1993
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
(Mark One)
/x/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1993
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
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Commission File Number 1-4710
Whitman Corporation
(Exact name of registrant as specified in its charter)
Delaware 36-607657
- ------------------------------- ---------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
3501 Algonquin Road, Rolling Meadows, Illinois 60008
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (708) 818-5000
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange on
Title of each class which registered
- ------------------------------- ------------------------
Common Stock, without par value New York Stock Exchange
Chicago Stock Exchange
Pacific Stock Exchange
Preferred Share Purchase Rights New York Stock Exchange
Chicago Stock Exchange
Pacific Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
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Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form
10-K or any amendment to this Form 10-K. [x]
As of February 28, 1994, the aggregate market value of the registrant's
common stock held by non-affiliates was $1,694.4 million. The number of
shares of common stock outstanding at that date was 105,898,919 shares.
DOCUMENTS INCORPORATED BY REFERENCE
Part Item
-------- --------
1. Whitman Corporation 1993 Annual Report to
Shareholders (Exhibit 13) I, II 1,5,6,7,8
2. Whitman Corporation definitive proxy
statement dated March 18, 1994 for the 1994
Annual Meeting of Shareholders. III 10,11,12
PART I
Item 1. Business.
GENERAL
Whitman Corporation ("Whitman") is engaged in three distinct businesses:
Pepsi-Cola and other non-alcoholic beverage products, Midas automotive
services, and Hussmann refrigeration systems and equipment.
Prior to 1968, Whitman's only substantial business was the Illinois
Central Railroad. Between 1968 and 1986, Whitman effected a series of
acquisitions aimed at diversifying beyond the railroad business, including
Pepsi-Cola General Bottlers in 1970 and Midas in 1972. In 1978, Pet
Incorporated, together with its subsidiary Hussmann, was acquired as a part
of this diversification program. In 1987, Whitman began a program of
strategic restructuring designed to transform itself into an enterprise
more focused on consumer goods and services. In 1988, Whitman sold its
Pneumo Abex Corporation aerospace and defense subsidiary, and in January,
1989, spun off its railroad operations to its shareholders. On April 1,
1991, Whitman spun off its Pet subsidiary (excluding its Hussmann
subsidiary) to its shareholders. After the Pet spin-off, the principal
operating companies of Whitman were Pepsi-Cola General Bottlers, Inc.
("Pepsi General"), Midas International Corporation ("Midas") and Hussmann
Corporation ("Hussmann").
Whitman incorporates by reference the information under the captions
"Discontinued Operations" and "Segment Reporting" which constitute notes 2
and 12, respectively, to the financial statements included in Whitman's 1993
Annual Report to Shareholders.
PEPSI GENERAL
Pepsi-Cola General Bottlers produces and distributes soft drinks and
non-alcoholic beverages, under exclusive franchises, in 12 states in the
Midwest and Southeast - a market of approximately 25 million people. It is
the largest independent Pepsi bottler in the U.S., accounting for about 12
percent of all Pepsi-Cola products sold in the U.S. each year. Pepsi
General products outsell all other soft drink brands in its major markets.
In 1993, approximately 88 percent of Pepsi General's volume was from
Pepsi-Cola products, including: Pepsi, Diet Pepsi, Caffeine Free Pepsi,
Mountain Dew, Slice, Crystal Pepsi, and All-Sport. Other soft drink
brands, including Dr. Pepper, Seven-Up, Hawaiian Punch, Dad's Root Beer,
Canada Dry, Ocean Spray, and Lipton's Tea, account for the remaining 12
percent. Diet products account for slightly more than 27 percent of total
case sales. Three-quarters of all case goods are cans, and 24 percent are
non-returnable bottles.
Historically, volume growth in the soft drink industry has come from
supermarkets, where competition is intense. Pepsi General's focus has been
to grow case volume and improve margins by focusing on other, higher margin
distribution channels, including convenience stores, gas stations, food
service and vending machines. In 1993, almost 50 percent of Pepsi
General's sales were through these other more profitable channels.
The majority of Pepsi General's products are distributed by route sales
people to retail outlets by truck. Currently, Pepsi General operates more
than 1,200 routes. Over the past few years, Pepsi General has been
expanding Pepsi Express, its bulk distribution system for large customers,
for a substantial improvement in productivity. In addition, Pepsi General
has pioneered the use of hand-held computers for route sales people. This
system enables Pepsi General to process sales and orders more efficiently,
better control inventories and discounts, and handle a wider range of
products more productively.
Pepsi General owns, leases, or sells the vending machines which dispense
its soft drink products in factories, offices, schools, stores, gasoline
stations and other locations. Pepsi General's business is seasonal and
weather conditions have a significant effect on sales.
One of Pepsi General's long-term strategic goals is to transform itself
from a carbonated soft drink company to a total beverage company and to
continue to grow faster than the industry. In 1993, Pepsi General took a
major step towards fulfilling this goal by introducing more new product
lines and brands than it had in the previous 20 years. They include:
Lipton Original Tea, a fresh brewed tea, Lipton Brisk, Ocean Spray juice
drinks, All-Sport, an isotonic drink, Crystal Pepsi, and Caffeine Free
Mountain Dew.
Pepsi General's franchises grant it the exclusive right to produce and
sell the products and use the related trade names and trademarks in the
franchised territories. The franchises require Pepsi General, among other
things, to purchase its concentrate requirements solely from the
franchisor, at prices established by the franchisor, and to promote
diligently the sale and distribution of the franchised products. Packaging
materials (bottles, bottle caps, cans, cartons, cases) are obtained from
manufacturers approved by the franchisor and other items are purchased in
the general market. The franchises are for an indefinite term and are
subject to termination upon failure to comply with the provisions of the
franchise agreement.
Competition among soft drinks of all kinds, and particularly in the
principal cola drink market (approximately 70% of all soft drinks sold in
the United States are colas), is intense and focuses on price to retail
outlets. Despite fluctuations in the prices of high fructose corn
sweeteners and materials used in soft drink packaging, Pepsi General has
not experienced difficulty in obtaining such items. It is the practice of
Pepsi General to protect the availability and pricing of its sweetener
requirements through commitments from suppliers for future delivery at the
lower of market or guaranteed ceiling prices.
MIDAS
Midas operates the world's largest franchised dealer network
specializing in under-the-car services - a $12 billion market. Midas
dealers service exhaust systems, brakes, and steering-suspension systems.
Many shops also offer oil changes. It is the market leader with an
estimated 18 percent of the U.S. exhaust market, 12 percent of the brake
market, and 4 percent of the steering and suspension market. In 1993,
Midas shops replaced more than four million exhaust systems, serviced over
two million brake systems, and continued to expand in the steering-
suspension business. In 1993, exhaust service represented less than 50
percent of Midas' retail sales. Midas continues to test other automotive
related services.
The United States is Midas' largest market, with 1,838 shops at the end
of 1993. Midas is the only national company in its industry, with at least
one shop in every county in the U.S. with a vehicle population of more than
25,000 cars and light trucks. Midas also has 239 shops in Canada, 215 in
France, 36 in Belgium, 28 in Spain, 139 in Australia, and 30 in other
countries.
Midas manufactures automotive aftermarket products at four facilities in
the United States. It is the third largest manufacturer of automotive
aftermarket exhaust systems in the U.S. It manufactures nearly 1,800
different types of mufflers which will fit nearly 96 percent of the cars
and light trucks - both foreign and domestic - on the road today in the
U.S. It also distributes brake and ride control components to its dealers.
In the United States, Midas has the capacity to meet the demands of the
market with its extensive network of shops. To maximize that presence,
Midas reorganized and decentralized its field operations in 1993. It put
more people in the field to work with franchises and shifted its focus from
national to regional marketing programs.
Midas continues to expand in markets outside the U.S. With 286 shops in
Europe, Midas is building on its established operations in France and
Belgium, while it continues to expand its newer operations in Spain. Midas
has also signed master franchise agreements in Mexico and in the Middle
East.
The principal source of Midas' revenue is derived from its network of
franchised and company-owned and operated retail shops. Midas collects an
initial franchise fee and receives yearly royalties based upon the
franchisee's gross revenues. In addition, Midas generates revenues from
the sale of manufactured mufflers and tubing, and from the resale of
purchased parts (primarily brakes, shocks and front-end alignment
components) to its franchisees. Midas also sells its manufactured exhaust
system parts under other brand names to automotive parts distributors,
jobbers and automobile accessory stores and its fabricated tube-bending
equipment to jobbers and retail installers.
The raw materials and supplies used in Midas products are purchased from
many suppliers and the company is not dependent upon any single source for
any of its raw materials or supplies.
Competition in the automotive replacement parts business is intensive at
both the wholesale and retail levels. Service, convenience, price, and
warranties are the primary competitive factors. Midas' warranty of
mufflers, brakes and shocks is particularly important to its marketing
program. Competitors include automotive service centers of retail chain
stores, muffler shops, automotive dealers, gasoline stations and
independent repair shops.
HUSSMANN
Hussmann Corporation produces merchandising and refrigeration systems
for the world's food industry. Products include refrigerated display
cases, commercial industrial refrigeration systems, storage coolers, bottle
coolers, walk-in coolers, and HVAC equipment. Hussmann is the market
leader in North America, and has substantial operations in the United
Kingdom.
The supermarket equipment industry in the United States, Hussmann's core
business, represents an $800 million market. The United States customer
base is comprised of approximately 13,000 independent and 18,000 chain-
owned supermarkets, plus over 52,000 other grocery stores. Every year,
approximately 4,000 stores purchase refrigeration equipment for either new
store openings or remodelings. Historically, Hussmann's business has been
divided approximately equally between new store activity and the remodeling
of existing stores. With the weak U.S. economy, about 45 percent of
Hussmann's business has been new store openings, and 55 percent
remodelings.
The convenience store specialty equipment industry in the U.S.
represents a market of over $300 million per year, serving approximately
71,000 stores. Hussmann maintains separate sales and manufacturing
operations for this industry.
North American commercial industrial refrigeration represents a market
of nearly $500 million. Hussmann manufactures unit coolers, condensing
units, and air-cooled condenser products for this market.
Mexico is Hussmann's second largest profit center. It has two
manufacturing operations, and uses both a direct sales force, and a network
of 150 independent dealers and distributors to bring its products to the
Mexican market. A large portion of Mexico's business is in equipment for
the soft drink and brewery industries. Hussmann's Canadian operations
consist of three manufacturing plants and a network of company-owned
branches and independent distributors.
In the United Kingdom, Hussmann has a manufacturing plant located in
Glasgow, Scotland, and a network of sales, service, and installation depots
located throughout the country. Hussmann's branch service and distribution
network in the United Kingdom is at least twice the size of its nearest
competitor.
In the Far East, Hussmann has a joint venture with a distributor in
Singapore who sells, services, and distributes Hussmann products throughout
the Southern Pacific Rim region. Hussmann also has distributor agreements
in Japan, Taiwan, New Zealand, Korea, Argentina, Columbia, El Salvador and
Costa Rica and licensees in Thailand and New Zealand.
In 1993, Hussmann introduced Protocol, a unique refrigeration system
which is CFC and HCFC free, and less expensive to install and operate than
conventional systems. Hussmann has exclusive use of the Protocol
compressor technology through 1994.
One of Hussmann's greatest strength's is its research and development
center where Protocol was developed. It is the only R&D center of its kind
in the industry. It allows Hussmann to work closely with chemical
companies and compressor, valve and controls manufacturers to create the
new generations of cases and systems.
The dollar amount of firm backlog at December 31, 1993 was $146.9
million, compared with $142.3 million in 1992. Substantially all such
backlog is expected to be filled within one year.
Hussmann products are marketed internationally by both company sales
personnel and independent distributors. The principal competitive factors
in the sale of Hussmann products are price, variety, quality and
technology, particularly energy conservation. The raw materials and
supplies used in Hussmann products are purchased from many suppliers and
Hussmann is not dependent upon any single source for any of its raw
materials or supplies.
EMPLOYEES
Whitman employed 14,868 persons worldwide as of December 31, 1993.
Whitman regards its employee relations as generally satisfactory.
ENVIRONMENTAL MATTERS
Whitman maintains a continuous program to facilitate compliance with
federal, state and local laws and regulations relating to the discharge or
emission of materials into, and other laws and regulations relating to the
protection of, the environment. The capital costs of such compliance,
including the costs of the modification of existing plants and the
installation of new manufacturing processes incorporating pollution control
technology, are not material.
Hussmann, together with numerous other defendants, has been named as a
potentially responsible party ("PRP")in two state actions under the
provisions of the Comprehensive Environmental Response, Compensation and
Liability Act of 1980 ("CERCLA") involving off-site waste disposal.
Neither of these matters is expected to involve any significant expense to
Hussmann. Whitman's remaining two operating companies, Midas and Pepsi
General, are not parties to any environmental litigation. Pepsi General
has been notified that it is a de minimus participant at six Superfund
sites. Midas has been named a PRP at one Superfund site where its
participation is also expected to be at the de minimus level.
Under the agreement pursuant to which Whitman sold Pneumo Abex
Corporation in 1988 and a subsequent settlement agreement entered into with
Pneumo Abex in September, 1991, Whitman has assumed indemnification
obligations for certain environmental liabilities of Pneumo Abex, net of
any insurance recoveries. Pneumo Abex is subject to a number of federal,
state and local environmental cleanup proceedings, including proceedings
under CERCLA at off-site locations involving other major corporations which
have also been named as PRPs. Pneumo Abex is also subject to private
claims and several lawsuits for remediation of properties currently or
previously owned by Pneumo Abex, and Whitman is subject to one such suit.
There is significant uncertainty in assessing the total cost of
remediating a given site and in determining any individual party's share in
that cost. This is due to the fact that the Pneumo Abex liabilities are at
different stages in terms of their ultimate resolution, and any assessment
and determination are inherently speculative, depending upon a number of
variables beyond the control of any party. Additionally, the settlement of
governmental proceedings or private claims for remediation invariably
involves negotiations within broad cost ranges of possible remediation
alternatives. Furthermore, there are significant timing considerations in
that a portion of the expense involved and any resulting obligation of
Whitman to indemnify Pneumo Abex may not be incurred for a number of years.
On September 30, 1992, the United States Environmental Protection Agency
issued a Record of Decision ("ROD") under the provisions of CERCLA setting
forth the scope of expected remedial action at a Pneumo Abex facility in
Portsmouth, Virginia. The original cost estimate to implement the ROD was
$28.9 million and has since been revised to $31.9 million. Whitman
management is optimistic that ongoing negotiations with the EPA will result
in less costly remedial action. Although Pneumo Abex was originally the
only named PRP, the EPA has identified 13 additional PRPs, most of which
are believed to be financially viable and which may be held responsible for
a portion of such costs.
Management believes that potential insurance recoveries may defray a
portion of the expenses involved in meeting Pneumo Abex environmental
liabilities. On November 20, 1992, Jensen-Kelley Corporation, a Pneumo-
Abex subsidiary, Pneumo Abex and certain other of its affiliates, and
Whitman and certain of its affiliates, filed a lawsuit against numerous
insurance companies in the Superior Court of California, Los Angeles
County, seeking damages and declaratory relief for insurance coverage and
defense costs for environmental claims. Whitman is unable to predict the
outcome of this litigation.
In the opinion of management, and based upon information currently
available, Whitman believes that the eventual resolution of these claims
and litigation, considering amounts already accrued but excluding potential
insurance recoveries, will not have a material adverse effect on Whitman's
financial condition or the results of operations.
Item 2. Properties.
Pepsi General's facilities include five bottling plants, three
combination bottling canning plants and three canning plants. In addition,
Pepsi General has 58 distribution warehouses and one storage warehouse.
Approximately 14 percent of Pepsi General's production is from leased
facilities. Midas operates four manufacturing plants in the United States.
Of the plants, three are owned and one is leased. In addition, Midas
maintains 12 warehouses in the United States and five warehouses in Canada,
of which two are owned and 15 are leased. At December 31, 1993, Midas
operated 120 Midas Muffler Shops in the United States, 33 Midas Muffler
Shops in Canada and 174 Midas Muffler Shops in six other foreign countries.
Hussmann operates 9 owned and 8 leased manufacturing facilities in the
United States, Canada, Mexico, and the United Kingdom. There are six owned
and 44 leased branch facilities in the United States, Canada, Mexico,
Hungary and the United Kingdom which sell, install and maintain Hussmann
products.
All facilities are adequately equipped and maintained and capacity is
considered to be adequate for current needs.
In addition, Whitman engages in a variety of industrial, commercial and
residential real estate activities in the United States.
Item 3. Legal Proceedings.
Whitman and its subsidiaries are defendants in numerous lawsuits, none
of which will, in the opinion of Whitman's counsel, have a material adverse
effect on Whitman's financial position.
See also "Environmental Matters", above.
Item 4. Submission of Matters to a Vote of Security Holders.
None.
PART II
Item 5. Market for Registrant's Common Equity and Related Stockholder
Matters.
Whitman incorporates by reference the information contained under the
heading "Securities Data" in Whitman's 1993 Annual Report to Shareholders
(Exhibit 13). There were 21,607 shareholders of record at December 31,
1993.
Item 6. Selected Financial Data.
Whitman incorporates by reference the information contained under the
heading "Six-Year Summary of Operations" in Whitman's 1993 Annual Report to
Shareholders (Exhibit 13).
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
Whitman incorporates by reference the information contained under the
heading "Management's Discussion and Analysis of Financial Condition and
Results of Operations" in Whitman's 1993 Annual Report to Shareholders
(Exhibit 13).
Item 8. Financial Statements and Supplementary Data.
Whitman incorporates by reference the information contained under the
headings "Financial Statements", "Notes to Consolidated Financial
Statements" and "Independent Auditors' Report" in Whitman's 1993 Annual
Report to Shareholders (Exhibit 13).
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.
None.
PART III
Item 10. Directors and Executive Officers of the Registrant.
Whitman incorporates by reference the information contained under the
caption "Election of Directors" in its definitive proxy statement dated
March 18, 1994, filed pursuant to Section 14 (a) of the Securities Exchange
Act of 1934, as amended.
The executive officers of Whitman and their ages as of March 1, 1994
were as follows:
Age Position
Bruce S. Chelberg 59 Chairman and Chief Executive Officer
Thomas L. Bindley 50 Executive Vice President
Frank T. Westover 55 Senior Vice President-Controller
Lawrence J. Pilon 45 Senior Vice President-Human Resources
Gerald A. McGuire 62 Corporate Vice President; President and
Chief Executive Officer, Pepsi-Cola
General Bottlers, Inc.
John R. Moore 58 Corporate Vice President; President and
Chief Executive Officer, Midas
International Corporation
J. Larry Vowell 53 Corporate Vice President; President and
Chief Executive Officer, Hussmann
Corporation
Charles H. Connolly 59 Vice President-Corporate Affairs and
Investor Relations
William B. Moore 52 Vice President, Secretary and General
Counsel
Except as described in the following paragraphs or as incorporated by
reference to the Registrant's definitive proxy statement, all the executive
officers of Whitman have held positions which are the same or which involve
substantially similar functions as indicated above during the past five
years.
Mr. Chelberg was elected Chairman and Chief Executive Officer in May,
1992. Prior to that, Mr. Chelberg served as Executive Vice President of
the Company since 1985. Mr. Bindley joined Whitman Corporation as
Executive Vice President in April, 1992. Prior to joining Whitman
Corporation, Mr. Bindley served as Executive Vice President of Square D
Corporation from August, 1986 through September, 1991. Mr. Pilon joined
Whitman Corporation as Senior Vice President in February, 1994. Prior to
joining Whitman Corporation, Mr. Pilon served as Vice President-Human
Resources and Secretary of National Intergroup, Inc. from June, 1986 to
January, 1994. Mr. Vowell was elected President and Chief Executive
Officer of Hussmann Corporation in January, 1991. Prior to that, Mr.
Vowell served as President and Chief Operating Officer of Hussmann U.S.
operations since March, 1990; Senior Vice President and General Manager of
Marketing from July, 1989; and President of the Convenience and Specialty
Group from 1987.
Item 11. Executive Compensation.
Whitman incorporates by reference the information contained under the
caption "Executive Compensation" and the last two paragraphs under the
caption "General Information" in its definitive proxy statement dated March
18, 1994, filed pursuant to Section 14(a) of the Securities Exchange Act of
1934, as amended.
Item 12. Security Ownership of Certain Beneficial Owners and Management.
Whitman incorporates by reference the information contained under the
captions "Principal Shareholders" and "Securities Ownership of Directors
and Executive Officers" in its definitive proxy statement dated March 18,
1994, filed pursuant to Section 14(a) of the Securities Exchange Act of
1934, as amended.
Item 13. Certain Relationships and Related Transactions.
None.
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K.
(a) See Index to Financial Statements on page F-2 and Exhibit Index.
(b) Through December 31, 1993, no reports on Form 8-K were filed
subsequent to the Registrant's Quarterly Report on Form 10-Q for
the quarter ended September 30, 1993.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized on the
18th day of March, 1994.
WHITMAN CORPORATION
By: /s/ Frank T. Westover
-----------------------------------
Frank T. Westover
Senior Vice President-Controller
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons in the
capacities indicated on the 18th day of March, 1994.
Signature Title
*Bruce S. Chelberg Chairman and Chief Executive Officer and
- ------------------------ Director
BRUCE S. CHELBERG (principal executive officer)
*Thomas L. Bindley Executive Vice President
- ------------------------ (principal financial officer)
THOMAS L. BINDLEY
/s/ Frank T. Westover Senior Vice President-Controller
- ------------------------ (principal accounting officer)
FRANK T. WESTOVER
*Richard G. Cline Director
- ------------------------
RICHARD G. CLINE
*James W. Cozad Director
- ------------------------
JAMES W. COZAD
*Pierre S. du Pont IV Director
- ------------------------
PIERRE S. du PONT IV
*By: /s/ FRANK T. WESTOVER
*Archie R. Dykes Director ----------------------
- ------------------------ Frank T. Westover
ARCHIE R. DYKES Attorney-in-Fact
March 18, 1994
*Helen Galland Director
- ------------------------
HELEN GALLAND
Director
- ------------------------
C. JACKSON GRAYSON, JR.
Director
- ------------------------
DONALD P. JACOBS
*Charles S. Locke Director
- ------------------------
CHARLES S. LOCKE
*Harry A. Merlo
- ------------------------ Director
HARRY A. MERLO
WHITMAN CORPORATION AND SUBSIDIARIES
Form 10-K
Financial Statements
Submitted in Response to Item 14(a)
Year Ended December 31, 1993
WHITMAN CORPORATION AND SUBSIDIARIES
INDEX TO FINANCIAL STATEMENTS
The consolidated financial statements, together with the related notes
and the report thereon of KPMG Peat Marwick, dated January 13, 1994,
appearing in Whitman's 1993 Annual Report to Shareholders (Exhibit 13), are
hereby incorporated by reference and made a part hereof.
Independent Auditors' Report on Financial Statement Schedules and Consent
Financial Statement Schedules:
Schedule V Property, plant and equipment
Schedule VI Accumulated depreciation and amortization of
property,plant and equipment
Schedule VIII Valuation and qualifying accounts
Schedule X Supplementary income statement information
Schedules not included have been omitted because they are not applicable
or the required information is shown in the financial statements or
related notes.
INDEPENDENT AUDITORS'REPORT ON FINANCIAL STATEMENT SCHEDULES
The Board of Directors and Shareholders of Whitman Corporation:
Under the date of January 13, 1994, we reported on the consolidated
balance sheets of Whitman Corporation and subsidiaries as of December 31,
1993 and 1992 and the related consolidated statements of income,
shareholders' equity and cash flows for each of the years in the three-year
period ended December 31, 1993, as contained in the 1993 Annual Report to
Shareholders of Whitman Corporation. These financial statements and our
report thereon are incorporated by reference in the annual report on Form
10-K for the year 1993. In connection with our audits of the
aforementioned consolidated financial statements, we also have audited the
related financial statement schedules as listed in the accompanying index.
These financial statement schedules are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statement schedules based on our audits. In our opinion, such financial
statement schedules, when considered in relation to the basic consolidated
financial statements taken as a whole, present fairly, in all material
respects, the information set forth therein.
/s/ KPMG PEAT MARWICK
KPMG Peat Marwick
Chicago, Illinois
January 13, 1994
INDEPENDENT AUDITORS' CONSENT
The Board of Directors and Shareholders of
Whitman Corporation:
We consent to incorporation by reference in Registration Statements Nos.
33-28238 and 33-65006 on Form S-8 and No. 33-50109 on Form S-3 of Whitman
Corporation of our reports dated January 13, 1994, relating to the
consolidated balance sheets of Whitman Corporation and subsidiaries as of
December 31, 1993 and 1992 and the related consolidated statements of
income, shareholders' equity, cash flows and related financial statement
schedules for each of the years in the three-year period ended December 31,
1993, which reports appear in or are incorporated by reference in the
December 31, 1993 annual report on Form 10-K of Whitman Corporation. Our
report refers to a change in the method of accounting for postretirement
benefits other than pensions.
/s/ KPMG PEAT MARWICK
KPMG Peat Marwick
Chicago, Illinois
March 18, 1994
SCHEDULE V
WHITMAN CORPORATION AND SUBSIDIARIES
PROPERTY, PLANT AND EQUIPMENT
Year Ended December 31, 1993
(in Millions)
Other
Balance at Changes Balance
Beginning Additions Retire- Add at End
Classification of Period at Cost ments (Deduct) of Period
- -------------- --------- --------- --------- --------- ---------
Land $ 58.8 $ 2.9 $ 1.5 $ (0.3) $ 59.9
Buildings 291.2 12.6 5.1 (0.6) 298.1
Machinery & Equip. 706.3 70.7 25.3 (2.8) 748.9
-------- ------ ------ ------ --------
Total $1,056.3 $ 86.2 $ 31.9 $ (3.7)(a) $1,106.9
======== ====== ====== ====== ========
(a) Consists of cumulative translation adjustments.
Year Ended December 31, 1992
Other
Balance at Changes Balance
Beginning Additions Retire- Add at End
Classification of Period at Cost ments (Deduct) of Period
- -------------- --------- --------- --------- --------- ---------
Land $ 55.9 $ 3.8 $ 0.6 $ (0.3) $ 58.8
Buildings 287.9 10.9 3.3 (4.3) 291.2
Machinery & Equip. 671.5 63.6 20.4 (8.4) 706.3
-------- ------ ------ ------ --------
Total $1,015.3 $ 78.3 $ 24.3 $(13.0)(a) $1,056.3
======== ====== ====== ====== ========
(a) Consists of cumulative translation adjustments.
Year Ended December 31, 1991
Other
Balance at Changes Balance
Beginning Additions Retire- Add at End
Classification of Period at Cost ments (Deduct) of Period
- -------------- --------- --------- --------- --------- ---------
Land $ 55.0 $ 2.2 $ 0.8 $ (0.5) $ 55.9
Buildings 287.5 11.8 5.7 (5.7) 287.9
Machinery & Equip. 642.2 64.8 28.9 (6.6) 671.5
-------- ------ ------ ------ --------
Total $ 984.7 $ 78.8 $ 35.4 $(12.8)(a) $1,015.3
======== ====== ====== ====== ========
(a) Includes $6.8 million of cumulative translation adjustments and $6.0
million of property transferred to Pet Incorporated in the April 1,
1991 spin-off.
SCHEDULE VI
WHITMAN CORPORATION AND SUBSIDIARIES
ACCUMULATED DEPRECIATION AND AMORTIZATION
OF PROPERTY, PLANT AND EQUIPMENT
Year Ended December 31, 1993
(in Millions)
Additions Other
Balance at Charged to Changes Balance
Beginning Costs and Retire- Add at End
Classification of Period Expenses ments (Deduct) of Period
- -------------- --------- --------- --------- --------- ---------
Buildings $ 90.7 $ 10.4 $ 2.4 $ (0.3) $ 98.4
Machinery & Equip. 389.5 68.0 21.6 (0.2) 435.7
-------- ------ ------ ------ --------
Total $ 480.2 $ 78.4 $ 24.0 $ (0.5)(a) $ 534.1
======== ====== ====== ====== ========
(a) Consists of cumulative translation adjustments.
Year Ended December 31, 1992
Additions Other
Balance at Charged to Changes Balance
Beginning Costs and Retire- Add at End
Classification of Period Expenses ments (Deduct) of Period
- -------------- --------- --------- --------- --------- ---------
Buildings $ 84.0 $ 10.6 $ 2.2 $ (1.7) $ 90.7
Machinery & Equip. 341.7 65.6 13.5 (4.3) 389.5
-------- ------ ------ ------ --------
Total $ 425.7 $ 76.2 $ 15.7 $ (6.0)(a) $ 480.2
======== ====== ====== ====== ========
(a) Consists of cumulative translation adjustments.
Year Ended December 31, 1991
Additions Other
Balance at Charged to Changes Balance
Beginning Costs and Retire- Add at End
Classification of Period Expenses ments (Deduct) of Period
- -------------- --------- --------- --------- --------- ---------
Buildings $ 77.4 $ 10.3 $ 2.0 $ (1.7) $ 84.0
Machinery & Equip. 307.9 58.6 19.8 (5.0) 341.7
-------- ------ ------ ------ --------
Total $ 385.3 $ 68.9 $ 21.8 $ (6.7)(a) $ 425.7
======== ====== ====== ====== ========
(a) Includes $3.2 million of cumulative translation adjustments and $3.5
million of reserves on property transferred to Pet Incorporated in the
April 1, 1991 spin-off.
SCHEDULE VIII
WHITMAN CORPORATION AND SUBSIDIARIES
VALUATION AND QUALIFYING ACCOUNTS
Year Ended December 31, 1993
(in Millions)
Additions
--------------------
Balance at Charged to Charged Balance
Beginning Costs and to Other at End
Classification of Period Expenses Accounts Deductions of Period
- -------------- --------- --------- --------- --------- ---------
Intangible assets $90.4 $ 17.1 $ -- $ (0.8)(a) $ 106.7
====== ====== ====== ====== =======
(a) Comprised of cumulative translation adjustments and adjustments to
purchase accounting for prior-year acquisitions.
Year Ended December 31, 1992
Additions
--------------------
Balance at Charged to Charged Balance
Beginning Costs and to Other at End
Classification of Period Expenses Accounts Deductions of Period
- -------------- --------- --------- --------- --------- ---------
Intangible assets $74.5 $ 17.3 $ -- $ (1.4)(a) $ 90.4
====== ====== ====== ====== =======
(a) Consists of cumulative translation adjustments.
Year Ended December 31, 1991
Additions
--------------------
Balance at Charged to Charged Balance
Beginning Costs and to Other at End
Classification of Period Expenses Accounts Deductions of Period
- -------------- --------- --------- --------- --------- ----------
Intangible Assets $58.8 $ 17.5 $ -- $ (1.8)(a) $74.5
====== ====== ====== ====== ======
(a) Includes $1.1 million of fully amortized intangibles removed from
reserve and $0.7 million of cumulative translation adjustments.
SCHEDULE X
WHITMAN CORPORATION AND SUBSIDIARIES
SUPPLEMENTARY INCOME STATEMENT INFORMATION
(in Millions)
Charged to Costs and Expenses
for Year Ended December 31
--------------------------------------
1993 1992 1991
-------- -------- --------
Maintenance and repairs $ 42.8 $ 41.4 $ 40.4
Advertising costs 41.1 38.2 37.4
EXHIBIT INDEX
No.* Description of Exhibit
- -------- ----------------------------------------------------------------
(3)a+ Certificate of Incorporation as Restated April 30, 1987, and
subsequently amended through June 24, 1992.
(3)b@ By-Laws, as Amended July 17, 1989.
(4)a# Indenture dated as of January 15, 1993, between Whitman
Corporation and The First National Bank of Chicago, Trustee.
(4)b# Form of 7-1 2% Note due February 1, 2003, issued pursuant to the
Indenture filed as Exhibit (4)a to the Whitman Corporation
1992 Annual Report on Form 10-K.
(4)c Form of Medium-Term Note, Series A, issued pursuant to the
Indenture dated January 15, 1993 filed as Exhibit 4(a) to the
Whitman Corporation 1992 Annual Report on Form 10-K.
(4)d Form of 6-1 2% Note due February 1, 2006, issued pursuant to the
Indenture dated January 15, 1993 filed as Exhibit 4(a) to the
Whitman Corporation 1992 Annual Report on Form 10-K.
(10)a# **1982 Stock Option, Restricted Stock Award and Performance Award
Plan (as amended through June 16, 1989).
(10)b# **Amendment No. 2 to 1982 Stock Option, Restricted Stock Award
and Performance Award Plan made as of September 1, 1992.
(10)c# **Form of Nonqualified Stock Option Agreement.
(10)d# **Amendment to 1982 Stock Option, Stock Award and Performance
Award Plan made as of February 19, 1993.
(10)e# **Form of Severance Compensation and Change in Control Agreement
dated as of March 17, 1989.
(10)f# **Form of Amendment to Severance Compensation and Change in
Control Agreement dated July 1, 1992.
(10)g# **Management Incentive Compensation Plan.
(10)h# **Long Term Performance Compensation Program.
(10)i **Whitman Corporation Executive Retirement Plan, as Amended and
Restated Effective January 1, 1991 and December 31, 1993.
(10)j **Hussmann Corporation Executive Retirement Plan, as Amended and
Restated Effective January 1, 1991 and December 31, 1993.
(10)k **Midas International Corporation Executive Retirement Plan, as
Amended and Restated Effective January 1, 1991 and December
31, 1993.
(10)l **Pepsi-Cola General Bottlers, Inc. Executive Retirement Plan, as
Amended and Restated Effective January 1, 1991 and December
31, 1993.
(10)m# **Deferred Compensation Plan for Directors, as Amended November
18, 1988.
(10)n# **Director Emeritus Program, as amended through February 16,
1990.
(10)o **Whitman Corporation Retirement Savings Plan, as Amended and
Restated Effective January 1, 1994.
(10)p **Form of Restricted Stock Award Agreement.
(12) Statement of Calculation of Ratio of Earnings to Fixed Charges.
(13) 1993 Annual Report to Shareholders (only the portions
incorporated by reference are included in this Exhibit)
(21) Subsidiaries of the Registrant.
(24) Powers of Attorney.
Exhibit Reference Explanations
- ------------------------------
* References are to Exhibit Table, Item 601 of Regulation S-K.
** Exhibit constitutes a management contract or compensatory plan,
contract or arrangement described under Item 601(b)(10)(iii)(A)
of Regulation S-K.
+ Incorporated by reference to the Registrant's Annual Report on
Form 10-K for the year ended December 31, 1992 as Exhibit 3.
@ Incorporated by reference to the Registrant's Annual Report on
Form 10-K for the year ended December 31, 1989 as Exhibit 3.
# Incorporated by reference to the Registrant's Annual Report on
Form 10-K for the year ended December 31, 1992 under the
indicated Exhibit number.
EXHIBIT 4(c)
Form of Medium-Term Note, Series A
SPECIMEN
[THIS NOTE MAY BE TRANSFERRED IN WHOLE BUT NOT IN PART BY THE DEPOSITARY TO
A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE
DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY
SUCH NOMINEE TO A SUCCESSOR DEPOSITARY SELECTED OR APPROVED BY THE COMPANY
OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS CERTIFICATE IS
PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY,
A NEW YORK CORPORATION ("DTC"), TO THE ISSUER OR ITS AGENT FOR REGISTRATION
OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED
IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR
TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR
TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE &
CO., HAS AN INTEREST HEREIN.]
Registered WHITMAN CORPORATION CUSIP:
No. FXRA- Medium-Term Note, Series A --------------
-----------
PRINCIPAL AMOUNT AND CURRENCY OR CURRENCY UNIT:
DENOMINATIONS
(IF OTHER THAN U.S. DOLLARS OR THE U.S. DOLLAR
DENOMINATIONS SET FORTH ON THE REVERSE):
OPTION TO RECEIVE PAYMENTS IN SPECIFIED CURRENCY:
YES: NO:
-------- -------- EXCHANGE RATE AGENT:
ISSUE DATE: STATED MATURITY DATE:
INTEREST RATE: COMPUTATION PERIOD:
INTEREST PAYMENT DATE(S): RECORD DATE(S):
REDEMPTION DATE(S): REDEMPTION PERCENTAGE(S):
REDEMPTION DATE(S) (OPTION OF HOLDER): REDEMPTION PERCENTAGE(S)
(OPTION OF HOLDER):
NOTICE PERIOD: ORIGINAL ISSUE DISCOUNT SECURITY:
If applicable, the following
will be completed solely for the
purpose of applying the United
States federal income tax
original issue discount ("OID")
rules:
OTHER PROVISIONS:
TOTAL AMOUNT OF OID:
YIELD TO MATURITY:
INITIAL ACCRUAL PERIOD OID:
WHITMAN CORPORATION, a Delaware corporation (herein called the
"Company," which term includes any successor corporation under the
Indenture referred to herein), for value received, hereby promises to pay
to: Cede & Co., or registered assigns, the principal amount specified
above (any currency or currency unit other than U.S. dollars being
hereinafter referred to as a "Specified Currency") on the Stated Maturity
specified above and to pay interest thereon (computed, unless a different
Computation Period is specified above, on the basis of a 360-day year of
twelve 30-day months) from and including the Issue Date specified above
(the "Issue Date") or from and including the most recent Interest Payment
Date to which interest on this Note (or any predecessor Note) has been paid
or duly provided for to but excluding the relevant Interest Payment Date,
on the Interest Payment Date(s) specified above in each year (each an
"Interest Payment Date") and at Maturity, at the rate per annum equal to
the Interest Rate specified above, until the principal hereof is paid or
duly made available for payment; provided, that unless the Holder hereof is
entitled to make, and has made, a Specified Currency Payment Election (as
hereinafter defined) with respect to one or more such payments, the Company
will make all such payments in U.S. dollars in amounts determined as set
forth herein. The interest so payable, and punctually paid or duly
provided for, on any Interest Payment Date will, as provided in the
Indenture, be paid to the Holder of this Note (or one or more predecessor
Notes) of record at the close of business on the Record Date specified
above next preceding such Interest Payment Date, provided, that interest
payable at Maturity shall be payable to the same Person to whom principal
on this Note is payable; and provided, further, that if the Issue Date is
after a Record Date and before the next succeeding Interest Payment Date,
the first payment of interest shall be payable on the second Interest
Payment Date following the Issue Date to the person in whose name this Note
(or one or more predecessor Notes) is registered at the close of business
on the Record Date next preceding such second Interest Payment Date.
Any such interest not so punctually paid or duly provided for
shall forthwith cease to be payable to the Holder on such Record Date, and
may be paid to the Holder of this Note (or one or more predecessor Notes)
of record at the close of business on a subsequent record date fixed by the
Trustee for the payment of such Defaulted Interest, notice whereof shall be
given to Holders not less than 15 days prior to such subsequent record
date. Payment of the principal of (and premium, if any, on) this Note and,
unless otherwise paid as hereinafter provided, the interest thereon will be
made at the office or agency of the Company in the Borough of Manhattan,
City and State of New York, in such coin or currency of the United States
of America as at the time of payment is legal tender for payment of public
and private debts; provided, that payment of the principal of (and premium,
if any) and interest on this Note due will be made in immediately available
funds at such office or agency if this Note is presented in time for the
Trustee (or a duly authorized paying agent) to make such payments in such
funds in accordance with its normal procedures; provided, further, that
payment of interest may be made at the option of the Company by check
mailed to the Person entitled thereto at such Person's address appearing in
the Security Register; and provided, further, that if this Note is
denominated in a Specified Currency, the Holder hereof is entitled to make,
and has made, a Specified Currency Payment Election with respect to such
payments, the Exchange Rate Agent is able to convert such payments as
provided below and the Specified Currency is not unavailable due to the
imposition of exchange controls or other circumstances beyond the control
of the Company, then (i) the payment of interest on this Note will be made
in the Specified Currency (or, if such Specified Currency is not at the
time of such payment legal tender for the payment of public and private
debts, in such other coin or currency of the country which issued such
Specified Currency as at the time of such payment is legal tender for the
payment of such debts) by check drawn on a bank office located outside the
United States and mailed to the address of the Person entitled thereto as
such address shall appear in the Security Register and (ii) the payment of
principal (and premium, if any) and interest due at Maturity will be made
in such Specified Currency (or, if applicable, such other coin or currency)
by wire transfer of immediately available funds to an account maintained by
the Holder hereof with a bank office located in the country which issued
the Specified Currency upon presentation of this Note to the Trustee (or a
duly authorized paying agent) in time for such wire transfer to be made by
the Trustee (or such paying agent) in accordance with its normal
procedures. Unless otherwise specified above, if this Note is denominated
in a Specified Currency the Holder hereof may elect to receive payments of
principal of (and premium, if any) and interest in such Specified Currency
(a "Specified Currency Payment Election") by delivery of a written request
(including, in the case of an election with respect to payments at
Maturity, appropriate wire transfer instructions) to the Trustee at its
principal corporate trust office referred to above on or prior to the
relevant Record Date or the sixteenth day prior to Maturity, as the case
may be. Such request may be in writing (mailed or hand delivered) or by
cable, telex or other form of facsimile transmission. The Holder may elect
to receive payment in the Specified Currency for all principal (and
premium, if any) and interest payments and need not file a separate
election for each payment. Such election shall remain in effect until
revoked by written notice to the Trustee, but written notice of any such
revocation must be received by the Trustee on or prior to the relevant
Record Date or at least sixteen days prior to Maturity, as the case may be.
Additional provisions of this Note are set forth on the reverse hereof.
Unless the certificate of authentication hereon has been executed
by or on behalf of the Trustee by manual signature, this Note shall not be
entitled to any benefit under the Indenture or be valid or obligatory for
any purpose.
IN WITNESS WHEREOF, the Company has caused this Note to be duly
executed under its corporate seal.
WHITMAN CORPORATION
Dated: By:
------------------- ----------------------------
Chairman and Chief
Executive Officer
This is one of the Securities of the series designated herein issued
under the within-mentioned Indenture.
THE FIRST NATIONAL BANK OF CHICAGO,
as Trustee
Attest:
-----------------------
Secretary
By:
-----------------------------
Authorized Signature
WHITMAN CORPORATION
Medium-Term Note, Series A
This Note is one of a duly authorized issue of debt securities of the
Company (herein called the "Securities"), issuable in one or more series,
unlimited in aggregate principal amount except as may be otherwise provided
in respect of the Securities of a particular series, issued and to be
issued under and pursuant to an Indenture dated as of January 15, 1993
(herein called the "Indenture"), duly executed and delivered by the Company
to The First National Bank of Chicago, as Trustee (the "Trustee"), and is
one of a series limited in aggregate principal amount to $175,000,000 (or
if Securities of this series are to be Original Issue Discount Securities
or are to be denominated in one or more Specified Currencies or with the
amount payable in respect of principal of or any premium or interest to be
determined by reference to the value, rate or price of one or more
specified indices ("Indexed Securities"), such principal amount as shall
result in an aggregate initial offering price of Securities equivalent to
not more than $175,000,000). The Securities of this series may be issued
from time to time in various principal amounts and currencies or currency
units, may mature at different times, may bear interest at different rates,
may be subject to different redemption provisions, if any, and may
otherwise vary. Reference is hereby made to the Indenture for a
description of the rights, limitations of rights, obligations, duties and
immunities thereunder of the Trustee, the Company and the Holders of
Securities (including Holders of the Securities of this series).
