(a) that a person has been totally disabled by a physical or
mental condition resulting from bodily injury, disease, or
mental disorder so as to render him incapable of continuing
his usual and customary employment with the Employing Company
and
(b) that such total disability shall be determined by a licensed
physician chosen by the Committee. The determination shall be
applied uniformly to all Behrhorst Participants.
B-1
55
SUPPLEMENT C
KRAFT FOODS THRIFT PLAN
Special Benefit Schedule for Former Participants in the
Profit Sharing Plan for Mueller Foodservice Corp.
Pursuant to subsection 1.12, this Supplement C is made a part of the
Plan and supersedes any provisions thereof which are not consistent with this
Supplement C.
(1) Participating Group: Former employees of Mueller Foodservice Corp. who
immediately prior to the Effective Date were participants in the Profit
Sharing Plan for Mueller Foodservice Corp. and who had benefits
transferred to this Plan ("Mueller Participants"). These employees were
employed by Kraft, Inc. on December 21, 1988.
(2) Effective Date: April 13, 1990.
(3) Eligibility: As of the Effective Date, the employees described in
paragraph 1 became eligible to participate in the Plan subject to its
normal terms, except as provided in paragraph 4 of this Schedule.
(4) Special Provisions: The following provisions of this paragraph (4)
shall apply to the portion of a Mueller Participant's Accounts
attributable to amounts transferred from the plan described in
paragraph (1) above:
(a) In the event a Mueller Participant terminates employment with
the Employers and Related Companies and becomes a participant
in a qualified retirement plan of another employer, the
Trustee is authorized to transfer such Mueller Participant's
account to such other plan upon receiving written
authorization from such other employer, the Mueller
Participant and the trustee of such other plan.
(b) A Mueller Participant may elect to apply the following
definition of "permanent and total disability":
A Mueller Participant is considered permanently and
totally disabled if such Mueller Participant is
unable to engage in any substantial gainful activity
because of a medically determinable physical or
mental impairment which can be expected to result in
death or has lasted or can be expected to last for a
continuous period of not less than twelve (12)
months.
C-1
56
SUPPLEMENT D
KRAFT FOODS THRIFT PLAN
Special Benefit Schedule for Former Participants in the
Tombstone Pizza Corporation Profit Sharing Plan
Pursuant to subsection 1.12, this Supplement D is made a part of the
Plan and supersedes any provisions thereof which are not consistent with this
Supplement D.
(1) Participating Group: Employees of Tombstone Pizza Corporation who
immediately prior to the Effective Date were participants in the
Tombstone Pizza Corporation Profit Sharing Plan and who had benefits
transferred to this Plan ("Tombstone Participants").
(2) Effective Date: January 1, 1991.
(3) Eligibility: As of the Effective Date, the employees described in
paragraph 1 became eligible to participate in the Plan subject to its
normal terms, except as provided in paragraph 4 of this Supplement D.
(4) Special Provisions:
The following special provisions shall apply only with respect
to that portion of a Tombstone Participant's benefit which is
attributable to amounts transferred to this Plan from the Tombstone
Pizza Corporation Profit Sharing Plan:
(a) Upon attainment of age 55, a Tombstone Participant shall be
100% vested.
(b) A Tombstone Participant may elect to apply the following
definition of "permanent and total disability":
A physical or mental condition which in the judgment
of the Committee based upon competent medical
evidence satisfactory to the Committee, totally and
presumably permanently prevents the Tombstone
Participant from engaging in any substantial gainful
employment with the Employer, provided such permanent
and total disability (i) did not arise while engaged
in or as a result of having engaged in a felonious or
criminal act or enterprise, or (ii) did not result
from service in the Armed Forces of the United States
of America or of any State thereof under
circumstances entitling the Tombstone Participant to
a veteran's disability pension. In determining
whether a Tombstone Participant is wholly or
permanently prevented from engaging in any
substantial gainful employment with the Employer,
there shall be excepted from consideration work
performed pursuant to a medically recommended plan
for rehabilitation.
(c) A Tombstone Participant, in lieu of the installments described
in clause 11.1(b)(ii), may elect to have his Account balance
distributed in a series of annual or more frequent
installments, provided, however, that the amount to be
D-1
57
distributed each year must be at least an amount equal to the
quotient obtained by dividing the Tombstone Participant's
entire interest by the life expectancy of the Tombstone
Participant or joint and last survivor expectancy of the
Tombstone Participant and beneficiary. Life expectancy and
joint and last survivor expectancy are computed by the use of
the return multiples contained in Treasury Regulation Section
1.72-9. For purposes of this computation, a Tombstone
Participant's (and his spouse's) life expectancy may be
recalculated no more frequently than annually, but the life
expectancy of a nonspouse beneficiary must be calculated at
the time payment first commences without further
recalculations.
(d) Prior to his severance from service, a Tombstone Participant
at any time may request a withdrawal of all or part of his
account attributable to qualified voluntary employee
contributions.
(e) Prior to his severance from service, a Tombstone Participant
may elect, pursuant to rules promulgated by the Committee, on
a form prescribed by and filed with the Committee, to make a
withdrawal of all or any portion of his account attributable
to his After-Tax Contributions.
D-2
58
SUPPLEMENT E
KRAFT FOODS THRIFT PLAN
Special Benefit Schedule for Former Participants in the
Churny Company, Inc. Profit Sharing Plan
Pursuant to subsection 1.12, this Supplement E is made a part of the
Plan and supersedes any provisions thereof which are not consistent with this
Supplement E.
(1) Participating Group: Employees of Churny Company, Inc. who immediately
prior to the respective Effective Date were participants in the Churny
Company, Inc. Profit Sharing Plan, who were either (a) salaried
employees who had benefits transferred to this Plan as of January 1,
1989 or (b) hourly non-union employees at Weyawega, Waupaca and Wausau
locations, who had benefits transferred to this Plan as of January 1,
1992 ("Churny Participants").
(2) Effective Dates: (a) January 1, 1989
(b) January 1, 1992
(3) Eligibility: As of the respective Effective Date, the employees
described in paragraph 1 became eligible to participate in the Plan,
subject to its normal terms, except as provided in paragraph 4 of this
Supplement E with respect to transferred benefits.
E-1
59
SUPPLEMENT F
KRAFT FOODS THRIFT PLAN
Special Benefit Schedule Applicable to Employees
of the California Vegetable Concentrates Division
Pursuant to subsection 1.12, this Supplement F is made a part of the
Plan as of the Effective Date set forth below and supersedes any provisions of
the Plan which are not consistent with this Supplement F.
(1) Participating Group: This Supplement F is applicable to those
Participants in the Plan who were employees of the California Vegetable
Concentrates division of Kraft Food Ingredients Corp. and who became
employees of Basic Vegetable Products, L.P., pursuant to that certain
Asset Purchase Agreement entered into as of February 16, 1993 by and
between Basic Vegetable Products, L.P., and Kraft Food Ingredients
Corp. ("Concentrates Participants").
(2) Effective Date: February 16, 1993.
(3) Special Vesting Provisions: A Concentrates Participant shall be 100%
vested in his sub-accounts attributable to Matching Contributions as of
the Effective Date.
(4) Special Distribution and Withdrawal Provisions:
(a) In accordance with procedures established by the Committee, a
Concentrates Participant during the period commencing on the
Effective Date and ending on March 31, 1993, may elect to
withdraw all of his sub-account balances attributable to his
After-Tax Contributions, Rollover Contributions, and Matching
Contributions, and the earnings thereon.
(b) Notwithstanding any provisions of the Plan to the contrary,
the Hardship withdrawal provisions and the in-service
withdrawal provisions of Section 10 of the Plan shall continue
to apply to a Concentrates Participant on and after the
Effective Date and for such time as the Concentrates
Participant remains an employee of Basic Vegetable Products,
L.P., or its successors or affiliates (collectively referred
to as the "Successor Employer"). Notwithstanding any
provisions of the Plan to the contrary, for purposes of
applying the post-employment termination distribution
provisions of Section 11 of the Plan to a Concentrates
Participant, such Concentrates Participant's service shall not
be considered to be terminated (whether on account of
retirement, permanent and total disability, or for any other
reason) until such time as said Participant has had a
separation from service with the Successor Employer.
F-1
60
SUPPLEMENT G
KRAFT FOODS THRIFT PLAN
Special Benefit Schedule for Former Participants in the
Lender's Bagel Bakery, Inc. Profit Sharing Plan
Pursuant to subsection 1.12, this Supplement G is made a part of the
Plan as of the Effective Date set forth below and supersedes any provisions of
the Plan which are not consistent with this Supplement G.
(1) Participating Group: This Supplement G modifies and supplements the
provisions of the Plan in connection with the participation in the Plan
of employees of the Lender's Bagel Bakery operating unit of General
Foods USA, and in connection with the merger into the Plan of the
Lender's Bagel Bakery, Inc. Profit Sharing Plan (the "Lender's Plan").
For purposes of this Supplement G, the term "Lender's Participants"
means those Participants in the Plan who immediately prior to the
Effective Date were participants in the Lender's Plan and who had
benefits from such plan transferred to this Plan.
(2) Effective Date: January 1, 1993.
(3) Eligibility: A Lender's Participant shall become a Participant in the
Plan on the Effective Date. Any other employee of the Lender's Bagel
Bakery operating unit of General Foods USA shall become eligible to
participate in the Plan on the later of the Effective Date or the date
such employee would otherwise become eligible to participate in
accordance with the provisions of Section 2 of the Plan.
(4) Merger of Plans: The Lender's Plan shall be merged with and into the
Plan effective March 31, 1993, and the assets and liabilities of the
Lender's Plan shall become the assets and liabilities of the Plan
effective with the merger, in accordance with Section 414(l) of the
Code. Effective with the date of the merger, the provisions of the Plan
shall apply to the transferred account balances from the Lender's Plan,
with the modifications set forth below.
(5) Vesting in Transferred Amounts: A Lender's Participant in this
Participating Group shall at all times be 100% vested in his
sub-account balance attributable to his transferred account balance
from the Lender's Plan.
(6) Special Distribution Provision: This paragraph 6 shall apply only with
respect to that portion of a Lender's Participant's benefit which is
attributable to amounts transferred to this Plan from the Lender's
Plan.
A Lender's Participant may elect to have the following definition of
permanent and total disability apply:
"Permanent and total disability" means the inability to engage
in any substantial gainful activity, considering the
Participant's age, education and work experience, by reason of
any medically determined physical or mental impairment which
can
G-1
61
be expected to last for a continuous period of not less than
12 months. The determination of the Committee based upon
competent medical advice which shall include the opinion of a
licensed physician shall be final as to whether any
Participant is disabled within the meaning of this Section,
except that a Participant who is eligible to receive Social
Security disability benefits shall be deemed to be so disabled
without further proof.
G-2
62
SUPPLEMENT H
KRAFT FOODS THRIFT PLAN
Special Benefit Schedule for Former Participants in the
Capri Sun, Inc. Retirement Savings Plan
Pursuant to subsection 1.12, this Supplement H is made a part of the
Plan as of the Effective Date set forth below and supersedes any provisions of
the Plan which are not consistent with this Supplement H.
(1) Participating Group: This Supplement H modifies and supplements the
provisions of the Plan in connection with the participation in the Plan
of employees of Capri Sun, Inc., and in connection with the merger into
the Plan of the Capri Sun, Inc. Retirement Savings Plan (the "Capri Sun
Plan"). For purposes of this Supplement H, the term "Capri Sun
Participants" means those Participants in the Plan who immediately
prior to the Effective Date were participants in the Capri Sun Plan and
who had benefits from such plan transferred to this Plan.
(2) Effective Date: January 1, 1993.
(3) Eligibility: A Capri Sun Participant shall become a Participant in the
Plan on the Effective Date. Any other employee of Capri Sun, Inc. shall
become eligible to participate in the Plan on the later of the
Effective Date or the date such employee would otherwise become
eligible to participate in accordance with the provisions of Section 2
of the Plan.
(4) Merger of Plans: The Capri Sun Plan shall be merged with and into the
Plan effective March 31, 1993, and the assets and liabilities of the
Capri Sun Plan shall become the assets and liabilities of the Plan
effective with the merger, in accordance with Section 414(l) of the
Code. Effective with the date of the merger, the provisions of the Plan
shall apply to the transferred account balances from the Capri Sun
Plan, with the modifications set forth below.
(5) Vesting in Transferred Amounts: A Capri Sun Participant shall at all
times be 100% vested in his sub-account balance attributable to his
transferred account balance from the Capri Sun Plan.
(6) Special Distribution and Withdrawal Provision. This paragraph 6 shall
apply only to that portion of a Capri Sun Participant's benefit under
the Plan which is attributable to amounts transferred to this Plan from
the Capri Sun Plan. A Capri Sun Participant may elect to have the
following definition of permanent and total disability apply:
"Permanent and total disability" means a physical or mental
condition of a Participant resulting from bodily injury,
disease, or mental disorder which renders him incapable of
continuing his usual and customary employment with the
Employer. The disability of a Participant shall be determined
by a licensed physician chosen by the Committee.
H-1
63
SUPPLEMENT I
KRAFT FOODS THRIFT PLAN
Special Benefit Schedule for Former Participants in the
Jack's Frozen Pizza, Inc. 401(k) Profit-Sharing Plan
Pursuant to subsection 1.12, this Supplement I is made a part of the
Plan and supersedes any provisions thereof which are not consistent with this
Supplement I.
(1) Participating Group: This Supplement I modifies and supplements the
provisions of the Plan in connection with the participation in the Plan
of employees of Jack's Frozen Pizza, Inc., and in connection with the
merger into the Plan of the Jack's Frozen Pizza, Inc. 401(k)
Profit-Sharing Plan (the "Jack's Plan"). For purposes of this
Supplement I, the term "Jack's Pizza Participants" means those
Participants in the Plan who immediately prior to the Effective Date
were participants in the Jack's Plan and who had benefits from such
plan transferred to this Plan.
(2) Effective Date: January 1, 1994.
(3) Eligibility: As of the Effective Date, the employees described in
paragraph 1 became eligible to participate in the Plan subject to its
normal terms, except as provided in paragraph 5 of this Supplement I.
(4) Merger of Plans: The Jack's Plan shall be merged with and into the Plan
effective April 1, 1994, and the assets and liabilities of the Jack's
Plan shall become the assets and liabilities of the Plan effective with
the merger, in accordance with Section 414(l) of the Code. Effective
with the date of the merger, the provisions of the Plan shall apply to
the transferred account balances from the Jack's Plan, with the
modifications set forth below.
(5) Special Provisions:
The following special provisions shall apply only with respect
to that portion of a Jack's Pizza Participant's benefit which is
attributable to amounts transferred to this Plan from the Jack's Plan:
(a) Upon retirement at or after attainment of age 55, a Jack's
Pizza Participant shall be 100% vested.
(b) A Jack's Pizza Participant may elect to apply the following
definition of "permanent and total disability":
The inability to engage in any substantial gainful
activity by reason of any medically determinable
physical or mental impairment that can be expected to
result in death or which has lasted or can be
expected to last for a continuous period of not less
than 12 months. The disability of a Jack's Pizza
Participant shall be determined by a licensed
physician
I-1
64
chosen by the Committee. The determination shall be
applied uniformly to all Jack's Pizza Participants.
I-2
65
SUPPLEMENT J
KRAFT FOODS THRIFT PLAN
Special Benefit Schedule for Former Participants in the
Salary Reduction and Voluntary Investment Plan for
Salaried Employees of Oscar Mayer Foods Corporation
Pursuant to subsection 1.12, this Supplement J is made a part of the
Plan and supersedes any provisions thereof which are not consistent with this
Supplement J.
(1) Participating Group: This Supplement J modifies and supplements the
provisions of the Plan in connection with the participation in the Plan
of employees of Oscar Mayer Foods Corporation, and in connection with
the merger into the Plan of the Salary Reduction and Voluntary
Investment Plan for Salaried Employees of Oscar Mayer Foods Corporation
(the "Oscar Mayer Plan"). For purposes of this Supplement J, the term
"Oscar Mayer Participants" means those Participants in the Plan who
immediately prior to the Effective Date were participants in the Oscar
Mayer Plan and who had benefits from such plan transferred to this
Plan.
(2) Effective Date: January 1, 1994.
(3) Eligibility: As of the Effective Date, the employees described in
paragraph 1 became eligible to participate in the Plan subject to its
normal terms, except as provided in paragraph 5 of this Supplement J.
(4) Merger of Plans: The Oscar Mayer Plan shall be merged with and into the
Plan effective April 1, 1994, and the assets and liabilities of the
Oscar Mayer Plan shall become the assets and liabilities of the Plan
effective with the merger, in accordance with Section 414(l) of the
Code. Effective with the date of the merger, the provisions of the Plan
shall apply to the transferred account balances from the Oscar Mayer
Plan, with the modifications set forth below.
(5) Special Provisions:
The following special provisions shall apply only with respect
to that portion of an Oscar Mayer Participant's benefit which is
attributable to amounts transferred to this Plan from the Oscar Mayer
Plan:
In addition to the withdrawal permitted under subsection 10.2
of the Plan, an Oscar Mayer Participant whose Termination Date has not
yet occurred may elect to withdraw all or a part of his interest in his
Accounts, as provided and in the order set forth below:
Up to 100% of the March 31, 1992 balance of his After-Tax Account and
the earnings thereon. Any such withdrawal shall be made first from the
After-Tax Contributions (excluding earnings thereon) made by the Oscar
Mayer Participant prior to January 1,
J-1
66
1987 and then from the balance of his March 31, 1992 After-Tax Account,
and the earnings thereon.
J-2
67
SUPPLEMENT K
KRAFT FOODS THRIFT PLAN
Special Benefit Schedule For Former Participants in the
RJR Nabisco Capital Investment Plan
Pursuant to subsection 1.12, this Supplement K is made a part of the
Plan as of the Effective Date set forth below and supersedes any provisions of
the Plan which are not consistent with this Supplement K.
(1) Participating Group: This Special Benefit Schedule modifies and
supplements the provisions of the Plan in connection with the
participation in the Plan of Nabisco cereal business employees, and in
connection with the transfer to the Plan of account balances of such
employees under the RJR Nabisco Capital Investment Plan (the "Nabisco
Plan"). For purposes of this Special Benefit Schedule, the
"Participating Group" means those Participants in the Plan who
immediately prior to the Effective Date were participants in the
Nabisco Plan and who had benefits from such plan transferred to this
Plan.
(2) Effective Date: January 4, 1993.
(3) Eligibility: Pursuant to an Asset Purchase Agreement dated as of
November 13, 1992 between the Corporation and Nabisco, Inc. and Nabisco
Cereals, Inc., the Corporation agreed to employ certain employees
(identified as "Transferred Employees" under the agreement) of the U.S.
Ready-to-Eat Cold Cereal Business of Nabisco, Inc. and Nabisco Cereals,
Inc. Each Transferred Employee who is a participant in the Nabisco Plan
shall become a Participant in the Plan on the Effective Date or, if
later, the date such Transferred Employee becomes employed by the
Corporation.
(4) Vesting in Transferred Amounts: A Participant in this Participating
Group shall at all times be 100% vested in his sub-account balance
attributable to his transferred account balance from the Nabisco Plan.
(5) Special Distribution and Withdrawal Provisions. The distributions and
withdrawal provisions of the Plan shall apply to the transferred
account balances from the Nabisco Plan, with the modifications set
forth below. The following provisions of this paragraph 5 shall apply
only to that portion of a Participant's benefit under the Plan which is
attributable to amounts transferred to this Plan from the Nabisco Plan.
(a) A Participant in this Participating Group may elect to have
the following definition of Permanent and Total Disability
apply in lieu of the definition set forth in Section 1.32 of
the Plan:
"Permanent and Total Disability" means being disabled as
determined by the Federal Social Security Administration.
K-1
68
(b) Prior to termination of Service, Retirement, death or Permanent and
Total Disability, and subject to the provisions set forth below, a
Participant in this Participating Group may elect to withdraw all or
part of the following portions of his account attributable to the
amounts transferred from the Nabisco Plan, in the following order:
(i) his after-tax contributions, plus earnings with respect
thereto;
(ii) his company matching contributions (whether or not made in the
form of matching stock contributions) and rollover
contributions, plus earnings with respect thereto; and
(iii) upon Permanent and Total Disability, his pre-tax
contributions, plus earnings with respect thereto.
K-2
69
SUPPLEMENT L
KRAFT FOODS THRIFT PLAN
Special Benefit Schedule for Former Participants in the
Entenmann's, Inc. Employee Savings Plan
Pursuant to subsection 1.12, this Supplement L is made a part of the
Plan as of the Effective Date set forth below and supersedes any provisions of
the Plan which are not consistent with this Supplement L.
(1) Participating Group: This Supplement L modifies and supplements the
provisions of the Plan in connection with the participation in the Plan
of employees of Entenmann's Inc., and in connection with the merger
into the Plan of the Entenmann's, Inc. Employee Savings Plan (the
"Entenmann's Plan"). For purposes of this Supplement L, the term
"Entenmann's Participants" means those Participants in the Plan who
immediately prior to the Effective Date were participants in the
Entenmann's Plan and who had benefits from such plan transferred to
this Plan.
(2) Effective Date: January 1, 1995.
(3) Eligibility: An Entenmann's Participant shall become a Participant in
the Plan on the Effective Date. Any other employee of Entenmann's, Inc.
shall become eligible to participate in the Plan on the later of the
Effective Date or the date such employee would otherwise become
eligible to participate in accordance with the provisions of Section 2
of the Plan.
(4) Merger of Plans: The Entenmann's Plan shall be merged with and into the
Plan effective January 1, 1995, and the assets and liabilities of the
Entenmann's Plan shall become the assets and liabilities of the Plan
effective with the merger, in accordance with Section 414(l) of the
Code. Effective with the date of the merger, the provisions of the Plan
shall apply to the transferred account balances from the Entenmann's
Plan, with the modifications set forth below.
(5) Vesting in Transferred Amounts: An Entenmann's Participant shall be
vested in amounts attributable to his transferred account balance from
the Entenmann's Plan (his "Entenmann's balance") in accordance with the
schedule set forth in subsection 9.1, taking into account vesting
service credited under the Entenmann's Plan prior to the Effective
Date.
(6) Special In-Service Withdrawal Provisions: The provisions of this
paragraph 6 shall apply only with respect to an Entenmann's
Participant's Entenmann's balance.
(a) Prior to his Termination Date, a Participant may elect to
withdraw all or a portion of his Entenmann's balance
attributable to his after-tax supplemental contributions
(including the earnings and appreciation thereon). The minimum
amount which a Participant may elect to have distributed to
him pursuant to this subparagraph shall be the lesser of $500
or his Entenmann's balance attributable
L-1
70
to his after-tax supplemental contributions (including the
earnings and appreciation thereon). A Participant who elects
to receive a distribution pursuant to this subparagraph shall
continue his status as a Participant in the Plan. Amounts
withdrawn by a Participant pursuant to this subparagraph shall
be distributed to him in cash, except that he can elect to
have distributions from the Philip Morris Stock Fund paid in
whole shares of Philip Morris common stock.
(b) Prior to his Termination Date, a Participant who is not vested
may elect to withdraw all of his Entenmann's balance
attributable to his after-tax basic contributions (including
the earnings and appreciation thereon). Partial withdrawals of
a Participant's after-tax basic contributions (including the
earnings and appreciation thereon) will not be permitted.
Notwithstanding any other provision of the Plan, any
Participant who makes a total withdrawal of his after-tax
basic contributions pursuant to this subparagraph shall be
suspended from making After-Tax Contributions and may not
resume such contributions until the first day of any month
which is at least 6 months after the day on which he
discontinued such contributions. Any Participant who makes a
withdrawal pursuant to this subparagraph shall forfeit the
amount of any corresponding post-December 31, 1985 Entenmann's
balance in his Matching Account. Amounts withdrawn by a
Participant pursuant to this subparagraph shall be distributed
to him in cash or in stock in accordance with the preceding
subparagraph.
(c) Prior to his Termination Date, a Participant who is vested may
elect to withdraw that portion of his Entenmann's balance
attributable to after-tax basic contributions and Company
contributions (including the earnings and appreciation
thereon). Amounts withdrawn by a Participant pursuant to this
subparagraph shall be distributed to him in the following
order and in cash or in stock in accordance with the preceding
subparagraphs:
(i) All or a portion of his Entenmann's balance
attributable to such after-tax basic contributions. A
Participant may make two withdrawals from his
Entenmann's balance attributable to such after-tax
basic contributions. The minimum amount of any
withdrawal is the lesser of $500 or his Entenmann's
balance attributable to such after-tax basic
contributions. However, a Participant's second
withdrawal must be of his entire Entenmann's balance
(except for that part of his Entenmann's balance
attributable to before-tax basic contributions).
Notwithstanding any other provision of the Plan, any
Participant who makes a second withdrawal of his
after-tax basic contributions pursuant to this
subsection shall be suspended from making Before-Tax
Contributions and After-Tax Contributions and may not
resume any such contributions until the first day of
any month which is at least 12 months after the day
on which he discontinued such contributions.
(ii) If he has withdrawn the maximum amount permitted
under (a), all or a portion of his Entenmann's
balance attributable to such Company contributions
provided, however, that the minimum amount which a
L-2
71
Participant may elect to have distributed to him
pursuant to this subparagraph shall be $1,000 or the
balance in his Company contribution account,
whichever is less.
(d) The value of a Participant's Entenmann's balance distributed
pursuant to this paragraph shall be determined as of the
Valuation Date next following receipt by the Committee of
notice of such election.
(e) The value of a Participant's Entenmann's balance in his
Account which is forfeited shall be applied to reduce Employer
contributions.
(f) At any time during his employment, a Participant may withdraw
the total value of his Rollover Contributions and the earnings
and appreciation thereon.
The Participant will not be required to discontinue contributions to
the Plan for any period of time on account of a withdrawal of the value of
Rollover Contributions.
L-3
72
SUPPLEMENT M
KRAFT FOODS THRIFT PLAN
Special Benefit Schedule for Former Participants in the
Freihofer Savings and Profit Sharing Plan
Pursuant to subsection 1.12, this Supplement M is made a part of the
Plan as of the Effective Date set forth below and supersedes any provisions of
the Plan which are not consistent with this Supplement M.
(1) Participating Group: This Supplement M modifies and supplements the
provisions of the Plan in connection with the participation in the Plan
of employees of the Charles Freihofer Baking Company, Inc. (Freihofer),
and in connection with the merger into the Plan of the Charles
Freihofer Baking Company, Inc. Savings and Profit Sharing Plan (the
"Freihofer Plan"). For purposes of this Supplement M, the term
"Freihofer Participants" means those Participants in the Plan who
immediately prior to the Effective Date were participants in the
Freihofer Plan and who had benefits from such plan transferred to this
Plan.
(2) Effective Date: January 1, 1995.
(3) Eligibility: A Freihofer Participant shall become a Participant in the
Plan on the Effective Date. Any other employee of Freihofer shall
become eligible to participate in the Plan on the later of the
Effective Date or the date such employee would otherwise become
eligible to participate in accordance with the provisions of Section 2
of the Plan.
(4) Merger of Plans: The Freihofer Plan shall be merged with and into the
Plan effective January 1, 1995, and the assets and liabilities of the
Freihofer Plan shall become the assets and liabilities of the Plan
effective with the merger, in accordance with Section 414(l) of the
Code. Effective with the date of the merger, the provisions of the Plan
shall apply to the transferred account balances from the Freihofer
Plan, with the modifications set forth below.
(5) Vesting in Transferred Amounts: A Freihofer Participant's vested
interested in his sub-account balance attributable to his transferred
account balance from the Freihofer Plan shall be determined by applying
the Plan's vesting schedule under subsection 9.1 to the vesting service
credited under the Freihofer Plan prior to the Effective Date, provided
that a Freihofer Participant's subaccount balance shall be at least 50%
vested at all times.
(6) Special Withdrawal Provision: The provisions of this paragraph 6 shall
apply only with respect to that portion of a Freihofer Participant's
benefit which is attributable to amounts transferred to this Plan from
the Freihofer Plan.
Notwithstanding the provisions of subsection 10.2, a Freihofer
Participant may withdraw any voluntary after-tax contributions made to
the Freihofer Plan and any earnings allocable thereto, until November
1, 1999 subject to a minimum withdrawal of $300.
M-1
73
SUPPLEMENT N
KRAFT FOODS THRIFT PLAN
Kraft Foods Inc. Common Stock
This Supplement N has an effective date of October 3, 2001 (or such
other date as approved by the Vice President Benefits of the Company). All
references in the Plan to "Kraft Foods, Inc." or the "Company" shall be a
reference to "Kraft Foods North America, Inc." In addition, Section 6.1 of the
Plan is amended and restated to read as follows:
6.1 Investment Funds and Loan Account. The Investment Committee shall
establish and cause the Trustee to maintain one or more "Investment Funds" for
the investment of Participants' Accounts, including one or more Investment Funds
that invest in the common stock of a corporation that is a member of the
controlled group of corporations (as defined under Section 414(b) of the Code)
that includes the Company. The Investment Committee shall also cause the Trustee
to maintain a "Loan Account" to reflect any loans to Participants pursuant to
subsection 10.1. The Investment Committee in its discretion may change the
Investment Strategy of any Investment Fund without prior notice to Participants.
N-1
EX-4.2
4
y53486ex4-2.txt
KRAFT FOODS TIP PLAN
1
Exhibit 4.2
KRAFT FOODS TIP PLAN
(Second Amendment and Restatement
Effective As of May 12, 1997)
Mayer, Brown & Platt
Chicago
2
I, Jill Youman, Secretary of the Management Committee for Employee
Benefits ("MCEB"), hereby certify that I have approved the form of the document
attached hereto and that such document is a full, true and complete copy of the
Kraft Foods TIP Plan, as amended through the date hereof. I hereby further
certify that Supplement C to the Kraft Foods TIP Plan was adopted by unanimous
written consent of MCEB dated August 27, 2001.
Dated this 24th day of September, 2001.
/s/ Jill Youman
----------------------
Secretary as Aforesaid
3
TABLE OF CONTENTS
Page
----
INDEX OF DEFINED TERMS.................................................................. iv
SECTION 1 General.................................................................. 1
History, Purpose and Effective Date...................................... 1
Related Companies and Employers.......................................... 1
Plan Administration, Trust and Fiduciary Responsibility.................. 1
Plan Year................................................................ 2
Accounting Dates......................................................... 2
Applicable Laws.......................................................... 2
Gender and Number........................................................ 2
Notices.................................................................. 2
Form of Election and Signature........................................... 2
Evidence................................................................. 3
Action by Employers...................................................... 3
Plan Supplements......................................................... 3
Defined Terms............................................................ 3
Compliance With USERRA................................................... 3
SECTION 2 Participation in Plan.................................................... 3
Eligibility for Participation............................................ 3
Commencement of Participation............................................ 4
Inactive Participation................................................... 4
Plan Not Contract of Employment.......................................... 4
SECTION 3 Service.................................................................. 4
Years of Service......................................................... 4
Hour of Service.......................................................... 5
One Year Break in Service................................................ 6
Service With Philip Morris Affiliates and Predecessor Employers.......... 7
Qualified Military Service............................................... 7
SECTION 4 Before-Tax, After-Tax and Rollover Contributions......................... 7
Before-Tax Contributions................................................. 7
After-Tax Contributions.................................................. 7
Total Before-Tax and After-Tax Contributions............................. 7
Payment of Before-Tax and After-Tax Contributions........................ 7
Modification, Discontinuance and Resumption of Before-Tax or After-Tax
Contributions............................................................ 8
Eligible Compensation.................................................... 8
Limitation on Compensation Taken Into Account For Any Plan Year.......... 8
Rollover Contributions................................................... 8
4
SECTION 5 Matching Contributions................................................... 9
Matching Contributions................................................... 9
Limitations on Amount of Employer Contributions.......................... 9
Payment of Employer Contributions........................................ 9
SECTION 6 Investment of the Trust Fund............................................. 9
Investment Funds and Loan Account........................................ 9
Loan Account and Investment Fund Accounting.............................. 9
Investment Fund Elections................................................ 9
Transfers Between Investment Funds....................................... 10
SECTION 7 Plan Accounting.......................................................... 10
Participants' Accounts................................................... 10
Allocation of Fund Earnings and Changes in Value......................... 11
Allocation and Crediting of Contributions................................ 11
Correction of Error...................................................... 11
Statement of Plan Interest............................................... 12
SECTION 8 Limitations on Compensation, Contributions and Allocations............... 12
Reduction of Contribution Rates.......................................... 12
Compensation for Limitation/Testing Purposes............................. 12
Limitations on Annual Additions.......................................... 12
Excess Annual Additions.................................................. 13
Combined Plan Limitation................................................. 13
Annual Dollar Limitation................................................. 14
Section 401(k)(3) Testing................................................ 14
Correction Under Section 401(k) Test..................................... 15
Highly Compensated....................................................... 16
Forfeiture of "Orphaned" Matching Contributions.......................... 16
SECTION 9 Vesting Service, Vesting and Termination Dates........................... 16
Determination of Vesting Service and Vested Interest..................... 16
Accelerated Vesting...................................................... 17
Termination Date......................................................... 17
Distribution of Before-Tax Account Only Upon Separation From Service..... 17
SECTION 10 Loans and Withdrawals of Contributions While Employed.................... 18
Loans to Participants.................................................... 18
Hardship Withdrawals..................................................... 20
Determination of Hardship................................................ 20
Age 59 1/2 Withdrawals................................................... 22
Withdrawals From 3/31/97 After-Tax and Matching Account Balances......... 22
Form of Withdrawals...................................................... 22
SECTION 11 Distributions............................................................ 22
Distributions to Participants After Termination of Employment............ 22
Distributions to Beneficiaries........................................... 24
- ii -
5
Special Rules Governing Annuity Elections................................ 25
Forfeitures and Restorations of Non-Vested Contributions................. 26
Limits on Commencement and Duration of Distributions..................... 27
Beneficiary Designations................................................. 28
Form of Payment.......................................................... 29
Facility of Payment...................................................... 29
Interests Not Transferable............................................... 29
Absence of Guaranty...................................................... 30
Missing Participants or Beneficiaries.................................... 30
Direct Rollover Option................................................... 30
Distributions on Account of Permanent and Total Disability............... 30
SECTION 12 No Reversion to Employers................................................ 30
SECTION 13 Administration........................................................... 31
Committee Membership and Authority....................................... 31
Allocation and Delegation of Committee Responsibilities and Powers....... 32
Uniform Rules............................................................ 32
Information to be Furnished to Committee................................. 32
Committee's Decision Final............................................... 32
Exercise of Committees' Duties........................................... 32
Remuneration and Expenses................................................ 33
Indemnification of the Committees........................................ 33
Resignation or Removal of Committee Member............................... 33
Appointment of Successor Committee Members............................... 33
SECTION 14 Amendment and Termination................................................ 33
Amendment................................................................ 33
Termination.............................................................. 34
Merger and Consolidation of the Plan, Transfer of Plan Assets............ 34
Distribution on Termination and Partial Termination...................... 34
Notice of Amendment, Termination or Partial Termination.................. 34
SECTION 15 Change of Control Provisions............................................. 35
Application.............................................................. 35
Definition of Change of Control.......................................... 35
Contribution Requirement................................................. 36
Vesting.................................................................. 37
Enforcement Rights; Amendment Restrictions............................... 37
Construction............................................................. 37
SUPPLEMENT A California Vegetable Concentrates Division A-1
SUPPLEMENT B Naperville Hourly Employees B-1
SUPPLEMENT C Kraft Foods Inc. Common Stock C-1
- iii -
6
INDEX OF DEFINED TERMS
1.9 - Access System
1.5 - Accounting Date
7.1 - Accounts
7.1(c) - After-Tax Account
4.2 - After-Tax Contribution
8.3 - Annual Additions
7.1(b) - Before-Tax Account
4.1 - Before-Tax Contribution
11.6 - Beneficiary
15.2(c) - Business Combination
15.2 - Change of Control
1.1 - Code
1.2 - Committee
1.3 - Committees
6.1 - Common Stock
1.1 - Company
8.2 - Compensation
15.5(b) - Control Date
15.3 - Control Period
8.7 - Deferral Percentage
11.1(c) - Distribution Date
1.1 - Effective Date
4.6 - Eligible Compensation
1.2 - Employer
1.3 - ERISA
8.8 - Excess Contributions
10.3 - Hardship
8.9 - Highly Compensated
8.7 - Highly Compensated Group
Deferral Percentage
3.2 - Hour of Service
15.2(b) - Incumbent Board
1.3 - Investment Committee
6.1 - Investment Funds
11.3(a) - Joint and Survivor Annuity
6.1 - Loan Account
7.1(a) - Matching Account
5.1 - Matching Contribution
3.3 - Maternity or Paternity Absence
8.7 - Non-highly Compensated Group
Deferral Percentage
3.3 - One Year Break in Service
15.2(a) - Outstanding Parent Common Stock
15.2(a) - Outstanding Parent Voting Securities
- iv -
7
2.1 - Participant
6.1 - Philip Morris Stock Fund
1.9 - PIN
1.1 - Plan
1.4 - Plan Year
3.4 - Predecessor Employer
1.2 - Related Company
11.5(b) - Required Beginning Date
7.1(d) - Rollover Account
4.8 - Rollover Contribution
8.3 - Section 415 Affiliate
11.6 - Spouse
3.4 - Subsidiary
9.3 - Termination Date
1.3 - Trust
1.3 - Trust Agreement
1.3 - Trustee
3.1, 9.1 - Year of Service
- v -
8
KRAFT FOODS TIP PLAN
(Second Amendment and Restatement
Effective As of May 12, 1997)
SECTION 1
General
1.1 History, Purpose and Effective Date. Kraft Foods, Inc., a Delaware
corporation (the "Company"), maintains the Kraft Foods TIP Plan (the "Plan"),
formerly known as the General Foods Employee Thrift-Investment Plan, to
encourage eligible employees to save a portion of their earnings on a regular
basis and to accumulate capital for their future economic security. The Plan was
amended and restated effective May 12, 1997. The following provisions constitute
a second amendment, restatement and continuation of the Plan as in effect
immediately prior to May 12, 1997, the "Effective Date" of the Plan as set forth
herein. To the extent that any provision of the Plan as set forth herein
specifically provides for an effective date other than May 12, 1997, such
provision will constitute an amendment of the Plan as in effect on such date
and, if such special effective date is later than the general Effective Date,
the applicable provision of the Plan as in effect immediately prior to the
Effective Date will continue to govern until such special effective date. The
Plan is intended to qualify as a profit sharing plan under section 401(a) of the
Internal Revenue Code of 1986, as amended (the "Code"), and is further intended
to include a qualified cash or deferred arrangement under section 401(k) of the
Code.
1.2 Related Companies and Employers. The term "Related Company" means
any corporation or trade or business during any period during which it is, along
with the Company, a member of a controlled group of corporations or a controlled
group of trades or businesses, as described in sections 414(b) and 414(c),
respectively, of the Code. The Company and each Related Company which adopts the
Plan with the consent of the Management Committee for Employee Benefits (the
"Committee") are referred to below collectively as the "Employers" and
individually as an "Employer".
1.3 Plan Administration, Trust and Fiduciary Responsibility. The
authority to control and manage the non-investment operations of the Plan is
vested in the Committee, as more fully described in subsection 13.1. Except as
otherwise expressly provided herein, the Committee shall have the rights, duties
and obligations of an "administrator" as that term is defined in section
3(16)(A) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA") and of a "plan administrator" as that term is defined in section
414(g) of the Code. With respect to the Plan's funding and the investment of its
assets, the Corporate Employee Plans Investment Committee of Philip Morris
Companies Inc. (the "Investment Committee") has the authority and responsibility
to appoint or select trustees, custodians, investment managers and insurance
companies to handle Plan assets and to allocate assets to each of them, to
determine the advisability of establishing or modifying the description of any
Investment Fund (as defined in subsection 6.1) made available under the Plan, to
establish investment guidelines, proxy voting policies and securities trading
procedures, and to monitor the investment
9
performance of the fiduciaries responsible for the investment of Plan assets.
The Committee and the Investment Committee are collectively referred to as the
"Committees". The Company and the Committees shall be "named fiduciaries", as
described in section 402 of ERISA, with respect to their authority under the
Plan. All assets of the Plan will be held, managed and controlled by one or more
trustees (the "Trustee") acting under a "Trust" established pursuant to a "Trust
Agreement" which forms a part of the Plan. As of the Effective Date, the assets
of the Plan are held under the Kraft General Foods Master Defined Contribution
Trust established pursuant to the Master Savings Plan Trust Agreement by and
between the Corporate Employee Plans Investment Committee of Philip Morris
Companies Inc., Philip Morris Companies Inc. and Bankers Trust Company, Trustee,
dated as of April 1, 1992, as the same may be amended from time to time.
1.4 Plan Year. The term "Plan Year" means the twelve-consecutive-month
period beginning on each January 1 and ending on the following December 31.
1.5 Accounting Dates. The term "Accounting Date" means each business day
as determined by the Committee in its sole discretion.
1.6 Applicable Laws. The Plan shall be construed and administered in
accordance with the internal laws of the State of Illinois to the extent that
such laws are not preempted by the laws of the United States of America.
1.7 Gender and Number. Where the context permits, words in any gender
shall include any other gender, words in the singular shall include the plural
and the plural shall include the singular.
1.8 Notices. Any notice or document required to be filed with the
Committee under the Plan will be properly filed if delivered or mailed by
registered mail, postage prepaid, to the Committee (or its delegate), in care of
the Company, at its principal executive offices. Any notice required under the
Plan may be waived by the person entitled to notice.
1.9 Form of Election and Signature. Unless otherwise specified herein,
any election or consent permitted or required to be made or given by any
Participant or other person entitled to benefits under the Plan, and any
permitted modification or revocation thereof, shall be made in writing or shall
be given by means of such telephone voice response system as the Committee may
designate from time to time as the vehicle(s) for executing regular transactions
under the Plan (referred to generally herein as the "Access System"). Each
Participant shall have a personal identification number or "PIN" for purposes of
executing transactions through the Access System and shall be required to
complete a signature authorization form, and entry by a Participant of his PIN
shall constitute his valid signature for purposes of any transaction the
Committee determines should be executed by means of the Access System, including
but not limited to enrolling in the Plan, electing contribution rates, making
investment choices, executing loan documents, and consenting to a withdrawal or
distribution. Any election made through the Access System shall be considered
submitted to the Committee on the date it is electronically transmitted.
- 2 -
10
1.10 Evidence. Evidence required of anyone under the Plan may be by
certificate, affidavit, document or other information which the person acting on
it considers pertinent and reliable, and signed, made or presented by the proper
party or parties.
1.11 Action by Employers. Any action required or permitted to be taken by
any Employer which is a corporation shall be by resolution of its Board of
Directors or a duly authorized committee thereof, or by a duly authorized
officer of the Employer. Any action required or permitted to be taken by any
Employer which is a partnership shall be by a general partner of such
partnership or by a duly authorized officer thereof.
1.12 Plan Supplements. The provisions of the Plan as applied to any
Employer or any group of employees of any Employer may be modified or
supplemented from time to time by the Committee by the adoption of one or more
Supplements. Each Supplement shall form a part of the Plan as of the
Supplement's effective date. In the event of any inconsistency between a
Supplement and the Plan document, the terms of the Supplement shall govern.
1.13 Defined Terms. Terms used frequently with the same meaning are
defined throughout the Plan in boldface. The Index of Defined Terms contains an
alphabetical listing of all such terms and the subsections in which they are
defined.
1.14 Compliance With USERRA. Notwithstanding any provisions of the Plan
to the contrary, contributions and benefits with respect to qualified military
service will be provided in accordance with section 414(u) of the Code.
SECTION 2
Participation in Plan
2.1 Eligibility for Participation. Participation in the Plan is entirely
voluntary. An eligible employee who elects to participate (a "Participant")
shall commence participation on the date determined under subsection 2.2.
Subject to the conditions and limitations of the Plan, each individual who was a
Participant in the Plan immediately prior to the Effective Date will continue as
such on and after that date, and each other employee of an Employer who was not
a Participant immediately prior to the Effective Date will be eligible to
participate in the Plan upon meeting the following eligibility requirements:
(a) he has completed one Year of Service (as defined in subsection 3.1);
(b) contributions are not being made on his behalf to another defined
contribution plan intended to be qualified under section 401(a) of
the Code that is sponsored by an Employer or a Related Company;
(c) he is a member of a collective bargaining unit as to which
retirement benefits have been the subject of good faith bargaining,
and the Plan has been extended to the collective bargaining unit
under a currently effective collective bargaining agreement; and
- 3 -
11
(d) he does not perform services for an Employer under a contract,
agreement or arrangement that purports to treat him as either an
independent contractor or the employee of a leasing organization,
agency, vendor or any other third-party, even if he is subsequently
determined (by judicial action or otherwise) to have instead been a
common law employee of such Employer.