The Securities are general, direct, unconditional and unsecured
obligations of the Company.
If this Security is designated on the face hereof as an Original Issue
Discount Security, then, notwithstanding anything to the contrary contained
in this Note, upon the redemption or acceleration of Maturity of this Note
there shall be payable, in lieu of the principal amount due at the Stated
Maturity hereof, as specified on the face hereof, an amount equal to the
Amortized Face Amount of this Security. The "Amortized Face Amount" shall
be the amount equal to (a) the issue price of this Note (as defined below),
plus (b) that portion of the difference between the issue price and the
principal amount of this Note that has been amortized at the Stated Yield
(as defined below) of this Note (computed in accordance with generally
accepted United States bond yield computation principles) at the date as of
which the Amortized Face Amount is calculated, but in no event shall the
Amortized Face Amount exceed the principal amount of this Note due at the
Stated Maturity hereof. As used in the previous sentence "issue price"
means the principal amount due at the Stated Maturity hereof less the Total
Amount of OID of this Note specified on the face hereof and the "Stated
Yield" means the Yield to Maturity specified on the face hereof (or if not
so specified, the yield to maturity compounded semi-annually and computed
in accordance with generally accepted United States bond yield computation
principles) for the period from the Issue Date to the Stated Maturity on
the basis of the issue price and such principal amount.
If this Note is denominated in a Specified Currency, unless the Holder
hereof is entitled to make, and has made, a Specified Currency Payment
Election with respect to such payments as provided on the face hereof, the
Holder of this Note shall receive payments of principal (and premium, if
any) and interest in U.S. dollars at an exchange rate based on the highest
bid quotation in The City of New York received by the Exchange Rate Agent
(who, unless otherwise specified on the face hereof, shall be the Trustee)
at approximately 11:00 A.M., New York City time, on the second Market Day
with respect to this Note preceding the applicable payment date from three
recognized foreign exchange dealers (one of which may be the Exchange Rate
Agent) selected by the Exchange Rate Agent and approved by the Company for
the purchase by the quoting dealer of the Specified Currency for U.S.
dollars for settlement on such payment date in the aggregate amount of such
Specified Currency payable to all Holders of Securities of this series
denominated in such Specified Currency and scheduled to receive U.S. dollar
payments on such payment date and at which the applicable dealer commits to
execute a contract. "Market Day" means (i) with respect to any Security of
this series denominated in U.S. dollars, any day that is a Business Day and
(ii) with respect to any Security of this series denominated in a Specified
Currency, any Business Day that is also a business day in the principal
financial center of the country of the Specified Currency or, with respect
to a Security of this series denominated in European Currency Units, in
Brussels. All currency exchange costs in converting a Specified Currency
into U.S. dollars in order to make payments hereon will be borne by the
Holder of this Note by deductions from such payments. If such bid
quotations are not available, or if a Specified Currency Payment Election
has been made with respect to such payments, payments will be made in the
Specified Currency (or, if such Specified Currency is not at the time of
such payment legal tender for the payment of public and private debts, such
other coin or currency of the country which issued such Specified Currency
as at the time of such payment is legal tender for the payment of such
debts); provided, that if such Specified Currency (or, if applicable, such
other coin or currency) is unavailable due to the imposition of exchange
controls or other circumstances beyond the Company's control, the Company
will be entitled to make payments in U.S. dollars on the basis of the
Market Exchange Rate for such Specified Currency (or, if applicable, such
other coin or currency) on the second Market Day prior to such payment or,
if such Market Exchange Rate is not then available, on the basis of the
most recently available Market Exchange Rate or as otherwise indicated
hereon.
If one or more Redemption Dates (or range(s) of Redemption Dates) is
specified on the face hereof, this Note is subject to redemption on any
such date (or during any such range) upon not less than 30 or more than 60
days' notice by mail, on any such date (or during any such range) or, if
such date is not a Market Day, on the first Market Day following such date,
as a whole, or from time to time in part, at the election of the Company,
at a Redemption Price determined as provided in this paragraph, together
with interest accrued to but excluding the Redemption Date, but any
interest payment due on or prior to the Redemption Date will be payable to
the Holder hereof (or one or more predecessor Securities) of record at the
close of business on the Record Dates referred to on the face hereof, all
as provided in the Indenture. If applicable, the "Redemption Price" for
any such redemption shall be the amount determined by multiplying the
Redemption Percentage specified on the face hereof with respect to the
relevant Redemption Date (or range of such dates), by the portion of the
principal amount hereof (or, if this Note is an Original Issue Discount
Security, the portion of the Amortized Face Amount hereof) to be redeemed;
provided, that in no event shall the Redemption Price be less than 100% of
the portion of the principal amount hereof (or, if this Note is an Original
Issue Discount Security, the portion of the Amortized Face Amount hereof)
to be redeemed.
If one or more Redemption Dates (Option of Holder) (or range(s) of
Redemption Dates) is specified on the face hereof, this Note is subject to
redemption on any such date (or during any such range) or, if such date is
not a Market Day, on the first Market Day following such date, as a whole
or from time to time in part, at the election of the Holder hereof, at a
Redemption Price determined as provided in this paragraph, together with
interest accrued to but excluding the Redemption Date, but interest
payments due on or prior to the Redemption Date will be payable to the
Holder hereof (or one or more predecessor Securities) of record at the
close of business on the Record Dates referred to on the face hereof, all
as provided in the Indenture. Such election shall be effected by the
Holder hereof delivering to the Company at the principal corporate trust
office of the Trustee (or duly authorized paying agent) in the Borough of
Manhattan, The City of New York, not less than 30 nor more than 60 days
prior to the date on which this Note is to be redeemed, or during such
other Notice Period specified on the face hereof, a notice requesting such
redemption in the form described below and specifying the date upon which
this Note is to be redeemed. Any notice given by a Holder pursuant to this
paragraph shall consist of either (i) this Note with the form entitled
"Option to Elect Redemption" set forth at the end of this Note duly
completed or (ii) a telegram, facsimile transmission or a letter from a
member of a national securities exchange, or the National Association of
Securities Dealers, Inc. or a commercial bank or trust company in the
United States setting forth the name of the Holder hereof, the principal
amount of this Note, the principal amount of this Note to be redeemed, the
certificate number or a description of the terms of this Note, a statement
that the option to elect redemption is being exercised thereby and a
guarantee that this Note, together with the duly completed form entitled
"Option to Elect Redemption" below, will be received by the Trustee not
later than the fifth Business Day after the date of such telegram,
facsimile transmission or letter; provided, that such telegram, facsimile
transmission or letter shall only be effective if this Note and form duly
completed are received by the Trustee by such fifth Business Day. Exercise
of the redemption option by the Holder hereof will be irrevocable. If
applicable, the "Redemption Price" for any such redemption shall be
determined by multiplying the Redemption Percentage (Option of Holder)
specified on the face hereof with respect to the relevant Redemption Date
(Option of Holder) (or range of such dates) by the portion of the principal
amount hereof (or, if this Note is an Original Issue Discount Security, the
portion of the Amortized Face Amount hereof) to be redeemed, together with
interest accrued thereon to but excluding the Redemption Date; provided,
that in no event shall the Redemption Price be less than 100% of the
portion of the principal amount hereof (or, if this Note is an Original
Issue Discount Security, the portion of the Amortized Face Amount hereof)
to be redeemed.
Notice of redemption having been given as aforesaid, this Note (or the
portion of the principal amount hereof so to be redeemed) shall, on the
Redemption Date, become due and payable at the Redemption Price herein
specified, and from and after such date (unless the Company shall default
in the payment of the Redemption Price and accrued interest) shall cease to
bear interest. In the case of any partial redemption at the election of
the Company of Securities of this series of like tenor and terms, the
Company shall give the Trustee written notice, at least 60 days (or such
shorter period acceptable to the Trustee) in advance of the Redemption Date
as to the aggregate principal amount to be redeemed, and the Securities to
be redeemed shall be selected by the Trustee in such manner as the Trustee
shall deem appropriate and fair and which may provide for the selection for
redemption of portions of the principal amount of Securities. If less than
all the Securities of this series of unlike tenor and terms are to be
redeemed, the particular Securities to be redeemed shall be selected by the
Company. In the event of any redemption of this Note in part only, a new
Security or Securities of this series of like tenor for the unredeemed
portion hereof will be issued in the name of the Holder hereof upon the
cancellation hereof, provided that such unredeemed portion shall not be
less than the minimum denomination of this Note.
If an Event of Default shall have occurred and be continuing with
respect to the Securities of any series, unless the principal of all of the
Securities of such series shall have already become due and payable, either
the Trustee or the Holders of not less than 25% in aggregate principal
amount of the Securities of such series then Outstanding, may declare the
entire principal of (or, in the case of Original Issue Discount Securities,
the Amortized Face Amount thereof), and premium, if any, on all of the
Securities of such series then Outstanding and the interest accrued thereon
to be due and payable immediately in the manner and with the effect
provided in the Indenture. Prior to a declaration of acceleration of the
Maturity of any Securities of any series, the Holders of not less than a
majority in aggregate principal amount of the Securities of such series
then Outstanding with respect to which a default or breach or an Event of
Default shall have occurred and be continuing may on behalf of the Holders
of all of the Securities of such series waive any past default or breach or
Event of Default and its consequences, except a default or breach or Event
of Default in the payment of principal of (or, in the case of Original
Issue Discount Securities, the Amortized Face Amount thereof), or premium,
if any or interest on any Security of such series. Upon any such waiver,
such default or breach shall cease to exist, and any Event of Default
arising therefrom shall be deemed to have been cured with the effect
provided in the Indenture but no such waiver shall extend to any subsequent
or other default or breach or Event of Default or impair any right
consequent thereon.
The Indenture permits the amendment thereof and the modification of
the rights and obligations of the Company and the rights of the Holders
under the Indenture at any time by the Company and the Trustee with the
consent of the Holders of a majority in aggregate principal amount of the
Securities then Outstanding of all series which are affected by
such amendment or modification, except that certain amendments which do not
adversely affect the rights of any Holder of the Securities may be made
without the approval of Holders of the Securities and no amendment or
modification may, among other things, extend the Stated Maturity of any
Security, reduce the principal amount thereof, reduce the rate or extend
the time of payment of any interest thereon without the consent of the
Holder of each Security so affected or reduce the aforesaid majority in
aggregate principal amount of Securities of any series, the consent of the
Holders of which is required for any such amendment or modification,
without the consent of the Holders of all Securities of each affected
series.
Notwithstanding any provision in the Indenture or any provision of
this Note, the Holder of this Note shall have the right, which is absolute
and unconditional, to receive payment of the principal of (or, in the case
of Original Issue Discount Securities, the Amortized Face Amount thereof),
and premium, if any, and interest on this Note at the times, place and
rate, and in the coin or currency herein prescribed.
As provided in the Indenture and subject to certain limitations
therein set forth, transfer of this Note is registrable on the Security
Register, upon due presentment for registration of transfer of this Note at
the office or agency of the Company in Chicago, Illinois, or such other
offices or agencies as the Company may designate, and thereupon the Company
shall execute and the Trustee shall authenticate and deliver in the name of
the transferee or transferees a new Security or Securities of authorized
denominations, of the same series and of like aggregate principal amount at
Stated Maturity. The Securities of this series are issuable only as fully
registered Securities in denominations of $100,000 and any integral
multiple of $1,000 in excess thereof (or in the case of Securities
denominated in a Specified Currency, in such minimum denomination not less
than the equivalent of $100,000 in such Specified Currency on the basis of
the noon buying rate for cable transfers in The City of New York as
certified for customs purposes by (or, if not so certified, as otherwise
determined by) the Federal Reserve Bank of New York (the "Market Exchange
Rate") for such Specified Currency on the date the Company agrees to issue
such Security, and such greater denomination or denominations as shall be
set forth on the face thereof). As provided in the Indenture and subject
to certain limitations therein set forth, this Note is exchangeable for a
like aggregate principal amount of Securities of the same terms as this
Note and of authorized denominations.
No service charge will be made for any such exchange or registration
of transfer, but the Company may require payment of a sum sufficient to
cover any tax or other governmental charge imposed in relation thereto.
All terms used in this Note which are defined in the Indenture have
the meanings assigned to them in the Indenture.
ABBREVIATIONS
The following abbreviations, when used in the inscription of the
face of this Note, shall be construed as though they were written out in
full according to applicable laws or regulations.
TEN COM - as tenants in common
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with right of survivorship and
not as tenants in common
UNIF GIFT MIN
ACT - Custodian
--------------- ---------------
(Custodian) (Minor)
Under Uniform Gifts to Minor Act ( )
--------------
(State)
Additional abbreviations may also be used though not in the above list.
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ASSIGNMENT FORM
To assign this Note, fill in the form below:
I or we assign and transfer this Note to
------------------------------------------
Insert assignee's soc. sec. or tax I.D. no.
- -------------------------------------------------------------
(Print or type assignee's name, address and zip code)
- ---------------------------------------------------------------------------
- ---------------------------------------------------------------------------
and irrevocably appoint
----------------------------------------------------
- -------------------------------------- agent to transfer this Note on the
books of the Company. The agent may substitute another to act for him.
- ---------------------------------------------------------------------------
Dated:
-------------------------- ---------------------------------
---------------------------------
---------------------------------
NOTICE: The signature to this assignment must correspond with the
name as it appears on the first page of the within Note in every
particular, without alteration or enlargement or any change whatever and
must be guaranteed by a member of a recognized Medallion Program approved
by the Securities Transfer Association Inc.
OPTION TO ELECT REDEMPTION
The undersigned hereby irrevocably requests and instructs Whitman
Corporation to redeem the within Note (or portion thereof specified below)
pursuant to its terms by payment of the Redemption Price to the undersigned
at
(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS INCLUDING POSTAL ZIP CODE OF
THE UNDERSIGNED
- ---------------------------------------------------------------------------
- ---------------------------------------------------------------------------
- ---------------------------------------------------------------------------
If less than the entire principal amount of the within Note is to
be redeemed, specify the portion thereof which the Holder elects to have
redeemed:
------------------------------------------------------------------
- ---------------------------; and specify the denomination or denominations
(which shall not be less than the minimum authorized denomination) of the
Securities to be issued to the Holder for the portion of the within Note
not being redeemed (in the absence of any such specification, one such
Security will be issued for the portion not being redeemed):
- ---------------------------------------------------------------------------
Dated:
-------------------- ----------------------------------------
NOTICE: This signature on this Option
to Elect Redemption must correspond with
the name as written upon the face of the
within Note in every particular without
alteration or enlargement.
EXHIBIT 4(d)
Form of 6-1/2% Note due February 1, 2006
SPECIMEN
THIS NOTE MAY BE TRANSFERRED IN WHOLE BUT NOT IN PART BY THE DEPOSITARY TO
A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE
DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY
SUCH NOMINEE TO A SUCCESSOR DEPOSITARY SELECTED OR APPROVED BY THE COMPANY
OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS CERTIFICATE IS
PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY,
A NEW YORK CORPORATION ("DTC"), TO THE ISSUER OR ITS AGENT FOR REGISTRATION
OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED
IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR
TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR
TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE &
CO., HAS AN INTEREST HEREIN.
No. 1 $100,000,000.00
WHITMAN CORPORATION
6-1/2% Note due February 1, 2006
CUSIP: 96647 KAB 8
WHITMAN CORPORATION, a Delaware corporation (herein called the
"Company," which term includes any successor corporation under the
Indenture referred to herein), for value received, hereby promises to pay
to:
CEDE & CO.
or registered assigns, the principal sum of
*ONE HUNDRED MILLION DOLLARS*
on February 1, 2006, and to pay interest on such principal sum at the rate
of six and one-half per centum (6-1/2%) per annum.
The Company will pay interest from the later of February 3, 1994 or
the most recent Interest Payment Date to which interest has been paid or
duly provided for, semi-annually on the Interest Payment Dates (February 1
and August 1, beginning August 1, 1994) and on February 1, 2006, or until
the principal hereof is otherwise paid or duly provided for. The interest
so payable, and punctually paid or duly provided for, on any Interest
Payment Date will, as provided in the Indenture, be paid to the Holder of
this Note (or one or more predecessor Notes) of record at the close of
business on the Record Date for such Interest Payment Date, which, except
in the case of interest payable at Maturity (as defined in the Indenture),
shall be the fifteenth day (whether or not a Business Day) of the month
preceding the month in which such Interest Payment Date occurs and, in the
case of interest payable at Maturity, shall be the date such that interest
payable at Maturity is paid to the same Person to whom principal on this
Note is payable. Interest will be computed on the basis of a 360-day year
of twelve 30-day months.
Any such interest not so punctually paid or duly provided for shall
forthwith cease to be payable to the Holder on such Record Date, and may be
paid to the Holder of this Note (or one or more predecessor Notes) of
record at the close of business on a subsequent record date fixed by the
Trustee for the payment of such Defaulted Interest, notice whereof shall be
given to Holders not less than 15 days prior to such subsequent record
date. Payment of the principal of this Note and, unless otherwise paid as
hereinafter provided, the interest thereon will be made at the office or
agency of the Company in the Borough of Manhattan, City and State of New
York, in such coin or currency of the United States of America as at the
time of payment is legal tender for payment of public and private debts;
provided, however, that payment of interest may be made at the option of
the Company by check mailed to the Person entitled thereto at such Person's
address appearing in the Security Register. Payment of the principal of
this Note and the interest thereon payable at Maturity will be made in
immediately available funds provided that this Note is presented at such
office or agency in time for the Trustee (or a duly authorized paying
agent) to make payment in such funds in accordance with its normal
procedures. Additional provisions of this Note are set forth on the
reverse hereof.
Unless the certificate of authentication hereon has been executed by
or on behalf of the Trustee by manual signature, this Note shall not be
entitled to any benefit under the Indenture or be valid or obligatory for
any purpose.
IN WITNESS WHEREOF, the Company has caused this Note to be duly
executed under its corporate seal.
WHITMAN CORPORATION
Dated: February 3, 1994 By:
------------------------------------
Chairman and Chief Executive Officer
This is one of the Securities of the series designated herein issued under
the within-mentioned Indenture.
THE FIRST NATIONAL BANK OF CHICAGO,
as Trustee
Attest:
-------------------------------
Secretary
By:
---------------------------------
Authorized Signature
WHITMAN CORPORATION
6-1/2% Note due February 1, 2006
This Note is one of a duly authorized issue of debt securities of the
Company (herein called the "Securities"), issuable in one or more series,
unlimited in aggregate principal amount except as may be otherwise provided
in respect of the Securities of a particular series, issued and to be
issued under and pursuant to an Indenture dated as of January 15, 1993
(herein called the "Indenture"), duly executed and delivered by the Company
to The First National Bank of Chicago, as Trustee (the "Trustee"), and is
one of a series limited in aggregate principal amount to $100,000,000 and
designated as 6-1/2% Notes due February 1, 2006 (herein called the "6-1/2%
Notes"). Reference is hereby made to the Indenture for a description of
the rights, limitations of rights, obligations, duties and immunities
thereunder of the Trustee, the Company and the Holders of Securities
(including Holders of the 6-1/2% Notes).
The 6-1/2% Notes are not redeemable prior to their Stated Maturity and
are not subject to any sinking fund.
If an Event of Default shall have occurred and be continuing with
respect to the Securities of any series, unless the principal of all of the
Securities of such series shall have already become due and payable, either
the Trustee or the Holders of not less than 25% in aggregate principal
amount of the Securities of such series then Outstanding, may declare the
entire principal of (and premium, if any, on) all of the Securities of such
series then Outstanding and the interest accrued thereon to be due and
payable immediately in the manner and with the effect provided in the
Indenture. Prior to a declaration of acceleration of the Maturity of any
Securities of any series, the Holders of not less than a majority in
aggregate principal amount of the Securities of such series then
Outstanding with respect to which a default or breach or an Event of
Default shall have occurred and be continuing may on behalf of the Holders
of all of the Securities of such series waive any past default or breach or
Event of Default and its consequences, except a default or breach or Event
of Default in the payment of principal of (or premium, if any) or interest
on any Security of such series. Upon any such waiver, such default or
breach shall cease to exist, and any Event of Default arising therefrom
shall be deemed to have been cured with the effect provided in the
Indenture but no such waiver shall extend to any subsequent or other
default or breach or Event of Default or impair any right consequent
thereon.
The Indenture permits the amendment thereof and the modification of
the rights and obligations of the Company and the rights of the Holders
under the Indenture at any time by the Company and the Trustee with the
consent of the Holders of a majority in aggregate principal amount of the
Securities then Outstanding of all series which are affected by such
amendment or modification, except that certain amendments which do not
adversely affect the rights of any Holder of the Securities may be made
without the approval of Holders of the Securities and no amendment or
modification may, among other things, extend the Stated Maturity of any
Security, reduce the principal amount thereof, reduce the rate or extend
the time of payment of any interest thereon without the consent of the
Holder of each Security so affected or reduce the aforesaid majority in
aggregate principal amount of Securities of any series, the consent of the
Holders of which is required for any such amendment or modification,
without the consent of the Holders of all Securities of each affected
series.
Notwithstanding any provision in the Indenture or any provision of
this Note, the Holder of this Note shall have the right, which is absolute
and unconditional, to receive payment of the principal of (and premium, if
any) and interest on this Note at the times, place and rate, and in the
coin or currency herein prescribed.
As provided in the Indenture and subject to certain limitations
therein set forth, transfer of this Note is registrable on the Security
Register, upon due presentment for registration of transfer of this Note at
the office or agency of the Company in Chicago, Illinois, or such other
offices or agencies as the Company may designate, and thereupon the Company
shall execute and the Trustee shall authenticate and deliver in the name of
the transferee or transferees a new Security or Securities of authorized
denominations, of the same series and of like aggregate principal amount at
Stated Maturity. The 6-1/2% Notes are issuable only as fully registered
Securities in denominations of $1,000 and any integral multiple of $1,000.
As provided in the Indenture and subject to certain limitations therein set
forth, this Note is exchangeable for a like aggregate principal amount of
Securities of the same terms as this Note and of authorized denominations.
No service charge will be made for any such exchange or registration
of transfer, but the Company may require payment of a sum sufficient to
cover any tax or other governmental charge imposed in relation thereto.
All terms used in this Note which are defined in the Indenture have
the meanings assigned to them in the Indenture.
ASSIGNMENT FORM
To assign this Note, fill in the form below:
I or we assign and transfer this Note to
-------------------------------------------
Insert assignee's soc. sec. or tax I.D. no.
- ---------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
- ---------------------------------------------------------------------------
- ---------------------------------------------------------------------------
- ---------------------------------------------------------------------------
and irrevocably appoint
--------------------------------------------------
- ---------------------------------------------------------------------------
agent to transfer this Note on the books of the Company. The agent may
substitute another to act for him.
Dated:
-------------------------- ----------------------------------
----------------------------------
NOTICE: The signature to this assignment must correspond with the
name as it appears on the first page of the within Note in every
particular, without alteration or enlargement or any change whatever and
must be guaranteed by a commercial bank or trust company having its
principal office or a correspondent in the City of New York or by a member
of the New York Stock Exchange.
EXHIBIT 10(i)
Whitman Corporation
Executive Retirement Plan
As Amended and Restated Effective January 1, 1991
and December 31, 1993
Whitman Corporation Executive Retirement Plan
Whitman Corporation (the "Company") amends and restates, effective as of
January 1, 1991 and December 31, 1993, an unfunded, deferred compensation
plan on behalf of certain designated management or highly compensated
employees of the Company. This document defines the provisions of such
plan and shall be known as the "Whitman Corporation Executive Retirement
Plan."
The Company maintains the Whitman Corporation Pension Plan (effective
January 1, 1992, the Pepsi-Cola General Bottlers, Inc. Pension Plan for
Salaried Employees) and the Whitman Corporation Retirement Savings Plan
(collectively the "Plans"), each of which is intended to meet the
requirements of a "qualified" retirement plan under Section 401(a) of the
Internal Revenue Code of 1986, as amended ("Code"). The Plans contain
certain restrictions that sometimes result in a diminution of benefits
available to certain highly compensated employees. This plan is intended
in part to be an unfunded, deferred compensation plan for a select group of
management or highly compensated employees, as described in sections
201(2), 301(a)(3), and 401(a)(1) of the Employee Retirement Income Security
Act of 1974 ("ERISA") and in part to be an excess benefit plan described in
section 3(36) of ERISA.
ARTICLE I
DEFINITIONS
1.1 "Accounting Period"
1.2 "Accounts"
1.3 "Actuarial Equivalent"
1.4 "Administrative Committee"
1.5 "Appendix"
1.6 "Beneficiary"
1.7 "Board of Directors"
1.8 "Change of Control"
1.9 "Company"
1.10 "Company Stock"
1.11 "Compensation"
1.12 "Compensation Committee"
1.13 "Compensation Limit"
1.14 "Contribution Dollar Limit"
1.15 "Conversion Election"
1.16 "Death Benefit"
1.17 "Deferrals"
1.18 "Deferral Election" or "Election"
1.19 "Deferral Percentage"
1.20 "Designated Participant"
1.21 "Effective Date"
1.22 "Eligible Employee"
1.23 "Employee"
1.24 "Enrollment Election"
1.25 "Exchange Act"
1.26 "Insider"
1.27 "Installment Form of Payment"
1.28 "Internal Revenue Code" or "Code"
1.29 "Investment Election"
1.30 "Investment Fund" or "Fund"
1.31 "Maximum Annual Additions Limitation"
1.32 "Maximum Annual Benefit Limitation"
1.33 "MIC Award"
1.34 "Notice Date"
1.35 "Participant"
1.36 "Payment Date"
1.37 "Pension Plan"
1.38 "Plan"
1.39 "Plan Year"
1.40 "Retirement Benefit"
1.41 "RSP"
1.42 "Section 401(m) Limitation"
1.43 "Settlement Date"
1.44 "Spouse"
1.45 "Sweep Date"
1.46 "Termination of Employment"
1.47 "Trade Date"
ARTICLE II
PARTICIPATION
2.1 Eligibility
2.2 Enrollment Election.
ARTICLE III
PARTICIPANT DEFERRALS
3.1 Replacement RSP Employee Deferral Election
3.2 Election Procedures
3.3 Coordination with RSP
ARTICLE IV
DEFERRALS AND POSTINGS
4.1 Replacement RSP Employer Deferral
4.2 MIC Deferral
4.3 Pay Based Deferral
4.4 Replacement RSP Employee Deferral
4.5 RSP Employer Deferral
4.6 RSP Employee Deferral
ARTICLE V
EXCESS RETIREMENT AND DEATH BENEFITS
5.1 Amount of Pension Benefits
5.2 Amount of Death Benefit
5.3 Pre-1994 Benefits
ARTICLE VI
ACCOUNTING FOR PARTICIPANTS'
ACCOUNTS AND FOR INVESTMENT FUNDS
6.1 Individual Participant Accounting
6.2 Accounting for Investment Funds
ARTICLE VII
INVESTMENT FUNDS AND ELECTIONS
7.1 General
7.2 Investment of Deferrals
7.3 Investment of Accounts
7.4 Insiders
7.5 Investment Returns on MIC Deferrals
7.6 Restrictions on Measurement
7.7 Procedures
ARTICLE VIII
VESTING AND FORFEITURES
8.1 Fully Vested Deferral Accounts
ARTICLE IX
WITHDRAWALS
9.1 Withdrawals for Hardship
9.2 Withdrawal Processing
ARTICLE X
DISTRIBUTIONS
10.1 Retirement Benefit
10.2 Pension Death Benefit
10.3 Accounts
10.5 Death Benefit of Accounts
10.6 Prior to 1994
10.7 Payments of Retirement and Death Benefit Due to a Change
of Control
10.8 Payment of Accounts Due to a Change of Control
ARTICLE XI
AMENDMENT AND TERMINATION
11.1 Prior to a Change of Control
11.2 After a Change of Control
ARTICLE XII
MISCELLANEOUS PROVISIONS
12.1 Administration
12.2 Finality of Determination
12.3 Expenses
12.4 Indemnification and Exculpation
12.5 Funding
12.6 Corporate Action
12.7 Interests not Transferable
12.8 Effect on Other Benefit Plans
12.9 Legal Fees and Expenses
12.10 Deduction of Taxes from Amounts Payable
12.11 Facility of Payment
12.12 Company Merger
12.13 Gender and Number
12.14 Invalidity of Certain Provisions
12.15 Headings
12.16 Notice and Information Requirements
12.17 Governing Law
ARTICLE I
DEFINITIONS
The following sections of this Article I provide basic definitions of
terms used throughout this Plan, and whenever used herein in a capitalized
form, except as otherwise expressly provided, the terms shall be deemed to
have the following meanings:
1.1 "Accounting Period" means each business day.
1.2 "Accounts" means the record of a Participant's interest in this
Plan represented by his or her:
(a) "MIC Deferral Account" which means a Participant's interest
in this Plan composed of MIC Deferrals posted for each Plan Year on or
after January 1, 1994 to the Participant under this Plan, if any (as
identified by the Administrative Committee) for such Plan Year, plus
all interest deemed credited to and minus all withdrawals and
distributions actually charged to such account.
(b) "Pay Based Account" which means a Participant's interest in
this Plan composed of Pay Based Deferrals posted for each Plan Year on
or after January 1, 1994 to the Participant under this Plan, plus all
income and gains deemed credited to and minus all losses deemed
charged to such account, as measured by the investment returns of each
Investment Fund designated by the Participant, and minus all
withdrawals and distributions actually charged to such account.
(c) "Replacement RSP Accounts" which consists of the following
two accounts:
(1) "Replacement RSP Employee Account" which means a
Participant's interest in this Plan composed of Replacement RSP
Employee Deferrals posted for each Plan Year on or after
January 1, 1994 to the Participant under this Plan, if any (as
identified by the Administrative Committee) for such Plan Year,
plus all income and gains deemed credited to and minus all losses
deemed charged to such account, as measured by the investment
returns of each Investment Fund designated by the Participant,
and minus all withdrawals and distributions actually charged to
such account; and
(2) "Replacement RSP Employer Account" which means a
Participant's interest in this Plan composed of Replacement RSP
Employer Deferrals posted for each Plan Year on or after
January 1, 1994 to the Participant under this Plan (as identified
by the Administrative Committee) for such Plan Year, plus all
income and gains deemed credited to and minus all losses deemed
charged to such account, as measured by the investment returns of
each Investment Fund designated by the Participant, and minus all
withdrawals and distributions actually charged to such account.
(d) "RSP Employee Account" which means a Participant's interest
in this Plan composed of RSP Employee Deferrals posted under this Plan
prior to January 1, 1994, if any (as identified by the Administrative
Committee), plus all income and gains deemed credited to and minus all
losses deemed charged to such account, as measured by the investment
returns of each Investment Fund designated by the Participant, and
minus all withdrawals and distributions actually charged to such
account.
(e) "RSP Employer Account" which means a Participant's interest
in this Plan composed of RSP Employer Deferrals posted under this Plan
prior to January 1, 1994, if any (as identified by the Administrative
Committee), plus all income and gains deemed credited to and minus all
losses deemed charged to such account, as measured by the investment
returns of each Investment Fund designated by the Participant, and
minus all withdrawals and distributions actually charged to such
account.
1.3 "Actuarial Equivalent" means an amount equal in value to the
benefit replaced as determined (i) in accordance with the terms of the
Pension Plan with respect to the determination of any form of benefit other
than a single sum, (ii) with respect to a single sum distribution, by
using: (A) an assumed annual discount rate equal to the weekly average of
the Bond Buyer's Average of 20 Municipal Bonds, rounded to the nearest
1/4%, as of a date selected by the Administrative Committee no earlier than
one year preceding the Payment Date, as published weekly by the Federal
Reserve Bank of St. Louis and (B) assumed mortality as set forth in the
Pension Plan.
1.4 "Administrative Committee" means the committee appointed pursuant
to the terms of this Plan to manage and control the operation and
administration of this Plan which shall be the same as the administrative
committee for the RSP.
1.5 "Appendix" means a written supplement attached to this Plan and
made a part hereof which has been added in accordance with the provisions
of this Plan.
1.6 "Beneficiary" means
(a) with respect to the Death Benefit payable upon the death of
a Participant, any person designated by the Participant (actually or
by default) to receive any retirement benefits which are payable with
respect to the death of a Participant under the Pension Plan; and
(b) with respect to the balance of a Participant's Accounts as
of the death of such Participant, each person designated by the
Participant on his or her most recent Enrollment Election form
approved by the Administrative Committee; provided that if a
Participant fails to designate a Beneficiary on an Enrollment Election
form or if all such designated persons predecease the Participant
without the Participant completing a new, approved Enrollment Election
form, then Beneficiary means any person designated by the Participant
(actually or by default) to receive the balance of any of his or her
accounts which are payable with respect to the death of such
Participant under the RSP.
An individual who is entitled to receive a Death Benefit on and after
the death of a Participant will remain a Beneficiary until the latest of
(a) receipt of the balance of all of such Accounts to which he or she is
entitled to receive; or (b) receipt of such Beneficiary's Death Benefit, if
any, is completed (or made in a single sum).
1.7 "Board of Directors" means the board of directors of the Company.
1.8 "Change of Control" means an event which shall be deemed to have
occurred if (i) there shall be consummated (A) any consolidation or merger
of the Company in which the Company is not the continuing or surviving
corporation or pursuant to which shares of the Company's Common Stock are
converted into cash, securities or other property, other than a merger of
the Company in which the holders of the Company's Common Stock immediately
prior to the merger have substantially the same proportionate ownership of
common stock of the surviving corporation immediately after the merger, or
(B) any sale, lease, exchange or other transfer (in one transaction or a
series of related transactions) of all or substantially all the assets of
the Company, or (ii) the shareholders of the Company shall approve any plan
or proposal for the liquidation or dissolution of the Company, or (iii) any
person (as such term is used in Sections 13(d) and 14(d)(2) of the Exchange
Act, other than the Company, or any employee benefit plan sponsored by the
Company, shall become the beneficial owner (within the meaning of Rule 13d-
3 under the Exchange Act) of securities of the Company representing twenty-
five percent (25%) or more of the combined voting power of the Company's
then outstanding securities ordinarily (and apart from rights accruing in
special circumstances) having the right to vote in the election of
directors, as a result of a tender or exchange offer, open market
purchases, privately negotiated purchases or otherwise, or (iv) at any time
during a period of two consecutive years, individuals who at the beginning
of such period constituted the Board of Directors of the Company shall
cease for any reason to constitute at least a majority thereof, unless the
election or the nomination for election by the Company's shareholders of
each new director during such two-year period was approved by a vote of at
least two-thirds of the directors then still in office who were directors
at the beginning of such two-year period.
1.9 "Company" means Whitman Corporation or any successor corporation
by merger, consolidation, purchase, or otherwise.
1.10 "Company Stock" means common stock issued by Whitman Corporation.
1.11 "Compensation" means
(a) for purposes of Replacement RSP Employee Deferrals,
Replacement RSP Employer Deferrals and Pay Based Deferrals for any
Plan Year, a Participant's "Compensation", as defined in the RSP
(disregarding any provision having the effect of excluding Replacement
RSP Employee Deferrals and MIC Deferrals), for a Plan Year to the
Participant;
(b) for purposes of RSP Employee Deferrals and RSP Employer
Deferrals, a Participant's Compensation, as defined in the RSP
(disregarding any provision having the effect of excluding RSP
Employee Deferrals), for a Plan Year;
(c) for purposes of MIC Deferrals, a Participant's MIC Award
(other than that portion of the MIC Award which is a Replacement RSP
Employee Deferral and excluding an amount equal to the Employee's
portion of taxes imposed by the Federal Insurance Contributions Act
with respect to the MIC Award and with respect to the Replacement RSP
Employer Deferrals on the portion of the MIC Award which is a
Replacement RSP Employee Deferral, and if needed, the Retirement
Benefit accrual, for that Plan Year); and
(d) for purposes of computing the Retirement Benefit, a
Participant's "Compensation," as defined in the Pension Plan
(disregarding any provision having the effect of excluding RSP
Employee Deferrals, Replacement RSP Employee Deferrals and MIC
Deferrals), for a Plan Year, as adjusted by the Administrative
Committee from Plan Year to Plan Year.
Notwithstanding the above, the definition of "Compensation" in the RSP
and the Pension Plan shall not include the Compensation Limit.
1.12 "Compensation Committee" means the Compensation Committee of the
Board of Directors.
1.13 "Compensation Limit" means the limitation on the amount of
Compensation which may be considered after application of Code section
401(a)(17).
1.14 "Contribution Dollar Limit" means the annual limit imposed on
each Participant pursuant to section 402(g) of the Code, which is seven
thousand dollars ($7,000) per Plan Year (as indexed for cost of living
adjustments pursuant to Code section 402(g)(5) and 415(d)).
1.15 "Conversion Election" means, effective on or after January 1,
1994, an election, on such form that may be required by the Administrative
Committee, by a Participant to change the method of measuring the
investment return on all or some specified portion of such Participant's
Accounts. No Conversion Election shall be deemed to have been given to the
Administrative Committee unless it is complete and delivered in accordance
with the procedures established by such Administrative Committee for this
purpose.
1.16 "Death Benefit" means a monthly (or single sum) benefit payable
to a Beneficiary and determined in accordance with Article V.
1.17 "Deferrals" means amounts posted to this Plan by the Company or
an Eligible Employee. Specific types of deferrals include:
(a) "MIC". An amount posted after 1993 based upon the
Participant's Deferral Election to defer some or all of his
or her Compensation.
(b) "Pay Based". An amount posted and allocated on a pay based
formula to an eligible Participant's Accounts.
(c) "Replacement RSP Employee". An amount posted after 1993
based upon the Participant's Deferral Election to defer some
of his or her Compensation.
(d) "Replacement RSP Employer". An amount posted after 1993
based upon the Replacement RSP Employee Deferral made by the
eligible Participant.
(e) "RSP Employee". An amount posted prior to 1994 on a pre-tax
basis which the Participant could have elected if he or she
were participating actively in the RSP.
(f) "RSP Employer". An amount posted prior to January 1, 1994
related to pre-tax contributions which the Participant could
not make to the RSP or which are made on behalf of
Designated Participants without regard to such pre-tax
contributions.
1.18 "Deferral Election" or "Election" means irrevocable elections
made by a Participant (a) to reduce his or her Compensation for a Plan Year
by an amount equal to the product of his or her Deferral Percentage and
such Compensation subject to the Deferral Election; (b) to select whether
Deferrals for that Plan Year will be paid in an Installment Form of
Payment; and (c) to select a Payment Date for the MIC Deferrals for that
Plan Year.
1.19 "Deferral Percentage" means (a) with respect to Replacement RSP
Employee Deferrals, the percentage of a Participant's Compensation for a
Plan Year which is to be deferred and posted to this Plan; and (b) with
respect to MIC Deferrals, the percentage of a Participant's Compensation
for a Plan Year which is to be deferred and posted to this Plan.
1.20 "Designated Participant" means an individual who is a Participant
of this Plan because he or she is on the list of Employees set forth in an
Appendix to the Pension Plan as not being an eligible employee for the
purpose of the Pension Plan.
1.21 "Effective Date" means generally January 1, 1991 and, where
noted, January 1, 1994, the dates upon which certain provisions of this
document become effective.
1.22 "Eligible Employee" means with respect to each Plan Year:
(a) with respect to the Retirement Benefit, each Employee who is
a participant in the Pension Plan or would be a participant in the
Pension Plan if they were not a Designated Participant.
(b) prior to 1994 with respect to Deferrals:
(1) each Employee who is a Participant in the RSP for that
Plan Year and whose pre-tax contributions which would otherwise
have been made for that Plan Year to the RSP are limited by the
Contribution Dollar Limit; or
(2) each individual who is a Designated Participant for
that Plan Year.
(c) after 1993 with respect to Deferrals, each Employee who is
participating in the Whitman Corporation Management Incentive
Compensation Plan during that Plan Year.
1.23 "Employee" means any person who is considered to be an employee
pursuant to the personnel policies of; or on and after a Change of Control,
who renders services as a common law employee to, the Company.
1.24 "Enrollment Election" means irrevocable elections made by a
Participant (a) to select the term of his or her Installment Form of
Payment; (b) to select the Payment Date of his or her Accounts following
Termination of Employment; and (c) to select the form of payment of his or
her Accounts as of December 31, 1993.
1.25 "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
1.26 "Insider" means for a Plan Year, or any portion thereof, the
Participant is subject to the reporting requirements of Section 16 of the
Exchange Act.
1.27 "Installment Form of Payment" means separately with respect to
(a) his or her Accounts (other than his or her MIC Account) or (b) his or
her MIC Account, the term of years selected by the Participant in his or
her Enrollment Election form over which to pay such Accounts in annual
installments commencing as of what would otherwise have been the Payment
Date of such Accounts and payable on each January 1 thereafter over a
period of not less than two (2) nor more than fifteen (15) years (stated as
a number of whole integers), with each installment being an amount equal to
the amount determined by dividing the applicable balance of such Accounts
as of the date of payment by the number of dates of payment remaining in
the installment period (including the current date of payment).
1.28 "Internal Revenue Code" or "Code" means the Internal Revenue Code
of 1986, as amended, any subsequent Internal Revenue Code and final
Treasury Regulations. If there is a subsequent Internal Revenue Code, any
references herein to Internal Revenue Code sections shall be deemed to
refer to comparable sections of any subsequent Internal Revenue Code.
1.29 "Investment Election" means, effective on and after January 1,
1994, an election, on such form that may be required by the Administrative
Committee, made by a Participant to direct the method of measuring the
investment return on his or her Deferrals (other than MIC Deferrals). No
Investment Election shall be deemed to have been given to the
Administrative Committee unless it is complete and delivered in accordance
with the procedures established by such Administrative Committee for this
purpose.
1.30 "Investment Fund" or "Fund" means one or more of the investment
alternatives which are available under the RSP at any determination date
unless designated otherwise by the Administrative Committee, and which are
used by this Plan as a measurement of investment return on Accounts other
than the MIC Account.
1.31 "Maximum Annual Additions Limitation" means the limitation
imposed by Code section 415 on benefits payable by defined contribution
plans qualified under Code section 401(a).
1.32 "Maximum Annual Benefit Limitation" means the limitation imposed
by Code section 415 on benefits payable by defined benefit pension plans
qualified under Code sections 401(a) including application of the
combination limitations of Code section 415(e) to cause a further
reduction, if any, of such benefits.
1.33 "MIC Award" means the amount of award payable to a Participant
under the Whitman Corporation Management Incentive Compensation Plan.
1.34 "Notice Date" means the date established by the Administrative
Committee as the deadline for it to receive a Deferral Election or any
other notification with respect to an administrative matter in order to be
effective under this Plan.
1.35 "Participant" means an Eligible Employee who begins to
participate in this Plan after completing the eligibility requirements. An
individual will remain a Participant until the latest of (a) distribution
of the balance of all of his or her Accounts; or (b) payment of his or her
Retirement Benefit, if any, is completed (or made in a single sum).
1.36 "Payment Date" means:
(a) with respect to Accounts, the first day of the fifteenth
(15th) month following a Participant's Termination of Employment
unless such Participant has selected an earlier Payment Date for
(1) his or her Accounts on an Enrollment Election form or (2) his or
her MIC Accounts on a Deferral Election Form; or
(b) the date a Participant's Retirement Benefit is distributed
or commences to be distributed as described in Article X.
1.37 "Pension Plan" means the Whitman Corporation Pension Plan; and
effective January 1, 1992, the Pepsi-Cola General Bottlers, Inc. Pension
Plan for Salaried Employees.
1.38 "Plan" means the Whitman Corporation Executive Retirement Plan.
1.39 "Plan Year" means the annual accounting period of this Plan which
ends on each December 31.
1.40 "Retirement Benefit" means a monthly (or single sum) pension
benefit payable to a Participant and determined in accordance with
Article V.
1.41 "RSP" means the Whitman Corporation Retirement Savings Plan, as
amended from time to time.
1.42 "Section 401(m) Limitation" means the limit imposed by Code
section 401(m).
1.43 "Settlement Date" means the date on which financial transactions
from a Trade Date are considered to be settled which is deemed to be the
same date as of which such transaction would have settled under the RSP
with respect to the same type of financial transaction (e.g. Investment
Election, Conversion Election, Payment Date).
1.44 "Spouse" means a person who is considered the Participant's
spouse under the RSP and Pension Plan, whichever is applicable.
1.45 "Sweep Date" means the date established by the Administrative
Committee as the cutoff date and time for the Administrative Committee to
receive notification with respect to a financial transaction in order to be
processed with respect to such Trade Date.
1.46 "Termination of Employment" occurs when a person ceases to be an
Employee as determined by the personnel policies of the Company; or on and
after a Change of Control, ceases to be an Employee. Transfer of
employment from the Company, or from one affiliate of the Company, to
another affiliate of the Company shall not constitute a Termination of
Employment for purposes of this Plan.
1.47 "Trade Date" means the date as of which a financial transaction
is considered by this Plan to have occurred which is deemed to be the same
date as of which such transaction would have occurred under the RSP with
respect to the same type of financial transaction (e.g. Investment
Election, Conversion Election, Payment Date).
ARTICLE II
PARTICIPATION
2.1 Eligibility. On or after the Effective Date:
(a) Participant on January 1, 1991. Each person who has a
balance in his or her Accounts, or who has accrued a Retirement
Benefit, as of January 1, 1991 shall be a Participant as of January 1,
1991.
(b) Other Eligible Employee. Each other Eligible Employee shall
become a Participant with respect to the Plan Year in which he or she
becomes an Eligible Employee; or effective January 1, 1994, as of the
first day of the Plan Year commencing on or after the date he or she
became an Eligible Employee.
2.2 Enrollment Election.
(a) Participant on January 1, 1994. Each person who is a
Participant on January 1, 1994 shall complete, sign and return an
Enrollment Election form provided for that purpose by the
Administrative Committee, to the Administrative Committee no later
than the designated Notice Date.
(b) Other Eligible Employees. Each person first eligible to
become a Participant shall complete, sign and return an Enrollment
Election form provided for that purpose by the Administrative
Committee, to the Administrative Committee no later than the
designated Notice Date.
ARTICLE III
PARTICIPANT DEFERRALS
3.1 Replacement RSP Employee Deferral Election.
(a) For each Plan Year commencing on or after January 1, 1994, a
Participant who is an Eligible Employee and who desires to have
Replacement RSP Employee Deferrals made on his or her behalf shall
file a Deferral Election pursuant to procedures specified by the
Administrative Committee specifying (1) his or her Deferral Percentage
of not less than two percent (2%) nor more than ten percent (10%)
(stated as a whole integer percentage) and authorizing the
Compensation otherwise payable to him or her for a Plan Year to be
reduced and deferred hereunder to such Participant's Payment Date; and
(2) whether or not the Replacement RSP Employee Account created with
respect to such Plan Year will be distributed in the Installment Form
of Payment.
(b) For each Plan Year commencing on or after January 1, 1994, a
Participant who is an Eligible Employee and who desires to have an MIC
Deferral made on his or her behalf shall file a Deferral Election
pursuant to procedures specified by the Administrative Committee
specifying (1) his or her Deferral Percentage of not less than 5% nor
more than 100% (stated as a whole integer percentage) and authorizing
his or her Compensation payable for a Plan Year to be reduced and
deferred hereunder to a fixed Payment Date not earlier than two (2)
full Plan Years after the date the Deferral Election is received by
the Administrative Committee; and (2) whether or not the MIC Account
created with respect to such Plan Year will be distributed in the
Installment Form of Payment.
(c) Notwithstanding Subsection (a) hereof, for any Plan Year the
Administrative Committee may, without amending this Plan, determine
that the maximum Deferral Percentage shall be greater or lesser than
the percentages set forth in Subsection (a) hereof. Otherwise, the
maximum Deferral Percentage as provided in Subsection (a) hereof shall
apply.
(d) Any Replacement RSP Employee Deferral Election which has not
been properly completed, or which is submitted at a time when the
Participant does not have outstanding a properly completed Investment
Election, will be deemed not to have been received and be void. A
Participant's Deferral Election shall be effective only if received by
the Administrative Committee on or before the Notice Date for a Plan
Year.
3.2 Election Procedures. If properly received by the Administrative
Committee, a Deferral Election may be effective only with respect to
Compensation paid in a Plan Year to which the Deferral Election applies and
only with respect to Compensation paid after the Notice Date for the
Deferral Election. Consistent with the above, the Administrative Committee
may establish rules and procedures governing when a Deferral Election will
be effective and what Compensation will be deferred by the Deferral
Election; provided such rules and procedures are not more permissive than
the terms and provisions of this Plan.
3.3 Coordination with RSP. Notwithstanding a Participant's Deferral
Election, if a Participant makes a "401(k) Hardship" withdrawal from the
RSP during a Plan Year, the "401(k) Hardship" withdrawal rules of the RSP,
which are intended to be applicable to this Plan, are incorporated by
reference herein and made a part hereof, but only to the extent required by
Treas. Reg. Sec. 1.401(k)-1, in order for the RSP to be a qualified cash or
deferred arrangement.
ARTICLE IV
DEFERRALS AND POSTINGS
4.1 Replacement RSP Employer Deferral.
(a) Frequency and Eligibility. For each period after 1993 for
which a Participant makes a Replacement RSP Employee Deferral, the
Company shall post to this Plan on behalf of such Participant an
Replacement RSP Employer Deferral as described in the following
Posting and Allocation Method paragraph.
(b) Posting and Allocation Method. The Replacement RSP Employer
Deferral for each period shall total one hundred percent (100%) of
each eligible Participant's Replacement RSP Employee Deferral for the
period, provided that no Replacement RSP Employer Deferral shall be
made based upon a Participant's Replacement RSP Employee Deferral in
excess of six percent (6%) of his or her Compensation. The
Replacement RSP Employer Deferral shall be posted to the Replacement
RSP Employer Account of such Participant as of the same date the
Replacement RSP Employee Deferral which it matches is posted.
4.2 MIC Deferral.
(a) Frequency and Eligibility. For each period after 1993 for
which a Deferral Election is in effect, the Company shall post to this
Plan on behalf of each Participant an amount equal to the amount
designated by the Participant as an MIC Deferral on his or her
Deferral Election.
(b) Posting. The MIC Deferral shall be posted to the MIC
Deferral Account of such Participant as of the date his or her MIC
Award would otherwise have been paid to the Participant.
4.3 Pay Based Deferral.
(a) Frequency and Eligibility. For each Plan Year, the Company
may make a Pay Based Deferral in an amount determined by the Company
on behalf of each Participant who is an Eligible Employee and who
would have qualified for a similar deferral in the RSP had such person
been eligible to participate in the RSP and in an amount determined in
the Posting and Allocation Method paragraph.
(b) Posting and Allocation Method. The Pay Based Deferral for
each period shall be posted as of the date determined by the
Administrative Committee (but not later than the tax filing deadline
for the Company's federal income tax return for the Plan Year with
respect to which the Pay Based Deferral relates, including extensions)
to the Pay Based Account of each of the Participants for the Plan Year
in direct proportion to their Compensation.
4.4 Replacement RSP Employee Deferral.
(a) Frequency and Eligibility. For each period for which a
Deferral Election is in effect, the Company shall post to this Plan on
behalf of each Participant an amount equal to the amount designated by
the Participant as an Replacement RSP Employee Deferral on his or her
Deferral Election.
(b) Posting. The Replacement RSP Employee Deferral shall be
posted to the Replacement RSP Employee Account of such Participant as
of the date such Compensation amount would otherwise have been paid to
the Participant.
4.5 RSP Employer Deferral.
(a) Frequency and Eligibility.
(1) Pre-1991. Amounts posted to a Participant's Accounts
for each Plan Year prior to 1991 are determined under the terms
and provisions of this Plan as it existed during any such Plan
Year.
(2) Post-1990 and Pre-1994. For each Plan Year after 1990
and prior to 1994, the Company shall post to this Plan on behalf
of each Participant whose pre-tax contribution to the RSP was
limited by the Contribution Dollar Limit for that Plan Year, and
who is not a Designated Participant for that Plan Year, an RSP
Employer Deferral as described in (b)(2) of the following Posting
and Allocation Method paragraph.
(3) Designated Participant. For each Plan Year after 1990
and prior to 1994, the Company shall post to this Plan on behalf
of each Participant who is a Designated Participant and an
Employee for that Plan Year, an RSP Employer Deferral as
described in (b)(3) of the following Allocation Method paragraph.
(b) Posting and Allocation Method.
(1) Pre-1991. RSP Employer Deferrals for Plan Years prior
to 1991 shall be posted as of January 1, 1991, to the RSP
Employer Account.
(2) Post-1990 and Pre-1994. The RSP Employer Deferral for
each Plan Year after 1990 and prior to 1994 shall be an amount
equal to (A) minus (B) where:
(A) is equal to the amount of matching contribution
which would have been made to the RSP for the Plan Year
based on the assumptions that (i) the Participant has made
pre-tax contributions to the RSP at the rate of six percent
(6%) of his or her compensation as defined in the RSP,
without regard to the Maximum Annual Additions Limitation,
the Contribution Dollar Limit and the Compensation Limit;
and (ii) matching contributions to the RSP were made with
respect to such amounts in accordance with the terms of the
RSP without regard to the Maximum Annual Additions
Limitation and the Section 401(m) Limitation; and
(B) is equal to the actual amount of matching
contribution made on behalf of the Participant to the RSP
for the Plan Year.
The RSP Employer Deferral after 1990 shall be posted to the
RSP Employer Account as of the same date it would have been made
as a matching contribution to the RSP, if it could have been made
(or as a pay based contribution to the RSP in 1991, if it could
have been made).
(3) Designated Participant. The RSP Employer Deferral for
each Plan Year after 1990 and prior to 1994 shall be an amount
equal to six percent (6%) of the Participant's Compensation,
without regard to the Maximum Annual Benefit Limitation. For the
1991 Plan Year, an amount shall be posted equal to 2% of such
Participant's Compensation. The RSP Employer Deferral after 1990
shall be posted to the RSP Employer Account as of the same date
it would have been made as a matching contribution to the RSP, if
it could have been made (or as a pay based contribution to the
RSP in 1991, if it could have been made).
4.6 RSP Employee Deferral.
(a) Frequency and Eligibility. Amounts posted to a
Participant's Accounts for each Plan Year prior to 1994 are determined
under the terms and provisions of this Plan as it existed during any
such Plan Year.
(b) Allocation Method. RSP Employee Deferrals for Plan Years
prior to 1994 shall be posted to the RSP Employee Account in
accordance with the terms of the Plan at that time.
ARTICLE V
EXCESS RETIREMENT AND DEATH BENEFITS
5.1 Amount of Pension Benefits. Effective on and after January 1,
1994, a Retirement Benefit will be paid under this Plan, only as provided
in Article X, to a Participant in an annual amount payable monthly equal to
the amount by which (a) exceeds (b):
(a) The amount of the annual retirement benefit payable in the form
of a single life annuity the Participant would have been entitled to
receive under the Pension Plan (1) had the Pension Plan not applied the
Maximum Annual Benefit Limitation in determining benefits payable from the
Pension Plan; and (2) had the Participant not been excluded from being an
"Eligible Employee" by being listed on an Appendix to the Pension Plan.
For purposes of this Section 5.1(a), the compensation used for determining
retirement benefits payable from the Pension Plan shall mean Compensation
as defined in this Plan for a Plan Year.
(b) The amount of the annual retirement benefit payable monthly which
the Participant is entitled to receive under the Pension Plan if it were to
commence on the Payment Date and to be paid in the form of single life
annuity.
5.2 Amount of Death Benefit. Effective on and after January 1, 1994,
a Death Benefit will be paid under this Plan, only as provided in
Article X, to a Beneficiary of a deceased Participant in an annual amount
payable monthly equal to the amount by which (a) exceeds (b):
(a) The amount of the annual death benefit payable in the form of a
single life annuity the Beneficiary of a deceased Participant would have
been entitled to receive under the Pension Plan (1) had the Pension Plan
not applied the Maximum Annual Benefit Limitation in determining benefits
payable from the Pension Plan; and (2) had the Participant not been
excluded from being an "Eligible Employee" by being listed on an Appendix
to the Pension Plan. For purposes of this Section 5.3(a), the compensation
used for determining death benefits payable from the Pension Plan means
Compensation as defined in this Plan for a Plan Year.
(b) The amount of the annual death benefit payable monthly which the
Beneficiary of a deceased Participant is entitled to receive under the
Pension Plan if it were to commence on the same date as the Death Benefit
under this Plan and to be paid in the form of single life annuity.
5.3 Pre-1994 Benefits. Any Retirement Benefit accrued by a
Participant prior to 1994, who is never an Eligible Employee after 1993,
shall be determined and paid solely under the terms of this Plan as it
existed prior to 1991.
ARTICLE VI
ACCOUNTING FOR PARTICIPANTS'
ACCOUNTS AND FOR INVESTMENT FUNDS
6.1 Individual Participant Accounting.
(a) Account Maintenance. The Administrative Committee shall
cause the Accounts for each Participant to reflect transactions
involving amounts posted to the Accounts and the measurement of
investment returns on Accounts in accordance with this Plan.
Investment returns during or with respect to an Accounting Period
shall be accounted for at the individual account level by "posting"
such returns to each of the appropriate Accounts of each affected
Participant. Account values shall be maintained in shares, units or
dollars.
(b) Trade Date Accounting and Investment Cycle. For any
financial transaction involving a change in the measurement of
investment returns, withdrawals or distributions to be processed as of
a Trade Date, the Administrative Committee must receive instructions
by the Sweep Date and such instructions shall apply only to amounts
posted to the Accounts as of the Trade Date. Such financial
transactions in an Investment Fund shall be posted to a Participant's
Accounts as of the Trade Date and based upon the Trade Date values.
All such transactions shall be effected on the Settlement Date (or as
soon as is administratively feasible) relating to the Trade Date as of
which the transaction occurs.
(c) Suspension of Transactions. Whenever the Administrative
Committee considers such action to be appropriate, the Administrative
Committee, in its discretion, may suspend from time to time the Trade
Date.
(d) Error Correction. The Administrative Committee may correct
any errors or omissions in the administration of this Plan by
restoring or charging any Participant's Accounts with the amount that
would be credited or charged to the Accounts had no error or omission
been made.
6.2 Accounting for Investment Funds. The investment returns of each
Investment Fund shall be tracked in the same manner as such Investment
Funds are tracked under the RSP. Investment income, earnings, and losses
charged against the Accounts shall be based solely upon the actual
performance (net of expenses and charges allowed under the RSP) of each of
the Investment Funds for the period of time all or some portion of each of
the Accounts has been designated to use such Investment Fund as a
measurement of investment returns. A change of measurement of returns from
one Investment Fund to another, or a distribution or withdrawal, shall be
determined as of the same dates and in the same manner as if amounts posted
in Accounts were actually invested in the RSP and such financial
transactions were being implemented in the RSP.
ARTICLE VII
INVESTMENT FUNDS AND ELECTIONS
7.1 General. Prior to January 1, 1994, a Participant's Investment
Election and Conversion Election (except as provided in Section 7.4) with
respect to this Plan were deemed to be identical to each comparable
investment direction made by the Participant under the RSP. Effective
January 1, 1994, this Plan will no longer use a Participant's RSP
investment directions, and other than as provided in Section 7.5, a
separate Investment Election and Conversion Election must be made with
respect to the Deferrals and Accounts; provided however, if no Investment
Election or Conversion Election is received from a Participant on or after
January 1, 1994, such Participant will be deemed to have submitted a
Conversion Election, effective January 1, 1994 with respect to his or her
Accounts as of December 31, 1993, which designates a percentage of such
Accounts to have its investment returns measured by an Investment Fund
which is the same percentage and investment fund in the RSP that such
Participant had previously been deemed to have designated prior to
January 1, 1994, with the exception that any amounts designated to measure
the investment returns of the Windsor Fund shall instead use the Large
Company Fund.
7.2 Investment of Deferrals.
(a) Investment Election. Each Participant may direct, by
submission to the Administrative Committee of a completed Investment
Election form provided for that purpose by the Administrative
Committee, to select a measurement of investment returns for Deferrals
(other than MIC Deferrals) posted to his or her Accounts (and the
portion of such Accounts attributable to such Deferrals) in one or
more Investment Funds. Each Investment Election shall apply
proportionately to all Deferrals (other than MIC Deferrals) based upon
the relative amount of each.
(b) Effective Date of Investment Election; Change of Investment
Election. A Participant's initial Investment Election will be
effective with respect to a Fund on the Trade Date which relates to
the Sweep Date on which or prior to which the Investment Election is
received pursuant to procedures specified by the Administrative
Committee. Any Investment Election which has not been properly
completed will be deemed not to have been received. A Participant's
Investment Election shall continue in effect, notwithstanding any
change in his or her Compensation or his or her Deferral Percentage,
until the effective date of a new Investment Election. A change in
Investment Election shall be effective with respect to a Fund on the
Trade Date which relates to the Sweep Date on which or prior to which
the Administrative Committee receives the Participant's new Investment
Election.
7.3 Investment of Accounts.
(a) Conversion Election. Notwithstanding a Participant's
Investment Election, a Participant or Beneficiary may direct the
Administrative Committee, by submission of a completed Conversion
Election form provided for that purpose to the Administrative
Committee, to change the measurement of investment returns of his or
her Accounts (other than the MIC Deferral Account). Each Conversion
Election shall apply proportionately to all affected Accounts based
upon the relative balance of each.
(b) Effective Date of Conversion Election. A Conversion
Election to change a Participant's measurement of investment returns
of his or her Accounts in one Investment Fund to another Fund shall be
effective with respect to such Funds on and after the Trade Date which
relates to the Sweep Date on which or prior to which the Election is
received pursuant to procedures specified by the Administrative
Committee. Notwithstanding the foregoing, to the extent required by
any provisions of an Investment Fund, the effective date of any
Conversion Election may be delayed or the amount of any permissible
Conversion Election may be reduced. Any Investment Election which has
not been properly completed will be deemed not to have been received.
7.4 Insiders.
Prior to January 1, 1994, and as of the later of May 5, 1992 or the
date on which such Participant becomes an Insider (as determined by the
Administrative Committee) ("Transfer Date"):
(a) The measurement of investment returns for an RSP Employer
Deferral hereunder shall initially be assumed to be the same as the
Investment Funds in which the Insider's pre-tax contributions are
initially invested in the RSP; and if the Insider does not make pre-
tax contributions to the RSP, then it shall be assumed to be that of
the Investment Fund primarily invested in Company Stock.
(b) Each Insider's change in investment directions under the RSP
shall be disregarded for purposes of this Plan:
(1) if such change would cause any portion of the Insider's
Deferral or Accounts to use the Fund invested primarily in
Company Stock as a measurement of investment return; or
(2) if such change is not in amounts and effective as of
such dates as are determined by the Administrative Committee
under a set of rules applicable to all Insiders.
7.5 Investment Returns on MIC Deferrals. All MIC Deferral Accounts
shall have interest as a measurement of investment return. The rate of
interest deemed to be earned on such Accounts on any day during a 6-month
period shall be the stated prime rate of interest charged by Continental
Bank, N.A. on the first business day in January or July of such period.
7.6 Restrictions on Measurement. The following additional
restrictions shall apply to the measurement of investment return of
Deferrals and Accounts other than those described in Section 7.5:
(a) Effective after January 1, 1994, no Investment Election
shall be permitted which results in a measurement of investment return
for Deferrals to be an Investment Fund invested primarily in Company
Stock and no Conversion Election shall be permitted which results in a
measurement of investment return for Accounts into or out of an
Investment Fund invested primarily in Company Stock;
(b) Any limitations, conditions or restrictions which may be
imposed by the Administrative Committee; and
(c) Any limitation, condition or restriction which is imposed on
the measurement of investment returns in or the liquidation of funds
out of any Investment Fund in the RSP.
7.7 Procedures. The procedures, frequency and time deadlines for
making an Investment Election or Conversion Election shall be the same as
the applicable procedures, frequency and time deadlines in the RSP, except
to the extent provided otherwise in this Plan or by the Administrative
Committee.
ARTICLE VIII
VESTING AND FORFEITURES
8.1 Fully Vested Deferral Accounts.
A Participant shall be fully vested and have a nonforfeitable
right to his or her Accounts at all times.
ARTICLE IX
WITHDRAWALS
9.1 Withdrawals for Hardship.
(a) Requirements. A Participant may request the withdrawal of
any amount from the portion of his or her Accounts (not in excess of
the balance of such Accounts) needed to satisfy a financial need by
making a withdrawal request in accordance with a procedure established
by the Administrative Committee. A financial need for this purpose is
a severe, unanticipated hardship, the occurrence of which is beyond
the Participant's control and for which the amount needed to satisfy
the hardship is determined only after the Participant has used other
readily available funds or resources (other than this Plan and the
RSP).
(b) Account Sources for Withdrawal. The withdrawal amount
shall come only from the following Accounts, in the following priority
order:
RSP Employee Account
RSP Employer Account
Replacement RSP Employer Account
Replacement RSP Employee Account
Pay Based Account
MIC Deferral Account
9.2 Withdrawal Processing.
(a) Minimum Amount. There is no minimum payment for any type
of withdrawal.
(b) Application by Participant. A Participant must submit a
withdrawal request, in accordance with a procedure established by the
Administrative Committee, to the Administrative Committee to apply for
any type of withdrawal.
(c) Approval by Administrative Committee. The Administrative
Committee is responsible for determining that a withdrawal request
conforms to the requirements described in this Section and notifying
the Company of any payments to be made in a timely manner. Any
request to make a withdrawal by a member of the Administrative
Committee may be approved only by disinterested members of the
Administrative Committee, or if none, the Compensation Committee.
(d) Time of Processing. The Company shall process all
withdrawal requests which it receives by a Sweep Date, based on the
value as of the Trade Date to which it relates, and fund them on the
next Settlement Date. The Company shall then make payment to the
Participant as soon thereafter as is administratively feasible;
provided however, if such payment will result in any portion of the
payment (or any other amount paid to such Participant during the same
Plan Year) not being deductible by reason of Code section 162(m), the
Compensation Committee may defer payment to a later Payment Date
designated by it.
(e) Medium and Form of Payment. The medium of payment for
withdrawals is cash. The form of payment for withdrawals shall be a
single installment.
(f) Investment Fund Sources. Within each Account used for
funding a withdrawal, amounts shall be taken by type of investment
measurement in direct proportion to the value of the Participant's
Accounts in each Investment Fund at the time the withdrawal is made.
ARTICLE X
DISTRIBUTIONS
Benefits payable under this Plan shall be paid in the form and time
prescribed below.
10.1 Retirement Benefit. A Participant who has a nonforfeitable right
to receive a retirement benefit from the Pension Plan shall receive a
Retirement Benefit in the following form of payment and as of the following
Payment Date:
(a) Form of Payment. The Retirement Benefit shall be paid in
monthly installments to the eligible Participant in the same manner
and form as the benefit which the Participant would receive under the
Pension Plan if it were to commence on the same Payment Date;
provided, however, the Compensation Committee, in its discretion, may
convert the Retirement Benefit payable under this Plan into an
Actuarial Equivalent single sum form of payment.
(b) Time of Payment. The Payment Date of a Participant's
Retirement Benefit shall be the earliest date on or after the
Participant's Termination of Employment as of which he or she could
have commenced payment of his or her retirement benefits from the
Pension Plan.
10.2 Pension Death Benefit.
(a) Form of Payment. The Death Benefit payable to the
Beneficiary of a Participant who is entitled to a Retirement Benefit
and who dies on or after his Payment Date shall be in the form
selected by the Participant commencing as of such Payment Date. Where
a Participant who is entitled to a Retirement Benefit dies prior to
his Payment Date, the form of payment of his or her Beneficiary's
Death Benefit shall be the same as the form of payment of any death
benefit payable under the Pension Plan; provided however, the
Compensation Committee, in its discretion, may convert the Death
Benefit payable under this Plan into an Actuarial Equivalent single
sum form of payment.
(b) Time of Payment. A Beneficiary's Death Benefit shall
commence to be paid as of the earliest date as of which he or she
could have commenced payment of a death benefit from the Pension Plan.
10.3 Accounts.
(a) Form of Payment. The form of payment of the balance of a
Participant's Accounts (other than his or her MIC Account for each
Plan Year) will be a single sum payment except with respect to those
Accounts for which the Participant has selected the Installment Form
of Payment on his or her Deferral Election Form, in which case such
Accounts will be paid in the Installment Form of Payment.
(b) Time of Payment. The Payment Date of the balance of a
Participant's Accounts (other than his or her MIC Account) shall be
the Payment Date following Termination of Employment selected by the
Participant on his or her Enrollment Election form; provided however,
if such payment will result in any portion of the payment (or any
other amount paid to such Participant during the same Plan Year) not
being deductible by reason of Code section 162(m), the Compensation
Committee may defer payment to a later Payment Date designated by it
and such Accounts shall continue to have investment returns measured
under this Plan.
10.4 MIC Account.
(a) Form of Payment. The form of payment of the balance of a
Participant's MIC Account for each Plan Year will be a single sum
payment except with respect to those MIC Accounts for which the
Participant has selected the Installment Form of Payment on his or her
Deferral Election Form, in which case such MIC Accounts will be paid
in the Installment Form of Payment.
(b) Time of Payment. The Payment Date of the balance of a
Participant's MIC Account for each Plan Year shall be the earlier of
the fixed Payment Date selected by the Participant on the Deferral
Election Form for the Plan Year or the Payment Date following a
Termination of Employment selected in his or her Enrollment Election
form; provided however, if such payment will result in any portion of
the payment (or any other amount paid to such Participant during the
same Plan Year) not being deductible by reason of Code section 162(m),
the Compensation Committee may defer payment to a later Payment Date
designated by it and such Accounts shall continue to have investment
returns measured under this Plan.
10.5 Death Benefit of Accounts. Upon the death of a Participant, the
remaining balance in his or her Accounts shall be paid to the Participant's
Beneficiary in a single sum as soon as administratively possible after the
Participant's death; provided however, if such payment will result in any
portion of the payment (or any other amount paid to such Beneficiary during
the same Plan Year) not being deductible by reason of Code section 162(m),
the Compensation Committee may defer payment to a later Payment Date
designated by it and such Accounts shall continue to have investment
returns measured under this Plan.
10.6 Prior to 1994. The timing and form of payment of a Retirement
Benefit, Death Benefit and balance of Accounts with respect to a
Participant or Beneficiary as of any date of determination prior to 1994
shall be determined by the terms and provisions of this Plan as of such
date.
10.7 Payments of Retirement and Death Benefit Due to a Change of
Control.
(a) Termination of Employment. Upon Termination of Employment
of a Participant within three (3) years following a Change of Control,
a single sum payment shall be made immediately to such Participant of
the amount by which the Actuarial Equivalent of (1) exceeds the
Actuarial Equivalent of (2):
(1) the amount determined in Section 5.1(a) based upon the
assumption that (A) the Participant has a nonforfeitable right to
his benefit from the Pension Plan, (B) benefits would have been
paid from the Pension Plan for reasons other than death in either
a joint and 100% annuity, if married, or a single life annuity,
if not married, and (C) benefits payable from the Pension Plan
would commence immediately following such Termination of
Employment.
(2) the amount determined in Section 5.1(b) based upon the
same assumptions as those in Section 10.7(a)(1) except (A).
(b) Retirement Benefit After Payment Date. Upon the occurrence
of a Change of Control on or after the Payment Date of a Participant's
Retirement Benefit, an Actuarial Equivalent single sum payment of such
Retirement Benefit shall be made immediately to such Participant.
(c) Death Benefit. Upon the occurrence of a Change of Control,
a Beneficiary who is receiving, or would as of such date commence to
receive, a Death Benefit shall be paid immediately an Actuarial
Equivalent single sum payment of such Death Benefit.
10.8 Payment of Accounts Due to a Change of Control. In the event of
a Participant's Termination of Employment within three (3) years following
a Change of Control, the balances of his or her Accounts shall be paid
immediately in a single sum.
ARTICLE XI
AMENDMENT AND TERMINATION
11.1 Prior to a Change of Control. The Company by action of the Board
of Directors reserves the right to amend this Plan from time to time or to
terminate this Plan at any time, but without the written consent of each
Participant and Beneficiary of a deceased Participant, no such action may
reduce or relieve the Company of any obligation with respect to any
Retirement Benefit (or Death Benefit) accrued or balance of Accounts
maintained under this Plan by such Participant (or Beneficiary) as of the
date of such amendment or termination, except to the extent such amendment
is required by written opinion of counsel to the Company to avoid
recognition of income subject to federal income taxation. Upon termination
of this Plan, the Actuarial Equivalent single sum value of a Participant's
Retirement Benefit (or of a Beneficiary's Death Benefit) and the balance of
Accounts maintained for such Participant (or for a Beneficiary) as of the
date of termination shall be paid as soon as administratively possible.
11.2 After a Change of Control. After a Change of Control, this Plan
may not be amended until all Accounts, Retirement Benefits and Death
Benefits have been paid in full (except for an amendment only to accelerate
the time of payment) and may be terminated only if all Accounts, Retirement
Benefits and Death Benefits have been paid in full.
ARTICLE XII
MISCELLANEOUS PROVISIONS
12.1 Administration. This Plan shall be administered by the
Administrative Committee. The Administrative Committee shall have, to the
extent appropriate, the same powers, rights, duties, and obligations with
respect to this Plan as the Administrative Committee of the Pension Plan
and RSP have under each such document (other than the power to amend this
Plan).
12.2 Finality of Determination. The determination of the
Administrative Committee as to any disputed questions arising under this
Plan, including questions of construction and interpretation shall be
final, binding, and conclusive upon all persons.
12.3 Expenses. The expenses of administering this Plan shall be borne
by the Company.
12.4 Indemnification and Exculpation. The members of the
Administrative Committee, its agents and officers, directors and employees
of the Company shall be indemnified and held harmless by the Company
against and from any and all loss, cost, liability, or expense that may be
imposed upon or reasonably incurred by them in connection with or resulting
from any claim, action, suit, or proceeding to which they may be a party or
in which they may be involved by reason of any action taken or failure to
act under this Plan and against and from any and all amounts paid by them
in settlement (with the Company's written approval) or paid by them in
satisfaction of a judgment in any such action, suit, or proceeding. The
foregoing provision shall not be applicable to any person if the loss,
cost, liability, or expense is due to such person's gross negligence or
willful misconduct.
12.5 Funding. While all benefits payable under this Plan constitute
general corporate obligations, the Company may establish a separate
irrevocable grantor trust for the benefit of all Participants, which trust
shall be subject to the claims of the general creditors of the Company in
the event of such corporation's insolvency, to be used as a reserve for the
discharge of the Company's obligations under this Plan to such
Participants. Any payments made to a Participant under the separate trust
for his benefit shall reduce dollar for dollar the amount payable to the
Participant from the general assets of the Company. The amounts payable
under this Plan shall be reflected on the accounting records of the Company
but shall not be construed to create or require the creation of a trust,
custodial, or escrow account, except as described above in this section.
No Participant (or Beneficiary of a Participant) shall have any right,
title, or interest whatever in or to any investment reserves, accounts, or
funds that the Company may purchase, establish, or accumulate to aid in
providing benefits under this Plan. Nothing contained in this Plan, and no
action taken pursuant to its provisions, shall create a trust or fiduciary
relationship of any kind between the Company, the Administrative Committee
or Compensation Committee and a Participant, Beneficiary or any other
person. Neither a Participant nor Beneficiary shall acquire any interest
greater than that of an unsecured creditor.
12.6 Corporate Action. Any action required of or permitted by the
Company under this Plan shall be by resolution of the Compensation
Committee or any person or persons authorized by resolution of such
Compensation Committee.
12.7 Interests not Transferable. The interests of the Participants
and their Beneficiaries under this Plan are not subject to the claims of
their creditors and may not be voluntarily or involuntarily transferred,
assigned, alienated, or encumbered by them.
12.8 Effect on Other Benefit Plans. Amounts credited or paid under
this Plan shall not be considered to be compensation for the purposes of a
qualified pension plan maintained by the Company. The treatment of such
amounts under other employee benefits plans shall be determined pursuant to
the provisions of such plans.
12.9 Legal Fees and Expenses. After a Change of Control, the Company
shall pay all legal fees and expenses which the Participant may incur as a
result of the Company's contesting the validity, enforceability or the
Participant's interpretation of, or determinations under, this Plan.
12.10 Deduction of Taxes from Amounts Payable.
(a) Distribution. The Company shall deduct from the amount to
be distributed such amount as the Company, in its sole discretion,
deems proper to protect the Company against liability for the payment
of death, succession, inheritance, income, or other taxes, and out of
money so deducted, the Company may discharge any such liability and
pay the amount remaining to the Participant, the Beneficiary or the
deceased Participant's estate, as the case may be.
(b) Withholding. The Company may withhold whatever taxes
(including FICA, state or federal taxes) it, in its sole discretion,
deems proper to protect the Company against liability for the payment
of such withholding taxes and out of the money so deducted, the
Company may discharge any such liability. Withholding for this
purpose may come from any wages due to the Participant, or if none,
from the Participant's Accounts hereunder.
12.11 Facility of Payment. If a Participant or Beneficiary is
declared an incompetent or is a minor and a conservator, guardian, or other
person legally charged with his or her care has been appointed, any
benefits to which such Participant or Beneficiary is entitled shall be
payable to such conservator, guardian, or other person legally charged with
his or her care. The decision of the Administrative Committee in such
matters shall be final, binding, and conclusive upon the Company and upon
each Participant, Beneficiary, and every other person or party interested
or concerned. The Company and the Administrative Committee shall not be
under any duty to see to the proper application of such payments.
12.12 Company Merger. This Plan shall be binding and
enforceable against any successor corporation to the Company, by merger,
consolidation, purchase or otherwise, and such successor corporation shall
be substituted hereunder for the Company.
12.13 Gender and Number. Except when the context indicates to
the contrary, when used herein, masculine terms shall be deemed to include
the feminine, and singular the plural.
12.14 Invalidity of Certain Provisions. If any provision of
this Plan shall be held invalid or unenforceable, such invalidity or
unenforceability shall not affect any other provisions hereof and this Plan
shall be construed and enforced as if such provisions, to the extent
invalid or unenforceable, had not been included.
12.15 Headings. The headings or articles are included solely
for convenience of reference, and if there is any conflict between such
headings and the text of this Plan, the text shall control.
12.16 Notice and Information Requirements. Except as otherwise
provided in this Plan or as otherwise required by law, the Company shall
have no duty or obligation to affirmatively disclose to any Participant or
Beneficiary, nor shall any Participant or Beneficiary have any right to be
advised of, any material information regarding the Company, at any time
prior to, upon or in connection with the Company's purchase, or any other
distribution or transfer (or decision to defer any such distribution) of
any Company Stock or any other stock held under this Plan.
12.17 Governing Law. This Plan shall be governed by the laws of
the State of Illinois.
Exhibits 10(j), 10(k), 10(l)
Pursuant to Instruction 2 of Item 601 of Regulation S-K, Whitman is only
filing the Whitman Corporation Executive Retirement Plan (Exhibit 10(i))
because Exhibits 10(j), 10(k), 10(l) are substantially identical to Exhibit
10(i) except the sponsoring parties thereof. All other portions of the
plans are identical.
Schedule of Material Differences:
10(j) Hussmann Corporation Executive Retirement Plan, as Amended and
Restated Effective January 1, 1991 and December 31, 1993.
Hussmann Corporation (the "Company") is the sponsor of the plan.
10(k) Midas International Corporation Executive Retirement Plan, as
Amended and Restated Effective January 1, 1991 and December 31,
1993.
Midas International Corporation (the "Company") is the sponsor of
the plan.
10(l) Pepsi-Cola General Bottlers, Inc. Executive Retirement Plan, as
Amended and Restated Effective January 1, 1991 and December 31,
1993.
Pepsi-Cola General Bottlers, Inc. (the "Company") is the sponsor of
the plan.
Whitman Corporation
WHITMAN CORPORATION
RETIREMENT SAVINGS PLAN
As Amended and Restated Effective January 1, 1994
Whitman Corporation Retirement Savings Plan
Whitman Corporation established the Whitman Corporation Retirement Savings
Plan for the benefit of eligible employees of the Company and its
participating affiliates. The Plan is intended to constitute a qualified
profit sharing plan, as described in Code Section 401(a), which includes a
qualified cash or deferred arrangement, as described in Code Section
401(k).
The Plan constitutes an amendment and restatement of the Whitman
Corporation Supplemental Retirement and Savings Plan.
ARTICLE I
DEFINITIONS
1.1 "Accounting Period"
1.2 "Accounts"
1.3 "Accrued Benefit"
1.4 "Administrative Committee"
1.5 "Appendix"
1.6 "Authorized Leave of Absence"
1.7 "Beneficiary"
1.8 "Board of Directors"
1.9 "CEO"
1.10 "Change Date"
1.11 "Commonly Controlled Entity"
1.12 "Company"
1.13 "Company Stock"
1.14 "Compensation"
1.15 "Computation Period"
1.16 "Contributions"
1.17 "Contribution Dollar Limit"
1.18 "Contribution Election" or "Election"
1.19 "Contribution Percentage"
1.20 "Conversion Election"
1.21 "Custodial Agreement"
1.22 "Custodian"
1.23 "Direct Rollover"
1.24 "Disability or Disabled"
1.25 "Distributee"
1.26 "Effective Date"
1.27 "Elective Deferral"
1.28 "Eligible Employee"
1.29 "Eligibility Service"
1.30 "Eligible Retirement Plan"
1.31 "Eligible Rollover Distribution"
1.32 "Employee"
1.33 "Employer"
1.34 "Employment Date"
1.35 "ERISA"
1.36 "Fair Market Value"
1.37 "Family Member"
1.38 "Highly Compensated Eligible Employee" or "HCE"
1.39 "Hour of Service"
1.40 "Internal Revenue Code" or "Code"
1.41 "Investment Election"
1.42 "Investment Fund" or "Fund"
1.43 "Limited Deferrals"
1.44 "Named Fiduciary"
1.45 "Non-Highly Compensated Employee" or "NHCE"
1.46 "Normal Retirement Date"
1.47 "Notice Date"
1.48 "Participant"
1.49 "Payment Date"
1.50 "Plan"
1.51 "Plan Year"
1.52 "QDRO"
1.53 "Qualified Matching Contribution"
1.54 "Related Plan"
1.55 "Rollover Contribution"
1.56 "Settlement Date"
1.57 "Spousal Consent"
1.58 "Spouse"
1.59 "Sweep Date"
1.60 "Termination of Employment"
1.61 "Trade Date"
1.62 "Trust"
1.63 "Trust Agreement"
1.64 "Trust Fund"
1.65 "Trustee"
1.66 "Trustee Transfer"
1.67 "Valuation Date"
1.68 "Year of Service"
ARTICLE II
PARTICIPATION
2.1 Eligibility
2.2 Reemployment
2.3 Participation Upon Change of Job Status
ARTICLE III
PARTICIPANT CONTRIBUTIONS
3.1 Pre-Tax Contribution Election
3.2 Election Procedures
3.3 Limitation of Elective Deferrals for all Participants
ARTICLE IV
EMPLOYER CONTRIBUTIONS AND ALLOCATIONS
4.1 Pre-Tax Contributions
4.2 Matching Contributions
4.3 Pay Based Contributions
4.4 Special Contributions
4.5 Miscellaneous
ARTICLE V
ROLLOVERS
5.1 Rollovers
ARTICLE VI
ACCOUNTING FOR PARTICIPANTS'
ACCOUNTS AND FOR INVESTMENT FUNDS
6.1 Individual Participant Accounting
6.2 Accounting for Investment Funds
6.3 Accounts for QDRO Beneficiaries
6.4 Special Accounting During Conversion Period
ARTICLE VII
INVESTMENT FUNDS AND ELECTIONS
7.1 Investment Funds
7.2 Investment of Contributions
7.3 Investment of Accounts
7.4 Establishment of Investment Funds
7.5 Transition Rules
ARTICLE VIII
VESTING AND FORFEITURES
8.1 Fully Vested Contribution Accounts
ARTICLE IX
PARTICIPANT LOANS
9.1 Participant Loans Permitted
9.2 Loan Funding Limits
9.3 Maximum Number of Loans
9.4 Source of Loan Funding
9.5 Interest Rate
9.6 Repayment
9.7 Repayment Hierarchy
9.8 Loan Application, Note and Security
9.9 Default, Suspension and Acceleration Feature
ARTICLE X
IN-SERVICE WITHDRAWALS
10.1 Withdrawals for 401(k) Hardship
10.2 Withdrawals for Participants over age 59-1/2 or who are
Disabled
10.3 Withdrawals of Mature Amounts
10.4 Withdrawal Processing
ARTICLE XI
DISTRIBUTIONS ON AND AFTER
TERMINATION OF EMPLOYMENT
11.1 Request for Distribution of Benefits
11.2 Deadline for Distribution
11.3 Payment Form and Medium
11.4 Small Amounts Paid Immediately 39
11.5 Payment Within Life Expectancy
11.6 Incidental Benefit Rule
11.7 QJSA and QPSA Information and Elections
11.8 Continued Payment of Amounts in Payment Status on
January 1, 1994
11.9 TEFRA Transitional Rule
11.10 Direct Rollover
ARTICLE XII
DISTRIBUTION OF ACCRUED BENEFITS ON DEATH
12.1 Payment to Beneficiary
12.2 Beneficiary Designation
12.3 Benefit Election
12.4 Payment Form
12.5 Time Limit for Payment to Beneficiary
12.6 QPSA Information and Election
12.7 Direct Rollover
ARTICLE XIII
MAXIMUM CONTRIBUTIONS
13.1 Definitions
13.2 Avoiding an Annual Excess
13.3 Correcting an Annual Excess
13.4 Correcting a Multiple Plan Excess
13.5 Two-Plan Limit
13.6 Short Plan Year
13.7 Grandfathering of Applicable Limitations
ARTICLE XIV
ADP AND ACP TESTS
14.1 Contribution Limitation Definitions
14.2 ADP and ACP Tests
14.3 Correction of ADP and ACP Tests
14.4 Method of Calculation
14.5 Multiple Use Test
14.6 Adjustment for Investment Gain or Loss
14.7 Required Records
14.8 Incorporation by Reference
14.9 Collectively Bargained Employees
14.10 QSLOB
ARTICLE XV
CUSTODIAL ARRANGEMENTS
15.1 Custodial Agreement
15.2 Selection of Custodian
15.3 Custodian's Duties
15.4 Separate Entity
15.5 Plan Asset Valuation
15.6 Right of Employers to Plan Assets
ARTICLE XVI
ADMINISTRATION AND INVESTMENT MANAGEMENT
16.1 Authority and Responsibility of the Board of Directors
16.2 Administrative Committee as Named Fiduciary
16.3 Administrative Committee Membership
16.4 Administrative Committee Structure
16.5 Administrative Committee Actions
16.6 Procedures for Designation of a Named Fiduciary
16.7 Compensation
16.8 Discretionary Authority of each Named Fiduciary
16.9 Responsibility and Powers of the Administrative Committee
Regarding Administration of the Plan
16.10 Allocations and Delegations of Responsibility
16.11 Administrative Committee Bonding
16.12 Information to be Supplied by Employer
16.13 Records
16.14 Plan Expenses
16.15 Fiduciary Capacity
16.16 Employer's Agent
16.17 Plan Administrator
16.18 Plan Administrator Duties and Power
16.19 Named Fiduciary Decisions Final
16.20 No Agency
ARTICLE XVII
CLAIMS PROCEDURE
17.1 Initial Claim for Benefits
17.2 Review of Claim Denial
ARTICLE XVIII
ADOPTION AND WITHDRAWAL FROM PLAN
18.1 Procedure for Adoption
18.2 Procedure for Withdrawal
ARTICLE XIX
AMENDMENT, TERMINATION AND MERGER
19.1 Amendments
19.2 Plan Termination
19.3 Plan Merger
ARTICLE XX
SPECIAL TOP-HEAVY RULES
20.1 Application
20.2 Special Terms
20.3 Minimum Contribution
20.4 Maximum Benefit Accrual
ARTICLE XXI
MISCELLANEOUS PROVISIONS
21.1 Assignment and Alienation
21.2 Protected Benefits
21.3 Plan Does Not Affect Employment Rights
21.4 Deduction of Taxes from Amounts Payable
21.5 Facility of Payment
21.6 Source of Benefits
21.7 Indemnification
21.8 Reduction for Overpayment
21.9 Limitation on Liability
21.10 Company Merger
21.11 Employees' Trust
21.12 Gender and Number
21.13 Invalidity of Certain Provisions
21.14 Headings
21.15 Uniform and Nondiscriminatory Treatment
21.16 Law Governing
21.17 Notice and Information Requirements
ARTICLE I
DEFINITIONS
The following sections of this Article I provide basic definitions of
terms used throughout the Plan, and whenever used herein in a capitalized
form, except as otherwise expressly provided, the terms shall be deemed to
have the following meanings:
1.1 "Accounting Period" means the periods designated by the
Administrative Committee with respect to each Investment Fund not to exceed
one year in duration.