Notwithstanding the foregoing provisions of this subsection 2.1, if an
individual is employed or reemployed by an Employer on or after the date on
which he first completes one Year of Service, he shall be eligible to become a
Participant in the Plan on the first day on which he meets the requirements of
paragraphs (b) and (c) of this subsection 2.1.
2.2 Commencement of Participation. Each employee eligible to participate
in the Plan is required to make an election to participate prior to his
commencement of participation in the Plan. Employees who first satisfy the
Plan's eligibility requirements on any day during the calendar month of April
1997 may elect to commence participation in the Plan effective as of April 1,
1997. Any eligible employee who does not properly elect to commence
participation in the Plan effective on or before April 1, 1997, under the
enrollment procedures established by the Committee, may not later elect to
commence participation in the Plan until May 12, 1997 or any day thereafter.
Employees who first satisfy the Plan's eligibility requirements on or after May
1, 1997, and prior to May 12, 1997, may elect to commence participation in the
Plan on May 12, 1997 or any day thereafter. Effective May 12, 1997, an employee
may elect to commence participation in the Plan on the first day following the
date he has satisfied the eligibility requirements set forth in subsection 2.1,
and if an eligible employee does not properly elect to commence participation on
such date, he may commence his participation on any day thereafter.
2.3 Inactive Participation. If an individual ceases to meet the
eligibility requirements of subsection 2.1, such individual shall be considered
an inactive Participant in the Plan as long as any amount is credited to his
Account under the Plan, and:
(a) no contributions shall be made by or for him under Section 4 or
Section 5;
(b) he may not make a withdrawal under Section 10 after he ceases to be
an employee of an Employer or a Related Company.
2.4 Plan Not Contract of Employment. The Plan does not constitute a
contract of employment, and participation in the Plan will not give any employee
or Participant the right to be retained in the employ of any Employer nor any
right or claim to any benefit under the Plan, unless such right or claim has
specifically accrued under the terms of the Plan.
SECTION 3
Service
3.1 Years of Service. For purposes of Section 2, an employee's "Years of
Service" means:
- 4 -
12
(a) With respect to any full-time employee, the aggregate of all time
periods commencing on the employee's first day of employment or
reemployment and ending on the day he commences a One Year Break in
Service (as defined in subsection 3.3). An employee's first day of
employment or reemployment is the first day for which he is credited
with an Hour of Service (as defined in subsection 3.2).
(b) With respect to any part-time or seasonal employee, each Computation
Period (as defined in the next sentence) during which he completes
at least 1,000 Hours of Service. A "Computation Period" is the
initial 12-consecutive-month period commencing on the date an
employee is first credited with an Hour of Service, and each Plan
Year commencing with the first Plan Year which begins on or after
the date he is first credited with an Hour of Service. An individual
who completes at least 1,000 Hours of Service during his first
Computation Period will be eligible to begin participating in the
Plan on the day following the end of such Computation Period; an
individual who first completes 1,000 Hours of Service in a
subsequent Computation Period will be eligible to begin
participating in the Plan on the day following the day in which he
worked his 1,000th Hour of Service.
For purposes of this Section 3, a "full-time employee" is an employee who is
regularly scheduled to work at least 1,000 hours in a calendar year, and a
"part-time or seasonal employee" is an employee who is scheduled to work for
fewer than 1,000 hours in a calendar year.
3.2 Hour of Service. The term "Hour of Service" means, with respect to
any employee, each hour for which he is paid or entitled to payment for the
performance of duties for an Employer or a Related Company or for which back
pay, irrespective of mitigation of damages, has been awarded to the employee or
agreed to by an Employer or a Related Company, subject to the following:
(a) An employee or Participant shall be credited with the number of
regularly scheduled working hours included in the time period on the
basis of which payment to the Employee is calculated (or, if the
number of such hours is not determinable, 8 Hours of Service per day
(to a maximum of 40 Hours of Service per week)) for any period
during which he performs no duties for an Employer or a Related
Company (irrespective of whether the employment relationship has
terminated) by reason of a vacation, holiday, illness, incapacity
(including disability), layoff, jury duty, military duty, or leave
of absence but for which he is directly or indirectly paid or
entitled to payment by an Employer or a Related Company. Payments
considered for purposes of the foregoing sentence shall include
payments unrelated to the length of the period during which no
duties are performed but shall not include payments made solely as
reimbursement for medically related expenses or solely for the
purpose of complying with applicable workmen's compensation,
unemployment compensation or disability insurance laws.
- 5 -
13
(b) Hours of Service shall be calculated and credited pursuant to
Department of Labor Regulation section 2530.200b-2, which is
incorporated herein by reference.
3.3 One Year Break in Service. Except with respect to an employee whose
absence from employment constitutes a Maternity or Paternity Absence, an
approved leave of absence, qualified military service, or compensable physical
disability incurred during employment service, the term "One Year Break in
Service" means the 12-consecutive-month period commencing on the earlier of
(a) the day an employee's employment with the Employers and Related
Companies is terminated for any reason, or
(b) in the event an employee remains absent from service with the
Employers and Related Companies for any reason other than a quit,
retirement, discharge or death, the first anniversary of the first
day of such period of absence, if he is not paid or entitled to
payment for the performance of duties for an Employer or a Related
Company during that 12-consecutive-month period. An employee or
Participant who is absent on an approved leave of absence for a
period shorter than 12 months will commence a One Year Break in
Service on the date of his scheduled return to work if he does not
in fact return to work at the expiration of such leave. An employee
or Participant who is absent on an approved leave of absence for a
period of 12 months or more will commence a One Year Break in
Service on the first anniversary of the first day of such leave if
he does not return to work at the scheduled expiration of such
leave. An individual who is absent because of service in the U.S.
Armed Forces will begin a One Year Break in Service on the 91st day
following his discharge from military service, if he does not return
to work within 90 days of such discharge. With respect to an
individual whose absence from employment constitutes a Maternity or
Paternity Absence, a One Year Break in Service will commence on the
second anniversary of the first day of such absence, and the period
between the first and second anniversaries of the first day of a
Maternity or Paternity Absence shall not constitute a Year of
Service. The term "Maternity or Paternity Absence" means an
employee's or Participant's absence from active employment with an
Employer or Related Company by reason of the employee's pregnancy,
the birth of a child of the employee, the placement of a child with
the employee in connection with the employee's adoption of such
child, or for purposes of caring for such child immediately after
its birth or placement. The Committee may require the employee or
Participant to furnish such information as it considers necessary to
establish that such individual's absence was a Maternity or
Paternity Absence. With respect to an individual whose absence from
employment is on account of a compensable physical disability
incurred during employment service, each year of such absence shall
not constitute a One Year Break in Service if such individual
recommences employment service within 30 days after the termination
of the period for which statutory compensation for such disability
was payable, or if such individual attains age 65 while on paid
disability leave.
- 6 -
14
3.4 Service With Philip Morris Affiliates and Predecessor Employers. For
purposes of Section 3 and subsection 9.1, service with a Subsidiary or a
Predecessor Employer shall be counted in the same manner as if such entity were
a Related Company. A "Subsidiary" is any corporation in which Philip Morris
Companies Inc. owns (directly or indirectly) more than 50% of the outstanding
voting stock. "Predecessor Employer" means a corporation or business which has
been merged into or consolidated with, or all or substantially all of its assets
acquired by, a Related Company or a Subsidiary.
3.5 Qualified Military Service. Notwithstanding any provision of this
Plan to the contrary, contributions, benefits and service credit with respect to
qualified military service will be provided in accordance with section 414(u) of
the Code.
SECTION 4
Before-Tax, After-Tax and Rollover Contributions
4.1 Before-Tax Contributions. Subject to the limitations set forth in
subsections 4.3 and 4.7 and Section 8 and such additional rules as the Committee
may establish on a uniform and nondiscriminatory basis, for any payroll period a
Participant may elect to have his salary or wages from his Employer reduced by a
whole percentage, and a corresponding amount contributed on his behalf to the
Plan by his Employer as a "Before-Tax Contribution." Such amount shall not be
less than 1 percent nor more than 10 percent of his Eligible Compensation (as
defined in subsection 4.6), but shall be limited to 6% with respect to Eligible
Compensation in excess of $15,000. Any election made pursuant to this subsection
4.1 shall be effective as soon as practicable after the Participant has made his
election in accordance with applicable Access System procedures.
4.2 After-Tax Contributions. Subject to the limitations set forth in
subsections 4.3 and 4.7 and Section 8 and such additional rules as the Committee
may establish on a uniform and nondiscriminatory basis, for any payroll period a
Participant may elect to make "After-Tax Contributions" to the Plan through
payroll deduction in a whole percentage that is not less than 1 percent nor more
than 10 percent of his Eligible Compensation (as defined in subsection 4.6), but
shall be limited to 6% with respect to Eligible Compensation in excess of
$15,000. Any election made pursuant to this subsection 4.2 shall be effective as
soon as practicable after the Participant has made his election in accordance
with applicable Access System procedures.
4.3 Total Before-Tax and After-Tax Contributions. Notwithstanding the
foregoing provisions of this Section 4, Before-Tax Contributions made on behalf
of a Participant pursuant to subsection 4.1 and After-Tax Contributions made by
such Participant pursuant to subsection 4.2 may not together exceed the maximum
amount permitted under either such subsection.
4.4 Payment of Before-Tax and After-Tax Contributions. Before-Tax
Contributions and After-Tax Contributions shall be made through periodic payroll
deductions and shall be paid to the Trustee by the Employer on the earliest date
on which such contributions can reasonably be segregated from the Employer's
general assets, but not later than the 15th business day of the month following
the month in which such amounts would otherwise have been payable to the
- 7 -
15
Participant. For Participants on a semi-monthly payroll, deductions shall be
made from each payroll payment and for Participants on a weekly payroll,
deductions shall be made 48 times during the Plan Year, but not more than 4
times during any calendar month.
4.5 Modification, Discontinuance and Resumption of Before-Tax or
After-Tax Contributions. Subject to such rules and restrictions as the Committee
may establish on a uniform and nondiscriminatory basis, a Participant may adjust
his Before-Tax and/or After-Tax Contributions prospectively by entering into the
Access System, prior to the time such change is to be effective, an election to
make any of the changes listed below:
(a) Change his Before-Tax and/or After-Tax Contribution rates within the
limits specified above.
(b) Discontinue making Before-Tax and/or After-Tax Contributions.
(c) Resume making Before-Tax and/or After-Tax Contributions.
4.6 Eligible Compensation. A Participant's "Eligible Compensation" for
any Plan Year shall mean his annual base wage or salary rate of pay as in effect
on September 30 of the preceding Plan Year, plus any amounts contributed by an
Employer pursuant to a salary reduction agreement and which is not includable in
gross income under section 125, 402(e)(3), 402(h) or 403(b) of the Code, but it
shall not include shift differentials, overtime or other premium pay, or bonus,
incentive or other extra compensation.
4.7 Limitation on Compensation Taken Into Account For Any Plan Year.
Notwithstanding any other provision of the Plan to the contrary, the amount of
Eligible Compensation that may be taken into account under the Plan for any Plan
Year for purposes of applying the limitations of this Section 4 and Section 5
shall not exceed the maximum amount permitted for the Plan Year under section
401(a)(17) of the Code.
4.8 Rollover Contributions. A Participant or an employee who meets the
eligibility requirements of subsection 2.1 (without regard to paragraph (a)
thereof) may make a Rollover Contribution (as defined below) to the Plan,
subject to the determination of the Committee that such rollover satisfies the
requirements of this subsection 4.8. Before approving a rollover, the Committee
may request from the Participant or employee any documents or opinion of counsel
which the Committee, in its discretion, deems necessary. The term "Rollover
Contribution" means a rollover contribution of all or part of a distribution
which, under applicable provisions of the Code, is permitted to be rolled over
to a qualified plan. In no event shall a Participant or employee be permitted to
make a rollover contribution of any amounts previously contributed to another
plan by the Participant on an after-tax basis. If an employee who is not
otherwise a Participant makes a Rollover Contribution to the Plan, he shall be
treated as a Participant only with respect to his Rollover Account (defined in
subsection 7.1) until he has met all of the requirements for Plan participation
set forth in subsections 2.1 and 2.2.
- 8 -
16
SECTION 5
Matching Contributions
5.1 Matching Contributions. Subject to the conditions and limitations of
subsection 4.7 and Section 8, for each payroll period during a Plan Year an
Employer shall contribute to the Plan on behalf of each Participant employed by
such Employer an amount equal to 45 percent of the Before-Tax and After-Tax
Contributions made by and on behalf of the Participant. Any contribution made
pursuant to this subsection 5.1 shall be referred to hereinafter as a "Matching
Contribution".
5.2 Limitations on Amount of Employer Contributions. In no event shall
the sum of any Before-Tax Contributions and Matching Contributions made by an
Employer for any Plan Year exceed the limitations imposed by section 404 of the
Code on the maximum amount deductible on account thereof by the Employer for
that year.
5.3 Payment of Employer Contributions. Matching Contributions under the
Plan for any Plan Year shall be paid to the Trustee, without interest, no later
than the time prescribed by law for filing the Employer's federal income tax
return, including any extensions thereof.
SECTION 6
Investment of the Trust Fund
6.1 Investment Funds and Loan Account. The Investment Committee shall
establish and cause the Trustee to maintain one or more "Investment Funds" for
the investment of Participants' Accounts, which may include an Investment Fund
(the "Philip Morris Stock Fund") which is intended to be invested primarily in
the common stock of Philip Morris Companies Inc. (the "Common Stock"). The
Investment Committee shall also cause the Trustee to maintain a "Loan Account"
to reflect any loans to Participants pursuant to subsection 10.1. The Investment
Committee in its discretion may add additional Investment Funds, may delete any
Investment Fund or may change the investment strategy of any Investment Fund
without prior notice to Participants.
6.2 Loan Account and Investment Fund Accounting. The Committee shall
maintain or cause to be maintained a separate subaccount for each Participant in
each of the Investment Funds and in the Loan Account to separately reflect his
interests in each such Fund or in the Loan Account and the portion thereof that
is attributable to each of his Accounts.
6.3 Investment Fund Elections. At the time that a Participant enrolls in
the Plan or makes a Rollover Contribution he may specify the percentage of
contributions subsequently credited to his Accounts that are to be invested in
each of the Investment Funds. Any such investment direction shall be deemed to
be a continuing direction until changed. During any period in which no such
direction has been given in accordance with rules established by the Investment
Committee, contributions credited to a Participant shall be invested in the
Investment Funds as determined by the Investment Committee. A Participant may
modify his investment direction prospectively by entering into the Access System
his election to do so prior to the
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effective time of the change in accordance with uniform rules established by the
Committee. Subject to uniform procedures established by the Committee, a
Participant may make one investment election with respect to future
contributions allocated to his Before-Tax, After-Tax and Rollover Accounts, and
a separate investment fund election with respect to future contributions
allocated to his Matching Account.
6.4 Transfers Between Investment Funds. Subject to uniform rules
established by the Committee, each Participant may prospectively elect to
re-allocate the investment of his Accounts among the Investment Funds then made
available to him. Any such election shall be made by entering it into the Access
System prior to the time it is to be effective in accordance with uniform rules
established by the Committee. One investment fund re-allocation election may be
made with respect to a Participant's Before-Tax, After-Tax and Rollover
Accounts, and a separate investment fund re-allocation election may be made with
respect to a Participant's Matching Account. Notwithstanding the foregoing, if a
Participant terminates employment before he is fully vested in his Accounts, and
forfeiture of the non-vested portion of his Accounts is delayed pending
distribution of the vested portion, such non-vested portion shall be invested in
accordance with rules established by the Committee to minimize the risk of loss,
and shall not be subject to the investment direction of the Participant.
SECTION 7
Plan Accounting
7.1 Participants' Accounts. The Committee shall maintain the following
"Accounts" in the name of each Participant:
(a) a "Matching Account," which shall reflect:
(i) Matching Contributions, if any, made on his behalf and the
income, losses, appreciation and depreciation attributable
thereto; and
(ii) any amounts transferred to the Plan from the General Foods
Employee Stock Ownership Plan (the ESOP) upon termination of
the ESOP in September 1988 and the income, losses,
appreciation and depreciation attributable thereto;
(b) a "Before-Tax Account," which shall reflect Before-Tax
Contributions, if any, made on his behalf and the income, losses,
appreciation and depreciation attributable thereto;
(c) an "After-Tax Account," which shall reflect After-Tax contributions,
if any, made by the Participant and the income, losses, appreciation
and depreciation attributable thereto; and
(d) a "Rollover Account," which shall reflect Rollover Contributions, if
any, made by him and the income, losses, appreciation and
depreciation attributable thereto.
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In addition, the Committee may maintain subaccounts within any of a
Participant's Accounts to reflect portions of the Account that are subject to
special withdrawal or distribution rights or are otherwise subject to special
rules. The Accounts and subaccounts provided for in this subsection 7.1 shall be
for accounting purposes only, and there shall be no segregation of assets within
the Investment Funds or the Loan Account among the separate Accounts. Reference
to the "balance" in a Participant's Accounts means the aggregate of the balances
in the subaccount maintained in the Investment Funds and Loan Account
attributable to those Accounts.
7.2 Allocation of Fund Earnings and Changes in Value. Subject to the
last sentence of this subsection, as of each Accounting Date, interest,
dividends and changes in value in each Investment Fund since the preceding
Account Date shall be allocated to each Participant's subaccount invested in
such Investment Fund by adjusting upward or downward the balance of his
subaccount invested in such Investment Fund in the ratio which the subaccount of
such Participant invested in such Investment Fund bears to the total of the
subaccount of all Participants invested in such Investment Fund as of such
Accounting Date, excluding therefrom, for purposes of this allocation only, all
Before-Tax, After-Tax, Matching and Rollover Contributions received since the
preceding Accounting Date, so that the total of the subaccount of all
Participants in each Investment Fund shall equal the total value of such fund
(exclusive of such contributions) in accordance with uniform procedures
consistently applied. Notwithstanding the fact that the Plan shall use a daily
valuation system, which generally means that Participants' Accounts will be
updated each Accounting Date to reflect activity for that day, such as new
contributions received by the Trustee, changes in Participants' investment
elections, and changes in the unit value of the Investments Funds, events may
occur that cause an interruption in the process affecting a single Participant
or a group of Participants. Neither the Employers, the Trustee nor the Plan
guarantee that any given transaction will be processed on the anticipated day.
The Investment Committee, in its discretion, may establish special rules for
valuing any Investment Fund invested primarily in stock of the Company or a
Related Company, to address the possibility of unusually high trading volume or
a temporary suspension of trading in such stock. Such rules may set forth the
circumstances under which transfers out of such Investment Fund will be valued
using either the closing price on the applicable day on the New York Stock
Exchange, a composite price listed in the Wall Street Journal, or a weighted
average selling price.
7.3 Allocation and Crediting of Contributions. Subject to the provisions
of Section 8, Before-Tax, After-Tax, Matching and Rollover Contributions made on
behalf of a Participant for any payroll period shall be credited to that
Participant's appropriate Accounts as of the Accounting Date coinciding with or
immediately following the last day of such payroll period. Notwithstanding the
foregoing, unless the Committee establishes uniform rules to the contrary,
contributions made to the Plan shall share in the gains and losses of the
Investment Funds only when actually made to the Trustee.
7.4 Correction of Error. In the event of an error in the adjustment of a
Participant's Accounts, the Committee, in its sole discretion, may correct such
error by either crediting or charging the adjustment required to make such
correction to or against income and expenses of the Trust for the Plan Year in
which the correction is made or the Employer may make an
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additional contribution to permit correction of the error. Except as provided in
this subsection 7.4, the Accounts of other Participants shall not be readjusted
on account of such error.
7.5 Statement of Plan Interest. As soon as practicable after the last
day of each Plan Year and at such other intervals as the Committee may
determine, the Committee shall provide each Participant with a statement
reflecting the balances of his Accounts. Each Participant is responsible for
reviewing his statement and any Participant who discovers an error shall bring
it to the attention of the Committee within 90 days of receipt of the statement.
If a Participant does not bring errors in his statement to the attention of the
Committee within 90 days of receipt of his statement, the Participant will be
deemed to have confirmed the accuracy of the statement.
SECTION 8
Limitations on Compensation, Contributions and Allocations
8.1 Reduction of Contribution Rates. To conform the operation of the
Plan to sections 401(a)(4), 401(k)(3), 402(g) and 415(c) of the Code, the
Committee may establish limits on the Before-Tax and After-Tax Contribution
rates that may be elected by Participants, may unilaterally modify or revoke any
Before-Tax or After-Tax Contribution election made by a Participant pursuant to
subsections 4.1 and 4.2, and may reduce the level of Matching Contributions
(even to zero) allocable to any Participant pursuant to subsection 5.l.
8.2 Compensation for Limitation/Testing Purposes. "COMPENSATION" for
purposes of this Section 8 shall mean:
(a) the Participant's wages, salary, commissions, bonuses and other
amounts received (in cash or kind) during the Plan Year from any
Employer or Related Company for personal services actually rendered
in the course of employment and includable in gross income,
including taxable fringe and welfare benefits, non-qualified stock
options taxable in the year of grant, amounts taxable under a
section 83(b) election and nondeductible moving expenses, but
excluding distributions from any deferred compensation plan
(qualified or non-qualified), amounts realized from the exercise of
(or disposition of stock acquired under) any non-qualified stock
option or other benefits given special tax treatment and lump sum
severance pay, all as defined in Treas. Reg. Section 1.415-2(d)(2),
plus,
(b) any amounts contributed on the Participant's behalf for the Plan
Year to a plan sponsored by an Employer or Related Company pursuant
to a salary reduction agreement which are not includable in gross
income under sections 125, 402(e)(3), 402(h) or 403(b) of the Code,
up to the maximum limit for that Plan Year under Code section 401(a)(17).
8.3 Limitations on Annual Additions. Notwithstanding any other
provisions of the Plan to the contrary, a Participant's Annual Additions (as
defined below) for any Plan Year shall not exceed an amount equal to the lesser
of:
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(a) $30,000; or
(b) 25 percent of the Participant's Compensation for that Plan Year,
determined without regard to clause (b) of subsection 8.2 for Plan
Years beginning prior to January 1, 1998, and calculated as if each
Section 415 Affiliate (defined below) were a Related Company,
reduced by any Annual Additions for the Participant for the Plan Year under any
other defined contribution plan of an Employer or a Related Company or Section
415 Affiliate, provided that, if any other such plan has a similar provision,
the reduction shall be pro rata. The term "Annual Additions" means, with respect
to any Participant for any Plan Year, the sum of all contributions allocated to
a Participant's Accounts under the Plan for such year, excluding any Before-Tax
Contributions that are distributed as excess deferrals in accordance with
subsection 8.6, but including any Before-Tax Contributions treated as excess
contributions under subsection 8.8. The term Annual Additions shall also
include, solely with respect to the dollar limit in (a) above, employer
contributions allocated for a Plan Year to any individual medical account (as
defined in section 415(l) of the Code) of a Participant and any amount allocated
for a Plan Year to the separate account of a Participant for payment of
post-retirement medical benefits under a funded welfare benefit plan (as
described in section 419A (d)(2) of the Code), which is maintained by an
Employer or a Related Company or Section 415 Affiliate. "Section 415 Affiliate"
means any entity that would be a Related Company if the ownership test of
section 414 of the Code was "more than 50%" rather than "at least 80%".
8.4 Excess Annual Additions. If, as a result of a reasonable error in
estimating a Participant's Compensation, a reasonable error in determining the
amount of Before-Tax Contributions that may be made with respect to a
Participant under the limits of section 415 of the Code or such other mitigating
circumstances as the Commissioner of Internal Revenue shall prescribe, the
Annual Additions for a Participant for a Plan Year exceed the limitations set
forth in subsection 8.3, the excess amounts shall be treated, as necessary, in
accordance with Treas. Reg. Section 1.415-6(b)(6)(ii), after any After-Tax
Contributions, and then any Before-Tax Contributions, and any income, losses,
appreciation or depreciation attributable to the foregoing, are first returned
to the Participant to reduce the excess amount.
8.5 Combined Plan Limitation. If a Participant also participates in any
defined benefit plan (as defined in section 415(k) of the Code) maintained by an
Employer or a Related Company or Section 415 Affiliate, the aggregate benefits
payable to, or on account of, the Participant under such plan together with this
Plan will be determined in a manner consistent with section 415(e) of the Code,
to the extent then applicable. The benefit provided for the Participant under
the defined benefit plan shall be adjusted to the extent necessary so that the
sum of the "defined benefit fraction" and the "defined contribution fraction"
(as such terms are defined in section 415(e) of the Code and applicable
regulations thereunder) calculated with regard to such Participant does not
exceed 1.0. For purposes of this subsection 8.5, all qualified defined benefit
plans (whether or not terminated) of the Employers, Related Companies and
Section 415 Affiliates shall be treated as one defined benefit plan. The
provisions of this subsection 8.5 shall not apply to Plan Years beginning after
December 31, 1999.
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8.6 Annual Dollar Limitation. In no event shall the Before-Tax
Contributions for a Participant under the Plan and any other elective deferrals
(as defined in section 402(g)(3) of the Code) under any other cash-or-deferred
arrangement maintained by an Employer or a Related Company for any taxable year
exceed $9,500 or such other amount as may be permitted under section 402(g) of
the Code. If during any taxable year a Participant is also a participant in any
other cash-or-deferred arrangement, and if his elective deferrals made under
such other arrangements together with his Before-Tax Contributions made under
the Plan exceed the maximum amount permitted for the Participant for that year
under section 402(g) of the Code, the Participant, not later than March 1
following the close of such taxable year, may request the Committee to direct
the Trustee to distribute all or a portion of such excess to him, with any gains
or losses allocable thereto for that Plan Year determined in accordance with any
reasonable method adopted by the Committee for that Plan Year that either (i)
conforms to the accounting provisions of Section 7 and is consistently applied
to the distribution of excess contributions under this subsection 8.6 and
subsection 8.8 to all affected Participants, or (ii) satisfies any alternative
method set forth in applicable Treasury regulations. Any such request shall be
in writing and shall include adequate proof of the existence of such excess, as
determined by the Committee in its sole discretion. If the Committee is so
notified, such excess amount shall be distributed to the Participant no later
than the April 15 following the close of the Participant's taxable year. In
addition, if the applicable limitation for a Plan Year happens to be exceeded
with respect to this Plan alone, or this Plan and another plan or plans of the
Employers and Related Companies, the Committee shall direct such excess
Before-Tax Contributions (with allocable gains or losses) to be distributed to
the Participant as soon as practicable after the Committee is notified of the
excess deferrals by the Company, an Employer or the Participant, or otherwise
discovers the error (but no later than the April 15 following the close of the
Participant's taxable year). Notwithstanding the foregoing provisions of this
subsection 8.6, the dollar amount of any distribution due hereunder shall be
reduced by the dollar amount of any Before-Tax Contributions previously
distributed to the same Participant pursuant to subsection 8.8, provided,
however, that for purposes of subsections 8.3 and 8.7, the correction under this
subsection 8.6 shall be deemed to have occurred before the correction under
subsection 8.8.
8.7 Section 401(k)(3) Testing. For any Plan Year beginning after
December 31, 1996, the amount by which the average of the Deferral Percentages
(as defined below) for the Plan Year for the group of eligible employees who are
Highly Compensated (the "Highly Compensated Group Deferral Percentage") exceeds
the average of the Deferral Percentages for the same Plan Year for the group of
eligible employees who are not Highly Compensated (the "Non-highly Compensated
Group Deferral Percentage"), shall be less than or equal to either (i) a factor
of 1.25 or (ii) both a factor of 2 and a difference of 2. The "Deferral
Percentage" for any eligible employee for a Plan Year shall be determined by
dividing his Before-Tax Contributions for that Plan Year by his Compensation for
that Plan Year, subject to the following special rules:
(a) any employee eligible to participate in the Plan at any time during
a Plan Year in accordance with subsection 2.1 (without regard to any
suspension imposed by any other provision hereunder) shall be
counted, whether or not any Before-Tax Contributions are made on his
behalf for the year;
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(b) the Deferral Percentage for any Highly Compensated Participant who
is eligible to participate in the Plan and who is also eligible to
make elective deferrals under one or more other arrangements
described in section 401(k) of the Code that are maintained by an
Employer or a Related Company for a plan year that ends with or
within the same calendar year as the Plan Year (other than a plan
subject to mandatory disaggregation under applicable Treasury
regulations) shall be determined as if all of such elective
deferrals were made on his behalf under the Plan;
(c) excess Before-Tax Contributions distributed to a Participant under
subsection 8.6 shall be counted in determining such Participant's
Deferral Percentage, except in the case of a distribution to a
non-Highly Compensated Participant required to comply with section
401(a)(30) of the Code; and
(d) all collective bargaining units shall be treated as a single
collective bargaining unit, and separate testing of each collective
bargaining unit shall not be required under this subsection 8.7.
Application of the provisions of this subsection 8.7 shall be made in accordance
with the requirements of section 401(k)(3) of the Code and applicable
regulations thereunder.
8.8 Correction Under Section 401(k) Test. In the event that the Highly
Compensated Group Deferral Percentage for any Plan Year does not initially
satisfy one of the tests referred to in subsection 8.7, the Committee shall
direct the Trustee to distribute the Excess Contributions (as defined below) for
such year, with any gains or losses allocable thereto for that Plan Year. The
"Excess Contributions" for any Plan Year shall mean the excess of the aggregate
amount of Before-Tax Contributions taken into account in computing the Deferral
Percentages of Highly Compensated Participants for such year over the maximum
amount of Before-Tax Contributions permitted under the test set forth in
subsection 8.7. Distribution of the Excess Contributions for a Plan Year shall
be made to Highly Compensated Participants on the basis of the amount of
contributions made on behalf of each such Participant for such year beginning
with those Highly Compensated Participants making the largest dollar amount of
contributions, in the manner required under section 401(k)(8)(B) of the Code.
The gain or loss allocable to Excess Contributions shall be determined in
accordance with any reasonable method adopted by the Committee for that Plan
Year that either (i) conforms to the accounting provisions of Section 7 and is
consistently applied to making corrective distributions under this subsection
8.8 and subsections 8.6, 8.10 and 8.11 to all affected Participants or (ii)
satisfies any alternative method set forth in applicable Treasury regulations.
The amounts to be distributed to any Participant pursuant to this subsection 8.8
shall be reduced by the amount of any Before-Tax Contributions distributed to
him for the taxable year ending with or within such Plan Year pursuant to
subsection 8.6. The Committee shall take such actions and cause any distribution
to be made no later than the close of the Plan Year following the Plan Year for
which the Excess Contributions were made.
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8.9 Highly Compensated. For years beginning after December 31, 1996, an
active employee (that is, an employee who performs services for the Employer or
any Related Company during the year in question) or Participant shall be "Highly
Compensated" for any Plan Year if:
(a) he was at any time during that Plan Year or the preceding Plan Year
a 5 percent owner of an Employer or a Related Company; or
(b) he received Compensation for the preceding Plan Year in excess of
$80,000 (indexed for cost-of-living adjustments under section 415(d)
of the Code).
A former employee (that is, any employee who separated from service, or was
deemed to have separated, prior to the year in question and who performs no
services for the Employers and Related Companies during the year) shall be
"Highly Compensated" if he was a Highly Compensated active employee for either
the separation year or any Plan Year ending on or after his 55th birthday.
Notwithstanding the foregoing provisions of this subsection 8.9, for any Plan
Year the Committee may use any alternative definition of highly compensated
permitted under section 414(q) of the Code and applicable regulations
thereunder.
8.10 Forfeiture of "Orphaned" Matching Contributions. If Before-Tax
Contributions are returned to a Highly Compensated Participant to satisfy the
contribution limits of section 415(c) of the Code, the deferral limits of
section 402(g) of the Code or the nondiscrimination requirements of section
401(k)(3) of the Code, any Matching Contributions allocable thereto shall be
forfeited and used to reduce the amount of Employer contributions otherwise
required to be made to the Plan.
SECTION 9
Vesting Service, Vesting and Termination Dates
9.1 Determination of Vesting Service and Vested Interest. A Participant
at all times shall have a fully vested, nonforfeitable interest in his
Before-Tax Account, After-Tax Account and Rollover Account. A Participant shall
become vested in his Matching Account in accordance with the following schedule:
Completed Years of Service Percent Vested
-------------------------- --------------
Less than 2 0%
2 25%
3 50%
4 75%
5 100%
For purposes of this subsection 9.1, a Participant's "Years of Service" will be
computed in accordance with paragraph 3.1(a) and subsection 3.4 regardless of
whether he is a full-time employee or a part-time or seasonal employee, provided
that no part-time or seasonal employee shall have fewer Years of Service for
purposes of this subsection 9.1 as of December 31, 1997
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than he would have had under the method of computing vesting service applicable
to him under the terms of the Plan as in effect on May 11, 1997. Notwithstanding
the foregoing provisions of this subsection 9.1, if an employee or Participant
terminates employment with the Employers and Related Companies when he does not
have a vested right to any portion of his Matching Account under this subsection
9.1, and if the number of his consecutive One Year Breaks in Service equals or
exceeds the greater of five (5) or the aggregate number of his Years of Service
prior to the first such One Year Break in Service, then his Years of Service
prior to such break shall be disregarded and, if he is later employed or
reemployed by an Employer or a Related Company, he shall be considered a new
employee for purposes of this subsection 9.1.
9.2 Accelerated Vesting. Notwithstanding the foregoing provisions of
this Section 9, a Participant shall have a fully vested, nonforfeitable interest
in all his Accounts when he attains age 55, dies or becomes permanently and
totally disabled (as defined below) while employed by an Employer or a Related
Company. In addition, in the event of the Plan's termination (in accordance with
subsection 14.2) or partial termination (as determined under applicable law and
regulations), or the complete discontinuance of Employer contributions to the
Plan, each affected Participant shall be fully vested in all his Accounts. For
purposes of this subsection 9.2, a Participant will be considered "permanently
and totally disabled" if, on account of physical or mental disability, he no
longer is capable of performing any job or position with his employer for which
he is otherwise eligible or qualified, such disability continues for at least
six (6) months, and it is demonstrated to the satisfaction of the Committee that
such disability will be permanent and continuous for the remainder of his life.
The Committee in its discretion may also determine that the Accounts of
Participants affected by a divestiture, plant closing or termination of an
operation shall be fully vested, even though such event does not constitute a
partial termination.
9.3 Termination Date. If a Participant is terminated for any reason, his
"Termination Date" generally will be the last day for which he is paid wages or
salary for services performed for an Employer, unless he is terminated while on
an unpaid leave of absence, in which case his Termination Date will be the day
as of which he is notified of his termination or resigns (whichever is
applicable).
9.4 Distribution of Before-Tax Account Only Upon Separation From
Service. Notwithstanding any other provision of the Plan to the contrary, a
Participant may not commence distribution of the portion of his Account
attributable to his Before-Tax Contributions prior to the date he attains age
59-1/2, even though his employment with the Employers and Related Companies has
terminated and he is otherwise eligible for a distribution under Section 11,
unless or until he also has a "separation from service" within the meaning of
section 401(k)(2)(B) of the Code. The foregoing restriction shall not apply,
however, if the Participant's termination of employment occurs in connection
with the sale by an Employer or a Related Company to an unrelated corporation of
at least 85% of the assets of a trade or business or the disposition of its
interest in a subsidiary to an unrelated entity that meets the requirements for
distribution under applicable Treasury regulations.
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SECTION 10
Loans and Withdrawals of Contributions While Employed
10.1 Loans to Participants. The Committee, upon request by a Participant
who is an employee of an Employer or a Related Company (excluding any employee
on layoff or a leave of absence without pay) or who is a "party in interest"
with respect to the Plan (as such term is defined in section 3(14) of ERISA) may
authorize a loan to be made to the Participant from his vested interest in the
Trust Fund, subject to the following:
(a) The minimum loan amount is $1,000. No loan shall be made to a
Participant if, immediately after such loan, the sum of the
outstanding balances (including principal and interest) of all loans
made to him under this Plan and under any other qualified retirement
plans maintained by the Related Companies would exceed the lesser
of:
(i) $50,000, reduced by the excess, if any, of:
(A) the highest outstanding balance of all loans to the
Participant from the plans during the one-year period
ending on the day immediately before the date on which
the loan is made; over
(B) the outstanding balance of loans from the plans to the
Participant on the date on which such loan is made; or
(ii) the combined values of the Participant's After-Tax, Before-Tax
and Rollover Accounts;
and no loan shall be made to a Participant from the Plan in an
amount that would exceed one-half of the total vested balance of the
Participant's Accounts under the Plan as of the date the loan is
made. Notwithstanding the foregoing, if the amount described in
clause (ii) above declines because of investment losses between the
date the loan is requested and the Accounting Date as of which it is
made, the difference may be taken from the vested portion of his
Matching Account (so long as the loan does not exceed one-half of
the total vested balance of his Accounts).
(b) Each loan to a Participant shall be charged against the
Participant's Accounts in the order and manner determined by the
Committee, and shall be charged pro rata against each Investment
Fund in which such Accounts are invested.
(c) Each loan shall be evidenced by a written note providing for:
(i) a repayment period of 12 through 60 months, inclusive;
(ii) a reasonable rate of interest (as determined below);
(iii) substantially equal payments of principal and interest over
the term of the loan no less frequently than quarterly; and
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(iv) such other terms and conditions as the Committee shall
determine.
The interest rate shall provide the Plan with a return commensurate
with the interest rates charged by persons in the business of
lending money for loans which would be made under similar
circumstances and shall be a fixed rate for the life of the loan.
The interest rate which applies to a loan shall be the rate in
effect on the date that the loan application is made by the
Participant.
(d) A loan shall be the borrowing Participant's individual investment
within the Loan Account.
(e) Payments of principal and interest to the Trustee with respect to
any loan to a Participant:
(i) shall reduce the outstanding balance with respect to that
loan;
(ii) shall reduce the balance of the Loan Account holding the
promissory note reflecting that loan;
(iii) shall be credited to the Participant's Accounts in the reverse
order in which they were charged; and
(iv) shall be invested in the Investment Funds in accordance with
his current investment directions with respect to such
Accounts.
(f) A Participant's obligation to repay a loan (or loans) from the Plan
shall be secured by the Participant's vested interest in the Plan.
The note evidencing the loan, the security agreement and the payroll
deduction authorization shall each be executed by the Participant by
entry of his PIN into the Access System. Endorsement of the loan
check shall constitute the Participant's affirmation of the note,
security agreement and payroll deduction authorization set forth in
the written confirmation sent to the Participant after he made his
loan request.
(g) Generally, loan repayments will be made by automatic payroll
deductions. However, during any period when payroll deduction is not
possible or is not permitted under applicable law, repayment will be
made by check or money order and shall be sent to the Plan's service
center. Loan repayments will be suspended under this Plan as
permitted under section 414(u)(4) of the Code.
(h) The loan may be prepaid in full, without penalty, at any time after
it has been outstanding for 12 months. In the event of early
repayment of the loan, the Participant may not apply for a new loan
until at least 30 days after the prior loan's repayment.
(i) Effective January 1, 1999, a loan to a Participant shall become
immediately due and payable without notice of any kind upon his
permanent and total disability or his termination of employment with
the Employers and Related Companies. Notwithstanding any other
provision of the Plan to the contrary, if the outstanding
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balance of principal and interest on any loan is not paid within the
grace period established by the Committee for a delinquent payment
(not later than the end of the calendar quarter following the
quarter in which it is due) or within 90 days after acceleration in
accordance with the preceding sentence, a default shall occur and
the Trustee shall apply all or a portion of the Participant's vested
interest in the Plan in satisfaction of such outstanding obligation,
but only to the extent such vested interest (or portion thereof) is
then distributable under applicable provisions of the Code. If
necessary to satisfy the entire outstanding obligation, such
application of the Participant's vested interest may be executed in
a series of actions as amounts credited to the Participant's
Accounts become distributable. Any partial payments shall be applied
first to the payment of accrued interest and thereafter to the
payment of outstanding principal.
(j) If distribution is to be made to a Beneficiary in accordance with
subsection 11.2, any outstanding promissory note of the Participant
shall be canceled and the unpaid balance of the loan, together with
any accrued interest thereon, shall be treated as a distribution to
or on behalf of the Participant immediately prior to commencement of
distribution to the Beneficiary.
(k) The Committee shall establish uniform procedures for applying for a
loan, evaluating loan applications, and setting reasonable rates of
interest, which shall be communicated to Participants in writing. A
Participant may have only one loan outstanding at any time, and any
prior loan must be repaid and credited to a Participant's Accounts
before the Participant may apply for a new loan.
10.2 Hardship Withdrawals. Subject to the provisions of this subsection
10.2 and of paragraph 10.3(c), a Participant who has not attained age 59-1/2,
whose Termination Date has not yet occurred, and who incurs a Hardship (as
defined in subsection 10.3) may elect to withdraw all or part of his interest in
the following Accounts, as provided and in the order set forth below:
(a) up to 100% of his After-Tax Account, and the earnings thereon;
(b) up to 100% of his Rollover Account; and
(c) up to 100% of the Before-Tax Contributions credited to his
Before-Tax Account and any earnings credited to such account as of
December 31, 1988.
Any such Hardship withdrawal is subject to a minimum amount of $500. A
Participant who does not have at least $500 in the Accounts listed above is
ineligible for a Hardship withdrawal. A Participant who is eligible to make a
withdrawal under subsection 10.5 and/or subsection 10.6 must withdraw the full
amount available to him under both such subsections before he makes a Hardship
withdrawal under this subsection 10.2.
10.3 Determination of Hardship. A withdrawal will not be considered to be
made on account of "Hardship" unless the following requirements are met:
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(a) The withdrawal is requested because of an immediate and heavy
financial need of the Participant, and will be so deemed if the
Participant represents that the withdrawal is made on account of:
(i) uninsured expenses for medical care described in section
213(d) of the Code incurred by the Participant, a parent of
the Participant, the Participant's spouse or any dependent of
the Participant (as defined in section 152 of the Code) or
necessary for such persons to obtain such medical care;
(ii) the purchase (excluding mortgage payments) of a principal
residence of the Participant;
(iii) payment of tuition and related educational fees for the next
12 months of post-secondary education for the Participant, or
his spouse, children or dependents;
(iv) the need to prevent the eviction of the Participant from his
principal residence or foreclosure on the mortgage of the
Participant's principal residence;
(v) funeral expenses of a family member, past due taxes, past due
child support, other past due obligations, cash settlements
due in a divorce, the cost of repairs to the Participant's
home as a result of major damage or to a major appliance, or
repairs to or purchase of a car needed to commute to work; or
(vi) any other circumstances of immediate and heavy financial need
identified as such in revenue rulings, notices or other
documents of the Internal Revenue Service of general
applicability or other unusual or unexpected expenses meeting
such criteria as are determined by the Committee to constitute
an immediate and heavy financial need.
(b) The withdrawal must also be necessary to satisfy an immediate and
heavy financial need of the Participant. It will be considered
necessary if the Committee determines that the amount of the
withdrawal does not exceed the amount required to relieve the
financial need (taking into account any applicable income or penalty
taxes resulting from the withdrawal) and if the need cannot be
satisfied from other resources that are reasonably available to the
Participant. In making this determination, the Committee may
reasonably rely on the Participant's written representation that the
need cannot be relieved:
(i) through reimbursement or compensation by insurance or
otherwise;
(ii) by reasonable liquidation of the Participant's assets, to the
extent such liquidation would not itself give rise to an
immediate and heavy financial need;
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(iii) by ceasing to make Before-Tax or After-Tax Contributions to
the Plan (or any other plan of the Employer permitting
deferral of compensation); or
(iv) by a loan pursuant to subsection 10.1 or by borrowing from
commercial sources on reasonable commercial terms.
(c) The withdrawal must be made pursuant to a written request to the
Committee, which request shall include any representation required
by this subsection 10.3 and adequate proof thereof, as determined by
the Committee in its sole discretion.
10.4 Age 59 1/2 Withdrawals. Once a Participant attains age 59-1/2 he may
withdraw all or any portion of his entire vested Account balance regardless of
whether he has a Hardship.
10.5 Withdrawals From 3/31/97 After-Tax and Matching Account Balances. A
Participant who was participating in the Plan prior to April 1, 1997 and whose
Termination Date has not yet occurred may elect to withdraw all or a portion of
his March 31, 1997 After-Tax Account and Matching Account balances, as provided
and in the order set forth below:
(a) that portion of his After-Tax Account attributable to After-Tax
Contributions made prior to April 1, 1997, and any earnings thereon;
and
(b) that portion of his Matching Account attributable to Matching
contributions made prior to April 1, 1997, and any earnings thereon.
Until November 1, 1999 any withdrawal under this subsection 10.5 is subject to a
minimum amount of $500 or the total amount that may be withdrawn pursuant to
this subsection, whichever is less.