1.2 "Accounts" means the record of a Participant's interest in the
Plan's assets represented by his or her:
(a) "ESOP Account" which means a Participant's interest in the
Plan's assets composed of the amount allocated under the Plan, as of
January 1, 1994, if any (as identified by the Administrative
Committee), (including amounts allocated from the Whitman Employee
Stock Ownership Plan prior to January 1, 1994, if any) which continue
to be accounted for under the Plan consistent with the former
provisions of the Plan (as identified by the Administrative Committee)
plus all income and gains credited to, and minus all losses, expenses,
withdrawals and distributions charged to, such Account.
(b) "Former Matching Contribution Account" which means a
Participant's interest in the Plan's assets composed of the amount
allocated under the Plan prior to January 1, 1994, if any (as
identified by the Administrative Committee), plus all income and gains
credited to, and minus all losses, expenses, withdrawals and
distributions charged to, such Account.
(c) "Matching Account" which means a Participant's interest in
the Plan's assets composed of Matching Contributions allocated on or
after January 1, 1994 to the Participant under the Plan, the amount
allocated under the Plan, as of January 1, 1994, if any (as identified
by the Administrative Committee), plus all income and gains credited
to, and minus all losses, expenses, withdrawals and distributions
charged to, such Account.
(d) "Pay Based Account" which means a Participant's interest in
the Plan's assets composed of Pay Based Contributions allocated on or
after January 1, 1994 to the Participant under the Plan, the amount
allocated under the Plan, as of January 1, 1994, if any (as identified
by the Administrative Committee), plus all income and gains credited
to, and minus all losses, expenses, withdrawals and distributions
charged to, such Account.
(e) "Post-Tax Account" which means a Participant's interest in
the Plan's assets composed of post-tax contributions made prior to
January 1, 1994 plus all income and gains credited to, and minus all
losses, expenses, withdrawals and distributions charged to, such
Account.
(f) "Pre-Tax Account" which means a Participant's interest in
the Plan's assets composed of Pre-Tax Contributions allocated on or
after January 1, 1994 to the Participant under the Plan, the amount
allocated under the Plan, as of January 1, 1994, if any (as identified
by the Administrative Committee), plus all income and gains credited
to, and minus all losses, expenses, withdrawals and distributions
charged to, such Account.
(g) "QVEC Account" which means a Participant's interest in the
Plan's assets composed of the amount allocated under the Plan, as of
January 1, 1994, if any (as identified by the Administrative
Committee) plus all income and gains credited to, and minus all
losses, expenses, withdrawals and distributions charged to, such
Account.
(h) "Rollover Account" which means a Participant's interest in
the Plan's assets composed of Rollover Contributions allocated on or
after January 1, 1994 to the Participant under the Plan, the amount
allocated under the Plan, as of January 1, 1994, if any (as identified
by the Administrative Committee), plus all income and gains credited
to, and minus all losses, expenses, withdrawals and distributions
charged to, such Account.
(i) "Special Account" which means a Participant's interest in
the Plan's assets composed of Special Contributions allocated on or
after January 1, 1994 to the Participant under the Plan, the amount
allocated under the Plan, as of January 1, 1994, if any (as identified
by the Administrative Committee), plus all income and gains credited
to, and minus all losses, expenses, withdrawals and distributions
charged to, such Account.
(j) "TRASOP Account" which means a Participant's interest in the
Plan's assets composed of the amount allocated under the Plan, as of
January 1, 1994, if any (as identified by the Administrative
Committee), (including amounts allocated from the Whitman Corporation
Tax Reduction Act Stock Ownership Plan prior to January 1, 1994, if
any) which continue to be accounted for under the Plan consistent with
the former provisions of the Plan (as identified by the Administrative
Committee) plus all income and gains credited to, and minus all
losses, expenses, withdrawals and distributions charged to, such
Account.
1.3 "Accrued Benefit" means the shares or units held in or posted to
Accounts on the Settlement Date.
1.4 "Administrative Committee" means the committee appointed pursuant
to the terms of the Plan to manage and control the operation and
administration of the Plan.
1.5 "Appendix" means a written supplement attached to this Plan and
made a part hereof which has been added in accordance with the provisions
of the Plan.
1.6 "Authorized Leave of Absence" means an absence, with or without
Compensation, authorized on a nondiscriminatory basis by a Commonly
Controlled Entity under its standard personnel practices applicable to the
Employee, including any period of time during which such person is covered
by a short-term disability plan of his or her Employer. An Employee who
leaves the service of a Commonly Controlled Entity to enter the Armed
Forces of the United States of America and who reenters the service of the
Commonly Controlled Entity with reemployment rights under any statute
granting reemployment rights to persons in the Armed Forces shall be deemed
to have been on an Authorized Leave of Absence. The date that an
Employee's Authorized Leave of Absence ends shall be determined in
accordance with the personnel policies of such Commonly Controlled Entity,
which ending date shall be no earlier than the date that the Authorized
Leave of Absence is scheduled to end, unless the Employee communicates to
such Commonly Controlled Entity that he or she is to have a Termination of
Employment as of an earlier date.
1.7 "Beneficiary" means any person designated by a Participant to
receive any benefits which shall be payable with respect to the death of a
Participant under the Plan or as a result of a QDRO.
1.8 "Board of Directors" means the board of directors of the Company.
1.9 "CEO" means the Chief Executive Officer.
1.10 "Change Date" means the one or more dates during the Plan Year
designated by the Administrative Committee as the dates available for
implementing or changing a Participant's Contribution Election.
1.11 "Commonly Controlled Entity" means (1) an Employer and any
corporation, trade or business, but only for so long as it and the Employer
are members of a controlled group of corporations as defined in Section
414(b) of the Code or under common control as defined in Section 414(c) of
the Code; provided, however, that solely for purposes of the limitations of
Code Section 415, the standard of control under Sections 414(b) and 414(c)
of the Code shall be deemed to be "more than 50%" rather than "at least
80%," (2) an Employer and an organization, but only for so long as it and
the Employer are, on and after the Effective Date, members of an affiliated
service group as defined in Section 414(m) of the Code, (3) an Employer and
an organization, but only for so long as the employees of it and the
Employer are required to be aggregated, on and after the Effective Date,
under Section 414(o) of the Code, or (4) any other organization designated
as such by the Administrative Committee.
1.12 "Company" means Whitman Corporation or any successor corporation
by merger, consolidation, purchase, or otherwise, which elects to adopt the
Plan and the Trust.
1.13 "Company Stock" means common stock issued by Whitman Corporation.
1.14 "Compensation" means:
(a) for purposes of allocating Contributions and for purposes of
applying Section 415 of the Code to the Plan and its Participants for
any limitation year, such compensation as determined by the
Administrative Committee and satisfying the definition of compensation
under Section 415 of the Code (within the meaning of Treasury
Regulation 1.415-2(d)(2) and (3)); provided however, for purposes of
allocating Contributions, a car allowance paid to an HCE shall be
excluded; and
(b) for any determination period with respect to an applicable
provision of the Code other than Section 415, such compensation as
determined by the Administrative Committee and which satisfies the
requirements of Section 414(s) of the Code.
Notwithstanding the foregoing provisions, Compensation shall include
elective amounts excludible from gross income under Code Sections 125 and
402(e)(3) and in no event shall the annual compensation of any Employee
taken into account under the Plan for any Plan Year exceed one hundred and
fifty thousand dollars ($150,000) (adjusted at the same time and manner as
under Section 401(a)(17) of the Code, prorated for any Plan Year of less
than twelve (12) months, and increased for family members as provided in
Section 401(a)(17) of the Code).
1.15 "Computation Period" means with respect to Eligibility Service,
the twelve (12) consecutive month period commencing with an Employee's
Employment Date and the Plan Year which includes the first anniversary of
the Employment Date and each subsequent Plan Year.
1.16 "Contributions" means amounts contributed to the Plan by the
Employer or an Eligible Employee. Specific types of contributions include:
(a) "Matching". An amount contributed by the Employer based
upon the amount contributed by the eligible Participant.
(b) "Pay Based". An amount contributed by the Employer and
allocated on a pay based formula to eligible Participants'
Accounts.
(c) "Pre-Tax". An amount contributed on a pre-tax basis in
conjunction with a Participant's Code Section 401(k) salary
deferral agreement.
(d) "Special". An amount contributed by the Employer to avoid
prohibited discrimination under Section 401(a)(4) of the
Code.
1.17 "Contribution Dollar Limit" means the annual limit imposed on
each Participant pursuant to Section 402(g) of the Code, which shall be
seven thousand dollars ($7,000) per calendar year (as indexed for cost of
living adjustments pursuant to Code Section 402(g)(5) and 415(d)).
1.18 "Contribution Election" or "Election" means the election made by
a Participant to reduce his or her Compensation by an amount equal to the
product of his or her Contribution Percentage and such Compensation subject
to the Contribution Election.
1.19 "Contribution Percentage" means the percentage of a Participant's
Compensation which is to be contributed to the Plan by his or her Employer
as a Contribution.
1.20 "Conversion Election" means an election by a Participant to
change the investment of all or some specified portion of such
Participant's Accounts on such form that may be required by the Named
Fiduciary to whom it is delivered. No Conversion Election shall be deemed
to have been given to the Named Fiduciary unless it is complete and
delivered in accordance with the procedures established by such Named
Fiduciary for this purpose.
1.21 "Custodial Agreement" means the Trust Agreement or an insurance
contract to provide for the holding of the assets of the Plan.
1.22 "Custodian" means the Trustee or an insurance company if the
contract issued by such company is not held by the Trustee.
1.23 "Direct Rollover" means a payment by the Plan to the Eligible
Retirement Plan specified by the Distributee.
1.24 "Disability or Disabled" means the Participant is disabled for
purposes of the Employer's long term disability plan.
1.25 "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 QDRO are Distributees with regard to the interest
of the Spouse or former Spouse.
1.26 "Effective Date" means January 1, 1994, the date upon which the
provisions of this document become effective. In general, the provisions
of this document only apply to Participants who are Employees on or after
the Effective Date. However, investment and distribution provisions apply
to all Participants with Account balances to be invested or distributed
after the Effective Date.
1.27 "Elective Deferral" means amounts subject to the Contribution
Dollar Limit.
1.28 "Eligible Employee" means any salaried Employee (including an
Employee on an Authorized Leave of Absence) of an Employer on and after the
Effective Date of the adoption of this Plan by the Employer, excluding any
salaried Employee:
(a) who is a member of a group of Employees represented by a
collective bargaining representative, unless a currently effective
collective bargaining agreement between his or her Employer and the
collective bargaining representative of the group of Employees of
which he or she is a member provides for coverage by the Plan;
(b) who is considered an Employee solely because of the
application of Section 414(n) of the Code;
(c) who is a nonresident alien who receives no earned income,
within the meaning of Code Section 911(d)(2), from sources within the
United States within the meaning of Code Section 861(a)(3); and
(d) who is scheduled in an Appendix.
1.29 "Eligibility Service" means the sum of an Employee's Years of
Service.
1.30 "Eligible Retirement Plan" means an individual retirement account
described in section 408(a) of the Code, an individual retirement annuity
described in section 408(b) of the Code, an annuity plan described in
section 403(a) 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.
1.31 "Eligible Rollover Distribution" means 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; and the
portion any distribution that is not includible in gross income (determined
without regard to the exclusion for net unrealized appreciation with
respect to employer securities).
1.32 "Employee" means any person who rendered services as a common law
employee to a Commonly Controlled Entity or is on an Authorized Leave of
Absence, including the period of time before which the trade or business
became a Commonly Controlled Entity, but excluding the period of time after
which it ceases to be a Commonly Controlled Entity. Any individual
considered an Employee of a Commonly Controlled Entity under Section 414(n)
of the Code shall be deemed employed by the Commonly Controlled Entity for
which the individual performed services.
1.33 "Employer" means the Company and any Commonly Controlled Entity
which has adopted the Plan; provided, that an entity will cease to be an
Employer when it ceases to be a Commonly Controlled Entity.
1.34 "Employment Date" means the day an Employee first earns an Hour
of Service.
1.35 "ERISA" means the Employee Retirement Income Security Act of
1974, as amended. Reference to any specific section shall include such
section, any valid regulation promulgated thereunder, and any comparable
provision of any future legislation amending, supplementing or superseding
such section.
1.36 "Fair Market Value" means:
(a) with respect to a security for which there is a generally
recognized market, the price of the security prevailing on a national
securities exchange which is registered under Section 6 of the
Securities Act of 1934;
(b) unless determined otherwise with respect to any guaranteed
income contract, the value reported by the issuing company or bank;
(c) with respect to a Participant loan, the unpaid principal and
accrued interest; and
(d) for any other asset, the fair market value of the asset, as
determined in good faith by the Trustee or the Administrative
Committee in accordance with regulations promulgated under Section
3(18) of ERISA.
1.37 "Family Member" shall mean an individual described in Code
Section 414(q)(6)(B).
1.38 "Highly Compensated Eligible Employee" or "HCE" means highly
compensated active employees and highly compensated former employees.
A highly compensated active employee includes any Employee who
performs service for the Employer during the determination year and who,
during the look-back year: (i) received Compensation from the Employer in
excess of $75,000 (as adjusted pursuant to Section 415(d) of the Code);
(ii) received Compensation from the Employer in excess of $50,000 (as
adjusted pursuant to Section 415(d) of the Code) and was a member of the
top-paid group for such year; or (iii) was an officer of the Employer and
received Compensation during such year that is greater than 50 percent of
the dollar limitation in effect under Section 415(b)(1)(A) of the Code.
The term highly compensated active employee also includes: (i) Employees
who are both described in the preceding sentence if the term "determination
year" is substituted for the term "look-back year" and the Employee is one
of the 100 Employees who received the most Compensation from the Employer
during the determination year; and (ii) Employees who are 5-percent owners
at any time during the look-back year or determination year.
If no officer has satisfied the Compensation requirement of (iii)
above during either a determination year or look-back year, the highest
paid officer for such year shall be treated as a highly compensated active
employee.
For this purpose, the determination year shall be the plan year. The
look-back year shall be the twelve-month period immediately preceding the
determination year. Pursuant to Code Section 414(q), the Administrative
Committee may elect for the lookback year to be the calendar year ending
with or within the applicable Plan Year determination year.
If the Employer at all times during the Plan Year maintains
significant business activities (and employs Employees in such activities)
in at least two significantly separate geographic areas and satisfies such
other conditions as the Secretary of the Treasury may prescribe, the
Administrative Committee may elect to apply a simplified definition of
Highly Compensated Employee under the Plan by substituting "$50,000" for
"$75,000" in paragraph (i) above, and disregarding paragraph (ii) above.
A highly compensated former employee includes any Employee who
separated from service (or was deemed to have separated) prior to the
determination year, performs no service for the Employer during the
determination year, and was a Highly Compensated Employee for either the
separation year or any determination year ending on or after the Employee's
55th birthday.
An Employee who performs services for the Employer any time during the
year is in the top-paid group of Employees for any year if such Employee is
in the group consisting of the top 20% of the Employees when ranked on the
basis of Compensation paid during such year. For purposes of determining
the number of Employees in the top-paid group (but not for identifying the
particular Employees in the top-paid group), the following Employees shall
be excluded:
(i) Employees who have not completed six (6) months of
service;
(ii) Employees who normally work less than 17-1/2 Hours of
Service;
(iii) Employees who normally work not more than six (6) months
during any year;
(iv) Employees who have not attained age 21;
(v) Employees who are included in a unit of Employees
covered by a bona fide collective bargaining agreement with the
Employer; and
(vi) Employees who are nonresident aliens and who receive no
earned income (within the meaning of Section 911(d)(2) of the Code)
from the Employer which constitutes income from sources within the
United States (within the meaning of Section 861(a)(3) of the Code).
The Administrative Committee may elect to apply paragraph (i), (ii) or (iv)
of this Section by substituting a shorter period of service, smaller number
of hours or months, or lower age for that specified in such subparagraphs.
The determination of who is a Highly Compensated Employee, including
the determination of the number and identity of Employees in the top-paid
group, the top 100 Employees, the number of Employees treated as officers
and the Compensation that is considered, will be made in accordance with
Section 414(q) of the Code and the regulations thereunder.
1.39 "Hour of Service" means, as it applies to Computation Periods,
each hour for which an Employee is entitled to:
(a) payment for the performance of duties for any Commonly
Controlled Entity;
(b) payment from any Commonly Controlled Entity for any period
during which no duties are performed (irrespective of whether the
employment relationship has terminated) due to vacation, holiday,
sickness, incapacity (including disability), layoff, leave of absence,
jury duty or military service;
(c) back pay, irrespective of mitigation of damages, by award or
agreement with any Commonly Controlled Entity (and these hours shall
be credited to the period to which the agreement pertains); or
(d) no payment, but is on an Authorized Leave of Absence (and
these hours shall be based upon his or her normally scheduled hours
per week or a 40 hour week if there is no regular schedule).
The crediting of hours shall be made in accordance with Department of Labor
regulation section 2530.200b-2 and 3. An equivalent number of hours shall
be credited for each payroll period in which the full-time Employee would
be credited with at least 1 hour. The payroll period equivalences are 190
hours monthly.
1.40 "Internal Revenue Code" or "Code" means the Internal Revenue Code
of 1986, as amended, any subsequent Internal Revenue Code and final
Treasury Regulations. If there is a subsequent Internal Revenue Code, any
references herein to Internal Revenue Code sections shall be deemed to
refer to comparable sections of any subsequent Internal Revenue Code.
1.41 "Investment Election" means an election by which a Participant
directs the investment of his or her Contributions on such form that may be
required by the Named Fiduciary to whom it is delivered. No Investment
Election shall be deemed to have been given to the Named Fiduciary unless
it is complete and delivered in accordance with the procedures established
by such Named Fiduciary for this purpose.
1.42 "Investment Fund" or "Fund" means one or more collective
investment funds, a pool of assets, or deposits with the Custodian, a
mutual fund, insurance contract, or managed pool of assets. The Investment
Funds authorized by the Administrative Committee are listed in an Appendix.
1.43 "Limited Deferrals" means Elective Deferrals subject to the
limits of Code Section 401(a)(30).
1.44 "Named Fiduciary" means:
(a) with respect to the authority each has over management and
operation of the Plan's administration and operation or discretionary
authority and control it may have with respect to the Plan, the
Administrative Committee and such other person who may be designated
to be a Named Fiduciary pursuant to Article XVI;
(b) with respect to the management and control of the Plan's
assets or the discretionary authority it may have with respect to the
Plan's assets, the Trustee, the Administrative Committee, and other
such person who may be designated to be a Named Fiduciary pursuant to
Article XVI.
1.45 "Non-Highly Compensated Employee" or "NHCE" means an Employee who
is neither an HCE nor a Family Member.
1.46 "Normal Retirement Date" means the date a Participant attains
sixty-five (65) years of age.
1.47 "Notice Date" means the date established by the Administrative
Committee as the deadline for it to receive notification with respect to an
administrative matter in order to be processed as of a Change Date
designated by the Administrative Committee.
1.48 "Participant" means an Eligible Employee who begins to
participate in the Plan after completing the eligibility requirements. A
Participant's participation continues until his or her Termination of
Employment and his or her Accrued Benefit is distributed or forfeited.
1.49 "Payment Date" means the date on or after the Settlement Date on
which a Participant's Accrued Benefit is distributed or commences to be
distributed, which date shall be at least the minimum number of days
required by law, if any, after the date the Participant has received any
notice required by law, if any. If a distribution is one to which sections
401(a)(11) and 417 of the Internal Revenue Code do not apply, such
distribution may commence less than thirty (30) days after the notice
required under section 1.411(a)-11(c) of the Income Tax Regulations is
given, provided that:
(a) the Plan Administrator clearly informs the Participant that
the Participant has a right to a period of at least thirty (30) days
after receiving the notice to consider the decision of whether or not
to elect a distribution (and, if applicable, a particular distribution
option); and
(b) the Participant, after receiving the notice, affirmatively
elects a distribution.
1.50 "Plan" means the Whitman Corporation Retirement Savings Plan, as
set forth herein and as hereafter may be amended from time to time.
1.51 "Plan Year" means the annual accounting period of the Plan and
Trust which ends on each December 31.
1.52 "QDRO" means a domestic relations order which the Administrative
Committee has determined to be a qualified domestic relations order within
the meaning of Section 414(p) of the Code.
1.53 "Qualified Matching Contribution" means a Matching Contribution
that is treated as a Pre-Tax Contribution and posted to the Pre-Tax
Account.
1.54 "Related Plan" means:
(a) with respect to Section 401(k) and 401(m) of the Code, any
plan or plans maintained by a Commonly Controlled Entity which is
treated with this Plan as a single plan for purposes of Sections
401(a)(4) or 410(b) of the Code; and
(b) with respect to Section 415 of the Code, any other defined
contribution plan or a defined benefit plan (as defined in Section
415(k) of the Code) maintained by a Commonly Controlled Entity,
respectively called a "Related Defined Contribution Plan" and a
"Related Defined Benefit Plan".
1.55 "Rollover Contribution" means:
(a) a rollover contribution as described in Section 402(c) of
the Code (or its predecessor); or
(b) a Trustee Transfer (1) to the Custodian of an amount by the
custodian of a retirement plan qualified for tax-favored treatment
under Code Section 401(a), which plan provides for such transfer;
(2) with respect to which the benefits otherwise protected by Code
Section 411 in such transferor plan are no longer required by Code
Section 411 to be protected in this Plan; and (3) which does not
include amounts subject to Code Section 401(k).
1.56 "Settlement Date" means the date on which the transactions from
the most recent Trade Date are settled.
1.57 "Spousal Consent" means the irrevocable written consent given by
a Spouse to a Participant's election (or waiver) of a specified form of
benefit or Beneficiary designation. The Spouse's consent must acknowledge
the effect on the Spouse of the Participant's election, waiver or
designation and be duly witnessed by a Plan representative or notary
public. Spousal Consent shall be valid only with respect to the spouse who
signs the Spousal Consent and only for the particular choice made by the
Participant which requires Spousal Consent. A Participant may revoke
(without Spousal Consent) a prior election, waiver or designation that
required Spousal Consent at any time before the Sweep Date associated with
the Settlement Date upon which payments will begin. Spousal Consent also
means a determination by the Administrator that there is no Spouse, the
Spouse cannot be located or such other circumstances as may be established
by applicable law.
1.58 "Spouse" means a person who, as of the earlier of a Participant's
Payment Date and death, is alive and married to the Participant within the
meaning of the laws of the State of the Participant's residence as
evidenced by a valid marriage certificate or other proof acceptable to the
Administrative Committee. A spouse who was the Spouse on the Payment Date
but who is divorced from the Participant at the Participant's death shall
still be the Spouse at the date of the Participant's death, except as
otherwise provided in a QDRO.
1.59 "Sweep Date" means the date established by the responsible Named
Fiduciary as the cutoff date and time for the responsible Named Fiduciary
to receive notification with respect to a financial transaction for an
Accounting Period in order to be processed with respect to a Trade Date
designated by the responsible Named Fiduciary.
1.60 "Termination of Employment" occurs when a person ceases to be an
Employee, as determined by the personnel policies of the Commonly
Controlled Entity to whom he or she rendered services; provided, however,
where a Commonly Controlled Entity ceases to be such with respect to an
Employee as a result of either an asset sale or stock sale an Employee of
the Commonly Controlled Entity shall be deemed not to have incurred a
Termination of Employment: (a) unless the Administrative Committee shall
make a determination that the transaction satisfies Section 401(k) of the
Code, or if no such determination is made, until such Employee ceases to be
employed by the successor to the Commonly Controlled Entity; or (b) if the
Administrative Committee shall make a Trustee Transfer of his or her
Accrued Benefit. Transfer of employment from one Commonly Controlled
Entity to another Commonly Controlled Entity shall not constitute a
Termination of Employment for purposes of the Plan.
1.61 "Trade Date" means the date as of which a financial transaction
occurs, however with respect to a transaction involving Investment Funds
maintained on a share accounting methodology, the transaction shall be
executed based upon the daily average of the proceeds or purchase price of
sales and purchases, respectively, of a share.
1.62 "Trust" means the legal entity resulting from the agreement
between the Company and the Trustee and all amendments thereto, in which
some or all of the assets of this Plan will be received, held, invested and
distributed to or for the benefit of Participants and Beneficiaries.
1.63 "Trust Agreement" means the agreement between the Company and the
Trustee establishing the Trust, and any amendments thereto.
1.64 "Trust Fund" means any property, real or personal, received by
and held by the Trustee, plus all income and gains and minus all losses,
expenses, withdrawals and distributions chargeable thereto.
1.65 "Trustee" means any corporation, individual or individuals
designated in the Trust Agreement who shall accept the appointment as
Trustee to execute the duties of the Trustee as set forth in the Trust
Agreement.
1.66 "Trustee Transfer" means (a) a transfer to the Custodian of an
amount by the custodian of a retirement plan qualified for tax-favored
treatment under Section 401(a) of the Code or by the trustee(s) of a trust
forming part of such a plan, which plan provides for such transfer; or
(b) a Direct Rollover within the meaning of Section 402(c)(8)(B) of the
Code; provided that with respect to any withdrawal or distribution from the
Plan, a Participant may elect a transfer to only one eligible retirement
plan, except as may otherwise be determined by the Administrative
Committee, in a uniform and nondiscriminatory manner.
1.67 "Valuation Date" means the close of business on each business
day.
1.68 "Year of Service" means, as it applies to Eligibility Service,
each Computation Period in which an Employee is credited with at least
1,000 Hours of Service.
An Employee's service with a company, the assets of which are acquired
by a Commonly Controlled Entity, shall only be counted as employment with
such Commonly Controlled Entity in the determination of his or her Years of
Service if (1) the Administrative Committee directs that credit for such
service be granted, or (2) a qualified plan of the acquired company is
subsequently maintained by any Employer or Commonly Controlled Entity.
ARTICLE II
PARTICIPATION
2.1 Eligibility. On or after the Effective Date as to each Employer:
(a) Participant on January 1, 1994. Each person who has an
Accrued Benefit on January 1, 1994 shall become a Participant as of
January 1, 1994.
(b) Other Eligible Employee. Each other Eligible Employee shall
become a Participant on the first day of the month on or after the
date he or she completes at least one year of Eligibility Service.
2.2 Reemployment.
(a) Eligible Employee Was Previously a Participant. An Eligible
Employee who previously was a Participant prior to his or her
Termination of Employment shall become a Participant on the first day
he or she earns an Hour of Service.
(b) Eligible Employee Had a Termination. An Eligible Employee
who previously completed the service requirement to become a
Participant and who had a Termination of Employment before he or she
became a Participant shall be eligible to become a Participant on the
later of (1) the date he or she would have become a Participant but
for his or her Termination of Employment, or (2) the date he or she
again performs an Hour of Service.
2.3 Participation Upon Change of Job Status. An Employee who is not
an Eligible Employee shall become a Participant on the later of (1) the
date he or she would have become a Participant had he or she always been an
Eligible Employee, or (2) the date he or she becomes an Eligible Employee.
ARTICLE III
PARTICIPANT CONTRIBUTIONS
3.1 Pre-Tax Contribution Election.
(a) A Participant who is an Eligible Employee and who desires to
have Pre-Tax Contributions made on his or her behalf by his or her
Employer shall file a Contribution Election pursuant to procedures
specified by the responsible Named Fiduciary specifying his or her
Contribution Percentage of not less than two percent (2%) nor more
than ten percent (10%) (stated as a whole integer percentage) and
authorizing the Compensation otherwise payable to him or her to be
reduced.
(b) Notwithstanding Subsection (a) hereof, for any Plan Year the
Administrative Committee may determine that the maximum Contribution
Percentage shall be greater or lesser than the percentages set forth
in Subsection (a) hereof. Otherwise, the maximum Contribution
Percentage as provided in Subsection (a) hereof shall apply.
(c) A Participant's Contribution Election shall be effective
only with respect to Compensation not yet paid as of the date the
Contribution Election is effective. A Contribution Election received
on or before a Notice Date shall become initially effective with
respect to payroll cycles ended after the applicable Change Date or if
reemployed on the first day of the next month. However, the
Administrative Committee, in its sole discretion, may declare an
additional window period to Participants. Any Contribution Election
which has not been properly completed or which does not contain a
properly completed Investment Election will be deemed not to have been
received and be void.
3.2 Election Procedures. A Participant's Contribution Election shall
continue in effect (with automatic adjustment for any change in his or her
Compensation) until the earliest of the date (1) his or her Contribution
Election is changed in accordance with paragraph (a) hereof; (2) he or she
ceases to be paid as an Eligible Employee; or (3) his or her Contribution
Election is cancelled in accordance with paragraph (b) hereof.
(a) Changing the Election. A Participant may increase or
decrease his or her Contribution Percentage (subject to the percentage
limits stated above) only once each Change Date by making a new
Contribution Election, pursuant to procedures specified by the
responsible Named Fiduciary, on which is specified the amount of the
Contribution Percentage.
(1) If such Contribution Election is received by the Notice
Date, the change shall be effective with respect to the
first payroll cycle ended after the Change Date.
(2) However, if the Administrative Committee deems it
necessary, the Administrative Committee may specify an
additional window period to Participants.
(3) The amount of increase or decrease of such Contribution
Percentage shall be effective only with respect to
Compensation not yet paid.
(4) Any Contribution Election which has not been properly
completed will be deemed not to have been received and
be void.
(b) Cancelling the Election. A Participant desiring to cancel
his or her existing Contribution Election and reduce his or her
Contribution Percentage to zero must make a new Contribution Election,
pursuant to procedures specified by the responsible Named Fiduciary.
The responsible Named Fiduciary will establish procedures, to be
administered in a uniform and nondiscriminatory manner, for allowing a
Participant to cancel his or her Contribution Election. Any
Contribution Election received on or before a Notice Date shall become
effective with respect to the payroll cycle ended after the next
Change Date. A Participant who is an Eligible Employee and who has
cancelled his or her Election may again make a Contribution Election
at any time. If such Contribution Election is received by the Notice
Date, it shall become effective with respect to the first payroll
cycle ended after the next Change Date. Any Participant who has
improperly completed a Contribution Election will be deemed not to
have made an Election.
3.3 Limitation of Elective Deferrals for all Participants. A
Participant's Limited Deferrals for any calendar year shall not exceed the
Contribution Dollar Limit. If a Participant advises the Administrative
Committee that he or she has Elective Deferrals (reduced by Elective
Deferrals previously distributed which are characterized as a result of the
application of Code Section 401(k)(3) to such Participant) in excess of the
Contribution Dollar Limit ("Excess Deferral"), the Administrative Committee
shall return such Excess Deferrals for the taxable year to the Participant.
To the extent the Participant's Limited Deferrals exceed the Contribution
Dollar Limit, the Employer may notify the Plan on behalf of the Participant
(and "Excess Deferral" shall be calculated by taking into account only
Limited Deferrals). If such advice was received by the Administrative
Committee during the taxable year, the Plan shall distribute the Excess
Deferral as soon as administratively feasible. If such advice was received
by the Administrative Committee after the taxable year but no later than
March 1 following the close of the taxable year, the Administrative
Committee shall cause the Plan to return such Excess Deferral no later than
April 15 immediately following the end of such taxable year, adjusted by
income allocable to that amount.
The net investment gain or loss associated with the Excess Deferral is
calculated as follows:
G
E x ------- x (1 + (10% x M))
(AB-G)
where:
E = the Excess Deferral amount,
G = the net gain or loss for the Plan Year in the Participant's
Pre-Tax Account,
AB = the total value of the Participant's Pre-Tax Account,
determined as of the end of the calendar year being
corrected,
M = the number of full months from the calendar year end to the
date the excess amount is paid, plus one for the month
during which payment is to be made if payment will occur
after the 15th of that month.
If the application of the limitations in this Section results in a
reduction of previously contributed Pre-Tax Contributions on behalf of a
Participant, Matching Contributions allocable with respect thereto (prior
to such reduction) which are not distributed under the ACP Test shall be
forfeited.
ARTICLE IV
EMPLOYER CONTRIBUTIONS AND ALLOCATIONS
4.1 Pre-Tax Contributions.
(a) Frequency and Eligibility. Subject to the limits of the
Plan and to the Administrative Committee's authority to limit
Contributions under the terms of this Plan, for each period for which
a Contribution Election is in effect, the Employer shall contribute to
the Plan on behalf of each Participant an amount equal to the amount
designated by the Participant as a Pre-Tax Contribution on his or her
Contribution Election.
(b) Allocation. The Pre-Tax Contribution shall be allocated to
the Pre-Tax Account of the Participant with respect to whom the amount
is paid.
(c) Timing, Medium and Posting. Pre-Tax Contributions shall be
paid to the Custodian in cash and posted to each Participant's Pre-Tax
Account by the Administrative Committee as soon as such amounts can
reasonably be balanced against the specific amount made on behalf of
each Participant. Pre-Tax Contributions shall be paid to the
Custodian not more than ninety (90) days after the date amounts are
deducted from the Participant's Compensation.
4.2 Matching Contributions.
(a) Frequency and Eligibility. Subject to the limits of the
Plan and to the Administrative Committee's authority to limit
Contributions under the Plan, for each period for which Participants'
Contributions are made, the Employer shall make Matching Contributions
as described in the following Allocation Method paragraph on behalf of
each Participant who contributed during the period.
(b) Allocation Method. The Matching Contributions for each
period shall total one hundred percent (100%) of each eligible
Participant's Pre-Tax Contributions for the period, provided that no
Matching Contributions shall be made based upon a Participant's
Contributions in excess of six percent (6%) of his or her
Compensation. The Employer may change the one hundred percent (100%)
matching rate or the six percent (6%) of considered Compensation to
any other percentages, including zero (0%).
(c) Timing, Medium and Posting. The Employer shall make each
period's Matching Contribution in cash as soon as is feasible, and not
later than the Employer's federal tax filing date, including
extensions, for deducting such Contribution. The Administrative
Committee shall post such amount to each Participant's Matching
Account once the total Contribution received by the Custodian has been
balanced against the specific amount to be credited to each
Participant's Matching Account.
(d) Compensation. Compensation shall be measured by the period
(not to exceed the Plan Year) for which the Contribution is being made
provided the Eligible Employee is a Participant during such period.
4.3 Pay Based Contributions.
(a) Frequency and Eligibility. Subject to the limits of the
Plan and to the Administrative Committee's authority to limit
Contributions under the Plan, for each Plan Year, the Employer may
make a Pay Based Contribution in an amount determined by the Whitman
Corporation on behalf of each Participant who was an Eligible Employee
on the last day of the Plan Year. In addition, such Contribution
shall be made on behalf of each Participant who ceased being an
Employee during the period after having attained his or her Normal
Retirement Date, or by reason of his or her Disability or death.
(b) Allocation Method. The Pay Based Contribution for each
period shall be allocated among eligible Participants in direct
proportion to their Compensation.
(c) Timing, Medium and Posting. The Employer shall make each
period's Pay Based Contribution in cash as soon as is feasible, and
not later than the Employer's federal tax filing date, including
extensions, for deducting such Contribution. The Administrative
Committee shall post such amount to each Participant's Pay Based
Account once the total Contribution received by the Custodian has been
balanced against the specific amount to be credited to each
Participant's Pay Based Account.
(d) Compensation. Compensation shall be measured by the period
(not to exceed the Plan Year) for which the Contribution is being made
provided the Eligible Employee is a Participant during such period.
4.4 Special Contributions.
(a) Frequency and Eligibility. Subject to the limits of the
Plan and to the Administrative Committee's authority to limit
Contributions under the Plan, for each Plan Year, the Employer may
make a Special Contribution in an amount determined by the
Administrative Committee on behalf of each Non-Highly Compensated
Employee Participant.
(b) Allocation Method. The Special Contribution for each period
shall be allocated among eligible Participants as determined by the
Administrative Committee, subject to a maximum dollar amount which may
be contributed on behalf of any Participant as determined by the
Administrative Committee.
(c) Timing, Medium and Posting. The Employer shall make each
period's Special Contribution in cash as soon as is feasible, but no
later than twelve (12) months after the end of the Plan Year to which
it is allocated. The Administrative Committee shall post such amount
to each Participant's Special Account once the total Contribution
received by the Custodian has been balanced against the specific
amount to be credited to each Participant's Special Account.
(d) True-Up Contribution. For each Participant who is an
Employee on the last business day of the Plan Year and who has elected
to contribute at least six percent (6%) of his or her Compensation as
a Pre-Tax Contribution for all periods during such Plan Year in which
he or she could make Pre-Tax Contributions, the Employer shall make a
Matching Contribution equal to the least of:
(1) six percent (6%) of the Participant's Compensation for
the Plan Year;
(2) the Participant's Pre-Tax Contributions for the Plan
Year; or
(3) six percent (6%) of the dollar limit in Code Section
401(a)(17).
(e) Compensation. Compensation shall be measured by the period
(not to exceed the Plan Year) for which the Contribution is being
made, provided the Eligible Employee is a Participant during such
period.
4.5 Miscellaneous.
(a) Deduction Limits. In no event shall the Employer
Contributions for a Plan Year exceed the maximum the Company estimates
will be deductible (or which would be deductible if the Employers had
taxable income) by any Employer or Commonly Controlled Entity under
Section 404 of the Code ("Deductible Amount"). Any amount in excess
of the Deductible Amount shall not be contributed in the following
order of Contribution type, to the extent needed to eliminate the
excess:
(1) Each Participant's allocable share of Pre-Tax
Contributions for the Plan Year will be reduced by an
amount equal to the excess of the Participant's Pre-Tax
Contributions over an amount which bears the same ratio
to the amount of Pre-Tax Contributions made to the Plan
on behalf of such Participant during the Plan Year as
the Deductible Amount available for the Plan Year
(reduced by the total amount of other types of Employer
Contributions for the Plan Year) bears to the aggregate
Pre-Tax Contributions made to the Plan on behalf of all
Participants subject to such Deductible Amount during
the Plan Year (before the application of this
provision).
(2) If the application of Section (a)(1) would result in a
reduction of a Participant's Pre-Tax Contributions
which are matched by Matching Contributions, the rate
at which Pre-Tax Contributions are reduced shall be
offset by a reduction for each Matching Contribution
not made as a result.
(3) Pay Based Contributions.
(b) Profit Sharing Plan. Notwithstanding anything herein to the
contrary, the Plan shall constitute a profit sharing plan for all
purposes of the Code.
ARTICLE V
ROLLOVERS
5.1 Rollovers. The Administrative Committee may authorize the
Custodian to accept a Rollover Contribution from an Eligible Employee in
cash, even if he or she is not yet a Participant. The Employee shall
furnish satisfactory evidence to the Administrative Committee that the
amount is eligible for rollover treatment. Such amount shall be posted to
the Employee's Rollover Account by the Administrative Committee as of the
date received by the Custodian.
If it is later determined that an amount transferred pursuant to the
above paragraph did not in fact qualify as a Rollover Contribution, the
balance credited to the Employee's Rollover Account shall immediately be
(1) segregated from all other Plan assets, (2) treated as a non-qualified
trust established by and for the benefit of the Employee, and (3)
distributed to the Employee. Any such nonqualifying rollover shall be
deemed never to have been a part of the Plan.
ARTICLE VI
ACCOUNTING FOR PARTICIPANTS'
ACCOUNTS AND FOR INVESTMENT FUNDS
6.1 Individual Participant Accounting.
(a) Account Maintenance. The responsible Named Fiduciary shall
cause the Accounts for each Participant to reflect transactions
involving assets of the Accounts in accordance with this Article.
Financial transactions during or with respect to an Accounting Period
shall be accounted for at the individual Account level by "posting"
each transaction to the appropriate Account of each affected
Participant. Participant Account values shall be maintained in
shares.