10.6 Form of Withdrawals. Any loan or withdrawal from any Account
pursuant to this Section 10 shall be made proportionately from each of the
Investment Funds in which such Account is invested. All loan proceeds shall be
paid solely in cash. All Hardship withdrawals and, except as provided in the
following sentence, all withdrawals under subsections 10.4 and 10.5, shall be
made solely in cash. Withdrawals under subsections 10.4 and 10.5 from the
portion of a Participant's Accounts that is invested in the Philip Morris Stock
Fund shall be made in cash, except to the extent the Participant elects to
receive whole shares of Common Stock (with cash in lieu of any fractional
share).
SECTION 11
Distributions
11.1 Distributions to Participants After Termination of Employment. If a
Participant's Termination Date occurs (for a reason other than his death), the
vested portions of his Accounts shall be distributed in accordance with the
following provisions of this subsection 11.1, subject to the rules of
subsections 11.5 and 9.4:
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(a) Effective January 1, 1998, if the value of the vested portions of
such Participant's Accounts (including any loans outstanding on his
Termination Date) does not exceed $5,000 or such larger amount as
may be permitted for involuntary cash-outs under applicable
provisions of the Code, (and for determinations made prior to
September 1, 1999 did not exceed such amount at the time of any
earlier withdrawal), determined as soon as practicable following his
Termination Date, such vested portions, less any outstanding loan
balance distributable in accordance with paragraph 10.1(i), shall be
distributed to him as soon as practicable following notification, in
a lump sum payment; provided, however, that the distribution shall
not commence earlier than 30 days after the Participant is given the
direct rollover notice required under section 402(f) of the Code
unless the Participant has been informed of his right to a period of
at least 30 days to consider the decision of whether or not to elect
a direct rollover, and the Participant, after receiving such notice,
affirmatively elects the distribution.
(b) If a Participant is not cashed out under the provisions of the
foregoing paragraph (a), the vested portions of the Participant's
Account, less any outstanding loan balance distributable in
accordance with subsection 10.1(i), shall be distributed (or shall
begin to be distributed) to the Participant on (or as soon as
practicable after) the Distribution Date (as defined in paragraph
(c) below) he elects, by one of the following methods chosen by the
Participant:
(i) by payment in a lump sum; or
(ii) by payment in a series of monthly, quarterly, semi-annual or
annual installments for a period selected by the Participant
that complies with subsection 11.5 (the amount of each
installment as of each applicable Accounting Date shall be
equal to the product of the Participant's then Account
balances multiplied by a fraction, the numerator of which is
one and the denominator of which is the difference between the
number of installments selected and the number of installments
previously paid); provided, however, that a Participant may
elect payments in the form of a fixed amount option under
which the Participant will receive a specified dollar amount
payable at specified intervals (monthly, quarterly,
semiannually or annually) until his account is completely
liquidated, and a Participant may elect to change the fixed
amount (without changing the frequency of the payments)
subject to uniform rules established by the Committee; and
provided further that the Participant may elect to accelerate
any installment payments and to have his remaining vested
Account balance distributed to him in a lump sum payment as
soon as practicable after the Accounting Date coincident with
or next following the date his acceleration election is
submitted to the Committee; or
(iii) by purchase from an insurance company and distribution to him
of an annuity contract providing for periodic distributions to
him for his life (with or without a period certain) or to him
and his beneficiary for their joint lives, subject to the
provisions of subsection 11.3.
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(c) A Participant's "Distribution Date" shall mean the Accounting Date
as of which a payment in any form is made to him pursuant to this
Section 11, without regard to any reasonable administrative delay;
provided, however, that in the event of an election of an annuity
under clause (b)(iii) above, the Distribution Date shall be no later
than the date payment is irrevocably made on behalf of the
Participant to the insurance company issuing the annuity contract. A
Participant may elect that his Distribution Date occur as of any
Accounting Date occurring on or after his Termination Date (but not
later than the date on which he attains age 70-1/2), provided that
no election of a Distribution Date will be valid if it is made more
than 90 days prior to such date and further provided that the
distribution shall not commence earlier than 30 days after the
Participant is given the direct rollover notice required under
section 402(f) of the Code and the notice required under Treasury
regulation section 1.411(a)-11(c) unless the Participant has been
informed of his right to a period of at least 30 days to consider
the decision of whether or not to elect a direct rollover and
whether or not to elect a distribution, and the Participant, after
receiving such notices, affirmatively elects the distribution.
11.2 Distributions to Beneficiaries. Subject to subsection 11.5, the
following rules shall apply if a Participant dies while any vested portion of
his Accounts remains undistributed:
(a) If the Participant dies before benefit payments to him have
commenced, the vested balance of his Accounts, less any outstanding
loan balance distributable in accordance with paragraph 10.1(j),
shall be distributed as follows:
(i) If the value of the vested portion of the Participant's
Accounts (less the outstanding loan balance) does not exceed
$5,000 (or the applicable cash-out limit), determined as soon
as practicable following his date of death, or, effective
September 1, 1999, if the Beneficiary is not the Participant's
surviving spouse, such vested portion (less the outstanding
loan balance) shall be distributed to his Beneficiary as soon
as practicable after his death, in a lump sum payment.
(ii) If the value of the vested portion of the Participant's
Accounts (less the outstanding loan balance) exceeds $5,000
(or the applicable cash-out limit), determined as soon as
practicable following his date of death and effective
September 1, 1999 the Beneficiary is the Participant's
surviving spouse, such vested portion (less the outstanding
loan balance) shall be distributed to his Beneficiary as of
any Accounting Date following the date of his death selected
by the Beneficiary (in accordance with subsection 11.5), in
one of the methods described at paragraph 11.1(b) as chosen by
the Beneficiary.
(b) If a Participant dies after benefit payments to him have commenced,
the vested balance, if any, of his Accounts shall continue to be
distributed to his Beneficiary in accordance with the method of
distribution selected by the Participant; provided, however, that
the Beneficiary may elect to accelerate the payments and
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to have such remaining vested balances distributed in a lump sum
payment as soon as practicable after the Accounting Date next
following the date the Beneficiary's acceleration election is filed
with the Committee.
11.3 Special Rules Governing Annuity Elections. If a married Participant
elects distribution in the form of an annuity pursuant to clause 11.1(b)(iii),
the following rules shall apply and shall supersede any other provision of the
Plan to the contrary:
(a) The vested portions of the Participant's Accounts, less any
outstanding loan balance distributable in accordance with paragraph
10.1(i), shall be used to purchase a nontransferable "Joint and
Survivor Annuity" (that is, an annuity payable for the life of the
Participant with a survivor annuity payable for the life of his
spouse which is not less than 50% of the amount of the annuity
payable during the joint lives of the Participant and spouse),
unless he elects another form of annuity and, if applicable, a
Beneficiary other than his spouse, with the consent of his spouse to
such form and Beneficiary, during the 90-day period immediately
preceding his Distribution Date. The Participant's Distribution Date
shall be no earlier than 30 days after the Participant is given the
notice required under Treasury regulation section
1.411(a)-11(c), (including a written explanation of the terms and
conditions of the Joint and Survivor Annuity and the effect of an
election of a different annuity form), unless the Participant has
been informed of his right to a period of at least 30 days to
consider the decision of whether or not to elect a distribution and
a particular distribution option, and the Participant, after
receiving such notice, affirmatively elects the distribution.
(b) No consent by the spouse to the election of a form of annuity other
than the Joint and Survivor Annuity and, if applicable, Beneficiary
other than the spouse shall be effective unless it is in writing,
acknowledges the effect of such consent and is witnessed by a Plan
representative or a notary public (unless the Committee determines
that there is no spouse, that the spouse cannot be located, that the
Participant and his spouse are legally separated, that the
Participant has been abandoned (under applicable state law) and the
Participant has a court order to that effect, or that consent may be
waived because of such other circumstances as regulations or rulings
under Code section 417 set forth).
(c) During the period between his election of an annuity and his
Distribution Date, no loan may be made to a Participant pursuant to
subsection 10.1, no amount may be withdrawn by the Participant
pursuant to Section 10 and no amount may be distributed to the
Participant pursuant to subsection 11.1, in any form other than a
Joint and Survivor Annuity, without the written consent of the
spouse as provided in paragraph (b) of this subsection 11.3.
(d) Subject to paragraph (e) below, if the Participant dies during the
period between his election of an annuity and his Distribution Date,
the vested portions of his Accounts (less any amounts credited to
the Loan Fund, which shall be distributed in accordance with
paragraph 10.1(j)) shall be paid to his spouse in the form of a life
annuity as of the Accounting Date next following the date the
Participant
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would have attained age 65 or, if the spouse so elects, as soon as
practicable after any earlier Accounting Date next following his
death; provided, however, that a spouse to whom payment is due under
this paragraph (d) may elect to have such vested portions, if any,
distributed in the form of a lump sum payment.
(e) The provisions of paragraph (d) above shall not apply, and
distribution upon the death of the Participant shall be made in
accordance with subsection 11.2, if the spouse consents to the
designation of a Beneficiary other than the spouse in accordance
with subsection 11.6 during the period between the Participant's
election of an annuity and his death, and acknowledges that such
consent to the Participant's designation of such Beneficiary
constitutes the spouse's consent to the Participant's waiver of a
qualified pre-retirement survivor annuity payable to the spouse in
accordance with section 417 of the Code.
(f) A Participant may revoke his election pursuant to this subsection
11.3, and may make a new election of any form of distribution
permitted under paragraph 11.1(b), at any time during the 90-day
period immediately preceding his Distribution Date; provided,
however, that if the effect of such revocation is to select a
distribution form other than a Joint and Survivor Annuity, it shall
be ineffective without the written consent of his spouse in
accordance with paragraph (b) of this subsection 11.3 to the new
form of distribution and, if applicable, a Beneficiary other than
the spouse.
11.4 Forfeitures and Restorations of Non-Vested Contributions. If a
Termination Date occurs with respect to a Participant who is not fully vested in
his Accounts (as determined under Section 9), the following rules shall apply:
(a) The non-vested portion of his Accounts shall be forfeited as of the
earlier of the date as of which the vested portion of his Accounts
is distributed to him or the date the Participant incurs five
consecutive One Year Breaks in Service.
(b) If a forfeiture occurs due to the distribution of the vested portion
of the Participant's Accounts, and the Participant is reemployed by
an Employer or a Related Company before he incurs five consecutive
One Year Breaks in Service, the amount forfeited under paragraph (a)
above shall be restored, as adjusted for earnings in accordance with
uniform rules established by the Committee, as soon as practicable
after his reemployment.
(c) If a forfeiture occurs due to the distribution of the vested portion
of the Participant's Accounts, and the Participant is reemployed by
an Employer or Related Company after he incurs five consecutive One
Year Breaks in Service, such reemployment shall have no effect on
the forfeiture under paragraph (a) above.
(d) The restoration referred to in paragraph (b) above shall be made
first from current forfeitures, if any, under the Plan and then, if
necessary, from a special Employer contribution to the Plan.
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(e) A restoration pursuant to paragraph (b) above shall not be
considered an annual addition for purposes of subsection 8.3.
(f) If a Participant who is reemployed by an Employer or Related Company
prior to incurring five consecutive One Year Breaks in Service
received a distribution of the vested portion of his Matching
Account, the amount restored under paragraph (b) above shall be
maintained in a separate subaccount within the Participant's
Matching Account and his vested interest in each subaccount shall be
determined in accordance with the rules set forth in Treas. Reg.
Section 411(a)-7(d)(5)(iii)(A).
(g) During the period between the Participant's Termination Date and the
date he is either reemployed by an Employer or Related Company or
the date the non-vested portion of his Matching Account is forfeited
such non-vested portion shall be credited to a forfeiture subaccount
and invested in accordance with rules established by the Committee
to minimize the risk of loss, and shall not be subject to the
investment direction of the Participant.
(h) All forfeitures under this subsection 11.4 shall be used to reduce
Matching Contributions under Section 5, except to the extent needed
to restore prior forfeitures under paragraph (b) above.
11.5 Limits on Commencement and Duration of Distributions. The following
distribution rules shall be applied in accordance with sections 401(a)(9) and
401(a)(14) of the Code and applicable regulations thereunder, including the
minimum distribution incidental benefit requirement of Treas. Reg. Section
1.401(a)(9)-2, and shall supersede any other provision of the Plan to the
contrary:
(a) Unless the Participant elects otherwise, in no event shall
distribution commence later than 60 days after the close of the Plan
Year in which the latest of the following events occurs: the
Participant's attainment of age 65; the 10th anniversary of the year
in which the Participant began participating in the Plan; or the
Participant's Termination Date. The failure of a Participant to
consent to a distribution is deemed to be an election to defer
commencement of payment for purposes of the preceding sentence.
(b) Notwithstanding any other provision herein to the contrary,
distribution of a Participant's Accounts shall commence to be made
to him (or on his behalf) once he has attained age 70-1/2 in the
form of a lump sum distribution or, if elected by the Participant,
in any other form permitted by paragraph 11.1(b), on or before his
Required Beginning Date (as defined below) and each December 31
thereafter. (In the event an annuity or lump sum has been elected,
each additional payment shall consist of a lump sum payment of all
amounts then credited to his Accounts.) For years beginning after
December 31, 1998, a Participant's "Required Beginning Date" shall
mean April 1 of the calendar year following the later of (i) the
calendar year in which he attains age 70 1/2, or (ii) the calendar
year in which the Participant's Termination Date occurs; provided,
however, that
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clause (ii) shall not apply to any Participant who is a 5-percent
owner of any Employer or Related Company (as defined in section 416
of the Code).
(c) Distribution payments made in the form of an annuity shall be made
over the life of the Participant or, if the Participant provides
accurate and timely Beneficiary information, over the lives of such
Participant and his Beneficiary (or over a period not extending
beyond the life expectancy of such Participant or the life
expectancy of such Participant and his Beneficiary).
(d) If a Participant dies after distribution of his vested interest in
the Plan has begun, the remaining portion of such vested interest,
if any, shall be distributed to his Beneficiary at least as rapidly
as under the method of distribution used prior to the Participant's
death.
(e) If a Participant dies before distribution of his vested interest in
the Plan has begun, distribution of such vested interest to his
Beneficiary shall be completed by December 31 of the calendar year
in which the fifth anniversary of the Participant's death occurs;
provided, however, that this five-year rule shall not apply to a
natural person designated as Beneficiary by the Participant or under
the specific terms of the Plan, if
(i) such vested interest will be distributed over the life of such
designated Beneficiary (or over a period not extending beyond
the life expectancy of such Beneficiary), and
(ii) such distribution to the Beneficiary begins not later than
December 31 of the calendar year following the calendar year
in which the Participant died or, if such Beneficiary is the
Participant's surviving spouse, not later than December 31 of
the calendar year following the calendar year in which the
Participant would have attained age 70 1/2.
(f) If the Participant's surviving spouse is his Beneficiary and such
spouse dies before the distributions to such spouse begins,
paragraph (e) shall be applied as if the surviving spouse were the
Participant.
(g) For purposes of paragraph (d) and (e), distribution of a
Participant's vested interest in the Plan is considered to begin on
his Required Beginning Date; provided, however, that distribution
irrevocably begun in the form of an annuity shall be considered to
begin on the date it actually commences.
(h) For purposes of this subsection 11.5, the life expectancy of a
Participant or a Beneficiary will be determined in accordance with
Tables V and VI of Treas. Reg. Section 1.72-9 (provided that the
Participant gives the Committee or its delegate timely and accurate
Beneficiary information), and shall not be recalculated.
11.6 Beneficiary Designations. The term "Beneficiary" shall mean the
Participant's surviving spouse. However, if the Participant is not married, or
if the Participant is married but his spouse consents (as provided below) to the
designation of a person other than the spouse, the
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36
term Beneficiary shall mean such person or persons as the Participant designates
to receive the vested portions of his Accounts upon his death. Such designation
may be made, revoked or changed (without the consent of any
previously-designated Beneficiary except his spouse) only by an instrument
signed by the Participant and filed with the Committee prior to his death. A
spouse's consent to the designation of a Beneficiary other than the spouse shall
be in writing, shall acknowledge the effect of such designation, shall be
witnessed by a Plan representative or a notary public and shall be effective
only with respect to such consenting spouse. In default of such designation, or
at any time when there is no surviving spouse and no surviving Beneficiary
designated by the Participant, his Beneficiary shall be his surviving children
(in equal shares) or, if he has no living child, his living parents (in equal
shares) or, if he has no living parent, his living brothers and sisters (in
equal shares) or, if he has no living brother or sister, his legal
representative. For purposes of the Plan, "spouse" means the person to whom the
Participant is legally married at the relevant time. Notwithstanding the
foregoing provisions of this subsection 11.6, no spouse's consent to the
designation of a person other than, or in addition to, the spouse as Beneficiary
shall be required if (i) the Participant and his spouse are legally separated or
the Participant has been abandoned (under applicable state law) and the
Participant has a court order to that effect or (ii) it is established to the
satisfaction of the Committee that the spouse's consent cannot be obtained
because there is no spouse, because the spouse cannot be located or because of
such other circumstances as may be prescribed in applicable Treasury
regulations.
11.7 Form of Payment. Distributions to or on behalf of a Participant or
Beneficiary shall be made proportionately from each of the Investment Funds in
which the Participant's Accounts are invested and, except as provided otherwise
in the following sentence, shall be paid solely in cash. Distributions from the
portion of a Participant's Accounts, if any, that is invested in the Philip
Morris Stock Fund shall be made in cash, except to the extent the Participant or
Beneficiary elects, solely with respect to distributions to be made in the form
of a lump sum or installments (and not with respect to any distribution to be
made in the form of an annuity), to receive whole shares of Common Stock (with
cash distributed in lieu of any fractional share).
11.8 Facility of Payment. Notwithstanding the provisions of subsections
11.1 and 11.2, if, in the Committee's opinion, a Participant or other person
entitled to benefits under the Plan is under a legal disability or is in any way
incapacitated so as to be unable to manage his financial affairs, the Committee
may direct the Trustee to make payment to a relative or friend of such person
for his benefit until claim is made by a conservator or other person legally
charged with the care of his person or his estate. Thereafter, any benefits
under the Plan to which such Participant or other person is entitled shall be
paid to such conservator or other person legally charged with the care of his
person or his estate.
11.9 Interests Not Transferable. The interests of Participants and other
persons entitled to benefits under the Plan are not subject to the claims of
their creditors and may not be voluntarily or involuntarily assigned, alienated
or encumbered, except in the case of qualified domestic relations orders that
relate to the provision of child support, alimony or marital rights of a spouse,
child or other dependent and which meet such other requirements as may be
imposed by section 414(p) of the Code or regulations issued thereunder.
Notwithstanding any other provision of the Plan to the contrary, distribution of
the entire portion of the Account balance of a Participant awarded to his
alternate payee may be made in a lump sum payment, as soon as practicable after
the Committee determines that such order is qualified, without regard to
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whether the Participant would himself be entitled under the terms of the Plan to
withdraw or receive a distribution of such amount at that time, but only if the
terms of the order provide for such immediate distribution either specifically
or by general reference to any manner of distribution permitted under the Plan.
11.10 Absence of Guaranty. None of the Committee, the Trustee, or the
Employers in any way guarantee the assets of the Plan from loss or depreciation.
The Employers do not guarantee any payment to any person. The liability of the
Trustee to make any payment is limited to the available assets of the Plan held
under the Trust.
11.11 Missing Participants or Beneficiaries. Each Participant and each
designated Beneficiary must file with the Committee from time to time in writing
his post office address and each change of post office address. Any
communication, statement or notice addressed to a Participant or designated
Beneficiary at his last post office address filed with the Committee, or, in the
case of a Participant, if no address is filed with the Committee, then at his
last post office address as shown on the Employers' records, will be binding on
the Participant and his designated Beneficiary for all purposes of the Plan.
None of the Committee, the Employers, or the Trustee will be required to search
for or locate a Participant or designated Beneficiary.
11.12 Direct Rollover Option. In accordance with uniform rules established
by the Committee, each Participant, surviving spouse of a Participant or
alternate payee under a qualified domestic relations order within the meaning of
section 414(p) of the Code who is due to receive an eligible rollover
distribution from the Plan may direct the Committee to transfer all or a portion
of such distribution directly to another eligible retirement plan. For purposes
of this subsection, the terms "eligible rollover distribution" and "eligible
retirement plan" as applied to any such individual shall have the meaning
accorded such terms under section 401(a)(31) of the Code (or any successor
provision thereto) and applicable regulations thereunder.
11.13 Distributions on Account of Permanent and Total Disability. For
purposes of this Section 11, a Participant will be considered to have terminated
employment and will be entitled to a distribution of his vested Account balances
when he is determined by the Committee to be permanently and totally disabled
(as defined in subsection 9.2).
SECTION 12
No Reversion to Employers
No part of the corpus or income of the Trust shall revert to the Employers
or be used for, or diverted to, purposes other than the exclusive benefit of
Participants and Beneficiaries, subject to the following:
(a) Employer contributions under the Plan are conditioned upon the
deductibility of the contributions under section 404 of the Code,
and, to the extent any such deduction is disallowed, the Trustee
shall, upon written request of the Employer, return the amount of
any contribution (to the extent disallowed), reduced by the amount
of any losses thereon, to the Employer within one year after the
date the deduction is disallowed.
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(b) If a contribution or any portion thereof is made by an Employer by a
mistake of fact, the Trustee shall, upon written request of that
Employer, return the amount of such contribution or portion, reduced
by the amount of any losses thereon, to that Employer within one
year after the date of payment.
(c) If, upon termination of the Plan, any amounts are held under the
Plan in a suspense account pursuant to Treas. Reg. Section
1.415-6(b)(6)(ii) and such amounts may not be credited to the
Accounts of Participants, such amount will be returned to the
Employers as soon as practicable after the termination of the Plan.
SECTION 13
Administration
13.1 Committee Membership and Authority. The Committee referred to in
subsection 1.3 shall consist of one or more members appointed by the Company.
Except as otherwise specifically provided in this Section 13, the Committee
shall act by a majority of its then members, by meeting or by writing filed
without meeting, and shall have the following discretionary authority, powers,
rights and duties in addition to those vested in it elsewhere in the Plan or
Trust Agreement:
(a) to adopt such rules of procedure and regulations as, in its opinion,
may be necessary for the proper and efficient administration of the
Plan and as are consistent with the provisions of the Plan;
(b) to enforce the Plan in accordance with its terms and with such
applicable rules and regulations as may be adopted by the Committee;
(c) to determine conclusively all questions arising under the Plan,
including the power to determine the eligibility of employees and
the rights of Participants and other persons entitled to benefits
under the Plan and their respective benefits, to make factual
findings and to remedy ambiguities, inconsistencies or omissions of
whatever kind;
(d) to maintain and keep adequate records concerning the Plan and
concerning its proceedings and acts in such form and detail as the
Committee may decide;
(e) to direct all payments of benefits under the Plan;
(f) to perform the functions of a "plan administrator", as defined in
section 414(g) of the Code, for all purposes of the Plan, including
for purposes of establishing and implementing procedures to
determine the qualified status of domestic relations orders (in
accordance with the requirements of section 414(p) of the Code) and
to administer distributions under such qualified orders;
- 31 -
39
(g) to employ agents, attorneys, accountants or other persons (who may
also be employed by or represent the Employers) for such purposes as
the Committee considers necessary or desirable to discharge its
duties;
(h) to establish a claims procedure in accordance with section 503 of
ERISA; and
(i) to furnish the Employers, the Investment Committee and the Trustee
with such information with respect to the Plan as may be required by
them for tax or other purposes.
The certificate of a majority of the members of the Committee that the Committee
has taken or authorized any action shall be conclusive in favor of any person
relying on the certificate.
13.2 Allocation and Delegation of Committee Responsibilities and Powers.
In exercising its authority to control and manage the operation and
administration of the Plan, the Committee may allocate all or any part of its
responsibilities and powers to any one or more of its members and may delegate
all or any part of its responsibilities and powers to any person or persons
selected by it. Any such allocation or delegation may be revoked at any time.
Any member or delegate exercising Committee responsibilities and powers under
this subsection shall periodically report to the Committee on its exercise
thereof and the discharge of such responsibilities.
13.3 Uniform Rules. In managing the Plan, the Committee shall uniformly
apply rules and regulations adopted by it to all persons similarly situated.
13.4 Information to be Furnished to Committee. The Employers and Related
Companies shall furnish the Committee such data and information as may be
required for it to discharge its duties. The records of the Employers and
Related Companies as to an employee's or Participant's period of employment,
termination of employment and the reason therefor, leave of absence,
reemployment and Compensation shall be conclusive on all persons unless
determined to be incorrect. Participants and other persons entitled to benefits
under the Plan must furnish to the Committee such evidence, data or information
as the Committee considers desirable to carry out the Plan.
13.5 Committee's Decision Final. Any interpretation of the Plan and any
decision on any matter within the discretion of the Committee made by the
Committee shall be binding on all persons. A misstatement or other mistake of
fact shall be corrected when it becomes known, and the Committee shall make such
adjustment on account thereof as it considers equitable and practicable.
13.6 Exercise of Committees' Duties. Notwithstanding any other provisions
of the Plan, the Committees shall discharge their duties hereunder solely in the
interests of the Participants and other persons entitled to benefits under the
Plan, and:
(a) for the exclusive purpose of providing benefits to Participants and
other persons entitled to benefits under the Plan; and
- 32 -
40
(b) with the care, skill, prudence and diligence under the circumstances
then prevailing that a prudent man acting in a like capacity and
familiar with such matters would use in the conduct of an enterprise
of a like character and with like aims.
13.7 Remuneration and Expenses. No remuneration shall be paid from the
Plan to a member of any of the Committees who is an employee of any Employer or
Related Company. Except as otherwise determined by the Committee, the reasonable
expenses of administering the Plan and the fees and expenses incurred in
connection with the collection, administration, management, investment,
protection and distribution of the Plan assets under the Trust shall be paid
directly by the Trust out of Plan assets or, if paid by one or more Employers,
reimbursed by the Trust to the maximum extent permitted by law.
13.8 Indemnification of the Committees. To the extent not reimbursed by
any applicable insurance policy, the Committees, the individual members thereof
and the secretary (if any) of each of the Committees shall be indemnified by the
Employers against any and all liabilities, losses, costs and expenses (including
legal fees and expenses) of whatsoever kind and nature which may be imposed on,
incurred by or asserted against any of them by reason of the performance of the
Committees' functions if the Committees or such members or secretary did not act
dishonestly or in willful violation of the law or regulation under which such
liability, loss, cost or expense arises.
13.9 Resignation or Removal of Committee Member. A Committee member may
resign at any time by giving ten days' advance written notice to the Company,
the Trustee and the other Committee members. The Company may remove a Committee
member by giving advance written notice to him and the other Committee members.
13.10 Appointment of Successor Committee Members. The Company may fill any
vacancy in the membership of the Committee and shall give prompt written notice
thereof to the other Committee members. While there is a vacancy in the
membership of the Committee, the remaining Committee members shall have the same
powers as the full Committee until the vacancy is filled.
SECTION 14
Amendment and Termination
14.1 Amendment. While it is expected that the Plan will be continued,
either the Company or the Committee nevertheless may terminate the Plan or amend
it from time to time, except that no amendment will reduce a Participant's
interest in the Plan to less than an amount equal to the amount he would have
been entitled to receive if he had resigned from the employ of the Employers and
the Related Companies on the day of the amendment, and no amendment will
eliminate an optional form of benefit with respect to a Participant or
Beneficiary except as otherwise permitted by law.
- 33 -
41
14.2 Termination. The Plan will terminate as to all of the Employers on
any day specified by the Company upon advance written notice of the termination
given to the Employers. Employees of an Employer shall cease active
participation in the Plan (and will be treated as inactive Participants in
accordance with subsection 2.3) on the first to occur of the following:
(a) the date on which that Employer ceases to be a contributing sponsor
of the Plan, by appropriate action taken by the Company or by such
Employer;
(b) the date that Employer is judicially declared bankrupt or insolvent;
or
(c) the dissolution, merger, consolidation, reorganization or sale of
that Employer, or the sale of all or substantially all of the assets
of an Employer, except that, subject to the provisions of subsection
14.3, with the consent of the Company or the Committee, in any such
event arrangements may be made whereby the Plan will be continued by
any successor to that Employer or any purchaser of all or
substantially all of that Employer's assets, in which case the
successor or purchaser will be substituted for the Employer under
the Plan.
14.3 Merger and Consolidation of the Plan, Transfer of Plan Assets. The
Committee in its discretion may direct the Trustee to transfer all or a portion
of the assets of this Plan to another defined contribution plan of the Employers
or Related Companies which is qualified under section 401(a) of the Code or, in
the event of the sale of stock of an Employer or all or a portion of the assets
of an Employer, to a qualified plan of an employer which is not a Related
Company, or to accept a transfer of assets and liabilities to this Plan from
another defined contribution plan that is qualified under section 401(a) of the
Code. In the case of any such merger, or transfer of assets and liabilities,
provision shall be made so that each affected Participant in the Plan on the
date thereof would receive a benefit immediately after the merger, consolidation
or transfer which is equal to the benefit he would have been entitled to receive
immediately prior to the merger or transfer. The Committee may adopt such
amendment or Supplement to the Plan as may be necessary to preserve the
protected rights that may not be changed or eliminated by reason of such
transfer or merger under section 411 of the Code; pending such amendment or
adoption of such Supplement, the applicable provisions of the merged or
transferee plan describing such section 411 protected rights shall be
incorporated herein by reference.
14.4 Distribution on Termination and Partial Termination. Upon
termination or partial termination of the Plan, all benefits under the Plan
shall continue to be paid in accordance with Sections 10 and 11 as those
sections may be amended from time to time.
14.5 Notice of Amendment, Termination or Partial Termination. Affected
Participants will be notified of an amendment, termination or partial
termination of the Plan as required by law.
- 34 -
42
SECTION 15
Change of Control Provisions
15.1 Application. In the event of a Change of Control (as defined in
subsection 15.2), the provisions of this Section 15 shall apply, notwithstanding
any other provision in the Plan to the contrary.
15.2 Definition of Change of Control. For purposes of the Plan, a "Change
of Control" means the happening of any of the following events:
(a) The acquisition by any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange
Act of 1934, as amended (the "Exchange Act")) (a "Person") of
beneficial ownership (within the meaning of Rule 13d-3 promulgated
under the Exchange Act) of 20% or more of either (i) the then
outstanding shares of common stock of Philip Morris Companies Inc.
(the "Parent") (such stock hereinafter referred to as the
"Outstanding Parent Common Stock") or (ii) the combined voting power
of the then outstanding voting securities of the Parent entitled to
vote generally in the election of directors (the "Outstanding Parent
Voting Securities"); provided, however, that the following
acquisitions shall not constitute a Change of Control: (i) any
acquisition directly from the Parent, (ii) any acquisition by the
Parent, (iii) any acquisition by any employee benefit plan (or
related trust) sponsored or maintained by the Parent or any
corporation controlled by the Parent or (iv) any acquisition by any
corporation pursuant to a transaction described in clauses (i), (ii)
and (iii) of paragraph (c) of this subsection 15.2; or
(b) Individuals who, as of November 1, 1989, constitute the Board of
Directors of the Parent (the "Incumbent Board") cease for any reason
to constitute at least a majority of such Board; provided, however,
that any individual becoming a director subsequent to November 1,
1989 whose election, or nomination for election by the Parent's
shareholders, was approved by a vote of at least a majority of the
directors then comprising the Incumbent Board shall be considered as
though such individual were a member of the Incumbent Board, but
excluding, for this purpose, any such individual whose initial
assumption of office occurs as a result of an actual or threatened
election contest with respect to the election or removal of
directors or other actual or threatened solicitation of proxies or
consents by or on behalf of a Person other than the Incumbent Board;
or
(c) Approval by the shareholders of the Parent of a reorganization,
merger, share exchange or consolidation (a "Business Combination"),
in each case, unless, following such Business Combination, (i) all
or substantially all of the individuals and entities who were the
beneficial owners, respectively, of the Outstanding Parent Common
Stock and Outstanding Parent Voting Securities immediately prior to
such Business Combination beneficially own, directly or indirectly,
more than 80% of, respectively, the then Outstanding shares of
common stock and the
- 35 -
43
combined voting power of the then outstanding voting securities
entitled to vote generally in the election of directors, as the case
may be, of the corporation resulting from such Business Combination
(including, without limitation, a corporation which as a result of
such transaction owns the Parent through one or more subsidiaries)
in substantially the same proportions as their ownership,
immediately prior to such Business Combination, of the Outstanding
Parent Common Stock and Outstanding Parent Voting Securities, as the
case may be, (ii) no Person (excluding any employee benefit plan (or
related trust) of the Parent or such corporation resulting from such
Business Combination) beneficially owns, directly or indirectly, 20%
or more of, respectively, the then outstanding shares of common
stock of the combined voting power of the then outstanding voting
securities of such corporation except to the extent that such
ownership existed prior to the Business Combination and (iii) at
least a majority of the members of the board of directors of the
corporation resulting from such Business Combination were members of
the Incumbent Board at the time of the execution of the initial
agreement, or of the action of the Incumbent Board, providing for
such Business Combination; or
(d) Approval by the shareholders of the Parent of (i) a complete
liquidation or dissolution of the Parent or (ii) the sale or other
disposition of all or substantially all of the assets of the Parent,
other than to a corporation, with respect to which following such
sale or other disposition, (A) more than 80% of, respectively, the
then outstanding shares of common stock of such corporation and the
combined voting power of the then outstanding voting securities of
such corporation entitled to vote generally in the election of
directors is then beneficially owned, directly or indirectly, by all
or substantially all of the individuals and entities who were the
beneficial owners, respectively, of the Outstanding Parent Common
Stock and Outstanding Parent Voting Securities immediately prior to
such sale or other disposition in substantially the same proportion
as their ownership, immediately prior to such sale or other
disposition, of the Outstanding Parent Common Stock and Outstanding
Parent Voting Securities, as the case may be, (B) less than 20% of,
respectively, the then outstanding shares of common stock of such
corporation and the combined voting power of the then outstanding
voting securities of such corporation entitled to vote generally in
the election of directors is then beneficially owned, directly or
indirectly, by any Person (excluding any employee benefit plan (or
related trust) of the Parent or such corporation), except to the
extent that such Person owned 20% or more of the Outstanding Parent
Common Stock or Outstanding Parent Voting Securities prior to the
sale or disposition and (C) at least a majority of the members of
the board of directors of such corporation were members of the
Incumbent Board at the time of the execution of the initial
agreement, or of the action of the Incumbent Board, providing for
such sale or other disposition of assets of the Parent or were
elected, appointed or nominated by the Incumbent Board.
15.3 Contribution Requirement. Subject to the conditions and limitations
of Section 8 (after taking into account the affect thereon of the last sentence
of this subsection 15.3) and of the next sentence, upon the occurrence of a
Change of Control, for the year in which the Change
- 36 -
44
of Control occurs and for each of the two years following the year in which the
Change of Control occurs the "Control Period", each Employer shall make a
"Matching Contribution" to the Plan on behalf of each Participant employed by
such Employer who has made Before-Tax or After-Tax Contributions to the Plan for
that year in an amount equal to the greater of:
(a) $.30 for each $1.00 contributed to the Plan by the Participants for
each year in the Control Period, or
(b) the average rate of the Matching Contributions for the two Plan
Years prior to the Plan Year in which the Change of Control occurs.
In no event shall the sum of the Before-Tax Contributions and any Matching
Contributions made by an Employer for any Plan Year exceed the limitations
imposed by section 404 of the Code on the maximum amount deductible on account
thereof by the Employer for that year. Each Employer's Matching Contributions
for any Plan Year shall be paid to the Trustee, without interest, no later than
the time prescribed by law for filing the Federal corporate income tax return of
Philip Morris Companies Inc., or its successors, as applicable, including any
extensions thereof. The Matching Contributions made on behalf of a Participant
pursuant to this Section 14 shall be allocated to the Participant's Matching
Account.
15.4 Vesting. Upon and after a Change of Control, a Participant's vested
percentage in all his Accounts under the Plan shall be 100%.
15.5 Enforcement Rights; Amendment Restrictions.
(a) In addition to all other rights under the Plan and applicable law,
any individual who shall be a Participant or Beneficiary at the date
on which the Change of Control occurs (the "Control Date") shall
from and after such date have the right to bring an action, either
individually or on behalf of all Participants and Beneficiaries, to
enforce the provisions of this Section 15 by seeking injunctive
relief or damages, or both, and the Company shall be obligated to
pay or reimburse such Participant or Beneficiary who shall prevail,
in whole or in substantial part, for all reasonable expenses,
including attorney's fees, in connection with such action.
(b) Anything in the Plan to the contrary notwithstanding, on and after
the Control Date none of the provisions of this Section 15 shall be
amended unless within sixty days after the date of the action taken
to amend such provisions at least two-thirds of the individuals who
were Participants at the date of such action shall have given their
written approval of such action based on full and complete
information provided to them regarding the actual and potential
effects of such action on them.
15.6 Construction. The foregoing provisions of this Section 15 shall be
construed liberally to the end that its purposes shall be fully implemented.
- 37 -
45
SUPPLEMENT A
KRAFT FOODS TIP PLAN
California Vegetable Concentrates Division
This Supplement A to the Kraft Foods TIP Plan sets forth special
provisions that first became effective February 16, 1993 and continue to be
applicable to the Participating Group described below on and after May 12, 1997
and supersedes any provisions of the Plan which are not consistent with this
Supplement A.
1. Participating Group: This Supplement A is applicable to those Participants
in the Plan who were employees of the California Vegetable Concentrates
division of Kraft Food Ingredients Corp. and who became employees of Basic
Vegetable Products, L.P., pursuant to that certain Asset Purchase
Agreement entered into as of February 16, 1993 by and between Basic
Vegetable Products, L.P., and Kraft Food Ingredients Corp.
2. Special Vesting Provisions: On and after February 16, 1993, a Participant
in this Participating Group shall be 100% vested in his Matching Account.
3. Special Withdrawal Provisions:
Notwithstanding any provisions of the Plan to the contrary, the provisions
of Section 10 relating to hardship withdrawals and in-service withdrawals
of After-Tax and Matching Contributions shall continue to apply to a
Participant in the Participating Group for such time as said Participant
remains an employee of Basic Vegetable Products, L.P., or its successors
or affiliates (collectively referred to as the "Successor Employer").
Notwithstanding any provisions of the Plan to the contrary, for purposes
of applying the post-employment termination distribution provisions of
Section 11 of the Plan to a Participant in the Participating Group, such
Participant's employment shall not be considered to have terminated
(whether on account of retirement, permanent and total disability, or for
any other reason) until such time as said Participant has terminated
employment with the Successor Employer.
A-1
46
SUPPLEMENT B
KRAFT FOODS TIP PLAN
Naperville Hourly Employees
This Supplement B to Kraft Foods TIP Plan sets forth special provisions
that first became effective January 4, 1993 and that continue to be applicable
on and after May 12, 1997 with respect to the Participating Group described
below and supersedes any provisions of the Plan which are not consistent with
this Supplement B.
1. Participating Group: This Supplement B is applicable to hourly employees
covered by a collective bargaining contract at the Kraft Foods facility
(formerly a Nabisco cereal plant) in Naperville, Illinois.
2. Special Service Provisions: For purposes of Section 3 and subsection 9.1
of the Plan, service with Nabisco Brands, Inc. and those companies treated
as a single employer under sections 414(b) and (c) of the Code prior to
January 4, 1993, shall be treated as service under the Plan for this
Participating Group.
3. Special Contribution Provisions. The following provisions shall apply in
lieu of subsections 4.1, 4.2, 4.3, 4.6 and 5.1 of the Plan:
(a) Before-Tax Contributions. Subject to the limitations set forth in
paragraph (c) below and subsection 4.7 and Section 8 of the Plan,
and such additional rules as the Committee may establish on a
uniform and nondiscriminatory basis, for any payroll period a
Participant in this Participating Group may elect to have his salary
or wages from his Employer reduced by a whole percentage, and a
corresponding amount contributed on his behalf to the Plan by his
Employer as a "Before-Tax Contribution", which amount shall not be
less than 1 percent nor more than 16 percent of his Eligible
Compensation (as defined in paragraph (d) below), for that payroll
period. Any election made pursuant to this paragraph (a) shall be
effective as soon as practicable after the Participant has made his
election in accordance with applicable Access System procedures.
(b) After-Tax Contributions. Subject to the limitations set forth in
paragraph (c) below and subsection 4.7 and Section 8 of the Plan,
and such additional rules as the Committee may establish on a
uniform and nondiscriminatory basis, for any payroll period a
Participant in this Participating Group may elect to make "After-Tax
Contributions" to the Plan through payroll deduction in a whole
percentage that is not less than 1 percent nor more than 16 percent
of his Eligible Compensation (as defined in paragraph (d) below) for
that payroll period. Any election made pursuant to this paragraph
(b) shall be effective as soon as practicable after the Participant
has made his election in accordance with applicable Access System
procedures.
B-1
47
(c) Total Before-Tax and After-Tax Contributions. Notwithstanding the
foregoing provisions of this paragraph 4 of Supplement B to the
Kraft Foods TIP Plan, for any payroll period the Before-Tax
Contributions made on behalf of a Participant in this Participating
Group and After-Tax Contributions made by such Participant may not
together exceed 16 percent of the Participant's Eligible
Compensation (as defined in paragraph (d) below) for such payroll
period.
(d) Eligible Compensation. With respect to Participants in this
Participating Group, "Eligible Compensation" means wages, overtime,
shift differential pay, vacation pay, sick pay, holiday pay and
other forms of cash compensation that are includible on the
Participant's Federal income tax form W-2 with respect to the
Participant's periods of active participation in the Plan, plus any
amounts contributed by an Employer pursuant to a salary reduction
agreement and which is not includable in gross income under sections
125, 402(e)(3), 402(h) or 403(b) of the Code, and excluding any
bonus payments.
(e) Matching Contributions. Subject to the conditions and limitations of
subsection 4.7 and Section 8 of the Plan, for each payroll period
during a Plan Year an Employer shall contribute to the Plan on
behalf of each Participant in this Participating Group employed by
such Employer a Matching Contribution amount equal to 25 percent of
the Before-Tax and After-Tax Contributions made by and on behalf of
the Participant that do not exceed 6 percent of such Participant's
Eligible Compensation for such payroll period. Match-eligible
Before-Tax and After-Tax Contributions from the first 6 percent of a
Participant's Eligible Compensation are sometimes referred to as
"Basic Contributions", and unmatched contributions in excess of the
first 6 percent of Eligible Compensation are sometimes referred to
as "Supplemental Contributions".
4. Special Accounting Provisions. The After-Tax Account maintained under the
Plan for each Participant in the Participating Group shall include the
after-tax contribution balances for such Participant, if any, that were
transferred to the Plan from the Nabisco Brands Employee Savings Plan. The
Matching Account maintained under the Plan for each Participant in the
Participating Group shall include the company contribution account
balances for such Participant, if any, that were transferred to the Plan
from the Nabisco Brands Employee Savings Plan, and all of such transferred
balances shall be 100% vested.
5. Special Vesting Provisions. In addition to the vesting provisions of
subsections 9.1 and 9.2 of the Plan, each individual who is a Participant
in this Participating Group on March 31, 1997 will have a fully vested,
nonforfeitable interest in his Matching Account upon the completion of 24
months of employment after his initial enrollment date in the Plan.
6. Special In-Service Withdrawal Provisions. The last sentence of subsection
10.5 of the Plan shall not apply to the Participants in this Participating
Group and accordingly no minimum withdrawal amount shall apply to such
Participants.
B-2
48
SUPPLEMENT C
KRAFT FOODS TIP PLAN
Kraft Foods Inc. Common Stock
This Supplement C has an effective date of October 3, 2001 (or such other
date as approved by the Vice President Benefits of the Company). All references
in the Plan to "Kraft Foods, Inc." or the "Company" shall be a reference to
"Kraft Foods North America, Inc." In addition, Section 6.1 of the Plan is
amended and restated to read as follows:
6.1 Investment Funds and Loan Account. The Investment Committee shall
establish and cause the Trustee to maintain one or more "Investment Funds" for
the investment of Participants' Accounts, including one or more Investment Funds
that invest in the common stock of a corporation that is a member of the
controlled group of corporations (as defined under Section 414(b) of the Code)
that includes the Company. The Investment Committee shall also cause the Trustee
to maintain a "Loan Account" to reflect any loans to Participants pursuant to
subsection 10.1. The Investment Committee in its discretion may change the
Investment Strategy of any Investment Fund without prior notice to Participants.
C-1
EX-4.3
5
y53486ex4-3.txt
NABISCO INC CAPITAL INVESTMENTS PLAN
1
NABISCO, INC. CAPITAL INVESTMENT PLAN
(Restated Effective as of December 31, 2000)
2
NABISCO, INC.
CAPITAL INVESTMENT PLAN
INDEX
Article Page
------- ----
I. DEFINITIONS...................................................... 1
1.01 Account.................................................... 2
1.02 Administrative Committee................................... 2
1.03 Affiliated Company......................................... 2
1.04 Affiliated Plan............................................ 2
1.05 Automatic Enrollment Date.................................. 2
1.06 Basic Contributions........................................ 2
1.07 Basic Contribution Account................................. 2
1.08 Beneficiary................................................ 3
1.09 Board of Directors......................................... 3
1.10 Break in Service........................................... 3
1.11 Code....................................................... 3
1.12 Committee.................................................. 4
1.13 Company.................................................... 4
1.14 Company Contribution Account............................... 4
1.15 Compensation............................................... 4
1.16 Disability................................................. 4
1.17 Effective Date............................................. 4
1.18 Eligible Employee.......................................... 4
1.19 Employee................................................... 5
1.20 Entry Dates................................................ 5
1.21 ERISA...................................................... 5
1.22 Investment Fund............................................ 5
1.23 Job Elimination............................................ 5
1.24 Participant................................................ 6
-i-
3
NABISCO, INC.
CAPITAL INVESTMENT PLAN
INDEX
Article Page
------- ----
1.25 Participant Company........................................ 6
1.26 Plan....................................................... 6
1.27 Plan Year.................................................. 6
1.28 Prior Plan................................................. 6
1.29 Retirement................................................. 6
1.30 RJR Plan................................................... 6
1.31 Rollover Contributions..................................... 6
1.32 Rollover Contribution Account.............................. 6
1.33 Service.................................................... 7
1.34 Severance Date............................................. 7
1.35 Supplemental After-Tax Contributions....................... 8
1.36 Supplemental After-Tax Contribution Account................ 8
1.37 Supplemental Pre-Tax Contribution ......................... 8
1.38 Supplemental After-Tax Contribution Account................ 8
1.39 Surviving Spouse........................................... 8
1.40 Termination of Employment.................................. 9
1.41 Trustee.................................................... 9
1.42 Trust Fund................................................. 9
1.43 Valuation Date............................................. 9
II. PARTICIPATION.................................................... 10
2.01 Eligibility................................................ 10
2.02 Participation.............................................. 10
2.03 Participant Status......................................... 11
III. CONTRIBUTIONS.................................................... 12
3.01 Participant Basic Contributions............................ 12
3.02 Supplemental Pre-Tax Contributions......................... 12
3.03 Supplemental After-Tax Contributions....................... 12
3.04 Company Contributions...................................... 12
3.05 Change in Participant Contributions........................ 14
- ii -
4
NABISCO, INC.
CAPITAL INVESTMENT PLAN
INDEX
(cont'd)
Article Page
------- ----
3.06 Suspension of Participant Contributions.................... 14
3.07 Restrictions on Pre-Tax Contributions...................... 14
3.08 Restrictions on Pre-Tax Contributions...................... 16
3.09 Qualified Military Service................................. 16
IV. TRUST FUND AND INVESTMENT FUNDS.................................. 18
4.01 The Trust Agreement........................................ 18
4.02 The Trustee................................................ 18
4.03 Separate Funds............................................. 18
4.04 Investment Funds........................................... 18
4.05 Temporary Investment....................................... 18
4.06 Investment of Contributions................................ 18
4.07 Voting by Participants..................................... 19
4.08 Investment Managers........................................ 20
4.09 Participant Responsibility For Selection of Funds.......... 20
V. ACCOUNT STATEMENTS AND VALUATION................................. 21
5.01 Valuation of Accounts...................................... 21
5.02 Valuation Upon Withdrawal or Distribution.................. 21
5.03 Statement of Accounts...................................... 21
VI. VESTING AND FORFEITURES.......................................... 22
6.01 Vesting of Participant's Contributions..................... 22
6.02 Vesting of Company Contributions........................... 22
6.03 Forfeiture on Termination of Employment.................... 23
6.04 Disposition of Forfeitures................................. 23
6.05 Restoration of Forfeitures................................. 23
VII. DISTRIBUTIONS.................................................... 24
7.01 Distribution of Benefits................................... 24
7.02 Installment Option......................................... 26
7.03 Proof of Death and Right of Beneficiary.................... 26
7.04 Completion of Appropriate Forms and Procedures............. 26
7.05 Investment Pending Distribution............................ 26
7.06 Direct Rollovers........................................... 26
-iii-
5
NABISCO, INC.
CAPITAL INVESTMENT PLAN
INDEX
(cont'd)
Article Page
------- ----
VIII. WITHDRAWAL PRIOR TO TERMINATION OF EMPLOYMENT
AND SPECIAL PRE-TAX CONTRIBUTION RULES........................... 28
8.01 Election to Withdraw from Accounts......................... 28
8.02 Withdrawal of After-Tax and Company Contributions.......... 28
8.03 Rules Applicable to Withdrawals Prior to Termination
of Employment.............................................. 29
8.04 Hardship Withdrawals....................................... 29
8.05 Restrictions on Pre-Tax Contribution Distributions......... 30
IX. LOANS ........................................................... 31
9.01 Loan Provisions............................................ 31
X. ADMINISTRATION OF THE PLAN....................................... 33
10.01 Nabisco Employee Benefits Committee........................ 33
10.02 Administrative Committee................................... 33
10.03 Authority and Duties of Various Fiduciaries................ 34
10.04 Named Fiduciaries.......................................... 36
10.05 Delegation................................................. 36
10.06 Multiple Capacities........................................ 36
XI. AMENDMENTS, TERMINATION, PERMANENT
DISCONTINUANCE OF CONTRIBUTIONS,
MERGER OR CONSOLIDATION.......................................... 37
11.01 Amendments................................................. 37
11.02 Termination or Permanent Discontinuance of Contributions... 37
11.03 Partial Termination........................................ 37
11.04 Benefits in Case of Merger or Consolidation................ 37
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6
NABISCO, INC.
CAPITAL INVESTMENT PLAN
INDEX
(cont'd)
Article Page
------- ----
XII. MISCELLANEOUS..................................................... 39
12.01 Benefits Payable from Trust Fund........................... 39
12.02 Elections.................................................. 39
12.03 No Right to Continued Employment........................... 39
12.04 Inalienability of Benefits and Interests................... 39
12.05 Qualified Domestic Relations Orders........................ 39
12.06 Payments for Exclusive Benefit of Participants............. 39
12.07 New Jersey Law to Govern................................... 40
12.08 No Guarantee............................................... 40
12.09 Address of Record.......................................... 40
12.10 Unlocated Spouse........................................... 40
12.11 Agent for Process.......................................... 40
12.12 Payments in the Event of Incompetency...................... 40
12.13 Transfer of Accounts to This Plan.......................... 40
12.14 Transfer of Accounts From This Plan to an Affiliated Plan.. 43
12.15 Direct or Indirect Transfer................................ 43
12.16 Payment of Expenses........................................ 43
12.17 Transfer of Accounts to the R. J. Reynolds Tobacco
Company Capital Investment Plan............................ 44
12.18 Headings................................................... 44
XIII. CLAIM PROCEDURE.................................................. 45
13.01 Initial Determination...................................... 45
13.02 Review..................................................... 45
XIV. LIMITATION ON BENEFITS........................................... 47
14.01 Code Section 415 Limits.................................... 47
14.02 Code Section 416 Limits.................................... 50
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7
NABISCO, INC.
CAPITAL INVESTMENT PLAN
INDEX
(cont'd)
Article Page
------- ----
XV. SPECIAL PROVISIONS PERTAINING TO TRANSFERS
FROM RJR NABISCO CAPITAL INVESTMENT PLAN......................... 55
SCHEDULE
Schedule A-- Compensation.............................................. 57
-v-
8
NABISCO, INC. CAPITAL INVESTMENT PLAN
INTRODUCTION
WHEREAS, prior to June 14, 1999, RJR Nabisco, Inc. ("RJR")
maintained the RJR Nabisco Capital Investment Plan (the "RJR Plan") for the
benefit of its eligible employees, including those employed by Nabisco, Inc.
(the "Company") and its affiliates ("Eligible Nabisco Employees"); and
WHEREAS, on June 14, 1999, RJR was spun-off from its parent
company, RJR Nabisco Holdings Corp. through a distribution to its shareholders
of all of the outstanding shares of the common stock of RJR, and, as a result of
such spin-off, RJR is no longer related to Nabisco, Inc. and its affiliates; and
WHEREAS, in connection with such spin-off, effective June 14,
1999, the RJR Plan is maintained by R. J. Reynolds Tobacco Company for the
benefit of its eligible employees and the eligible employees of its affiliates;
and
WHEREAS, in light of the foregoing, effective June 14, 1999,
the Eligible Nabisco Employees are no longer eligible to participate in the RJR
Plan; and
WHEREAS, effective as of June 14, 1999, the Company desires to
establish the Nabisco, Inc. Capital Investment Plan (the "Plan"), a profit
sharing plan containing Section 401(k) cash or deferred features for the benefit
of the Eligible Nabisco Employees and newly eligible employees of the Company
and its affiliates; and
WHEREAS, effective June 14, 1999, the account balances held
under the RJR Plan attributable to the Eligible Nabisco Employees and
forfeitures attributable to individuals who terminated employment prior to June
14, 1999 but would have been employees of the Company or its affiliates on June
14, 1999 but for such termination of employment are being transferred to the
Plan; and
WHEREAS, as a result of the acquisition of the common stock of
Nabisco Holdings Corp. by Philip Morris Companies Inc. and the subsequent merger
of Nabisco, Inc. into Kraft Foods North America, Inc., the Plan is hereby
restated and amended effective as of December 31, 2000.
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ARTICLE I
DEFINITIONS
1.01 Accounts, unless otherwise indicated, means a Participant's Basic,
Supplemental Pre-Tax, Supplemental After-Tax, and Company Contribution
Accounts and any subaccounts thereunder. Some Participants may also
have Rollover Contribution Accounts and After-Tax Basic Contribution
Accounts.
1.02 Administrative Committee means the Administrative Committee(s) that is
appointed by the Committee to handle the day-to-day administration of
the Plan. (See Section 10.02).
1.03 Affiliated Company means the Company and any corporation which is a
member of a controlled group of corporations (as defined in Section
414(b) of the Code) which includes the Company; any trade or business
(whether or not incorporated) which is under control (as defined in
Section 414(c) of the Code) with the Company; any organization (whether
or not incorporated) which is a member of an affiliated service group
(as defined in Section 414(m) of the Code) which includes the Company;
and any other entity required to be aggregated with the Company
pursuant to regulations under Section 414(o) of the Code. For purposes
of Article XIV, the definition of Affiliated Company shall be modified
in accordance with Code Section 415(h).
1.04 Affiliated Plan means a defined contribution plan sponsored by an
Affiliated Company.
1.05 Automatic Enrollment Date means, for each Eligible Employee, a date
determined by the Committee, which date is no earlier than three weeks
following the date the Eligible Employee first becomes eligible to
participate in the Plan in accordance with Section 2.01(b).
1.06 Basic Contributions means the contributions of a Participant which are
credited to his Basic Contribution Account in accordance with Section
3.01.
1.07 Basic Contribution Account means that portion of the Trust Fund which,
with respect to any Participant, is attributable to his Basic
Contributions and any investment earnings or losses thereon, and
excluding amounts, if any, distributed to the Participant in accordance
with Section 3.07(c). An After-Tax Basic Contribution Account includes
that portion of the Trust Fund which, with respect to any Participant,
is attributable to any After-Tax Basic Contributions which were
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transferred to this Plan pursuant to ARTICLE XV, and any investment
earnings or losses thereon.
1.08 Beneficiary means the beneficiary designated by the Participant under
the Company's group term life insurance plan, unless the Participant
has designated any other person or persons (who may be designated
contingently or successively and which may be an entity other than a
natural person) on a form supplied by the Administrative Committee to
receive benefits payable in the event of the death of the Participant;
provided, however that if the Participant is married at the date of his
death, the Beneficiary shall be the Participant's Surviving Spouse, and
any Beneficiary designation that does not name the Participant's
Surviving Spouse as the Beneficiary shall be void unless it has been
consented thereto on a form supplied by the Administrative Committee in
writing by the Participant's Surviving Spouse and such consent (i)
designated the alternative Beneficiary and/or form of benefit which may
not be changed without spousal consent, (ii) acknowledges the effect of
such election, and (iii) is witnessed by a notary public. The
Participant may, however, revoke his alternate Beneficiary at any time,
thereby reinstating his Surviving Spouse as sole Beneficiary. In the
event of the Participant's death without an effective Beneficiary
designation, any Plan benefits payable shall be paid in equal parts to
the Participant's surviving children or, if the Participant has no
surviving children, to the Participant's surviving parents or, if the
Participant has no surviving parents, to the Participant's surviving
siblings or, if the Participant has no surviving siblings, to the
Participant's estate. Section 9.01 (a) should be referred to in the
event of the death of a Participant with an outstanding loan balance,
Section 12.05 should be referred to in the event of a Qualified
Domestic Relations Order and Section 12.12 should be referred to for
payment in the event of incompetency of a Beneficiary.
1.09 Board of Directors means, prior to August 2001, the Board of Directors
of Nabisco, Inc. and after July 2001, the Board of Directors of Kraft
Foods North America, Inc., and any committee authorized by such Board
to act in its behalf with reference to the Plan.
1.10 Break in Service means any twelve-consecutive-month period beginning on
a Severance Date during which an Employee does not complete an Hour of
Service.
1.11 Code means the Internal Revenue Code of 1986 as amended from time to
time. Reference to any Section or subsection of the Code includes
reference to any comparable or succeeding provisions of any legislation
which amends, supplements or replaces such Section or subsection.
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1.12 Committee means the Nabisco Employee Benefits Committee which shall act
as the Plan Administrator for the Plan. The Committee shall have the
duties and powers described in Article X.
1.13 Company means, prior to August 2001, Nabisco, Inc. Subsequent to July
2001, Company means the Nabisco Biscuit & Snacks Group of Kraft Foods
North America, Inc. With respect to any corporate act after July 2001,
Company means Kraft Foods North America, Inc.
1.14 Company Contribution Account means that portion of the Trust Fund
which, with respect to any Participant, is attributable to any
contributions made on his behalf by the Company, and any investment
earnings and gains or losses thereon.
1.15 Compensation means, with respect to any Plan Year, the basic
compensation and such other forms of compensation paid for employment
as are listed in Schedule A hereto for the calendar year beginning in
such Plan Year. Compensation in excess of the limit described in
Section 401(a)(17) of the Code (subject to cost of living adjustments)
shall not count for purposes of this Plan.
1.16 Disability means being disabled as determined by the Federal Social
Security Administration and receiving the Social Security Award.
1.17 Effective Date of this Plan means June 14, 1999.
1.18 Eligible Employee means any person employed by a Participating Company
in an "eligible category", who is paid from a United States dollar
payroll maintained in the United States; provided, that except as the
Board of Directors or the Committee, pursuant to authority delegated to
it by the Board of Directors, may otherwise provide on a basis
uniformly applicable to all persons similarly situated, no person shall
be an "Eligible Employee" for purposes of the Plan:
(a) who is excepted by the Committee,
(b) whose terms and conditions of employment are determined by a
collective bargaining agreement with the Company or a
Participating Company which does not make this Plan applicable
to him, provided that employee retirement benefits were
negotiated thereunder, or
(c) who is a "leased employee" as defined in Section 414(n) of the
Code and who is required by such Section to be considered an
employee of the Company or an Affiliated Company.
Notwithstanding the foregoing, if a
4
12
"leased employee" is reclassified as an Employee, years of
service as a "leased employee" of the Company or an Affiliated
Company shall be considered in computing Service for vesting.
Notwithstanding any provision of the Plan to the contrary,
Eligible Employee shall not include any person who becomes an Employee pursuant
to the Asset Purchase Agreement entered into on November 19, 1999 among Favorite
Brands International Holding Corp., Favorite Brands International, Inc., Sather
Trucking Corporation, Trolli, Inc., Nabisco, Inc., Nabisco Brands Company, and
Nabisco Technology Company and who works at a facility in the following
locations.
Favorite Brands International, Inc., and Trolli, Inc. Locations
1. Bannockburn, Illinois 8. Pittston, Pennsylvania
2. Chicago, Illinois 9. Round Lake, Minnesota
3. DesPlaines, Nevada 10. New Orleans, Louisiana
4. Henderson, Nevada 11. Oklahoma City, Oklahoma
5. Kendallville, Indiana 12. San Bernadino, California
6. Ligonier, Indiana 13. Creston, Iowa
7. Chattanooga, Tennessee 14. Plantation, Florida
The exclusion from participation of those Employees covered by the Asset
Purchase Agreement shall not apply beginning as of the date the Nabisco
Retirement Savings Plan and the Nabisco Retirement Plan are merged with the
Plan.
1.19 Employee means any person employed by (or, after July 2001, working at)
the Company or an Affiliated Company.
1.20 Entry Dates are any business day.
1.21 ERISA means the Employee Retirement Income Security Act of 1974, and as
is amended from time to time.
1.22 Investment Fund or Funds means the separate funds in which Participant
and Company Contributions to the Plan are invested in accordance with
Article IV.
1.23 Job Elimination means the elimination of an existing position at the
sole discretion of the Company when, because of changing needs or
circumstances, (i) the job is no longer performed, or (ii) the job is
still performed, but fewer employees are needed to perform it.
5
13
1.24 Participant means any person participating in the Plan as provided in
Article II. Except for purposes of Sections 2.01, 2.02 and 6.02 (ii)
and Article 3, an Eligible Employee who has made a rollover or transfer
to the Plan which meets the requirements of Section 12.13 or 12.15 and
for whom a Rollover Contribution Account is maintained shall be treated
as a Participant and such Eligible Employee shall become a Participant
for all purposes after meeting the requirements of Sections 2.01 and
2.02. In addition, in any Plan Year in which the Plan is top-heavy (as
defined in Section 14.02) and for purposes of Section 14.02(f),
"participant" shall include an Eligible Employee not otherwise
described in the preceding two sentences who shall, pursuant to
Treasury Regulation Section 1.416-1, Q&A M-10, receive the contribution
described in Section 14.02(f), and such Eligible Employee shall become
a Participant for all purposes after meeting the requirements of
Sections 2.01 and 2.02.
1.25 Participating Company means the Company and any United States
subsidiary of the Company which is approved by the Committee to
participate in the Plan. The term shall not include any foreign
corporations, or units thereof.
1.26 Plan means the Nabisco, Inc. Capital Investment Plan.
1.27 Plan Year means the period from each December 31 through the next
December 30. The Limitation Year shall be the calendar year.
1.28 Prior Plan means any U.S. qualified plan (or an individual retirement
account, annuity or bond in which a qualified plan distribution was
separately invested pursuant to Code Sections 408(d)(3)(A)(ii) and
(D)(i)).
1.29 Retirement means the normal retirement of a Participant who has
attained age 65, or the early retirement of a Participant who has
attained age 55 and who has completed 10 years of service.
1.30 RJR Plan means the RJR Nabisco Capital Investment Plan.
1.31 Rollover Contributions means the amount contributed to the Plan as a
rollover contribution from a Prior Plan, in accordance with Section
12.13(b).
1.32 Rollover Contribution Account means that portion of the Trust Fund
which, with respect to any Eligible Employee, is attributable to his
Rollover Contributions, and any investment earnings or losses thereon.
6
14
1.33 Service means all periods during which an Employee is employed by (or,
after July 2001, working at) the Company, a Participating Company or
any Affiliated Company commencing with the first day of employment or
the first day of reemployment and ending with his Severance Date which
next follows the first day of employment or the first day of
reemployment, as the case may be. The first day of employment or the
first day of reemployment shall be deemed to be the first day in which
the Employee performs an "Hour of Service" (as defined in Department of
Labor Reg. Section 2530.200b-2) as an Employee. Periods of Service
commencing on the first day of employment and ending on the first
Severance Date and commencing on each reemployment date and ending on
the Severance Date which next follows shall be aggregated on a day by
day basis and 365 days of aggregate Service shall constitute one year
of Service. Service shall include any period of authorized part-time
employment, periods of authorized leave of absence up to a maximum of
one year, periods of absence due to service in the Armed Forces of the
United States as required pursuant to Section 414(u) of the Code,
periods of absence due to unpaid leave taken pursuant to the Family and
Medical Leave Act of 1993 or similar state laws (to the extent required
by such laws, but only to the extent such leave is not otherwise
credited under this Section 1.33), and periods of absence due to
illness or disability up to a maximum of 12-consecutive months. Service
shall also include all service credited to an Eligible Employee under
the RJR Plan prior to June 14, 1999. If an individual who is a
participant in the RJR Plan on or after June 14, 1999 becomes an
Eligible Employee on or before June 14, 2000, Service shall also
include the service credited to such Eligible Employee under the RJR
Plan in respect of the period commencing on June 14, 1999 and ending on
June 14, 2000.
Notwithstanding the preceding paragraph and unless otherwise determined
by the Committee, Service with an Affiliated Company that was not a
member of the Nabisco Controlled Group as of December 10, 2000 shall
only be taken into account subsequent to the time that such corporation
became an Affiliated Company. Nabisco Controlled Group means Nabisco,
Inc. and any other corporation that was a member of the controlled
group of corporations (as defined in Section 1563(a) of the Code) that
included Nabisco, Inc. as of December 10, 2000.
1.34 Severance Date means the following:
(a) the date on which an Employee quits, retires, is discharged,
dies or terminates employment following a period of salary and
benefit continuation; or
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15
(b) the first anniversary of the first date of a period in which
an Employee remains absent from Service (with or without pay)
with the Company or an Affiliated Company for any reason other
than quit, retirement, discharge, or death; provided, however,
the absence from Service of an Employee receiving benefits
under one or more long-term disability plans of the Company or
an Affiliated Company is not a severance until the earlier of
normal retirement age, the cessation of such disability
payments or two consecutive years on long-term disability;
provided further that if such an Employee in active employment
after his normal retirement age becomes disabled, his
Severance Date is the date such long-term disability plan
benefits commence or would commence.
In the case of an Employee who is absent from work by virtue
of (i) the Employee's pregnancy, (ii) birth of the Employee's
child, (iii) placement of a child with the Employee by
adoption, or (iv) caring for any such child for a period of up
to a year immediately following such birth or placement, the
Severance Date is the second anniversary of the first day of
absence from Service provided that the period between the
first and second anniversary of such first day of absence is
neither counted as Service nor a Break in Service.
1.35 Supplemental After-Tax Contributions means the contributions which a
Participant elects to make to the Plan in accordance with Section 3.03.
1.36 Supplemental After-Tax Contribution Account means that portion of the
Trust Fund which, with respect to any Participant, is attributable to
his own Supplemental After-Tax Contributions and any investment
earnings or losses thereon and any subaccounts as may be necessary to
reflect the provisions of Section 3.07.
1.37 Supplemental Pre-Tax Contributions means the contributions which a
Participant elects to have the Company make directly to the Plan on
behalf of the Participant in accordance with Section 3.02.
1.38 Supplemental Pre-Tax Contribution Account means that portion of the
Trust Fund which, with respect to any Participant, is attributable to
his own Supplemental Pre-Tax Contributions and any investment earnings
or losses thereon.
1.39 Surviving Spouse means the person to whom the Participant is married,
under applicable state law, at the time of the Participant's death and
to whom the benefits under the Plan shall be payable in the event of
the Participant's death unless a valid Beneficiary designation and
consent thereto by the Participant's spouse has been
8
16
made and received by the Committee, or unless such benefits are subject
to a qualified domestic relations order as defined in Section 414(p) of
the Code.
1.40 Termination of Employment means separation from the employment of the
Company or an Affiliated Company for any reason, including, but not
limited to, Retirement, death, Disability, resignation or dismissal;
provided, however, that transfer in employment between the Company and
an Affiliated Company shall not be deemed to be a "Termination of
Employment" and provided further, that if an Employee is rehired by the
Company or an Affiliated Company within 30 days of his or her
separation from the employment of the Company or an Affiliated Company,
such separation shall not be considered to be a "Termination of
Employment."
1.41 Trustee means a trustee or trustees at any time acting as such under a
trust agreement or agreements established for purposes of this Plan.
1.42 Trust Fund means the cash and other properties arising from (i)
contributions made by Participants and by the Participating Companies
in accordance with the provisions of this Plan, (ii) funds transferred
from the RJR Plan or Affiliated Plans, and (iii) any investment
earnings and gains or losses thereon. The Trust Fund is held and
administered by the Trustee pursuant to Article IV.
1.43 Valuation Date means each business day and any other date the Committee
deems desirable or necessary to value the Trust Fund in accordance with
Article V.
When used herein, the masculine shall include the feminine, and the singular
shall include the plural, unless the context clearly indicates a different
meaning.
9
17
ARTICLE II
PARTICIPATION
2.01 Eligibility.
(a) An Eligible Employee who was eligible to participate in the
RJR Plan immediately prior to the Effective Date shall be
eligible to participate in the Plan on the Effective Date.
(b) Any Employee shall be eligible to become a Participant in the
Plan as of the first Entry Date coincident with or next
following the date he becomes an Eligible Employee.
(c) All Eligible Employees of a Participating Company who
participate in this Plan shall participate under the terms and
conditions herein stated.
(d) An Employee who was a participant in the Nabisco Retirement
Savings Plan or the Nabisco Retirement Plan on the date that
such plan merged with the Plan shall become a Participant as
of the Entry Date coinciding with or next following the merger
date. All service under any such plan shall be taken into
account for determining participation under the Plan.
2.02 Participation.
(a) An Eligible Employee may become a Participant on any Entry
Date by making application in a manner prescribed by the
Committee in which he:
(i) designates the percentage of Compensation to be
contributed as Basic Contributions in accordance with
Section 3.01;
(ii) designates the percentage of Compensation, if any, to
be contributed as Supplemental Pre-Tax and/or
Supplemental After-Tax Contributions in accordance
with Sections 3.02 and 3.03;
(iii) authorizes applicable payroll deductions; and
(iv) chooses one or more Investment Fund(s).
(b) If the Eligible Employee does not make the application
contemplated in Section 2.02(a) prior to his Automatic
Enrollment Date, such Eligible
10
18
Employee shall become a Participant effective as of his
Automatic Enrollment Date and shall be deemed to have (i)
authorized payroll deductions for Basic Contributions in
accordance with Section 3.01, equal to 3% of his Compensation
and (ii) elected to invest such contributions in the Fidelity
Asset Manager: Income. Notwithstanding the foregoing, the
Eligible Employee may at any time elect a different
contribution percentage (including 0%) in accordance with
Section 3.05 and/or different Investment Funds in accordance
with Section 4.06.
2.03 Participant Status. An Employee who has become a Participant shall
remain a Participant so long as he remains in the service of the
Company or an Affiliated Company, and shall cease to be a Participant
upon his Termination of Employment, except that he shall remain a
Participant so long as he has an Account balance. Active participation,
however, including contributions to the Plan by or for a Participant,
shall automatically be suspended effective as of the Participant's
Severance Date. Participation in the Plan shall cease as of the date
Accounts are transferred to an Affiliated Plan pursuant to Section
12.14.
11
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ARTICLE III
CONTRIBUTIONS
3.01 Participant Basic Contributions. Subject to the provisions of Section
3.07, each Participant may elect that the Participating Company
contribute from 1% to 6% of his Compensation to the Plan (in 1%
increments) as Pre-Tax Contributions in lieu of an equal amount being
paid to him as current cash Compensation. Basic Contributions are
matched with Company Contributions in accordance with Section 3.04.
Basic Contributions are made through payroll deductions and are
credited to Participants' Accounts as soon as reasonably possible
following the date of payment of the Compensation from which the
contribution is taken.
3.02 Supplemental Pre-Tax Contributions. Subject to the provisions of
Section 3.07, a Participant who has authorized the maximum Basic
Contribution rate of 6% may also make additional pre-tax contributions
to the Plan by authorizing Supplemental Pre-Tax Contributions of 1% to
10% of his Compensation (in 1% increments) in lieu of an equal amount
being paid to him as current cash Compensation. Supplemental Pre-Tax
Contributions are made through payroll deductions and are credited to
Participants' Accounts as soon as reasonably possible following the
date of payment of the Compensation from which the contribution is
taken.
3.03 Supplemental After-Tax Contributions. A Participant may make
contributions to the Plan on an after-tax basis, either in lieu of or
in combination with Pre-Tax Contributions by authorizing Supplemental
After-Tax Contributions of 1% to 16% of his Compensation (in 1%
increments); provided that the combined percentage of Compensation for
Basic and Supplemental Contributions is a minimum of 1% and a maximum
of 16%. (After-Tax Contributions are referred to as "supplemental" even
though a Participant may elect to make them prior to authorizing any or
the full amount of Pre-Tax Basic Contributions). Supplemental After-Tax
Contributions are made through payroll deductions and are credited to
Participants' Accounts as soon as reasonably possible following the
date of payment of the Compensation from which the contribution is
taken.
3.04 Company Contributions.
(a) All Company Contributions shall be made subject to the terms
and conditions of this Section 3.04. Prior to August 2001,
Company Contributions are made by Nabisco, Inc. After July
2001, Company Contributions are made with respect to the
Nabisco Biscuit & Snacks Group of Kraft Foods North America,
Inc.
12
20
(b) For each Plan Year, the Participating Companies shall
contribute an amount which, together with any forfeitures
under Article VI, shall produce an allocation to each
Participant's Company Contribution Account equal to 50% of
such Participant's Basic Contributions for such Plan Year.
(c) Each Participating Company's share of Company Contributions
for any Plan Year shall be that proportion of the amount of
Company Contributions for that year which the Basic
Contributions withheld by that Participating Company bears to
the total Basic Contributions withheld by all Participating
Companies for the Plan Year.
(d) In any Plan Year in which the Plan is top-heavy (as defined in
Section 14.02) the Participating Companies shall make
additional Company Contributions to the extent necessary to
comply with the minimum top-heavy contribution requirement as
set forth in Section 14.02(f).
(e) Each Company Contribution to the Plan is conditioned on its
deductibility.
In the event that the Commissioner of Internal Revenue,
determines that the Plan does not qualify for tax-exempt
status under Section 401 of the Code and issues an adverse
determination with respect to its initial qualification, the
Company Contributions made on or after the date on which such
determination is applicable shall be returned to the Company
without interest within one year after such determination, but
only if the application for determination is made by the time
prescribed by law for filing the Company's return for the
taxable year in which the Plan was adopted, or such later date
as the Secretary of the Treasury may prescribe.
In the event that a Company Contribution to the Plan is made
by a mistake of fact or all or part of the Company's
deductions under Section 404 of the Code for contributions to
the Plan are disallowed by the Internal Revenue Service, the
portion of the contributions attributable to such mistake of
fact or to which such disallowance applies shall be returned
to the Company without interest. Any such return shall be made
within one year after the making of such contribution by
mistake of fact or disallowance of deductions, as the case may
be.
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3.05 Change in Participant Contributions. Subject to the provisions of this
Article, a Participant may elect to change the percentage of his
authorized payroll deduction by giving notice to the Committee in such
manner as the Committee may prescribe. Such changed percentage shall
become effective beginning with the first payroll period commencing
after processing such notice. If the Committee makes a mistake-of-fact
with regard to any contribution, it shall, depending on the
mistake-of-fact, either (i) cause said contribution to be returned to
the Participant without restriction or (ii) accept additional
contributions for the affected period.
3.06 Suspension of Participant Contributions.
(a) A Participant may elect to suspend his Basic, Supplemental
Pre-Tax or Supplemental After-Tax Contributions by notifying
the Committee in advance in the manner prescribed by the
Committee. The suspension shall become effective on the first
day of the first payroll period commencing on or after
processing such request. No Company Contributions shall be
made on behalf of a Participant during a period of suspension
of Basic Contributions.
(b) A Participant who has suspended his Basic, Supplemental
Pre-Tax or Supplemental After-Tax Contributions may elect to
apply to the Committee to resume his contributions in the
manner prescribed by the Committee. The resumption shall
become effective as of the first payroll period commencing on
or after processing his request.
(c) No contributions may be made by a Participant for any period
of unpaid absence from Service. A Participant who has ceased
to make contributions under the Plan in accordance with this
subsection (c) shall again be eligible to resume making
contributions on the date he returns to Service as an Eligible
Employee.
(d) A Participant who has ceased to make contributions under the
Plan because he has ceased to be an Eligible Employee but,
nevertheless, continues to be an Employee shall again be
eligible to resume making contributions on the date he again
becomes an Eligible Employee and gives notice to the Committee
in the prescribed manner.
3.07 Restrictions on Pre-Tax Contributions.
(a) In no event may the sum of the Basic and Supplemental Pre-Tax
Contributions made by the Company on behalf of any Participant
exceed
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$10,000 (as adjusted in accordance with Code Section
402(g)(5)). In the event the dollar limit for pre-tax
contributions is reached with respect to a Participant during
a calendar year, all additional contributions made on behalf
of the Participant for that calendar year will be made on an
after-tax basis, including, if necessary, a portion of the
contributions that the Participant had designated as Basic
Contributions.
(b) The Committee shall have the right to establish rules with
respect to the making of elections of Pre-Tax Contributions,
including, without limitation, the right to require that any
such election be made at such time prior to its becoming
effective as the Committee shall determine and the right to
restrict the Participant's right to change such election. Such
contributions are intended to be treated for federal income
tax purposes as contributions made by the Company under a
qualified cash or deferred arrangement (as defined in Section
401(k) of the Code) but shall be treated as if they were
contributions by a Participant for the purpose of the Plan
except where the Plan expressly indicates otherwise.
(c) Notwithstanding any other provision of the Plan, Allocable
Excess Pre-Tax Contributions and income allocable thereto
shall be distributed no later than April 15 to Participants
who claim Allocable Excess Pre-Tax Contributions for the
preceding calendar year. "Allocable Excess Pre-Tax
Contributions" shall mean the amount of Pre-Tax Contributions
for a calendar year that the Participant allocates to this
Plan that exceed the limits of Code Section 402(g).
(d) The Participant's claim shall be in writing, shall be
submitted to the Committee no later than March 1; shall
specify the Participant's Allocable Excess Pre-Tax
Contributions for the preceding calendar year; and shall be
accompanied by the Participant's written statement that if
such amounts are not distributed, such Allocable Excess
Pre-Tax Contributions, when added to amounts deferred under
other plans or arrangements described in Sections 401(k),
402(h), 408(k) or 403(b) of the Code, exceed the limit imposed
on the Participant by Section 402(g) of the Code for the year
in which the deferral occurred. A Participant is deemed to
notify the Committee of any Allocable Excess Pre-Tax
Contributions that arise by taking into account only those
amounts deferred pursuant to this Plan and any other Plans of
a Participating Company.
(e) The Allocable Excess Pre-Tax Contributions distributed to a
Participant with respect to a calendar year shall be adjusted
for income and, if there is
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a loss allocable to the Excess Pre-Tax Contributions, shall in
no event be less than the lesser of the Participant's Pre-Tax
Account under the Plan or the Participant's Pre-Tax
Contributions for the Plan Year.
3.08 Code Section 401(k) and 401(m) Nondiscrimination Tests. The Plan is
subject to the following nondiscrimination tests.
(a) Definitions. For purposes of this Section, the following
additional definitions shall be used for Plan Years beginning
after 1996:
(i) Highly Compensated Employee means an individual who
performs service during the determination year and is
an Employee who is a 5-percent owner (as defined in
Section 416(i)(1) of the Code) at any time during the
Plan Year or the preceding Plan Year, or an Employee
who received compensation in excess of $80,000
(adjusted for changes in the cost of living) and is a
member of the "Top-Paid Group" for the preceding Plan
Year.
(ii) "Top-Paid Group" means those Employees who are in the
top 20-percent of all Employees based on compensation
paid by the Company.
(b) Average Actual Deferral Percentage Test ("ADP"). For each Plan
Year, Participants' Pre-Tax Contributions shall satisfy the
requirements described under Section 401(k)(3)(A)(ii) of the
Code. The Committee shall have the right to limit Pre-Tax
Contributions of Highly Compensated Employees as it deems
necessary to satisfy such requirements.
(c) Average Actual Contribution Percentage Test ("ACP"). For each
Plan Year, matching Company Contributions and Participant
After-Tax Contributions shall satisfy the requirements under
Section 401(m)(2) of the Code. The Committee shall have the
right to limit matching Company Contributions and Participant
After-Tax Contributions of Highly Compensated Employees as it
deems necessary to satisfy such requirements.
3.09 Qualified Military Service. Any Participant who resumes participation
in the Plan following a period of qualified military service shall have
the right to make-up the contributions described in Section 3.01,
Section 3.02 and Section 3.03 that were not made on account of
qualified military service as provided under Section 414(u) of the
Code. The Company will make contributions as described in Section 3.04
in
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the same manner and in the same amount as if the Participant's
contributions were made during qualified military service.
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ARTICLE IV
TRUST FUND AND INVESTMENT FUNDS
4.01 The Trust Agreement. The Company shall enter into a trust agreement
which shall contain such provisions as shall render it impossible for
any part of the corpus of the Trust or income therefrom to be at any
time used for, or diverted to, purposes other than for the exclusive
benefit of Participants. Any or all rights or benefits accruing to any
person under the Plan with respect to any Company Contributions
deposited under the Trust Agreement shall be subject to all the terms
and provisions of the Trust which shall specifically incorporate and be
subject to the provisions of the Plan.
4.02 The Trustee. The Trustee shall be a corporate trustee appointed by the
Corporate Employee Plans Investment Committee of Philip Morris
Companies Inc. (the "Philip Morris Committee"), unless such authority
is transferred to the Compensation and Governance Committee of Kraft
Foods Inc. (the "Kraft Committee").
4.03 Separate Funds. Subject to Section 4.04, the Trustee shall maintain
separate Investment Funds within the Fund as are designated by the
Company.
4.04 Investment Funds. The Philip Morris Committee, unless such authority is
transferred to the Kraft Committee, shall select the Investment Funds
offered under the Plan and reserves the right to eliminate or add Funds
from time to time, including Funds that invest in the common stock of
an Affiliated Company.
4.05 Temporary Investment. Pending permanent investment of the assets of any
Investment Fund, the Trustee may temporarily hold cash or make
short-term investments in obligations of the United States Government,
commercial paper, an interim investment fund for tax qualified employee
benefit plans established by the Trustee unless otherwise provided by
applicable law, or other investments of a short-term nature.
4.06 Investment of Contributions.
(a) Election. All Basic Contributions, Supplemental Pre-Tax
Contributions, Supplemental After-Tax Contributions and
Company Contributions will be invested at the election of the
Participant in multiples of 1% in any one or
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combination of the Investment Funds under the Plan, subject to
any restrictions imposed on investing in any stock fund. A
Participant may make or change an election on any day by
giving notice to the Committee in the prescribed manner. Any
such election or change of election shall be effective as of
the first payroll period after it is processed.
(b) Reallocation of Investments. A Participant may elect on any
day to reallocate the investment of his Accounts to any one or
combination of the Investment Funds in multiples of 1% by
giving notice to the Committee in such manner as the Committee
may prescribe. The amounts reallocated will be based upon
values as of the Valuation Date applicable to the processing
of the request.
4.07 Voting by Participants.
(a) Voting of Stock Generally. Each Participant shall have the
right and shall be afforded the opportunity to instruct the
Trustee how to vote that proportionate number of the total
number of shares of stock held in any Fund that consists of
the common stock of the Company or an Affiliated Company that
is the same proportion that the value of his interest bears to
the total value of such Fund. Instructions by Participants to
the Trustee shall be in such form and pursuant to such
regulations as the Committee may prescribe. Any such
instructions shall remain in the strict confidence of the
Trustee.
(b) Tender or Exchange Offers. In the event of a tender or
exchange offer for any or all shares of Stock, the Committee
shall notify each Participant or Beneficiary and utilize its
best efforts to timely distribute or cause to be distributed
to him such information as will be distributed to other
shareholders of such Stock in connection with any such tender
or exchange offer. Each Participant or his Beneficiary shall
have the right to instruct the Trustee in writing not to
tender or exchange shares of Stock credited to his Account
under the Trust Fund. Unless the Trustee determines that ERISA
requires it to act otherwise, the Trustee shall not tender or
exchange any shares of Stock credited to a Participant's
Account under the Trust Fund unless specific instructions to
tender or exchange such shares have been received. For
purposes of this Section 4.07(b), "Stock" shall mean the stock
held in any Fund that consists of the common stock of the
Company or an Affiliated Company.
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4.08 Investment Managers. The Philip Morris Committee may enter into a
written agreement with or direct the Trustee to enter into an agreement
with one or more investment managers to manage the investments of one
or more of the Investment Funds. Such investment managers may include
legal reserve life insurance companies which enter into group annuity
contracts with the Trustee. The Philip Morris Committee may remove any
such investment manager or any successor investment manager, or direct
the Trustee to do so, and any such investment manager may resign. In
addition, the Philip Morris Committee may, upon removal or resignation
of an investment manager, provide for the appointment of a successor
investment manager. The Kraft Committee shall exercise the duties
described in this Section 4.08 if such authority is transferred to the
Kraft Committee from the Philip Morris Committee.
4.09 Participant Responsibility For Selection of Funds. Each Participant is
solely responsible for the selection of his Investment Funds. Neither
the Trustee, the Committee, any Administrative Committee, the Company
nor any of the directors, officers or employees of the Company or any
Affiliated Company is required to advise a Participant as to the manner
in which his Accounts should be invested. The fact that a security is
available to Participants for investment under the Plan shall not be
construed as a recommendation for the purchase of that security, nor
shall the designation of any Investment Fund impose any liability on
the Company, any Affiliated Company, their directors, officers or
employees, the Trustee, the Committee, or any Administrative Committee.
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ARTICLE V
ACCOUNT STATEMENTS AND VALUATION
5.01 Valuation Of Accounts. As of each Valuation Date, the Accounts of each
Participant shall be adjusted to reflect any appreciation or
depreciation in the fair market value and any income earned by each
Investment Fund in which the Participant's Accounts are invested since
the prior Valuation Date. Such fair market value shall be the aggregate
fair market value of all securities or other property held for each
Investment Fund, plus cash and accrued earnings, less accrued expenses
and proper charges against each Investment Fund.
When determining the value of Participant Accounts, any deposits due
which have not been deposited in the Trust Fund on behalf of the
Participant shall be added to his Accounts. Similarly, adjustments of
Accounts for appreciation or depreciation of an Investment Fund shall
be deemed to have been made as of the Valuation Date to which the
adjustment relates, even though they are actually made as of a later
date.
5.02 Valuation Upon Transfer Withdrawal or Distribution. The valuation of
Accounts for purposes of an in-service withdrawal, a transfer of
Accounts to another Investment Fund, or a cash distribution shall be as
described in Section 5.01.
5.03 Statement of Accounts. Each Participant shall be furnished at least
annually a statement setting forth the value of his Accounts.
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ARTICLE VI
VESTING AND FORFEITURES
6.01 Vesting Of Participant's Contributions. Each Participant's Basic
Contribution Account, Supplemental Pre-Tax Contribution Account and
Supplemental After Tax Contribution Account shall at all times be fully
vested.
6.02 Vesting of Company Contributions. A Participant shall become fully
vested in his Company Contribution Account upon the earlier of (i)
completion of 60 months of Service, (ii) 24 months of employment after
his initial Entry Date, or (iii) the occurrence of any one of the
following:
(a) attainment of age 65,
(b) Retirement,
(c) Disability,
(d) death,
(e) termination of employment as a result of Job Elimination,
(f) termination of the Plan, or
(g) complete discontinuance of Company Contributions.
With respect to an Employee who becomes a Participant following the
merger of the Nabisco Retirement Savings Plan (the "Savings Plan") or
the Nabisco Retirement Plan (the "Retirement Plan") with the Plan, the
following additional conditions shall apply regarding any amount
credited to his Company Contribution Account:
(a) The vested percentage shall not be less than the vested
percentage, determined as of the merger date, of the
Employee's (i) matching contributions account and supplemental
contribution account under the Savings Plan or (ii) the amount
attributable to employer contributions under the Retirement
Plan.
(b) A "Year of Service" under the Savings Plan shall be equivalent
to 12 months of Service under the Plan.
(c) The Employee's Entry Date shall be the later of November 19,
1999 or the date of hire by the Company.
(d) The Employee shall be credited with 12 months of Service for
the period beginning July 1, 2000 and ending June 30,
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2001 if he would have been credited with a "Year of
Service" shall have the meaning described in Section 8.2 of
the Savings Plan.
(e) All service under the Savings Plan and the Retirement Plan as
of the merger date will be taken into account under the Plan.
(f) With respect to a former participant in the Retirement Plan,
any such Employee will have a 100% vested interest upon
attaining age 55 while employed by the Company.
6.03 Forfeiture on Termination of Employment. If a Participant's employment
is terminated prior to attainment of age 65 for reasons other than
Retirement, Disability, death, or Job Elimination the portion, if any,
of his Company Contribution Account in which he is not vested shall be
forfeited upon the earlier of (i) the accrual of five (5) consecutive
Break in Service years, or (ii) the receipt of a cash-out and, under
circumstances where all Participant Contributions were distributed
prior to Termination of Employment or there are no Participant
Contributions, a cash-out will be deemed to have been made on the date
the Termination of Employment occurred. All forfeitures pursuant to
(ii) above are subject to the provisions of Section 6.05.