(b) Trade Date Accounting and Investment Cycle. For any
transaction to be processed as of a Trade Date, the responsible Named
Fiduciary must receive instructions by the Sweep Date and such
instructions shall apply only to amounts held in or posted to the
Accounts as of the Trade Date. Financial transactions in an
Investment Fund shall be posted to a Participant's Account as of the
Trade Date and based upon the Trade Date values provided by the
Custodian. All transactions shall be effected on the Settlement Date
relating to the Trade Date (or as soon as is administratively
feasible).
(c) Suspension of Transactions. Whenever the responsible Named
Fiduciary considers such action to be in the best interest of the
Participants, the Administrative Committee in its discretion may
suspend from time to time the Trade Date.
(d) Temporary Investment. To the extent practicable, the
responsible Named Fiduciary shall direct the Custodian to make
temporary investments in a short term interest fund of assets in an
Account held pending a Trade Date.
(e) How Fees and Expenses are Charged to Participants. Account
maintenance fees to the extent not paid by the Employer shall be
charged prorata to each Participant's Account on the basis of each
Participant's Accrued Benefit, provided that no fee shall reduce a
Participant's Account balance below zero. Transaction type fees (such
as special asset fees, Conversion Election change fees, etc.) shall be
charged to the Accounts involved in the transaction. Fees and
expenses incurred for the management and maintenance of Investment
Funds shall be charged at the Investment Fund level and reflected in
the net gain or loss of each Fund to the extent not paid by the
Employer.
(f) Error Correction. The Administrative Committee may correct
any errors or omissions in the administration of the Plan by restoring
or charging any Participant's Accrued Benefit with the amount that
would be credited or charged to the Account had no error or omission
been made. Funds necessary for any such restoration shall be provided
through payment made by the responsible Named Fiduciary.
(g) Accounting for Participant Loans. Participant loans shall
be held in a separate Fund for investment only by such Participant and
accounted for in dollars as an earmarked asset of the borrowing
Participant's Account.
6.2 Accounting for Investment Funds.
(a) Share Accounting. The investments in each Investment Fund
designated in the Appendix shall be maintained in full and fractional
shares. The responsible Named Fiduciary is responsible for
determining the number of full and fractional shares of each such
Fund. To the extent an Investment Fund is comprised of a collective
investment fund of the Custodian, the net asset and unit values shall
be determined in accordance with the rules governing such collective
investment funds, which are incorporated herein by reference. Fees
and expenses incurred for the management and maintenance of Investment
Funds shall be charged at the Investment Fund level and reflected in
the net gain or loss of each Fund to the extent not paid by the
Employer.
(b) Accounting for Company Stock. The following additional
rules shall apply to the Company Stock Fund:
(1) Shareholder Rights. Shareholder Rights with respect to
all Company Stock in an Account shall be exercised by
the Trustee in accordance with directions from the
Participant pursuant to the procedures of the Trust
Agreement.
(2) Tender Offer. If a tender offer is commenced for
Company Stock, the provisions of the Trust Agreement
regarding the response to such tender offer, the
holding and investment of proceeds derived from such
tender offer and the substitution of new securities for
such proceeds shall be followed.
(3) Dividends and Income. Dividends (whether in cash or in
property) and other income received by the Custodian in
respect of Company Stock shall be reinvested in Company
Stock and shall constitute income and be recognized on
an accrual basis for the Accounting Period in which
occurs the record date with respect to such dividend;
provided that, with respect to any dividend which is
reflected in the market price of the underlying stock,
the Administrative Committee may direct the Custodian
during such trading period to trade such stock the
regular way to reflect the value of the dividend, and
all Fund transfers and cash distributions shall be
transacted accordingly with no accrual of such
dividend, other than as reflected in such market price.
(4) Transaction Costs. Any brokerage commissions, transfer
taxes, transaction charges, and other charges and
expenses in connection with the purchase or sale of
Company Stock shall be added to the cost thereof in the
case of a purchase or deducted from the proceeds
thereof in the case of a sale; provided, however, where
the purchase or sale of Company Stock is with a
"disqualified person" as defined in Section 4975(e)(2)
of the Code or a "party in interest" as defined in
Section 3(14) of ERISA, no commissions may be charged
with respect thereto.
6.3 Accounts for QDRO Beneficiaries. A separate Account shall be
established for a Beneficiary entitled to any portion of a Participant's
Account under a QDRO as of the date and in accordance with the directions
specified in the QDRO. Such Account shall be valued and accounted for in
the same manner as any other Account.
(a) Investment Direction. A QDRO Beneficiary may direct the
investment of such Account in the same manner as any other
Participant; provided however, a QDRO Beneficiary may not acquire
Company Stock.
(b) Distributions. A QDRO Beneficiary shall be entitled to
payment as provided in the QDRO and permissible under the otherwise
applicable terms of this Plan, regardless of whether the Participant
is an Employee, and to name a Beneficiary as specified in the QDRO.
(c) Participant Loans. A QDRO Beneficiary shall not be entitled
to borrow from his or her Account. If a QDRO specifies that the QDRO
Beneficiary is entitled to any portion of the Account of a Participant
who has an outstanding loan balance, all outstanding loans shall
continue to be held in the Participant's Account and shall not be
divided between the Participant's and QDRO Beneficiary's Accounts.
6.4 Special Accounting During Conversion Period. The responsible
Named Fiduciary and Custodian may use any reasonable accounting methods in
performing their respective duties during the period of converting the
prior accounting system of the Plan and Trust to conform to the individual
Participant accounting system described in this Section. This includes,
but is not limited to, the method for allocating net investment gains or
losses and the extent, if any, to which contributions received by and
distributions paid from the Trust during this period share in such
allocation. All or a portion of the Trust assets may be held, if
necessary, in a short term interest bearing vehicle, which may include
deposits of the Trustee, during the conversion period for establishing such
individual Participant Accounts.
ARTICLE VII
INVESTMENT FUNDS AND ELECTIONS
7.1 Investment Funds. Except for a Participant's loan Account, the
Trust shall be maintained in various Investment Funds. The Administrative
Committee may change the number or composition of the Investment Funds,
subject to the terms and conditions agreed to with the Custodian.
7.2 Investment of Contributions.
(a) Investment Election. Each Participant may direct the
Trustee, by submission to the responsible Named Fiduciary of a
completed Investment Election provided for that purpose by the
responsible Named Fiduciary, to invest Contributions posted to his or
her Accounts in one or more Investment Funds. If the Administrative
Committee directs, for any Accounting Period, Contributions with
respect to which the Participant has investment control may be
invested separately in Funds.
(b) Effective Date of Investment Election; Change of Investment
Election. A Participant's initial Investment Election will be
effective with respect to a Fund on the Trade Date which relates to
the Sweep Date on which or prior to which the Investment Election is
received pursuant to procedures specified by the responsible Named
Fiduciary. Any Investment Election which has not been properly
completed will be deemed not to have been received. A Participant's
Investment Election shall continue in effect, notwithstanding any
change in his or her Compensation or his or her Contribution
Percentage, until the earliest of (1) the effective date of a new
Investment Election, or (2) the date he or she ceases to be paid as an
Eligible Employee. A change in Investment Election shall be effective
with respect to a Fund on the Trade Date which relates to the Sweep
Date on which or prior to which the Administrative Committee receives
the Participant's new Investment Election.
(c) Switching Fees. A reasonable processing fee may be charged
directly to a Participant's Account for Investment Election changes in
excess of a specified number per Plan Year as determined by the
Administrative Committee.
7.3 Investment of Accounts.
(a) Conversion Election. Notwithstanding a Participant's
Investment Election, a Participant or Beneficiary may direct the
Trustee, by submission of a completed Conversion Election provided for
that purpose to the responsible Named Fiduciary, to change the
interest his or her Accrued Benefit has in one or more Investment
Funds.
(b) Effective Date of Conversion Election. A Conversion
Election to change a Participant's or Beneficiary's investment of his
or her Accrued Benefit in one Investment Fund to another Fund shall be
effective with respect to such Funds on the Trade Date(s) which
relates to the Sweep Date on which or prior to which the Election is
received pursuant to procedures specified by the responsible Named
Fiduciary. Notwithstanding the foregoing, to the extent required by
any provisions of an Investment Fund, the effective date of any
Conversion Election may be delayed or the amount of any permissible
Conversion Election may be reduced. Any Investment Election which has
not been properly completed will be deemed not to have been received.
(c) Switching Fees. A reasonable processing fee may be charged
directly to a Participant's Account for Conversion Election changes in
excess of a specified number per Plan Year as determined by the
Administrative Committee.
7.4 Establishment of Investment Funds. The Administrative Committee
shall cause to be established one or more Investment Funds set forth in the
Appendix. In addition, the Administrative Committee may, from time to
time, in its discretion:
(a) limit investments in or transfers from an Investment Fund;
(b) add funding vehicles thereunder;
(c) liquidate, consolidate or otherwise reorganize an existing
Investment Fund; or
(d) add a new Investment Fund to the Appendix.
7.5 Transition Rules. Effective as of the date any Investment Fund
is added or deleted, each Participant and Beneficiary shall have the
opportunity to submit new Investment Elections and Conversion Elections to
the responsible Named Fiduciary no later than the applicable Sweep Date.
The responsible Named Fiduciary and Custodian may use any reasonable
accounting methods in performing their respective duties during the period
of transition from one Investment Fund to another, including, but not
limited to:
(a) designating into which Investment Fund a Participant's
Accrued Benefit will be invested if the Participant fails to submit a
proper Conversion Election;
(b) the method for allocating net investment gains or losses and
the extent, if any, to which amounts received by and distributions
paid from the Trust during this period share in such allocation;
(c) investing all or a portion of the Trust's assets in a
short-term, interest-bearing Fund during such transition period; and
(d) delaying any Trade Date during a designated transition
period or changing any Notice Date, Sweep Date or Change Date during
such transition period.
ARTICLE VIII
VESTING AND FORFEITURES
8.1 Fully Vested Contribution Accounts.
A Participant who is an Employee on January 1, 1994, shall be
fully vested and have a nonforfeitable right to his or her Accrued Benefit
in all Accounts at all times. A Participant who is not an Employee on or
after January 1, 1994 shall have a vested and nonforfeitable right to his
or her Accrued Benefit in the manner determined under this Plan as it
existed on his or her Termination of Employment.
ARTICLE IX
PARTICIPANT LOANS
9.1 Participant Loans Permitted. The Administrative Committee is
authorized to establish and administer a loan program for a Participant who
is an Eligible Employee or a former Eligible Employee who is a "party in
interest" under ERISA pursuant to the terms and conditions set forth in
this Article. All loan limits are determined as of the Trade Date the
Trustee reserves funds for the loan. The funds will be disbursed to the
Participant as soon as is administratively feasible after the next
following Settlement Date.
9.2 Loan Funding Limits.
The loan amount must meet the following limits:
(a) Plan Minimum Limit. The minimum amount for any loan is
$1,000.00.
(b) Plan Maximum Limit. Subject to the legal limit described in
(c) below, the maximum a Participant may borrow, including the
outstanding balance of existing Plan loans, is fifty percent (50%) of
vested balance of the following Accounts:
Pre-Tax Account
Special Account
Matching Account
Pay Based Account
Former Matching Contribution Account
ESOP Account
TRASOP Account
Rollover Account
Post-Tax Account
QVEC Account.
(c) Legal Maximum Limit. The maximum a Participant may borrow,
including the outstanding balance of existing loans, is based upon the
value of his or her vested interest in this Plan and all other
qualified plans maintained by a Commonly Controlled Entity (the
"Vested Interest"). The maximum amount is equal to 50% of his or her
Vested Interest, not to exceed $50,000. However, the $50,000 amount
is reduced by the Participant's highest outstanding balance of all
loans from any Commonly Controlled Entity's qualified plans during the
12-month period ending on the day before the Trade Date on which the
loan is made.
9.3 Maximum Number of Loans. A Participant may have only one loan
outstanding at any given time, and any prior existing loan must be fully
repaid for 3 months before a new loan may be secured.
9.4 Source of Loan Funding. A loan to a Participant shall be made
solely from the assets of his or her own Accounts. The available assets
shall be determined first by Contribution Account and then by investment
type within each type of Contribution Account. The hierarchy for loan
funding by type of Contribution Account shall be the order listed in the
preceding Plan Maximum Limit paragraph. Within each Account used for
funding, amounts shall first be taken from the available cash in the
Account and then taken by type of investment in direct proportion to the
market value of the Participant's interest in each Investment Fund as of
the Sweep Date on which the loan is made.
9.5 Interest Rate. The interest rate charged on Participant loans
shall be fixed and equal to the Trustee's prime rate.
9.6 Repayment. Substantially level amortization shall be required of
each loan with payments made at least monthly, through payroll deduction,
provided that payment can be made by check for advance loan payments, or
when a Participant is on an Authorized Leave of Absence, Disabled or
transferred to the employ of a Commonly Controlled Entity which is not
participating in the Plan. Loans may be prepaid in full or in part at any
time. The loan repayment period shall be as mutually agreed upon by the
Participant and Administrative Committee, not to exceed five (5) years.
9.7 Repayment Hierarchy. Loan principal repayments shall be credited
to the Participant's Accounts in the inverse of the order used to fund the
loan. Loan interest shall be credited to the Contribution Account in
direct proportion to the principal repayment. Loan payments are credited
by investment type based upon the Participant's current Conversion Election
for that Account.
9.8 Loan Application, Note and Security. A Participant shall apply
for any loan in accordance with a procedure established by the responsible
Named Fiduciary. The responsible Named Fiduciary shall administer
Participant loans and shall specify the time frame for approving loan
applications. All loans shall be evidenced by a promissory note and
security agreement and secured only by a Participant's Account balance.
The Plan shall have a lien on a Participant's Account to the extent of any
outstanding loan balance.
9.9 Default, Suspension and Acceleration Feature.
(a) Default. A loan is treated as a default on the earlier of
(i) the date any scheduled loan payment is more than ninety (90) days
late, provided that the Administrative Committee may agree to a
suspension of loan payments for up to twelve (12) months for a
Participant who is on an Authorized Leave of Absence or Disabled. or
(ii) 30 days from the time the Participant receives written notice of
the note being due and payable and a demand for past due amounts.
(b) Actions upon Default. In the event of default, the
Administrative Committee may direct the Trustee to execute upon its
security interest in the Participant's Account by segregating the
unpaid loan balance from the Account, including interest to the date
of default and report the default as a taxable distribution. As soon
as a Plan withdrawal or distribution to such Participant would
otherwise be permitted, the Administrative Committee shall instruct
the Trustee to distribute the note to the Participant.
(c) Acceleration. A loan shall become due and payable in full
once the Participant incurs a Termination of Employment unless he or
she is Disabled in which case the note will not be due and payable
until the Participant ceases to be Disabled, dies or the note is
otherwise due.
ARTICLE X
IN-SERVICE WITHDRAWALS
10.1 Withdrawals for 401(k) Hardship.
(a) Requirements. A Participant may request the withdrawal of
any amount from the portion of his or her Accounts needed to satisfy a
financial need by making a withdrawal request in accordance with a
procedure established by the Administrative Committee. The
Administrative Committee shall only approve those requests for
withdrawals (1) on account of a Participant's "Deemed Financial Need",
and (2) which are "Deemed Necessary" to satisfy the financial need.
(b) "Deemed Financial Need". Financial commitments relating
to:
(1) costs directly related to the purchase or construction
(excluding mortgage payments or balloon payments) of a
Participant's principal residence;
(2) the payment of expenses for medical care described in
Section 213(d) of the Code previously incurred by the
Participant, the Participant's Spouse, or any
dependents of the Participant (as defined in Section
152 of the Code) or necessary for those persons to
obtain medical care described in Section 213(d) of the
Code;
(3) payment of tuition and related educational fees for
the next twelve (12) months of post-secondary
education for the Participant, his or her Spouse,
children or dependents (as defined in Section 152 of
the Code); or
(4) necessary payments to prevent the eviction of the
Participant from his or her principal residence or the
foreclosure on the mortgage of the Participant's
principal residence.
(c) "Deemed Necessary". A withdrawal is "deemed necessary" to
satisfy the financial need only if all of these conditions are met:
(1) the withdrawal may not exceed the dollar amount needed
to satisfy the Participant's documented Financial
Hardship, plus an amount necessary to pay federal,
state, or local income taxes or penalties reasonably
anticipated to result from such withdrawal;
(2) the Participant must have obtained all distributions,
other than Financial Hardship distributions, and all
nontaxable loans under all plans maintained by the
Company or any Commonly Controlled Entity;
(3) the Participant will be suspended from making Pre-Tax
Contributions, post-tax contributions, (or similar
contributions under any other qualified or
nonqualified plan of deferred compensation maintained
by a Commonly Controlled Entity) for at least twelve
(12) months from the date the withdrawal is received;
and
(4) the Contribution Dollar Limit for the taxable year
immediately following the taxable year in which the
Financial Hardship withdrawal is received shall be
reduced by the Elective Deferrals for the taxable year
in which the Financial Hardship withdrawal is
received.
(d) Account Sources for Withdrawal. All available amounts must
first be withdrawn from his or her Accounts under Section 10.2 or
10.3. The remaining withdrawal amount shall come only from his or her
Accounts, in the following priority order of Accounts:
Post-Tax Account
QVEC Account
TRASOP Account
ESOP Account
Rollover Account
Former Matching Contribution Account
Pay Based Account
Matching Account
Pre-Tax Account
The amount that may be withdrawn from a Participant's Pre-Tax Account
shall not include earnings and Qualified Matching Contributions posted
to his or her Pre-Tax Account after the end of the Plan Year which
ends before July 1, 1989.
10.2 Withdrawals for Participants over age 59-1/2 or who are Disabled.
(a) Requirements. A Participant who is over age 59-1/2 or who
is Disabled may withdraw from the portion of his or her Accounts
listed in paragraph (b) below.
(b) Account Sources for Withdrawal. When requesting a
withdrawal, any withdrawal amount shall come only from his or her
Accounts, in the following priority order of Accounts:
Post-Tax Account
QVEC Account
TRASOP Account
ESOP Account
Rollover Account
Former Matching Contribution Account
Pay Based Account
Matching Account
Pre-Tax Account
Special Account.
10.3 Withdrawals of Mature Amounts.
(a) Requirements. Withdrawal is permitted from an amount
credited to any of the Accounts listed in paragraph (b) below.
(b) Contribution Account Sources for Withdrawal. When
requesting a withdrawal, any withdrawal amount shall come only from
his or her Accounts, in the following priority order of Accounts:
Post-Tax Account
QVEC Account
TRASOP Account
ESOP Account
Rollover Account
Former Matching Contribution Account.
10.4 Withdrawal Processing.
(a) Ordering. To the extent of the outstanding principal
amount (excluding earnings) as of December 31, 1986 attributable to
his or her Post-Tax Account, any withdrawal hereunder shall be deemed
first to be made therefrom, second from Post-Tax Contributions, if
any, made after December 31, 1986, plus earnings thereon in the same
pro rata manner as required by Code Section 72(e), and, thirdly, from
earnings on such principal amount as of December 31, 1986.
(b) Minimum Amount. There is no minimum payment for any type
of withdrawal.
(c) Permitted Frequency. The maximum number of withdrawals
permitted in any Plan Year (other than for 401(k) Hardship) is two.
For this purpose, two types of withdrawals distributed in one payment
shall constitute one withdrawal.
(d) Application by Participant. A Participant must submit a
withdrawal request in accordance with a procedure established by the
responsible Named Fiduciary to the responsible Named Fiduciary to
apply for any type of withdrawal. Only a Participant who is an
Employee may make a withdrawal request.
(e) Approval by Administrative Committee. The responsible
Named Fiduciary is responsible for determining that a withdrawal
request conforms to the requirements described in this Section and
notifying the Custodian of any payments to be made in a timely manner.
(f) Time of Processing. The Custodian shall process all
withdrawal requests which it receives by a Sweep Date, based on the
value as of the Trade Date to which it relates, and fund them on the
next Settlement Date. The Custodian shall then make payment to the
Participant as soon thereafter as is administratively feasible.
(g) Medium and Form of Payment. The medium of payment for
withdrawals is either cash or direct deposit. The form of payment for
withdrawals shall be a single installment.
(h) Investment Fund Sources. Within each Account used for
funding a withdrawal, amounts shall be taken by type of investment in
direct proportion to the market value of the Participant's interest in
each Investment Fund at the time the withdrawal is made.
(i) Direct Rollover. With respect to any payment hereunder in
excess of $200 which constitutes an Eligible Rollover Distribution, a
Distributee may direct the Administrative Committee to have all or
some portion of such payment (other than from a Post-Tax Account) paid
in the form of a Trustee Transfer, in accordance with procedures
established by the responsible Named Fiduciary, provided the
responsible Named Fiduciary receives written notice of such direction
with specific instructions as to the Eligible Retirement Plan on or
prior to the applicable Sweep Date for payment. If the Participant
does not transfer all of such payment, the minimum amount which can be
transferred is $500.
ARTICLE XI
DISTRIBUTIONS ON AND AFTER
TERMINATION OF EMPLOYMENT
11.1 Request for Distribution of Benefits.
(a) Request for Distribution. Subject to the other
requirements of this Article, a Participant may elect to have his or
her vested Accrued Benefit paid to him or her beginning upon any
Settlement Date following his or her Termination of Employment by
submitting a completed distribution election in accordance with a
procedure established by the responsible Named Fiduciary. Such
election form shall include or be accompanied by a notice which
provides the Participant with information regarding all optional times
and forms of payment available. The election must be submitted to the
responsible Named Fiduciary by the Sweep Date that relates to the
Payment Date.
(b) Failure to Request Distribution. If a Participant has a
Termination of Employment and fails to submit a distribution request
in accordance with a procedure established by the responsible Named
Fiduciary by the last Payment Date permitted under this Article, his
or her vested Accrued Benefit shall be valued as of the Valuation Date
which immediately precedes such latest date of distribution (called
the "Default Valuation Date") and a notice of such deemed distribution
shall be issued to his or her last known address as soon as
administratively possible. If the Participant does not respond to the
notice or cannot be located, his or her vested Accrued Benefit
determined on the Default Valuation Date shall be treated as a
Forfeiture. If the Participant subsequently files a claim, the amount
forfeited (unadjusted for gains and losses) shall be reinstated to his
or her Accounts and distributed as soon as administratively feasible,
and such payment shall be accounted for by charging it against the
Forfeiture Account or by a contribution from the Employer of the
affected Participant.
11.2 Deadline for Distribution. In addition to any other Plan
requirements and unless the Participant elects otherwise, or cannot be
located, the Payment Date of a Participant's vested Accrued Benefit shall
be not later than sixty (60) days after the latest of the close of the Plan
Year in which (i) the Participant attains the earlier of age sixty-five
(65) or his or her Normal Retirement Date, (ii) occurs the tenth (10th)
anniversary of the Plan Year in which the Participant commenced
participation, or (iii) the Participant had a Termination of Employment.
However, if the amount of the payment or the location of the Participant
(after a reasonable search) cannot be ascertained by that deadline, payment
shall be made no later than 60 days after the earliest date on which such
amount or location is ascertained. In any case, the Payment Date of a
Participant's vested Accrued Benefit shall not be later than April 1
following the calendar year in which the Participant attains age seventy
and one-half (70-1/2) and each December 31 thereafter and shall comply with
the requirements of Section 401(a)(9) of the Code and the Treasury
Regulations promulgated thereunder.
11.3 Payment Form and Medium.
(a) General. A Participant's vested Accrued Benefit shall be paid in
the form of:
(1) a lump sum,
(2) periodic installments as selected by the
Participant, not to exceed 15 years,
(3) a single or joint life annuity, or
(4) periodic distributions of at least $500.00, each in an
amount designated by the Participant but not to exceed two
distributions per Plan Year.
(b) Medium of Payment. Payments will generally be made in cash
(generally by check), alternatively, if the Participant elects an in-kind
distribution, a single sum payment will be made in a combination of cash
and whole shares of Company Stock. Any annuity option permitted will be
provided through the purchase of a non-transferable single premium contract
from an insurance company which must conform to the terms of the Plan and
Section 401(a)(9) of the Code and which will be distributed to the
Participant or Beneficiary in complete satisfaction of the benefit due.
11.4 Small Amounts Paid Immediately. If a Participant has a
Termination of Employment and the Participant's vested Accrued Benefit is
$3,500 or less, the Participant's Accrued Benefit shall be paid as a single
sum as soon as administratively feasible after his or her Termination of
Employment.
11.5 Payment Within Life Expectancy. The Participant's payment
election must be consistent with the requirement of Code section 401(a)(9)
that all payments are to be completed within a period not to exceed the
lives or the joint and last survivor life expectancy of the Participant and
his or her Beneficiary. The life expectancies of a Participant and his or
her spouse may be recomputed annually.
11.6 Incidental Benefit Rule. The Participant's payment election must
be consistent with the requirement that, if the Participant's Spouse is not
his or her sole primary Beneficiary, the minimum annual distribution for
each calendar year, beginning with the year in which he or she attains age
seventy and one-half (70-1/2), shall not be less than the quotient obtained
by dividing (a) the Participant's vested Accrued Benefit as of the last
Trade Date of the preceding year by (b) the applicable divisor as
determined under the incidental benefit requirements of Code Section
401(a)(9).
11.7 QJSA and QPSA Information and Elections. The following
information and election rules will apply to any Participant who elects an
annuity option:
(a) "QJSA". A qualified joint and fifty percent (50%) survivor
annuity, meaning a form of benefit payment which is the actuarial
equivalent of the Participant's vested Accrued Benefit at the Payment
Date, payable to the Participant in monthly payments for life and
providing that, if the Participant's Spouse survives him or her,
monthly payments equal to fifty percent (50%) of the amount payable to
the Participant during his or her lifetime will be paid to the Spouse
for the remainder of such person's lifetime.
(b) "QPSA". A qualified pre-retirement survivor annuity,
meaning that upon the death of a Participant before the Payment Date
of his or her vested Accrued Benefit, such benefit will become payable
to the surviving Spouse as an annuity, unless Spousal Consent has been
given to a different Beneficiary or the surviving Spouse chooses a
different form of payment.
(c) QJSA Information to a Participant. No more than ninety
(90) days before the Payment Date, each Participant who has a Spouse
and requests an annuity form of payment shall be given a written
explanation of (1) the terms and conditions of the QJSA to his or her
annuity; (2) the right to make an election to waive this form of
payment and choose an optional form of payment and the effect of this
election; (3) the right to revoke this election and the effect of this
revocation; and (4) the need for Spousal Consent.
(d) QJSA Election. A Participant may elect (and such election
shall include Spousal Consent if married), at any time within the
ninety (90) day period ending on the Payment Date, to (1) waive the
right to receive the QJSA and elect an optional form of payment; or
(2) revoke or change any such election.
(e) QJSA Spousal Consent to Participant Loans. Spousal Consent
must be obtained for any Participant loan which is funded from any
amount to which the election in paragraph (d) above applies within the
ninety (90) day period ending on the date such loan is secured.
(f) QJSA Spousal Consent to Participant In-Service Withdrawals.
Spousal Consent must be obtained for any Participant in-service
withdrawal which is funded from any portion of an Account to which the
election in paragraph (d) above applies within the ninety (90) day
period ending on the date of such in-service withdrawal.
(g) QPSA Beneficiary Information to Participant. Each married
Participant who has requested an annuity form of payment shall be
given written information stating that (1) his or her death benefit is
payable to his or her surviving Spouse; (2) his or her ability to
choose that the benefit be paid to a different Beneficiary; (3) the
right to revoke or change a prior designation and the effects of such
revocation or change; and (4) the need for Spousal Consent. Such
information shall be provided during whichever of the following
periods ends later:
(1) the period that begins one year before the date on
which the Participant requests an annuity form of
payment and that ends one year after such date; and
(2) the period that begins with the first day of the Plan
Year in which the Participant attains age thirty-two
(32) and that ends with the close of the Plan Year in
which the Participant attains age thirty-five (35).
Notwithstanding the foregoing, if the Participant incurs a Termination
of Employment after requesting an annuity form of payment, but before
attaining age thirty-five (35), the information described in the first
sentence of this Subsection shall be provided during the period that
begins one year before the date of the Participant's Termination of
Employment and that ends one year after such date.
(h) QPSA Beneficiary Designation by Participant. A married
Participant may designate (with Spousal Consent) a non-spouse
Beneficiary at any time after the Participant has been given the
information in the QPSA Beneficiary Information to Participant
paragraph above and upon the earlier of (1) the date the Participant
incurs a Termination of Employment, or (2) the beginning of the Plan
Year in which that Participant attains age 35.
11.8 Continued Payment of Amounts in Payment Status on January 1,
1994. Any person who became a Participant prior to January 1, 1994 only
because he or she had an Accrued Benefit and who had commenced to receive
payments prior to January 1, 1994 shall continue to receive such payments
in the same form and payment schedule under this Plan.
11.9 TEFRA Transitional Rule. Notwithstanding any other provisions of
this Plan, distribution on behalf of any Participant may be made in
accordance with the following requirements (regardless of when such
distribution commences):
(a) The distribution must have been one provided for in the
Plan.
(b) The distribution by the Plan is one which would not have
disqualified the Plan under Code Section 401(a)(9) as in effect prior
to amendment by TEFRA.
(c) The distribution is in accordance with a method of
distribution designated by the Participant whose interest is being
distributed or, if the Participant is deceased, by a Beneficiary of
such Participant.
(d) Such designation was in writing, was signed by the
Participant or the Beneficiary, and was made before January 1, 1984.
(e) The Participant had accrued a benefit under the Plan as of
December 31, 1983.
(f) The method of distribution designated by the Participant or
the Beneficiary specifies the time at which distribution will
commence, the period over which distribution will be made, and in the
case of any distribution upon the Participant's death, the
Beneficiaries of the Participant listed in order of priority.
11.10 Direct Rollover. With respect to any payment in excess of
$200 hereunder which constitutes an Eligible Rollover Distribution, a
Distributee may direct the Administrative Committee to have such payment
(other than from a Post-Tax Account) paid in the form of a Trustee
Transfer, in accordance with procedures festablished by the Administrative
Committee, provided the responsible Named Fiduciary receives written Notice
of such direction with specific instructions as to the Eligible Retirement
Plan on or prior to the applicable Sweep Date for payment. If the
Participant does not transfer all of such payment, the minimum amount which
can be transferred is $500.
ARTICLE XII
DISTRIBUTION OF ACCRUED BENEFITS ON DEATH
12.1 Payment to Beneficiary. On the death of a Participant prior to
his or her Payment Date, his or her vested Accrued Benefit shall be paid to
the Beneficiary or Beneficiaries designated by the Participant in
accordance with the procedure established by the responsible Named
Fiduciary. Death of a Participant on or after his or her Payment Date
shall result in payment to his or her Beneficiary of whatever death benefit
is provided by the form of payment in effect on his or her Payment Date.
12.2 Beneficiary Designation. Each Participant shall complete a
beneficiary designation indicating the Beneficiary who is to receive the
Participant's remaining Plan interest at the time of his or her death. The
Participant may change such designation of Beneficiary from time to time by
filing a new beneficiary designation with the Administrative Committee. No
designation of Beneficiary or change of Beneficiary shall be effective
until properly filed with the Administrative Committee. Notwithstanding
any designation to the contrary, the Participant's Beneficiary shall be the
Participant's Spouse to whom the Participant is legally married under the
laws of the State of the Participant's residence on the date of the
Participant's death and surviving him or her on such date, unless such
designation includes Spousal Consent. If the Participant dies leaving no
Spouse and either (1) the Participant shall have failed to file a valid
beneficiary designation, or (2) all persons designated on the beneficiary
designation shall have predeceased the Participant, the Administrative
Committee shall have the Custodian distribute such Participant's Accrued
Benefit in a single sum to his or her estate.
12.3 Benefit Election.
(a) Request for Distribution. In the event of a Participant's
death prior to his or her Payment Date, a Beneficiary may elect to
have the Accrued Benefit of a deceased Participant paid to him or her
beginning upon any Settlement Date following the Participant's date of
death by submitting a completed distribution election in accordance
with the procedure established by the responsible Named Fiduciary.
The election must be submitted to the responsible Named Fiduciary by
the Sweep Date that relates to the Settlement Date upon which payments
are to begin.
(b) Failure to Request Distribution. In the event a
Beneficiary fails to submit a timely distribution request, his or her
vested Accrued Benefit shall be valued as of the Valuation Date which
immediately precedes such latest date of distribution (called the
"Default Valuation Date") and a notice of such deemed distribution
shall be issued to his or her last known address as soon as
administratively possible. If the Beneficiary does not respond to the
notice or cannot be located, his or her vested Accrued Benefit
determined on the Default Valuation Date shall be treated as a
Forfeiture. If the Beneficiary subsequently files a claim, the amount
forfeited (unadjusted for gains and losses) shall be reinstated to his
or her Accounts and distributed as soon as administratively feasible,
and such payment shall be accounted for by charging it against the
Forfeiture or by a Contribution from the Employer of the affected
Beneficiary.
12.4 Payment Form. In the event of a Participant's death after his or
her Payment Date, payment shall be made in the form selected by the
Participant. Otherwise, a Beneficiary shall be limited to the same form of
payment to which the Participant was limited. Payments will generally be
made in cash (by check); alternatively, if the Beneficiary elects an
in-kind distribution, a single sum payment will be made in a combination of
cash and whole shares.
12.5 Time Limit for Payment to Beneficiary. Payment to a Beneficiary
must either:
(a) be completed within five (5) years of the Participant's
death; or
(b) begin within one year of his or her death and be completed
within the period of the Beneficiary's lifetime, except that:
(1) If the Participant dies after the April 1 immediately
following the end of the calendar year in which he or
she attains age seventy and one-half (70-1/2), payment
to his or her Beneficiary must be made at least as
rapidly as provided in the Participant's distribution
election;
(2) If the surviving Spouse is the Beneficiary, payments
need not begin until the date on which the Participant
would have attained age seventy and one-half (70-1/2)
and must be completed within the Spouse's lifetime;
and
(3) If the Participant and the surviving Spouse who is the
Beneficiary die (A) before the April 1 immediately
following the end of the calendar year in which the
Participant would have attained age seventy and
one-half (70-1/2); and (B) before payments have begun
to the Spouse, the Spouse will be treated as the
Participant in applying these rules.
12.6 QPSA Information and Election. The following information and
election rules will apply to any Beneficiary of a Participant who dies
prior to his or her Payment Date after having elected a life annuity
option.
(a) Form of Payment. The Participant's vested Accrued Benefit
will be paid in the form of a QPSA.
(b) QPSA Information to a Surviving Spouse. Each surviving
Spouse who requests an annuity form of payment shall be given a
written explanation of (1) the terms and conditions of being paid his
or her vested Accrued Benefit in the form of a single life annuity,
(2) the right to make an election to waive this form of payment and
choose an optional form of payment and the effect of making this
election, and (3) the right to revoke this election and the effect of
this revocation.
(c) QPSA Election by Surviving Spouse. A surviving Spouse may
elect, at any time up to the Sweep Date associated with the Settlement
Date upon which payments will begin, to (1) waive the single life
annuity and elect an optional form of payment, or (2) revoke or change
any such election.
(d) Small Amounts Paid Immediately. If a Beneficiary's vested
Accrued Benefit is $3,500 or less, the Beneficiary's Accrued Benefit
shall be paid as a single sum as soon as administratively feasible.
12.7 Direct Rollover. With respect to any payment in excess of $200
hereunder which constitutes an Eligible Rollover Distribution, a
Distributee may direct the Administrative Committee to have such payment
(other than from a Post-Tax Account) paid in the form of a Trustee
Transfer, in accordance with the procedure established by the responsible
Named Fiduciary, provided the responsible Named Fiduciary receives written
Notice of such direction with specific instructions as to the Eligible
Retirement Plan on or prior to the applicable Sweep Date for payment. If
the Participant does not transfer all of such payment, the minimum amount
which can be transferred is $500.
ARTICLE XIII
MAXIMUM CONTRIBUTIONS
13.1 Definitions.
(a) "Annual Additions" means with respect to a Participant for
any Plan Year the sum of:
(1) Contributions and Forfeitures (and any earnings
thereon) allocated as of a date within the Plan Year;
(2) All contributions, forfeitures and suspended amounts
(and income thereon) for such Plan Year, allocated to
such Participant's account(s) under any Related
Defined Contribution Plan as of a date within such
Plan Year;
(3) The sum of all after-tax contributions of the
Participant to Related Plans for the Plan Year and
allocated to such Participant's accounts under such
Related Plan as of a date within such Plan Year
("Aggregate Employee Contributions");
(4) Solely for purposes of this Section, all contributions
to any "separate account" (as defined in Section
419A(d) of the Code) allocated to such Participant as
of a date within the Plan Year if such Participant is
a "Key Employee" within the meaning of Code Section
416(i); and
(5) Solely for purposes of this Section, all contributions
to any "individual medical benefit account" (as
defined in Section 415(l) of the Code) allocated to
such Participant as of a date within the Plan Year.
(b) "Maximum Annual Additions" of a Participant for a Plan Year
means the lesser of:
(1) twenty-five percent (25%) of the Participant's
Compensation, or
(2) the greater of thirty thousand dollars ($30,000) or
one-quarter of the dollar limitation in Code Section
415(b)(1)(A) as adjusted for cost of living increases
(determined in accordance with regulations prescribed
by the Secretary of the Treasury or his or her
delegate pursuant to the provisions of Section 415(d)
of the Code).
(c) "Annual Excess" means, for each Participant affected, the
amount by which the allocable Annual Additions for such Participant
exceeds or would exceed the Maximum Annual Addition for such
Participant.
13.2 Avoiding an Annual Excess. Notwithstanding any other provision
of this Plan, a Participant's "Annual Additions" for any Plan Year, which
is hereby designated as the "limitation year" for the Plan, as that term is
used in Section 415 of the Code, shall not exceed his or her "Maximum
Annual Additions." If, at any time during a Plan Year, the allocation of
additional Contributions for a Plan Year would produce an Annual Excess,
the affected Participant shall receive the Maximum Annual Addition from
Contributions, and, at the direction of the responsible Named Fiduciary,
for the remainder of the Plan Year Contributions will be reduced, if
possible, to the amount needed for each affected Participant to receive the
Maximum Annual Addition.
13.3 Correcting an Annual Excess. If for any Plan Year as a result of
a reasonable error in estimating a person's Compensation, Elective
Deferrals, or such other facts and circumstances which the Internal Revenue
Service will permit, a Participant's Annual Excess shall be treated in the
following manner:
(a) Aggregate Employee Contributions allocable under a Related
Plan shall be distributed to the Participant, if permitted, by the
amount of the Annual Excess.
(b) If any Annual Excess remains, Pre-Tax Contributions shall
be distributed to such Participant.
13.4 Correcting a Multiple Plan Excess. If a Participant's Accounts
have or would have an Annual Excess, the Annual Excess shall be corrected
by reducing the Annual Addition to this Plan before reductions have been
made to other Related Defined Contribution Plans.
13.5 Two-Plan Limit. If a Participant participates in any Related
Defined Benefit Plan, the sum of the "Defined Benefit Plan Fraction" (as
defined below) and the "Defined Contribution Plan Fraction" (as defined
below) for such Participant shall not exceed one (called the "Combined
Fraction").
(a) "Defined Benefit Plan Fraction" means, for any Plan Year, a
fraction, the numerator of which is the projected benefit payable
pursuant to Code Section 415(e)(2)(A) under all Related Defined
Benefit Plans and the denominator of which is the lesser of: (i) the
product of 1.25 and the dollar limit in effect for the Plan Year under
Code Section 415(b)(1)(A), and (ii) the product of 1.4 and one hundred
percent (100%) of the Participant's average Compensation for his or
her high three (3) years.
(b) "Defined Contribution Plan Fraction" means, for any Plan
Year, a fraction, the numerator of which is the sum of the Annual
Additions (as determined pursuant to Section 415(c) of the Code in
effect for such Plan Year) to a Participant's Accounts as of the end
of the Plan Year under the Plan or any Related Defined Contribution
Plan, and the denominator of which is the lesser of:
(1) The sum of the products of 1.25 and the dollar limit
under Code Section 415(c)(1)(A) for such Plan Year and
for each prior year of service with a Commonly
Controlled Entity and its predecessor, and
(2) the sum of the products of 1.4 and twenty-five percent
(25%) of the Participant's Compensation for such Plan
Year and for each prior year of service with a
Commonly Controlled Entity and its predecessor.
If the Combined Fraction of such Participant exceeds one and if the
Related Defined Benefit Plan permits it, the Participant's Defined
Benefit Plan Fraction shall be reduced by limiting the Participant's
annual benefits payable from the Related Defined Benefit Plan in which
he or she participates to the extent necessary to reduce the Combined
Fraction of such Participant to one.
13.6 Short Plan Year. With respect to any change of the Plan Year
(and co-existent limitation year), the dollar limitation of the Maximum
Annual Addition for such Plan Year shall be determined by multiplying such
dollar amount by a fraction, the numerator of which is the number of months
(including fractional parts of a month) in the short Plan Year, and the
denominator of which is twelve (12).
13.7 Grandfathering of Applicable Limitations. The Plan shall
recognize and apply any grandfathering of applicable benefits and
contributions limitations which are permitted under ERISA, the Tax Equity
and Fiscal Responsibility Act of 1982 and the Tax Reform Act of 1986.
ARTICLE XIV
ADP AND ACP TESTS
14.1 Contribution Limitation Definitions. For purposes of this
Article, the following terms are defined as follows:
(a) "Average Contribution Percentage" or "ACP" means,
separately, the average of the Calculated Percentage for Participants
within the HCE Group and the NHCE Group, respectively, for a Plan
Year.
(b) "Average Deferral Percentage" or "ADP" means, separately,
the average of the Calculated Percentage calculated for Participants
within the HCE Group and the NHCE Group, respectively, for a Plan
Year.
(c) "Calculated Percentage" means the calculated percentage
for a Participant. The calculated percentage refers to either the
K-Contributions (including amounts distributed because they exceeded
the Contribution Dollar Limit) with respect to Compensation which
would have been received by the Participant in the Plan Year but for
his or her Contribution Election, or M-Contributions allocated to the
Participant's Account as of a date within the Plan Year, divided by
his or her Compensation for such Plan Year.
(d) "M-Contributions" shall include Matching Contributions
(excluding Qualified Matching Contributions). In addition,
M-Contributions may include Pre-Tax Contributions and Special
Contributions treated as Matching Contributions, but only to the
extent that (1) the Administrative Committee elects to use them; and
(2) they meet the requirements of Code Section 401(m) to be regarded
as Matching Contributions. M-Contributions shall not include Matching
Contributions which become a Forfeiture because the Contribution to
which it relates is in excess of the ADP Test, ACP Test or the
Contribution Dollar Limit.
(e) "K-Contributions" shall include Pre-Tax Contributions
(excluding Pre-Tax Contributions treated as Matching Contributions),
but shall exclude Limited Deferrals to this Plan made on behalf of any
NHCE in excess of the Contribution Dollar Limit. In addition,
Deferrals may include Qualified Matching Contributions and Special
Contributions, but only to the extent that (1) the Administrative
Committee elects to use them and (2) they meet the requirements of
Code Section 401(k) to be regarded as elective contributions.
(f) "HCE Group" and "NHCE Group" means, with respect to each
Employer and its Commonly Controlled Entities, the respective group of
HCEs and NHCEs who are eligible to have amounts contributed on their
behalf for the Plan Year, including Employees who would be eligible
but for their election not to participate or to contribute, or because
their pay is greater than zero but does not exceed a stated minimum,
but subject to the following:
(1) If the Related Plans are subject to the ADP or ACP
Test, and are considered as one plan for purposes of
Code Sections 401(a)(4) or 410(b) (other than
410(b)(2)), all such plans shall be aggregated and
treated as one plan for purposes of meeting the ADP
and ACP Tests provided that, for Plan Years beginning
after December 31, 1989, plans may only be aggregated
if they have the same Plan Year.
(2) If an HCE who is a five-percent owner (within the
meaning of Code Section 416) or one of the ten HCE
most highly compensated during the Plan Year has any
Family Members, the K-Contributions, M-Contributions
and Compensation of such HCE and his or her Family
Members shall be combined and treated as a single
HCE. In addition, such amounts for all other Family
Members shall be removed from the NHCE Group
percentage calculation.
(3) If an HCE is covered by more than one cash or
deferred arrangement maintained by the Related Plans,
all such arrangements (other than arrangements in
plans that are not required to be aggregated for this
purpose under Treas. Reg. Sec.
1.401(k)-1(g)(l)(ii)(B)) with respect to the Plan
Years ending with or within the same calendar year
shall be aggregated and treated as one arrangement
for purposes of calculating the separate percentage
for the HCE which is used in the determination of the
Average Percentage.
14.2 ADP and ACP Tests. For each Plan Year, the ADP and ACP for the
HCE Group must meet either the Basic or Alternative Limitation when
compared to the respective ADP and ACP for the NHCE Group:
(a) Basic Limitation. The ADP or ACP for the HCE Group may
not exceed 1.25 times the ADP or ACP, respectively, for the NHCE
Group.
(b) Alternative Limitation. The ADP or ACP for the HCE Group
is limited by reference to the ADP or ACP, respectively, for the NHCE
Group as follows:
If the NHCE Group Then the Maximum HCE
Percentage is: Group Percentage is:
---------------- --------------------
Less than 2% 2 times ADP or ACP for the NHCE Group
2% to 8% ADP or ACP for the NHCE Group plus 2%
More than 8% Basic Limitation applies
14.3 Correction of ADP and ACP Tests.
(a) Reduction of K-Contributions or M-Contributions. If the
ADP or ACP are not met or will not be met, the Administrative
Committee shall determine a maximum percentage to be used in place of
the Calculated Percentage for each HCE that would reduce the ADP or
ACP of the HCE Group by a sufficient amount to meet the ADP and ACP
Tests. For any HCE Group who has a Family Member, the reduction
amount shall be prorated among Family Members as provided in Code
Sections 401(k) and (m).
(b) ADP Correction. Pre-Tax Contributions (including amounts
previously refunded because they exceeded the Contribution Dollar
Limit) shall be refunded to the Participant by the end of the next
Plan Year in an amount equal to the actual K-Contribution minus the
product of the maximum percentage for that HCE and the HCE's
Compensation. Matching Contributions with respect to such distributed
Pre-Tax Contributions shall be forfeited (unless paid to the
Participant due to an ACP Correction).
(c) ACP Correction. Matching Contribution amounts in excess
of the maximum percentage of an HCE's Compensation shall, by the end
of the next Plan Year, be refunded to the Participant.
(d) Investment Fund Sources. Once the amount of Pre-Tax and
Matching Contributions to be refunded is determined, amounts shall
then be taken by type of investment in direct proportion to the market
value of the Participant's interest in each Investment Fund (which
excludes Participant loans) as of the Trade Date as of which the
correction is processed.
(e) Family Member Correction. To the extent any reduction is
necessary with respect to an HCE and his or her Family Members that
have been combined and treated for testing purposes as a single
Employee, the excess K-Contributions and/or M-Contributions from the
ADP and/or ACP Test shall be prorated among each such Participant in
direct proportion to his or her K-Contributions and/or M-Contributions
included in each test.
14.4 Method of Calculation. The Administrative Committee shall
determine the maximum percentage for each HCE whose Calculated
Percentage(s) is(are) the highest at any one time by reducing his or her
Calculated Percentage in the following manner until the ADP and/or ACP Test
is satisfied:
(a) The Calculated Percentage for each HCE under a Related
Plan shall be reduced to the extent permitted under such Related Plan.
(b) If more reduction is needed, the Calculated Percentage of
each HCE whose Calculated Percentage (stated in absolute terms) is the
greatest shall be reduced by one-hundredth (1/100) of one percentage
point.
(c) If more reduction is needed, the Calculated Percentage of
each HCE whose Calculated Percentage (stated in absolute terms) is the
greatest (including the Calculated Percentage of any HCE whose
Calculated Percentage was adjusted under Paragraph (b) shall be
reduced by one-hundredth (1/100) of one percentage point.
(d) If more reduction is needed, the procedures of Paragraph
(c) shall be repeated.
14.5 Multiple Use Test. If the Average Contribution Percentage and
the Average Deferral Percentage for the HCE Group exceeds the Basic
Limitation in both the ADP or the ACP Tests (after correction of the ADP
and ACP Test), the ADP and ACP (as corrected) for the HCE Group must also
comply with the requirements of Code Section 401(m)(9), which as of the
Effective Date require that the sum of these two percentages (as determined
after any corrections needed to meet the ADP or ACP Tests have been made)
must not exceed the greater of:
(a) the sum of
(1) the larger of the ADP or ACP for the NHCE Group times
1.25; and
(2) the smaller of the ADP or ACP for the NHCE Group,
times two (2) if the NHCE Average Percentage is less
than two percent (2%), or plus two percent (2%) if it
is two percent (2%) or more; or
(b) the sum of
(1) the lesser of the ADP or ACP for the NHCE Group times
1.25; and
(2) the greater of the ADP or ACP for the NHCE Group,
times two (2) if the NHCE Average Percentage is less
than two percent (2%), or plus two percent (2%) if it
is two percent (2%) or more.
If the multiple use limit is exceeded, the Administrative Committee
shall determine a maximum ADP or ACP for the HCE Group and shall
reduce the ADP or ACP for each HCE in the same manner as would be used
to correct to ADP or ACP.
14.6 Adjustment for Investment Gain or Loss. The net investment gain
or loss associated with the K-Contributions and/or M-Contributions to be
distributed shall be distributed or charged against a distribution within
two and one-half (2-1/2) months but no later than twelve (12) months
following the close of the applicable Plan Year. Such gain or loss is
calculated as follows:
G
E x ------ x (1 + (10% x M))
(AB-G)
where:
E = the total excess Deferrals or Contributions,
G = the net gain or loss for the Plan Year from all of an
HCE's affected Accounts,
AB = the total value of an HCE's affected Accounts,
determined as of the end of the Plan Year being
corrected,
M = the number of full months from the Plan Year end to the
date excess amounts are paid, plus one for the month
during which payment is to be made if payment will
occur after the fifteenth (15th) of the month.
14.7 Required Records. The Administrative Committee shall maintain
records which are sufficient to demonstrate that the ADP, ACP and Multiple
Use Test has been met for each Plan Year for at least as long as the
Employer's corresponding tax year is open to audit.
14.8 Incorporation by Reference. The provisions of this Section are
intended to satisfy the requirements of Code Sections 401(k)(3), (m)(2),
(m)(9) and Treas. Reg. Sec.'s 1.401(k)-1(b), 1.401(m)-1(b) and 1.401(m)-2
and, to the extent not otherwise stated in this Section, those Code
Sections and Treasury Regulations are incorporated herein by reference.
14.9 Collectively Bargained Employees. The provisions of this
Article shall apply separately to Participants who are collectively
bargained employees within the meaning of Treas. Reg. Sec. 1.410(b)-6(d)(2)
and for Participants who are not collectively bargained employees.
14.10 QSLOB. The Administrative Committee in its sole discretion may
apply the provisions of this Article separately with respect to each
qualified separate line of business, as defined in Section 414(r) of the
Code.
ARTICLE XV
CUSTODIAL ARRANGEMENTS
15.1 Custodial Agreement. The Administrative Committee may enter into
one or more Custodial Agreements to provide for the holding, investment and
payment of Plan assets, or direct by execution of an insurance contract
that all or a specified portion of the Plan's assets be held, invested and
paid under such a contract. All Custodial Agreements, as from time to time
amended, shall continue in force and shall be deemed to form a part of the
Plan. Subject to the requirements of the Code and ERISA, the
Administrative Committee may cause assets of the Plan which are securities
to be held in the name of a nominee or in street name provided such
securities are held on behalf of the Plan by:
(a) a bank or trust company that is subject to supervision by
the United States or a State, or a nominee of such bank or trust
company;
(b) a broker or dealer registered under the Securities Exchange
Act of 1934, or a nominee of such broker or dealer; or
(c) a "clearing agency" as defined in Section 3(a)(23) of the
Securities Exchange Act of 1934, or its nominee.
15.2 Selection of Custodian. The Administrative Committee shall
select, remove or replace the Custodian in accordance with the Custodial
Agreement. The subsequent resignation or removal of a Custodian and the
approval of its accounts shall all be accomplished in the manner provided
in the Custodial Agreement.
15.3 Custodian's Duties. Except as provided in ERISA, the powers,
duties and responsibilities of the Custodian shall be as stated in the
Custodial Agreement, and unless expressly stated or delegated to the
Custodian (with the Custodian's acceptance), nothing contained in this Plan
shall be deemed by implication to impose any additional powers, duties or
responsibilities upon the Custodian. All Employer Contributions and
Rollover Contributions shall be paid into the Trust, and all benefits
payable under the Plan shall be paid from the Trust, except to the extent
such amounts are paid to a Custodian other than the Trustee. An Employer
shall have no rights or claims of any nature in or to the assets of the
Plan except the right to require the Custodian to hold, use, apply and pay
such assets in its hands, in accordance with the directions of the
Administrative Committee, for the exclusive benefit of the Participants and
their Beneficiaries, except as hereinafter provided.
15.4 Separate Entity. The Custodial Agreement under this Plan from
its inception shall be a separate entity aside and apart from Employers or
their assets, and the corpus and income thereof shall in no event and in no
manner whatsoever be subject to the rights or claims of any creditor of any
Employer.
15.5 Plan Asset Valuation. As of each Valuation Date, the Fair Market
Value of the Plan's assets held or posted to an Investment Fund shall be
determined by the Administrative Committee or the Custodian, as
appropriate.
15.6 Right of Employers to Plan Assets. The Employers shall have no
right or claim of any nature in or to the assets of the Plan except the
right to require the Custodian to hold, use, apply, and pay such assets in
its possession in accordance with the Plan for the exclusive benefit of the
Participants or their Beneficiaries and for defraying the reasonable
expenses of administering the Plan; provided, that:
(a) if the Plan receives an adverse determination with respect
to its initial qualification under Sections 401(a), 401(k) and 401(m)
of the Code, Contributions conditioned upon the qualification of the
Plan shall be returned to the appropriate Employer within one (1) year
of such denial of qualification; provided, that the application for
determination of initial qualification is made by the time prescribed
by law for filing the respective Employer's return for the taxable
year in which the Plan is adopted, or by such later date as is
prescribed by the Secretary of the Treasury under Section 403(c)(2)(B)
of ERISA;
(b) if, and to the extent that, deduction for a Contribution
under Section 404 of the Code is disallowed, Contributions conditioned
upon deductibility shall be returned to the appropriate Employer
within one (1) year after the disallowance of the deduction;
(c) if, and to the extent that, a Contribution is made through
mistake of fact, such Contribution shall be returned to the
appropriate Employer within one year of the payment of the
Contribution; and
(d) any amounts held suspended pursuant to the limitations of
Code Section 415 shall be returned to the Employers upon termination
of the Plan.
All Contributions made hereunder are conditioned upon the Plan being
qualified under Sections 401(a) or 401(k) and 401(m) of the Code and a
deduction being allowed for such contributions under Section 404 of
the Code. Pre-Tax Contributions returned to an Employer pursuant to
this Section shall be paid to the Participant for whom contributed as
soon as administratively convenient. If these provisions result in
the return of Contributions after such amounts have been allocated to
Accounts, such Accounts shall be reduced by the amount of the
allocation attributable to such amount, adjusted for any losses or
expenses.
ARTICLE XVI
ADMINISTRATION AND INVESTMENT MANAGEMENT
16.1 Authority and Responsibility of the Board of Directors. The
Board of Directors, on behalf of the Company, shall have overall
responsibility for the establishment, amendment and termination of the
Plan, for the establishment of a funding policy for the Plan and Trust, for
the designation of a Named Fiduciary pursuant to the procedures in
Section 16.6, and for the allocation of fiduciary responsibilities among
Named Fiduciaries pursuant to the procedures in Section 16.6. There is
hereby delegated to the Administrative Committee, to act on behalf of the
Company and not the Plan or Trust, all of the power and authority the Board
of Directors has with respect to the designation of a Named Fiduciary, the
establishment of a funding policy, and the power to amend this Plan as
provided in the Plan. As a result of such transfer of power and authority,
the Board of Directors shall have no longer be a Named Fiduciary with
respect to the Plan or Trust.
16.2 Administrative Committee as Named Fiduciary.
(a) The Administrative Committee shall be a Named Fiduciary
with respect to:
(1) its authority to manage and control the
administration and operation of the Plan, except as hereinafter
provided;
(2) its authority to manage and control the Plan's
assets, but only to the extent the Trust Agreement expressly
permits, including without limitation, the following:
(A) to appoint and remove the Trustee;
(B) to selectively direct the Trustee as to the
investment and reinvestment of the assets of the Trust
Fund;
(C) to appoint an Investment Manager, by written
notice in writing to the Trustee, to manage, acquire or
dispose of that portion of the Trust Fund which is
assigned to it by the Administrative Committee;
(D) to direct the Trustee, by notice in writing to
the Trustee, to enter into an agreement with an Investment
Manager; and
(E) to require that the Trustee is subject to the
direction of the Administrative Committee with respect to
a portion of the Trust Fund.
(b) The Administrative Committee shall not be a Named
Fiduciary whenever it acts on behalf of the Company and,
notwithstanding any other term or provision of the Plan or Trust, the
Administrative Committee shall cease to be a Named Fiduciary with
respect to:
(1) some specified portion of the operation and
administration of the Plan, to the extent that a Named Fiduciary
is designated pursuant to the procedure in the Plan to severally
have authority to manage and control such portion of the
operation and administration of the Plan; or
(2) some portion of the management and control of the
Plan's assets, to the extent that a Named Fiduciary is designated
pursuant to the procedure in the Plan to severally have authority
to manage and control such portion of the management and control
of the Plan's assets.
16.3 Administrative Committee Membership. The Administrative
Committee shall consist of not less than 3 persons, who shall be appointed
by the CEO. In the absence of such initial appointment of all members of
the Administrative Committee, the CEO will be the Administrative Committee.
Administrative Committee members shall remain in office at the will of the
CEO and the CEO may from time to time remove any of said members with or
without cause and shall appoint their successors.
16.4 Administrative Committee Structure. Any individual may be a
member of the Administrative Committee. Any member of the Administrative
Committee may resign by delivering his or her written resignation to the
CEO, and such resignation shall become effective upon the date specified
therein. A member who is an Employee shall automatically cease to be a
member upon his or her Termination of Employment. In the event of a
vacancy in membership, the remaining members shall constitute the
Administrative Committee in question with full power to act until said
vacancy is filled.
16.5 Administrative Committee Actions. The Administrative Committee
may act, whether as a Named Fiduciary on behalf of the Plan or on behalf of
the Company, as follows:
(a) The members of the Administrative Committee may act at a
meeting (including a meeting at different locations by telephone
conference) or in writing without a meeting (through the use of a
single document or concurrent document).
(b) Any Administrative Committee member by writing may
delegate any or all of his or her rights, powers, duties and
discretions to any other member with the consent of such other member.
(c) The Administrative Committee shall act by majority
decision, which action shall be effective as if such action had been
taken by all members of the Administrative Committee; provided that by
majority action one or more Administrative Committee members or other
persons may be authorized to act with respect to particular matters on
behalf of all Administrative Committee members.
(d) Subject to applicable law, no member of the Administrative
Committee shall be liable for an act or omission of the other
Administrative Committee members in which the former had not
concurred.
(e) Any action by the Administrative Committee on behalf of
this Plan involving its authority to manage and control the operation
and administration of the Plan or the Plan's assets shall be treated
as an action of a Named Fiduciary under this Plan.
(f) Where reference is made in this Plan or Trust (or where
the Administrative Committee designates in writing) that its action is
on behalf of the Company, the Administrative Committee shall be acting
only on behalf of the Company and not as a Named Fiduciary.
(g) Except as provided in Section 16.20, the Administrative
Committee may, in writing delivered to the Trustee, empower a
representative to act on its behalf and such person shall have the
authority to act within the scope of such empowerment to the full
extent the Administrative Committee could have acted.
16.6 Procedures for Designation of a Named Fiduciary. The
Administrative Committee, acting on behalf of the Company, may from time to
time, designate a person to be a Named Fiduciary with respect to some
portion of the authority it may have with respect to management and control
of the operation and administration of the Plan or the management and
control of the Plan's assets. Such designation shall specify the person
designated by name and either (a) specify the management and control
authority with respect to which the person will be a Named Fiduciary; or
(b) incorporate by reference a contract or agreement with such person to
provide services to or on behalf of the Plan or Trust and use such contract
or agreement as a means for specifying the management and control authority
with respect to which such person will be a Named Fiduciary. No person who
is designated as a Named Fiduciary hereunder must consent to such
designation nor shall it be necessary for the Administrative Committee to
seek such person's acquiescence. The authority to manage and control,
which any person who is designated to be a Named Fiduciary hereunder may
have, shall be several and not joint with the Administrative Committee and
shall result in the Administrative Committee no longer being a Named
Fiduciary with respect to, nor having any longer, such authority to manage
and control. On and after the designation of a person as a Named
Fiduciary, the Company, the Administrative Committee and any other Named
Fiduciary with respect to the Plan or Trust shall have no liability for the
acts (or failure to act) of any such Named Fiduciary except to the extent
of its co-fiduciary duty under ERISA.
16.7 Compensation. The members of the Administrative Committee shall
serve without compensation for their services as such.
16.8 Discretionary Authority of each Named Fiduciary. Each Named
Fiduciary on behalf of the Plan and Trust will enforce the Plan and Trust
in accordance with their terms. Each Named Fiduciary shall have full and
complete authority, responsibility and control (unless an allocation has
been made to another Named Fiduciary in which case such Named Fiduciary
shall have such authority, responsibility and control) over that portion of
the management, administration, and operation of the Plan or Trust
allocated to such Named Fiduciary, including, but not limited to, the
authority and discretion to:
(a) Formulate, adopt, issue and apply procedures and rules and
change, alter or amend such procedures and rules in accordance with
law and as may be consistent with the terms of the Plan or Trust;
(b) Exercise such discretion as may be required to construe
and apply the provisions of the Plan or Trust, subject only to the
terms and conditions of the Plan or Trust; and
(c) Take all necessary and proper acts as are required for
such Named Fiduciary to fulfill its duties and obligations under the
Plan or Trust.
16.9 Responsibility and Powers of the Administrative Committee
Regarding Administration of the Plan. The Administrative Committee shall
have full and complete authority, responsibility and control (unless an
allocation has been made to another Named Fiduciary in which case such
Named Fiduciary shall have such authority, responsibility and control) over
that portion of the management, administration, and operation of the Plan
allocated to the Administrative Committee, including, but not limited to,
the authority and discretion:
(a) to appoint and compensate such specialists (including
attorneys, actuaries and accountants) to aid it in the administration
of the Plan, and arrange for such other services, as the
Administrative Committee considers necessary or appropriate in
carrying out the provisions of the Plan;
(b) to appoint and compensate an independent outside
accountant to conduct such audits of the financial statements of the
Trust as the Administrative Committee considers necessary or
appropriate;
(c) as the final appeals fiduciary under ERISA Section 503, to
make a final determination, based upon the information known to the
Administrative Committee within the scope of its authority and control
as a Named Fiduciary, based upon determinations made and such other
information made available from an Employer plus such final
determinations made by each other Named Fiduciary within the scope of
its authority and control, as are determined to be relevant to the
Administrative Committee, as to:
(1) any matter or issue presented to it through the
Plan's claims procedure or
(2) which Named Fiduciary has an obligation to make the
Plan with respect to a Participant, or a Participant, whole for
losses which should not have occurred or profits which should
have been earned had such Named Fiduciary either not breached its
fiduciary duty to the Plan or not made an error which resulted in
such loss, the amount of damages each such Named Fiduciary shall
have, and the method of compensating the Plan or such
Participant. Any final determination shall not be subject to de
novo review if challenged in court and shall not be overturned
unless proven to be arbitrary and capricious upon the evidence
considered by the Administrative Committee at the time of its
decision.
(d) to assure that the Plan does not violate any provisions of
ERISA limiting the acquisition or holding of Company Stock;
(e) to appoint the Plan Administrator to act within the duties
and responsibilities set forth in Section 16.18;
(f) to act as the fiduciary responsible for monitoring the
confidentiality and independent fiduciary requirements associated with
Company Stock in order for the Plan to qualify as a Section 404(c)
plan under Department of Labor regulations;
(g) to create a legal remedy to the Plan with respect to a
Participant or Beneficiary, or to a Participant or Beneficiary, for
any loss incurred (whether restitution or opportunity losses) by the
Plan on behalf of such Participant or Beneficiary, or by such
Participant or Beneficiary, due to a breach of fiduciary duty to the
Plan by a Named Fiduciary or other error (whether negligent or
willful) which the Administrative Committee determines is a
substantial contributing factor to such loss (or a portion of such
loss); provided however, no such remedy shall exist if the loss is due
to any of the following which could not have been anticipated, or if
anticipated, could not have been mitigated by prior planning so as to
result in the avoidance of such loss:
(1) acts of God;
(2) Governmental authority;
(3) strike or labor disputes;
(4) fires or loss of facilities;
(5) breach of contract by others;
(6) computer shutdown; or
(7) telephone outages; and
(h) to take all necessary and proper acts as are required for
the Administrative Committee to fulfill its duties and obligations
under the Plan.
16.10 Allocations and Delegations of Responsibility.
(a) Delegations. Each Named Fiduciary may designate persons
(other than a Named Fiduciary) to carry out fiduciary responsibilities
(other than trustee responsibilities as described in Section 405(c)(3)
of ERISA) it may have with respect to the Plan or Trust and make a
change of delegated responsibilities. Such delegation shall specify
the delegated person by name and either (a) specify the discretionary
authority with respect to which the person will be a fiduciary; or
(b) incorporate by reference a contract or agreement with such person
to provide services to the Plan or Trust on behalf of the delegating
Named Fiduciary as a means of specifying the discretionary authority
with respect to which such person will be a fiduciary. No person
(other than an investment manager (as defined in Section 3(38) of
ERISA) to whom fiduciary responsibility has been delegated must
consent to being a fiduciary nor shall it be necessary for the Named
Fiduciary to seek such person's acquiescence; however, where such
person has not contractually accepted the responsibility delegated, he
or she must be given notification of the services to be performed and,
in either case, will be deemed to have accepted such fiduciary
responsibility if he or she performs the services described for
thirty (30) days or more without specific objection thereto. The
discretionary authority any person who is delegated fiduciary
responsibilities hereunder may have shall be several and not joint
with the Named Fiduciary delegating and each other Named Fiduciaries.
A delegation of fiduciary responsibility to a person which is not
implemented in the manner set forth herein shall not be void; however,
whether the delegating Named Fiduciary shall have joint liability for
acts of such person shall be determined by applicable law.
(b) Allocations. The Administrative Committee, acting on
behalf of the Company, may allocate fiduciary responsibilities (other
than trustee responsibilities described in Section 405(c)(3) of ERISA)
among Named Fiduciaries when it designates a Named Fiduciary in the
manner described in Section 16.6, or may reallocate fiduciary
responsibilities among existing Named Fiduciaries by action of such
Administrative Committee in accordance with Sections 16.5 and 16.6;
provided each such Named Fiduciary is given notice of the services,
management and control authority allocated to it either by way of an
amendment to the Plan, Trust or a contract with such person, or by way
of correspondence from the Administrative Committee. Each Named
Fiduciary, by signing its contract or by accepting such amendment or
correspondence and rendering the services requested without objection
for thirty (30) days, shall be conclusively bound to have assumed such
fiduciary responsibility as a Named Fiduciary. An allocation of
fiduciary responsibility to a person which is not implemented in the
manner set forth herein shall not be void, however, such person may
not be a Named Fiduciary with respect to the Plan and Trust.
(c) Limit on Liability. Fiduciary duties and responsibilities
which have been allocated or delegated pursuant to the terms of the
Plan or the Trust, are intended to limit the liability of the Company,
Administrative Committee and each Named Fiduciary, as appropriate, in
accordance with the provisions of Section 405(c) of ERISA.
16.11 Administrative Committee Bonding. The members of the
Administrative Committee shall serve without bond (except as otherwise
required by federal law).
16.12 Information to be Supplied by Employer. Each Employer
shall supply to the Administrative Committee or a designated Named
Fiduciary, within a reasonable time of its request, the names of all
Employees, their age, their date of hire, and the amount of Compensation
paid to each Employee, the names and dates of all Employees who incurred a
Termination of Employment during the Plan Year, and the Hours of Service
earned by each Employee during the Plan Year. Each Employer shall provide
to the Administrative Committee or a designated Named Fiduciary such other
information as it shall from time to time need in the discharge of its
duties. The Administrative Committee and each Named Fiduciary may rely
conclusively on the information certified to it by an Employer.
16.13 Records. The regularly kept records of the designated
Named Fiduciary (or, where applicable, the Trustee) and any Employer shall
be conclusive evidence of a Participant's Compensation, his or her age, his
or her status as an Eligible Employee, and all other matters contained
therein applicable to this Plan; provided that a Participant may request a
correction in the record of his or her age at any time prior to retirement,
and such correction shall be made if within ninety (90) days after such
request he or she furnishes in support thereof a birth certificate,
baptismal certificate, or other documentary proof of age satisfactory to
the Administrative Committee.
16.14 Plan Expenses. All expenses of the Plan which have been
approved by the Administrative Committee shall be paid by the Trust except
to the extent paid by the Employers, and if paid by the Employers such
Employers may seek reimbursement of such expenses from the Trust and the
Trust shall reimburse the Employers. If borne by the Employers, expenses
of administering the Plan shall be borne by the Employers in such
proportions as the Administrative Committee shall determine.
16.15 Fiduciary Capacity. Any person or group of persons may
serve in more than one fiduciary capacity with respect to the Plan.
16.16 Employer's Agent. The Administrative Committee shall act
as agent for the Company when acting on behalf of the Company and the
Company shall act as agent for each Employer.
16.17 Plan Administrator. The Secretary of the Administrative
Committee shall be the Plan Administrator (within the meaning of Section
3(16)(A)) who may (but need not) be a member of the Administrative
Committee; and in the absence of such appointment, the Administrative
Committee shall be the Plan Administrator.
16.18 Plan Administrator Duties and Power. The Plan
Administrator will have full and complete authority, responsibility and
control over the management, administration and operation of the Plan with
respect to the following:
(a) initially determine all questions relating to a
Participant's eligibility for participation and benefits under the
Plan and to initially resolve, in the exercise of its full and
complete discretionary authority, any issues presented through the
Plan's claims procedure based upon the information made available to
it by the designated Named Fiduciary or an Employer;
(b) satisfy all reporting and disclosure requirements
applicable to the Plan, Trust or Plan Administrator under ERISA, the
Code or other applicable law;
(c) make appropriate determinations as to whether Rollover
Contributions constitute such;
(d) provide and deliver all written forms used by Participants
and Beneficiaries, give notices required by law, and seek a favorable
determination letter for the Plan and Trust;
(e) withhold any amounts required by the Code to be withheld
at the source and to transmit funds withheld and any and all necessary
reports with respect to such withholding to the Internal Revenue
Service;
(f) where applicable, to provide each Participant or his or
her Spouse with QJSA and QPSA information;
(g) certify to the Trustee the amount and kind of benefits
payable to or withdrawn from Participants and Beneficiaries and the
date of payment, including withdrawals;
(h) respond to a QDRO;
(i) make available for inspection and to provide upon request
at such charge as may be permitted and determined by it, documents and
instruments required to be disclosed by ERISA;
(j) make a determination of whether a Participant is suffering
a deemed or demonstrated financial need and whether a withdrawal from
this Plan is deemed or demonstrated necessary to satisfy such
financial need, provided, however, in making such determination, the
Plan Administrator may rely, if reasonable to do so, upon
representations made by such Participant in connection with his or her
request for a withdrawal;
(k) take such actions as are necessary to establish and
maintain in full and timely compliance with any law or regulation
having pertinence to this Plan;
(l) whatever responsibilities are delegated to the Plan
Administrator by the Administrative Committee; and
(m) interpret and construe the provisions of the Plan, to make
regulations and settle disputes described above which are not
inconsistent with the terms thereof.
16.19 Named Fiduciary Decisions Final. The decision of the
Administrative Committee or a Named Fiduciary in matters within its
jurisdiction shall be final, binding, and conclusive upon the Employers and
the Trustee and upon each Employee, Participant, Spouse, Beneficiary, and
every other person or party interested or concerned.
16.20 No Agency. Each Named Fiduciary shall perform (or fail to
perform) its responsibilities and duties or discretionary authority with
respect to the Plan and Trust as an independent contractor and not as an
agent of the Company, any Employer or the Administrative Committee. No
agency is intended to be created nor is the Administrative Committee
empowered to create an agency relationship with a Named Fiduciary.
ARTICLE XVII
CLAIMS PROCEDURE
17.1 Initial Claim for Benefits. Each person entitled to benefits
under this Plan (a "Claimant") must sign and submit his or her claim for
benefits to the Administrative Committee in writing in such form as is
provided or approved by such Administrative Committee. A Claimant shall
have no right to seek review of a denial of benefits, or to bring any
action in any court to enforce a claim for benefits prior to his or her
filing a claim for benefits and exhausting his or her rights under this
Section. When a claim for benefits has been filed properly, such claim for
benefits shall be evaluated and the Claimant shall be notified by the
Administrative Committee or agent of its approval or denial within ninety
(90) days after the receipt of such claim unless special circumstances
require an extension of time for processing the claim. If such an
extension of time for processing is required, written notice of the
extension shall be furnished to the Claimant by the Administrative
Committee or agent prior to the termination of the initial ninety (90) day
period which shall specify the special circumstances requiring an extension
and the date by which a final decision will be reached (which date shall
not be later than one hundred eighty (180) days after the date on which the
claim was filed). A Claimant shall be given a written notice in which the
Claimant shall be advised as to whether the claim is granted or denied, in
whole or in part. If a claim is denied, in whole or in part, the Claimant
shall be given written notice which shall contain (1) the specific reasons
for the denial, (2) references to pertinent Plan provisions upon which the
denial is based, (3) a description of any additional material or
information necessary to perfect the claim and an explanation of why such
material or information is necessary, and (4) the Claimant's rights to seek
review of the denial.
17.2 Review of Claim Denial. If a claim is denied, in whole or in
part (or if within the time periods prescribed for in the initial claim,
the Administrative Committee has not furnished the Claimant with a denial
and the claim is therefore deemed denied), the Claimant shall have the
right to request that the Administrative Committee review the denial,
provided that the Claimant files a written request for review with the
Administrative Committee within sixty (60) days after the date on which the
Claimant received written notification of the denial. A Claimant (or his
or her duly authorized representative) may review pertinent documents and
submit issues and comments in writing to the Administrative Committee.
Within sixty (60) days after a request for review is received, the review
shall be made and the Claimant shall be advised in writing by the
Administrative Committee of the decision on review, unless special
circumstances require an extension of time for processing the review, in
which case the Claimant shall be given a written notification by the
Administrative Committee within such initial sixty (60) day period
specifying the reasons for the extension and when such review shall be
completed (provided that such review shall be completed within one hundred
and twenty (120) days after the date on which the request for review was
filed). The decision on review shall be forwarded to the Claimant by the
Administrative Committee in writing and shall include specific reasons for
the decision and references to Plan provisions upon which the decision is
based. A decision on review shall be final and binding on all persons for
all purposes. If a Claimant shall fail to file a request for review in
accordance with the procedures described in this Section, such Claimant
shall have no right to review and shall have no right to bring action in
any court and the denial of the claim shall become final and binding on all
persons for all purposes.
ARTICLE XVIII
ADOPTION AND WITHDRAWAL FROM PLAN
18.1 Procedure for Adoption. Any Commonly Controlled Entity may by
resolution of such Commonly Controlled Entity's board of directors adopt
the Plan for the benefit of its employees as of the date specified in the
board resolution. No such adoption shall be effective until such adoption
has been approved by the Administrative Committee.
18.2 Procedure for Withdrawal. Any Employer (other than the Company)
may, by resolution of the board of directors of such Employer, with the
consent of the Administrative Committee and subject to such conditions as
may be imposed by the Administrative Committee, terminate its adoption of
the Plan. Notwithstanding the foregoing, an Employer will be deemed to
have terminated its adoption of the Plan when it ceases to be a Commonly
Controlled Entity.
ARTICLE XIX
AMENDMENT, TERMINATION AND MERGER
19.1 Amendments.
(a) Power to Amend. The Company on behalf of all Employers, or
the Administrative Committee as provided in Subsection (c) below, may
amend, modify, change, revise or discontinue this Plan by amendment at
any time; provided, however, that no amendment shall:
(1) increase the duties or liabilities of the Custodian or
the Administrative Committee without its written
consent;
(2) have the effect of vesting in any Employer any
interest in any funds, securities or other property,
subject to the terms of this Plan and the Custodial
Agreement;
(3) authorize or permit at any time any part of the corpus
or income of the Plan's assets to be used or diverted
to purposes other than for the exclusive benefit of
Participants and Beneficiaries;
(4) except to the extent permissible under ERISA and the
Code, make it possible for any portion of the Trust
assets to revert to an Employer to be used for, or
diverted to, any purpose other than for the exclusive
benefit of Participants and Beneficiaries entitled to
Plan benefits and to defray reasonable expenses of
administering the Plan;
(5) amend the provisions of this Plan which either (1)
state the amount and price of Company Stock to be
awarded to designated officers or categories of
officers and, specifically, the timing of such awards,
or (2) set forth a formula that determines the amount,
price and timing of such awards, shall not be amended
more than once every six (6) months, other than to
comport with changes in the Code, ERISA or the rules
thereunder;
(6) permit an Employee to be paid the balance of his or
her Pre-Tax Account unless the payment would otherwise
be permitted under Code Section 401(k); and
(7) have any retroactive effect as to deprive any such
person of any benefit already accrued, except that no
amendment made in order to conform the Plan as a plan
described in Section 401(a) of the Code of which
amendments are permitted by the Code or are required
or permitted by any other statute relating to
employees' trusts, or any official regulations or
ruling issued pursuant thereto, shall be considered
prejudicial to the rights of any such person.
(b) Restriction on Amendment. No amendment to the Plan shall
deprive a Participant of his or her nonforfeitable rights to benefits
accrued to the date of the amendment. In addition to the foregoing,
the Plan shall not be amended so as to eliminate an optional form of
payment of an Accrued Benefit attributable to employment prior to the
date of the amendment. The foregoing limitations do not apply to
benefit accrual occurring after the date of the amendment.
(c) The Administrative Committee. The Administrative
Committee, acting on behalf of the Company, may amend, modify, change
or revise the Plan by amendment if such amendment could have been
adopted under this Section and it does not materially increase the
duties and obligations of any or all Employers with respect to the
Plans.
19.2 Plan Termination. It is the expectation of the Company that it
will continue the Plan and the payment of Contributions hereunder
indefinitely, but the continuation of the Plan and the payment of
Contributions hereunder is not assumed as a contractual obligation of the
Company or any other Employer. The right is reserved by the Company to
terminate the Plan at any time, and the right is reserved by the Company
and any other Employer at any time to reduce, suspend or discontinue its
Contributions hereunder, provided, however, that the Contributions for any
Plan Year accrued or determined prior to the end of said year shall not
after the end of said year be retroactively reduced, suspended or
discontinued except as may be permitted by law. Upon termination of the
Plan or complete discontinuance of Contributions hereunder (other than for
the reason that the Employer has had no net profits or accumulated net
profits), each Participant's Accrued Benefit shall be fully vested. Upon
termination of the Plan or a complete discontinuance of Contributions,
unclaimed amounts shall be applied as Forfeitures and any unallocated
amounts shall be allocated to Participants who are Eligible Employees as of
the date of such termination or discontinuance on the basis of Compensation
for the Plan Year (or short Plan Year). Upon a partial termination of the
Plan, the Accrued Benefit of each affected Participant shall be fully
vested. In the event of termination of the Plan, the Administrative
Committee shall direct the Custodian to distribute to each Participant the
entire amount of his or her Accrued Benefit as soon as administratively
possible, but not earlier than would be permitted in order to retain the
Plan's qualified status under Sections 401(a), (k) and (m) of the Code, as
if all Participants who are Employees had incurred a Termination of
Employment on the Plan's termination date. Should a Participant or a
Beneficiary) not elect immediate payment of a nonforfeitable Accrued
Benefit in excess of three thousand five hundred dollars ($3,500), the
Administrative Committee shall direct the Custodian to continue the Plan
and Custodial Agreement for the sole purpose of paying to such Participant
his or her Accrued Benefit or death benefit, respectively, unless in the
opinion of the Administrative Committee, to make immediate single sum
payments to such Participant or Beneficiary would not adversely affect the
tax qualified status of the Plan upon termination and would not impose
additional liability upon any Employer or the Custodian.
19.3 Plan Merger. The Plan shall not merge or consolidate with, or
transfer any assets or liabilities to any other plan, unless each person
entitled to benefits would receive a benefit immediately after the merger,
consolidation or transfer (if the Plan were then terminated) which is equal
to or greater than the benefit he or she would have been entitled to
immediately before the merger, consolidation or transfer (if the Plan were
then terminated). The Administrative Committee shall amend or take such
other action as is necessary to amend the Plan in order to satisfy the
requirements applicable to any merger, consolidation or transfer of assets
and liabilities.
ARTICLE XX
SPECIAL TOP-HEAVY RULES
20.1 Application. Notwithstanding any provisions of this Plan to the
contrary, the provisions of this Article shall apply and be effective for
any Plan Year for which the Plan shall be determined to be a "Top-Heavy
Plan" as provided and defined herein.
20.2 Special Terms. For purposes of this Article, the following terms
shall have the following meanings:
(a) "Aggregate Benefit" means the sum of:
(1) the present value of the accrued benefit under each
and all defined benefit plans in the Aggregation Group
determined on each plan's individual Determination
Date as if there were a termination of employment on
the most recent date the plan is valued by an actuary
for purposes of computing plan costs under Section 412
of the Code within the twelve (12) month period ending
on the Determination Date of each such plan, but with
respect to the first plan year of any such plan
determined by taking into account the estimated
accrued benefit as of the Determination Date; provided
(A) the method of accrual used for the purpose of this
Paragraph (1) shall be the same as that used under all
plans maintained by all Employers and Commonly
Controlled Entities if a single method is used by all
stock plans or, otherwise, the slowest accrual method
permitted under Section 411(b)(1)(C) of the Code, and
(B) the actuarial assumptions to be applied for
purposes of this Paragraph (1) shall be the same
assumptions as those applied for purposes of
determining the actuarial equivalents of optional
benefits under the particular plan, except that the
interest rate assumption shall be five percent (5%);
(2) the present value of the accrued benefit (i.e.,
account balances) under each and all defined
contribution plans in the Aggregation Group, valued as
of the valuation date coinciding with or immediately
preceding the Determination Date of each such plan,
including (A) contributions made after the valuation
date but on or prior to the Determination Date, (B)
with respect to the first plan year of any plan, any
contribution made subsequent to the Determination Date
but allocable as of any date in the first plan year,
or (C) with respect to any defined contribution plan
subject to Section 412 of the Code, any contribution
made after the Determination Date that is allocable as
of a date on or prior to the Determination Date; and
(3) the sum of each and all amounts distributed (other
than a rollover or plan-to-plan transfer) from any
Aggregation Group Plan, plus a rollover or
plan-to-plan transfer initiated by the Employee and
made to a plan which is not an Aggregation Group Plan
within the Current Plan Year or within the preceding
four (4) plan years of any such plan, provided such
amounts are not already included in the present value
of the accrued benefits as of the valuation date
coincident with or immediately preceding the
Determination Date.
The Aggregate Benefit shall not include the value of any rollover or
plan-to-plan transfer to an Aggregation Group Plan, which rollover or
transfer was initiated by a Participant, was from a plan which was not
maintained by an Employer or a Commonly Controlled Entity, and was
made after December 31, 1983, nor shall the Aggregate Benefit include
the value of employee contributions which are deductible pursuant to
Section 219 of the Code.
(b) "Aggregation Group" means the Plan and one or more plans
(including plans that terminated) which is described in Section 401(a)
of the Code, is an annuity contract described in Section 403(a) of the
Code or is a simplified employee pension described in Section 408(k)
of the Code maintained or adopted by an Employer or a Commonly
Controlled Entity in the Current Plan Year or one of the four
preceding Plan Years which is either a "Required Aggregation Group" or
a "Permissive Aggregation Group".
(1) A "Required Aggregation Group" means all Aggregation
Group Plans in which either (1) a Key Employee
participates or (2) which enables any Aggregation
Group Plan in which a Key Employee participates to
satisfy the requirements of Sections 401(a)(4) and 410
of the Code.
(2) A "Permissive Aggregation Group" means Aggregation
Group Plans included in the Required Aggregation
Group, plus one or more other Aggregation Group Plans,
as designated by the Administrative Committee in its
sole discretion, which satisfy the requirements of
Sections 401(a)(4) and 410 of the Code, when
considered with the other component plans of the
Required Aggregation Group.
(c) "Aggregation Group Plan" means the Plan and each other plan
in the Aggregation Group.
(d) "Current Plan Year" means (1) with respect to the Plan,
the Plan Year in which the Determination Date occurs, and (2) with
respect to each other Aggregation Group Plan, the plan year of such
other plan in which occurs the Determination Date of such other plan.
(e) "Determination Date" means (1) with respect to the Plan
and its Plan Year, the last day of the preceding Plan Year; or (2)
with respect to any other Aggregation Group Plan in any calendar year
during which the Plan is not the only component plan of an Aggregation
Group, the determination date of each plan in such Aggregation Group
to occur during the calendar year as determined under the provisions
of each such plan.
(f) "Former Key Employee" means an Employee (including a
terminated Employee) who is not a Key Employee but who was a Key
Employee.