6.04 Disposition of Forfeitures. All forfeitures shall be used to reduce
Company Contributions otherwise payable to the Plan.
6.05 Restoration of Forfeitures. Any amount forfeited pursuant to the
provisions of clause (ii) of Section 6.03 shall be restored to the
Account of a Participant if the Participant is re-employed before he
accrues five consecutive Break in Service years. The restoration will
occur without the requirement that the Participant repay to the Plan
any amounts previously distributed to him.
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ARTICLE VII
DISTRIBUTIONS
7.01 Distribution Of Benefits.
(a) Termination of Employment. A Participant who has a Termination
of Employment for reasons other than Retirement, Disability or
death shall receive a lump sum distribution of the value of
his vested Accounts, subject to the provisions of Section
7.01(e). Distribution shall be made as soon as
administratively feasible following the valuation of the
Participant's Accounts. If the Committee has not received an
application for distribution by the time specified in
subsection (d) below, a distribution shall automatically be
made at such time.
(b) Retirement or Disability. A Participant who has a Termination
of Employment due to Retirement or Disability shall receive a
lump sum distribution of the value of his Accounts.
Distribution shall be made as soon as administratively
feasible following the valuation of the Participant's
Accounts. However, and notwithstanding anything in this Plan
to the contrary, a Participant may not postpone payment beyond
April 1 of the calendar year following the calendar year in
which he attains age 70 1/2. Participants who are not 5%
owners (as defined in Code Section 416(i)(1)(B)) and who
attained age 70 1/2 prior to January 1, 1988, are not required
to have their distribution commence prior to April 1 of the
calendar year following the calendar year in which they
retire, regardless of their age.
(c) Death. The Accounts of a Participant who has died shall be
distributed to his Beneficiary in a single lump sum payment.
Payment will be made after notification and verification of
the Participant's death; provided however, that if the
Beneficiary is the Participant's Surviving Spouse, a
distribution shall not be made until after a written
application for distribution from the Surviving Spouse has
been received by the Committee. The Accounts shall be valued
as soon as administratively feasible after receipt of the
written application for distribution, and distribution shall
be made as soon as administratively feasible following the
valuation of the Participants Accounts. If the Committee has
not received an application for distribution by the time the
Participant would have attained age 65, the distribution shall
automatically be made at such time.
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(d) Latest Date for Distribution. Distributions to a Participant
shall commence no later than the April 1 following the
calendar year in which the Participant attains age 70 1/2.
(e) Small Lump Sum Cash-Outs. The foregoing notwithstanding, if
the value of the Participant's vested Account does not exceed
$5,000, a distribution shall be made to the Participant as
soon as administratively feasible after a written application
for distribution has been received by the Committee, valued as
soon as administratively feasible after receipt of such
application; provided; however, that if the Committee does not
receive a written application for distribution within 90 days
after the Participant's Termination of Employment, the Account
shall be valued and distribution shall be made as soon as
administratively feasible after the expiration of such 90-day
period. In no event shall the Account of a Participant which
is in excess of the amount of $5,000 be distributed to him or
on his behalf prior to the time specified in (d) above without
the written consent to the Participant or, if applicable, his
Surviving Spouse.
(f) QDRO. Notwithstanding subsections (a)-(e) above and Section
8.05, if a qualified domestic relations order, as described in
Section 12.05, requires the distribution of all or part of a
Participant's benefits under the Plan, the establishment or
acknowledgment of the alternate payee's rights to benefits
under the Plan in accordance with the qualified domestic
relations order shall in all events be applied in a manner
consistent with the terms of the Plan. Notwithstanding the
foregoing, (i) the Committee is authorized, pursuant to such
uniform and nondiscriminatory rules as it shall establish
which shall be consistent with applicable law and the terms of
the applicable qualified domestic relations order, to cash out
benefits to which alternate payees may be entitled prior to
the date such benefits would otherwise become payable in
accordance with the applicable provisions of the Plan, and
(ii) in no event shall the recognition of an alternate payee's
rights in accordance with this Section 7.01 (f) be deemed to
include the right to make a withdrawal pursuant to the
provisions of Article VIII or to receive any benefits in the
form of a partial payment.
(g) Company/Affiliated Company Stock Fund Distributions. With
respect to any Investment Fund that consists of the common
stock of the Company or an Affiliated Company, a Participant
or his Beneficiary may elect that the distribution from any
such Investment Fund be made in the form of cash or shares of
stock, except that any fractional portion of a share shall be
paid in
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cash. If a Participant does not make an election in connection with the
distribution, all amounts shall be paid in cash.
7.02 Installment Option. A Participant or Beneficiary may elect to receive
the value of his Accounts in monthly or annual installment payments;
provided, however, such Participant may elect at any time to receive
the remaining amount credited to his Accounts in a lump-sum
distribution.
7.03 Proof of Death and Right of Beneficiary. The Committee may require and
rely upon such proof of death and such evidence of the right of any
Beneficiary to receive the undistributed value of the Account of a
deceased Participant as the Committee may deem proper, and its
determination of death and of the right of such Beneficiary or other
person to receive payments shall be conclusive.
7.04 Completion of Appropriate Forms and Procedures. The Committee has
prescribed forms/procedures providing notice to it in order for a
distribution to be made under the Plan. In the event a Participant or
Beneficiary does not comply with such procedures before the date a
distribution becomes payable under the terms of the Plan, distribution
from such Participant's or Beneficiary's Account may, at the option of
the Committee (taking into account Section 12.12), be mailed to the
Address of Record as provided in Section 12.09.
7.05 Investment Pending Distribution.
(a) The provisions of Section 4.06 shall continue to apply to the
Accounts of inactive Participants, including Participants who
have elected the installment option as provided in Section
7.02(a).
(b) A Participant is not entitled to any interest, dividends or
any other form of investment proceeds on his Account for the
period between the Valuation Date on which his Account is
valued for payment and the date payment is made.
7.06 Direct Rollovers.
Notwithstanding any provision of the Plan to the contrary that would
otherwise limit a distributee's election under this Article, a
distributee may elect, at the time and in the manner prescribed by the
Plan Administrator, to have any portion of an eligible rollover
distribution paid directly to an eligible retirement plan specified by
the distributee in a direct rollover.
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(a) Eligible Rollover Distribution. An eligible rollover
distribution is any distribution of all or any portion of the
balance to the credit of the distributee, except that an
eligible rollover distribution does not include: any
distribution that is one of a series of substantially equal
periodic payments (not less frequently than annually) made for
the life (or life expectancy) of the distributee or the joint
lives (or joint life expectancies) of the distributee and the
distributee's designated beneficiary, or for a specified
period of ten years or more; any distribution to the extent
such distribution is required under Section 401(a)(9) of the
Code; the portion of any distribution that is not includible
in gross income (determined without regard to the exclusion
for net unrealized appreciation with respect to employer
securities); and any hardship distribution described in
Section 401(k)(2)(B) of the Code made after 1998.
(b) Eligible Retirement Plan. An eligible retirement plan is an
individual retirement account described in Section 408(a) of
the Code, and individual retirement annuity described in
Section 408(b) of the Code, and annuity plan described in
Section 403(b) of the Code, or a qualified trust described in
Section 401(a) of the Code, that accepts the distributee's
eligible rollover distribution. However, in the case of an
eligible rollover distribution to the surviving spouse, an
eligible retirement plan is an individual retirement account
or individual retirement annuity.
(c) Distributee. A distributee includes an employee or former
employee. In addition, the employee's or former employee's
surviving spouse and the employee's or former employee's
spouse or former spouse who is the alternate payee under a
qualified domestic relations order, as defined in Section
414(p) of the Code, are distributees with regard to the
interest of the spouse or former spouse.
(d) Direct Rollover. A direct rollover is a payment by the plan to
the eligible retirement plan specified by the distributee.
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ARTICLE VIII
WITHDRAWAL PRIOR TO TERMINATION OF
EMPLOYMENT AND SPECIAL PRE-TAX CONTRIBUTION RULES
8.01 Election to Withdraw from Accounts. As of any Valuation Date and
subject to Sections 8.02, 8.03 and 8.04, a Participant may elect to
withdraw, in cash only and in a stated amount, all or a portion of the
value of vested amounts in his Accounts from which withdrawals are
allowed.
8.02 Withdrawal of After-Tax and Company Contributions. Withdrawals as
described in Section 8.01 and subject to the rules of Section 8.03
shall be applied by the Committee against a Participant's Accounts in
the order and classification as follows:
Tax-Free Withdrawal: If applicable, the amount in his Supplemental
After-Tax Account that may be withdrawn on a tax-free basis.
Regular Withdrawal: The remaining value in his Supplemental After-Tax
Account, the value in his Rollover Contribution Account, and the vested
value in his Company Contribution Account.
Participants with less than 60 months of Plan participation may not
withdraw (i) after-tax contributions that were matched and have been in
the Plan for less than 24 months, and (ii) Company Contributions that
have been in the Plan for less than 24 months.
Hardship Withdrawal: A Participant who qualifies for a financial
hardship as defined in Section 8.04 may withdraw up to 100% of the
amount available under a Regular Withdrawal plus the remaining value of
his After-Tax Supplemental Account, the remaining vested value of his
Company Contribution Account, and any dollar amount from his Basic and
Supplemental Pre-Tax Contribution Accounts, excluding earnings to Basic
Pre-Tax Contributions and Supplemental Pre-Tax Contributions made under
this Plan and earnings credited after December 31, 1988 to Pre-Tax
Contributions made under the RJR Plan.
Withdrawal Upon Attainment of Age 59 1/2 or Disability: A Participant
who has attained age 59 1/2 or is totally Disabled may withdraw the
maximum available under a Regular Withdrawal plus any dollar amount up
to the remaining vested value of his After-Tax Supplemental Account,
Company Contributions Account and his Basic and Supplemental Pre-Tax
Accounts.
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8.03 Rules Applicable to Withdrawals Prior to Termination of Employment. The
following rules shall, except as noted in Section 8.04, apply to
withdrawals under this Article VIII:
(a) Withdrawals may only be made by prior notice to the Committee
in the manner prescribed by the Committee.
(b) Excluding Hardship withdrawals, no more than one withdrawal
may be made in any six-month period.
(c) Excluding Hardship withdrawals, in no event may a Participant
make a withdrawal in an amount less than $1000, or the maximum
amount available for withdrawal as a Tax-Free Withdrawal or a
Regular Withdrawal, if less.
(d) In no event may a Participant elect an order of withdrawal
other than set forth in Section 8.02, nor may a Participant
select the classification or Investment Fund from which his
stated amount of withdrawal will be withdrawn.
(e) Payments of withdrawal amounts will be made as soon as
practicable after a Participant's election to withdraw.
(f) Amounts received from any plan in a trust-to-trust transfer
which were subject to Code Section 401 (k) under such plan
shall be subject to Code Section 401 (k) requirements under
this Plan.
8.04 Hardship Withdrawals. Financial hardship for purposes of Section 8.02
shall mean that a Participant requires a withdrawal of money for an
immediate and heavy financial need. Such withdrawal cannot exceed the
sum of (i) the amount required to meet such need and (ii) any amounts
necessary to pay any federal, state or local income taxes or penalties
reasonably anticipated as a result of the distribution. No withdrawal
shall be permitted unless the hardship cannot reasonably be relieved
from other sources including distributions (other than hardship
withdrawals) and nontaxable loans available under this Plan or any
other plan, through reimbursement or compensation by insurance or
otherwise, by liquidation of assets to the extent such liquidation
would not itself cause an immediate and heavy financial need, by
cessation of all Basic and Supplemental Pre-Tax Contributions or
Supplemental After-Tax Contributions under the Plan, or by borrowing
from commercial sources on reasonable commercial terms. Purchase by a
Participant of a primary residence, the need to prevent eviction or
foreclosure on the primary
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residence of a Participant, post-secondary education tuition, related
fees, or room and board for a Participant or his dependents and any
non-reimbursed medical expense of a Participant or his dependents may
generally be considered situations of heavy financial need, unless
otherwise governed by law or regulation. The Committee may, under rules
established by it which are uniformly applicable to all similarly
situated Participants, determine other circumstances where a
Participant has a heavy financial need and the decision of the
Committee as to whether a Participant satisfies the financial hardship
rule shall be conclusive, unless otherwise governed by law or
regulation.
8.05 Restrictions on Pre-Tax Contribution Distributions. Notwithstanding any
other provision in this Plan to the contrary, a Participant's Pre-Tax
Contribution Account may not be distributed earlier than upon one of
the following events:
(a) The Participant's Retirement, death, Disability or Termination
of Employment;
(b) The termination of the Plan without the establishment of a
successor plan;
(c) A Participant's attainment of age 59 1/2;
(d) A Participant's hardship, restricted as set forth in Section
8.04;
(e) The sale or other disposition of the Company or any Affiliated
Company to an unrelated corporation, which does not maintain
the Plan, of substantially all of the assets used in a trade
or business, but only with respect to Employees who continue
with the acquiring corporation; or
(f) The sale or disposition by the Company or any Affiliated
Company of its interest in a subsidiary to an unrelated entity
which does not maintain the Plan, but only with respect to
Employees who continue employment with the subsidiary.
This Section is intended to comply with the earliest
distribution requirements of Treasury Reg. 1.401 (k)-1(d) and
is not intended to add any forms of distribution not otherwise
allowed under the Plan.
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ARTICLE IX
LOANS
9.01 Loan Provisions. An active Participant may make application to the
Committee to borrow from the Trust Fund and the Committee may permit
such a loan upon the conditions hereinafter specified and any other
rules promulgated by the Committee.
(a) Loans shall be made available to all eligible Participants on
a reasonably equivalent basis and (i) shall not be made
available to highly compensated employees (as defined in
Section 414(q) of the Code) in an amount greater than the
amount made available to other Participants, and (ii) shall
not be permitted for purchasing securities or in any way
financing a securities investment.
(b) The maximum amount of a loan to a Participant shall not exceed
the lesser of (i) 50% of the vested interest in his Account,
or (ii) $50,000, reduced by the highest outstanding loan
balance during the preceding twelve months. The minimum loan
amount is $1,000. Notwithstanding the foregoing, no amount of
a Participant's Account shall be considered available for a
loan if it is subject to a qualified domestic relations order
as such term is defined under Section 414(p)(1)(A) of the
Code.
(c) The Committee shall have complete discretion in determining
lien priorities among the various investments in the Account.
The Committee shall determine the interest rate for each loan,
consistent with the rate being charged by other lending
institutions for a similar loan to an unrelated borrower on
the same date. A loan shall be deemed to be an investment of a
Participant's individual Account and all interest payments and
repayments of principal shall be credited to the Account of
the Participant.
(d) The Participant shall be required to authorize payroll
deductions from his Compensation in an amount sufficient to
repay the loan over its term. Loan repayment amounts shall be
credited to a Participant's Account as of the date of payment
of the Compensation from which the repayment is taken. In the
event of default of the Participant before the loan is repaid
in full, the unpaid balance shall become due and payable and,
to the extent that the outstanding amount is not repaid within
60 days after demand for payment is
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sent, such amount shall be deemed to have been distributed and
the Trustee shall first satisfy the indebtedness from the
amount payable to the Participant before making any payment to
the Participant. In the event of a Participant's death before
the loan is repaid in full, the Participant's estate shall be
the Beneficiary with respect to the outstanding loan
notwithstanding any other deemed or actual Beneficiary
designation and the unpaid loan balance shall be deemed to
have been distributed to the Participant's estate.
Upon a Participant's Termination of Employment, the
Participant can repay any outstanding loan balance in full or
continue to repay the outstanding balance in the same amount
and at the same rate as prior to the Termination of
Employment. Repayments after a Participant's Termination of
Employment shall be effected as determined by the Committee.
(e) During the repayment period for the loan, the Participant
shall be permitted to fully participate in the Plan.
(f) The Participant shall execute such other documents as the
Committee shall request.
(g) Only one loan for each Participant may be outstanding at one
time.
(h) The Committee may make additional rules for loans under the
Plan, provided that such rules are administered in a
nondiscriminatory manner.
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ARTICLE X
ADMINISTRATION OF THE PLAN
10.01 Nabisco Employee Benefits Committee.
(a) The general administration of the Plan and the responsibility for
carrying out the provisions of the Plan shall be placed in the
Committee, consisting of not less than three persons.
(b) Any member of the Committee may resign by delivering his written
resignation to the Secretary of the Committee and such resignation
shall become effective upon the date specified therein. A member
shall be deemed to have resigned if he leaves the active employment
of the Company and all Affiliated Companies.
(c) The Committee shall elect from its members a Chairman, and shall
also elect a Secretary who may, but need not, be one of the members
of the Committee. The Committee may appoint from its members such
committees with such powers as it shall determine, and may authorize
one or more of its members, or any agent, to execute or deliver any
instrument or make any payment in its behalf.
(d) The Committee shall hold meetings upon such notice, at such place or
places, and at such time or times as it may from time to time
determine.
(e) A majority of the members of the Committee shall constitute a quorum
for the transaction of business. All resolutions or other action
taken by the Committee shall be by the vote of a majority of the
members of the Committee present at any meeting or without a meeting
by an instrument in writing signed by a majority of the members of
the Committee.
(f) No member of the Committee shall receive any compensation for his
service as such, and, except as may be required by applicable law,
no bond or other security is required of him in such capacity in any
jurisdiction.
10.02 Administrative Committee.
(a) The Committee, in its discretion, may delegate its administrative
duties and responsibilities to one or more Administrative
Committees each consisting of three or more persons, who shall be
appointed by and serve at the
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pleasure of the Committee and one or more of whom may also be
members of such Committee. Vacancies in the Administrative Committee
shall be filled by the Committee but the Administrative Committee
may act, notwithstanding any vacancies, so long as there are at
least two members of such Committee. The members of an
Administrative Committee shall serve without compensation for their
services as such, but shall be reimbursed by the Company for all
necessary expenses incurred in the discharge of their duties.
(b) Subject to restrictions imposed by the Committee, an Administrative
Committee's powers shall include the following powers:
(i) to interpret Plan provisions with respect to eligibility,
service, vesting and determination of benefits,
(ii) to calculate benefits and authorize the payment of benefits by
the Plan trustees through disbursement accounts as directed by
the Administrative Committee,
(iii) to authorize the payment of routine plan expenses exclusive of
trustee, investment manager, or actuary fees,
(iv) to prepare and/or approve the filing of required governmental
reports,
(v) to maintain Plan and Account records,
(vi) to prepare employee announcements, forms and procedures, and
(vii) to review denials of benefit claims made by Participants or
Beneficiaries.
The Administrative Committee, at its discretion, may delegate to
assistants, including employees in the Company's Employee Benefits
Department, ministerial and clerical duties.
10.03 Authority and Duties of Various Fiduciaries.
(a) The Committee (or the Administrative Committee acting on behalf
of the Committee) shall have the exclusive right to interpret the
Plan and to decide
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any and all matters arising under the Plan or in connection with its
administration, including determination of and eligibility for the
amount of distributions and withdrawals. The Company shall have no
power to direct or modify any interpretations, determinations, or
decisions of the Committee. The Committee may amend the Plan,
subject to the provisions of Section 11.01. The Committee may adopt
rules for the administration of the Plan and the conduct of its
business and such rules shall be consistent with the provisions of
the Plan.
(b) The Committee and any other named fiduciary may each employ counsel,
agents, and such clerical and accounting services as it may require
in carrying out its responsibilities under the Plan. All fiduciaries
shall be entitled to rely upon tables, valuations, certificates,
opinions, and reports furnished by any actuary, accountant, or legal
counsel appointed under the provisions of the Plan.
(c) The Committee shall keep in convenient form such personnel data as
may be necessary for the Plan. The Committee shall prepare,
distribute, and file such reports and notices as may be required by
applicable law or regulation.
(d) The members of the Committee shall use that degree of care,
skill, prudence and diligence that a prudent man acting in a like
capacity and familiar with such matters would use in his conduct
of a similar situation. A member of the Committee shall not be
liable for the breach of fiduciary responsibility of another
fiduciary unless (i) he participates knowingly in, or knowingly
undertakes to conceal, an act or omission of such other
fiduciary, knowing such act or omission is a breach; or (ii) by
his failure to discharge his duties solely in the interest of the
Participants, Surviving Spouses and Beneficiaries for the
exclusive purpose of providing their benefits and defraying
reasonable expenses of administering the Plan not met by the
Company, he has enabled such other fiduciary to commit a breach;
or (iii) he has knowledge of a breach by such other fiduciary and
does not make reasonable efforts to remedy the breach; or (iv)
the Committee improperly allocates duties among its members or
delegates duties to others and fails to properly review such
allocation or delegation of fiduciary responsibilities.
(e) The Company will indemnify and hold harmless the members of the
Committee and any person to whom fiduciary responsibilities are
delegated under this Plan against any cost or expense (including
attorney's fees) or liability (including any sum paid in settlement
of a claim with the approval
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of the Company) arising out of any act or omission to act, except
in the case of willful misconduct.
(f) Whenever, in the administration of the Plan, any discretionary
action is required, the authorized party shall exercise his
authority in a nondiscriminatory manner so that all persons
similarly situated will receive substantially the same treatment.
10.04 Named Fiduciaries.
(a) The Committee and any Administrative Committee shall each constitute
named fiduciaries as such term is defined in ERISA.
(b) Any fiduciary appointed as a named fiduciary by the Company by
resolution or appointed by an appropriate instrument executed by an
officer of the Company thereunto authorized shall also constitute a
named fiduciary in respect of the duties delegated to him or it in
such resolution or instrument.
10.05 Delegation. Any named fiduciary designated herein or appointed as provided
herein, unless precluded from doing so by the terms of such appointment,
may by appropriate instrument designate any person (including any firm or
corporation) to carry out part or all of such fiduciary's responsibilities
and upon such designation the named fiduciary shall have no liability,
except as imposed by applicable law, for any act or omission of such
person. The foregoing does not preclude any other fiduciary to the extent
allowed by ERISA and the terms of his appointment from delegating part or
all of such fiduciary's responsibilities with respect to the Plan.
10.06 Multiple Capacities. Any fiduciary may serve in more than one
fiduciary capacity with respect to the Plan.
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ARTICLE XI
AMENDMENTS, TERMINATION, PERMANENT DISCONTINUANCE
OF CONTRIBUTIONS, MERGER OR CONSOLIDATION
11.01 Amendments. Subject to the provisions hereinafter set forth, the Company
reserves the right at any time and from time to time by action of the
Committee in writing, both retroactively and prospectively, to modify or
amend, in whole or in part, any or all of the provisions of the Plan;
provided, however, that (a) no such modification or amendment shall make
it possible for any part of the funds of the Plan to be used for, or
diverted to, purposes other than for the exclusive benefit of
Participants, Surviving Spouses or Beneficiaries under the Plan; and (b)
no modification or amendment shall be made which has the effect of
decreasing retroactively the Accounts of any Participant or of reducing
the nonforfeitable percentage of the Company Contribution Account of a
Participant below the nonforfeitable percentage thereof computed under the
Plan as in effect on the later of the date on which the amendment is
adopted or becomes effective; and provided further, that any amendment of
the Plan that involves a material increase in benefits for officers of the
Company, a material increase in cost or a material change in design, other
than technical amendments required by law or regulations, must be approved
by the Board of Directors. No amendment shall eliminate or reduce an early
retirement benefit or eliminate an optional form of benefit except as
permitted by law.
11.02 Termination or Permanent Discontinuance of Contributions. The Company may
by action of the Committee terminate the Plan with respect to all
participating locations or any of them or direct complete discontinuance
of contributions hereunder by all or any of the participating location for
any reason at any time. In case of such termination or complete
discontinuance of contributions hereunder, there shall automatically vest
in the appropriate Participants nonforfeitable rights to the Company
Contributions credited to their Accounts, and the total amount in each
Participant's Accounts shall be distributed, as the Committee shall
direct, to him or for his benefit.
11.03 Partial Termination. In the event of a partial termination of the Plan,
the provisions of Section 11.02 shall be applicable only to the
Participants affected by such partial termination.
11.04 Benefits in Case of Merger or Consolidation. The Plan may not be merged or
consolidated with, nor may its assets or liabilities be transferred to,
any other plan unless each Participant, spouse or Surviving Spouse, former
Participant, retired
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Participant or Beneficiary under the Plan would, if the resulting plan
were then terminated, receive a benefit immediately after the merger,
consolidation, or transfer which is equal to or greater than the benefit
he would have been entitled to receive immediately before the merger,
consolidation, or transfer if the Plan had then terminated.
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ARTICLE XII
MISCELLANEOUS
12.01 Benefits Payable from Trust Fund. All persons with any interest in the
Trust Fund shall look solely to the Trust Fund for any payments with
respect to such interest.
12.02 Elections. Elections for benefits or Beneficiaries hereunder shall be made
by a Participant in the manner prescribed by the Committee for such
purposes, within the prescribed time limits.
12.03 No Right to Continued Employment. Neither the establishment of the Plan
nor the payment of any benefits thereunder nor any action of the Company,
the Board of Directors, the Committee or the Trustee shall be held or
construed to confer upon any person any legal right to be continued in the
employ of the Company.
12.04 Inalienability of Benefits and Interests. No benefit payable under the
Plan or interest in the Trust Fund shall be subject in any manner to
anticipation, alienation, sale, transfer, assignment, pledge, encumbrance
or charge, and any such attempted action shall be void and no such benefit
or interest shall be in any manner liable for or subject to debts,
contracts, liabilities, engagements or torts of any Participant, Surviving
Spouse or Beneficiary.
12.05 Qualified Domestic Relations Orders.
(a) The provisions in Section 12.04 shall also apply to the creation,
assignment or recognition of aright to any benefit payable with
respect to a Participant pursuant to a domestic relations order,
unless such order: (i) is determined to be a qualified domestic
relations order, as defined in Section 414(p) of the Code, or (ii)
was entered before January 1, 1985.
(b) If the Committee is in receipt of a domestic relations order, or
the Committee is otherwise aware that a qualified domestic
relations order affecting a Participant's account is being
sought, the Committee may take such action as necessary
(including, without limitation, restricting the participant's
ability to withdraw or borrow funds in his or her Accounts) in
order to administer the Plan consistently with the terms of any
such qualified domestic relations order.
12.06 Payments for Exclusive Benefit of Participants. Payments of benefits in
respect of the interest of a Participant under the Plan to any person
other than such Participant
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in accordance with the provisions of the Plan shall be deemed to be for
the exclusive benefit of such Participant.
12.07 New Jersey Law to Govern. All questions pertaining to the construction,
regulation, validity and effect of the provisions of the Plan shall be
determined in accordance with the laws of the State of New Jersey, except
to the extent such laws are pre-empted by ERISA.
12.08 No Guarantee. Neither the Company nor the Trustee guarantee the Trust
Fund in any manner against loss or depreciation.
12.09 Address of Record. Each individual or entity with an actual or potential
interest in the Plan shall file and maintain a current record address with
the Plan. Communications mailed by the Company, Trustee, or Committee to
such record address fulfills all obligations to provide required
information to Participants, including former employees, Surviving Spouses
and Beneficiaries, in regard to the Plan. If no record address is filed,
it may be presumed that the address used by the Company in forwarding
statements of a Participant's Account is the record address.
12.10 Unlocated Spouse. Notwithstanding the consent requirement in Section 1.08,
if the Participant establishes to the satisfaction of the Committee that
such written consent cannot be obtained because there is no spouse or the
spouse cannot be located, a waiver shall be deemed to be valid. Any
consent necessary under Section 1.08 will be valid only with respect to
the spouse who signs the consent, or in the event of a deemed election,
the designated spouse.
12.11 Agent for Process. The Secretary of Kraft Foods North America, Inc.
shall be the designated agent for the service of legal process.
12.12 Payment in the Event of Incompetency. If the Committee finds that a
Participant or other person entitled to a benefit is unable to care for
his affairs because of illness or accident or is a minor, the Committee
may direct that any benefit payment due the Participant, unless claim
shall have been made therefor by a duly appointed legal representative, be
paid to his spouse, a child, or a parent for the benefit of such
Participant, and any such payment so made shall be a complete discharge of
the liabilities of the Plan therefor.
12.13 Transfer of Accounts to This Plan.
(a) Affiliated Plans. If a participant of a U.S. qualified
Affiliated Plan becomes eligible to be a Participant of this Plan
before receiving a distribution from
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the Affiliated Plan, his Account under the Affiliated Plan shall be
transferred to this Plan by way of a trustee-to-trustee transfer.
This Plan shall be considered as a successor plan with regard to
such employee and all Affiliated Plan contributions transferred
shall be treated as though they were made under this Plan for
purposes of vesting, withdrawals and distributions. In the absence
of an applicable Participant election, assets transferred from an
Affiliated Plan shall be invested in the equivalent investment funds
under this Plan or, if an equivalent investment fund does not exist,
then the assets from the Affiliated Plan shall be invested in the
Interest Income Fund; and the accounts of participants and
beneficiaries under the Affiliated Plan will become their Accounts
as Participants and Beneficiaries under this Plan, effective as of
the transfer date. Once a Participant has received a distribution
from the Affiliated Plan, it shall be treated as a Prior Plan for
purposes of this Section 12.13.
(b) Prior Plans. This Plan does not accept trustee-to-trustee
transfers from a Prior Plan. However, the Trustee is authorized
to accept as a Rollover Contribution any contribution that meets
the following criteria:
(i) the contribution is made by, or on behalf of, an
Eligible Employee;
(ii) the contributed amounts were distributed from the Prior Plan
as an "eligible rollover distribution"(as defined in Section
7.06);
(iii) the contribution is made either (a) as a direct rollover from
the Prior Plan to this Plan, or (b) by the Eligible Employee,
within 60 days after the date such distribution is received by
the Eligible Employee;
(iv) if applicable, the spousal consent requirements of
Code Section 417(x)(2) were complied with; and
(v) such Rollover Contribution meets any other conditions as
determined necessary by the Trustee or Committee to comply
with Code Section 408(d)(3).
Rollover Contributions shall be held in the Eligible Employee's
Rollover Contribution Account. The Eligible Employee is at all
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times fully vested with respect to his Rollover Contribution
Account.
(c) RJR Plan. In connection with the spin-off of RJR Nabisco, Inc.
by RJR Nabisco Holdings Corp. effective as of June 14, 1999,
certain individuals who were participating in the RJR Plan
immediately prior to the spin-off, ceased to participate in the
RJR Plan effective as of such date and, as of such date,
commenced participation in this Plan (such individuals being
hereinafter referred to as "Transferred Nabisco Employees". In
connection with such commencement of participation in the Plan,
this Plan shall accept a transfer of such Transferred Nabisco
Employees' accounts (including any outstanding participant loans)
under the RJR Plan in accordance with the provisions of ARTICLE
XV. In addition, this Plan shall accept a transfer of the
Accounts and any unused forfeiture amounts that are attributable
to the Accounts of any individual who terminated employment with
Nabisco, Inc. or an affiliate (other than an affiliate that is a
participating company under the RJR Plan) prior to June 14, 1999,
in accordance with the provisions of ARTICLE XV. If an individual
who is a participant in the RJR Plan becomes an Employee after
June 14, 1999 and elects to transfer amounts from the RJR Plan to
this Plan, this Plan shall accept a transfer of such Employee's
accounts (including any outstanding participant loans) under the
RJR Plan in accordance with the provisions of ARTICLE XV.
(d) Certain 401(k) Plans. With respect to an Eligible Employee who,
pursuant to an Asset Purchase Agreement entered into on November
19, 1999, has an accrued benefit from a qualified plan maintained
by Favorite Brands International, Inc. transferred to the Nabisco
Retirement Savings Plan (the "Savings Plan") or an accrued
benefit from a qualified plan maintained by Trolli, Inc.
transferred to the Nabisco Retirement Plan (the "Retirement
Plan") and who becomes a Participant before receiving a
distribution from the Savings Plan, as applicable, including any
outstanding loan balances, shall be transferred to this Plan by
way of a trustee-to-trustee transfer.
With respect to an Eligible Employee who previously was a
participant in the Stella D'Oro Biscuit Co., Inc. Salary
Reduction Plan (For Employees Who are Members of B.C. & T.C.W.
Local 50) (the "Local 50 Plan") or the Stella D'Oro Biscuit Co.,
Inc. Salary Reduction Plan for Employees of Local 550 (the "Local
550 Plan") and who becomes a Participant before receiving a
distribution from the Local 50 Plan, his account balance in the
Local 50 Plan or the Local 550 Plan, as applicable, including any
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outstanding loan balances, shall be transferred to this Plan by way
of a trustee-to-trustee transfer.
All service credited under the Savings Plan, the Retirement Plan,
the Local 50 Plan and the Local 550 Plan shall be taken into account
for all purposes under the Plan. In the absence of an applicable
Participant election, assets transferred from the Savings Plan, the
Retirement Plan, the Local 50 Plan or the Local 550 Plan shall be
invested in the equivalent investment funds under this Plan or, if
an equivalent investment funds does not exist, then the assets from
the Savings Plan, the Retirement Plan, the Local 50 Plan or the
Local 550 Plan shall be invested in the Interest Income Fund. Once a
Participant has received a distribution from the Savings Plan, the
Retirement Plan, the Local 50 Plan or the Local 550 Plan, it shall
be treated as a Prior Plan for purposes of this Section 12.13.
12.14 Transfer Of Accounts from this Plan to an Affiliated Plan. If a
Participant transfers employment from the Company to an Affiliated Company
and thereafter becomes eligible to participate in an Affiliated Plan, the
assets in his Accounts in the Plan shall be transferred to such Affiliated
Plan in accordance with the terms thereof.
12.15 Direct or Indirect Transfer. With respect to any Eligible Employee who is
actively employed, the Plan shall accept any "eligible rollover
distribution"(as defined in Section 7.06) from a defined benefit plan,
money purchase pension plan (including a target benefit plan), stock bonus
plan, or profit sharing plan or a conduit individual retirement account.
12.16 Payment of Expenses.
(a) Direct charges and expenses arising out of the purchase or sale of
securities, and taxes levied on or measured by such transactions may
be charged against the Account(s) or Investment Fund for which the
transactions took place.
(b) Direct charges or expenses arising out of the establishment and
maintenance of any funding account with an insurance company or
other financial institution may be charged against the Account(s) or
Investment Fund(s) for which the funding account is established.
(c) Investment Manager fees arising out of the establishment and
maintenance of any investment Fund may be charged against the
Investment Fund for which the Investment Manager fees are incurred.
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(d) Trustee fees attributable to the Trust, auditor fees for the plan,
and IRS user fees may be paid directly from the Trust. The Committee
shall determine the manner in which these fees shall be charged
against the Accounts or Investment Funds held in the Trust.
(e) Any other charges or expenses relating to the maintenance or
administration of the Plan that are permitted under applicable law
to be paid from the Trust including, but not limited to,
recordkeeping fees, may be paid directly from the Trust. The
Committee shall determine the manner in which these charges and
expenses shall be charged against the Accounts or Investment Funds
held in the Trust.
(f) Any of the expenses in (a)-(e) above may, at the option of the
Company, be paid wholly or partly directly by the Company.
(g) The Company shall pay all other expenses reasonably incurred to
administering the Plan.
(h) The Committee may authorize additional expenses to be charged
directly from the Trust; provided that payment of such additional
expenses from the Trust is permitted under applicable law, such fees
are reasonable, and that any change in fee policy is communicated to
Participants in a timely manner.
12.17 Transfer of Accounts to the R. J. Reynolds Tobacco Company Capital
Investment Plan. The assets in the Accounts (including any outstanding
Participant loans) of any individual who terminates employment with the
Company or an Affiliated Company and commences employment with R. J.
Reynolds Tobacco Company (or its affiliates) may (upon the election of
such individual) be transferred to the corresponding accounts under the
RJR Plan.
12.18 Headings. Headings of Articles and Sections of the Plan are inserted
for convenience of reference. They constitute no part of the Plan.
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ARTICLE XIII
CLAIMS PROCEDURE
13.01 Initial Determination. The initial determination of a Participant's,
Surviving Spouse's or Beneficiary's eligibility for, and the amount of, a
benefit shall be made by the Administrative Committee, or in its absence,
the Committee, which shall mail or deliver to each covered individual who
has filed an effective claim for a benefit a written statement of the
amount of his benefit or a notice of denial of his claim on or before the
90th day following the Committee's receipt of such claim. If special
circumstances require additional time for processing the claim, the
Administrative Committee, or in its absence, the Committee, may delay
issuing its statement or notice for an additional 90 days provided that
the Participant, Surviving Spouse or Beneficiary is notified of the
circumstances necessitating the delay and the date the Committee expects
to render its final opinion. A claim for benefits is not effective unless
filed in the manner prescribed by the Committee. Each notice of whole or
partial denial of claimed benefits shall set forth the specific reasons
for the denial, the time within which an appeal must be made by the
Participant, Surviving Spouse or Beneficiary or his duly authorized
representative, and shall contain such other information as may be
required by applicable law. If a statement or notice is not issued within
the prescribed period, the claim shall be deemed denied.
13.02 Review. Each Participant, Surviving Spouse or Beneficiary whose claim for
benefits has been wholly or partially denied shall have such rights to
review documents and submit comments as applicable law and regulations of
the Committee may provide, and shall also have the right to request the
Committee to review such denial; such request to be made on forms
prescribed by the Committee. A request for review shall be filed by the
Participant, Surviving Spouse or Beneficiary or his duly authorized
representative on or before the 60th day following the earlier of the
Participant's, Surviving Spouse's or Beneficiary's receipt of notice of
denial of his claim or the expiration of the prescribed period for issuing
a statement of benefits or notice of denial. The Committee shall issue a
written statement on or before the 60th day following its receipt of such
request stating the Committee's decision on review and the reasons
therefore, including specific references to pertinent Plan provisions on
which the decision is based, and any other information required by
applicable law. If special circumstances require additional time for
processing such review, the Committee may delay issuing its decision for
an additional 60 days provided that the Participant, Surviving Spouse or
Beneficiary is notified of such circumstances and the date the Committee
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expects to render its final decision. If the decision is not issued within
the prescribed period, the appeal shall be deemed denied.
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ARTICLE XIV
LIMITATION ON BENEFITS
14.01 Code Section 415 Limits.
(a) The following definitions shall be applied in construing this
Section.
(1) Defined Benefit Plan means any defined benefit plan (as
defined in Section 415(k) of the Code) maintained by any
Affiliated Company.
(2) Related Plan means any Defined Contribution Plan (as defined
in Section 415(k) of the Code), other than the Plan,
maintained by any Affiliated Company or any individual account
maintained for voluntary contributions made by a Participant
under a Defined Benefit Plan.
(3) Total Compensation means all remuneration paid to an Employee
by any Affiliated Company, as determined pursuant to the
provisions of Treasury Regulation Section 1.415-2(d)(11)(i).
(4) Annual Addition means the sum of the following amounts
credited to a Participant's account for the limitation year:
(A) employer contributions;
(B) employee contributions;
(C) forfeitures; and
(D) amounts allocated to an individual medical account, as
defined in Section 415(1)(2) of the Code, which is part
of a pension or annuity plan maintained by the employer
and amounts derived from contributions paid or accrued
after December 31, 1985, in taxable years ending after
such date, which are attributable to post-retirement
medical benefits allocated to the separate account of a
key employee, as defined in Section 419A(d)(3) of the
Code, under a welfare
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benefit fund, as defined in Section 419(e) of the Code,
maintained by the employer.
(b) Limitations Applicable to Participants in Defined Contribution
Plans Only
(i) The Annual Addition credited to a Participant under the Plan
or any Related Plan for any Limitation Year must not exceed
the lesser of (1) $30,000 (or, if greater, 25% of the defined
benefit dollar limitation set forth in Section 415(b)(1) of
the Code as in effect for the Plan Year) or (2) 25% of the
Participant's Total Compensation for such Limitation Year.
(ii) Excess Annual Additions. If the amount of Annual Additions
which are credited to a Participant under this Plan for any
Limitation Year exceeds the maximum amount permitted under
this Section ("Excess Annual Additions", and if such excess
was caused by the allocation of forfeitures, a reasonable
error in estimating a Participant's annual compensation, a
reasonable error in determining the amount of Basic
Contributions and Supplemental Pre-Tax Contributions that may
be made with respect to the Participant under the limitations
of this Section, or other limited facts and circumstances
which the Commissioner of Internal Revenue finds justified,
the Excess Annual Additions may be reduced for such Limitation
Year in the following manner:
(A) Supplemental After-Tax Contributions (and any income
attributable thereto ) made by the Participant shall be
distributed to the Participant to the extent such
distributions reduce the Excess Annual Additions. Any
Supplemental After-Tax Contributions that are so
distributed shall not be considered as an Annual
Addition for the Limitation Year and shall be
disregarded for purposes of Section 3.08.
(B) If there remains any Excess Annual Additions after the
application of subparagraph (i) of this paragraph,
Supplemental Pre-Tax Contributions (and any income
attributable thereto) made by the Participant shall be
distributed to the Participant to the extent that such
distributions reduce the Excess Annual
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Additions. Any Supplemental Pre-Tax Contributions
that are so distributed shall not be considered as an
Annual Addition for the Limitation Year and shall be
disregarded for purposes of Sections 3.07 and 3.08.
(C) If there remains any Excess Annual Additions after the
application of subparagraphs (i) and (ii) of this
paragraph, Basic Contributions (and any income
attributable thereto) made by the Participant shall be
distributed to the Participant to the extent that such
distributions reduce the Excess Annual Additions. Any
Basic Contributions that are so distributed shall not be
considered as an Annual Addition for the Limitation Year
and shall be disregarded for purposes of Sections 3.07
and 3.08.
(D) If there remains any Excess Annual Additions after the
application of subparagraphs (i), and (ii) and (iii) of
this paragraph, such Excess Annual Additions shall be
used to reduce Company Contributions for the next
Limitation Year (and succeeding Limitation Years, as
necessary) for the Participant. However, if the
Participant is not participating in the Plan for the
applicable Limitation Year, the Excess Annual Additions
shall be held in a suspense account for that Limitation
Year and allocated in the next Limitation Year to all
remaining Participants in the same proportion as the
Compensation paid to such Participants during such
Limitation Year. Furthermore, the Excess Annual
Additions shall be used to reduce Company Contributions
for the next Limitation Year (and succeeding Limitation
Years, as necessary) for all of such Participants. Any
Excess Annual Additions that are treated in accordance
with this subparagraph (iv) for the Limitation Year
shall not be considered as Annual Additions for such
Limitation Year.
(E) If the suspense account is in existence at any time
during the Limitation Year in accordance with this
Section, investment gains and losses and other
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income and expenses shall not be allocated to the
suspense account.
(F) If this Plan is terminated and at the time of such
termination a balance remains in the suspense account
which, because of the limitations imposed by this
Section, cannot be credited to any Participant, such
balance shall revert to the Company.
(c) Adjustments on Account of Excess Credits. If it is determined at any
time that the Defined Contribution Fraction and the Defined Benefit
Fraction exceed 1.0, the maximum benefit under any applicable
Defined Benefit Plan will be adjusted to the extent necessary to
satisfy the combined fraction limitation.
(d) In addition to other limitations set forth in the Plan and
notwithstanding any other provisions of the Plan, contributions (and
contributions to all other Defined Contribution Plans required to be
aggregated under this Plan under the provisions of Section 415 of
the Code), shall not be made in an amount in excess of the amount
permitted under Section 415 of the Code.
14.02 Code Section 416 Limits. This Section is intended to ensure the Plan's
compliance with Section 416 of the Code. It shall be applicable to
Participants for any Plan Year with respect to which the Plan is
top-heavy.
(a) Definitions. The following definitions shall be applied in
construing this Section.
(i) Top-Heavy Plan means any plan maintained by the Company or
an Affiliated Company if, as of the Determination Date, the
Top-Heavy Ratio for the plan and all other plans in the
Aggregation Group exceeds 60%. The plan will be deemed a
"super top-heavy plan" if, as of the Determination Date,
the Plan would meet the test specified above for being a
Top-Heavy Plan if 90% were substituted for 60% in each
place it appears in this subsection(i).
(ii) Determination Date means the last day of the preceding Plan
Year (or, in the case of the first plan year of a plan, the
last day of such Plan Year). When plan aggregation is
required, calculation of accrued benefits as of the
Determination Date which fall within the same calendar year
will be used.
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58
(iii) Valuation Date means the same date as the Determination
Date.
(iv) Key Employee means each Employee or former Employee who is, at
any time during the Plan Year ending on the Determination
Date, or was, during any one of the four Plan Years preceding
the Plan Year ending on the Determination Date, any one or
more of the following:
(1) An officer of the Company or an Affiliated Company
having an annual compensation greater than 50% of the
dollar limitation in effect under Code Section
415(b)(I)(A) for any Plan Year;
(2) One of 10 Employees having annual compensation from the
Company or an Affiliated Company of more than the dollar
limitation in effect under Code Section 415(c)(1)(A) and
owning (or considered as owning within the meaning of
Code Section 318) both the largest interests in the
Company or an Affiliated Company and a 1/2% ownership
interest;
(3) Any person owning (or considered as owning within the
meaning of Code Section 318) more than 5% of the
outstanding stock of the Company (or stock having more
than 5% of the total combined voting power of all stock
of the Company); or
(4) Any person who has annual compensation of more than
$150,000 and would be described in subsection (3) above,
if "1%" was substituted for "5%"
For purposes of determining whether a person is an officer in
subsection (1) above, in no event will more than 50 Employees
be considered Key Employees solely by reason of officer
status. In addition, persons who are merely nominal officers
will not be treated as Key Employees solely by reason of their
titles as officers. For purposes hereof, compensation is as
defined in Section 1.415-2(d) of the Income Tax Regulations.