(g) "Key Employee" means an Employee (or a terminated Employee)
who at any time during the Current Plan Year or at any time during the
four preceding Plan Years is:
(1) an officer of a Commonly Controlled Entity whose
compensation from a Commonly Controlled Entity during
the Plan Year is greater than fifty percent (50%) of
the amount specified in Section 415(b)(1)(A) of the
Code (as adjusted for cost-of-living increases by the
Secretary of the Treasury) for the calendar year in
which the Plan Year ends; provided, however, that no
more than the lesser of (A) fifty (50) Employees, or
(B) the greater of (i) three (3) Employees or (ii) ten
percent (10%) (rounded to the next whole integer) of
the greatest number of Employees during the Current
Plan Year or any of the preceding four Plan Years
shall be considered as officers for this purpose.
Such officers considered will be those with the
greatest annual compensation as an officer during the
five (5) year period ending on the Determination Date;
(2) One of the ten employees who owns (or is considered to
own within the meaning of Section 318 of the Code)
more than a one half percent (1/2%) interest in value
and the largest percentage ownership interest in value
in a Commonly Controlled Entity and whose total annual
compensation from a Commonly Controlled Entity is not
less than the amount specified in Section 415(b)(1)(A)
of the Code (as adjusted for cost-of-living increases
by the Secretary of the Treasury) for the calendar
year in which the Plan Year ends;
(3) A person who owns more than five percent (5%) of the
value of the outstanding stock of any Commonly
Controlled Entity or more than five percent (5%) of
the total combined voting power of all stock of any
Commonly Controlled Entity (considered separately) or;
(4) A person who owns more than one percent (1%) of the
value of the outstanding stock of a Commonly
Controlled Entity or more than one percent (1%) of the
total combined voting power of all stock of a Commonly
Controlled Entity (considered separately) and whose
total annual compensation (as defined in section
1.415-2(d) of the Treasury Regulations) from the
Employer or a Commonly Controlled Entity is in excess
of one hundred and fifty thousand dollars ($150,000).
The rules of Section 416 (i)(1)(B) and (C) of the Code shall be
applied for purposes of determining an Employee's ownership interest
in a Commonly Controlled Entity for purposes of Paragraphs (3) and (4)
herein. A Beneficiary (who would not otherwise be considered a Key
Employee) of a deceased Key Employee shall be deemed to be a Key
Employee in substitution for such deceased Key Employee. Any person
who is a Key Employee under more than one of the four Paragraphs of
this Section shall have his or her Aggregate Benefit under the
Aggregation Group Plans counted only once with respect to computing
the Aggregate Benefit of Key Employees as of any Determination Date.
Any Employee who is not a Key Employee shall be a Non-Key Employee.
(h) "Top-Heavy Plan" means the Plan with respect to any Plan
Year if the Aggregate Benefit of all Key Employees or the
Beneficiaries of Key Employees determined on the Determination Date is
an amount in excess of sixty percent (60%) of the Aggregate Benefit of
all persons who are Employees within the Current Plan Year; provided,
that if an individual has not performed services for an Employer or a
Commonly Controlled Entity at any time during the five (5) year period
ending on the Determination Date, the individuals's Accrued Benefit
shall not be taken into account. With respect to any calendar year
during which the Plan is not the only Aggregation Group Plan, the
ratio determined under the preceding sentence shall be computed based
on the sum of the Aggregate Benefits of each Aggregation Group Plan
totaled as of the last Determination Date of any Aggregation Group
Plan to occur during the calendar year.
20.3 Minimum Contribution. For any Plan Year that the Plan shall be a
Top-Heavy Plan, each Participant who is an Eligible Employee but who is
neither a Key Employee nor a Former Key Employee on the last day of the
Plan Year shall have allocated to his or her Matching Account on the last
day of the Plan Year a Pay Based Contribution in an amount equal to three
percent (3%) of such Participant's Compensation not in excess of two
hundred thousand dollars ($200,000); provided, however, in no event shall
such contribution on behalf of such Participant be less than five percent
(5%) of such Compensation if any Aggregation Group Plan is a defined
benefit plan which does not satisfy the minimum benefit requirements with
respect to such Participant. The amount of Pay Based Contributions
required to be allocated under this Section for any Plan Year shall be
reduced by the amount of Employer Contributions and Forfeitures allocated
under this Plan on behalf of the Participant and employer contributions and
forfeitures allocated on behalf of the Participant under any other defined
contribution plan in the Aggregation Group for the Plan Year. Elective
Deferrals to any Aggregation Group Plan made on behalf of a Participant in
Plan Years beginning after December 31, 1984 but before January 1, 1989
shall be deemed to be Employer Contributions for the purpose of this
Section. Elective Deferrals and matching contributions to Aggregation
Group Plans in Plan Years beginning on or after January 1, 1989 shall not
be used to meet the minimum contribution requirements of this Section.
Where Employer Contributions and Forfeitures allocated on behalf of a
Participant are insufficient to satisfy the minimum contribution otherwise
required by this Section, an additional employer contribution shall be made
and allocated to the Matching or Pay Based Account of such Participant.
20.4 Maximum Benefit Accrual. For any Plan Year that the Plan is a
Top-Heavy Plan, the denominator of the "defined benefit plan fraction" and
the denominator of the "defined contribution plan fraction" shall be
determined by substituting "1.0" for "1.25"; provided, however, this limit
shall not apply with respect to an Employee for any Plan Year during which
he or she accrues no benefit under any plan of the Aggregation Group. The
preceding sentence shall not apply if, within this Article, there is
substituted "four percent (4%)" for "three percent (3%)" and "seven and
one-half percent (7.5%)" for "five percent (5%)" and "ninety percent (90%)"
for "sixty percent (60%)."
ARTICLE XXI
MISCELLANEOUS PROVISIONS
21.1 Assignment and Alienation. As provided by Code Section
401(a)(13) and to the extent not otherwise required by law, no benefit
provided by the Plan may be anticipated, assigned or alienated, except:
(a) to create, assign or recognize a right to any benefit with
respect to a Participant pursuant to a QDRO, or
(b) to use a Participant's vested Account balance as security
for a loan from the Plan which is permitted pursuant to Code Section
4975.
21.2 Protected Benefits. All benefits which are protected by the
terms of Code Section 411(d)(6) and ERISA Section 204(g), which cannot be
eliminated without adversely affecting the qualified status of the Plan on
and after January 1, 1994, shall be provided under this Plan to
Participants for whom such benefits are protected. The Administrative
Committee shall cause such benefits to be determined and the terms and
provisions of the Plan immediately prior to January 1, 1994 are
incorporated herein by reference and made a part hereof, but only to the
extent such terms and provisions are so protected. Otherwise, they shall
operate within the terms and provisions of this Plan, as determined by the
Administrative Committee.
21.3 Plan Does Not Affect Employment Rights. The Plan does not
provide any employment rights to any Employee. The Employer expressly
reserves the right to discharge an Employee at any time, with or without
Cause, without regard to the effect such discharge would have upon the
Employee's interest in the Plan.
21.4 Deduction of Taxes from Amounts Payable. The Custodian shall
deduct from the amount to be distributed such amount as the Custodian, in
its sole discretion, deems proper to protect the Custodian and the Plan's
assets held under the Custodial Agreement against liability for the payment
of death, succession, inheritance, income, or other taxes, and out of money
so deducted, the Custodian may discharge any such liability and pay the
amount remaining to the Participant, the Beneficiary or the deceased
Participant's estate, as the case may be.
21.5 Facility of Payment. If a Participant or Beneficiary is declared
an incompetent or is a minor and a conservator, guardian, or other person
legally charged with his or her care has been appointed, any benefits to
which such Participant or Beneficiary is entitled shall be payable to such
conservator, guardian, or other person legally charged with his or her
care. The decision of the Administrative Committee in such matters shall
be final, binding, and conclusive upon the Employer and the Custodian and
upon each Employee, Participant, Beneficiary, and every other person or
party interested or concerned. An Employer, the Custodian and the
Administrative Committee shall not be under any duty to see to the proper
application of such payments.
21.6 Source of Benefits. All benefits payable under the Plan shall be
paid or provided for solely from the Plan's assets held under the Custodial
Agreement and the Employers assume no liability or responsibility therefor.
21.7 Indemnification. To the extent permitted by law each Employer
shall indemnify and hold harmless each member (and former member) of the
Board of Directors, each member (and former member) of the Administrative
Committee, and each officer and employee (and each former officer and
employee) of an Employer to whom are (or were) delegated duties,
responsibilities, and authority with respect to the Plan against all
claims, liabilities, fines and penalties, and all expenses reasonably
incurred by or imposed upon him or her (including but not limited to
reasonable attorney fees and amounts paid in any settlement relating to the
Plan) by reason of his or her service under the Plan if he or she did not
act dishonestly, with gross negligence, or otherwise in knowing violation
of the law under which such liability, loss, cost or expense arises. This
indemnity shall not preclude such other indemnities as may be available
under insurance purchased or provided by an Employer under any by-law,
agreement, or otherwise, to the extent permitted by law. Payments of any
indemnity, expenses or fees under this Section shall be made solely from
assets of the Employer and shall not be made directly or indirectly from
the assets of the Plan.
21.8 Reduction for Overpayment. The Administrative Committee shall,
whenever it determines that a person has received benefit payments under
this Plan in excess of the amount to which the person is entitled under the
terms of the Plan, make two reasonable attempts to collect such overpayment
from the person.
21.9 Limitation on Liability. No Employer nor any agent or
representative of any Employer who is an employee, officer, or director of
an Employer in any manner guarantees the assets of the Plan against loss or
depreciation, and to the extent not prohibited by federal law, none of them
shall be liable (except for his or her own gross negligence or willful
misconduct), for any act or failure to act, done or omitted in good faith,
with respect to the Plan. No Employer shall be responsible for any act or
failure to act of any Custodian appointed to administer the assets of the
Plan.
21.10 Company Merger. In the event any successor corporation to
the Company, by merger, consolidation, purchase or otherwise, shall elect
to adopt the Plan, such successor corporation shall be substituted
hereunder for the Company upon filing in writing with the Custodian its
election so to do.
21.11 Employees' Trust. The Plan and Custodial Agreement are
created for the exclusive purpose of providing benefits to the Participants
in the Plan and their Beneficiaries and defraying reasonable expenses of
administering the Plan, and the Plan and Custodial Agreement shall be
interpreted in a manner consistent with their being, respectively, a Plan
described in Sections 401(a), 401(k) and 401(m) of the Code and Custodial
Agreements exempt under Section 501(a) of the Code. At no time shall the
assets of the Plan be diverted from the above purpose.
21.12 Gender and Number. Except when the context indicates to
the contrary, when used herein, masculine terms shall be deemed to include
the feminine, and singular the plural.
21.13 Invalidity of Certain Provisions. If any provision of
this Plan shall be held invalid or unenforceable, such invalidity or
unenforceability shall not affect any other provisions hereof and the Plan
shall be construed and enforced as if such provisions, to the extent
invalid or unenforceable, had not been included.
21.14 Headings. The headings or articles are included solely
for convenience of reference, and if there is any conflict between such
headings and the text of this Plan, the text shall control.
21.15 Uniform and Nondiscriminatory Treatment. Any discretion
exercisable hereunder by an Employer or the Administrative Committee shall
be exercised in a uniform and nondiscriminatory manner.
21.16 Law Governing. The Plan shall be construed and enforced
according to the laws of the state in which the Trust is located, to the
extent not preempted by ERISA.
21.17 Notice and Information Requirements. Except as otherwise
provided in this Plan or in the Custodial Agreement or as otherwise
required by law, the Employer shall have no duty or obligation to
affirmatively disclose to any Participant or Beneficiary, nor shall any
Participant or Beneficiary have any right to be advised of, any material
information regarding the Employer, at any time prior to, upon or in
connection with the Employer's purchase, or any other distribution or
transfer (or decision to defer any such distribution) of any Company Stock
or any other stock held under the Plan.
Executed in counterpart originals this day of
------- ----- -------
1993, but effective as of the Effective Date.
Whitman Corporation
By:
-----------------------------
Title:
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APPENDIX A
Investment Funds
The Investment Funds offered to Participants and Beneficiaries as of
January 1, 1994, based upon share accounting, are:
1. Fixed Income Fund
2. Whitman Stock Fund
3. Pet Stock Fund
4. Large Company Fund
5. Small Company Fund
6. International Fund
7. Conservative Portfolio
8. Moderate Portfolio
9. Growth Portfolio
10. Aggressive Growth Portfolio
The Investment Funds prior to January 1, 1994 are those Investment
Funds that were in the Plan on the business day prior to January 1, 1994.
Restrictions on Investment Elections
No contributions, loan repayments or distribution repayments may be
invested in the Pet Stock Fund.
Restrictions on Conversion Elections
No Conversion Elections may result in any Plan assets being invested
in the Pet Stock Fund. Any Conversion Election to transfer funds out of
the Pet Stock Fund shall be invested in the Investment Funds at the same
percentage designated in a Participant's Investment Election.
APPENDIX B
Excluded Employees
The following Employees shall not be an Eligible Employee:
(a) Any Employee who is eligible to participate in the Whitman
Management Incentive Compensation Plan ("MIC Plan") at any time during
the Plan Year which begins on or after the date such Employee is
designated by an Employer as being eligible for such MIC Plan;
(b) Union employees, leased employees and non-resident aliens;
(c) Any employee of the following divisions of Pepsi-Cola
General Bottlers, Inc. (unless they were transferred from a division
which offers the Plan):
Lougen Limited - doing business as both Pepsi-Cola Bottling
Company of Carroll, Iowa and Pepsi-Cola Bottling Company of
Ft. Dodge, Iowa;
Marquette Bottling Works, Inc. - doing business as Pepsi-Cola
Bottling Company of Marquette, Michigan;
Beverage Bottlers, Inc., Wisconsin Rapids, Wisconsin; and
Pepsi-Cola Bottling Company of Oshkosh, Inc., Oshkosh, Wisconsin;
and
(d) Any employee of Company-owned stores of Midas International
Corporation (COSMIC Enterprises) who work in the following job
classifications:
(1) technicians;
(2) counter representatives; and
(3) foremen hired after April 1, 1989.
EXHIBIT 10(p)
RESTRICTED STOCK AWARD
SPECIMEN
RESTRICTED STOCK AWARD AGREEMENT dated as of May 5, 1993,
between WHITMAN CORPORATION, a Delaware corporation (the
"Corporation"), and
--------------------------------------,
an employee of the Corporation or one of its subsidiaries
(the "Holder").
WHEREAS, the Board of Directors of the Corporation has established
and the shareholders have approved the Whitman Corporation Stock Incentive
Plan (the "Plan");
WHEREAS, the Management Resources and Compensation Committee of
the Board of Directors of the Corporation (the "Committee"), in accordance
with the provisions of the Plan, has selected the Holder as a salaried key
management employee who, in the Committee's judgment, has significant
potential for making substantial contributions to corporate growth and
objectives;
WHEREAS, in order to reward the Holder for services to be rendered
in a manner that relates directly to the Corporation's performance and
further the identity of interests of the Holder and the Corporation's
shareholders through opportunities for increased stock ownership by the
Holder, the Committee has determined that the Holder be granted a
Restricted Stock Award under the Plan;
NOW, THEREFORE, in consideration of the foregoing and the Holder's
acceptance of the terms and conditions hereof, the parties hereto have
agreed, and do hereby agree, as follows:
1. The Corporation hereby grants to the Holder, as a matter of
separate agreement and not in lieu of salary or any other compensation for
services, shares of Common Stock of the Corporation on the terms
----------
and conditions herein set forth.
2. The certificates representing the shares of Common Stock
granted to the Holder shall be registered in the name of a nominee for the
benefit of the Holder and retained in the custody of the Corporation until
such time as they are delivered to the Holder or forfeited to the
Corporation in accordance with the terms hereof (the "Restriction Period").
During the Restriction Period, the Holder will be entitled to vote such
shares and to receive dividends paid on such shares (less any amounts which
the Corporation is required to withhold for taxes).
3. Subject to paragraph 4 hereof, if the Holder shall have been
continuously in the employment of the Corporation or one of its
subsidiaries for a period of one year from the date of grant of this
Restricted Stock Award, the Corporation shall deliver to the Holder on or
about the first anniversary hereof a certificate, registered in the name of
the Holder and free of restrictions hereunder, representing one-third of
the total number of shares granted to the Holder pursuant to this
Agreement. Similarly, if the Holder shall be so continuously employed on
each of the second and third anniversaries hereof, the Corporation on or
about each such anniversary shall deliver additional certificates
representing one-third of the total number of such shares. No payment shall
be required from the Holder in connection with any delivery to the Holder
of shares hereunder.
4. Notwithstanding the provisions of paragraph 3 hereof, if the
performance criteria specified in the Corporation's Long Term Performance
Compensation Plan (as approved by the Committee on June 19, 1992) shall not
have been met for the performance measurement period ending in the year in
which shares would otherwise be delivered to the Holder hereunder, then the
delivery of such shares shall be deferred until the next subsequent
anniversary hereof which follows a performance measurement period in which
such criteria have been met.
5. In the event the Holder retires at or after age 65 or shall
die or become disabled, and if there then remain any undelivered shares
subject to restrictions hereunder, then such restrictions shall be deemed
to have lapsed and the certificates for the remaining shares shall
forthwith be delivered to such retired Holder (or his beneficiary, estate
or heirs).
6. Subject to the provisions of paragraph 5 above, if the Holder
ceases to be an employee of the Corporation or one of its subsidiaries for
any reason (including retirement prior to age 65) during the Restriction
Period, then the Holder shall cease to be entitled to delivery of any of
the shares covered by this Agreement which have not theretofore been
delivered by the Corporation pursuant to paragraph 3 above, and all rights
of the Holder in and to such undelivered shares shall be forfeited;
provided, however, the Committee may, within 120 days after such
termination of employment, in its sole discretion, determine whether such
former Holder shall receive all or any part of the undelivered shares
granted pursuant to this Restricted Stock Award Agreement and whether to
impose any conditions in connection therewith. In addition, the Committee
shall from time to time determine in its sole discretion whether any period
of nonactive employment, including authorized leaves of absence, or absence
by reason of military or governmental service, shall constitute termination
of employment for the purposes of this paragraph.
7. The granting of this Restricted Stock Award shall not in any
way prohibit or restrict the right of the Corporation to terminate the
Holder's employment at any time, for any reason. The Holder shall have no
right to any prorated portion of the shares of Common Stock otherwise
deliverable to the Holder on the anniversary hereof next following a
termination of employment (whether voluntary or involuntary) in respect of
a partial year of employment.
8. While shares of Common Stock are held in custody for the
Holder pursuant to this Agreement, they may not be sold, transferred,
pledged, exchanged, hypothecated or disposed of by the Holder and shall not
be subject to execution, attachment or similar process.
9. This Agreement and each and every obligation of the
Corporation hereunder are subject to the requirement that if at any time
the Corporation shall determine, upon advice of counsel, that the listing,
registration or qualification of the shares covered hereby upon any
securities exchange or under any state or Federal law, or the consent or
approval of any governmental regulatory body, is necessary or desirable as
a condition of or in connection with the granting hereof or the delivery of
shares hereunder, then the delivery of shares hereunder to the Holder may
be postponed until such listing, registration, qualification, consent or
approval shall have been effected or obtained free of any conditions not
acceptable to the Board of Directors of the Corporation.
10. In addition to amounts in respect of taxes which the
Corporation shall be required by law to deduct or withhold from any
dividend payments on the shares covered hereby, the Corporation may defer
making any delivery of shares under this Agreement until completion of
arrangements satisfactory to the Corporation for the payment of any other
applicable taxes, whether through share withholding provided for by the
Plan or otherwise.
11. In the event of a "change in control", as that term is defined
in the Plan, then the Holder shall have all the rights specified in
Paragraph 10(B) of the Plan.
12. Defined words used in this Agreement shall have the same
meaning as set forth in the definitions section or elsewhere in the Plan,
the terms and conditions of which shall constitute an integral part hereof.
13. Any notice which either party hereto may be required or
permitted to give the other shall be in writing and may be delivered
personally or by mail, postage prepaid, addressed to the Treasurer of the
Corporation at its principal office and to the Holder at his address as
shown on the Corporation's payroll records, or to such other address as the
Holder by notice to the Corporation may designate in writing from time to
time.
WHITMAN CORPORATION
By:
-----------------------------------
Vice President
ACCEPTED:
- -----------------------------------------
Holder
*I hereby elect to be taxed (check one):
( ) as the restrictions lapse.
( ) as of the date of grant.
- -----------------------------------------
Holder
- -----------------------------------------
(insert date)
*Any election to be taxed as of the date
of grant must be filed with the Internal
Revenue Service not later than 30 days
after the date hereof.
EXHIBIT 12
WHITMAN CORPORATION
STATEMENT OF CALCULATION OF RATIO OF EARNINGS TO FIXED CHARGES
(in Millions, Except Ratios)
Years Ended December 31,
----------------------------------------------
1993 1992 1991 1990 1989
------ ------ ------ ------ ------
Earnings:
Income from Continuing
Operations before Taxes $ 212.2 $ 170.6 $ 161.7 $ (39.0) $ 146.8
Fixed Charges Excluding
Capitalized Interest 105.9 106.9 138.2 168.1 166.1
------- ------- ------- ------- -------
Income as Adjusted $ 318.1 $ 277.5 $ 299.9 $ 129.1 $ 312.9
======= ======= ======= ======= =======
Fixed Charges:
Interest Expense $ 96.2 $ 97.7 $ 128.6 $ 158.7 $ 156.2
Portion of Rents
Representative of
Interest Factor 9.7 9.2 9.6 9.4 9.9
------- ------- ------- ------- -------
Fixed Charges Excluding
Capitalized Interest 105.9 106.9 138.2 168.1 166.1
Capitalized Interest 0.2 0.2 0.2 0.3 0.3
------- ------- ------- ------- -------
Total Fixed Charges $ 106.1 $ 107.1 $ 138.4 $ 168.4 $ 166.4
======= ======= ======= ======= =======
Ratio of Earnings to
Fixed Charges 3.0x 2.6x 2.2x 0.8x 1.9x
======= ======= ======= ======= =======
(1)
(1) In 1990, the ratio of earnings to fixed charges was less than one-to-
one coverage principally as a result of a $170 million restructuring
charge. The dollar amount of fixed charge coverage deficiency in 1990
was $39.3 million. Excluding the restructuring charge, the ratio of
earnings to fixed charges was 1.8 times in 1990.
EXHIBIT 13
Whitman Corporation 1993 Annual Report to Shareholders
FINANCIAL STATEMENTS
CONSOLIDATED STATEMENTS OF INCOME
Whitman Corporation and Subsidiaries
For the years ended December 31
(in millions) 1993 1992 1991
-------- -------- -------
Sales and revenues $2,529.7 $2,388.0 $2,393.3
Cost of goods sold 1,625.0 1,545.6 1,555.4
-------- -------- --------
Gross profit 904.7 842.4 837.9
Selling, general and administrative expenses 582.3 550.7 548.4
Amortization expense 17.1 17.3 17.7
-------- -------- --------
Operating income 305.3 274.4 271.8
Interest expense (96.2) (97.7) (128.6)
Interest income 12.8 9.0 14.4
Other income (expense), net (9.7) (15.1) 4.1
-------- -------- --------
Income before income taxes 212.2 170.6 161.7
Income tax provision 90.7 68.5 70.3
-------- -------- --------
Income from continuing operations before
minority interest 121.5 102.1 91.4
Minority interest 15.1 10.0 11.0
-------- -------- --------
Income from continuing operations 106.4 92.1 80.4
Income from discontinued operations after
taxes (Note 2) -- -- 17.2
Loss from dispositions of discontinued
operations after taxes (Note 2) -- (32.3) --
Extraordinary loss on early debt retirement
after taxes (Note 4) (4.2) -- --
Cumulative effect of change in accounting
principle after taxes (Note 5) (24.0) -- --
-------- -------- --------
Net income $ 78.2 $ 59.8 $ 97.6
======== ======== ========
Average number of common shares outstanding 107.5 107.2 105.9
======== ======== ========
Income (loss) per common share (in dollars):
Continuing operations $ 0.99 $ 0.86 $ 0.76
Discontinued operations -- (0.30) 0.16
Extraordinary loss on early debt retirement (0.04) -- --
Cumulative effect of change in accounting
principle (0.22) -- --
-------- -------- --------
Net income $ 0.73 $ 0.56 $ 0.92
======== ======== ========
Cash dividends per common share $ 0.290 $ 0.255 $ 0.445
======== ======== ========
The following notes are an integral part of these statements.
- ---------------------------------------------------------------------------
CONSOLIDATED BALANCE SHEETS
Whitman Corporation and Subsidiaries
As of December 31 (in millions) 1993 1992
-------- --------
Assets:
Current assets:
Cash and cash equivalents $ 93.0 $ 132.5
Receivables - net of allowance for doubtful accounts
of $7.8 million in 1993 and $7.1 million in 1992 324.1 280.9
Inventories:
Raw materials and supplies 67.6 73.3
Work in process 39.5 37.6
Finished goods 115.6 104.7
-------- --------
Total inventories 222.7 215.6
Other current assets 51.4 41.8
-------- --------
Total current assets 691.2 670.8
Investments 238.5 210.9
Property (at cost):
Land 59.9 58.8
Buildings and improvements 298.1 291.2
Machinery and equipment 748.9 706.3
-------- --------
Total property 1,106.9 1,056.3
Accumulated depreciation and amortization (534.1) (480.2)
-------- --------
Net property 572.8 576.1
Intangible assets, net of accumulated amortization
of $106.7 million in 1993 and $90.4 million in 1992 525.9 543.9
Other assets 74.8 61.1
-------- --------
Total assets $2,103.2 $2,062.8
======== ========
The following notes are an integral part of these statements.
- ---------------------------------------------------------------------------
Whitman Corporation and Subsidiaries
As of December 31 (in millions) 1993 1992
-------- --------
Liabilities and shareholders' equity:
Current liabilities:
Short-term debt, including current maturities of
long-term debt $ 90.0 $ 108.7
Accounts and dividends payable 232.9 211.1
Income taxes payable 10.7 14.7
Accrued expenses:
Salaries and wages 39.0 34.4
Interest 22.8 21.2
Other expenses 77.3 92.4
-------- --------
Total current liabilities 472.7 482.5
Long-term debt 749.3 791.8
Deferred income taxes 66.6 69.7
Other liabilities 124.7 79.2
Minority interest 172.9 161.1
Shareholders' equity:
Common stock (no par, 250.0 million shares authorized;
107.1 million outstanding at December 31, 1993 and
December 31, 1992) 404.4 403.4
Retained income 172.4 126.3
Cumulative translation adjustment (52.3) (45.4)
Treasury common stock (7.5) (5.8)
-------- --------
Total shareholders' equity 517.0 478.5
-------- --------
Total liabilities and shareholders' equity $2,103.2 $2,062.8
======== ========
The following notes are an integral part of these statements.
- ---------------------------------------------------------------------------
CONSOLIDATED STATEMENTS OF CASH FLOWS
Whitman Corporation and Subsidiaries
For the years ended December 31
(in millions) 1993 1992 1991
-------- -------- --------
Cash flows from operating activities:
Income from continuing operations $ 106.4 $ 92.1 $ 80.4
Adjustments to reconcile to net cash
provided by operating activities:
Depreciation and amortization 95.5 93.5 86.6
Other 24.0 23.3 12.3
Changes in assets and liabilities, net
of acquisitions and dispositions:
(Increase) decrease in receivables (43.2) 16.8 4.5
(Increase) decrease in inventories (7.1) 3.7 2.2
Increase (decrease) in payables 21.8 4.0 (13.4)
Increase (decrease) in accrued interest 1.6 (3.6) (25.6)
Net change in other assets and liabilities 14.3 (22.8) (41.2)
-------- -------- --------
Net cash provided by continuing operations 213.3 207.0 105.8
-------- -------- --------
Net cash provided by (used in) discontinued
operations (29.8) (12.2) 59.1
-------- -------- --------
Net cash provided by operating activities 183.5 194.8 164.9
-------- -------- --------
Cash flows from investing activities:
Capital investments (88.7) (79.2) (79.2)
Proceeds from sales of property 14.3 12.0 22.9
Decrease (increase) in other investments (31.0) 48.4 44.2
Decrease in short-term investments -- -- 29.2
Proceeds from disposition of businesses -- -- 599.6
-------- -------- --------
Net cash provided by (used in) investing
activities (105.4) (18.8) 616.7
-------- -------- --------
Cash flows from financing activities:
Net borrowings from (repayment of) bank
lines of credit and commercial paper 83.6 -- (384.0)
Proceeds from issuance of long-term debt 263.3 38.0 3.5
Repayment of long-term debt (430.8) (159.1) (310.4)
Net increase (decrease) in current debt -- (2.2) 2.2
Issuance of common stock 2.2 3.6 9.8
Treasury stock purchases (3.9) -- --
Common dividends (31.1) (27.3) (46.6)
-------- -------- --------
Net cash used in financing activities (116.7) (147.0) (725.5)
-------- -------- --------
Effects of exchange rate changes on cash
and cash equivalents (0.9) (1.6) (1.8)
-------- -------- --------
Change in cash and cash equivalents (39.5) 27.4 54.3
Cash and cash equivalents at beginning
of year 132.5 105.1 50.8
-------- -------- --------
Cash and cash equivalents at end of year $ 93.0 $ 132.5 $ 105.1
======== ======== ========
The following notes are an integral part of these statements.
- ---------------------------------------------------------------------------
<TABLE>
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
Whitman Corporation and Subsidiaries
<CAPTION>
For the years ended Convertible First Note
December 31, 1993, Preferred Stock Receivable Common Stock Cumulative Treasury Stock
1992 and 1991 (dollars -------------------- from ---------------------- Retained Translation -------------------
in millions) Shares Amount ESOP Shares Amount Income Adjustments Shares Amount
--------- --------- --------- --------- --------- -------- ------------------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Balance, January 1, 1991 1,085,625 $ 496.7 $(450.7) 104,227,287 $ 341.7 $ 557.6 $ (52.2) (1,254,112) $ (39.1)
---------- ------- ------- ----------- ------- ------- ------- --------- -------
Net income 97.6
Preferred stock redemptions (7,841) (3.6) (2.3) 191,439 5.9
Termination of ESOP (1,077,784) (493.1) 450.7 3,098,324 79.2
Stock option plans 277,287 8.4
Other changes, net (10.9) 296,434 11.1
Translation adjustments (7.1)
Dividends declared on common
stock (46.6)
Dividends declared-Pet Inc.
stock (514.8) 33.4
---------- ------- ------- ----------- ------- ------- ------- --------- -------
Balance, December 31, 1991 -- -- -- 107,325,611 407.7 93.8 (25.9) (488,952) (13.7)
---------- ------- ------- ----------- ------- ------- ------- --------- -------
Net income 59.8
Stock option plans 82,259 2.6
Other changes, net (4.3) 189,730 5.3
Translation adjustments (19.5)
Dividends declared on common
stock (27.3)
---------- ------- ------- ----------- ------- ------- ------- --------- -------
Balance, December 31, 1992 -- -- -- 107,325,611 403.4 126.3 (45.4) (216,963) (5.8)
---------- ------- ------- ----------- ------- ------- ------- --------- -------
Net income 78.2
Treasury stock purchases (282,084) (3.9)
Stock option plans 184,947 1.0 (1.0) 79,805 2.2
Translation adjustments (6.9)
Dividends declared on common stock (31.1)
---------- ------- ------- ----------- ------- ------- ------- --------- -------
Balance, December 31, 1993 -- $ -- $ -- 107,510,558 $ 404.4 $ 172.4 $ (52.3) (419,242) $ (7.5)
========== ======= ======= =========== ======= ======= ======= ========= =======
</TABLE>
The following notes are an integral part of these statements.
- ------------------------------------------------------------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Whitman Corporation and Subsidiaries
1. Significant Accounting Policies
- ----------------------------------
Principles of consolidation. The consolidated financial statements
include the accounts of Whitman Corporation and all of its significant
subsidiaries (the Company).
Cash and cash equivalents. Cash and cash equivalents consist of
deposits with banks and financial institutions which are unrestricted as to
withdrawal or use, and which have an original maturity of three months or
less.
Inventories. Inventories are valued at the lower of cost (principally
determined on the first-in, first-out or average methods) or net realizable
value.
Investments. Investments consist primarily of long-term floating-rate
notes and government securities (carried at cost which approximates
market), real estate held for sale (carried at cost), investments in 20 to
50 percent-owned companies (accounted for on the equity method) and other
miscellaneous investments.
Property. Depreciation is computed on the straight-line method and
includes depreciation for properties under capital leases. When property
is sold or retired, cost and accumulated depreciation are eliminated from
the accounts and gains or losses are recorded in income. Expenditures for
maintenance and repairs are expensed as incurred. The approximate ranges
of annual depreciation rates for major property classifications are as
follows:
Buildings 2% - 5%
Machinery and equipment 5% - 33%
Intangible assets. Intangible assets consist of the excess of cost
over fair market value of tangible assets acquired, reflecting premiums
paid for consumer franchises, brand names, trademarks, patents,
distribution systems, manufacturing know-how and other intangible assets.
Such premiums are being amortized on straight-line bases over periods not
exceeding 40 years.
Postretirement expenses. The Company adopted Statement on Financial
Accounting Standards No. 106 "Postretirement Benefits Other Than Pensions"
as of January 1, 1993. The cumulative effect of this change in accounting
principle is reflected as a separate item on the accompanying income
statement. Pension costs are funded in amounts not less than minimum
levels required by regulation.
Income taxes. The Company adopted Statement of Financial Accounting
Standards No. 109, "Accounting for Income Taxes" as of January 1, 1993.
Income per common share. Income per common share is based upon the
weighted average number of common and common equivalent shares outstanding,
assuming the exercise of stock options where dilutive.
Interest rate and currency swaps. The Company enters into a variety
of interest rate and currency swaps in its management of interest rate and
foreign currency exposures. The differential to be paid or received is
accrued as interest rates change and is recognized over the lives of the
agreements. Realized and unrealized gains and losses on foreign currency
transactions are recognized currently in other income (expense), net.
- --------------------------------------------------------------------------
2. Discontinued Operations
- --------------------------
In September, 1990, the Company decided to distribute the common stock
of its Pet Incorporated subsidiary (Pet) to the shareholders of Whitman
Corporation. This spinoff was completed on April 1, 1991. The 1991 income
from discontinued operations for Pet was net of income tax expenses of
$23.4 million. Revenues from the discontinued Pet operations amounted to
$472.9 million in 1991.
In the third quarter of 1993, the Company settled a lawsuit filed by
the Middleby Corporation against the Company's Hussmann subsidiary for
$19.5 million in cash and certain other concessions. The suit related to
the 1989 sale of Hussmann's foodservice equipment operations. Provision
for the lawsuit and related expenses (after taxes), along with additional
income taxes and other expenses associated with previously discontinued
operations were reflected in the third quarter of 1992 as part of
discontinued operations.
- --------------------------------------------------------------------------
3. Provision for Income Taxes
- -----------------------------
The income tax provision consisted of:
(in millions) 1993 1992 1991
-------- ------- -------
Current:
Federal $ 63.1 $ 51.9 $ 37.9
Foreign 14.0 13.3 9.9
State and local 10.6 8.9 8.0
-------- -------- --------
Total current 87.7 74.1 55.8
-------- -------- --------
Deferred:
Federal 3.2 (4.6) 12.2
Foreign 1.4 (1.4) 0.4
State and local (1.6) 0.4 1.9
-------- -------- --------
Total deferred 3.0 (5.6) 14.5
-------- -------- --------
Income tax provision $ 90.7 $ 68.5 $ 70.3
======== ======== ========
The items which gave rise to differences between the income tax
provision in the income statements and the income tax computed at the
United States statutory rate are summarized below:
(dollars in millions) 1993 1992 1991
------------- ------------ ------------
Amt. % Amt. % Amt. %
------ ------ ------ ------ ------ ------
Income tax expense computed
at statutory rate $ 74.3 35.0 $ 58.0 34.0 $ 55.0 34.0
State income taxes, net
of federal income tax
benefit 5.9 2.8 6.1 3.6 6.5 4.0
Higher foreign effective
tax rates 5.2 2.4 4.1 2.4 2.0 1.3
Purchase accounting
amortization 4.7 2.2 4.5 2.6 4.5 2.8
Other items, net 0.6 0.3 (4.2) (2.4) 2.3 1.4
------ ----- ------ ----- ------ -----
Income tax provision $ 90.7 42.7 $ 68.5 40.2 $ 70.3 43.5
====== ===== ====== ===== ====== =====
Pretax income from foreign operations amounted to $30.7 million, $25.4
million, and $26.5 million in 1993, 1992 and 1991, respectively. U.S.
income taxes have not been provided on the undistributed income ($72.4
million) of the Company's foreign subsidiaries which currently is not
intended to be remitted to the U.S.
The deferred income tax (benefit) resulted from:
(in millions) 1993 1992 1991
------ ------ ------
Restructuring charge $ 0.9 $ 5.4 $ 16.2
Depreciation (3.3) (1.8) (1.3)
Realized translation gains -- (4.6) --
Pension accruals 0.1 1.1 1.4
Other items 5.3 (5.7) (1.8)
------- ------- -------
Deferred income tax provision (benefit) $ 3.0 $ (5.6) $ 14.5
======= ======= =======
Deferred income taxes reflect the impact of "temporary differences"
between amounts of assets and liabilties for financial reporting purposes
and such amounts as measured by income tax regulations. Temporary
differences which gave rise to deferred tax assets and liabilities at
December 31, consisted of:
(in millions) 1993 1992
------ ------
Deferred tax assets:
Provision for closed and sold businesses $ 27.0 $ 35.3
Lease transactions 20.8 21.7
Self-insurance provisions 19.3 18.6
Postretirement benefit accrual 12.2 --
Other 36.8 34.2
------ ------
Total deferred tax assets 116.1 109.8
Deferred tax liabilities:
Property, plant and equipment 70.8 75.6
Deferred gains 52.3 50.0
Other 35.5 34.0
------ ------
Total deferred tax liabilities 158.6 159.6
------ ------
Net deferred tax liability $ 42.5 $ 49.8
====== ======
Net deferred tax liability (asset) included in:
"Other current assets" $(24.1) $(19.9)
"Deferred income taxes" 66.6 69.7
------ ------
Net deferred tax liability $ 42.5 $ 49.8
====== ======
Effective January 1, 1993, the Company adopted Statement of Financial
Accounting Standards No. 109, Accounting for Income Taxes. Statement No.
109 superseded existing accounting standards for income taxes, including
Statement No. 96 which the Company adopted in 1988. Adoption of Statement
No. 109 did not result in any cumulative adjustment and did not have any
significant effect on the Company's financial statements or results of
operations. The increase in Federal income tax rates in 1993 did not have
a significant effect on the deferred tax balances.
The Internal Revenue Service (IRS) has examined the Company's Federal
income tax returns through 1987. The IRS has proposed adjustments for the
year 1987 which would substantially increase the Company's tax liability.
The Company is strongly contesting the proposed adjustments, and management
believes that the ultimate determination of these matters will not have any
material adverse effect on either the Company's financial position or its
results of operations.
- ---------------------------------------------------------------------------
4. Debt
- -------
Debt at December 31 consisted of the following:
(in millions) 1993 1992
------ ------
Whitman Corporation:
- -------------------
Loans and notes due 1994 through 2005, effective
rates 3.6% to 12.5% $ 516.4 $ 324.9
Swiss franc bonds and notes due 1994 and 1995,
exchanged for U.S. dollar liabilities, effective
rates 12.1% to 12.4% 96.7 197.6
Bank loans and commercial paper due 1994,
effective rates 3.5% to 3.7% 83.6 --
Canadian notes due 1995, exchanged for U.S. dollar
liabilities at 12.2% 38.1 38.1
Equipment notes due 1994 through 1996, 10.97% to
13.25%
15.4 25.2
Whitman Finance Corporation, N.V.:
- ---------------------------------
Sinking fund zero coupon bonds due 1994, 14.25% 54.8 48.0
Retractable notes due 1994, 5.8% 5.3 48.5
Split currency bonds due 1993 and 1997, effective
rates 11.4% and 12.6%
-- 185.4
Other Subsidiaries:
- ------------------
Obligations under capital leases 19.4 20.6
Industrial development bonds due 1994 to 2014, 2.9%
to 10.9% 9.8 10.6
Various, due 1994 to 1998, 7.5% to 10.5% 1.2 2.0
------- -------
Total debt 840.7 900.9
Less: Amount due within one year 90.0 108.7
Unamortized discount 1.4 0.4
------- -------
Total long-term debt $ 749.3 $ 791.8
======= =======
At December 31, 1993, the Company had contractual bank credit lines
which permit it to borrow up to $250 million. The interest rates may be
floating or fixed and are based on domestic rates or the London Interbank
Offered Rate ("LIBOR") at the option of the Company. At December 31, 1993,
there were borrowings of $33.6 million under such commitments. The Company
pays commitment fees ranging from 3 16 to 1 4 percent per annum on the
unused portion of such commitments. No compensating balances are required
under the terms of these credit arrangements.
The Company also maintains a $100 million commercial paper program and
had $50 million of commercial paper outstanding under this program at
December 31, 1993. No compensating balances or commitment fees are
required with this program.
At December 31, 1993, $248.3 million of currently maturing notes have
been classified as long-term because the Company intends to refinance these
obligations for more than one year.
The amounts of long-term debt maturing in 1995 through 1998, are:
$146.2 million, $72.2 million, $1.0 million and $1.0 million, respectively.
The credit lines expire in 1994 and 1996. The Company expects to be able
to extend such lines of credit.
In September, 1993, the Company redeemed the entire issue of $95.8
million 7-1 4% split currency bonds (effective interest rate of 12.6%),
originally due September, 1997, for $101.9 million. After related expenses
and fees, this early debt retirement resulted in an after tax loss of $4.2
million, or $0.04 per share. This loss is reported separately as an
extraordinary loss in the Consolidated Statements of Income. The proceeds
for redemption came from seven to twelve year notes issued during 1993 with
effective interest rates ranging from 5.8% to 6.9%.
The Company has entered into interest rate swap agreements to reduce
the impact of changes in interest rates on its floating rate long-term
debt. At December 31, 1993, the Company had interest rate swap agreements
with commercial banks in a total notional principal amount of $65 million.
These interest rate swap agreements effectively guarantee the Company's
interest on $65 million of its floating rate notes at fixed interest rates
ranging between 5.9 percent and 9.8 percent. These interest rate swap
agreements mature at the time the related notes mature in 1994. The
Company has also entered into other interest rate swap agreements to take
advantage of lower floating interest rates on some of its fixed rate debt.
At December 31, 1993 the Company had these types of interest rate swap
agreements with commercial and investment banks in a total notional
principal amount of $125 million and an effective interest rate of
approximately 5.8 percent. These interest rate swap agreements mature in
1996, while the related notes mature in 2003.
The Company has also entered into foreign currency swap agreements to
reduce the effect of changes in foreign exchange rates on its debt and
investments denominated in foreign currencies. At December 31, 1993, the
Company had agreements converting its Swiss franc and Canadian dollar
denominated liabilities to U.S. dollar liabilities of $96.7 million and
$38.1 million, respectively, at effective U.S. interest rates ranging
between 12.1 percent and 12.4 percent. The agreements commit the Company
to exchange $46.7 million for 116.7 million Swiss francs in 1994, $50.0
million for 138.2 million Swiss francs in 1995 and $38.1 million for 50
million Canadian dollars in 1995.
The Company is exposed to credit loss in the event of nonperformance
by the other parties to the interest rate and foreign currency swap
agreements. However, the Company does not anticipate nonperformance by the
counterparties.
Interest expense included $2.1 million, $2.6 million and $2.7 million
for 1993, 1992 and 1991, respectively, relating to liabilities under
capital lease agreements. Interest capitalized during periods of
construction was not significant.
At December 31, 1993, collateral of $72.3 million, consisting
predominantly of equipment and real estate, was pledged under various long-
term loan agreements.
The fair value of the Company's debt, based upon discounting of future
cash flows, did not vary materially from the carrying value of such debt as
of December 31, 1993.
- ---------------------------------------------------------------------------
5. Pension and Other Postretirement Plans
- ------------------------------------------
Company-sponsored defined benefit pension plans.
Substantially all of the Company's employees are covered under various
defined benefit pension plans sponsored and funded by the Company. Plans
covering salaried employees provide pension benefits based on years of
service and employees' compensation during the five years preceding
retirement. Plans covering hourly employees generally provide benefits of
stated amounts for each year of service. Plan assets are invested
primarily in common stocks, corporate bonds and government securities.
Net periodic pension cost for 1993, 1992 and 1991 included the
following components:
(in millions) 1993 1992 1991
------ ------ ------
Service cost-benefits earned during period $ 7.7 $ 7.3 $ 4.6
Interest cost on projected benefit
obligation 16.4 16.3 14.6
Actual return on assets (28.0) (20.6) (44.2)
Net amortization and deferral 10.2 3.4 25.6
------- ------- -------
Total net periodic pension cost $ 6.3 $ 6.4 $ 0.6
======= ======= =======
The principal economic assumptions used in the determination of net
periodic pension cost include the following:
1993 1992 1991
------ ------ ------
Discount rate 7.5% 8.0% 9.0%
Expected long-term rate of return on assets 10.0% 10.0% 10.0%
Rates of increase in compensation levels 5.0% 5.5% 7.0%
The following table reconciles the pension plans' funded status to the
amounts recognized in the Company's balance sheets as of December 31, 1993
and 1992:
(in millions) 1993 1992
----------------------- ------------------------
Assets Accumulated Assets Accumulated
Exceed Benefits Exceed Benefits
Accumulated Exceed Accumulated Exceed
Benefits Assets Benefits Assets
------------ ------------ ------------ ------------
Actuarial present
value of benefit
obligation (measured
as of September 30):
Vested benefit
obligation $(152.3) $ (50.5) $(142.1) $ (43.6)
======= ======= ======= =======
Accumulated benefit
obligation (153.4) (52.6) (144.2) (46.1)
======= ======= ======= =======
Projected benefit
obligation (177.5) (55.9) (167.7) (48.8)
Plan assets at fair
market value (measured
as of September 30) 189.9 41.3 175.0 37.5
------- ------- ------- -------
Plan assets in excess
of (less than)
projected benefit
obligation 12.4 (14.6) 7.3 (11.3)
Unrecognized net asset
at transition to SFAS
No. 87 (4.8) - (5.0) -
Unrecognized prior
service cost 19.0 6.2 18.2 5.3
Unrecognized net loss
(gain) (3.2) 7.4 1.3 6.3
Additional liability
required to recognize
minimum liability - (10.6) - (8.1)
------- ------- ------- -------
Prepaid (accrued) pension
cost recognized on
balance sheets $ 23.4 $ (11.6) $ 21.8 $ (7.8)
======= ======= ======= =======
The principal economic assumptions used in determining the above
benefit obligations were: discount rates of 7.0 percent and 7.5 percent
in 1993 and 1992, respectively, and rates of increase in future
compensation levels of 4.5 percent and 5.0 percent, respectively.
Company-sponsored defined contribution plans
Substantially all U.S. salaried employees, certain U.S. hourly
employees and certain Australian and Canadian employees participate in
voluntary, contributory defined contribution plans to which the Company
makes partial matching contributions. Company contributions to these plans
amounted to $8.1 million, $7.5 million and $11.3 million in 1993, 1992 and
1991 respectively.
Multi-employer pension plans
The Company's subsidiaries participate in a number of multi-employer
pension plans which provide benefits to certain unionized employee groups
of the Company. Amounts contributed to the plans totaled $5.0 million,
$5.3 million and $4.7 million in 1993, 1992 and 1991, respectively.
Postretirement benefits other than pensions
Effective January 1, 1993, the Company adopted Statement of Financial
Accounting Standards No. 106, which among other items, required the Company
to reflect in its financial statements estimates of future costs of medical
and survivor benefits for certain retirees. Previously, the costs of the
Company's retiree and survivor benefit programs were recognized in the
financial statements on a cash accounting basis. The Company has elected
to recognize this change in accounting on the immediate recognition basis.
The cumulative effect of adopting this change in accounting principle was
an increase in accrued postretirement costs of $38.7 million, a decrease in
deferred tax liabilities of $14.7 million and a decrease in net income of
$24.0 million ($0.22 per share).
The Company provides a majority of U.S. retired employees and selected
other employees in Canada certain life and health care benefits.
Eligibility for these benefits varies with the employee's classification
prior to retirement. Benefits are provided through insurance contracts or
welfare trust funds. The insurance plans generally are financed by monthly
insurance premiums which are based upon the prior year's experience.
Benefits paid from a welfare trust are financed by monthly deposits which
approximate the amount of current claims and expenses. Employees retiring
after 1988 are generally required to pay the full cost of these benefits.
The Company has the right to modify or terminate these benefits.
Net periodic postretirement cost for 1993 included the following
components:
(in millions) 1993
------
Service cost-benefits earned during the period $ 0.4
Interest cost on accumulated postretirement benefit obligation 2.9
-------
Net periodic postretirement cost $ 3.3
=======
Net periodic postretirement benefit costs for 1992 and 1991 were $2.8
million and $2.6 million, respectively.
The Company's postretirement health care and life plans currently are not
funded. The status of the plans at December 31, 1993 was as follows:
(in millions)
Actuarial present value of accumulated postretirement benefit
obligation:
Retirees $ 32.3
Fully eligible active plan participants 1.1
Other active plan participants 4.3
-------
Total 37.7
Plan assets at fair market value --
-------
Accumulated postretirement benefit obligation in excess of
plan assets 37.7
Unrecognized net loss 1.1
Unrecognized prior service cost 1.7
-------
Accrued postretirement benefit cost $ 40.5
=======
The accumulated postretirement benefit obligation at December 31, 1993
was determined using a 7.0 percent discount rate and a 4.5 percent increase
in compensation levels. The rate of increase in the per capita costs of
covered health care benefits was assumed to be 10.3 percent in 1994,
decreasing gradually to 5.0 percent by the year 2007 and thereafter.
Increasing the assumed health care cost trend rate by 1 percentage point
would increase the accumulated postretirement benefit obligation at
December 31, 1993 by $4.2 million and the net periodic postretirement cost
for 1993 by $0.4 million.
Multiemployer postretirement medical and life insurance
The Company's subsidiaries participate in a number of multiemployer
plans which provide health care and survivor benefits to unionized
employees during their working lives and after retirement. Portions of the
benefit contributions, which cannot be disaggregated, related to
postretirement benefits for plan participants. Total amounts charged
against income and contributed to the plans (including benefit coverage
during their working lives) amounted to $5.4 million in 1993.
- ---------------------------------------------------------------------------
6. Leases
- ---------
At December 31, 1993, annual minimum rental payments under capital and
operating leases that have initial noncancellable terms in excess of one
year were as follows:
(in millions) Capital Operating
Leases Leases
---------- ----------
1994 $ 4.3 $ 47.0
1995 3.6 41.0
1996 2.7 35.5
1997 2.3 30.8
1998 2.3 27.2
Thereafter 21.1 116.3
------- -------
Total minimum lease payments 36.3 $ 297.8
Less imputed interest 16.9 =======
-------
Present value of minimum lease payments $ 19.4
=======
Minimum payments under operating leases have not been reduced by
$129.6 million of sublease rental income which is due in the future under
noncancellable subleases.
Total rent expense applicable to operating leases amounted to $29.0
million, $27.7 million and $28.9 million in 1993, 1992 and 1991,
respectively. These amounts have been reduced by sublease rental income of
$21.2 million, $21.6 million and $18.6 million, respectively. A majority
of the Company's leases provide that the Company pay taxes, maintenance,
insurance and certain other operating expenses.
- ---------------------------------------------------------------------------
7. ESOP Convertible First Preferred Stock (Series A)
- -----------------------------------------------------
In January, 1989, the Company created an Employee Stock Ownership Plan
(ESOP) for substantially all of its U.S. salaried employees. The ESOP
Trustee purchased $500 million of Whitman ESOP Convertible First Preferred
Stock (Series A) (the "ESOP Preferred Stock"), with the proceeds of a $500
million note issued to the Company by the ESOP Trustee. Dividends on the
ESOP Preferred Stock issued to the ESOP were cumulative at an annual rate
of 7.75 percent per share from the date of original issue.
On March 28, 1991, Whitman terminated its ESOP, effective January 1,
1991, in conjunction with its previously initiated restructuring plan and
the Pet spinoff. On March 28, 1991, outstanding ESOP Preferred Stock
allocated to Whitman employees totaled 170,060 shares and was exchanged for
3,098,324 shares of Whitman common stock. The termination of the ESOP
resulted in the issuance of the 3,098,324 shares of Whitman common stock
totaling $79.2 million and retirement of the outstanding note receivable
from the ESOP Trustee in exchange for the unallocated ESOP Preferred Stock.
- ---------------------------------------------------------------------------
8. Stock Options and Shares Reserved
- ------------------------------------
The Company's Stock Incentive Plan (the "Plan"), originally approved
by shareholders in 1982 and subsequently amended from time to time,
provides for granting incentive stock options, nonqualified stock options,
related Alternate Stock Rights, Restricted Stock Awards, and Performance
Awards or any combination of the foregoing. Incentive stock options and
nonqualified stock options are exercisable during a ten-year period
beginning six months to three years after the date of grant. Alternate
Stock Rights have been granted with respect to certain nonqualified and
incentive stock options. Options are granted at 100% of fair market value
at date of grant. During 1991, the option price and shares outstanding
were adjusted according to a formula to give effect to the spinoff of Pet
Incorporated on April 1, 1991.
Changes in options outstanding are summarized as follows:
Option Price
Shares per Share
---------- -------------------
Balance at January 1, 1991 1,821,996 $ 7.235 - $ 35.063
----------
Granted 1,724,600 11.750 - 13.668
Adjustment for Pet stock distribution 1,281,777 5.062 - 15.474
Exercised or surrendered for ASRs (246,265) 7.235 - 23.313
Recaptured or terminated (788,247) 11.158 - 35.063
----------
Balance at December 31, 1991 3,793,861 5.062 - 15.474
----------
Granted 1,390,200 12.875 - 13.810
Exercised or surrendered for ASRs (95,431) 5.062 - 11.750
Recaptured or terminated (53,702) 10.288 - 15.474
----------
Balance at December 31, 1992 5,034,928 6.937 - 15.474
----------
Granted 739,100 13.563
Exercised or Surrendered for ASRs (210,243) 8.440 - 14.453
Recaptured or terminated (18,618) 11.750 - 14.453
----------
Balance at December 31, 1993 5,545,167 $ 6.937 - $ 15.474
==========
At December 31, 1993, 3,332,733 shares were exercisable and 7,290,376
shares were available for future grants.
During 1993 and 1991, the Company granted 91,900 and 200,819
restricted shares of stock, respectively, to key members of management
under the Plan. There were no grants of restricted stock in 1992. At
December 31, 1993, there were 91,900 restricted shares of stock outstanding
under the Plan.
In addition to Common Stock options, there were 1,248,214 shares of
common stock reserved at December 31, 1993 for issuance pursuant to the
Company's Retirement Savings Plan.
- ---------------------------------------------------------------------------
9. Shareholder Rights Plan and Second Preferred Stock
- -----------------------------------------------------
In 1989, the Company adopted a Shareholder Rights Plan and declared a
dividend of one preferred share purchase right (a Right ) for each
outstanding share of common stock, without par value, of the Company. Each
Right entitles the registered holder to purchase from the Company one one-
hundredth of a share of Junior Participating Second Preferred Stock (Series
1), without par value, of the Company at a price of $120 per one one-
hundredth of a share of such Second Preferred Stock, subject to adjustment.
The Rights will become exercisable if someone buys 15 percent or more of
the Company's common stock. In addition, if someone buys 15 percent or
more of the Company's common stock, each right will entitle its holder
(other than that buyer) to purchase a number of shares of the Company's
common stock having a market value of twice the Right's $120 exercise
price. If the Company is acquired in a merger, each Right will entitle its
holder to purchase a number of the acquiring company's common shares having
a market value at the time of twice the Right's exercise price.
Prior to the acquisition of 15 percent or more of the Company's stock,
the Rights can be redeemed by the Board of Directors for one cent per
Right. The Company's Board of Directors is also authorized to increase the
threshhold to not more than 20 percent. The Rights will expire on January
30, 1999. The Rights do not have voting or dividend rights, and until they
become exercisable, have no dilutive effect on the per-share earnings of
the Company.
The Company has 10 million authorized shares of Second Preferred
Stock. In January 1989, the Company's Board of Directors designated 2.5
million shares of the Second Preferred Stock as Junior Participating Second
Preferred Stock (Series 1) in conjunction with the Shareholder Rights Plan.
There was no Second Preferred Stock issued or outstanding during 1993 or
1992.
- ---------------------------------------------------------------------------
10. Supplemental Cash Flow Information
- --------------------------------------
Net cash provided by operating activities reflects cash payments or
cash receipts as follows:
(in millions) 1993 1992 1991
------ ------ ------
Interest paid $ 82.0 $ 85.5 $ 139.8
Interest received (13.4) (8.4) (15.3)
Income taxes paid 75.2 57.2 70.7
Taxes paid include total federal income taxes paid. As a consequence
of filing consolidated federal tax returns, it is impractical to
distinguish between taxes relating to continuing and discontinued
operations.
The termination of the ESOP in March, 1991 resulted in the issuance of
common stock and retirement of the outstanding note receivable from the
ESOP trustee in exchange for the Company's convertible first preferred
stock. The ESOP termination did not require the use of cash or any
additional debt.
In March, 1991, the Company declared a dividend payable in the common
stock of Pet Incorporated on April 1, 1991. The dividend reduced the
Company's retained earnings by $514.8 million. The dividend was in the
form of common stock and did not require the use of cash or any additional
debt.
- ---------------------------------------------------------------------------
11. Environmental and Other Contingencies
- -----------------------------------------
The Company is subject to certain indemnification obligations under
agreements with previously sold subsidiaries for potential environmental
liabilities. There is significant uncertainty in assessing the Company's
share of the potential liability for such claims. The assessment and
determination for cleanup at these sites is inherently speculative, and the
Company's share of such costs are subject to various factors, including
possible insurance recoveries and allocations of any liabilities among many
other potentially responsible and financially viable partners. While the
ultimate liability cannot be ascertained, current information would suggest
that the Company's potential exposure will not be material. Management
believes, even before considering possible insurance recoveries, that it
has made adequate provision for such potential liabilities.
The Company also has other contingent liabilities from various pending
claims and litigation on a number of matters, for which the ultimate
liability for each claim, if any, cannot be determined. In the opinion of
management, and based upon information currently available, the ultimate
resolution of these claims and litigation, including potential
environmental exposures, and considering amounts already accrued, will not
have a material effect on the Company's financial condition or the results
of operations.
- ---------------------------------------------------------------------------
<TABLE>
12. Segment Reporting
- ---------------------
The Company is engaged in three distinct businesses: Pepsi-Cola and other beverages; Midas automotive services; and Hussmann
refrigeration systems and equipment. Selected financial information related to the business segments is shown below:
<CAPTION>
Sales & revenues Operating profit Identifiable assets
---------------------------- ---------------------------- ----------------------------
(in millions) 1993 1992 1991 1993 1992 1991 1993 1992 1991
-------- -------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Pepsi General $1,179.6 $1,111.2 $1,121.9 $ 170.5 $ 139.0 $ 144.7 $ 843.6 $ 827.5 $ 851.5
Midas 503.6 485.6 476.0 67.1 73.1 76.4 386.9 389.2 386.7
Hussmann 846.5 791.2 795.4 83.6 76.8 66.1 487.4 471.5 469.1
Eliminations and other -- -- -- -- -- -- 210.6 219.1 228.5
-------- -------- -------- -------- -------- -------- ------- -------- --------
Total before corporate
administrative expenses $2,529.7 $2,388.0 $2,393.3 321.2 288.9 287.2 1,928.5 1,907.3 1,935.8
======== ======== ========
Corporate administrative expenses (15.9) (14.5) (15.4)
Total operating income 305.3 274.4 271.8
-------- -------- --------
Interest expense, net (83.4) (88.7) (114.2)
Other income (expense), net
corporate assets (9.7) (15.1)4.1 174.7 155.5 187.2
-------- -------- -------- -------- -------- --------
Pretax income/total assets $ 212.2 $ 170.6 $ 161.7 $2,103.2 $2,062.8 $2,123.0
======== ======== ======== ======== ======== ========
</TABLE>
Depreciation
and Capital
amortization investments
-------------------- --------------------
(in millions) 1993 1992 1991 1993 1992 1991
------ ------ ------ ------ ------ ------
Pepsi General $52.9 $ 52.0 $50.3 $ 45.0 $41.0 $ 36.1
Midas 15.5 14.8 13.9 24.4 20.5 21.0
Hussmann 16.5 17.2 17.1 19.2 17.3 14.3
Eliminations & others 10.6 9.5 5.3 0.1 0.4 7.8
------ ------ ------ ------ ------ ------
Total before corporate
administrative expenses $95.5 $ 93.5 $86.6 $ 88.7 $79.2 $ 79.2
====== ====== ====== ====== ====== ======
<TABLE>
Selected geographical information is presented below:
<CAPTION>
Sales and revenues Operating profit Identifiable assets
---------------------------- ---------------------------- ----------------------------
(in millions) 1993 1992 1991 1993 1992 1991 1993 1992 1991
-------- -------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
United States $2,142.2 $2,002.3 $1,982.3 $ 292.4 $ 262.8 $ 263.6 $1,613.9 $1,616.0 $1,619.1
Foreign 442.7 406.2 422.6 28.8 26.1 23.6 314.6 291.3 316.7
Eliminations (55.2) (20.5) (11.6) -- -- -- -- -- --
-------- -------- -------- -------- -------- -------- -------- -------- --------
Total before corporate
expenses/assets $2,529.7 $2,388.0 $2,393.3 $ 321.2 $ 288.9 $ 287.2 $1,928.5 $1,907.3 $1,935.8
======== ======== ======== ======== ======== ======== ======== ======== ========
</TABLE>
Equity in net income and net assets of the Company's continuing
foreign operations amounted to $15.5 million and $157.2 million,
respectively, in 1993, $13.6 million and $158.2 million in 1992, and $16.1
million and $150.6 million in 1991.
Operating profit is reported exclusive of net interest expense,
corporate administrative expenses, equity in net income of affiliates,
other miscellaneous income and expense items, and income taxes. Foreign
currency gains or losses were not significant. Sales between operating
segments and between geographical areas were not significant. Export
sales, sales to any single customer and sales to domestic or foreign
governments were each less than ten percent of consolidated sales and
revenues.
Corporate assets are principally cash or cash equivalents,
investments, and furniture and fixtures.
- ---------------------------------------------------------------------------
13. Selected Quarterly Financial Data (unaudited)
- -------------------------------------------------
(in millions, except First Second Third Fourth Full
per-share data) Quarter Quarter Quarter Quarter Year
-------- -------- -------- -------- --------
1993:
- -----
From continuing
operations:
Sales $ 522.5 $ 634.7 $ 703.7 $ 668.8 $2,529.7
Gross profit 183.0 233.7 255.5 232.5 904.7
Income from continuing
operations 8.4 29.1 39.8 29.1 106.4
Income (loss) per share:
Continuing operations $ 0.08 $ 0.27 $ 0.37 $ 0.27 $ 0.99
Net income $ (0.14) $ 0.27 $ 0.33 $ 0.27 $ 0.73
1992:
- -----
From continuing
operations:
Sales $ 497.8 $ 609.2 $ 662.6 $ 618.4 $2,388.0
Gross profit 176.0 215.7 235.8 214.9 842.4
Income from continuing
operations 5.3 25.4 35.0 26.4 92.1
Income per share:
Continuing operations $ 0.05 $ 0.24 $ 0.33 $ 0.25 $ 0.86
Net income $ 0.05 $ 0.24 $ 0.03 $ 0.25 $ 0.56
The earnings per share may not be additive due to changes in average
shares outstanding during the periods or rounding.
- ---------------------------------------------------------------------------
STATEMENT OF FINANCIAL RESPONSIBILITY
The consolidated financial statements of Whitman Corporation and
subsidiaries have been prepared by management which is responsible for
their integrity and content. These statements have been prepared in
accordance with generally accepted accounting principles and include
amounts which reflect certain estimates and judgments by management.
The Board of Directors, acting through the Audit Committee of the
Board, has responsibility for determining that management fulfills its
duties in connection with the preparation of these consolidated financial
statements. The Audit Committee meets periodically and privately with the
Independent Auditors and with the internal auditors to review matters
relating to the quality of the financial reporting of the Company, the
related internal controls and the scope and results of audit examinations.
The Committee also meets with management and the internal audit staff to
review the affairs of the Company.
To meet management's responsibility for the fair and objective
reporting of the results of operations and financial condition, the Company
maintains systems of internal controls and procedures to provide reasonable
assurance of the reliability of its accounting records. These systems
include written policies and procedures, a substantial program of internal
audit and the careful selection and training of its financial staff.
The Company's Independent Auditors, KPMG Peat Marwick, are engaged to
audit the consolidated financial statements of the Company and to issue
their report thereon. Their audit has been made in accordance with
generally accepted auditing standards. Their report follows.
- ---------------------------------------------------------------------------
INDEPENDENT AUDITORS' REPORT
THE BOARD OF DIRECTORS AND SHAREHOLDERS
OF WHITMAN CORPORATION:
We have audited the accompanying consolidated balance sheets of
Whitman Corporation and Subsidiaries as of December 31, 1993 and 1992, and
the related consolidated statements of income, shareholders' equity, and
cash flows for each of the years in the three-year period ended December
31, 1993. These consolidated financial statements are the responsibility
of the Company's management. Our responsibility is to express an opinion
on these consolidated financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to
obtain reasonable assurance about whether the consolidated financial
statements are free of material misstatement. An audit includes examining,
on a test basis, evidence supporting the amounts and disclosures in the
consolidated financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as
well as evaluating the overall consolidated financial statement
presentation. We believe that our audits provide a reasonable basis for
our opinion.
In our opinion, the consolidated financial statements referred to
above present fairly, in all material respects, the financial position of
Whitman Corporation and Subsidiaries at December 31, 1993 and 1992, and the
results of their operations and their cash flows for each of the years in
the three-year period ended December 31, 1993 in conformity with generally
accepted accounting principles.
As discussed in Note 5 to the Consolidated Financial Statements,
effective January 1, 1993, the Company changed its method of accounting for
postretirement benefits other than pensions.
KPMG Peat Marwick
Chicago, Illinois
January 13, 1994
- ---------------------------------------------------------------------------
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Liquidity and Capital Resources
- -------------------------------
In 1993, the Company continued to strengthen its financial condition by
refinancing a portion of its debt at substantially lower interest rates and
by reducing its debt levels. The Company repaid $430.8 million of debt
(carrying an average interest cost of 10.8%) from cash provided by
operating activities and proceeds from $263.3 million of long-term debt
issued during 1993 at an average interest cost of 6.2%. In addition, the
Company borrowed $83.6 million under its contractual bank credit lines and
commercial paper programs at an average effective interest rate of 3.6%.
As a result of the Company's strong cash flows, the Company's total debt
declined $61.2 million to $839.3 million and the Company's long-term debt-
to-capital ratio improved to 52.1 percent at the end of 1993, down from
55.3 percent as of December 31, 1992.
In spite of the reduction in debt levels, the Company continued to
invest in its future growth and in its efforts to increase productivity.
Capital spending amounted to $88.7 million in 1993, up 12.0 percent from
1992, and excluded approximately $10 million of capital equipment which was
financed through operating leases. Capital spending for 1994 currently is
expected to exceed 1993 levels by a significant margin.
The Company has $338 million of debt that comes due in 1994. It
currently is planned that the Company will use a portion of its anticipated
free cash flow to pay down debt. The remainder is expected to be
refinanced, and on February 3, 1994, the Company issued $100 million of 6-
1 2 percent, 12-year notes, due 2006. It is anticipated that the Company
will issue additional debt as existing debt matures or as market conditions
warrant.
The Company believes with its strong free cash flow, its outlook for
continued earnings improvements, its existing and available lines of credit
and with the potential for additional debt or equity offerings, that it
will have sufficient resources to fund its future growth, including capital
expenditures and possible acquisitions.
Operating Results:
- ------------------
1993 compared with 1992
- -----------------------
Sales and revenues increased by $141.7 million, or 5.9 percent, to
$2,529.7 million in 1993.
Pepsi General's revenues increased $68.4 million, or 6.2 percent, over
1992. The increase principally reflected higher case volume, up 4.4
percent, and included growth in not only the core Pepsi brands, but in new
products, such as All Sport, Lipton Teas and Ocean Spray. The average net
selling price per case improved by approximately one percent with the
remainder of the revenue increase principally reflecting improved product
mix.
Midas' revenues increased by $18.0 million to $503.6 million. Midas'
domestic revenues were up 4 percent over those of 1992, in spite of a 52-
week year in 1993 compared with a 53-week year in 1992, and principally
reflected increased retail and wholesale sales during the latter part of
1993. Foreign revenues were up 3 percent over 1992 with growth in Europe
being offset in part by lower revenues in Canada and Australia, which
continued to experience recessionary conditions.
Hussmann's revenues increased $55.3 million, or 7.0 percent, to $846.5
million, with the improvement principally reflecting the benefits of
improved demand for Hussmann's products throughout the world.
Gross profit margins improved for the third straight year after the
spin-off of Pet, increasing from 35.3 percent in 1992 to 35.8 percent in
1993. This margin improvement reflected the benefits of lower ingredient
costs, some modest price improvement and improved volumes at Pepsi General.
The improvement was offset by modestly lower profit margins at Midas and
Hussmann, where the inability to increase prices to offset increased costs
depressed margins.
Selling, general and administrative expenses increased 5.7 percent to
$582.3 million, compared with a 5.9 percent increase in sales. As a
result, such expenses declined modestly as a percentage of sales from 23.1
percent in 1992 to 23.0 percent in 1993. Such expenses increased at all
subsidiaries, and generally reflected the effects of inflationary increases
in costs, with the most significant increase being reported by Midas, where
the increase reflected, among other items, an increase in the number of
company-owned shops, particularly in Europe, as well as expenses associated
with restructurings in the U.S. and shop closings in Australia.
Amortization expense did not change significantly.
As a result of the improved sales and revenues, as well as improved
gross profit margins, operating income increased by $30.9 million, an 11.3
percent improvement, over 1992.
Pepsi General's operating income increased by 22.7 percent to $170.5
million in 1993. The sharply improved results reflected the benefits of
higher volume, due in part to more favorable weather conditions in 1993,
lower ingredient and can costs and a modest improvement in pricing.
Operating margins improved by 2 full percentage points to 14.5 percent.
Midas' operating earnings in 1993 declined $6.0 million to $67.1
million. Midas' U.S. operating results were $2.8 million below 1992 and
reflected, among other items, restructuring charges in the U.S., the
continuing recessionary conditions in the Northeast and in Southern
California, as well as the inability to raise prices to offset material and
wage increases. Midas' foreign operations were down $3.2 million,
principally in Australia and Canada, reflecting weak economic conditions in
those countries plus the expenses associated with the closing of a number
of shops in Australia, which more than offset improved results in Europe.
Hussmann reported record earnings of $83.6 million, up 8.9 percent
over the previous record of $76.8 million in 1992. The improved
performance reflected the benefits of improved volumes throughout their
operations and the benefits of continued emphasis on cost controls.
Interest expense declined by $1.5 million to $96.2 million. The
reduction reflected the effects of lower interest rates. Average debt
levels increased during 1993 as the Company issued debt in advance of
repayments to take advantage of favorable conditions.
Interest income increased by $3.8 million to $12.8 million. The
additional income was principally the result of higher levels of
temporarily investable funds from proceeds of debt issued in advance of
repayment requirements.
Other expense declined by $5.4 million in 1993, with the reduction
principally reflecting gains from asset sales.
1992 compared with 1991
- -----------------------
Sales and revenues for the year 1992 totaled $2,388.0 million, down
$5.3 million, or 0.2 percent, from 1991.
Pepsi General revenues declined by $10.7 million, or 1.0 percent, to
$1,111.2 million. The reduction reflected 1992 being a 52-week year,
compared with a 53-week year in 1991. Unit volume, adjusted to exclude the
extra week in 1991, increased by 1.0 percent. The average net selling
price per case remained unchanged from 1991, and continued to reflect
extremely competitive conditions.
Midas' revenues increased by $9.6 million, or 2.0 percent, to $485.6
million. The growth in revenues was principally in their European
operations, reflecting improved demand and the expansion of the number of
shops. The growth in revenues in Europe was offset, in part, by lower
revenues in Canada, reflecting the continuing depressed economy, while
revenues in the U.S. were essentially flat with those of 1991.
Hussmann's revenues of $791.2 million were $4.2 million, or 0.5
percent, below those of 1991. If adjusted, however, for operations sold or
disposed of during 1992, revenues would be 1.1 percent higher than 1991.
This adjusted increase reflected the benefits of modest price increases and
improved industry demand, offset in part by the adverse affects of foreign
currency fluctuations.
Gross profit margins improved from 35.0 percent in 1991 to 35.3
percent in 1992. This improvement principally reflected continuing tight
cost controls. Margins improved slightly at Pepsi General, where lower
ingredient costs and improved productivity more than offset higher
concentrate and labor costs. Margins improved also at Hussmann due to
tight cost controls. Midas' margins declined, as strong competitive
pressures did not permit Midas to raise prices sufficiently to offset
higher costs.
Selling, general and administrative expenses increased by only $2.3
million, or 0.4 percent. Such expenses increased at Pepsi General, due, in
part to higher bad debt write-offs and expenses related to productivity
programs. Midas' expenses were essentially flat with those of 1991, while
Hussmann's expenses were down by $4.7 million, with both subsidiaries
obtaining benefits from on-going cost reduction programs.
Amortization expense remained essentially unchanged.
Operating income increased to $274.4 million in 1992, compared with
$271.8 million in 1991.
Pepsi General's operating income declined by $5.7 million to $139.0
million in 1992. The lower earnings principally reflected the 52-week year
in 1992, compared with the 53-week year in 1991, as well as some unusually
large write-offs of bad debts. Operating margins declined to 12.5 percent
compared with 12.9 percent in 1991, primarily reflecting slightly lower
sales and higher S,G&A costs.
Midas' operating earnings declined by $3.3 million to $73.1 million.
The reduction in earnings was in their U.S. and Canadian operations, and
reflected continuing weak economic conditions and lower earnings from
company-owned shops. These unfavorable results more than offset strong
earnings improvements in Europe.
Hussmann's operating income rose sharply to $76.8 million, up 16.2
percent over 1991. The strong improvement was in spite of lower revenues
and was due to, among other factors, the on-going benefits of Hussmann's
cost reduction and productivity improvement programs.
Interest expense declined by $30.9 million. This reduction reflected
a full-year's benefit of the reduction in debt. The Company received
nearly $600 million on April 1, 1991 from the Pet spin-off which was used,
along with free cash flow, to pay down debt over a period of time as debt
came due. The lower expense also reflected the benefits of lower interest
rates.
Interest income was reduced by $5.4 million to $9.0 million, and also
reflected the effects of lower interest rates, as well as lower levels of
investable funds during 1992.
Other income, expense net was a net cost of $15.1 million in 1992, an
unfavorable variance of $19.2 million when compared with 1991. This
variance, to a substantial degree, was due to the recording of lower gains
on asset sales in 1992 compared with 1991.
Environmental Matters
- ---------------------
The Company is involved, directly or as a possible indemnitor, in a
number of environmental proceedings and claims. The Company continues to
actively investigate such matters in an attempt to evaluate the Company's
exposure to each claim. In many instances, many other major corporations
have also been identified as potentially responsible parties. As discussed
in Note 11 to the consolidated financial statements, the Company believes
that it has made adequate provision for such potential liabilities,
excluding consideration of possible insurance recoveries. However, it is
not possible at this time to determine what the Company's ultimate
liability on these claims may be.
- ---------------------------------------------------------------------------
Whitman Corporation and Subsidiaries
Securities Data
- ---------------
The common stock of the Company is listed on the New York, Chicago and
Pacific stock exchanges. The table below sets forth the reported high and
low sales prices as reported by THE WALL STREET JOURNAL on the Whitman
common stock and indicates the Whitman dividends for each quarterly period
for the years 1993 and 1992.
Common
-----------------------------
High Low Dividend
-------- -------- --------
1993:
1st quarter $ 15.375 $ 13.875 $ 0.065
2nd quarter 15.000 12.750 0.075
3rd quarter 15.500 13.250 0.075
4th quarter 17.000 14.875 0.075
1992:
1st quarter $ 16.375 $ 12.750 $ 0.060
2nd quarter 15.000 12.500 0.065
3rd quarter 13.875 12.250 0.065
4th quarter 15.250 12.250 0.065
- ---------------------------------------------------------------------------
<TABLE>
Six-Year Summary of Operations
<CAPTION>
For the years ended December 31
(dollars in millions except per share) 1993 1992 1991 1990 1989 1988
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Operating Results:
Sales and revenues:
Pepsi General $ 1,179.6 $ 1,111.2 $ 1,121.9 $ 1,041.2 $ 961.4 $ 900.0
Midas 503.6 485.6 476.0 476.4 433.7 394.8
Hussmann 846.5 791.2 795.4 787.4 788.9 728.2
-------- -------- -------- -------- -------- --------
Total $ 2,529.7 $ 2,388.0 $ 2,393.3 $ 2,305.0 $ 2,184.0 $ 2,023.0
======== ======== ======== ======== ======== ========
Operating income:
Pepsi General $ 170.5 $ 139.0 $ 144.7 $ 117.5 $ 108.1 $ 118.9
Midas 67.1 73.1 76.4 66.7 68.0 63.4
Hussmann 83.6 76.8 66.1 35.2 60.6 58.5
Corporate administrative expenses (15.9) (14.5) (15.4) (157.8) (26.3) (12.8)
-------- -------- -------- -------- -------- --------
Total operating income 305.3 274.4 271.8 61.6 210.4 228.0
Interest expense, net (83.4) (88.7) (114.2) (96.2) (84.7) (107.5)
Other income (expense), net (9.7) (15.1) 4.1 (4.4) 21.1 (2.0)
-------- -------- -------- -------- -------- --------
Income (loss) before income taxes 212.2 170.6 161.7 (39.0) 146.8 118.5
Income tax provision (benefit) 90.7 68.5 70.3 (17.9) 50.9 52.5
Minority Interest 15.1 10.0 11.0 10.2 10.3 13.6
-------- -------- -------- -------- -------- --------
Income (loss) from continuing operations 106.4 92.1 80.4 (31.3) 85.6 52.4
Income (loss) from discontinued operations -- (32.3) 17.2 50.6 105.1 157.4
Extraordinary loss on early debt retirement (4.2) -- -- -- -- --
Cumulative effect of changes in accounting principle (24.0) -- -- -- -- 23.7
-------- -------- -------- -------- -------- --------
Net income 78.2 59.8 97.6 19.3 190.7 233.5
Preferred dividends requirement -- -- -- 38.6 36.6 --
-------- -------- -------- -------- -------- --------
Income (loss) applicable to common stock $ 78.2 $ 59.8 $ 97.6 $ (19.3) $ 154.1 $ 233.5
======== ======== ======== ======== ======== ========
Net Income (Loss) Per Share:
From continuing operations $ 0.99 $ 0.86 $ 0.76 $ (0.68) $ 0.48 $ 0.49
From discontinued operations -- (0.30) 0.16 0.49 1.02 1.48
Extraordinary loss on early debt retirement (0.04) -- -- -- -- --
Cumulative effect of change in accounting principle (0.22) -- -- -- -- 0.22
-------- -------- -------- -------- -------- --------
Net income (loss) $ 0.73 $ 0.56 $ 0.92 $ (0.19) $ 1.50 $ 2.19
======== ======== ======== ======== ======== ========
Average shares (in millions) 107.5 107.2 105.9 102.8 102.6 106.7
======== ======== ======== ======== ======== ========
Cash dividends per common share $ 0.29 $ 0.255 $ 0.445 $ 1.05 $ 1.005 $ 0.94
======== ======== ======== ======== ======== ========
Other Statistics:
Total assets $ 2,103.2 $ 2,062.8 $ 2,123.0 $ 3,347.3 $ 3,334.6 $ 3,039.6
Long-term debt $ 749.3 $ 791.8 $ 895.9 $ 1,643.4 $ 1,655.9 $ 1,350.8
Capital investments $ 88.7 $ 79.2 $ 79.2 $ 96.4 $ 117.6 $ 117.1
Depreciation and amortization $ 95.5 $ 93.5 $ 86.6 $ 84.3 $ 76.2 $ 68.0
Number of employees at December 31 14,868 14,374 14,703 15,129 15,165 15,099
</TABLE>
EXHIBIT 21
SUBSIDIARIES OF THE REGISTRANT
As of March 1, 1994
Percentage Of
Voting Stock
Owned Or
Place of Controlled By
Name Incorporation The Registrant
- --------------------------------------- -------------- ---------------
Whitman Corporation (Registrant) Delaware
IC Equities, Inc Delaware 100 %
Cove Development Corp. Delaware 100
Whitman Finance Corporation N.V. Netherlands Antilles 100
Whitman Leasing, Inc. Delaware 100
Illinois Center Corporation Delaware 100
S&T South, Inc. Illinois 100
Mid America Improvement Corporation Illinois 100
South Properties, Inc. Illinois 100
Eviron of Inverrary, Inc. Florida 100
S&T of Mississippi, Inc. Mississippi 100
Midas International Corporation Delaware 100
Cosmic Enterprises, Inc. Delaware 100
Cosmic Stores, Inc. New York 100
Midas Euro, Inc. Delaware 100
Midas Realty Corporation Delaware 100
Midas Properties Delaware 100
Muffler Corporation of America Illinois 100
LeSilencieux S.A. France 100
Midas Mufflers (Vic.) Pty. Ltd. Australia 100
Midas Australia Pty. Ltd. Australia 100
Midas S.A. Belgium 100
Midas Silenciador, S.A. Spain 100
Top Escape Spain 100
Carex Uitlaatcenter N.V. Belgium 100
Midas International Corp(Wyo.) Wyoming 100
Midas Canada Holdings, Ltd. Canada 100
Midas Canada, Inc. Canada 100
Midas Realty Corp. of Canada,
Inc. Canada 100
Midas Autoservice GESMBH Austria 100
Midas Schweiz AG Switzerland 100
Pepsi Cola General Bottlers, Inc. Delaware 80
PCGB, Inc. Illinois 80
Genadco Advertising Agency, Inc. Illinois 80
Kolmar Products Corporation Wisconsin 80
Pepsi Cola General Bottlers of
Indiana, Inc. Delaware 80
Pepsi Cola General Bottlers of
Ohio, Inc. Delaware 80
Pepsi Cola General Bottlers of
Virginia, Inc. Virginia 80
Pepsi Cola General Bottlers of
Princeton, Inc. West Virginia 80
Pepsi Cola General Bottlers
of Memphis, Inc. Tennesse 80
Pepsi Cola Bottling Co. of
Bloomington, Inc. Delaware 80
Pepsi Cola Bottling Co.
of Wisconsin, Inc. Wisconsin 80
Marquette Bottling Works Michigan 80
Northern Michigan Vending, Inc. Michigan 80
Pepsi Cola General Bottlers
of Iowa, Inc. Iowa 80
Pepsi Cola Bottling Company, Inc.,
of Waterloo, Iowa Iowa 80
Hussmann Corporation Missouri 100
Krack Corporation Illinois 100
Hussmann Tempcool Holdings
PTE Limited Singapore 50
Whitman International, S.A. Switzerland 100
Whitman Insurance Co., Ltd. Bermuda 100
Hussmann Canada Holdings, Ltd.. Canada 100
Hussmann Canada, Inc. Canada 100
Hussmann Holdings, Ltd. Great Britain 100
Hussmann (Europe) Ltd. Great Britain 100
Hussmann Refrigeration Ltd. Great Britain 100
Craig Nicol Ltd. Scotland 100
Hussmann Mexico S.A. de C.V. Mexico 100
American Refrigeration
Products S.A. de C.V. Mexico 100
Industrias Frigorificas
S.A. de C.V. Mexico 100
The names of certain subsidiaries are omitted because such
subsidiaries, considered in the aggregate as a single subsidiary, would
not constitute a significant subsidiary.
EXHIBIT 24
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned Director and or
Officer of Whitman Corporation, a Delaware corporation (the "Company"),
hereby constitutes and appoints BRUCE S. CHELBERG, THOMAS L. BINDLEY and
FRANK T. WESTOVER, and each of them, his true and lawful attorneys-in-fact
and agents, with full power of substitution and resubstitution, for him and
in his name, place and stead, in any and all capacities, to sign the
Company s Annual Report on Form 10-K for the fiscal year ended December 31,
1993, and any and all amendments thereto, and to file the same, with all
exhibits and schedules thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents and each of them, full power and authority to
do and perform each and every act and thing requisite and necessary to be
done in and about the premises, as fully and to all intents and purposes as
he might or could do if personally present, hereby ratifying and confirming
all that said attorneys-in-fact and agents, or their substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand and seal
this 18th day of March, 1994.
Date Date
/s/ Bruce S. Chelberg 3/18/94 /s/ Archie R. Dykes 3/18/94
- ------------------------ --------------------------
Bruce S. Chelberg Archie R. Dykes
/s/ Thomas L. Bindley 3/18/94 /s/ Helen Galland 3/18/94
- ------------------------ --------------------------
Thomas L. Bindley Helen Galland
/s/ Frank T. Westover 3/18/94
- ------------------------ ---------------------------
Frank T. Westover Jackson C. Grayson Jr.
/s/ Richard G. Cline 3/18/94
- ------------------------ ---------------------------
Richard G. Cline Donald P. Jacobs
/s/ James W. Cozad 3/18/94 /s/ Charles S. Locke 3/18/94
- ------------------------ ---------------------------
James W. Cozad Charles S. Locke
/s/ Pierre S. duPont IV 3/18/94 /s/ Harry A. Merlo 3/18/94
- ------------------------ ---------------------------
Pierre S. duPont IV Harry A. Merlo