51
59
(v) Non-Key Employee means any Participant in the Plan (including
a beneficiary of such Participant) who is not a Key Employee.
(vi) Aggregation Group means all plans that are subject to Required
Aggregation (in accordance with subsection 14.02(b)). The
Aggregation Group may also include plans subject to Permissive
Aggregation (in accordance with subsection 14.02(c)), if such
aggregation would eliminate the status of plans in the
Aggregation Group as Top-Heavy Plans.
(b) Required Aggregation. This Plan and all other qualified plans,
including any terminated plans, maintained by the Company or an
Affiliated Company which include a Key Employee must be
aggregated to determine if the group as a whole is top-heavy. In
addition, each other qualified plan maintained by the Company or
an Affiliated Company which enables any plan in which a Key
Employee is a Participant to meet the requirements of Sections
410(a)(4) and 410 of the Code must be aggregated.
(c) Permissive Aggregation. The Company may include other plans
maintained by the Company or an Affiliated Company which when
considered as a group with the required aggregation group, would
continue to satisfy the requirements of Sections 401(a)(4) and 410
of the Code, to determine if the group as a whole is top-heavy,
provided such plans are comparable in benefits or contributions.
(d) Top-Heavy Ratio.
(i) The top-heavy ratio is a fraction, the numerator of which
is the sum of account balances under the defined
contribution plans in the Aggregation Group for all Key
Employees and the present value of accrued benefits under
the defined benefit plans for all Key Employees, and the
denominator of which is the sum of the account balances
under the defined contribution plans in the Aggregation
Group for all Participants and the present value of accrued
benefits under the defined benefit plans in the Aggregation
Group for all Participants. Both the numerator and
denominator are adjusted to include any distributions made
in the five-year period ending on the "Determination Date"
and any contributions due but unpaid as of the
Determination Date.
52
60
(ii) The value of account balances and the present value of accrued
benefits will be determined as of the most recent Valuation
Date. The account balances and accrued benefits of a
Participant who is not a Key Employee but who was a Key
Employee in a prior year will be disregarded. The calculation
of the top-heavy ratio, and the extent to which distributions,
rollovers and transfers are taken into account will be made in
accordance with Section 416 of the Code and the regulations
thereunder.
(iii) If any Participant has not performed an Hour of Service for
the Company at any time during the five-year period ending on
the Determination Date, the account of such Participant shall
not be taken into account.
(e) Minimum Vesting. For any Plan Year in which the Plan is a top-heavy
plan as determined pursuant to Section 416 of the Code, a
Participant will have a nonforfeitable right to a percentage of the
Participant's Accounts derived from Company Contributions as set
forth below if such schedule is more favorable to the Participant
than the vesting schedule under Section 7.02.
Years of Service Completed
For Vesting Purposes Vested Interest
-------------------- ---------------
Less than two 0%
Two but less than three 20%
Three but less than four 40%
Four but less than five 60%
Five or more 100%
The above vesting schedule applies to all benefits the meaning of
Section 411(a)(7) of the Code, including benefits accrued before the
effective date of Section 416 of the Code and benefits accrued
before the Plan became top-heavy. However, any Participants who have
completed at least three (3) years of service for vesting purposes
as of the last day of the last Plan Year (a) before the Plan became
top-heavy or (b) in which the Plan is top-heavy, shall have the
right to elect to continue to have the vesting schedule in effect on
the last day of such Plan Year applied to all of his benefits under
the Plan. Further, no reduction in vested benefits may occur in the
event the Plan's status as top-heavy changes for any Plan Year.
53
61
(f) Minimum Required Contribution. It is intended that the Company or
an Affiliated Company will meet the minimum contribution
requirements of Section 416(c) of the Code by providing a minimum
contribution (which may include forfeitures otherwise allocable)
without regard to any Social Security contributions for such Plan
Year for each Participant who is a non-key employee in an amount
equal to at least 3% of such Participant's compensation (as defined
in Section 1.415-2(d) of the Income Tax Regulations) for such Plan
Year, Such 3% minimum contribution requirement shall be increased to
4% for any year in which the Company or an Affiliated Company also
maintains a defined benefit pension plan if necessary to avoid the
application of Section 416(h)(1) of the Code, relating to the
special adjustments to Section 415 limits of the Code for top-heavy
plans, if the adjusted limitations of Section 416(h)(1) would
otherwise be exceeded if such minimum contribution were not so
increased. The minimum contribution required shall be made to any
non-key employee who is still employed on the last day of the plan
year regardless as to the number of hours of Service performed
during the year and regardless of the employee's level of
compensation.
A Non-Key Employee who is also covered under a defined benefit plan
that is part of the same Aggregation Group shall receive his minimum
benefit under the defined benefit plan, offset by the actuarially
determined value of the minimum contribution made under this Plan.
If for the Plan Year the Plan becomes a super top-heavy plan, then
the denominator of both the defined contribution plan fraction and
the defined benefit plan fraction shall be calculated as set forth
in Section 14.01 (b) for the limitation year ending in such Plan
Year by substituting "1.0" for "1.25" in each place such figure
appears.
The percentage minimum contribution required hereunder shall in no
event exceed the percentage contribution made for the Key Employee
for whom such percentage is the highest for the Plan Year after
taking into account contributions or benefits under other qualified
plans in this Plan's aggregation group providing no other defined
benefit plan uses the defined contribution plan to satisfy Code
Section 401 (a) as provided in Section 416(c)(2)(B)(ii) of the Code.
54
62
ARTICLE XV
SPECIAL PROVISIONS PERTAINING TO TRANSFERS
FROM THE RJR NABISCO CAPITAL INVESTMENT PLAN
Amounts transferred from accounts of the RJR Plan shall be accounted for
in accordance with the following rules:
15.01 Amounts transferred from the RJR Plan to this Plan consisting of
Participant's "Basic Contribution Account" (as such term was defined in
the RJR Plan) attributable to elective deferrals made pursuant to Section
401 (k) of the Code and any earnings attributable to such elective
deferrals, shall be credited to such Participant's Basic Contribution
Account under this Plan.
15.02 Amounts transferred from the RJR Plan to this Plan consisting of
Participant's "Supplemental Pre-Tax Contribution Account" (as such term
was defined in the RJR Plan) attributable to elective deferrals made
pursuant to Section 401 (k) of the Code and any earnings attributable to
such elective deferrals, shall be credited to such Participant's
Supplemental Pre-Tax Contribution Account under this Plan.
15.03 Amounts transferred from the RJR Plan to this Plan consisting of a
Participant's "Supplemental After-Tax Contribution Account"(as such term
was defined in the RJR Plan), shall be credited to such Participant's
Supplemental After-Tax Contribution Account under this Plan.
15.04 Amounts transferred from the RJR Plan consisting of a Participant's
"Company Contribution Account" as such term was defined in the RJR Plan)
attributable to "matching contributions" (as defined under Code Section
401(m)(4)(A)) and any earnings attributable to such matching
contributions, shall be credited to such Participant's Company
Contribution Account under this Plan.
15.05 Amounts transferred from the RJR Plan consisting of a Participant's
"Rollover Account" (as such term was defined in the RJR Plan), shall be
credited to such Participant's Rollover Account under this Plan.
15.06 Amounts transferred from the RJR Plan consisting of a Participant's
"After-Tax Basic Contribution Account" (as such term was defined in the
RJR Plan), shall be credited to such Participant's After-Tax Basic
Contribution Account under this Plan.
55
63
15.07 All applicable "benefit options" (within the meaning of Section
411(d)(6)(B)(ii) of the Code and the Treasury Regulations thereunder) that
are attributable to any amounts transferred from the RJR Plan shall
continue to apply with respect to such transferred amounts held under this
Plan.
15.08 Any outstanding loan transferred to the Plan from the RJR Plan will
continue to be held on the same terms as those contained in the loan
agreement between the Participant and the RJR Plan, except that the Plan
will be substituted as the obligee of the loan.
15.09 Any unused forfeiture amounts that are attributable to the account of any
individual who terminated employment with the Company prior to June 14,
1999 shall be transferred to this Plan and held as unused forfeitures
under this Plan.
15.10 The provisions of Section 6.05, relating to the restoration of
forfeitures, shall apply to any individual who: (i) was a participant in
the RJR Plan, (ii) terminated employment with the Company prior to June
14, 1999, (iii) received a distribution of his vested interest under the
RJR Plan, (iv) was re-employed by the Company or any Affiliated Company on
or after June 14, 1999 prior to completing five (5) consecutive Breaks in
Service (including, for this purpose, any breaks in service that might
have occurred under the RJR Plan), and (v) repays the full amount
previously distributed to him within five (5) years of the date he is
re-employed by the Company or any Affiliated Company.
15.11 All applicable "benefit options" (within the meaning of Section
411(d)(6)(B)(ii) of the Code and the Treasury Regulations thereunder)
that are attributable to amounts transferred from the Stella D'Oro
Biscuit Co., Inc. 401 (k) Profit Sharing Plan, the Stella D'Oro Biscuit
Co., Inc. Profit Sharing Plan, the Cornnuts, Inc. Profit Sharing and
Retirement Plan or any other qualified plan from which amounts were
transferred to the RJR Plan and subsequently transferred to this Plan
pursuant to this ARTICLE XV, shall continue to apply with respect to
such transferred amounts held under this Plan.
56
64
CIP -- COMPENSATION
SCHEDULE A - COMPENSATION
I. The following payments are included as Compensation for all
Participants:
- Basic Salary
- Overtime
- Shift Premium Pay
- Commissions
- Sales incentive payments paid in cash
- Vacation Pay (except as noted in II)
- Management Incentive Plan bonus or any similar management bonus if (i)
payment is made on a non-deferred basis and (ii), the total aggregate
amount of such bonuses do not exceed the regular AIAP award for the
plan year and/or the maximum award payable under the AIAP.
- Compensation deferred pursuant to salary reduction arrangement under
Code Sections 401 (k), 125 or, effective as of December 31, 2001,
132(f)(4) to which the Company makes contributions.
- Lump Sum payments in lieu of an increase in basic salary.
- Payments under the Kraft Incentive Plan
- Amounts paid under the Field Operation Incentive Plan
- Cash denominated awards under the LTIP which are granted in lieu of
regular AIAP awards or on a contractually required annual basis.
- Salary continuation payments paid in semi-monthly installments
- All U.S. based payroll amounts whether or not the employee is U.S.
based.
57
65
II. The following payments are not included as Compensation for
Participants:
Any form of compensation not listed in Part I, and specifically excluding
the following:
- Vacation Pay taken in lieu of vacation
- Moving expenses
- Housing differential
- Bonus or other award payment which have been previously deferred
- Change of control bonus
- Stay-on/completion bonus
- Special incentive or bonus payments paid on an irregular or one-time
basis unless designated for inclusion by the CEO
- Commendation Awards, Contest Awards or any other bonus paid on an
irregular or one time basis (Nabisco, Inc.)
- Company contributions under any employee benefit plan (except
contributions on account of employee elections to defer salary under
Code Sections 401(k), 125 or, effective as of December 31, 2001,
132(f)(4).
- Amounts deferred pursuant to the Nabisco Scholastic Savings Plan.
58
EX-4.4
6
y53486ex4-4.txt
NABISCO INC EMPOYEE SAVINGS PLAN
1
NABISCO, INC.
EMPLOYEE SAVINGS PLAN
(Restated Effective December 31, 2000)
2
TABLE OF CONTENTS
ARTICLE I - DEFINITIONS..........................................................1
1.01 Account....................................................1
1.02 Administrative Committee...................................1
1.03 Affiliated Company.........................................1
1.04 Affiliated Plan............................................1
1.05 After-Tax Contribution.....................................1
1.06 Automatic Enrollment Date..................................1
1.07 Base Pay...................................................1
1.08 Basic Contributions........................................2
1.09 Basic Contribution Account.................................2
1.10 Beneficiary................................................2
1.11 Board of Directors.........................................2
1.12 Code.......................................................2
1.13 Committee..................................................3
1.14 Company....................................................3
1.15 Company Contributions......................................3
1.16 Company Contribution Account...............................3
1.17 Disability.................................................3
1.18 Effective Date.............................................3
1.19 Eligible Employee..........................................3
1.20 Employee...................................................4
1.21 Employer...................................................4
1.22 Enrollment Date............................................4
1.23 ERISA......................................................4
1.24 Holland Participant........................................4
1.25 Hour of Service............................................4
1.26 Investment Fund or Funds...................................4
1.27 Job Elimination............................................5
1.28 Nabisco Controlled Group...................................5
1.29 Participant................................................5
1.30 Period of Severance........................................5
i
3
1.31 Plan.......................................................5
1.32 Plan Year..................................................5
1.33 Pre-Tax Contribution.......................................5
1.34 Prior Plan.................................................5
1.35 Rollover Contributions.....................................5
1.36 Rollover Contribution Account..............................6
1.37 Service....................................................6
1.38 Severance Date.............................................6
1.39 Supplemental Contributions.................................7
1.40 Supplemental Contribution Account..........................7
1.41 Surviving Spouse...........................................7
1.42 Termination of Employment..................................7
1.43 Trustee....................................................7
1.44 Trust Fund.................................................7
1.45 Valuation Date.............................................8
ARTICLE II - PARTICIPATION.......................................................9
2.01 Eligibility................................................9
2.02 Participation..............................................9
2.03 Participant Status........................................10
ARTICLE III - CONTRIBUTIONS.....................................................11
3.01 Basic Contributions.......................................11
3.02 Supplemental Contributions................................11
3.03 Pre-Tax Contributions.....................................11
3.04 Change in Participant Contributions.......................12
3.05 Suspension of Participant Contributions...................12
3.06 Company Contributions.....................................13
3.07 Code Section 401(k) and 401(m) Nondiscrimination Tests....15
3.08 Restrictions on Pre-Tax Contributions.....................16
3.09 Qualified Military Service................................17
ARTICLE IV - TRUST FUND AND INVESTMENT FUNDS....................................18
4.01 The Trust Agreement.......................................18
ii
4
4.02 The Trustee...............................................18
4.03 Separate Funds............................................18
4.04 Investment Funds..........................................18
4.05 Temporary Investment......................................18
4.06 Investment of Participant Contributions...................18
4.07 Voting by Participants....................................19
4.08 Investment Managers.......................................19
4.09 Participant Responsibility for Selection of Funds.........19
ARTICLE V - ACCOUNTS............................................................21
5.01 Valuation of Accounts.....................................21
5.02 Valuation Upon Transfer, Withdrawal or Distribution.......21
5.03 Statement of Accounts.....................................21
ARTICLE VI - VESTING AND FORFEITURES............................................22
6.01 Vesting of Participant's Contributions....................22
6.02 Vesting of Company Contributions..........................22
6.03 Forfeiture on Termination of Employment...................23
6.04 Disposition of Forfeitures................................23
6.05 Restoration of Forfeitures................................23
ARTICLE VII - DISTRIBUTIONS.....................................................24
7.01 Distribution of Benefits..................................24
7.02 Proof of Death and Right of Beneficiary...................26
7.03 Completion of Appropriate Forms...........................26
7.04 Investment Pending Distribution...........................26
7.05 Direct Rollovers..........................................26
ARTICLE VIII - WITHDRAWAL PRIOR TO TERMINATION OF
EMPLOYMENT AND SPECIAL PRE-TAX
CONTRIBUTION RULES...............................................28
8.01 Election to Withdraw from Accounts........................28
8.02 Withdrawal of After-Tax and Company Contributions.........28
8.03 Rules Applicable to Withdrawals Prior to
Termination of Employment.................................28
iii
5
8.04 Hardship Withdrawals......................................29
8.05 Restrictions on Pre-Tax Contribution Distributions........29
ARTICLE IX - LOANS..............................................................31
9.01 Loan Provisions...........................................31
ARTICLE X - ADMINISTRATION OF PLAN..............................................33
10.01 Nabisco Employee Benefits Committee.......................33
10.02 Administrative Committee..................................33
10.03 Authority and Duties of Various Fiduciaries...............34
10.04 Named Fiduciaries.........................................35
10.05 Delegation................................................36
10.06 Multiple Capacities.......................................36
ARTICLE XI - AMENDMENTS, TERMINATION, PERMANENT
DISCONTINUANCE OF CONTRIBUTIONS, MERGER
OR CONSOLIDATION...................................................37
11.01 Amendments................................................37
11.02 Termination or Permanent Discontinuance of Contributions..37
11.03 Partial Termination.......................................37
11.04 Benefits in Case of Merger or Consolidation...............37
ARTICLE XII - MISCELLANEOUS.....................................................38
12.01 Benefits Payable from Trust Fund..........................38
12.02 Elections.................................................38
12.03 No Right to Continued Employment..........................38
12.04 Inalienability of Benefits and Interests..................38
12.05 Qualified Domestic Relations Orders.......................38
12.06 Payments for Exclusive Benefit of Participants............38
12.07 New Jersey Law to Govern..................................38
12.08 No Guarantee..............................................39
12.09 Address of Record.........................................39
12.10 Unlocated Spouse..........................................39
12.11 Agent for Process.........................................39
12.12 Payments in the Event of Incompetency.....................39
iv
6
12.13 Transfer of Accounts to this Plan.........................39
12.14 Transfer of Plan Assets to an Affiliated Plan.............40
12.15 Headings..................................................41
12.16 Payment of Expenses.......................................41
12.17 Direct or Indirect Transfer...............................41
ARTICLE XIII - CLAIM PROCEDURE..................................................43
13.01 Initial Determination.....................................43
13.02 Review....................................................43
ARTICLE XIV - LIMITATIONS ON BENEFITS...........................................44
14.01 Code Section 415 Limits...................................44
14.02 Code Section 416 Limits...................................46
v
7
ARTICLE I
DEFINITIONS
1.01 Account means with respect to any Participant, his Basic and
Supplemental Contribution Accounts and his Company Contribution
Account, and any subaccounts thereunder, including, but not limited to,
subaccounts containing that portion of his Basic and/or Supplemental
Contributions which a Participant has designated as pre-tax
contributions made by the Company on his behalf pursuant to a salary
reduction agreement and any investment earnings and gains or losses
thereon. Some Participants may also have Rollover Contribution
Accounts.
1.02 Administrative Committee means the Administrative Committee appointed
by the Committee pursuant to Section 10.02 to carry out the day to day
responsibilities of the Plan Administrator.
1.03 Affiliated Company means the Company and any corporation which is a
member of a controlled group of corporations (as defined in Section
414(b) of the Code) which includes the Company; any trade or business
(whether or not incorporated) which is under common control (as defined
in Section 414(c) of the Code) with the Company; any organization
(whether or not incorporated) which is a member of an affiliated
service group (as defined in Section 414(m) of the Code) which includes
the Company; and any other entity required to be aggregated with the
Company pursuant to regulations under Section 414(o) of the Code. For
purposes of Article XIV, the definition of Affiliated Company shall be
modified in accordance with Code Section 415(h).
1.04 Affiliated Plan means a defined contribution plan sponsored by an
Affiliated Company if such plan has been designated by the Committee as
an Affiliated Plan.
1.05 After-Tax Contribution means that portion of the Basic and/or
Supplemental Contributions which are made by a Participant on an
after-tax basis, i.e. those contributions not designated as Pre-Tax
Contributions.
1.06 Automatic Enrollment Date means, for each Eligible Employee, a date
determined by the Committee, which date is no earlier than three weeks
following the date the Eligible Employee first becomes eligible to
participate in the Plan in accordance with Section 2.01(a).
1.07 Base Pay means, with respect to any Plan Year, wages, overtime, shift
differential pay, vacation pay (excluding pay taken in lieu of a
vacation), sick pay, holiday pay, salary continuation paid in
installments, and other forms of cash compensation that are included on
the Participant's Federal income tax form W-2 for the calendar year
beginning in such Plan Year with respect to the Participant's periods
of active participation in the Plan, except such compensation as may be
specifically excluded by the Committee. Base Pay includes pay deferred
pursuant to salary reduction
8
arrangements under Code Sections 401(k), 125 and, effective
as of December 31, 2001, 132(f)(4). Base Pay does not include
severance pay (or salary continuation paid in a lump sum), any form of
bonus pay or contributions by the Company to any other employee
benefit plan on behalf of an Employee. Base Pay in excess of
(a) $200,000 in any Plan Year beginning on or after January 1, 1989
and ending prior to January 1, 1994, or (b) $150,000 in any Plan Year
thereafter (subject to adjustment as provided in Code Section
401(a)(17)), shall not count for purposes of this Plan.
1.08 Basic Contributions means the contributions of a Participant which are
credited to his Basic Contribution Account in accordance with Section
3.01.
1.09 Basic Contribution Account means that portion of the Trust Fund which,
with respect to any Participant, is attributable to his own Basic
Contributions and any investment earnings and gains or losses thereon.
1.10 Beneficiary means the beneficiary designated by the Participant under
the Company's group term life insurance plan, unless the Participant
has designated any other person or persons, other than the
Participant's Surviving Spouse, (who may be designated contingently or
successively and which may be an entity other than a natural person) on
a form supplied by the Administrative Committee to receive benefits
payable in the event of the death of the Participant; provided, however
that if the Participant is married at the date of his death, the
Beneficiary shall be the Participant's Surviving Spouse, and any
Beneficiary designation that does not name the Participant's Surviving
Spouse as the Beneficiary shall be void unless it has been consented
thereto on a form supplied by the Administrative Committee in writing
by the Participant's Surviving Spouse and such consent (i) designates
the alternative Beneficiary and/or form of benefit (which may not be
changed without spousal consent), (ii) acknowledges the effect of such
election, and (iii) is witnessed by a notary public. In the event of
the Participant's death without an effective Beneficiary designation,
any Plan benefits payable shall be paid in equal parts to the
Participant's surviving children or, if the Participant has no
surviving children, to the Participant's surviving parents or, if the
Participant has no surviving parents, to the Participant's surviving
siblings or, if the Participant has no surviving siblings, to the
Participant's estate. Section 9.01(d) should be referred to in the
event of the death of a Participant with an outstanding loan balance,
Section 12.05 should be referred to in the event of a Qualified
Domestic Relations Order and Section 12.12 should be referred to for
payment in the event of incompetency of a Beneficiary.
1.11 Board of Directors means, prior to August 2001, the Board of Directors
of Nabisco, Inc. and after July 2001, the Board of Directors of Kraft
Foods North America, Inc., and any committee of directors authorized by
such Board to act in its behalf with reference to the Plan.
1.12 Code means the Internal Revenue Code of 1986 as amended from time to
time. Reference to any Section or subsection of the Code includes
reference to any
2
9
comparable or succeeding provisions of any legislation which amends,
supplements or replaces such Section or Subsection.
1.13 Committee means the Nabisco Employee Benefits Committee which shall act
as the Plan Administrator for the Plan. The Committee shall have the
duties and powers described in Article X.
1.14 Company means, prior to August 2001, Nabisco, Inc. Subsequent to July
2001, Company means the Nabisco Biscuit & Snacks Group of Kraft Foods
North America, Inc. With respect to any corporate act after July 2001,
Company means Kraft Foods North America, Inc.
1.15 Company Contribution means the contributions made by the Company which
are credited to a Participant's Company Contribution Account in
accordance with Section 3.06.
1.16 Company Contribution Account means that portion of the Trust Fund
which, with respect to any Participant, is attributable to any
contributions made in his behalf by the Company, and any investment
earnings and gains or losses thereon.
1.17 Disability means being disabled as determined by the Federal Social
Security Administration.
1.18 Effective Date of this restatement means December 31, 2000. The
original effective date is February 1, 1987.
1.19 Eligible Employee means any Employee who is paid on an hourly basis,
who is paid from a United States dollar payroll maintained in the
United States, and who has met the eligibility requirements of Section
2.01; provided, that except as the Committee may otherwise provide on a
basis uniformly applicable to all persons similarly situated, no person
shall be an "Eligible Employee" for purposes of the Plan:
(a) who is excepted by the Committee,
(b) whose terms and conditions of employment are determined by a
collective bargaining agreement with the Company which does
not make this Plan applicable to him, provided that employee
retirement benefits were negotiated in good faith thereunder,
or
(c) who is a "leased employee" as defined in Section 414(n) of the
Code and who is required by such Section to be considered an
employee of the Company or an Affiliated Company.
Notwithstanding the foregoing, if a "leased employee" is
reclassified as an Employee, years of service as a "leased
employee" of the Company or an Affiliated Company shall be
considered in computing Vesting Service.
3
10
Notwithstanding any provision of the Plan to the contrary, Eligible
Employee shall not include any person who becomes an Employee pursuant
to the Asset Purchase.
Agreement entered into on November 19, 1999 among Favorite
Brands International Holding Corp., Favorite Brands
International, Inc., Sather Trucking Corporation, Trolli,
pInc., Nabisco, Inc., Nabisco Brands Company, and Nabisco
Technology Company and who works at a facility in the
following locations:
Favorite Brands International, Inc. and Trolli, Inc. Locations
1. Bannockburn, Illinois 8. Pittston, Pennsylvania
2. Chicago, Illinois 9. Round Lake, Minnesota
3. DesPlanes, Nevada 10. New Orleans, Louisiana
4. Henderson, Nevada 11. Oklahoma City, Oklahoma
5. Kendallville, Indiana 12. San Bernadino, California
6. Ligonier, Indiana 13. Creston, Iowa
7. Chattanooga, Tennessee 14. Plantation, Florida
The exclusion from participation of those Employees who became
Employees pursuant to the Asset Purchase Agreement of November
19, 1999, shall not apply beginning as of the date of the
Nabisco Retirement Savings Plan and the Nabisco Retirement
Plan are merged with the Plan.
1.20 Employee means any person employed by (or, after July 2001,
working at) the Employer.
1.21 Employer means, prior to August 2001, Nabisco, Inc. and any
member of the Nabisco Controlled Group that participates in
the Plan. Subsequent to July 2001, Employer means the Nabisco
Biscuit & Snacks Group of Kraft Foods North America, Inc.
1.22 Enrollment Date means the business day on which an Eligible
Employee's application for participation is processed.
1.23 ERISA means the Employee Retirement Income Security Act of
1974, and as is amended from time to time.
1.24 Holland Participant means a Participant who is employed at the
Company's plant in Holland, Michigan and who is a member of
BCT Local 697.
1.25 Hour of Service means any hour, regardless of whether or not
duties have been performed, for which an Employee is paid, or
entitled to payment, by the Company or any Affiliated Company.
The determination of Hours of Service shall be consistent with
the minimum requirements of Department of Labor Regulation
Section 2530.200b-2.
1.26 Investment Fund or Funds means the separate funds in which
Participant and Company Contributions to the Plan are invested
in accordance with Article IV.
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1.27 Job Elimination means the elimination of an existing position
at the sole discretion of the Company when, because of
changing needs or circumstances, (i) the job is no longer
performed, or (ii) the job is still performed, but fewer
employees are needed to perform it.
1.28 Nabisco Controlled Group means Nabisco, Inc. and any other
corporation that was a member of the controlled group of
corporations (as defined in Section 1563(a) of the Code) that
included Nabisco, Inc. as of December 10, 2000.
1.29 Participant means any person participating in the Plan as
provided in Article II. Except for purposes of Sections 2.01,
2.02 and 6.02(ii) and Article 3, an Eligible Employee who has
made a rollover or transfer to the Plan which meets the
requirements of Section 12.13 or 12.15 and for whom a Rollover
Contribution Account is maintained shall be treated as a
Participant and such Eligible Employee shall become a
Participant for all purposes after meeting the requirements of
Sections 2.01 and 2.02. In addition, in any Plan Year in which
the Plan is top-heavy (as defined in Section 14.02) and for purposes
of Section 14.02(f), "Participant" shall include an Eligible Employee
not otherwise described in the preceding two sentences who shall,
pursuant to Treasury Regulation Section 1.416-1, Q&A M-10, receive the
contribution described in Section 14.02(f), and such Eligible Employee
shall become a Participant for all purposes after meeting the
requirements of Sections 2.01 and 2.02.
1.30 Period of Severance means all periods of time commencing on
the Severance Date of an Employee and ending on the date of
his reemployment by the Company or an Affiliated Company.
1.31 Plan means the Nabisco, Inc. Employees Savings Plan, as
described herein or as hereafter amended.
1.32 Plan Year means the period from each December 31 through the
next December 30. The Limitation Year shall be the calendar
year.
1.33 Pre-Tax Contribution means that portion of the Basic and/or
Supplemental Contributions which a Participant has designated
as pre-tax contributions made by the Company on his behalf
pursuant to a salary reduction agreement.
1.34 Prior Plan means any U.S. qualified plan (or an individual
retirement account, annuity or bond in which a qualified plan
distribution was separately invested pursuant to Code Sections
408(d)(3)(A)(ii) and (D)(i)), other than an Affiliated Plan or
the Nabisco Plan for Pensions, which the Committee has
approved so that an Eligible Employee may make a rollover
contribution to this Plan, pursuant to Section 12.13.
1.35 Rollover Contributions means the amount contributed to the
Plan as a rollover contribution from a Prior Plan in
accordance with Section 12.13(b).
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1.36 Rollover Contribution Account means that portion of the Trust
Fund which, with respect to any Eligible Employee, is
attributable to his Rollover Contributions and any investment
earnings or losses thereon.
1.37 Service means all periods of time, both before, on and after
February 1, 1987, during which an Employee is employed by the
Company (or, after July 2001, working at the Company) or any
Affiliated Company commencing with the first day of employment
or the first day of reemployment and ending with his Severance
Date which next follows the first day of employment or the
first day of reemployment, as the case may be. The first day
of employment or the first day of reemployment shall be deemed
to be the first day in which he performs an Hour of Service.
Periods of Service commencing on the first day of employment
and ending on the next following Severance Date shall be
aggregated on a day by day basis and 365 days of aggregated
Service shall constitute one year of Service. Service shall
include any period of authorized part-time employment, periods
of authorized leave of absence up to a maximum of one year,
periods of absence due to service in the Armed Forces of the
United States, as required pursuant to Code Section 414(u),
periods of absence due to unpaid leave taken pursuant to the
Family and Medical Leave Act of 1993 or similar state laws (to
the extent required by such laws, but only to the extent such
leave is not otherwise credited under this Section 1.37), and
periods of absence up to a maximum of 12 consecutive months
due to illness or disability. For purposes of determining
Service, an Employee shall be credited with any period of
employment with the Company (or, after July 2001, at the
Company) or an Affiliated Company during which he may be
otherwise ineligible for participation in the Plan. Service
will include any period of time beginning on an Employee's
Severance Date and ending on the date on which he performs an
Hour of Service, provided that such Hour of Service is
performed within 12 months of the date his employment was
terminated or he was otherwise first absent from work,
whichever is applicable.
Notwithstanding the preceding paragraph and unless otherwise
determined by the Committee, Service with an Affiliated
Company that was not a member of the Nabisco Controlled Group
as of December 10, 2000 shall only be taken into account
subsequent to the time that such corporation became an
Affiliated Company.
1.38 Severance Date shall mean the earlier of the following:
(a) the date on which an Employee quits, retires, dies,
or is discharged; or
(b) the first anniversary of the first date of a period
in which an Employee remains absent from Service
(with or without pay) with the Company or any
Affiliated Company for any reason other than quit,
retirement, death or termination; provided, however,
the absence from Service of an Employee receiving
benefits under one or more long-term disability plans
of the Company or an Affiliated Company is not a
severance until the earliest of normal retirement
age, the cessation of such disability payments
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or the expiration of the initial 24 months of long-term
disability payments; provided further that if such an
Employee in active employment after his normal retirement age
becomes disabled, his Severance Date is the date such
long-term disability plan benefits commence or would
commence.
In the case of an Employee who is absent from work by
virtue of (i) the Employee's pregnancy, (ii) birth of
the Employee's child, (iii) placement of a child with
the Employee by adoption, or (iv) caring for any such
child for a period of up to a year immediately
following such birth or placement, the Severance Date
is the second anniversary of the first day of absence
from Service provided that the period between the
first and second anniversary of such first day of
absence if neither counted as Service nor a Break in
Service.
1.39 Supplemental Contributions means the contributions which a
Participant elects to make to the Plan in accordance with
Section 3.02.
1.40 Supplemental Contribution Account means that portion of the
Trust Fund which, with respect to any Participant, is
attributable to his own Supplemental Contributions and any
investment earnings and gains or losses thereon.
1.41 Surviving Spouse means the person to whom the Participant is
married, under applicable state law, at the time of the
Participant's death and to whom the benefits under the Plan
shall be payable in the event of the Participant's death
unless a valid Beneficiary designation and consent thereto by
the Participant's spouse has been made and received by the
Committee, or unless such benefits are subject to a qualified
domestic relations order as defined in Section 414(p) of the
Code.
1.42 Termination of Employment means separation from the employment
of the Company and all Affiliated Companies for any reason,
including, but not limited to, retirement, death, disability,
resignation or dismissal by the Company; provided, however,
that transfer in employment between the Company and an
Affiliated Company shall not be deemed to be a "Termination of
Employment" and provided further, that if an Employee is
rehired by the Company or an Affiliated Company within 30 days
of his or her separation from the employment of the Company or
an Affiliated Company, such separation shall not be considered
to be a "Termination of Employment."
1.43 Trustee means a trustee or trustees at any time acting as such
under a trust agreement or agreements established for purposes
of this Plan.
1.44 Trust Fund means the cash and other properties arising from
(i) contributions made by Participants and by the Company in
accordance with the provisions of this Plan, (ii) funds
transferred from a Prior Plan, and (iii) any investment
earnings and gains or losses thereon. The Trust Fund is held
and administered by the Trustee pursuant to Article IV.
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1.45 Valuation Date means each business day and any other date the
Committee deems desirable or necessary to value the Trust Fund
in accordance with Article V.
When used herein, the masculine shall include the feminine, and the singular
shall include the plural, unless the context clearly indicates otherwise.
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ARTICLE II
PARTICIPATION
2.01 Eligibility.
(a) Any Eligible Employee shall be eligible to become a
Participant in the Plan as of the first Enrollment
Date coincident with or next following his completion
of six months of Service or, if earlier, the date
negotiated under a collective bargaining agreement.
Notwithstanding the foregoing sentence, an Eligible
Employee employed by Planters LifeSavers shall be
eligible to become a Participant in the Plan as of
the first Enrollment Date coincident with or next
following his date of hire.
(b) All Eligible Employees who participate in this Plan
shall participate under the terms and conditions
herein stated.
(c) An Employee who was a participant in the Nabisco
Retirement Savings Plan, Nabisco Retirement Plan,
Stella D'Oro Biscuit Co., Inc. Profit Sharing Plan,
Stella D'Oro Biscuit Co. Midwest, Inc. Retirement
Plan or Stella D'Oro Biscuit Co., Inc. Salary
Reduction Plan (for Employees of Local 50) on the
date that any such plan merged with the Plan shall
become a Participant as of the Enrollment Date
coinciding with or next following the merger date.
All service under any such plan shall be taken into
account for determining participation under the Plan.
2.02 Participation.
(a) An Eligible Employee may become a Participant on any
Enrollment Date by making application in a manner
prescribed by the Committee in which he:
(i) designates the percentage of his Base Pay to
be contributed as Basic Pre-Tax and/or
After-Tax Contributions in accordance with
Section 3.01;
(ii) designates any percentage of his Base Pay to
be contributed as Supplemental Pre-Tax
and/or After-Tax Contributions in accordance
with Section 3.02;
(iii) authorizes applicable payroll deductions
from his Base Pay for Basic and Supplemental
Contributions; and
(iv) chooses one or more Investment Fund(s) for
his Accounts.
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(b) An Employee, other than an Employee in the Bakery,
Confectionery, Tobacco Workers and Grain Millers
Union, who becomes an Eligible Employee on or after
August 1, 1998 may become a Participant pursuant to
this Section 2.02(b). If the Eligible Employee does
not make the application contemplated in Section
2.02(a) prior to his Automatic Enrollment Date, such
Eligible Employee shall become a Participant
effective as of his Automatic Enrollment Date and
shall be deemed to have (i) authorized payroll
deductions for Basic Contributions in accordance with
Section 3.01, equal to 2% of his Compensation and
(ii) elected to invest such contributions in the
Fidelity Asset Manager: Income. If Section 3.03 is
applicable to the Eligible Employee, the Basic
Contributions shall be Pre-Tax Contributions.
Notwithstanding the foregoing, the Eligible Employee
may at any time elect a different contribution
percentage (including 0%) in accordance with Section
3.04 and/or different Investment Funds in accordance
with Section 4.06.
2.03 Participant Status. An Eligible Employee who has once become a
Participant shall remain a Participant so long as he remains in the
Service of the Company or an Affiliated Company, and shall cease to be
a Participant upon his Termination of Employment, except that if he has
met the conditions for entitlement to a benefit, he shall remain as an
inactive Participant so long as he has an Account balance. Active
participation, however, including contributions to the Plan by or for a
Participant, shall automatically be suspended effective as of the
Participant's Severance Date. Participation in the Plan shall cease as
of the date Accounts are transferred to an Affiliated Plan pursuant to
Section 12.13.
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ARTICLE III
CONTRIBUTIONS
3.01 Basic Contributions. Each Participant may contribute a percentage of
his gross Base Pay as Basic Contributions which are eligible to receive
a matching Company Contribution; such percentage shall be 1% to 6% of
Base Pay in 1% increments. Basic Contributions are matched with Company
Contributions in accordance with Section 3.06. The Basic Contributions
shall be made through payroll deductions and are credited to
Participants' Accounts as soon as reasonably possible following the
date of payment of the Compensation from which the contribution is
taken. Basic Contributions can be made either as After-Tax Basic
Contributions or, if and when Section 3.03 becomes applicable to the
Participant, as Pre-Tax Basic Contributions. If no such designation is
made, Basic Contributions shall be After-Tax Contributions.
Participating units, all of which may elect Basic and Supplemental
After-Tax Contributions under Sections 3.01 and 3.02, are set forth in
Schedule A, which is maintained by the Committee and may be revised
from time to time without further amendment to reflect changes under
the applicable collective bargaining agreement or under an agreement
for the acquisition or sale of a business.
3.02 Supplemental Contributions. A Participant who has authorized the
maximum Basic Contribution rate of 6% may also make additional
contributions under the Plan which are not subject to matching Company
Contributions by authorizing additional payroll deductions of 1% to 10%
of his Base Pay in 1% increments, which are credited to Participants'
Accounts as soon as reasonably possible following the date of payment
of the Compensation from which the contribution is taken. Supplemental
Contributions can be made either as After-Tax Supplemental
Contributions or, if and when Section 3.03 becomes applicable to the
Participant, as Pre-Tax Supplemental Contributions. If no such
designation has been made, Supplemental Contributions shall be
After-Tax Contributions.
3.03 Pre-Tax Contributions.
(a) This Section 3.03 is applicable only to all non-union hourly
employees and those bargaining units who have collectively
bargained for the right to make Pre-Tax Contributions.
Participating units, all of which may elect Basic and
Supplemental Pre-Tax Contributions under Sections 3.01 and
3.02, are set forth in Schedule A, which is maintained by the
Committee and may be revised from time to time without further
amendment to reflect changes under the applicable collective
bargaining agreement or under an agreement for the acquisition
or sale of a business.
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(b) Subject to Section 3.08, any Participant eligible under
3.03(a) to do so may elect that up to 16% of his gross Base
Pay that he has elected to contribute to the Plan pursuant to
Sections 3.01 and 3.02, be further designated in 1% increments
as Pre-Tax Contributions. Pre-Tax Contributions shall be
contributed by the Company to the Plan on behalf of the
Participant in lieu of an equal amount being paid to him as
Base Pay. A Participant may not designate more than the dollar
amount specified by the Internal Revenue Service as Pre-Tax
Contributions in any calendar year. Such Pre-Tax Contributions
are credited to Participants Accounts as soon as reasonably
practicable following the date of payment of the Compensation
from which the contribution is taken. Basic and Supplemental
contributions not designated as Pre-Tax Contributions shall be
After-Tax Contributions.
(c) The Committee shall have the right to establish rules with
respect to the making of elections pursuant to this Section,
including, without limitation, the right to require that any
such election be made at such time prior to its becoming
effective as the Committee shall determine and the right to
restrict the Participant's right to change such election. Such
Pre-Tax Contributions are intended to be treated for federal
income tax purposes as contributions made by the Company under
a qualified cash or deferred arrangement (as defined in Code
Section 401(k)), but shall be treated as if they were
contributions by a Participant for the purpose of the Plan
except where the Plan expressly indicates otherwise.
3.04 Change in Participant Contributions. Subject to the provisions of
Sections 3.01, 3.02, 3.03 and 3.07, a Participant may elect to change
the percentage of his authorized payroll deduction by giving notice to
the Committee in such manner as the Committee may prescribe. If the
Committee makes a mistake-of-fact with regard to any contribution, it
shall, depending on the mistake-of-fact, either (i) cause said
contribution to be returned to the Participant without restriction, or
(ii) accept additional contributions for the affected period. Examples
of a "mistake-of-fact" would be the continuation of payroll deductions
after a Participant has requested the suspension of such deductions or
failure to act on written instructions to take deductions.
3.05 Suspension of Participant Contributions.
(a) A Participant may elect to suspend his Basic or Supplemental
Contributions by notifying the Committee in advance in the
manner prescribed by the Committee. The suspension shall
become effective with the next practicable payroll period
commencing on or after processing such request. No Company
Contributions shall be made on behalf of a Participant during
a period of suspension of Basic Contributions.
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(b) A Participant who has suspended his Basic or Supplemental
Contributions may elect to apply to the Committee to resume
his contributions in the manner prescribed by the Committee.
The resumption shall become effective as of the first payroll
period practicable commencing on or after processing his
request.
(c) No contributions may be made by a Participant for any period
of unpaid absence from Service. A Participant who has ceased
to make contributions under the Plan in accordance with this
subsection (c) shall again be eligible to resume making
contributions on the date he returns to Service as an Eligible
Employee and gives notice to the Committee in the prescribed
manner.
(d) A Participant who has ceased to make contributions under the
Plan because he has ceased to be an Eligible Employee but,
nevertheless, continues to be an Employee shall again be
eligible to resume making contributions on the date he again
becomes an Eligible Employee and gives notice to the Committee
in the prescribed manner.
3.06 Company Contributions.
(a) Prior to August 2001, Company contributions are made by
Nabisco, Inc. After July 2001, Company contributions are made
with respect to the Nabisco Biscuit & Snacks Group of Kraft
Foods North America, Inc.
(b) With respect to each payroll period, the Company shall
contribute on behalf of each Participant an amount equal to
25% of such Participant's Basic Contributions to the Plan for
such payroll period unless a bargaining unit negotiated for
this Plan without a match. Company Contributions under this
paragraph will be paid to the Trustee as soon as practicable
and at least on a monthly basis. Effective February 1, 1987,
with respect to participants at the Pennsauken, New Jersey
plant, continuing until the closure of such plant in March
1993, the Company Contribution shall be an amount equal to 30%
of each such Participant's Basic Contributions. Effective July
1, 1996, the Company Contributions for Holland Participants
only shall be an amount equal to 50% of each such Holland
Participant's Basic Contributions for each payroll period.
Participating units for which no Company Contributions have
been negotiated are set forth in Schedule A which is
maintained by the Committee and may be revised from time to
time without further amendment to reflect changes under an
applicable collective bargaining agreement or under an
agreement for the acquisition or sale of a business.
With respect to a former participant in (or an Eligible
Employee who works at a location covered by) the Nabisco
Retirement Savings Plan who becomes a Participant in the Plan
on or after the merger date of the
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Nabisco Retirement Savings Plan with the Plan, the Company
Contributions shall be an amount equal to 50% of such
Participant's Basic Contributions for each payroll period.
With respect to a former participant in (or an Eligible
Employee who works at a location covered by) the Nabisco
Retirement Plan who becomes a Participant in the Plan on or
after the merger date of the Nabisco Retirement Plan with the
Plan, the Company Contributions shall be an amount equal to
50% of such Participant's Basic Contributions not exceeding 4%
of Base Pay for each payroll period.
With respect to those hourly locations that, pursuant to
collective bargaining agreements or negotiations, have become
covered under the salaried welfare plans of the Company and
are described in Schedule C, the Company shall contribute on
behalf of each affected Participant an amount equal to 50% of
such Participant's Basic Contributions to the Plan for each
payroll period.
With respect to a former participant in (or an Eligible
Employee who works at a location covered by) the Stella D'Oro
Biscuit Co., Inc. Profit Sharing Plan, the Company shall make
an annual profit sharing contribution on a discretionary basis
in the amount required under the operative collective
bargaining agreement covering such former participants.
(c) Each Affiliated Company participating in the Plan shall for
any Plan Year contribute a portion of the total Company
Contributions, made pursuant to subsection (b) above, equal to
the aggregate amounts which are credited for such Plan Year to
the accounts of Participants for periods while they are
Employees of each such Affiliated Company.
(d) In satisfaction of its obligation under this Section 3.06, the
Company shall pay its contribution in cash.
(e) In any Plan Year in which the Plan is top-heavy (as defined in
Section 14.02) the Company shall make additional Company
Contributions to the extent necessary to comply with the
minimum top-heavy contribution requirement as set forth in
Section 14.02(f).
(f) Each Company Contribution to the Plan is conditioned on its
deductibility.
In the event that the Commissioner of the Internal Revenue
Service determines that the Plan does not qualify for
tax-exempt status under Section 401 of the Code and issues an
adverse determination with respect to its initial
qualification, the Company Contributions made on or after the
date on which such determination is applicable shall be
returned to the Company without interest within one year after
such determination, but
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only if the application for determination is made by the time
prescribed by law for filing the Company's return for the
taxable year in which the Plan was adopted, or such later date
as the Secretary of the Treasury may prescribe.
In the event that a Company Contribution to the Plan is made
by a mistake of fact or all or part of the Company's
deductions under Section 404 of the Code for contributions to
the Plan are disallowed by the Internal Revenue Service, the
portion of the contributions attributable to such mistake of
fact or to which such disallowance applies shall be returned
to the Company without interest. Any such return shall be made
within one year after the making of such contribution by
mistake of fact or disallowance of deductions, as the case may
be.
3.07 Code Section 401(k) and 401(m) Nondiscrimination Tests. The Plan is
subject to the following nondiscrimination tests.
(a) Definitions. For purposes of this Section, the following
additional definitions shall be used for Plan Years beginning
after 1996:
(i) Highly Compensated Employee means an individual who
performs service during the determination year and is
an Employee who is a 5-percent owner (as defined in
Code Section 416(i)(1)) at any time during the Plan
Year or the preceding Plan Year, or an Employee who
received compensation in excess of $80,000 (adjusted
for changes in the cost of living) and is a member of
the "Top-Paid Group" for the preceding Plan Year.
(ii) "Top-Paid Group" means those Employees who are in the
top 20-percent of all Employees based on compensation
paid by the Company.
(b) Average Actual Deferral Percentage Test ("ADP"). For each Plan
Year, Participants' Pre-Tax Contributions shall satisfy the
requirements described under Section 401(k)(3)(A)(ii) of the
Code. The Committee shall have the right to limit Pre-Tax
Contributions of Highly Compensated Employees as it deems
necessary to satisfy such requirements.
(c) Average Actual Contribution Percentage Test ("ACP"). For each
Plan Year, matching Company Contributions and Participant
After-Tax Contributions shall satisfy the requirements under
Section 401(m)(2) of the Code. The Committee shall have the
right to limit matching Company Contributions and Participant
After-Tax Contributions of Highly Compensated Employees as it
deems necessary to satisfy such requirements.
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3.08 Restrictions on Pre-Tax Contributions.
(a) In no event may the Pre-Tax Basic and Pre-Tax Supplemental
Contributions made by the Company on behalf of any Participant
exceed $9,240 (as adjusted in accordance with Code Section
402(g)(5)). In the event the dollar limit for pre-tax
contributions is reached with respect to a Participant during
a calendar year, all additional contributions made on behalf
of the Participant for that calendar year will be made on an
after-tax basis, including, if necessary, a portion of the
contributions that the Participant had designated as Basic
Contributions.
(b) The Committee shall have the right to establish rules with
respect to the making of elections of pre-tax contributions,
including, without limitation, the right to require that any
such election be made at such time prior to its becoming
effective as the Committee shall determine and the right to
restrict the Participant's right to change such election. Such
contributions are intended to be treated for federal income
tax purposes as contributions made by the Company under a
qualified cash or deferred arrangement (as defined in Section
401(k) of the Code) but shall be treated as if they were
contributions by a Participant for the purpose of the Plan
except where the Plan expressly indicates otherwise.
(c) Notwithstanding any other provision of the Plan, Allocable
Excess Pre-Tax Contributions and income allocable thereto
shall be distributed no later than April 15 to Participants
who claim Allocable Excess Pre-Tax Contributions for the
preceding calendar year. "Allocable Excess Pre-Tax
Contributions" shall mean the amount of Pre-Tax Contributions
for a calendar year that the Participant allocates to this
Plan that exceed the limits of Code Section 402(g).
(d) The Participant's claim shall be in writing, shall be
submitted to the Committee no later than March 1; shall
specify the Participant's Allocable Excess Pre-Tax
Contributions for the preceding calendar year; and shall be
accompanied by the Participant's written statement that if
such amounts are not distributed, such Allocable Excess
Pre-Tax Contributions, when added to amounts deferred under
other plans or arrangements described in Sections 401(k),
402(h), 408(k) or 403(b) of the Code, exceed the limit imposed
on the Participant by Section 402(g) of the Code for the year
in which the deferral occurred. A Participant is deemed to
notify the Committee of any Allocable Excess Pre-Tax
Contributions that arise by taking into account only those
amounts deferred pursuant to this Plan and any other Plans of
a Participating Company.
(e) The Allocable Excess Pre-Tax Contributions distributed to a
Participant with respect to a calendar year shall be adjusted
for income and, if there is a loss allocable to the Allocable
Excess Pre-Tax Contributions, shall in no
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event be less than the lesser of the Participant's Pre-Tax
Account under the Plan or the Participant's Pre-Tax
Contributions for the Plan Year.
3.09 Qualified Military Service. Any Participant who resumes
participation in the Plan following a period of qualified military
service shall have the right to make-up Basic Contributions and
Supplemental Contributions that were not made on account of
qualified military service as provided under Code Section 414(u).
Such contributions shall be After-Tax Contributions except to the
extent that Section 3.03 applied to such Participant during the
period of qualified military service. The Company will make
contributions as described in Section 3.06 with respect to any
Basic Contributions and Supplemental Contributions made by a
Participant under this Section 3.09 in the same manner and in the
same amount as if the contributions were made by the Participant
during qualified military service.
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ARTICLE IV
TRUST FUND AND INVESTMENT FUNDS
4.01 The Trust Agreement. The Company shall enter into a trust agreement
which shall contain such provisions as shall render it impossible for
any part of the corpus of the Trust or income therefrom to be at any
time used for, or diverted to, purposes other than for the exclusive
benefit of Participants. Any or all rights or benefits accruing to any
person under the Plan with respect to any Company contributions
deposited under the Trust Agreement shall be subject to all the terms
and provisions of the Trust which shall specifically incorporate and be
subject to the provisions of the Plan.
4.02 The Trustee. The Trustee will be a corporate trustee appointed by the
Corporate Employee Plans Investment Committee of Philip Morris
Companies Inc. (the "Philip Morris Committee"), unless such authority
is transferred to the Compensation and Governance Committee of Kraft
Foods Inc. (the "Kraft Committee").
4.03 Separate Funds. Subject to Section 4.04, the Trustee shall maintain
separate Investment Funds within the Fund as are designated by the
Company.
4.04 Investment Funds. The Philip Morris Committee, unless such authority is
transferred to the Kraft Committee, shall select the Investment Funds
offered under the Plan and reserves the right to eliminate or add Funds
from time to time, including Funds that invest in the common stock of
an Affiliated Company.
4.05 Temporary Investment. Pending permanent investment of the assets of any
Investment Fund, the Trustee temporarily may hold cash or make
short-term investments in obligations of the United States Government,
commercial paper, an interim investment fund for tax qualified employee
benefit plans established by the Trustee unless otherwise provided by
applicable law, or other investments of a short-term nature.
4.06 Investment of Participant Contributions.
(a) Election. All Basic Contributions, Supplemental Pre-Tax
Contributions, Supplemental After-Tax Contributions and
Company Contributions will be invested at the election of the
Participant in multiples of 1% in any one or combination of
the Investment Funds under the Plan, subject to any
restrictions imposed on investing in any stock fund. A
Participant may make or change an election on any day by
giving notice to the Committee in the prescribed manner. Any
such election or change of election shall be effective as of
the first payroll period after it is processed.
(b) Reallocation of Investments. A Participant may elect on any
day to reallocate the investment of his Accounts to any one or
combination of the Investment Funds, in multiples of 1% by
giving notice to the Committee
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in such manner as the Committee may prescribe. The amounts
reallocated will be based upon values as of the Valuation Date
applicable to the processing of the request.
4.07 Voting by Participants.
(a) Voting of Stock Generally. Each Participant shall have the
right and shall be afforded the opportunity to instruct the
Trustee how to vote that proportionate number of the total
number of shares of stock held in any Fund that consists of
the common stock of the Company or an Affiliated Company which
is the same proportion that the value of his interest bears to
the total value of such Fund. Instructions by Participants to
the Trustee shall be in such form and pursuant to such
regulations as the Committee may prescribe. Any such
instructions shall remain in the strict confidence of the
Trustee.
(b) Tender or Exchange Offers. In the event of a tender or
exchange offer for any or all shares of Stock, the Committee
shall notify each Participant or Beneficiary and utilize its
best efforts to timely distribute or cause to be distributed
to him such information as will be distributed to other
shareholders of such Stock in connection with any such tender
or exchange offer. Each Participant or his Beneficiary shall
have the right to instruct the Trustee in writing not to
tender or exchange shares of Stock credited to his Account
under the Trust Fund. Unless the Trustee determines that ERISA
requires it to act otherwise, the Trustee shall not tender or
exchange any shares of Stock credited to a Participant's
Account under the Trust Fund unless specific instructions to
tender or exchange such shares have been received. For
purposes of this Section 4.07(b), "Stock" shall mean the stock
held in any Fund that consists of the common stock of the
Company or an Affiliated Company.
4.08 Investment Managers. The Philip Morris Committee may enter into a
written agreement with or direct the Trustee to enter into an
agreement with one or more investment managers to manage the
investments of one or more of the Investment Funds. Such investment
managers may include legal reserve life insurance companies which enter
into group annuity contracts with the Trustee. The Philip Morris
Committee may remove any such investment manager or any successor
investment manager, or direct the Trustee to do so, and any such
investment manager may resign. In addition, the Philip Morris Committee
may, upon removal or resignation of an investment manager, provide for
the appointment of a successor investment manager. The Kraft Committee
shall discharge the duties described in this Section 4.08 if such
authority is transferred from the Philip Morris Committee to the Kraft
Committee.
4.09 Participant Responsibility For Selection of Funds. Each Participant is
solely responsible for the selection of his Investment Funds. Neither
the Trustee, the
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Committee, any Administrative Committee, the Company nor any of the
directors, officers or employees of the Company or any Affiliated
Company is required to advise a Participant as to the manner in which
his Accounts should be invested. The fact that a security is available
to Participants for investment under the Plan shall not be construed as
a recommendation for the purchase of that security, nor shall the
designation of any Investment Fund impose any liability on the Company,
any Affiliated Company, their directors, officers or employees, the
Trustee, the Committee, or any Administrative Committee.
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ARTICLE V
ACCOUNTS
5.01 Valuation of Accounts. As of each Valuation Date, the Accounts of each
Participant shall be adjusted to reflect any appreciation or
depreciation in the fair market value and any income earned by each
Investment Fund in which the Participant's Accounts are invested since
the prior Valuation Date. Such fair market value shall be the aggregate
fair market value of all securities or other property held for each
Investment Fund, plus cash and accrued earnings, less accrued expenses
and proper charges against each Investment Fund.
When determining the value of Participant Accounts, any deposits due
which have not been deposited in the Trust Fund on behalf of the
Participant shall be added to his Accounts. Similarly, adjustments of
accounts for appreciation or depreciation of an Investment Fund shall
be deemed to have been made as of the Valuation Date to which the
adjustment relates, even though they are actually made as of a later
date.
5.02 Valuation Upon Transfer, Withdrawal or Distribution. The valuation of
accounts for purposes of an in-service withdrawal, a transfer of
accounts to another Investment Fund, or a cash distribution shall be
the same as described in Section 5.01.
5.03 Statement of Accounts. Each Participant shall be furnished at least
annually a statement setting forth the value of his Accounts.
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ARTICLE VI
VESTING AND FORFEITURES
6.01 Vesting of Participant's Contributions. Each Participant's Basic
Contribution Account, Supplemental Contribution Account and Rollover
Account shall at all times be fully vested.
6.02 Vesting of Company Contributions. A Participant shall become fully
vested in his Company Contribution Account upon the earliest of (i)
completion of 60 months of Service, (ii) 24 months of employment after
his initial Enrollment Date, or (iii) the occurrence of any one of the
following:
(a) attainment of age 65;
(b) retirement at age 65;
(c) disability (as defined by the Social Security Administration);
(d) death;
(e) termination of employment as a result of Job Elimination;
(f) termination of the Plan, or
(g) complete discontinuance of Company Contributions.
The foregoing notwithstanding, if negotiated with a collective
bargaining unit when negotiating Plan coverage for the unit, an
Eligible Employee who is a member of such unit shall be immediately and
fully vested in his Account if he enrolls in the Plan as of the first
possible date for members of his unit.
With respect to an Employee who becomes a Participant following the
merger of the Nabisco Retirement Savings Plan (the "Savings Plan"), the
Nabisco Retirement Plan (the "Retirement Plan"), the Stella D'Oro
Biscuit Co., Inc. Profit Sharing Plan (the "Profit Sharing Plan"), the
Stella D'Oro Biscuit Co. Midwest, Inc. Retirement Plan (the "Midwest
Plan"), or the Stella D'Oro Biscuit Co., Inc. Salary Reduction Plan
(for Employees of Local 50) (the "Local 50 Plan") with the Plan, the
following additional conditions shall apply regarding any amount
credited to his Company Contribution Account:
(a) The vested percentage shall not be less than the vested
percentage, determined as of the merger date, of the
Employee's (i) matching contribution account and supplemental
contribution account under the Savings Plan or (ii) the amount
attributable to employer contributions under the Retirement
Plan.
(b) A "Year of Service" under the Savings Plan shall be equivalent
to 12 months of Service under the Plan.
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(c) With respect to a former participant in the Savings Plan or
the Retirement Plan, the Employee's Enrollment Date shall be
the later of November 19, 1999 or the date of hire by the
Company.
(d) The Employee shall be credited with 12 months of Service for
the period beginning July 1, 2000 and ending June 30, 2001 if
he would have been credited with a "Year of Service" under the
Savings Plan for such period. A "Year of Service" shall have
the meaning described in Section 8.2 of the Savings Plan.
(e) All service under the Savings Plan, Retirement Plan, Profit
Sharing Plan, Midwest Plan and Local 50 Plan as of the merger
date will be taken into account under the Plan.
(f) As of the merger date, all participants in the Profit Sharing
Plan, Midwest Plan and Local 50 Plan will have a 100% vested
interest in their Company Contribution Account.
(g) With respect to a former participant in the Retirement Plan,
any such Employee will have a 100% vested interest upon
attaining age 55 while employed by the Company.
6.03 Forfeiture on Termination of Employment. If a Participant's employment
is terminated prior to attainment of age 65 for reasons other than
Retirement, Disability, death, or Job Elimination the portion, if any,
of his Company Contribution Account in which he is not vested shall be
forfeited upon the earlier of (i) the accrual of five (5) consecutive
Break in Service years, or (ii) the receipt of a cash-out and, under
circumstances where all Participant Contributions were distributed
prior to Termination of Employment or there are no Participant
Contributions, a cash-out will be deemed to have been made on the date
the Termination of Employment occurred. All forfeitures pursuant to
(ii) above are subject to the provisions of Section 6.05. A "Break in
Service" is any 12-consecutive month period beginning on a Severance
Date during which an Employee does not complete an Hour of Service.
6.04 Disposition of Forfeitures. All forfeitures shall be used to reduce
Company Contributions otherwise payable to the Plan.
6.05 Restoration of Forfeitures. Any amount forfeited pursuant to the
provisions of clause (ii) of Section 6.03 shall be restored to the
Account of a Participant if the Participant is re-employed before he
accrues five consecutive Break in Service years. The restoration will
occur without the requirement that the Participant repay to the Plan
any amounts previously distributed to him.
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ARTICLE VII
DISTRIBUTIONS
7.01 Distribution of Benefits.
(a) Termination of Employment. A Participant who has a Termination
of Employment for reasons other than retirement, disability or
death shall receive a lump sum distribution of the value of
his vested Accounts, subject to the provisions of Section 7.01
(e). Distribution shall be made as soon as administratively
feasible following the valuation of the Participant's
Accounts. If the Committee has not received an application for
distribution by the time specified in subsection (d) below, a
distribution shall automatically be made at such time.
(b) Retirement or Disability. A Participant who has a Termination
of Employment due to retirement or disability shall receive a
lump sum distribution of the value of his Accounts.
Distribution shall be made as soon as administratively
feasible following the valuation of the Participant's
Accounts. However and notwithstanding anything in this Plan to
the contrary, a Participant may not postpone payment beyond
April 1 of the calendar year following the calendar year in
which he attains age 70 1/2. Participants who are not 5%
owners (as defined in Code Section 416(i)(1)(B)) and who
attained age 70 1/2 prior to January 1, 1988, are not required
to have their distribution commence prior to April 1 of the
calendar year following the calendar year in which they
retire, regardless of their age.
(c) Death. The Accounts of a Participant who has died shall be
distributed to his Beneficiary in a single lump sum payment.
Payment will be made after notification and verification of
the Participant's death; provided, however, that if the
Beneficiary is the Participant's Surviving Spouse, a
distribution shall not be made until after a written
application for distribution from the Surviving Spouse has
been received by the Committee. The Accounts shall be valued
as soon as administratively feasible after receipt of the
written application for distribution, and distribution shall
be made as soon as administratively feasible following the
valuation of the Participants Accounts. If the Committee has
not received an application for distribution by the time the
Participant would have attained age 65, the distribution shall
automatically be made at such time.
(d) Latest Date for Distribution. Distributions to a Participant
shall commence no later than the April 1 following the
calendar year in which the Participant attains age 70 1/2.
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(e) Small Lump Sum Cash-Outs. The foregoing notwithstanding, if
the value of the Participant's Account does not exceed $5,000,
a distribution shall be made to the Participant as soon as
administratively feasible after a written application for
distribution has been received by the Committee, valued as
soon as administratively feasible after receipt of such
application; provided, however, that if the Committee does not
receive a written application for distribution within 90 days
after the Participant's Termination of Employment, the Account
shall be valued and distribution shall be made as soon as
administratively feasible after the expiration of such 90-day
period. In no event shall the Account of a Participant which
is in excess of the amount of $5,000 be distributed to him or
on his behalf prior to the time specified in (d) above without
the written consent of the Participant or, if applicable, his
Surviving Spouse.
(f) QDRO. Notwithstanding subsections (a)-(e) above and Section
8.05, if a qualified domestic relations order, as described in
Section 12.05, requires the distribution of all or part of a
Participant's benefits under the Plan, the establishment or
acknowledgment of the alternate payee's rights to benefits
under the Plan in accordance with the qualified domestic
relations order shall in all events be applied in a manner
consistent with the terms of the Plan. Notwithstanding the
foregoing, (i) the Committee is authorized, pursuant to such
uniform and nondiscriminatory rules as it shall establish
which shall be consistent with applicable law and the terms of
the applicable qualified domestic relations order, to cash out
benefits to which alternate payees may be entitled prior to
the date such benefits would otherwise become payable in
accordance with the applicable provisions of the Plan, and
(ii) in no event shall the recognition of an alternate payee's
rights in accordance with this Section 7.01(f) be deemed to
include the right to make a withdrawal pursuant to the
provisions of Article VI, make a loan application pursuant to
the provisions of Article IX or to receive any benefits in the
form of a partial payment.
(g) Company/Affiliated Company Stock Fund Distributions. With
respect to any Investment Fund that consists of the common
stock of the Company or an Affiliated Company, the Participant
or his Beneficiary may elect that the distribution from any
such Investment Fund be made in the form of cash or shares of
stock, except that any fractional portion of a share shall be
paid in cash. If a Participant does not make an election in
connection with the distribution, all amounts shall be paid in
cash.
(h) Installment Distributions. Notwithstanding any provision of
the Plan to the contrary, a Participant or Beneficiary may
elect to receive the value of his Accounts in monthly or
annual installment payments; provided, however, such
Participant may elect at any time to receive the remaining
amount credited to his Accounts in a lump-sum distribution.
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7.02 Proof of Death and Right of Beneficiary. The Committee may require and
rely upon such proof of death and such evidence of the right of any
Beneficiary to receive the undistributed value of the Account of a
deceased Participant as the Committee may deem proper, and its
determination of death and of the right of such Beneficiary or other
person to receive payments shall be conclusive.
7.03 Completion of Appropriate Forms. The Committee has prescribed
forms/procedures providing notice to it in order for a distribution to
be made under the Plan. In the event a Participant or Beneficiary does
not comply with such procedures before the date a distribution becomes
payable under the terms of the Plan, distribution from such
Participant's or Beneficiary's Account may, at the option of the
Committee (taking into account Section 12.12), be mailed to the Address
of Record as provided in Section 12.09.
7.04 Investment Pending Distribution.
(a) The provisions of Section 4.06 shall continue to apply to the
accounts of inactive Participants.
(b) A Participant is not entitled to any interest, dividends or
any other form of investment proceeds on his Account for the
period between the Valuation Date and the date payment is
made.
7.05 Direct Rollovers.
This Section applies to distributions made on or after January 1, 1993.
Notwithstanding any provision of the plan to the contrary that would
otherwise limit a distributee's election under this Article, a
distributee may elect, at the time and in the manner prescribed by the
plan administrator, to have any portion of an eligible rollover
distribution paid directly to an eligible retirement plan specified by
the distributee in a direct rollover.
(a) Eligible Rollover Distribution. An eligible rollover
distribution is any distribution of all or any portion of the
balance to the credit of the distributee, except that an
eligible rollover distribution does not include: any
distribution that is one of a series of substantially equal
periodic payments (not less frequently than annually) made for
the life (or life expectancy) of the distributee or the joint
lives (or joint life expectancies) of the distributee and the
distributee's designated beneficiary, or for a specified
period of ten years or more; any distribution to the extent
such distribution is required under Section 401(a)(9) of the
Code; the portion of any distribution that is not includible
in gross income (determined without regard to the exclusion
for net unrealized appreciation with respect to employer
securities); and any hardship distribution described in Code
Section 401(k)(2)(B) made after 1998.
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(b) Eligible Retirement Plan. An eligible retirement plan is an
individual retirement account described in section 408(a) of
the Code, and individual retirement annuity described in
section 408(b) of the Code, and annuity plan described in
section 403(b) of the Code, or a qualified trust described in
section 401(a) of the Code, that accepts the distributee's
eligible rollover distribution. However, in the case of an
eligible rollover distribution to the surviving spouse, an
eligible retirement plan is an individual retirement account
or individual retirement annuity.
(c) Distributee. A distributee includes an employee or former
employee. In addition, the employee's or former employee's
surviving spouse and the employee's or former employee's
spouse or former spouse who is the alternate payee under a
qualified domestic relations order, as defined in section
414(p) of the Code, are distributees with regard to the
interest of the spouse or former spouse.
(d) Direct Rollover. A direct rollover is a payment by the plan to
the eligible retirement plan specified by the distributee.
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ARTICLE VIII
WITHDRAWAL PRIOR TO TERMINATION OF EMPLOYMENT
AND SPECIAL PRE-TAX CONTRIBUTION RULES
8.01 Election to Withdraw from Accounts. As of any Valuation Date and
subject to Sections 8.02, 8.03 and 8.04, a Participant may elect to
withdraw, in cash only and in a stated amount, all or a portion of the
value of vested amounts in his Accounts from which withdrawals are
allowed.
8.02 Withdrawal of After-Tax and Company Contributions. Withdrawals as
described in Section 8.01 and subject to the rules of Section 8.03
shall be applied by the Committee against a Participant's Accounts as
follows:
Tax-free Withdrawal: Any dollar amount up to 100% of his After-Tax
Contributions contributed prior to January 1, 1987, or their value, if
less.
Regular Withdrawal: The amount available as a Tax-free Withdrawal, plus
any dollar amount up to the remaining value of his After-Tax
Contributions, his Rollover Account and vested Company Account.
Participants with less than five years of Plan participation may not
withdraw After-Tax Contributions that were matched by the Company and
are in the Plan for less than 24 months or Company Contributions that
are in the Plan for less than 24 months.
Hardship Withdrawal: A Participant who qualifies for a financial
hardship as defined in Section 8.04 may withdraw up to 100% of the
amount available under a Regular Withdrawal, plus the remaining value,
if any, of his After-Tax Contributions, the remaining vested value of
his Company Contributions and an amount from his Pre-Tax Contributions
Account that does not exceed his Pre-Tax Contributions plus earnings
credited to such contributions as of December 31, 1988.
Withdrawal Upon Attainment of Age 59 1/2 or Disability: A Participant
who has attained age 59 1/2 or is totally disabled, as such term is
defined by the Social Security Administration, may withdraw the amount
available under a Regular Withdrawal, plus any dollar amount up to the
remaining vested value of his After-Tax, Company and Pre-Tax
Contributions.
8.03 Rules Applicable to Withdrawals Prior to Termination of Employment. The
following rules shall, except as noted in Section 8.04, apply to
withdrawals under this Article VIII:
(a) Withdrawals may only be made by prior notice to the Committee
in the manner prescribed by the Committee.
(b) Excluding Hardship withdrawals, no more than one withdrawal
may be made in any six-month period.
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(c) Excluding Hardship withdrawals, in no event may a Participant
make a withdrawal in an amount less than $1,000, or the
maximum amount available for withdrawal as a Tax-free
Withdrawal or a Regular Withdrawal, if less.
(d) In no event may a Participant elect an order of withdrawal
other than set forth in Section 8.02, nor may a Participant
select the classification or Investment Fund from which his
stated amount of withdrawal will be withdrawn.
(e) Payments of withdrawal amounts will be made as soon as
practicable after a Participant's election to withdraw.
(f) Amounts received from any Prior or Affiliated Plan in a
trust-to-trust transfer which were subject to Code Section
401(k), under such Plan, shall be subject to Code Section
401(k) requirements under this Plan.
8.04 Hardship Withdrawals.
Financial hardship for purposes of Section 8.02 shall mean that a
Participant requires a withdrawal of money for an immediate and heavy
financial need. Such withdrawal cannot exceed the sum of (i) the amount
required to meet such need and (ii) any amounts necessary to pay any
federal, state or local income taxes or penalties reasonably
anticipated as a result of the distribution. No withdrawal shall be
permitted unless the hardship cannot reasonably be relieved from other
sources, including distributions (other than hardship withdrawals) and
nontaxable loans available under this Plan or any other plan, through
reimbursement or compensation by insurance or otherwise by liquidation
of assets to the extent such liquidation would not itself cause an
immediate and heavy financial need, by cessation of all Pre-Tax
Contributions or After-Tax Contributions under the Plan, or by
borrowing from commercial sources on reasonable commercial terms.
Purchase by a Participant of a primary residence, the need to prevent
eviction or foreclosure on the primary residence of a Participant,
post-secondary education tuition, related fees, and room and board for
a Participant or his dependents and any non-reimbursed medical expense
of a Participant or his dependents may generally be considered
situations of heavy financial need, unless otherwise governed by law or
regulation. The Committee may, under rules established by it which are
uniformly applicable to all similarly situated Participants, determine
other circumstances where a Participant has a heavy financial need and
the decision of the Committee as to whether a Participant satisfies the
financial hardship rule shall be conclusive, unless otherwise governed
by law or regulation.
8.05 Restrictions on Pre-Tax Contribution Distributions. Notwithstanding any
other provision in this Plan to the contrary, a Participant's Pre-Tax
Contribution Accounts may not be distributed earlier than upon one of
the following events:
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(a) The Participant's retirement, death, disability or Termination
of Employment;
(b) The termination of the Plan without the establishment of a
successor plan;
(c) A Participant's attainment of age 59 1/2;
(d) A Participant's hardship, restricted as set forth in Section
8.04.
(e) The sale or disposition of the Company or any Affiliated
Company to an unrelated corporation, which does not maintain
the Plan, of substantially all of the assets used in a trade
or business, but only with respect to Employees who continue
with the acquiring corporation; or
(f) The sale or disposition by the Company or any Affiliated
Company of its interest in a subsidiary to an unrelated entity
which does not maintain the Plan, but only with respect to
Employees who continue employment with the subsidiary.
This Section is intended to comply with the earliest distribution
requirements of Treasury Reg. 1.401(k)-l(d) and is not intended to add
any forms of distribution not otherwise allowed under the Plan.
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ARTICLE IX
LOANS
9.01 Loan Provisions. An active Participant may make application to the
Committee to borrow from the Trust Fund and the Committee may in its
sole discretion permit such a loan upon the conditions hereinafter
specified and any other rules promulgated by the Committee.
(a) Loans shall be made available to all Participants on a
reasonably equivalent basis and (i) shall not be made
available to highly compensated employees (as defined in
Section 414(q) of the Code) in an amount greater than the
amount made available to other Participants, and (ii) shall
not be permitted for purchasing securities or in any way
financing a securities investment.
(b) The maximum amount of a loan to a Participant shall not exceed
the lesser of: (i) 50% of the Participant's vested interest in
his Account; or (ii) $50,000, reduced by the highest
outstanding loan balance during the preceding twelve months.
The minimum loan amount is $1,000. Notwithstanding the
foregoing, no amount of a Participant's Account shall be
considered available for a loan if it is subject to a
qualified domestic relations order as such term is defined
under Section 414(p)(1)(A) of the Code.
(c) The Committee shall have complete discretion in determining
lien priorities among the various investments in the Account.
The Committee shall determine the interest rate for each loan,
consistent with the rate being charged by other lending
institutions for a similar loan to an unrelated borrower on
the same date. A loan shall be deemed to be an investment of a
Participant's individual Account and all interest payments and
repayments of principal shall be credited to the Account of
the Participant.
(d) The Participant shall be required to authorize payroll
deductions from his compensation in an amount sufficient to
repay the loan over its term. Loan repayment amounts shall be
credited to a Participant's Account as of the date of payment
of the Compensation from which the repayment is taken. In the
event of default of the Participant before the loan is repaid
in full, the unpaid balance thereof shall become due and
payable and, to the extent that the outstanding amount is not
repaid within 60 days after demand for payment is sent, such
amount shall be deemed to have been distributed and the
Trustee shall first satisfy the indebtedness from the amount
payable to the Participant before making any payment to the
Participant. In the event of a Participant's death before the
loan is repaid in full, the Participant's estate shall be the
Beneficiary with respect to the outstanding
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loan notwithstanding any other deemed or actual Beneficiary
designation and the unpaid loan balance shall be deemed to
have been distributed to the Participant's estate.
Upon a Participant's Termination of Employment, the
Participant can repay any outstanding loan balance in full or
continue to repay the outstanding balance in the same amount
and at the same rate as prior to the Termination of
Employment. Repayments after a Participant's Termination of
Employment shall be effected as determined by the Committee.
(e) During the repayment period for the loan, the Participant
shall be permitted to fully participate in the Plan.
(f) The Participant shall execute such other documents as the
Committee shall request.
(g) Only one loan for each Participant may be outstanding at one
time.
(h) The Committee may make additional rules for loans under the
Plan, provided that such rules are administered in a
nondiscriminatory manner.
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ARTICLE X
ADMINISTRATION OF PLAN
10.01 Nabisco Employee Benefits Committee.
(a) The general administration of the Plan and the responsibility
for carrying out the provisions of the Plan shall be placed in
the Committee, consisting of not less than three persons.
(b) Any member of the Committee may resign by delivering his
written resignation to the Secretary of the Committee and such
resignation shall become effective upon the date specified
therein. A member shall be deemed to have resigned if he
leaves the active employment of the Company and all Affiliated
Companies.
(c) The Committee shall elect from its members a Chairman, and
shall also elect a Secretary who may, but need not, be one of
the members of the Committee. The Committee may appoint from
its members such committees with such powers as it shall
determine, and may authorize one or more of its members, or
any agent, to execute or deliver any instrument or make any
payment in its behalf.
(d) The Committee shall hold meetings upon such notice, at such
place or places, and at such time or times as it may from time
to time determine.
(e) A majority of the members of the Committee shall constitute a
quorum for the transaction of business. All resolutions or
other action taken by the Committee shall be by the vote of a
majority of the members of the Committee present at any
meeting or without a meeting by an instrument in writing
signed by a majority of the members of the Committee.
(f) No member of the Committee shall receive any compensation for
his service as such, and, except as may be required by
applicable law, no bond or other security is required of him
in such capacity in any jurisdiction.
10.02 Administrative Committee.
(a) The Committee, in its discretion, may delegate its
administrative duties and responsibilities to one or more
Administrative Committees each consisting of three or more
persons, who shall be appointed by and serve at the
pleasure of the Committee and one or more of whom may also
be members of such Committee. Vacancies in the
Administrative Committee shall be filled by the Committee
but the Administrative Committee may act, notwithstanding
any vacancies, so long as there are at least two members of
such Committee. The members of an Administrative
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Committee shall serve without compensation for their services
as such, but shall be reimbursed by the Company for all
necessary expenses incurred in the discharge of their duties.
(b) Subject to restrictions imposed by the Committee, an
Administrative Committee's powers shall include the
following powers:
(i) to interpret Plan provisions with respect to
eligibility, service, vesting and determination of
benefits,
(ii) to calculate benefits and authorize the payment of
benefits by the Plan trustees through disbursement
accounts as directed by the Administrative Committee,
(iii) to authorize the payment of routine Plan expenses
exclusive of trustee, investment manager, or actuary
fees,
(iv) to prepare and/or approve the filing of required
governmental reports,
(v) to maintain Plan and Account records,
(vi) to prepare employee announcements, forms and
procedures, and
(vii) to review denials of benefit claims made by
Participants or Beneficiaries.
The Administrative Committee, at its discretion, may delegate to
assistants, including employees in the Company's Employee Benefits
Department, ministerial and clerical duties.
10.03 Authority and Duties of Various Fiduciaries.
(a) The Committee (or the Administrative Committee acting on
behalf of the Committee) shall have the exclusive right to
interpret the Plan and to decide any and all matters
arising under the Plan or in connection with its
administration, including determination of and eligibility
for the amount of distributions and withdrawals. The
Company shall have no power to direct or modify any
interpretations, determinations, or decisions of the
Committee. The Committee may amend the Plan, subject to the
provisions of Section 11.01. Further, the Committee may
adopt rules for the administration of the Plan and the
conduct of its business and such rules shall be consistent
with the provisions of the Plan.
(b) The Committee and any other named fiduciary may each employ
counsel, agents, and such clerical and accounting services as
it may require in
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carrying out its responsibilities under the Plan. All
fiduciaries shall be entitled to rely upon tables, valuations,
certificates, opinions, and reports furnished by any actuary,
accountant, or legal counsel appointed under the provisions of
the Plan.
(c) The Committee shall keep in convenient form such personnel
data as may be necessary for the Plan. The Committee shall
prepare, distribute, and file such reports and notices as may
be required by applicable law or regulation.
(d) The members of the Committee shall use that degree of care,
skill, prudence and diligence that a prudent man acting in
a like capacity and familiar with such matters would use in
his conduct of a similar situation. A member of the
Committee shall not be liable for the breach of fiduciary
responsibility of another fiduciary unless (i) he
participates knowingly in, or knowingly undertakes to
conceal, an act or omission of such other fiduciary,
knowing such act or omission is a breach; or (ii) by his
failure to discharge his duties solely in the interest of
the Participants, Surviving Spouses and Beneficiaries for
the exclusive purpose of providing their benefits and
defraying reasonable expenses of administering the Plan not
met by the Company, he has enabled such other fiduciary to
commit a breach; or (iii) he has knowledge of a breach by
such other fiduciary and does not make reasonable efforts
to remedy the breach; or (iv) the Committee improperly
allocates duties among its members or delegates duties to
others and fails to properly review such allocation or
delegation of fiduciary responsibilities.
(e) The Company will indemnify and hold harmless the members of
the Committee and any person to whom fiduciary
responsibilities are delegated under this Plan against any
cost or expense (including attorney's fees) or liability
(including any sum paid in settlement of a claim with the
approval of the Company) arising out of any act or omission to
act, except in the case of willful misconduct.
(f) Whenever, in the administration of the Plan, any discretionary
action is required, the authorized party shall exercise his
authority in a nondiscriminatory manner so that all persons
similarly situated will receive substantially the same
treatment.
10.04 Named Fiduciaries.
(a) The Committee and any Administrative Committee shall each
constitute named fiduciaries as such term is defined in ERISA.
(b) Any fiduciary appointed as a named fiduciary by the Company by
resolution or appointed by an appropriate instrument executed
by an
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officer of the Company thereunto authorized shall also
constitute a named fiduciary in respect of the duties
delegated to him or it in such resolution or instrument.
10.05 Delegation. Any named fiduciary designated herein or appointed as
provided herein, unless precluded from doing so by the terms of such
appointment, may by appropriate instrument designate any person
(including any firm or corporation) to carry out part or all of such
fiduciary's responsibilities and upon such designation the named
fiduciary shall have no liability, except as imposed by applicable law,
for any act or omission of such person. The foregoing does not preclude
any other fiduciary to the extent allowed by ERISA and the terms of his
appointment from delegating part or all of such fiduciary's
responsibilities with respect to the Plan.
10.06 Multiple Capacities. Any fiduciary may serve in more than one
fiduciary capacity with respect to the Plan.
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ARTICLE XI
AMENDMENTS, TERMINATION, PERMANENT DISCONTINUANCE
OF CONTRIBUTIONS, MERGER OR CONSOLIDATION
11.01 Amendments. Subject to the provisions hereinafter set forth, the
Company reserves the right at any time and from time to time by action
of the Committee in writing, both retroactively and prospectively, to
modify or amend, in whole or in part, any or all of the provisions of
the Plan; provided, however, that (a) no such modification or amendment
shall make it possible for any part of the funds of the Plan to be used
for, or diverted to, purposes other than for the exclusive benefit of
Participants, Surviving Spouses or Beneficiaries under than Plan; and
(b) no modification or amendment shall be made which has the effect of
decreasing retroactively the Accounts of any Participant or of reducing
the nonforfeitable percentage of the Company Contribution Account of a
Participant below the nonforfeitable percentage thereof computed under
the Plan as in effect on the later of the date on which the amendment
is adopted or becomes effective; and provided further, that any
amendment of the Plan that involves a material increase in benefits for
officers of the Company, a material increase in cost or a material
change in design, other than technical amendment required by law or
regulations, must be approved by the Board of Directors. No amendment
shall eliminate or reduce an early retirement benefit or eliminate an
optional form of benefit except as permitted by law.
11.02 Termination or Permanent Discontinuance of Contributions. The Company
may by action of the Committee terminate the Plan with respect to all
participating locations or any of them or direct complete
discontinuance of contributions hereunder by all or any of the
locations for any reason at any time. In case of such termination or
complete discontinuance of contributions hereunder, there shall
automatically vest in the appropriate Participants nonforfeitable
rights to the Company contributions credited to their Accounts, and the
total amount in each Participant's Accounts shall be distributed, as
the Committee shall direct, to him or for his benefit.
11.03 Partial Termination. In the event of a partial termination of the
Plan, the provisions of Section 11.02 shall be applicable only to
the Participants affected by such partial termination.
11.04 Benefits in Case of Merger or Consolidation. The Plan may not be merged
or consolidated with, nor may its assets or liabilities be transferred
to, any other plan unless each Participant, spouse or Surviving Spouse,
former Participant, retired Participant or Beneficiary under the Plan
would, if the resulting plan were then terminated, receive a benefit
immediately after the merger, consolidation, or transfer which is equal
to or greater than the benefit he would have been entitled to receive
immediately before the merger, consolidation, or transfer if the Plan
had then terminated.
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ARTICLE XII
MISCELLANEOUS
12.01 Benefits Payable from Trust Fund. All persons with an interest in the
Trust Fund shall look solely to the Trust Fund for any payments with
respect to such interest.
12.02 Elections. Elections for benefits or Beneficiaries hereunder shall be
made by a Participant in the manner prescribed by the Committee for
such purposes, within the prescribed time limits.
12.03 No Right to Continued Employment. Neither the establishment of the Plan
nor the payment of any benefits thereunder nor any action of the
Company, the Board of Directors, the Committee, or the Trustee shall be
held or construed to confer upon any person any legal right to be
continued in the employ of the Company.
12.04 Inalienability of Benefits and Interests. No benefit payable under the
Plan or interest in the Trust Fund shall be subject in any manner to
anticipation, alienation, sale, transfer, assignment, pledge,
encumbrance or charge, and any such attempted action shall be void and
no such benefit or interest shall be in any manner liable for or
subject to debts, contracts, liabilities, engagements or torts of any
Participant, Surviving Spouse or Beneficiary.
12.05 Qualified Domestic Relations Orders.
(a) The provisions in Section 12.04 shall also apply to the
creation, assignment, or recognition of a right to any benefit
payable with respect to a Participant pursuant to a domestic
relations order, unless such order: (i) is determined to be a
qualified domestic relations order, as defined in Section
414(p) of the Code, or (ii) was entered before January 1,
1985.
(b) If the Committee is in receipt of a domestic relations
order, or the Committee is otherwise aware that a qualified
domestic relations order affecting a Participant's account
is being sought, the Committee may take such action as
necessary (including, without limitation, restricting the
participant's ability to withdraw or borrow funds in his or
her Accounts) in order to administer the Plan consistently
with the terms of any such qualified domestic relations
order.
12.06 Payments for Exclusive Benefit of Participants. Payments of benefits in
respect of the interest of a Participant under the Plan to any person
other than such Participant in accordance with the provisions of the
Plan shall be deemed to be for the exclusive benefit of such
Participant.
12.07 New Jersey Law to Govern. All questions pertaining to the construction,
regulation, validity and effect of the provisions of the Plan shall be
determined in accordance
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with the laws of the State of New Jersey, except to the extent such
laws are pre-empted by ERISA.
12.08 No Guarantee. Neither the Company nor the Trustee guarantee the
Trust Fund in any manner against loss or depreciation.
12.09 Address of Record. Each individual or entity with an actual or
potential interest in the Plan shall file and maintain a current record
address with the Plan. Communications mailed by the Company, Trustee,
or Committee to such record address fulfills all obligations to provide
required information to Participants, including former employees,
Surviving Spouses and Beneficiaries, in regard to the Plan. If no
record address is filed, it may be presumed that the address used by
the Company in forwarding statements of a Participant's Account is the
record address.
12.10 Unlocated Spouse. Notwithstanding the consent requirement in Section
1.10, if the Participant establishes to the satisfaction of the
Committee that such written consent cannot be obtained because there is
no spouse or the spouse cannot be located, a waiver shall be deemed to
be valid. Any consent necessary under Section 1.10 will be valid only
with respect to the spouse who signs the consent, or in the event of a
deemed election, the designated spouse.
12.11 Agent for Process. The Secretary of Kraft Foods North America, Inc.
shall be the designated agent for the service of legal process.
12.12 Payments in the Event of Incompetency. If the Committee finds that a
Participant or other person entitled to a benefit is unable to care for
his affairs because of illness or accident or is a minor, the Committee
may direct that any benefit payment due the Participant, unless claim
shall have been made therefor by a duly appointed legal representative,
be paid to his spouse, a child or a parent for the benefit of such
Participant, and any such payment so made shall be a complete discharge
of the liabilities of the Plan therefor.
12.13 Transfer of Accounts to This Plan.
(a) Affiliated Plans. If a participant of a U.S. qualified
Affiliated Plan becomes eligible to be a Participant of
this Plan before receiving a distribution from the
Affiliated Plan, this Account under the Affiliated Plan
shall be transferred to this Plan by way of a
trustee-to-trustee transfer. This Plan shall be considered
as a successor plan with regard to such employee and all
Affiliated Plan contributions transferred shall be treated
as though they were made under this Plan for purposes of
vesting, withdrawals and distributions. In the absence of
an applicable Participant election, assets transferred from
an Affiliated Plan shall be invested in equivalent
investment funds under this Plan or, if an equivalent
investment fund does not exist, in the Money Market Fund
or, effective October 1, 1994, the Interest Income Fund;
and the accounts of participants and
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beneficiaries under the Affiliated Plan will become their
Accounts as Participants and Beneficiaries under this Plan,
effective as of the transfer date. Once a Participant has
received a distribution from the Affiliated Plan, it shall be
treated as a Prior Plan for purposes of this Section 12.13.
(b) Prior Plans. This Plan does not accept trustee-to-trustee
transfers from a Prior Plan. However, the Trustee is
authorized to accept as a Rollover Contribution any
contribution that meets the following criteria:
(i) the contribution is made by, or on behalf of, an
Eligible Employee;
(ii) the contributed amounts were distributed from the Prior
Plan as an "eligible rollover distribution" (as defined
in Section 7.05)
(iii) the contribution is made either (a) as a direct rollover
from the Prior Plan to this Plan, or (b) by the Eligible
Employee, within 60 days after the date such
distribution is received by the Eligible Employee;
(iv) if applicable, the spousal consent requirements of
Code Section 417(a)(2) were complied with; and
(v) such Rollover Contribution meets any other conditions as
determined necessary by the Trustee or Committee to
comply with Code Section 408(d)(3).
Rollover Contributions shall be held in the Eligible
Employee's Rollover Contribution Account. The Eligible
Employee is at all times fully vested with respect to his
Rollover Contributions.
(c) As of July 1, 1998, upon the spin-off and transfer of
hourly participants' accounts from the Cornnuts, Inc.
Profit Sharing and Retirement Plan (the "Cornnuts Plan") to
this Plan, each hourly participant of the Cornnuts Plan
shall have an Account in this Plan. The Cornnuts Plan
shall be treated as an Affiliated Plan and this Plan shall
provide, at a minimum, protection for any benefits under
the Affiliated Plan that are required under Code Section
411(d)(6). In the absence of an applicable Participant
election, assets transferred from such an Affiliated Plan
shall be invested in equivalent investment funds under this
Plan. Service with such Affiliated Plan shall be
recognized for purposes of vesting in Company Contributions
under Section 6.02.
12.14 Transfer of Plan Assets to an Affiliated Plan. If a Participant
transfers employment from the Company to an Affiliated Company and
thereafter becomes eligible to participate in an Affiliated Plan, the
assets in his Accounts in the Plan shall be transferred to such
Affiliated Plan in accordance with the terms thereof.
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12.15 Headings. Headings of Articles and Sections of the Plan are inserted
for convenience of reference. They constitute no part of the Plan.
12.16 Payment of Expenses.
(a) Direct charges and expenses arising out of the purchase or
sale of securities, and taxes levied on or measured by such
transactions may be charged against the Account(s) or
Investment Fund for which the transactions took place.
(b) Direct charges or expenses arising out of the establishment
and maintenance of any funding account with an insurance
Company or other financial institution may be charged against
the Account(s) or Investment Fund for which the funding
account is established.
(c) Investment Manager fees arising out of the establishment and
maintenance of any Investment Fund may be charged against the
Investment Fund for which the Investment Manager fees are
incurred.
(d) Trustee fees attributable to the Trust, auditor fees for the
plan, and IRS user fees may be paid directly from the Trust.
The Committee shall determine the manner in which these fees
shall be charged against the Account(s) or Investment Funds
held in the Trust.
(e) Any other charges or expenses relating to the maintenance or
administration of the Plan that are permitted under applicable
law to be paid from the Trust including, but not limited to,
recordkeeping fees, may be paid directly from the Trust. The
Committee shall determine the manner in which these charges
and expenses shall be charged against the Accounts or
Investment Funds held in the Trust.
(f) Any of the expenses in (a)-(e) above may, at the option of
the Company, be paid wholly or partly directly by the
Company.
(g) The Company shall pay all other expenses reasonably
incurred in administering the Plan.
(h) The Committee may authorize additional expenses to be charged
directly from the Trust; provided that such fees are in
compliance with applicable law, are reasonable, and that any
change in fee policy is communicated to Participants in a
timely manner.
12.17 Direct or Indirect Transfer. With respect to any Participant who is
actively employed, the Plan shall accept any "eligible rollover
distribution" (as defined in Section 7.05) from a defined benefit plan,
money purchase pension plan (including a target benefit
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plan), stock bonus plan, profit sharing plan, or a conduit individual
retirement account.
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ARTICLE XIII
CLAIM PROCEDURE
13.01 Initial Determination. The initial determination of a Participant's,
Surviving Spouse's or Beneficiary's eligibility for, and the amount of,
a benefit shall be made by the Administrative Committee, or in its
absence, the Committee which shall mail or deliver to each covered
individual who has filed an effective claim for a benefit a written
statement of the amount of his benefit or a notice of denial of his
claim on or before the 90th day following the Committee's receipt of
such claim. If special circumstances require additional time for
processing the claim, the Administrative Committee, or in its absence,
the Committee may delay issuing its statement or notice for an
additional 90 days provided that the Participant, Surviving Spouse or
Beneficiary is notified of the circumstances necessitating the delay
and the date the Committee expects to render its final opinion. A claim
for benefits is not effective unless filed on forms prescribed by the
Committee. Each notice of whole or partial denial of claimed benefits
shall set forth the specific reasons for the denial, the time within
which an appeal must be made by the Participant, Surviving Spouse or
Beneficiary or his duly authorized representative, and shall contain
such other information as may be required by applicable law. If a
statement or notice is not issued within the prescribed period, the
claim shall be deemed denied.
13.02 Review. Each Participant, Surviving Spouse or Beneficiary whose claim
for benefits has been wholly or partially denied shall have such rights
to review documents and submit comments as applicable law and
regulations of the Committee may provide, and shall also have the right
to request the Committee to review such denial; such request to be made
on forms prescribed by the Committee. A request for review shall be
filed by the Participant, Surviving Spouse or Beneficiary or his duly
authorized representative on or before the 60th day following the,
earlier of the Participant's, Surviving Spouse's or Beneficiary's
receipt of notice of denial of his claim or the expiration of the
prescribed period for issuing a statement of benefits or notice of
denial. The Committee shall issue a written statement on or before the
60th day following its receipt of such request stating the Committee's
decision on review and the reasons therefore, including specific
references to pertinent Plan provisions on which the decision is based,
and any other information required by applicable law. If special
circumstances require additional time for processing such review, the
Committee may delay issuing its decision for an additional 60 days
provided that the Participant, Surviving Spouse or Beneficiary is
notified of such circumstances and the date the Committee expects to
render its final decision. If the decision is not issued within the
prescribed period, the appeal shall be deemed denied.
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ARTICLE XIV
LIMITATION ON BENEFITS
14.01 Code Section 415 Limits.
(a) The following definitions shall be applied in construing
this Section.
(1) Defined Benefit Plan means any defined benefit plan (as
defined in Section 415(k) of the Code) maintained by any
Affiliated Company.
(2) Related Plan means any Defined Contribution Plan (as
defined in Section 415(k) of the Code), other than the
Plan, maintained by any Affiliated Company or any
individual account maintained for voluntary
contributions made by a Participant under a Defined
Benefit Plan.
(3) Total Compensation means all remuneration paid to an
Employee by any Affiliated Company, as determined
pursuant to the provisions of Treasury Regulation
Section 1.415-2(d)(11)(i).
(4) Annual Addition means the sum of the following amounts
credited to a Participant's account for the limitation
year:
(i) employer contributions;
(ii) employee contributions;
(iii) forfeitures; and
(iv) amounts allocated to an individual medical
account, as defined in Section 415(l)(2) of the
Code, which is part of a pension or annuity plan
maintained by the employer and amounts derived
from contributions paid or accrued after December
31, 1985, in taxable years ending after such date,
which are attributable to post-retirement medical
benefits allocated to the separate account of a
key employee, as defined in Section 419A(d)(3) of
the Code, under a welfare benefit fund, as defined
in Section 419(e) of the Code, maintained by the
employer.
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(b) Limitations Applicable to Participants in Defined
Contribution Plans Only.
(i) The Annual Addition credited to a Participant under
the Plan or any Related Plan for any Limitation Year
must not exceed the lesser of (1) $30,000 (or, if
greater, 25% of the defined benefit dollar limitation
set forth in Section 415(b)(1) of the Code as in
effect for the Plan Year) or (2) 25% of the
Participant's Total Compensation for such Limitation
Year.
(ii) Excess Annual Additions. If as a result of the
allocation of forfeitures, a reasonable error in
estimating a Participant's annual compensation, or under
other limited facts and circumstances which the
Commissioner of Internal Revenue finds justified, the
Annual Additions which cause the limitations of Code
Section 415 for the limitation year to be exceeded shall
not be deemed Annual Additions in that limitation year
and shall be treated as follows:
The excess amounts in the Participant's Account
attributable to Supplemental After-Tax Contributions
shall first be returned to the Participant. If
necessary, Company Contributions shall be used to reduce
Company Contributions for the next limitation year (and
succeeding limitation years, as necessary) for that
Participant if that Participant is covered by the Plan
as of the end of the limitation year. However, if that
Participant is not covered by the Plan as of the end of
the limitation year, then the excess amounts shall be
held unallocated in a suspense account for the
limitation year and allocated and reallocated in the
next limitation year to all of the remaining
Participants in the Plan. Furthermore, the excess
amounts must be used to reduce Company Contributions for
the next limitation year (and succeeding limitation
years, as necessary) for all of the remaining
Participants in the Plan. If a suspense account is in
existence at any time during the limitation year in
accordance with this Section, investment gains and
losses and other income shall be allocated to the
suspense account. To the extent that investment losses
are allocated to the suspense account, the entire amount
allocated to Participants from the suspense account,
including any such gains or other income or less any
losses, is considered as the Annual Addition.
(c) In addition to other limitations set forth in the Plan and
notwithstanding any other provisions of the Plan,
contributions (and contributions to all other Defined
Contribution Plans required to be aggregated under this Plan
under the provisions of Section 415 of the Code), shall not be
made in an amount in excess of the amount permitted under
Section 415 of the Code.
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14.02 Code Section 416 Limits. This Section is intended to ensure the Plan's
compliance with Section 416 of the Code. It shall be applicable to
Participants for any Plan Year with respect to which the Plan is
top-heavy.
(a) Definitions. The following definitions shall be applied in
construing this Section.
(i) Top-Heavy Plan means any plan maintained by the
Company or an Affiliated Company if, as of the
Determination Date, the Top-Heavy Ratio for the plan
and all other plans in the Aggregation Group exceeds
60%. The plan will be deemed a "super top-heavy plan"
if, as of the Determination Date, the Plan would meet
the test specified above for being a Top-Heavy Plan
if 90% were substituted for 60% in each place it
appears in this subsection (i).
(ii) Determination Date means the last day of the preceding
Plan Year (or, in the case of the first plan year of a
plan, the last day of such Plan Year). When plan
aggregation is required, calculation of accrued benefits
as of the determination dates which fall within the same
calendar year will be used.
(iii) Valuation Date means the same date as the
Determination Date.
(iv) Key Employee means each Employee or former Employee who
is, at any time during the Plan Year ending on the
"Determination Date", or was, during any one of the four
Plan Years preceding the Plan Year ending on the
Determination Date, any one or more of the following:
(1) An officer of the Company or an Affiliated Company
having an annual compensation greater than 50% of
the dollar limitation in effect under Code Section
415(b)(1)(A) for any Plan
Year;
(2) One of 10 Employees having annual compensation
from the Company or an Affiliated Company of more
than the dollar limitation in effect under Code
Section 415(c)(1)(A) and owning (or considered as
owning within the meaning of Code Section 318)
both the largest interests in the Company or an
Affiliated Company and a 1/2% ownership interest;
(3) Any person owning (or considered as owning within
the meaning of Code Section 318) more than 5% of
the outstanding stock of the Company (or stock
having more
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than 5% of the total combined voting power of all
stock of the Company); or
(4) Any person who has annual compensation of more
than $150,000 and would be described in subsection
(3) above, if "1%" was substituted for "5%".
For purposes of determining whether a person is an officer in
subsection (1) above, in no event will more than 50 Employees
be considered Key Employees solely by reason of officer
status. In addition, persons who are merely nominal officers
will not be treated as Key Employees solely by reason of their
titles as officers. For purposes hereof, compensation is as
defined in Section 1.415-2(d) of the Income Tax Regulations.
(v) Non-Key Employee means any Participant in the Plan
(including a beneficiary of such Participant) who is not
a Key Employee.
(vi) Aggregation Group means all plans that are subject to
Required Aggregation (in accordance with subsection
14.02(b). The Aggregation Group may also include plans
subject to Permissive Aggregation (in accordance with
subsection 14.02(c)), if such aggregation would
eliminate the status of plans in the Aggregation Group
as Top-Heavy Plans.
(b) Required Aggregation. This Plan and all other qualified
plans, including any terminated plans, maintained by the
Company or an Affiliated Company which include a Key
Employee must be aggregated to determine if the group as a
whole is top-heavy. In addition, each other qualified plan
maintained by the Company or an Affiliated Company which
enables any plan in which a Key Employee is a Participant
to meet the requirements of Sections 410(a)(4) and 410 of
the Code must be aggregated.
(c) Permissive Aggregation. The Company may include other plans
maintained by the Company or an Affiliated Company which when
considered as a group with the required aggregation group,
would continue to satisfy the requirements of Sections
401(a)(4) and 410 of the Code, to determine if the group as a
whole is top-heavy, provided such plans are comparable in
benefits or contributions.
(d) Top-Heavy Ratio.
(i) The top-heavy ratio is a fraction, the numerator of
which is the sum of account balances under the
defined contribution plans in the Aggregation Group
for all Key Employees and the present value of
accrued benefits under the Defined Benefit Plans for
all Key Employees, and the denominator of which is
the sum of the
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account balances under the defined contribution plans in
the Aggregation Group for all Participants and the
present value of accrued benefits under the defined
benefit plans in the Aggregation Group for all
Participants. Both the numerator and denominator are
adjusted to include any distributions made in the
five-year period ending on the "Determination Date" and
any contributions due but unpaid as of the Determination
Date.
(ii) The value of account balances and the present value of
accrued benefits will be determined as of the most
recent Valuation Date. The account balances and accrued
benefits of a Participant who is not a Key Employee but
who was a Key Employee in a prior year will be
disregarded. The calculation of the top-heavy ratio, and
the extent to which distributions, rollovers and
transfers are taken into account will be made in
accordance with Section 416 of the Code and the
regulations thereunder.
(iii) If any Participant has not performed an Hour of Service
for the Company at any time during the five-year period
ending on the Determination Date, the account of such
Participant shall not be taken into account.
(e) Minimum Vesting. For any Plan Year in which the Plan is a
top-heavy plan as determined pursuant to Section 416 of the
Code, a Participant will have a nonforfeitable right to a
percentage of the Participant's Accounts derived from Company
Contributions as set forth below if such schedule is more
favorable to the Participant than the vesting schedule under
Section 7.02.
Years of Service Completed
For Vesting Purposes Vested Interest
Less than two 0%
Two but less than three 20%
Three but less than four 40%
Four but less than five 60%
Five or more 100%
The above vesting schedule applies to all benefits within the
meaning of Section 411 (a)(7) of the Code, including benefits
accrued before the effective date of Section 416 of the Code
and benefits accrued before the Plan became top-heavy.
However, any Participants who has completed at least three (3)
years of service for vesting purposes as of the last day of
the last Plan Year (a) before the Plan became top-heavy or (b)
in which the Plan is top-heavy, shall have the right to elect
to continue to have the vesting schedule in effect on the last
day of such Plan Year applied to all of his benefits under the
Plan. Further, no reduction in vested benefits may
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occur in the event the Plan's status as top-heavy changes for
any Plan Year.
(f) Minimum Required Contribution. It is intended that the
Company or an Affiliated Company will meet the minimum
contribution requirements of Section 416(c) of the Code by
providing a minimum contribution (which may include
forfeitures otherwise allocable) without regard to any
Social Security contributions for such Plan Year for each
Participant who is a non-key employee in an amount equal to
at least 3% of such Participant's compensation (as defined
in Section 1.415-2(d) of the Income Tax Regulations) for
such Plan Year. Such 3% minimum contribution requirement
shall be increased to 4% for any year in which the Company
or an Affiliated Company also maintains a defined benefit
pension plan if necessary to avoid the application of
Section 416(h)(1) of the Code, relating to the special
adjustments to Section 415 limits of the Code for top-heavy
plans, if the adjusted limitations of Section 416(h)(1)
would otherwise be exceeded if such minimum contribution
were not so increased. The minimum contribution required
shall be made to any non-key employee who is still employed
on the last day of the plan year regardless as to the
number of hours of Service performed during the year and
regardless of the employee's level of compensation.
A non-key employee who is also covered under a defined benefit
plan that is part of the same aggregation group shall receive
his minimum benefit under the defined benefit plan, offset by
the actuarially determined value of the minimum contribution
made under this Plan.
If for the Plan Year the Plan becomes a super top-heavy plan,
then the denominator of both the defined contribution plan
fraction and the defined benefit plan fraction shall be
calculated as set forth in Section 14.01(b) for the limitation
year ending in such Plan Year by substituting "1.0" for "1.25"
in each place such figure appears.
The percentage minimum contribution required hereunder shall
in no event exceed the percentage contribution made for the
Key Employee for whom such percentage is the highest for the
Plan Year after taking into account contributions or benefits
under other qualified plans in this Plan's aggregation group
providing no other defined benefit plan uses the defined
contribution plan to satisfy Code Section 401 (a) as provided
in Section 416(c)(2)(B)(ii) of the Code.
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SCHEDULE A
After- Pre- 25% Effective Date
Co./Division Participating Unit Location Tax Tax Match (if after 1/1/92)
------------ ------------------ -------- --- --- ----- -----------------
Biscuit NUH Addison, IL Yes Yes Yes
Biscuit Sales BCT #300 Addison, IL Yes Yes Yes
Biscuit Sales NUH Albuquerque, NM Yes Yes Yes
Biscuit NUH Altoona, PA Yes Yes Yes
Biscuit NUH Amherst, NY Yes Yes Yes
Biscuit Sales BCT #16 Amherst, NY Yes Yes Yes
Biscuit Sales IBT #952 Anaheim, CA Yes Yes Yes 5/96
Biscuit NUH Asheville, NC Yes Yes Yes
Biscuit Production IAM #2 Atlanta, GA Yes Yes Yes 1/95
Biscuit Production IBEW #613 Atlanta, GA Yes Yes Yes 1/95
Biscuit Production BCT #42 Atlanta, GA Yes Yes Yes
Biscuit NUH Atlanta, GA Yes Yes Yes
Biscuit NUH Aurora, CO Yes Yes Yes
Biscuit BCT #26 Aurora, CO Yes Yes Yes
Biscuit Sales IBT #570 Baltimore, MD Yes Yes Yes 11/1/96
Biscuit Sales NUH Baltimore, MD Yes Yes Yes
Biscuit Sales NUH Bangor, ME Yes Yes Yes
Biscuit IBT #734 Bedford Park, IL No No No
Biscuit Sales RWDSU #441 Birmingham, AL Yes Yes Yes 2/1/97
Biscuit Sales NUH Birmingham, AL Yes Yes Yes
Biscuit Sales IBT #483 Boise, ID Yes Yes No 11/1/96
Biscuit NUH Boise, ID Yes Yes Yes
Biscuit NUH Boston, MA Yes Yes Yes
Biscuit Sales BCT #300 Broadview, IL Yes Yes Yes
Biscuit NUH Brockton, MA Yes Yes Yes
Biscuit NUH Buena Park, CA No No No
Biscuit Production BCT #83 Buena Park, CA Yes Yes Yes
57
After- Pre- 25% Effective Date
Co./Division Participating Unit Location Tax Tax Match (if after 1/1/92)
------------ ------------------ -------- --- --- ----- -----------------
Biscuit Production IBT #952 Buena Park, CA Yes Yes Yes 5/96
Foods Production BCT #16 Buffalo, NY Yes Yes Yes
Foods Production IUOE #71AB Buffalo, NY Yes Yes Yes 6/1/95
Foods Production IAM #330 Buffalo, NY Yes Yes Yes 1/1/95
Biscuit NUH Buffalo, NY Yes Yes Yes
Biscuit Sales NUH Burlington, VT Yes Yes Yes
Biscuit Sales NUH Cairo, IL Yes Yes Yes
Foods Production NUH Cambridge, MD Yes Yes Yes
Biscuit Sales NUH Casper, WY Yes Yes Yes
Biscuit NUH Cedar Rapids, IA Yes Yes Yes
Biscuit IBT #238 Cedar Rapids, IA Yes Yes Yes
Biscuit Sales NUH Charleston, SC Yes Yes Yes
Biscuit Sales NUH Charlotte, NC Yes Yes Yes
Biscuit Sales NUH Chattanooga, TN Yes Yes Yes 5/96
Biscuit IBT #515 Chattanooga, TN No No No
Biscuit NUH Chesapeake, VA Yes Yes Yes
Biscuit Production IUOE #399 Chicago, IL Yes Yes Yes
Biscuit Production IAM #8 Chicago, IL Yes Yes Yes 1/95
Biscuit Production BCT #300 Chicago, IL Yes Yes Yes
Biscuit NUH Chicago, IL Yes Yes Yes
Biscuit NUH Cincinnati, OH Yes Yes Yes
Biscuit NUH Cleveland, OH Yes Yes Yes
Biscuit Sales BCT #26 Colorado Springs, CO Yes Yes Yes
Biscuit NUH Colorado Springs, CO Yes Yes Yes
Biscuit Sales NUH Columbia, SC Yes Yes Yes
Biscuit Sales NUH Columbus, OH Yes Yes Yes
Biscuit Sales IBT #163 Compton, OH Yes Yes Yes 5/96
Biscuit Sales NUH Corpus Christi, TX Yes Yes Yes
Biscuit BCT #11 Corpus Christi, TX Yes Yes Yes
Biscuit BCT #163 Corpus Christi, TX Yes Yes Yes
58
After- Pre- 25% Effective Date
Co./Division Participating Unit Location Tax Tax Match (if after 1/1/92)
------------ ------------------ -------- --- --- ----- -----------------
Biscuit NUH Culver City, CA Yes Yes Yes
Biscuit IBT #63 Culver City, CA Yes Yes Yes
Biscuit NUH Dallas, TX Yes Yes Yes
Field IBT #767 Dennison, TX No No No
Biscuit Sales BCT #72 Denver, CO Yes Yes Yes
Biscuit NUH Denver, CO Yes Yes Yes
Biscuit NUH Des Moines, IA Yes Yes Yes
Biscuit IBT #147 Des Moines, IA No No No
Biscuit NUH Des Moines, IA Yes Yes Yes
Biscuit NUH Detroit, MI Yes Yes Yes
Biscuit Sales NUH Dothan, AL Yes Yes Yes
Biscuit Sales NUH Duncan, SC Yes Yes Yes
Biscuit NUH Dunellen, NJ Yes Yes Yes
Biscuit IBT #560 Dunellen, NJ Yes Yes Yes
Biscuit NUH Earth City, MO Yes Yes Yes
Biscuit IBT #688 Earth City, MO Yes No Yes
Biscuit Sales IBT #560 Edison, NJ Yes Yes Yes 1/95
Biscuit Sales NUH El Paso, TX Yes Yes Yes
Biscuit Sales NUH Erie, PA Ye Yes Yes
Biscuit NUH Eugene, OR Yes Yes Yes
Biscuit IBT#57 Eugene, OR Yes Yes Yes
Biscuit Sales NUH Evansville, IN Yes Yes Yes
Biscuit Sales IBT #33 Fairfax, VA No No No 5/96
Biscuit Production IUOE #68-68A Fairlawn, NJ Yes Yes Yes
Biscuit Production BCT #719 Fairlawn, NJ Yes Yes Yes
Biscuit IBT #807 Fairlawn, NJ Yes Yes Yes
Biscuit Sales IBT #116 Fargo, ND Yes Yes Yes 1/1/97
Biscuit NUH Fargo, ND Yes Yes Yes
Biscuit Sales IBT #51 Farmington, MI Yes Yes Yes 6/1/96
Biscuit NUH Farmington, MI Yes Yes Yes
59
After- Pre- 25% Effective Date
Co./Division Participating Unit Location Tax Tax Match (if after 1/1/92)
------------ ------------------ -------- --- --- ----- -----------------
Biscuit NUH Flint, MI Yes Yes Yes
Biscuit IBT #332 Flint, MI No No No
Biscuit Sales NUH Ft. Lauderdale, FL Yes Yes Yes
Biscuit NUH Ft. Wayne, IN Yes Yes Yes
Biscuit Sales IBT #414 Ft. Wayne, IN Yes Yes No 6/1/96
Biscuit Sales IBT #559 Glastonbury, CT Yes Yes Yes 1/1/96
Biscuit NUH Glastonbury, CT Yes Yes Yes
Biscuit NUH Glenview, IL Yes Yes Yes
Biscuit BCTU #300 Glenview, IL Yes Yes Yes
Biscuit Sales NUH Goldsboro, NC Yes Yes Yes
Biscuit NUH Green Bay, WI Yes Yes Yes
Biscuit Sales IBT #75 Green Bay, WI Yes Yes Yes 8/1/96
Biscuit Sales NUH Greensboro, NC Yes Yes Yes
Biscuit NUH Greenville, SC Yes Yes Yes
Biscuit Sales IBT #114 Hamilton, OH Yes Yes Yes
Biscuit NUH Hamilton, OH Yes Yes Yes
Biscuit NUH Hayword, CA Yes Yes Yes
Biscuit IBT #70 Hayword, CA No No No
Biscuit IBT #853 Hayword, CA No No No
Biscuit Sales IBT #2 Helena, MT Yes No Yes
Biscuit NUH Helena, MT Yes Yes Yes
Biscuit NUH Henrietta, NY Yes Yes Yes
Biscuit IBT #791 Henrietta, NY Yes Yes Yes
PLS RWDSU #82 Holland, MI Yes Yes Yes 50%
LS NUH Holland, MI Yes Yes Yes 50%
Biscuit Sales NUH Honolulu, HI Yes Yes Yes
Biscuit Sales IBT #463 Horsham, PA Yes Yes No 6/1/95
Biscuit NUH Horsham, PA Yes Yes Yes
Biscuit Production MILL #2232 Houston, TX Yes Yes Yes
Biscuit Production IBEW #716 Houston, TX Yes Yes Yes
60
After- Pre- 25% Effective Date
Co./Division Participating Unit Location Tax Tax Match (if after 1/1/92)
------------ ------------------ -------- --- --- ----- -----------------
Biscuit Production BCT #163 Houston, TX Yes Yes Yes
Biscuit IBT #988 Houston, TX Yes Yes Yes
Biscuit NUH Houston, TX Yes Yes Yes
Biscuit Sales NUH Huntington, WV Yes Yes Yes
Foods Production UFCW #700 Indianapolis, IN Yes Yes No 6/1/96
Biscuit Sales IBT #135 Indianapolis, IN Yes Yes Yes 2/1/97
Biscuit Sales IBT #745 Irving, TX Yes Yes Yes 4/95
Biscuit NUH Irving, TX Yes No Yes
Biscuit Sales NUH Jacksonville, FL Yes Yes Yes
Biscuit NUH Kansas City, MO Yes Yes Yes
FSD NUH Kent, WA No No No
Biscuit NUH Kent, WA Yes Yes Yes
Biscuit IBT #117 Kent, WA Yes Yes Yes
Biscuit IBT #174 Kent, WA Yes Yes Yes
Biscuit Sales NUH LaCrosse, WI Yes Yes Yes
Biscuit Sales NUH Lafayette, LA Yes Yes Yes
Biscuit Sales NBC Landover, MD Yes Yes Yes
Biscuit NBC Lansing, MI Yes Yes Yes
Biscuit Sales IBT #14 Las Vegas, NV Yes Yes Yes 5/96
Biscuit NUH Las Vegas, NV Yes Yes Yes
Biscuit Sales IBT #669 Latham, NY Yes Yes Yes 8/1/94
Biscuit NUH Latham, NY Yes Yes Yes
Biscuit Sales IBT #878 Little Rock, AK Yes Yes Yes
Biscuit NUH Little Rock, AK Yes Yes Yes
Biscuit NUH Los Angeles, CA Yes Yes Yes
Biscuit Sales IBT #89 Louisville, KY Yes Yes Yes
Biscuit Sales NUH Louisville, KY Yes Yes Yes
Biscuit Sales NUH Lubbock, TX Yes Yes Yes
Biscuit Sales NUH Macedonia, OH Yes Yes Yes
Biscuit Sales IBT #52 Macedonia, OH Yes Yes Yes
61
After- Pre- 25% Effective Date
Co./Division Participating Unit Location Tax Tax Match (if after 1/1/92)
------------ ------------------ -------- --- --- ----- -----------------
Biscuit NUH Macon, GA Yes Yes Yes
Biscuit IBT #528 Macon, GA No No No
Biscuit NUH Mansfield, Yes Yes Yes
Biscuit NUH Marlton Yes Yes Yes
Biscuit Sales BCT #719 Maspeth, NY (Garage) Yes Yes Yes
Biscuit NUH Maumelle Yes Yes Yes
Biscuit IBT #878 Maumelle Yes Yes Yes
Biscuit NUH Medford, OR Yes Yes Yes
Biscuit IBT #962 Medford, OR Yes Yes Yes
Biscuit NUH Melbourne, FL Yes Yes Yes
Biscuit IBT #984 Memphis, TN Yes Yes Yes
Biscuit NUH Memphis, TN Yes Yes Yes
Biscuit NUH Meridian, MS Yes Yes Yes
Biscuit NUH Methuen, MA Yes Yes Yes
Biscuit IBT #686 Methuen, MA Yes Yes Yes
Biscuit NUH Miami, FL Yes Yes Yes
Biscuit NUH Milpitas, CA Yes Yes Yes
Biscuit IBT #078 Milpitas, CA Yes Yes Yes
Biscuit IBT #296 Milpitas, CA Yes Yes No
Biscuit NUH Minneapolis, MN (East and West) Yes Yes Yes
Biscuit Sales IBT #289 Minneapolis, MN (East and West) Yes Yes Yes 1/1/96
Biscuit NUH Modesto, CA Yes Yes Yes
Biscuit Sales NUH Montgomery, AL Yes Yes Yes
Biscuit NUH Montgomery, NY Yes Yes Yes
Biscuit IBT #338 Montgomery, NY Yes Yes Yes
Biscuit IBT #64 Montgomery, NY Yes Yes Yes
Biscuit IBT #26 Monticello, NY Yes Yes Yes
Biscuit IUOE #399 Naperville, IL Yes No Yes
Biscuit AFGM #343 Naperville, IL Yes No Yes
Biscuit IAM #1202 Naperville, IL Yes No Yes
62
After- Pre- 25% Effective Date
Co./Division Participating Unit Location Tax Tax Match (if after 1/1/92)
------------ ------------------ -------- --- --- ----- -----------------
Biscuit Sales NUH Nashville, TN Yes Yes Yes
Biscuit NUH New Bedford, MA Yes Yes Yes
Biscuit Production IBT #344 New Berlin, WI Yes Yes Yes
Biscuit NUH New Berlin, WI Yes Yes Yes
Biscuit Sales BCT #719 New Hyde Park, NY Yes Yes Yes
Biscuit IBT #807 New Hyde Park, NY No No No
Biscuit Sales IBT #270 New Orleans, LA Yes No Yes
Biscuit NUH New Orleans, LA Yes Yes Yes
Biscuit Production BCT #357 Niagara Falls, NY Yes Yes Yes
Biscuit Production F&O #90 Niagara Falls, NY Yes Yes Yes 50%
Biscuit Production IBT #586 Niagara Falls, NY Yes Yes No 1/?/95
Biscuit BCT #1 Niles, IL Yes Yes Yes
Biscuit IBT #734 Niles, IL No No No
Biscuit Sales BCT #42 Norcross, GA Yes Yes Yes
Biscuit NUH Norcross, GA Yes Yes Yes
Biscuit Sales IBT #64 North Smithfield, RI Yes Yes Yes 1/1/96
Biscuit NUH North Smithfield, RI Yes Yes Yes
Biscuit IBT #64 North Smithfield, RI Yes Yes Yes
Stella BCT #50 NY/NJ Yes Yes Yes
Stella IBT #550 NY/NJ Yes Yes Yes
Biscuit Sales BCT #719 Oakdale, NY Yes Yes Yes
Biscuit NUH Oakdale, NY Yes Yes Yes
Biscuit BCT #125 Oakdale, NY Yes Yes Yes
Biscuit Sales NUH Oklahoma City, OK Yes Yes Yes
Biscuit Sales NUH Olean, NY Yes Yes Yes
Biscuit IBT #554 Omaha, NE No No No
Biscuit NUH Ontario, CA Yes Yes Yes
Biscuit IBT #166 Ontario, CA Yes Yes Yes
Biscuit IBT #952 Ontario, CA Yes Yes Yes
Biscuit Sales NUH Orlando, FL Yes Yes Yes
63
After- Pre- 25% Effective Date
Co./Division Participating Unit Location Tax Tax Match (if after 1/1/92)
------------ ------------------ -------- --- --- ----- -----------------
Biscuit IBT #186 Oxnard, CA No No No
Biscuit IBT #627 Peoria, IL No No No
Biscuit Production BCT #492 Philadelphia, PA Yes Yes Yes
Biscuit NUH Philadelphia, PA Yes Yes Yes
Biscuit NUH Phoenix, AZ Yes Yes Yes
Biscuit IBT #104 Phoenix, AZ Yes Yes No
Biscuit Production IUOE #95-95A Pittsburgh, PA Yes Yes Yes
Biscuit Production BCT #12-A Pittsburgh, PA Yes Yes Yes
Biscuit NUH Pittsburgh, PA Yes Yes Yes
Biscuit NUH Pleasanton, CA Yes Yes Yes
Biscuit BCT #719 Pleasantville, NY Yes Yes Yes
Biscuit Sales NUH Portland, OR/ME Yes Yes Yes
Biscuit Production IAM #63 Portland, OR Yes Yes Yes 1/95 ?
Biscuit Production IUOE #87 Portland, OR Yes Yes Yes 1/95 ?
Biscuit Production BCT #364 Portland, OR Yes Yes Yes
Biscuit IBT #206 Portland, OR Yes Yes No
Biscuit IBT #305 Portland, OR Yes Yes Yes
Biscuit IBT #962 Portland, OR Yes Yes Yes
Biscuit NUH Portland, OR Yes Yes Yes
Biscuit Sales NUH Portsmouth, VA Yes Yes Yes
Biscuit Sales NUH Quincy, IL Yes Yes Yes
Biscuit IBT #891 Richland, MS Yes Yes Yes
Biscuit NUH Richland, MS No No No
Biscuit Sales NUH Richmond, VA Yes Yes Yes
Biscuit Production BCT #358 Richmond, VA Yes Yes Yes
Biscuit Sales BCT #719 Ridgewood, NY Yes Yes Yes
Biscuit IBT #807 Ridgewood, NY No No No
Biscuit Sales IBT #166 Riverside, Va Yes Yes Yes 5/96
Biscuit Sales NUH Roanoke, VA Yes Yes Yes
Biscuit NUH Rock Island, IL No No No
64
After- Pre- 25% Effective Date
Co./Division Participating Unit Location Tax Tax Match (if after 1/1/92)
------------ ------------------ -------- --- --- ----- -----------------
Biscuit IBT #137 Sacramento, CA No No No
Biscuit IBT #150 Sacramento, CA No No No
Biscuit ILWU #17 Sacramento, CA No No No
Biscuit NUH Sacramento, CA Yes Yes Yes
Biscuit Sales NUH Salt Lake City, UT Yes Yes Yes
Biscuit Sales NUH San Antonio, TX Yes Yes Yes
Biscuit BCT #111 San Antonio, TX Yes Yes Yes
Biscuit Sales IBT #683 San Diego, CA Yes Yes Yes 5/96
Biscuit NUH San Francisco, CA Yes Yes Yes
Biscuit IBT #85 San Francisco, CA Yes Yes No
Biscuit IBT #853 San Francisco, CA No No No
Biscuit IBT #860 San Francisco, CA No No No
Biscuit NUH San Jose, CA Yes Yes No
Biscuit IBT #296 San Jose, CA No No No
Biscuit Sales NUH Savannah, GA Yes Yes Yes
Biscuit NUH Scranton, PA Yes Yes Yes
Biscuit NUH Seattle Yes Yes Yes
Biscuit IBT #962 Seattle Yes Yes Yes
Biscuit Sales BCT #719 Secaucus, NJ Yes Yes Yes
Biscuit NUH Secaucus, NJ Yes Yes Yes
SPD UFCW #880 Sevil Plt. No No No
Biscuit Sales NUH Sheffield, AL Yes Yes Yes
Biscuit Sales IBT #568 Shreveport, LA Yes No Yes
Biscuit NUH Shreveport, LA Yes Yes Yes
Biscuit Sales NUH Sioux Falls, SD Yes Yes Yes
Biscuit NUH Smithfield, RI Yes Yes Yes
Biscuit IBT #64 Smithfield, RI Yes Yes Yes
Biscuit Sales IBT #690 Spokane, WA Yes Yes Yes 7/1/94
Biscuit NUH Spokane, WA Yes Yes Yes
Biscuit NUH Springfield Yes Yes Yes
65
After- Pre- 25% Effective Date
Co./Division Participating Unit Location Tax Tax Match (if after 1/1/92)
------------ ------------------ -------- --- --- ----- -----------------
Biscuit IBT #823 Springfield Yes Yes Yes
Biscuit IBT #688 St. Louis, MO Yes No Yes 8/1/92
Biscuit Sales NUH St. Louis, MO Yes Yes Yes
Biscuit Sales IBT #145 Stamford, CT Yes Yes Yes 1/1/96
Biscuit IBT #559 Stamford, CT Yes Yes Yes
Foods Production IBT #695 Stoughton, WI Yes Yes Yes 5/1/95 or 7/1/92 ?
PLS Local #26 Suffolk, VA Yes Yes Yes 50% 1/96
Biscuit IBT #182 Syracuse, NY Yes Yes Yes
Biscuit NUH Tacoma, WA Yes Yes Yes
Biscuit Sales IBT #79 Tampa, FL Yes Yes Yes 4/1/95
Biscuit IBT #79 Tampa, FL Yes Yes Yes
Biscuit Sales IBT #560 Teterboro, NJ Yes Yes Yes 1/1/95
Biscuit NUH Teterboro, NJ Yes Yes Yes
Biscuit Sales NUH Thomasville, GA Yes Yes Yes
Biscuit Production AFGM #58 Toledo, OH Yes Yes Yes
Biscuit NUH Toledo, OH Yes Yes Yes
Biscuit NUH Tolleson Yes Yes No
Biscuit IBT #104 Tolleson Yes Yes No
Biscuit IBT #104 Tucson, AZ Yes Yes No
Biscuit NUH Tucson, AZ Yes Yes Yes
Biscuit Sales NUH Tulsa, OK Yes Yes Yes
Biscuit Sales IBT #745 Tyler, TX Yes No Yes
Biscuit NUH Tyler, TX Yes Yes Yes
PL NUH Urbana, OH Yes Yes Yes 50% 7/1/98
Biscuit Sales IBT #186 Valencia, CA Yes Yes Yes 5/96
Biscuit Sales NUH Waco, TX Yes Yes Yes
Biscuit Sales IBT #697 Washington, PA Yes Yes Yes
Biscuit NUH Washington, PA Yes Yes Yes
Biscuit NUH Westbrook Yes Yes Yes
Biscuit NUH Westbury, NY Yes Yes Yes
66
After- Pre- 25% Effective Date
Co./Division Participating Unit Location Tax Tax Match (if after 1/1/92)
------------ ------------------ -------- --- --- ----- -----------------
Biscuit BCT #719 Westbury, NY Yes Yes Yes
Biscuit IBT #807 Westbury, NY No No No
Biscuit NUH Williamsport, MD Yes Yes Yes
Biscuit NUH Wilmington, NC Yes Yes Yes
Biscuit Production NUH Wrighstown, WI Yes Yes Yes
Biscuit NUH Wyomissing, PA Yes Yes Yes 50%
67
SCHEDULE C
Location Effective Date
-------- --------------
Fort Smith, AR NUH May 1, 1998
Suffolk, VA UAW August 1, 1998
Greenfield, CA NUH September 1, 1998
Minneapolis Plant AFGM October 1, 1998
Chattanooga, TN NUH January 1, 1999
Buena Park, CA IUOE March 1, 1999
Fairfax, VA NUH July 1, 1999
Grand Rapids, MI NUH July 1, 1999
Wyomissing, PA NUH October 1, 1999
Pensacola, FL NUH February 1, 2000
Fresno, CA NUH March 1, 2000
Endicott, NY NUH April 1, 2000
Harrisburg, PA NUH July 1, 2000
Wichita, KS NUH January 1, 2001
Omaha, NE NUH January 1, 2001
Landover, MD NUH January 1, 2001
Salisbury, MD NUH March 1, 2001
Endicott, NY NUH April 1, 2001
Knoxville, TN NUH July 1, 2001
Bethlehem, PA NUH August 1, 2001
EX-5.1
7
y53486ex5-1.txt
OPINION RE LEGALITY
1
Exhibit 5.1
[Letterhead of Hunton & Williams]
October 9, 2001
The Board of Directors
Kraft Foods Inc.
Three Lakes Drive
Northfield, Illinois
Kraft Foods Inc.
Registration of Shares for the Kraft Foods Thrift Plan,
the Kraft Foods TIP Plan, the Nabisco, Inc. Capital Investment Plan
and the Nabisco, Inc. Employee Savings Plan
Ladies and Gentlemen:
We have acted as counsel to Kraft Foods Inc., a Virginia corporation (the
"Company"), in connection with the preparation and filing of a registration
statement on Form S-8 under the Securities Act of 1933, as amended, with respect
to 62,000,000 shares of the Company's Class A common stock (the "Shares"),
together with an indeterminate amount of interests (the "Interests"), to be
offered pursuant to the Kraft Foods Thrift Plan (the "Thrift Plan"), the Kraft
Foods TIP Plan (the "TIP Plan" and together with the Thrift Plan, the "Kraft
Plans"), the Nabisco, Inc. Capital Investment Plan (the "CIP Plan") and the
Nabisco, Inc. Employee Savings Plan (the "ESP Plan" and together with the CIP
Plan, the "Nabisco Plans").
In rendering this opinion, we have relied upon, among other things, our
examination of the Kraft Plans and the Nabisco Plans and such records of the
Company and its subsidiaries and certificates of its officers and of public
officials as we have deemed necessary.
Based upon the foregoing and the further qualifications stated below, we
are of the opinion that:
1. the Company is duly incorporated, validly existing and in good
standing under the laws of the Commonwealth of Virginia; and
2. the Interests, when issued in accordance with the terms of the
Thrift Plan, the TIP Plan, the CIP Plan or the ESP Plan, as the case may be,
will be legally issued, fully paid and non-assessable and will constitute the
binding obligations of the Thrift Plan, the TIP Plan, the CIP Plan or the ESP
Plan, as the case may be.
We hereby consent to the filing of this opinion with the Securities and
Exchange Commission as an exhibit to such registration statement.
Very truly yours,
/s/ Hunton & Williams
EX-23.2
8
y53486ex23-2.txt
CONSENT OF PRICEWATERHOUSECOOPERS LLP
1
Exhibit 23.2
CONSENT OF PRICEWATERHOUSECOOPERS LLP
INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 of our report dated January 29, 2001 relating to the
combined financial statements and our report dated March 16, 2001 relating to
the financial statement schedule of Kraft Foods Inc., which appear in the
Current Report on Form 8-K of Kraft Foods Inc. dated August 10, 2001. We also
consent to the incorporation by reference in this Registration Statement of our
reports dated May 30, 2001 relating to the financial statements, which appear in
the Annual Reports of the Kraft Foods Thrift Plan and the Kraft Foods Employee
Thrift-Investment Plan (now known as the Kraft Foods TIP Plan) on Forms 11-K for
the year ended December 31, 2000. We also consent to the incorporation by
reference in this Registration Statement of our reports dated June 15, 2001
relating to the financial statements, which appear in the Annual Reports of the
Nabisco, Inc. Capital Investment Plan and the Nabisco, Inc. Employee Savings
Plan on Forms 11-K for the year ended December 30, 2000.
/S/ PRICEWATERHOUSECOOPERS LLP
--------------------------------
PRICEWATERHOUSECOOPERS LLP
Chicago, Illinois
October 9, 2001
EX-23.3
9
y53486ex23-3.txt
CONSENT OF DELOITTE AND TOUCHE LLP
1
Exhibit 23.3
CONSENT OF DELOITTE & TOUCHE LLP, INDEPENDENT AUDITORS
We consent to the incorporation by reference in this Registration
Statement of Kraft Foods Inc. Form S-8 dated October 9, 2001 of our report dated
February 2, 2000 on our audits of the consolidated financial statements of
Nabisco Holdings Corp. as of December 31, 1998 and 1999 and for the three years
ended December 31, 1999 appearing in the Prospectus dated June 12, 2001,
furnished to the Securities and Exchange Commission on August 10, 2001 as an
exhibit to Kraft Foods' Current Report on Form 8-K. We also consent to the
incorporation by reference of our reports dated June 23, 2000 relating to the
financial statements which appear in the Annual Reports of the Nabisco, Inc.
Capital Investment Plan and the Nabisco, Inc. Employee Savings Plan on Forms
11-K for the year ended December 30, 2000.
/s/ DELOITTE & TOUCHE LLP
-----------------------------
DELOITTE & TOUCHE LLP
Parsippany, New Jersey
October 9, 2001